Operational Marketing Strategy - A Presentation

Operational & digital marketing Florine Niant – 2A int Operational Marketing The practical implementation of marketing strategies. Planning and Execution Analysis and Reporting Developing marketing Tracking marketing plans, setting performance, budgets, developing analyzin...

Operational & digital marketing Florine Niant – 2A int Operational Marketing The practical implementation of marketing strategies. Planning and Execution Analysis and Reporting Developing marketing Tracking marketing plans, setting performance, budgets, developing analyzing data, and products, define their reporting on results. price and distribution, and managing communication campaigns. 1. Product A product can be : Something offered A service offered to A tangible item. A digital product. for sale. customers. Product Design Considerations When designing a product, many factors need to be considered to ensure success. Different Aspects of the Product Design Labelling Branding Consider functionality, Provide consumers with Ensure brand consistency usability, and aesthetics essential product across all elements of the when designing a product. information and meet product, from design to legal requirements. packaging. Packaging Considerations Primary Packaging Secondary Packaging Tertiary Packaging The immediate container A container that holds A larger carton or pallet for the product, like a the primary packaging, used for shipping and bottle or a bag. like a box or a carton. handling Product Lifecycle The product lifecycle is a concept used to describe the stages a product goes through from its introduction to its eventual decline. It’s important to understand how the products evolve over time and to develop strategies for each stage. Introduction Growth Maturity Decline Actions at each step of the product lifecycle Develop/Update the Range Homogeneous Competitive Range Advantage The product The product manager ensures manager makes the product line is sure the range stays consistent and competitive and complementary. relevant in the market. NPD Planning Information New product Sharing developments are The product planned manager keeps strategically, with everyone involved in clear goals and the process timelines. informed.  Develop/Update the Range 1 Test and Understand 3 Product Renewal or Launch As a Product Manager, test, 2 Anticipate Product renewal use, and Market or launch understand your Changes requires a products even if significant they were Stay ahead of the portion of a launched before curve by product you joined the anticipating manager's time. company. changes in your market and adjusting your products accordingly. Simple Change of Formula or Packaging: why ? Energize the Brand Maintain Discussions Improve Profitability A simple change can Keep the product relevant Adjust the formula to make a big impact. to distribution partners. reduce costs or improve quality. Keep the product familiar, Stay engaged with Re-evaluate suppliers or but attract new customers and industry production processes. customers. trends. 1990 : Groquik retires ! https://www.dail ymotion.com/vi deo/xfpuk0 New Product Launch Tips 1 Open Your Eyes 2 Open Your Ears Observe your Listen to your competitors. Learn customers. What from their are their needs successes and and pain points? failures. 3 Cooperate 4 Take a Step Back Collaborate with Unplug and step colleagues, away from your customers, and daily routine. New suppliers to gather ideas can emerge diverse from unexpected perspectives. places. Advice for New Product Launch Customer Problem Target Audience Identify the specific Define the ideal problem your customer profile for product solves for your product. Who the customer. What are you aiming to need does it fulfill? reach? Unique Selling Proposition Articulate the key benefit that sets your product apart from competitors. Long-term Competitive Advantage A strong brand identity Focus on offering Build strong relationships helps establish your something unique to your with your customers to product as different from customers. This could be a build loyalty. competitors. unique feature, lower price, or a better customer experience. Finding Your Product's Voice Product Name Packaging Power Craft a name that resonates with your Packaging is your product's first target audience. It should be impression. Design a visually appealing memorable, relevant, and reflect your and informative package that stands out product's unique value proposition. on supermarket shelves and captures consumer attention. A Data-Driven Approach to Success 1 Customer 2 Continual Feedback Optimization Gathering post- Each launch launch customer should be an feedback is opportunity to crucial. This refine your insights will help product and you understand marketing customer strategies, satisfaction and ensuring identify areas for continuous improvement. improvement and Collaboration for Success Team Effort The product manager is not alone in this journey. Collaboration with the hierarchy, marketing, sales, and research teams is essential for success. The concept sheet The concept sheet : example Product Development: A Case Study 1 Your challenge: in groups of 3-4 students, design a new range of skincare produc for a selected brand (L’Oréal, Caudalie, Clinique, Clarins….) 2 Your tasks will be to define the product (include concept sheet), price (include be place, and in-store advertising for your new range. You will have to conduct a store check for the project. We will work on that until Feb 11th : 15 MIN ORAL PRESENTATIONS that day 2. Price We usually combine 3 strategies to fix prices Cost + margin Competitive Pricing Value-Based Pricing Calculate the total Align your price with Set a price based on cost of production competitors, either the perceived value and add a markup to setting a price below, of your product to the determine the selling above, or equal to the customer, considering price. competition. their needs and willingness to pay. Price Elasticity: Understanding Customer Response Study Price Elasticity Conduct research to understand how price 1 changes affect customer demand for your product. Optimize Pricing Strategy 2 Use the insights from your price elasticity study to refine your pricing strategy and maximize profitability. Price Elasticity Calculation and Determination of Psychological Price Price Elasticity: Price elasticity measures how the demand for a product varies in response to changes in its price. It is calculated using the formula : price elasticity = demand variation / price variation Practical Example: The price of orange juice increases from €2 to €2.20 (a 10% increase). Sales decrease from 500 to 450 units (a 10% decrease). Let’s calculate: ((2,20-2)/2) / (450-500)/500) = 0,1/(-0,1) = -1 Negative number = the demand is elastic : consumers are sensitive to this price increase. 0 = extremely rare = changing the price doesn’t change the demand Positive number = snobbery effect / higher price leads to higher demand  In case #1, the price increase causes a nearly proportional decrease in demand; elasticity is close to -1. In case #2, a strong price increase only leads to a small drop in demand; the elasticity is low, between 0 and -1. This results in a steep slope of the demand line. In this case, the product is essential for consumers who cannot do without it even if prices rise. This is the case of oil, for example, which is not substitutable (especially for transport). In contrast, in case #3, a small price increase leads to a large drop in demand. In this case, the product is not vital and easily replaceable. Consumers will easily turn away if prices are too high (if apricots are in flames, then consumers will eat peaches this summer). Optimal Psychological Price: This price corresponds to what consumers consider fair and acceptable. Simple version: Ask two questions: “At what price would this product seem too expensive?” and “What is the minimum price below which you would doubt the quality?” The average of the responses provides a reliable estimate. Imagine a pack of biscuits is sold for €3. You ask these two questions to a sample of consumers and obtain the following responses: Average minimum price: €2 Average maximum price: €4 What would be the optimal psychological price? The different Pricing Strategies Penetration Pricing 1 Use a low price to gain market share and attract a large customer base. Price Skimming 2 Start with a high price to target early adopters and recover development costs before lowering the price to attract a broader audience. Competitive Alignment 3 Align your price with the lowest or highest price of competitors to establish a competitive advantage. Variable Pricing 4 Adjust prices based on factors like distribution channels, timing, and demand fluctuations to maximize revenue. Balancing Profitability and Credibility 1 2 Profit Maximization Brand Credibility Maximize profits by Maintain brand finding the optimal credibility by setting a balance between price price that aligns with and volume. the perceived value of your product. Price Negociation and Control Price Control Monitor selling prices through store checks, distributor relationships, and online tools to ensure price consistency and prevent price wars. Adapting to a Dynamic Market Price Wars and Global Competition Stay vigilant in the face of online price wars and cheaper imports, especially in durable goods. Multi-Channel Strategies Develop tailored product references for different distribution channels to address varying pricing and market dynamics. Real-Time Price Monitoring Utilize online tools and analytics to track and monitor prices in real-time to maintain competitive pricing and profitability.  Benchmarking: Understanding the Competitive Landscape Example : Brand Product Size NPK Average RRP GfK Hit Value (£) Volume 2014 Apr MAT (chemical Price List Volume Sales formula) (Value) per Shop Miracle-Gro Indoor Plant 1L Not Listed £3.30 £3.99 1 £1,430,125 433,787 RTU 155.60 Food (RTU) Miracle-Gro Indoor Plant 3L Not Listed £6.32 £5.49 4 £546,971 86,295 RTU 95.30 Food (RTU) Baby Bio Indoor Plant 175ml 10.6 4.4 1.7£2.32 £2.99 2 £1,418,512 612,124 Original 172.30 Food (RTU) Baby Bio Orchid Plant 175ml 5.3 2.2 0.8 £3.08 £2.99 3 £638,806 207,693 Orchid Food Food (RTU) 87.80 Fito Indoor Plant 250ml Not Listed £3.08 £2.99 3 £638,806 207,693 Orchid Food (RTU) Feed 87.80 Westland Cactus Plant 250ml 133 £4.51 £4.99 28 £37,835 8,389 Cactus 41.50 Food (RTU) Product Development: A Case Study 1 Your challenge: in groups of 3-4 students, design a new range of skincare produc for a selected brand (L’Oréal, Caudalie, Clinique, Clarins….) 2 Your tasks will be to define the product (include concept sheet), price (include benchmark = vs competition), place, and in-store advertising for your new range. You will have to conduct a store check for the project. We will work on that until Feb 4th : 15 MIN ORAL PRESENTATIONS that d Place = Distribution The Importance of distribution Key Marketing Factor Suppliers and retailers : common An important element of the marketing Retailers strive to attract customers, mix, encompassing aspects like cultivate loyalty, fulfill consumer needs, distribution channels, store placement, maximize sales, and ensure profitable and product availability. It's crucial for margins, just like their suppliers ! reaching target audiences and achieving marketing goals. Place in Action 1 Manufacturers produce goods and retailers sell them to consumers. This process involves various steps and actors, each contributing to the overall distribution network. 2 The distribution channel can involve intermediaries like wholesalers, distributors, or agents, facilitating the flow of goods from manufacturers to retailers. 3 The final stage sees retailers offering goods to consumers in various forms: physical stores, online platforms, or both. Classifying Retail Channels Food vs. Non-FoodSpecialization Levels Retailers can be Retailers exhibit broadly categorized varying degrees of based on their specialization, product focus. We ranging from usually distinguish generalists to hyper- the food vs non-food specialists. channels. Store Size and Format Food retailers differ in their size and format, with convenience stores, supermarkets, and hypermarkets catering to diverse customer needs and shopping patterns. Evolving Retail Landscape Mail Order Distance Selling Traditional mail Distance selling order, relying on encompasses all catalogues, has forms of e- evolved into online commerce, shopping, offering enabling a wider range of consumers to products and purchase products convenient access. remotely, from anywhere with internet access. Brick and Mortar, Click and Mortar, Pure Player Retailers adopt various models: brick and mortar stores with physical locations, click and mortar combining online and physical presence, and pure players solely operating online. Manufacturer-Retailer Dynami Growing Concentration Power Dynamics The distribution Distributors often hold a landscape is becoming stronger position due to increasingly their market share, concentrated, with a leading to power few powerful retailers imbalances in dominating the market negotiations with and shaping manufacturers. negotiations. Rise of Trade Brands Distributors are increasingly developing their own brands, competing with established manufacturer brands and further impacting Channel Selection for Manufacturers Company Strategy Manufacturers base channel choices on their overall strategy, objectives, and market position, aligning distribution with their long-term vision. Objectives and Performance Specific objectives are crucial factors in selecting the most effective distribution channels : turnover growth, market penetration, channel performance… Product Attributes and Costs The nature of the product, its distribution requirements, and associated costs influence the choice of channels, ensuring efficient and profitable distribution. Distribution Channel Considerations Channel Pros Cons Direct Sales High control, direct It's a whole new activity, customer relationship limited reach Distributors / retail stores Wide reach, physical High cost, less control, presence, customer potential conflicts interaction Online Platforms Global reach, low entry barriersHigh competition Distribution as a Legacy Historical Influence Distribution patterns often stem from historical decisions and established practices, making it 1 challenging to adapt to evolving market dynamics. Marketing and Sales Collaboratio Distribution responsibilities are typically 2 shared between sales and marketing departments, requiring effective collaboration and alignment of strategies. Usually Marketing sets the overall distribution strategy, while sales executes tactical implementation. Distribution Challenges and Opportunities Product Differentiation 1 Developing distinct products or brands tailored to specific distribution channels can be a complex but potentially rewarding strategy. Product Placement 2 Ensuring optimal product placement within stores is crucial for visibility, attracting consumer attention, and driving sales. Innovation and Launch Strategies Innovative product launches require careful 3 consideration of placement strategies, maximizing visibility and generating consumer interest.  Leveraging Distribution for Suc 1 2 Packaging Shelf Placement A compelling and Strategic product informative product placement on store packaging design is crucial shelves maximizes for attracting attention, visibility and convenience conveying brand values, for consumers, influencing and encouraging purchasing decisions. purchases. 3 Launch Promotions Promotional activities like displays, tastings, and special offers generate excitement and encourage trial during product launches. Encouraging Repeat Purchases Product Range and Variety Bulk Options and Promotions Offering a wide variety of products Providing larger packs, multi-buy meets diverse consumer needs and discounts, and loyalty programs encourages repeat purchases by incentivize consumers to purchase more providing options for different frequently and in larger quantities. Data-Driven Distribution Optimization Leveraging data analytics to track consumer behavior, sales performance, and market trends provides insights for optimizing distribution strategies and making informed decisions. Product Development: A Case Study 1 Your challenge: in groups of 3-4 students, design a new range of skincare produc for a selected brand (L’Oréal, Caudalie, Clinique, Clarins….) 2 Your tasks will be to define the product (include concept sheet), price (include benchmark), place, and in-store advertising for your new range. You will have to conduct a store check for the project. We will work on that until Feb 11th : 15 MIN ORAL PRESENTATIONS that day