the mirror image: business offerings ≥ market receipts in value assessment relative to...

The mirror image: Business offerings ≥ Market receipts in value

assessment relative to individuals’ need, want, and demand

The transaction process: Something must be exchanged between

parties at two sides for profitability to stay in business

Business Offerings Product Ideas Organizations Persons Destination/location

Market Consumer Industrial/Business

Financial Commodities Technology

Product Goods Services

Market Demographic Psychographic Behavioral Socio-Economic

Status Combined groupings

Product (design+engineering) Branding

Functions Process-how to

Properties Attributes Features Utilitarian functions

Line Mix

Width Length Depth

Life cycle Intro-growth-maturity-

decline

Human Brand Identification

Brand equity formation Brand status association

Benefits Need

Biological Psychological Social Personal developmental

Want in form of Family Traditional heritage Cultural conformance Personal determinants

Demand Aggregated wants

supported by purchasing power

Brand Evaluation HI (M) O(M) F(A) C(A) L(E)

Hi, mom, fa-ca-le with

Market Development E

L (Preferred) L

E I I

Elleii

Brand Evaluation Host v. Member

How the host brand incubates member brands?

Origin v. Manufacturing How the brand origin

interacts with effect of country/place of manufacturing?

Focal Brand v. Brand Allies How a brand(s) can shadow

or augment the brand in focus of evaluations?

Chief v. Associated Brands How strong the association

can be? Locus Brand Core v. Brand

Extensions How far it can go on a

sliding scale of effect and control?

Hi, mom, fa-ca-le with

Market Development Existing

Loyal Those who are committed

Preferred Those who preferred yours

over competing one but with a “catch”

Leisure Those who browse around

without a brand preference

Extended(prospective) Informed

Those who have been exposed or informed with the brand at issue

Innocent Those who have never been

exposed with a particular brand at issues

Elleii

Combined Strategies from Decisions of Product Price Promotion (IMC) Place (Distribution)

Target at Classic Segmentation by: Demographic Psychographic Behavioral SES, etc

To position A product

distinguishable in the mind of intended market (customers and consumers) relative to its quality in the price-value assessment

To achieve Loyal consumers

through stages from their innocence

Price = TC + “ME” Unit

TC: total cost = VC + FC

ME : marketing effort including branding, promotions, etc

Unit: quantity of product

Value = Q + “BE” Unit

Q: quality - real + perceived relative to many such real self, ideal self, etc

BE: Brand Equity

Unit: quantity of product

Business side

Price =

UtilitiesFormTimePlace Ownership

Market side

ValueBenefits

NeedWantDemand

Product decisions Price decisions Promotion decisions Place decisions Business strategies

Product- anything a consumer acquires or might acquire to meet an emerged need.*The term Need is depicted as a state of disequilibrium between the actual and desired self. i.e., Necessities, wants, and desires.

This includes: Attributes-main or core qualities of product. Features- additional, distinct aspects of product. Utilitarian Functions- practical, useful, and

functional properties of product.

The product branding process

The product branding consideration

The product engineering process

The product positioning

Brand Engineering should include•Differentiation against competitors•Fit with desired human personality

traits •Possession with strong associations•Arousal of stimulating emotions•Creation of Brand Equity-value

beyond the real value of product•Visualization of desired Brand Image

•Fanciful or Arbitrary•Aspirin•Coke•Google•Yumlings

•Suggestive•Yumlings•Fish-Fri v. Chick-Fri

•Descriptive•Chicken Soup•….

•Generic Aspirin Coke Google ≠ Yahoo

The “Swinging Clock Pendulum” rule without trademark registration

The auto protection with trademark registration

Achieve tangible differentiation against competitors

Achieve excellence in quality (real/actual and perceived

Google 30% of Chinese market share (11.2%?) $90 m/$200m in sales in 2008

(google.cn/CHN) in comparison of $22 billion worldwide

60-60% of Chinese market share $381 m in sales in 2008 and two digits

of percentage increase in 2009 by quarter reports

“Grain’s Song” in Chinese name The name "Google" originated from a

misspelling of the word "googol“ in English which refers to 10100, the number represented by a 1 followed by one hundred zeros, reflective of the product itself

Many people have asked about the meaning of Baidu in English for Chinese.

'Baidu' was inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compared the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles.

'...hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood.' (Chinese: 众里寻他千百度，蓦然回首，那人却在灯火阑珊处 ;)

Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal.

Product Every element of a claim

Is literally infringed, or Is infringed under the doctrine of equivalents

Trademark Likelihood of consumer confusion

Strength of mark Proximity of the goods Similarity of the marks Evidence of actual confusion Marketing channel used Types of goods and purchaser care Intent Likelihood of expansion

Dilution Kodak bicycles, or Buick Aspirin , ..

Price- the amount of money one must pay to obtain the right to use the product.

Price should be determined by the following factors:

Fixed and variable costs Competition Company objectives Proposed positioning strategies Target group and willingness to pay

Based on the company’s objectives.Examples include: Penetrating Pricing Bundle Pricing Skimming Pricing Psychological Pricing Competition Pricing Premium Pricing Optional Pricing

Promotion- the communication of information of a product to generate a positive consumer response (sales).

Decisions concerning promotions include:

Promotional strategy (push, pull, etc.) Advertising Personal selling & sales force Sales promotions Public relations & publicity Marketing communications budget

Place (Distribution)- is having the product available where target customers can buy it.

Some examples of distribution decisions include:

Distribution channels Market coverage (inclusive, selective, or

exclusive distribution) Specific channel members Inventory management Warehousing Distribution centers Order processing Transportation Reverse logistics Backward and Forward Integration

Targeting a market involves research to determine the changing trends of consumer behavior.

This is done through researching:

DemographicsPsychological AspectsBehavioral AspectsSocio-economic Status By ELLEII

Demographics- selected population characteristics. Examples: location, race, age income, education, occupation, etc.

Demographics determine certain cultural factors that will affect not only consumer behavior but also the marketing strategy of a company.

Psychological Aspects-studies the mind and behavior of individuals. Refers to the mental and behavioral constitution of a person.

By researching a target market’s different perceptions, thoughts, values, and beliefs a better understanding of what the marketing strategy must accommodate with is revealed.

This area of aspects can also reveal where to position a product for the greatest success.

Behavioral Aspects- refer to how a person conducts his or herself in specific situations for observable conduct only, such as frequency of purchase or usage under the effect of a given stimuli or situation.

This is pertinent to developing a solid marketing strategy.

Such factors can be pinpointed as: Celebrity Endorsers Brand personality Emotions Imagery

Socio-economic status- divides population into classes according to income, occupation, education, and ethnic background.

Example of scales: Lower-middle, Middle, Upper-Middle, and Upper levels.

This determines the appropriate location, pricing, and themes that will be successful in marketing a product to its niche.

There are four stages through which persons in a target market have to be developed into a business market share.

They are as follows: ELLII – Preferred between L and L

Individuals that must have no knowledge of a brand coming to a marketplace

Individuals that must be made aware of the brand to purchase for the first time.

Those who may or may not recognize the brand and make non-committal or non-habitual purchases

Those who prefer the brand over other competing ones and will purchase it continually unless competitor product has a distinguishable advantage such as special price discount, new feature, or the preferred one is currently out of stock.

Those who are brand loyal and will purchase ONLY that brand, even if brand is out of stock.

The relationships between need, want, and demand

How does a need “emerge” Where does a need come from? Is need or want a universal? Can we do business for a demand

without affordability?

- an emerged state of disequilibrium from what has been maintained as a homeostasis in humans; or a result of being out of the Zone of Comfort in humans, it comes from in the fields of biological, psychological, social, and economic perspective, etc.

- Desire - a feeling that accompanies an unsatisfied state. A wish, craving, or lust.

– a form of need taken in the desirable feeling that is determined by individual preference shaped by how one has been “formulated” from his or her development, family, cultural, ethnic, peer influences, or personal limitations.

the aggregated want or desire to possess a good or service with purchasing power (money or affordability) necessary to make a legal transaction for the good or service.

The demand curve displays the relationship between the price of the product and the amount of product consumers want to buy. This relationship is indirect because as prices

go up, people buy less of that particular product. It is referred to as the Law of Demand.

During times of recession and depression, the demand of products in general declines; however it is the “wants” that can be suppressed or delayed far more than the “needs” that could have emerged

The relationship of Demand/Need/Want should be “mirrored” the relationship of the product’s attributes, features, and utilitarian features from the Business side.

On the business side, price can be determined by: Total Cost/Quantity plus “marketing effort.” This will present a minimum dollar value to the market side because price will never be less that the expenses accrued from producing a product unless other economic or strategic considerations are factored.

On the market side, value can be determined by Quality plus Brand Equity. Quality can be viewed and verified through usage in the form of real or perceived one in this equation.

This relationship can be depicted by use of the product positioning method.

Product positioning- an image of the product or brand in the consumer’s mind relative to competing products and brands.

Through the use of a perceptual map, brands can position themselves in a market with competitors to form their own niche of the market and create a successful brand or product.

Q3 Q4

Q2 Q1

Using the perceptual map below, the market responses of the Quadrants 1-4 will be determined: Quadrant 1 represents high-priced, low quality products, therefore, labeled as Market Rejection. The consumer choice to purchase in this category is unlikely to have repeat purchases once the lack of quality is revealed. “The best marketing will sell it for once only.”

Q3 Q4

Q2 Q1

Quadrant 2 represent low quality, low-priced products that are most affordable for the general population. The consumer choice for this category will be significantly higher than Quadrant 1 because of the affordability, especially in times of recession. Therefore, labeled as Market Choices or Market Selection. (Leisure in ELLEII)

Q3 Q4

Q2 Q1

Quadrant 3 represents low-priced, high quality products. This Quadrant should command the highest market share because of product’s high quality and low price. Therefore, labeled as Market Acceptance or “Consumers’ Dream.” Consumers in Q2 will most likely to purchase those in Q3 once the product’s info in known. Remember ELLEII w Preferred?

Q3 Q4

Q2 Q1

Quadrant 4 represents the most exclusive product category with high quality and high price. Q4 serves those few with affordability and want to be uniquely different from the commons, and those are “aspirational” to be those few (through living beyond real self in a hope to elevate “status” to be that). Ordinary people do also consider such when facing bit ticket items such as cars, houses, watches, shows, dresses, etc. The market share is limited but could be “puffed” when certain conditions are met.

The Pan’s Paradigm has presented you with the scope and elements of Marketing in general

These are on the start line of how to study Marketing Principles, Consumer Behavior, Promotion, Pricing Strategies, Marketing Research, Sales/Sales Management, or International Marketing.

Please keep this model as we have to navigate often by using the pathways of this “forest” of this business model, minus those in management, accounting, finance, MIS, or strategic perspectives in the field.