Download - Primary Selective Demand Strategies
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Co-ordination of marketing programmes Specication of impact on demand Primary demand strategies
Increase the number of users by increasing thewillingness and ability
Increase the rate of purchase by broadeningusage, increasing level of consumption or byincreasing rate of replacement
Selective demand strategies !pand the served market by broadening
distribution or product-line e!tension "c#uire competitors customers by head-to-
head competition or di$erentiated positioning %etain customers by maintaining satisfaction,
meeting competition and relationshipmarketing
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'arketing strategy is the coordination of
marketing programs( 'iddle managers are responsible for
marketing programmes, which are)
"dvertising,
sales promotion,
personal selling,
customer service,
new product development
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'arketing programmes should beconsistent with marketing ob+ectives
'arketing strategies should achievemarketing ob+ectives
'arketing strategies specify the impacta rm hopes to achieve on demand
primary or selective(
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.arget marketselection
.ype of demandto be stimulated
"ll buyers in the relevantmarket
/primary demand0
uyers in one or moresegments /selective demand0
Primary demand "mong new users "mong current users
Selective demand In new served markets "mong competitor2 customers In current customer base
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'arket potential estimate
Industry sales forecast
Company sales
forecast
4nrealised market potential- Primary demand gap
Company sales potential
- Selective demand gap
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Prospector
5efender
"naly6er
%eactor
Innovator7rst mover7high risk7moves onto new markets
Security in stable market7good marketer7conservative range
Smart second 7 mobile defender7followstrends more 7 keeps small range
8o strong I5 in market7mass market type
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Primary 5emand
5emand for the product form or product classthat has been dened as the relevant market(
Includes 9potential2 buyers Same characteristics as buyers but not buying(
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;illingness < ( ( ( %elated product and services 4sage problems =alue or e!perience compatibility Perceived risk /high or low involvement0
( ( ability to buy Cost factors
Packaging and si6e factors
Spatial availability
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Primary demand maps the potential for aproduct( "nalyse features common to all customers(
Identify growth opportunities(
'anagers seek ways to increase primarydemand through increasing ;illingness < ability to buy
!panding si6e of market /potential actual buyers0
/ actual buyers increase fre#uency of use0
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Selective 5emand 5emand for a specic brand or supplier within the
relevant market(
Includes only 9actual2 buyers
"$ected by 5ecision making process
@igh 7 low involvement
!tended 7 routine analysis
.ype of purchase 8ew task 7 routine replacement 7 variety seeking
Perception of product attribute di$erences Irrelevant 4nimportant Aptional 'akes the product di$erent, but not important
5efensive 8ecessary to avoid elimination
5eterminant Important anduni#ue
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"im to increase level of demand for aproduct form or product class si6e
of market increases(.wo fundamental strategic
approaches)
Increase the number of users
Increase the rate of purchase
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Increase the number of users
useful in the introductory stage
of the life-cycle also for products with large
market shares /at maturity stage0
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Strategies for increasing the numberof users
Birms must increase)
;illingness to buy
"bility to buy
Ar both
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Strategies for increasing willingness to buy)
1(5emonstrating the e!isting benets of theproduct form
eg 5isposable diapers - Convenience andperformance
&( 5emonstrating or promoting new benets fore!isting products
eg Carnival cruise lines - Selling fun - not seavoyages
*( 5eveloping new products with benets, moreappealing to certain segments
eg ight eer - greattaste, no into!ication(
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Increasing the ability to buy using
ower prices
A$ering credit facilities
Dreater availability by
more distributors,
'ore fre#uent deliveries,
less stock outs(
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Bour reasons for reducing a price)
Some potential buyers who would notbuy the product at a higher price will
now buy Increase the rate of purchase
"void losing customers to competitors/defend0
Dain customers from competitors /attack0
Price is used to inFuence demand indi$erent ways
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Increasing the rates of purchase ;hen the markets are mature
and sluggish 'ake customers buy more often
or in higher volume
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Strategies used to increase rate ofpurchase roadening usage
Increase level of consumption Increase rate of replacement
roaden usage by e!panding
=ariety of uses 4sage occasions
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roadening variety of uses for orange+uice "t breakfast
"fter sports Source of vitamin C In cocktails
roadening use occasions
ftpos - for withdrawal or to pay bills Pi66a @ut - delivery service to e!pandlunch time business
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Increase level of consumption
ow price or special volume package eg Soft drink economy si6e, 13 beer packs
Changing buyers perception of theproduct benets g 1 pork industry /health benets of white
meat0,
g & "merican !press /"utomatic insuranceof products purchased0
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Increase rate of replacements bydesigning strategies that encouragereplacement
Bashion industry - change design
Bridges /may last &?years0 'aybe replaced earlier if cost, space
utili6ation, or convenience can beimproved(
Planned obsolescence through
innovation &&
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Primary demand strategies are lesswidely used than selective demandstrategies
4seful when there are gaps betweenmarket potential and industry sales
"nalysis of buying process may helpto identify factors limiting ability andwillingness to buy
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'arket potential estimate
Industry sales forecast
Company sales
forecast
4nrealised market potential
- Primary demand gap
Company sales potential
- Selective demand gap
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5esigned to improve the competitiveposition of the product, service or businessin the segment
Bundamental focus is on market share
Sales gains at the e!pense of competitors
.hree di$erent types) !panding the served market "c#uire new customers from competitors %etain current customers
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!panding the served market
roaden distribution
Product line e!tensions
"c#uiring competitors customers
;hen industry sales are growingslowly and close to market potential
In high growth industries who aremoving location
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Customer "c#uisition strategies
must be perceived as more e$ectivein meeting customers needs
must use determinant attributes ofeach segment
.wo basic strategic options)
@ead to head positioning 5i$erentiated positioning
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@ead to head positioning A$er basically the same benets Autdo competitors on)
Superior marketing e$ort Cost7price leadership
Superior marketing e$ort
Autdo competition on #uality Autspending on advertising ;ider variety and wider availability Baster delivery
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@ead-to-head Price7Cost leadership same #uality at lower price /eg "ir ines,
.elephone services0 "void head to head competition 'ay be vulnerable to an aggressive new brand
o$ering di$erent benets
Spend more money to gain retailer and
distributor support
Increase advertising spend may not produce
comparable increase in sales
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5i$erentiated positioning
enet7attribute positioning mphasise uni#ue attributes, packaging, benets
evers &??? bar soap - deodorant and moisturiser
Customer oriented positioning Cater to a specic customer type /niche0
uyer characteristics eg Dovt( agencies, 4niversities(
Specialised needs eg Specialised hospital services(
4ni#ue product use eg Cold remedies for nighttime(
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%etention strategies %etain current customers - /ach new
customer costs about ve times as much as ane!isting customer in promotional cost0
4sed by rms with dominant marketshare( lines up with defender strategy /increase
promo( spend to hold out competitors(0
Small market share rms with entrenchedpositions in particular segments( typical niche business /operating on close
relationship with customers0
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Strategies make a customer stay)
'aintain a high level of customer
satisfaction 'eet competitors2 o$erings
stablish strong relationships/economic and interpersonal0
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.o maintain satisfaction
'aintain customer beliefs on superior
product #uality reassure high #uality in advertisements
Provide additional information about
the product7service to enhancee$ective use 9free2 seminars
'aintenance < repair, complaint
management( Heep after sales service standards high to **
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'eeting competition o$erings 5o better on)
Price Cheaper, or better value( uality Bind out e!pectations and e!ceed them(
Beatures and Aptions Can o$ering be made to 9t2 customers
betterJ "dvertising 'ore 7 more e$ective /J0
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%elationship marketing 5evelop formal interpersonal ties with
the buyer to enhance repeat business oyalty cards thru to service agreements
4se economic incentives Contracts - protection against price
increase
'emberships - "nnual fees, Seasontickets Put computer terminals at customers
oKces
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asic options are)
ine e!tensions
ring out new product with signicantdi$erences to e!isting
Blankers Separate brand to cover weakness in main
brand(
Combination brands Promoting /productLbrand0 to boost sales
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Product Ab+ective.o achieve viable level
of sales for new
product(
.o achieve viablemarket share /for new
brand0
'arket share growth
'arketing Strategy
Primary - Increasenumber of users
Selective - "c#uisitionof customers
Selective - "c#uisitionof customers
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Product Ab+ective 'arket share
maintenance
Cash Fowma!imisation
'arketing Strategy
Selective - %etention ofcustomers or ac#uisition
of customers new to themarket
Selective - %etention of
customersPrimary - Increasepurchase rate
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Product Ab+ective Sustaining
protability
@arvesting
'arketing Strategy
Selective - %etention
of customers /limitedsegments0
Selective - %etention
with minimum e$ort
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'anagers can use more than one strategysimultaneously
Consider the impact of strategy oncomplementary and substitute products Beasibility of a strategy depends on problems
and opportunities
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'arket analysis provides information on) 1( ;ho buys the product form7who does not
&( Situations product is used7not used
*( Bactors inFuencing willingness and ability to buy / manager can select strategies to increase the
number of users or rate of use using aboveinformation primary demand0
( Bactors inFuencing buyers choice process
/ this gives insights to segmentation opportunities selective demand0
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Competitive analysis help to determine) ;ho are the competitorsJ ;hat is the intensity of competitionJ
@ow to compete e$ectively against 5irect brand competitors using selective demand strategies(
Indirect product class competitors using primary demand strategies(
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'arket measurements provide informationon)
Industry growth rates
Si6e of primary demand gap Protability
y combining productivity estimates with
protability analysis can determine protconse#uences of strategies and programs