proposed marketing budget: $3.3m
DESCRIPTION
Does Natureview Have the Marketing Capabilities & Resources Required to Enter the 6-8 oz Supermarket Market? . Proposed Marketing Budget: $3.3M. /2.9% Share $1.1M/Share Point. Danon & Yoplait spend >: $120M. /57 % Share $2.1M/Share Point. - PowerPoint PPT PresentationTRANSCRIPT
Does Natureview Have the Marketing Capabilities & Resources Required to Enter the 6-8 oz Supermarket Market?
Product Management• Ability to develop & deliver superior-quality goods and services.
Communications Management and Brand-building capability• Ability to create & manage SUPERMARKET customer perceptions leading to hi levels of brand equity,
using effective positioning, advertising, personalized communications, integrated mktg communications
Channel Management• Ability to establish and manage SUPERMARKET channels of distribution that effectively and efficiently
deliver value to end-user customers
Market Sensing & Customer Insights• Ability to learn about SUPERMARKET customers, competitors, channel members and the broader
market to develop actionable market intelligence and customer segmentation and targeting schema
Marketing Planning & Implementation• Ability to conceive and implement marketing strategies that optimize the match between the firm’s
resources (including multiple product lines/brands) & the SUPERMARKET marketplace
Proposed Marketing Budget: $3.3M
Danon & Yoplait spend >: $120M
Natureview’s Projected Share of Supermarket Market: ~ 2.9%
/57% Share $2.1M/Share Point/2.9% Share $1.1M/Share Point
Does Natureview Have the Marketing Capabilities & Resources Required to Enter the 32 oz Supermarket Market?
Product Management• Ability to develop & deliver superior-quality goods and services. Longer Shelf Life!
Communications Management and Brand-building capability• Ability to create & manage SUPERMARKET customer perceptions leading to hi levels of brand equity,
using effective positioning, advertising, personalized communications, integrated mktg communications
Channel Management• Ability to establish and manage SUPERMARKET channels of distribution that effectively and efficiently
deliver value to end-user customers
Market Sensing & Customer Insights• Ability to learn about SUPERMARKET customers, competitors, channel members and the broader
market to develop actionable market intelligence and customer segmentation and targeting schema
Marketing Planning & Implementation• Ability to conceive and implement marketing strategies that optimize the match between the firm’s
resources (including multiple product lines/brands) & the SUPERMARKET marketplace
Proposed Marketing Budget: $1.5M
Danon & Yoplait spend >: $120M
Natureview’s Projected Share of Supermarket Market: ~ .9%
/57% Share $2.1M/Share Point/.9% Share $1.7M/Share Point
Does Natureview Have the Marketing Capabilities & Resources Required to Take 68% Share of the Multipack Natural Foods Market?
Product Management• Ability to develop & deliver superior-quality goods and services.
Communications Management and Brand-building capability• Ability to create & manage customer value perceptions leading to high levels of brand equity, using
effective positioning, advertising, personalized communications, & integrated mktg communications
Channel Management• Ability to establish and manage NATURAL FOODS channels of distribution that effectively and
efficiently deliver value to end-user customers
Market Sensing & Customer Insights• Ability to learn about NATURAL FOODS customers, competitors, channel members and the broader
market to develop actionable market intelligence and customer segmentation and targeting schema
Marketing Planning & Implementation• Ability to conceive and implement marketing strategies that optimize the match between the firm’s
resources (including multiple product lines/brands) & the marketplace
Proposed Marketing Budget: $250K
Current Marketing Spend: $360K
Natureview’s Projected Share of NF Market: ~ 11%
/24% Share $15K/Share Point/11% Share $23K/Share Point
Natureview Key Takeaways• The value of identifying competitive advantage for the focal
company, key competitors, and key downstream collaborators. In other words, understanding competition at each level in the channel.
• The value of identifying stage of the life cycle for each product-market.
• The value of identifying the key capabilities required to achieve competitive advantage in each product-market.
• The value of identifying gaps between current capabilities and capabilities required to achieve success in new product-markets.
• The value of questioning the face validity of sales forecasts.
Integrated Marketing Communications
• Basic model of communication and how technology is changing that model.
• IMC Strategy – Target Audience(s) & Communication Objective(s)– Communications Mix, Message & Media– Communications Budget– Evaluation & Control
Doubt everything or believe everything: these are 2 equally convenient strategies. With either we dispense with the need for reflection.
Henri Poincare
Key Learning Points
5
Traditional Mass Marketing Communication Model
6
Mass Communication Model with Interactive Media
7
ResearchHow is competition
utilizing social media? How can
we use social media?
MineWho is talking?
ListenWhat are they
saying?
CreateDevelop social
media campaign and
generate UNIQUE content
The Social Media Process
8
If Twitter is a never-ending barrage of babble and nonsense, does it really matter?
9
Integrated Marketing Communications Strategy1. Select Target Audience(s) & Communication Objective(s)
• Flows from marketing strategy but may include noncustomer targets (e.g., influencers)
• Identify information requirements: what, where, when• Customer response, sales or profit objectives• Models are all hierarchical and have three basic stages:
cognitive, affective, and behavioral.2. Select the Communications Mix, Message & Media
• Based on product-market characteristics, communication objectives, organizational capabilities & channel considerations
• Consistent concept and message across the communications mix3. Establish & Allocate the Communications Budget
• Percentage of sales; Competitive-parity; Objective & task4. Evaluation & Control
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K&P Purchase-Process Model
Awareness
Consideration
Preference
Purchase
Repurchase11
Flare’s Communication Strategy for SavvyHow will you accelerate the
Purchase process
Build Awareness & Consideration
Generate
Preference
Generate
(Re)Purchase
Target Audience (VALS description, demographics & current status as Flare customer)
Communications message (What will you say?)
Pull communication: Advertising Media, Direct Marketing, or Blogs you will use (Be specific)
Push communication through retail partners (will you use personal selling, point of purchase collateral material?)
Metric used to evaluate effectiveness
12
For example: “You are the love in Loveliest”
13
McKinsey Word-of-Mouth MarketingExperiential (50-80%); Consequential; Intentional (e.g., celebrity)
78% of consumers
trust peer recommendations
Only 14% trust advertisements
Influentials typically generate three times more word-of-mouth messages than noninfluentials do, and each message has four times more impact on a recipient’s purchasing decision. About 1 percent of these people are digital influentials—most notably, bloggers—with disproportionate power.McKinsey Word-of-Mouth Marketing
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Introducing Socialnomics
Integrated Marketing Communications Strategy2. Select the Communications Mix, Message & Media
• Based on product-market characteristics, communication objectives, organizational capabilities & channel considerations– Advertising & social media usually line up with intermediate
(i.e., cognitive or affective) customer response objectives• Select media & vehicles that “fit” & reach target audience(s)
– Publicity & PR typically have advertising-type objectives but may quantify them as media-buy objectives (e.g., generate $xxx worth of media exposure).
– Sales promotion, direct marketing & personal selling typically have behavioral (i.e., sales and profit) objectives
• Consistent concept and message across the mix– Informational/Rational Appeals focus on functional or practical
aspects of the product & feature a unique selling proposition.– Emotional Appeals address underlying psychological aspect of
purchase decision using Humor, Fear, Guilt, Sex to enhance recall & brand liking. 15
Integrated Marketing Communications Strategy2. Select the Communications Mix, Message & Media
• Based on product-market characteristics, communication objectives, organizational capabilities & channel considerations– Advertising & social media usually line up with intermediate
customer response objectives• Select media & vehicles that reach target audience(s)
– Publicity & PR typically have advertising-type objectives but may quantify them as media-buy objectives (e.g., generate $xxx worth of media exposure).
– Sales promotion, direct marketing & personal selling typically have sales or profit objectives
• Consistent concept and message across the mix– Informational/Cognitive Appeals focus on functional or practical
aspects of the product & feature a unique selling proposition.– Emotional Appeals address underlying psychological aspect of
purchase decision using Humor, Fear, Guilt, Sex to enhance recall & brand liking. 16
Comparative ad– Brand and competitive
brand are mentioned– Usually not done by
market leaders• e.g., Coke may not
mention Pepsi, but Pepsi mentioned Coke in its “Pepsi Challenge”
Designing Cognitive Ads
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Designing Emotional AdsHumor
Marketers tend to build campaigns around emotional positioning, yet we found that consumers actually tend to talk—and generate buzz—about functional messages.McKinsey Word-of-Mouth Marketing 18
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• Image ads– Are more abstract; used to
convey an image– Great for positioning
Designing Emotional Ads
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Integrated Marketing Communications Strategy3. Establish the Communications Budget
– Competitive-parity: Same $ level as key competitors– Percentage of sales: Same % as key competitors– Objective & task: How do you achieve the objectives?
• Consideration, preference, (re)purchaseAllocate to Communications Mix & Specific Media– Advertising & Social Media (usually part of a Pull Strategy)
• Cost per thousand (CPM), reach, frequency & gross rating points (GRPs), ratings, awareness, and circulation data…
– Personal Selling (usually part of a Push Strategy)• Number of customers, frequency of contact, length of call,
sales– Direct Marketing & Sales Promotion
• Response rates, purchase rates, purchase dollars… 21
Impact of Phone Contacts on Spending
22
Impact of Email Contacts on Spending
23
Impact of Mail Contacts on Spending
24
Impact of Different Combinations on Spending
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Integrated Marketing Communications Strategy4. Evaluation & Control
– Objective Guarantees– Marketing Mix Modeling
• ST revenue elasticity wrt advertising = 22%• LT revenue elasticity wrt advertising = 41%
– LT carryover effects. – NB: elasticities wrt advertising are dropping!
– Tracking success over time• If possible, sales, inquiries, repeat purchases or other
behavioral measures• If not…
– Top-of-mind awareness (unaided recall)– Aided recall
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Cumulative Ad Spending and Market Share
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$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00$0
$10
$20
$30
$40
$50
$60
$70
$80
$90Product Revenues as a Function of Media Spend
2008 Media Spend (000,000s)
Reve
nue
(000
,000
s)
Natural '06
Loveliest ('75)
Summit ('98)
Essential ('00)
Swept Away ('03)
Awash ('96)
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What is demand (or revenue) elasticity with respect to Media Spend?
Revenue Elasticity wrt Promotion
E = % change in promotion spend% change in demand (or revenue)
EMedia$ = (1.44-.51)/.51(37.5-23.4)/23.4
= .33
Media $D from $0.51 (SweptAway)$1.44 (Essential)
EMedia$ =(50.1-37.5)/37.5(2.72-1.44)/1.44
= .38
Media $D from $1.44 (Essential) $2.72 (Summit)
ST revenue elasticity wrt advertising = 22%LT revenue elasticity wrt advertising = 41%
29See Demand Elasticity Final Exam Problem
$0.00 $2.00 $4.00 $6.00 $8.00 $10.00 $12.00 $14.00 $16.00 $18.00$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
f(x) = 14.1212471854893 ln(x) + 35.4673306581736R² = 0.987113262927147
Product Revenues as a Function of Media Spend
2008 Media Spend (000,000s)
Reve
nue
(000
,000
s)
Natural '06
Loveliest ('75)
Summit ('98)
Essential ('00)
Swept Away ('03)
Awash ('96)Why is it different for new products (Natural & Savvy?) versus established products?
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FlareThis case requires that you analyze different growth opportunities and develop recommendations – supported by clear and compelling strategic and financial analyses – that will allow you to achieve your sales growth objective. You must consider positioning, branding strategy, channel strategy, and especially the integrated communications strategy.Summary Marketing Strategy for 3 brands
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Objective (Quantified & measurable)
Target Customer ProfileSee VALS
Flare’s Product-Market Strategy (see K&P Ex 1.2)
Branding Strategy (K&P 143-47)*Competitive Advantage Core capability Positioning Statement
(K&P 140)
Recommended Channel Focus
Flare’s competitive advantage is
Based on:
Review Questions
• Identify the 4 key steps in an Integrated Marketing Communications Strategy.
• Identify the three key stages (or objectives) in a hierarchical response model.
• Which communication mix elements are most effective for achieving different communication objectives?
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See you in Plano Next Week!