Introduction to

Marketing JENNIFER DEBOER

1

Outline Introduction to Marketing

Customer Research (5 C’s)

Customer, Company, Competition, Context/Climate, and

Collaboration

Marketing Mix (4 P’s)

Product, Price, Promotion, and Place (Distribution)

Value Propositions (NABC)

Need, Approach, Benefit, Competition

Assignment 2

2

Introduction to Marketing Marketing is “the activity, set of institutions, and processes for creating,

communicating, delivering, and exchanging offerings that have value

for customers, clients, partners, and society at large.” – AMA

3

The Marketing Concept

Customer

Competition

Company

3

Customer or

market NEED

Alternative

approach to the

COMPETITION

BENEFITS you

provide the

customer

Your unique

APPROACH; also, MARKETING

Marketing Examples/Methods 5

• sales

• advertising

• commercials

• demographics

• packaging

• distribution

• consumer research

• pricing

• discounts

• publicity

• supply chains

• relationships

• international trade

• social media

• attitudes

• after sales service

• communications

• public relations

• products

• quality

• warranties

• consumer trust

• market share

• education

• data analysis

• profit

• competition

The Marketing Plan 4

Market Research

?

Marketing Mix

?

Marketing Strategy

• Customer

• Company

• Competition

• Context/Climate

• Collaboration

• Product

• Price

• Place

• Promotion

Marketing Plan

Marketing Research Categories

Types of marketing research:

1. Exploratory Research - to gain ideas and insights (“marketing

artist”/qualitative approach )

2. Descriptive Research – to provide numerical information

(“marketing scientist”/quantitative approach)

3. Causal Research – to establish causality (“marketing

scientist”/quantitative approach)

5

8

MARKET

RESEARCH

APPROACHES: Marketing

Artist vs.

Marketing

Scientist

Marketing Research Sources

Review relevant websites, online reports, brochures, flyers, advertising, etc.

Visit retailers, manufacturers, public events, etc.

Consult experts (i.e. sales staff, managers, scholars, etc.)

Talk to people with first-hand knowledge (i.e. carpenters, builders,

architects, developers, renovators, engineers, etc.)

Explore government publications/statistics, forest sector associations

data/media, university data/media, academic publications, trade

publications, etc.

9

5 C’s of Market Research 5 C’s of Market Research

Customer: customer/market need, customer segments, target markets, and market positioning

Company: what is your company’s approach & what benefits does this approach provide, business description, strengths, weaknesses, opportunities, and threats (e.g. SWOT analysis)

Competition: who/what is the competition, how competitive is the market environment (e.g. Porter’s Five Forces Model)

Context/Climate: political, economic, social, and technological environment (e.g. PEST analysis) – may also contribute to NABC

Collaboration: mutually beneficial partnership opportunities – may also contribute to NABC

10

Customer Research (1st C) 11

Market Segmentation:

Identify bases for segmenting the market; develop segment profiles

Target Market: Develop measures

of market attractiveness; select target

markets

Market Positioning: Develop

positioning for target market;

develop a marketing mix

1. What is the customer or market need?

2. Who is the primary customer for the product/service?

Market Segmentation Strategies 12

Geographic

•Local

•Cities

•Regions

•Province

•State

•Nation

•Country

•Continent

Demographic

•Age

•Gender

•Family

•Education

•Income

•Religion

Psychographic

•Lifestyle

•Social Class

•Personality

•Hobbies

•Interests

Behavioral

•User Status

•Usage Rate

•Benefits Sought

•Loyalty

•Occasions

•Attitudes

Target Market = a particular group of consumers at which a product or

service is aimed. With a clearly defined target audience, it is much

easier to determine where and how to market your company.

Target Markets and Market Positioning

Positioning refers to the place that a

brand occupies in the mind of the

customer and how it is distinguished

from products from competitors.

In order to position products or

brands, companies may emphasize

the distinguishing features of their

brand (what it is, what it does and

how, etc.) or they may try to create

a suitable image (inexpensive or

premium, utilitarian or luxurious,

entry-level or high-end, etc.).

13

Total Available

Market

Potential Market

Target

Market

Company Research (2nd C) 14

Strengths: What do you do well? How do you stand

apart from you competitors? What tangible and

intangible assets/resources do you have?

Weaknesses: Which areas need improvement to

compete with competitors? What does your business

lack? Are resources limited?

Opportunities: What opportunities exist in your market?

What market changes might you anticipate? How

can these opportunities benefit your business?

Threats: Who are your potential competitors? Which

risks are associated with your business/market? What

threatens your marketing efforts?

The company analysis examines the approach (e.g. mission, vision,

objectives, strategies, etc.) and benefits (e.g. product line, capabilities,

technology, etc.) of a business.

Competitive Research (3rd C)

Assess the competitive environment; who/what is the competition?

Porter's five forces analysis is a framework that attempts to analyze

the level of competition within an industry and business strategy

development.

Consider existing competitors,

potential competitors, suppliers,

buyers, and substitute products

Examples???

15

16

Context/Climate Research (4th C) Context/climate analysis is the evaluation of the macro-environmental

factors affecting the business. The primary factors to consider include political, economic, social/cultural, technological (PEST), however, some

models add environmental and legal as well (i.e.PESTLE).

17

Examples???

PEST Analysis

Political = legislation (current and future), subsidies, grants, regulation,

corruption, and general political climate

Economic = taxes, tariffs, industry factors, interest and exchange rates,

local and global economic climate, market and trade cycles

Social = consumer attitudes and opinions, ethical issues, lifestyle

trends, demographics, media views, customer spending patterns,

major events and influences

Technological = competing technologies, innovation potential,

research funding opportunities, maturity of technology, intellectual

property issues

18

Collaboration Research (5th C)

Collaborators are the external stakeholders who team up with the

organization in a mutually beneficial partnership.

Agencies, suppliers, distributors, referrals, and business partners are

typical collaborators; it is important to understand their capabilities,

performances, and issues to better identify business opportunities and

problems.

19

Marketing Mix (4 P’s)

Product Price Promo Place

20

Marketing Mix (4 P’s): Product (1st P)

Product

21

Product Definition

A product can be a tangible good or an intangible service that fulfills

customers’ wants or needs. Whether you sell plywood or provide

ecotourism accommodations, it is imperative that you have a clear

understanding of exactly what your product or service is and what

makes it unique before you can successfully market it.

22

Forest Product Examples

Plywood

Resins

Nanocellulose

Fruits/Nuts

Pulp

Prefab Homes Newsprint

Fencing

Medicine

Paper

Recreation

Maple Syrup Bioenergy

Flooring

Corks

Pallets

Ecotourism

MSR Lumber Furniture

Fibreboard

Decks

Firewood

Standboard

Doors Rayon

Shakes/Shingles

Ethanol

Windows

Cabinets

Carbon

23

Product Evaluation

What does the customer want/need

from the product or service?

What does the product look like?

How will the customer use it?

Where will the customer use it?

What features must the product have

to meet the client’s needs?*

Are there any necessary features that

you missed?*

Are you creating features that are not

needed by the client?*

24

New Product Development

Why must successful businesses continually develop new products?

to stay in business (to mitigate against the decline of products)

to contribute to growth in sales, profitability, and/or market share

to gain a competitive advantage (address needs and wants of

customers)

to capitalize on excess plant capacity, even out seasonal production

flows, and address changes in resource base

to exploit new technologies

25

New Product Ideas 26

Innovative Product Life Cycle 27

New Product Implications

Why do new products succeed (fail) in the marketplace?

the product offers no competitive advantage

markets are poorly defined

poor company fit, lack of channel support

weak marketing efforts

development / production / marketing costs underestimated

markets overestimated

poor understanding of customers’ wants and needs

28

Typical Product Life Cycle 29

All products have a

limited lifespan!

The key to a successful

business is not just

understanding this life

cycle, but also

proactively managing

products throughout their

lifetime, applying the

appropriate resources

and sales and marketing

strategies, depending on

what stage products are

at in the cycle.

Product Life Cycle Description Stage 1. Market Introduction: this is when a new

product is first brought to market, before there is a proved demand for it; costs are high while sales are low and creep along slowly.

Stage 2. Market Growth: demand begins to accelerate and the size of the total market expands rapidly; this might also be called the “Takeoff Stage.” Costs decrease while sales and competition increase.

Stage 3. Market Maturity: demand slows and levels off; costs decrease while sales and competition increase.

Stage 4. Market Decline: the product begins to lose customer appeal and sales drift downward; prices, sales, and profitability diminish.

30

Product Life Cycle Implications

Implications of the product life cycle:

length of a product’s life cycle depends on:

the rate of technological change and innovation

market acceptance of substitutes

economic factors

product class

Extending a product’s life cycle is possible:

redefine markets

redefine production

redefine products

31

Marketing Mix (4 P’s): Price (2nd P)

Price

32

Price The price of the product is the amount that a customer pays for it.

The price must encompass fixed costs, variable costs, taxes, and

profit margins.

Once a concrete understanding of the product offering is

established we can start making some pricing decisions. Price

determinations will impact profit, supply, demand, survival, and

marketing strategy.

Adjusting the price of the product has a big impact on the entire

marketing strategy as well as greatly affecting the sales and

demand of the product.

Pricing strategies???

33

Pricing StrategiesPricing models:

cost-based pricing (often 2-5 times the product cost; most common)

market share-based pricing (e.g. introductory pricing)

sales volume-based pricing (e.g. price by sales volume range)

status quo pricing (e.g. adopt current mainstream prices)

value-based pricing (e.g. vital medicines/pay anything)

feature pricing (e.g. price incrementals for additional features)

portfolio pricing (e.g. blend low and high mark-ups)

competitive positioning (e.g. push competitors out of market)

razor blade model (e.g. cheap product/razor and expensive supplies/blades)

*Discounts: trade, package, cash, promotional, quantity, seasonal, coupons, rebates

34

Pricing Example… 35

Portfolio Pricing… 36

$5 $6 $8 $10 $12$11 $19

Pricing Implications

What is the value of the product or service to the customer?

Are there established price points for this product or service in your

market segment?

Is the customer price sensitive?

What discounts should be considered?

How will your price compare to that of your competitors?

37

Marketing Mix (4 P’s): Promotion (3rd P)

Promo

38

Promotion A successful product or service means nothing unless the benefit of such a

product or service can be communicated clearly to the target market.

Promotion is any activity to raise awareness of a product or to encourage

existing and potential customers to purchase a product.

Advertising is a form of promotion but not all promotions are advertisements.

39

Promotional Mix 40

Advertising and direct

marketing require the

least cost per contact

but tend to be less

effective whereas

public relations and

personal selling require

the greatest cost per

contact but tend to

be more effective.

Personal selling

dominates the forest

products industry.

Promo Mix

Advertising

Direct Marketing

Sales Promotion

Public Relations

Personal Selling

Internet Marketing

Promotional Mix Described Advertising: paid form of communication to customers / potential customers through

media outlets (TV, magazines, radio, outdoor)

Direct Marketing: communication with target markets to generate a response and/or transaction (telemarketing, direct mail, catalogues, flyers)

Internet Marketing: interactive media and messaging delivered via the internet

(social media, company websites, e-commerce)

Sales Promotion: marketing activities that provide extra value or incentives to the

sales force or customers (trade shows, showrooms, free samples, coupons, discounts,

point of purchase displays, sales incentives, etc.)

Public Relations: information about a firm / product disseminated to the public at no (or little) cost (news releases, media reporting, etc.) in order to earn public understanding and acceptance

Personal Selling: direct presentation of information related to a firm’s

product/service; provides personalized/tailored message and immediate feedback.

41

Promotional Implications When can you best communicate your marketing messages to your

target market?

Where can you best communicate your marketing messages to your

target market?

How do your competitors promote their products or services?

How does your competitors’ choices/actions influence your choice of

promotional activity?

42

Marketing Mix (4 P’s): Place (4th P)

Place

43

Attributes?

Place Place (aka distribution or logistics) is about (1) where the product is made, (2)

where the product is stored, (3) how the product is transported to the

customer, and (4) where the customer purchases/receives the product.

The place for each of these things should ensure that the product gets to the

right place at the right time without damage or loss.

The ideal place will be:

Convenient for the customer and the business

Accessible for the customer if it is the place where the product is sold

Low cost or free for the customer if it is the place where the product is sold

Reasonable cost to the business

44

Place Strategies There are many place/distribution strategies:

Intensive distribution – sell through as many outlets as possible

Exclusive distribution – select retailers are given exclusive rights

Selective distribution – between intensive and exclusive

Franchising - the right to market or sell goods under the

trademarked name, or patented process, of an established

business

45

Place Implications

Where do current and potential customers go to look for your

product?

If they look in a store, what kind and where?

How can you access the best distribution channels?

What do you competitors do and how can you learn and/or

differentiate from them?

Do you need a sales force, brick and mortar store?

Do you need a website and online presence?

46

Value Propositions: NABC Approach NABC was developed to provide a more systematic approach to the

understanding of value propositions. In other words, the value of

original and creative thinking.

This method enables idea-makers and innovators to present their ideas

while at the same time it assesses their value using a range of central

and consistent parameters.

Using NABC to introduce one’s idea is called ‘to pitch.’ To pitch means

to try and sell, so to speak, an idea in a precise and concise way. It is

important to have thorough knowledge of the value proposition. It is preferable, however, to elaborate or go into depth only when

answering questions, while the presentation itself should always remain

short and concise.

47

Value Propositions: NABC Approach NABC = Need, Approach, Benefit, and Competition

N for Need. N is the most important factor in the method. An idea

without a practical need for it remains just what it is: a good idea

and nothing more.

A for Approach. A is usually a point of departure for most activities,

but with the NABC method, A always comes after N.

B for Benefit. B stands for the innovative elements of an idea, in

other words that which constitutes its uniqueness.

C for Competition. C stands for a study of the competition existing

in the area concerned. C is often mistaken for N. C, however,

focuses on the reality within which a concept has to function.

48

NABC Framework 49

Dragon’s Den (Assignment 2) Each student and student group will be graded on the following:

Class Presentation (Dragon Evaluations): 10 – 15 min presentation & 10 min Q&A*

Develop a forest related entrepreneurial innovation. Research the feasibility of the innovation and present a value proposition to a panel of “dragons” (i.e. potential investors). Presentations will be graded on innovativeness, creativity, engagement, content, and style.

Team Evaluation

Similar to Assignment 1, team evaluations will be completed by your fellow team members. Each team member will be evaluated on attendance to team meetings, group cohesion, productivity and focus, constructive ideas and feedback, quality of work, and quantity of work.

Value Proposition Report: 10 – 12 pages

Submit a formal report (i.e. NABC value proposition) for your innovation. This report should include an executive summary, the identified product/service need, a business/company description (including the approach your company will pursue and the benefits the business will provide customers), a competitiveanalysis (i.e. who/what is your competition), a marketing plan (i.e. the 4 P’s), and any additional relevant information (i.e. climate or collaborations).

50

Presentation Sign-Ups Meet with your group and discuss when you’d like to present.

Presentations will be scheduled March 20, 21, 23, 27, 28, and 30th. No

more than three groups may select the same presentation date.

Send ONE group member to the front of the classroom to select a

presentation date. Please respect your peers while doing so.

51

o Choose one of the six

dates indicated (starred)

o Maximum of three groups

may present each day

Questions??? 52