Introduction to
Marketing JENNIFER DEBOER
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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
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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
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The Marketing Concept
Customer
Competition
Company
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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)
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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.
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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
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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.).
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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???
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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).
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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
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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.
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Marketing Mix (4 P’s)
Product Price Promo Place
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Marketing Mix (4 P’s): Product (1st P)
Product
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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.
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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
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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?*
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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
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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
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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.
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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
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Marketing Mix (4 P’s): Price (2nd P)
Price
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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???
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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
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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?
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Marketing Mix (4 P’s): Promotion (3rd P)
Promo
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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.
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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.
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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?
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Marketing Mix (4 P’s): Place (4th P)
Place
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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
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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
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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?
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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.
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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.
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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).
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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.
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o Choose one of the six
dates indicated (starred)
o Maximum of three groups
may present each day
Questions??? 52
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