Marketing Theory for Engineering

Entrepreneurs - II
Gamini Nanda Gunawardana
B.Sc.Eng.(Hon.); M.B.A.; C.Eng.; M.I.E.(SL); M.C.S.(SL);
M.I.D.P.M.(UK); F.I.A.P.(UK); M.B.C.S.(UK)
Director Ceylinco Consolidated
gaminig@ccom.lk
http://groups.yahoo.com/group/gaminigunawardana

What is Marketing?
Marketing is the social process by which
individuals and groups obtain what they need
and want through creating and exchanging
products and value with others. - Kotler.

Marketing is the management process that
identifies, anticipates and satisfies customer
requirements profitably. - The Chartered
Institute of Marketing.

Marketing is essentially about marshalling the
resources of an organization so that they meet
the changing needs of the customer on whom
the organization depends. - Palmer.

Stages in Organizational Planning
Corporate
Strategic
Plan
Business Unit
Strategic
Plan
Strategic
Marketing
Plan
Short Term
(Tactical )
Marketing Plan
The Corporate & Marketing
Strategy Process
Price Promo
Business Unit Analysis
Mission &
Objectives
Strategy for Each SBU
SBU 1 SBU 2 SBU 3
Marketing Situation Analysis
Target Market Strategy
Marketing
Positioning Strategy
Place Product
The Strategic Marketing Plan
Implementation
Control and Evaluation
of Performance
Production Concept Consumers will
favor products that are available and
affordable and the management should
therefore focus on improving production
and distribution efficiency.
Product Concept Consumers will favor
products that offer the highest quality,
performance and features and that the
organization should therefore devote its
energy to making continuous product
improvements.
Selling Concept Consumers will not buy
enough of the organizations products
unless it takes large scale selling nad
promotion effort.
Marketing Role
Market analysis
Target markets
Competition
Customers
Business planning
Defines objectives
Defines revenue & growth
opportunities
Match core competencies
held/needed
Defines whole product
Defining role within value
chain
Implications
Internal and external

Market analysis
Target markets
Competition
Customers
Business planning
Defines objectives
Defines revenue & growth
opportunities
Match core competencies
held/needed
Defines whole product
Defining role within value
chain
Implications
Internal and external
Positioning
Company
Product
Product and program
management
Value delivery
Evangelism, partnerships
Channel strategy
Direct, OEM, tiered
Launch planning and execution
Cross functional team leadership
Marketing communications
Collateral, packaging
Public awareness
Lead generation
Sales tools and training
Customer-centric & strategic
Customer-centric & tactical
MARKETING STRATEGY PROCESS
Situation
Analysis
Marketing
Program
Development
(Tactics)
Implementing
and Managing
Marketing
Strategy
Designing
Marketing
Strategy
Setting
Objectives
Analysis of
Environmental Factors
Identify Threats &
Opportunities
Analysis of Key
Competitors
Analysis of Firms
Resources and
Limitations
Product-Market
Analysis
Situation Assessment
Situation Analysis
Laws and regulations
Politics
The current state of technology
Economic conditions
Sociocultural aspects
Demand trends
Media availability
Stakeholder interests
Competitor - Marketing plans and campaigns
Internal factors such as your own experience and
resource availability

Macro Environment Factors
Analyzing Competition
1. Define Industry Structure & Characteristics
2. Identify &
Describe Key
Competitors
5. Identify New
Competitors
3. Evaluate Key
Competitors
PRODUCT- MARKET
STRUCTURE &
MARKET SEGMENTS
4. Anticipate
Actions by
Competitors
Extent of
Market Coverage
Customer
Satisfaction
Current
Capabilities
Past
Performance
Competitor
Evaluation
Evaluating Key Competitors
Forces Driving Competition
Potential
Entrants
Suppliers
Substitutes
Buyers
Bargaining Power of Suppliers
Bargaining Power of Buyers
Threat of Substitute Products
Threat of New Entrants
Level of
Industry
Rivalry
Set SMART Objectives
Specific - Be precise about what you are
going to achieve
Measurable - Quantify your objectives
Achievable - Are you attempting too
much?
Realistic - Do you have the resource to
make the objective happen (men, money,
machines, materials, minutes)?
Timed - State when you will achieve the
objective
Product-Market Life Cycle
The classic product-market life cycle curve
is a good reflection of what happens to
product markets
The key to this model is knowing where you
are and adopting the appropriate strategy
Define the product-market at a meaningful
level (at least: product in application, better:
offering to fulfill needs of a segment)
Use data to gain an objective view of current
position Develop appropriate strategy for the
situation
A common fallacy is to believe that you can
change the course of the curve
Product - Market Life Cycle
MARKET
INTRODUCTION
MARKET
GROWTH
MARKET
MATURITY
MARKET
SATURATION
MARKET
DECLINE
Total Industry Sales
Total Industry Profit
Market Life Cycle : How I know where I am
MARKET
INTRODUCTION
MARKET
GROWTH
MARKET
MATURITY
MARKET
SATURATION
MARKET
DECLINE
Total Industry Sales
Total Industry Profit
Competitors
None to Few
Few but
Increasing
Several
to Many
Several Several
to Few
Product Differentiation
Very High
High
Diminishing Little
Little
to None
Market Life Cycle -Strategic Options
MARKET
INTRODUCTION
MARKET
GROWTH
MARKET
MATURITY
MARKET
SATURATION
MARKET
DECLINE
Total Industry Sales
Total Industry Profit
GROW
GROW

Maintain
MAINTAIN MAINTAIN

Harvest
HARVEST

Exit
The BCG Matrix
?
Low
High
G
R
O
W
T
H

R
A
T
E
MARKET SHARE
High
Low
GE Planning Grid
Protect Position
Invest to Build Build Selectively
Selectivity/
Manage for
Earnings
Limited
Expansion or
Harvest

Protect and
Refocus
Manage for
Earnings
Divest
Low
High
Medium
Medium Strong Weak
Business Position
Strategies
Market Attractiveness
Build Selectively
Strategies
Which segment? How will we target the
segment? How should we position within
the segment?
Why this segment and not a different
one? (This will focus the mind).
Define the segment in terms of
demographics and lifestyle. Show how
you intend to 'position' your product or
service within that segment.
Development (Growth) Strategies
3. Product
Development
Diversification
(Related or Unrelated
to Core Business)
Existing
Markets
New Markets
New
Products
Existing
Products
1. Market
Penetration
2. Market
Development
1. Cost Leadership
The low cost leader in any
market gains competitive
advantage from being able
to many to produce at the
lowest cost. However, low
cost does not always lead
to low price.
2. Differentiation
Differentiated goods and
services satisfy the needs
of customers through a
sustainable competitive
advantage.
3. Focus or Niche strategy
Where an organization can
afford neither a wide
scope cost leadership nor a
wide scope differentiation
strategy, a niche strategy
could be more suitable.
Marketing Tactics

Convert the strategy into the marketing mix (also
known as the 4Ps). These are your marketing tactics.
Price Will you cost plus, skim, match the competition
or penetrate the market?
Place Will you market direct, use agents or
distributors, etc?
Product Sold individually, as part of a bundle, in bulk,
etc?
Promotion Which media will you use? e.g sponsorship,
radio advertising, sales force, point-of-sale, etc?
Think of the mix elements as the ingredients of a
'cake mix'.
Elements of the Marketing Mix
Marketing manager
Product
Features
Brand name
Packaging
Service
Warranty
Price
List price
Discounts
Allowances
Credit items
Payment period
Place
Outlets
Channels
Coverage
Transportation
Stock level
Promotion
Advertising
Personal selling
Sales
promotion
Publicity
Target Customers
Intended Positioning
Cohesive marketing mix
Promotion
Product
Place
Price
Market Mix & Life Cycle
MARKET
INTRODUCTION
MARKET
GROWTH
MARKET
MATURITY
MARKET
SATURATION
MARKET
DECLINE
Product
One or Few
Various - look
for best
product
Build brand
familiarity
Little
differentiation
Battle of the
Brands
No product
differentiation
Other ways to
differentiate?
Some drop
out
Place
Build Value Chains
Maybe selective distribution
Consolidate
channels
Eliminate costs, find better
low cost channels
Promotion
Pioneering, Informing
Awareness, Build brand
Informing & Persuading
Build selective demand
Differentiate brand
Persuade &
Remind
Price
Skimming or
Penetration
Value or
Penetration
Add value or
Meet competition
Price dealing
and price cutting
Promotions
Personal Selling
Sales Promotion
Public Relations
Direct Mail
Trade Fairs and
Exhibitions
Advertising
Sponsorship
Marketing research
Primary Research.
1. Interviews
2. Mystery shopping
3. Focus groups
4. Projective
techniques
5. Product tests
6. Diaries
Secondary Research :
Trade associations
National and local press
Industry magazines
Web sites
Informal contacts
Trade directories
Published company accounts
Business libraries
Professional institutes
Previously gathered marketing
research
Census data
Public records

Control
Start-up costs
Monthly budgets
Sales figure
Market share data
Consider the cycle of control

Corporate Image As A
Strategic Weapon

5th P of Marketing:
Perception
Competitors can mimic a product, price,
distribution strategy.
The one thing that competitors cannot copy
is a well-defined corporate personality.