Week #2:  CompanyAnalysis- Marketing Situation

Deliverables:

    * Product Portfolio Analysis

Assess Your Product Line's Marketing Mix: Are your products meeting consumer expectations?

To what degree are you achieving optimal performance metrics----across your 4 P's:

  • Product: Design-Age, Quality & Positioning

  • Promotion: Customer Awareness

  • Place: Customer Accessibility

  • Price

  • & Overall Customer Satisfaction (December Survey Rating)

    * Marketing Strategy  
  • Describe the distinct marketing objectives & tactics you need to achieve to successfully execute your chosen Competitive Strategy -- specifically which segments you will compete in & why? What will be the nature & magnitude of $$-investment you will make in promotion, distribution and R&D...and why?... And any plans for development of New Products-- How many will you be introducing.. into which segments.. in which rounds?? )

   * Brand Plans

Following the dictates of your Competitive Strategy

 --- create a Brand Plan for each of the 5 brands that comprise your current product line -- as well as a Brand Plan for any & every new product that you plan to introduce.

Each Brand Plan should include:

1) The Brand's Round 1  R&D (age, position, MTBF) and Pricing objectives & tactics ...

2) The Marketing objectives & tactical plans --for the Brand's Advertising  (Awareness & Media ) and Distribution (Accessibility & Sales Force allocation) strategies.

3) The Brand's Creative Strategy: your 'S-Logo' (Company Logo & Slogan);   Plus a Tagline & Positioning Statement for each Brand.

 

 

 

1) Product Portfolio Analysis: The data necessary to evaluate each of your 5 brands can be found in the Capstone Courier-- pages 5 thru 9-- herein, is an excerpt from page 5-- which delineates all the data you need to evaluate your product in the Traditional Segment:

 

 

 

For example-  an analysis & evaluation of Andrew Company's Traditional product ABLE could be illustrated thusly:

 __________________________________________________________________

 

Table 1: Traditional Segment-Brand= ABLE

Marketing Variables

Customer Expectation/Ideal

  Able's Current Performance Metrics

Marketing Implications (Strengths & Weaknesses) Consumer Report Rating*

Product Design

     
     Age- 47% of Decision 2 years 3.1

C-Poor - major weakness=1/2 decision

     Position-21% P=5   S=15 P=5.5   S=14.5 A-Good
     Reliability-9% 14000 -19000 17500 A-Good
Price-23% $20-$30 $28.00 C-Poor
       
Promotion-Awareness >80% 55% B-Fair

$$ Expenditure  

$2-3M $1M Promo $ Expenditure-Too low
Place- Accessibility >80% 55% B-Fair

$$ Expenditure  

$2-3M $1M Accessibility $ Expenditure-Too Low
Customer Satisfaction-  December Survey Rating

>40-Excellent, >30-good, <30-Poor

17 C-Poor

*Consumer Report Rating ( @ Getting Started / Complete Online Situation Analysis / Consumer Report)

Price: Award an A if your product's price is in the bottom third of the expected price range, B if it is in the middle third and C if it is in the top third.

Reliability: Award an A if the MTBF specification is in the top third of the range, B if it is in the middle third and C if it is in the bottom third.

Age: Award an A if the age on December 31 is within 0.5 years of the ideal age, B if the age is 0.6 to 1 year and C if the age is beyond 1 year.

Positioning: Award an A if your product is within 0.5 units of the segment's ideal spot, B if it is 0.6 to 1.5 units away and C if it is beyond 1.5 units.

Awareness: Award an A if your product's awareness exceeds 80%, B if it is 50% to 80%, and C if it is below 50%

Accessibility: Award an A if your product's accessibility exceeds 80%, B if it is 50% to 80% and C if it is below 50%.

 

Overall: Give your product an A only if the top two buying criteria for the segment (as listed in the Capstone Courier Segment Analysis reports) were rated A, and if the awareness and accessibility were rated at least a B. Give your product a B if the top two attributes were at least a B and awareness and accessibility were at least a B. Otherwise, give your product a C.

 

 

2) Marketing Strategy Statement: ie's

Select one of the Six Basic Strategies  (Section 12 in your Online Team Member Guide)

 

Cost Leader with Product Life Cycle Focus:


As a Cost Leader with Product Life Cycle Focus Digby will seek to minimize costs through efficiency and expertise. Products will be allowed to age and change in appeal from High End, to Traditional, and eventually Low End buyers... We will have a minimum presence in "specialty" segments (Size & Performance)...  R&D spending will also be minimized (very little repositioning & new product every 2-3 years)...Will spend  moderately on promotion and sales


 


Broad Differentiation Strategy:  


A Broad Differentiator will seek to create maximum awareness and brand equity. It wants to be well known as a maker of high quality/highly desirable products.
Firm Profile:
High R&D spending to keep products fresh
Maintains a presence in all market segments
Spends heavily on advertising and sales to create maximum awareness and accessibility
Prices tend to be higher

 

 

 

 

~Brand Plan CheckList~

 CProduct Design & Pricing

    ü R&D -Age, Quality & Positioning

 CPromotion:

    ü Awareness & Media Strategy

  CDistribution:

  üAccessibility & Sales Force Strategy

 CCreative Strategy:

  üCompany Slogo

    ü Tagline & Positioning Statement

 

 

Sample...

 

Table 1: Purchase Decision Attributes Rnd1 Decisions- Brand = ABLE / Niche Differentiation 

 Decision

Criteria Weighting

Able Current Spec's Consumer Expectations Rnd1 Marketing  Objectives Tactics-Rnd#1
     Age- 47% of Decision 3.1 2 years As age is the #1 buying criterion... priority will be given to meet Ideal-age expectation: Reposition to reduce age  
     Position-21% P=5.5 S=14.5 Able will be maintained in the traditional segment... as close to the Ideal-Spot as possible... for all 8 rounds:

Tweak Perf. & Size to meet year-end ideals:

*Increase P +.2

* Decrease S - .2

     Reliability-9% 17500 MTBF 14-19000 Given our differentiation strategy we will keep MTBF high- but is not major factor in Consumers decision  No change- leave @ 17500

Price-23%

$28.00 $19.50-$29.50 W/ premium products, consumers expect/accept premium prices we will keep w/in top third of the price range:  No change- leave Price @ $28.00


Table 2

Promotion & Distribution Variables

  (Online Guide-Lines)

Objectives & Tactics
(Awareness)
Customer awareness within a given sector decays 33% every year, as such a minimal “maintenance” budget has to be dedicated for that sector to at least maintain the awareness at the same level. Additionally, promotion spending suffers from diminishing returns that can be represented via a graph:--

In order to maintain the status-quo awareness, approximately $1,500,000 has to be spent manually. Each product maintains its own awareness score within the segment.

 

 

 

Able's Brand awareness at start Rnd1 = 37% --1/3 less Rnd0@55%  ...our objective is to reach 100% awareness by Rnd3 ... Expenditures on Awareness will be at max-optimum  until 100% awareness is reached.. thereafter ~ $1.4M will be spent/yr to maintain 100% levels of awareness

 

 Traditional/ ABLE Awareness @ start Rnd Target Access @ end Rnd

 $

 needed

Rnd: 0 to 1 37%  86% $3M
Rnd: 1 to 2 59% 99% $1.75M
Rnd: 2 to 3 64% ~100% $1.4M
(Media Strategy)

 

Media expenditures will be driven by the channels with “Good” reach (Print Media and Direct Mail for Traditional), with leftover budget dedicated to the “Fair” channel (Trade Shows for Traditional):

 

Round 1

Round 2

Round 3

Print Media

 700k

 700k

 700k

Direct Mail

 800k

 800k

 600k

Web Media

 -

 -

 -

(Accessibility)
Product accessibility, like awareness, decays 33% every year. However, unlike awareness, product accessibility is assigned for the entire segment, thus all our products in that sector benefit from it. Sales budget suffers from diminishing returns as well:

Able's Brand Accessibility at start Rnd2 = 36%(54% less 1/3) ... our objective 90% ... Accordingly we will spend $3M to increase access by ~31% ...  until round 2-3 when with the addition of our new Traditional product "Abler" $2M will be spent  (on each brand in the segment) ... there after $3.5M will be allocated per year across both brands in the segment to maintain  access @ ~90+%
 Traditional/ ABLE Access @ start Rnd Target Access @ end Rnd

 $

 needed

Rnd: 0 to 1 36%  67% $3M
Rnd: 1 to 2 44% 75% $3M
Rnd: 2 to 3 50% 84% $2M of $4M

 

(Sales Force & Time Allocation)

 

 

The sales force budget will be allocated according to the effectiveness in the Traditional segment, which is Distributors -> Inside Sales -> Outside Sales:

 

Round 1

Round 2

Round 3

Outside Sales

0

0

0

Inside Sales

26

26

26

Distributors

12

12

12

Total

2.5 M

2.5 M

2.5 M

 

Since the Traditional market segment will be in the lowest priority tier for Andrews, it will be given minimal attention by our sales staff, with the approximate breakdown as follows:

 

Traditional

Low End

High End

Performance

Size

Allocation

10%

10%

14%

33%

33%

 

 
Assumptions – Media Channels

Media channels vary in their effectiveness for different market segments, as follows:

Media Channels Assumptions

 

Traditional

Low End

High End

Performance

Size

Diminishing

Print Media

Good

Good

Poor

Poor

Fair

$700k

Direct Mail

Good

Good

Fair

Poor

Poor

$800k

Web Media

Poor

Poor

Fair

Good

Good

$500k

Email

Poor

Poor

Fair

Good

Good

$600k

Trade Shows

Fair

Fair

Good

Fair

Poor

$300k

 

A successful marketing strategy will focus on the “Good” media channels first and foremost, with “Fair” being secondary, and “Poor” only used as the last resort. The diminishing returns (per product) outline the marketing budget, per channel, where the additional awareness gained is minimized.

Assumptions – Sales Force

Like media channels, different sales channels work better than others for each segment:

  Sales Force Assumption

 

Traditional

Low End

High End

Performance

Size

Diminishing

Outside Sales

Low

Medium

High

Medium

High

12

Inside Sales

Medium

Low

Medium

High

Medium

30

Distributors

High

High

Low

Low

Low

12

 

Sales budget will be focused on the distribution channels with High and Medium effectiveness in the given market sector. Diminishing returns outline the maximum number of sales people/distributors allowed per turn.

 ü CREATIVE STRATEGY

 Create your Company 'S-Logo' (Logo & Slogan)....and develop taglines/positioning statements for your Brands...

Sample...  

 

SLogo Brand Tagline / Positioning Statement

  • Low End –Feat- for the electronic consumer Industry:
      "The proven sensor at the sensible price "
  • Traditional -Fast -for the Computer & Automation Industry:
      "No Worries- Ferris Inside
  • High End= Fist- for the Security Industry:
     When you can't cut corners you need Cutting-Edge Sensitivity"
  • Performance- Foam -for the Avionics, Missile & Weaponry Industry:
    "Unmatched Accuracy requires Unsurpassed Reliability"
  • Size- Fume- for the Automotive Industry:
    "Great sensor - Small package

 

 

 

 

 

BRAND PLAN- EXAMPLE:

  

In both its Marketing and R&D efforts, Andrews plans to remain consistent with Niche Differentiator strategy and maintain aggressive focus on Performance and Size sectors, with secondary focus on the High End sector. While there are no plans to discontinue product lines in the Traditional and Low End sectors, they will be mostly supported at "maintenance" levels and will only be addressed with any overflow funds and capacities within the company.

R&D and Pricing Strategy

Our approach will differ depending on the target sector, consistent with our global strategy. Each brand will be maintained as follows:

Table 

Able (Traditional Segment)

Criteria

Weight

Current

Expected

Objectives

Tactics (Rnd1)

Age

47.0%

3.1

2.0

Age governs accounts for almost half of the buying criteria, and it can be adjusted even with minor (inexpensive) modifications to the brand, to maintain strong presence in the sector without tying up a lot of resources.

Reposition slightly to reduce age, keep repositioning the brand every couple of years, while lagging slightly behind the drift (depending on finance/resources availability).

Price

23.0%

$28.00

$19.50 - $29.50

Maintain price at the upper acceptable range, per the "premium" strategy and marketing message.

No change to price in the first round.

Position

21.0%

Pfmn 5.5,

Size 14.5

Pfmn 5.7,

Size 14.3

Minor repositioning every 2-3 years to keep up with the drift, and maintain as close to the optimum Age as possible.

Reposition in Round 1 slightly, possibly "overshoot" to create leeway for the following round.

* Pfmn +0.5

* Size -0.5

Reliability, MFBT

9.0%

17,5k

14k - 19k

Differentiation strategy calls for high-quality products, maintain MFBT in the high range

No change in MFBT, leave at 17.5k

 

While the Traditional segment will not be the primary focus of our company right out of the gates, we feel that it is a very cost-efficient market to maintain reasonable presence by maintaining close to ideal range and acceptable position, via repositioning the product slightly every two years. Maintaining prices in the upper echelon of the acceptable range will allow us to not have to worry about keeping the costs low, at least initially.

  Acre

Acre (Low End Segment)

Criteria

Weight

Current

Expected

Objectives

Tactics (Rnd1)

Price

53.0%

$21.00

$14.50 - $24.50

Price is #1 buying criterion and must be kept relatively low to stay competitive. As a differentiator, our company will keep prices in the upper third of the range.

Price will not be changed for the initial rounds, then will be slowly reduced to account for "inflation" and improvements in automation.

Age

24.0%

7.0

4.6

Keep age relatively close to ideal by updating the R&D parameters every 3-4 rounds.

Current age is on the fringe of the acceptable range, have to update the brand in Round 1 even if slightly.

Position

16.0%

Pfmn 3.0,

Size 17.0

Pfmn 2.2,

Size 17.8

This will be the slowest-drifting segment on the market. Changes to positioning will only be needed to update the brand's age and stay within a reasonable range of the ideal spot.

Since age needs to be updated ASAP, minor changes are needed in Round1:

* Pfmn +0.2

* Size -0.2

Reliability, MTBF

7.0%

14k

12k - 17k

Reliability is not a major factor for consumers, can be upgraded only if resources allow.

No change, keep at 14k.

 

Low End segment's brands will receive very little attention initially (depending on the financial/production flexibility), thus there is a risk with this low-cost segment to become prohibitive due to low automation and profits highly depending on labor costs. If Andrews' falls too far behind here initially, it is a real risk that the company might have to drop out of the segment completely, or have to invest heavily to "catch up."

 

 

Acre Marketing Strategy

Acre (Low End Segment)

Variables

Objectives and Tactics

Awareness

 

Acre brand awareness at the start of Round 1 will be 35% [52% - (52% / 3)]. Low End segment will not be our focus, but like with Traditional segment, we do not want to fall behind too much. We want to maintain awareness and be able to drive our sales up to at least use up our existing production capacities. We consider 80% awareness as being the lowest acceptable value to that end. Expenditures on awareness in this segment will be outlined as follows:

 

Low End /
Acre

Awareness at
Start of Round

Target Awareness at
End of Round

$$$ Needed

Round 0 to 1

35%

78%

2M

Round 1 to 2

52%

86%

1.5M

Round 2 to 3

58%

84%

1.2M

 

Media

Strategy

 

Media expenditures will be driven by the channels with “Good” reach (Print Media and Direct Mail for Low End), with leftover budget dedicated to the “Fair” channel (Trade Shows for Low End):

 

 

Round 1

Round 2

Round 3

Print Media

700k

 700k

 700k

Direct Mail

800k

 800k

 500k

Web Media

200k

 -

 -

Email

-

 -

 -

Trade Shows

 300k

 -

 -

Total

 2M

 1.5M

 1.2M

 

Accessibility

 

Acre brand accessibility at the start of Round 1 will be 27% [40% - (40% / 3)]. Our objective is to provide above-average accessibility for this channel, without going “all out”, depending on the financial flexibility and resources. Our preliminary goal is to achieve and maintain ~75% accessibility for this sector:

 

Low End /
Acre

Accessibility at
Start of Round

Target Accessibility at End of Round

$$$ Needed

Round 0 to 1

27%

57%

2.75M

Round 1 to 2

38%

68%

2.75M

Round 2 to 3

46%

75%

2.75M

 

Sales Force

 

The sales force budget will be allocated according to the effectiveness in the Low End segment, which is Distributors -> Outside Sales -> Inside Sales:

 

 

Round 1

Round 2

Round 3

Outside Sales

12

12

12

Inside Sales

1

1

1

Distributors

12

12

12

Total

2.75 M

2.75 M

2.75 M

 

Time Allocation

 

Since the Low End market segment will be in the lowest priority tier for Andrews, it will be given minimal attention by our sales staff, with the approximate breakdown as follows:

 

 

Traditional

Low End

High End

Performance

Size

Allocation

10%

10%

14%

33%

33%

 

 

 

 

 

 

 

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