Running head: strategic marketing assignment
Product 2 analysis
Pricing, product, place, promotion
It is a basic product which was recently introduced in the market hence consumers are unfamiliar with the product. The consumers have strong brand preference and they put more effort into comparing options and preferences before purchasing. It is extremely dangerous to execute ideas without first identifying and testing assumptions about the value of those ideas. We shouldn’t jump to a solution before we understand the problem.When it comes to building products, the starting point is — always—needs. Not what we assume would be cool, but what users or the business need to be successful. Different inputs into this process include the following, which we’ll discuss in detail in this post:
Once there are existing revenue streams, there are several standard growth strategies, such as expanding to new regions, establishing new channels, appealing to a broader market, and building new products for an existing market.It is a natural instinct to want to target as many people and groups as possible. However, by doing this your promotional strategy will never talk specifically to any one group, and you will most likely turn many potential customers off.
User needs. We must have a good understanding of the market, the company’s customers (existing and potential), and their behaviors and attitudes. We should never be caught off guard by questions about the product’s target audience.
Business needs. The “putting users first” mantra too often neglects the fact that a product exists to make money. Having revenue goals is not an excuse for bad design, though.
Technical needs. Development needs get ignored much of the time in favor of the more tangible front-end and business requirements. Developers know the limitations of the product; they know what needs to be fixed, and they know what technical debt needs to be paid.
Many businesses offer products based on the attitudes, beliefs and emotions of their target market. The desire for status, enhanced appearance and more money are examples of psychographic variables. They are the factors that influence your customers’ purchasing decision. A seller of luxury items would appeal to an individual’s desire for status symbols.
Business customers, as well as consumers, can be described in psychographic terms. Some companies view themselves as cutting edge or high tech, while others consider themselves socially responsible, stable and strong. Still others see themselves as innovative and creative. These distinctions help in determining how your company is positioned and how you can use the company’s position as a marketing tactic.Most businesses use a combination of the above to segment their markets. Demographic and geographic criteria will usually qualify your target markets so you can establish if segment members have enough money to purchase your offering or if they’re in a location that’s accessible to the product. Most businesses then use the psychographic and behavioristic factors to construct a promotional campaign that will appeal to the target market.Current customers can provide you with insight on potential customers and how to appeal to them. You may also discover an opportunity to produce additional products to serve this market or improve on an existing product. The marketing mixes for multi-segment strategy may vary by product feature, price, and promotional material and distribution methods. If product variations requires additional work, you may incur higher production costs. Additionally, different promotional plans and distribution efforts will result in higher marketing costs. Plan carefully, to make sure the costs don’t outweigh the benefits.
One of the biggest mistakes we can make in product development is jumping to execution before an appropriate planning cycle has been completed, so we need to give planning the attention it deserves.User research, on the other hand, focuses on users’ interactions with a product. It is concerned with how people interact with technology, and what we can learn from their wants, needs, and frustrations.Assessment research helps us figure out if the changes we’ve made really improve the product, or if we’re just spinning our wheels for nothing. This class of research is often overlooked, but it’s a crucial part of the product development cycle. Methods include surveys and web analytics to gives us a view of how our products perform over time, not just in terms of hard conversions, but also in terms of the attitudes of our users. These methods are most useful when combined with further design research to understand why we’re seeing the changes we see. For example, form analytics can tell us where people abandon a form. Once we’ve made usability improvements to the form, it’s important to assess if those changes made a difference to completion rates. Without assessment research we won’t know if we’re going in the right direction.
Good revenue streams can come from many different sources. Consumers are willing to pay for things as long as the value is immediately clear to them. And the entire product management process is built around finding that value first, and then building a product and business around it, as opposed to making something and then scrambling to find the value. So, user needs research is always the first place to look for how the product can make money.
In production and inventory control, increased accuracy is likely to lead to lower safety stocks. Therefore forecasting must weigh the cost of a more sophisticated and more expensive technique against potential savings in inventory costs.The most sophisticated technique that can be economically justified is one that falls in the region where the sum of the two costs is minimal.same type of forecasting technique is not appropriate to forecast sales, say, at all stages of the life cycle of a product—for example, a technique that relies on historical data would not be useful in forecasting the future of a totally new product that has no history.
Sometimes a revenue stream starts out as a good idea, but a change in the external environment turns it into something undesirable. The problem is that by then it might already be a large source of revenue, which places the business in quite a predicament.Market segmentation is the process of breaking down a larger target market into smaller segments with specific characteristics. Each group requires different promotional strategies and marketing mixes because each group has different wants and needs. Segmentation will help you customize a product/service or other parts of a marketing mix, such as advertising, to reach and meet the specific needs of a narrowly defined customer group.
Primarily, these are used when data are scarce—for example, when a product is first introduced into a market. The use human judgment and rating schemes to turn qualitative information into quantitative estimates. The objective here is to bring together in a logical, unbiased, and systematic way all information and judgments which relate to the factors being estimated. Such techniques are frequently used in new-technology areas, where development of a product idea may require several “inventions,” so that R&D demands are difficult to estimate, and where market acceptance and penetration rates are highly uncertain.At each stage of the life of a product, from conception to steady-state sales, the decisions that management must make are characteristically quite different, and they require different kinds of information as a base. The forecasting techniques that provide these sets of information differ analogously.
The date when a product will enter the rapid-growth stage is hard to predict three or four years in advance (the usual horizon).
A company’s market share is its sales measured as a percentage of an industry’s total revenues. Determine a company’s market share by dividing its total sales or revenues by the industry’s total sales over a fiscal period. Use this measure to get a general idea of the size of a company relative to the industry.
To calculate market share, first determine a period you want to examine. It can be a fiscal quarter, year or multiple years. Next, calculate the company’s total sales over that period. Then, find out the total sales of the company’s industry. Finally, divide the company’s total revenue by its industry’s total sales.
An in-depth investigation and analysis of competition is one of the most important components of a comprehensive market analysis. A competitive analysis allows you to assess your competitor’s strengths and weaknesses in your marketplace and implement effective strategies to improve your competitive advantage. There are several markets where it is relatively easy to name every competitor. These are concentrated markets where only a handful of competitors exist.
Professional marketing research, such as focus groups and questionnaires, can provide you with valuable information about your competition. While a marketing research firm can save you time and legwork, it can be quite expensive and simply not a possibility for new and growing businesses. Much of the information you need in order to profile your competitors is readily available to all business owners. As your business grows and expands, you should consider supplementing your own research efforts with some formal research conducted for you by an outside firm.
Secondary sources of information are recommended as an excellent starting point for developing a competitive and industry analysis. Secondary sources include information developed for a specific purpose but subsequently made available for public access and thus alternative uses. For example, books are secondary sources of information as are articles published in journals. Marketing reports offered for sale to the general public also are considered secondary sources. Although, they have been created for a purpose other than your current need, they are still excellent sources of information and data. With the ever increasing speed of document identification and retrieval through electronic means, secondary sources are not only an inexpensive source of information but are readily available soon after publication.
Unlike strategy CEOs, change agents focus not on where their organizations will end up but on how they will get there. These CEOs cultivate an environment of constant questioning and risk taking, and frequent reinvention of business practices and products. Change, these CEOs explain, is the best way to deliver consistently extraordinary results. It should be noted that the CEOs we identified as change agents are all leading profitable organizations. But they still believe that deeply entrenched ways of doing business will ultimately be their companies’ undoing. Their job, as they see it, is to create an environment of constant renewal. Indeed, a leitmotiv of our conversations with these chief executives was their goal of building not just better organizations but organizations that enthusiastically embrace ambiguity, uncertainty, and upheaval.
There is an overall process that must be in place so that everything is linked. This typically starts with planning at a very high level – strategic. Once you have defined a strategy, you can move the process down to operational plan and this in turn should feed your financial planning process or budgets.
Quantitative characteristics tend to be hard numbers that are measured somehow – such as trends, ratios, and percentages. Qualitative characteristics are softer type factors that you can include into planning and budgeting, such as getting the opinions of experts on what they expect to happen.
Regression analysis looks at relationships between variables. The tighter the fit, the higher the relationship and thus, regression analysis can be very useful for forecasting the output of one variable given the input of another variable.
At breakeven Sales Revenue is equal to the number of units sold times the price you get for each unit sold:
Sales Revenue = Px
P = Selling Price Per Unit
x = Units Produced and Sold
V = Variable Cost Per Unit
F = Total Fixed Costs
Op = Operating Profits (Before Tax Profits)
t = Tax rate
Kottler, P., & Keller, K. L. (2003). Marketing management. Analyse, Planung, Umsetzung und.
Shimp, T. A. (1997). Advertising, promotion, and supplemental aspects of integrated marketing communications. Harcourt Brace College Publishers.
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