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Flashcards

MKTG206: MarkStrat MCT

Paige Caunce English 47 cards

Cards in this deck (47)

  1. 1MarkStrat: Participant HandbookMKTG206: MCT
  2. 2VI. POSITIONING AND R&DThe marketing environment will change during the course of the simulation.
    The size and growth rate of consumer segments will evolve over time.
    Some segments will grow and thus become more attractive whilst others will shrink.
  3. 3To respond to changes, companies will have to introduce new Clinite or Nutrute brands and reposition or withdraw existing ones.Your department will be faced with the following strategic issues on market segmentation and product positioning:
    - Which segments to target,
    - How to design products satisfying the needs of these segments,
    - How to position new brands effectively, and
    - How to reposition existing brands to better fit customers' needs.
  4. 41. Assessing Perceptions and PreferencesTechnical experts can easily classify marketed brands based on objective data such as technical attributes and prices.
    However, consumers who are about to make a purchase are influenced by their perceptions of the brands available on the market rather than by the actual features and properties of these brands.
  5. 51.Perceptions are by definition subjective and can, therefore, be distorted from reality.
    The MarkStrat simulation provides two market research studies to assess consumers' needs and estimate how brands are perceived.
  6. 61a. Semantic ScalesThis study describes how consumers perceive the marketed brands.
    Respondents are asked to rate the physical characteristics of each brand on a scale from 1 to 7.
  7. 71a.This study also provides the ideal rating for each characteristic and each segment.
    By comparing the perceived ratings of your brands with the ideal ones for a given segment, you can determine if this brand fits the needs of consumers in that segment.
  8. 81b. Multidimensional Scaling of Brands Similarities and PreferencesThis study also describes how consumers perceive the marketed brands.
    It shows a three-dimensional map exposing the similarities and differences between marketed brands.
    This map is a graphical representation of the respondents' ratings.
  9. 91b.The three dimensions:
    - Economy
    - Performance, and
    - Convenience
    can be related to the actual physical characteristics.
    Finally, respondents are asked to indicate their ideal position on the map.
  10. 102. Prediction of Ideal PointsIdeal points (preferences) represent the needs of consumers in a given segment.
    They are calculated by averaging the individual responses of all respondents.
    Consumers needs are also influenced by the actions of competitors.
  11. 112.Using these charts, you can interpolate where ideal points will be located in few periods time.
    You want to choose a position for your brand that will be close to the needs of consumers for several periods.
  12. 123. Matching Product Attributes with PositionWe now assume that the coordinates where the product should be positioned are known.
    The next step is to find the characteristics that correspond to the desired position on the map.
  13. 133.The easiest solution is to find a brand that is located at a position close to desired one and to look at its characteristics.
    If no such brand exists, then you will have to interpolate, using the best positioned brands on the market.
    Interpolation may be done using the semnatic scales data or the multidimensional scaling ones.
  14. 143a. Using Semantic ScalesSemantic scales
  15. 153c. The Case of a New MarketThe perceptual map is not available when no brands are marketed.
    But you can still obtain information of segment needs from the semantic scales study.
  16. 163c.e.g. Assume that Elderly consumers have indicated that they are looking for products with a high Safety, i.e. their ideal point is 5.5 (1-7 scale). Our best option is to assume there is a linear relationship between Safety and semantic scales.
  17. 173c.Safety (10) = 1
    Safety (100) = 7
    P = 1.0 + [6.0 x (X-LB)/(UB-LB)]
    where P is the desired value on the 1-7 scale, or
    X = LB + [(UB-LB) x (P-1.0)/6.0]
    where X is the correspondong physical level
  18. 184. Situations Where Repositioning is RequiredIdeal points on the perceptual map or on the semantic scales' chart reflect the needs of consumers, or the price they are ready to pay to get a product that fits their needs.
    However, there are several reasons why brands are not always ideally positioned:
  19. 194a. Changing Segment NeedsSegment needs evolve over time, due to changes in the environment or in consumers' values and behaviours.
    Consequently, a brand which was well positioned when it was introduced to the market may now be perceived as low-performance or as having unnecessarily high efficacy.
  20. 204b. Price PressureAs price is the most important dimension in the Clinite market, manufacturers should expect pressure from consumers to lower prices.
    Again, if brand prices are not adjusted according, the distance between the brand and the ideal point along the price or economy exis is likely to increase.
  21. 214c. New Target SegmentsFor a new market in its early stages, a good strategy may be to serve several segments with a single brand.
    This situation may occur if the needs of two segments are fairly similar or if one segment is too small to allow the necessary economies of scale.
  22. 224d. Competitor EntryIn the absence of competition, one firm may successfully serve consumers with a product that is not exactly adapted to their needs.
    Then, if a competitor introduces a new brand that fits these needs better, it may become necessary to reposition the old brand closer to the ideal point.
  23. 235. Repositioning StrategyRepositioning can be achieved by advertising or by R&D.
    Although consumers' perceptions are linked to the brand's physical characteristics, they can be slightly influenced by communication.
  24. 245.The repositioning effect is limited; this is especially true when the brand awareness level is high, because a brand with which consumers are extremely families is more difficult to reposition.
  25. 255a. Positioning with AdvertisingAdvertising is mainly used to build brand awareness and to inform customers about products' physical characteristics, but it can also be used to reposition.
    Using advertising is a four-step process:
  26. 265a. Step (1)Identify your desired position on the perceptual map or on the semantic scales' chart.
  27. 275a. Step (2)Enter the coordinates identified on the perceptual objectives for the brand when making Marketing Mix decisions.
    You can choose to set perceptual objectives base on either semantic scales or MDS dimensions.
    Select the two chosen dimensions and enter the coordinates of the point that you want to reach.
  28. 285a. Step (3)Allocate an advertising media budget for the brand, to buy media space and time, and an advertising research budget.
    The effect of advertising research is two-fold. 1. Makes your advertising campaign more effective. 2. The repositioning impact will be higher in terms of reaching perceptual objectives.
  29. 295a. Step (4)Indicate how you want to allocate your advertising budget across consumer segments.
    The targeted segments must be consistent with the perceptual objectives that you have set.
  30. 305a.Finally, you will have to implement the same type of advertising program when you change the physical characteristics of a brand or when you change its price significantly.
  31. 315b. Positioning through Research and DevelopmentUsing R&D to reposition a product or to introduce a new one is a four-step process:
  32. 325b. Step (1)Identify the desired position on the perceptual map or on the semantic scales chart.
  33. 335b. Step (2)Estimate the physical characteristics that correspond to this desired position.
  34. 345b. Step (3)Develop an R&D project with the physical characteristics calculated above.
  35. 355b. Step (4)Introduce a new brand or modifying an existing one.
  36. 366. Research & DevelopmentHow to choose the target base cost of a project, and on the lifecycle of R&D projects, from design to completion.
  37. 376a. Project Base CostWhen designing a project, the Marketing department must specify the target manufacturing unit cost of the desired product.
    Because this cost decreases over time with experience, the Marketing and R&D department have agreed to specify the transfer cost of the first 100,000 units of the new product.
    This cost is called the base cost.
  38. 386a.Base costs have no upper limit.
    If you indicate a high base cost, the R&D department will have more flexibility in finding the appropriate materials and manfacturing processes.
    As a consequence, the project is easier to develop, and is less expensive in terms of the total development budget.
  39. 396a.The lower limit of the base cost for a given project depends on its technical specifications: the more sophisticated a product is, the higher the minimum base cost will be.
    The higher the level of each attritbute, the higher the minimum unit cost.
  40. 406a.One strategy for choosing a base cost is to request that the R&D department develop the project at the minimum.
    This solution is highly attractive in terms of margins, but may be more expensive overall since its development budget is likely to be much higher.
  41. 416a.Another solution is to calculate the highest base cost economically achievable.
    You start from the desired or ideal price of the targeted customers, i.e. the price that consumers are willing to pay for a product fitting their needs.
    The base cost is then obtained by subtacting the average distributor's margin plus the margin that will make the future product economically attractive for you to market.
  42. 426b. Budget Required for CompletionAn R&D project includes the research work necessary to develop a prototype of the desired product and the development work necessary to find supplies and set up manufacturing processes.
  43. 436b.The budget required for the completion of a project is a function of several parameters.
    The budget depends on the requested physical characteristics: the more sophisticated the future prduct, the higher the budget.
  44. 446b.It also depends on the experience of the firm with comparable products.
    Finally, the development budget depends on the base cost requested.
  45. 456c. Responses from the R&D Department....
  46. 466d. Brand Introduction, Modification or WithdrawalR&D projects may be used as soon as they are completed to launch new brands, or to modify exisitng ones.
    They may also be shelved for future use.
  47. 476d.A new brand is introduced on the market byb entering a brand name which has not been used.
    This brand name is completely independent of the code used for the R&D project.
    An existing brand is modified by keeping its current name and using the physical characteristics corresponding to a new completed project.

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Flashcards on MKTG206: MarkStrat MCT , created by Paige Caunce on 28/01/2019.
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