Kotler starts this chapter by defining what a product actually is - not just a physical product but also to include services. I often use the term 'product & service' brand proposition - to cover both physical products such as toothpaste and services such as an insurance product.
Kotler introduces a three step model to help us understand what a product/service actually is - he uses terms such as; 'augmented product', 'tangible product' and 'core product'.
We are very familiar with the concept of features & benefits - where buyers/consumers 'buy' benefits that are derived from the features.
In today's world, it would be rare I think, to find a single product/service under a single brand name. When Kotler wrote this chapter, the world was experiencing many industry sectors leveraging their product and brand names to introduce variants and also line extensions.
The final section of this charpter makes for some interesting reading as it explores the various ways that companies such as; Procter & Gamble, Heinz, General Electric and Kellogg's were using brand hierarchies - family brand names etc.
Again, Kotler's thinking can still be applied to today's marketing world - a few new examples can be given but the overall concepts still apply !
Monday, 1 May 2017
Wednesday, 26 October 2016
Developing, Testing, and Launching New Products and Services
"An extremely important responsibility of the marketing group is to help the company identify new market needs and opportunities and respond to them with appropriate and effective product solutions"
Is this still the responsibility of the marketing group ? Or have companies introduced specific new product/services teams and departments ? Does this function come under commercial for example ?
Wherever the responsiblity lies, I think we all agree it is a critical function of any company if they are to survive and thrive.
With new technologies, we are all probably buying into new products and services at a much faster rate than when Kotler first wrote this sentence - but it is still true today.
Kotler uses some research to state how New Product/Service Development can be managed by companies - he gives an example of the various stages companies can go through;
Not all ideas will pass to the next stage - so, comapnies must have a mechanism to generate enough 'Ideas' for the process to start and for the system to generate enough ideas to achieve the business objectives.
All companies, to be successful need to manage a process that works for them - this chapter is a good start point for any company. The challenge is to establish a system that is as effective as possible to help the company grow/replace products/services that reach the end of their life-cycle.
This is another chapter with relevance to today's marketers.
Is this still the responsibility of the marketing group ? Or have companies introduced specific new product/services teams and departments ? Does this function come under commercial for example ?
Wherever the responsiblity lies, I think we all agree it is a critical function of any company if they are to survive and thrive.
With new technologies, we are all probably buying into new products and services at a much faster rate than when Kotler first wrote this sentence - but it is still true today.
Kotler uses some research to state how New Product/Service Development can be managed by companies - he gives an example of the various stages companies can go through;
- Idea Generation
- Idea Screening
- Concept Development & Testing
- Marketing Strategy Development
- Business Analysis
- Product Development
- Market Testing
- Commercialization
- The Consumer-Adoption Process
Not all ideas will pass to the next stage - so, comapnies must have a mechanism to generate enough 'Ideas' for the process to start and for the system to generate enough ideas to achieve the business objectives.
All companies, to be successful need to manage a process that works for them - this chapter is a good start point for any company. The challenge is to establish a system that is as effective as possible to help the company grow/replace products/services that reach the end of their life-cycle.
This is another chapter with relevance to today's marketers.
Thursday, 21 April 2016
Marketing Strategies for the Global Marketplace
This chapter starts with a review of the American market back in the 1980's - Kotler clearly states that the American market and companies are being targeted by foreign companies and he suggests that an answer to this issue is to address competitiveness in terms of product quality & price but also to seek new markets outside of the US - sounds very familiar to today's global marketplace !
Once the decision has been made to trade outside of the home market, Kotler suggests a model to review the various steps necessary to give the company the best chance of success; this starts with an appraisal of the international market, deciding which markets to enter ("global nichemanship" may be a good option), how to enter each market, the marketing programme for each market and the marketing organisation. This is straightforward and a good model to follow for companies looking to expand their sales territories. Nothing outdated here.
Kotler's section on 'Deciding How to Enter the Market' goes into the options of; indirect export, direct exporting, licensing, joint ventures and direct investments.
One of the other key decisions marketers will need to address is the issue of 'global standardisation' or 'customisation' - to what extent will the marketing strategy be tailored for each market ? Only thorough and insightful market research and analysis, and testing, will the marketer be able to answer these questions with a high degree of confidence.
This chapter is still relevant today as it was back in the 80's - although our world has changed a lot, Kotler's approach to this business issue is very useful and challenging for today's company executives who are working through these challenges.
Once the decision has been made to trade outside of the home market, Kotler suggests a model to review the various steps necessary to give the company the best chance of success; this starts with an appraisal of the international market, deciding which markets to enter ("global nichemanship" may be a good option), how to enter each market, the marketing programme for each market and the marketing organisation. This is straightforward and a good model to follow for companies looking to expand their sales territories. Nothing outdated here.
Kotler's section on 'Deciding How to Enter the Market' goes into the options of; indirect export, direct exporting, licensing, joint ventures and direct investments.
One of the other key decisions marketers will need to address is the issue of 'global standardisation' or 'customisation' - to what extent will the marketing strategy be tailored for each market ? Only thorough and insightful market research and analysis, and testing, will the marketer be able to answer these questions with a high degree of confidence.
This chapter is still relevant today as it was back in the 80's - although our world has changed a lot, Kotler's approach to this business issue is very useful and challenging for today's company executives who are working through these challenges.
Monday, 12 January 2015
Marketing Strategies for Different Stages of the Product Life Cycle
Kotler says, "the company must think about how to extend the product's life and profitability in the face of knowing that it will not last forever". This assumes of course, that products have a lifecycle. I guess we can all think about products/brands/services that we have used in the past that no longer fit with either today's way of living or my own life cycle.
Kotler continues,"to say that a product has a life cycle is to assert four things;
1. products have a limited life
2. product sales pass through distinct stages, each posing different challenges to the seller
3. product profits rise and fall at different stages of the product life cycle
4. products require different marketing, financial, manufacturing, purchasing, and personnel strategies in the different stages of their life cycle.
We understand the typical product life cycle (PLC) as being an S-shaped curve with four phases; introduction, growth, maturity and decline.
But, as Kotler says, in reality, very few products follow this S-shape during its life - what is more normal is an overlap of this S-shape as marketers look to extend various satges or even start a new PLC for the same product. There are of course a range of strategies available to help the marketer extend the products PLC.
Kotler gives us a handy model - see table 12.1, to show how the marketer can set the relevant strategy depending upon where the product is on its PLC.
The end of the chapter goes on to discuss the PLC for markets. This again is probably very familiar territory for us marketers.
But, how many of us actually plot either the PLC for our brands under management or the market they compete within ? And then use this analysis to help set strategy ?
In my years working across a wide range of sectors and georgraphies, I have used the concept of PLC but not really analysed the PLC that thoroughly and then gone onto to use this analysis to help set the strategy moving forwards. I can think of a few projects where this analysis could be useful and I will plan to add this tool into the range of marketing models I use on a regular basis when working as a marketing consultant.
Kotler continues,"to say that a product has a life cycle is to assert four things;
1. products have a limited life
2. product sales pass through distinct stages, each posing different challenges to the seller
3. product profits rise and fall at different stages of the product life cycle
4. products require different marketing, financial, manufacturing, purchasing, and personnel strategies in the different stages of their life cycle.
We understand the typical product life cycle (PLC) as being an S-shaped curve with four phases; introduction, growth, maturity and decline.
But, as Kotler says, in reality, very few products follow this S-shape during its life - what is more normal is an overlap of this S-shape as marketers look to extend various satges or even start a new PLC for the same product. There are of course a range of strategies available to help the marketer extend the products PLC.
Kotler gives us a handy model - see table 12.1, to show how the marketer can set the relevant strategy depending upon where the product is on its PLC.
The end of the chapter goes on to discuss the PLC for markets. This again is probably very familiar territory for us marketers.
But, how many of us actually plot either the PLC for our brands under management or the market they compete within ? And then use this analysis to help set strategy ?
In my years working across a wide range of sectors and georgraphies, I have used the concept of PLC but not really analysed the PLC that thoroughly and then gone onto to use this analysis to help set the strategy moving forwards. I can think of a few projects where this analysis could be useful and I will plan to add this tool into the range of marketing models I use on a regular basis when working as a marketing consultant.
Thursday, 31 July 2014
Marketing Strategies for Market Leaders, Challengers, Followers and Nichers
This chapter looks at designing "winning strategies" for organisations that takes into account; the competitor situation of a market, stages in the organisation's product life cycle and global opportunities & challenges.
Kotler argues; "Competitors in a particular target market will, at any point in time, differ in their objectives and resources, and hence in their strategies."
I have often come across companies that claim they have "maxed out" in their market - I think they mean that they have probably reached the maximum market share level possible. In this case, the objective maybe to maintain this position and defend against competitor attack - not easy but with a well planned strategy, this is achieveable.
Also, many companies are not number one in their market and they look to get to that position - should you attack the number one player or is there a 'softer' target ?
This chapter by Kotler looks at various positions an organisation can take within their market - he actually lists six positions that he has taken from Arthur D Little, a management consultant firm.
Kotler goes onto discuss how a 'market leader', 'market challenger', 'market follower' and 'market nicher' can design their strategy based upon their objectives, resources and competitive strengths.
In summary, Kotler says that a 'market leader' faces three options; i) expand the total market and by retaining the same share position, their business will grow, ii) protect current position by defending off attacks from competitors, and iii) growing market share.
Kotler also covers options fro the other three positions of the organisation.
This chapter is still, I think, very real and relevant for today's marketer - we are all faced with the dynamics of whatever market we are working in. And it is true to say that when I work with an organisation on their strategy, their competitors are also working on theirs - and if they are not, we should adopt the position that they could be.
Kotler argues; "Competitors in a particular target market will, at any point in time, differ in their objectives and resources, and hence in their strategies."
I have often come across companies that claim they have "maxed out" in their market - I think they mean that they have probably reached the maximum market share level possible. In this case, the objective maybe to maintain this position and defend against competitor attack - not easy but with a well planned strategy, this is achieveable.
Also, many companies are not number one in their market and they look to get to that position - should you attack the number one player or is there a 'softer' target ?
This chapter by Kotler looks at various positions an organisation can take within their market - he actually lists six positions that he has taken from Arthur D Little, a management consultant firm.
Kotler goes onto discuss how a 'market leader', 'market challenger', 'market follower' and 'market nicher' can design their strategy based upon their objectives, resources and competitive strengths.
In summary, Kotler says that a 'market leader' faces three options; i) expand the total market and by retaining the same share position, their business will grow, ii) protect current position by defending off attacks from competitors, and iii) growing market share.
Kotler also covers options fro the other three positions of the organisation.
This chapter is still, I think, very real and relevant for today's marketer - we are all faced with the dynamics of whatever market we are working in. And it is true to say that when I work with an organisation on their strategy, their competitors are also working on theirs - and if they are not, we should adopt the position that they could be.
Saturday, 4 January 2014
Identifying Market Segments, Selecting Market Targets, and Developing Market Positions
This chapter starts with Kotler talking about the importance of recognizing that companies cannot effectively serve all customers in a market. "The firm, instead of competing everywhere, often against superior odds, needs to identify the most attractive market segments that it can serve effectively."
Kotler goes on to say: "the heart of modern strategic marketing can be described as STP marketing - namely, segmenting, targeting and positioning. This does not obviate the importance of LGD marketing - lunch, golf and dinner" !
Kotler explains that sellers have not always held this view and marketing thinking has passed through three phaes; i) mass marketing, ii) product-variety marketing and iii) target marketing.
In today's world, most companies adopt the target market approach and by using new technologies effectively, marketers are able to target customers and importantly, measure response.
Even today, marketers need to follow Kotler's three step approach to Market Segmentation, Targeting and Positioning;
Kotler goes on to say: "the heart of modern strategic marketing can be described as STP marketing - namely, segmenting, targeting and positioning. This does not obviate the importance of LGD marketing - lunch, golf and dinner" !
Kotler explains that sellers have not always held this view and marketing thinking has passed through three phaes; i) mass marketing, ii) product-variety marketing and iii) target marketing.
In today's world, most companies adopt the target market approach and by using new technologies effectively, marketers are able to target customers and importantly, measure response.
Even today, marketers need to follow Kotler's three step approach to Market Segmentation, Targeting and Positioning;
- Identify segmentation variables & segment the market
- Develop profiles of resulting segments
- Evaluate the attractiveness of each segment
- Select the target segments
- Identify possible positioning concepts for each target segment
- Select, develop, and signal the chosen positioning concept
Saturday, 5 October 2013
Measuring and Forecasting Markets
"Market measurement and forecasting skills are an essential requirement for formulating marketing objectives and plans."
As Kotler discusses in Chapter 2, the two criteria for market attractiveness to organisations are; i) market size and ii) market growth.
Measuring the market size accurately and precisely are important skills for the marketer. Kotler provides a model on page 257, that provides 90 different types of demand estimates for a market size that an organisation could use; Kotler's model has three dimensions, i) product level, ii) space/territory level and iii) time.
"Market demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program."
This clearly shows how complex market measurement can be and that as marketers, we must embrace all of these areas to fully understand what we mean when we say that a market size is x.
Measuring market share is relativley easy when you know the actual size of the market. Forecasting future market share is discussed by Kotler and he provides some interesting modelling based on relative marketing expenditure values. I think that these are now outdated as we have moved into an era where digital can provide us with more accurate means to predict future sales and market shares.
The chapter goes onto discuss forecasting future market sizes - again, an important element for the marketer when developing a marketing plan over one, three and five years.
In my experience, knowing the size of the defined market and what share each organisation has, is critical when developing marketing objectives and strategies. Being as precise as possible with market definitions, market size measurements and market shares, is one important part of the process of developing strategies for growth, i.e. if the market is static, market growth will come from stealing market share from a competitor - which one(s) and how ? then follow.
As Kotler discusses in Chapter 2, the two criteria for market attractiveness to organisations are; i) market size and ii) market growth.
Measuring the market size accurately and precisely are important skills for the marketer. Kotler provides a model on page 257, that provides 90 different types of demand estimates for a market size that an organisation could use; Kotler's model has three dimensions, i) product level, ii) space/territory level and iii) time.
"Market demand for a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program."
This clearly shows how complex market measurement can be and that as marketers, we must embrace all of these areas to fully understand what we mean when we say that a market size is x.
Measuring market share is relativley easy when you know the actual size of the market. Forecasting future market share is discussed by Kotler and he provides some interesting modelling based on relative marketing expenditure values. I think that these are now outdated as we have moved into an era where digital can provide us with more accurate means to predict future sales and market shares.
The chapter goes onto discuss forecasting future market sizes - again, an important element for the marketer when developing a marketing plan over one, three and five years.
In my experience, knowing the size of the defined market and what share each organisation has, is critical when developing marketing objectives and strategies. Being as precise as possible with market definitions, market size measurements and market shares, is one important part of the process of developing strategies for growth, i.e. if the market is static, market growth will come from stealing market share from a competitor - which one(s) and how ? then follow.
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