Today

1
Todays Topic The Marketing Function

• What it is
• why it matters
• and how to make
• Marketing Mix
• decisions

2
Remaining Course Schedule

• The Marketing Function (CardioThoracic Systems)
• Sales Sales Channels (GolfLogix)
• Internet-based Marketing (HubSpot)
• RD Product Development (Guidant)
• Operations (Crocs)
• Product Launch (Invisalign)
• Final Exam on Product Launch (Mathsoft)

3
Todays Agenda

• Mid-course feedback survey results
• The marketing function and marketing mix
  decisions
• Return graded mid-term exams
• Developing a marketing plan CardioThoracic
  Systems (case)
• Readings/assignment for next week sales channels
  (GolfLogix case)

4
Todays Key Learnings

• Marketing roles and responsibilities
• The marketing mix
• Company and product positioning (with, against,
  content)
• Promoting a product (marketing communication)

5
The Marketing Plan

• Executive Summary
• Table of Contents
• Summary of Current Situation
• Focused Assessment of Market Opportunity
• Financial and Marketing Goals
• Summary of Companys Marketing Strategy
• Target Market
• Product/Service
• Positioning
• Distribution
• Price
• Promotion
• Marketing Budget (Monthly)
• Forecast Unit Sales and Revenues (Monthly)
• Plan to Monitor/Evaluate Action Plans by Period

6
The Marketing Mix C4P
Price(s)
(Target) Customer
Product
Place
Promotion
Taken together, the 4Ps define __?__
7
Marketing is responsible for marketing mix
decisions (C 4Ps)

• Customers/needs to be targeted (target customer
  segments)
• Product (product, positioning, service,)
• Price (levels and strategies)
• Promotion (communication)
• Place (sales/distribution methods)

8
If thats what marketing does

• whos responsible for revenues and profits?

9
The only choices are.

• Senior mgmt (CEO/president, group head, ...)
• Marketing
• RD
• Sales
• Operations (manuf, service ops, logistics)
• Support IT, Finance, HR, Legal,
• Investor Relations,
  Public/Media
• Relations (PR), etc

10
What is Marketings true north in making mix
decisions?
11
What is Marketings true north in making mix
decisions?

• Market and financial objectives
• for the product,
• based on corporate strategy/objectives (if
  relevant),
• guided by the companys competitive advantages

12
Mix elements Customers

• Targeted end-customers
• (a subset of the entire market)
• Identified by
• Names /group identity
• Demographics
• Psychographics
• Needs
• Specificity simplifies other mix decisions!

13
Mix elements Product

• Product features/functionality (product itself)
• Cost target (and/or profit target)
• Competitive positioning, and fit with corporate
  (brand) positioning
• Name
• Packaging
• Customer service
• Breadth and depth of product line (versions)

14
Product Positioning Statement

• Our product,
• compared to relevant competitors,
• is the one that
• (has these differentiators)
• and/or
• (provides these benefits)

15
Considerations in Creating a Positioning
Statement

• Who are you positioning yourself with ?
• What are their desires/needs and fears/concerns ?
• Who/what are you positioning against ?
• What are your differentiators ?

16
Mix elements Price

• Prices manufacturer, wholesaler, distributor
• Payment terms and conditions
• Warranty
• Discount policies
• Price strategy vs. competitors
• Bidding tactics

17
Mix elements Place

• Channel choice direct and/or indirect
• Channel length and breadth
• Channel partner selection
• Franchising policies
• Channel coordination and control
• Channel competencies
• Channel training (sales and product)

18
Mix elements Promotion

• Branding (creating a company or product image)
• Advertising (multiple media paid and free)
• Direct marketing (mail, catalog, telemarketing,
  internet)
• Reference customers (testimonials)
• Public relations
• Industry relations (trade orgs, industry
  analysts,)
• Trade shows and events
• Price promotions

19
Promotionmessage and media

• Message most often the message is the
  positioning statement itself, often expressed in
  an attention-grabbing way
• Media identifying the most effective media for
  delivering the message is, driven by
  consideration of who the positioning targets are

20
The mix should fit with..

• Needs/desires of the target customers
• The companys competencies and image
• Competitors and their strategies/programs
• Channel partners needs and competencies
• And.the competitive advantage decision

21
The Marketing Plan

• Summary of Current Situation
• Focused Assessment of Market Opportunity
• Financial and Marketing Goals
• Summary of Companys Marketing Strategy
• Target Market
• Product/Service
• Positioning
• Distribution
• Price
• Promotion
• Marketing Budget (Monthly)
• Forecast Unit Sales and Revenues (Monthly)
• Plan to Monitor/Evaluate Action Plans by Period

22
Marketing readings for 3/21

• Creating a Marketing Plan An Overview
• (read to understand the specific
  components
• of each element of the marketing mix)
• Learning by the Case Method (read again)
• CardioThoracic Systems (case)

23
CardioThoracic SystemsCase Summary

• CTS was founded in 1993 based on a product
  concept that permitted coronary artery bypass
  operations on a beating heart
• CTS went public (IPO) in 1996, before it had a
  product for sale
• In 1998, the product is in its third version, and
  although CTS has 50 share of the beating heart
  market, use of this approach by heart surgeons
  is still below expectations
• Financial results are poor 1997 revenues
  9.4M, OI (22.4M)
• CTS believes its major challenge is to grow the
  market

24
Assignment for 3/21the 6 homework questions are
in white

• (In analyzing this case, you should think about
  Who are the competitors? Who are the target
  customers? What is CTS competitive advantage(s)?
  What are the relevant whole product
  differentiators? What is the size of the market
  opportunity?)
• What is CTSs share of the overall CABG market?
• Is there a recognized need for CTSs product?
  Explain.
• What are the costs and benefits of adopting this
  new technology? (who receives the benefits, and
  who pays the costs?)
• What are the steps in the adoption process for
  this technology?
• How should CTS define success over the next two
  years?
• How should CTS position its product? (write a
  positioning statement)

25
CTS Product Evolution
January 1997 2500 1 or 2 vessels MICS ----------
- Not enough vessels Too many changes No
safety valve
September 1997 1000 1 or 2 vessels Open
chest ------------- Not enough vessels (80 of
CABG ops do 3 or more)
April 1998 1000 All vessels Open
chest ------------ ?
?
26
Whats the Competition?

• Angioplasty
• Angioplasty with stents
• Traditional CABG
• Other beating-heart CABG solutions
• MICS CABG
• MICS beating-heart CABG

27
Product Positioning Statement

• Our product,
• compared to relevant competitors products,
• is the one that
• (has these differentiators)
• and/or
• (provides these benefits)

28
Considerations in Creating a Positioning
Statement

• Who are you positioning yourself with ?
• What are their desires/needs and fears/concerns ?
• Who/what are you positioning against ?
• What are your differentiators ?

29
Todays Key Learnings

• Marketing roles and responsibilities
• The marketing mix
• Product positioning (with, desires/fears,
  against, differentiators/benefits)
• Promoting a product (marketing communication)

30
Topic for 3/28 ClassSales (Distribution
Channels)

• How companies reach their customers types of
  sales channels available
• Rationale for choosing which sales channel(s) to
  use
• Issues in managing and serving sales channels
• Impacts of channel choice on the design of the
  whole product

31
Sales Readings for 3/28 Class

• Going to Market - read to understand types of
  sales channels, and the reasons for choosing them
• GolfLogix Measuring the Game of Golf (case)

32
GolfLogix Case Summary

• A start-up company in 2002
• Uses GPS technology to aid golfers
• Two product versions distance only and
  complete system
• Currently selling to/through golf courses
• Considering also using retail channels (would
  require a modification to their product)

33
Sales questions for 3/28 class

• What are the most significant end-customer and
  sales channel benefits of the each of the
  GolfLogix products?
• What is the market potential (number sold and
  GolfLogix revenues) of each of the GolfLogix
  products?
• Who are the appropriate target customers for the
  Distance Only product? For the Complete System?
• What are the positives-and-negatives of selling
  through golf courses? Through retail channels?
• If only one of the channels can be chosen, which
  one should GolfLogix use? Given the option of
  selling through both channels, should GolfLogix
  do that? Why?