Primary Selective Demand Strategies

8/21/2019 Primary Selective Demand Strategies

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Co-ordination of marketing programmes Specication of impact on demand Primary demand strategies

Increase the number of users by increasing thewillingness and ability

Increase the rate of purchase by broadeningusage, increasing level of consumption or byincreasing rate of replacement

Selective demand strategies !pand the served market by broadening

distribution or product-line e!tension "c#uire competitors customers by head-to-

head competition or di$erentiated positioning %etain customers by maintaining satisfaction,

meeting competition and relationshipmarketing

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'arketing strategy is the coordination of

marketing programs( 'iddle managers are responsible for

marketing programmes, which are)

"dvertising,

sales promotion,

personal selling,

customer service,

new product development

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'arketing programmes should beconsistent with marketing ob+ectives

'arketing strategies should achievemarketing ob+ectives

'arketing strategies specify the impacta rm hopes to achieve on demand

primary or selective(


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.arget marketselection

.ype of demandto be stimulated

"ll buyers in the relevantmarket

/primary demand0

uyers in one or moresegments /selective demand0

Primary demand "mong new users "mong current users

Selective demand In new served markets "mong competitor2 customers In current customer base

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'arket potential estimate

Industry sales forecast

Company sales

forecast

4nrealised market potential- Primary demand gap

Company sales potential

- Selective demand gap


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Prospector

5efender

"naly6er

%eactor

Innovator7rst mover7high risk7moves onto new markets

Security in stable market7good marketer7conservative range

Smart second 7 mobile defender7followstrends more 7 keeps small range

8o strong I5 in market7mass market type


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Primary 5emand

5emand for the product form or product classthat has been dened as the relevant market(

Includes 9potential2 buyers Same characteristics as buyers but not buying(

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;illingness < ( ( ( %elated product and services 4sage problems =alue or e!perience compatibility Perceived risk /high or low involvement0

( ( ability to buy Cost factors

Packaging and si6e factors

Spatial availability

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Primary demand maps the potential for aproduct( "nalyse features common to all customers(

Identify growth opportunities(

'anagers seek ways to increase primarydemand through increasing ;illingness < ability to buy

!panding si6e of market /potential actual buyers0

/ actual buyers increase fre#uency of use0

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Selective 5emand 5emand for a specic brand or supplier within the

relevant market(

Includes only 9actual2 buyers

"$ected by 5ecision making process

@igh 7 low involvement

!tended 7 routine analysis

.ype of purchase 8ew task 7 routine replacement 7 variety seeking

Perception of product attribute di$erences Irrelevant 4nimportant Aptional 'akes the product di$erent, but not important

5efensive 8ecessary to avoid elimination

5eterminant Important anduni#ue

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"im to increase level of demand for aproduct form or product class si6e

of market increases(.wo fundamental strategic

approaches)

Increase the number of users

Increase the rate of purchase

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Increase the number of users

useful in the introductory stage

of the life-cycle also for products with large

market shares /at maturity stage0

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Strategies for increasing the numberof users

Birms must increase)

;illingness to buy

"bility to buy

Ar both

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Strategies for increasing willingness to buy)

1(5emonstrating the e!isting benets of theproduct form

eg 5isposable diapers - Convenience andperformance

&( 5emonstrating or promoting new benets fore!isting products

eg Carnival cruise lines - Selling fun - not seavoyages

*( 5eveloping new products with benets, moreappealing to certain segments

eg ight eer - greattaste, no into!ication(

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Increasing the ability to buy using

ower prices

A$ering credit facilities

Dreater availability by

more distributors,

'ore fre#uent deliveries,

less stock outs(

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Bour reasons for reducing a price)

Some potential buyers who would notbuy the product at a higher price will

now buy Increase the rate of purchase

"void losing customers to competitors/defend0

Dain customers from competitors /attack0

Price is used to inFuence demand indi$erent ways

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Increasing the rates of purchase ;hen the markets are mature

and sluggish 'ake customers buy more often

or in higher volume

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Strategies used to increase rate ofpurchase roadening usage

Increase level of consumption Increase rate of replacement

roaden usage by e!panding

=ariety of uses 4sage occasions

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roadening variety of uses for orange+uice "t breakfast

"fter sports Source of vitamin C In cocktails

roadening use occasions

ftpos - for withdrawal or to pay bills Pi66a @ut - delivery service to e!pandlunch time business

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Increase level of consumption

ow price or special volume package eg Soft drink economy si6e, 13 beer packs

Changing buyers perception of theproduct benets g 1 pork industry /health benets of white

meat0,

g & "merican !press /"utomatic insuranceof products purchased0

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Increase rate of replacements bydesigning strategies that encouragereplacement

Bashion industry - change design

Bridges /may last &?years0 'aybe replaced earlier if cost, space

utili6ation, or convenience can beimproved(

Planned obsolescence through

innovation &&


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Primary demand strategies are lesswidely used than selective demandstrategies

4seful when there are gaps betweenmarket potential and industry sales

"nalysis of buying process may helpto identify factors limiting ability andwillingness to buy

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'arket potential estimate

Industry sales forecast

Company sales

forecast

4nrealised market potential

- Primary demand gap

Company sales potential

- Selective demand gap


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5esigned to improve the competitiveposition of the product, service or businessin the segment

Bundamental focus is on market share

Sales gains at the e!pense of competitors

.hree di$erent types) !panding the served market "c#uire new customers from competitors %etain current customers

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!panding the served market

roaden distribution

Product line e!tensions

"c#uiring competitors customers

;hen industry sales are growingslowly and close to market potential

In high growth industries who aremoving location

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Customer "c#uisition strategies

must be perceived as more e$ectivein meeting customers needs

must use determinant attributes ofeach segment

.wo basic strategic options)

@ead to head positioning 5i$erentiated positioning

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@ead to head positioning A$er basically the same benets Autdo competitors on)

Superior marketing e$ort Cost7price leadership

Superior marketing e$ort

Autdo competition on #uality Autspending on advertising ;ider variety and wider availability Baster delivery

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@ead-to-head Price7Cost leadership same #uality at lower price /eg "ir ines,

.elephone services0 "void head to head competition 'ay be vulnerable to an aggressive new brand

o$ering di$erent benets

Spend more money to gain retailer and

distributor support

Increase advertising spend may not produce

comparable increase in sales

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5i$erentiated positioning

enet7attribute positioning mphasise uni#ue attributes, packaging, benets

evers &??? bar soap - deodorant and moisturiser

Customer oriented positioning Cater to a specic customer type /niche0

uyer characteristics eg Dovt( agencies, 4niversities(

Specialised needs eg Specialised hospital services(

4ni#ue product use eg Cold remedies for nighttime(

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%etention strategies %etain current customers - /ach new

customer costs about ve times as much as ane!isting customer in promotional cost0

4sed by rms with dominant marketshare( lines up with defender strategy /increase

promo( spend to hold out competitors(0

Small market share rms with entrenchedpositions in particular segments( typical niche business /operating on close

relationship with customers0

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Strategies make a customer stay)

'aintain a high level of customer

satisfaction 'eet competitors2 o$erings

stablish strong relationships/economic and interpersonal0

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.o maintain satisfaction

'aintain customer beliefs on superior

product #uality reassure high #uality in advertisements

Provide additional information about

the product7service to enhancee$ective use 9free2 seminars

'aintenance < repair, complaint

management( Heep after sales service standards high to **


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'eeting competition o$erings 5o better on)

Price Cheaper, or better value( uality Bind out e!pectations and e!ceed them(

Beatures and Aptions Can o$ering be made to 9t2 customers

betterJ "dvertising 'ore 7 more e$ective /J0

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%elationship marketing 5evelop formal interpersonal ties with

the buyer to enhance repeat business oyalty cards thru to service agreements

4se economic incentives Contracts - protection against price

increase

'emberships - "nnual fees, Seasontickets Put computer terminals at customers

oKces

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asic options are)

ine e!tensions

ring out new product with signicantdi$erences to e!isting

Blankers Separate brand to cover weakness in main

brand(

Combination brands Promoting /productLbrand0 to boost sales

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Product Ab+ective.o achieve viable level

of sales for new

product(

.o achieve viablemarket share /for new

brand0

'arket share growth

'arketing Strategy

Primary - Increasenumber of users

Selective - "c#uisitionof customers

Selective - "c#uisitionof customers

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Product Ab+ective 'arket share

maintenance

Cash Fowma!imisation

'arketing Strategy

Selective - %etention ofcustomers or ac#uisition

of customers new to themarket

Selective - %etention of

customersPrimary - Increasepurchase rate

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Product Ab+ective Sustaining

protability

@arvesting

'arketing Strategy

Selective - %etention

of customers /limitedsegments0

Selective - %etention

with minimum e$ort

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'anagers can use more than one strategysimultaneously

Consider the impact of strategy oncomplementary and substitute products Beasibility of a strategy depends on problems

and opportunities

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'arket analysis provides information on) 1( ;ho buys the product form7who does not

&( Situations product is used7not used

*( Bactors inFuencing willingness and ability to buy / manager can select strategies to increase the

number of users or rate of use using aboveinformation primary demand0

( Bactors inFuencing buyers choice process

/ this gives insights to segmentation opportunities selective demand0

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Competitive analysis help to determine) ;ho are the competitorsJ ;hat is the intensity of competitionJ

@ow to compete e$ectively against 5irect brand competitors using selective demand strategies(

Indirect product class competitors using primary demand strategies(

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'arket measurements provide informationon)

Industry growth rates

Si6e of primary demand gap Protability

y combining productivity estimates with

protability analysis can determine protconse#uences of strategies and programs

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Primary Selective Demand Strategies

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