How buyers define Value and choose suppliers Buyers buy from the firm that delivers the

highest delivered value DELIVERED VALUE = TOTAL CUSTOMER VALUE- TOTAL CUSTOMER PRICE TOTAL CUSTOMER VALUE= PRODUCT VALUE + SERVICE VALUE + PERSONNEL VALUE+ IMAGE VALUE TOTAL CUSTOMER PRICE = MONETRAY PRICE+ TIME COST + ENERGY COST + PSYCHIC COST

FIVE LEVELS OF A PRODUCT CORE BENEFIT,

GENERIC PRODUCT : Basic version of the product

EXPECTED PRODUCT: A set of attributes and conditions that buyers normally expect and agree to when they purchase the product. AUGMENTED PRODUCT : Additional services and benefits that distinguishes the companies offer POTENTIAL PRODUCT : all augmentations and transformations that this product might ultimately undergo

INFORMATION SEARCH & EVALUATION OF ALTERNATIVES

TOTAL SET AWARENESS SET CONSIDERATION SET CHOICE SET FINAL BRAND CHOICE

INFORMATION SOURCES : PERSONAL SOURCES: family , friends, neighbours, acquaintances COMMERCIAL SOURCES : advt, salespeople, dealers, packaging , displays, trade magazines, fairs, trade associations, yellow pages, trade directories, catalogues etc PUBLIC SOURCES : Mass media, consumer rating orgn, EXPERIENTIAL SOURCES: Handling, examining, using the product

Cameras: Picture sharpness, camera speeds, camera size and prize Hotels : location, cleanliness, atmosphere, cost Tires : Safety, tread life, ride quality, price

PRODUCT HEIRARCHY

NEED FAMILY : THE CORE NEED THAT UNDERLIES THE PRODUCT FAMILY eg security, HOPE
PRODUCT FAMILY : ALL THE PRODUCT CLASSES THAT CAN SATISFY A CORE NEED WITH MORE OR LESS EFFECTIVENESS eg savings and income, TOILETRIES

PRODUCT CLASS: A GROUP OF PRODUCTS WITHIN THE PRODUCT FAMILY THAT ARE RECOGNIZED AS HAVING A FUNCTIONAL COHERENCE eg financial instruments, COSMETICS
PRODUCT LINE : A GROUP OF PRODUCTS WITHIN A PRODUCT CLASS THAT ARE CLOSELY RELATED BECAUSE THEY FUNCTION IN A SIMILAR MANNER OR ARE SOLD TO THE SAME CUSTOMER GROUPS OR ARE MARKETED THROUGH THE SAME TYPE OF OUTLETS OR FALL WITHIN GIVEN PRICE RANGES eg life insurance, LIPSTICK PRODUCT TYPE : THOSE ITEMS IN A PRODUCT LINE THAT SHARE ONE OF THE SEVERAL FORMS OF THE PRODUCT eg term life, TUBE/STICK

BRAND : THE NAME ASSOCIATED WITH ONE OR MORE ITEMS IN THE PRODUCT LINE THAT IS USED TO IDENTIFY THE SOURCE OR CHARACTER OF ITEMS eg prudential, LAKME, RENEWABLE

ITEM : A DISTINCT UNIT WITHIN A BRAND OR PRODUCT LINE THAT IS DISTINGUISHABLE BY SIZE PRICE, APPEARANCE OR SOME OTHER ATTRIBUUTE. THE ITEM IS CALLED STOCK-KEEPING UNI OR PRODUCT VARIANT eg prudential renewable term life insurance, PARIS NIGHT

A PRODUCT SYSTEM IS A GROUP OF DIVERSE BUT RELATED ITEMS THAT FUNCTION IN A COMPATIBLE MANNER Eg NIKON sells a basic 35 mm camera along with extensive set of lenses, filters and other Options that constitute a product system

A PRODUCT MIX IS THE SET OF ALL PRODUCTS AND ITEMS THAT A PARTICULAR SELLER MAKES AVAILABLE TO THE BUYERS.
THE BREADTH OF P&GS PRODUCT MIX REFERS TO HOW MANT DIFFERENT PRODUCT LINES THE COMPANY CARRIES EG HAIR CARE PRODUCTS,HEALTH CARE PRODUCTS, PERSONAL HYGIENE PRODUCTS, BEVERAGES , FOOD AND SO ON THE LENGTH OF P&GS PRODUCT MIX REFERS TO THE TOTAL NUMBER OF ITEMS IN ITS PRODUCT MIX THE DEPTH OF P&GS PRODUCT MIX REFERS TO HOW MANY VARIANTS ARE OFFERED TO EACH PRODUCT IN THE LINE. For eg if Crest comes in 3 sizes and 2 variants regular and mint Crest has a depth of six

EARTHMOVING AND CONSTRUCTION/ AGRICULTURE EQUIP COMPANIES CATERPILLAR : KOMATSU : CUMMINS INTERNATIONAL HARVESTER JOHN DEEREE : CNH : IRON PLANET: JMS INTERNATIONAL: VOLVO CONSTRUCTION EQUIPMENT THOMSON TRUCKS: CUMMINS: BEML: MITSUIBISHI HEAVY EQUIPMENT: MASSSEY FERGUSON:

Farm management is changing: company hastening this process is Deere and Company Deere is experimenting with GPS and biosensors on its combines Imagine driverless combines and tractors with on board sensors that can measure the Oil content of grain , or distinguish between weeds and crops. Farmers can ration herbicide according to soil conditions in a particular area GPS guided steering ensures repeatable accuracy, eliminates over treating of crops and Enables work on hilly terrain, thereby reducing time , fuel, labor and chemical costs. The new technologies can also help the farmer monitor all his equipment , including engine condition and location. By integrating remote diagnostics into the system Deere can warn farmers of likely equipment failures, avoiding costly mistakes during harvesting and plantation.

CATERPILLAR: PREMIUM PRODUCT QUALITY: High quality equipment, heavier guage steel to convince buyers of its superiority. EXTENSIVE AND EFFICIENT DEALERSHIP SYSTEM Largest number of independent construction equipment dealers Dealers do not carry any other line and spends the most money training, servicing and Motivating them SUPERIOR SERVICE Delivery of replacement parts anywhere in the world within 48 hours stdn of products across the world SUPERIOR PARTS MANAGEMENT 50% of profits come from sale of replacement parts. Superior parts mgmt system keeps margins high PREMIUM PRICE FULL LINE STRATEGY GOOD FINANCING

DEFENSE STRATEGIES
POSITION DEFENSE:: Defending by building an impregnable fortification around ones territory. Eg model T ford could lead to marketing myopia FLANKING DEFENSE : Market leader should not only guard its territory but also erect some flanks or outposts to serve as a defensive corner to protect a weak front eg GM and Ford Made a mistake while Japanese launched the small car invasion , Vega and Pinto PREEMPTIVE DEFENSE : A more aggressive defense maneuver is to launch an attack on enemy before it starts its offensive . COUNTER OFFENSIVE DEFENSE: The leader cannot remain passive in the face of a competitor s price cut, promotion blitz, product improvement or sales territory invasion. CONTRACTION DEFENSE : Planned contraction is giving up the weaker territories and reassigning forces to stronger territories. Eg Heinz and Del Monte. MOBILE DEFENSE: The leader stretches its domain over new territories that can serve as future centers of defense and offense. Eg petroleum companies recast themselves into energy companies. Marketing myopia would be replaced by marketing hyperopia.

ATTACK STRATEGIES FRONTAL ATTACK: When a company masses its forces right up against its opponent. It attacks the opponents strengths rather than its weaknesses, d/o who has more strength and endurance. Modified frontal attack: price cutting and cost cutting . FLANK ATTACK: An enemys army is strongest where it expects to be attacked. It is Necessarily less secure in its flanks and rear. a) Geographical b) Segmental c) Uncovered needs ENCIRCLEMENT ATTACK: The encirclement involves launching a grand offensive on several front , sides and rear simultaneously. The aggressor may offer the market everything the opponent offers and more..so that the offer is un-refusable. Aggressor must command Superior resources. BYPASS ATTACK: Colgate vs P&G It means bypassing the enemy and attacking easier markets to broaden ones resource base a) Diversifying into unrelated products b) Diversifying into new geographical markets c) Leapfrogging into new technologies. GUERRILLA ATTACK : Waging small, intermittent attacks on different territories of the Opponent, with the aim of harrassing and demoralizing the opponent and eventually Securing permanent footholds.

CORE COMPETENCE: SHARP AND TOSHIBA HAVE INVESTED HUNDREDS OF MILLIONS OF DOLLARS IN BUILDING FLAT SCREEN DISPLAY COMPETENCIES: WORKING ON OPPORTUNITY SHARE. POTENTIAL MKTS: EVERYTHING FROM POCKET DIARIES TO LAPTOP COMPUTERSTO MINIATURE TVS TO LCD PROJECTION TVS TO VIDEO TELEPHONES. TODAY SHARP AND TOSHIBA ARE REAPING THE FINANCIAL BENEFITS .FOR ANY CO HOPING TO ENTER A PRODUCT MARKET CATEGORY WHER PORTABLE DISPLAYS ARE IMPORTANT BE IT IBM OR APPLE WILL WIND UIP SOONER OR LATER TALKING N DOING BUSINESS WITH TOSHIBA AND SHARP.. BELATEDLY US COMPANIES HV REALIZED FLAT SCREENS HV MULTITUDE OF APPLICATIONS MAN OF THEM MILITARY.
HWELETT-PACKARD COMPETENCIES IN MEASUREMENT, COMPUTING AND COMMUNICATION GIVE IT THE OPTION OF PARTICIPATING IN AWIDE ARRAY OF MKTS. REMOTE MEDICAL DIAGNOSTICS. HOME VIDEO PRINTER

A CORE COMPETENCE IS A BUNDLE OF SKILLS AND TECH THAT ENABLES A COMPANY TO PROVIDE A PARTICULAR BENEFIT TO CUSTOMERS.
AT SONY BENEFIT IS POCKETABILITY AND THE CORE COMPETENCE IS MINIATURIZATION. EG WALKMAN, PORTABLE CD , POCKET TV

AT FEDERAL EXPRESS IT IS ON TIME DELIVERY AND THE CORE COMPETENCE IS LOGISTICS MGMT PACKAGING , ROUTING AND DELIVERY RESTS ON BAR CODE TECH,WIRELESS COMMUNICATION,NETWORK MGMT N LINEAR PROGRAMMING

AT WALMART BENEFIT IS CHOICE AVAILABILTY, N VALUE MOTOROLA WIRELESS COMMUNICATION UNTEETHERED HONDAS KNOWHOW ENGINES BENEFITS:SUPERIOR FUEL ECONOMY, ZIPPY ACCELERATION, EASY REVVING AND LESS NOISE N VIBRATION SKF: WORLDSLEADING MNFT OF ROLLER BEARINGS COMPETTENCY ANTIFRICTION AND PRECISION ENGRR CAN MACHINE HARD METALS TO INCREDIBLY HIGH TOLERANCES AND IN MAKING PERFECTLY SPHERICAL SHAPES. IT CAN MNFT HIGH PRECISION RECORDING HEADS THAT GO INSIDE A VCR AND BALLS THAT GO INTO BALL PENS.

CANON: BUYS MORE THAN 75%OF THE COMPONENTS THAT GO INTO ITS COPIERS CANON SELLS LASER PRINTER ENGINES TO APPLE AND HP CANONS CORE PRODUCT SHARE IS HIGHER THAN THE BRAND SHARE IN LASER PRINTERS

TAIWAN HAS BECOMETHE ARMS DEALEROF THE COMPUTER WARS, TAIWANEE COMPANIES LIKE ACER,INVENTECH,DATATECH,N COMPALL SELL COMPONENTS TO DELL.IBM, APPLE N AST

NIKE TOO OUTSOURCES ALL ITS PROCESSES BUT HAS COMPETENCIES IN LOGISTICS,QUALITY DESIGN, PRODUCT DEVELOPMENT, DISTRIBUTION AND MERCHANDISING.

CORE COMPETENCE MUST GIVE COSTOMER VALUE, COMPETITOR DIFFERENTIATION AND EXTENDABILITY

PREMIER PLUS 10
WHAT NEW CC WILL WE NEED TO BUILD N PROTECT TO EXTEND OUR FRANCHISE IN CURRENT MKTS? SONY BOUGHT BOTH COLUMBIA PICTURES AND CBS RECORDS FILL IN THE BLANKS WHAT IS THE OPPORTUNITY TO IMPROVE OUR POSITION IN EXISTINGMKTS BY BETTER LEVERAGING OUR EXISTING CORE COMPTENCIES

MEGA OPPORTUNITIES
WHAT NEW CORE COMPETENCIES WOULD WE NEED TO BUILD TO PARTICIPATEIN THE MOST EXCITINGMKTS OF THE FUTURE WHITE SPACES WHAT NEW PRODUCTS OR SERVICES COULD WE CREATE BY CREATIVELY REDEPLOYING OR RECOMBINING OUR CURRENT CORE COMPETENCIES

CORE COMPETENCE NEW

EXISTING

EXISTING

NEW MARKETS