Marketing Concepts: Market Share, Spokespersons, and Media

Posted on Dec 6, 2024 in Economy

Diffusion of Innovations

Hypotheses

Two-Step Hypothesis: Information flows from media to opinion leaders, then to the general public.

Trickle-Down Effect: Initially, products are expensive and only accessible to wealthy consumers. Over time, prices drop, making them available to a broader audience.

Everett Rogers Hypothesis:

  • Left Extreme: Some consumers adopt the product immediately.
  • Right Extreme: Some consumers are the last to purchase.

Consumers are classified into five groups: Innovators, Early Adopters, Early Majority, Late Majority, and Laggards.

Crossing the Chasm Hypothesis (Geoffrey Moore): Marketers should focus on one consumer group at a time, using each as a base to target the next group.

Technology-Driven Hypothesis: The rate of diffusion measures how quickly a new idea spreads among consumers.

Factors Influencing Diffusion (Everett M. Rogers)

  • Product advantages or benefits
  • Riskiness/delay of purchase
  • Ease of product use/complexity
  • Immediacy of benefits
  • Observability
  • Cost

Product Life Cycle

A product life cycle has four stages: introduction, growth, maturity, and decline.

Product Life Strategies

  • High Price: Start high, then lower to increase consumer base.
  • Low Price: Start low to reach most of the market quickly, then raise the price.
  • Market to new regions to increase revenue.
  • Adapt to changing demands (e.g., Netflix from DVDs to streaming).

Market Stages

Introduction

Invest in advertising and marketing to create awareness. Sales tend to be slow.

Growth

Growing demand, competition, branding, price, and availability are key factors.

Maturity

Costs decrease, focus on maintaining market share, retailers become distributors.

Decay

New innovations replace existing products, profits cease, new alternatives emerge.

Expanding Lifespan

  • Add new features
  • Revitalize packaging
  • Target new market segments
  • Create bold marketing campaigns

Market Share

Market Share = Firm’s Sales / Total Market Sales

Sales may be determined on a:

  • Value basis (sales price x volume)
  • Unit basis (shipped units or customers served)

Reasons to Increase Market Share

  • Economies of Scale: Higher volume can lead to cost advantages.
  • Stagnant Industry: Increase sales by gaining more market share.
  • Reputation: Market leaders have leverage.
  • Increased Bargaining Power: Advantage in negotiations.

Drivers of Market Share

  • Share of Preference: Influenced by product, pricing, and promotion.
  • Share of Voice: Firm’s proportion of promotional expenditures.
  • Share of Distribution: Achieved through more intensive distribution.

Marketing Mix Variables

  • Product: Improve quality or attributes to provide more value.
  • Price: Reduce price to increase sales volume.
  • Distribution: Add new channels or increase intensity.
  • Promotion: Increase advertising, unless competitors respond similarly.

An increase in market share is not always desirable. It may require additional investment, and profits can decline if gained through increased promotional expenses. Price wars and increased competition can also result. Antitrust issues may arise if one company dominates the market.

Spokesperson Functions

  • Representation: The face and voice of the company.
  • Media Relations: Engaging with media, delivering statements, and responding to inquiries.
  • Crisis Communication: Managing public statements during a crisis.
  • Delivering Key Messages: Communicating company information persuasively.
  • Building Public Trust: Establishing credibility and trust.
  • Speech and Event Presentations: Participating in press conferences.
  • Internal Communication: Communicating with internal audiences.
  • Tracking Public Perception: Monitoring public perception of company messages.

These functions help maintain a positive corporate image, manage reputational risks, and communicate effectively.

Spokesperson Skills

  • Strong Communication Skills: Ability to communicate clearly and effectively.
  • Effective Public Speaking Skills.
  • Excellent Writing Skills: Creating press releases, speeches, and articles.
  • Knowledge of Media Relations: Handling media requests and tough questions.
  • Building Public Trust: Being transparent, knowledgeable, and articulate.
  • Understanding of Marketing and Branding: Effectively communicating the organization’s message.
  • Flexibility and Adaptability: Adapting to new situations and challenges.
  • Emotional Intelligence: Understanding and responding to the emotions of others.

Types of Media Engagements

1. Live Interviews (TV and Radio): Require thinking on your feet and responding in real-time.

2.

3. Press Conferences: Events where a spokesperson addresses reporters.

4.

5. Crisis Management: Effectively communicating the organization’s response to the public.