Teaching Plan: Session 1 - Columbia University



The Relative Implications of RIDE for Marketing Communications & Promotional Tactics

|Strategic RIDE |Targeting |Medium |Message |

|Situation | | | |

|Technological Risk |More targeted, early adopters; Premium |No mass advertising; Highly targeted: (Internet, tradeshows, free |Technology solution & |

| |price |trials/demos, PR in tech/professional magazines, |features (“Pull”) |

| | |grass-roots/consumer promotions) | |

|Marketing Risk |Broader audience; |Mass advertising, broader interest magazines; More channel |Word of mouth, |

| |Lower price |incentives to “push” product |everyone uses it, |

| | | |referenceability |

|Industrial goods |Slow & low scaleability; Segmentation & |Local demos & publications; More channel incentives to “push” | |

| |targeting is geography-based; |product; Conservative spending on communications & promos due to | |

| |Channel incentives to push |need to coordinate w/ manufacturing capacity | |

|Information goods |Faster growth & high scaleability; |Greater investment in advertising & promotions – no coordination | |

| |Segmentation & targeting more user-based |issues with manufacturing capacity constraints or timing issues; | |

| |and global (less geographic); |Global (Internet distributed) demos & publications; Samples and | |

| |Target lead users |“experience” important (free trial & razor-blade tactics); | |

| | |Tell a new story to generate buzz and create “pull” (using mass | |

| | |advertising for B2C; PR and targeting lead users for B2B; | |

|Elastic Demand |Typically means a broader market of main |Mass communications (if consumer market), referenceability, Word | |

| |stream (MRKT Risk) and low price |of mouth | |

|Inelastic Demand |Typically means early adopters looking | | |

| |for features (Tech Risk) and high price | | |

|Homogenous Demand | |Mass advertising |Broad-based |

|Heterogeneous Demand |Different target segments |Marketing communication is more complex; Numerous different |Customized and |

| | |channels; Tradeshows with multiple versions; Mass advertising |segment-specific |

| | |cannot work | |

|High Externalities |As many as fast as possible; |Greater upfront marketing communications & promo investment for | |

| |Sacrifice revenues & profits upfront for |creating awareness; | |

| |subsequent dominance; Sacrifice (cost) |Mass advertising + grass roots/gorilla/viral marketing; “free” | |

| |effectiveness for greater speed; “Spend |product promotions (seeding the market & razor-blade tactics) | |

| |now for a better future” |Note that this works (especially mass ads) when high | |

| | |Externalities + Info good + homogenous Demand + early stage. | |

| | |Later, try to reach “positive economics” of MRKT dollars | |

|Low Externalities |Ensure high quality and (customer) |Marketing communications and promotions investments spread over | |

| |revenue / profitability first; Keep cash |time | |

| |burn @ reasonable rate; “Save now for a | | |

| |better future” | | |

| | | | |

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MarCom Investment

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MarCom Investment

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