Marketing lec 1-5 Flashcards
marketing
Long lasting process/strategy
companies create value for customers
build strong customer relationships (long lasting = profits)
capture value from customers in return
needs/wants of customers
5 steps of marketing process
- understand mkt & customer needs/wants
- design customer driven mkting strategy
- construct integrated mkting programme (Deliver superior value)
- build profitable relationships = customer delight
- capture value from customers = profits & customer equity
3Cs
- customers
- company (SWOT, ansoff, BCG, PESTLE)
- competitors (Porter, comp strategies, perceptual maps)
fitting 5 elements together
- 3Cs
- SWOT
- segmentation & targeting
- differentiation & positioning
- Target market
-narrowing down to focused strategy with quantitative and qualitative screening criteria
-external mkt env
target market
- product (solution)
- price (value)
- place (access)
- promotion (education)
business orientation
facilitates exchange
management philosophies
1. product concept
2. production
3. selling
4. marketing
product concept
consumers prefer products that = offer quality, performance, innovative features
e.g artisan products
production concept
consumers prefer products that are widely available and inexpensive
e.g. mass produce inexpensive products
selling concept
buy only if company actively promotes or sells to them
-high pressure selling tactics
production -> existing products -> selling/promotion -> profit via sales volume
marketing concept
consumers buy/prefer products that focus on their needs/wants and deliver better value than competitors
marketing concept 4 elements
- TM (segment/target/position)
- customer needs (keep input for successful marketing)
- integrated marketing (coordinating all mkting activities affecting customers)
- profits through customer satisfaction (consumers choosing between wide range of products that might satisfy a given need)
6 customer needs
1-tangible/intangible
2-rational/emotional
3-existing
4-latent(not yet satisfied)
5-incipient (not yet known)
6-market driven/market driving
choosing between product/services?
- customer value
- customer satisfaction
- customer loyalty
customer value
value - difference between perceived benefits of owning & perceived sacrifices of acquiring
benefits = +ve = product/service/relationships/image/experiential
sacrifices = -ve = monetary/time/energy/psychological
e.g. Alessi Anna G wine opener
customer satisfaction
expected/reputed performance
perceived/experiential performance
meet expectations perceived benefits > perceived sacrifices
customer loyalty
retention
habitual use of product/service arising from experiential value and satisfaction & inertia (laziness) or unavailability
brand
name/term/design/symbol or any other feature
identifies 1 sellers goods/service as distinct from other sellers
customer vs consumer
customer = person who buys good/service from shop/business
consumer = user of bought product/service
may be same person not necessarily tho
offering/product
what company/business is selling
physical good/service
product may mean both physical goods and services
market vs product orientation
marketing concept = customer needs
-define mission in terms of customer needs not products
e.g. railways vs transportation
e.g. movies vs entertainment
market research
quantitative & qualitative (meaning)
longitudinal = career vs static = job
-surveys/focus groups/product tests
-diagnostic/comparative
-netnography/ buzz-monitoring
-happens at all levels, not just about customers
companies increasingly aware of need to understand customer data
5 levels of market research
- competitors
- trends
- habits
- segments
- campaign development, measurement, planning
types of data
primary & secondary
(mintel = company specific) data monitor, statista etc
big data
big data
window into customers lives = understand/predict behaviour
invaluable = optimise business process
PESTLE & examples
political, economic, social, tech, legal, env
external analysis
broad & overarching (various factors)
avoid tunnel vision
most important factors to be linked to business threats and opportunities
e.g. COVID & scented candles
e.g. alcohol free beer
SWOT
external - opps & threats
internal - strengths & weaknesses
- utilise strength = capitalise on opps
- maximise strength to overcome threats
- minimise weakness = maximally capitalise on opportunities
- minimise weaknesses and threats (difficult position)
marketing planning
sequential process = involving series of activities leading to setting of mkting obj & formulation of plans for achieving them
corporate level strategic planning
4 levels
- define company mission (LT) -> customer focused
- company obj & goals set (corp level)
- design business portfolio
- planning mkting & other functional strategies (company wide guides mkting strategy & planning)
defining the business (strategy pyramid)
- Values (stand for)
- Vision (want to get to)
- Mission (business we are in)
- strategic obj (goals)
- actions & KPIs (get there)
values
define acceptable interpersonal & operating behaviour standards
govern & guide behaviour of individuals within org
vision
statement about what org wants to become
give shape and direction to org future
mission
broad statement of intent
sets out org purpose and direction
what it wishes to achieve in LT
strategic obj/goals
5 ways they are articulated
desired outcomes of orgs various activities
articulated in terms of:
1. profit
2. MS
3. share value
4. return on inv
5. numbers of customers served
actions & KPIs
means by which resources of org are matched with needs of env in which organisation decides to operate
McDonalds example
SMART goals
objectives & KPIs
Specific, measurable, actionable (do something about), relevant, time limited (when reach goal by)
strategic planning
analysis -> planning -> implementation -> control
develop and maintaining fit between organisations goals & capabilities and changes taking place in marketing opportunities
strategic planning descriptions
strategic plans - analysis at corporate & product level
develop marketing plans & carry out = at operational level 7Ps or SAVE
7Ps
price
product
promotion
place
Service:
people
process
physical env
SAVE
4Ps but for a service
solution (instead of product)
access (place)
value (price)
education (promotion)
relevant in B2B and digital contexts
Ansoff’s growth matrix
portfolio analysis
3 things company does
business portfolio = collection of businesses and products and brands (SBUs) that make up company
company must:
1-analyse current SBUs/ product portfolio
2-decide which SBU (brand/product) = receive more/less/no inv
3-develop growth strategies = adding new products/businesses to portfolio
e.g. Danone & Cars & Beauty
SBU
strategic business units
Boston consulting group growth share matrix
question mark = build to star or phase out, require cash to hold MS
dogs = low profit potential
cash cow = established, successful, cash generators, likely to decline (less attractive)
stars = profit potential, may need heavy inv
generic competitive & differentiation strategies
WHAT:
1. cost leadership/operational excellence e.g. Lidl
2. differentiation/product leadership e.g. Wholefoods
HOW:
3. customer intimacy e.g. Mindful chef
trying to be good at all value disciplines, company ends up being best at none
competitive positions in the market and strategies
examples (food industry)
- market nicher (specialise limited mkt, maintain fit offering/mkt needs) WHOLE FOODS
- market follower (focus on growth & maintain market share follow closely/at a distance focus on differentiation and profit) LIDL, OCADO
- market challenger (attack mkt leader, fight for leadership, attack rivals) SAINSBURYS
- market leader (expanding existing mkt, protecting/growing MS) TESCO
competitive strategy
4 types
winning - consumer want & brand does best
losing - consumer want & competitor does best
dumb - brand does best & competitor do best
risky - consumer wants & competitor do best & brand do best
CVP & USP
customer value proposition
unique selling point
positioning statement
- what is the product
- who targeted at
- key benefit/need
- different from others
sustainable competitive advantage
sticks & dont want someone to be able to copy it
Effective (do the right things) - consumers
important & perceived
efficient (do things right)
protectable & profitable
important & perceived competitive advantage
important - Zappos - shoe store customer service should be so good that if a customer calls for a pizza they should provide
perceived - Deutsche Bank - looking at different methods of travel whether will be on time) car vs train vs plane
cola wars vs Pepsi (compete on something else as pepsi cant compete with coke)
blue ocean strategies
new market
competition irrelevant
new demand
red ocean strategies
existing market
crowded high comp
diminishing margins
compete = beat comp and capture more existing demand
red ocean strategies
existing market
crowded
highly competitive
diminishing margins
compete by beating competition & capturing more of existing demand
consumer behaviour
consumer black box
needs and motivation
perception, learning and memory
personality factors
consume
eat/drink
completely destroy
reduce to nothing
engage full attention of (engross/dominate/use up)
consumer
person who consumes
one who uses product
purchaser of goods/services
consumption
act or process of consuming
consummation
completion
parallels with idea of customer satisfaction but broaden concept
consumer society
society which marketing of goods/services is important social and economic activity
consumer culture
culture = pattern of beliefs/values/meanings/customs
suggests consumption is a cultural activity linked to meaning and driven not just by practical or economic factors
more about want than need
consumerism
protection or promotion of consumer interests in relation to the producer
often derogatory
preoccupation with consumer goods and their acquisition
economics view vs marketing view of consumers
economic:
consumers = rational decision makers
carefully weigh pros and cons
marketing:
consumers = partly emotional decision makers
decisions influenced by multitude of irrational factors
consumer black box
stimuli (external factors) marketing mix & environmental
black box (buyers mind/internal factors) consumer characteristics & decision making process
responses purchase vs none
personality
trait approach
bipolar scales used to try and build up profile of typical customer
often draws on stereotypes (masculine vs feminine)
opinions
cognitive(based on thought)
quick responses
held with limited conviction, often not yet formed/fully developed underlying attitude on this issue or item
attitudes
affective (link to emotional state/feeling)
internalised deep ingrained into system
held with greater degree of conviction
longer duration more likely to influence behaviour
values
cognitive (link to motivations/behaviour - actually do)
held more strongly & underpin our attitudinal and behavioural systems
link to conscience, develop via familial socialisation process (culture/sub culture/religion)
frequently formed in early childhood
maslow’s hierarchy of needs
fill from bottom up
paradox of value
exchange value
use value
law of diminishing marginal utility
utility used (satisfying wants and needs)
utility something has to you is reflected by how much you’d be willing to pay for it.
life stage concept
depending on your life stage
different needs and means
life stage someone is in = gives a lot of insight on what kind of consumer they are
understanding consumers
6 ways
- motivations
- personality
- perceptions
- learning
- beliefs and attitudes
- self concept (actual vs ideal vs online)
classical and operant conditioning and social learning
classical conditioning - associating two unrelated things together because they always happen, associate stimulus to reaction
operant conditioning - teaching through rewards/punishments for specific behaviours
social learning - see something happen to someone else because they did something and dont try it because saw them get hurt from it or rewarded for something good
how is learning relevant for brands examples
Coca Cola - santa or colour red
nokia - sound
nike - logo
Tiffany - blue box
consumption of pretty products
if something is aesthetic or pretty = use/eat less of it
e.g. cupcakes & toilet roll
panic buying/internal and social influences
loss aversion & herd mentality
loss aversion - dislike uncertainty & avoid losses
e.g. stockpiling gives sense of control
herd mentality - follow example of others
e.g. Bandwagon effect, scarce products more attractive
dual process theory of thinking
system 1:
intuitive, associative, unconscious, quick, not under our control (“auto pilot”) - lots of decisions based on this
system 2:
rational, lazy, effortful, slow, controlled
classical models of consumer behaviour
- buyer decision process
- buyer decision process in a B2B setting
differences:
-more complex, more people involved, more rational,
types of buying behaviour
- complex
- variety seeking
- dissonance reducing
- habitual
axis = involvement & level of differences between brands
doesn’t account for different decision making styles of consumers
high involvement decision making & what it helps understand
application of cognitive psychology, implicitly assumes consumers are rational problem solvers
understand…
-high prices, complex, speciality goods, self image associated products, product with perceived risk
high vs low involvement factors
- level of perceived personal importance/interest (relationship have to products)
- stimulus specific
(product/brand/service) - situationally specific
- implications
-same product = treated by different people with different involvement levels
-same person at different times and in different situations could have different involvement levels for same product
involvement = important determinant in motivation of consumers
consumer decision making
factors influencing
-high vs low involvement
-thinking vs feeling rational choice vs emotional choice
impulse buying
habitual consumption
consumer choice processes
classic model = car
emotion driven = holiday
habitual = bread
impulse = cake
foote cone and belding product classification system
level of involvement
thinking
feeling
sensory branding
e.g lush
certain smell
consumers making decisions
most often not rational decision makers
many factors in black box - influence how consumers make decisions
high vs low involvement decisions
thinking vs feeling
different phases of decision making process influenced by external internal and social forces
segmenting
identify
analyse
describe market segments
whole market subdivided into different segments
DESCRIBE
targeting
evaluate each and decide which to go after
selecting particular segments
CHOOSE
positioning
design product/service to meet segments needs
develop offer and marketing mix that will create a competitive adv in minds of selected TM
ensuring brand becomes most attractive to selected segments
OFFER
targeting marketing process same as STP process
ensure success
1. segmenting
2. targeting
3. positioning
defining the market influences this process
market segment
group of buyers
-similar needs/wants
-respond in similar way to marketing actions
target market
segments of the market you will try to reach
why segment the market
-diff wants (varied/sophisticated) (Segmentation reflects complexities in the market)
-design focus marketing programmes
-determine resource allocation (allows matching demand and supply)
-increases efficiency & effectiveness of companies
-sets basis for targeting
segmentation process:
- identify broad market of interest
- identify key buyer characteristics
- cluster buyer types (identify truly differentiating dimensions & name/label different segments)
- find out WHY behave the way they do
- make rough estimates of size, potential, cost of each segment
- select your target
segmentation terminology
segmentation/targeting/positioning process
segmentation (select market and variables & develop segment profiles)
targeting (analyse segment attraction & select target segments)
positioning (analyse differentiators by target segment and develop segment proposition)
understanding customer segments
5Ws
1H
variables for segmentation
- geographic
- socio-demographic
- geo-demographic
- customer value
- psychographic (lifestyle/attitudes)
- consumer behaviour (purchase behaviour/benefit)
use a mix
ways to segment consumer markets
- profile (general) e.g. gender
- psychographic (domain) e.g. travel ad
- behavioural (specific) e.g. McDonalds wifi
ways to segment business markets
- geography
- demography (industry/company size)
- benefits sought (user status/usage rate/loyalty status)
segmenting profiling for car example or shoppers
- older/less mobile
- less affluent urban young families
- less affluent older sceptics
- affluent empty nesters
rational planners vs everyday deal hunters
effective segmentation and target group evaluation
- measurable (identify who belongs)
- accessible (way to reach consumers/businesses in segment)
- differentiable (clearly different)
- substantial (worth adapting offering/programme to this segment)
- actionable (company take actions needed to reach segment)
target group = not every effective segment is a good target group
targeting pros and cons
pros:
1-high price customers only (max profit)
2-specific customer needs (min comp, satisfy better)
3-restrict distribution (barrier to entrants)
cons:
1-expense (money to define market)
2-exclude customers (reduce business potential)
3-increase vulnerability (paradigms/patterns shift away from sector)
targeting strategies:
1 segment/multiple/one person/everyone
broad -> narrow
1. undifferentiated (mass)
- differentiated (segmented)
- concentrated (niche)
- micro-marketing (one-one individual)
example of differentiated strategy Arcadia group
undifferentiated mass marketing
one product = entire market
-not really marketing
-everyone assumed want same thing & same needs
e.g. you can have any colour you want as long as its black
differentiated marketing
diff segments = diff products/marketing mixes
common targeting strategy - pursued by most large FMCG
e.g. global car markers
requires considerable resources
organic vs acquisition
not option for all companies
niche concentrated strategies
market to one or few segments
to maximise resource effectiveness (financial, HR, skills, knowledge, competencies)
particular attractiveness to one segment
one to one micro marketing
different product/mkting mix for individuals
e.g e tailers
e.g. tesco club card holders
possible due to advances in IT
price premium
social responsibility as a marketer
increased focus in targeting is good for consumers
avoid unfitting products/mass spamming
risk of exploitation
e.g. junk food ads banned in children’s media
positioning
ensure brand becomes most attractive to selected segments
act of designing company’s offering so it occupies meaningful and distinct position in target consumers mind
creates backbone for marketing mix
effective positioning
act of linking products and services to solutions that customers seek
keys to successful positioning
- clarity
- consistency
- credibility
- competitiveness
unique selling proposition
who you are
what you Stand for
winning - consumer wants & brand does well (best features meet consumer needs, make it bigger)
risky - battle your competitor for positional power - go emotional)
avoid - competitor meets the consumer needs better than you
who cares - competitors battle in areas consumers just dont care about, time waste
positioning statement elements
promise to whom
reason to believe
what
positioning map
- traditional
- conservative
- minimalist
- planner
- digital
- striver
clear market gap - aim to fill?
segmentation/targeting/positioning process
segmentation (select market and variables & develop segment profiles)
targeting (analyse segment attraction & select target segments)
positioning (analyse differentiators by target segment and develop segment proposition)
moving from products to brands
material utility/functional benefit vs symbol meaning/utility
brands as symbols
meaning from advertising/celebrity culture/popular culture
porters 5 forces
Ansoffs matrix
BCG matrix
Perceptual mapping
SWOT
Strength
Weakness
Opportunity
Threat
PESTLE
