Strategic Marketing I Flashcards
Strategic Missteps: Nike
- Product relevance –> lack of investment in radical innovations and R&D
- Short-Term marketing focus –> need to focus on long term marketing, overemphasis on performance marketing
- Direct to consumer overreliance –> they prioritized digital channels and direct to consumer sales –> neglected wholesale partnerships, reduced availability
- Misinterpreting Covid trends (assumed Covid driven e-commerce growth was permanent –> reduced physical retail presence prematurely
Strategic Marketing: components and business areas
Market-oriented corporate planning
Each Strategic Business Unit has different components
1. Growth & profit targets
2. Core task & positioning
3. Marketing Mix
What to do for growth? (company)
- Invest in Social Media
- Market Research –> innovation
- Sampling
- Improving Customer Experience
- Performance Marketing
- Work on logo
- Sponsor
- Open a pop of store
Overview strategic marketing
Financial goal –> growth strategy –> Core tasks profile –> positioning –> marketing mix
Growth potentials I
Competencies/Market potential
–> customer potential
–> Product potential
Growth potentials II
Competencies/Market potential
–> Innovation (Developing potential)
–> Persistence (Exploiting potential)
Customer acquisition
- “Non” users: People who do not know about the product or brand
- Competitor’s customers
Product innovation
- Market novelty: introduction of a product or service that is new to the market, offering unique features, benefits, or applications that were previously unavailable
- Imitation
Customer retention
-Penetration:
–> Refers to increasing the number of customers using a product or service
–> Focuses on gaining a larger share of the existing market by expanding product reach
–> Strategies include promotions, pricing adjustments, and expanding distribution channels
- Retention:
–> Focuses on keeping current customers loyal and engaged
–> Involves customer satisfaction, personalized experiences, and loyalty programs
–> Retention strategies include excellent customer service, regular follow-ups, and offering incentives to stay
Product maintenance
-Preservation
–> Focuses on maintaining the product’s existing quality, functionality, and reliability
–> Involves regular updates, bug fixes, repairs, and customer support
–> Ensures customer satisfaction and prevents product deterioration over time
-Expansion
–> Involves improving or extending the product to reach new customers or increase usage
–> May include adding new features, introducing variations, or targeting new markets
–> Helps sustain growth by adapting to changing consumer needs and market trends
Attract new customers (non-users)
example : sampling
Customer acquisition: Competitor’s customers
” cheaper” –> “I buy it because it‘s cheaper” (price advantage)
“Neither cheaper or better” –> “I don‘t buy it because it‘s neither cheap nor does it perform better”
“Better” –> “ I buy it because is better” (Performance advantage)
Customer acquisition: Preferential strategy
a marketing approach that aims to attract new customers by offering them special advantages, incentives, or personalized experiences that differentiate a brand from its competitors
Benefits of This Strategy (Preferential strategy)
- Reduces entry barriers for potential customers
- Increases brand exposure by attracting a larger audience
- Encourages customer loyalty, leading to long-term revenue
- Facilitates upselling to higher-tier products or services
Customer acquisition online
the process of attracting and converting potential customers through digital channels.
Conversion rate
Number of Conversions / Total Number of Visitors or Leads x 100
A higher conversion rate means better utilization of marketing spend and higher profitability
Customer Acquisition Cost
Total Marketing and Sales Costs / Number of New Customers Acquired
A low CAC is preferable, but it must be compared to the Customer Lifetime Value
How do you know that the net promoter score is a good score? (same for the customer acquisition)
- compare to industry standard
- benchmark against own
Customer retention: Penetration
- Better exploit price willingness: The goal is to try to identify customers’ individual willingness to pay and adjust the price upward or
downward to maximize profits - Increase repurchases: The goal is to decrease the period between repurchases
- Upselling: The goal is to influence the customer in a way that s/he purchases a more expensive product than originally intended
- Follow-up purchases:The goal is to establish a relationship with customers that will lead to subsequent purchases (e.g., a subscription model)
-Cross-selling: The goal is to nudge customers to purchase related or complementary products or service
Customer retention: Retention
- Ensuring continuous repurchases: The goal is to nudge customers into continuous repurchases
-Avoiding the switch to the competition: The goal is to avoid that customers switch to competitors
-Customer recovery management: The goal is to win customers back who have terminated a customer relationship (e.g., who canceled a
subscription membership)
-Professional complaint management: The goal is to deal in the best possible way with customers who complain about a company’s product or
service offering. Ideally, professional complaint management even increases customer satisfaction
-Increasing customer satisfaction: The goal is to have the most satisfied customers.
Churn rate: Does one’s customer retention investments pay off?
Number of Customers Lost During Period/ Total Customers at the Start of Period x 100
Low Churn Rate
Healthy business with strong customer satisfaction
High Churn Rate
Potential issues with product quality, pricing, or competition
