Marketing Mix and Analysis

Marketing Mix

• Evolved from 4Ps (Product, Price, Place, Promotion) to 4Cs (Customer, Cost, Convenience, Communication) and now 4Es (Experience, Everyplace, Exchange, Evangelism)
• Marketing function relates to many people, groups, and forces
• First task: discovering consumer needs
• Second task: satisfying consumer needs

Four Forms of Customer Value

• Price value: customers perceive a product as being cheaper than competitors' (e.g., Ryanair, Aldi, Easycar)
• Performance value: customers look for the latest features, functionality, and quality (e.g., Dyson)
• Emotional value: what is in the mind of the customers (e.g., Volvo and safety, Chanel and luxury)
• Relational value: the quality of service received by a customer – a high level of trust leads to the lifetime value of a customer

Customer Lifetime Value (CLV or LTV)

• The total estimated financial value that a customer will bring to a business over the entire duration of their relationship
• Calculated by estimating the total revenue that a customer will generate from their purchases and subtracting the cost of acquiring and serving them
• Important metric to help businesses understand the value of acquiring and retaining customers

Business Mission

• A broadly defined, enduring statement of purpose that distinguishes a business from others of its type
• Captures two essential ingredients: enduring and specific to the individual organization

Marketing Objectives

• Derived from the results of the marketing audit and the SWOT analysis

Marketing Metrics

• Key emerging area of control
• Two key elements: effectiveness of operational marketing activity and impact of marketing on the bottom line

Ansoff Matrix

• Not specified in the text, but generally refers to a matrix used to identify growth opportunities for a business

Customer Value-Driven Marketing Strategy

• Begins with selecting which customers to serve and determining a value proposition that best serves the targeted customers
• Consists of four steps: market segmentation, market targeting, differentiation, and positioning

Four Major Steps in Designing a Customer Value-Driven Marketing Strategy

• Market segmentation: dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors
• Market targeting: evaluating each market segment's attractiveness and selecting one or more market segments to enter
• Differentiation: actually differentiating the firm's market offering to create superior customer value
• Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place in the minds of target consumers

Major Segmentation Variables

• Geographic: nations, regions, states, counties, cities, neighborhoods, population density, climate
• Demographic: age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, generation
• Psychographic: social class, lifestyle, personality
• Behavioral: occasions, benefits, user status, usage rate, loyalty status

Demographic Segmentation

• Age and life-cycle segmentation: dividing a market into different age and life-cycle groups
• Gender segmentation: dividing a market into different segments based on gender
• Income segmentation: dividing a market into different income segments

Psychographic Segmentation

• Divides a market into segments based on variables such as social class, lifestyle, and personality
• Examples: Panera's healthy-living lifestyle segment, Fitbit's health and fitness tracking devices aimed at different benefit segments

Behavioral Segmentation

• Occasion segmentation: segments divided according to occasions, when the buyers get the idea to buy, make their purchase, or use the purchased item
• Benefit segmentation: segments divided according to the different benefits that consumers seek from the product
• User status: segments markets into nonusers, ex-users, potential users, first-time users, and regular users of a product
• Usage rate: segments markets into light, medium, and heavy product users
• Loyalty status: consumers can be loyal to brands, stores, and companies

Marketing Mix

• Evolved from 4Ps (Product, Price, Place, Promotion) to 4Cs (Customer, Cost, Convenience, Communication) and now 4Es (Experience, Everyplace, Exchange, Evangelism)
• Marketing function relates to many people, groups, and forces
• First task: discovering consumer needs
• Second task: satisfying consumer needs

Four Forms of Customer Value

• Price value: customers perceive a product as being cheaper than competitors' (e.g., Ryanair, Aldi, Easycar)
• Performance value: customers look for the latest features, functionality, and quality (e.g., Dyson)
• Emotional value: what is in the mind of the customers (e.g., Volvo and safety, Chanel and luxury)
• Relational value: the quality of service received by a customer – a high level of trust leads to the lifetime value of a customer

Customer Lifetime Value (CLV or LTV)

• The total estimated financial value that a customer will bring to a business over the entire duration of their relationship
• Calculated by estimating the total revenue that a customer will generate from their purchases and subtracting the cost of acquiring and serving them
• Important metric to help businesses understand the value of acquiring and retaining customers

Business Mission

• A broadly defined, enduring statement of purpose that distinguishes a business from others of its type
• Captures two essential ingredients: enduring and specific to the individual organization

Marketing Objectives

• Derived from the results of the marketing audit and the SWOT analysis

Marketing Metrics

• Key emerging area of control
• Two key elements: effectiveness of operational marketing activity and impact of marketing on the bottom line

Ansoff Matrix

• Not specified in the text, but generally refers to a matrix used to identify growth opportunities for a business

Customer Value-Driven Marketing Strategy

• Begins with selecting which customers to serve and determining a value proposition that best serves the targeted customers
• Consists of four steps: market segmentation, market targeting, differentiation, and positioning

Four Major Steps in Designing a Customer Value-Driven Marketing Strategy

• Market segmentation: dividing a market into smaller segments of buyers with distinct needs, characteristics, or behaviors
• Market targeting: evaluating each market segment's attractiveness and selecting one or more market segments to enter
• Differentiation: actually differentiating the firm's market offering to create superior customer value
• Positioning: arranging for a market offering to occupy a clear, distinctive, and desirable place in the minds of target consumers

Major Segmentation Variables

• Geographic: nations, regions, states, counties, cities, neighborhoods, population density, climate
• Demographic: age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, generation
• Psychographic: social class, lifestyle, personality
• Behavioral: occasions, benefits, user status, usage rate, loyalty status

Demographic Segmentation

• Age and life-cycle segmentation: dividing a market into different age and life-cycle groups
• Gender segmentation: dividing a market into different segments based on gender
• Income segmentation: dividing a market into different income segments

Psychographic Segmentation

• Divides a market into segments based on variables such as social class, lifestyle, and personality
• Examples: Panera's healthy-living lifestyle segment, Fitbit's health and fitness tracking devices aimed at different benefit segments

Behavioral Segmentation

• Occasion segmentation: segments divided according to occasions, when the buyers get the idea to buy, make their purchase, or use the purchased item
• Benefit segmentation: segments divided according to the different benefits that consumers seek from the product
• User status: segments markets into nonusers, ex-users, potential users, first-time users, and regular users of a product
• Usage rate: segments markets into light, medium, and heavy product users
• Loyalty status: consumers can be loyal to brands, stores, and companies