Dr. Roberto Moraleda Doctor Jr. - EC1 Midterm Topics, PDF

Dr. Roberto Moraleda Doctor Jr. Professorial Lecturer Dr. Roberto M. Doctor Jr. Dr. Robert Doctor had been a College Dean, Senior Professor, Principal, Adjudication Board Attorney, and Chairman of the Board of a corporation. During his college and Graduate Studies, he conscientiously served as President of Student Councils and organizations. With leadership distinctions, journalism, acting, service and loyalty awards, academic scholarship grants and Latin honors, he finished five different courses: Bachelor of Education, Bachelor of Laws and Letters, Master of Arts in Public Administation, Executive Master in Business Admin (EMBA), and Doctor of Business Administration (DBA), Major in Human Resources Management. 2-4 Quezon City University (QCU), formerly known as the Quezon City Polytechnic University (QCPU), is a city government-funded university in Quezon City, Philippines. It was established on March 1, 1994 as the Quezon City Polytechnic offering technical and vocational courses. It was renamed as Quezon City Polytechnic University when it was elevated into university status in 2001. It was again renamed as the Quezon City University on July 2019 by virtue of Ordinance No. SP-2812, series of 2019, changing its University Charter, which qualifies QCU as a beneficiary of Republic Act 10931, also known as the free tuition law.  VISION: To be recognized as the #1 local University of employable graduates  MISSION: To provide a comprehensive education that enhances the lives of QCU students for nation building and as world citizens  STRATEGIC DIRECTIONS: Excellence in Curricular Innovation Faculty Excelence Student Excellence Excellence in Research Excellence in Community Engagement Excellence in Institutional Governance Excellence Campus Environment  SHARED VALUES: (JOY) Jointness of Undertakings and Organizational Adaptability with Yoke of Efficiency and Effectiveness [email protected] GRADING SYSTEM 40% MIDDLE TERM EXAMINATION coverage: WEEK 1 - 7 TopicS 60% Class Performances ----- quizzes (15%), oral or written recitation (10%), assignments (5%), (visit & consultation) strat study (10%) & output presentation and submission (20%) BS ENTREPRENEURSHIP EC 1 TOPICS WEEK 1 TYPES OF MARKETING AND CUSTOMER VALUE WEEK 2 STRATEGIC PLANNING AND MARKETING WEEK 3 CONSUMER MARKET AND BUYING PROCESS WEEK 4 BUSINESS MARKET AND PURCHASING BEHAVIOR WEEKS 5 & 6 SDGs, STP MODEL, AND GROWTH STRATEGIES WEEK 7 PRODUCTS: CONSUMER OFFERINGS, INCLUDING SERVICES: INTANGIBLE PRODUCTS WEEK 8 (VISIT & CONSULTATION) STRAT STUDY OUTPUT PRESENTATION AND SUBMISSION WEEK 9 MIDDLE TERM EXAMINATION REFERENCES Albrecht, M., Green, M. & Hoffman, M. (2023). Principles of Marketing. Houston, Texas. Open Staxx Go, J. & Escareal-Go, C. (2017). Principles and Practices in Marketing in the Philippine Setting. Quezon City, Philippines: Josiah and Carolina Go Foundation, Inc Geyhalter (2016). How to Launch a Brand. Brandtro Publishing Long Beach CA. Jobber, D. & Ellis-Chadwick, F. (2024). Principles and Practice of Marketing. Foundation Park, Roxboroug Kotler, K. (2016). Marketing Management 15th edition, United States: Pearson Education Kotler, K. (2016). A Framework for Marketing Management Sixth edition, United States: Pearson Education Nijssen, E. (2022). Entrepreneurial Marketing Third ed. New York, NY. Routledge Vibrant (2018), Marketing Management: Essentials You Always Wanted to Know. Vibrant Publishers at Smashwords, Unites States of America. What is Marketing? Marketing refers to any actions a company takes to attract an audience to the company's product or services through high-quality messaging. Marketing aims to deliver stand- alone value for prospects and consumers through content, with the long-term goal of demonstrating product value, strengthening brand loyalty, and ultimately increasing sales. Purpose of Marketing Marketing is the process of getting people interested in the company's product or service. This happens through market research, analysis, and understanding ideal customer's interests. Marketing pertains to all aspects of a business, including product development, distribution methods, sales, and advertising. Modern Marketing began in 1950s when people started to use more than just print media to endorse product. As TV -- and soon, the internet -- entered households, marketers could conduct entire campaigns across multiple platforms. And as you might expect, over the last 70 years, marketers have become increasingly important to fine-tuning how a business sells a product to consumers to optimize success. Types of Marketing Marketing campaigns live depends entirely on where customers spend their time. Conduct market research that determines which types of marketing -- and which mix of tools within each type -- is best for brand building. Here are several types of marketing that are relevant nowadays, some have stood the test of time: 1. Internet Marketing: Inspired by product campaigns that took place online, the very idea of having a presence on internet for business reasons is a type of marketing in and of itself. 2. Search Engine Optimization: Abbreviated "SEO," this is the process of optimizing content on a website so that it appears in search engine results. It is used by marketers to attract people who perform searches that imply they are interested in learning about a particular industry. 3. Blog Marketing: Blogs are no longer exclusive to individual writer. Brands now publish blogs to write about their industry and nurture interest of potential customers who browse internet for information. 4. Social Media Marketing: Businesses can use Facebook, Instagram, Twitter, LinkedIn, and similar social networks to create impressions on their audience over time. 5. Print Marketing: As newspapers and magazines get better at understanding who subscribes to their print materials, businesses continue to sponsor articles, photography, and similar content in same publications their customers are reading. 6. Search Engine Marketing: This type of marketing is a bit different than SEO, which is described above. Businesses can now pay a search engine to place links on pages of its index that get high exposure to their audience. It is a concept called "pay-per-click". 7. Video Marketing: While there were once just commercials, marketers nowadays put money into creating and publishing all kinds of videos that entertain and educate their core customers. Marketing and Advertising If marketing is a wheel, advertising is one wheel spoke. Marketing entails product development, market research, product distribution, sales strategy, public relations, and customer support. Marketing is necessary in all stages of a business's selling journey, and it can use numerous platforms, social media channels, and teams within their organization to identify their audience, communicate to it, amplify its voice, and build brand loyalty over time. On the other hand, advertising is just one component of marketing. It's a strategic effort, usually paid for, to spread awareness of a product or service as a part of the more holistic goals outlined above. Put simply, it's not the only method used by marketers to sell a product. Let's say a business is rolling out a brand new product and wants to create a campaign promoting that product to its customer base. This company's channels of choice are Facebook, Instagram, Google, and its company website. It uses all of these spaces to support its various campaigns every quarter and generate leads through campaigns. To broadcast its new product launch, it publishes a downloadable product guide to its website, posts a video to Instagram demonstrating its new product, and invests in a series of sponsored search results on Google directing traffic to a new product page on its website. Advertising took place on Instagram and Google. Instagram generally isn't an advertising channel, but when used for branding can develop a base of followers that's primed for a gentle product announcement every now and again. Google was used for advertising in this example; the company paid for space on Google -- program known as pay- per-click -- on which to drive traffic to a product page CUSTOMER VALUE Customer Value is the sum total of benefits that customers accrue from a service or product in relation to its cost. Customer Value Proposition (or CVP) is the total amount of benefits offered by seller in return of payment for the goods or services. Value Proposition is formulated to convince customer that this particular product will add more value than competitor’s product. Conceiving and delivering excellent customer value is most essential for all kinds of business organizations in today’s competitive business environment. Delivering Value requires a deep insight into the art of value creation, by choosing the best value for its customers and delivering that value in effective and efficient manner. Value Delivery Process Marketing was taking place during the selling process. As different individuals have specific wants, perceptions, preference and buying criteria, a smart company must design and deliver offerings for well defined target markets. This inspired a new view that marketing should take place at the beginning of planning. Companies instead of emphasizing on making and selling, should now see their value delivery process. Value Creation and Delivery Sequence should be divided into three phases such as:  First Phase Before any product comes into the market, marketer must segment, target the market and develop the offerings value positioning.  Second Phase Marketer must identify the specific features of product, price and distribution.  Third Phase Here. a marketer must communicate the value of the product through various means. Value delivery process begins before the product exists, it continues through development and after launch. This including the other two phases has cost implications. STRATEGIC PLANNING Strategic Planning is a systematic process of predicting the long term goals of an organization and identifying the best approach for achieving it. Preparing effective marketing strategies requires understanding of the strategic planning process corporate policies, objectives, and business plans. A strategic plan defines organization’s strategy. Existing situation and possible opportunities need to be analyzed to determine right directions for the organization. This has to be done along with firm’s competencies, its competitive advantage, weak- nesses, and business that they want to be in. Strategic plan, where the most significant decisions are taken, helps to keep the firms well ahead of the competition and to realize its mission in the long run as well as the firm’s well–being and growth. Stages of Strategic Planning Process Strategic planning process is a systematic approach that organizations use to define their strategies, make decisions, and allocate resources to achieve long-term objectives. While specific models and terminologies might vary, the following are the common stages involved in the strategic planning process 1. Defining the Business 2. Defining the Mission Statement 3. Setting up Strategic Business Units (SBUs) 4. Environmental Scanning 5. Strategy Formulation 1. Defining the firm’s business Defining the firm’s business is the focal point of strategic planning. It is a crucial factor that enables the firms in selecting appropriate opportunities for leading the firm in the right direction. Management experts Peter Drucker and Theodore Levitt stressed on the basic questions which every firm needs to find answers to. That has to be done on a continuous basis.  What businesses are we in? Whom do we intend to serve? Do we accurately define our business? Do we know our customers? What brings us to this particular business? What would be the nature of this business in future? What business would we like to be in the future? What are our basic strengths and competencies to pursue current business or enter into a desired business? 2. Defining the Mission Statement A mission statement defines the purpose of company’s existence. Mission statement should be able to guide the actions of the organization, set its overall objectives, provide a route map, and guide decision– making. Mission provides a framework, on the basis of which company’s strategies are formulated. Every organization develops unique mission statement which it communicates to its stakeholders, so that they can understand the purpose of firm’s existence. A common mission statement provides a sense of integration within the organization and emphasises focus on realising the organizational goal. Mission statements are again guided by the vision of the organisation. Vision is what the organisation wishes to achieve over a period of time, say in two decades. Example of Mission statements “McDonald’s vision is to be the world’s best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile.” Define firms major areas needing focus Mission statements usually remain unchanged over a period of time and would generally be changed only when it loses its credibility or significance. Corporate objectives of the firm are guided by its mission statements. Once the mission statement has been defined, the organization can then plan to set up its Strategic Business Units. 3. Setting up of Strategic Business Units (SBUs) SBUs are essentially for multi–product organizations. SBU can be defined as an independent organizational unit, small enough to be flexible and large enough to have a control over most of its activities and decisions. A SBU can also be called a profit center or responsibility center that concentrates on a particular product offering for a particular market segment. They typically have an independent marketing plan, competition analysis, and marketing campaign, though they may be a part of a larger business organization. Generally SBUs display the following characteristics It could be a set of businesses which can operate separately from the rest of the organization. It has its own competition. It has separate manager who is responsible for the overall functioning, decision making, strategic planning, performance and profit management of the firm. Once strategic business units are set, organizations go in for environmental scanning to find out opportunities and threats that exist, as well to uncover strengths and weaknesses that lie within the organization. 4. Environmental Scanning No firm can function in isolation; it operates in an environment known as the business environment, consisting of various factors that influence the business policies and decisions. Business environment can be divided into: internal environment and external environment. Internal Environment are internal to the firm and would consist of the factors such as internal policies of the firm, the management, its employees etc. External Environment - external to the firm are factors such as the competitors of the firm, market, consumers, technology, government policies etc. External environ ment can be further divided into micro and macro environments. Overall environment has significant impact on the strategies of an organization, many times changes in the environment determine.or lead to changes in its strategic plans. External and internal environment scan thoroughly all available opportunities, hidden threats, and its own weaknesses and competi tiveness /strengths. Strategy Formulation Strategic Planning, Implementing and Controlling Process 5. Strategy Formulation Organizations have a hierarchy of inter- related strategies, with respective strategies formulated for different levels of the organization. Corporate Strategy Business Unit Strategy Functional Strategy Corporate Strategy is concerned with meeting the stakeholder expectations and delivering value to the stakeholders, mainly influenced by investors in the organization and acts as a guideline for strategic planning throughout the organization. Corporate strategy is often incorporated in “mission statement”. Business Strategy is more concerned with functioning and competitiveness of business for particular market. It would usually be concerned with strategic decisions regarding choice of products, delivering customer value, gaining competence, finding and exploring or generating new opportunities. Functional Strategy is concerned with how each functional area is organized to deliver the corporate and business–unit level strategic directions. Under functional strategy, we would concentrate on the marketing functiomal strategy. Strategic Marketing Planning Included in Marketing Planning Process are four STEPS Goal Setting Scanning the market environment and analyzing of market opportunities Internal Scanning Developing Marketing Objectives 1. Goal Setting Since marketing strategy is derived from the business strategy as well as corporate strategy, marketing objectives are set according to the goals that have been set at higher hierarchies.  For example If the corporate objective of the firm is to maximize the market share then the marketing objective would also focus on achieving the same objectives. 2. Scanning the market environment for finding opportunities and threats  One major reason market scan is done is to find the opportunities and threats that exists in the environment. Scanning done in strategic planning and marketing planning are almost similar. Since the major difference being that the marketing scanning involves scanning the environment of specific business unit with specific business purpose, whereas environmental scanning under strategic planning entails the overall environment of the organization. A business unit analyzes the environment and gather marketing information. It also assesses opportunities existing in the environment, study consumer behaviour and product in question. A vital aspect in environmental scanning is to understand the competition and all factors on competition. Other than the competition itself, there are other important factors too that shape the competition. Professor Michael Porter in his article (1979) has suggested five major forces that shape and decide the nature and intensity of the industry competition.  Existing competition  Threat of new entrants  Threat of substitute products  Bargaining power of customers  Bargaining power of suppliers Intensity of competition depends on the size of entrants, bigger the new entrants, the more intense would be the competition. A threat of substitute products with an improvement in its performance or price differentiation can change the industry’s competitive scenario. 3. Internal Scanning Internal scanning is done to analyze the firm’s competencies and weaknesses. Firm needs to find where its competitive advantage lies, whether it is firm’s product design, services or distribution. This evaluation is required to ascertain how equipped the firm is to face the market competition. 4, Developing Marketing Objectives it is formulation of marketing objectives. Broad outline of marketing objectives would be derived from corporate objectives of the related business. Corporate strategy would have already defined the direction for each business. Once marketing planning is done, next step would be this that requires developing contents of a marketing plan. Marketing Plan A Marketing Plan is a brief summary of objectives and recommendations. It may be part of an overall business plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of no or little use.  Contents of a marketing plan include the:  Executive Summary It is a brief summary of major objectives and recommendations, giving the management an overall view of the major purpose of the marketing plan. (A table of content should follow the page for executive summary).  Situational Analysis It portrays the significant data on sales, costs, profits, markets, competitors, etc. This data is further used for doing SWOT ANALYSIS (Strength, Weaknesses, Opportunities and Threats).  SWOT ANALYSIS Management needs to evaluate the strength, weakness, opportunities and threats in SWOT analysis and factors affecting achievement of marketing objectives.  Objectives This stage clearly outlines financial and marketing objectives like sales volume, profitability, market share, among others.  Marketing Strategy Here the target segments are defined for whom the market offering is focused on. Products positioning is planned with the help of inputs received from related functional areas such as purchase, finance, sales departments.  Action Program (Operational marketing plan itself, for the period under review) marketing action program is specified which would be used to achieve the set objectives.  Financial Forecast It would generally be the overall budgeting -– on revenue side – the sales forecast and average price would be depicted, -– on expense side – it would show estimated expenses and the difference between revenue and expenses or estimated profit.  Strategic Controls This final stage of marketing plan outlines controls for monitoring the implementation of marketing plan. There would be periodic review of results and corrective measures should be specially recommended as required.  Formulating Marketing Strategy is proper outlining of the game plan of the organization. Main elements involved in formulating the marketing strategy are  Selecting the Target Market  Formulating the Marketing Mix - the essence of marketing strategy of a firm is felt from its target market and marketing mix. Target market should be to whom the firm intends to cater and marketing mix determines how the products will be offered to target market. Selecting Target Market  Target Market is the market that one would want to cater to. Selecting target market is a significant part of developing a marketing strategy.  Marketing Mix it can be defined as the effective combination of the Ps of marketing to formulate a unique selling proposition for the product. Every firm should have a different combination of the marketing mix as per its individual requirements. it is also known as four (4) Ps of Marketing – Product Mix (eg, frozen foods along with a variety of fresh fruits), Place Mix (eg, chain of whole–sellers, retailers, along with events), Price Mix (eg, extra filled packs, say 20% extra, along with special promotional price for trials), and Promo Mix (eg, above–the–line, say TV, along with below–the–line promotions, say direct mail). An additional three (3) Ps of marketing applicable to services are the – Physical Evidence, People and Process. Every business raises the difference in its nature and situation uses different marketing strategic styles, which ever best suits them. Broad Types of Marketing Strategies 1. Market Leader - Market Strategy Market leader strategy is as well known as offensive or confrontation strategy. Generally employed by firms which are currently not the leaders in the market but aspires to be a market leader. Firms try to expand their market share by using all marketing mix elements, and the target of attack would be market leader. 2. Market Challenger – Marketing Strategy This strategy focuses on gap analysis. Gap analysis can be done by comparing the performance of competitors existing products in the market with the actual expectation of consumers regarding the product. A firm can then strive to bridge the gap by providing products as per customers’ expectation leading higher customer satisfaction levels. In this strategy, competitors’ weaknesses are taken as advantageous opportunities. 3. Niche Market – Marketing Strategy Niche markets are small differentiated markets where no other firms have thought of entering into. Generally these markets are too small to attract large number of competitions. Niche may serve some specific customer or some specific areas. Examples are those companies focused on adventure sports, trekking; or travel companies concentrating much on a specific segment of pilgrims. 4. Market Follower – Marketing Strategy A market follower depends on its competitors to identify markets. As a follower, the firm needs to be keen on its competitor’s weaknesses and try improving on them. This marketing strategy saves the firm on cost arising from having to carry out research because it only has to work on its competitors weaknesses to better its own products or services. What is consumer market?  Consumer Market is one in which buyers of the product are consumers themselves. It may seem obvious, but the reality is that not everyone who buys an item does so for his own use. This is the basic level of any market and that we find it in establishments as simple as supermarkets, grocery stores, car sales, and so on. However, market customers differ according to their tastes and needs, so that an entrepreneur must identify target niche to offer respective requirements. Types of Consumer Markets Currently the consumer market is divided into several types depending on the type of customers you are targeting in a project. Some of them are: 1. B2B First of all, there is the famous Business to Business. This is a model in which companies sell to companies, not to individual customers. But of course, since we are in a consumer market, that company will use what you sell, and not ever resell it. This model is characterized by obtaining larger orders from fewer customers, which helps you eliminate costs and operate on a large scale, which translates into greater profitability. An example would be raw material wholesalers, who market those elements needed to create a product from scratch. 2. Professional Services Businesses need not only raw materials, they also need training or consulting in multiple areas to achieve goals. This is where professional services come in. We are talking about companies that provide services to other companies in interesting areas such as marketing, technology, sales, human resources training and more. In most cases, this is done in a conssulting format, although nowadays there are also training programs, group lectures, masters, and many others 3. Industrial Sales These are the sales of all the equipment that is permanent over time and has a fairly long useful life. This includes working machinery, chemical products, raw materials, office equipments, plastic materials, etc. 4. B2C A model called Business to Consumer. Company sells its products to individuals, not to companies. In most cases, it's made up of businesses like supermarkets, department stores, pharmacy chains, franchises, among others where growth potential is very interesting but profit margin is usually low per product sold. 5. Consumer Products Consumer products are used on a massive scale. They are characterized by fairly voracious competition, so constantly work to gain the loyalty of customers. Users in this niche tend to switch brands very easily since there is cheaper product that provides similar benefits. Is it cost-effective? Yes, but it can be one of the most complex sectors to participate in. 6. Food and Beverage All those products that are intended for consumption by the body. They usually have multiple regulations to ensure that the person acquires high quality item, since it is something that goes directly to the body. It's essential to know target audiences and their lifestyle very well, since in a very short time they can change brands without giving practically any sign of it. How is the consumer market segmented? In order to position each product, a market segmentation is made to focus efforts on those niches that are interested in your product. Let's see which are the most relevant segments today: Demographic Demographic segmentation divides markets into specific variables such as gender, family size, age range, religious beliefs, occupation, among others. 1. Gender Yes, we're talking about whether it’s a man or a woman, and in some cases we even find brands that are interested in the sexual tastes of their customers. Companies that use this type of segmentation the most are clothing brands, cosmetics distributors and media. There are products more consumed by men and others more consumed by women. 2. Age This is one of the most used variables when segmenting a market. Each age group has different expectations and needs. That is why it's important to know target customer to offer them what they are looking for. 3. Income We mean the buying power of target audience. It's important to know approximately what user's income is to know if they have the capacity to purchase product. Social Class It is divided into high, middle and low class. Each company makes products for a certain social stratum, so it's time to know which one is yours. There's everything from furniture for the upper class to smartphones for the lower class, which shows the importance of this segmentation. Geographic In this case, divide a market into different geographic sections, whether it is a country, state, department or even neighborhood. Climate It's essential to know what the average weather is like, where user lives. Never sell beach products to someone who lives in areas surrounded by mountains. Density Number of people living in a place influence their needs.  Keep this in mind before making a first offer, since they are usually very busy due to the lifestyle in big cities. Consumer Market is one of the most important markets today. It reflects the economic health of a country and the characteristics of its people depending on relevance of their respective segmentations. Pay attention to it and focus efforts on those niches that are willing to buy your product or service.  Consumer Buying Behavior refers to the decisions and actions people undertake to buy products or services for personal use. In other words, it’s the actions you take before buying a product or service, and as you will see, many factors influence that behavior. You and all other consumers combine to make up the consumer market.  Consumer Behavior observes how people choose, use, and discard products: goods (food or non-food) and services, encompassing respective emotional, cognitive and behavioral reactions Understanding consumer behavior is key for businesses trying to orchestrate impactful marketing tactics that shape consumer decision-making pathways. Understanding consumer buying behavior is crucial for businesses striving to succeed in today’s competitive marketplace:  Insights into Customer Needs: Consumer behavior analysis provides valuable insights into the needs, desires, and preferences of target audience. Understanding how consumers choose products reveals gaps in product suite or irrelevant offerings, while also highlighting the most wanted products in your catalog. Effective Marketing Strategies: Knowing how consumers make purchasing decisions allows businesses to develop more effective marketing strategies. By aligning messaging, branding, and promotions with consumer preferences can increase likelihood of capturing their attention and driving conversions. Product Development and Innovation: Consumer behavior research helps identify gaps in the market and areas for product improvement. By listening to consumer feedback and observing behavior, businesses innovate and develop products that resonate with target audience, leading to greater customer satisfaction and loyalty. Competitive Advantage: Understanding consumption behavior gives businesses a competitive edge. By staying ahead of consumer trends and preferences, you can anticipate market shifts, outmaneuver competitors, and position your brand as a leader in your industry. Customer Engagement and Retention: By understanding consumer behavior, businesses can create personalized experiences that engage and retain customers. By building relationships based on trust and understanding, businesses can foster long-term loyalty and advocacy. Consumer Behavior Analysis shouldn’t end until the following are identified:  Consumer sentiments and preferences toward different options, including brands and best products.  Factors that influence consumers’ choices among various options.  Consumer behaviors during the research and shopping phases.  Influence of consumers’ surroundings, including peers, family, and media, on their decisions. TYPES OF CONSUMER BEHAVIOR 1. Complex Purchasing Behavior This type of behavior occurs when consumers are buying expensive, rarely-purchased items. In this case, people are deeply involved in the purchase process, conducting extensive research before making a significant investment. Think about purchasing a house orrenting a car; these are consumer behavior examples of complex buying behavior. 2. Dissonance-Reducing Purchasing Behavior Dissonance is defined as a lack of harmony. In the shopping process, this behavior is visible when consumers struggle to differentiate between brands. There’s no favorite brand and none of the options is particularly attractive, so ‘dissonance’ appears as consumers fear they will regret their decision. For instance, when buying a lawnmower, you may select one based on price and convenience. However, you’ll still seek reassurance about your choice afterward. 3. Habitual Purchasing Behavior As opposed to the first two behaviors, this one appears when consumers mindlessly buy something, with little to no involvement in the product or brand category. To illustrate, let’s think of grocery shopping: you visit the store and buy your preferred type of bread. Demonstrate zero brand loyalty, as you go for your preferred taste, no matter the logo on the label. 4. Variety-Seeking Behavior We have this scenario, where consumers purchase a different product not because they were dissatisfied with the previous one, but because they seek variety. Think of people who order protein or any supplements. It’s not that they’re not satisfied with the product in itself; they just got bored of the same taste and looked for some chocolaty feelings in their protein shakes. It’s important to understand all these types of behaviors and determine which type of customers brand attracts. What Influences Consumer Behavior? Marketing Campaigns Most obvious, and the most in control factor lies in your marketing efforts. When executed effectively and consistently, with compelling messaging, marketing tactics can prompt consumers to switch brands and even opt for higher- priced alternatives. For example, campaigns generated through Facebook can serve as reminders for regularly purchased products or services, like insurance. Economic Conditions Moving on to uncontrollable situations, economic climates, particularly regarding big-ticket items such as houses or cars, significantly shape consumer behavior. Evidently, positive economic conditions tend to strengthen consumer confidence and their willingness to make purchases, regardless of financial commitments. Personal Preferences Factors like preferences, priorities, morals, and values play a substantial role in shaping consumer behavior, particularly in industries such as fashion or food. While advertisements can influence behavior to some extent, consumers’ choices are primarily guided by their personal preferences. For example, climate change activists are unlikely to start consuming fast-fashion products, just as vegans aren’t going to buy your medium-rare stake, regardless of advertising efforts. Group Influence Peer pressure is a significant driver of consumer behavior. Opinions and actions of family members, classmates, neighbors, and acquaintances can exert so considerable influence on our decisions. Social psychology comes into play, affecting choices like opting for fast food over home-cooked meals, which can be influenced by education levels and social factors. Purchasing Power Finally, our financial capacity is a key determinant of our consumer behavior. Unless exceptionally wealthy, budget considerations often precede purchase decisions. Even if a product is exceptional and the marketing compelling, lacking the financial means to afford it can discourage a purchase. Customer Behavior Patterns Be careful not to confuse buying behavior pattern with buying habits. Consumer habits develop as inclinations towards actions and become spontaneous over time, while patterns exhibit a predictable mental structure. Each customer possesses unique buying habits while buying behavior patterns are collective and provide marketers with distinct characterizations. Place of Purchase Customers often split their purchases among various stores, even if all items are available in one location. For example, while a hypermarket may offer clothes and shoes, customers may still prefer purchasing those items from specific clothing brands. Understanding customer behavior regarding place choice will help you identify key store location. Items Purchased Examining a shopping cart reveals valuable consumer insights about purchased items and quantities. Essential items may be bought in bulk, luxury items are purchased less frequently and in smaller quantities. Quantity of each item bought is influenced by factors such as perishability, purchasing power, unit of sale, price, and intended consumer base. Time and Frequency of Purchase Customers expect service at all hours, especially in era of e-commerce where shopping is just few clicks away. Shops must align their services with customer purchase patterns, meeting demands at various times and frequencies. Seasonal variations, regional differences must also be considered. Method of Purchase Customers can either make in-store purchases, opt for online orders, paying via credit card or upon delivery. What is the consumer buying process? Buying process is the series of stages a consumer goes through before becoming a customer. Businesses can improve sales generation by learning about each stage and how to best optimize their use. When laid out visually, the buying process takes the shape of a funnel. At the top is everyone who hears of a business. At the bottom is small percentage that turns into customers. Six (6) stages of consumer buying process 1. Realizing there is a problem A person first realizes there is a problem that needs solving. A business's goal is to solve a specific problem for its customer through its products or services. It is this step that starts the journey for every customer. To get consumers to enter into this stage, businesses want to direct their advertising efforts toward highlighting these problems. A business should think about what problems its particular product or service can solve, then focus on these. 2. Conducting Research Once a potential customer realizes they have a problem, the next thing they may do is conduct some research. Unless a business is selling relatively cheap products, they can count on consumers to perform some basic research before buying. To help consumers in this stage of the journey, businesses can provide plenty of information related to the person's problem. During this stage, they are trying to lead potential customers toward the idea that they need the business's help without directly promoting their products or services. Things businesses want to focus on during this stage are: Getting positive reviews on their products or services Building authority as an expert within their niche Receiving endorsements from popular figures within their niche Generating brand awareness through advertising and social media Example: The landscaping company could create a blog post titled "5 Tips for Taking Care of Your Lawn." This blog post would talk about all the possible solutions, one of which is hiring a landscaper 3. Comparing Options Think about which course of action they would like to take or which products they want to try. It is during this stage that businesses want to showcase their advantages and contrast themselves with their competitors. Some things businesses can focus on here include: Providing product comparison guides Getting reviewed by major websites or print outlets Offering customer testimonials Providing customer support agents to answer questions 4. Deciding to purchase Even if a business does a good job of showing consumers why they need its product and why it is better than the competitors, there is still a chance that the consumer may decline to buy the product. Focus on: Reminding customer of problem and how he helped Providing some measure of security (for example, a strong return policy or money-back guarantee) Sending out simple email reminders to customers who are close to completing the sales process Offering last-second discounts to get the consumer to convert into a customer 5. Completing the purchase If a business is successfully able to convince a consumer to become a customer, it should make sure buying process is as simple as possible. Businesses focus on streamlining their checkout process to remove any chance that prospective customers leave. They can do this in a few ways such as: Using professional shopping cart software Offering several payment methods Keeping lines short and moving at the store Upgrading their POS software or equipment 6. Evaluating Decisions Buying process doesn't stop with the completion of the sale. After receiving a product or service, customers analyze and evaluate their decision. For businesses, bringing back a customer is much easier than generating a new one, making it important that customers are satisfied with their decision.  There are a few ways that businesses can help to ensure that customers are happy with their purchase and buy again: Provide excellent customer service Provide refunds if nrt replacements in a timely fashion Offer a referral bonus Ask for customer feedback Provide discounts for repeat customers Create helpful guides to get the most out of the company’s product Example: Customers are satisfied with the landscaping company and signs a contract for year-round services. They then tell their neighbors and friends about the company. Those referrals lead to more business for landscaping company. What is a Business Market? It is a method a company uses to sell products or services to a specific group of consumers. Typically, business markets facilitate sales from one business to another in cases where one business plans to re-use or resell another company's products or services. A company that purchases goods and services in a business market might use items they purchase as materials to produce new products of their own. There are business markets designed around making sales directly to consumers, and they focus on reaching large audience rather than marketing to other businesses. Here are five (5) different types of business markets: Business-to-consumer Market A business-to-consumer market involves businesses advertising products directly to customers for purchase. The business-to-consumer market is usually identified as the biggest type of business market, as it caters to the largest group of potential consumers. This is because companies that use a business-to- consumer market design their efforts considering the general public or specific demographics that exist within the population, such as different age groups, genders or groups with special interests. Business-to-business Market Companies that use business-to-business markets advertise and sell respective goods or services to other businesses instead of marketing directly to consumers. Products and services sold in a business-to-business market are often reused or resold by the company that purchases them and sometimes function as materials for manufacturing new products. Some companies that operate in a business-to-business market might also sell to consumers, but most focus on selling their products or services to other companies or businesses. Industrial Market If a business sells products or services used in industrial or production projects, it likely operates in an industrial market. Most companies that use an industrial market advertise and sell their goods and services to other companies rather than immediately to consumers. Industrial products and services are typically most useful to companies that reuse them to complete other projects and are not usually ideal for personal use by individuals. Industrial markets are often considered one of smallest business markets, since their products and services serve smaller groups of consumers. Services Market Services market refers to when a business advertises and sells services instead of food or non food. Businesses that operate in a services market can also function in a business-to-business market if they sell their services primarily to businesses or a business-to-consumer market if they more frequently sell directly to customers. This can depend on the type of service a business offers, such as whether it's service that benefits individual consumers or entire businesses. Professional Services Market A professional services m facilitates the advertising and sale of services from specialized professions. As companies that operate in professional services markets offer specialized work, their businesses and employees typically have some sort of licensing or certification that permits them to work in their field. Because some companies in a professional services market might provide services that can benefit entire businesses as well as individual consumers, they can sometimes function in both a business-to-business and a business-to-consumer market. Business Market Characteristics  Here are a few characteristics of business markets: Business markets often serve a smaller consumer market that contains large buyers. Business markets can facilitate business between companies that are far away from each other in terms of location. Demand in business markets remains consistent and unaffected by changes in prices. Purchases made in a business market might involve several buyers. Business markets grow and shrink depending on how many customers are purchasing a final version of a product. Selling and advertising in a business market requires a high degree of professionalism. Business markets can present more complex purchasing decisions than consumer markets. Making purchases in a business market is a formal process. Business markets facilitate long-term professional relationships between buyers and sellers. What is Business Buyer Behavior? Organizations that purchase goods and services for manufacturing other products and services sold, leased or supplied to others are business buyers. Organizational buying is also known as institutional buying or business-to-business (B2B) buying. Business buyer behavior starts when a company or organization determines a need for goods. Then, they gather details to compare and contrast products and services from competing brands. They make final purchase decision. Organizations purchase products for internal use, use in manufacturing process to provide finished product. When the goods are used in their manufacturing process, the purchase process is called industrial buying. In some ways, business buyer behaviors are similar to individual customer buying in that the organization does not make the purchasing decisions. Still, people from all levels of the organization are involved in the proces. Characteristics of Business Buying Behavior Unlike individual consumer purchases, business buyer behaviors are governed by distinct characteristics that shape how organizations approach and manage their procurement processes.  Recognizing these characteristics is essential for suppliers aiming to meet the needs of their business clients effectively and for businesses seeking to optimize their purchasing strategies. Here, we outline the different key features: Collective Decision-Making: Business purchases often involve input from multiple stakeholders, leading to collaborative decision-making processes involving many departments or individuals. Large-Scale Transactions: Business buying typically involves larger quantities and higher financial stake than individual consumer purchases, necessitating more careful consideration and strategic planning. Long-Term Supplier Relationships: Businesses often seek to establish long-term relationships with suppliers for quality, reliable supply, and potential cost benefits. Rational and Structured Approach: Unlike individual consumers, businesses follow more sensible, structured approach to purchasing, focusing on functionality, quality, and return on investment. Sensitivity to External Factors: Business buyer behavior is influenced by external factors such as market trends, economic conditions, and technological advancements, requiring businesses to stay informed and adaptable. Negotiation Process: Negotiations are common aspect of business purchases, focusing on price, delivery schedules, payment terms, and after-sales services. Emphasis on Supplier Evaluation: Businesses thoroughly evaluate potential suppliers, considering factors like reputation, financial stability, production capacity, and quality control measures. Formal Procurement Policies and Procedures: Business purchases are often governed by legal procurement policies and procedures, ensuring compliances, transparency, and consistency in purchasing decisions. Requirement-Based Purchasing: Business buying is primarily driven by specific organizational needs and requirements rather than impulse or personal preference. Focus on Total Cost of Ownership (TCO): Businesses consider not just the purchase price but the total cost of ownership, which includes expenses related to maintenance, operation, and disposal of a product. Four (4) Types of Buying Behavior Business buyer behavior refers to organizations’ decision-making processes and actions in purchasing and procuring goods and services. This behavior is typically more complex than individual consumer buying due to factors like larger transaction volumes, formal procedures, and the involvement of multiple decision-makers. There are several types of business buying behaviors Straight Rebuy: This business buyer behavior is the most straightforward buying behavior, where a business reorders a product or service without any modification. It’s common in routine purchase decisions and often involves automatic reordering systems. Modified Rebuy: In this scenario, a business has experience with the product but is looking to make some changes. This could be due to changes in need, desire for better pricing, or improved features. The decision- making process is more involved than a straight rebuy but less than a new task. New Task: This business buyer behavior occurs when a business purchases a product or service for the first time. The decision-making process is usually lengthy and complex, involving extensive research and consideration of various suppliers. It often requires approval from higher levels of management. Competitive Pressure: The need to stay competitive can drive businesses to make purchases that help them maintain or enhance their market position. Internal Policies and Procedures: Organizational procurement policies and a structure of decision-making process can also influence buying behavior. What are some Responsibilities of Buyers? Industrial marketer must recognize people who are parts of purchasing decision process. Buying centers involve everyone or every unit that is involved in such processes. Initiators are individuals who place the request for a purchase or acquisition. Users are the starters of the purchasing process as they use the products. Individuals within an organization who affect decision-making by presenting information on purchasing requirements are known as influencers (for example, R&D personnel). Deciders, such as engineers, are parts of the organization that have the power to make decisions regarding the purchase. Gatekeepers are parts of the organization with the authority to prohibit sellers or details from reaching buying center members. These could be receptionists, secretaries, or purchasing agents. Approvers are the individuals who approve the purchase. Buyers have legitimate authority to decide on the supplier and organize the purchase terms. Sustainable Development Goals These goals were created to make the world a better place socially, morally, economically, politically and physically. Some goals may be more relevant to specific industries than others. Businesses can approach these goals in various ways ― any step toward sustainability is a step in the right direction. 1. End Poverty Set and enforce strict nondiscriminatory policies.  Recruit, train and employ local community members, including those living in poverty, and integrate them into your value chain. 2. Zero Hunger  Support and encourage small-scale farming and practice farm-to-table or “farm-to-office” snacks, sourced from local entities whenever possible. Demonstrate transparency in the agricultural supply chain. 3. Good Health and Well-being  Offer employee health benefits. Make investments in health a priority in business operations. 4. Quality Education  Creating programs, such as internships, work-study programs and traineeships, that give students soonest access to the corporate environment.  Providing employees with continuous opportunities to improve their (job) skills for their current and future employment. 5. Gender Equality  Pay equal remuneration, including benefits, for work of equal value. Support access to child and dependent care by providing services, resources and info to both women and men. Establish a zero-tolerance policy toward all forms of violence at work, including verbal and physical abuse. 6. Clean Water and Sanitation  Prioritize water efficiency by installing best-practice technologies for water conservation. Educate employees about the importance of water efficiency. Prohibit the use of chemicals and materials -- particularly detrimental to water quality if improperly disposed of. 7. Affordable and Clean Energy Pursue efficient certifications, i.e. LEED or Energy Star.  Prioritize energy conservation and energy efficiency practices across all operations; preserve light, heating, cooling, and more whenever possible. 8. Decent Work and Economic Growth Offer apprenticeship opportunities.  Foster an entrepreneurial culture and invest in and mentor young entrepreneurs. Install a firm policy against unfair hiring and recruitment practices, such as gender bias. 9. Industry, Innovation and Infrastructure  Establish standards and promote regulation that ensures company projects and initiatives are managed sustainably. Promote innovation by giving stakeholders opportunity to offer creative solutions to sustainability challenges. 10. Reduced Inequalities  Invest in business-driven poverty eradication activities, such as developing a living wage policy. Partner with civil society networks to provide education and entrepreneurial skills training. 11. Sustainable Cities and Communities Jointly develop and participate in sustainable community that brings together relevant stakeholders through a common and neutral platform to jointly analyze, discuss and act on urban functionality, resilience, development.  Support and utilize public transportation services. 12. Responsible Consumption and Production  Reduce manufacturing impacts by substituting virgin raw materials in products with post-consumer materials through recycling and upcycling, and waste significantly ensuring that any unavoidable waste is utilized to fullest degree, such as organic waste as fuel or fertilizer. 13. Climate Action Retrofit the lighting systems of the company’s facilities to energy-efficient LED lighting.  Understand climate risk and build resilience into the company’s assets and supply chain. Expand sustainable forest management through responsible sourcing practices and product substitution. 14. Life Below Water  Track the life cycle of products and materials to understand how they are disposed of and which products could likely find their way into marine environments. Record and disclose information on the chemical and material usage within products, packaging and processing systems to facilitate closing the loop.  Prevent waste mismanagement or littering that could pollute the marine environment. 15. Life on Land Measure, manage and mitigate impacts on ecosystems and natural resources. Scale up best practices for land-use planning and management.  Commit to and implement responsible sourcing practices beyond compliance ― applying environmental and social safeguards ― for all raw materials and commodities 16. Peace, Justice and Strong Institutions  Comply with laws and seek to meet international standards; require and support business partners to do the same. 17. Partnerships for the Goals Partake in SDG-related partnerships like the U.N.’s Make the Global Goals Local campaign, the SDG reporting initiative and locally based sustainability initiatives. What is segmentation, targeting, and positioning (STP Marketing)? Segmentation, targeting, and positioning (often referred to as segmentation-targeting-positioning or STP marketing) is a consumer-centric approach to marketing communications. STP model helps deliver more relevant, personalized messages to target audiences. At its core, STP marketing helps you to better target your marketing messages and better serve your customer base. Here's an example: I once created a marketing strategy for a fitness apparel brand. Rather than appeal to all fitness enthusiasts across the board, the brand wanted to target a specific segment within their target market: female yoga fans in their 30s and 40s. Ultimately, our marketing campaign was much more efficient and cost-effective since we knew our audience, where to reach them, and what messages would resonate. Conducting an STP Marketing Analysis STP allows to take a large, anonymous audience and define how different products (or different components of the same product) relate to specific consumer segments within that larger audience — thus understanding how to position product(s), messaging to grab the attention of each segment. Here are its parts:  1. Segmentation Segmentation refers to the process of dividing your audience into smaller groups based on certain characteristics. This process allows you to group your individual audience members into similar groups so you can better communicate your products, features, and benefits that may be most relevant to them.  You can segment your audience based on one or more of these criteria:  Demographics, which typically answer the question of who your buyer is (e.g. age, gender, education, location, and profession)  Psychographics, which answer the question of why your buyer buys (e.g. priorities, personality traits, and beliefs and values)  Lifestyle traits, such as hobbies, entertainment preferences, and non-work activities  Behavior, such as brand loyalty, channel preferences, and other shopping habits  Segmentation may sound a little familiar to another process we often discuss here -- buyer personas. While the two are very similar, buyer personas help you create a handful of customer profiles that represent your broader audience. Segmentation allows you to split your audience into countless groups, each of which you can uniquely target. While the two are very similar, buyer personas help you create a handful of customer profiles that represent your broader audience. Segmentation allows you to split your audience into countless groups, each of which you can uniquely target. For example, let’s say Paws & Tails is a Chicago pet- sitting company that offers pet-sitting, dog walking, and boarding services. Given the vast number of pet owners in the city, they need to segment their audience into smaller groups to better understand how to position their services.  Based on their research and current customer base, they split their audience into three main segments: Segment A is made up of high-income pet owners who work often and need daytime dog walking and pet pop- in visits. Segment B is made up of middle-class individuals and families who travel and need overnight boarding or pet- sitting services. Segment C is made up of older pet owners and retirees who need help caring for their pets.  2. Targeting With your audience segments in hand, it’s time to move on to the targeting phase. First, however, you must decide which segments are worth targeting with your marketing. To decipher this, I like to ask myself the following questions about each segment: Is this segment composed of enough potential customers to justify targeting? Would it yield enough profits if the segment were to convert? Is it measurably different from the other segments? Is it accessible by all members of Marketing and Sales? Is your company equipped and able to serve the segment? Are there any physical, legal, social, or technological barriers that could prevent that? Choosing what segments to target is a strategic decision. Thankfully, certain strategic planning models — the PESTLED+ analysis is a personal favorite — can help you better understand the viability of each segment. It takes a lot of work to successfully target a segment of your audience. But from my experience, whether you’ve identified two segments or ten, don’t feel the need to target more than one segment at once. In fact, I've found that targeting one at a time can help you better position your marketing for each specific segment Following our example from before, Paws & Tails conducts research to better understand its Chicago audience. Paws & Tails finds that Segment A makes up 60% of its market size, Segment B makes up 30%, and Segment C makes up 10%. Moreover, Segment A has a higher average income and is willing to pay more for pet-sitting and walking services. Because of this, they choose to focus on Segment A.  3. Positioning At this point, you should understand the demographics, psychographics, motivations, and pain points of the segments you’ve chosen to target, which can provide a place to start when it comes to positioning your product or service. First, take a step back and examine your product or service through the perspective of your chosen segment. If you were in their shoes, why would you choose your product over a competitor’s? What features or benefits are most relevant to you, based on the motivations and pain points you’ve identified? This information is important to defining your brand positioning and understanding how it stacks up next to your competitors. One way to understand where you, well, stand is by building a positioning map, which is “the visual plotting of specific brands against axes, where each axis represents an attribute that is known to drive brand selection.” That segment you choose to target should dictate what two attributes you plot on your positioning map. For example, let’s say Paws & Tails decides Segment A selects pet-sitting brands based on 2 attributes: services area and reliability. By understanding 1) what the target segment deems most important for brand selection and 2) where its competitors succeed (and fall short), Paws & Tails is able to identify an open market opportunity and position its marketing to best fit the needs and goals of its audience. Using STP Analysis in Marketing STP Model is a priceless addition to any marketing strategy, regardless of your industry, product, or audience. It prioritizes efficient and effective marketing and ensures you’re delivering only the most relevant, targeted messaging across the board. By leading with a consumer-centric approach like STP ensures that every inch of your marketing is relevant to your audience — thus, increasing the likelihood that they convert, purchase, and become lifelong customers. What is Growth Strategy? A growth strategy is a detailed outline that lists the actions businesses plan to take to expand operations, increase revenue and boost market reach. With a growth strategy, an organization evaluates its financial, market and industry positions to establish clear objectives that help the business develop over time. A strategy for growth can require different departments and teams to work together to further the company's goals. As an action plan, your growth strategy can include the following components:  Goal: Define what the company hopes to achieve with a growth strategy.  People: Outline who is involved in the project.  Product: Consider whether the company has positioned a product to help achieve its goal.  Tactics: Identify the steps the company can take to reach its goal.  Examples of growth strategy goals include increasing market share and revenue, acquiring assets and improving the organization's products or services. The growth strategy your employer implements may include aspects such as: Investing in new software Conducting market research Adding new locations Hiring new employees Lowering the cost of a product  Tips for developing an effective growth strategy when planning and initiating a business growth strategy:  Use a growth strategy template: This can help integrate all the required elements into the strategy you develop to help the business grow and succeed.  Establish value: Determine what sets your business apart from the competition. You can outline what value the company's products and services bring to customers and why individuals may want to choose the company over other retailers or business organizations in the market.  Define customer markets: Determine who your ideal customers are and whether these individuals already purchase goods and services from the company. Then, you can consider how to better address their desires, requests and priorities.  Analyze competitors: Perform an analysis of your competitors to find out what they do that works, doesn't work and how they reach the same market. You can use this information to develop a growth strategy that integrates effective methods for the company's competitors.  Determine where revenue comes from: Identify all the company's current revenue streams and look for ways to add more opportunities to earn revenue. For example, a new product or service offering could be one way to add new revenue streams. Monitor performance: Effective strategies typically require key performance indicators that allow to evaluate what aspects of strategies are effective and w/c aren't. Growth Strategies that help business plan, organize and implement various processes, drive sales, increase profits and widen customer market: 1. Market Expansion It can be an effective approach to business growth. This strategy involves a company selling its products or services to a new market. A business may use market expansion as a strategy if there is little room for growth in its industry among its competitors or if the company finds new uses for its products within different markets. i.e: a software company expands its market from IT and techno consumers to education, healthcare and other market sectors. 2. Market Segmentation Market segmentation is another type of growth strategy that divides customer market into smaller groups, also being called as called segments, according to various criteria, including customer interests, locations, ages or professions. A business might implement market segmentation as a growth strategy for developing campaigns that are directly targeted to each segment. For example: a clothing retailer uses market segmentation to create segments based on age, then creates targeted campaigns for age-appropriate clothing. 3. Market Penetration Market penetration is another marketing growth strategy that businesses can use to increase their revenue. This strategy operates by marketing a company's existing products or services to its current market. This increases the company's market share, which is the percentage of the dollar and product sales it holds within its market compared to its competitors. To implement market penetration, company might lower its product or service prices, especially if there is little distinction between its products. This can increase its market share by attracting more repetitive sales. 4. Product Expansion Businesses also use strategies regarding the products they develop and sell to support growth and increase profits. Product expansion is one such strategy where a company can expand its product line or redesign products to increase sales and revenue. For example, a technology company can employ product expansion strategies when new technology emerges or older forms become outdated. 5. Diversification Diversification is a business growth strategy that involves an organization developing and selling new products to new customer markets. It can be a challenging strategy to implement since it may involve extensive product and consumer research. However, with the proper market analysis and research, a company can become quite successful through innovative approaches to appealing to a wider range of customers. 6. Forward Acquisition and Merging Businesses may also use acquisitions and mergers as a means of growth and profitability. A forward acquisition is growth strategy that involves buying component businesses that are essentially a part of a company's distribution chain. For example, a major food grocer might use a forward acquisition to buy up additional properties to convert to its grocer brand. This enables companies to move competition out of the way while enabling more accessibility for customer markets. 7. Horizontal Acquisition A horizontal acquisition is similar in principle to a forward acquisition because it consists of buying another company or organizations. However, a horizontal acquisition enables companies to buy competing businesses that add to business growth and development. This strategy also serves companies by eliminating competition and increasing market share. 8. Backward Acquisition Along with forward and horizontal acquisition strategies, a backward acquisition is an integrative business growth strategy that involves a company buying one of its suppliers to better control its supply chain. This is an effective growth strategy because it allows businesses to develop and launch new products more quickly and for fewer costs. For example, an automobile parts supply company might undergo a backward acquisition to acquire a business that manufactures the parts it sells. This would therefore allow parts of the business to offer custom-made parts to bigger customers. 9. New Partnerships Businesses and organizations increase revenue and achieve growth by forming new partnerships with similar businesses that offer similar products and services. This can be highly effective for: Increasing resources Boosting staff Acquiring diverse talent Gaining access to essential equipment or advance technology Another benefit of this business growth strategy is that those organizations that form the partnership gain exposure to each other's customer markets, ultimately increasing sales and revenue. 10. Viral Loop Strategy Viral loop strategy is a growth strategy that involves several processes to be successful. When a company implements this strategy, it may include these steps:  First, customers must try the company's products or service offerings.  Then, the company offers incentives for its customers to share the products or their services with their networks.  These new customers then purchase the company's products or services, try them and also refer others to try the company's products or services.  This cycle repeats consistently and works by increasing the number of customers who purchase from the company. An effective product marketing strategy can be the key to growing brand, boosting revenue, and unlocking new opportunities. Focused on demonstrating the specific values and benefits of a product to your customer, a product marketing campaign can be extremely valuable in both B2B and B2C environments, particularly as customer- centric advertising grows more popular. There are still countless people who don’t understand what product marketing actually means. Only around 5% of product marketers are convinced their role is fully understood, even among business leaders. What is Product Marketing Strategy? Product marketing is the art and science of bringing a product to market. It involves various strategic marketing and sales tactics, as well as long-term lead nurturing, up- selling, and cross-selling techniques. A product marketing strategy is the exact plan a business or compantes use to bring their product to their audience. Your strategy will usually include things like figuring out the positioning and messaging you want to link to your product, launching the product, and ensuring customers and salespeople understand what it can do. Strategies can also cover insights into how various teams (production, marketing, sales, and customer support) will work together to drive demand and usage of a product. In this context, understanding the role of the product manager is crucial because they play a big part in coordinating between different teams and ensuring the product aligns with the overall marketing strategy. Product Marketing Strategy Example Product marketing is focused on the steps people take to purchase your products, and how you can support people in adopting and using that product. Let’s take a look at a classic example. Apple is a household name in a highly competitive technology market. To stand out from the crowd, Apple ensures its products are beautifully well-designed, easy to use, and convenient. Apple’s product marketing strategy focuses specifically on the benefits it can deliver to users, rather than just listing the features you can get from each item. Apple’s language in virtually every product page and marketing campaign concentrates on telling consumers what they can do, and what they’ll be able to accomplish. Apple tells a narrative with its marketing content which helps the customer imagine the challenges they can overcome. For another example, look at Billie, a woman’s razor brand well known for the #ProjectBodyHair campaign. This started with TV campaign that actually shows body hair in women’s razor ads – something which hadn’t been done before. Why Need a Product Marketing Strategy? Product marketing strategies are all about understanding your audience’s needs, and positioning your product in a way that grabs attention. Developing the right product for your market and ensuring you present it in a way that captures audience attention is essential for growth.  With a product marketing strategy, you can: Improve your understanding of your customer: Implementing product strategy requires a company to conduct in-depth research into their target audience. Learn what your customers need to see in your products to determine it is valuable to them, and their lives. Understand your Competitors While you’re building your product marketing strategy, you’ll need to look at your wider market and determine how your product or service is different from other existing options. You can compare your strategy to those of your competitors, and get a better insight into what you’re going up against. With in-depth competitor research, you’ll be able to differentiate yourself more clearly in your target market and ensure you’re positioned appropriately in your chosen industry. After you’ve assessed your competition, ask yourself: How is my product suitable for today’s market? How is this product different from competing products? Can we differentiate our product even further (with extra features, pricing changes, etc)? Ensure teams are on the same page When you know exactly what makes product stands out and why customers want it, it’s much easier to give your teams a consistent view of their purpose, and brand’s mission. With a strong product marketing strategy, align product sales, marketing, and service teams around shared understanding of company’s purpose. When everyone in the team has better understanding of the purpose of the product you’re selling and why it’s so beneficial, they’ll be more likely to communicate this information correctly. Boost revenue and sales Customers have endless options when it comes to where they can spend money these days. One way to ensure they come to you instead of the competition, is to position product as the best option for their needs. Building a product marketing strategy that gives an in- depth understanding of customers will help to generate more sales, through more personalized marketing. How to Develop Your Own Product Marketing Strategy? One good product marketing strategy should guide the positioning, promotion, and pricing of product. With this plan, be able to take product from “development” stage, all the way through to launch with a clear vision. Here’s how to get started. Step 1: Get to Know Product’s Target Audience A strong product marketing strategy begins with deep knowledge of target audience. You’ll need to define a specific target audience and create a buyer persona to understand pain points, expectations, or requirements. With more information you can include in your personas, the better. You’ll need to know where your target customer comes from, what kind of issues they’re facing, why they might want your product, and even how much they earn on a regular basis. The more data you have, the more you’ll be able to ensure all the aspects of your product marketing strategy are targeted to the right person. Step 2: Conduct Market Research After you’re done with your customer research, the next step is figuring out where your product is positioned in the context of the wider market. Look at Look at the other products similar to yours that exist in the current market. What exactly can these products offer? Perform a full analysis of each item, thinking about: What your product can do better What your competitor’s product does well Whether people are happy with the product, or what their overall response is Answering these questions will help you to choose a position for yourself in your chosen market. Step 3: Determine positioning and messaging With this knowledge of target audience and competition, be able to start investing in positioning and messaging strategies. Positioning involves thinking about where your product exists in the market in the context of other brands and solutions. For instance, is your product one of the cheapest on the market, or one of the most expensive? Do you offer the widest selection of features, or a specific focus on customer service your customers love? Positioning you discover will help to determine what need to emphasize in messaging (such as excellent service, or low prices).  Some of the questions need to answer when developing positioning and messaging include: What makes this product unique? Why is this product better than our competitors? Why is our product ideal for our target audience? What will our audience get out of this product they can’t get elsewhere? Why should customers trust and invest in our product? Once you’ve answered these questions, create an elevator pitch that describes everything someone would need to know about product in an exciting, compact way. Step 4: Create go-to-market strategy Now it’s time to think about how you’re going to bring your product to customers. Identify which personas you’re going to be targeting with your product, and how you’re going to be capturing their attention with your messaging strategy. Think about how you’re going to price your product, and what kind of methods you’re going to be using for selling. For instance, do you want to sell through distributors or direct to customers? Use this to consider the kind of marketing methods to use, like social media marketing, or content campaigns As you choose marketing automation and sales strategies, also select KPIs you’ll want to measure as you progress to see whether your product marketing strategy is successful. Brief your sales and marketing leaders on your go-to- market strategy and ensure they have all the resources they need to do their job, such as advertising tools, product samples, brand guidelines, and go-to market strategy templates. Step 5: Launch, monitor, and optimize Finally, you’ll be ready to launch your product. There are two aspects to the “launch” for most companies.  Internal launches involve introducing everyone in your team to your product’s main benefits and features, which you’ll need to do before anything else.  External launches mean bringing your content to market through the various advertising and sales channels you chose above. Remember to monitor the performance of your campaign by tracking the KPIs you’ve set. These KPIs might include:  Number of trial or demo sign-ups  Lead to customer rates  Product usage levels  Customer engagement score  Net Promoter score  Feature adoption and engagement  Usage of assets  Win rates  Upsells and cross-sells Setting Your Own Product Marketing Strategy While product marketing can seem like a complicated process at first, it’s something that becomes easier the more you work at it. A good product marketing strategy can be an essential part of ensuring your new product is a success with marketing strategy, making sure you understand your audience, their needs, and your position in the market, the more likely you are to see a significant return on investment from your products. Product Strategy Definition Product strategy refers to a comprehensive plan that outlines the long-term goals and objectives of a company’s product or service offerings. It involves making strategic decisions regarding the target market, positioning, pricing, and product features, aiming to achieve sustainable competitive advantage and maximize customer value. Elements of Product Strategy Market Analysis: Crucial element of product strategy is conducting a thorough analysis of the target market, including customer needs, preferences, and trends. This helps identify opportunities and gaps in the market, guiding the development of products that meet customer demands. Competitive Positioning: Product strategy involves positioning the product to differentiate it from competitors and create a unique value proposition. This may include emphasizing features, pricing, quality, or customer service to gain a competitive advantage. Product Lifecycle Management: This includes planning for product updates, enhancements, and eventual replacements to ensure continued relevance and customer satisfaction. Pricing and Revenue Model: This involves analyzing market dynamics, cost structures, and customer willingness to pay to set optimal prices that maximize profitability and customer value. Go-to-Market Strategy: A product strategy should outline the approach for launching and promoting the product in the market. This includes defining the target audience, distribution channels Relevant Considerations in Product Strategy Customer Feedback and Insights: Incorporating customer feedback and insights into the product strategy helps ensure the product meets their needs and expectations. This can be achieved through market research, user testing, and ongoing customer engagement. Monitor and Measure: Establish metrics and key perform ance indicators to monitor the product’s performance and track progress towards the defined goals. Regularly review the data to identify areas for improvement. Continuous Innovation: A successful product strategy requires a commitment to continuous innovation and adaptation. This involves monitoring market trends, technological advancements, and customer feedback to identify product improvement, expansion opportunities. Product Strategy Examples Apple Inc.: Apple’s product strategy revolves around creating innovative and user-friendly devices that seamlessly integrate with their software ecosystem. By focusing on premium quality, sleek design, and cutting- edge technology, Apple has successfully positioned itself as a leader in the consumer electronics industry. Coca-Cola: Coca-Cola’s product strategy centers on brand differentiation and diversification. They offer wide range of beverages, including carbonated soft drinks, juices, teas, and energy drinks, catering to various consumer preferences and market segments. This allows Coca-Cola to maintain strong market presence and capture larger share of beverage industry. Netflix: Netflix’s product strategy is built on providing a vast library of on-demand streaming content. They have become the leading online entertainment provider. This strategy enables Netflix to attract and retain subscribers, driving its growth and market dominance. Marketing Strategy Writeshop and Group Output Presentation MIDDLE TERM EXAMINATION

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