Introduction to Marketing Fall 2024 Final Review PDF

Introduction to Marketing Final Review November 26, 2024 Niland Mortimer  Final assessment ✤ In-class ✤ December 3rd, 8:00-9:40am ✤ Review your Marketplace Simulation learning From mission to marketing strategy Market segmentation Segmentation cuts ...

Introduction to Marketing Final Review November 26, 2024 Niland Mortimer  Final assessment ✤ In-class ✤ December 3rd, 8:00-9:40am ✤ Review your Marketplace Simulation learning From mission to marketing strategy Market segmentation Segmentation cuts  Marketing strategy ✤ Marketing strategy is the marketing logic by which a company creates customer value and achieves pro table relationships. ✤ which customers to serve (segmentation and targeting) ✤ how (differentiation and positioning) fi Why strategy? ✤ What marketing strategy is all about, what distinguishes it from other kinds of business planning (e.g.operating ef ciency) is competitive advantage. ✤ Without competitors there would be no need for strategy. ✤ The sole purpose of strategic planning is to enable the company to gain as ef ciently as possible a sustainable edge over its competitors. fi fi  Why strategy? ✤ Corporate strategy is the attempt to alter the company’s strength relative to that of its competition in the most ef cient way. ✤ Marketing strategy and planning incorporates the actions aimed at altering the strength of the enterprise relative to that of its competitors. fi  Why marketing strategy? ✤ We distinguish these strategic actions from actions aimed at achieving operational improvements, greater pro tability, a more streamlined organization, more ef cient management procedures, or improved training. ✤ There is urgency to strategy: deterioration of a company’s position relative to that of its competitors may endanger the very existence of the enterprise. fi fi Porter/What is Strategy ✤ Strategy is the creation of a unique and valuable position, involving a different set of activities. Michael Porter ✤ Strategy requires you to make trade-offs in competing— to chose what not to do. Michael Porter ✤ Strategy involves creating “ t” among a company’s activities. fi Market differentiation and positioning ✤ After a company decides which market segments to enter, it must determine how to differentiate its market offering for each targeted segment and what position it wants to occupy in those segments. ✤ A product’s position is the place it occupies relative to competitor’s products in the minds of consumers.  The right competitive advantage ✤ Not all differentiators are meaningful or important to consumers. ✤ Some may create company costs as well as consumer bene ts. fi  The right competitive advantage ✤ A differentiator is worth establishing to the extent it satis es these criteria: ✤ Important ✤ Distinctive Where does Brand Purpose ✤ Superior t within these criteria? ✤ Communicable ✤ Pre-emptive ✤ Affordable ✤ Pro table fi fi fi Selecting an overall positioning strategy ✤ The full positioning of a brand is called the brand’s value proposition ✤ The full mix of bene ts on which a brand is differentiated and positioned ✤ It is the answer to the customer’s question, “Why should I buy your brand?” fi Managing the marketing effort ✤ Marketing process: ve marketing management functions: ✤ analysis (research) ✤ planning (strategic approach +marketing mix) ✤ implementation (carry out the plans) ✤ organization (constantly monitor) ✤ control (measure and evaluate results) fi  Contents of a marketing plan ✤ Executive summary ✤ brief summary of main goals and recommendations for management review ✤ Current market situation ✤ describes the target market and the company’s position in it ✤ de nes the market, customer needs, product review, competitors, distribution and sales trends fi Contents of a marketing plan ✤ Threats and opportunities analysis ✤ assesses major threats and opportunities the brand may face, anticipating positive or negative developments ✤ Objectives and issues ✤ states the marketing objectives and key issues that will affect results Contents of a marketing plan ✤ Marketing strategy ✤ outlines the broad marketing logic to engage customers, create customer value, build customer relationships ✤ includes speci cs of target market, positioning, and budget fi  Contents of a marketing plan ✤ Marketing actions ✤ spells out how the marketing strategy will be turned into speci c programs ✤ What will be done; how will it be done; who will do it; how much will it cost ✤ Budget ✤ detail budget with pro t and loss projection fi fi Contents of a marketing plan ✤ Controls and measurement ✤ outlines controls to monitor process and measures return on marketing investment Pricing  Pricing Policy ✤ We usually think of pricing decisions primarily as an economic calculus concerned with extracting value, pricing can also have powerful branding effects. ✤ Pricing policies can express either a transactional view (maximizing pro ts from a current purchase) or a relational view (treating customers as long-term partners). fi Pricing strategies Pricing strategies Selecting advertising media ✤ Reach (% of target audience exposed) Media ✤ Frequency (times of exposure) Planning Terms ✤ Impact (qualitative value) ✤ Engagement (inside the head of consumers) Always remember what Marshall McLuhan said ✤ “The medium is the message.”  Consumer sales promotions ✤ Consumer promotions are tactics or techniques designed to help a business nd new customers or reward current customers. ✤ The most common consumer promotions are aimed at enhancing the value of your product, either by reducing the cost or adding more bene t to the regular price. ✤ Consumer promotions can also be utilized to achieve various other objectives as well, and different promotions work better for different purposes. fi fi Sales Promotions Developing new products Internal/External Is it real? Sources Can we win? Is it worth doing? Try out on target customers Positioning Price Distribution Sales, costs, pro t Budget projections Do consumers like it? Make it Launch! fi  Brand Strategy ✤ Every rm activity that engages prospective customers is a potential branding tool. ✤ Branding is not limited to communications. fi Brand Strategy ✤ All elements of the marketing mix contribute to branding (and also destroy brand value if they are not managed properly). ✤ Each marketing mix element must also serve purposes other than branding (for instance, meeting next quarter’s sales objectives). ✤ Therefore, managers must always balance branding objectives against other marketing goals. Brand Strategy ✤ Brands are not mere images. Rather, they are multi-sensory prisms that are “built into” products. ✤ Often the most critical and challenging branding task is how to design the product in a way that optimizes brand value. ✤ Dyson Brand Strategy ✤ Thinking of product design as a branding issue is a novel approach that has emerged only recently in design-intensive industries. ✤ Product policy becomes a branding question when we ask: how can we use product design to enhance brand value? ✤ Rather than design products to achieve internal technical hurdles, engineering the brand into the product requires a reverse logic: what designs will best in uence customers’ perceptions of value? fl Brand Consistency Branding: Packaging ✤ Packaging also conveys stories, images, and associations about the product inside, creating meaning. Branding: Advertising ✤ Advertising is a powerful tool for building brand cultures because it is a storytelling medium. ✤ Advertising is used to shape how the audience thinks about the product by embedding the product in dramatic ctions and using imaginative metaphors to provoke the audience to think differently about the product. fi Branding: Channel ✤ For products sold by partners in a market channel, the customer- facing parts of the channel can have a powerful impact on the brand culture. Connecting to the customer ✤ Connecting to customers with another story—a new narrative about social purpose —becomes a life-line to perceived value, brand loyalty, and ultimately revenue rewards.  The new brand purpose ✤ Keith Weed, CMO Unilever (arguably the most in uential corporate marketing executive today): ✤ ‘To successfully engage with consumers in the future brands must convey that they are ‘a purpose-driven business.’” ✤ Cannes 2017. fl Larry Fink’s Letter to CEOs "Society is demanding that companies, both public and private, serve a social purpose. To prosper over time, every company must not only deliver nancial performance, but also show how it makes a positive contribution to society. Companies must bene t all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate." Larry Fink, BlackRock CEO fi fi  Marketing information ✤ Internal data ✤ sales transactions ✤ web and social sites visited ✤ cash ows ✤ promotion stats (e.g. did the coupon drop work or not?) ✤ eld observations fi fl Touchpoints: learning from customers ✤ Touchpoints ✤ wherever the customer comes into virtual or concrete contact with the products, services, communications, places, people, processes, technologies. ✤ Instagram, YouTube, service centers, call centers, retail stores, warehouses, email, advertising  Touchpoints ✤ National Australia Bank has 10 touchpoints: ✤ branches, email, corporate website, social media, ATMs, nancial planners, Internet Banking, personal banker, mobile mortgage specialists, customer contact center ✤ How many customer touchpoints does Apple have? fi Moments of truth ✤ Moments of truth occur during customer interactions at touchpoints. ✤ moments when customers form evaluative judgements, positive or negative, about the experience. ✤ customers generally have expectations of what should happen at moments of truth Customer Engagement ✤ First there’s a touchpoint; then there’s the moment of truth; then we get customer engagement. ✤ Engaged customers have a higher intensity of participation and connection to the brand or business. ✤ strong sense of identi cation, based on their experiences with the rm’s offerings, activities, and reputation fi fi How to measure customer engagement ✤ Four dimensions: ✤ 1. Cognitive ✤ Do our customers know our brand values? ✤ The name of our local sales rep? ✤ The locations of our stores? ✤ Our sustainability efforts? How to measure customer engagement ✤ 2. Emotional ✤ Do our customers like the experiences we provide? ✤ They do prefer our offerings to competitors? ✤ Are they excited by our new product launch? ✤ Are they jumpers? How to measure customer engagement ✤ 3. Behavioral ✤ How often do our customers visit our website? ✤ How long do they stay there? Where do they navigate? ✤ Our product pages? ✤ Our blog? ✤ Download a white paper ? How to measure customer engagement ✤ 4. Social ✤ Do our customers recommend friends? ✤ Likes on Facebook, or Instagram? ✤ Join our Twitter feed and conversations? ✤ Comment on our blog? Discerning pain points ✤ Sometimes you look at a business, or category, and discover customer pain points ✤ dissatisfaction with the way things are ✤ high prices Ripe for disruption ✤ limited availability ✤ poor service Marketing information ✤ Competitive marketing intelligence ✤ Systematic monitoring, collection, and analysis of publicly available information about consumers, competitors, and developments in the marketplace ✤ Getting to know your competitor’s strengths and weaknesses is the foundation on which to base good strategy. ✤ For brands, the growth of online activity has seen competitor analysis methods, metrics and tools blossom. Consumer buyer behavior ✤ The behavior of the nal consumers—sometimes called the “end” consumer ✤ all of whom make up a consumer market for a brand ✤ It’s the marketer’s job to understand the end consumer, and all of the factors that affect consumer behavior fi Consumer buyer behavior ✤ The central question: how do consumers respond to the various marketing efforts made by the brand? ✤ how are they likely to respond? ✤ why? ✤ can this behavior be leveraged and enlarged? Consumer buyer behavior ✤ There is no average consumer: a mass of individuals, each with their own “black box” of biases, judgements, preferences, budgets, opportunities. ✤ Marketers can control: ✤ 4Ps-product, price, place, promotion ✤ 4Es-experience, engagement, exchange, evangelism Consumer buyer behavior ✤ Marketers cannot control major forces and events in the buyer’s environment: economic } ✤ Consumer ✤ technological Black Box ✤ social ✤ cultural Consumer buyer behavior Consumer buyer behavior ✤ Culture ✤ Human behavior is largely learned ✤ Every group of people has a culture ✤ Subculture is a group of people within a culture that have shared value systems based on common life experiences and situations Competitive benchmarking ✤ There is no shortage of competitor analysis tools on the market, and each can offer insights relevant to its own particular niche and contribute to competitive benchmarking. ✤ You just need to decide which part of your competitor’s business you want to spy on.  Values in consumer behavior ✤ It is dif cult to imagine a single example of consumer behavior without reference to personal values. ✤ The study of consumer values shows many signs of becoming a challenging area for research... values may prove to be one of the most powerful explanations of, and in uences on, consumer behavior. ✤ They can perhaps equal or surpass the contributions of other major constructs including attitudes, product attributes, degree of deliberation, product classi cations and life-styles fl fi fi  Values in consumer behavior ✤ It is dif cult to imagine a single example of consumer behavior without reference to personal values. ✤ The study of consumer values shows many signs of becoming a challenging area for research... values may prove to be one of the most powerful explanations of, and in uences on, consumer behavior. ✤ They can perhaps equal or surpass the contributions of other major constructs including attitudes, product attributes, degree of deliberation, product classi cations and life-styles fl fi fi  Five competitive forces ✤ Direct competitors ✤ Customers These de ne an industry’s structure and shape the nature of competitive interaction within ✤ Suppliers an industry. ✤ Potential entrants ✤ Substitute products fi  Strategy in a post-pandemic world ✤ Covid-19 had a profound impact ✤ but how it will play out remains uncertain. ✤ still in the very early stages of understanding the pandemic’s full rami cations. ✤ First priority was focus on protecting employees and getting back to work amid deep uncertainty ✤ What new world is emerging and what does that mean for marketing strategy? fi Strategy in a post-pandemic world ✤ What’s known is that the strategy a rm had in place in January 2020 is no longer relevant. ✤ Nobody planned for the demand spikes and supply shocks that have occurred already in 2021-22-23. ✤ The shifts seen among customers, competitors and markets will inevitably raise questions about the rm’s strategy’s core assumptions. fi fi Strategy in a post-pandemic world ✤ The belief that the business had three years to build out its digital channel? That no longer holds. ✤ The once-easy reliance on global markets for both revenue and supply? That suddenly looks risky. ✤ Government intervention and new regulations around the world will reshape business boundaries. ✤ Hard truth: if businesses don’t move rst to improve market position, competitors will. fi Strategy in a post-pandemic world ✤ Marketing cannot take a wait-and-see approach. ✤ The time to act is now, both to lock in the changes already made and to accelerate recovery. ✤ History is unambiguous in showing that winners and losers are forged in the crucible of turbulence. After the global nancial crisis of 2008-9, companies that had a clear plan for pursuing opportunities in the maelstrom rocketed away from the rest over the following decade. ✤ Post-crisis, a full 40% of the companies in the S&P 500 dropped out as their performance withered. ✤ Given the current level of economic disruption, the dropout rate could be more than 50% this time around (Bain). fi  Strategy in a post-pandemic world ✤ Most companies will need to retool their strategy, both to re ect what is knowable today and to prepare for a future de ned by uncertainty. ✤ That will demand that companies raise their game across three vital aspects of strategy: adaptability, prediction, and resilience. fl fi Strategy in a post-pandemic world Prediction: marketer’s tool ✤ Anticipating change in the industry’s direction using six lenses can help uncover the biggest uncertainties and most consequential tipping points: Prediction: marketer’s questions ✤ Whether it’s a pandemic, a cyberattack, regime change or natural disaster, how do we take care of people? ✤ How should the business be thinking about supply chain disruption? ✤ What will happen to sales channels? ✤ How will customers react? ✤ The goal isn’t to plan for each disaster scenario exhaustively but proactively to consider the likely impacts and which targeted investments would help the rm respond more effectively. fi You, today and in the future. ✤ You will be better marketers and managers as a result of experiencing the shocks of the Covid-19 pandemic. ✤ “Never let a good crisis go to waste.” ✤ Winston Churchill  The future ✤ The pandemic is the worst calamity most business leaders have seen, ✤ but it is hardly unique, and not the last. ✤ The past two decades have witnessed a startling series of crises and black-swan events, including terrorist attacks, murderous local con icts, wars, fatal-disease outbreaks, and unprecedented weather events, such as hurricanes, tsunamis, and wild res. ✤ And on top of “ordinary” business disasters: data breaches, trade wars, digital disruptions, and so on. fl fi The future ✤ The future won’t be all that different: ✤ It is likely to present companies with a series of unexpected challenges and opportunities, and business as usual will no longer be suf cient. ✤ An agile business system can help companies create the innovations they will need to survive in these uncertain times. fi Final thoughts for review Why marketing ✤ Human beings are the animals with language. ✤ We awake daily into a meaningful understanding of the world. ✤ We assign meaning to everything that exists and everything that occurs. ✤ We are compelled to know what things mean. We cannot stand to not know what things mean. Why marketing ✤ It was only through language that human beings became human beings. ✤ The impulse to mean and to know is constitutive of our being. Why marketing ✤ In our dwelling in the world of marketing, it is essential that we consider the function of meaning, as well as the process by which meanings emerge in the world. ✤ Meaning was not a property that was somehow granted to human beings. It was learned through language. ✤ Language is learned within a culture. Why marketing ✤ Because it’s about what it’s like to be a human being. Why marketing ✤ Our quest to nd meaning nds delight in narrative, in storytelling. ✤ Marketing is the application of narrative, of giving meaning, to things (products and services) that inherently have no meaning. ✤ Branding is its brainchild. fi fi