Marketing Bocconi PDF

1.​Introduction to Marketing What is Marketing? ​ Marketing is a process by which companies create value for customers and build strong customer relationships to capture value in return. ​ Focus on customer needs and wants, creating desired satisfaction more effectively and efficie...

1.​Introduction to Marketing What is Marketing? ​ Marketing is a process by which companies create value for customers and build strong customer relationships to capture value in return. ​ Focus on customer needs and wants, creating desired satisfaction more effectively and efficiently than competitors. What Marketing is NOT: ​ Merely sales, advertising, or fads. ​ Misleading people into buying things they don’t need. What Marketing Should Be: ​ Identifying and fulfilling a demand in the market. ​ Starts before the product is developed. What is Marketed? ​ Products: Tangible goods. ​ Services: Intangible offerings. ​ Organizations: Institutions promoting themselves. ​ People: Personal branding (e.g., influencers, politicians). ​ Places: Tourism and location branding. ​ Causes: Social or environmental initiatives. Marketing Strategy Overview: ​ Definition: The marketing logic for creating customer value and building profitable customer relationships. ​ Strategic Planning Steps: ○​ 1: Define the company mission ○​ 2: Set objectives and goals ○​ 3: Design the business portfolio ○​ 4: Plan marketing and other strategies 2.​Marketing Strategy Steps of Strategic Planning: 1)​ Define the company mission: a)​ A mission statement defines the organization’s purpose, goals, and values b)​ Mission statements should be: i)​ Market-oriented: focused on customer needs ii)​ Meaningful & specific: clear and motivational iii)​ Should highlight the company’s unique strengths and tell how it intends to win marketplace 2)​ Set Objectives and Goals: a)​ Business objectives: Profit increase, customer focus, sustainability.  b)​ Marketing Objectives: Product improvement, customer loyalty, partnerships, promotion. 3)​ Design the Business Portfolio: a)​ A collection of businesses or products the company manages. b)​ Evaluating the business portfolio: i)​ Portfolio analysis is a major activity in strategic planning whereby management evaluates the products and businesses that make up the company ii)​ Identify SBUs (Strategic Business Unit): an SBU is a distinct part of a company that operates as an independent entity with its own mission, objectives and strategies. (Ex. Apple’s SBUs by product categories: iPhones, Mac computers, and Apple watch) iii)​ Assess Attractiveness: Evaluate the market potential of each SBU iv)​ Allocate Resources: Decide how much support or investment each SBU should receive based on potential profitability and alignment with company goals. c)​ Tools for Portfolio Analysis: i)​ BCG Growth-Share Matrix: -​ Categorizes SBUs based on market growth and relative market share ​ Stars: High growth, high share (requires heavy investment but generates high returns) ​ Cash Cows: established; requires less investment and can be a source of funding for other quadrants ​ Question Marks: High growth, but lack dominance (need a lot more investment for more market share). ​ Dogs: Low growth, low share (typically divested). ​ Example: Coca-Cola uses its Stars to fund development in Question Marks and maintain Cash Cows. ii)​ GE/ McKinsey Matrix: -​ Analyzes SBUs on two dimensions: market attractiveness and business position. -​ ​ Invest/ Grow: High attractiveness, strong position. ​ Cautiously Invest: Moderate attractiveness and/or position. ​ Harvest/Divest: Low attractiveness and/or weak position. iii)​ Ansoff Matrix: -​ Focuses on growth strategies for SBUs:  -​ Market Penetration: increase market share with existing products in existing markets -​ Market Development: introducing existing products in new markets(new geographic markets, new customer segments) -​ Product Development: developing new products in existing markets -​ Diversification: New products in new markets. 4)​ Marketing Planning and Strategy a)​ Basics of Marketing Strategy: ​ Segmentation: Grouping consumers based on shared traits. ○​ Conditions for segments ​ Differentiable: segments respond differently to differed marketing mix elements and programs ​ Accessible: segments can be effectively reached ​ Actionable: you can make effective programs designed for attracting and serving the segments ​ Substantial: large or profitable enough to serve ​ Measurable: the size, purchasing power, and profiles of the segments can be quantified ○​ Types of ways to segment: ​ Geographic: laws and regs, culture, language, infrastructure, climate, politics ,etc (Example: Products targeted for cold vs. warm climates.) ​ Demographic: age, income, sex, edu, ethnicity, etc (Challenge: Assumes uniformity within groups, risking stereotyping) ​ Psychographic: opinions, beliefs, values, personality, thinking styles lifestyles (Willingness to pay for premium shipping based on personality traits) ​ Behavioral: purchase frequency, user/ loyalty status, purchasing channels, usage occasions (customer actions) ​ Benefits-based: customer motivations (the desired outcome of what they want) ​ Targeting: Selecting segments to focus on. ○​ Targeting Strategies: ​ Undifferentiated: target the entire market with a single offer/ approach (mass marketing) ​ Differentiated: target several different segments with separate positioning and messaging ​ Concentrated: target a large part of a smaller segment ​ Micromarketing: targeting every individual differently ​ Differentiation: Creating superior customer value. ​ Positioning: Establishing a distinctive place in customers' minds. b)​ Four P/ Four C Model:  ​ Product (Customer Solution): Design, quality, packaging. ​ Price (Customer Cost): Discounts, payment terms. ​ Place (Convenience): Supply chain, delivery. ​ Promotion (Communication): Advertising, personal selling. 3. Developing the Marketing Plan Creative Marketing ​ Key Principles: ○​ Create with the customer, not just for the customer: Involve customers in the process. ○​ Identify and address pain points. ○​ Create a complete experience: Includes product, purchase process, support, and long-term relationships. ​ Case Example: Kaiser Permanente ○​ Challenge: Become more consumer-oriented and differentiate from competitors ○​ Solution: ​ Digital experience with a welcome program for new members. ​ Online portal for services like email communication with doctors, appointment scheduling, and prescription refills. ○​ Results: ​ 60% of new members registered within 6 months. ​ Members were 2.6x more likely to stay with the company. Purchase Funnel ​ Model used to set strategic objectives, involving stages of the customer journey: ○​ Awareness: Does the consumer know your brand? ○​ Consideration: Can your brand solve their problem? ○​ Preference: Is your product the best solution? ○​ Action: Will the consumer buy your product? ○​ Loyalty: Will the consumer repurchase? ○​ Advocacy: Will the consumer recommend your brand? Customer Journey ​ Characteristics: ○​ Not always linear; customers engage with touchpoints in varied orders. ○​ Company's Role: Map the intended customer journey using consumer research. ○​ Customer's Role: Decide how to interact with touchpoints. ​ Buyer Persona: ○​ A fictional representation of current or potential customers based on research. ○​ Helps craft tailored marketing messages. Marketing Plan  ​ Purpose: ○​ Provide direction and focus for a brand, product, or company. ○​ Align marketing strategies with the company’s objectives. ​ Importance of Research: ○​ Understand customer needs, market conditions, competition, and opportunities. ​ Components: ○​ Executive Summary: Primary objectives, e.g., differentiation, new product launch. ○​ Current Market Situation: Overview of market, competition, and channels. ○​ SWOT Analysis: a framework to assess internal and external factors affecting the company. ​ Strengths (internal capabilities). ​ Weaknesses (internal limitations). ​ Opportunities (external factors for growth). ​ Threats (external challenges). ○​ Marketing Objectives and Issues ○​ Marketing Strategy (4 Ps): ​ Product, Price, Place, Promotion. ○​ Action Programs: ​ Detailed steps to implement strategies ○​ Budget and Financial Analysis: ​ Costs, revenue projections, and risk assessments. ○​ Controls: ​ Metrics for monitoring effectiveness and risks. 4. Segmentation, Targeting, and Positioning Segmentation ​ Ensures focused strategies that resonate with specific groups ​ Divides the overall market into smaller, distinct groups with shared characteristics. ​ What are the conditions for Effective Segmentation? ​ What are the types of ways to segment? Targeting ​ Helps businesses allocate resources effectively to profitable segments ​ Evaluating and selecting which segments to serve. ​ What are the targeting strategies? ​ Factors Influencing Targeting: ○​ Product specifics, market variability, company resources, competition, lifecycle stage, and consumer demand.0 Positioning  ​ Differentiates a brand in competitive markets by highlighting its unique value ​ The process of creating a distinct image of a product in the minds of the target market. ​ Differentiation: ○​ Establishing features or values that set a product apart from competitors. ○​ Criteria for differentiation: ​ Important: Valued by the target market. ​ Distinctive: Unique from competitors. ​ Superior: Better than alternatives. ​ Communicable: Clear to consumers. ​ Affordable: Accessible to the target market. ​ Profitable: Economically viable. ​ Positioning tools: ○​ Positioning Map: ​ Visual representation showing how a brand compares to competitors on key attributes. ○​ Value Proposition: ​ The set of benefits a company promises to deliver to its target customers. ​ Example: Tiffany & Co.'s proposition emphasizes luxury, craftsmanship, and exclusivity. ○​ Positioning statement: ​ A concise summary that communicates the brand's value proposition to its target audience. ​ Template: "For [target market] who [need], [brand] provides [benefit] because [reason]." ​ Ex: For high-income individuals seeking exclusivity, Tiffany & Co. offers luxurious jewelry known for its craftsmanship and legacy. 5. Marketing Research 1 What is Marketing Research? ​ Systematic design, collection, analysis, and reporting of data relevant to a specific marketing problem ​ Objectives: ○​ Identify and define marketing opportunities/problems. ○​ Evaluate and refine marketing actions. ○​ Monitor marketing performance. Marketing Information System ​ Components: ○​ Internal Databases:  ​ Data from internal company records. ​ Pros: Quick access. ​ Cons: May be incomplete or insufficient. ○​ Market Intelligence ​ Publicly available information. ​ Purpose: Detect opportunities and threats. ○​ Marketing Research: ​ Custom data collection for specific problems. ​ Includes primary and secondary data sources. Marketing Research Stages 1)​ Define the Problem: ​ Translate managerial problems into research questions. ​ Example: ○​ Managerial Problem: Why is market share low? ○​ Research Questions: What attributes influence customer choice? How do customers rate our product vs. competitors? 2)​ Develop the Research Plan: ​ Outline research objectives, data sources, variables, methods, and estimated costs. 3)​ Collect and Analyze Data: ​ Use qualitative or quantitative methods as needed. 4)​ Interpret Finding and Make Recommendations: ​ Turn data into actionable insights. Types of Marketing Research ​ Exploratory Research: ○​ Purpose: Generate initial insights and hypotheses. ○​ Methods: Focus groups, secondary data, opinion leader surveys. ○​ Uses focus groups to define problems or generate hypotheses ○​ Example: Identifying why sales are declining. ​ Descriptive Research: ○​ Purpose: Describe characteristics of relevant groups. ○​ Methods: Surveys, cross-sectional studies. ○​ Conducts surveys to understand customer profiles ○​ Example: Understanding customer demographics or behaviors. ​ Casual Research: ○​ Purpose: Identify cause-and-effect relationships. ○​ Methods: Experiments (e.g., A/B testing). ○​ Test cause-and-effect relationships through controlled experiments. ○​ Example: Determining if packaging changes increase sales. Data Sources  1)​ Primary Sources: ​ Collected for the specific research problem. ​ Examples: Focus groups, surveys, experiments. ​ Pros: Specific, current, reliable. ​ Cons: Time-consuming, expensive. 2)​ Secondary Data: ​ Pre-existing data collected for other purposes. ​ Examples: Census data, internal databases, commercial online databases. ​ Pros: Cost and time-efficient. ​ Cons: May not fully address the specific research problem. Data Collection Approaches ​ Qualitative Research: ○​ Small samples, unstructured methods. ○​ Examples: Focus groups, in-depth interviews, projective techniques. ○​ Purpose: Explore attitudes, behaviors, and motivations. ​ Quantitative Research: ○​ Large samples, structured methods. ○​ Examples: Surveys, experiments. ○​ Purpose: Test hypotheses and measure relationships. 6. Marketing Research 2 Survey Design ​ Surveys are the most widely used method for primary data collection. ​ Used to gather information on: ○​ Knowledge, attitudes, preferences, and behaviors. Overall Process of Survey Design 1)​ Define Your Sample: ​ Identify the group you wish to study 2)​ Define Information Needs: ​ Determine the data points you want to collect 3)​ Draft Questions: ​ Ensure clarity and relevance. 4)​ Decide Ordering and Randomization: ​ Prevent order bias by varying or structuring questions effectively. 5)​ Include Traps and Validation: ​ Use mechanisms like attention checks to ensure data quality. 6)​ Pilot and Re-Evaluate: ​ Test the survey to refine questions and improve user experience. Designing Effective Questions  ​ Tips: ○​ Focus on survey objectives. ○​ Avoid questions respondents cannot answer or may not want to answer. ○​ Consider respondent burden: simpler questions are better. ​ Example: ○​ Bad: "How much would you pay for a product you've never seen?" ○​ Better: Provide context, e.g., product description or usage scenario. Types of Questions 1)​ Open-Ended: a)​ Encourages free-form responses. b)​ Use sparingly due to complexity in analysis. 2)​ Closed-Ended: a)​ Offers predefined response options (e.g., yes/no, multiple choice). 3)​ Scaled-Response: a)​ Measures intensity (e.g., Likert scales). 4)​ Rank-Order: a)​ Asks respondents to rank preferences or priorities. Attitude Measurement ​ Definition: A predisposition to respond favorably or unfavorably to: ○​ A product, service, idea, or person. ​ Specificity: ○​ Broader categories (e.g., music) may elicit vague responses, whereas specific contexts (e.g., attending a concert) yield actionable insights. Response Mode Effects ​ People's attitudes can vary based on how questions are asked ​ Choices vs. Ratings: ○​ Choices: Indicate a preference (e.g., Magnavox > Sony). ○​ Ratings: Indicate intensity (e.g., Sony scored higher than Magnavox). ​ Rankings vs. Ratings: ○​ Rankings prioritize preferences, while ratings assess intensity. Traps and Validation ​ Include mechanisms to ensure data quality: ○​ Attention Checks: Questions designed to catch inattentive participants. ○​ Trap Questions: Identify inconsistent responses. ○​ Entry Screeners: Filter participants based on criteria like demographics or prior behaviors. Sampling  ​ A sample is a segment of the population selected for research to represent the whole ​ Key Questions: ○​ Whom to study: Define the population of interest. ○​ How many to study: Consider the research design and budget. ○​ How to select them: Choose an appropriate sampling technique. ​ Sampling Considerations 1)​ Measurement Goals: What is being measured? 2)​ Population Characteristics: Define the demographics and scope. 3)​ Resources: Budget and time constraints. 4)​ Population Variance: Account for diversity and representativeness. ​ Sampling Process 1)​ Define Target Population: Specify the group relevant to the study. 2)​ Determine Sampling Frame: Narrow down to an "empirical target population." 3)​ Select Sampling Technique: Decide between probability or non-probability sampling. 4)​ Set Sample Size: Balance precision with resource constraints. 5)​ Execute Sampling: Implement and collect data. ​ Sampling Losses ○​ Causes: ​ Lack of motivation. ​ Social desirability bias (respondents answer to align with societal expectations). ​ General disinterest in participation. ○​ Examples: ​ Uneven response rates across different groups or timeframes. ​ Differences in behavior between early and late responders. ​ Sampling Techniques ○​ Probability Sampling: Each member of the population has a known, equal chance of selection ​ Simple Random Sampling: Equal probability for all members. ​ Systematic Sampling: Start randomly, then select every n-th individual. ​ Stratified Sampling: Divide population into subgroups (strata) based on key characteristics; sample randomly within strata. ○​ Non-Probability Sampling: Selection is based on researcher judgment, not random chance ​ Convenience Sampling: Selecting participants based on accessibility. ​ Judgmental Sampling: Researcher selects "ideal" participants. ​ Quota Sampling: Ensures representation by setting participant quotas for specific subgroups. ​ 7. Branding Brand Resonance Model  ​ Brand Salience: Ensures customers recognize the brand and recall it in relevant situations. ​ Brand Performance: Measures how well the brand meets functional needs, like product quality and price. ​ Brand Imagery: Abstract associations (e.g., personality traits, lifestyle fit). ​ Brand Judgment: Customer evaluations of credibility, relevance, and superiority. ​ Brand Feelings: Emotional responses evoked by the brand. ​ Brand Resonance: The ultimate goal—deep loyalty, strong identity alignment, and community belonging. Brand Strategy Decisions ​ Positioning: Establishing attributes, benefits, and values that give a competitive edge. ​ Associations: Using logos, colors, slogans, and jingles to build brand equity. ​ Name Selection: Prioritizing memorability, pronunciation, and cultural adaptability. ​ Sponsorship: National vs. private brands, licensing, and co-branding. ​ Development: Line/brand extensions, rebranding, or launching new brands. Brand Architecture ​ When you have many brands under your master brand, brand architecture shows how the brands relate to or are different from each other ​ Branded House: Unified identity; products bolster the master brand but are vulnerable to crises. (Ex. FedEx) (one product could impact the entire brand) ​ House of Brands: Separate identities; minimizes risk but costly to manage individually. (Ex P&G has a house of brands that include Tide, Tampax, Swiffer, Bounty, etc) ​ Endorsed Brands: Unique sub-brand identity with the master brand backing trust. (Ex. Marriott)  ​ Sub-Brands: Allows targeting diverse audiences with clear links to the parent brand. (Ex. Apple) Brand Management ​ Relevance is key: Adapting to market trends without diluting brand meaning. ​ Line Extensions: Expanding within categories to attract varied segments. ​ Brand Extensions: Moving into related markets with logical connections to the parent brand. ​ Rebranding: A comprehensive update requiring consistency across the marketing mix. Key Metrics ​ Brand Equity: Improves loyalty, performance perception, and marketing efficiency. ​ Brand Value: Financial measure, challenging but critical for assessing impact. Benefits of Branding ​ For Companies: ○​ Enhances marketing efficiency. ○​ Builds loyal customers for long-term stability. ○​ Facilitates market expansion through extensions. ​ For Consumers: ○​ Provides psychological confidence. ○​ Simplifies decision-making 8. Products and Services Product Classification: ​ Convenience: Frequent, low-effort purchases (e.g., snacks). ​ Shopping: Less frequent, involves comparison (e.g., appliances). ​ Specialty: High effort, brand loyalty (e.g., luxury cars). ​ Unsought: Low awareness, rarely purchased (e.g., life insurance). Industrial Products: ​ Materials and Parts: Used in production (e.g., raw materials). ​ Capital Items: Long-term business use (e.g., equipment).  ​ Supplies and Services: Short-term business needs (e.g., cleaning supplies). Product Line and Mix ​ Product Line: Group of related products (e.g., variations of toothpaste). ​ Product Mix: Total offerings by a company, measured by: ○​ Width: Number of product lines. ○​ Length: Total products across all lines. ○​ Depth: Versions of a single product. ○​ Consistency: How closely related product lines are. Increasing business ​ Add new product lines (widen the product mix) ​ Lengthen existing product lines ​ Deepen product mix by adding more versions of each product ​ Pursue more or less product line consistency – strengthen reputation in one field or in several Product Life Cycle (PLC) Stages: 1)​ Product development: Concept generation, no revenue. 2)​ Introduction: High costs, uncertain adoption. 3)​ Growth: Market acceptance, sales rise, competition enters. 4)​ Maturity: Sales peak, differentiation becomes harder. 5)​ Decline: Sales fall due to substitutes or changing needs. Technology Adoption Curve ​ Outlines the rate at which different groups adopt new technologies or products ​ The curve includes five key segments: ○​ Innovators (2.5%): ​ Who they are: Risk-takers, tech enthusiasts, and first adopters. ​ Behavior: Willing to pay more for innovation and tolerate uncertainties or flaws. ​ Importance: Provide initial traction and feedback. ○​ Early Adopters (13.5%): ​ Who they are: Opinion leaders who influence others. ​ Behavior: Less risk-tolerant than innovators but quick to see benefits. ​ Importance: They validate the technology for the majority. ○​ Early Majority (34%): ​ Who they are: Pragmatic, cautious consumers. ​ Behavior: Wait to see how the technology pans out before adopting. ​ Importance: Represent the start of mainstream adoption and significant revenue growth.  ○​ Late Majority (34%): ​ Who they are: Skeptical users who adopt after technology becomes a standard. ​ Behavior: Price-sensitive, rely on established social proof. ​ Importance: Drive sales in the maturity phase of the product life cycle. ○​ Laggards (16%): ​ Who they are: Traditionalists, resistant to change. ​ Behavior: Purchase products out of necessity, if at all. ​ Importance: Least likely to contribute to significant market growth. The “Chasm” ​ The "Chasm" refers to a critical gap between Early Adopters and the Early Majority. Crossing this chasm is essential for a product to transition from niche appeal to mainstream success. ​ What can you do to reduce this chasm? ○​ Target a specific niche within the early majority group where the risk of adoption is lower (ex. Apple targeting creative professionals with the first Mac computers before expanding to general consumers) ○​ Provide a full product solution (ex. Apple’s ecosystem) ○​ Provide social proof; show evidence of benefits and case studies of product effectiveness in campaigns (ex. Tesla highlighting the satisfaction of early Model S customers to attract broader market) Extending the Product Life Cycle 1)​ Increase Usage: Encourage current users to use more frequently. 2)​ New Users/Markets: Target different demographics or geographies. 3)​ New Use Cases: Reposition products for alternative purposes. 9. Products & Services + New Product Failures 1)​ Pokemon Go: Case Study in Products & Services ​ Overview: ○​ Mobile AR game launched in July 2016, combining GPS, cameras, and augmented reality. ○​ Goal: Players explore real-world locations to capture virtual Pokémon.  ​ Target Audience: ○​ Millennials and Gen Z who grew up with Pokémon. ○​ Gamers seeking interactive, outdoor experiences. ​ Revenue Sources: ○​ In-app purchases (e.g., PokéCoins). ○​ Sponsored locations (e.g., partnerships with McDonald’s). ​ Challenges Pokemon Go Faced ○​ Server Overload: ​ Niantic underestimated demand, causing widespread performance issues. ○​ Gameplay Fatigue: ​ Repetitive mechanics without added features (e.g., trading or battling). ​ Users wanted more structured gameplay. ○​ Third-Party Cheating Platforms: ​ External apps and forums provided cheats, such as tracking Pokémon locations. ​ Niantic banned these tools, frustrating players who relied on them. ○​ Employee Strain: ​ Developers were focused on addressing cheats and server bugs, slowing feature updates. ​ Why was Pokemon Go Initially Successful? ○​ Nostalgia for Pokémon resonated with a wide audience. ○​ Innovative use of AR and GPS technology made it stand out. ○​ Encouraged physical activity and social interaction. ​ Niantic’s Stance on Third-Party Developers: ○​ Pros of banning: Maintained game integrity and reduced strain on servers ○​ Cons of banning: Alienated a portion of the player base; Lost an opportunity to collaborate and enhance gameplay. ​ Is Pokemon Go a Fad? ○​ While its initial peak may classify it as a fad, its core user base and later updates (e.g., trading, raids) helped sustain it long-term. Services Marketing ​ Service Types: 1)​ Governmental Services: a)​ Examples: Courts, police, fire departments, postal services, public schools. b)​ These are typically funded by taxes and aim to serve public needs. 2)​ Private Not-for-Profit Organizations: a)​ Examples: Museums, charities, churches. b)​ Operate to fulfill social, cultural, or educational missions rather than to generate profits.  3)​ Business Organizations: a)​ Examples: Airlines, hotels, banks, consulting firms, medical practices, and legal services. b)​ Provide services in exchange for payment, often competing on quality and customer experience. ​ Service Characteristics: ○​ Intangibility: Services can’t be seen or touched before purchase. ○​ Inseparability: Production and consumption occur simultaneously. ○​ Variability: Quality depends on when, where, and who delivers it. ○​ Perishability: Services cannot be stored for future use. ​ Marketing Strategies: ○​ Service-Profit Chain: Link employee and customer satisfaction to profitability. ○​ Interactive Marketing: Focus on quality interactions between buyer and seller. ○​ Internal Marketing: Ensure employees embody the firm’s values. ○​ Service Recovery Paradox: Effective resolution of failures can increase customer loyalty. ○​ Example: Southwest Airlines - Proactively addresses service issues (e.g., delays) within 24 hours; Actions include apologies, explanations, and compensation Products and Services as Experiences ​ Products and services increasingly blend to create memorable experiences for customers. ​ Companies aim to deliver emotional connections and holistic value. New Product Failure ​ Common Causes: 1)​ Insignificant Point of Difference: Product isn’t unique or desirable (e.g., Clairol’s "Look of Buttermilk"). 2)​ Incomplete Market/Definition: Product doesn’t solve a clear problem (e.g., Google Glass). 3)​ Insufficient Market Attractiveness: Poorly defined target market (e.g., bubble gum-scented air freshener). 4)​ Poor Timing: Launch misaligned with market demand (e.g., self-heating coffee cans in summer). 5)​ Flawed Research: Misunderstanding customer needs or preferences. 6)​ Packaging Failure: Ineffective design or functionality. Examples like Pokémon Go and Southwest Airlines illustrate the importance of innovation, problem-solving, and customer-centric strategies. 10. New Product Development New Product Failure 1)​ Insignificant “Point of Difference”  ​ The product doesn’t stand out from competitors in a meaningful way or provide a unique benefit. ​ Ex. Clairol’s Look of Buttermilk promised a "natural look," but consumers didn’t understand what "buttermilk" added to hair care. It failed to articulate a clear, compelling reason for purchase. 2)​ Incomplete Market and Product Definition ​ The product’s purpose, target audience, or problem-solving capability is unclear. ​ Ex. Google Glass—while innovative, it lacked a clear use case. Was it for professionals, tech enthusiasts, or everyday users? This confusion alienated potential buyers ​ Without understanding who the product is for and how it solves a specific problem, marketing efforts become ineffective. 3)​ Insufficient Market Attractiveness ​ The target market is too small, unprofitable, or uninterested in the product. ​ Ex. A bubble gum-scented air freshener for kids—children don’t typically buy air fresheners, and parents likely don’t prioritize a bubble gum scent for their homes. ​ Even if a niche exists, the demand may not be large enough to sustain the product. 4)​ Poor Timing ​ The product launches at the wrong time, missing peak demand or market readiness. ​ Nescafe Hot When You Want—a self-heating coffee can launched in spring when fewer people wanted hot beverages. By autumn, the product’s performance didn’t match consumer expectations. ​ Launching out of season or ahead of consumer readiness can result in poor initial sales and negative word-of-mouth. 5)​ Flawed Research ​ The product is developed without a deep understanding of customer needs, preferences, or behavior ​ Assumptions made without data are risky; consumer feedback is crucial during development. 6)​ Packaging Failure ​ Packaging that is hard to open, unattractive, or fails to communicate the product’s value can discourage purchases. Strategies to Address Failures: 1)​ Brace for slow adoption. 2)​ Eliminate outdated alternatives. 3)​ Minimize resistance with behaviorally compatible products. 4)​ Target niche or underserved markets. New Product Development Process Step 1): Idea Generation  ​ What happens: Generating as many ideas as possible from various sources; Ideas can come from internal teams or external contributors. ​ Internal sources of ideas: ○​ R&D Departments: Focus on technological and product innovations. ○​ Management and Employees: Workshops and brainstorming sessions. ○​ Entrepreneurial Programs: Incentives for staff to pitch new ideas. ​ External sources of ideas: ○​ Customers: Feedback and complaints can inspire solutions. ○​ Competitors: Learning from what works or doesn’t in the market. ○​ Consultants and Crowdsourcing: Gathering input from industry experts or public campaigns (e.g., Lay’s Do Us a Flavor). Step 2): Idea Screening ​ What happens: Narrowing down the list of ideas to those with the highest potential.; Eliminates ideas that are not feasible, profitable, or aligned with the company’s goals. ​ Key Evaluation Criteria: 1)​ Is it real? Does it solve a genuine consumer need or want? 2)​ Can we win? Can the company develop a competitive advantage? 3)​ Is it worth doing? Does it align with long-term company goals and profitability? ​ Tools Used: ○​ Feasibility studies. ○​ SWOT analysis to measure internal strengths/weaknesses and external opportunities/threats. Step 3): Development and Testing ​ What happens: Turning ideas into product concepts with specific features and benefits; Concepts are then tested on a small group of potential customers. ​ Why it's important: Ensures that the concept resonates with consumers before committing to development; Helps identify any major flaws or areas for improvement early on. ​ Ex: Testing prototype designs or conducting focus groups to gauge reactions. Step 4): Strategy Development ​ What happens: Developing a plan to bring the product to market, including the Four P’s (Product, Price, Place, Promotion). ​ Key Considerations: ○​ Segmentation: Which consumer groups will this product appeal to? ○​ Targeting: Who is the primary audience for this product? ○​ Positioning: How does this product stand out in the marketplace? ○​ Differentiation: What unique features make it better than alternatives? ​ Ex. A family car might emphasize safety and reliability, while a sports car focuses on speed and design. Step 5): Business Analysis ​ What happens: Financial and risk analysis to determine the product’s profitability. ​ Key Metrics: 1)​ Sales Estimates: ​ Study similar products or conduct consumer surveys. ​ Predict minimum and maximum sales volumes. 2)​ Cost Calculations: ​ Estimate costs for production, marketing, and distribution. 3)​ Profit Analysis: ​ Calculate potential ROI and break-even points. Step 6): Product Development ​ What happens: Turning the concept into a tangible product. ​ Key Components: ○​ Actual product: Design, branding, quality, packaging. ○​ Augmented Product: After-sales services, warranties, delivery options. Step 7): Test Marketing ​ What happens: Launching the product in controlled environments to gather data on customer reactions. ​ Likely to occur when investment is large and product and marketing reception is uncertain ​ Types of test marketing: 1)​ Controlled Test Markets: Limited release in select stores or regions to track sales. 2)​ Simulated Test Markets: Creating a virtual shopping environment to test consumer responses to packaging, pricing, and placement. ​ Both of these are cheaper than full test marketing and they speed up the process ​ Purpose: Fine-tune the product and marketing strategy before a full-scale launch; May be skipped for fast-moving industries or low-risk products. Step 8): Commercialization ​ What happens: full-scale launch of product ​ Key Decisions: 1)​ When to Launch: Seasonal demand, competitor launches, and production schedules influence timing. 2)​ Where to Launch: Single-location tests, national rollouts, or international markets. 3)​ Other considerations: Managing potential product cannibalization within the company’s portfolio. (you don’t want your new product eating up the sales of your old products) Success Factors for New Products (ACCORD Model) Key factors influencing product adoption: 1)​ Advantage: How much better the product is compared to alternatives. 2)​ Compatibility: How well it fits into existing consumer behaviors and norms. 3)​ Complexity: Simplicity aids adoption; lower complexity reduces resistance. 4)​ Observability: Benefits must be visible and obvious. 5)​ Riskiness: Lower perceived risk encourages adoption. 6)​ Divisibility (Trialability): Trial options allow consumers to test before committing. Example: Car back-up camera 1)​ Advantage: Improves safety compared to mirrors. 2)​ Compatibility: Aligns with current driving habits. 3)​ Complexity: Easy to use (look at the screen). 4)​ Observability: Benefits (safety) are visible. 5)​ Riskiness: Low risk with initial learning curve. 6)​ Divisibility: Testable via car test drives 11. Promotion Promotions ​ Tools to engage and communicate with customers and stakeholders. ​ Goals: Communicate customer value; Build and maintain strong customer relationships. Integrated Marketing Communications (IMC) Purpose: Ensures that all promotional tools and channels work together to deliver a cohesive message. Key Components: 1)​ Align communication strategy with marketing strategy (segmentation, targeting, positioning). 2)​ Reflect the value being delivered. 3)​ Integrate with other marketing mix elements. 6 M’s Framework for IMC ​ Market: Identify the audience (e.g., consumers, influencers, channel partners).  ​ Mission: Define the campaign objective (e.g., awareness, trial, purchase, advocacy). ​ Message: Communicate key values or benefits. ​ Media: Choose communication vehicles (e.g., digital, print, broadcast). ​ Money: Allocate budget for campaign efforts. ​ Metric: Monitor performance (e.g., engagement, conversions). Marketing Communication Tools 1)​ Advertising: Paid promotion through TV, print, or digital platforms. 2)​ Sales Promotions: Short-term incentives to encourage purchase. 3)​ Public Relations (PR): Activities to build a positive corporate image. 4)​ Personal Selling: Direct customer interaction through sales representatives. 5)​ Digital Marketing: Customer engagement via digital channels, including social media and email. Advertising ​ Help consumers through the buying process by building: ○​ Awareness: Inform customers about the product. ○​ Consideration: Build appeal, knowledge, and liking. ○​ Purchase: Encourage action. ○​ Advocacy: Develop loyalty and word-of-mouth. ​ Types of Campaigns: ○​ Informative Ads: Educate about new products or features. ○​ Persuasive Ads: Build brand preference or encourage switching. ○​ Reminder Ads: Maintain visibility for established products. ○​ Comparative Ads: Highlight differences versus competitors. ​ Advertising Strategy: ○​ Combine creative messaging with targeted media planning. ○​ Avoid cookie-cutter approaches and focus on memorable content. ​ Key Concepts in Modern Advertising 1)​ Advertainment: Combine ads with entertaining content (e.g., short films). 2)​ Brand Integration: Seamlessly embed products in other media (e.g., TV shows, movies). 3)​ Native Advertising: Ads mimic the look and feel of surrounding content (e.g., social media posts). Media Strategy ​ Media Types: ○​ Personal: Direct interactions (e.g., sales reps, influencers). ○​ Non-Personal: Mass media (e.g., TV, print, digital). ​ Media Metrics: ○​ Reach: Percentage of target market exposed to the ad.  ○​ Frequency: Average number of exposures per person. ○​ Impact: Effectiveness of message delivery. ○​ Engagement: Interactions like clicks or shares. Messaging Strategy 1)​ Understand customer benefits. 2)​ Ensure messages are: ​ Understandable: Clear and engaging. ​ Believable: Realistic claims. ​ Distinctive: Highlight unique benefits. 3)​ Tailor tone, visuals, and format to resonate with the audience. Execution Styles: ​ Emotional: Appeal to feelings (e.g., humor, warmth, fear). ​ Rational: Highlight product features or value. ​ User-Generated Content: Involve customers in creating brand content. Public Relations (PR) ​ Functions: 1)​ Manage public perception and build goodwill. 2)​ Handle crises with proactive or reactive strategies. 3)​ Engage with stakeholders (e.g., investors, employees). ​ PR Crisis Strategies: ○​ Reactionary: Apologies, corrections, or clarifications after a crisis. ○​ Defensive: Deny claims or present evidence. ○​ Accommodative: Acknowledge issues and take corrective action. ○​ Proactive: Anticipate and mitigate risks in advance. 12. Sales Promotions & Personal Selling & Pricing Sales Promotions ​ Purpose: Provide incentives for immediate purchases or engagement. ​ Ex: ○​ Free samples, bonus packs, discounts, coupons, rebates. ○​ Buy one, get one free, loyalty cards, digital coupons. ○​ Games, contests, sweepstakes, and special events. ​ Objectives: 1)​ Stimulate Purchases 2)​ Invigorate mature products. 3)​ Provide trials for new products. 4)​ Increase usage frequency. 5)​ Reward loyal customers.  6)​ Reinforce product positioning and value. 7)​ Build long-term customer relationships. ​ Should You Use Discounted Prices or Added Value? ○​ Discounted Prices: ​ When: For price-sensitive customers, inventory clearance, high competition, or seasonal sales. ​ Pros: Immediate sales boost, easy communication. ​ Cons: Risk of eroding brand perception and loyalty. ○​ Added Value: ​ When: To emphasize unique features, build brand loyalty, or improve differentiation. ​ Pros: Strengthens brand perception and engagement. ​ Cons: Slower results, harder to communicate value. Personal Selling ​ Definition: Face-to-face, telephone, or virtual communication aimed at relationship building and problem-solving. ​ Actions: Sales presentations, trade shows, webinars, social media outreach. ​ Key Traits of Good Salespeople: ○​ Active listening, confidence, problem-solving, and relationship building. ​ Motivation: Bonuses, commissions, autonomy, and intrinsic rewards. ​ Modern Selling: Consumers often research before engaging with salespeople; Focus shifts from product knowledge to providing solutions. Pricing ​ Amount of money charged for a product/ service ​ General Pricing Strategies: 1)​ Cost-Based Pricing: ​ Prices are based on production, distribution, and sales costs plus a fair margin. ​ Cost-Plus Pricing: Adds a standard markup to the cost ○​ Simplest pricing method and minimizes price competition. ○​ Ignores market demand and competition. ○​ typically , is used to set a floor below which prices cannot dip ​ Break-Even Pricing: Determines the minimum sales volume needed to cover costs. (total costs = total revenue) 2)​ Value-Based Pricing: ​ Prices are based on perceived customer value, not production costs. ​ Rather than cutting prices to match competition, add quality, services, and value-added features to differentiate offers and support higher prices ​ Steps: 1)​ Assess customer needs and perceptions. 2)​ Set target price based on perceived value. 3)​ Design products that deliver value at the target price.  3) Competition-Based Pricing: ​ Sets prices based on competitor strategies and market offerings. ​ When: Useful for benchmarking or undercutting competitors. ​ Risks: Overreliance on competitor prices can neglect product value. 4) New Product Pricing: 1.​ Price Skimming: ​ What it is: Setting a high introductory price that lowers over time. ​ When to use: For innovative products with minimal competition. ​ Pros: Captures early adopters and high initial margins. ​ Cons: Slower adoption by price-sensitive customers. 2.​ Penetration Pricing: ​ What it is: Setting a low initial price to attract mass-market adoption (goal is to get those attracted to become loyal long-term customers) ​ When to use: In highly competitive or price-sensitive markets. ​ Pros: Encourages quick adoption and builds market share. ​ Cons: Lower initial profitability. 13. Pricing II Product Form ​ Product Line Pricing: ○​ Set different prices for products within a product line based on features or perceived value. ○​ Example: Offering budget, standard, and premium versions of a product. ​ Optional Product Pricing: ○​ Base product priced separately, with additional features or upgrades offered at an extra cost. ○​ Example: Airline tickets with optional baggage fees. ​ Captive Product Pricing:  ○​ Pricing products that must be used together, such as printers and ink cartridges. ○​ Warning: Excessive captive product pricing risks losing customers to alternatives. ​ Product Bundle Pricing: ○​ Combine multiple products into a single offering at a reduced price. ○​ Examples: ​ Bundling slow-moving items with popular products. ​ Introducing lesser-known items alongside established ones. Price Adjustment Strategies ​ Discounts and Allowances: price reductions to reward volume buying, early payment, or word-of-mouth ​ Promotional Pricing: Temporary price reductions to drive short-term sales. ○​ Risk: Overuse may lead to the "dust settling effect," where sales drop after promotions. ​ Segmented Pricing: Charging different prices for the same product to different groups based on: ​ Product form: Same product with varied packaging (e.g., Excedrin Migraine vs. Excedrin Extra Strength). ​ Geography: Price variations by location. ​ Time: Peak vs. off-peak pricing. ​ Customer differences: Targeting distinct willingness-to-pay segments. Dynamic Pricing: Adjusting prices in real-time based on demand, supply, or competitor actions. ​ Goal is to maximize revenue by charging more when demand is high and adjusting prices down when demand is low ​ Common Uses: Ridesharing (Uber), airlines, entertainment ​ Key Factors that facilitate dynamic pricing: ○​ Perceived scarcity. ○​ Time sensitivity. ○​ Transparency through online tools. ○​ Opportunity of flexible booking/ resale Participative Pricing ​ Pay-What-You-Want (PWYW): ○​ Consumers set their own price, even zero. ○​ Best for products with low marginal costs. ○​ Example: Used in fundraising or events. ​ Pay-It-Forward (PIF) Pricing: ○​ Consumers pay to benefit the next customer ○​ Encourages altruism and reinforces community values. 14. Digital Marketing Overview ​ Definition: Using digital media, data, and technology to create, communicate, and deliver value to consumers. ​ Core goals: Build awareness, convert leads into customers, foster engagement, and drive retention and loyalty. ​ Benefits: ○​ Cost-effective for reaching wide audiences. ○​ Enables personalized, targeted communication. ○​ Builds long-term customer relationships through engagement and retention strategies. ​ Challenges: ○​ Limited attention spans. ○​ Media fragmentation across channels. ○​ Budget constraints. ○​ Rapidly evolving technologies and consumer preferences. Types of Media in Digital Marketing 1.​ Paid Media: ​ Paid ads on search engines, social media, or websites. ​ Examples: Pay-Per-Click (PPC), display ads, traditional offline ads. 2.​ Owned Media: ​ Digital content controlled by the company. ​ Examples: Websites, blogs, email campaigns, social media posts. 3.​ Earned Media: ​ Public exposure through word-of-mouth, customer reviews, and organic social media mentions. Push vs. Pull Marketing ​ Push Media: ○​ Communication content that an advertiser broadcasts to consumers. ○​ Examples: TV ads, email blasts. ​ Pull Media: ○​ Content sought proactively by consumers. ○​ Examples: Search engine ads, engaging blog posts. ○​ Tends to be more interactive, and personalized ○​ Focus on inbound marketing, companies attract customers; reduces media cost (reduces advertising wastage); yet marketers have less control than in traditional communications Goals and Audience 1.​ Awareness: Do customers know you exist? 2.​ Consideration: Does your product solve their problem?  3.​ Preference: Is your product the best fit? 4.​ Purchase: Will they buy? 5.​ Loyalty: Will they repurchase and become loyal? 6.​ Advocacy: Will they recommend your product? ​ Modified Funnel: Includes user experience, trial/consumption, and repurchase behavior. Lead Generation and Nurturing What is a Lead? ​ A person potentially interested in your product, identified through actions like providing contact information. ​ How to Convert Visitors into Leads: ○​ Lead capture- give something before you ask ○​ Offer value in exchange for information (lead magnets) ​ Examples: Free trials, webinars, eBooks, cheat sheets. ○​ Optimize landing pages for conversions. ​ Lead Nurturing: Stimulate more interest in prospective customers (leads) by providing engaging and relevant content; building relationships with your leads ○​ Personalized emails. ○​ Retargeting ads. (display ads shown to consumers who have visited the website before) ○​ Educational and engaging content “Inbound links”- links from other websites that lead to your website (referrals from others) -​ More backlinks can increase your ranking as it is a sign of relevance, importance and trustworthiness -​ You can get backlinks by: -​ Leaving comments on high-authority websites -​ Participate in forums -​ Write guest posts and offer backlinks -​ Get people to mention your brand on social networks Search Engine Optimization (SEO) ​ Key Components: ○​ On-page SEO: focuses on optimizing individual web pages to improve rankings ○​ Off-page SEO: Build credibility through linking other sources. ​ Main goal is to increase visibility (rank higher in organic search results) ​ Relevance: Extent to which content on a a web page matches the content of the query ​ Importance: Gauged by the # of external links to the site and the quality of those external links  ​ SEO Keyword Strategy ○​ Types of Keywords: ​ Short-Tail Keywords: Broad and generic (e.g., "shoes"); ideal for building brand awareness, often people are not ready to convert ​ Long-Tail Keywords: Specific and detailed (e.g., "affordable running shoes for men").; ideal for posts used to draw in more loyal and engaged audience ​ Transactional Intent - ready to purchase (“suit under 100 euros”) ​ Commercial intent - likely searching products (”best running shoes) ​ Navigation intent - intention to go to a certain website/ destination (“restaurant A’s address”) ​ Informational Intent - exploring and searching for knowledge (“how to create a marketing plan”) ​ Pros and Cons of SEO ○​ Pros: ​ Significant traffic driver ​ Improved web presence ​ Highly targeted (you can reach those who are more interested in you) ○​ Cons: ​ Results unpredictable ​ SEO takes time for new sites ​ Aggressive competition Pay-Per-Click Ads ​ Advantages: ○​ Faster results than SEO ○​ Highly targeted and measurable. ○​ Builds brand awareness even without clicks. ​ Disadvantages: ○​ Competitive and expensive if not managed well. ○​ Requires expertise for effective campaigns. Display Ads ​ Objective: Drive awareness, often at the top of the funnel ​ Metrics: ○​ Impressions (number of times an ad shown to consumers); even if the ad was displayed someone may not have paid attention to it, that's why impressions alone is not a reliable metric ○​ Click-through rate (CTR). (number o flicks per impression ○​ Conversion rate (percentage of clicks that lead to a desired activity like sign-up or subscription).  ​ Challenges: ○​ Banner blindness (ignore anything that looks like an ad) reduces effectiveness. ○​ Misplacement of ads can harm brand reputation. ○​ Relatively high costs or low efficiency ​ How to improve the effectiveness of display ads ○​ Use contextual ads (ads that match the website topics) ○​ Use highly visible ads ○​ Use retargeting ads (display ads shown to consumers who have visited the website before) ○​ Use morphing display ads (portfolio of potential ads that have slightly different messaging) Content Marketing ​ Create and manage content (text, video, audio) to engage customers to meet business goals ​ Goals: ○​ Educate and inspire. ○​ Entertain while promoting subtly. ○​ Build customer trust and loyalty. ​ Effective Content Strategies: ○​ Focus on storytelling and authenticity. ○​ Align with the target audience’s journey. Social Media and Influencer Marketing Goals of Social Media Marketing: ​ Increase brand awareness. ​ Build engagement and loyalty. ​ Manage reputation and thought leadership. Influencer Types: ​ Mega Influencers: Celebrities with 1M+ followers. ​ Macro Influencers: 100K–1M followers. ​ Micro Influencers: 10K–100K followers; high engagement rates. ​ Nano Influencers: 1K–10K followers; often highly niche. Choosing Influencers: ​ Assess reach, relevance, resonance, and recognition. ​ Micro and Nano influencers often provide better engagement for niche products. 19. Marketing Channels ​ Value Delivery Network ○​ Includes the company, suppliers, distributors, and customers who collaborate to enhance the overall system's performance. ​ Partners: ○​ Upstream Partners: Supply raw materials, components, and expertise needed to create a product/ service ○​ Downstream Partners: Focus on delivering products or services to customers. Nature of Marketing Channels ​ Marketing (or distribution) channel: A set of independent organizations that make a product or service available for consumers. ​ Types of Channels: ○​ Direct Channels: No intermediaries; producers sell directly to consumers. (through your own website or retail store; can be more work logistically) ○​ Indirect Channels: Include intermediaries like wholesalers and retailers. (contains at least 1 intermediary) (you can reach more, but you'll have to share profits) ​ Channel Benefits: ○​ Economies of scale. ○​ Reducing complexity for consumers (e.g., grocery stores vs. sourcing products individually). ○​ Matching product assortments to consumer needs. ​ Channels (intermediaries) help with… ○​ Complete Transactions: Provide product information, assemble products, execute promotions, and engage prospective buyers. ○​ Fulfill Transactions: Transport and store goods, manage inventory, and cover financial costs. ○​ Ultimately bringing the goods to the consumer ○​ Address Consumer Needs: ​ Information Needs: ​ ​ Trying before buying. ​ Product demos and price comparisons. ​ Customization. ​ Logistical Needs: ​ Convenience, variety, and immediacy of availability. ​ Trade-Offs: ​ More intermediaries may limit customization. ​ Discount channels (e.g., Walmart) may sacrifice depth of information for convenience. Conflicts  ​ Vertical Conflict: ○​ Occurs between different levels of the channel (e.g., producer vs. retailer). ○​ Example: McDonald’s franchises prioritize cost-cutting over brand consistency. ○​ Resolutions: ​ Transparency (share relevant data, sales trends) ​ Collaboration (joint planning and role clarification). ​ Incentives (e.g., rewards for meeting service targets). ​ Implement centralized control or stronger agreements to align goals across levels (e.g., McDonald's enforcing brand standards across franchises). ​ Define each channel member’s responsibilities to reduce overlap and misunderstandings. (ex Distinguishing between a franchisor’s role in marketing and a franchisee’s role in local operations( ​ Horizontal Conflict: ○​ Occurs between channel members at the same level (e.g., two retailers). ○​ Multiple distributors at the same level compete for the same customers ○​ Example: Showrooming—customers test products in physical stores but buy online. ○​ Resolutions: ​ Price matching, unique promotions, or service differentiation. ​ Product differentiation (eg different cuts/ shirts) ​ Different sizes (eg small sizes for express retailers and bulk sizes for Costco-esque retailers) Strategic Channel Decisions 1.​ Channel Design Decisions: ​ Analyze consumer needs. ​ Define objectives and select intermediaries. ​ Optimize distribution intensity: ○​ Intensive Distribution: stock products in (e.g., candy, toothpaste). ○​ Selective Distribution: Limited to qualified partners (e.g., consumer electronics). ○​ Exclusive Distribution: Highly restricted (e.g., luxury goods). ​ Distribution intensity: How large/ far-reaching is the distribution network? ○​ Having multiple outlets increases access ○​ But it also reduces exclusivity Push vs. Pull ​ Push: Manufacturers “push” products down toward consumers ○​ Direct marketing efforts to promote intermediaries to stock products (e.g., trade promotions, discounted offered to retailers/ distributors to stock and sell products). ○​ Ensures widespread product availability  ○​ Effective when brand loyalty is low ​ Pull: get consumers to come to the product ○​ Direct promotions to consumers to drive demand (e.g., advertising campaigns). ○​ Effective when brand loyalty is high Retailing ​ All activities involved in selling goods or services directly to final consumers ○​ First Moment of Truth: Decision-making in physical stores. ○​ Zero Moment of Truth: Pre-purchase online research. ​ Retail Strategy: ○​ Service Levels: ​ Self-service (e.g., Walmart), limited service (e.g., Best Buy), full service (e.g., car dealerships). ○​ Store Types: ​ Specialty stores (shoe stores), department stores, supermarkets, discount stores, convenience stores, category killers (e.g., Home Depot). ○​ Pricing: ​ High-markup, low-volume (specialty stores). ​ Low-markup, high-volume (discount retailers). ○​ Online Shopping Trends:​ ​ More common for habitual purchases. ​ Less common for products that are new or require more deliberation/ information (but even these items go online now more and more) Omni-Channel and New Retail Formats ​ Omni-Channel Retailing: ○​ Seamless integration of in-store, online, and mobile shopping experiences. ○​ Examples: ​ Click-and-Collect: Order online, pick up in-store. ​ Webrooming: Research online, purchase in-store. ​ Showrooming: Test in-store, buy online. ​ Innovative Retail Formats: ○​ Pop-up stores (create buzz in busy, high-rent areas), online flash sales (helps move inventory, create buzz), cashierless checkouts. ​ Retail Convergence: ○​ Different types of retailers offering similar products, driven by price transparency online, increases competition 20. Sustainable Marketing Sustainability Definition: ​ UN Definition: Development that meets current needs without compromising future generations’ ability to meet theirs. ​ Triple Bottom Line: Sustainability encompasses three pillars: ○​ Protecting natural resources. ○​ Ensuring community well-being. ○​ Promoting long-term economic growth. Sustainable Marketing Efforts ​ Goals: ○​ Understand consumer needs and align with long-term environmental and societal benefits. ○​ Communicate and educate consumers while encouraging behavior change. ○​ Build trust through transparency and credibility. ​ Principles ○​ Define the company’s mission in broad social terms. ○​ Balance immediate consumer satisfaction with long-term societal benefits. ○​ Focus on delivering superior value and fostering long-term loyalty. ​ Challenges: ○​ Premium pricing of sustainable products. ○​ Consumer skepticism about product quality and sustainability claims. ○​ Lack of immediate, tangible benefits for sustainable products. ○​ Limited market readiness for sustainable alternatives. Addressing Challenges 1)​ Premium Pricing: a)​ Communicate the long-term benefits. b)​ Highlight sustainable practices behind the pricing. 2)​ Desirability Concerns: a)​ Use premium branding, storytelling, and education campaigns. b)​ Highlight unique product benefits. 3)​ Market readiness: a)​ Start with niche audiences and scale strategically. b)​ Replicate the experience of existing alternatives. 4)​ Trust and Credibility: a)​ Be transparent and earn reputable certifications. b)​ Advocate for larger causes to align with sustainability values. 5)​ Intangible Benefits: a)​ Emphasize immediate appeals like design and performance.  b)​ Create an emotional connection with the product. Criticisms of marketing in Sustainability 1)​ Overconsumption: ​ Foster mindful consumption by focusing on quality over quantity. 2)​ Cultural pollution: ​ Shift toward relevant and effective advertising that adds value rather than overwhelming consumers. Key Issues 1)​ Greenwashing: Misleading claims that overstate a product's sustainability. 2)​ Greenhushing: Under Communicating genuine sustainability efforts due to fear of scrutiny, Businesses must adhere to regulations like the EU Green Claims Directive to remain authentic. Examples of Sustainable Marketing 1)​ Unilever’s Approach: a)​ Focused on transparency and commitment to long-term sustainability goals. b)​ Tackling criticism through innovation and mindful marketing strategies.