Strategic and Digital Marketing PDF

STRATEGIC AND DIGITAL MARKETING During the history of marketing there was a passage between two different approaches: descriptive and inferential. descriptive: it simply consists in watching what people do. inferential: it consists in understanding why people choose to do something, the determi...

STRATEGIC AND DIGITAL MARKETING During the history of marketing there was a passage between two different approaches: descriptive and inferential. descriptive: it simply consists in watching what people do. inferential: it consists in understanding why people choose to do something, the determinants that bring people to take specific action. Scientists used to use different methods to study the behaviour of people, starting with microeconomics: → based on the information that I have, I try to make the best decision that I can = it is not realistic because most of the time we don’t know all the options, we don’t know how to maximise a product, we are not completely rational so as humans we make mistakes, we have limited cognitive capabilities Then scientists started to use behavioural economics, the opposite approach, which directly plays with the cognitive and the psychology of people; basically it makes us decide and buy whatever it wants based on our psychology and our preferences. Macrotrend Sustainability Sustainable development = environmental dimension, social dimension and economic dimension. It would be very difficult to give a specific definition of sustainable development but one of them it is: Sustainable development is a development that meets the needs of the present without compromising the ability of future generations to meet their own needs (gemini) → equity between people of today and people of tomorrow. The disaster of Chernobyl led people to realise that it would have been necessary not only to develop the economic dimension, because neglecting the other aspects would have been too dangerous. However it is very difficult to deal with the environmental aspect: on one hand we have ideology and on the other we have negationism: – ideology: not everybody agrees with the same ideas; it is difficult to detect effectively what is right and what is wrong. With some actions, such as throwing paint on famous paintings, it is possible to attract 1% of people but the others can choose not to follow these ridiculous actions. People could ask themselves if this is really ideology and caring about the planet, and choose to go on the other side. – negationism: with negationism we have the typical type of people that find excuses for what is happening to our environment. → The approach changed a lot, years ago sustainability was WWF, the survival of pandas ecc. It depends on the values of people. Now we realise that everybody should be aware of what is happening because it will affect all of us and it has a huge impact on our society, it is important for our economic system. The main source of pollution in our cities is heating. A global risk is something that might or might not happen, in particular it is an uncertain event or condition that, if it occurs, can cause a significant negative impact for several countries or industries (global GDP or populations) within 10 years (WEF definition). For economists, climate change is the biggest threat for industrial sectors and nations. Everything that we said leads us to declare that we really need Sustainable development.  How do we define needs? = maslow pyramid. It is difficult to handle an answer because there are different kinds of needs, basic needs or sophisticated needs. Should we consider the needs to be all the same regardless of time and space? Do we have the same needs as people of 20 years old living in Israele? of course not. ”without compromising”: how do we know today for tomorrow? We need to make decisions today without compromising the capabilities of the people of tomorrow; how do we know? Ex. biofuels, the idea is so great that everybody in the world was creating fields of corn = something that was born with good intentions brought people to starving because of the rising prices and the absence of food due to the use of corn to produce biofuel: but this was understood 10 years later. Unsustainable development has always been a problem, since the era of the Roman Empire. For example the Serenissima Republic was completely unsustainable because it had a lot of negative impacts on the environment. A lot of wood was necessary to maintain Venice, so they started to chop down forests of Padua, Mestre, Verona and Belluno and all the territory of pianura padana. For this reason nowadays there aren’t woods in these cities = unsustainable development. Everything to say that this has always been a problem, but nowadays it has more pressure on us than in the past. This is also due to a shocking increase of the size of the population; also the industrialization and post industrialization pollution and emissions enormously increased. There are a lot of things that we do everyday that are very polluting (barbecue, fireplace that goes for hours is more polluting than a diesel car); this is not the main problem but we must realise what we are doing to our environment and what we can avoid. The most important organs involved in an organisation are businesses, policy makers and consumers; but we must underline also the importance of the investors: – Risk seeking: shares – Risk averse: obligations Investors, such as investing banks, don’t care about the environment at all but at the same time they want to invest their capital in a sustainable company that takes ethical decisions and that takes care about the environment. why? → because investing in these types of companies provides a better outcome. How do we know if a company really makes ethical decisions? There are some organisations that analyse companies and check if they are making ethical decisions taking care of the environment; two examples could be: – Dow Jones: this organisation deals with big industrial companies, using a family of indexes to rank their sustainability. – MSCI: this organisation deals with less companies but which occupy different sectors; it provides grading within sectors, working with seven classes (ex. Tesla should be an AAA, but it is only an A because MSCI doesn’t take into account only sustainability but many other features). why invest? → sustainable companies are more likely to comply with regulations, to avoid incidents and especially to be competitive in the long run. During the years the business approach to sustainability had an evolution: then nowadays Focus on costs: Focus on opportunities: Sustainability was seen only as a cost and a sacrifice Nowadays sustainability is an opportunity for growth for that a company had to make. a company. End-of-pipe approach: Proactive approach throughout the production Every company wanted to put a limit on the pollution process: they produces, but the only thing they had to do was to Today companies are completely changing their product put a filter at the end of the pipe to clear the air and service or even the entire production process to → nothing changes meet the environmental needs.  Environment seen as an issue for technical dep.ts: Shared responsibility: Years ago sustainability was something only engineers Today the environment is a shared responsibility, which worked with. means we also need green bonds, marketing experts etc. Everybody is part of sustainability. Confidential information: Communication and transparency as a competitive Every information was confidential, nobody wanted to tool: communicate information to the market about Nowadays everybody is proud of their ethical decisions, sustainability. they want people to know what their are doing to decrease pollution in the environment One of the biggest problem nowadays is greenwashing: Greenwashing means suggesting that a process, a product or a service is green and sustainable for the environment when it is not. The main problem of greenwashing is that the majority of the customers are not able to understand if a process is truly green or not = there is a lack of trust and confidence in communication. how can I persuade the customer? → to solve this problem it is necessary to adapt certifications: a third independent party analyses everything a company does; if the process, the product and the service is green or not. Therefore it is a third party that is communicating. – EMAS: this organisation certifies tangible products (physical object that can be perceived by touch). To get the certification a company must constantly improve, month by month (the organisation takes notes). Somebody thinks that this process is not fair: taking into consideration a very bad company,it is very simple for it to improve, shifting from very bad to a little better. In this case the company is getting the certificate even though it can be one of the worst companies in the world. On the other hand if a company is very good it is difficult to improve, therefore it won’t get the certification. – Ecolabel: this organisation provides a long list of requirements that must be fulfilled to get the certification. – Certified B: it is different for a private non-profit organisation (the company has to pay itself, self-assessment etc.) What about people? The important thing about people is how they behave; when it comes to sustainability there are different sectors, but one in particular comes to our mind: food. Nobody ever talks about farming, a food sector which introduces more gases and pollution than the entire transportation system. There are many reasons to choose plant based, apart from being vegan, such as the reduction of pollution, the reduction of killed animals, the non ingestion of non healthy meat = less energy wasted, less deforestation, less pollution. At institutional level, there are different initiatives aimed at hindering the impacts of human activities on the environment, ensuring a path which is socially, economically and environmentally sustainable: – Agenda 2030: it is a global action programme aimed to end poverty, protect the planet and grant prosperity and peace; it is mainly composed of 17 objectives to achieve by 2023. The only problem is that Agenda 2030 is not binding and in a certain way it is just a vision. Invece what we really need is to take action and to focus on local initiatives which are binding. – EU 20-20-20: it is a European programme in which every member has to reach the 20% of a target, otherwise it has to pay a certain amount of money. For Europe it was possible thanks to the arrival of covid-19 and lockdown. For 2020 the goals fixed were: - Reduction of 20% of the greenhouse gases emissions. - Bring energy savings to 20%. - Increase to 20% the consumption of renewable fonts. – EU green deal: it is a set of political initiatives proposed by the European Commission with the goal of being the first continent with zero climate impact by 2050. The pandemic and the resulting economic crisis, pushed the EU to formulate a coordinated response, with large economic support packages and the launch of the Next Generation EU. → Next Generation EU is a recovery plan for which 800 billion euros has been deployed to fulfil a list of goals by 2050 to become the first continent with zero emissions. Every country of the EU gets a specific amount of money and an official document, the Pnrr, states how every single money has to be spent. Italy by far is perceiving the most of it because it is in a bad situation, it means there is a lack of infrastructure, there is no money, there is no technological development or sustainable transition. WHAT IS MARKETING? There are tons of definitions to visualise what marketing is; in particular the American Marketing Association changes the definition over time. Nowadays it defines marketing as: “The activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners and society at large”. Marketing focuses on enterprise: in this definition product, price, process and promotion are contained. → marketing mix = Which product? At what price? How do I distribute my goods? How do I promote it? Big corporations have big divisions, but even in small businesses there is a marketing division: everyone in contact with people is doing marketing, everybody is responsible for gaining or losing customers. Organisations are bidirectional, it means that information can move in both directions between different levels and departments. Marketing has been used for a long time, but years ago there wasn’t properly the discipline, therefore we can locate 4 different periods of marketing: 1. Production era: goods were scarce so the main problem was being able to produce a lot, hence people accepted everything that was on budget. Some symbols and names come to our mind: Tailor, scale economies, automotive sector, industry, fordism. Prices were low even though there were economies of scale because fixed costs could have been divided into a larger number of units so the price could be lower. 2. Sales era: customers did not accept everything anymore due to the increasing number of companies. You had to provide a reason to buy from your company and to demonstrate that you were different from others → competition starts. 3. Marketing concept era: It started around 1950; marketers began to understand that it wasn’t necessary anymore to let people get to know your difference only. They needed to understand peoples’ needs, find what they were looking for and produce products based on this concept. 4. Customer relationship era: Nowadays the relationship between the company and the customer has to follow through all the process. The relationship doesn’t end when you sell the product; companies have to increase the level of understanding of the experience they could have buying the product or the service. MARKETING MIX Marketing mix is a combination of factors that can be controlled by a company to influence consumers to purchase its products. It is defined also as The four Ps: product: a good, service, or idea to satisfy the consumer’s needs. price: what is exchanged for the product, at what price do I sell my product? promotion: a means of communication between the buyer and the seller. place: a means of getting the product to the consumer. Apart from the marketing mix, there are also uncontrollable forces such as the market, the behaviour of the customers (there wouldn’t be marketing without consumer behaviour), the strategy of the competitors, regulations and technological development. We can also split marketing into two parts: – strategic marketing: It is an analysis-oriented process focused on identifying the needs of individuals and organisations. – operational marketing: It is an action-oriented process that extends over a short-medium term time plan and targets existing markets or segments. MARKETING MODEL Marketing follows a model, which is composed by four main steps segmentation: The market is a cake splitted with different types of customers with different kinds of needs. Not everybody can address the needs of all the different types of customers, so companies have to divide the market: people in the same group will be very close but very different to the others. A clear example are politicians that cannot satisfy all the ideas of the general public. ⭣ requisites: Before choosing the segment, companies have to analyse all of them and choose the one that is large enough to be profitable. It has to be accessible, reachable and the one that can value both my idea and by product. If segmentation is done properly, segments must respond differently to different marketing mix elements and actions: if the response is the same it means that they should have been in the same segment. – differentiated marketing: it is an approach to marketing that appeals to a niche market or different types of customers. – customised marketing: it represents a type of marketing that is tailored to the specific needs of a company or individual. targeting: Companies need to decide the segment that is more aligned with their capabilities, their ideas and their products and services; they have to choose their segment. positioning: It is NOT where companies place their products in stores, it is NOT product placement. It is the position that a product or a brand has in the mind of customers, the different perception that people have of your company or product → subjectivity and relativity. ⭣ problem: The main problem is that the perception of people cannot be changed, or better, it is difficult to change their mind because subconsciously for people it is like having made the wrong decision for themselves. There are many examples such as easyJet or even IKEA. The last one has always been perceived as a low budget and low quality company, but in the last few years something changed, people don’t perceive the company as low quality as before → experience. Beyond the fact that the company worked on price, cost and differentiation and cost leadership, they now offer experiences: not everybody goes there to buy their products, somebody goes there to have a different kind of experience. marketing mix Designing an effective marketing mix communicates to the market a clear customer value proposition (= a business or marketing statement that describes why a customer should buy a product or use a service), which is a cluster of benefits the company promises customers to satisfy their needs. – product: it is a set of both tangible and intangible attributes that characterises the offer to a target market. As the time goes by, intangible assets are becoming more important as customers are interested also in the semiotic part. It is important not only the functional part but also the psychological one as companies want to know how customers feel about the product or the service and what their needs and expectations are. But how can we investigate how consumers perceive the attributes of a product/service, like for instance the sustainability of the product? → kano model. 1. Focus group: it represents a brainstorming where I let people discuss a specific topic and I ask them to make a list of characteristics of a specific product. 2. Questionnaire: then I realise a questionnaire where I ask people only two questions: – the first investigates the reaction of customers if the product HAS a specific feature – the second investigates the reaction of customers if the product DOESN’T HAVE a specific feature. At the end of the questionnaire I put the questions into a matrix and I classify how the feature of the product is perceived; it should look like this: – must-be: It represents features that customers expect and that they take for granted. They don’t generate satisfaction because they are essential features but their absence generates enormous dissatisfaction. – attractive: if a specific feature is not present it doesn’t matter, if there is I am happy. – one-dimensional: if there is a specific feature I am very happy, otherwise I will be disappointed. – indifferent: these attributes refer to aspects that are neither good nor bad, and they do not result in either customer satisfaction or customer dissatisfaction. – reverse: I am satisfied if a specific quality is NOT present, but I will be frustrated if it is present (rumour or silence of cars). Companies typically produce and sell a lot of products and services to diversify: Diversification: production of different types of categories of products to deliver to different markets. Big companies are the ones that diversify more and don’t focus just on one product to have more chances. In this way if a company has problems with a product, it can shift its strengths to another business without facing a loss or a decrease in profits. A strategy to visualise the different business of a company is the Boston Consulting Group Matrix, BCG: Market growth: represents a market that is increasing or shrinking. Relative market share: represents the position of a firm compared to its main competitors. As it can be seen, there are four different types of products: – question mark: the product is not in a good position but it is in a promiscuous environment, that means that the product could grow and have success. Usually this is the first position, for instance products of startups are more likely to be in this position because they are just to boom. – star: this is the best position a product can have; it means that my product is the leading one in the market, so I do everything I can to defend this position and keep my competitors away. – cash cow: the products are in a good position but it doesn’t make sense to invest because the market is shrinking. At this point companies milk all the leader resources that they have, without investing. – dog: the worst position a product can have; if a product is in this situation, companies will be more likely to divest, as the product is both not leading and not in an profitable market. Taking into account a simple example where the majority of products are question marks and stars, it would be possible to consider that the company is in a wealthy situation. → NOT necessarily because I don’t know the profit margin of each product, I don’t know the percentage of impact of each product that I have. Ex. If the core business is a dog, even though there are lots of stars and question marks, the company is in a bad situation. On the other hand if there are lots of dogs but the core business are stars and question marks, the company is in a good and profitable situation. ⭣ The main problem is that the BCG matrix is just a snapshot of the situation in a specific moment, while it is important to take into consideration the whole situation: where were we yesterday? Last year? If a product is a dog but during the years has been increasing and is close to becoming a cash cow, it is different. Therefore it is important to look at how the situation is evolving in a dynamic way. PRICING Companies also need to choose the price at which they are going to sell their products, based on a bounder: – lowest price: cost of production Sometimes it happens that companies sell below the cost of production in the short run → sottocosto. This could happen for two main reasons: companies that want to enter the market and the only way to do so is to set low prices; somebody is entering the market and the company doesn’t want to be overcome. – highest price: willingness to pay of customers It is very difficult to detect the willingness to pay of customers so I must use marketing research. The willingness to pay is strictly connected with the elasticity of the demand = what is the impact of a change on prices on the demand of the product. cross elasticity of demand: what is the impact of a change on prices of a company on the demand of my products. If a competitor changes its prices, what is the impact on the demand of my products? Differentiation: the extent to which a brand, a product or service is perceived as different by customers. Do consumers perceive my products as different from the ones of my competitors? → differentiation and cross elasticity are very close: if a product has a low differentiation it means that it is not too different from the others = as the price changes customers buy the cheapest one. If a product has a high differentiation it means that it is very different from the other ones = as the price increases, there could be little changes because the two products are differentiated. There are three different methods to set prices: cost-based pricing: A company knows exactly its production costs, so it takes into account costs and adds a percentage of profit – it decides how much should be the markup. It is the less effective one and the one that only looks inside the company. competitor-oriented pricing: This method takes into consideration not only the production cost, but also what my competitors are doing. Sometimes, such as when the differentiation is very low, it is important to do what competitors do. While it is not important when there is a high differentiation (competitive bidding(?)). marketing pricing: This method takes into account especially what people's needs are and what is the added value that a product provides to customers. There are two main methods: – experimentation: it was used to measure the willingness to pay, through experiments. It was necessary to choose very similar cities (demographically, budget etc.) and to sell the same product at different prices for each city. After six months or one year companies could see the price that gave the highest profit. Today it doesn’t work well because everybody knows what is going on everywhere. – trade-off analysis: this method proposes a sort of portfolio of products; first it is necessary to identify some attributes and to articulate them so that there are 20 or more product profiles. Then I propose the different combinations and I ask customers to order them from the best to the worst = features and combinations that will give the company the highest profit. If a company is going to introduce a new product in the market, there are two main options to choose its price: 1. skimming: The company intentionally proposes the product at a high price because people subconsciously associate the high price with quality. As the time goes by customers will develop brand loyalty and the company will be able to lower the prices. In this way the product will be perceived as more convenient and the idea of quality will remain on people’s mind (Apple). 2. market penetration: The company set a low and convenient price because it wants to get in the hook. The company wants people to try it and enjoy it in a way that they won’t get rid of it. At this moment the company raises the price without any problems because customers are addicted to its product (Netflix is a clear example of this method). PLACING Today there is a completely different approach to placing products in the market from years ago, simply because of globalisation and the birth of online platforms. Gen Z was born buying products online but boomers didn’t even want to try it until covid-19 where they were forced to learn to buy online. A distribution channel can be defined as a structure made up of interdependent partners who can make goods and services available to consumers or client companies. The bond between the producer and the consumer can be direct or indirect: – direct: the producer is directly connected with the consumer, he doesn’t have to share margins with other actors and he can have direct feedback about the product and how the company is doing from the point of view of the customer. – indirect: this kind of bond can have its advantages but most companies could not have enough resources to manage all the passages between the producer and the customer. When it comes to distributing products in the market, there are three different approaches: intensive strategy: the product that the company sells is available everywhere and for everybody. The advantage is that everybody can try the product and develop a brand or product loyalty. The disadvantage is the perception of people that link the availability and the cheap price to a low quality product. selective strategy: the company chooses specific shops and cities where it wants the product to be available. In this way the experience of the customer could be different and the company can choose a place where employees can follow customers and explain the story of the product. exclusive strategy: the company chooses very few places until the circle narrows only to one shop. Today there are three main megatrends that are influencing marketing, which are the postmodern consumer, the digitalization and the sustainability. Today’s customers, also called 2.0 customers, are digitally and environmentally aware rather than in the past. It is difficult to find a definition about the “sustainable consumer” also because can be defined green and ethical consumers: – green consumer: he is concerned with environmental sustainability; he looks for companies and products that minimise the environmental impact such as eco-friendly packaging. – ethical consumer: he is concerned both with environmental and social issues; he values fair trade, workers’ rights and for instance ethical labour practices. In general, the profile of a responsible consumer doesn’t exist since all of us can always be more or less sustainable and environment-friendly. However there are two profiles of consumers: – – a consumer who is interested in environmental issues but that cannot afford this type of lifestyle and products. Who is the most sustainable consumer? It is difficult to find an answer so it is necessary to look at what people do, how they behave, why they make certain choices and which are the values they believe in → inferential approach. THEORIES Segmentation based on socio-demographics: This approach was used years ago because it mainly focused on the green and ideal consumer that could buy the products of a company. The main features of investigations were age, gender, education and income; therefore what could companies do to convince people to buy their product? → this approach doesn’t provide an answer. NEP scale (Dunlap & Van Liere): The NEP scale is the most famous one in terms of marketing because it deepens more in the psychological aspect. It is usually composed of 14 statements with respondents asked to indicate their level of agreement or disagreement. Their answers are based on the Likert scale, whose number of options is usually limited (4,5,6). There is a big difference between choosing odd or even numbers: – odd number: the responder can be neutral because he has the answer right in the middle, so that he isn’t going in detail. – even number: the responder must give a precise answer because in this case the company wants people to stand for what they really value and want to know how they are feeling about certain topics. How do companies manage the responses? → it is NOT the average, because the responses don’t go in the same direction. It must be applied reverse coding = changing the order of some response options in a way that all of them go in the same direction, to then apply the average. ⭣ However there can be two main problems using the NEP scale: Somebody doesn’t answer to all the questions, but much worse is when somebody provides random responses, because they are polluting all the data of other people, so companies need some checks such as: “if you are reading this question, leave this line blank” if responders answer it means that they are not paying attention. There are many affecting factors on our behaviour which are cognitive based (I decide what to do and what to buy). However sometimes we do things automatically without thinking, this behaviour is called habit and it is about repetition. If everytime I look at the different options that I have and then always choose the same one, then this behaviour is called repetition. The main factors that affect our behaviour are the individual sphere, the rational sphere and the contextual sphere (= what are the values of people that surrounds me) Intentions: theories of the rational cognitive stream Theory of reasoned action: Human behaviour depends on its intentions but sometimes there could be a gap between them. Ex. I develop an intention to buy a specific product but it is not available, so I won’t buy it → intention ≠ behaviour. The antecedents of intentions are both attitudes, a genetic predisposition to do something, and subjective norms, that is what a person thinks that the others expect from him. Sometimes the two things don’t go in the same direction, therefore this theory is too superficial. Theory of planned behaviour: Basically it is the same theory of the previous one, but this takes into account also the volitional control, a person’s ability to consciously regulate or control their own actions, decisions or behaviours through deliberate choice. Norm-activation model: The intentions of a person depend on personal norms (= feeling of moral obligation to act). The two variables that activate personal norms are: – awareness of consequences: if a person knows the consequences of an action, he can be more aware and responsible. – ascription of responsibility: judgements about whether a person should feel guilty and responsible or no for an action based on societal or moral norms. Ex. I know that driving a hybrid car could be more sustainable but I am driving a normal car. Do I have to feel guilty? Value-belief-norm theory: This model deeply goes in the antecedents of the awareness of consequences, which are personal values (altruistic, egoistic, traditional, openness to change). In the previous model awareness of consequences and ascription of responsibility weren’t linked, here the awareness of consequences is the antecedent of the ascription of responsibility. The main problem here with habits is that they are very difficult to change and sometimes marketing information are not reaching the customers because of a barrier. HABITS – more in detail Once the definition of habit is clear, it is important to know how to measure them through the SRHI scale and the Oreg resistance to change scale. The difference between them is that the first one investigates more in detail the habits and their strengths. The second one only investigates a genetic predisposition of the resistance to change. – ABC model: it is used to understand how behaviour is influenced by its antecedents and consequences. The components of the ABC model are the antecedents, the events that occur right before a behaviour, the behaviour, that is the action itself and the consequences that refer to the results that follow the behaviour. This model is used to understand and change unwanted behaviours or to encourage desired behaviours and reduce the negative ones. – Comprehensive Action Determination model: it is used to understand how people decide to engage in behaviours that benefit the environment. – Habit Discontinuity Hypothesis: it suggests that people’s habits are more likely to change when they experience major life changes or disruptions in their routine. How can the behaviour be influenced? Many external factors can influence our behaviours, mainly two things: non-monetary incentives/inducements: it is about the empowerment of customers, making them understand that they are important for the company and that they can make a difference. It is also about creating campaigns focusing on the benefits of green products or the contribution to the environmental cause. monetary inducements: it represents discounts and most of us would prefer this option but there are many problems: by definition it is more expensive than creating a campaign. As a second problem there is persistence, as discounts can’t be maintained for a long time, while campaigns can last over time. – intrinsic motivation: doing something because it is inherently interesting or enjoyable. – extrinsic motivation: doing something because it leads to a separable outcome. Ex. studying not to learn but to get a good grade - crowding-in: it is a combination of intrinsic and extrinsic motivation, they go in the same direction. - crowding-out: extrinsic and intrinsic motivation go in opposite directions. - overjustification effect: when external rewards or incentives for an intrinsically motivated behaviour lead to a decrease in that intrinsic motivation. Ex. If a child who loves drawing starts receiving money for each drawing, they may begin to draw less for fun and more for the reward. Spillover: what I do in a specific domain has an impact on what I will do in other environments. For instance, if I start buying sustainable products I will start being more environmentally aware. However there can be positive and negative spillovers: – self-perception: when a person starts acting responsible, he will build a self-perception of a person who cares about the environment; this idea will guide all his future behaviours and actions. – cognitive-dissonance: if I act inconsistently I might be perceived as hypocrite (???). – learning theories: when a person makes responsible actions, he increases his level of knowledge about it; this behaviour will influence all his future behaviours (???). – contribution ethics: when a person does something good in a domain, he might feel he’s done enough and that it is time for others to make responsible decisions. – moral licensing: it represents a phenomenon where individuals feel justified for making an unethical action just after making a moral decision. The last two spillovers are quite the same but they differ on the fact that in the first we are talking about the relationship with others, while in the second we are talking about a person herself. primary vs secondary research: – primary: when we collect data for the first time, for example from a survey. The advantages are up to data and precise information about what I need. On the other hand it is time consuming and sometimes very expensive. – secondary: when we work on data that is already available, for example online. The advantages are cheaper information and less time consuming. However we may not find the information we are searching for and data may not be up to date. qualitative vs quantitative research: – qualitative: when collecting few quality data is far more important than lots of data. (?) – quantitative: when we need to collect a great amount of data, no matter if they are quality data or not. (?) cross-sectional vs longitudinal studies: – cross-sectional: when we collect data once, taking only one picture of a phenomenon in a specific moment in time. – longitudinal: when we collect data always following the same sample of people over time. It can be used only if the group of people in which I am collecting data remains the same. research validity vs reliability: – validity: a study is valid only if it properly collects data, because sometimes it is not that easy to create the right questions to collect the right data that I need. – reliability: it asks, is it possible to generalise data? When I take a representative sample (of the same population I am analysing) and assume, from my experiments, that the result can be compared to the entire element, then I can generalise data. Collecting data about consumer behaviour helps companies better target their efforts. The data gathered may be objective, such as statistics about purchasing habits, or subjective, such as consumer opinions about products or issues. Research firms may use a variety of methods to gather information and construct a complete profile of consumer behaviour: – surveys/questionnaires: a survey is defined as the evaluation of experiences or opinions of a group of people via questions, while a questionnaire is defined as a collection of written questions with an answer choice made to conduct a survey. – structured interview: when right from the start a person knows exactly the questions he is about to ask, so then he takes the answers word by word. – non-structured interview: when a person only has a broad idea about about the questions, but they mainly depend on how the interview is going and the topics coming out. This can’t be done by anyone but only by strong personalities. – focus group: when few people organise themselves and brainstorm about a certain topic with a leader organising the talks, so that everybody can talk. – ethnographics: when I simply observe what people do in real settings (going to an apple store and just watching what people do). It can be an advantage because I can directly observe people’s behaviour without asking anybody, but it takes a lot of time and it is simpler making an online survey (where I can have thousands of answers in a few minutes). DESIGNING & CONDUCTING SURVEY RESEARCH Clarity: are all the questions understood by the respondents? Of course they are clear to us but we do not have to take for granted that they are always clear to others too. → everytime we must do a pretest, take a few people similar to my target and propose them the questions; then ask them how they interpreted them (there’s always something wrong that comes up). Comprehensiveness: are the response choices sufficient to cover a wide range of alternatives? - open-ended questions: when the respondent is able to write down his opinion. This gives the respondent the opportunity to express himself, but it is an option difficult to manage with dealing with large numbers of questions. - close-ended questions: when the respondent has a range of options to answer the question. ⭣ what companies usually do is leaving a space for open-ended questions at the end of each question. NB: a multipoint scale is not for sure a Likert scale because the multipoint scale is not only about agreement or disagreement as the Likert scale, it could also ask how a person feels about certain things (MP more information). Acceptability: it is necessary not to invade privacy or personal space. When dealing with sensible questions, ALWAYS provide an option where people can abstain. Then, the survey must be of appropriate length: I am asking people to give me their time, furthermore people get easily bored. Thus we must measure the time of the survey by proposing it to people that have never looked at the questions. It has to take no longer than 4 or 5 minutes. There are different types of scales while proposing the answers’ options: – Likert scale – Semantic scale: when having bicolor objectives, one on the negative and one on the positive side (dirty - - - clean). – behaviour intention scale: it measures likelihood consumers will act a certain way. – rank-order scale: when ranking something from the one that satisfies me the most to the least one. Level of wording: sometimes we frame our sentences to be more complex, while we have to be simple, specific and straightforward. We must directly go to the point of the question without complex structures and ambiguous questions. We also must avoid multi purpose questions, introducing more than one issue and expecting just one answer. Moreover the questions must be as neutral as possible and follow a logical order while proposing the questions (natural sequence of time/most familiar-least familiar) = people get easily bored. Inviting the responders to participate in the survey is the only shot that companies have to bring customers. First of all we have to describe in a very broad way the content of the survey, without influencing the participants. Then we have to ensure that the participation is voluntary and not forced by anyone. At the end of the survey we have to describe that it is finishing and at the beginning provide an estimation of time to complete it. → at the end it is important to provide contact information in case the participants have questions about the survey. Usually nobody uses this, but psychologically it is helpful to cancel barriers between the company and the respondent, moreover it makes the responder feel like he always has support. – Sampling: companies need to find participants to participate in the study: it can be random people, or convenient sampling, meaning that the company asks people that are very easy to contact and ask them to spend 5 minutes. – Self-selection bias: it can happen that the people who want to participate could be completely different from the entire population and, therefore, do not represent reality. UNCONVENTIONAL MARKETING The traditional way of doing marketing is not sufficient anymore, due to the fact that customers have changed over time. The new customers became more sophisticated and more needy, they don’t trust advertising anymore, developing behaviours to avoid it. As soon as they can, they skip any kind of advertising. There are such barriers between companies and customers. Since 2003 if customers didn’t like the product, they could have talked about it with family and friends. Today, with the advent of technology, an influencer can reach millions of people and influence them with his own ideas, and this is out of the control of companies. ⭣ Unconventional marketing, tries to find new ways of communication to gain trust of customers. Guerriglia marketing: (= derived from military guerriglia) it is a marketing strategy employed by companies with limited resources, that “attack” customers with surprise. It is a specific area of unconventional marketing. viral marketing: when a company exponentially spreads messages through social media platforms. It is necessary to create a curious, entertaining and interesting message that people want to share with others. It is an advantageous technique because most of the time it is cheap and it costs zero for companies to upload videos on social media, as customers will do the “dirty job” of sharing it with others. The main problem is that companies cannot have an estimate of how many people they could reach. Using viral marketing, companies have no guarantee that people will enjoy the video and want to share it. Ex. Pepsi Max, Ice Bucket Challenge, Rockin’ 1000. To apply this strategy there are some elements required: – something to offer – require a little commitment on the part of the consumer to transfer the message: quick, immediate, effortless. – very quickly from little known to very known – If I find something funny I want to share with others ? – – ambient marketing: The core of this technique is the environment, meaning everything that surrounds us. Environment is part of the marketing message, indeed it makes sense as long as it is in a specific spot. Customers encounter it when they least expect to have marketing stimulus. Companies can easily get an estimate of how many people they will reach, but unlike viral marketing it is impossible to reach so many people. Moreover people remember the image but not the name of the company in the ad. Ex. coffin on the zebra-crossing placement/casinò numbers in marco polo airport.  neuromarketing: It illustrates the unconscious mechanism of the brain when seeing a marketing advertisement. Our brain is divided into different parts which are highly specialised; the aim of neuromarketing is to detect which of these parts gets activated the most when seeing a specific image. This can be done detecting the amount of blood or oxygen that flows in a specific area or through electric responses. – brain imaging tool: taking a picture of what is happening in the brain (not invasive) – biophysiological tool: – behavioural tool: eye tracking. Why is not neuromarketing a genuine type of unconventional marketing? Neuromarketing is not marketing, it is detecting consumer behaviour, whose results can be used both for conventional and unconventional marketing. Companies are not advertising anything. Ex. Pepsi (= sports) CocaCola (= family, christmas, red, tradition), when our mind gets activated we prefer CocaCola because it reminds us of tradition, union, family etc. Instead when we don’t know what we are drinking we would probably prefer Pepsi. The most drinked one is CocaCola, but at the end of the day people prefer the taste of Pepsi. → Coca tried to imitate Pepsi changing the amount of sugar: it was always the same but with a different taste but it was a failure. They got back to the “worst” recipe but knowing that coca was what consumers preferred. stealth marketing: Stealth is about being invisible; applied in marketing, it is a low cost and very successful technique as the customer is not aware that he is free to commercial stimulus. – product placement: it is NOT positioning and not even placing products in stores. Product placement is about sponsoring products in films, tv series etc. Nowadays there are strict rules: the customers must be aware of the advertisement (at the end of the film) and the brand or product must be perfectly consistent with the movie. Companies have no guarantee if the film goes viral or not; worse is if my product is used as a bad product or linked to a bad character (a person that goes to jail). The movie is going to stay there forever, so it is out of control of companies. – undercover marketing: when people working for a company pretend to be somebody else and sponsor the product. The advantage is that people can try hands-on the product and it is very credible because it is a random person suggesting the product, and not the company. Nevertheless nowadays it is not used anymore because we are not sure whether it is legal and also because we can reach way less people. Ex. Random couple asking for a picture with a new Sony phone. tribal marketing: This marketing strategy combines two inconsistent human features: as humans, people are individualistic and sophisticated and they don’t want to buy the same products as others. On the other hand people want to feel part of something, sharing ideas, lifestyle and values with others. The product is the starting point, because it is a means of communication on how and what I want to appear and who I want to be. Ex. Harley Davidson’s motorcyclists started to organise meetings, gatherings etc independently from the company. This can be seen as a positive aspect, but it is also bad because if the community grows independently, it is out of control of the company, and it doesn’t want to have this image. retro-marketing: People living today are very pessimistic about the future and wish they could go back to the safe and better place of yesterday. In this sense marketers try to exploit this nostalgia offering products that recall the “old times” such as vintage or retro.