CH1:Creating Customer Value

1. Introduction:

1.1 Business process:

Market driven ( uncovers needs through market research)

Market-driving (creates new products based on company’s vision of the future)

Value difference between what customer pays and the benefits he/she receives

1.2 Customer Value:

Functional; Experiential; Economic; Social

 Functional: features, eg: features of laptop

Different customers value different functions differently

Multi attribute model to score the preferences

Non compensatory model, conjoint analysis

 Economic: Tangible monetary savings eg: fuel efficiency of cars

 Experiential: Intangible psychological and emotional value

Through branding (psychology, perception of quality), design (good design, options), customer experience (front
line employees are critical), emotional benefits (have emotional bond with the company) or great service

 Social:

Benefits to customers based on social interaction

 Network effects
 Preference formation
 Social Capital
 Social Relationship

2. EVC- economic value to customer:

True economic benefit of a product: cost and savings involved

Eg; Hybrid cars, LEDs, Solar Panels, Front-loading washing machine etc

Calculating economic value: total cost of ownership or life-cycle cost

Maximum price customer is willing to pay= its economic value to the customer, EVC

Three points:

1) Firm charges less than EVC to give incentive to switch

2) EVC calculated as total life cycle cost over the entire life of a product
3) EVC is relative not absolute. Different customers can have different EVC for same product

Numerical based on EVC

Marketing implications of EVC:

Powerful tool for segmenting and targeting

Introducing new products and determining their position against existing products

Drawback: EVC ignores other functional or intangible benefits or customer’s underlying assumptions

3. Functional Value:
Emphasizes value by offering new features or functional benefits

Cannot be easily translated in terms of economic benefits or price tags

Multi-attribute model captures how customer evaluate products with different features

Preference for brand = Sumproduct (Importance of attribute x rating of brand on attribute)

Marketing implication of functional value:

What to do if your product has low rating in the multi-attribute matrix?

1) re-design product on said attributes

2) Negative advertising ( against competitor products)
3) Change customers mind about importance of different attributes
4) Target a different customer segment that prefers your attribute
5) Create an entirely new attribute that is required

Limitations of multi-attribute matrix:

 Compensatory: high value on one attribute can compensate for low value on another attribute. Soln.
Customers use non-compensatory approach with a minimum threshold to satisfy ( eg. Conjunctive model)
 Hard for customers to articulate or answer. Soln. Use conjoint analysis ( laptops with different attributes
(two) are shown, customer choses one and use statistical analysis to infer)

Note difference between features (what the product offers) and benefits (what customer gets from features)

Feature Wars: Adding more features without focus on benefits to customer

Capability v/s usability. As you add more features, its capability increases but usability decreases

ECONOMIC AND FUCTIONAL VALUE ARE BOTH TANGIBLE AND CONCRETE

4. Experiential Value:

Branding, Design, Customer experience, customer service

4.1 Branding:

Quality, status, image, immense psychological value to customers

Eg; Lexus vehicles

4.2 Design:

Eg; Ford Model T importance of color

Apple

Unique designs are important. Hospitals are adapting.

4.3 Customer Experience and Customer Service:

Employee satisfaction is key

Service-profit chain: Demonstrated the link among employee satisfaction, customer satisfaction, customer loyalty and
customer profitability

Employee satisfaction results from high quality support services and policies that enable employees to deliver values to
customer

Front-line employees: hire for attitude instead of aptitude eg; Southwest airlines, Tata group

Product offering: Fewer v/s larger product line, Larger product line will reduce customer satisfaction

Customer Management: Technology allows offloading tasks to customer, eg; bank services

4.4 Emotional benefits:

Emotional bond with customers to create long term loyalty

Eg; P&G “Thank You, Mom” initiative/advertisement

5. Social Values:

5.1 Network effects:

The more people use the service the greater the value to you

Strong network effects

Provides an increasing return to scale

5.2 Preference formation:

Consumer preferences are constructed and heavily influenced by their peers

Herding behavior on social media

5.3 Social Capital:

User generated content eg; Yelp, Youtube, facebook etc

Why users create content?

Benefit from the content of the site and want to reciprocate the same

By offering suggestion or improvements they feel enpowered

5.4 Social Relationships:

Your product should Foster social activities and interactions

6. Gaps between customer expectations and value delivered:

1) Perception of what is excellent is different
2) Ambiguous translation of objective
3) Sub-par resources
4) Advertisement expectations much higher than delivered
5) Customer perception of good service different from company

ARTICLE: Marketing Myopia

a near-sighted focus on selling products and services, rather than seeing the “big picture” of what consumers really want.

lack of insight into what a business is doing for its customers, what are the needs of customers

Product is not your company

“ Business will do better in the end if they focus on meeting the customer needs rather than selling products”

Eg; Railroad; failed because they were railroad oriented instead of transportation oriented, product oriented instead of
customer oriented
CH2:Marketing Strategy (blueprint by which the firms plan to compete)
Introduction:

Purpose of business: acquire, retain, and develop into brand ambassador

Problem: Attain sustainable differentiation- yield revenue-cover costs- contribute profit

Customer differs based on: What they value in a product/service; How they want to buy; How they trade-off price v/s
benefits

Marketing Strategy Formation Process:

Analysis: 5C (Customer, Company, Collaborators, Competition, Context)

Decisions: 1) Aspiration Decision (what the company hopes to achieve in market: STP)

STP:

Segmenting (to identify possible groups to serve)

Targeting (a specific group or groups to address)

Positioning (in the mind of selected customer)

2) Action Plan Decision (4Ps -Product, Promotion, Place, Price)

4P:

Divided into two broad categories:

a) Creating value for the customers

a) Product offered
b) Communication to the customer about the product (promotion)
c) Mechanism to distribute the product to the customer (place)
b) Capture the value created
1) Price charged for the product

Outcomes: Customer acquisition, retention, brand ambassador leading to sales, profits, franchise

Outcomes created include: brand reputation and customer loyalty

5C Analysis: (Product/Market fit)

Customer Behavior Analysis:

Two things:

1) Who is involved in the decisions? (Decision Making Unit)

2) How are they making this decision? (Decision Making Process) (Quantitative surveys to qualitative methods such
as focus group discussions)

Checking the product/market fit; B2B more complex analysis than B2C

Thomas Bonana’s six major roles:

1) Initiators (stimulate the search of the product)

2) Gatekeepers (problem or product experts)
3) Deciders (Make the purchasing choice)
4) Influencers (Some input/influence)
5) Purchasers (Consummate the transaction)
6) Users (consume the product)

Company Analysis

SWOT analysis
Prahalad and Hamel: Core competency

Two key elements of core competency:

1) Key contribution into creating perceived customer value in products

2) Difficult for competitors to imitate

Assess the following: Firm’s finances, R&D capability, Manufacturing capability, Other assets

Collaborator Analysis:

Set of external assets that may be assessed to complement those of the company

For eg; Backing from VCs or stakeholders (financial), suppliers partnering with the firm

Competitive Analysis

Create more value (benefits minus cost) for customers than any other options known to them

How to: assess other offerings, market they address, how they address it, future prospects

Eg; 10 K filings, interviewing potential customers about competitor’s product, competitor’s marketing actions, reverse
engineering or "tear down"

Context Analysis

What cultural, technological and legal factors limits?

Culture: Cultural trends related to social media, online communities (Systematic analysis of cultural trends: coolhunting)

Politics, regulation, laws and social norms are dynamic factors to consider

Unstable markets: banking, television and pharma

The aspirational Decision: Segmenting, Targeting and Positioning:

Segmenting

Demographics (Age, income, gender, occupation)

Geographic (nation, region of country, urban v/s rural)

Lifestyle/Psychographic (Hedonistic v/s value oriented)

Customer behavior (user status (user/non user), usage rate, medium or heavy user, loyalty status)

Targeting

Goal: Define a target market that can be reached by the firm efficiently, whose members value the

firm’s comparative advantage and who are willing to be able to pay for it

Deliberately exclude some customers

Positioning

Defining a value proposition for the target segments;

Differentiating a product or service from other in the perception of customers

Essential elements:

1) Target customer
2) Wants of that customer
3) Product type and category
4) Key benefit to be provided

Answers how would we approach the target market? What would we want segment to see in us?
Gets the whole organization aligned regarding the aspiration decision

External statements derived from positioning (eg; taglines)

The Action Plan: (Marketing Mix Decision)

Benson Shapiro’s “three degrees of interaction” in marketing mix:

Consistency (minimum standard); Integration (+ive interaction); Leverage (each element used best);

Product Decisions:

Centerpiece

Complete set of ways (rather than one core feature) that a firm delivers value to its chosen customers

Applies to services as well as products

Complete set of ways include brand name, company reputation, core functionality, ease of installation, ease of use, post-
sale assistance or warranty

Four things:

1) Product breadth: Variety and number of product lines offered

2) Product Depth: How many different options in the product line? Eg; good, better, best. Also appealing to
different segments (Urban v/s rural etc)
3) Evolving product lines: Modifying existing version with new and improved features. Can either trade-up
(premium over existing) or trade-down(reducing functionality or existing to capture lower price point market)
4) Product Testing: Building concept, prototype, customer feedback, revise product. Testing can be done using
surveys, taste tests, simulated test markets, actual test markets, beta test

Promotion Decision

How organizations communicate to customer about potential product?

Goal: create product awareness, knowledge of features, interest in purchasing, trail purchase, keep the customer, making
them brand ambassadors

Through customer reviews, rating, posting on social media, unboxing videos, etc

Tasks in promoting: (6M)

Objective:

a) Market (formalizing a positioning statement) (To whom?)

b) Mission (Objective?)
c) Message (Specific points? Should include aspiration in positioning statement + customers’ state of mind)

Tactics:

d) Media (Which vehicles? One way (TV Ads, Podcasts, Newspapers, magazines) v/s two way (Direct mail,
Catalogs, Infomercials, E-mail, Telemarketing, salesperson) OR Mass v/s Customized communication)
Two types in communication mix:
a) Customer promotions (free samples, continuity programs, coupons)
b) Trade promotions (free goods or discounted price)
Two types while allocating cost to promotion:
1) Push strategy: Focus on inducing intermediaries eg. retailers in creating demand for products. Eg; direct selling to
customers in showrooms, packaging designs, or point-of-sale displays
2) Pull strategy: Already has strong customer preferences, uses retails for product access only. Motivating
customers to seek out your brand in an active process via tactics such as advertising, customer relationship
management (CRM), and sales promotions
e) Money: Objective and task approach. How to accomplish the mission and market objectives? How much
spent in effort?

Results:
 f) Measurement of results: should be done against the objective of the communication plan eg; metrics to
measure increase in level of product awareness, Behavioral measure (retention)

Place Decisions

Distribution channels or where or how an organization decides to go to market

Market channel tasks:

1) Generate Demand
2) Fulfil Demand
3) After Sales Service
4) Information/Market Feedback for Strategy Development

Eg; Online/offline stores (omni-channel retailer), Sales representatives, e-commerce, dealers, collaborators, joint ventures,
etc

Reach different customers through different routes: e-commerce, “touch and feel”, going to retail store+ seeking lower
price online, etc

Two Major areas:

1) Channel Design ( Direct or DIY Strategy Or pursue channel partners? What role will channel partners play? )
2) Channel management ( Policies and procedures that guide the functions performed by various actors in the
channel)

Key goal: To minimize conflict between partners in a distribution system

Pricing Decisions

Tapping into the value to create revenues for the firm; cover costs; generate profits

Highly leveraged effect on bottom line

Pricing mechanism: Auctions, Posted price, take it or leave it, etc

Three things for effective pricing program:

a) Value of the product to the customer (rather than firm’s COGS)

Perceived value: upper bound on what the customer is willing to pay
Function of Firm’s offering + price and feature of the competitors known to customer
Firms cost (COGS) is lower bound to price
Perceived value consists of: True economic value; Price of next best alternative; value of the performance
differential compared to the next best alternative
b) Opportunities to vary price across customers according to the value they individually place
Price customization
Three types:
a) Buyer characteristics (higher or lower willingness to pay)
b) Transactional characteristics (Quantity and volume discounts)
c) Product Line variations (Base or upgraded model)

Pricing model

a) Uniform pricing model (Uniform price that caters to 50% of the market willing to buy)
b) Custom pricing model ( Segment the market and apply uniform pricing model)
c) Customers’ price sensitivity
Through market research
Customer’s price sensitivity increases (business pricing latitude decreases) due to:
1) When a third party bears the cost
2) Cost represents major chunk of expenditure
3) Buyer is planning on selling the product
4) Buyers are able to judge quality without looking at the price
5) Ease of access of reviews or performance and price of alternatives
6) No urgency to buy
 7) Buyer can switch from one supplier to another without any additional cost
8) Limited difference between your product and competitors
9) Customer has long term relationship with the company

Conclusion:

NPS- Net Promotor Score: tracking the percent of customers rating the company at the top end of the range, believing
these customers will promote the brand to others

CH3:Marketing Intelligence
1. Introduction:

Coca-Cola:

Did market research but it failed to enhance market intelligence; emotional attachment of consumers

Examples of Forever 21, Porche

Marketing intelligence is a deep and informed understanding of the relationship between the customer, marketing
environment and the company’s offering

2. Essential Reading:

Customer Value Proposition: what the company hopes to bring to the market

Eg; Planter Nuts (bought data from Neilson and used freely available gov, sources)

Consumer perceptions

Combined four different types of data ( Free on hand or “secondary data; Paid for secondary data; Newly collected or
“primary data of quantitative nature and “”primary data” of qualitative nature.

Understand customers and strategy and specific actions of competitors

3. Research processes and research techniques:

Five-step model

 Formulate the problem or question

 Determine the sources of information and design a research process
 Choose the most appropriate data collection method
 Collect the data
 Analyze and interpret the data

Data type- Secondary and Primary

Secondary(Accumulator)- Internal and External (free or paid)

Primary (processes)- Experimental(Location based) and Non-experimental (orientation based)

Experimental- Laboratory and field

Non-experimental- Qualitative and quantitative

4. Research Methods:

Secondary data: (quicker and cheaper for marketers)

Internal ( company accounting records-COGS, unit sales by product, region or customer, expenditures by time period; Sales
call records-level of satisfaction, account penetration and potential and competitive activity)

External (Free sources- GDP, unemployment levels, consumer spending, household debt to income levels, patent
applications and the number of firms operating in a country in any particular industry;)
4.1 Collecting Primary Data:

4.1.1 Experimental research:

A/B testing (manipulates the environment in some way)- easy to implement

Eg; Basecamp freemium model; Catalina marketing; Hubspot flywheel framework

Focus on lifetime value of customer

Booking.com core is A/B testing

Laboratory setting (lower cost, quicker results, confidentiality and internal validity) v/S Field setting(what people do rather
than what they say they will do; costly)

4.1.2 Non experimental research:

Qualitative data research

(best suited to initial market explorations)

Three ways: Interviews, Focus groups, direct observation-empathetic research)

Quantitative data research:

(requires previous knowledge of that market or good understanding of the specific issues at hand)

BASES test, Surveys or Sample surveys, online v/s offline surveys

Eg; Colgate Palmolive

Census (polling of the entire population)

Some survey errors

5. Conjoint analysis:

How it works? ( Define a product, study design)

When you have a lot of attributes

Automobile manufacturers

Applications of conjoint analysis

Market share formula

6. Perceptual Mapping:

Consumer preferences and choices

Product positioning and market structure

Eg: Loreal

CH4: Marketing Metrics

1. Introduction:

Measure effectiveness of marketing spending

Practical metrics to evaluate the overall success of marketing initiatives

Supporting metrics to evaluate each area of the marketing mix (Product, Price, Promotion, Place)

Importance of goal setting

 2. Goal setting:

Establishing targets for performance using comprehensive end-result metrics is not the only way!!

Overall strategic objectives + individual tactics with discrete measurement of the performance of each tactic

Multiple levels of target:

“external” which may be revealed to analysts and business press

“middle” target or actual target

“stretch” target is known aspirational goal for employees and encouraging them to think

There is “silver” metric which is the use of one single marketing metric for an org

3. Developing the set of metrics:

Perspective:

Several perspectives are important while measuring marketing effectiveness

End-result metric, intermediate metric(aspects of performance prior to the transaction and may provide an earlier glimpse
to success)

Awareness example of in-process metric

Internal (pertaining to the firm in question or its channel members) v/s external focus(data from the market)

Each tactic should be consistent

Brevity

Use small number of metrics for evaluation to support consistency

Goal must cascade from business unit’s overall strategic objective down to the metrics used for goal setting and evaluation
of individual marketing tactics

4. Overall Metrics

Primary objective is profit

ROI; Derivative of ROI is ROMI (Return on marketing investment)- focuses only on the incremental profit and costs that
can be attributed to a specific marketing campaign or tactic

Payback period: projected length of time until the marketing initiative pays for itself

Payback period ignores any profit achieved after the breakeven point and does not take into account the time value of
money

Market share; More than 70% of the time the most profitable company in a market is not the market share leader

Eg; lego

Customer Lifetime value (CLV) -predicts the value of the future profit flows associated with an individual customer over
the lenth of time the firm can retain the customer

Customer retention v/s customer churn

Setting goals via CLV: customer retention rate and margin per customer

Net Promotor Score (NPS)- measuring customer loyalty

Customer Satisfaction (CUSAT)

5. Promotional Metrics

Promotional tactics, such as advertising, public relations and sponsorship,etc

Brand awareness, Brand preference, purchase intentions sequentially influence the likelihood of purchase-> Hierarchy of
effects

Brand awareness unaided awareness v/s aided awareness

Brand preferences Measure before and after a customer is exposed to a marketing tactic

Purchase intentions How likely to purchase a product in given time frame?

Brand equity

Share of voice

Cost per impression (CPM) Lower v/s Higher CPM

Customer acquisition cost

For online metrics: unique site visitors, clickthrough rate, abandonment rate, value of online promotions that influence
the purchasing behavior or “assist” in the purchase

6. Pricing metrics

Manufactured suggested retail price (MSRP)

MSRP v/s discounting

Percentage sales on deal

Average unit retail price(AUR)

AUR close to MSRP means promotion and channel tactics are working effectively

Minimum advertised price (MAP)

Initial Mark-up (IMU) factor

Gross margin percentage eg; keystone markup, real time pricing systems

McKinsey’s Waterfall

7. Channel Metric

Availability:

All commodity volume (ACV)

Distribution percentage

Average items carries

Share of shelf

Inventory:

Inventory turns

Gross margin return on inventory investment (GMROII)

Retail:

Same-store sales

Sales per square foot

To increase same-store sales retailers strive to grow traffic, conversion, average basket size

8. Product Metric:

Customer’s perceived product superiority

Cannibalization

Percentage of sales of new products

Portfolio balance

CH5: Marketing Analysis Toolkit: Market Size and Market Share Analysis
1. Introduction
Size of the markets to develop sales forecast

This is used to size a market and generate a sales forecast using market build-up methodology

Market demand, company demand

Market and product penetration rates and market share

2. Measuring a market
Potential Market, Available market, target market

3. Estimating Market Demand

What is market demand?

Primary v/s secondary demand

Market minimum

Market potential

Market forecast

Market Demand in dollars= Market Demand in units * Average retail price point in the market

4. Estimating Product Demand

Product demand (or secondary demand) depends on: a) level of marketing expenditures as compared to the competitors
spending levels b) the effectiveness and efficiency of marketing expenditure v/s competitors

Product Demand in dollars= Product demand in units* Average price point of item

5. Calculating Market Share

Unit share, Dollar share

6. Calculating Market Penetration

Penetrated Market

Market Penetration Index= Market Demand/ # of consumers in potential market

Product Penetration Index= Product Demand/ # of consumers in the target market

7. How to size a market using market build-up Methods?

Market Demand= (# of buyers in the market) x (annual quantity purchased by an average buyer) x (the average price paid
for a unit)

CH6: CONSUMER BEHAVIOR AND THE BUYING PROCESS

1. Introduction

Consumer buying decision vary by product category, by the buying context, and/or by customers’ personal idiosyncrasies
Consumer buying behavior and buying process

2. Frameworks for understanding How Consumers make decisions

Cognitive v/s emotional decision making; high involvement decision making v/s low involvement decision making;
optimizing v/s "satisficing" decision making; compensatory v/s non compensatory decision making

a. Cognitive v/s emotional decision making

Cognitive driven by mind; Emotional driven by heart

How do marketers determine whether a person’s buying behavior is largely cognitive, emotional, or some combination of
the two?

Product type, (utilitarian purpose v/s hedonic pleasure; search v/s experience)

Context (What does the product tell about you to others?)

Individual differences

b. High Involvement v/s Low-Involvement Decision Making

High involvement eg; wedding dress, stems from factors like expense, risk, uncertainity

Low involvement eg; purchasing gum

High or low involvement can change over time

Some strategies for high or low involvement

c. Optimizing v/s satisfising decision Making

d. Compensatory v/s Non-compensatory Decision Making
3. The Consumer Decision Making Process

Phase 1: Pre-Purchase

Phase 2: Purchase

Phase 3: Post-Purchase

4. Consumer Decision Making Unit

Roles within decision making unit (Buyer, influencer, gatekeeper, approver, initiator)
5. Merck and the Marketing of Propecia

CH7:B2B
2.1 B2B strategy
B2B strategy components

 Market
o Segmentation
 Price
 Communication
 Distribution
Business strategy components
 Scope
 Advantage
 Objectives
2.2 Selecting Markets
2 Segmentation
2.2 Demographics
2.3 Operating variables (technology, user / nonuser status, customer capabilities)
 2.4 purchasing situations (urgency, quantity, product application)
2.5 customer economics (profitability, costs to serve)
2.6 buyer characteristics (personalities, relationships, power-structures)
3 Market selection after segmentation (look @ slides)
3.2 Market product fit
3.3 Market company fit
3.4 Company product fit

2.3 Knowing the buyer

 OBC- organizational buying centre or DMU

o Functional OBC- marketing, engineering
o Structure and involvement of OBC- size, centralization, formalization, lateral and vertical
involvement
 Types of purchase
o Straight buy
o Modified rebuy
o New task
 Stages in buying process
o Need recognition and benefits
o Establish specifications
o Request for proposal (RFP)
o Post purchase evaluation
2.4 Understanding and communicating products/service benefits
 Typology of buyer benefits: 4 categories, Narayandas.
o Economic and Tangible- better storage
o Non-economic and tangible- top lawyers for M&A
o Economic and non-tangible- energy audit
o Non-economic and non-tangible- trustworthiness
Rules for prioritizing the benefits
 Value proposition- resonating focus
 Ineffective ways of articulating: all benefits or favourable points of difference
 Value and Price- different customers, different value

2.5 Aligning the organization

R&R between product, sales and service unit

 Product managers
 Sales rep
 Customer Service

Approaches to aligning product, sles and service functions

 Structural linkages
 Market research ,Information system
 Management process

Internet and B2B

 Automation
 Cloud
 Trade shows websites, ecommerce
 CH8:Segmenting and Targeting
 Benefits of segmentation to Organizations and Customers
o Benefits to organization
o Benefits to customers
 Characteristics of useful segmentation
o Identifiable
o Substantial
o Accessible
o Stable
o Differentiable
o Actionable
o Geo
o Demo
o Psycho
o Behavioural

Basis for segmentation

2 Why do customers make decisions they do

3 What have the customers done
3.2 Customer purchase behaviour
3.3 RFM
3.4 Customer loyalty
4 Who are the customers
 Segment characteristics
 Competition
 Company Fit
2.3 Ethical and Privacy issues
 Using data to identify customers
 Discriminatory pricing
2.4 Strategy from ST

Influence firm’s resource allocation and marketing strategy

 Product Strategy- different offerings based on age, aspirations, income

 Pricing strategy- business travellers vs leisure
 Communication strategy- advertisement
 Salesforce and channel strategy
 Customer management strategy- Eg: RFM
Cluster analysis

CH9: Positioning

Positioning statements
For whom
What value
Why and how
Relative to whom
USP
1. 3c
1.3 Consumer analysis: relevant, resonant, realistic
1.4 Competitive analysis: distinctive, defensible, durable
1.5 Company analysis: feasible, favourable, faithful
 2. Value positioning, feature positioning, benefit positioning: ladder
3. Vertical and horizontal positioning
4. Perceptual Mapping
5. Brand repositoing
5.3 Negative sides
5.4 Four components of positioning
5.4.1 For whom, for when, where
5.4.2 What value
5.4.3 Why and how
5.4.4 Relative to whom
5.5 Gender bending
6. Identity brand
7. Reverse positioning
8. Value proposition`

CH10: BRANDING
Why is branding important to an organization? Metrics to measure

Brand culture(firm, popular culture, consumers, influencers) ; brand stories

Brand equity positive or negative ( brand awareness, perceived quality, brand associations, brand loyalty, patents,
trademarks) – achieving brand equity using the following

Brand Dynamics Pyramid

Presence- Relevance-Performance-Advantage-Bonding

BrandResonance Pyramid

Salience- Performance-Judgement-Feelings-Resonance

Brand value

Interbrand’s methodology (impact of brand on its employees; driving cutomer loyalty; meeting investing expectations)

1. Economic profit to company or financial performance

2. Role of Brand Index
3. Strength of the brand (create loyalty relative to its competitors)- clarity, commitment, governace,
responsiveness, authenticity,relevance, differentiation, consistency, presence, engagement

BrandZ

1. Financial value
2. Brand contribution( ability to drive current demand, price premium, future demand and price)

Brand Finance

1. Royalty relief approach ( value a company would be willing to pay to license its brand as if it did on its own) (D to
AAA)

How organizations build strong branding?

Product mix or portfolio (national brands, provate brands, family/master/corporate brand, parent/umbrella brand(brand
extensions), co-branded, ingredient brands)

Brand elements- brand name, logo and tagline or slogan

Six criteria to follow:

First three- internally facing and brand building and last three externally facing and defensive

Memorable, Meaningful, Likable, Transferable, Adaptable, Protectable

Packaging and brand personality

Sincerity ; Excitement; Competence; Sophistication; Ruggedness;

Brand message ( simple and clear, relevant, differentiation, Believability, Consistency, First to say it)

70-90% at “consider” and “buy” stages but need be at “evaluate” “enjoy/advocate/ bond”

Average spending in social media advertising is low because ( cost and time; knowledge risk; incentive structure;
measurement;loss of control)

Defending your brand

Brand communitiies

Economic downturn, counterfeiting, direct copetitor

Measuring brand success

Perceptual mapping

Brand strength (differentiation and relevance) and brand stature ( esteem and knowledge)

BAV group’s brand stature and brand strength

Power grid ( four quadrants)

Brand report card

( ability to deliver benefits; Relevance, value perception; positioning; consistency; brand architecture; brand equity; brand
meaning; internal support; measuring brand equity)

Four step process to manage brand portfolio:

Making the case

Pruning the portfolio

Liquidating brands

Growing core brands

Class notes: Session 10

Dove’s real beauty

Sep1: Tick box campaign

Step2:

Step 3: Make women feel the need to be more beautiful

Step 4: Do beauty

Maslow’s need hierarchy

Physical need-safety-Social-esteem-Self actualization

Aspect1: Make more women beautiful

Aspect 2: Make women more beautiful

Consumer will move to its higher level need when the lower level need is satisfied

More people started belonging to the group-

There was a twin prong strategy by dove management to make broad base the concept of beauty. Earlier it was a narrow
conceptualization where only celebrities are only beautiful but now they say people who are using dove take steps to make
themselves more beautiful. They induced the concept of people taking active steps to be beautiful.
Framework to understand the processes:

Keller’s brand resonance pyramid:

Top of mind recall; aided recall; unaided recall

After recall comes recognition

Recognition we need knowledge

Salient is a broader aspect than awareness; Requires understanding and comprehension what the brand starts for

There should be an affinity; combined affect of all these things. These are preference. Before the consumer devel

1: Objective is to establish the points of parity and points of difference. Meaning: what are you? What is the meaning that
one would like to convey about the brand? Meaning is communicated across various levels. For qg; meaning is
communicated across ingredients. Meaning comes at various levels: cleansing ingredients, cocoa or paracetamol.

Then comes attributes and features. Then comes the benefits( energy giving). Then it comes to values, culture of the brand
and then finally it comes to who is the user. There are six different levels at which meaning can be conveyed,

When the meaning is conveyed, all of them can be combined into a holistic a=understanding. When it comes to
performance what becomes important? Quality.

Salience: category identification and need satisfaction

Relationship- based on trust, successful brand identification

Culture-

Self-image- self esteem

Personallity: outstanding attribute

Physique for the brand concept- an array of prodycts that are soft enough or healthy enough to be used and which actively
promotes the physical beauty

What was in the re3flection? What it needs to be adopted in the reflection in the personality

Brand Identity prism

Co-branding (cross industry value chain)

Class Notes: Session 8

Dentogram to demonstrate the cluster distance

Estimate the cluster distance

What happens when you are at the maximum market, the entire market will be one.

Cluster analysis can be used on it, in order to be able to cluster the subjects. In-order to cluster the subjects n groups.

The cluster distance of the characteristics are dissimilar between groups.

Q1-5 Address source of customer dissatisfaction

Q6-12 Address customer top 3 preferences

Q13, 14 address segment or cluster attractiveness

Ready to examine PicDec Q1 and Q10

TechSavvy- Q2 and Q3

Value mobile over Digicam or vice versa. Q4 and Q5.

Value PicDec Q6, Q7, Q8

Social Media Affinity Q9

Innovativeness Q11

Price sensitivity, payment availability Q12, Q13

Multiply Q12* % of respondents in each cluster, you will find

C1 C2 C3 C4 C5 C6
1.38 0.8 1.51 0.12 1 0.33

C1 has the highest affinity to PicDec, C2 does not have so much affinity to PicDec

Exhibit 4:

Profiling of the lcusters; Demographics and media profile of the cluster

What are the number of cluster we are going for?

Class notes: Session 5

Marketing Performance Evaluation:

Awareness- Interest-

Most ambitious target to reduce conflict among employees who is working towards a target every quarter is called stretch
target.

External target is the most conservative. So that the market sees it as a good performing company. This is the minimum
target the company wants to achieve.

Awareness is a metric. The value of the achievement target us 50%. What rate the tactics? If you want high awareness, you
want high visibility through advertisement.

Gross opportunity to see. Give product at ta discounted rate, so that they first try the product.

What is the actual performance of the programme?

If it is underperforming, the reach should increase before 70%, awareness above 50%

If you have a launch pf the product, if your annual objectives are not achieve, then you move to the strategic tactics.

Definition of the metric and who should be responsible for delibvering the metric

What are the goal setting?

VERB studio:

Communication goals (Economic value, Social value, Experiential value, functional values)

1. Access goals (Subscribers, Instructors)

2. Engagement goals(40% active learner)- No of active learners- Average time spent by a learner in a week-
Instructors no of leanrers- Instructors-

Customer satisfaction goals

3. Acquisition goals (Conversion metric)-growth rate

4. Retention goals
5. Consumption satisfaction-3M minutes of classes- Total view time or learning time- Customer satisfaction index

Platform

1. Instructors (Live, recorded)

2. Users (Learners)

Two things in marketing- purchase process and consumption process

Combination of acquisition and retention ( market share)

No of premium user / No of freemium users; ROI Total profit/ Total money spend;

CLV is one way of capturing long term customer profitability

CLV represents the present value of the stream of expected profits over the customer’s lifetime purchase

Profits represent the excess of revenue over the costs of attracting, selling, and servincing, the account of the customer.

The stream of expected profits is discounted to arrive at the present value

Optimizing CLV represents optimizing or developing a loyal customer base. This involves acquisition, reducing defection
and the retention of customers.

Acquisition could be through different methods that include advertising in media, direct mail and email to prospects

Different acquisition methods would lead to different acquisition costs, leading to varying CLVs

Defection reduction involves reducing customers churn.

CLV across a period of time is called customer equity

Class notes- Session 4

Bullet points

· Customers have perception of a brand where they prefer one brand over the other. Perception must be managed
by the marketer in order to market their product.
· Blind taste test and open taste test. They performed trials. 11 million gov issued soldiers. Trial is an important
part of purchase process. So, to get a person to try is a necessary thing. Trial is part of the adoption process and it
is also important for market penetration. How do you measure market penetration? How many people have tried
it at least once? Penetration is another aspect of trial apart from trial from adoption. That is why new product
gets introduced in samples
· How you influence perception? Use of perception for preference formation. Customers are discerning enough to
see what can be taken or what cannot be taken. Things can be corrected by checking the records of the
information so they can differentiate which I s a rumor and which is not
· Measurement of emotions. This comes as a part of qualitative market research. Qualitative first and quantitative
later. For eg; The result that you derive from Bangalore market will be different from what they perceived from
The Paris market.
· Poll research. Noting down the emotional binding or the unfavourable sentiments. They did not incorporate
qualitative analysis to quantitative data. If they did, they could have made a scale about definitely don’t buy to
definitely buy.
· Experimental testing the most important is A/B testing. One of the groups is the control group and the other is
test or exposure group. They could have done multiple A/B test to understand where the difference lies. You
match by randomization to maintain homogeneity.
· Representativeness of the sample from the population. This contains a high number of people who wanted to
change this would be skewed. We have to make sure it to be unbiased.

Experimental research

Laboratory experiments: Highly secretive. The variables that are controlled are highly confidential.

Low on external validity. It is low on cost, quicker result and confidentiality is maintained.

Field experiments: Ad through cable TV, Low on secrecy. Highly expensive and high on external validity. However, may not
be generalisable. Assess what consumers do rather than what they say they will do. Ordinal and Interval data.

Normally we advertise the product but we should not forget about the consumer. As time evolves, consumers taste and
preferences also changes, which are more local and more individualistic than features and benefits. Consumer’s preference
has changed from thirst quenching to taste.

Inference:
In a crisis, the firm has to acknowledge and correct the situation. Coke sort of recovered because it acknowledged the
outcry of the people.

CONTEXT OF STRATEGIC DECISION MAKING IN MARKETING

What are firms’s core markets and product?

How should a leadership position be achieved ?

Market research is a formal search of information for strategic Decision Making in Marketing And Tactical Marketing
Decision Making.

Information should be timely, accurate, actionable.

Information on consumers, competition, brands of firms

Lead to marketing insight

What are the importance of insight?

Failure of Market research for lack of Insight: The new coke decision was not made without market research. MR could not
reveal the deep and abiding emotional attachment to original coke by customers.

Importance of insight:

Marketing insights provide diagnostic information about how and why marketers observe certain effects in the market
place and what it means to firms.

Eg; The symptom of declining sales has roots in customer dissatisfaction which is caused by faulty product design.

It could lead to surprises through revelations about marketpkace understanding

It could fill gap in information

Defined as a deep and informed understanding of the customer, the market. The market environment. The firm’s offering
and the relationship between them.

It is to be the root of all the marketing decision. The digital era has made online data gathering for market intelligence a
matter of course.

Who should be the target market and what does the customer and market means to the firm?

What is the marketing mix decisions that needs to be taken to achieve the marketing objective or overcome the marketing
problem?

Consistency and leverage (marketing mix decisions)

The broad steps to marketing intelligence:

1. Start with a situation analysis ( C-Context)

2. Set out the target margets (C-Customer-Market)
3. Define the problem or objective(C-company)
4. Layout the research design either through deep qualitative insight gaining research of consumers or/ and surveys
of consumers ( Qualitative or explorational check, Focus group. Study a case and draw similar analogy)
(Quantitative check is using a questionnaire; We should be able to ask the right questions with the right amount
of details with the right option to consumer. For this, we need to study the market, )
5. Determine sources of data from (a) free-on-hand secondary data such as government statistics (b) paid for
secondary data such as Neilson syndicated reports; (c) qualitative primary data such as those of surveys. (Free
government data;Syndicated research is the research by research agencies. For eg, a retail audit, etc So they
provide (media study to get the viewer ship data) They conduct some open studies which we can buy)
6. Design the data gathering instrument (survey from say) and gather the data from appropriate sources of data-
outlined in (v) above
7. Analyze the data
8. Interpret the data
 9. Understand consumer and the market (C-customer) for the specific situation (C-context_ mentioned in (i) above,
as well as the strategy and actions competitors (C-competitive) and the behaviour of collaborators (C-
collaborators), to arrive at insights. (I)
10. Solve the problem mentioned in (iii) above for the firm © from (viii) and (ix) as a marjet intelligence solution.

Step to 3 to 8 is market research and step 9 and 10 are an extension of market research (broaden the market research to
get addition information to arrive at insight) to arrive at insights and would cover the 5C together.

To arrive at insights, what is being implied is, it is not sufficient to look at customers but also understand the market,
collaborators and competitors.

Different consumers give different emphasis. Some companies may not look at context, they might look at layout design.

o Targeting
 Undifferentia
segment
 Clustering
 Multi attribu
 Conjoint
 Latent class a