CHAPTER 1 - CREATING CUSTOMER VALUE AND ENGAGEMENT

WHAT’S MARKETING ?

-​ Deals with customer

-​ Attract new customers by promising superior value
-​ Keep and grow current customers by delivering value and satisfaction
-​ Not only selling and advertising but satisfying customer needs
-​ Today’s marketers want to become a part of your life and enrich your experiences
with their brands.
-​ Massive networks of people, technologies and activities competing for your attention
and purchases
-​ Peter Drucker, “The aim of marketing is to make selling unnecessary.

= Engaging customers and managing profitable customer relationships

= Process by which companies engage customers, build strong customer relationships, and
create customer value in order to capture value from customers in return

Marketing process :

1.​ Marketers need to understand the marketplace and customer needs and wants.
2.​ Marketers design a customer-driven marketing strategy with the goal of getting,
engaging, and growing target customers.
3.​ Marketers construct a marketing program that actually delivers superior value.
4.​ Engage customers, build profitable relationships, and create customer delight
5.​ The company reaps the rewards of strong customer relationships by capturing value
from customers (to create profits and customer equity)

UNDERSTANDING THE MARKETPLACE AND CUSTOMER NEEDS

Customer needs, wants and demands

Needs : states of felt deprivation

-​ Physical needs (food, clothing, warmth, safety)
-​ Social needs (belonging, affection)
-​ Individual needs (knowledge, self-expression)
Wants : the form human needs take as they are shaped by culture and individual
personality.
Demands : human wants that are backed by buying power.

Marketing does not create needs, but only enlightens wants. Needs pre-exist marketing,
and it’s up to the marketers to understand consumers’ needs in order to influence them into
purchasing products amongst all competitors.

Customers’s needs + wants are fulfilled through :

Market offerings are some combination of products, services, information, or experiences
offered to a market to satisfy a need or want.

Marketing myopia : when sellers pay more attention to the products rather than to the
benefits and experiences produced by these products.

Customer Value and Satisfaction : Customers buy accordingly to their expectations about
the value and satisfaction that various marketing offerings deliver

Satisfied customers : buy again + tell others about their good experience
Dissatisfied customers : switch to competitors and disparage the product to others

Marketers must be careful to set the right level of expectations :

-​ Expectations too low : they may satisfy those who buy but fail to attract enough
buyers
-​ Expectations too high : buyers will be disappointed

Exchange : is the act of obtaining a desired object from someone by offering something in
return.

Market : is the set of actual and potential buyers of a product or service. These buyers share
a particular need or want that can be satisfied through exchange relationships.
→ Marketing means managing markets to bring about profitable customer relationships.

Now : also customer-managed relationships → customers influence each other

Marketing strategy and mix

Marketing strategy : The marketing logic by which the company hopes to create customer
value and achieve profitable customer relationships.

The 4 P’s = 4 elements of marketing

= everything the company can do to influence the demand for its products
→ Need to work together to create a proposition/offer to customers in the target segment
of the best perceived value and generate a positive response.

Product : what I am selling

-​ Variety, design, packaging, brand name, image, quality attributes, and benefits
-​ Anything that adds value to it

Price : retail price, discount, offer, bonuses, credit terms, payment plans (easier to pay)

Promotion : ensure that our target group is aware of our offer, and develop actions to
raise interest/desire developing an action plan that creates call to action and final
purchase (AIDA = attention, interest, desire, action)
-​ advertising, personal selling, sales promotion, sponsorship, sales, calls, brochures,
public reaction
Place/distribution : how my clients find my product
-​ Distribution, delivery, download, logistics, retail locations

People : company members, shareholders, consumers

Physical evidence : the first distinction of a product

Processes : determines the capability of the product to supply the demand of the
consumers.

Product, Place, People = STRATEGIC P (cannot be changed overnight)

Promotion, Price, Processes, Physical Appearance = TACTICAL P (changed + easily)

From buyer's point of view : Acceptability, affordability, accessibility, awareness

5 alternative concepts under which organizations design and carry out their marketing
strategies:

-​ The production concept : consumers will favor products that are available and
highly affordable → main focus on improving production and distribution efficiency.
-​ The product concept : consumers will favor products that offer the most in quality,
performance, innovative features → focus on making continuous product
improvements (can lead to marketing myopia).
-​ The selling concept : consumers will not buy enough of the firm’s products unless it
undertakes a large-scale selling and promotion effort.
-​ The marketing concept : achieving organizational goals depends on knowing the
needs and wants of target markets and delivering the desired satisfactions better
than competitors do. Under the marketing concept, customer focus and value are the
paths to sales and profits. Instead of a product-centered make-and- sell philosophy,
the marketing concept is a customer-centered sense-and-respond philosophy. The
job is not to find the right customers for your product but to find the right products for
your customers.
-​ Societal marketing concept : The company’s marketing decisions should consider
consumers’ wants + the company’s requirements + consumers’ long-run interests +
society’s long-run interests.

Preparing an integrated marketing plan and program

Know which customers to serve → marketers develop an integrated marketing program that
will actually deliver the intended value to target customers : consists of the marketing mix

MANAGING CUSTOMER RELATIONSHIPS AND CAPTURING CUSTOMER VALUE

Engaging customers and managing customer relationships

Customer relationship management : overall process of building and maintaining

profitable customer relationships by delivering superior customer value and satisfaction.
Deals with all aspects of acquiring, engaging and growing customers.
= most important concept of modern marketing

Customer perceived value : customer’s evaluation of the difference between all the
benefits and all the costs of a marketing offer relative to those of competing offers.
→ Buys from the firm that offers the highest

Customer satisfaction : the extent to which a product’s perceived performance matches a

buyer’s expectations.
-​ If products performance falls short of expectations : dissatisfied
-​ Matches expectations : satisfied
-​ Exceeds expectations : highly satisfied, delighted
→ repeat purchases + become marketing evangelists (spread the words
about their good experiences to others)

Higher level of customer satisfaction → greater customer loyalty → better company

performance

Frequency marketing programs : reward customers who buy frequently or in large

amounts (airlines, hotel upgrade, supermarket discounts) = loyalty rewards program

Customer engagement and today’s digital and social media

New customer relationship-building tools : websites, online ads and videos, mobile ads,
apps, blogs, social media
→ Fostering direct and continuous customer involvement
→ Customers are better informed, more connected, more empowered

Key to engagement marketing : making relevant and genuine contribution to targeted

consumer’s lives and interactions

Consumer-generated marketing : brand exchanges created by consumers themselves,

both invited and uninvited, by which consumers are playing an increasing role in shaping
their own brand experiences and those of other consumers
-​ Exchanges in blogs, social media…
-​ Some companies go directly to their customers for new product ideas and designs
-​ Can be a time consuming and costly process

Partner relationship management : working closely with partners in other company

departments and outside the company to jointly bring greater value to customers
-​ Every functional area in the organization can interact with customers
-​ Marketers must also partner with suppliers, channel partners…
-​ Supply chain : from raw materials to final products that are carried to final buyers
Capturing value from customers

Good customer relationship management → customer satisfaction → remain loyal → spend

more and stay around longer + talk favorably = good economic sense
⇒ It’s 5 times cheaper to keep an old customer than to acquire a new one

Customer lifetime value : the value of the entire stream of purchases that the customer
would make over a lifetime of patronage.
→ Losing a customer is not losing a sale it’s losing the entire stream of purchase

Share of customer : the portion of the customer’s purchasing that a company gets in its
product categories.

To increase it :
-​ Firms can offer greater variety to current customers
-​ Create programs to cross-sell and up-sell more products and services

Customer equity : the total combined customer lifetime values of all the company’s
customers.
= measure of the future value of the company’s customer base.
= may be a better measure of a firm’s performance than current sales or market share
= suggest the future

4 relationship groups of customers :

-​ Strangers : low profitability, no loyalty, little fit between the company’s offerings and
their needs
-​ Butterflies : profitable, not loyal, good fit
-​ True friends : profitable and loyal, strong fit, convert them into true believers who
come back regularly and tell others about their good experience
-​ Barnacles : highly loyal, not profitable, limited fit

CHANGING MARKETING LANDSCAPE

The digital age : online, mobile, social media marketing

Age of the Internet of Things (IOT) : everything and everyone is digitally connected to
everything and everyone else

Digital and social media marketing : using digital marketing tools such as websites, social
media, email and blogs to engage consumers everywhere, at any time, via their digital
devices → real time marketing

Mobile marketing = fastest growing digital marketing platform → stimulate immediate buying,
make shopping easier, enrich the brand experience

The changing economic environment : The Great Recession caused consumers to

rethink their buying priorities and bring their consumption back in line with their incomes.
Even as the post-recession economy has strengthened, Americans are now showing an
enthusiasm for frugality not seen in decades. The challenge is to balance a brand’s value
proposition with current times while also enhancing its long-term equity.

⇒ Marketers emphasize in the value in their value propositions : practicality, durability

Growth of not-for-profit marketing : marketing has also become a fundamental part of the
strategies of many non-profit organizations (public universities, hospitals, museums,
foundations, etc). They face great competition to receive support and gain support.
→ A successful marketing strategy can help them attract followers, funds and support.

Government agencies show an increased interest in marketing too (US military : plan to
attract recruits)

Rapid globalization : today almost every company is touched in some way by global
competition → marketers take a global view

Sustainable marketing : Worldwide consumerism changes → need to develop sustainable

marketing practices. Consumers expect companies to deliver value in a socially and
environmentally responsible way.

CHAPTER 2 - COMPANY AND MARKETING STRATEGY

DEFINING MARKETING'S ROLE

Strategic planning : the process of developing and maintaining a strategic fit between the
organisation's goals and capabilities and its changing marketing opportunities
-​ Involves adapting the firm to take advantage of opportunities in its constantly
changing environment
-​ Starts by defining its overall purpose and mission
-​ Then turned into detailed supporting objectives that guide the entire company
-​ Then designing the business portfolio
 -​ Then planning marketing and other functional strategies

Defining a market oriented mission

Mission statement : statement of the organisation's purpose, what it wants to accomplish in

the larger environment
-​ Acts as an invisible hand that guides people in the organisation
-​ Should be market oriented and defined in terms of satisfying customer needs
-​ Should be meaningful and specific yet motivating

Setting company objectives and goals

Profits can be improved by increasing sales or by reducing costs. Sales can be increased by
improving customer engagement and raising the company’s share of the health-care market.
→ These goals then become the company’s current marketing objectives. ⇒ Marketing
strategies and programs must be developed to support these marketing objectives.
​
DESIGNING THE BUSINESS PORTFOLIO

Business portfolio : the collection of businesses and products that make up the
company, should fit the company’s strengths and weaknesses to opportunities in the
environment

Analysing the current business portfolio :

-​ The company will want to put strong resources into its more profitable businesses
and phase down or drop its weaker ones
-​ Analyse the strategic business units (SBU, key businesses that make up the
company), can be a company division, a product line within a division or a single
product or brand
-​ Next : assess the attractiveness of its SBUs and decides how much support each
deserves

BCG (Boston Consulting Group) approach

= leading management consulting firm

= developed the best known portfolio planning method

Growth share matrix : method that evaluates a company’s SBUs in terms of market growth
rate and relative market share
Market growth : provides measure of market attractiveness
Relative market share ; serves as measure of a company strength in the market

1. Stars (high-growth, high-share) They often need heavy investments to finance their rapid
growth. Eventually their growth will slow down, and they will turn into cash cows.
​ ​ ​ ​ ​
2. Cash cows (low-growth, high-share) These established and successful SBUs need less
investment to hold their market share. Thus, they produce a lot of the cash that the company
uses to pay its bills and support other SBUs that need investment.
​ ​ ​ ​ ​
3. Question marks (low-share, high-growth) : They require a lot of cash to hold their share,
let alone increase it. Management has to think hard about which question marks it should try
to build into stars and which should be phased out.
​ ​ ​ ​ ​
4. Dogs (low-growth, low-share) : They may generate enough cash to maintain themselves
but do not promise to be large sources of cash.
​ ​ ​ ​
→ Under the classic BCG portfolio planning approach, the company invests funds from
mature, successful products and businesses (cash cows) to support promising products and
businesses in faster-growing markets (stars and question marks), hoping to turn them into
future cash cows.

Once it has classified its SBUs : the company must determine what role each will play in the
future + strategy

-​ It can invest more in the business unit to build its share.

-​ It can invest just enough to hold the SBU’s share at the current level.
-​ It can harvest the SBU, milking its short-term cash flow regardless of the long-term
effect.
-​ It can divest the SBU by selling it or phasing it out and using the resources
elsewhere.

→ Method : can be difficult, time consuming and costly to implement

Developing strategies for growth and downsizing

Goal : not growth but profitable growth → marketing’s role to achieve it

-​ Identify, evaluate and select market opportunities
-​ Law down strategies for capturing them

ANSOFF MATRIX-Product/market growth expansion grid :

Also strategies to downsize because :
-​ Firm may have grown too fast or entered areas where it lacks experience
-​ Market environment might change, making some products or markets less profitable

PARTNERING TO BUILD CUSTOMER RELATIONSHIPS

​
Partnering with other company departments

Company’s value chain : the series of internal departments that carry out value-creating
activities to design, produce, market, deliver and support a firm’s products
→ The major functional unit must work together to accomplish strategic objectives.
→ Firm’s success depends not only on how well each department performs but also on how
well the various pens coordinate their activities.

But : interdepartmental relations are full of conflicts and misunderstandings

Partnering with others in the marketing system

​ ​ ​ ​ ​ ​
QSCV : quality, service, cleanliness, and value. ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​
Value delivery network : A network composed of the company, suppliers, distributors, and,
ultimately, customers who partner with each other to improve the performance of the entire
system in delivering customer value.

→ In its quest to engage customers and create customer value, the firm needs to look
beyond its own internal value chain and into the value chains of its suppliers, its distributors,
and, ultimately, its customers.
​ ​ ​ ​
MANAGING THE MARKETING EFFORT

5 marketing management functions : analysis, planning (develop strategic plan),

implementation and organization (carry out plan), control (measure results and take
corrective action)

Marketing analysis :
Marketing Planning

Involves choosing marketing strategies that will help the company attain its overall strategic
objectives.
-​ Executive summary of main goals and recommendations
-​ Current marketing situation
-​ Market description
-​ Product review : sales, prices, gross margin
-​ Review of competition
-​ Review of distribution : evaluates recent sales trends
-​ Threats and opportunities analysis
-​ Objectives and issues
-​ Marketing strategy
-​ Action programs
-​ Budgets
-​ Controls

Marketing Implementation
​
= process that turns marketing plans into marketing actions to accomplish strategic
marketing objectives
= who, where, when, how

Marketing department organisation

In large companies : CMO, Chief Marketing Officer who heads up the company’s entire
marketing operation and represents marketing on the company’s top management team.
-​ Functional organisation ; different marketing activities are headed by a functional
specialist
-​ Geographic organisation : assigns sales and marketing people to specific countries,
regions, districts
-​ Product management organisation (for very different products or brands)
-​ Customer management organisation (for customers with different needs)

Marketing control = measuring and evaluating the results of marketing strategies and plans
and taking corrective action to ensure that the objectives are achieved
 -​ Operating control : checking ongoing performance and taking corrective action when
necessary
-​ Strategic control : looking at whether the company’s basic strategies are well
matched with opportunities

MARKETING RETURN ON INVESTMENT

Marketing ROI : the net return from a marketing investment divided by the costs of the
marketing investment. Measure the profits generated by investments in marketing activities.
-​ Can be difficult to measure
-​ Returns such as engagement, advertising, brand building impact aren’t easily put into
dollar returns
-​ Marketing investments result in improved customer value, engagement, satisfaction
→ increase customer attraction and retention

CHAPTER 3 - ANALYSING THE MARKETING ENVIRONMENT

MICRO AND MACRO ENVIRONMENT

Marketing environment : actors and forces outside marketing that affect marketing
management's ability to build and maintain successful relationships with target customers.
-​ Marketers should be environmental trend trackers and opportunity seekers
-​ 2 disciplined methods : marketing search and marketing intelligence (for collecting
informations and developing insights about the marketing environment)
-​ By carefully studying it : they can adapt their strategies to meet new marketplace
challenges and opportunities

Microenvironment : the actors close to the company that affects its ability to serve its
customers - the company, suppliers, intermediaries, customer markets, competitors, and
publics
-​ Marketing management’s job = build relationships with customers by creating
superior customer value and satisfaction BUT cannot do it alone
→ marketing success requires building relationships with the other company
departments

Company :
-​ All the company groups (R&D, finance..) form the internal environment
-​ Top management : sets the company’s mission, objectives, broad strategies, policies
-​ Marketing managers : make decisions within these broader strategies and plan +
work closely with other company departments

Suppliers :
-​ Provide the resources needed by the company to produce its goods and services
-​ Supplier problems can seriously affect marketing : supply shortage/delay, natural
disasters can cost sales in the short run and damage customer satisfaction in the
long run
Marketing intermediaries :
-​ Firms that help the company to promote, sell and distribute its goods to final buyers
-​ Include resellers, physical distribution firms, marketing services agencies, financial
intermediaries

Competitors :
-​ Marketers must do more than simply adapt to the needs of target consumers
-​ They must algo gain strategic advantage by positioning their offerings strongly
against competitor's offerings in the minds of consumers

Publics :
-​ Any group that has an actual or potential interest in or impact on an organization’s
ability to achieve its objectives
-​ Financial publics : influences the company’s ability to obtain funds (bank,
investments analysts, stockholders)
-​ Media publics : carries news, features, editorial opinions (television stations,
newspapers, magazines)
-​ Also : government publics, citizen action publics, internal publics, general publics,
local publics

Customers :
-​ Most important actors in the company’s microenvironment
-​ Consumer markets : individuals and households that buy goods and services for
personal consumption
-​ Business markets : buy goods and services for further processing or use in their
production processes
-​ Reseller markets : buy goods and services to resell at a profit
-​ Government markets : government agencies that buy goods and services to produce
public services or transfer it to others who need them
-​ International markets :buyers in other countries
-​ Company might target any or all of the 5 types of customer markets

Macroenvironment : the larger societal forces that affect the microenvironment -

demographic, natural, economical, technological, political and cultural forces
-​ Even the most dominant companies can be vulnerable to the often turbulent and
changing forces in the marketing environment
-​ Forces can be unforeseeable and uncontrollable
-​ Others can be predicted and handled through skillful management

DEMOGRAPHIC ENVIRONMENT

Demography : study of human populations in terms of size, density, location, age, gender,
race, occupations and other statistic
-​ Important because it involves people and people make up markets
-​ Changes in the world demographic environment have major implications for
businesses

The changing age structure of the population

 -​Falling birth rates + longer life expectancies : US population is rapidly getting older
-​4 generational groups : baby boomers, generation X, millennials and generation Z
-​Baby boomers : born during the years following the WW2, lasting until 1664
(wealthiest generation in the US, marketer’s dream)
-​ Generation X : 1965 - 1976 (less materialistic than the other groups, they prize
experience, family comes first, quality > quantity, connected generation)
-​ Millennials (Y) : 1977-2000 (face higher unemployment, debts, huge and attractive
market, very connected)
-​ Generation Z : born after 2000 (confident with digital technologies, prefer shopping
online
→ Generational marketing ?

The changing american family

-​ More people separating/divorcing
-​ Number of working women increasing
-​ More men stay at home

Geographic shift in population

-​ Us population shifting toward the Sunbelt states
-​ Midwest and Northeast have lost population
-​ Moving from rural to metropolitan areas
-​ Shift in where people work + more people working from home

Increasing diversity
-​ In cultures
-​ In sexual orientation
-​ Disabilities

ECONOMIC ENVIRONMENT

= economic factors that affect consumer purchasing power and spending patterns
-​ Can have a dramatic effect on consumer spending and buying behaviour
-​ Changes in : income, cost of living, interest rates, saving and borrowing patterns :
large impact on the marketplace
-​ With adequate warning, companies can take advantage of changes in the economic
environment
-​ Until recently : American consumers spent freely, fueled by income growth, a boom in
the stock market, rapid increases in housing values, and other economic good
fortunes. However, the free spending and high expectations of those days were
dashed by the Great Recession of 2008–2009.
→ Consumers are buying less and looking for greater value in the things they do buy.
-​ Value marketing : has become the watchword for many marketers : Marketers in all
industries are looking for ways to offer today’s more financially frugal buyers greater
value—just the right combination of product quality and good service at a fair price.

NATURAL ENVIRONMENT
= The physical environment and the natural resources that are needed as inputs by markets
or that are affected by marketing activities
-​ Companies can’t prevent natural occurrences but they should prepare for dealing
with them
-​ Marketers should be aware of the several trends in the natural environment
-​ Shortages of raw materials : firms making products that require scarce resources (oil,
coal, minerals) face large cost increases even if the materials remain available
-​ Increased pollution : industry will almost always damage the quality of the natural
environment.
-​ Increased government intervention in natural resource management : governments
of different countries vary in their concern and efforts to promote a clean
environment.
-​ Environmental sustainability means meeting present needs without compromising the
ability of future generation to meet their needs

TECHNOLOGICAL ENVIRONMENT
= forces that create new technologies, creating new product and market opportunities
-​ Perhaps the most dramatic force now shaping our destiny
-​ Technology has released wonders like antibiotics, robotic surgery, smartphones,
internet
-​ And horrors such as nuclear missiles
-​ New technologies can offer exciting opportunities for both buyers and sellers
-​ Radio Frequency Identification (RFID) technology : used by many firms to track
products and customers
-​ Changes muy rapidly : creating new markets and opportunities
-​ Every technology replaces an older technology

POLITICAL AND SOCIAL ENVIRONMENT

Political environment : laws, governments agencies, and pressure groups that influence
and limit various organizations and individuals in a given society

Legislation regulating business :

-​ Well conceived regulation can encourage competition and ensure fair markets for
goods and services
-​ Governments develop public policy (laws that limit business for the good of society
as a whole) to guide commerce
-​ Protects companies from each other
-​ Protects consumers from unfair business practices
-​ Protect the interests of society (profitable business activity does not always create a
better quality of life

Increase emphasis on ethics and socially responsible actors

-​ Almost every aspect of marketing involves ethics and social responsibility issues
-​ Involve conflicts of interests
-​ Now : online privacy issues with mobile and social media marketing

Cause related marketing :

 -​ To exercise their social responsibility and build more positive image, companies are
now linking themselves to causes
-​ Use business to make the world a better place
-​ Has become a primary form of corporate giving : linking purchases of the company’s
products and services with benefiting worthwhile causes or charitable organizations
-​ Stirred some controversy : more a strategy for selling than for giving ? “cause
exploitative” ? → increasing sales, improving image

CULTURAL ENVIRONMENT

Cultural environment : consists of institutions and other forces that affect a society’s
values, perceptions, preference and behaviors

The persistence of cultural values : people in a society hold many values and beliefs that
shape their attitudes and behaviours.
→ Core beliefs : passed on from parents, reinforces by school, business
→ Secondary beliefs : more open to change (easier to change for marketers)

RESPONDING TO THE MARKETING ENVIRONMENT

Some companies :
-​ Take a reactive approach, they see the marketing environment as uncontrollable,
passively accept it
-​ Take a proactive stance toward the marketing environment, they develop strategies
to change the environment, often create and shape new industries

CHAPTER 4 - MANAGING MARKETING INFORMATION TO GAIN CUSTOMER

INSIGHTS

MARKETING INFORMATION AND CUSTOMER INSIGHTS

To create value for customers + build meaningful relationships with them : marketers must
gain insights into what customers need and want.
→ Insights come from good marketing information

Marketing info and today’s big data :

-​ Big data : huge and complex data generated by today’s information generation,
collection, storage and analysis technologies.
-​ Companies can now generate and find marketing information in great quantities
-​ Most managers are overloaded with data
-​ Presents big opportunities and challenges : marketers need better information and
make a better use of the info they have.

Managing marketing information :

 -​ Customer insights : marketing information-based understanding of customers and the
marketplace that become the basis for creating customer value, engagement, and
relationships.
-​ Companies must design effective marketing info systems that give managers the
right info, in the right form, at the right time.
-​ Marketing information system : consists of people and procedures dedicated to
assessing information needs, developing the needed information and helping
decision makers use the info to generate and validate actionable customer and
market insights.
-​ Use internal​databases, marketing​intelligence, and marketing research.
-​ Can be very costly

ASSESSING INFORMATION NEEDS AND DEVELOPING DATA

Marketers can obtain the needed info from :

Internal databases : collections of consumer insights and ket information obtained from data
sources within the company’s network
-​ One advantage of internal databases is that they can usually be accessed quickly
and cheaply.

Marketing intelligence : systematic monitoring, collection and analysis of publicly available

information about consumers, competitors, and developments in the marketplace. Helps
marketers gain insights into how consumers talk about and engage with their brands and
into competitor moves and strategies to prepare quick responses. Good competitive
intelligence helps marketers understand the consumer environment and their​competitor's
actions. In doing​so, it aids strategic decision making by identifying early warning signs of
opportunities and threats.

Marketing research : systematic design, collection, analysis, reporting of data relevant to a

specific marketing situation facing an organization.
-​ Gives marketers insights into customer motivations, purchase behaviour, and
satisfaction.

TYPES OF MARKET RESEARCH

-​ Primary data
-​ Secondary data
-​ Qualitative
-​ Quantitative

MARKET RESEARCH has 4 steps :

1. Defining the problem and research objectives
-​ Often the hardest step : manager may know that something is wrong without knowing
the specific cause
-​ Guide the entire research process

→ Exploratory research : Marketing research to gather preliminary information that will help
define problems and suggest hypotheses.
→ Descriptive research : Marketing research to better describe marketing problems,
situations, or markets, such as the market potential for a product or the demographics and
attitudes of consumers.

→ Causal research : Marketing research to test hypotheses about cause-and-effect

relationships.

2. Developing a research plan : must define the exact information needed, develop a plan
for gathering it efficiently and present the plan to management

→ Gather secondary data : information that already exists somewhere, having been
collected for another purpose
-​ Companies can buy it from outside suppliers
-​ Can be obtained more quickly and at a lower cost than primary data
-​ Internet search engines and commercial online databases

→ Gather primary data : Information collected for the specific purpose at hand
-​ Observational research : gathering primary data by observing relevant people,
actions and situations
-​ Ethnographic research : involves sending trained observers to watch and interact
with consumers in their natural environment
-​ Survey research : gathering data by asking people questions about their knowledge,
attitudes, preferences and buying behaviour
> Most used method of research to gather descriptive info
> Flexible (phone, email, in person..)
> People may be unwilling to respond + may answer even if they don’t know the answer +
may give pleasing answers
-​ Experimental research : by selecting matched groups, giving them treatments,
controlling related factors an checking for differences in group responses
> Suited for gathering causal information
> Online controlled experiments can be simple and inexpensive to run with immediate results

Contact methods :
-​ Mail questionnaires
> Collect a lot of info at a low cost
> More honest answers
> Not very flexible (same questions in fixed order)
> Take longer to complete
> Response rates are low

-​ Telephone interviewing
> Gather info quickly
> Greater flexibility
> Cost is higher
> Interviewer bias
> Respondents normally not answer the phone

-​ Personal interviewing (individual & group interviewing)

> Reactions and behaviour can be observed by the interviewer (qualitative data)
> Costs more

-​ Focus group interview

> Major qualitative research tool
> Researcher can observe facial expressions
> Normally employ small samples to keep costs down
> Members are not always open and honest
> Consensus can occur

-​ Online marketing research (questionnaire on social media sites, online focus groups
= qualitative , online experiments)
> Suited for quantitative research
> Speed and low costs
> Easy distribution
> Instantaneous responses
> Within the reach of small and big businesses
> Low costs
> Interactive and engaging
> Less intrusive

-​ Online behavioural and social tracking and targeting

> Online listening provides spontaneity and real time consumer opinions
> Analyses brand related comments by consumers + how they feel about a brand
> gives info on the searches they make, how they shop, how often..

Sampling plan
Sample = segment of the population selected for marketing research to represent the
population as a whole (should be representative in order to make estimates of the behaviour
and thoughts of the larger population)
1)​ Who is to be studied = Sampling unit
2)​ How many people should be included = Sample size
3)​ How should the people in the sample be chosen = Sampling process

-​ Probability sample = Each member has a known chance of being included in the
sample + sampling error can be calculated
> Costs + takes time

→ Simple random sample

→ Stratified random sample= population is divided into mutually exclusive groups (age and
nationality) and random samples are drawn from each group
→ Cluster random sample= population is divided into mutually exclusive groups and the
researcher draws a sample of the groups to interview

-​ Nonprobability sample
→ Convenience sample: easiest members from which to obtaon info are selected
→ Judgement sample: researches uses his judgements to select members
→ Quota sample
Research instruments :
-​ Questionnaires
> Flexible (in person, email or phone)
> Close ended, open ended (exploratory research), multiple choice, scale questions

-​ Mechanical instruments (neuromarketing + biometric measures)

3. Implementing the research plan

-​ Next : puts the marketing research plan into action.
-​ This involves collecting, processing, and analyzing the information.
-​ Data collection can be carried out by the company’s marketing research staff or
outside firms.
-​ Researchers must also process and analyse the collected data to isolate important
information and insights.
-​ They need to check data for accuracy and completeness and code them for analysis.
-​ The researchers then tabulate the results and compute statistical measures.

4. Interpreting and reporting the findings

-​ Now interpret the findings, draw conclusions, and report them to management.
-​ The researcher should not try to overwhelm managers with numbers and fancy
statistical techniques : present important findings and insights that are useful in the
major decisions faced by management.
-​ Interpretation should not be left only to researchers : the marketing manager knows
more about the problem and the decisions that must be made.
-​ Similarly, managers may be biased : They might tend to accept research results that
show what they expected and reject those that they did not expect or hope for.
​ ​ ​ ​
ANALYSING AND USING MARKETING INFORMATION

-​ Information gathered from internal databases

-​ Competitive marketing intelligence
-​ Marketing research
→ Usually requires additional analysis (advanced analytics to learn more about the
relationships within sets of data for example)
→ Information analysis might also involve the application of analytical models that will help
marketers make better decisions.

Customer relationship management (CRM) : managing detailed information about individual

customers and carefully managing customer touch points to maximize customer loyalty.
-​ Companies can provide higher levels of customer service and develop deeper
customer relationships. Used to pin-point high-value customers, target them more
efficiently, cross-sell the company’s products and create offers tailored to specific
customer requirements.

Marketing analytics : analysis tools, technologies and processes by which marketers dig out
meaningful patterns in big data to gain customer insights and gauge marketing performance
 -​ Marketers apply it to the large and complex sets of data they collect from web, mobile
and social media tracking

Using marketing information :

-​ No value if not used to make better marketing decisions
-​ But marketing managers may also need access to nonroutine information for special
situations and on-the-spot decisions. (a sales manager having trouble with a large
customer may want a summary of the account’s sales and profitability over the past
year)
-​ Many firms use company intranet and internal CRM systems to facilitate this process
: these systems provide ready access to research and intelligence information,
customer transaction and experience information, shared reports and documents,
and more.​ ​

SPECIAL ISSUES SOME MARKETING RESEARCHERS FACE

Marketing research in small businesses and nonprofit organizations :

-​ Also need market information
-​ But large scale studies are beyond their budget
→ Observation or informal surveys suing small samples
-​ Many associations, local media and government agencies provide special help to
small organizations

International marketing research :

-​ International researchers deal with diverse markets in many different countries
-​ Often vary greatly in their levels of economic development, culture and buying
patterns
-​ May have a difficult time finding good secondary data
-​ Must often collect their own primary data : not easy task
-​ Cultural & language differences from country to country can cause additional
problems for international researchers : language, attitudes toward marketing
research.

Public policy and ethics in marketing research :

-​ Intrusions on consumer privacy : some consumers resent and mistrust marketing
research. They don’t like being interrupted. Marketers must be careful not to cross
over the privacy line.
-​ Misuse of research findings

CHAPTER 5 - CONSUMER MARKETS AND BUYER STRATEGY

MODEL OF CONSUMER BEHAVIOUR

Consumer buyer behaviour : the buying behaviour of final consumers (individuals and
households that buy goods and services for personal consumption)
​ ​ ​ ​ ​
Consumer market : All the individuals and households that buy or acquire goods and
services for personal consumption.

-​ Consumer snake buying decisions everyday

-​ Often, consumers themselves don’t know what influences their purchases

How do consumers respond to various marketing efforts the company might use ?

Marketers want to understand how the stimuli are changed into responses inside the
consumer’s black box

Buyer’s characteristics (include cultural, social, personal and psychological factors)

→ Influence how he or she perceives and reacts to stimuli

Buyer’s decision process : begins long before the actual purchase and continues long after

CHARACTERISTICS AFFECTING CONSUMER BEHAVIOUR

Cultural factors :
➢​ Culture
-​ Most basic cause of a person’s wants and behaviour
-​ A child learns basic values, perceptions, wants and behaviours from his or
her family and other important institutions
-​ Marketers are always trying to spot cultural shifts to discover new products
that might be wanted
-​ Example : cultural shift toward greater concern about health and fitness
➢​ Subculture
-​ Groups of people with shared value systems based on common life
experiences and situations
-​ Many make up important market segments
-​ Marketers often design products and marketing programs tailored to their
needs
-​ Hispanic american consumers : large, fast-growing market, make shopping a
family affair, very loyal to their brands, active on mobile networks
-​ African american consumers : quality and selection, heavy users of social
media
-​ Asian american consumers : brand loyal, luxury
➢​ Social class
 -​ Society’s most permanent and ordered divisions whose member share similar
values, interests and behaviours
-​ Measured by a combination of : income, occupation, education, wealth

Social factors :
➢​ Groups and social networks
-​ Membership groups : have direct influence
-​ Reference group : direct or indirect points of comparison in forming a person’s
attitudes or behaviour
-​ Marketers try to identify the reference groups of their target markets
-​ Word of mouth influence : can have an impact on consumer buying behavior
(words of trusted people tend to be more credible than those from commercial
sources)
-​ Opinion leaders : people within a group who, because of special skills,
knowledge, personality, exert social influencer on others → Marketers must
figure out how to reach them
-​ Evangelists : they go beyond just loyal customers, they are believers of the
brand
-​ Marketers are trying to harness the power of the new social networks to
promote their products and build closer customer relationships
-​ Marketers working with influencers
➢​ Family
-​ Can strongly influence buyer behaviour
-​ Husband-wife involvement varies by product category and stage in the buying
process
-​ Children also have a strong influence on family buying decisions
➢​ Roles and Status
-​ Role : consists of the activities people are expected to perform according to
the people around them, each role carries a status reflecting the general
esteem given to it by society
-​ People usually choose products appropriate to their roles and status

Personal factors :
➢​ Occupation : affects the goods and services bought
➢​ Age and life stage
➢​ Economic situation : marketers watch trends in spending, personal income, savings
and interest rates
➢​ Lifestyle :
-​ A person’s pattern of living as expressed in his or her psychographics
activities, interest, opinions), more than just personality but whole pattern of
acting and interacting in the world
-​ Consumer don’t just buy products, they buy the values and lifestyles those
products represent
➢​ Personality and self-concept : consumers are likely to choose brands with
personalities that match their own (sincerity, excitement, sophistication, competence
and ruggedness)

Psychological factors :
 ➢​ Motivation
-​ Need that is sufficiently pressing to direct the person to seek satisfaction
-​ Freud assumed that people are largely unconscious about the real
psychological forces shaping their environment
-​ Many companies employ teams of psychologists for example to carry out
motivation research to find out about the subconscious motivations underlying
consumer’s emotions and behaviours toward brands
-​ Maslow : physiological needs, safety needs, social needs, esteem needs,
self-actualization needs

➢​ Perception
-​ Process by which people select, organise and interpret information to form a
meaningful picture of the world
-​ Selective attention : tendency for people to screen out most of the info to
which they are exposed (marketers must work hard to attract customer’s
attention)
-​ Selective distortion : tendency of people to interpret info in a way that will
support what they already believe
-​ Selective retention : consumers are likely to remember good points made
about a brand they favour and forget those about competitors

➢​ Learning
-​ Describes the changes in an individual’s behaviour arising from experience
-​ Drive : strong internal stimulus that calls for action (becomes a motive when it
is directed toward a particular stimulus objet)
-​ Cues : minor stimuli that determine when, where and how the person
responds
-​ Cues influence a consumer’s response to his or her interest in buying a
product
-​ Then if pleased : reinforcement

➢​ Beliefs and attitudes

-​ Belief : descriptive thought that a person holds about something
-​ May be based on real knowledge, opinion or faith
-​ Beliefs make up product and brand image that affect buying behavior
-​ If beliefs are wrong/prevent purchase : marketers will want to launch a
campaign to correct them
-​ Attitude : a person’s relatively consistent evaluations, feelings and tendencies
toward an object or idea, they are difficult to change
-​ Attitudes put people into a frame of mind of liking or disliking things, moving
toward or away from them
-​ Marketers should try to fit they products into existing patterns rather than
attempting to change attitudes

BUYING DECISION BEHAVIOUR AND BUYER DECISION PROCESS

Types of buying decision behaviour :

➢​ Complex BB :
 -​ High-consumer involvement and significant brand difference
(When consumers are highly involved in a purchase and perceive significant
differences amongst brands)
-​ Ex : when the product is expensive, risky, purchased infrequently), and highly
self-expressive (new car, has to learn a lot about the product)
-​ Marketers need to help buyers learn about product class attributes,
differentiate their brand’s features

➢​ Dissonance-reducing BB :
-​ High-consumer involvement and little brand difference
-​ When consumers are highly involved with an expensive, infrequent or risky
purchase but see little difference among brands

➢​ Habitual BB :
-​ Low-consumer involvement and little significant brand difference
-​ Low-cost, frequently purchased products
-​ Consumers do not search extensively for info
-​ May not evaluate their choice even after the purchase
-​ Marketers use sales promotions to promote buying

➢​ Variety-seeking BB :
-​ Low consumer involvement and significant brand difference
-​ Consumers often do a lot of brand switching for the sake of variety rather than
because of dissatisfaction
-​ Marketers try to encourage habitual BB by dominating shelf space, keep
shelves stocked, advertisement

The Buyer decision process

1)​ NEED RECOGNITION
-​ The buyer recognizes a problem or need
-​ Can be triggered by internal or external stimuli

2)​ INFORMATION SEARCH

-​ Consumers can obtain information from personal sources, commercial
sources, public sources and experiential sources
-​ Commercial sources inform the buyer but personal sources legitimise or
evaluate products

3)​ EVALUATION OF ALTERNATIVES

-​ Alternative evaluation : stage of buying decision process in which the
consumer uses information to evaluate alternative brands in the choice set
(cafereful calculations, little or no evaluating, buy on impulse, on their own,
turn to friends... )
-​ Ranks brands and girls purchase intentions

4)​ PURCHASE DECISION

-​ Buy the most preferred brand
 -​ Attitude of others and unexpected situational factors can interfere between
intention and decision

5)​ POST PURCHASE BEHAVIOUR

-​ After buying a product : satisfied or dissatisfied, will engage post purchase
behaviour
-​ Consumer’s expectations vs product’s perceived performance

DECISION PROCESS FOR NEW PRODUCTS

Stages in the adoption process :

-​ Awareness : consumer becomes aware of the new product but lacks info about it
-​ Interest : consumer seeks info about the new product
-​ Evaluation : consumer considers whether trying the new product makes sense
-​ Trial : consumer tries the product
-​ Adoption : consumer decides to make full and regular use of the product

Individual difference in innovativeness :

-​ People differ greatly in their readiness to try new products
-​ After a slow start, an increasing number of people adopt the new product. As
successive groups of consumers adopt the innovation, it eventually reaches its
cumulative saturation level.
→ Innovators (first 2.5 percent) : venturesome—they try new ideas at some risk.
→ Early adopters (the next 13.5 percent) : guided by respect—they are opinion
leaders in their communities and adopt new ideas early but carefully
→ Early mainstream : deliberate—although they rarely are leaders, they adopt new
ideas before the average per- son.
→ Late mainstream : skeptical—they adopt an innovation only after a majority of
people have tried it.
→ Lagging adopters : tradition bound—they are suspicious of changes and adopt the
innovation only when it has become something of a tradition itself.
⇒ Innovating firms should research the characteristics of innovators/early adopters and
direct initial marketing efforts toward them.

Influence of product characteristics on rate of adoption : ​ ​ ​ ​

-​ Relative advantage : The degree to which the innovation appears superior to
existing products. All-electric cars require no gas and use clean, less costly energy.
-​ Compatibility : The degree to which the innovation fits the values and experiences
of potential consumers. Electric cars are driven the same way as gas-powered cars.
However, they are not compatible with the nation’s current refuelling network. Plug-in
electric charging stations are few and far between.
-​ Complexity : The degree to which the innovation is difficult to understand or use.
(“conceptual complexity” of the new technologies and concerns about how well they
will likely work slow down the adoption rate)
-​ Divisibility : The degree to which the innovation may be tried on a limited basis.
Consumers can test-drive electric cars
-​ Communicability : The degree to which the results of using the innovation can be
observed/described to others.
​ ​
CHAPTER 6 - BUSINESS MARKETS AND BUSINESS BUYER BEHAVIOUR

STAGES OF THE BUSINESS BUYER DECISION PROCESS

1)​ Problem recognition
2)​ General need description
3)​ Product specification
4)​ Supplier search (find best vendors)
5)​ Proposal solicitation (invite suppliers to submit proposals)
6)​ Supplier selection (buyer selects suppliers)
7)​ Order-routine specification (buyer writes final order with chosen suppliers, technical
specifications, quantity needed, expected time of delivery, return policies..)
8)​ Peformance review (of the supplier)

BUSINESS MARKETS
BUSINESS BUYER BEHAVIOUR
-​ Straight rebuys
-​ Modified rebuys
-​ New tasks

ENGAGING BUSINESS BUYERS WITH DIGITAL AND SOCIAL MARKETING =

e-procurement

INSTITUTIONAL (schools, hospitals, prisons)

GOVERNMENT MARKETS (purchase products and services for defense, education, health
and other public needs..)

CHAPTER 7 - CUSTOMER VALUE-DRIVEN MARKETING STRATEGY

(CVDMS)

Marketers realise : impossible to appeal all buyers in the marketplace

-​ Too numerous
-​ Widely scattered
-​ Varied in their needs and buying practises
→ Companies must identify the parts of the market they can serve best and most profitably
→ Must design CVDMS that build the right relationship with the right customers

MARKETING STRATEGY

4 steps to design a CVDMS :

Select customers to serve

1)​ Segmentation
Market segmentation : Dividing a market into distinct groups of buyers who have different
needs, characteristics, or behaviours and who might require separate marketing strategies
or mixes.

2)​ Targeting
Market targeting : Evaluating each market segment’s attractiveness and selecting one or
more segments to serve.
​ ​ ​ ​ ​
Decide on a value proposition : how it will create value for target customers
3)​ Differentiation
Involves actually differentiating the market offering to create superior customer value

4)​ Positioning
Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to
competing products in the minds of target consumers

1) MARKET SEGMENTATION

Segmenting consumer markets

→ Geographic segmentation
-​ Dividing a market into different geographical units such as nations, states, regions,
countries, neighbourhoods
-​ Adjusting stores size
-​ Localise products assortments and services

→ Demographic segmentation
-​ Dividing the market into segments based on variables such as
-​ Age and life-cycle stage (must be careful to guard against stereotypes)
-​ Gender (long used in marketing clothing, cosmetics, toys)
-​ Income, occupation, education, religion, ethnicity and generation

→ Psychographic segmentation
-​ DIviding the market into different segments based on lifestyle or personality
characteristics
-​ People in the same demographic group can have very different psychographic
characteristics

→ Behavioural segmentation
-​ Dividing a market into segments based on consumer knowledge, attitudes, uses of a
product or responses to a product
-​ Considered best starting point for building market segments
-​ Buyers can be grouped according to occasions when they get the idea to buy,
actually make their purchases, or use the purchased items.
-​ A powerful form of segmentation is grouping buyers according to the different
benefits that they seek from a product. ​ ​ ​ ​ ​ ​
 -​ Markets can be segmented into non-users, ex-users, potential users, first-time users,
and regular users of a product. Marketers want to reinforce and retain regular users,
attract targeted non-users, and reinvigorate relationships with ex-users. ​ ​
​ ​ ​ ​
-​ Markets can also be segmented into light, medium, and heavy product users.
-​ Buyers can be divided into groups according to their degree of loyalty. Highly loyal
customers can be a real asset. (They often promote the brand through personal word
of mouth and social media.) Instead of just marketing to loyal customers, companies
should engage them fully and make them partners in building the brand and telling
the brand story.

→ Such rich segmentation provides a powerful tool for marketers of all kinds. It can help
companies identify and better understand key customer segments, reach them more
efficiently, and tailor market offerings and messages to their specific needs.
​ ​ ​ ​
Segmenting business markets
​ ​ ​ ​ ​ ​
Business marketers also use some additional variables :
-​ Customer operating characteristics
-​ Purchasing approaches
-​ Situational factors
-​ Personal characteristics
​ ​ ​ ​
Segmenting international markets

Few companies have either the resources or the will to operate in all, or most of the
countries.
→ International firms need to group their world markets into segments with distinct buying
needs and behaviours.

They can segment by :

-​ Geographic location
-​ Economic factors : countries might be grouped by population income levels or by
their overall level of economic development.
-​ Political and legal factors : type of government, receptivity to foreign firms, monetary
regulations, amount of bureaucracy
-​ Cultural factors : grouping markets according to common languages, religions,
values, customs
→ Presumes that segments should consist of clusters of countries. However, as new
communication technologies connect consumers around the world, marketers can define
and reach markets of like-minded consumers no matter where in the world they are.
= Intermarket segmentation (cross-market segmentation)

Requirements for effective segmentation

Not all segmentations are effective, market segments must be :

-​ Measurable : the size, purchasing power, and profiles of the segments can be
measured.
 -​ Accessible : the market segments can be effectively reached and served.
-​ Substantial : the market segments are large or profitable enough to serve. A
segment should be the largest possible homogeneous group worth pursuing with a
tailored marketing program.
-​ Differentiable : the segments are conceptually distinguishable and respond
differently to different marketing mix elements and programs. (If men and women
respond similarly to marketing efforts for soft drinks, they do not constitute separate
segments.)
-​ Actionable : effective programs can be designed for attracting and serving the
segments. ​
​ ​ ​ ​ ​
2) MARKET TARGETING

→ Reveals the firm’s market segment opportunities

Evaluating market segments

Firm must look at :
-​ Segment size and growth (the largest, fast-growing are not always the most attractive
ones, smaller companies may lack the skills and resources needed to serve larger
segments)
-​ Segment structural attractiveness : a segment is less attractive if it already contains
strong and aggressive competitors or if it is easy for new entrants to come into the
segment. Also affected by the relative power of buyers and the presence of powerful
suppliers who can control prices and quality/quantity
-​ Company objectives and resources : some segments can be dismissed if they do not
match with the company’s long-run objectives, the company may lack the
skills/resources

Selecting target segments

= set of buyers who share common needs or characteristics that a company decides to
serve

Undifferentiated marketing : a market-coverage strategy in which a firm decides to ignore

market segment differences and go after the whole market with one offer
(1 marketing plan for ALL segments)
→ Focuses on what is common in the needs of consumers rather than on what is
different.
→ The company designs a product and a marketing program that will appeal to the
larger number of buyers

Differentiated (segmented) marketing : a market-coverage strategy in which a firm targets

several market segments and designs separate offers for each.
(Different marketing plans for different segments)
→ Offering product and marketing variations to segments hoping for higher sales and
strong position
→ Creates more sales than undifferentiated marketing
Concentrated marketing : a firm goes after a large share of one market or a few smaller
segments or niches
(Targets a large share of 1 or a few segments or niches, niches suitable for smaller
businesses)
→ Firm achieves a strong market position because of its greater knowledge of
consumer needs in the niches it serves and the special reputation it acquires
→ Can be highly profitable
→ Also involves higher-than-normal risks : will suffer if the segment turns sour
●​ Firm can target more effectively & efficiently
●​ Improved customer relationships
●​ Reduced level of competition, due to highly specialised products
●​ Less chances of survival (niche can disappear in the long term)

Micromarketing : tailoring products to the needs and wants of specified individuals and
local customer segments
(customise marketing plans to satisfy needs and wants of specific individuals + has the
highest costs per user)
​ → Individual marketing / one to one marketing : new high-tech version thanks to
advances in communication technology. It can reduce economies of sale, create logistics
problems
→ Local marketing

Choosing a targeting strategy : companies need to consider many factors.

-​ Depends on the company’s resources : When the firm’s resources are limited →
concentrated marketing
-​ Depends on the degree of product variability : uniform products, such as grapefruit
or steel → Undifferentiated marketing
-​ Products that can vary in design, such as cameras and cars → differentiation or
concentration.
-​ The product’s life-cycle stage also must be considered : when a firm introduces a
new product, it may be practical to launch one version only, and undifferentiated
marketing or concentrated marketing may make the most sense. In the mature stage
of the product life cycle, however, differentiated marketing often makes more sense.
-​ Another factor is market variability : If most buyers have the same tastes, buy the
same amounts, and react the same way to marketing efforts → undifferentiated
marketing
-​ Competitors’ marketing strategies should be considered
​ ​
Socially responsible target marketing
-​ Concerns : controversial or potentially harmful products (ex : fast-food
chains)

3) and 4) DIFFERENTIATION AND POSITIONING

Company must decide on a value proposition :

-​ How it will create differentiated value for targeted segments and what positions it
wants to occupy in those segments.
A brand’s value proposition : is the set of benefits or values it promises to deliver to
consumers to satisfy their needs.
→ Explain why your product is better than others (better, quicker, cheaper than what already
exists)

Product position : the way a product is defined by consumers on important attributes - the
place it occupies in consumer’s minds relative to competing products

Choosing a differentiation and positioning strategy

In most cases :
-​ 2 or more firms go after the same position in a market
-​ Then each will have to find ways to set itself apart.
-​ Each must differentiate its offer by building a unique bundle of benefits that appeal a
substantial group within the segment

-​ A brand’s positioning must serve the needs and preferences of well-defined target
markets (Ex : DD and starbucks, both coffee and snacks but target very different
customers who want different things)
-​ Each brand succeeds because it creates just the right value proposition for its unique
mix of customer

3 steps
1)​ Identifying a set of differentiating competitive advantages on which to build a position
2)​ Choosing the right competitive advantages
3)​ Selecting an overall positioning strategy.
4)​ The company must then effectively communicate and deliver the chosen position to
the market.
Identifying possible value differences and CA

CA : an advantage over competitors gained by offering greater customer value either by

having lower prices or providing more benefits that justify higher prices.

BUT : promise → delivery

-​ If a company position its products as offering the best quality and service, it must
actually differentiate the product so that it delivers the promised quality and service

-​ Product differentiation : brands can be differentiated on features, performance, style,

design
Beyond physical :
-​ Services differentiation : firm can also differentiate the services that accompany the
product, speedy, convenient service
-​ Channel differentiation : through the way they design their channels ( coverage,
expertise and performance)
-​ People differentiation : hiring and training better people than competitors do.
Requires that a company select its customer-contact people carefully + train them
well
 -​ Image differentiation : company’s image should convey a product’s distinctive
benefits and positioning. Developing a strong and distinctive image calls for creativity
and hard work.

Choosing the right competitive advantages

If more than 1 CA : must choose the ones on which it will build its positioning strategy, must
decide how many differences to promote and which ones

How many ?
-​ For Rosser Reeves : a company should develop a unique selling proposition, a
unique attribute and tout itself as number one on that attribute
-​ Buyers tend to remember number one better (especially in this over communicated
society)
-​ Other marketers : companies should position themselves on more than 1
differentiator. May be necessary if 2 or more firms claim to be the best on the same
attribute.
-​ Mass market is fragmented into many small segments : companies are trying to
broaden their positioning strategies to appeal to more segments

Which ones ?
-​ Important : The difference delivers a highly valued benefit to target buyers
-​ Distinctive : Competitors do not offer the difference, or the company can offer it in a
more distinctive way.
-​ Superior : The difference is superior to other ways that customers might obtain the
same benefit.
-​ Communicable : The difference is communicable and visible to buyers.
-​ Preemptive : Competitors cannot easily copy the difference.
-​ Affordable : Buyers can afford to pay for the difference.
-​ Profitable : The company can introduce the difference profitably.

Selecting an overall positioning strategy

-​ More for more

-​ More for the same
-​ More for less
-​ The same for less
-​ Less for much less

Position statement : “To busy multitaskers who need help remembering things, Evernote is a
digital content management application that makes it easy to capture and remember
moments and ideas from your everyday life using your computer, phone, tablet, and the
web.”
> POP
> POD
> RTB
> CA
Communicating and delivering the chosen position

Once it has a chosen position : the company must take strong steps to deliver and
communicate the desired position to its targeted consumers. All the company’s marketing
mix efforts must support the positioning strategy (adjust Price, place, product, promotion
according to the value proposition)

-​ Often harder to implement than to come up with it

-​ Usually takes a long time

Market Research

Definition:
-​ The process of determining the viability of a new service or product through research
conducted directly with potential customers
-​ Allows a company to detect its target market and get feedback from consumers
-​ Conducted by the company itself or by a third party company
-​ Done through surveys, product testing, and focus groups

Types of Marketing Research:

Definition:
Set of techniques used to systematically, collect, record data in order to help decision
makers.

Primary Information:
-​ Exploratory: less structured, more open ended questions
-​ Specific: finds answers to previously identified issues that are brought to attention
through exploratory research
Advantages:
-​ Allows organization to address issues specific to theri situation
-​ Greater control over how the info is collected
Disadvantages:
-​ Costly and time consuming

Secondary Information:
-​ include : textbooks, news articles, review articles, meta analysis =2
-​ Data previously collected by an outside entity
-​ Includes: population information from government census data, trade association
research reports, research from another business in the same industry
Advantages:
-​ Vast in availability
-​ Cost and time efficient because info is readily available
Disadvantages:
-​ Not first hand info → not specific
-​ Chance data might be incorrect

Qualitative Research (Ad-Hoc)

-​ What, why, how → development and understanding
 -​ To develop an initial understanding of an issue
-​ Understand different perspectives between groups
-​ Uncover underlying motivations that influence decision making
-​ Provide information needed to design a quantitative study
-​ Explain findings from quantitative study

Quantitative Research (Ad-Hoc)

-​ Who, how many, how much, how big → evaluation, sizing
-​ Find whether there is consensus on an issue
-​ Project results to a larger population
-​ Identify evidence regarding cause-and-effect relationships
-​ Test hypotheses and examine relationships
-​ Identify and size market segments

4 common methods of Market Research:

1.​ Surveys
-​ Easy to analyse and cost efficient
2.​ interviews
-​ Most insightful
-​ Produces big benefits in understanding target markets

3.​ Focus groups

-​ Bring together a group of selected people who fit company’s target market
-​ Doing it right is expensive

4.​ Observation:
-​ Most powerful
-​ Employee takes notes while they watch an ideal user engage with their
product

​
​ ​ ​ ​