Marketing (intro)

Marketing notions (intro)

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Marketing (intro) by Mind Map: Marketing (intro)

1. ZOOM ON THEME 1: Marketing Research

1.1. Marketing problem (symptoms) Vs. Research problem (underlying causes)

1.1.1. The marketing research process Defining the problem Develop the study plan Gather information Analyse the result Present the results Take a decision

1.1.1.1. Types of data collected by marketing research

1.1.1.1.1. Secondary Vs. Primary data

1.1.1.1.2. Internal vs External data

1.1.1.1.3. Informations about

1.1.1.1.4. Periodicity

1.2. Research design; is the plan or approach selected to answer your research problem

1.2.1. Type of research design

1.2.1.1. Qualitative research

1.2.1.1.1. Is exploratory

1.2.1.1.2. Examples of methods used

1.2.1.1.3. The tool used to collect the data

1.2.1.1.4. The transcription of the interview

1.2.1.1.5. The sample size

1.2.1.1.6. Methods used to analyse qualitative data

1.2.1.2. Quantitative research

1.2.1.2.1. Is confirmatory / conclusive

1.2.1.2.2. Examples of methods used

1.2.1.2.3. The tool used to collect the data

1.2.1.2.4. Sampling

1.2.1.2.5. 2 methods

1.2.1.3. Mixed Design (most of the time we have a qualitative phase followed a quantitative phase) - You combine the 2 approaches

2. THEME 2: Strategic Marketing

2.1. SBU: means a strategic business unit (a product division, or activity)

2.2. To analyze the business portfolio we can use

2.2.1. The Boston Consulting Group’s Matrix helps analyzing the business portfolio

2.2.1.1. See slide 181

2.2.1.2. The four quadrants are designated Stars), Question Marks, Cash Cows and Dogs.

2.2.2. The GE McKinsey Matrix

2.2.2.1. Is a more advanced version of the BCG Matrix

2.3. Strategic decisions

2.3.1. 1- Segmentation

2.3.1.1. Segmentation is the process of categorizing customers into groups (a.k.a. segments, clusters)… …So that customers within a segment are similar enough to be treated similarly (economies of scale, coherence), yet different enough from customers in other segments (worthy of differentiation).

2.3.1.1.1. We distinguish between: 1. Segmentation variables (bases) Characteristics that tell us why segments differ (e.g., needs, wants, benefits, solutions to problems, usage situation, usage rate, decision processes, past behavior) 2. Discriminant variables (descriptors) Characteristics that tell us how to find, reach, identify segments (age, income, education, profession, lifestyles, media habits, use occasions; industry, size, location, organizational structure)

2.3.1.2. We can use 5 types of criteria to segment (or combine them)

2.3.1.2.1. Geographical segmentation Socio-demographical segmentation Psychographic segmentation Behavioral segmentation Desired benefits segmentation

2.3.2. 2- Targeting

2.3.2.1. Once it has assessed the different segments, the company must select those on which it wishes to suggest an offer. Targeting is about defining which segment do you want to address? And what is your marketing proposition to them?

2.3.2.1.1. To choose your segments: - Attractiveness of the segment (size, growth, profitability, risk, competitors) - Company objectives and resources

2.3.2.2. We have 3 targeting strategies

2.3.2.2.1. 1- Undifferentiated targeting: A single mix for all segments

2.3.2.2.2. 2- Differentiated targeting: A different mix for the selected segments

2.3.2.2.3. 3- Concentrated targeting: 1 single mix of THE selected segment

2.3.3. 3- Positioning

2.3.3.1. Positioning = a strategy that aims to make a brand occupy a distinct position, relative to competing brands, in the mind of the customer

2.3.3.1.1. You can generate a positioning map

3. THEME 3: Operational marketing

3.1. 1- Product. Creating offerings that have value for customers

3.1.1. PRODUCT = anything that can be offered… A physical good A service An experience A place An organisation An idea A mix of all

3.1.2. The product mix and the product-line

3.1.2.1. Product mix (product assortment): the complete set of all products and items that a company brings to the marketplace.

3.1.2.1.1. A product mix is everything a company sells. It consists of the sum of products lines.

3.1.2.2. A product line: is composed of a group of products within a product class that are closely related because they perform a similar function, are sold to the same customer groups, are marketed through the same outlets or channels, or fall within given price ranges.

3.1.3. Packaging: all the activities of designing and producing the container for a product.

3.1.3.1. The Packaging conveys: Emotions Information Convenience

3.1.3.2. The 3 levels of the packaging

3.1.3.2.1. Primary package a bottle

3.1.3.2.2. Secondary package links six bottles together

3.1.3.2.3. Shipping package a palette

3.1.3.3. Absolute psychological threshold

3.1.3.3.1. The smallest level of stimulus that the customer can detect Merchandising example: 20 cm of shelf space are necessary for a product to get noticed by the consumer

3.1.4. Managing the Product life cycle

3.1.4.1. Managing products

3.1.4.1.1. Consistency of the product mix: means how closely related are the various products lines

3.1.4.1.2. We have 3 strategies: Product-line filling Product-line stretching Product-line pruning

3.1.4.2. The product life cycle

3.1.4.2.1. The product life cycle is the process a product goes through from when it is first introduced into the market until it declines or is removed from the market. The life cycle has four stages - introduction, growth, maturity and decline.

3.1.4.2.2. The PLC concept can be applied to analyze a product/service category a product/service a brand

3.1.5. Branding

3.1.5.1. A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

3.1.5.1.1. Branding is the set of activities designed to create a brand and position it in the minds of consumers

3.1.5.2. The Role of Brands for the customer

3.1.5.2.1. Identify the maker

3.1.5.2.2. Memorization

3.1.5.2.3. Increase value

3.1.5.2.4. Create identification to the product

3.1.5.3. Brand equity is the added value endowed on products and services with a recognizable name as compared to its generic equivalent.

3.1.5.4. Branding–Advantages

3.1.5.4.1. Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions Less vulnerability to crises Larger margins More inelastic consumer response Greater trade cooperation Possible licensing opportunities Increased marketing communications effectiveness

3.1.5.5. Strong brands may become a noun (a “bran-duct”)

3.1.5.6. Brand personality

3.1.5.6.1. Brand personality is a set of human characteristics that are attributed to a brand name.

3.1.5.7. A consumer brand community is a group of people who identify themselves to the brand and who are organizing social activities related this brand passion.

3.1.5.7.1. It could initiated by the brand HOG of Harley-Davidson

3.1.5.8. Branding strategies

3.1.5.8.1. Brand extension: entering a new product category with an existing brand

3.1.5.8.2. Rebranding

3.1.5.8.3. Co-branding

3.2. 2- Price. Trading value for those offerings in order to optimize exchange.

3.2.1. The price is often equated to a sum of money. The price can also be seen as all of the costs, monetary or not, borne by the consumer to consume a product (time, effort, etc.).

3.2.2. ‘Magic price’, prices are often expressed as "odd prices“$19.99 or £2.97. The first digit of the price resonates with us the most according to research

3.2.3. Factors that determine the price

3.2.3.1. 1- Demand: price elasticity

3.2.3.1.1. In economics elasticity means the degree to which a demand or supply is sensitive to changes in price

3.2.3.1.2. It’s possible to predict the demand via customer surveys (marketing research)

3.2.3.2. 2- The environment

3.2.3.2.1. The general economic climate has an impact on the price (is it an economic expansion period? A recession? Etc.)

3.2.3.3. 3- Competition: principles and risks

3.2.3.3.1. Companies can also try to align themselves with the pricing strategies observed within the market: Alignment with the price of competing products (market price). Determining an optimal price (an optimal difference with the competitors)

3.2.3.4. 4- Company objectives

3.2.3.4.1. We identify 3 major strategies: Price positioning: is when price is used for positioning and to signal quality and/or luxury. (For example: perfume and luxury apparel) Penetration strategy means taking aggressive action to greatly expand one's share of total sales in a market. (For example, many new foods introduce themselves to the market with a penetration pricing strategy.) Skimming is a type of pricing strategy in which the company which has a new or unique product sells it at a premium initial price then lowers the price over time. (For example, Playstation 3 was originally sold at $599 in the US market, but it has been gradually reduced to below $200. )

3.2.4. Pricing methods

3.2.4.1. We have 4 methods

3.2.4.1.1. 1- The marketing strategy (price used for positioning pruposes): you have to choose a price that is both affordable to your targeted customers and that conveys the level of quality you want to be inferred for your product. 2- Competition: In this pricing method you adjust your price strategy to the one of your challengers. 3- Cost based pricing: in this strategy you have to sell your product at a cost that cover your costs of production, communication, distribution and so on 4- Price Sensitivity (psychological pricing): we seek to identify the acceptable price range for a customer.

3.2.4.2. To set the price we follow this recommended order: We start by checking if we use the price in our positioning strategy, then we check the acceptable price range for customers (price Sensitivity), then we verify the manufacturing costs, we analyze the competition prices, before selecting which pricing method (among the 4 methods) is the most appropriate.

3.2.5. The price in the digital age

3.2.5.1. New pricing strategies

3.2.5.1.1. Auction and negotiation

3.2.5.1.2. Yield management:

3.2.5.1.3. Freemium

3.2.5.2. Evolution of consumer behavior

3.2.5.2.1. The consumer has the ability to: Compare prices, online and in physical stores Know the price before going to the store Access for free many services online Access new forms of exchange of goods and services between customers (for example bartering).

3.3. 3- Place. Delivering those offerings to the consumer in a way that optimizes value

3.3.1. The distribution channel is designated by: The number of intermediaries (=channel levels) Channel types

3.3.1.1. Example of intermediaries: Wholesaler, Jobber, Retailer, etc.

3.3.1.1.1. Other examples: Flagship stores: its purpose is to function as a showcase for the company, and to draw and keep customers to the brand more than sales. Pop up-store: pop-up shop") that is opened temporarily

3.3.1.2. - Pure Players - Brick and mortar - Click and mortar - Paper and click

3.3.1.2.1. Pure players: Online sales exclusively

3.3.1.2.2. Brick and mortar: It means a physical presence of an organization

3.3.1.2.3. Click and mortar : Combination of online sales and sales in physical stores

3.3.1.2.4. - Paper and click: Mail order selling & online sales

3.3.2. Retailers status: - Independent - Contractual - Corporate - Mix status

3.3.2.1. Independent retailers are privately owned businesses.

3.3.2.2. Contractual (Franchise) Arrangement where one party (the franchiser) grants another party (the franchisee) the right to use its trademark as well as certain business systems and processes, to sale a good or service according to certain specifications.

3.3.2.3. Corporate: Subsidiaries (manufacturer’s own stores). The company operates multiple stores in the form of a chain

3.3.2.4. Mix Status: Where some stores are corporate and others are franchise. Examples: Mc Donald’s, YVES ROCHER

3.3.3. Distribution intensity

3.3.3.1. The number of retailers (the last intermediary) depend on the distribution strategy: Exclusive distribution Selective distribution Intensive distribution

3.3.3.1.1. Exclusive distribution In a geographical area, a unique reseller can sell the brand // Exclusive dealing arrangements.

3.3.3.1.2. Selective distribution Giving a limited number of dealers the right to distribute the company’s products in their territories, only if they are able to respect specifications.

3.3.4. Trade Marketing

3.3.4.1. Trade marketing « Historically, we have gone from a marketing where the target was the consumer, to a marketing where the distributor became important ».

3.3.4.1.1. Trade marketing: is a discipline of marketing that relates to increasing the demand at wholesaler, retailer, or distributor level rather than at the consumer level.

3.4. 4- Promotion. Communicating in order to inform customers on those offerings

3.4.1. Companies use various promotion tools to communicate the value created by products/services to consumers.

3.4.2. The main trends in communication market

3.4.2.1. Shifting marketing communication model: - Consumers better informed thanks to information technology, internet… they are also more mature - Decline of traditional media: television, magazines - New media: VOD, Internet, Smartphones, podcasts, emails, apps…

3.4.3. The actors in the promotion industry

3.4.3.1. - Advertisers: companies, individuals or organizations that organize coordinated promotional messages delivered to a target of customers through one or more channels such as print, radio, television and direct mail. - Advertising agencies  creating & implementing the branding strategy - Media agencies: media planning (Media planning : what’s the best support for this target? When? How? They book the advertising space )

3.4.4. The 3 objectives of communication

3.4.4.1. A- Increase awareness, inform

3.4.4.1.1. Speedo sponsors swimmers: lets you know that it is a professional brand that makes technical, innovative and quality products

3.4.4.2. B- Creating attachment to the brand/product

3.4.4.2.1. Make the brand desired beyond its functional attributes Create brand preference

3.4.4.3. C- Push to action (nudge to adopt a behavior)

3.4.4.3.1. Attract consumers in stores Promote the adoption of a desirable behavior (prevention)

3.4.5. The target and message conception

3.4.5.1. A communication target is a set of individuals or organizations with whom we want to communicate to achieve a specific objective There are often several possible communication targets: Core target = priority target

3.4.5.2. A message is conceived around ideas to convey (the axis of communication) and the formulation that will have the better impact on the target

3.4.5.2.1. « Find a truth and make it matter »

3.4.5.2.2. For example: the brand Dove Insight: brands impose a definition of beauty too far from reality The strategic focus: Dove campaigns for the recognition of “real women“ beauty

3.4.6. Communication mix

3.4.6.1. Definition: The combination of promotional techniques that are used to communicate the benefits of the product to the consumer

3.4.6.2. We have 4 main methods: - Advertising - Sales promotion - Events and public relations - Direct marketing

3.4.6.2.1. 1- Advertising developed along with mass media (TV, press, display, radio) Traditionally advertising refers a lot on media (TV, radio, press, display), but recently it also move towards non conventional communication devices  non media

3.4.6.2.2. 2- Sales promotion: The objective is to create a consumer behavioral change (= to trigger impulse buying) To increase product notoriety To trigger product (first) try To reduce price aversion

3.4.6.2.3. 3) Events and public relations: is a communication method that involves face-to-face contact between companies and their customers at special events like concerts, fairs, and sporting events.

3.4.6.2.4. 4- Direct marketing: Techniques used to contact a prospect directly and to elicit a response without the intervention of intermediaries (advertising agency, retailer, etc.).

3.4.6.3. Integrated marketing communication: It is the practice of unifying all marketing communication efforts so they send a consistent, persuasive message promoting the brand’s goals (Moriarty et al., 2009)

3.5. Marketing Ethics

3.5.1. Sustainable and ethical marketing Socially and environmentally responsible marketing that meets the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs.

3.5.1.1. Marketing’s purpose is to promote consumption, and the inevitable outcome of successful marketing is unsustainable overconsumption. According to the critics, more is not always better. Some groups have taken their concerns straight to the public. For example, the Center for a New American Dream is a nonprofit organization founded on a mission to “help Americans to reduce and shift their consumption to improve quality of life, protect the environment, and promote social justice.”

3.5.2. The respect of legality and is not a guarantee of morality Marketers are free to define ethical rules and could refuse to answer to certain demand if they consider them immoral The world is not about consumption, people can promote other values to reach happiness and fulfillment.

4. General considerations

4.1. There are 3 key branches in marketing

4.1.1. Marketing research

4.1.1.1. Qualitative

4.1.1.2. Quantitative

4.1.2. Strategic marketing

4.1.2.1. Segmentation

4.1.2.2. Positioning

4.1.2.3. Targeting

4.1.3. Operational marketing (marketing mix) - 4P's

4.1.3.1. Product

4.1.3.2. Price

4.1.3.3. Promotion

4.1.3.4. Place

4.2. History

4.2.1. History: Mass marketing> Segmented marketing> personalized marketing

4.2.2. Def. Marketing is the implementation on a scientific basis of all the activities which contribute in an organization to create, promote, distribute efficiently products or services with various audiences (merchant / non-merchant activities)

4.3. Terminology

4.3.1. The market is made of

4.3.1.1. Potential market

4.3.1.1.1. real market

4.3.1.1.2. Relative non consumers

4.3.1.2. Absolute non consumers

4.3.2. B2B

4.3.3. B2C

4.3.4. C2C

4.3.5. Platform economy

4.3.6. Direct competitor versus indirect competitor

4.3.7. Demarketing

4.3.8. Latent demand

4.3.9. Disruptive versus incremental innovation

4.4. Frameworks

4.4.1. Value framework

4.4.1.1. Consumption value framework

4.4.1.1.1. Utilitarian: objective consumption

4.4.1.1.2. Experiential: about sensory and emotional elements

4.4.1.1.3. Symbolic or conspicuous

4.4.1.1.4. Aesthetic or consuming for moral values (CSR, spirituality, etc)

4.4.2. SWOT

4.4.2.1. PESTEL

4.4.3. Porter value chain analysis differentiates between primary and secondary activities to create value for the business and the customer (see slide 98)

4.4.4. Porter generic competitive strategies use 2 dimensions (price and level of specialization) to identify 3 strategies

4.4.4.1. See slide 103

4.4.5. The Five Levels of Maslow's Hierarchy of Needs Physiological Needs Safety Needs. ... Love/Belonging. ... Self-Esteem. ... Self-Actualization.