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ELBAKKALIYoussef STRATEGICMARKETING SUMMARYANDKEYCONCEPTS ELBAKKALIYoussef 2015-2016 ELBAKKALIYoussef CH2FROMCOMPANYSTRATEGYTOMARKETINGSTRATEGY Marketingstrategyrequiresverticalandhorizontalalignementwiththeotherdepartements èIT’SNOTASINGLEDEPARTMENT!! ISTHEREAGOODMARKETINGSTRATEGY?Nostrategyisthebestforallcompanies 2.1COMPANYSTRATEGY It’stheoverallscopeanddirectiontoachievespecificgoals Thenatureofthecompanyadvantagedeterminesthecompanystratagy(Example: MerecedesàTechnology;Aldi/RyanairàCost) à3CHARACTERISTICS • ItisaVISIONèHowweseethemarket • ItisdevelopedagainstacompetitorèNotinisolation • ItislongtermorientedèYouonlychangewhennecessary à3LEVELS • Group/corporatelevel(allmarkets,…) • Strategicbusinessunitlevel(food/nonfood…) • Functionorcenterofexcellence(R&D,engineering…) - Singlebusinessthatcanbeplannedseparately - Ithasitsownsetofcompetitors - Ithasamanagerresponsibleforitsstrategy - à2TYPESOFSTRATEGYACCORDINGTOPORTER Costadvantage(Ryanair)><Differentiation(Audi…) 2.2STRATEGICPLANPROCESS àVISION:Whatthecompanywantstobe,theirvisionoftheworld.Mustbeinspirational àMISSION:Thefundamentalpurposeofanorganisation.Whyitexistsandwhatitdoesto achieveitsmission.Missionstatementsare“theimpossibledream”thatacompanywants toreach AGOODMISSIONSTATEMENTHAS5CHARACTERISTICS 1. Thefocusonalimitednumberofgoals 2. Theystressthecompany’smajorpoliciesandvalues 3. Theydefinethemajorcompetitivespereswithinthecompanywilloperate 4. Theytakealongtermview 5. Theyareasshort,memorableandmeaningfulaspossible COMPANYCULTUREisveryhardtochange(BMW,DHL…) ELBAKKALIYoussef CHAPTER3MARKETANALYSIS Makingmarketingdecisionsinafast-changingworldisbothanartandascience. 2.1External&Internalanalysis 2.1.1Externalanalysis MICROENVIRONMENT Theactorsclosetothecompanythataffectitsabiltytoserveitscutsomers,thesuppliers, marketingintermediaires,customermarkets,competitorsandpublics. èTHECOMPANY:Wetakeintoaccountgroupsinsidethecompany.Suchastop management,finance,R&D,…Themarketingdepartementhastoworkwiththeother departementsofthecompany.EXAMPLE:Aldi’smarketerscan’tpromiselowpricesunless itsoperations/purchasingdept. èTHESUPPLIERS:Suppliersareveryimportantbecausetheyprovideressourcesneededby thecompanytoproducegoods.Therelationwiththesuppliersaffectsdirectlythefinal productandthemarketing.EXAMPLE:ActivesuspensionBMW… èINTERMEDIAIRES:Firmsthathelpthecompanytopromote,sell,anddistributeitsgoods tofinalbuyers.Example:McDonaldssellsCocaCola èCOMPETITORS:Marketershavetofocusnotonlyoncustomersbutalsooncompetitors. èPUBLICS:Anygroupwhocanhelpthecompanytoachieveitsobjectives.Forexample: FinancialPublics,MediaPublics,Governmentpublics,Citizen-actionpublicsetc èCUSTOMERS:ThecompanycantargetanyorallofcustomermarketssuchasConsumer Markets,Businessmarkets,Resellermarkets,GovernmentmarketsorInternationalmarkets. MACROENVIRONMENT èDEMOGRAPHICENVIRONMENT: • BabyBoomers19461964 • GenerationX19651976 • Millennials19772000 èECONOMIC • Changesintheeconomyaffectthewaythatpeoplebuy • Incomedistribution:wehavetotargetthegoodsocialclassdependingonhisincome ELBAKKALIYoussef èNATURAL • Thegrowingshortagesofrawmaterialssuchaswater • IncreasedpollutionèTheinfluenceofenvironmentalgroupswillincrease èTECHNOLOGICAL • Newtechnologiesofferalotofopportunitiesformarketers èPOLITICAL • Thelegislationaroundbusinesshasbeenincreasingduringthelastyears • 3goals:Protectcompaniesfromunfaircompetition,protectconsumerandprotect theinterestsofsociety • Afairmarketispercievedasgoodbycompanies • IncreasedemphasisonEthicsandRSEforexampleonInternetwiththelegislation aroundprivacy èCULTURAL • Forcesthataffectsociety’sbasicvalues • Themajorculturalvaluesofasocietyareexpressedinpeople’sviewsofthemselves andothers CONCLUSION “Therearethreekindsofcompanies:thosewhomakethingshappen,thosewhowatch thingshappen,andthosewhowonderwhat’shappened.”Butpayattention,theyarethings thatyoucan’tchangesuchasgeographicpopulationshiftsetc 2.1.2Internalanalysisormarketintelligencesystem(MIS) MISsupplieshappeningsdataèdistributeaccurateinformationtomarketingdecision makers.Theyarealotofwaystocollectdata(Purchaseinformation,ontheinternet…) 2.2Interpretationoftheresults 2.2.1SWOTAnalysis Internalelements=Strengths–Weaknesses Externalelements=Opportunities-Threats èThegoalistomatchthecompany’sstrengthstoattractiveopportunitieswhile eliminatingtheweaknessesandminimizingthethreats. Corecompetency Inthepast,companieswhereusedtoownalltheresourcesoftheirbusiness.Buttodaythey wecanobtainbetterqualityorlowercost 1) Itisasourceofcompetitiveadvantage 2) Ithasapplicationsinawidevarietyofmarkets 3) Itisdifficultforcompetitorstoimitate ELBAKKALIYoussef Opportunities 1) Tooffersomethingthatisinshortsupply 2) Tosupplyanexistingproductorserviceinaneworsuperiorway 3) Atotallynewproductorservice Threats Notallthethreatsarethesame.Themanagerhastoprepareaplaninadvancetomeet them. Strenghts/WeaknessesChecklist Acompanycanmakeachecklistforstrenghts/weakenesses 2.2.2BCGMatrix Ithelpscompaniestoanalyzeproductlineinsearchofgrowthopportunities PortfoliomanagementèTheprocessbywichmanagementevaluatestheproductsand businessesthatmakeupthecompany.Thecompanywillputmoremoneyinthemost profitableprojects,theywilltrytoidentifythekeybusinessesofthecompanycalled StrategicBusinessUnits. Moststandardportfoliosanalaysisevaluatetwothings:theattractivenessofSBU’smarket andthestrengthoftheSBU’spositioninthatmarket Growth-sharematrix(matriceBCG) • StarsàHighgrowhighshareproducts,theyneedhighinvestments.Starscan becomecashcowsiftheysustaintheirsuccess • CashCowsàLowgrowhighshareproducts,theyarewellestablishedinthemarket andneedlowerinvestments.Theyaretheleadersinthemarketplace • QuestionmarksàHighgrowmarketslowshareproducts,theyrequirealotof moneytoholdtheirshare. • DogsàLowgrowth,lowshareproductsàthedon’tpromisesourcesofcash Thecirclesinthematrix: Thecompanywantstoinvestinthemorepromisingquestionmarkstomakethembecome stars,andalsomantainthestarssothattheywillbecomecashcows. Thecompanyhasalso2cashcowswhofinancethestars,thequestionmarksandthedogs. ELBAKKALIYoussef 4StrategiesderivedfromtheBCGmatrix OncethecompanyhasidentifieditsStrategicBusinessUnits(SBU’s),thecompanycan pursueoneofthe4strategiesforeachSBU 1) Itcaninestmoreinthebusinessunittobuilditsshare 2) ItcaninvestjustenoughtoholdtheSBUatthecurrentlevel 3) Itcanharvest(récolter)theSBU,milkingitsshort-termcashflow 4) ItcanselltheSBU 2.2.3TheGEgrid TheGE/Matricmeasuresproductsaccordingtobusiness-unitstrengthandindustry attractiveness. CONCLUSION: àTheBCGmatrixclassifiescurrentbusinessesbutprovideslittleadviceforfutureplanning. Itcanalsobedifficulttoimplementbythemanagament. àTodaythestrategic-planningisinthehandsofdivisionalmanagerswhoareclosetotheir markets 2.2.4Porter’s5forcesmodel Modelusedtoidentifywethernewproducts,servicesorbusinessescanbeprofitable 1. BargainingpowerofSUPPLIERSàHereyouevaluatehoweasyitisforsuppliersto increaseprices.Thelesssuppliersyouhave,thefewerchoiceyouhave,thereisthen adependenceofsuppliers(theyaremorepowerful) 2. RivalryamongEXISTINGFIRMSàWhatisimportanthereisthenumbernumberof competitorsandtheircapability 3. ThreatofPOTENTIALENTRANTSàTheabilityofpeopletoenteryourmarket.Thisis affectedbytime/moneytoenter,economiesofscale,keytechnologies,barriers…A strongpositionallowsyoutopreserveafavorableposition 4. ThreatofSUBSTITUTIONàTheabilityofcustomertofindadifferentwayofdoing whatyoudo(copyoftheprocesscanweakenyourposition 5. BargainingpowerofBUYERSàhowitiseasyforbuyertodrivespricesdown ELBAKKALIYoussef CH4COMPETITIVESTRATEGIESANDGOALFORMULATION 3.1Developingcompetitivestrategies Companieshavetofindbusinessestoconsiderinthefuture.Theyneedgrowthtosatisfy stakeholdersandattracttoptalent.Thecompany’sobjectivehastobe‘profitablegrowth’ andnotsimplygrowth. DEFINITIONS • CompetitiveadvantageàOfferingconsumersmorevalueandsatisfactionthan competitorsdo • CompetitoranalysisàTheprocessofidentifiying,assessingandselectingkey competitors. • CompetitivemarketingstrategiesàStronglypositionagainstcompetitorsandgive thecompanythestrongestpossiblestrategicadvantage. MARKETPOSITIONING • MarketleaderàThefirminanindustrywiththelargestmarketshare(exProximus) • MarketchallengeràArunner-upfirmfightinghardtoincreaseitsmarketshare(ex Base,Mobistar) • MarketfolloweràArunner-upfirmthatwantstoholditsshareinanindustry (Telenet) • MarketnicheràAfirmthatservssmallsegmetntsthattheotherfirmsinanindustry overlookorignore(JimMobile) Nostrategyisbestforallcompanies,eachcompanymustdeterminewhatesmakesmost sense. 3.1.1Marketingleaderstrategies Theleaderhasthelargestmarketsharesandusuallyotherfirmsfocusontheleaderasa companytochallenge,imitateoravoid.Toremainnumberone,leadingcompaniescantake anyofthreeactions 1) Expandingtotaldemand(Danone) Theycanfindnewusers(menforexample),developnewuses(livrederecette)and encouragemoreusageofitsproducts(Roycosoups). 2) Protectingmarketshare Theleadermustpreventorfixtheweaknessesthatprovideopportunitiestoits competitors. Theleadermustkeepstrongrelationshipswithcustomers,pricesmustremain consistent. ELBAKKALIYoussef ThebestdefenseisOFFENSEèTheleadershouldbetheleaderintheindustry,new products… 3) Expandingmarketshares Insomemarketsasmallmarketsharerepresentsalotofsales.Profitabiltyriseswith increasingmarketshare.Butnotalways,highersharestendtoproducehigher returnsonlywhenunitcostswithincreased,orwhenthecompanyoffershigher qualityathigherprice. 3.1.2Marketchallengerstrategies Companiesthataresecond,thirdorlowercanchallengethemarketleader. Achallengermustdefinewichcompetitorstochallenge,itcanattacktheleaderàahigh riskbuthighgainstrategy.Oritcansimplytrytogetthemoremarketshare. • Challengersbecomeleadersbyimitatingandimprovingtheideasofthepioneering leader.(Chryslerhadthefirstminivan,butthenToyotaimproveditandbecamethe marketleader) • Youcanavoidtheleaderandtargetsmallplayers(likeinthebeermarket) • Thechallengercanalsomakeafullfrontalattackbytargetingthecompetitor’s strengths(CocaColavsPepsi) • Finally,thechallengercanmakeanindirectattackagainsttheleader.SuchasRed Bullwhostartedinunconventionaloutletssuchasnightclubs.Nowtheyselltheir softdrinkwithhighmargins.(YoupaytwiceforaRedBull) 3.1.3Marketfollowersstrategy Notallthecompanieswanttochallengetheleader,becausehecanquicklymatchtodefuse theattack.Manycompaniesdecidetofollow.Thefollowercanlearnformleader’s experience(successandfailure),itcanalsocopyorimprovetheleader’sproductswithmuch lessinvestmentand,finally,thefollowercancompetewithlessrisksandinvestments. 3.1.4Marketnicherstrategies Firmswithlowsharescanbehighlysuccessfulandprofitablethroughsmartniching. Itisveryprofitablebecausetheyknowverywellthecustomer.Nicherstrytofindoneor moremarketthataresafeandprofitable&servesspecificcustomerneedsbetterthanany one.Thenichemarketshavenointerestformajorcompetitors. DEVELOPINGSTRATEGIESFORGROWTHèProduct/marketexpansiongrid ELBAKKALIYoussef PRODUCT/MARKETGROWTHMATRIX MarketpenetrationèGrowthby increasingsalesofcurrentproductsin currentmarkets,withoutchangingthe product(retentionofexisting customers&geographical) MarketdevelopmentèGrowthby developpingnewmarketsegment marketsforcurrentcompanyproducts (newcustomers) ProductdevelopmentèGrowthwitha newproductoncurrentmarket segments(morerevenupercustomer) DiversificationèGrowthwithstarting abusinessoutsidethecompany’s productsandmarkets(newrevenues) BLUEOCEANSTRATEGY Thebooksuggeststhatanorganizationshouldcreatenewdemandeinanuncontested marketorspace,ratherthanhead-to-headcompetition RedOceansèTheexistingindustriestoday,therulesofthegameareknowbyall (competition).Companiestrytowinagainsttheirrivals.Themarketplaceiscrowdedand theprospectsofgrowtharereduced. BlueOceansèTheindustrieswhodon’texisttoday,theunkownmarketplacedwhere thereisnocompetition.Youhavenottofightfordemand,youcreateit.Itisthewider, deeperpotentialofmarketspacethatisnotyetexplored. ELBAKKALIYoussef BLUEOCEANSTRATEGYEXAMPLE Amazon,CirqueduSoleil,Apple,Viagra WiththecreationofViagra,Pfizercreatedablueoceaninlifestyledrugs. 3.2GoalFormulation OncetheSWOTanalysisisfinished,wecanproceedtoagoalformulation.Mostcompanies pursueamixofobjectives(salesgrowth,marketshare,innovation..) Thebusinessunitssetstheseobjectivesandthemanagesbyobjective(MBO) ForanMBOsystemtowork,theyare4criteria,objectivemustbe: 1. Hierarchy,fromthemosttoleastimportantèForexample,thegoalcanbean increaseoftheROI,butwecanalsoimproveotherthingsduringtheprocess 2. QuantitativeèItisbettertosayIwanttoincreaseROIto15percent 3. RealisticèTheyshouldarisefromanalysisandnotfromthninking 4. ConsistentèIt’snotpossibletomaximisesalesandprofitssimultaneously.Shorttermprofitversuslong-termgrowth,deeppenetrationofexistingmarketsversus developmentofnewmarkets… ELBAKKALIYoussef CHAPTER5.SEGMENTATION Wichcustomerswillweserve?Tryingallcustomerscanmeanservingnonofthem. Companieshavetoservetherightconsumertherightway(consumer-centricity) Companiesmustidentifythepartsofthemarketsitcanserveandmostprofitably.Must companieshavemovedfrommassmarketingtotargetmarketing.Firmsarefocusingonthe buyerswhohaveagreaterinterestinthecompany. THESTPTRIO(SEGMENTATION,TARGETING,POSITIONING) Targetmarketingrequires: 1) MarketsegmentationèIdentifydistinctgroupsofbuyers 2) MarkettargetingèSelectoneoremoremarketstoenter 3) MarketpositioningèComunicatethedistinctivebenefitthatthecompanycanoffer Customersinanymarketshavedifferentwants.Throughsegmentationcomapaniesdivide themarketintosmallerpartsthatcanbereachedmoreefficiently. DEFINITIONS MarketsegmentationèDividingamarketintosmallersegments MarkettargetingèSelectthesegmentorsegmentstoenter DifferentiationèDifferentiatingthemarketofferingtocreatesuperiorcustomervalue PositioningèPositionthemarketofferinginthemindsoftargetcustomers SEGMENTATINGCONSUMERMARKETS Marketsegmetationdividesmarketintowell-definedslices.Amarketsegmentconsistsofa groupofcustomerswhosharesimilarsetofneeds.Theyaredifferentsegmentation methods: 1. Geographicsegmentation(NorthAmerica,Canada…) Geographicalunitsasnations,states,regions,counties,citiesetc.Alotofcompaniesare localizingtheirproductsandsalestofittheneedsofindividualregions. 2. Demographic Age,gender,family,size,familylifecycle,income,occupation,education,religion,race… • Ageandlife-cyclesegmentationisusedbysomecompanies.Butpayattention againststereotypes.(GrandparentscangowiththeirchildrentoDisneylandfor example) • Gendersegmentationhaslongbeenusedinclothing,cosmetics…Wehaveanother examplewithLegogamesforboysandforgirls • Incomeincomeisusedbycompaniesofproductsandservicessuchasautomobiles, clothes,travel…AnexampleistheAccorgroupwhohasahotelsforallkindof budgets.AnotherexampleisVWgroupwhohasSeat&SkodabutalsoPorsche& Lamborghini ELBAKKALIYoussef ThereisalsotheexampleofLIDL,ALDI,wealthypeoplealsogotothiskindofshops becauseoftheeconomiccrisis.Andlowincomegroupswhobuyluxuryproducts suchasLVMH,Sunglasses… 3. Psychographic(workingclass,…) Dividingamarketintodifferentsegmentsbasedonsocialclass,lifestyle,orpersonality characteristics. Peopleinthesamedemographicgroupcanhaveverydifferentpsychographic characteristics.Theproductspeoplebuyreflecttheirlifestylesandtheirpersonalities TheyarepsychographicmeasurementsliketheStrategicBusinessInsight’sVALSwho classifiesUSadultsinto8groups 1) Innovators1)Believers 2) Thinkers2)Strivers 3) Achievers3)Makers 4) Experiencers4)Survivors Example:HertzSweden&Dogs 4. Behavorial Dividingthemarketbasedonconsumerknowledge,attitudes,usesorresponsestoa product 5. Occasion(regularoccasion,holiday,seasonal…) Occasionswhenbuyersgettheideatobuyforaday,week,month…ForexampleChristmas, Easter,amarriage… 6. Benefit Thedifferentbenefitsthatconsumersseekfromtheproduct.Insomemarketssuchas Championathleticpeoplelookforfunction&styleforexample.Wehaveanotherexample withColgatetoothpastes(whiteteeth,sensitiveteethetc) Wecanalsosegmentbusinessmarketswiththesamevariablesweuseinconsumer markets. NOTES:Marketersusuallyusemultiplesegmentationbasesandnotonlyone. ELBAKKALIYoussef REQUIREMENTSFOREFFECTIVESEGMENTATION Tobeusefulmarketsegmentsmustbe • Measurable:thesize,purchasingpower,andprofilesofthesegmentscanbe measured(forexampleètheyare30.5millionlefthandedpeopleintheUS) • Accessible:themarketsegmentscanbeeffectivelyreachedandserved • Substantial:themarketsegmentsarelargeorprofitableenoughtoserveèFor example,carmanufacturerscannotproducecarsonlyforfatpeople • Differentiable:Ifmenandwomenrespondsimilarlytomarketingeffortsforsoft drinks,youdon’thavetoseparatesegments • Actionnable:Effectiveprogramscanbedesignedforattractingandservingthe segments. Asmallairlinecompanyidentifiedsevensegmentsbutitsmarketingstaffwastoo small SUMMARY 1. Targetmarketingincludesthreeactivities:marketsegmentation,markettargeting andmarketpositioning.Marketsegmentsarelarge,identifiablegroupswithina market. 2. Themajorsegmentationvariablesforconsumermarketsaregeographic, demographic,psychographic,andbehavioral.Marketersusethemsinglyorin combination 3. Businessmarketersuseallthesevariablesalongwithoperatingvariables,purchasing approaches,andsituationalfactors. 4. Tobeuseful,marketsegmentsmustbemeasurable,substantial,accessible, differentiable,andactionable. 5. Wecantargetmarketsatfourmainlevels:mass,multiplesegments,single(orniche) segment,andindividuals 6. Amassmarkettargetingapproachisadoptedonlybythebiggestcompanies 7. GlobalizationandtheInternethavemadenichemarketingmorefeasibletomany. 8. Morecompaniesnowpracticeindividualandmasscustomization ELBAKKALIYoussef CHAPTER6TARGETING Whichcustomerswillthecompanyserve? DEFINITIONS èTargetmarketisasetofbuyerssharingcommonneedsorcharacteristicsthatthe companydecidestoserve èMarkettargetingTheprocessofevaluatingeachmarketsegment’sattractivenessand selectingoneormoresegmentstoenter èUndifferentiated(mass)marketingAmarket-coverageinwhichafirmdecidestoignore marketsegmentdifferncesandgoafterthewholemarketwithoneoffer èDifferentiated(segmented)marketingAmarket-coveragestrategyinwichafirmdecides totargetseveralmarketsegmentsanddesignsseparateoffersforeach èConcentrated(niche)marketingAmarket-coveragestrategyinwhichafirmgoesaftera largeshareofoneorafewsegmentorniches èMicromarketingTailoringproductstospecificindividualsandlocalcustomersegments èLocalmarketingTailoringbrandstotheneedsandwantsoflocalcustomers èIndividualmarketingTailoringproductstotheneedsofindividualcustomers TARGETING Marketsegmentationrevealsthefirm’smarketsegmentopportunities.Thefirmhasto evaluatenowthevarioussegmentsanddecidewhichitcanservebest EVALUATINGMARKETSEGMENTS Themarketer’staskistoidentifytheappropriatenumberandnatureofmarketsegments anddecidewhichonetotarget.Thecompanymustfirstcollectandanalyzedataoncurrent segmentsandthenchoosethegoodone.Thefirmmustlookatthreefactors:segmentsize andgrowth,segmentstructuralattractivenessandcompanyobjectivesandresources. SELECTINGMARKETSEGMENTS Afterevaluatingsegments,thecompanymustdecidewhichandhowmanysegmentsitwill target. ELBAKKALIYoussef Leftside=Massmarket;Rightside=Customization a) Undifferentiated(mass)Marketing Inthisstrategy,thecompanydecidestoignoremarketsegmentdifferencesandtargets thewholemarketwithoneoffer.Itdesignsaproductwithanimagethatcanbesoldvia massdistribution.AgoodexampleistheFord-Tinonecolor,black. POSITIVEPOINTS NEGATIVEPOINTS -Lowercosts - Difficulttoreachamassaudience - Findaproductthatwillsatisfyall consumers - Problemsofcompetitionagainst niches b) Differentiated(segmented)Marketing (+)Afirmdecidestotargetseveralmarketsegmentsand designsseparateoffersforeach(suchasVWgrouporVF Corporationwhoownsalotofknownbrands) (-)Differentiatedmarketingincreasescosts.Developing separatemarketingplansetcincreasescosts. c) Concentrated(niche)Marketing Astrategyinwhichafirmgoesafteralargeshareonasmallmarket(niche) Throughconcentrationacompanyacquiresastrongpositionbecausetheyknowvery welltheconsumerneeds.Itcanmarketmoreeffectivelyandefficiently. Agoodnichemarketissmallbuthassize,profitandgrowthpotentialbutdoesnot attractmanycompetitors ELBAKKALIYoussef d) Micromarketing Itisthepracticeoftailoringtheproducttospecificindividuals«onetoonemarketing». Todaymarketerscollectdata,criticsofusers…anddesigntheproducttheuserswant. Micro-marketersseetheindividualineverycustomer EXAMPLES:àLocalmarketing,GPSlocation,Masscustomization(NikeID),video screenswhodeterminewhoiswatchingtheminordertochangetheads&retargeting data(Sojern) (-)Negativepoints:Micromarketingincreasescosts&createslogisiticproblems SUMMARY 1.Targetmarketingincludesthreeactivities:marketsegmentation,markettargeting, andpositioning.Marketsegmentsarelarge,identifiablegroupswithinamarket. 2.Twobasesforsegmentingconsumermarketsareconsumercharacteristicsand consumerresponses. Themajorsegmentationvariablesforconsumermarketsaregeographic,demographic, psychographic,andbehavioral.Marketersusethemsinglyorincombination. 3.Businessmarketersuseallthesevariablesalongwithoperatingvariables,purchasing approaches,andsituationalfactors. 4.Tobeuseful,marketsegmentsmustbemeasurable,substantial,accessible, differentiable,andactionable. 5.Wecantargetmarketsatfourmainlevels:mass,multiplesegments,single(orniche) segment,andindividuals. 6.Amassmarkettargetingapproachisadoptedonlybythebiggestcompanies.Many companiestargetmultiplesegmentsdefinedinvariouswayssuchasvarious demographicgroupswhoseekthesameproductbenefit. 7.Anicheisamorenarrowlydefinedgroup.GlobalizationandtheInternethavemade nichemarketingmorefeasibletomany. 8.Morecompaniesnowpracticeindividualandmasscustomization.Thefutureislikely toseemoreindividualconsumerstaketheinitiativeindesigningproductsandbrands ELBAKKALIYoussef CHAPTER7POSITIONING Oneofthemostvaluableassetsofafirmisitsbrand.Abrandisaproductorservicewhose dimensionsdifferentiateitfromotherproducts.Thesedifferencesmaybefunctional, rational,ortangible(Goodquality).Theymayalsobemoresymbolic,emotional,or intangible(IbuyaniPhonebecauseIloveApple). Asconsumers’livesbecomemorecomplicatedandrushedabrand’sabilitytosimplify decisionmakingandreduceriskbecomesinvaluable.Thesameproductcanbeperceivedin adifferentwayifthebrandsaredifferent.(McDonaldsmilkorapplejuicetastesbetterthan unmarkedones) BRANDEQUITY It’stheaddedvalueofthebrandonproductsandservices.Itcanbebecauseoftheway consumersfeel,thinkandactwithrespecttothebrand.èSeethebrandzexamplewho developedamodelofbrandstrengthbasedonPresence,Relevance,Performance, Advantage,Bonding Customer-basedbrandequityisthewaycustomersreacttoaproductwhenitisidentifiedor not(IloveanadbecauseitsMercedesoul’inverse) THESCOPEOFBRANDING MarketerscanapplybrandingonEVERYTHINGèOngoods,onaservice,onacountry,a politicalparty… DIFFERENCIATIONANDPOSITIONING Productsaremadeinfactories,butbrandshappeninthemindsofconsumers.Consumers cannotevaluateproductseverytimetheybuy,tosimplifyit,theyorganizecompaniesinto categoriesand“POSITION”themintheirminds.(It’sToyota,soit’sagoodcar) BENEFITSOFBRANDPOSITIONINGANDDIFFERENTIATION Positioningconsistsinoccupyingadistinctiveplaceinthemindsofthetargetmarket. ELBAKKALIYoussef IDENTIFIYINGOPTIMALPOINTS-OF-DIFFERENCEANDPOINTS-OF-PARITY • Points-of-differenceareattributesthatconsumersstronglyassociatewithabrand, andbelievetheycouldnotfindthesame.(SuchasMacbooks) CriteriaifPODs - Desirability:Consumersmustseethebrandaspersonallyrelevanttothem(Nivea crème) - Deliverabilty:thecompanyhastomaintainthebrandinthemindsofconsumers - Differentiabilty:Consumersmustthebrandassociationassuperiorforthe consumers • Pointsofparityareattributesthatarenotnecessarilyuniquetothebrand CHOOSINGADIFFERENTIATIONANDPOSITIONING Theyare3steps: 1. Identifyingasetofdifferentiatingcompetitiveadvantagesonwhichtobuilda position 2. Choosingtherightcompetitiveadvantages 3. Selectinganoverallpositioningstrategy Inmanycases,twoormorefirmswillgoafterthesameposition.Soeachfirmmust differentiateitsofferandcommunicateiteffectivelytothemarket. 1. IDENTIFIYINGASETOFCOMPETITIVEADVANTAGES - Productdifferentiation(exBose) - Servicedifferentiation(exBritishAirways) - Chaneldifferentiation(exAmazon) - Peopledifferentiation(exDisney) 2. CHOOSINGTHERIGHTCOMPETITIVEADVANTAGE Imaginethatthecompanyfoundenoughpotentialdifferentiationsforacompetitive advantage.Itnowmustchoosetheonesonwhichitwillworkandpromote. èAlotofmarketersstandfortheUniqueSellingProposition(USP):whichmeansworking as“numberone”onthatattribute(Safetyforexample) èOthermarketersthinkthatthecompanyshouldpositionitselfonmorethanone differentiator. ELBAKKALIYoussef Therightcompetitiveadvantagehastobe:(keycriteria) • Important:Thedifferencedeliversahighlyvaluedbenefittotargetbuyers • Distinctive:Competitorsdon’tofferthesamedifference • Superior:Thedifferenceissuperiortootherwaysthatcustomersmightobtainthe samebenefit • Communicable:Thedifferenceiscommunicableandvisibletobuyers • Preemptive:Competitorscannoteasilycopythedifference • Affordable:Buyerscanaffordtopayforthedifference • Profitable:Thecompanycanintroducethedifferenceprofitably 3. SELECTINGANOVERALLPOSITIONINGSTRATEGY Thebrand’svaluepropositionis thefullmixofbenefitsonwhich abrandisdifferentiatedand positioned.“WhyshouldIBuy yourbrand?”.Itcanbe“paying moreformorequality”suchas Audicars Theredcellsshowthelosing valuepropositionsandthe greenonesrepresentwining valuepropositions. CHAPTER8MARKETINGPLAN AmarketingplanIsawrittendocumentthatsummarizeswhatthemarketerhaslearned aboutthemarketplaceandindicateshowthefirmplanstoreachitsmarketingobjectives. Eachproductlevelmustdevelopamarketingplanforachievingitsgoals(example UnileverèDove) Themarketingplanshowshowtheorganizationwillachieveitsobjectivesthrough marketingstrategies,theconsumeristhestartingpoint.Today,marketingplansare customer&competitorsoriented. ELBAKKALIYoussef CONTENTOFAMARKETINGPLAN èExecutivesummary&tableofcontents:Presentsabriefsummaryofthemaingainsin ordertohelptopmanagementfindingtheplan’smajorpointsquickly èSituationanalysis:Relevantdataonsales,costs,themarket,competitors,the macroenvironment… Describesthetargetmarketandacompany’sposition,includinginformationaboutthe market,productperformance,competition,&distribution: • Amarketdescrpition • Aproductreview • Areviewofcompetition • Areviewofdistribution èThreatsandopportunitiesanalysis Assessesmajorthreatsandopportunitiesthattheproductmightface,helpingmanagement toanticipateimportantpositiveornegativeimpactsonthecompany èObjectivesandissues Statesthemarketingobjectivesthatthecompanywouldliketoattainandhowtoachieve them. èMarketingstrategy:Herewedefinethemission,marketing&financialobjectivesand needsthemarketofferingisaskingthroughcompetition&position. Itanswersthequestion.Howwillthecompanycreatevalueforcustomersinorderto capturevaluefromcustomersinreturn?Italsooutlinesthespecificstrategyforeach marketingmixelementandexplainshowtorespondtothreatsandopporutnities. èActionprograms èFinancialprojectionsThisisessentiallyaprojectedprofit&lossstatementwhichshows expectedcosts,profit…Onceapproved,itbecomesthebasisforall,incluidingmarketing operations ELBAKKALIYoussef èImplementationcontrols:Spellingoutthegoalsandbudgetsforeachmonth,sothatthe managementcanrevieweachperiod’sresults. Alotofsuprisesoccurduringtheimplementationofmarketingplans,thisiswhymarketer usemarketingcontrol&KPI’s(keyperfomanceindicators).Itinvolves3steps: 1. Themanagmentsetsspecificmarketinggoals 2. Thenitmeasuresitsperformanceinthemarketplace 3. Themanagementtakescorrectiveactiontoclosethegapsbetweengoalsand performance Thepurposeistoensurethatthecompany’sgoalsetoutinitsannualplan ELBAKKALIYoussef CHAPTER9KPI’s&MEASUREMENT "HalfthemoneyIspendonadvertisingiswasted;ThetroubleisIdon'tknowwhichhalf.” It’snoteasytomeasuretheresultsofmarketingexpensesbecauseoutputssuchasthe brandimage,thecustomerloyalty…cantakealotoftimetomanifestthemselves.Itishard toisolatetheeffectsofanyparticularmarketingacitivity. But,measuringthereturnonmarketingisakeynecessityformarketingmanagers,they havetobesurethattheirmarketingfundsarebeingwellspent.Today“marketing accountability”becomesmoreandmoreimportant. DEFINITIONS èMarketingmetricsisasetofmeasuresthathelpsquantify,compare,andinterpretthe marketingperformance è Marketingcontrolismeasuringandevaluatingtheresultsofmarketingstrategies& plansandtakingcorrectiveactionstoensurethattheobjectivesareachieved(seechapter8) èMarketingROIisthenetreturnfromamarketinginvestmentdividedbythecostsofthe marketinginvestment. èKeyperformanceindicators(KPI’s)it’saperformancemeasurement.Itisusedto evaluatesuccess,orsuccessinaparticularactivityandthisismadeperiodically. KPIsMEASURMENT AwinningKPIis àEasytounderstand àMeaurable àActual(uptodate) àNotgreatinnumber MARKETINGDASHBOARDS Marketingdashboardsareliketheinstrumentpanelinacarorplane,visuallydisplayingreal timeindicatorstoensureproperfunctioning.Itisveryinterestingbecauseitbringsdata alivetoimprovedanalysis. ELBAKKALIYoussef MARKETINGSCORECARDS àAcustomer-performancescorecardrecordshowwellthecompanyisdoingyearafter yearoncustomer-basedmeasures àAstakeholder-performancescorecardtracksthesatisfactiononcompany’sperformance ofemployees,suppliers,banks,distributors,retailers,andstockholders. MARKETINGMETRICS AccordingtoAmbler,measuringmarketingperformancecanbesplitintotwoparts àShorttermresultssuchassalesturnover,shareholdervalue… àChangesinbrandequityincludecustomerbeahaviors,percievedquality,loyalty,etc MARKETINGROI Everycampaign yourunshould haveanROI.Itisa quantifiedwayto analyze,improve andpredictthe returnon marketing.Many companiesuse customer relationship measuressuchas satisfaction, retentionand equity