Download Direct, Online, Social Media, and Mobile Marketing Creating

Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 17-18:
Direct,
Online,
Social
Media,
and
Mobile
Marketing
Creating
Competitive
Advantage
Lecturer:
Szilvia Bíró-Szigeti, PhD
Department of Management and Corporate Economics
Copyright © 2016 Pearson Education, Inc.
Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 17:
Direct, Online, Social
Media, and Mobile
Marketing
Copyright © 2016 Pearson Education, Inc.
17-1
Direct and Digital Marketing
Direct and digital marketing involve engaging directly with
carefully targeted individual consumers and customer
communities to both obtain an immediate response and build
lasting customer relationships.
For many companies today,
direct
and
digital
marketing constitute a
complete model for doing
business.
Direct and Digital Marketing
Rapid Growth of Direct and Digital Marketing
Direct and digital marketing have
become the fastest-growing
form of marketing.
Direct marketing continues to
become more Internet-based,
and digital direct marketing is
claiming a surging share of
marketing spending and sales.
Direct and Digital Marketing
Benefits of Direct and Digital Marketing to Buyers
Convenience
Access to comparative
information about
companies, products, and
competitors
Ready access to
many products
Interactive and
immediate
Direct and Digital Marketing
Benefits of Direct and Digital Marketing to Sellers
Access to buyers not
reachable through
other channels
Flexible
Tool to build
customer
relationships
Low-cost, efficient,
fast alternative to
reach markets
Forms of Direct and Digital Marketing
Multichannel
marketing
Digital and Social Media Marketing
Online Marketing
Online marketing
is marketing via the Internet using
company Web sites, online ads and promotions, e-mail, online
video, and blogs.
Marketing Web sites engage consumers to move them closer to
a direct purchase or other marketing outcome.
Branded community Web sites present brand content that
engages consumers and creates customer community around
a brand.
Digital and Social Media Marketing
Online Marketing
Online advertising is advertising that appears while
consumers are browsing online and includes display ads,
search-related ads, online classifieds, and other forms.
E-mail marketing involves sending highly targeted, highly
personalized, relationship-building marketing messages via
e-mail.
Spam
is unsolicited,
messages.
unwanted
commercial
e-mail
Digital and Social Media Marketing
Online Marketing
Viral marketing is the digital version of word-of-mouth
marketing: videos, ads, and other marketing content that is
so infectious that customers will seek it out or pass it along
to friends.
Online video
marketing involves posting digital video
content on brand Web sites or social media sites such as
YouTube, Facebook, and others.
Digital and Social Media Marketing
Online Marketing
Blogs are online journals where people and companies
post their thoughts and other content, usually related to
narrowly defined topics.
Social media are independent and commercial online
communities where people congregate, socialize, and
exchange views and information.
Public Policy Issues in Direct and Digital Marketing
Irritation, Unfairness, Deception, and Fraud
• Irritation includes annoying and offending customers.
• Unfairness includes taking unfair advantage of
impulsive or less-sophisticated buyers.
• Deception includes “heat merchants” who design
mailers and write copy designed to mislead
consumers.
• Fraud includes identity theft and financial scams.
Public Policy Issues in Direct and Digital Marketing
Consumer Privacy
The concern is that marketers may know
too much about consumers and use this
information to take unfair advantage.
Public Policy Issues in Direct and Digital Marketing
A Need for Action
• AdChoices advertising
• Can Spam
• COPPA
• TRUSTe
option icon in the upper right of this online ad,
consumers can learn why they are seeing the ad and opt out if
they wish.
to curb direct marketing excesses, various government agencies
are investigating not only do-not-call lists but also do-not-mail
lists, do-not-track online lists, and Can Spam legislation.
requires online operators targeting children to post privacy policies on
their sites. They must also notify parents about any information they’re
gathering and obtain parental consent before collecting personal
information from children under age 13.
is a nonprofit self-regulatory organization, works with many large
corporate sponsors, including to audit privacy and security
measures and help consumers navigate the Internet safely.
Exercise
Determine the marketing return on sales (marketing ROS) and return on
marketing investment (marketing ROI) for Company A and Company B in the
table below. Which company is performing better?
Solution
Principles of Marketing
Global Edition
Kotler and Armstrong
Chapter 18:
Creating Competitive
Advantage
Copyright © 2016 Pearson Education, Inc.
18-1
Creating Competitive Advantage
• Competitive advantages require delivering more value and
satisfaction to target consumers than competitors.
• Competitive marketing strategies are how companies
analyze their competitors and develop value-based strategies
for profitable customer relationships.
Competitor Analysis
Competitor analysis is the process of identifying, assessing, and
selecting key competitors.
Competitor Analysis
Identifying Competitors
Competitors can include:
• All firms making the same product or class of
products
• All firms making products that supply the same
service
• All firms competing for the same consumer dollars
Competitor Analysis
Assessing Competitors
Competitors’
objectives
• Profitability
• Market share
growth
• Cash flow
• Technological
leadership
• Service leadership
Competitors’
strategies
• Strategic group
offers the
strongest
competition
Competitor Analysis
Assessing Competitors
Competitors’
strengths and
weaknesses
• What can our
competitors do?
• Benchmarking
Estimating
competitors’
reactions
• What will our
competitors do?
Competitor Analysis
Selecting Competitors to Attack and Avoid
Customer value analysis determines the benefits that
target customers’ value and how customers rate the
relative value of various competitors’ offers.
• Identification of major attributes that customers value
and the importance of these values
• Assessment of the company’s and competitors’
performance on the valued attributes
Competitor Analysis
Designing a Competitive Intelligence System
• Identifies competitive information and the
best sources of this information
• Continually collects information
• Checks information for validity and
reliability
• Interprets information
• Organizes information
• Sends key information to relevant decision
makers
• Responds to inquiries about competitors
Competitive
Intelligence
System
Competitor Strategies
Basic Competitive Strategies
Michael Porter’s four basic
competitive positioning strategies:
Overall cost
leadership
Differentiation
Focus
Middle of the
road
Competitor Strategies
Basic Competitive Strategies
Overall cost leadership strategy:
A company achieves the lowest production and distribution costs and
allows it to lower its prices and gain market share.
Differentiation strategy:
A company concentrates on creating a highly differentiated product
line and marketing program so it comes across as an industry class
leader.
Focus strategy:
A company focuses its effort on serving few market segments well
rather than going after the whole market.
Competitor Strategies
Basic Competitive Strategies
A company that pursues a clear strategy
will achieve superior performance.
A company without a clear strategy, “a
middle-of-the-roader”,
will
not
succeed.
Competitor Strategies
Basic Competitive Strategies
Michael Treacy and Fred Wiersema suggest
companies can gain leadership positions by
delivering superior value to their customers
in three strategies or “value disciplines.”
• Operational excellence
• Customer intimacy
• Product leadership
Competitor Strategies
Basic Competitive Strategies
Operational excellence refers to a company providing value by
leading its industry in price and convenience by reducing
costs and creating a lean and efficient value delivery system.
Customer intimacy refers to a company providing superior value
by segmenting markets and tailoring products or services to
match the needs of the targeted customers.
Product leadership refers to a company providing superior value
by offering a continuous stream of leading-edge products or
services. Product leaders are open to new ideas and
solutions and bring them quickly to the market.
Competitor Strategies
Competitive Positions
Market leader
strategies
Market
challenger
strategies
Market
follower
strategies
Market nicher
strategies
Competitor Strategies
Competitive Positions
The firm with the
largest market
share
Runner-up firms that
are fighting hard to
increase their market
share.
Other runner-up firms
that want to hold their
share without rocking
the boat.
Firms that
serve small
segments
not being
pursued by
other firms.
Competitor Strategies
Market Leader Strategies
• Expand total demand
• Protect their current market
• Expand market share
Competitor Strategies
Market Leader Strategies
Expand total demand by developing:
• New users
• New uses
• More usage
Competitor Strategies
Market Leader Strategies
Protect current market by:
• Fixing or preventing weaknesses that provide
opportunities to competitors
• Maintaining consistent prices that provide value
• Keeping strong customer relationships
• Promoting continuous innovation
Competitor Strategies
Market Leader Strategies
Expand market share by:
• Increasing profitability with increasing
market share in served markets
• Producing high-quality products
• Creating good service experiences
• Building close relationships
Competitor Strategies
Market Leader Strategies
Challenge the leader with
an aggressive bid for
more market share.
Second mover advantage:
Challenger
observes
what has made the
leader successful and
improves on it.
Competitor Strategies
Market Follower Strategies
• Play along with competitors and not rock the boat
• Copy or improve on leader’s products and programs with less
investment
• Bring distinctive advantages
• Keep costs and prices low or quality and services high
Competitor Strategies
Market Nicher Strategies
An ideal market niche is big enough to be profitable with
high growth potential and has little interest from
competitors.
The key to market niching is specialization:
• Market
• Customer
• Product
• Marketing mix
Balancing Customer and Competitor Orientations
Companies need to continuously adapt strategies to changes
in the competitive environment.
• Competitor-centered company
• Customer-centered company
• Market-centered company
Balancing Customer and Competitor Orientations
A competitor-centered company spends most of its time tracking
competitors’ moves and market shares and trying to find ways to
counter them.
• An advantage is that the company is a fighter.
• A disadvantage is that the company is reactive.
A customer-centered company spends most of its time focusing on
customer developments in designing strategies.
Provides a better position than competitor-centered company to
identify opportunities and build customer relationships
A market-centered company spends most of its time focusing on
both competitor and customer developments in designing
strategies.
Balancing Customer and Competitor Orientations
Exercise
1: C
2: D
3: A
4: C
5: B