Note: This is prepared for reference purpose only.

Info was sourced from public

domain.

BCG Matrix
Every business needs strategic planning to rule in the industry. Therefore, The Boston Consulting
Group designed product portfolio matrix (BCG matrix) or growth-share matrix to help business with
long-term strategic planning.

BCG Matrix helps business to analyze growth opportunities by reviewing the market growth and
market share of products and further help in deciding where to invest, to discontinue or develop
products. BCG Model puts each of a firm’s businesses into one of four categories. The categories
were all given remarkable names- Cash Cows, Stars, Dogs, and Question Marks.

Question Marks (High Growth, Low Market Share)

These businesses represent a low market share in a high growth industry. As the name suggests, it is
difficult to say if these products will become the Stars or drop into the Dogs category. Generally,
these products are the startup or new products, which have a good commercial prospect.

Therefore, they require a huge amount of investment to gain or maintain market share and to become
a Star product. No doubt the market has growth opportunities, but these products have not
succeeded to take benefits of these market opportunities to such an extent that they can be
recognized as Stars.

Fanta, a Coca-Cola product, is one such example where the business units can be seen as a
question mark. As the brand has not been able to gain widespread popularity similar to Coke.
Therefore, the brand is losing its popularity. However, in some areas, it has been able to obtain a
generous sales volume.

Cash Cows (Low Growth, High Market Share)

Cash Cows category represents businesses having a large market share in a mature, slow-growing
industry. Businesses under this category usually follow stability strategies. Further, these firms required
little investment and generate cash that can be utilized for investment in other business units. However,
when Cash Cows lose their appeal and move towards decline, a retrenchment policy may be followed.

Coca-Cola is one such example of Cash Cows. This product is sold across 200 countries in a mature
beverage industry. The bottling partners in different regions help in making the finished beverages
available to the market. This is how the organization is earning a significant amount of revenues from its
finished products. In a mature industry, it is advisable for a company to keep the sales volume high as the
business unit is comparatively a good source to generate revenue .

Stars (High Growth, High Market Share)

Stars are leaders in business. These products have rapid growth and dominant market share. However,
they require heavy investment to maintain its position and its large market share. Furthermore, Stars lead
to a large amount of cash consumption and cash generation. Therefore, an attempt should make to hold
market share and to support further growth, otherwise, a star will become a cash cow.
The bottled water Kinley, a Coca-Cola product, is one such example of Stars. This example is suitable
here because the mineral water industry is still viewed as a gradually growing segment on an international
scale. The rising population would require more bottled water to fulfill the needs of the people. Due to the
rising need for bottled water, the growth opportunities for this business product in the industry has
increased. Even though Kinley faces competition from other competitors. Nevertheless, it is essential for
the management to understand that the bottled water brands will remain a source of significant sales in
future.

Dogs (Low Growth, Low Market Share)

Dogs represent business having a low market share in a low growth market. These firms have low market
share due to poor quality, ineffective market, high cost, etc. They neither generate cash nor require a
huge amount of cash. Due to low market share, these firms face cost disadvantages. Therefore, in such
situation, managers need to decide whether the investment currently being spent on keeping these
products alive, could be spent on making something that would be more profitable.

Diet coke, a Coca-Cola product, is on such example of Dogs. It was launched with the motive to offer
consumers relatively healthier beverage option in terms of calories consumed. However, the brand has
not been able to fetch consumers’ interest, which led to declined sales of this business unit. The soda
industry has been matured in recent years; therefore, the growth prospects for new products are limited
now.

Final Words
The BCG model helps in strategic planning, but like any other marketing model, it works in some
situation and in others. It helps companies to assess which products need to be promoted to generate
revenue and which one needs to be discontinued. In short, BCG Model gives a true picture of how
marketing efforts will affect business’s overall cash flow.
STP- Segmentation, Target, Positioning

Today, the STP marketing model (Segmentation, Targeting, Positioning) is a familiar

strategic approach in modern marketing. It is one of the most commonly applied
marketing models in practice, with marketing leaders crediting it for efficient,
streamlined communications practice.

STP marketing focuses on commercial effectiveness, selecting the most valuable

segments for a business and then developing a marketing mix and product positioning
strategy for each segment. As Market continues to develop, so do opportunities for
segmentation, targeting, and positioning. So, whether you're brand new to STP or a
seasoned veteran, it can be useful to take stock and double-check you're utilizing every
chance you get to reach, interact with, convert and engage customers .

The STP model is useful when creating marketing communications plans since it helps
marketers to prioritize propositions and then develop and deliver personalized and
relevant messages to engage with different audiences. The three-step funnel consists of
market segmentation, market targeting, and product positioning.

Within your research-based market segmentation phase, you are aiming to identify a
basis for the segmentation of your target customers and determine important
characteristics to differentiate each market segment.

When creating your targeting and positioning strategy, you must evaluate the potential
and commercial attractiveness of each segment, and then develop detailed product
positioning for each selected segment, including a tailored marketing mix based on your
knowledge of that segment.
Segmentation:

1. Demographics
Breakdown by any combination: age, gender, income, education, ethnicity, marital
status, education, household (or business), size, length of residence, type of residence,
or even profession/occupation.

An example is Firefox who sells 'coolest things', aimed at a younger male audience.
Though, Moshi Monsters, however, is targeted to parents with fun, safe and educational
space for younger audiences.

2. Psychographics
This refers to 'personality and emotions' based on behavior, linked to purchase choices,
including attitudes, lifestyle, hobbies, risk aversion, personality, and leadership traits.
magazines read and TV. While demographics explain 'who' your buyer is,
psychographics inform you 'why' your customer buys.
There are a few different ways you can gather data to help form psychographic profiles
for your typical customers.

1. Interviews: Talk to a few people that are broadly representative of your target
audience. In-depth interviews let you gather useful qualitative data to really
understand what makes your customers tick. The problem is they can be
expensive and difficult to conduct, and the small sample size means they may
not always be representative of the people you are trying to target.

2. Surveys: Surveys let you reach more people than interviews, but it can be
harder to get as insightful answers.

3. Customer data: You may have data on what your customers tend to

purchase from you, such as data coming from loyalty cards if an FMCG brand
or from online purchase history if you are an e-commerce business. You can
use this data to generate insights into what kind of products your customers
are interested in and what is likely to make them purchase. For example, does
discounting vastly increase their propensity to purchase? In which case they
might be quite spontaneous.

3. Lifestyle
This refers to Hobbies, recreational pursuits, entertainment, vacations, and other non-
work time pursuits.

Companies such as on and off-line magazine will target those with specific hobbies i.e.
FourFourTwo for football fans.

Some hobbies are large and well established, and thus relatively easy to target, such as
the football fan example. However, some businesses have found great success
targeting very small niches very effectively. A great example is the explosion in
'prepping' related businesses, which has gone from a little heard of fringe activity to a
billion-dollar industry in recent years. Apparently now 3.7 million American's think of
themselves as preppers or survivalists. A great way to start researching and targeting
these kind of niches is Reddit, where people create subReddits to share information
about a given interest or hobby.
4. Belief and values
Refers to Religious, political, nationalistic, and cultural beliefs and values.

The Islamic Bank of Britain offers Sharia-compliant banking which meets specific
religious requirements.

A strange but interesting example of religious demographics influencing marketing that

you might not have guessed is that Mormons are really into 'multi-level
marketing'. They're far more likely to be engaged in the practice than any other US
group. Going the extra mile with demographic research can lead to discovering new
marketing opportunities and thinking outside the box. For example, did you know the
average age of a Cadillac driver is 47.1 years old? But you don't tend to see them in the
car ads. An opportunity waiting to be seized!

5. Life stages
Life stages are the Chronological benchmarking of people’s lives at different stages.

An example is Saga holidays which are only available for people aged 50+. They claim
a large enough segment to focus on this life stage.

6. Geography
Drill down by Country, region, area, metropolitan or rural location, population density or
even climate.

An example is Neiman Marcus, the upmarket department store chain in the USA now
delivers to the UK.

7. Behavior
Refers to the nature of the purchase, brand loyalty, usage level, benefits sought,
distribution channels used, reaction to marketing factors.

In a B2B environment, the benefits sought are often about ‘how soon can it be
delivered?’ which includes the ‘last-minute’ segment -  the planning in advance
segment.

An example is Parcelmonkey.co.uk who offers same-day, next day and international

parcel deliveries.
8. Benefit
Benefit is the use and satisfaction gained by the consumer.

Smythson Stationery offer similar products to other stationery companies, but their
clients want the benefit of their signature packaging: tissue-lined Nile Blue boxes and
tied with navy ribbon!

If you're looking to optimize your marketing through the STP model or want access to a
library of marketing theory and case studies to help grow your business, now's the
perfect time to book your free 1-2-1 consultation call with the team. Our consultation
calls are designed to put you in the driver's seat and talk through your opportunities, so
you can make an informed decision about the best strategy for your business. Book
your call to find out more.

Market targeting
The list below refers to what’s needed to evaluate the potential and commercial
attractiveness of each segment.

 Criteria size: The market must be large enough to justify segmenting. If the

market is small, it may make it smaller.

 Difference: Measurable differences must exist between segments.

 Money: Anticipated profits must exceed the costs of additional marketing plans

and other changes.

 Accessible: Each segment must be accessible to your team and the segment

must be able to receive your marketing messages

 Focus on different benefits: Different segments must need different benefits.

What to watch for in segmentation, positioning, and targeting

marketing strategy

 Make sure the market is large enough to matter and customers can be easily
contacted.

 Apply market research to ensure your approach will add value to the existing
customer experience, above and beyond competitors.
  As Market continues to become more sophisticated, to support digital marketers'
wants and needs, consider the developments in relation to your product/service.

4Ps of marketing

The marketing mix and the 4Ps of marketing are often used as synonyms for
one another. In fact, they are not necessarily the same thing.
The 4Ps are:

 Product (or Service).

 Place.
 Price.
 Promotion.

Product/Service
 What does the customer want from the product /service? What needs
does it satisfy?
 What features does it have to meet these needs? Are there any
features you've missed out? Are you including costly features that the
customer won't actually use?
 How and where will the customer use it?
 What does it look like? How will customers experience it?
 What size(s), color(s), and so on, should it be?
 What is it to be called?
 How is it branded?
 How is it different from products by your competitors?
 What is the most it can cost to provide and still be sold sufficiently
profitably? (See also Price, below.)
Place
 Where do buyers look for your product or service?
 If they look in a store, what kind? A specialist boutique or in a
supermarket, or both? Online? Or direct, via a catalog?
 How can you access the right distribution channels?
 Do you need to use a sales force? Or attend trade fairs? Or make
online submissions? Or send samples to catalog companies?
 What do your competitors  do, and how can you learn from that
and/or differentiate?

Price
 What is the value of the product or service to the buyer?
 Are there established price points  for products or services in this
area?
 Is the customer price sensitive? Will a small decrease in price gain
you extra market share? Or will a small increase be indiscernible,
and so gain you extra profit margin?
 What discounts should be offered to trade customers, or to other
specific segments  of your market?
 How will your price compare with your competitors?

Promotion
 Where and when can you get your marketing messages across to
your target market?
 Will you reach your audience by advertising online, in the press, on
TV, on radio, or on billboards? By using direct marketing mailshots.
Through PR? On the internet?
  When is the best time to promote? Is there seasonality in the market?
Are there any wider environmental issues that suggest or dictate the
timing of your market launch or subsequent promotions?
 How do your competitors do their promotions? And how does that
influence your choice of promotional activity?
Business 2 Business Marketing

What is B2B Marketing?

As the name suggests, business-to-business marketing refers to the marketing of

products or services to other businesses and organizations. It holds several key
distinctions from B2C marketing, which is oriented toward consumers.

In broad sense, B2B marketing content tends to be more informational and

straightforward than B2C. This is because business purchase decisions, in
comparison to those of consumers, are based more on bottom-line revenue
impact. Return on investment (ROI) is rarely a consideration for the everyday
person — at least in a monetary sense — but it’s a primary focus for corporate
decision makers.

In the modern environment, B2B marketers often sell to buying committees with
various key stakeholders. This makes for a complex and sometimes challenging
landscape, but as data sources become more robust and accurate, the ability to
map out committees and reach buyers with relevant, personalized information is
greatly improving.

Who is B2B Marketing For?

Any company that sells to other companies. This can come in many forms:
software-as-a-service (SaaS) subscriptions, security solutions, tools,
accessories, office supplies, you name it. Many organizations fall under both the
B2B and B2C umbrellas.

B2B marketing campaigns are aimed at any individual(s) with control or influence
on purchasing decisions. This can encompass a wide variety of titles and
functions, from low-level researchers all the way up to the C-suite.

Creating a B2B Marketing Strategy

Competition for customers, and even for attention, is high. Building out a B2B
strategy that delivers results requires thoughtful planning, execution, and
management. Here’s a high-level look at the process B2B companies use to
stand out in a crowded marketplace:

Step One: Develop an Overarching Vision

Fail to plan, plan to fail – this truism remains eternally accurate. Before any
decisions are made, you’ll want to select specific and measurable business
objectives, then lay out the framework for how your B2B marketing strategy will
achieve them. Answering these seven B2B content strategy questions is a good
place to start.

Step Two: Define Your Market and Buyer Persona

This is an especially vital step for B2B organizations. Whereas B2C goods often
have a wider and more general audience, B2B products and services are usually
marketed to a distinct set of customers with particular challenges and needs. The
more narrowly you can define this audience, the better you’ll be able to speak to
them directly with relevant messaging.
We recommend creating a dossier for your ideal buyer persona — by
researching demographics, interviewing people in the industry, and analyzing
your best customers — to compile a set of attributes you can match against
prospects to qualify leads.

Step Three: Identify B2B Marketing Tactics and Channels

Once you’ve established solid intel around your target audience, you’ll need to
determine how and where you intend to reach them. The knowledge you’ve
attained through the previous step should help guide this one. You’ll want to
answer questions like these about your ideal customers and prospects:

 Where do they spend their time online?

 What questions are they asking search engines?

 Which social media networks do they prefer?

 How can you fill opportunity gaps that your competitors are leaving
open?

 What industry events do they attend?

Step Four: Create Assets and Run Campaigns

With a plan in place, it’s time to put it into motion. Follow best practices for each
channel you incorporate into your strategy. Critical ingredients in effective
campaigns - a message your team wants to spread that’s typically tied to a
desired action -  include a creative approach, useful insights, sophisticated
targeting, and strong calls to action.
Step Five: Measure and Improve

This is the ongoing process that keeps you moving in the right direction. In the
simplest terms, you want to figure out why your high performing content performs
and why your low performing content doesn’t so that you can make smarter
decisions concerning your money and time. The more vigilant you are about
consulting analytics and applying your learnings, the more likely you are to
surpass your goals and grow continually. Even with a well-researched
foundation, the creation of content and campaigns inherently requires a lot of
guesswork until you have substantive engagement and conversion data to rely
on.

Let your audience dictate your path. Consult metrics to pinpoint the channels,
topics, and media that resonate most, then double-down. Meanwhile, cut or alter
anything that isn’t performing.

Types of B2B Marketing

Here are a few of the most common B2B marketing types and channels:

Blogs: A mainstay for almost any content team. Regularly updated blogs provide
organic visibility and drive inbound traffic to your site. Your blog can house any
number of different content formats: written copy, infographics, videos, case
studies, and more.

Search: SEO best practices change as often as Google’s algorithm (a lot),

making this a tricky space to operate in, but any B2B marketing strategy needs to
account for it. Lately the focus has been shifting away from keywords and
metadata, and more toward searcher intent signals.

Social Media: Both organic and paid should be in the mix. Social networks allow
you to reach and engage prospects where they’re active. B2B buyers
increasingly use these channels to research potential vendors for purchase
decisions.

Whitepapers/eBooks: Standalone assets containing valuable information, these

downloadable documents can either be gated (meaning a user must provide
contact information or perform another action to access) or ungated. Often used
as a B2B lead generation tool.

Email: While its effectiveness is waning somewhat in the age of spam filters and
inbox shock, email won’t disappear anytime soon. To work around overloaded
inboxes, some sales and marketing professionals use LinkedIn InMail for lead
generation.

Videos: This content type can be applied in several of the previous categories

mentioned here (blogs, social media, emails) but is worth singling out because it
is growing so important to B2B strategies.

B2B Marketing Best Practices

How can you set yourself up for B2B marketing success? Here are a few proven
pillars that will help your team stand out and make an impact.

Be Human

The following might be the single greatest fallacy in B2B marketing, and it derives
from the very name: marketing to businesses, instead of people.

Yes, you’re trying to sell to a company, but you aren’t literally marketing to a
building or some intangible entity. You are trying to reach actual people within the
company, and like any other human being, they are driven by emotional and
cognitive motivations.
Don’t just learn about the companies and accounts you’re pursuing. Learn about
the people within them, and make sure your marketing speaks to them. Yes,
business decisions tend to be more rational and logical in nature, but that doesn’t
mean your content and tone should be robotic.

Focus on Targeting

This was mentioned earlier but bears repeating: Overly broad campaigns
inevitably lead to wasted time and spend, because you’re serving content and
ads to people who are either uninterested or unable to influence a buying
decision. Take the time up-front to define and segment your audience. Create
messaging that speaks directly to the specific people who you want to see it.

The best B2B marketers and sellers today are finding ways to offer
personalization at scale.

Thought Leadership Makes an Impact

Research continues to show that senior-level decision makers highly value this
type of content, using it to vet both vendors and solutions.

The SlideShare below, via Edelman, lays out statistics that substantiate the
importance of B2B thought leadership:  

Keep Context in Mind

As we’ve mentioned, personalization and relevance are essential. You want to

speak the language of your customers, but that’s not always enough. You also
want to deliver content and ads that fit thematically with where they’re viewed.

For instance, shorter videos with quick hooks perform better on social media
feeds, whereas a longer format is probably better suited for YouTube. It takes a
different copy angle to catch someone scrolling through LinkedIn than other
networks. Put yourself in the end user’s shoes and try to adopt their mindset.

B2B Marketing Solutions on LinkedIn

According to the B2B Content Marketing 2018: Benchmarks, Budgets, and

Trends report from CMI and MarketingProfs, LinkedIn is the most-used social
media platform for B2B marketers (at 97%), and also the most effective.

(Image: Content Marketing Institute)

This intuitively makes sense. LinkedIn is the world’s largest professional

networking site, with more than 550 million members, and its context is more
fitting than other networks for most B2B-leaning content.

At a base level, we highly advise that every B2B organization develop

an optimized Company Page, which you can do for free on LinkedIn, as this is
your brand’s hub on the platform and a frequent destination for buyer research.
Posting updates frequently will help you stay present, active, and visible.
For maximizing your business impact and B2B marketing ROI, there are a
number of LinkedIn marketing products and features you can take advantage of
to reach and engage the right members.

Native Ads

Also known as Sponsored Content, these ads appear within LinkedIn feeds,
alongside the user-generated content members come to peruse. Very useful for
thought leadership, brand awareness, and driving strategic traffic. Learn more
about LinkedIn Native Ads.

Lead Generation

This is a primary goal against which many B2B marketers are measured. Lead
Gen Forms are extremely effective for this purpose because they pre-populate
based on a member’s LinkedIn profile data, and don’t force the user to navigate
from the site, creating a seamless experience. Learn more about LinkedIn Lead
Gen Forms.

Retargeting

This relatively new capability within LinkedIn enables you to track website
visitors, using the LinkedIn Insight Tag, and then market to them while they’re on
the platform. It goes without saying that these individuals are more likely to be
interested in your company and product, improving your odds of
conversion. Learn more about LinkedIn Website Retargeting.

Sponsored InMail

As it grows harder to reach professional inboxes (and sometimes just to find

email addresses to begin with) Sponsored InMail is growing more advantageous.
You can use this tool to send tailored direct messages to members on LinkedIn,
even if you’re not yet connected. Learn more about LinkedIn Sponsored InMail.

Dynamic Ads

These ads are customized to the member viewing them, populating with profile
images and relevant details to stand out and capture attention. Learn more about
LinkedIn Dynamic Ads.

Breaking Down B2B Marketing

Summarizing the most important takeaways from our exploration of modern B2B
marketing, here are some key considerations to keep in mind:

 Although it’s business to business marketing, you’re still speaking to

human beings. Don’t fall into the trap of being overly formal or robotic.

 The foundational steps in creating a B2B marketing strategy are

developing your vision, defining your audience, identifying tactics and
channels, putting content and campaigns into motion, and then
continually measuring for optimization.

 Popular types of B2B marketing content include blogs, search,

whitepapers, social media, email, and video.

 Truly effective B2B marketing is conversational, targeted, and

contextually relevant. Thought leadership content is among the most
effective in this category.

 LinkedIn should be an integral component of any B2B social media

marketing

Why LinkedIn for B2B?

LinkedIn is by far most the important social network to reach out to
business buyers and connect with professionals in general and thus one
of the major platforms in B2B social media (and increasingly in content
marketing). The network allows you to build relationships, establish
thought leadership, generate leads, gain insights, conduct market
research, improve reputation and build online communities.

1. Create awareness and improve reputation.

LinkedIn is an ideal platform to increase your online presence. With more than
two professionals signing up on LinkedIn every second, businesses have the
opportunity to network with an increasing number of interesting contacts. Using
the different personal and group features in LinkedIn, companies and the people
representing them can all improve their visibility and credibility, both as
individuals and (thus) as a brand.

Don’t forget the use status update functionality, an underutilized feature,

although with the new design, the updates are more prominent visible on the
homepage.

2. Thought leadership and influencer marketing.

Several LinkedIn features allow you to position yourself as leaders in a
particular domain. From providing high-quality content, improving your personal
profile and participating in LinkedIn communities to answering questions: the
network is fertile ground for thought and practice leaders, aiming to become
trusted advisors. Leadership and reputation go hand in hand with influence. As
the main purpose of LinkedIn is networking, it also enables you to identify and
engage other influencers.

3. Selling and generating leads.

LinkedIn is probably the best network to generate leads. On top of traditional
techniques such as mentioning interesting content potential customers can
download or driving traffic to relevant sources, LinkedIn offers very personal
ways of identifying potential leads, engaging them and turning them into
customers. This is done by a good combination of listening, analyzing,
participating, sharing, networking and responding. Networking with potential
clients and marketing to them indirectly through LinkedIn will increase the
opportunity to make sales.
Customers and prospect are more likely to post questions and needs, 18% is
Group-related posts which gives the B2B marketers an opportunity to identify
new leads. Another 18% are content sharing and liking content, which gives you
insights on what they find interesting.

By giving answers to questions on LinkedIn, you can demonstrate know-how. If

your solution/answer, in the form of a response to a question, is what potential
customers are looking for, they will initiate a contact.

4. Social CRM.
LinkedIn is ideal in a social CRM context: it allows us to gain a better view on –
prospective – customers and other contacts. This can be done using simple
Social CRM applications but also by using ‘connecters’, for instance, for Outlook.
Although most Social CRM solutions offer integration with LinkedIn, you can also
set up a basic integration of your contacts as LinkedIn supports Google
Contacts. A benefit of a social CRM tool is that it allows you to see what your
contacts are doing on LinkedIn in real-time, offering valuable additional
information on their behavior and preferences. When targeting a contact,
LinkedIn itself allows you to see this information in its own environment.

5. Traffic building.
One of the strengths of LinkedIn that is not often mentioned is its power in link
building and traffic driving. Just as other social networks do, LinkedIn has a
social sharing button that enables you to share content in your status updates
(which are visible on the homepage) and in LinkedIn Groups (communities) you
are a member of. This works especially well for business-related content and
can lead to viral effects. Business content often gets shared more often via
LinkedIn than via Facebook.

6. Listening and gaining insights.

Last but certainly not least: LinkedIn is perfect to listen, ask questions and gain
insights. Which is the case for all social media marketing!
PORTER’S FIVE FORCES MODEL
Porter's Five Forces of Competitive Position Analysis were developed in 1979 by Michael E Porter of
Harvard Business School as a simple framework for assessing and evaluating the competitive
strength and position of a business organization.

This theory is based on the concept that there are five forces that determine the competitive
intensity and attractiveness of a market. Porter’s five forces help to identify where power lies in a
business situation. This is useful both in understanding the strength of an organization’s current
competitive position, and the strength of a position that an organization may look to move into.

Strategic analysts often use Porter’s five forces to understand whether new products or services are
potentially profitable. By understanding where power lies, the theory can also be used to identify
areas of strength, to improve weaknesses and to avoid mistakes.

The five forces are:

1. Supplier power. An assessment of how easy it is for suppliers to drive up prices. This is driven by
the: number of suppliers of each essential input; uniqueness of their product or service; relative size
and strength of the supplier; and cost of switching from one supplier to another.

2. Buyer power. An assessment of how easy it is for buyers to drive prices down. This is driven by
the: number of buyers in the market; importance of each individual buyer to the organisation; and
cost to the buyer of switching from one supplier to another. If a business has just a few powerful
buyers, they are often able to dictate terms.

3. Competitive rivalry. The main driver is the number and capability of competitors in the market.
Many competitors, offering undifferentiated products and services, will reduce market
attractiveness.

4. Threat of substitution. Where close substitute products exist in a market, it increases the

likelihood of customers switching to alternatives in response to price increases. This reduces both
the power of suppliers and the attractiveness of the market.

5. Threat of new entry. Profitable markets attract new entrants, which erodes profitability. Unless
incumbents have strong and durable barriers to entry, for example, patents, economies of scale,
capital requirements or government policies, then profitability will decline to a competitive rate.

Arguably, regulation, taxation and trade policies make government a sixth force for many industries.

What benefits does Porter’s Five Forces analysis provide?

Five forces analysis helps organisations to understand the factors affecting profitability in a specific
industry, and can help to inform decisions relating to: whether to enter a specific industry; whether to
increase capacity in a specific industry; and developing competitive strategies.

Marketing Research
Consumer behavior
“Consumer behavior is the actions and the decision processes of people who purchase
goods and services for personal consumption” – according to Engel, Blackwell, and
Mansard,
Consumer buying behavior refers to the study of customers and how they
behave while deciding to buy a product that satisfies their needs. It is a study
of the actions of the consumers that drive them to buy and use certain
products.
Study of consumer buying behavior is most important for marketers as they can
understand the expectation of the consumers. It helps to understand what
makes a consumer to buy a product. It is important to assess the kind of
products liked by consumers so that they can release it to the market.
Marketers can understand the likes and dislikes of consumers and design
base their marketing efforts based on the findings.
Consumer buying behavior studies about the various situations such as what
do consumers buy, why do they buy, when do they buy, how often do
consumers buy, for what reason do they buy, and much more.
For example, consumer buying behavior is studied by consumer researchers
and their aim is to know why women buy moisturizers (to reduce skin
problems), the most preferred brand (Olay, L’Oréal), how often do they apply
it (twice a day, thrice a day), where do the women prefer to buy it
(supermarkets, online) and how many times do they buy it (weekly, monthly).
It’s insightful to listen to some of the first cut opinions on Vocalley from
consumers on how they think about various brands and their expectations,
when it comes to electronic products and gadgets. 

Importance of Consumer Behavior

Understanding consumer behavior is essential for a company to find success
for its current products as well as new product launches. Every consumer has
a different thought process and attitude towards buying a particular product. If
a company fails to understand the reaction of a consumer towards a product,
there are high chances of product failure.
Due to the changing fashion, technology, trends, living style, disposable
income, and similar other factors, consumer behavior also changes. A
marketer has to understand the factors that are changing so that the
marketing efforts can be aligned accordingly.
What is the importance of consumer buying behavior? This article outlines several of
them.

them.
1. Consumer Differentiation:
In marketing, consumer differentiation is a way to distinguish a consumer from
several other consumers. This helps to make a target group of consumers
with the same or similar behavior.
Though you have a targeted customer demographic in your business, you can still have
variations between individual customers. Each group of consumers are different
and their needs and wants differ from other groups.  When a marketer is
knowledgeable about differentiation of each group of consumers, he can
design separate marketing programes.
Consumer differentiation will help to tailor your strategies to the needs of varying
customer groups. When consumer differentiation is done, you can expand the width and
breadth of your services. You will be able to effectively serve a wider group of people.
2. Retention of Consumers:
“Consumer behavior is of most importance to marketers in business studies
as the main aim is to create and retain customers” says Professor Theodore
Levitt (Kumar, 2004). 
Consumer behavior is not just important to attract new customers, but it is
very important to retain existing customers as well. When a customer is happy
about a particular product, he/she will repeat the purchase. Therefore, marketing
the product should be done in such a way that it will convince customers to buy the
product again and again.
Thus, it is very evident that creating customer and retaining them is very
important. This can be done only by understanding and paying attention
towards the consumer’s buying behavior.

3. Design Relevant Marketing Programe:

Understanding consumer behavior allows you to create effective marketing
campaigns. Each campaign can speak specifically to the separate group of
consumers based on their behavior.
For example, while targeting kids market, you may have to look out for venues such as
TV ads, school programes and blogs targeting young mothers. Y ou will need to take
different messaging approaches for different consumer groups. 
A study of consumer behavior enables the marketers to understand what motives
consumers to make purchases. Furthermore, the same  motive can be utilized in
advertising media to stir the desire to make a purchase. Moreover, marketers should
take decisions regarding the brand logo, coupons, packing and gifts on the basis of
consumer behavior. 

4. Predicting Market Trend:

Consumer behavior analysis will be the first to indicate a shift in market trend.
For example,  the recent trend of consumers is towards environment
friendliness and healthy food.  This changing market trend was observed by
many brands including McDonalds.  Based on the consumer
behavior, McDonald’s brought healthy food options. 
By conducting consumer behavior study, a company saves a lot of resources
that might otherwise be allocated to produce a product that will not be sold in
the market. For example, in summer a brand will not waste its resources for
producing a product that will not sell in summer. Based on consumer behavior
the company decides on production strategy which will save on warehouse
costs and marketing costs.

5. Competition:
One of the most important reasons to study consumer behavior is to find out
answers to some of the questions:
  Is the customer buying from your competitor?
 Why is a consumer buying from your competitor?
 What features attracts a consumer to your competitor products?
 What gaps are your consumers identifying in your products when
compared to your competitors? 
Studying consumer behavior facilitates in understanding and facing competition. Based
on consumers’ expectations, your brand can offer competitive advantages. 

6. Innovate New Products:

We all know some of the big names such as New Coke, Crystal Pepsi, Colgate Kitchen
Entrées, Earring Magic Ken Doll, and Wheaties Dunk-a-Balls Cereal. Can you see the
similarities in these products? Yes, they all failed!!
The sad truth is that most new products and new ideas end up in failure. There
is an estimate of new product failures – they range from 33% to 90% based on the
kind of industry.
Companies consistently strive hard to improve the success rate of their new products or
new ideas. One of the most important ways is to conduct sound and thoughtful
consumer behavior study. 

With the help of consumer behavior analysis, Nike realized that most of its

target audience is not professional athletes, but many of them were striving to
be more like them. So at the 2012 Olympics in London, Nike introduced a
campaign to encourage athletics called  ‘Find Your Greatness’. It aimed to
promote the aspirations of being an athlete, not just with high-performing
athletes, but wanted to include all people regardless of their physical
capability. The campaign was well planned and was data-driven, of course,
carefully analyzed before taking any action. This message inspired many
consumers and had enormous appeal for target consumers. 
 
7. Stay Relevant in the Market
When the world is changing as rapidly as it is happening today, the biggest challenge
we all face is staying relevant to our target market. And do you know what is the main
reason behind the rapid changes? It is the ever-changing behavior of our customers.
Today’s consumers have greater choices and opportunities, which means they can
easily switch to a company that offers better products and services.  
“The pre-eminent skill required to shift ahead in the twenty-first century is the
ability to see and seize.” -Adamson and Steckel, authors of Shift Ahead.
Losing relevance will only cost the company its market share. Haven’t we
seen Sony Walkman failing to stay relevant in the digital music era, and the
taxi industry doom with no preparedness to battle the UBER uprise!!
8. Improve Customer Service
Consumers require different levels of customer service, and understanding the
differences within your customer base will help you provide the most appropriate service
for individual needs.
For example, if you own an electronics store, high school or college students who buy a
new laptop are more likely to understand the features they’re looking for than a person
buying his first computer. With the first demographic, your service goal will be to provide
information about the latest trends in technology, while with the second demographic,
you’ll need to spend more time educating the customer, finding out what his specific
needs are, and even teaching him how to use the features of his new electronic device.
Conclusion
Leading companies such as The Coca-Cola Company and Barclays, have constantly
improved its existing products and focused on developing new products. The Coca-Cola
Company aligns its corporate strategy of ‘refreshing everyone who is touched by our
business’,  by conducting market research to identify consumer behavior. Similarly,
Barclays conducted consumer behavior study to better understand the needs
of this target market.
Consumer behavior analysis has emerged as an important tool to understand your
customers. By looking into consumer psychology and the forces behind customer
buying behavior, companies can craft new products, marketing campaigns and 
increase profitability.  
Companies should talk to consumers, watch out for frustrations, and most
importantly, identify their needs and expectations!