MM Rijtjes

What marketing should be:
 Value for all stakeholders

 External orientation on customers
 Profit through customer satisfaction
Done by identifying needs and wants
Differentiating features:
 Important to consumers
 Imitability
 Ease of update
 Willingness to pay premium
STP:
 Segmentation
o Identify variables and segment market
o Develop profiles for segments
 Targeting
o Evaluate attractiveness
o Choose target segments
 Positioning
o Identify positioning concepts for each target segment
o Select, develop, signal and maintain chosen positioning concepts
Segmentation:
Criteria for segmentation:

 Distinctive: are there meaningful differences between segments?
 Operational: can these segments be acted upon?
 Substantial: are there sustainable profits in the segment?
Why segment?
 Allows for competition co-existence
 Caters to different needs (aggregation bias)
 Limited resources
Tools: Classifying segments:

 Level 1: personal characteristics
o Demographic and SES
o Psychographic and lifestyle
o Geographic
 Level 2: Benefits sought
o Criteria:
 Different people have different needs
 Preferences influenced by personal characteristics
 Ability to act upon preferences
o Benefit segmentation
o Occasion segmentation
 Level 3: Behaviour
o Heavy-user segmentation
o Segments of 1
Targeting
Criteria:
 Customer
o Distinctive
o Operational
o Substantial
 Company
o Ability to supply
o Synergies/conflicts ; cannibalisation
 Competitor
 Costs
Tools: Importance-Performance Model

 Customer focus (important benefits sought)
 Competitor focus (competitor ability)
 Company focus (company ability)
Segment attractiveness:
 Size
 Growth potential
 Seasonality
 Cost position
 Technology
 Inter segment conflict/synergies ; cannibalisation
Strategies:
 Mass marketing (undifferentiated)
 Single target market (concentrated)
 Multiple target market (differentiated)
o Vertical differentiation (price/quality)
o Horizontal differentiation (different product categories)
Positioning:
Criteria:
 Important and meaningful
 Credibly superior
 Pioneering
 Distinctive
 Sustainable
 Communicable
 Feasible
Tools:
Quantitative:
 perceptual maps: identify attributes (attributes rating method or similarity scaling)
Qualitative:
 ZMET
o Respondents collect pictures
o Respondents explain pictures
o Respondents make collage
o Researchers make summary collage
 Brand personification: link person to brand to create identification and desire-to-be
Strategies:
 Features and benefits
 Price/quality
 Product class
 Product user
 Competitor
 Symbol/imagery
Positioning statement: [target market] + [product] + [claim] + [evidence for claim]
SBU negative effects:

 Imprisoned resources
 Bounded innovation
 Underinvestment in core competency
Criteria Core Competency:

 Reusable for different products/markets/segments
 Contribute to customer perceived benefit
 Inimitable
 Reside downstream
 Distributed (hard to map)
Resource Based View (RBV)

Important dimensions for market value:
 Scarcity
 Demand
 Appropriability (transferability)
Market leaders wait because:

 View competition differently
 Confuse tactics and strategy
 Misunderstanding strategy
under-reaction
Why?
inertia, resistance to change, arrogance/overconfidence, time constraints
Competitive strategies:
 Low cost
 Differentiation
 Customized solutions
Marketing Mix
Product
Development Process:
1. Opportunity identification
2. Design
3. Testing
4. Introduction
5. Life cycle management
Designing tests:
 Empirical tests
o Detailed attribute description/conjoint analysis (Conjoint analysis =assess packages
of attributes)
o Experimental/innovative methods methods
 Conceptual test
o Assessing consumer responses
Product components:
 Core product
 Augmented product
Branding for buyers:

 Easier to search for product if the brand is known
 Quality association
 Status gained
 Feelings of connectedness
Branding for sellers:

 Recognition
 Loyalty
 Eases decision-making
 Differentiation
Brand value = brand awareness + brand image

Brand awareness = brand recognition + brand recall
Brand image = brand association +
Place / distribution channel
Distribution is making goods/services available:

 at the right TIME
 at the right LOCATION
 in the correct QUANTITY
 to the right CUSTOMER
 in a way that is BETTER than the competitor
reasons for distribution channels:
 inadequate finances for selling functions
 better rate of return on core business
 inability to provide by oneself
 contact efficiency
o direct = manufacturer  consumer
o indirect = manufacturer  intermediary  consumer
Channel design:
1. find out what customers want
2. benchmark
3. design options/explore alternatives
4. evaluate and compare
Channel members:
 own sales force
 agents
 distributors
 brokers
 retailers
Channel conflict:
 vertical: between channel layers (manufacturer vs distributor)
 horizontal: within channel layer (distributor vs distributor)
 multichannel: between different channels and layers
common conflicts:
 goal incompatibility
 unclear roles and rights
 differences in perception
 level of dependence
Price
Economic approach: Marketing approach:

 short run profits Long run profits (build brand)
 demand and supply based on positioning
 rational consumer recognises bounded rationality and heuristics
Communicating price:
 people
o bounded rationality
o limited time and attention
o unable to judge quality
 behaviour as result of these characteristics:
o heuristics
o subconscious influences
o highlighted or first info has most influence
 implications
o comparison effects (base price effect)
o fairness
o formatting effects
Psychological factors matter most when:
o time is limited
o product importance is low
o later in the day
o after making many decisions
o information is absent
Promotion
Create:
o awareness
o attractiveness
Tools:
o customers:
o coupons (price discrimination)
o trade:
o discounts
o risk protection
Problems with sales promotions/discounts:

o operational inefficiency
o high break-even
o high fixed expenses (uninformative accounting)
o limited increase in long term sales
o pre promo dip
o post promo dip
o competing brands
o negative effects for customer and brand equity
o customers become short term oriented
o resistance to regular price
o no money spent on long term differentiation
o abuse by customers
o harm ability to ask premium
o abuse by trade
o 60% of items sold to retailers are on deals
Customer purchase funnel: Customer decision journey:

1. Awareness 1. consider
2. Consideration 2. evaluate
3. Preference (3. Experience)
4. Purchase 4. Buy  possibly lead to loyalty loop
5. Loyalty 4.1 enjoy
6. Advocacy 4.2 advocate
4.3 bond
Marketing communication:
o objective
o target
o communication task/message
o desired effect
o time horizon
o Budget
o Percentage of sales (flawed: ads create sales)
o All you can afford
o Competitive parity (weighed comparison of competitor)
o Media strategy
o Broadcast
o Print
o Transit
o Internet
o Personal mobile devices (apps)
 Add convenience
 Offer unique value
 Provide social value
 Offer incentives
 entertain
o Alternatives
o Vehicle selection
o Creative strategy
o Communication content
 STP strategy
 Market research
 Selling proposition
o Communication execution
 Experts
 Similarity
 Bond/hostage
 Physically attractive
o Evaluation
o Exposures
o Reception
o Acceptance
o Retention
o Behaviour
Emotional appeals:
o Humor
o Needs to be done just right
o Fear
o Provide solution
o Music
o Needs to be memorable
o Sex
o Men  shortsighted
o Only effective when consistent with positioning strategy

MM Rijtjes

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MM Rijtjes

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What marketing should be:

 Value for all stakeholders

Criteria for segmentation:

Tools: Classifying segments:

Tools: Importance-Performance Model

Positioning statement: [target market] + [product] + [claim] + [evidence for claim]

SBU negative effects:

Criteria Core Competency:

Resource Based View (RBV)

Market leaders wait because:

Branding for buyers:

Branding for sellers:

Brand value = brand awareness + brand image

Place / distribution channel

Distribution is making goods/services available:

Economic approach: Marketing approach:

Problems with sales promotions/discounts:

Customer purchase funnel: Customer decision journey:

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