Understanding Customer Segments & Product Strategies: Consumer Behavior & Marketing, Slide di Marketing

Scarica Understanding Customer Segments & Product Strategies: Consumer Behavior & Marketing e più Slide in PDF di Marketing solo su Docsity! Lezione 4 What is the consumer behaviour Consumer buyer behaviour: the buying behaviour of final consumers, individuals and households, who buy good and services for personal consumption. Consumer market: all of the personal consumption of final consumers Costumers • Company can target any or all five types of customer markets • Type – Consumer markets – Business markets – Reseller markets – International markets – Government markets Model of Consumer Behaviour: Response Model Consumer Characteristics Characteristics Affecting Consumer Behaviour Cultural Factor • Culture is the learned values, perceptions, wants, and behavior from family and other important institutions. • Subculture are groups of people within a culture with shared value systems based on common life experiences and situations. Like Nationality, Religion, Region and Race • Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors • Measured by a combination of occupation, income, education, wealth, and other variables • Mobility influenced by culture in country 1 Social Factor I. Group ands Social Networks: • Membership Groups: groups with direct influence and to which a person belongs • Referrence Groups: groups that form a comparison or reference in forming attitudes or behavior • Aspirational Groups: groups an individual wishes to belong to • Word of mouth (WOM) influence and buzz marketing: - opinion leaders are people within a reference group who exert social influence on others - KOL: key opinion leaders - marketers identify them to use as brand ambassadors • Online Social Networks are online communities where people socialize or exchange information and opinions • Include blogs, social networking sites (facebook), virtual worlds (second life) II. Family: • The most important consumer-buying organization in society • Roles of husband, wife, children on purchase different products III. Social factors • Social roles and status are the groups, family, clubs, and organizations that a person belongs to that can define role and social status. Personal Factor • Age and life-cycle stage: like bachelorhood, honeymooners, parenthood, dissolution • Occupation affects the goods and services bought by consumer • Economic situation includes trend in: Trends in spendings, Personal income, Savings, Interest rates • Lifestyle is a person’s pattern of living as expressed in his on her psychographics. Measures a consumer’s AIOs (activities, interests, opinions) to capture information about a person’s pattern of acting and interacting in the environment • Personality: the unique psychological characteristics that lead to consistent and lasting responses to the consumer’s environment • Consumers choose brands that match their own personality Psychological Factor I. Motivation: a motive is a need that is sufficiently pressing to direct the person to seek satisfaction of the need. A need becomes a motive when is aroused to a sufficient level of intensity to drive us to act. Sigmund Freud assumed that people are largely unconscious about the real psychological forces shaping their behavior. II. Perception: is the process by which people select, organize, and interpret information to form a meaningful picture of the world. • Selective attention is the tendency for people to screen out most of the information to which they are exposed. • Selective distortion is the tendency for people to interpret information in a way that will support what they already believe. • Selective retention is the tendency to remember good points made about a brand they favor and forget good points about competing brands. 2 3. Product specification describes the technical criteria – Product value analysis is an approach to cost reduction where components are studied to determine if they can be redesigned, standardized, or made with less costly methods of production. 4. Supplier search involves compiling a list of qualified suppliers 5. Proposal solicitation is the process of requesting proposals from qualified suppliers 6. Supplier selection is the process when the buying center creates a list of desired supplier attributes and negotiates with preferred suppliers for favorable terms and conditions. 7. Order-routine specifications is the final order with the chosen supplier and lists all of the specifications and terms of the purchase. 8. Performance review involves a critique of supplier performance to the purchase terms. 5 Lezione 5 Two essential questions in marketing Market Segmentation STP Strategy Why? Increasingly fragmented market • The customer is really a “king”. Consumers are becoming more sophisticated and choosy – They have better access to information – They have more choice – They are overloaded with marketing messages – They are more cynical • One offer never appeals to everyone. In the developed economies at least the idea of mass marketing is essentially dead – One product for a large market does not work anymore – Offers to everyone will be beaten by offers to targeted groups – This is especially true in our “always on” world • Marketing is becoming more complex and more exciting What is Segmentation? The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behavior who might require separate products of marketing programs. Within each group: – people with similar characteristics (e.g., comparable purchase behavior) – Similar response to marketing activities. Consumer market: key segmenting variables 6 Geography Per esempio nell’Asia va di moda fairness and whitening mentre in Occidente il Bronzing Inoltre cambia molto anche in base all’età e tipo di persone, tipo donne incinta. Psychographics You and your car’s personality: you buy things in line with your self-concept (who am I?). Tipo una BMW viene vista come una macchina di lusso, adori guidarla da sola. Mentre una Mercedes è una macchina vista e percepita di alto lusso, hai la percezione che venga guidata da un driver privato. Behavioral • Group consumers via needs/wants • What do you want from your cell phone? Business Markets • Many same variables as consumer markets • Additional variables – Operating characteristics – Purchasing approaches – Situational factors – Personal factors International Markets Requirements for Effective Segmentation Measurable. The size, purchasing power, and profiles of the segments can be measured. Accessible. The market segments can be effectively reached and served. Substantial. The market segments are large or profitable enough to serve. Differentiable. The segments are conceptually distinguishable. Actionable. Effective programs can be designed for attracting and serving the segments. Approach to Segmentation • No single correct approach • One market can be segmented in different ways • Identify bases for segmenting the market • Using multiple segmentation basis • Develop profiles of resulting segmentation Benefits to Segmentation Segmentation enables marketers to: ✓ Select target market. ✓ Identify and satisfy specific benefits sought by particular groups. ✓ Divide the market into segments by separating marketing programs. ✓ Action the market segmentation plan. 7 Choosing a Deifferentiation and Positioning Strategy Process • Identifying a set of possible competitive advantages to build a position. Differentiation can be based on products, channels, people, image, services. • Choosing the right competitive advantages. How many differences to promote? Unique selling proposition or several benefits. Also not all brand differences are meaningful. A competitive advantage should be: important, distinctive, superior, affordable etc.. • Selecting an overall positioning strategy. Value proposition is the full mix of benefits upon which a brand is differentiated and positioned. • Developing a positioning statement. Positioning statement summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference). Pitfalls of Positioning 1. Companies sometimes try to build brand awareness before establishing a clear brand position. 2. Companies often promote attributes that consumers don't care about. 3. Companies sometimes invest too heavily in points of difference that can easily be copied. 4. Certain companies become so intent on responding to competition that they walk away from their established positions. 5. Companies may think they can reposition a brand, but this is nearly always difficult and sometimes impossible. Summary • Need to ensure benefits of segmentation outweigh the costs • Segmentation can occur at various levels • Various approaches to segmentation can be adopted • One to one marketing becoming more important, but traditional segmentation approaches will continue to be relevant • Once segmentation is established, targeting and positioning strategies are required • Identify and communicate what makes the organization different • Positioning strategies should be supported by careful development of marketing mix elements • Re-positioning may be necessary due to changing needs or poor sales performance. 10 Lezione 6 Understanding product strategy What is a Product? Product is anything that can be offered in a market for attention, acquisition, use, or consumption that might satisfy a need or want. – Definition from AMA: a bundle of attributes (features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible and intangible forms. Thus a product may be an idea, a physical entity (a good), or a service, or any combination of the three. Service is a product that consists of activities, benefits or satisfaction that is essentially intangible and does not result in the ownership of anything. Experience represent what buying the product or service will do for the customer. The Service/Product Continuum Levels of Products and Services Product Classification What is a Product? Consumer products Consumer products are products and services for personal consumption Classified by how consumers buy them -Convenience products: customer usually buys frequently, immediately, and with minimum comparison and buying effort (e.g. newspaper, candy, fast food, etc.) - Shopping products: customer compares carefully on suitability, quality, price, style (e.g. furniture, cars, etc.) - Specialty products: unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort (e.g. medical services, designer clothes etc.) − Unsought products: consumer does not know about or knows about but does not normally think of buying (e.g. life insurance, funeral services for pets, etc.) 11 What is a product? Industrial Products Products purchased for further processing or for use in conducting a business. • Classified by the purpose for which the product is purchased − Materials and parts: include raw materials and manufactured materials and parts usually sold directly to industrial users − Capital items: are industrial products that aid in the buyer’s production or operations − Supplies and services: include operating supplies, repair and maintenance items, and business services. Broadened concept of product Organizations, Persons, Places, and Ideas • Organization marketing (e.g., UN) • Person marketing (e.g., “Black Life Matters”) • Place marketing (e.g., China) • Social (idea) marketing (e.g., Chinese Dream) • Events (e.g., contest, show, ceremony) Product & Services Decisions Three levels: - Individual product decisions: An individual product is any brand or variant of a brand in a product line. - Product line decisions: A product line is a group of individual products that are related in functions, customer-purchased needs, or distribution channels. Tipo diversi marchi di shampoo. - Product mix decisions: A product mix consists of all the product lines and items that a particular seller offers for sale. A product mix is a combination of product lines, which are combinations of individual products. I. Making Individual Product/Service Decisions 1. Product Attributes Developing a product or service involves defining the benefits that product or services will offer. These benefits are communicated and delivered by product attributes such as: • Quality. Quality is the characteristics of a product or service that bear its ability to satisfy stated or implied customer needs. • Features. competitive tool for differentiating a product from competitors’ products. • Design. More than skin deep; contributes to a product’s usefulness as well as to its looks. • Style. Describes the appearance of the product. 2. Branding Brand is the name, term, sign, or design—or a combination of these—that identifies the maker or seller of a product or service. 3. Packaging Packaging involves designing and producing the container or wrapper for a product. 12 Managing New-Product Development A Successful new-product development should be: - customer-centered - Team-based - Systematic Product Life-Cycle Strategies Shortening lengths of product life cycles and their different shapes increase the complexity of marketing decisions. Firms respond to these trends by developing marketing strategies to take advantage of each life cycle stage. III. Service Marketing Types of Service Industries • Business services • Government (e.g., courts, employment services, hospitals, schools, military services, police and fire departments) • Private not-for-profit organizations (e.g., museums, charities, churches, colleges, foundations, and hospitals). Characteristics of Service Important Marketing Strategies for Service Firms In addition to traditional marketing strategies, service firms often require additional strategies • Service-profit chain • Internal marketing • Interactive marketing Service-Profit Chain Service-profit chain links service firm profits with employee and customer satisfaction. 15 Three Types of Services Marketing Internal marketing and interactive marketing The service firm must orient and motivate its customer-contact employees and supporting service people to work as a team to provide customer satisfaction. Service quality depends heavily on the quality of the buyer-seller interaction during the service encounter. Three marketing tasks for service companies Service differentiation service quality service productivity Managing Service Differentiation Create a competitive advantage from three aspects: • Offer can include distinctive features. • Delivery can include more able and reliable customer contact people, environment, or process. • Image can include symbols and branding. Managing Service Quality • Service quality: varies depending on interactions between employees and customers (Interactive Marketing). • To provide a competitive advantage by delivering consistently higher quality than its competitors. • Service failure: a good service recovery can turn angry customers into loyal ones. Managing Service Productivity - Refers to the cost side of marketing strategies for service firms, such as employee recruiting, hiring, and training. - service quantity and quality strategies (balance). - Harness the power of technology. Matching Demand and Supply Branding Strategy Product Mix Characteristics Firms marketing multiple products and services must devise strategies for individual products, specific product lines, and the overall product mix. 16 Branding Strategy: Building Strong Brands Brand vs. Product (definition from AMA American Marketing Association) – Brand: A brand is a name, term, design, symbol or any other feature that identifies one seller’s good or service as distinct from those of other sellers. – Product: A product is defined as a bundle of attributes (features, functions, benefits, and uses) capable of exchange or use; usually a mix of tangible and intangible forms. Role of brand Major Brand Strategy Decisions Brand Positioning Marketers can position brands at any of three levels. – Attributes – Benefits – Beliefs and values Two important concepts: Brand Equity and Brand Value Brand equity is the differential effect that knowing the brand name has on customer response to the product or its marketing. Brand value is the total financial value of a brand (e.g., in stock market). Brand Name Selection 1. Suggests benefits and qualities 2. Easy to pronounce, recognize, and remember 3. Distinctive 4. Extendable 5. Translatable for the global economy 6. Capable of registration and legal protection Brand Sponsorship • Co-brand • Manufacturer’s brand (or national brand) • Store brand (or private brand) • Licensed brand Brand Development Strategies 17 Additional considerations on pricing strategy 1. Two major pricing strategies for New product I牐Market-skimming pricing II牐 Market-penetration pricing I牐Market-skimming pricing is a strategy setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price, the company makes fewer but more profitable sales. • Product quality and image must support the higher price, and enough buyers must want the product at the price • Costs of producing the product in smaller volume can’t be so high that they cancel the advantage of higher prices • Competitors should not be able to enter the market easily II牐Market-penetration pricing sets a low price for a new product in order to attract a large number of buyers and a large market share • Price sensitive market • Production and distribution costs must decrease as sales volume increase • Low prices must keep competition out of the market 2. Product Mix Pricing Strategy È fatto da diversi elementi che sono i seguenti I. Product line pricing takes into account differences between products in the line, customer evaluation of their features and competitor’s prices. II. Optional-product pricing takes into account optional or accessory products along with the main product. III. Captive-product pricing involves products that must be used along with the main product. IV. By-product pricing: produced as a result of the main product; disposing them is costly; could be valuable—turning trash into cash. V. Product bundle pricing combines several products at a reduced price (tipo menù Mc) 3. Price Adjustment Strategies I. Discount and allowance pricing reduces prices to reward customer responses such as paying early, volume purchases, off- season buying (discounts & allowances). II. Segmented pricing is used when a company sells a product at two or more prices even though the difference is not based on cost (e.g. customer segment, location segment, product form segment, time based pricing). III. Psychological pricing occurs when sellers consider the psychology of prices and not simply the economics. High price = high quality? Maybe, especially when lack of info. Reference prices sono I prezzi che I buyer tengono in mente and refer to when looking at a given product. (Si ricordano dei prezzi passati ad esempio) IV. Promotional pricing is when prices are temporarily priced below list price or even cost to create buying excitement and urgency. Es. Discount, special event pricing, limited time offer, longer warrantees, free maintenance. The Risk of promotional Pricing è: hurt brand if used too frequently, easily copied by competitotrs, creates price wars. V. Geographical pricing is used for customers located in different parts of the country or the world. VI. Dynamic and internet pricing is when prices are adjusted continually to meet the characteristics and needs of the individual customer and situations (e.g., airline, hotel, sports). Dynamic pricing online allows sellers to: monitor customer behaviour, aid 20 customers with price comparisons, negotiate prices in online auctions and exchanges. Potential problem: fairness. VII. ) International pricing is when prices are set in a specific country based on country- specific factors: economic conditions, cost, competitive conditions, laws and regulations, infrastructure, company marketing objective. 4. Impacts of Price Changes Initiating Pricing Changes Price cuts occur due to: Excess capacity; Falling demand in the face of strong price competition or a weakened economy. Price increase from: Cost inflation ( es raw materials); Increased demand; Lack of supply Buyer Reactions to Pricing Changes Competitor reactions to Pricing Changes Questions to ask: • Why do they change the price? • Is the price cut permanent or temporary? • What are the impacts on market share and profits? Responding to “price changes by competitor” 5. Public Policy and Pricing Laws: fair play in pricing • price collusion: competitors reach an agreement about the price • predatory pricing: extremely low price to drive competitors out of the market (kindle?) • However…hard to quantify… Societal pricing concerns • Price discrimination: sellers offer the same price terms to customers at a given level of trade. • Deceptive pricing: sellers state prices or price savings that mislead consumers or are not actually available to consumers. 21 Lezione 8 The Place “P” Getting the right product to the right customer at the right time and the right place. Supply Chain Upstream partners: are firms that supply raw materials, components, parts, information, finances, and expertise needed to create a product or service. Downstream partners: include the marketing channels or distribution channels that look toward the customer, including retailers and wholesalers. Marketing Channel: a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user. Supply Chains vs Demand Chain Supply chain “make and sell” view includes the firm’s raw materials, productive inputs, and factory capacity. Demand chain “sense and respond” view suggests that planning starts with the needs of the target customer. Value Delivery Network Value delivery network is composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system. Basic facts about Intermediaries Intermediary organizations have survived because they performed marketing functions faster and cheaper than others. Intermediaries add costs to products, but these costs are usually offset by the values they create. How Channel Members Add Value With intermediaries: reducing transaction cost trough intermediaries. Stanno tra I manufacturer e I customer. Disintermediation is the cutting out of marketing channel intermediaries by producers or the displacement of traditional resellers by new intermediaries. Functions of Marketing Channels Help to complete transaction Help to fulfill to complete transaction Types of Marketing Channels 22 Channel Design and Management Decision Channel Management Decision Retailing Strategies What is Retailing? Retailing includes all the activities in selling products or services directly to final consumers for their personal, non-business use Three Types of Retail Objectives: 1. Target market: Customer Needs 2. Retail format: Method for Satisfying Needs 3. Bases for building sustainable competitive advantage: Defending Position Against Competitors The psychology of Retailing Product orientation Classification of Retail Stores Type of Retailers - Amount of Service Esiste il Self-service, limited service, full service. Serve customers who are willing to perform their own locate-compare-select process to save money. Assist customers in every phase of the shopping process, resulting in higher prices. Type of Retailers - Product Line Specialty Store: Narrow product line with deep assortment. Department Store: offers a wide variety of merchandise selections (furniture, cosmetics, clothing) and many customer service. 25 Convenience store: offers staple convenience goods, easily accessible locations, long store hours, and rapid checkouts. Supermarket: large, low cost, low margin, high volume, self service store, with grocery and household products. Superstore: larger than supermarket, offering food, non-food items and service. Type of Retailers - Relative Prices Discount store: A retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume. Off-price retailer: buys at less-than-regular wholesale prices and sells at less than retail. - Factory outlet: Manufacturer-owned store selling seconds, production overruns, or discontinued lines. - Warehouse club: Large, warehouse-style store selling food and general merchandise at discount prices to membership cardholders. - Independent Off-price retailers: Independently owned and operated or a division of a larger retail cooperation. Type of Retailers - Organizational Approach Retailer Marketing Decisions Segmentation targeting, differentiation, and positioning involves the definition and profile of the market so the retail marketing decisions can be made. Product Assortment and Service decisions include: product assortment, services mix and store atmosphere. Price decision. Price policy must fit the target market and positioning, product and service assortment, and competition. • High markup on lower volume • Low markup on higher volume Place Decision. Central business districts (CBD) are located in cities and include department and specialty stores, banks, and movie theaters Shopping center is a group of retail businesses planned, developed, owned, and managed as a unit. Tipo: Regional shopping centers; Community shopping centers; Neighborhood shopping centers; Power center; Lifestyle centers. Promotion Decision. 26 Retailing Trends and Developments • A slowed economy and tighter consumer spending (America) • New retail forms, shortening retail life cycle • The rise of mega-retailers • Growth of Direct, Online, Mobile and Social Media Retailing • Retail technology • Green retailing • Global expansion of major retailers Wholesaling Strategies Wholesaling includes all activities involved in selling goods and services to those buying for resale or business use. Functions of wholesaling - Selling and promoting involves the wholesaler’s sales force helping the manufacturer reach many smaller customers at lower cost. - Buying and assortment building involves the selection of items and building of assortments needed by their customers, saving the customers’ work. - Bulk breaking involves the wholesaler buying in larger quantity and breaking into smaller lots for its customers. - Warehousing involves the wholesaler holding inventory, reducing its customers’ inventory cost and risk. - Transportation involves the wholesaler providing quick delivery due to its proximity to the buyer. - Financing involves the wholesaler providing credit and financing suppliers by ordering earlier and paying on time. - Risk bearing involves the wholesaler absorbing risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence. - Market information involves the wholesaler providing information to suppliers and customers about competitors, new products, and price developments. - Management services and advice involves wholesalers helping retailers train their sales clerks, improve store layouts, and set up accounting and inventory control systems. Types of wholesalers I. Merchant wholesalers is the largest group of wholesalers and include: • Full-service wholesalers who provide a full set of services • Limited service wholesalers who provide few services and specialized functions II. Brokers and agents do not take title, perform a few functions, and specialize by product line or customer type • Brokers bring buyers and sellers together and assist in negotiations. • Agents represent buyers or sellers on a more permanent basis III. Manufacturers’ sales branches and offices is a form of wholesaling operations conducted by sellers or buyers themselves rather than through independent wholesalers. 27 Word-of-mouth(WOM) influence: the impact of the personal words and recommendations of trusted friends, family, associates, an other consumers on buying behavior. Opinion leaders are people within a reference group who, because of their special skills, knowledge, personality, or other characteristics, exerts social influence on others Buzz marketing involves cultivating opinion leaders and getting them to spread information about a product or service to others in their communities. Is media that carry messages without personal contact or feedback, including major media, atmospheres, and events that affect the buyer directly. Major media include print, broadcast, display, and online media Atmospheres are designed environments that create or reinforce the buyer’s leanings toward buying a product Events are staged occurrences that communicate messages to target audiences • Press conferences • Grand openings • Exhibits • Public tours Events and Experiences Relevant – A well-chosen event or experience can make consumers invest in the outcome. Engaging – Most actively engage consumers Implicit – Indirect soft sell 5. Selecting the Message Source The message’s impact on the target audience is affected by how the audience views the communicator. Si ingaggiano celebrità come atleti, esperti, entertainers. 6. Collecting Feedback Involves the communicator understanding the effect on the target audience by measuring behavior resulting from the content. Setting the Total Promotion Budget Affordable budget method sets the budget at an affordable level. It starts with total revenues, deduct operation expenses and capital cost, and then devote some remaining fund for promotion. • It ignores the effects of promotion on sales • Uncertain annual promotion budget, making long-term planning difficult • Often result underspending Percentage of sales method sets the budget at a certain percentage of current or forecasted sales or unit sales price. • Easy to use and helps management think about the relationship between promotion, selling price, and profit per unit •Wrongly views sales as the cause rather than the result of promotion. 30 Competitive-parity method sets the budget to match competitor outlays, which may represent industry standards. • Companies differ significantly in their promotion needs •No evidence of preventing promotion wars Objective-and-task method sets the budget based on what the firm wants to accomplish with promotion and includes: 1. Defining promotion objectives 2. Determining tasks to achieve the objectives 3. Estimating costs of performing these tasks • It forces management to link promotion spending and the expected results •BUT it is hard to figure out which tasks can achieve the stated objectives. Advertising Advertising is any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor. Come internet, Print, Broadcast, Outdoor. Major advertising decisions I. Setting Advertising Objectives An advertising objective is a specific communication task to be accomplished with a specific target audience during a specific time. ! Informative advertising is used when introducing a new product category; the objective is to build primary demand. ! Persuasive advertising is important with increased competition to build selective demand. ! Reminder advertising is important with mature products to help maintain customer relationships and keep customers thinking about the product. II. Setting the Advertising Budget Four main methods to set the promotion budget: affordable method, percentage-of- sales method, competitive-parity method, objective-and-task method. Other factors to consider when setting the budget Product life-cycle stage: New products require larger budgets; Mature brands require lower budgets. Market share/Competition: • Building or taking market share requires larger budgets • Markets with heavy competition or high advertising clutter require larger budgets • Undifferentiated brands require larger budgets III. Developing Advertising Strategy Advertising strategy is the strategy by which the company accomplishes its advertising objectives and consists of: 31 • Message decision: creating advertising messages • Media decision: selecting advertising media Advertisements need to break through the clutter: • Gain attention • Communicate well Advertisements need to be better planned, more imaginative, more entertaining, and more rewarding to consumers. Message strategy is the general message that will be communicated to consumers • Identifies consumer benefits Creative concept is the idea that will bring the message strategy to life and guide specific appeals to be used in an advertising campaign Characteristics of the appeals include: Meaningful, Believable, Distinctive. Message execution is when the advertiser turns the big idea into an actual ad execution that will capture the target market’s attention and interest. • The creative team must find the best approach, style, tone, words, and format for executing the message. Consumer generated messages possono usare da YouTube videos, brand website contests, positives (low expense, new creative ideas, fresh perspective on brand). Non-personal communication Major steps include: I. Reach is a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time. Frequency is a measure of how many times the average person in the target market is exposed to the message. Impact is the qualitative value of a message exposure through a given medium. II. Choose major media type like television, newspapers, the internet, magazines, radio. III. Select specific media vehicles within each media type. • Media planners must compute the cost per thousand persons reached by a vehicle, as well as the costs of producing ads for different media. • The media planner must balance media costs against several media effectiveness factors: audience quality and engagement, editorial quality. IV. Media timing. The planner must consider seasonality, pattern of the advertising (se continuato o irregolare). IV. Evaluating the Effectiveness and Return on Advertising Investment • Communication effects indicate whether the ad and media are communicating the ad message well and should be tested before or after the ad runs. • Sales and profit effects compare past sales and profits with past expenditures or through experiments. • Return on advertising investment: The net return on advertising investment divided by the costs of the advertising investment. 32 Social Media Marketing Social media are independent and commercial online communities where people congregate, socialize, and exchange views and information. Advantage: targeted, personale, interactive, sharing. Mobile Marketing Check cellphone 50~80 times/day (US youngsters), Location-based marketing. Traditional vs Digital Direct Marketing Public policy issues in Direct Marketing: irritation, unfairness, deception, 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 Marketing: invasion of privacy The concern is that marketers may know too much about consumers and use this information to take unfair advantage. • Online privacy: over-use of databases • Actions Required: technology, self-regulation in direct marketing industry, self- protection by consumers. Summary: The Marketing Promotional Mix 35 Lezione 11 Balancing Customer and Competitor Orientations Companies need to continuously adapt strategies to changes in the competitive environment. Competitor analysis Marketing orientation: CCDVTP - PS - not just selling your product! From a product-and-selling philosophy to a customer-and-marketing philosophy. From managing product to managing customer relationship. Competitive advantages require delivering more value and satisfaction to target consumers than competitors do. Competitive marketing Strategy Objectives: generate a competitive advantage; increase the loyalty of customers; beat competitors. Process: 1st step: competitor analysis • The process of identifying, assessing and selecting key competitors. 2nd step: develop competitive marketing strategies • Strongly position the company against competitor and give the company the strongest possible sustainable (i.e. long term) strategic advantage. Competitor Analyisis Competitor myopia refers to a firm focusing on what it considers to be its direct competition and not being aware of indirect or new competitors. Who are your competitors? Two points of view 36 Determine competitors Objectives Relative importance on… Current profitability, market share growth, cash flow, technological leadership, others… Why? Reveals competitors’ satisfaction with current situation and how it might react to different competitive actions. Assessing Competitors Strength & Weakness Information sources • Normally learn through secondary data, personal experience, WOM • Primary marketing research with customers, suppliers, and dealers: •Check competitors’ online & social media sites! Benchmarking Comparing the company’s products and processes to those of competitors or leading firms in other industries to identify best practices and find ways to improve quality and performance. 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. Estimating Competitors Reactions What can our competitors do? -> What will competitors do? Philosophy and mentality; React differently: swiftly and strongly, or not; Varies by industry: telecom service provider vs. app; Varies by product life cycle: car sharing/taxi app. Competitive strategies Finding Uncontested Market Space Red-ocean strategy vs. Blue-ocean strategy • Red-ocean strategy: Compete in existing market space, exploit existing demand. • Blue-ocean strategy: Create uncontested market space, create and capture new demand. Designing a Competitive Intelligence System The information must be continuously collected, interpreted, distributed and used. Basic Competitive Strategies 37 Lezione 12 Global Marketing The world is getting smaller. Smaller world is better or worse? Open or close? Act upon WE mindset (humanity) or ME mindset (ethnocentrism)? Factors Driving to Globalization Reduction of trade barriers. But the trade war between China and USA is stopping the process!!!; Improved communication by internet and mobile; Faster and cheaper transportation; Economies of scale forces standardization; The impacts of COVID-19? Factors Against Globalization Customer tastes and Culture • Global organizations can be difficult to manage • Local market conditions and pressure groups • The impacts of COVID-19? What happened for China’s Globalization • Moving from learning from multi-internationals on marketing on learning how to do marketing around the world. • Consumption structure improved • More regulation on multi-nationals Major International Marketing Decisions Looking at the global marketing environment; deciding whether to go global; deciding which markets to enter; deciding how to enter the market; deciding the global market program; deciding on the global marketing organization. 1. Looking at the Global Marketing Environment The International Trade Systems Economic communities (WTO and regional free trade zones, EU): a group of nations organized to work toward common goals in the regulation of international trade. Political-Legal Environment Attitudes toward international buying Government bureaucracy; Political stability Monetary regulations (Exchange rates, exchange controls, etc.); Countertrade. Cultural Environment Impact of Culture on Marketing Strategy (Cultural traditions, preferences, business norms and behavior vary from country to country). Impact of Marketing Strategy on Cultures (Exposure to foreign products and media cause changes in values • “Globalization” or “Americanization”). 40 2. Deciding Whether to Go Global Factors to consider: • Can the company understand the consumers? • Can it offer competitively attractive products? • Will it be able to adapt to local culture? • Can they deal with foreign nationals? • Do the company’s managers have the experience? • Has management considered regulation and political environment of other countries? 3. Deciding Which Markets to Enter • Define international marketing objectives and policies • Foreign sales volume • How many countries to market to • Types of countries to market to based on: geography; income and population political climate. Rank potential global markets based on: • Market size • Market growth • Cost of doing business • Competitive advantage • Risk level 4. Deciding How to Enter the Market Exporting We define exporting as entering foreign markets by selling goods produced in the company’s home country, often with little modification. – Indirect exporting is working through independent international marketing intermediaries, which involves less investment and less risk. – Direct exporting is where the company handles their own exports. • Exporting involves the least change in the company’s product lines, organization, investments, or mission. Joint Venturing Joint venturing: joining with foreign companies to produce or market products or services. – Joint venturing differs from exporting in that the company joins with a host country partner to sell or market abroad. – It differs from direct investment in that an association is formed with someone in the foreign country. • Four types: – Licensing, contact manufacturing, management contracting, joint ownership. 41 Direct Investment Direct investment is the development of foreign-based assembly or manufacturing facilities. • It may offers number of advantages including lower costs; labor, raw material, logistics, government incentives. Deeper relationship with local market; full control over the investment • The main disadvantage is the risk, from restricted or devalued currencies, falling markets, or government changes. Global Marketing Program Decisions Main Marketing Strategies How much, if at all, to adapt marketing strategies and programs to local conditions? • With technology and communication, consumer needs are getting similar. • Marketing should be tailored to the unique needs of each targeted consumer group. Two extremes: • Standardized marketing mix involves selling the same products and using the same marketing approaches worldwide • Adapted marketing mix involves adjusting the marketing mix elements in each target market, bearing more costs but hoping for a larger market share and ROI. “ Think globally, but act locally!”. 1) Standardized Marketing Mix This approach is appropriate when • Similar market segments exist across countries • Customer seek similar features • Products have universal specifications • Business customers have converging expectations 2) Adapted Marketing Mix Adaptation can be pursed when there are distinct: • National preferences • Laws and regulations • Living standards and economic conditions • National infrastructure • Under these circumstances, companies focus on local preferences, thoughts, and cultural attributes in some degree. • Balancing these contradicting attributes is a complex and comprehensive process. 42