Appunti Marketing

Marketing

Marketing: the action or business of promoting and selling products or services.

In simple words, marketing is the process of attracting potential customers and clients to a product or service.

We can identify four types of companies:

• Product/Technology oriented
• Sales oriented
• Market oriented
• Customer oriented

When we want to sell something, we need also to identify to which segment the process, marketing, is directed to and so identify the group of people that have the same needs, but those needs are different from the needs of other people.

Market definition

In order to better comprehend this process we need to understand the market; the steps to do so are six:

1) Market definition

A market is the area of business in which the company intends to operate, to be known and appreciated and to employ its resources.

The importance in the identification of a market stands in fact that it helps to understand what we must concentrate our attention on and it facilitates communication with the outside.

The first question any company must ask itself is on which market it wants to refer in order to play an effective marketing action.

Ex. of the qualification of the market —> Need, Desire and Demand (iPhone)

In general we can identify five macro environment that characterize a market:

• Potential market —> Market that is achieved when the marketing effort is infinite
• Qualified market —> Market with the requisites to be available for the purchase
• Available market —> Qualified plus able to spend enough to buy the product
• Served —> Available market that is reached by the marketing effort of the company
• Penetrated —> Market that has already purchased products/services in the category

Demand analysis

2) Demand analysis

The purchase volume (q) of a product (p) by a specific group of customers (c) in a specific geographic area (g) in a specific lapse of time (t) can be calculated in function of the specific context (e) and a specific marketing program (m).

1

Characteristic of the demand:

• Product or service
• Unit of measure
• Customers
• Geography
• Time
• Level of aggregation
• Players and competitors

The demand is influenced by some external variables such as economic situation, competitive system, equivalent product, position in the industry and customers expenditure availability and the main variables are the product or service, the price, the stores, the promotion and the salesforce.

In order to estimate and forecast the demand there are several processes and methods that can be used to obtain a qualitative and quantitative valuation of it and the choice of the right model depends on the specific objectives and on the availability of quantitative data.

An important thing to do is to estimate the market size and this can be done thanks to some formulas Q = N x na/N% x Ta x ct.

The information needed to understand the demand and the market size can be obtained thanks to the desk research: collecting data from existing resources hence it is often considered a low cost technique as compared to field research, as the main cost is involved in executive’s time, telephone charges and directories.

2

Trends

3) Trends

The trends are scenario’s factors that can influence company’s success; the variables are effecting supply levels, demand levels and cost structures (we can use PESTLE).

Competitor analysis

4) Competitor analysis

In order to estimate the power and the influence of the competitor it can be useful to use Porter’s model of 5 forces.

When we talk about competitors, we want to know all the market information of them (market share etc).

Steps to do in order to analyze competitors:

• Identify the company’s competitors
• Assessing competitors’ objectives, strategies, strengths, weaknesses and reaction patterns
• Selecting which competitors to attack or avoid

Competitor Analysis in marketing terms means analysing the competitors in all the items regarding the strategic and operational marketing.

So it is important to analyze and define related KPI a lot of items in what competitors are doing, how much they are investing in marketing activities, what are the results and the quality of the marketing activities.

Micro level analysis of demand B2C

5) Micro level analysis of demand B2C

B2C and B2B.

Micro —> customer as an individual/organization with multiple interests

The stimuli-response model

External stimuli (marketing actions) —> customer —> response (purchase decision)

The customer decision process to buy or not is affected by some psychological factors: Perception, Motivation, Attitudes and Learnings.

The strategic advantage that marketing, and the external stimuli, is trying to capture is a piece of customer’s mind in order to obtain from her good responses.

(No customer’s mind can store all the external stimuli coming from the market)

Phases as customer clients:

• Recognition of the need (Initiator)
• Definition of the specifications
• Search of information
• Request for an offer
• Evaluation of alternatives
• Decision (Influencer can influence the decision, Decider)
• Post-purchase (Buyer and User)

3

Micro level analysis of demand B2B

6) Micro level analysis of demand B2B

In the B2B environment the demand is often derived and particular dynamic and the customers are other companies.

Factors influencing the business buying process:

• Situational
• Environmental
• Organizational
• Interpersonal
• Individual

4

In supply chain management, the Kraljic matrix (or Kraljic model) is a method used to segment the purchases or suppliers of a company by dividing them into four classes, based on the complexity (or risk) of the supply market (such as monopoly situations, barriers to entry, technological innovation) and the importance of the purchases or suppliers (determined by the impact that they have on the profitability of the company). This subdivision allows the company to define the optimal purchasing strategies for each of the four types of purchases or suppliers.

The buying process

5

Actors in the buying process

Not a single buyer, but a “Purchase centre” with various people and functions involved in the buying process.

Actors in the buying process:

Initiator: identifies a need and believes it can be satisfied by buying a good or service; activates the process.

User: uses the product or service purchased; may be the activator of the buying process and plays an important role in defining specifications.

Buyer: has the formal authority and the power to negotiate with the supplier.

Influencer: directly or indirectly influences the decision process, providing information and evaluation criteria for the alternatives.

Decider: has the authority to choose between the existing alternatives/proposals and formally approves the decision

Each actor has his own role and therefore his own objectives and constraints.

The marketing manager’s task is to:

• Identify the roles in relation to the buying situation
• Keep separate the distinct roles
• Identify the decision variables and the services of the purchase that each role sees or has the authority to see
• Approach each role on the basis of the objectives it maximizes

6

Assessing the market position

Assessing the market position

Market share

Relative market share = (market share of the company) / (market share of leading company)

Some brand KPI related to the awareness of the brand:

• Top of mind (first brand that comes to mind)
• Unaided awareness (number of people who express knowledge of the brand without prompting)
• Aided awareness (number of people who express knowledge of the brand when prompted)

7

Targeting

Targeting

Analysing the market it is necessary to segment it in order to make it more manageable.

Segmentation is a marketing process through which the company divides the market into various sub-groups (with different demand profiles, but internally homogeneous) on the basis of which management develops specific marketing plans to best satisfy their requirements.

Segmentation’s aim is to give insights to markets in order to define the best possible marketing program for every specific group of customers.

The main characteristics of a good market segmentation are:

• Measurability
• Accessibility
• Homogeneity
• Importance
• Duration

Advantages and disadvantages

Segmentation types and variables

Segmentation types and variables: by product and by customer (B2B or B2C)

Segmentation by product

Segmentation by product

Advantages: Simplicity, Immediacy and Clarity.

Disadvantages: Simplistic, Little visibility of the competition amongst products and does not consider the variables related to the customer’s characteristics.

Segmentation by customer

Segmentation by customer

There are three dimensions to consider: customer Characteristic, customer Behavior and customer Need.

We need to understand from our segmentation who are in the segment, what are they doing and why are they doing that.

1

Segmentation by customer - B2C markets

Segmentation by customer - B2C markets

B2C

Knowing customer characteristics, behaviors and needs is fundamental to design the marketing plan. Marketers collect information and then use them with specific objectives.

Segmentation by customer - B2B markets

Segmentation by customer - B2B markets

17

Strategy & Marketing - a.y. 2022/23 – Prof. Alberto Cellini

B2B

28

Strategy & Marketing - a.y. 2022/23 – Prof. Alberto Cellini

2

Segmentation methods

Segmentation methods

• Mathematical —> Using statistical-mathematical techniques and algorithms (survey research, data analysis and segment profiling)
• Heuristic —> Empirical methods (successive elimination approach, two-phase approach or multi-phase approach)

Steps to follow in the elimination approach

Steps to follow in the elimination approach

1. Check-list of possible segmentation variables.
2. Variables identified as relevant are compared in pairs using a matrix.
3. Unimportant “crossovers” and contradictions are eliminated.
4. Variables are gradually combined to reduce the number of combinations.
5. Products are entered according also to the different use functions.
6. The final product-market (segments) matrix is built

3

Two-phase approach description

Two-phase approach description

Multi-phase approach

Multi-phase approach

4

Marketing strategies

Marketing strategies

• Undifferentiated —> A single marketing plan for the whole market
• Differentiated —> Various marketing plans for the different segments
• Concentrated —> A single marketing plan concentrated on only one segment

TARGET = a target market is a group of customers within a business’ serviceable available market

Marketing strategies at which a business aims its marketing effort and resources; it is a subset of the total market for a product or service.

It is possible to look at targeting strategies in more detail by identifying 5 possible approaches.

M1 M2 M3

P1

P2

P3

Market specialization

Product specialization

A single segment

Targeting strategies: choice of target segments

Total coverage

Selective specialization

42

Strategy & Marketing - a.y. 2022/23 – Prof. Alberto Cellini

H High-interest segments, but high investment

Segments with high entry/presence priority

Attractiveness of segments

Segments of no interest

Segments to defend only with marginal spaces (self-financing)

L L H

Compatibility of segments with the company's new strategies and resources

5

43

Strategy & Marketing - a.y. 2022/23 – Prof. Alberto Cellini

Buyer persona

Buyer persona

A buyer persona is a representation of your target customer.

It’s a picture you paint based on research and interviews with actual customers.

Persona development is paramount for the success of an inbound marketing program, no matter the size or scope of your business.

A generic customer journey can be divided into three stages:

• Awareness
• Consideration
• Decision

Customer experience = sequence of interactions between an individual and a brand occurring throughout a series of touchpoint, encountered along the customer journey.

These interactions generate cognitive, emotional, behavior and sensorial impacts and reactions.

6

Positioning

Positioning

Positioning deals with a space dimension and is the phase through which a firm decides how it wants to be perceived by the market.

The space dimension is the customer mind.

Positioning works on perception; customers automatically compare our offer with the competitors’ one!

Levels:

• Strategic product positioning —> Analysing the strength of the product positioning into the customers’ mind and its differential elements towards competitors.
• Strategic portfolio positioning —> Analysing the products/brands mix in a portfolio strategy perspective.

Objectives:

• To understand which factors customer mostly consider to choose
• To understand the relative importance of each factor in the consumer’s path to purchase
• To value how consumers behave towards competitors’ offers
• To find “free spaces” for a distinctive positioning

Benefits:

• It helps to create the right marketing plan
• It helps to find new marketing niches or generally speaking new opportunities
• It helps to find a better product positioning through the right marketing leverages

Positioning tools

(In general it is called Perception map)

1

Positioning critical success factors

Positioning critical success factors

1. Addressed to a precise customers’ segment
2. Linked to a mental category that already exists in the mind of the target
3. Delimited and defined
4. Simple and clear
5. Long-lasting
6. Coherent

Re-positioning

Re-positioning

Positioning changes can be influenced by the environment, the demand or the competition and so it is necessary to re-positioning (when? Radical change of the customer or competitors’ strategic movement).

2

Re-positioning strategies

Re-positioning strategies

Change the perception on one or more feature through one✦ or more marketing leverage

B XIXA

Re-positioning

Strategy & Marketing - a.y. 2022/23 - prof. Alberto Cellini

33

Re-positioning strategies

New product launch on different segments (with di