Marketing

6.4. BRAND PORTFOLIO AND COMPETITION

In this paragraph we can see different branding strategies used to attack competitors or counteract their initiatives.

• Flankers: brands are introduced with the main purpose of disturbing the positioning of someone else.

Ex: intel Celeron against AMD

• Cash Cow: Maintain profitability with a low marketing support and support launch of new brands.

Ex: pasta barilla is the cash cow while barilla al bronzo has an high-end prestige

• Low entry level: Attract lower end of the market. (Ex: BMW series 3) The risk of this is reduce the value of

the brand, because we are reducing part of the exclusivity of the brand possessors. It could be suggestable

to introduce a new brand if we are moving to a lower level of the market.

• High end prestige: Add prestige and credibility to the whole portfolio. if the brand is recognized as a low end

brand it could be difficult to introduced a higher level of the market

Managing a brand portfolio is something dynamic!

The introduction of new variants can be done using one of the following methods:

- Line Extension: Introduction of new variants(no new brands) beside the existing ones in order to satisfy a

need of customers on already served segment (flankering).

- Category extension: Entering in a new market exploiting an existing brand. (ex. Barilla entered in the Ice

cream industry with Ringo).

- Multiple brands: Introduction of products in the same product line with a different brand. Multiple brands

match different needs and target different segments.

Brand Portfolio management risks:

The main risk of brand portfolio is the brand cannibalization when introducing a new brand, so that the new brand

steel part of the customers that were previously buying your own brand.

Case 1: worst case, the new brand do not extend the sales.

Case 2: the brand extend sales (but don’t effect competitors).

Case 3: The new brand extends sales and conquers part of the

other companies’ market, cannibalizing a bit.

Case 4: Best case; it extends sales and conquers part of the other

brands’ market

ESSELUNGA CASE

1) Variables to segment:

- by product

- by customers characteristics

o social demographics

o geografic

o behaviours:

▪ purchasing behaviours

▪ product usages

o psychological

2) Two approaches:

- mathematical, a large amount of data is needed

- heuristc method

o success elimination approach -> too many variables to consider

o two phase approach -> in this case there aren’t two levels of variables so clearly separated

o nested approach -> the best for this case

3) I use the perception map, value curve and radar map.

Set of attributes relevant for customers are: product range, price, quality of fresh food, wine and spirits area,

children area, delivery, self-cash.

4) sub brand-> le eccelenze di esselunga

5) The distribution data should be pretty intense.

The object is to increase the coverage. Thanks to franchising is possible to increase the coverage limiting the

investment but franchising could affect the service quality.

6)there are three methodology: cost based; perceive value pricing; competitive based.

In eCommerce we can use different form of price

7) private label are the products with the brand name of supermarket. We cosider only the product where the brand

isn’t important for the customers such as product with low loyalty.

8)

9) - advertising: okay per esselunga since standardize product and big audience

- sales promotion

- sponsorship

- PR

no personal selling!!! It’s different from personal assistant

10) media:

- Television

- Social media

- Newspaper

- Radio

- Search advertising

CHAPTER 7 – DIGITAL MARKETING

Digital market are a set of tools that can be used by marketers that exploit digital technologies. The digital

technologies empowered a lot both marketers and customers.

On one side the marketers are more capable to address clients. Companies know a lot more about the clients

compared to the past, so that they are able to segment, profile and easily reach the customers.

On the other side the clients are more able to compare more alternatives.

7.1. MARKETING MIX EVOLUTION The marketing mix is the tool that

transform a strategic market positioning in

a tangible thing that could be experienced

by the customers.

However, the digital technologies, changed

both the analysis of the market (so the

market strategy) but also the method

through which is possible to develop the

marketing mix and create the PoD and so

the competitive advantage.

Nowadays we have a lot of Media Mix alternatives added to the traditional methods. However the Digital

technologies didn’t changed only the way of using marketing levers, they also changed the entire value chain

structure (all the set of activities necessary to deliver a valuable product.

The evolution of marketing mix followed 2 lines of evolution:

• Line 1: from products to customer to experience centric model (giving more and more importance to the

experience)

• Line 2: The digitalization of the entire marketing mix. Each of the 4 Marketing Mix Levers of the 4Ps Model

have been evolved considering the technological shift.

7.2. LINE 2 – DIGITALIZATION OF THE MARKETING MIX

In the traditional marketing mix we have analysed the 7PS, however nowadays the focus has changed from the

product to the customer first and the experience then.

4Ps Model: The 4Ps model (+ 3Ps of Service) are the marketing mix levers previously defined in chapter 2.

4Cs Model: From the product to a co-creation: The idea is that thanks to digital

technologies the product realised is the result of an interaction

between the customer and the provider.

Companies should consider these new opportunities to:

• Enhancing /rethinking their traditional offering, with digital add-on

• Designing brand new digital offerings

Ex Esselunga: fidelity card (profile the customer and then develop

new product)s; automatic checkouts (customers can do part of the service).

From Price to Currency: In the past for each product there was a price. Nowadays the price fluctuate more according

to the offer and the demand. For this reason the price is becoming a currency because it changes considering the

demand and the supply (Ex seat of an airplane). This is possible because nowadays it is much easier thanks to digital

technologies to change the price instantly. Moreover this brought to several new methods to develop price setting:

- Dynamic pricing: based on availability (Transport, Accomodation)

- Free vs. paid shipment (Carrefour vs. Esselunga)

- Subscription methods (Spotify, Netflix, Microsoft Office 356, etc.)

- Bundle Pricing: multiple products sold together to form a unique offer

- Freemium: offer a basic service for free, advanced service on payment (many SaaS, LinkedIn, Dropbox, etc.)

- Paywall: restricting access to content via subscription (Corriere.it)

Digital tools enable the seller to discriminate the customers on the basis of their purchasing power.

From Place to Closeness: Nowadays it is important to be close to the customer, using the digital channel, so that the

physical channel is directly connected with the digital channel of the company. The objective of companies is create

omni-channel integrated marketing strategies, combining online and offline service.

When dealing with the omnichannel there are 2 aspects of the customer behaviour to take under consideration:

- Webrooming: customers search online and buy offline

- Showrooming: customers try offline and buy online

Ex Esselunga: home delivery -> I can buy online but also search online and buy in the physical store.

From Promotion to Conversation: Promotion is turned to be conversation. It is easier to have feedbacks

from the company that is selling the product. Digital horizontal communication brought to an easier access

to information, so that the customers can be more informed about product characteristics, service failures and so

on. So the power is shifting from companies to consumers.

Customers participate more actively and the UGC (User generated content) is becoming more and more important.

7.3. INBOUND MARKETING

Create relevant content for the topic that the people are searching, if we match the interest we find potential

customers. Ex: company that produce ski can create the blog “the best places where to ski this winter”

Create content to help the basic knowledge and offer some tutorial (strongly connect with the idea of customers

experience).

Inbound marketing Definition: Inbound marketing is a method of attracting, engaging, and delighting people to grow

a business that provides value and builds trust.

It is a completely different from the one seen in the AIDA model that was based on attention and interest to

convince people to take a decision and make an action. The companies nowadays want to make people spend time

with them, engaging them and construct with them a long-term relation. The company want people spend time on

their platform.

So the point is that every companies nowadays has to become a media company, releasing contents from their

owned platform. (ex: crate site and/or social media profile)

When people, for example, visit a website are spending time on a company platform, that gives visibility to

the company itself. So as much a company has good contents as much the company has visibility.

The companies wants to:

✓ Attract: create contents to attract users

✓ Engage: So that customer start to interact with the company

✓ Delight: make customer delighted (felicissimo), so that they will share their

experience and restart the process attracting new customers.

So the point is that the companies, instead of creating ads and reach customers

interrupting them from doing something else, companies want to attract

potential customers providing them with something valuable and establish with

them a long term relationship.

Inbound marketing funnel:

The inbound marketing Funnel is a process operated by the inbound marketing strategy that make possible to

transform a stranger into a promoter of the company itself. Bounce rate: ratio of

users that leave the

page without interacting

with it.

Open rate: ratio of

people that open the

email received.

Virality: a measure to

evaluate the word of

mouth.

From stranger to visitor: The moment 0. The moment in which there is the first contact between the company and

the potential customer. Through the first contact the company is able to attract people.

From visitors to Leads: having visitors is not sufficient because they disappear in few minutes. We want to create an

engagement. To do that we have to insert a CTA (call to action), in order to exchange something that is valuable for

the potential customer (like coupons) with its info (like mail, telephone n. ecc). So the visitors (anonymous) become

a lead (recognizable).

From Leads to customers: The objective is being ready when the lead &ldq