Riassunto Marketing for Made in Italy

What marketing isn't?

We must be proud of Italy and made in Italy because made in Italy export accounts for a total of 1/3 of our GDP. We have to consider that:

• In 2019, the made in Italy export was 476 billion euro (+3.2% in 2018 and +41% on 2010). Starting from 2019, Italian export was the only positive component of our GDP, then each year a plus for export. More or less one-third of our GDP. At the end of 2020, of course, the level will be lower, and we will come back to the level of 2019 more or less in two years, that is in 2022.
• Italy ranks at 9th position in the world in terms of overall exports and at 5th position in terms of manufacturing trade surplus. Trade surplus: the difference between products and services (here we just talk of manufactured products) and imports is positive, so we export more than we import. This difference is very large, about 100 billion euros;
• According to the Corradini - Fortis index (measures the trade balance across many different product categories) on a sample of 5,117 products internationally traded, Italy ranks at first, second, or third position for trade balance on a total of 932;
• Italy is the undisputed world leader in certified agrifood productions (products with labels as IGP, DOC) - with more than 800 geographical indications registered by the EU – and is one of the European leaders in the bioeconomy sector;
• Italy is the fifth tourism destination in the world (and the first European destination for extra-European tourists after France) and is world leader for the number of UNESCO heritage sites. Tourism is very connected with the luxury business because most of the sales of luxury products in Italy are covered by tourists.

Italy extraordinary commonplace - video

Italy is a world leader in the creation of major infrastructures – 1000 construction sites in 90 countries. Italy has the world's 5th largest trade surplus in manufactured goods. Italy enjoys the largest increase in pharmaceutical and biomedical exports in the world – it produces more than one-third of the world’s contrast agents. Italy is Europe’s second-largest exporter – 100 billion euros’ worth machinery and capital goods. Italy is home to leading aerospace technologies – it was the third country in the world to send a satellite into orbit. Italy exports 40 billion euros’ worth of goods in the food & drink industry and related technologies. Italy is the undisputed leader in the production of super yachts with 40% of world orders. Italy is the country with the greatest number of UNESCO world heritage sites.

Marketing:

It's not (only) advertising and selling

Advertising is a part of marketing but it is not marketing, and it is not even necessary to make advertising. Peter Drucker, a leading management theorist says that “the aim of marketing is superfluous to know and understand the customer. The aim of marketing is so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed then, is to make the product or service available.”

In a marketing plan usually, we have adv, but we can say that the ideal goal of marketing is to make adv unnecessary. Example: bread. We consume bread every day but usually, we don’t have ads about bread, but we consume and buy it. It satisfies well our needs and wants that we buy it even without ads. Understanding needs and wants is important: I can save money on adv in this way. The problem of advertising, in fact, is that it is expensive.

In many cases, companies spend a lot on adv, at the end they don’t have good results probably because they believe adv is marketing, they don’t have a clear idea of their target, what people want, they believe that adv is the solution to sell every product. Then after bad results, they say marketing doesn’t work. Consequence: when there is a problem in a company, first of all, they cut marketing costs (as they think it is unnecessary). That is a problem for the marketing as a science. Marketing has a bad reputation because of this: conventionally marketing needs adv, adv is expensive, in many cases, adv doesn’t work, so marketing is just about spending money that doesn’t work.

If you are good at marketing you don’t need to spend money on adv. The most important part of marketing is the understanding of marketing needs and wants. One of the most important activities in the field of marketing is analysis, marketing research.

It is not a magic formula

• Marketing is not a solution to a poorly designed product or service.
• And in general, there are no “magic formula” or “rules of thumb” to be successful in marketing.
• Marketing is not mathematics!

If you go online it’s full of people who sell “the magic marketing formula” that is “follow these points and you’ll become rich”. In the marketing strategy, there is not one single way to do the right thing. There are no strict rules, it’s not a magic formula but a process. You have to make a number of choices in a number of fields, but in general, there are not magic formulas. In any case, if your product has problems, there are no marketing strategies that can help you to sell a product that in the end is not good. There are marketing strategies and tactics that can help you in the short term, but not in the long term.

It's not (necessarily) a business function!

• Although many companies have a marketing function, increasingly marketing is not done only by the marketing department. Because marketing must affect every aspect of the customer experience, marketers must properly manage all possible touchpoints (products, pricing, promotion, place).

As the late David Packard of Hewlett-Packard observed, “Marketing is far too important to leave to the marketing department.” Marketing is not a business function (in many companies you have not a marketing department, or a marketing manager) but many small companies are good at marketing, even without a department or a manager. Rule: your customer comes first and all the things you do aim to satisfy your customers and to create value for them. Marketing is first of all a philosophy which is very simple: there is only one road, the one for which customers come first and all the things that you do aim to satisfy your customers, to create value for them, and to get a profit through customer satisfaction. When you do this, your company is marketing-oriented.

Example: Amazon or Apple -> the most important thing that they do is to be marketing-oriented. All the things that they do, they are customer-oriented, they try to get easy for you to buy, to get the product easily. Of course, if you have a marketing department it is easier to apply a marketing approach, but you can have a good marketing approach even without it. All the different functions will converge on this final goal: customer comes first and you want to create value for them. You can apply very well the marketing approach even if don’t have a marketing department, because marketing is first of all a philosophy with one rule, that customers come first.

What is marketing? Let's ask its father to define it

Philip Kotler: author of the most famous books on marketing

“If your boss quoted that your job is to create communicate and deliver V, value, to a T, target market, at a P, profit. Create, communicate and deliver value to a target market at a profit. Now let's take the create/ communicating/ deliver: creating value is called product management. Your product may be a service but whatever whether it's a tangible or an intangible, some way your company must have product management, that's creating value.

But you have to communicate value: that's called branding and that's brand management. There's a difference between product management and brand management: you could have five products, what have you done to brand them? Communicate excitement, differentiation and so on and then to deliver value is called customer management. So you're in three businesses: product management, brand management, and customer management, and they've changed. Product management was really this business: you have a company and from the inside, you make things and then you ask the sales and marketing people to get rid of them but you do it inside, you do it with your scientists and engineers.

What's changing in product management today: take Procter and Gamble, the ones making a new product for Procter & Gamble are not just their scientists inside, they have connected with 10 times as many scientists outside. See the old idea was you got to do things secretly, in other words, you're inventing something that Unilever should know about, closed doors. Now P&G will tap scientists anywhere in the world where they have solutions to a problem that P&G wants to solve. For example, P&G makes Pringles and they decided that for kids they'd like to print funny things on each Pringle, which is a potato chip. How do you print a funny thing, a picture or a word on a Pringle chip? Their scientists couldn't figure it out until they identified a cookie maker in Italy who has been printing things on his cookies, so it's called open technology/ open innovation. Find the best ideas anywhere they can come from.

So with respect to product management we've opened it up, with respect to brand management: the brand building used to mean packaging, it meant a name/ a logo. Brand management today is what you're all about, the brand is a promise, the brand inspires everything you do, the way you act when you're approached and when you reach customers and it's emotional. There's a new direction: emotions were generally thought the formula was this “I'm going after your mind, I'm going after your heart. I want mind share and I want heart share”. Now we're saying we also want spirit share, a share of something a little more than narrow to your own interests. We might be a firm that is civic, is caring, and we want to be appreciated because we care about the shape of the world and that's called corporate social responsibility, but in creating an emotional relationship, it's more than limited to the person's own nurturing of his or her ego.

Even the D of customer management has changed: do you think you're doing customer management if you essentially have a database of customers and you're reaching them through direct mail and online email and so on? Is that really customer management or is that dealing with a database? What's new about customer management is we want to meet the customers and know them really beyond the database. In fact, we want to get the customer's help in creating products, we want to co-create with the customer our products and we want to even co-create our advertising. We want their help in creating ads for us now this is a radical change in marketing”.

Marketing defined by marketing textbooks

• “A societal and managerial process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others” (Kotler, 1980).

Based on this definition we can focus on a number of words: marketing is a process that includes a logical sequence of activity. It means that the quality of one activity included in the process depends on the result of the activity you have in the same process before it. So, to make things practical: without a proper marketing plan, you cannot identify the right target or the right way to differentiate the right product or brand. If you don’t identify the target/positioning in the right way, it’s difficult to manage adv in the right way, etc. Process: logical sequence of activities and each activity included is able to affect the others.

Which kind of process? Managerial process means you manage activities (analysis, marketing research, design a product, design ads, manage stores) while marketing is also a societal process, that is to say, marketing is the part of management that deals with the relationship between your company and the external environment, mostly you manage the relation with customers. In a certain way, we can say marketing will shape the way you will look when you will interact with the others and will determine your activity in performing your interaction.

Final goal of marketing: create value for customers. Products and services are the instruments to create that value.

• Creating, distributing, promoting, and pricing goods, services, and ideas “The process of to satisfying exchange relationships dynamic environment facilitate with customers in a” (Pride and Ferrell, 1995).

Here we get more elements: process, goal to create value. From a practical point of view, we create products and services, we distribute them (decide a distribution strategy), then promotion (adv), pricing. In the field of marketing we have marketing operations (the 4 P): we manage products, we decide the price, we manage distribution or place and we manage advertising or promotion. When we create value for customers the aim is to make customers satisfied.

Customer satisfaction is a very important part of the marketing process. Doing this is not easy because we design and apply a marketing strategy in a very dynamic environment: the pandemic is an environmental fact (affects the way we live and we do things).

• Create, communicate and deliver “An organizational function and a set of processes aiming to value advantage of the organization to customers and manage relationships with them for the and its stakeholders” (Kerin et alii, 2007).

Here we have 2 additional important elements: “Manage relations with them”: marketing is not just to sell a product one shot. In many cases, we go to a store, we interact with people in the store, they convince us to buy the products, they get a short term result. But then I start to use the product, I realize the product is not what they said/not what I wanted/needed: I won’t buy again in that store. From the perspective of those people in the store, their job is to sell. This is the opposite of marketing, because in the field of marketing and in the marketing strategy we want to create value and satisfy the customer to create a long-term relationship with them.

In the value creation process, if we create value for customers, we sell but it is not enough because we create value, we have customer satisfaction, and consequently customer loyalty.

Creating customer loyalty is important because when we have it we have 2 main results:

1. If we are loyal to a specific product or brand, I keep on buying in many cases for a long time;
2. When the product associated with my favorite brand is a little more expensive than others, but I like the brand and I am satisfied with it, I become less sensitive to the price variation.

From the point of view of the brand, this is the most important thing: I can manage my price, getting more clients besides is more expensive than managing my relationship with loyal clients. Relatively less expensive, so less cost (my customers are loyal so I don’t need much adv to push them to buy) and I increase my profits because when people are happy they become less sensitive to price variation. Customer loyalty means profits: they are less sensitive to price and I don’t need to push on adv to convince them to buy.

3. Another important thing: share a positive word of mouth. We create brand ambassadors and they advertise for free.

Everything must be managed based on ethics: the difference between good and bad marketing. When we go in a store, and we buy a product based on the information we get inside that store, that is bad marketing because it is not ethical. The store will lose the client and you will tell a friend at the store you were convinced to buy a product basing on untrue information.

So marketing is..

1. A sequence of activities (process)(logical sequence of activities)....
2. ....aiming at creating favourable conditions for an exchange between two or more parties (one to sell one to buy)..
3. ....with the purpose of satisfying interests and creating value for all of them (ideally LT relationship)(value for the customer: right product at the right price, product able to create value for him and satisfy him; value for the company: make a profit)

The difference between good and bad marketing is ethics. Everything must be done in the right way according to ethical tools. Using unethical strategies is not marketing, and in the LT we will not get positive results.

A brief history of marketing

What is marketed?

Marketing for made in Italy

The invention of marketing comes from the evolution of the way that companies used to interact with the clients. So marketing is the result of an evolution, interaction between companies and clients. At the very beginning, the beginning of the industrial era, we had the concept of product orientation, different from the marketing orientation: example of product orientation is the first popular car, the Ford T, very famous because it was the first example of a car sold at a price that was not so high, so it was affordable for most families. Before it, the car was a luxury product. Very successful, but also quite easy from a certain point of view because there were not competitors: only model car sold at that price, no competitors, no differentiation /positioning / targeting. Only one model, no optional etc. The Ford T was an example of product orientation: competitive advantage of it was not in understanding customers’ needs/ wants, but in a high production efficiency (they invented a new way to produce).