JWI 518 Marketing in a Global Environment, Week4 Summary - 11/4/12
This week we got inside the mind of the consumer, to understand the
logical and emotional motivators in purchase decisions and create an
effective marketing strategy.
I learned a lot of valuable marketing insights that I can use gainfully
going forward, not only during my interactions with the marketing
department but also on a daily basis since I am always selling something
to external or internal customers.
I. Kotler, Chapter 5: Analyzing Consumer Markets
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Traditional marketing view: Make and Sell focus
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- works only in developing markets when consumers are not fussy about quality, features, style
Strategic marketing view: Deliver superior Value
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Value delivery process
Choose the value: Segment, Target, Position (STP)
Provide the value: features, prices, distribution
Communicate the value: sales force, internet, advertising
Value Chain (Porter)
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Tool for identifying ways to create more customer value
Firm should examine costs and performance of each activity
Benchmark competitors as well as best in class practices of best companies
Create superior value delivery network - the supply chain
5 primary activities
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(i) inbound logistics
(ii) operations to convert materials into final products
(iii) outbound logistics - shipping out final products
(iv) marketing & sales
(v) service
4 support activities
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(i) procurement
(ii) technology development
(iii) HR management
(iv) firm infrastructure - Cost of General Management, planning, finance, accounting, legal, govt affairs
Strong firms develop core competencies in 5 core business processes
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(i) Market sensing
(ii) New product realization
(iii) Customer acquisition & retention
(iv) CRM - build, understand relationship with individual customers
(v) Fulfillment management
Companies no longer compete - marketing networks do
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Holistic marketing
Manage relationships with itself, customers, stakeholders
Integrate value exploration, creation delivery
Market oriented strategic planning
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Develop a viable fit between firm's objectives, skills, resources
and its changing market opportunities
Measure Marketing Performance
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Metrics - Short term results, changes in brand equity
Marketing dashboard: customer performance scorecard, stakeholder performance scorecard
II. Wathieu, Apple Stores, HBS case study 2002, 2010
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Market positioning - do more with the computer elegantly
Store design with theater - enrich customers and convert them from PC use
Store manager, Genius, Sales Associate - elevate customer service with clear cut responsibilities
III. Video: Jack Welch, A Great Marketer
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Great marketers - Have True Empathy for who they are talking to; they feel like the consumer & business audience;
not hawking a product; trying to meet a need; putting themselves in shoes of the eventual customer
IV. Video: Jack Welch, Creative Promos
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Creative Promos: Clear as glass, tough as steel; To break into Detroit Auto market
Jerry McClain, famous pitcher - held plastic while he pitched - the ad got talked about
Exaggerate - use creative talents of ad agency and your people
Bob Gibson - China shop, could not break it
there is no formula to get there
V. Week 4 | Lecture 1: Marketing Psychology: Understand Why People Buy
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Traditional marketing strategy - "Find a need and fill it" - limited and can lead to disasters
Understand customers, psychology and behavior to design a well-focused marketing and advertising plan
(i) Consumer motivation begins with a need.
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Basic fact: People do not want what you are selling. People buy anticipated satisfactions, not products
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Buyers are looking for satisfaction from a solution to a problem, above and beyond a product and its features.
need -> critical features -> right product -> at right value
(cost/benefit; emotional/logical; weigh fears vs needs, wants, desires)
-> solution -> satisfaction
Sells-Product
Gillette Clean shave-Blade
Revlon Romance-Nail polish
Betty Crocker Feeling of love & pride-Tasty cake
Winning Products are in the critical path to customers' satisfaction
Understanding real motivations of buyers is the first step in creating a successful marketing strategy
(ii) Firm's 10-step marketing strategy
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Segment Demographics -> market research motivation for each segment
-> identify attributes in product that customers value : concrete,
functional, abstract -> identify logical and emotional motivations of
each segment -> match segment vs attributes -> combine segments
with similar emotional/logical motivations -> identify right media
based on budget & target market
-> create right marketing message -> connect the product to motivation in the mind of the customer
(iii) Marketing Message to Persuade Buyers
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Know the buyer's motivations and understand how to motivate them (this is the foundation for any marketing strategy)
The primary underlying thought in buyers’ minds is this: “What’s in it for me?”
Remind buyers of some key satisfactions they want to achieve
Promise you can make it happen
Highlight the key features of the product or service
- The role of features is simply to prove to the buyer that a product can deliver on its promise of satisfaction
- Use the product’s attributes as a way to validate your promises, not
as the primary focus of the message. The focus must be on customer
satisfaction.
Provide testimonials to convince people that you can deliver on your promise.
ask customers to take the next step in the buying process-go to the showroom, the store, the Web site, or pick up the phone.
This approach is far more effective than simply selling features.
VI. Week 4 | Discussion 1: Marketing Psychology - Get inside the buyer's mind
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When we analyze a buyer’s motivations as they relate to our type of product or service,
we also take into account the method (channel) by which he may find or buy our product.
The internet has affected the motivations of consumers by making them do things they may not normally do.
VII. Week 4 | Lecture 2: Generating Demand
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Many years ago, Xerox built computers that were very good. No one bought
them. Despite having an excellent product, the company created no
compelling reason for customers to own a Xerox computer. Without demand,
it had no sales.
Seven ways to generate demand
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(1) Create favorable perceptions of the brand in the buyers’ minds (this is the marketer's job)
(2) Develop features that make the brand different and stand out.
(3) Create a winning Image of superior quality with product appearance and packaging
- What the product looks and feels like makes a big difference.
- Packaging isn’t just what wraps the product. It is how a store gives an image to its products.
- clean floors, uplifting smells, well mannered employees key for good business
- the experience and the assurance that anything they buy can be returned without a problem.
- offer a classy look in the store, which conveys to shoppers the message that everything in the store is of high quality.
(4) separate your brand from the competition through the distinctive
offers you make - find a way to increase the perceived value of the
offer to the buyer.
-if you lose your job within six months, the company will take back your car.
- create the perception of value in the buyer’s mind. Bath products + loofah sponge; gym membership + trainer
(5) Provide Prestige
Countries like Italy, France, and Germany have high-quality images that rub off on their products and, buyers hope, on them.
-make a customer feel special and give him a reason to hope, gain respect and envy
(6) Innovate Distribution - differentiate and increase value
- fast home delivery when other pizza companies made you come in to pick up your food.
- shop from your easy chair
- gets your package there the next day, unbroken.
- build multibillion-dollar empires on a more attractive distribution
model. Break down tradition - the only place you can buy is a store
(7) Offer More - greater customer value
VIII. Week 4 | Discussion 2: Generating Demand
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ABI Research Mobile Marketing Strategies http://www.abiresearch.com/products/service to learn more about it.
As a consumer, I have mixed feelings about targeted ads coming at me on my mobile.
Marketing managers must balance giving valuable deals real time vs intrusive messages.
Ideally customers should opt in or opt out of mobile marketing (as suggested by Ken Sneed)
Dr DP
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