26/09/2020
Salient
Looking back
Marketing management is the art and
science of choosing target markets and
getting, keeping, and growing customers
through
creating,
delivering
and
communicating superior customer value.
It’s now the company approach to solving customer
needs or wants that differentiates the brand.
It is no longer about product or service excellence –
customers expect that. It’s about the experiential
dimension of this product or service.
3
26/09/2020
Consumers response to communication
AWARENESS
KNOWLEDGE
COGNITIVE
STAGE
LIKING
PREFERENCE
AFFECTIVE
STAGE
CONVICTION
PURCHASE
BEHAVIOR STAGE
LAVIDGE & STEINER A model for predictive measurements of advertising effectiveness
13
26/09/2020
CONSUMER BEHAVIOR
MARKET SEGMENTATION
BRAND POSITIONING
2
2.1 CONSUMER
BEHAVIOR
14
26/09/2020
Understanding consumer behavior
• Consumer behavior is the study on how individuals, groups and
organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants.
CONSUMER
CHARACTERISTICS
Cultural
Social
Personal
+
CONSUMER
CONSUMER
PSYCHOLOGY
BEHAVIOR
Perception
Emotion
Memory
Consideration
Evaluation
Purchase
Marketing management, by P. Kotler & K. L. Keller
1. Consumer characteristics
• Many factors can influence the way people think, feel and act when
they buy. We can divide them in three categories.
CULTURAL
FACTORS
SOCIAL
FACTORS
PERSONAL
FACTORS
Marketing management, by P. Kotler & K. L. Keller
15
26/09/2020
A. Cultural factors
• Culture is the fundamental determinant of a person’s wants and
behaviors. It’s made of values.
• Each culture consists of smaller subcultures that provide more
specific identification and socialization
(nationality, regions, religion, etc.)
for
their
members
• Marketers must closely attend to cultural values in every country to
understand how best market their products and find new
opportunities.
Marketing management, by P. Kotler & K. L. Keller
A. Cultural factors illustrations
PATRIOTISM
FAMILY
RELIABILITY
16
26/09/2020
A. Cultural factors illustrations
A. Cultural factors
• Almost all societies exhibit social stratification, in the form of
social classes, relatively homogeneous and enduring divisions
in a society, with some form of hierarchy and with members
who share similar status, values, interests and behaviors.
• Example in the US: Lower lowers > Upper lowers > Working class > Middle
class > Upper middles > Lower uppers > Upper uppers
• Social class members can show distinct product and brand
preferences in some areas.
Marketing management, by P. Kotler & K. L. Keller
18
26/09/2020
1. Consumer characteristics
• Many factors can influence the way people think, feel and act when
they buy. We can divide them in three categories.
CULTURAL
FACTORS
SOCIAL
FACTORS
PERSONAL
FACTORS
Marketing management, by P. Kotler & K. L. Keller
B. Social factors - family
• The family is the most important consumer buying organization in
the society, and family members constitute the most influential
primary reference group.
• The family of orientation consists of parents and siblings. From
parents, a person acquires an orientation toward politics, economics,
sport, religion…and a sense of personal ambition, self-worth and
love.
• The family of procreation are the spouse and the children.
• For expensive products and service, the decision is shared. For some categories
of products or services, roles can be split or shared.
• More and more influence wielded by children and teens.
Marketing management, by P. Kotler & K. L. Keller
20
26/09/2020
B. Social factors - family
B. Social factors – reference groups
• Reference groups are all the groups that have a direct or
indirect influence on someone’s attitudes or behaviors.
• Primary groups are the ones with whom the person has continuous
and informal interaction: family, close friends or coworkers…
• Secondary groups tend to be more formal and they require less
continuous interaction: sport club, religion, charity…
• Reference groups influence their members:
• They expose an individual to new behaviors and lifestyles
• They influence attitudes and self-concept
• They create pressures for conformity, included in consumption
Marketing management, by P. Kotler & K. L. Keller
21
26/09/2020
B. Social factors - illustration
B. Social factors – opinion leader
• If a reference group is strong, opinion leaders can be
identified.
• An opinion leader is a person who offers informal advice
or information about a specific product or category.
• Opinion leaders are often highly confident, socially active
and frequent users of the category.
Marketing management, by P. Kotler & K. L. Keller
22
26/09/2020
1. Consumer characteristics
• Many factors can influence the way people think, feel and act when
they buy. We can divide them in three categories.
CULTURAL
FACTORS
SOCIAL
FACTORS
PERSONAL
FACTORS
Marketing management, by P. Kotler & K. L. Keller
C. Personal factors
• Tastes and preferences are often related
• to the age and stage in the life cycle
• to the number, age and gender of people in the household
• to the psychological life-cycles
• to the critical life events or transitions (marriage, divorce, kids,
retirement, etc.)
• Jobs, occupations or hobbies play a role.
• Economic
circumstances can also influence consumption
patterns (recessions…)
Marketing management, by P. Kotler & K. L. Keller
25
26/09/2020
C. Personal factors - Illustrations
C. Personal factors - personality
• Personality can be defined by a set of distinguishing human
psychological traits that lead to relatively consistent and enduring
responses to environmental stimuli including buying behavior.
• Brands also have a personality, a specific mix of human traits that we
can attribute to a particular brand.
• Consumers tend to choose a brand personality consistent with:
• Their actual self-concept (how they view themselves)
• Their ideal self-concept (how they would like to view themselves)
• Other self-concept (how they think others see them)
Marketing management, by P. Kotler & K. L. Keller
26
26/09/2020
C. Personal factors - personality
• 5 brand personalities can be established
1. Sincerity – down to earth, honest, wholesome and cheerful
2. Excitement – daring, spirited, imaginative, and up-to-date
3. Competence – reliable, intelligent, and successful
4. Sophistication – upper-class and charming
5. Ruggedness - outdoorsy and tough
• Those personalities depend on the country: in Spain and Japan, “peacefulness”
replaced “ruggedness”; in Korea, two additional values are central: “passive
likeableness” and “ascendency”
Jennifer Aaker
Sincerity
27
26/09/2020
Excitement
Competence
28
26/09/2020
Sophistication
Sophistication
29
26/09/2020
Ruggedness
Understanding consumer behavior
• Consumer behavior is the study on how individuals, groups and
organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants.
CONSUMER
CHARACTERISTICS
Cultural
Social
Personal
+
CONSUMER
CONSUMER
PSYCHOLOGY
BEHAVIOR
Perception
Emotion
Memory
Consideration
Evaluation
Purchase
Marketing management, by P. Kotler & K. L. Keller
30
26/09/2020
2. Consumer pyschology
• The way a consumer feels when in contact with a brand or a product,
the images he’s built up over their experience can be looked from
three perspectives
PERCEPTION
EMOTIONS
MEMORY
A. Perception
• How a person, who is motivated to act, will do so is influenced by his
or her perception of the situation.
• Perception is the process by which we select, organize and interpret
information inputs to create a meaningful picture of the world.
• Senses play a key-role in perception:
• Vision
• Touch
• Smell
• Sound
• Taste
Marketing management, by P. Kotler & K. L. Keller
31
26/09/2020
A. Perception
• Perception is absolutely correlated to the person who perceives. Each
one can respond differently to the exact same stimuli.
• Selective attention: the process that helps us screen most stimuli out.
• People are more likely to notice
• Stimuli that relate to a current need
• Stimuli they anticipate
• Stimuli whose deviations are large in relationship to the normal size of the
stimuli
• We can also be influenced by unexpected stimuli.
Marketing management, by P. Kotler & K. L. Keller
A. Perception
An average person is exposed to 1,500 ads or brand communications a day
32
26/09/2020
Consumer psychology
• The way a consumer feels when in contact with a brand or a product,
the images he’s built up over their experience can be looked from
three perspectives
PERCEPTION
EMOTIONS
MEMORY
B. Emotions
• Consumer response is not all cognitive and rational: much is
emotional and invokes different kinds of feelings.
• Creating an emotional connection is a strong way to engage
loyal consumers
• Classic emotions that can be triggered:
• Pride
• Excitement
• Confidence
• Amusement
• Wonder
• …
Marketing management, by P. Kotler & K. L. Keller
33
26/09/2020
B. Emotions
B. Emotions
34
26/09/2020
Consumer psychology
• The way a consumer feels when in contact with a brand or a product,
the images he’s built up over their experience can be looked from
three perspectives
PERCEPTION
EMOTIONS
MEMORY
c. Memory
• Brand associations consist of all brand-related thoughts, feelings,
perceptions, images, experiences, beliefs, attitudes… that are linked
to the brand.
• Marketing is then a way of making sure consumers have product and
service experiences that create the right brand knowledge structures
and maintain them in memory.
35
26/09/2020
Understanding consumer behavior
• Consumer behavior is the study on how individuals, groups and
organizations select, buy, use, and dispose of goods, services, ideas,
or experiences to satisfy their needs and wants.
CONSUMER
CHARACTERISTICS
Cultural
Social
Personal
+
CONSUMER
CONSUMER
PSYCHOLOGY
BEHAVIOR
Perception
Emotion
Memory
Consideration
Evaluation
Purchase
Marketing management, by P. Kotler & K. L. Keller
The buying decision process roles
5 roles in a buying decision
1.
2.
3.
4.
5.
Initiator
Influencer
Decider
Buyer
User
Marketing management, P. Kotler & K. L. Keller
36
26/09/2020
2.2 MARKET
SEGMENTATION
37
26/09/2020
Market segmentation
• Market segmentation divides a market into well-defined slices: a
market segment consists of a group of customers who share a similar
set of needs and wants.
• The company or brand task is to identify the appropriate number and
nature of market segments and decide which ones(s) to target.
Marketing management, by P. Kotler & K. L. Keller
Segmentation process
1.
2.
3.
4.
5.
6.
7.
Needs-based segmentation: group customers into segments based on
similar needs and benefits sought by customers in solving a particular
consumption problem
Segment identification: for each segment, determine which
demographics, lifestyles and usage behaviors make the segment
distinct and actionable
Segment attractiveness: using segment attractiveness criteria (such as
market growth, competitive intensity and market access)
Segment profitability
Segment positioning: for each segment, create a relevant "value
proposition" and product-price positioning strategy
Segment "acid-test": test the attractiveness of each segment’s
positioning strategy
Marketing-mix strategy: expand segment positioning strategy to
include the 4 P’s of the marketing mix
Market-based management, R. J Best
38
26/09/2020
Effective segmentation criteria
1.
2.
3.
4.
5.
Measurable: the size, purchasing power, and characteristics
of the segment can be measured
Substantial: the segments are large and profitable enough to
serve
Accessible: the segments can be effectively reached and
served
Differentiable:
the
segments
are
conceptually
distinguishable and respond differently to different
marketing-mix elements and programs
Actionable: effective programs can be formulated for
attracting and serving the segments
Marketing management, P. Kotler & K. L. Keller
Market segmentation factors
• Descriptive characteristics and/or behavioral considerations can be
used and combined to segment consumer markets.
DESCRIPTIVE
SEGMENTATION
BEHAVORIAL
SEGMENTATION
Marketing management, by P. Kotler & K. L. Keller
39
26/09/2020
Market segmentation factors
• Descriptive characteristics and/or behavioral considerations can be
used and combined to segment consumer markets.
DESCRIPTIVE
SEGMENTATION
BEHAVORIAL
SEGMENTATION
Marketing management, by P. Kotler & K. L. Keller
Market segmentation factors
Descriptive
Segmentation
Age
Gender
Geography, climate
City size, density
Family size and life-cycle
Income
Education, occupation
…
Marketing management, by P. Kotler & K. L. Keller
40
26/09/2020
Market segmentation - occupation
Market segmentation factors
• Descriptive characteristics and/or behavioral considerations can be
used and combined to segment consumer markets.
DESCRIPTIVE
SEGMENTATION
BEHAVORIAL
SEGMENTATION
Marketing management, by P. Kotler & K. L. Keller
44
26/09/2020
Market segmentation factors
Behavioral
segmentation
Lifestyle
Personality
Behavior
Benefit
Usage rate
Loyalty stage
Readiness stage
Attitude towards product
…
Marketing management, by P. Kotler & K. L. Keller
Market segmentation – lifestyle
• A lifestyle is a persons pattern of living in the world as expressed in
activities, interests, and opinions. It portrays the « whole person »
interacting with their environment.
Marketing management, by P. Kotler & K. L. Keller
45
26/09/2020
Market segmentation - benefits
6 benefits segments in the US premium wine market
1.
2.
3.
4.
5.
6.
Enthusiasts (12%)
Image seekers (20%)
Savvy shoppers (15%)
Traditionalists (16%)
Satisfied sippers (14%)
Overwhelmed (23%)
Marketing management, by P. Kotler & K. L. Keller
How to select the market segments
MARKET COVERAGE
MASS
MARKET
FULL
MARKET
COVERAGE
MULTIPLE
SEGMENTS
SINGLE
SEGMENTS
INDIVIDUALS
AS
SEGMENTS
CUSTOMI
ZATION
Marketing management, P. Kotler & K. L. Keller
47
26/09/2020
How to select the market segments
MARKET COVERAGE
MASS
MARKET
FULL
MARKET
COVERAGE
CUSTOMI
ZATION
Marketing management, P. Kotler & K. L. Keller
1. Full market coverage
• The aim to serve all customers with all the products they need.
• Only very large firms can undertake such a strategy.
• There are two ways to cover a whole market
1.
2.
Through undifferentiated or mass marketing: the firm ignores
segment differences and goes after the whole market with one
offer. It uses mass production, mass distribution and mass
communications, lowering the costs and trying to reach an always
bigger audience.
Through differentiated marketing: the firm sells different
products to all the different segments of the market. Differentiated
market creates more total sales than undifferentiated marketing.
But it also increases the costs of doing business.
Marketing management, P. Kotler & K. L. Keller
48
26/09/2020
1. Full market coverage - undifferentiated
Marketing management, P. Kotler & K. L. Keller
1. Full market coverage
• The aim to serve all customers with all the products they need.
• Only very large firms can undertake such a strategy.
• There are two ways to cover a whole market
1.
2.
Through undifferentiated or mass marketing: the firm ignores
segment differences and goes after the whole market with one
offer. It uses mass production, mass distribution and mass
communications, lowering the costs and trying to reach an always
bigger audience.
Through differentiated marketing: the firm sells different
products to all the different segments of the market. Differentiated
market creates more total sales than undifferentiated marketing.
But it also increases the costs of doing business.
Marketing management, P. Kotler & K. L. Keller
49
26/09/2020
How to select the market segments
MARKET COVERAGE
MASS
MARKET
FULL
MARKET
COVERAGE
MULTIPLE
SEGMENTS
CUSTOMI
ZATION
Marketing management, P. Kotler & K. L. Keller
2. Multiple segment specialization
• With selective specialization, a firm selects some of all the possible
segments, each of them being attractive and appropriate.
• There may be little or no synergy among the segments, but each
promises to be a moneymaker. This strategy has the advantage to
diversify the firm’s risk.
• A company can try to achieve some synergy with:
1. Product specialization: the firm sells a certain product to several
2.
different market segments.
Market specialization: the firm concentrates on serving many
needs of a particular customer group. It can gain a strong
reputation among this customer group and becomes a channel for
additional products its members can use.
Marketing management, P. Kotler & K. L. Keller
52
26/09/2020
2. Multiple segment specialization
Age
Gender
Family
stage
Hobbies
Charities
Communities
…
Marketing management, P. Kotler & K. L. Keller
2. Multiple segment specialization
• With selective specialization, a firm selects a subset of all the
possible segments, each of them being attractive and appropriate.
• There may be little or no synergy among the segments, but each
promises to be a moneymaker. This strategy has the advantage to
diversify the firm’s risk.
• A company can try to achieve some synergy with:
1. Product specialization: the firm sells a certain product to several
2.
different market segments.
Market specialization: the firm concentrates on serving many
needs of a particular customer group. It can gain a strong
reputation among this customer group and becomes a channel for
additional products its members can use.
Marketing management, P. Kotler & K. L. Keller
53
26/09/2020
2. Multiple segment specialization
Marketing management, P. Kotler & K. L. Keller
How to select the market segments
MARKET COVERAGE
MASS
MARKET
FULL
MARKET
COVERAGE
MULTIPLE
SEGMENTS
SINGLE
SEGMENTS
CUSTOMI
ZATION
Marketing management, P. Kotler & K. L. Keller
54
26/09/2020
3. Single segment concentration
The firm markets to only one particular segment: through concentrated
marketing, the firm gains deep knowledge of the segment’s needs and
achieve a strong market presence. It also enjoys operating economies by
specializing its production, distribution and promotion.
• A niche is an even more narrowly defined customer group seeking a
distinctive mix of benefits within a segment.
• Niche customers have a distinct set of needs:
1. They will pay a premium to the firm that best satisfies them
2. The niche is fairly small but has size, profit, and growth potential and
3.
is unlikely to attract many competitors
It gains certain economies through specialization
Marketing management, P. Kotler & K. L. Keller
3. Single segment concentration
55
26/09/2020
3. Single segment concentration
How to select the market segments
MARKET COVERAGE
MASS
MARKET
FULL
MARKET
COVERAGE
MULTIPLE
SEGMENTS
SINGLE
SEGMENTS
INDIVIDUALS
AS
SEGMENTS
CUSTOMI
ZATION
Marketing management, P. Kotler & K. L. Keller
56
26/09/2020
4. Individual marketing
• The ultimate level of segmentation leads to segments of one.
• Companies
have gathered enough information
individual customers and business partners.
• Their factories are designed more flexibly.
about
• Mass-customization is the ability
to meet each customer’s
requirements – to prepare on a mass basis individually
designed products, services, programs, and communications.
• Mass-customization is now extremely present in products, and
of course in services, that can offer individualized experiences.
Marketing management, P. Kotler & K. L. Keller
4/ Individual marketing
57
26/09/2020
4. Individual marketing
2.3 BRAND
POSITIONING
58
26/09/2020
Brand positioning definition
Positioning is the act of designing a company’s offering
and image to occupy a distinctive place in the minds of the
target market. The goal is to locate the brand in the minds
of consumers to maximize the potential benefit to the firm.
• A good brand positioning helps guide marketing strategy
to make the right decisions by:
• clarifying the brand’s essence
• identifying the goals it helps the consumer to achieve
• showing how it does so in a unique way.
Marketing management, P. Kotler & K. L. Keller
Choosing a competitive frame of reference
The frame of reference defines which other brands a brand
competes with and which should be the focus of the competitive
analysis.
Identifying competitors, belonging to the same category that
gathers companies willing to satisfy the same customer need.
2. Analyzing competitors
1.
• What is each competitor seeking in the marketplace?
• What drives each competitor’s behavior?
• What is the competitor’s mission?
3.
Is the market stable and established, or rapidly changing?
Marketing management, P. Kotler & K. L. Keller
59
26/09/2020
Choosing a competitive frame of reference
Options with multiple frames of reference
1.
Develop the best possible positioning for each type of
competitors and then see whether there is a way to create one
combined positioning robust enough to effectively address them
all.
2.
If competition is too diverse, prioritize competitors and then
choose the most important set of competitors to serve as a
competitive frame.
A brand should never try to be all things to all people.
Marketing management, P. Kotler & K. L. Keller
Identifying points-of-parity (POPs)
Points of parity are attributes or benefit associations that
are not necessarily unique to the brand but may in fact be
shared with other brands.
• Example: category POPs. These are the necessary but not
sufficient conditions for brand choice. They are the “green
fees” necessary to be in the game.
Marketing management, P. Kotler & K. L. Keller
60
26/09/2020
Identifying points-of-difference (PODs)
Points of difference are attributes or benefits that consumers
strongly associate with a brand, positively evaluate and believe
they could not find to the same extent with a competitive brand.
• Three criteria to establish them.
1. Desirability. Consumers must see the brand association as
personally relevant to them, with a strong reason to believe.
2. Deliverability. The company must have the internal resources and
commitment to feasibly and profitably create and maintain the
brand association in the minds of the consumers.
3. Differentiability. Consumers must see the brand association as
distinctive and superior to relevant competitors.
Marketing management, P. Kotler & K. L. Keller
Identifying POPs and PODs
61
26/09/2020
Session 2 - Wrap-up
Market segmentation divides a market into welldefined slices: a market segment consists of a group of
customers who share a similar set of needs and wants.
Positioning is the act of designing a company’s offering and
image to occupy a distinctive place in the minds of the target
market. The goal is to locate the brand in the minds of
consumers to maximize the potential benefit to the firm.
THE FUNDAMENTALS
OF MARKETING
UP 14206 – September 2020
École du Management et de l’Innovation
64