BASIC MARKETING
How do we define Marketing:
● offering something of value don't need to worry about selling
● you have the best videogame but if no one knows
● company; customer
● creating something of value
○ value is always perceived, not everyone gets the same value
○ is a function (input output; product of something)
○ a variable that influences somethings
○ benefits and costs
○ Why are some of you spending a lot of money on video games? How much do
you spend on hair stylist?
■ getting benefits
○ Value changes
● is an activity
● We are not the same (consumer behavior)
○ People have different preferences
○ we are different
○ What makes us different?
○ Thus we have different values
● How we communicate
○ Online
○ Companies license to you (literally)
○ delivery (distribution strategy)
○ pricing strategy
○ Same offering different prices
● What do we need to exchange to happen?
■ two party
■ one has something of value to the other
● EX: How can marketing be so powerful and influence human behavior?
○ KFC associated with christmas in Japan
○ diamond ring associated with wedding proposal due to marketing
● Marketing has come to 4 orientations:
○ After industrial revolution: Production Orientation
■ "If you build it they will come"
■ What focus?
● focus on what you are good at
■ Companies came with new products not because people need it
● Still happens
● Focus on what customer wants
○ After WWII: Aggressive selling technique (Sale orientation)
■ Don't need but convince you need
○ Market Orientation
■ Marketing means potential buyers; consumers
■ What do consumers want and we will build that
■ "Customers not always know what they want but they know what
they have"
● they go to comfort zone
■ they want what they know
○ Societal Orientation
■ adds one more stake
● what do customer want
● what is good to society
● makes they look good
○ marketing tactic
● As a company focus on target group
○ if you try to be something to everyone you end up being no one to anyone
○ most loved companies most polarized
■ most loved by one group is also most hated by other group
○ like politicians
○ boyscout backfire
■ companies make things controversial want boycott from other groups
■ sales went up
● more popular to other group
● If you don't know what consumers want
○ think ahead
○ know how companies would behave in the future
● What is Strategy?
○ like an old map
■ where do you want to go
● objectives and goals
■ your end destination: objective
■ what are your resources
■ the evolving scenario
○ Marketing strategy is the process of creating and maintaining a feat between
3 things (organizations, objections and resources) and evolving market
opportunities
■ key factors:
● objectives/goals
● opportunities evolves
● What should be the key factors for goals?
○ realistic
■ definition: available
■ grounded in some reality
■ measurable
■ relatable to benchmark
■ linked to a timeline
● Swarm analysis
○ weakness
■
Strength and Weakness
■ something you are good at
■ something you are not good at
○ opportunities
■ you can't control
■ external factor
○ trends
● As marketing manager
■ things you can control
○ what services you provide
○ who you want to target
● Product (your decision)
● Price (you have to put grounded price)
● Place (distribution strategy)
○ where will you sell it, what kind of platform
● all link to your target customer group
○ target market (who you want to target)
● Where do you want to advertise?
● they are reaction to things you can control
■ things/factors/variables you can't control
● how public perceives you
● demand
● how much you end up charging
● trends
● laws and regulations
○ different countries different regulations
● competition
○ technology changes linked to competition
● geographical factors
● economy conditions
○ how much you sell
○ cheaper products, fast food do better in resection
○ prosperity
● supply side factors
Class 2
● companies need to have something different from other companies
○ innovation
● why would people buy one from another
○ social desirable
■ a lot of people unconsciously get products due to…
●
Competitive Advantage
○ to do well
○ reason to buy
○ comes in different forms
■ Price
■ Convenience
■ Perceived better quality
○ What gives you competitive advantage
○ Mean unique features of a company that are perceived by the target market
as significantly superior than the offering of the competition
■ better to the target market
● focus on the target market
○ How can you get Competitive Advantage?
■ price (Ex: target)
○ How do you have Competitive Advantage?
■ SCA (Sustainable Competitive Advantage)
● Innovativeness (be proactive) → new → try new ideas
○ if not → lost advantage competitiveness
○ Incumbent's Curse
■ market leader
● Patents (on the product or offer)
● Copyright/Trademarks
● Brands
● History
○ Ex: Harvard 1º College
○ Ex Levis 1º in Denim
○ Channel
■ one of few brands that go to everyone
● Geography
○ Chocolate → Switzerland
■ given competitive advantage
■ Strategic Alternatives
● Market:
○ involving target/current customers
● Product
○ different ratios depending on the goal
● Market Penetration: increase market share among existing
customers
○ Why do customers buy more often?
■ if they are consuming more per episode and/or
consuming more frequently
● consume more
○ buy more
■ due to advertising we put pasta na escova
inteira
● if orange juice pro almoço
● Market development: try to attract new customers to existing
products
○ Something
○ don't change products
■ Ex: cosmetics
■ New customers
● go to other ways to get it
● Product development:
○ create new products for existing customers
■ current customers
○ new products for new markets:
■ introduce new products into new markets
● change product depending on markets
○ Ex: McDonalds Mexico → sells
tacos
○ Strategy depends on approach
■ Portfolio Matrix
● 2x2
○ 2 variables 2 levels
● market share dominance: high x low
○ the dominance on market
● market growth rate: high x low
○ low market is growing
Class 3
● Market Strategic Implications:
○ Build Strategy:
■ applicable only for STARS or brand that has potential to be a STAR
■ STAR gives you better garantia for the future
■ prioritize / future oriented
○ Hold Strategy:
■ Cash Cow
■ don't change
■ advertising
○ Harvest Strategy:
■ Mostly for problem child/question mark and DOG; but sometimes also
for cash cows
■ if product is not going as well
■ sell anywhere
■ do whatever you can for the brand
○ Divest Strategy:
■ Dog and also problem child/question mark
■ get rid of something (product)
● stop making + stop selling
● TARGET MARKET STRATEGY
○ every brand should have a specific target market
○ why not?
■ we are different, not the same taste, etc
○ customer Heterogeneity
○ if you try to appeal to everyone then you cannot appeal anyone
● 4 C's of Marketing Strategy
○ Customer Needs
■ whose needs am I satisfying
○ Company Skills and Resources
■ am I capable to satisfy those needs
○ Competition
■ differentiate from your competition
■ what can you offer better than competition
○ Context
■ scenario
■ can't control but can adapt
■ external factors
● Consumer Decision Making
○ consumer behavior decision making starts with recognizing/identifying needs
■ Need/Want: gap between your current state and desired state
● not everyone has the same needs
● need only arises if there is a gap
● needs are of different types
○ hierarchy of needs
○ Gather information / Information Search
■ internal: own experience
■ external: marketing controlled (the company website), non-marketing
(e.g., friends, family, neutral forums)
○ Evaluation of Alternatives
■ Criteria to rank attributes and/or weights to attributes
● attributes are features of any product
● different needs to different people
○ Purchase
■ prices important for you?
○ Post-Purchase Behavior
■ after you buy something
■ follow-up after purchase
■ Post-purchase stage:
● Cognitive dissonance
○ Needs can be explicit or it could be latent
■ latent: something that is not observable
● Ex: feeling
● something your really need but you don't know
■ Customers don't always know what they want… They want what they
know
● Types of Consumer Buying Decisions
○ Routine Response Behavior
■ stakes are low
■ not much effort
■ Ex: bread
○ Limited decision Making
■ Ex: casual clothing
○ Extensive Decision Making
■ go through all five steps
■ involved in the purchase
■ a lot of effort
● Types of Decision Making is Influenced by:
○ Consequential
○ Costs
○ Involved
● Person
● Customer Heterogeneity (different)
● Factors that influence consumer judgment and behavior
○ Cultural Factors
■ Culture:
● group thing
● Values: things you hold to be important
● Beliefs
○ Social factors
■ Social:
● Reference Groups
○ we gravitate to people that are similar to us
○ human tendency
○ influence each other
● Family Members
● Opinion Leaders
○ social media influencers
○ Individual Factors
■ Physiological and Psychological factors
● Psychological
○ Personality
■ influences what you like
○ Motivates: link to what motivates you
○ Enjoyable: what you find fun
■ Height, weight,
■ Gender
● Physiological reasons
○ Ex: abs
● Social reasons
○ social norms
■ cosmetics
■ Age
■ Personality
● Who are you? What motivates you?
■ Life cycle stage
■ Lifestyle
● personality correlated
● Affect and Cognition
○ Affect: emotion/feelings
■ reward system
● activated → reacts to sadness
● "on average people spend more when they are sad"
○ not planned
○ Cognition: thought process
■ mind
○ Social norm
■ says that women are more emotional than men
■ on average
■ naturally driven or social norms?
● Gender/Sex
○ Physiological Reasons
○ Social Reasons
● CLV (Customer Lifetime Value) score
○ how much money you are bringing them / how much you will bring in the
future
○ how much money you are bringing for the company on the long run
○ high CLV
○ Amount of money spent (in general, not necessarily one visit)
○ Age (younger people, everything else remaining same would get higher CLV
○ if you are buying on sale you are not bringing money for the company
○ Online reviews and complaints
■ bad reviews CLV goes down
■ good reviews CLV goes up
● SEGMENTATION, TARGETING, AND POSITIONING
○ Market: is customers
■ All of this to be aligned:
● People or organizations with
● Needs or wants for the product
● The ability to pay
● Willingness to pay
■ potential customers
○ Market Segment:
■ Break down market into sub-groups with similar characteristics and/or
needs
■ Marketing Segmentation
■ Criteria for Effective Segmentation
● Substantial (large amount)
○ in order to have a segment need to be large
● Identifiable
● Measurability
○ segment should be measurable
○ measure the size of each segment
● Accessibility
● Responsiveness
○ means people in those different segments react
differently to the same thing (same message)
○ different segments reach differently to marketing
■ Why do we do segmentation?
● allows to satisfy needs in more efficient ways
● not everyone has the same needs
■ WAYS in which Segmentation is Usually Done:
■ Bases/Factor for Undertaking Segmentation:
● How to do segmentation/ how it is usually done?
○ Different needs → different products
○ Demographics:
■ Age
■ Gender/Sex
● both
biological,
physiological
and
societal needs
● Ex: Pink Tax
■ Race/Ethnicity
■ Income
■ Education
■ Location
■ Family life cycle
○ Psychographics:
■ the study of consumers based on their
activities, interests, and opinions
■ places you visited
■ personality
○ Benefits Sought:
■ refers to customers choosing products and
services based on the features and solutions
that matter to them most.
■ the same product may give different people
different benefits
○ Usage Rate
■ a measure of the quantity of a product
consumed by a user in a given period; users
may be subdivided as heavy, moderate and
light.
● 80/20 Rule
○ says that about 80% of revenue is generated by 20% of
customers
■ Target Market Strategies:
● Undifferentiated Strategy
○ one strategy for the whole market
○ no segmentation
○ one product for everyone
○ most for new product category
● Multi-Segment Strategy
○ different products for different segments
● One-to-One Marketing:
○ segment size of 1
● Customization
● Positioning: Place a brand is expected to occupy in the
customers' minds; how is a brand perceived
● Low Price
● Repositioning:
○ changing the market's perceptions of an offering so
that it can compete more effectively in its present
market or in other target segments.
● EXAMPLE:
○ Positioning of Procter & Gamble (P&G) Laundry
Detergent Brands
■ Tide
■ Cheer: color protection
● Segmentation based on needs and
benefits
■ Gain: Odor removal; scent
■ Dash: Value Brand
■ Ivory: baby clothes
■ Ariel: aimed at Hispanic market
● Perceptual Mapping:
○ a chart used by market researchers and businesses to depict and understand
how target customers view and feel about a given brand or product.
● Displaying products on different attributes
★ Definition and importance of marketing;
★ Exchange;
★ Marketing Orientations and Philosophies;
★ Customer Value;
★ Customer Satisfaction.
★ Strategic Marketing Management;
★ Controllable and Uncontrollable variables;
★ SWOT analysis; Elements of the Marketing Mix;
★ External Environmental Factors;
★ Sources of Competitive Advantage;
★ StrategicAlternatives;
★ Portfolio Matrix;
★ Target Market Strategy;
★ External Environment.
★ Consumer Decision-Making Process and associated steps;
★ Evoked set;
★ Cognitive Dissonance;
★ Involvement and Factors determining level of involvement;
★ Marketing Implications of Involvement;
★ Types of Buying Decisions;
★ Factors influencing buying decisions;
★ Components and effects of culture;
★ Social Influences on Consumer Buying Decisions;
★ Psychological Influences; Maslow’s Hierarchy of Needs;
★ Customer Lifetime Value.
★ Market Segmentation;
★ Importance of Market Segmentation;
★ Criteria for Successful Market Segmentation;
★ Bases for Market Segmentation;
★ Benefits of Segmentation;
★ Psychographic Segmentation;
★ Steps in Segmenting Markets;
★ Target Markets and Strategies for Selecting Target Markets;
★ Positioning; Product Differentiation;
★ Perceptual Maps;
★ Repositioning.