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Andrew Whalley

Strategic Marketing

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ISBN 978-87-7681-643-8

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1

The Three levels of Marketing

9

1
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3

The Theoretical basis of competition

17

1
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5

The Marketing Concept

35

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What can be marketed?

40

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Basic product

44

2
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4

Perceived product

45

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6

Summary of the Chapter

45

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Cross-functional issues

47

3
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3

Forecasting market and sales

64

3
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5

Objectives setting

66

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Segmentation, Targeting & Positioning

67

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2 Targeting

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Positioning and Perception

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Strategies for Product Positioning

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Corporate Positioning

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Chapter summary

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1 Price

88

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3 Product

92

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5

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Physical Evidence

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7 Process

100

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102

Product Management

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Marketing Communications or MarCom or
Integrated Marketing Communications (IMC)

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The Marketing Communication Process

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The development of Marcoms

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9 
Expanding marketing’s traditional boundaries

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Strategic Marketing

Preface

Preface
This book is aimed to give an overview of what marketing really means in the contemporary business
environment
...

Let’s start with the premise that despite its importance, Marketing is the least well understood of all the
business disciplines, both by those working within business and by the public at large
...

The left-wing socialists, social scientists, journalists, and popular mass media programme makers do at
least acknowledge marketing as being real
...
Both views are at best incomplete in terms of truly understanding
markets from the key perspective – that of the customers and suppliers who interact to make the markets
...
Goods & Services, collectively called Products, are developed to meet
customer needs and so those needs must be researched and understood
...

Product, Brand or Marketing Managers have to design marketing programmes for their products and
develop good customer relationships to ensure their brands’ ongoing success
Marketing has arguably become the most important idea in business and the most dominant force
in culture
...
This means that marketing pervades society not on a daily basis but on a second by
second basis
...
First of all, marketing issues are important in
all areas of the organisation – customers are the reasons why businesses exist! In fact, marketing efforts
(including such services as promotion and distribution) often account for more than half of the price of
a product
...


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In particular at the highest levels marketing becomes an
integrating holistic culture that drives integrated, co-ordinated and focussed business practices with the
interests of the customer as its heart – a combination that makes such businesses difficult to beat in the
market
...

• Marketers distribute products – there must be some efficient way to get the products from
the factory to the end-consumer
...
Promotion involves advertising – and much more
...

• Marketers also price products to “move” them
...
In some cases, however, price may provide the customer with a “signal”
of quality
...

• Marketing is applicable to services and ideas as well as to tangible goods
...


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This perception isn’t in many ways unreasonable, advertising and promotion are
the major way in which most people are exposed to marketing
...

• It is where the cutting edge of human nature meets the versatility of technology
...


1
...
” The better definitions
are focused upon customer orientation and satisfaction of customer needs;
• The American Marketing Association (AMA) uses the following: “The process of planning
and executing the conception, pricing, promotion, and distribution of ideas, goods, and services
to create exchanges that satisfy individual and organizational objectives
...
”
• The Chartered Institute of Marketing (CIM), “Marketing is the management process that
identifies, anticipates and satisfies customer requirements profitably
...
” In the article the McKenna states, “Marketing today is not a function; it is
a way of doing business
...
So yes, marketing is everything
...
This entails understanding the
environment the business is operating in; customers, competitors, laws, regulations, etc
...
This second layer is about segmenting (S) the market,
deciding which customers to target (T) and deciding what messages you want the targets to associate
with you; what is called Positioning (P)
...


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Brands are now about image – or more correctly its perception, branding
is a link between the attributes customers associate with a brand and how the brand owner wants the
consumer to perceive the brand: the brand identity
...

Not all of these will be beneficial from the brand owner’s perspective and they will seek to bridge the gap
between the brand image and the brand identity, by trying to change the customers perceptions – brand
image – to be closer to what’s wanted brand identity; sometimes this necessitates a brand re-launch
...
Effective brand names build a connection between the
brand’s personality as it is perceived by the target audience and the actual product/service, by implication
the brand name should be on target with the brand demographic, i
...
based in correct segmentation
and targeting
...

The third level of marketing is about the day to day operational running of marketing, it encompasses
the control of the Marketing Mix and the processes within a business that help create and deliver that
company’s products and services to the customer
...

These operational issues are covered in Chapters Five, Six and Seven
...
The environment is “dynamic
...

• This process involves both planning and implementing (executing) the plan
...
com

Strategic Marketing

So what is marketing?

To summarise then we can see that a simple definition of marketing would be, “The right product, in the
right place, at the right time, at the right price,” Adcock et
...
This is a succinct and practical definition
that uses Borden/McCarthy’s 4Ps – Product, Price, Place & Promotion, which are covered in Chapter Five
...
2

The value of Marketing; Needs, Utility, Exchange Relationships & Demand

It is a fundamental idea of marketing that organisations survive and prosper through meeting the needs
and wants of customers
...
This matching process takes place in what is called the marketing
environment and involves both strategic and tactical marketing within the organisation’s structure
...

An entrepreneur realised that the feedback his company was getting had begun to show less
and less positive results over the past twelve months
...
Looking deeper a key issue seemed to be that customers where no
longer finding the business easy and flexible to deal with
...
He split his staff into those roles were to directly serve
customers, e
...
Customer service, Sales, Marketing and those whose roles were to support the
company, e
...
Accounting, Logistics, HR
...

Once assembled he explained the reason for the meeting and that he had reached a solution; the
badges
...
Those of you wearing a green badge – it is your job to say yes to a customer and find a way
to do it
...

Now that’s the Marketing Concept as a cultural philosophy for a business
...
They face threats from competitors, and changes
in the political, economic, social and technological aspects of the macro-environment
...
An organisation that adopts the marketing concept accepts the needs of potential customers
as the basis for its operations, and thus its success is dependent on satisfying those customer needs
...


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The lowest level is associated with
physiological needs, with the peak level being associated with self-actualisation needs; especially identity
and purpose
...
Once an individual has moved upwards to the next level, needs in the lower level will no longer
be prioritized
...
e
...

People have basic needs for food, shelter, affection, esteem and self-development
...
In fact many of these needs are created from
human biology and the nature of social relationships, it is just that human society and marketers have
evolved many different ways to satisfy these basic needs
...
As such each person’s span of needs
is likely to be unique and this it follows that customer needs are, therefore, very broad
...

Consumer wants are shaped by social and cultural forces, the media and marketing activities of businesses;
as such a want is much more specific and goes beyond the basic to include aspirational values as well
as the need satisfaction
...
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Strategic Marketing

So what is marketing?

Thus, whilst customer needs are broad, customer wants are usually quite narrow
...
What they want to eat and in what kind of environment will
vary enormously
...
Some are perfectly happy with a microwaved
ready-meal, others will only countenance a scratch cooked meal with organic ingredients
...

Indeed it is this diversity of wants and needs that allows a variety of ‘solutions’ to be developed in any
market and that directly leads to the need to think carefully about how and what can satisfy wants and
needs
...
3
...

This leads onto another important concept – that of demand
...
e
...
For example, many consumers around the globe want a
Ferrari car, but relatively few are able and willing to actually buy one
...
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...

Indeed the concept of demand is how we in marketing actually define a market – a group of potential
customers with a shared need that can be satisfied through an exchange relationship to the mutual
satisfaction of the potential customers and the supplier
...

We can also take this a step further
...
This grouping through
understanding shared needs is fundamental to effective marketing, but is also a major area of contention
within most businesses because it is easy to get wrong
...

So to summarise;
• A firm’s marketers carefully study of the needs individuals and businesses in order to asses
the potential of a market
...

• A target market
-- The group of people toward who an organization markets its products or ideas with a
strategy designed to satisfy their specific needs and preferences
...

Businesses therefore have not only to make products that consumers want, but they also have to make
them affordable to a sufficient number to create profitable demand
...
It is not Burger King or KFC that
make people hungry, nor Budweiser or Coco-cola that make them thirsty
...
com

Strategic Marketing

So what is marketing?

However, businesses do try to influence demand by designing products and services that are;
• Attractive
• Work well
• Are affordable
• Are available
From what we’ve looked at so far it should be evident that Marketing also fundamentally involves an
exchange process, that is marketing involves two or more parties trading something of value with each
other
...
If we travel to another city and
stay at a hotel, we exchange money or more commonly credit through the use of a credit card, for the
use of the room and services of the hotel
...

So to understand Marketing we need to understand the exchange process;
• There must be two parties, each with unsatisfied needs or wants
...

• Each must have something to offer
...
Thus, a consumer who buys a soft drink in a
vending machine for £1
...
Conversely, the vendor must value the money more
...
It is
possible, although a bit weird, to exchange two ducks for a pair of shoes
...
This could be through a display in a store, an
infomercial, or a posting on eBay
...
Because of marketing, the buyer’s need for a certain product is satisfied, and the
seller’s business is successful
...

So we can see that Marketing is said to have a positive effect on an economy and helps satisfy needs by
bringing supplier and customer together, it facilitates the exchange transaction
...
A charity takes a donation and the
exchange is the feeling of self-gratification the giver of the donation feels for giving
...
g
...
e
...


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Utility is a measure of the relative
satisfaction from, or desirability of, consumption of various goods and services
...
The Product and/or service and marketing of the product and/
or service form the foundation of the exchange process and together they create a utility
...
Richard Buskirk has
presented an idea that marketing is an activity that creates from, place, time and ownership utility;
1
...
Product planning and development activities create form utility
...
Time utility: making a product available when consumers want to purchase it
...

3
...

4
...
Goods may be lying in a reliable state
with producer or the manufacturer or their agents until some other person needs them
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Strategic Marketing

So what is marketing?

The production process creates form utility of a goods or service, whereas time, place, and ownership
utility are created by the marketing function; it is the act of offering a goods or service, when (time utility),
where (place utility) and via processes that make possession easy, e
...
price/distribution/purchasing terms
(ownership utility)
...
So the greater the utility, the greater the demand and potentially the more successful the business
...

Marketing functions are the activities that create utility and facilitate the exchange process and include;
• Buying or leasing
• Selling or leasing
• Transporting
• Storing
• Standardising or grading
• Financing
• Risk taking
• Information gathering
It is worth noting at this point that the concept of utility overlaps into later points on the Marketing
Mix, value chain and on goods versus services marketing
...
3

The Theoretical basis of competition

It is important to distinguish here between strategy frameworks and strategy models
...
However, models are
difficult to apply to specific company situations and instead, qualitative frameworks have been developed
with the specific goal of better informing business practice
...
3
...


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This is what a business’s strategic plan does; it lays out where
the business is heading for (targets/goals), where in currently is and what resources it intends to use, at
what time, with what expected result, to get there
...
These are the objects of most
corporate strategy:
Competitive advantage grows out of value a firm is able to create for its buyers that exceeds the firm’s cost
of creating it
...

There are two basic types of competitive advantage: cost leadership and differentiation
...

COMPETITIVE ADVANTAGE
Lower Cost

Differentiation

Broad
Target

1
...
Differentiation

Narrow
Target

3A
...
Differentiation
Focus

COMPETITIVE
SCOPE

Source: Porter, M, 1985:12
Figure Two; Porter’s Generic Strategies

A firm’s relative position within an industry is given by its choice of competitive advantage (cost leadership
vs
...
Competitive scope distinguishes between firms
targeting broad industry segments and firms focusing on a narrow segment
...
Porter maintains
that achieving competitive advantage requires a firm to make a choice about the type and scope of its
competitive advantage
...


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This framework is more in-tune with more advanced marketing concepts developed
around the service dominant approach to marketing
...

The external analysis builds on an economics perspective of industry structure, and how a firm can make
the most of competing in that structure
...
Porter’s Five Forces and Value Chain concepts comprise the
main externally-based framework
...

Internal analysis, like core competence for example, is less based on industry structure and more in
specific business operations and decisions
...
The internal
view is more appropriate for strategic organization and goal setting for the firm
...


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The
internal analysis emphasizes building competencies, resources, and decision-making into a firm such
that it continues to thrive in a changing environment, this has a close resonance with Porter’s value chain
concept and with the Resource based view (RBV) of the firm covered later in this chapter
...

The internal and external views mostly frame and inform the problem
...
Some of these strategic decisions are event driven
(particular projects or reorganisations responding to the environment and opportunity), while others
are the subject of periodic strategic reviews
...
3
...
The “Five Forces” diagram (Figure Three) captures the main idea of
Porter’s theory of competitive advantage
...

Competitive strategy must grow out of a sophisticated understanding of the rules of competition that
determine an industry’s attractiveness
...
The five forces determine
industry profitability, and some industries may be more attractive than others
...
Industry structure determines who will capture the value
...
The five forces framework highlights what is important, and directs manager’s towards
those aspects most important to long-term advantage
...
In some respects it is best to use the Five Forces framework as checklist for getting started,
and as a reminder of the many possible sources for what those few driving forces could be
...
com

Strategic Marketing

So what is marketing?

Entry Barriers
• Economies of scale
• Proprietary product differences
• Brand identity
• Switching costs
• Capital requirements
• Access to distribution
• Absolute cost advantages
Proprietary learning curve
Access to necessary inputs
Proprietary low-cost product design
• Government policy
• Expected retaliation

Suppliers

New Entrants
Threat of
New Entrants
Industry
Competitors

Bargaining Power
of Suppliers

Rivalry Determinants
• Industry growth
• Fixed (or storage) costs / value added
• Intermittent overcapacity
• Product differences
• Brand identity
• Switching costs
• Concentration and balance
• Informational complexity
• Diversity of competitors
• Corporate stakes
• Exit barriers

Bargaining Power
of Buyers

Intensity
of Rivalry
Determinants of Supplier Power
• Differentiation of inputs
• Switching costs of suppliers and firms in the industry
• Presence of substitute inputs
• Supplier concentration
• Importance of volume to supplier
• Cost relative to total purchases in the industry
• Impact of inputs on cost or differentiation
• Threat of forward integration relative to threat of
backward integration by firms in the industry

Threat of
Substitutes

Substitutes

Determinants of Substitution Threat
• Relative price performance of substitutes
• Switching costs
• Buyer propensity to substitute

Buyers

Determinants of Buyer Power
Bargaining Leverage
• Buyer concentration vs
...
1985:6
Figure 3: Porter’s 5 Forces – Elements of Industry Structure

1
...
3

How is competitive advantage created?

At the most fundamental level, firms create competitive advantage by perceiving or discovering new and
better ways to compete in an industry and bringing them to market
...
The innovation approach mirrors the modern marketing concept; the invention
approach mirrors old style product pushing
...
The most typical causes of innovations that shift
competitive advantage are the following:
• new technologies
• new or shifting buyer needs
• the emergence of a new industry segment
• shifting input costs or availability
• changes in government regulations

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Innovation as a means of developing and introducing new products also needs to be understood in terms
of the adopting behaviour of the consumer as formulated by Everett Rogers, in his work Diffusion of
Innovations (1962)
...
However it
was Rogers who first drew a variety of outlines together to develop a framework for the adoption of ideas
the adoption of new ideas, services and products which consisted of a sequential set of stages, as follows;
-- Becoming aware of the new product
-- Seeking information about it
-- Developing favorable attitudes toward it
-- Trying it out in some direct or indirect way
-- Finding satisfaction in the trial
-- Adopting the product into a standing usage or repurchase pattern
...
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Rogers also incorporated thoughts on consumer behaviour in terms of the
speed of adoption of a new product/service/idea and the cumulative penetration of the market by it
...
These are illustrated in figure 4
...
(1962)
Figure 4: The adoption Process of New Products and relative market share

Rogers outlines five adopter characteristics;
• Innovator: 2
...
5% of purchases; usually opinion leaders and naturally adopt products
after the innovators; crucial because adoption by them means the product becomes
acceptable, spurring on later purchasers
• Early Majority: 34% of purchases; spurred on by the early adopters; wait to see if the
product will be adopted by society and will purchase only when this has happened; usually
have some status in society
• Late Majority: 34% of sales; usually purchase the product at the late stages of majority
within the lifecycle
• Laggards: 16% of total sales; usually purchase the product near the end of its life; the ‘wait
and see’ group (wait to see if the product will get cheaper)
This concept also has implications for product management, particularly in terms of extra input into
models like Ansoff ’s matrix
...
com

Strategic Marketing

1
...
4

So what is marketing?

How is competitive advantage implemented?

But besides watching industry trends, what can the firm do? At the level of strategy implementation,
competitive advantage grows out of the way firms perform discrete activities – conceiving new ways to
conduct activities, employing new procedures, new technologies, or different inputs
...
Porters “Value Chain” and “Activity Mapping” concepts
help us think about how activities build competitive advantage
...

It scrutinizes each of the activities of the firm (e
...
development, marketing, sales, operations, etc
...
The value chain maps a firm into its strategically relevant activities
in order to understand the behaviour of costs and the existing and potential sources of differentiation
...
All the activities in the value chain contribute to buyer value, and the
cumulative costs in the chain will determine the difference between the buyer value and producer cost
...
com

Strategic Marketing

So what is marketing?

The value-chain concept has been extended beyond individual firms and it is now routinely applied to
whole supply chains and distribution networks
...
The industry wide
synchronized interactions of those local value chains create an extended value chain, sometimes global
in extent
...
” A value
system includes the value chains of a firm’s supplier (and their suppliers all the way back), the firm itself,
the firm distribution channels, and the firm’s buyers (and presumably extended to the buyers of their
products, and so on)
...

For example, a car manufacturer might require its autoparts suppliers to be located nearby its assembly
plant to minimize the cost of transportation
...
In strategic management terms this
was called vertical, backwards or forwards integration depending on the starting point of the business
within the value system
...
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...

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Strategic Marketing

So what is marketing?

A firm gains competitive advantage by performing these strategically important activities more cheaply
or better than its competitors
...
It’s also important to understand how a firm fits into the overall value
system, which includes the value chains of its suppliers, channels, and buyers
...
Competitive advantage requires that the firm’s value
chain be managed as a system rather than a collection of separate parts
...
This is the height of folly
...

This is crucial, since the essence of implementing strategy is in the activities – choosing to perform
activities differently or to perform different activities than rivals
...
A firm’s value chain is an interdependent system
or network of activities, connected by linkages
...
Linkages create tradeoffs requiring
optimization and coordination and indeed these linkages are the key to be flexible and reactive to
changing business conditions
...
This
makes business sense when a company can produce particular products or services using
distinctive sets of activities
...
This can be used when there are distinct groups of customers with differing
needs, and when a tailored set of activities can serve those needs best
...

• access-based positioning – segmenting by customers who have the same needs, but the best
configuration of activities to reach them is different, in such circumstances the way in which
the various customer segments are served is different, e
...
website and a shop sell the same
items but serve different customers based on access
...
com

Strategic Marketing

So what is marketing?

Porter’s major contribution with “activity mapping” is to help explain how different strategies, or positions,
can be implemented in practice
...
A company’s strategic position, then, is contained within
a set of tailored activities designed to deliver it
...
Fit locks out competitors by creating a “chain that is as strong as its
strongest link
...

Porter defines three types of fit:
• simple consistency – first order fit between each activity and the overall strategy
• reinforcing – second order fit in which distinct activities reinforce each other
• optimisation of effort – coordination and information exchange across activities to eliminate
redundancy and wasted effort
...
3
...
Indeed recent decades bear testament to the periodic
movement of low labour costs businesses from country to country
...

• Number of distinct sources – many are harder to imitate than few
...

Advocates of this framework emphasize the importance of a dynamic strategy in today’s more dynamic
business environment, given the impact of technology in the widest sense it is hard to argue that our
contemporary business environment is anything like that of even the 1990s let alone earlier eras
...


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In such an environment, the essence of strategy is not the structure of a company’s products and markets
but the dynamics of its behaviour
...
Underlying it all, though, is a set of core competencies
or capabilities that are hard to imitate and distinguish the company from competition
...


Source; Author adapted from various sources
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Strategic Marketing

1
...
6

So what is marketing?

What are core competencies and capabilities?

Prahalad and Hamel speak of core competencies as the collective learning in the organization, especially
how to coordinate diverse production skills and integrate multiple streams of technology (1990)
...
Taking Pralahad and Hamel’s view, three tests
can be applied to identify core competencies:
1
...
makes significant contribution to end user value, and
3
...
Indeed Stalk,
Evans, and Schulman (1992) speak of capabilities similarly, but define them more broadly to encompass
the entire value chain rather than just specific technical and production expertise
...
Portfolio of competencies
...
It follows that organization of a company
into autonomous strategic business units, based on markets or products can cripple the ability
to exploit and develop competencies – it unnecessarily restricts the returns to scale across
the organization
...
This is a radical departure from traditional
organisational theory
...
Products based on competencies
...
Thus,
core competence allows both focus (on a few competencies) and diversification (to whichever
markets firm’s capabilities can add value)
...
This
partly determines the pace at which competencies can be enhanced and extended (through a
learning-by-doing sort of improvement)
...
com

Strategic Marketing

So what is marketing?

3
...

The costs of losing a core competence can be only partly calculated in advance – since the
embedded skills are built through a process of continuous improvement, it is not something that
can be simply bought back or “rented in” by outsourcing
...
These were strategic investments
that enabled the company’s relentless focus on customer needs
...

4
...

There is a consensus of opinion about the limitations to restricting product development to
areas in which core competencies already exist, or core rigidities
...

1
...
7

Resource-Based View of the Firm (RBV)

The RBV framework is a relatively recent development that combines the internal (core competence)
and external (industry structure) perspectives on strategy
...
Competitive advantage is ultimately attributed to the ownership of a valuable
resource
...
g
...
g
...
g
...

No two companies have the same resources because no two companies share the same set of experience,
have acquired the same assets and skills, or built the same organisational culture
...

For a resource to be the basis of an effective strategy, it must pass a number of external market tests of
its value
...

Durability – how quickly does the resource depreciate?

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Heterogeneity of resources => rents exist
A basic assumption is that resource bundles and capabilities are heterogeneous across
firms
...
First, firms with superior resources can
earn Ricardian rents (profits) in competitive markets because they produce more efficiently
than others
...
e
...
Second, firms with market power can earn monopoly profits
from their resources by deliberately restricting output
...



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Strategic Marketing

So what is marketing?

2
...

3
...

4
...
Otherwise, the cost of getting there would offset the benefit of the resource or
asset
...
In
determining what valuable resources are, firms should look both at external industry conditions and at
their internal capabilities – in essence an audit of both macro and micro-environments is still required
but is processed via a different model that recognises that resources can come from anywhere in the
value chain and can be physical assets, intangibles, or routines
...
As such businesses must consider industry structure and dynamics when
deciding which resources to invest in
...
Good strategy requires continual rethinking
of the company’s scope, to make sure it’s making the most of its resources and not getting into markets
where it does not have a resource advantage
...


1
...
One of the key results reported in almost every study was that those
companies that followed traditional approaches to strategy, collaboration, organization, and business
processes (as taught in most MBA programmes and espoused by some consultants), had decreased the
chances for success compared to those firms whose managers followed innovative approaches to strategic
thinking and action
...


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...

Change, the story goes, is the striking feature of contemporary business, and successful firms will be the
ones that deal most effectively with change, not simply those that are good at planning ahead
...
When industries are
rapidly and unpredictably changing, strategy based on industry analysis, core capabilities, and planning
may be inadequate by themselves, and would be well complemented by an orientation towards dealing
with change effectively and continuously
...
4
...

Theories that draw analogies between biological evolution and economics or business can be very
satisfying: they explain the way things work in the real world, where analysis and planning is often a
rarity
...

In Eisenhardt & Brown’s framework, firms develop a “semi-coherent strategic direction”
...
In many regards this has overlaps with what
many older strategic texts term ‘emergent strategy’
...
Firms are not hindered by too much planning or centralised control, but
they have enough structure so that change can be organized to happen
...

They successfully ‘evolve’, because they pursue a variety of moves – reacting to the evolutionary pressure
of customers’ needs and in doing so make some mistakes but also relentlessly reinvent the business by
discovering new growth opportunities
...
It’s important to note that firms should not just react
well to change, but must also do a good job of anticipating and leading change
...

In Built to Last, Collins and Porras (1994) outline habits of eighteen long-successful, visionary companies
...
Evolutionary processes can be a powerful way to stimulate progress
...
There is no one formula for the “right” set of core values, but it is important to have them
...


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...
In marketing-speak these values should be a major part of a firm’s corporate
positioning who’s values need to be congruent with those of its products and services
...
Note; “maximize shareholder wealth” is not an adequate
core ideology – it does not inspire people at all levels and provides little guidance
...
Strategy and
planning should foster and complement such change, not suffocate it
...

Not everything about an organization is a candidate for change in considering alternative
strategies
...
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...
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Strategic Marketing

So what is marketing?

1
...
2 Hypercompetition
As discussed earlier, there is little doubt that today’s business environment has become dynamic as such
traditional sources of competitive advantage erode rapidly, and sustaining advantages can be a distraction
from developing new ones
...
This has become known as Hypercompetition
...
2
...
6
...
The primary goal of this new approach to strategy is disruption of the status quo, to seize the
initiative through creating a series of temporary advantages
...
From economic theory we know that there is no equilibrium as in
perfect competition, and only temporary profits are possible in hypercompetition markets
...
These approaches
are described in Chapter Eight
...

Successful strategy in hypercompetitive markets is based on three elements:
• Vision for how to disrupt a market
-- setting goals, building core competencies necessary to create specific disruptions
• Key capabilities enabling speed and surprise in a wide range of actions
• Disruptive tactics illuminated by game theory
-- shifting the rules of the game, signalling, simultaneous and strategic thrusts

1
...
To understand Marketing it is thus important to understand
what these eras were and what their philosophy of business was, indeed some businesses still run on
these philosophies are do not utilise the marketing concept
...
com

Strategic Marketing

So what is marketing?

190

The Production Era
• Minimal dialogue between customers and suppliers
• Mass production
• Homogenous products
• Distribution is the focus of marketing

194

The Institutional Period and Selling Orientation
• Rapid growth
• More focus on cost management, inventory management and asset management
• Selling focus (company builds it and sales person sells it)
• Minimal customer voice
• Increasing need for marketing communications
• The development of the 4Ps

195

The Marketing Concept
•
•

Companies should only make what they can market instead of trying to market what they
have made
Increasing customer focus

198

Relationship Marketing/ Supply Chain Era
• Customers now have a dialogue, not just a voice
• Close, long-term relationships based on mutual trust
• More emphasis on win-win outcomes

200

Value Chain Era
• Start with customer requirement and build infrastructure to deliver maximum value
• Integration of supply and demand chains
• Proactive, knowledge-based relationships

? Era
Source: Adapted by author from various sources
Figure 7: The four Eras of predominant business philosophy

Markets are ancient, but the concept of marketing arose only in the middle of the 20th century
...
As markets
matured in the early 20th century, firms had to compete harder for market share, but they did so through
advertising and sales promotions aimed at unloading goods on resistant customers; the hard sell reigned
...
This was a period of rapid social change driven by technological
and scientific innovation (see BBC history website) leading to mechanisation and industrialisation and
the mass production philosophy made famous by Henry Ford
...


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...
e
...
The key idea was that a good
product would sell itself and thus little to no emphasis was placed on marketing, indeed emphasis was
placed on maximising distribution; a good product with wide distribution equalled success
...

One result was that for the first time the production of goods was separated from their consumption
...

During the late 1930s and more so in the 1940s a shift in thinking began
...
The beginnings of International travel on a
accessible scale also fuelled both growth and competition
...
It is in this period that most of today’s creative agencies
in advertising and marketing have their roots
...
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...
Through
the 1950s this led to a gradual change as other companies began to realise that ‘persuading’ people to
buy something was relatively difficult and that as such actually discovering customers basic needs and
then supplying products and services to satisfy them was both a sounder philosophical concept and
more importantly a much more efficient and effective economic premise on which to run a business
...

The growth in demand for services (and the resulting production) has continued through to the
present day, despite recessions
...

Through the 1950s and 1960s the emphasis on researcher customer needs grew until philosophies such
as ‘Customer is King’ evolved which was the true start towards the modern Marketing Concept
...
Their success was noted and quickly spawned imitators
...

During the late 1970s and early 1980s this concept developed further
...
In this a customer was viewed as important
enough to be worth developing a long-term ongoing relationship with and so a salesperson would be
assigned to develop this relationship rather than constantly looking for new customers
...

Whilst the success of CRM and the accompanying Relationship Marketing phenomenon that
accompanied it in marketing circles is debateable, the orientation that it placed on both customer and
supplier getting value from a long-term relationship is not
...

The Marketing concept was the most recent of the ‘levels’ of marketing to develop and can be summarised
as a philosophy (belief) that an entire firm must be co-ordinated to serve the needs and wants of its
present and potential customers at a profit
...


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...
e
...
At its core this philosophy
recognises that marketplace success begins with understanding the customer
...
e
...
In part it is also explained by the increasing
competitive forces levied on markets by factors such a globalisation, technology etc
...

There are three main alternatives to adopting a marketing orientation
...

Sales orientation; Some businesses see their main problem as selling more of the product or
services which they already have available
...

The difference is that a sale-orientated business pays little attention to customer needs and
wants, and does not try particularly hard to create suitable products or services
...
By concentrating on producing maximum volumes, such a
business aims to maximise profitability by exploiting economies of scale
...
Such an approach is probably most effective when a business operates
in very high growth markets or where the potential for economies of scale is significant
...
Consider a business
that is “obsessed” with its own products – perhaps even arrogant about how good they are
...

However, by failing to consider changing technological developments or subtle changes in consumer
tastes, a product-orientated business may find that its products start to lose ground to competitors
...
com

Strategic Marketing

What can be marketed?

2 What can be marketed?
We satisfy our needs and wants by buying goods and services
...
; they are physical, having form and substance
...
When you purchase a good you thus get physical ownership of it, whereas when you purchase
a service you gain ownership of nothing
...

It is only when you get down to individual adaptation of the marketing mix elements that such a
consideration is required
...


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...
The goods and
services continuum enables marketers to see the relative goods/services composition of total products
...

Goods and services are the outputs offered by businesses to satisfy the demands of consumer and
industrial markets
...
They have
shape and can be seen and touched
...

• Perishability: All goods have some degree of durability beyond the time of purchase
...

• Separability: Goods can be stored for later use
...
Because the production and consumption of services are simultaneous,
services and the service provider cannot be separated
...
The quality of services, however, is different each time
they are delivered
...
com

Strategic Marketing

What can be marketed?

Secondly when one considers the real world such a split between goods and services is clearly tautology –
they are both products
...

For example, a restaurant provides a physical good (prepared food), but also provides services in the
form of ambiance, the setting and clearing of the table, waiting on table, etc
...

This has led to some academics developing the Service Dominant Logic (SDL) approach to marketing,
which focuses on this area as the substantive satisfier of needs
...
Firstly we can describe a ‘Product’ as a bundle of attributes or characteristics
...
Bread comes in many varieties, leavened and unleavened, white, wholemeal,
brown, a mix of the two, sliced or unsliced, buns, baps or loaf, small, medium or large or it may be
small – these are physical attributes of the bread
...
g
...

Note these physical attributes are aimed at satisfying people’s needs
...

Indeed if we think about this a Product may have to satisfy many needs to be successful
...
Primarily it has to quench thirst and taste good, but it is likely that it also has to be low
calorie, be convenient to drink and convey a suitable image
...
g
...
g
...
Some of these are fulfilled by basic product
characteristics, but some needs require more than just product ingredients, e
...
image is largely created
by its advertising and the convenience of drinking is down to the size and design of the can or bottle
...


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...
The core benefit is the central reason for the product
to exist, it is the simplest possible answer to an expressed need: no frills, no branding or packaging, no
warranties or service promises, just the most basic reason why the product is needed
...
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Strategic Marketing

2
...
E-mail, SMS text, messenger programs are new ways of satisfying the need
to communicate, and have supplanted letters, faxes, telegrams, and public phone boxes as earlier ways
to satisfy this communication need, but they haven’t created a new need in themselves
...
Marketers must be sure that their products
will satisfy a need in its most basic sense
...
Consider the fate of the Sinclair C5, as shown in figure 10
...
As a result the product and Sinclair research in turn – failed
...
2

Basic product

The basic product is the product stripped down to its essentials, and is often referred to as the FAB;
Features, Attributes and Benefits
...
Benefits are the favourable
results customers expect to obtain by using a product
...
Benefits reside in the customer and are always abstract they are often the result of
a cluster of product attributes, some of which may be abstract attributes
...

For example, a drink may have high caffeine content (a concrete attribute), whilst a computer has a
quad core processor making it able to multi-task and get more done, faster; we would characterise this
intangible attribute by using the term “performance
...
com

Strategic Marketing

2
...
Among these are customer service, guarantees,
service network, delivery, after-sales service and credit facilities
...


2
...
This varies according to customers’ perceptions
of the product, e
...
different customers have different views
...
We have different likes
and dislikes, different tastes – that is largely why suppliers offer us a choice of products
...
We call this positioning – it is the place a product is perceived to occupy in the minds of
customers/consumers relative to other competing brands
...

Perceptual mapping is covered in section 4
...

If there is a mismatch of customer perception and supplier intention, then there is a problem
...
5

A note on branding

Branding spans two levels in the total product model
...
Brand image is also an important part of the customer’s
perception of the product and so fits into the model’s outer ring
...


2
...

But the way that different products are marketed is very different, and as you might suppose by now
this is dependent the nature of the product and on the market we are aiming to serve, this second
approach to categorizing products classifies them on the basis of their uses
...
The major distinction
in this system is between consumer and business products, with the later referred to as ‘industrial’
products in some books
...
Note that these terms are
based on the target market not on the product or service, as it is perfectly possible for a product or
service to be a need for a business and a consumer, e
...
car insurance, buildings insurance, stationery
...
com

Strategic Marketing

What can be marketed?

B2C marketing is what all of you reading this will have been exposed to in your life to date; it’s the
marketing of goods and services to members of the general public, as an individual or as part of a social
group, e
...
family, friends
...

B2B marketing is different in that it involves marketing to an organisation which will have a variety of
different people several of whom will have a role in the choice of the goods and services that are used
by their organisation
...
Chapter Two explores B2C and B2B marketing in more detail
...


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By 2020, wind could provide one-tenth of our planet’s
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Up to 25 % of the generating costs relate to maintenance
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...

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Strategic Marketing

Marketing’s role in the business

3 Marketing’s role in the business
3
...
Customer satisfaction is the result of a product meeting or exceeding the buyer’s needs and
expectations
...

Value in terms of the quality being commensurate with the price and with the overall cost of acquisition –
a concept that goes beyond basic price to incorporate delivery and other additional charges
...
Value in terms of the brand reputation of the
supplier; a reputation for quality can enhance a firm’s competitiveness, whereas a slip in quality can
damage a firm’s image and ability to compete
...
Figure 4 shows a conceptual model for value and hints
at the complexity involved, this is a primary reason why traditional economics based theory can never
explain purchasing behaviour
...
com

Strategic Marketing

Marketing’s role in the business

Customers who believe that they have received value are more likely to remain satisfied with the company
and continue their relationships
...

• To formulate value propositions that meets customers’ needs and creates a differential
advantage
...

• To understand that superior value requires superior knowledge, skills, systems and
marketing assets
...

Information is the foundation of understanding customer wants and needs and it is the successful
companies that make every attempt to ensure the satisfaction of their customers, by astutely and
assiduously collecting this information
...

For many businesses this is actually a main use of their website, where customers can leave unconstrained
comments and suggestions about products, services and experiences
...
Indeed many customers often feel greater loyalty
after a conflict has been resolved than if they had never complained at all
...
Indeed we should also be
able to see that personal selling also has a key role within marketing if we extend the service metaphor –
personal selling is often a key aspect of such service, especially for products with large intangible service
elements to them
...
There is a major change in the way companies organise themselves as firms
switch from product-based to customer-based structures
...


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...
So we can see that as companies have moved towards
a more marketing oriented way of operating, the issues within marketing and thus the values associated
with marketing have become increasingly important in all functional and operational areas of those
businesses
...


3
...
”
A distinction must be made between the strategic planning process, which spans a time period of 3 to 5
years, and the marketing planning which will be made every year
...
These different processes are distinguished
because of the generally known importance of producing both short and long-term marketing plans
The strategic marketing planning process consists of the following sequential activities (Nieuwland, 1994)

49
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...
Therefore we will
now look at SMP step-by-step
...
If the company is operating
on an international basis, the strategic marketing planning process is mostly practiced on a decentralised
level within the organisation
...
Each PD can be split up in Product/Market-Combinations
(PMC) (Van der Lee, Moëd & Dierckxsens, 1987)
...

3
...
1

Research of environment and situation

Addition research specific to markets would also be needed, for instance; political, economic factors,
entry and exit barriers, degree of concentration, market power via Porter’s Five Forces and the market
situation
...
This includes analyzing the industry for instance market potential, market
size, growth and shares and actions of competitors
...
Mirroring the concepts discussed in Chapters 1 & 2 the first view of
the environment is to contrast between that within the firm and that outside the firm
...
All internal aspects
are directly within the span of control of the firm and can be altered, stopped or started at its decision
...


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...

Those aspects that are external can be further split into those that are completely outside the control or
direct influence of the firm, laws, economics, social and technological changes for example and those
that are substantively outside the control of the firm; their suppliers, unions, local community and other
stakeholders
...


Source: adapted by author from various sources
...


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...
2
...
1 PESLEDI
Before the corporate, SBU and PD strategies are determined, the company has to examine the current,
macro-environment of the company
...
You will see this type of analysis also referred
to as PEST or PESTLE – they are all the same
...

RUN LONGER
...
GAITEYE
...
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...

Identifying PEST influences is a useful way of summarising the external environment in which a business
operates
...

Table 1 below lists some possible factors that could indicate important environmental influences for a
business under the PEST headings
...
g
...
com

Technological

Strategic Marketing

Marketing’s role in the business

3
...
1
...
C
...
analysis, BCG-matrix, Boston Box, Boston Matrix, Boston Consulting
Group analysis, portfolio diagram) is a chart that had been created by Bruce Henderson for the Boston
Consulting Group in 1968 to help corporations with analyzing their business units or product lines
...

The BCG Matrix now is a well known tool for the marketing manager
...
Relative market
share is plotted on the horizontal axis – this serves as a measure of SBU strength in the market and
market growth rate is plotted on the vertical axis – this provides a measure of market attractiveness, see
figure fifteen below
...
Often they need heavy investment to
sustain their growth
...

• Cash Cows – Cash cows are low-growth businesses or products with a relatively high
market share
...
They need to be managed for continued profit – so that they continue to
generate the strong cash flows that the company needs for its Stars
...
com

Strategic Marketing

Marketing’s role in the business

• Question marks – Question marks are businesses or products with low market share
but which operate in higher growth markets
...

-- Management have to think hard about “question marks” – which ones should they
invest in? Which ones should they allow to fail or shrink?
• Dogs – Unsurprisingly, the term “dogs” refers to businesses or products that have low
relative share in unattractive, low-growth markets
...

Conventional strategic thinking suggests there are four possible strategies for each SBU:
1
...
Hold: here the company invests just enough to keep the SBU in its present position
3
...
This may have the effect of turning Stars
into Cash Cows
...
Divest: the company can divest the SBU by phasing it out or selling it – in order to use the
resources elsewhere (e
...
investing in the more promising “question marks”)
...
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Strategic Marketing

Marketing’s role in the business

The matrix ranks only market share and industry growth rate, and only implies actual profitability, the
purpose of any business
...
The matrix also overlooks
other elements of industry thus with this or any other such analytical tool, ranking business units has
a subjective element involving guesswork about the future, particularly with respect to growth rates
...
Poor definition of a business’s
market will lead to some dogs being misclassified as cash bulls
...
In this way a range of SBUs/products they can be better compared to each other
...


Source: adapted by author from various sources
Figure 16: The improved BCG Matrix

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...
as a tool to screen General Electric’s large portfolio of SBUs
...
k
...
,
the GE Business Screen or GE Strategic Planning Grid) is to evaluate businesses along two composite
dimensions: industry attractiveness and industry strength
...
it utilizes more comprehensive axes (the BCG matrix uses market growth rate as a proxy for
industry attractiveness and relative market share as a proxy for the strength of the business
unit); and
2
...

The McKinsey/GE Matrix, Figure Seventeen, overcomes a number of the disadvantages of the BCG Box;
• Firstly, market attractiveness replaces market growth as the dimension of industry
attractiveness, and includes a broader range of factors other than just the market growth
rate
...
g
...
com

Strategic Marketing

Marketing’s role in the business

• Secondly, competitive strength replaces market share as the dimension by which the
competitive position of each SBU is assessed
...
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...

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Strategic Marketing

Marketing’s role in the business

A less well known tool in this area is the ‘Advantage Matrix’ also developed by the Boston Consulting
Group and used by them in preference to the standard BCG
...
In essence, the former category covers the approach of the standard BCG matrix,
while the latter represents Porter’s approach of `differentiating’ products so that they do not compete
head-on with their competitors
...
In this case there are considerable economies of scale, but few
opportunities for differentiation
...
Examples are volume
cars and consumer electronics
...
Here there is neither the opportunity for differentiation nor
economies of scale; examples are textiles and shipbuilding
...

• Specialized business
...
The main strategies are focus and
segment leadership
...
These organizations also gain benefit from differentiation,
particularly in the services sector, but little from economies of scale; examples being
restaurants and job-shop engineering
...

The advantage of this matrix is that it highlights the assumptions that are hidden in the BCG
...

3
...
1
...
3
...
But is mentioned here as a reminder of its
importance in this are of analysis
...
2
...
4 Ansoff ’s Matrix
Ansoff ’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it
markets new or existing products in new or existing markets, this is shown in figure eighteen
...
These are shown in the lower half of figure eighteen
...
com

Strategic Marketing

Marketing’s role in the business

Source: Adapted by author from various sources
Figure 18: Ansoff’s Matrix

Market penetration – is the name given to a growth strategy where the business focuses on selling
existing products into existing markets
...
The business is focusing
on markets and products it knows well
...
It is unlikely, therefore, that this strategy will require much investment in new market
research
...
com

Strategic Marketing

Marketing’s role in the business

Market development – is the name given to a growth strategy where the business seeks to sell its existing
products into new markets
...
This strategy may require the development of new competencies and
requires the business to develop modified products which can appeal to existing markets
...
This is an inherently more risk strategy because the business is moving into markets in


...
For a business to adopt a diversification strategy, therefore, it must
have a clear idea about what it expects to gain from the strategy and an honest assessment of the risks
...


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Strategic Marketing

Marketing’s role in the business

Another attempt to update the matrix was launched in 1998, by Bruce D
...
Popper of Bellarmine College
...
They argue that expanding
the original four-cell matrix was necessary because it assumes customers are “familiar with the products
(or product category) being offered (even if they are not familiar with the firm who offered the product)
...
” It has however not found popular favour
...
2
...
5 5Ms internal audit
As mentioned earlier in this chapter the 5M framework is about aligning a firm’s internal sources to
those needed by it in order to successfully implement its strategies for the market/s it is operating in
...
Within marketing 5Ms is a core model
for linking strategy to internal organisation and as such also has a role in RBV and competencies views
...
2
...
6 SWOT-Analysis
After studying the environment and the situation, it is neces­ ary to do a SWOT analysis
...
Strengths are the internal competencies a company needs to have and weaknesses are
the competencies that the company does not have; note these should be defined from the customer’s
perspective – if the customer doesn’t see something as a strength, then no matter how proud of it the
business is it is meaningless in a SWOT analysis
...
This is a marketing
perspective on SW not that adopted by many strategic management texts
...
On the other hand, an environmental threat is a challenge posed by
an unfavourable trend or development in the environment that would lead, in the absence of purposeful
marketing action, to the erosion of the company’s position
...
com

Strategic Marketing

Marketing’s role in the business

After having performed the SWOT analysis, the company will use these findings to define the main
issues that must be addressed in the strategic marketing plan
...

The result of the analysis is usually presented as a four box table or diagram, as shown in the top left
part of figure nineteen, at the side of this the next part of the diagram shows the risk profile of each box
in a SWOT analysis
...


Source: adapted by author from various sources
Figure 19: SWOT & Enhanced SWOT analysis

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...
3

Marketing’s role in the business

Forecasting market and sales

Before realistic marketing objectives can be set, market and product sales forecasts have to be made
...
The setting forecasts with any degree of realism and accuracy is one of the most difficult tasks
in business
...
It becomes even harder in times of economic turbulence
and infla­ion, and in markets that have distinct seasonal trends, e
...
holidays, fashion
...


3
...
If an objective or goal
states where you want to be, then the plan itself sets out the preferred route to your destination, and
control then tells you if you are on the right route, when you have arrived at your destination and what
alternative routes are available if your original becomes blocked
...

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...


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...
Resources are scarce and costly so it is
important to control marketing plans
...
In management we use variance analysis where we compare actual
progress against the standards
...
This process is no different in marketing than it is in
accounting
...

• Sales analysis
...

• Budgets
...

• Marketing research
...

• Feedback from customer’s satisfaction surveys
...

• Customer Relationship Management (CRM) systems
...

• Location of buyers and potential buyers
...

• Distributor support
...

• Market reaction/acceptance to pricing polices
...


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...
5

Marketing’s role in the business

Objectives setting

The forecasts of market and sales will be the guidelines to determine the objectives and the marketing
strategy and programme
...
These statements have to be quantified and a time horizon has
to be set
...

3
...
1

Research and designing of strategies

After the objectives have been approved by the PD, the PMC should determine their target markets,
because serving the total market is often impossible since it is often too large
...

3
...
2

Strategic marketing programme

The last step of the strategic marketing planning process is the formulation of a strategic marketing plan
and budget for each target market, which have to be approved by the organisation’s board of directors
...

However, it is worth remembering that many of the concepts, as well as many of the specific techniques,
will work equally well whether they are directed at goods or services
...
Theodore Levitt suggested that “instead of talking of ‘goods’ and of
‘services’, it is better to talk of ‘tangibles’ and ‘intangibles’ ”
...

Marketing tactics will be developed besides the action programmes, detailing what are to be done, when by
whom at what cost and over what period of time
...

3
...
3 Control
The last step of the marketing planning and control process is control, which forms a distinct process
itself and so is dealt with in detail below
...
com

Strategic Marketing

Segmentation, Targeting & Positioning

4 Segmentation, Targeting &
Positioning
You will recall that it was earlier stated that the essence of the marketing concept is the idea of placing
customer needs at the centre of the organization’s decision-making
...
This starts with trying to understand the market by segmenting it
...
Markets also have disparate macro-environment
factors affecting them; different levels and types of competition and several other factors also mean that
markets are rarely homogeneous
...
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www
...
com

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...
It is this later factor that has primarily given rise to the need to segment markets
...
Witness the growth of consumerism in
emerging markets – China is a good case in point where increased growth in western style luxuries and
other Fast moving consumer goods (FMCG) has been rampant in the last decade as more liberal market
controls have been introduced
...
Segmentation and the subsequent strategies
of targeting and positioning start by recognizing that increasingly, within the total demand/market for a
product, specific tastes, needs and demand may differ
...
Here, customers who share similar demand
preferences are grouped together within each segment
...
Segment; determine which kinds of customers exist, then
2
...
Position; implement our segmentation by optimizing our products/services for that segment
and communicating that we have made the choice to distinguish ourselves that way
...
com

Strategic Marketing

Segmentation, Targeting & Positioning

Source: Adapted by author from various sources
Figure 22: Segmentation, Targeting & Positioning; the Process

Generically, there are three approaches to marketing and this reflects into the STP needs of each strategy
...
This usually only works for commodities where the product is standard and where
one competitor really can’t offer much more any other
...

In the concentrated strategy, one firm chooses to focus on one of several segments that exist while leaving
other segments to competitors
...
They
therefore need to understand the particular segment they are operating in depth but not the whole market
...
They need to understand the whole market and to be able to segment it on
differing customer needs
...
1 Segmentation
Segmentation can be simply summarised as dividing a market by a set of pre-determined criteria
...
Truly understanding the needs of potential and actual customers in a
market allows a company to segment along the lines of needs – needs it can serve, needs it cannot, needs
it wants to serve
...


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...

It is made harder in practice because there may be a large number of variables that can be used to
differentiate consumers of a given product category; yet, in practice, it becomes impossibly cumbersome
to work with more than a few at a time
...
e
...

As such it is worth examining the common kinds of variables can be used for segmentation
...

• Psychographic variables take this a step farther, to segment on lifestyle, attitudes, personality
and values
...
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Strategic Marketing

Segmentation, Targeting & Positioning

• Another basis for segmentation is behaviour
...
Some consumers
are “heavy” users while others are “light” users; classic examples for this are smoking and
alcoholic drinks
...

• Segmentation by usage occasion is similar to behaviour but focuses on when the product is
used, e
...
Wedding dresses
...
g
...

Effective segmentation is achieved when customers sharing similar patterns of demand are grouped
together and where each group or segment differs in the pattern of demand from other segments in the
market
...
Measurable/identifiable Here, the base(s) used should preferably lead to ease of
identification in terms of who is in each segment
...

2
...

3
...

4
...

The third criterion is particularly important for effective segmentation, as it is an essential prerequisite
when attempting to identify and select market targets
...
2 Targeting
In the next step, we decide to target one or more segments
...

• First, what is the existing level of competition and how good at serving customer needs are
they? The greater the numbers and better they are able to meet customer needs the more
difficult it will be for another business to also be a success
...


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...

• Fourthly, are we able to actual communicate with the segment?
While McDonald’s has a great reputation for fast, consistent quality, family friendly food, it would be
difficult to convince consumers that McDonald’s now offers gourmet food
...

This is the first important lesson in targeting – most firms cannot meet ALL market needs
...
Specifically, the advantages of target marketing are:
1
...
Such gaps can be real (e
...
sweet, strong, harsh or mild) or they can be
illusionary in terms of the way people want to view the product (e
...
happy, aloof, silly or
moody)
...

2
...

3
...


4
...
Product positioning refers to the way in which an organisation sets itself
apart in the market and how its products and services are perceived by the target market as a whole; this
incorporates the concept of all stakeholders of the company
...

Taking Porter’s work we know that this has to take one of three formats – cost leadership, differentiation
or focus
...


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...
This aspect fits more closely with differentiation as a generic
strategic option and this in part helps to explain the proliferation of brands, products and services
...
The differentiating variable may be actual – based on the physical attributes
and features of the product, or perceived – based on the image of the product or the supplier; as is the
case with many services
...


Source: Adapted by author from various sources
Figure 23: Positioning & its main elements
...
4

Positioning and Perception

The concept of positioning has two dimensions:
• What the organisation wishes to achieve (how it wants its products to be viewed by
consumers)
...

• What consumers actually believe about a particular product or service

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...
Most successful positioning
results often stem from products that possess favourable connotations or perceived positive value
...
Summarising Ries and Trout
state that positioning can be achieved within three major concepts;
1
...
Symbolic positions
-- Self-image enhancement
-- Ego identification
-- Belongingness and social meaningfulness
-- Affective fulfillment
3
...
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Strategic Marketing

Segmentation, Targeting & Positioning

This encompasses the fact that what customers actually believe or perceive will directly influence the
purchase decision
...

Before an organisation establishes a successful position in the marketplace, four key considerations
are important; clarity, consistency, credibility and competitiveness (Jobber, 1995) – The 4C positioning
framework;
• Clarity – the positioning idea must be clear with regard to both the target market and the
basis of competitive advantage
...

• Credibility – the position chosen must be credible in the minds of the target groups
...


4
...

In understanding product positioning, it is important to remember that what is being positioned is not
simply the product itself but rather the total product offering; see page 46–47
...
It must also, through marketing research, establish which features are considered to be
important by consumers
...

There will typically be a variety of attributes to consider and many of these will relate to image as much as
to physical characteristics
...

This is frequently represented on a product positioning map or perceptual map, figure twenty-four,
which visually depicts consumer perceptions and then prioritises brands in relation to those perceptions
...
com

Strategic Marketing

Segmentation, Targeting & Positioning

Sources: Adapted by author from public sources
...
Figure twenty four shows a basic
conceptual perceptual map based on the dimensions; quality and price – this is a very basic perceptual
map but it uses the most commonly plotted, and perhaps the least useful, dimensions in such mapping
...

Using Quality and Price to plot the UK chocolate market we can ididentify distinct served market areas; Belgium
chocolates are plotted as high quality and price, whereas Twix is plotted one low quality low price brand
...


Example 2: The UK Chocolate Market

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...
We must also remember
that such perceptions are not static the act of product re-launch, of re-branding of the introduction of a
new product, brand or competitor alters the perceptions of the customers in that market, especially of
those products and brands that have chosen to use competitors as a basis for their positioning
...
5
...

• The closer the positioning of two brands on the map, the more likely they are to compete
...

• Gaps in the market can be identified that represent potential market niches
...
By plotting the average
scores for each product in relation to each attribute a profile of what the customer seeks and what the
organisation offers can be compiled
...

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Strategic Marketing

Segmentation, Targeting & Positioning

Perceptual mapping can also be used to investigate the relative positions of products and companies in
the case of corporate branding/positioning
...
6

Strategies for Product Positioning

In developing a positioning strategy, the organisation is attempting to create a unique place for its
product in the minds of stakeholders
...
There are a number of positioning
strategies which an organisation can adopt and these may be used independently or together
...
6
...

4
...
2

Positioning in relation to the user/usage
...

4
...
3

Positioning in relation to competitors
...
Three possible approaches include:
4
...
3
...
This is an aggressive and risky positioning strategy
that challenges the competition head-on, but also offers considerable benefits in sales and profit terms
if successful
...

4
...
3
...
This incorporates some aspects of Porter’s Five Forces
model in terms of substitute products and can be used to overcome entrenched barriers to direct market
entry
...
com

Strategic Marketing

Segmentation, Targeting & Positioning

4
...
3
...
The rationale behind this approach to positioning is that it should enable the organisation to attract
consumers who might not otherwise have considered purchasing a product of this nature
...


4
...
It involves changing
the target market, the differential advantage or both
...

• Intangible Repositioning: The less tangible aspects of the product are given greater emphasis
...


4
...
Organisational positioning is perhaps most important
for markets in which the purchase decision is driven as much by the organisation as it is by the product
...
g
...
g
...


4
...
The marketing mix (4Ps/7Ps,
see chapter six) represent the marketing variables which are directly controlled by the organisation
...

Marketing strategy (STP+Branding) will aim to identify product positions, whereas the marketing mix
(4Ps/7Ps) will be concerned with creating and maintaining those positions
...
This requires continuous monitoring
of consumers perceptions of the product and of competing offerings to ensure that the marketing effort
is creating and maintaining the desired product position
...
com

Strategic Marketing

Segmentation, Targeting & Positioning

Steps in Product Positioning:
• Define market segments
• Determine which segments to target
• Understand targeted customers’ needs/expectations/priorities
• Develop (or modify) product/service to address these needs
• Evaluate perceived positioning of competitors’ products/services/brands
• Select positioning bases (criteria) for product/service vis-a-vis targeted customers’ needs and
competitors’ position in the market
• Communicate the selected positioning/image/proposition to the targeted customer
...
ligsuniversity
...

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Strategic Marketing

Branding

5 Branding
Brands much more than just logos or names
...
That experience is made of a multitude of good, neutral and bad encounters
such as the way a product performs, an advertising message, a press report, a telephone call, or a rapport
with a sales assistant, CIM (2007)
...
This started as a military application but soon spread to
guilds and master craftsmen who made especially good products
...
With the
expansion of world trade, brands became a necessity as a mark of quality and assurance
...
Today a strong brand brings with it a wealth of quality, value and high
performance cues and can even be an intrinsic part of its customers’ lifestyles; branding is now a strategy
used ‘to differentiate products and companies, and to build economic value for both the consumer and the
brand owner’
...
Companies used to be
centred on the production of goods or services
...

The importance of marketing has long been well accepted in most organisations and customer satisfaction
is now seen as being at the heart of success rather than excellence in production or selling – largely as
a result of increased competition making it harder to attract and keep customers
...
This makes
up their brand identity
...
An appreciation of those values then helps the customers to form a brand image
in their minds
...
1

Why do we brand products?

Companies invest millions in the development and protection of their brands; they do so because branded
products have distinct advantages over non-branded ones, this is akin to differentiated versus generic
product positioning
...
com

Strategic Marketing

Branding

A strong brand is now seen as key to commercial success by providing the following main advantages:
• high brand equity
• increased product awareness levels
• the ability to charge a premium price
• reduced susceptibility to price wars
• competitive edge
• a sound basis for building strong customer relationships
• higher likelihood of repeat purchases
• retail leverage
• new products have a better chance of success thanks to the brand name
Whilst the above are the main advantages there are others and the exact mix of advantages will depend
on the context of the brand-product-market environment on a case by case basis
...
It is not enough just to attach a name
and a logo to a product and as with products unless they are developed and adapted, brands tend to
decline over time
...

5
...
1

High brand equity

The basis of brand equity lies in the relationship that develops between a consumer and the company
selling the products or services under the brand name
...
Thus a well known brand adds value to a product both from the customer perspective
and from the company’s
...

5
...
2

Increased product awareness

Clearly it is crucial that potential customers should be aware of a product, it is the first stage on their
journey to buying it (see sequential models in Chapter 6
...
One of the key roles of advertising
is to build that awareness and an easily recognised brand makes that task much more achievable
...


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...
1
...
Think of the differences in
the prices of trainers
...
g
...
It is not just a question of having a well known name, the strength
of the brand depends upon the values associated with it in that particular market
...

Without a brand, a firm will have to settle for a commodity position in the market where low prices
alone drive sales
...
g
...
In very price conscious markets, e
...
children’s shoes and
clothing, or in economic downturns, marketers can come under great pressure to compete on price but
this might devalue their brand (assuming it already has a reputation)
...
e
...


In the past four years we have drilled

81,000 km
That’s more than twice around the world
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Working
globally—often in remote and challenging locations—we invent,
design, engineer, manufacture, apply, and maintain technology
to help customers find and produce oil and gas safely
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...
1
...
If the
marketing communications have worked well, then the potential customer will already have built up a
set of associations with the brand, short-circuiting a lot of the information searching that they might
otherwise have to do
...

5
...
5

Building relationships

The strength of the customer’s relationship with a brand is central to that brand’s growth
...
There are many
big companies who own many brands which do not bear their owner’s name
...

The importance of this brand relationship has prompted companies to develop various relationshipbuilding activities which establish a two-way flow of communication with their customers and encourage
them to integrate brands into their lives
...
The number of brand communities is increasing rapidly, thanks in part
to the World Wide Web, and they form a significant part of a growing number of people’s social lives
...
” Brand communities are characterised by a set of shared attitudes towards, and beliefs about,
the brand (shared consciousness), rituals and traditions connected with the brand and a sense of moral
guardianship for the brand
...
Brand communities can be very possessive about the importance of understanding their
views is illustrated by the reaction of loyal customers to the introduction of a new recipe for Coca Cola
...

New Coke lasted about three months
...
com

Strategic Marketing

5
...
6

Branding

Repeat purchases

Most human beings instinctively avoid unnecessary risk
...
There are other possible risks too for
example: ego risk if the product is unflattering (e
...
clothes) or ridiculed by others (e
...
an unpopular
scent), or physical risk if the product turns out to be unsafe (e
...
faulty machinery)
...

A good experience of a brand results in a happy customer who continues to purchase
...
Worse still, they may tell their friends, family
and acquaintances of their bad experience, influencing them against the brand
...

5
...
7

Retail leverage

In many countries, notably the UK, large retailers have enormous power when it comes to setting prices
and dictating terms of purchase and sale
...
Tesco therefore has a great deal of buying
power (see 6
...
However, there are some branded products that are so popular that even a retailer
as powerful as Tesco is unlikely to leave them off its shelves, for example: Heinz Tomato Ketchup, Heinz
Baked Beans, Kellogg’s cereals, Coca Cola, Kleenex tissues
...
1
...

Many entrepreneurs have launched seemingly superb products only to watch them fail
...
The customers can call on their
experience of previous products of the same brand, and transfer those brand values to the new product
...


5
...
Successful branding is about promoting your strengths
...

Within the context of a general introduction to marketing theory it is not possible to cover the subject
of Branding in the depth and breadth its role in modern business demands
...
com

Strategic Marketing

The Marketing Mix

6 The Marketing Mix
In the early 1960s, Professor Neil Borden of the Harvard Business School identified a number of company
performance actions he believed influenced the consumer decision to purchase goods or services
...
Professor E
...
Thus was codified the famous four Ps (4Ps) which
have gone on to become perhaps the most famous term in marketing to date
...
g
...
In fact to illustrate this let’s think about a cake mix
...
However, you can alter the final cake by altering the amounts of mix elements contained
in it
...



...
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Strategic Marketing

The Marketing Mix

Exactly the same principles apply with the marketing mix
...
So for a high profile brand, increase the focus on promotion and
desensitize the weight given to price
...
Co-ordinating the decisions is based on
marketing research and results in a marketing plan; a blueprint to optimise the use of the business’s
resources to maximise the satisfaction to the customers and the gains of the business
...

There are major differences when it comes to services marketing versus the marketing of tangible
products
...
The buyer purchases are intangible, you gain ‘ownership’ of nothing
2
...
It’s more difficult to compare the quality of similar services, there isn’t a list of Features and
attributes you can easily compare
4
...

Let’s think about a service – Car Insurance
...
You know the price and indeed all the other elements of price
that might be included, e
...
payment by instalment
...
Promotion could
have been via any of the means listed later in this chapter
...
In our car insurance example, you might have spoken to a salesperson in your
home or a broker; you might have spoken to a customer service person by phone, or at a branch office
...
All of these start to bring Physical evidence into play which often overlaps into the Place and
People elements
...
You only have to think about how many times you abandon a web
site if it’s slow to appreciate how vital processes are within the extended marketing mix
...
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Strategic Marketing

The Marketing Mix

Service marketing also includes the concept of ‘servicescape’ referring to but not limited to the aesthetic
appearance of the business from the outside, the inside, and the general appearance of the employees
themselves; in essence the concept of servicescape underlines the interrelated nature of several elements
of the 7Ps when viewed from a customer perspective – it is a marketing concept philosophy approach
...
This can also be seen in developing economies, where the
shift to services means a shift away from customer decisions based on tangible FABs to intangible service
elements
...
This has given rise to the phrase “Managing the evidence”, which refers to the
act of informing customers that the service encounter has been performed successfully by us and how
was it for you
...
The underlying rationale is that a customer might not
appreciate the full worth of the service if they do not have a good benchmark for comparisons
...
1 Price
There are many ways to price a product
...

Let’s have a look at some of them and try to understand the best policy/strategy in various situations
...
com

Strategic Marketing

The Marketing Mix

• Premium pricing, is used where there is uniqueness about the product or service
...
Good examples are Cruises, Jimmy Choo Shoes, Haut Couture fashion, Art
...

In this the price charged for products and services is set artificially low in order to gain
market share
...
This approach was used
by France Telecom and Sky TV
...
Exactly as the name implies this is a no frills low price
...
Supermarkets often have economy
brands for soups, spaghetti, etc
...

• Price skimming
...
However, such advantage is
rarely, if ever, sustainable in the long-term as such high returns encourage competitors
...
Once other
manufacturers were tempted into the market and the watches were produced at a lower unit
cost, other marketing strategies and pricing approaches are implemented
...
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Strategic Marketing

The Marketing Mix

• Psychological pricing
...
For example ‘price point perspective’
99p not £1, £6
...

• Product line pricing
...
For example car washes
...
This is often used in ‘families’ of product where a variety
of product offerings exist, e
...
strengths, qualities and pack sizes are priced in relation to the
others
...
In this the seller attempts to increase the amount customer
spend once they start to buy
...
For example airlines will charge for optional extras such as guaranteeing a window
seat or reserving a row of seats next to each other
...
This was a common tactic in financial
product sales during the 1970s and 1980s
...

• Captive product pricing
...
For example a razor manufacturer will
charge a low price and recoup its margin (and more) from the sale of the only design
of blades which fit the razor
...
Here sellers combine several products in the same package
...

• Promotional pricing is ubiquitous you can see examples everyday online and on the high
street, the commonest is the BOGOF (Buy One Get One Free) offer
...
For example rarity value, or where shipping costs increase price
...
Its use is tending to decline with the advent of the
internet and the consequent ability to buy from just about anywhere
...
g
...


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...
2 Place
Place isn’t just about the point of sale, it’s about the total channel of distribution and a consideration of
the value chain from raw materials through to the customer
...

So when considering place we need to think about a channel of distribution which comprises a set of
institutions which perform all of the activities utilised to move a product and its title from production
to consumption, Bucklin (1966)
...
Do we use direct or indirect channels? (e
...
‘direct’ to a consumer, ‘indirect’ via a wholesaler)
...
Single or multiple channels
...
Cumulative length of the multiple channels, longer length adds cost
4
...

5
...
g
...

6
...
e
...

There are many types of intermediaries such as wholesalers, agents, retailers, the Internet, overseas
distributors, direct marketing (from manufacturer to user without an intermediary), and many others
...
Channel Intermediaries – Wholesalers
They break down ‘bulk’ into smaller packages for resale by a retailer, i
...
they buy from
producers and resell to retailers and in doing do take title to the goods
...
A wholesaler will often take on the some of the marketing responsibilities
...

2
...
Generally they don’t take title to the goods,
unless they are a ‘stockist agent’ who will hold consignment stock, i
...
will store the stock,
but the title will remain with the producer
...
g
...
Agents can be very expensive to
train
...
They are
difficult to motivate
...
Channel Intermediaries – Retailers
Retailers will generally have a much stronger personal relationship with the consumer
...
com

Strategic Marketing

The Marketing Mix

4
...
Where the retail purchase is
significant the retailers will often offer credit to the customer e
...
electrical wholesalers, or
travel agents, which requires consideration in pricing decisions
...
Most retailers now
have a strong brand in their own right, ASDA, TESCO, Sainsbury
...
Channel Intermediaries – Internet
The Internet presents us with geographically dispersed and disparate market in customer
terms
...
With the advent
of broadband and satellite it has also become a delivery medium for products such as TV,
Films, Software, Interactive games etc
...
3 Product
We looked at what a product is in Chapter 2, where we defined a product as anything that satisfies
customer needs
...
Within marketing we general group products together with
others which satisfy broadly the same needs
...
Different markets have their own preferred descriptors
...
Many are bought both by businesses and by consumers (though the specifications
may be different)
...
com

Strategic Marketing

The Marketing Mix

B2C – consumer products

examples

Durable goods; These products are expected to last a
considerable length of time
...
They do not last
...
Normally they
are used there and then
...


Hairdressing, gardening, cleaning, Sat TV, broadband

Convenience goods are products that customers buy
frequently and think little about
...
The main categories are;
1
...
Customers are not usually prepared
to pay too high a price for such purchases
...
Staple goods are purchased regularly, perhaps always kept

stock at home
...


Bread, cleaning products, toilet roll

3
...


Painkillers, sink unblocker

Shopping goods carry a higher associated risk for a customer
than convenience products do
...
These
products are therefore sometimes referred to as highinvolvement purchases, i
...
the customer gets very involved in
the decision-making
...
They
may be high-risk products and so customers may need
extensive emotional support and encouragement from the
supplier before they buy

antiques, sports equipment, wedding clothes, classic
cars,

Fast moving consumer goods (FMCG) are a form of
convenience good, but in this case looked at from the retailer’s
point of view
...


Toothpaste, washing up liquid, coffee, tea, milk,
sugar,

B2B – industrial products

examples

Capital goods are durable products, i
...
they are designed to
last for a number of years
...
Consequently great
care is normally taken over these purchases
...


Accessories are smaller capital items, which support the
business
...


PCs, telephones, mobile phones

Raw materials are goods that will be processed, and added
to, by the business
...

They are often generic products, e
...
iron ore, crude oil
...


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...
They are bought by
businesses to incorporate into their own products

Engines, wheel hubs, brakes, frames, circuit boards
...


Stationery, pens, papers

Services are provided by a third party to a business, usually
so that it can concentrate on running its own operation
efficiently
...


Source: adapted by author from various sources
Figure 26: Product types

6
...
1

The Product Life-cycle

Another concept that is vital to understand the marketing approach to products is that of the Product
Life-cycle (PLC)
...
Note however that this analogy has a few drawbacks; Jeans may die, but clothes probably
will not, in fact it is unlikely Jeans will die as a product but they will change according to the evolving
market needs of the consumers
...


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Strategic Marketing

The Marketing Mix

Despite the questionable validity the concept of the PLC does offer a useful ‘model’ for managers when
managing products and considering overall strategy
...
Figure twenty-seven illustrates the overall concept of
the PLC in the upper diagram and then overlays the strategic options considered normal
...
In most markets the majority of the major brands have held their position for at least
two decades
...
This of course could be argued to be an extended ‘maturity’ phase
...
The important point is that in many markets the product or brand life
cycle is significantly longer than the planning cycle of the organisations involved
...
Even if the PLC (and the related PLM support) exists for them, their
plans will be based just upon that piece of the curve where they currently reside (most probably in the
‘mature’ stage); and their view of that part of it will almost certainly be ‘linear’ (and limited), and will
not encompass the whole range from growth to decline
...
com

Strategic Marketing

The Marketing Mix

The key criticisms of the PLC concept are;
• Generic description, based on successive stages, of the way a product behaves in the marketplace
• Framework to guide adoption of strategies to changing market conditions and requirements
• Drawbacks PLC
-- Lifecycles: product category vs
...
4 Promotion
This includes all of the tools available to the marketer for ‘marketing communications’
...
The elements of the promotions mix are:
• Personal Selling
...

• Public Relations
...

• Trade Fairs and Exhibitions
...

• Sponsorship
...

Let us look at the individual components of the promotions mix in more detail
...

6
...
1

Personal Selling
...
The sales person
acts on behalf of the organisation
...
Personal selling is highly persuasive and is often used in markets where personal choice
figures strongly in the purchase, e
...
cosmetics
...
com

Strategic Marketing

6
...
2

The Marketing Mix

Sales Promotion

Sales promotions tend to be thought of as being all promotions apart from advertising, personal selling,
and public relations
...

6
...
3

Public Relations (PR)

Public Relations is defined as ‘the deliberate, planned and sustained effort to establish and maintain mutual
understanding between an organisation and its publics’, Institute of Public Relations
...
Pro-active campaigns are long-term attempts to build on core values of
the organisation, whereas reactive campaigns are often the result of the need to counter an event that
has resulted in negative views about the organisation, e
...
a plane crash, not enough helicopters for your
army, etc
...
4
...
Based initially on Direct mail where, Creative agencies work
with marketers to design a highly focussed communication in the form of a mailing
...


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As such Direct Marketing is a major sub-section of
marketing in its own right
...
4
...
They offer the opportunity for companies to meet with
both the trade and the consumer, for both to build relationships outside traditional sales meetings
...

6
...
6 Advertising
Advertising is a ‘paid for’ communication in a communications medium, which might be mass, i
...
nontargeted or direct, targeted
...
Traditional advertising ‘media’ were mass, e
...

newspapers (local, national, free, trade), magazines and journals, television (local, national, terrestrial,
satellite), cinema, outdoor advertising (such as posters, bus sides) and radio
...

6
...
7 Sponsorship
Sponsorship is where an organisation pays to be associated with a particular event, cause or image
...
The attributes of the event
are then associated with the sponsoring organization
...


6
...
Strictly speaking there are no physical attributes to
a service, so a consumer tends to rely on material cues
...

• Internet/web pages
...

• Brochures
...

• Signage (such as those on aircraft and vehicles)
...

• Business cards
...

• Mailboxes and many others…
...
com

Strategic Marketing

The Marketing Mix

A sporting event is packed full of physical evidence
...
The stadium itself could be impressive and have an electrifying
atmosphere
...

Some organisations depend heavily upon physical evidence as a means of marketing communications, for
example tourism attractions and resorts (e
...
Disney World), parcel and mail services (e
...
UPS trucks),
and large banks and insurance companies (e
...
Lloyds of London)
...
6 People
People are the most important element of any service or experience
...
Most of us can think of a situation where the personal service offered
by individuals has made or tainted a tour, vacation or restaurant meal
...
Here are
some ways in which people add value to an experience, as part of the marketing mix – training, personal
selling and customer service
...
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the quality of your dissertation!

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...
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Strategic Marketing

The Marketing Mix

6
...
1 Training
All customer facing personnel need to be trained and developed to maintain a high quality of personal
service
...
In practice most training is either ‘on-the-job’ or
‘off-the-job
...
g
...
Off-the-job training sees learning taking place at a college, training centre or conference facility
...
6
...
There is the product delivery salesperson, e
...
fast food, or mail
...
The internal sales person would
take an order by telephone, e-mail or over a counter
...
In both cases little selling is done
...

The forth type is the technical salesperson, e
...
a technical sales engineer
...
Finally, there are creative
sellers
...
This is tough selling, and tends
to offer the biggest incentives
...

6
...
3

Customer Service

Customer services provided expertise, e
...
on the selection of financial services, technical support,
e
...
offering advice on IT and software and co-ordinate the customer interface, e
...
controlling service
engineers, or communicating with a salesman
...


6
...
Some see processes as a means to achieve an outcome, for example – to achieve a 30%
market share a company implements a marketing planning process
...
Another view is that marketing has a number of processes that integrate together to create
an overall marketing process, for example – telemarketing and Internet marketing can be
integrated
...
A further view is that marketing processes are used to control the marketing mix, i
...

processes that measure the achievement marketing objectives
...
com

Strategic Marketing

The Marketing Mix

All views are understandable, but not particularly customer focused
...
It’s
best viewed as something that your customer participates in at different points in time
...
Process, physical evidence and
people enhance services
...

• Customers are retained, and other serves or products are extended and marked to them
...

Processes essentially have inputs, throughputs and outputs (or outcomes)
...


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...
Product management, which is inbound focused and
product marketing, which is outbound focused, are different yet complementary efforts which both have
the objective of maximizing sales revenues, market share, and profit margins
...
pragmaticmarketing
...
The role of product management spans many activities from strategic to tactical and varies based
on the organizational structure of the company, within most businesses these activities are the province
of a Product manager
...
In some companies, the product management function is the hub of
many other activities around the product
...
As such product management often serves an inter-disciplinary role, bridging gaps
within the company between teams of different expertise, most notably between engineering-oriented
teams and business-oriented teams
...
For example product managers often translate
business objectives set for a product by marketing or sales into engineering requirements, considering
the input from marketing research undertaken to reveal customer needs
...
As such it is pivotal to the
success and future of a business
...
Product Management
communicates the market opportunity to the executive team with a business rationale for pursuing the
opportunity including financial forecasts and risk assessment
...
Product Management
communicates to Marketing Communications using positioning documents, one for each type of buyer
...


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...

In essence Product management IS marketing in marketing organisations
...
Already today, SKF’s innovative knowhow is crucial to running a large proportion of the
world’s wind turbines
...
These can be reduced dramatically thanks to our
systems for on-line condition monitoring and automatic
lubrication
...

By sharing our experience, expertise, and creativity,
industries can boost performance beyond expectations
...

Visit us at www
...
com/knowledge

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...
e
...
In a very real sense all marketing
communication activity is a form of promotion, which is in one way or another it attempts to promote
the interest of the brand, product range and/or company
...
Basically if an advertisement is
submitted to a publication and a commission is paid to the advertising agency to feature the piece then
this is deemed to be ‘above-the-line’ communication
...
This distinction is accepted by most and is the distinction adopted here
...
1

The Marketing Communications Mix

Promotion describes the communications activities of advertising, personal selling, sales promotion and
publicity/public relations
...

• Personal selling involves a seller attempting to persuade a potential buyer to make a purchase
...

that encourage quick action by buyers
...

The company has control over the first three variables, but has little control over the fourth variable,
publicity/public relations
...
Taken together, these promotional activities make up the promotional or
communications mix with varying emphasis on each element according to the type of product or
service, characteristics of consumers and company resources
...


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...
In particular coordination of the product communication, including
brand name, design of packaging and trade-marks are all product cues which convey a message about
the total product offering is vital in terms of consistency and clarity
...
The place in which the products are to be found also has notable communications
value; why else would people spend extra on goods from Harrods or Harvey Nichols? Indeed within the
retail market individual shops have ‘personalities’ that consumers associate with the products they sell
and the products in turn receive a ‘halo effect’ from the shops in which they can be found
...


8
...
Buyers’ perceptions of market offerings are influenced
by the amount and type of information they receive as well as their reaction to that information
...
An effective marketing communications system also allows feedback from the consumer to
the seller
...

This predisposition can be modelled with the use of a normal distribution
...
Such people have a low level
of perceived risk and in fact they positively like the risk and excitement associated with the purchase of
new, innovative products
...
5% of the population, this was explored early in the chapter 1
...
3
...
5% of the market
...
They still have a low level of
perceived risk but are slightly more risk adverse than the ‘innovator’ category
...
Most people fall in
to one of these categories
...
com

Marketing Communications or MarCom or
Integrated Marketing Communications (IMC)

Strategic Marketing

A key question for the marketing communicator is: Are the innovators and early adopters also opinion
leaders? The majority of potential customers are too risk adverse or too disinterested to be ‘first in the
market’ for an innovation
...

Instead, they are influenced by people that they know who they regard as opinion leaders
...
For example a computer enthusiast may be regarded
as an ‘innovator’ for new computer products’
...


8
...
If, on the other
hand, the audience believes that the communicator has underlying motives, particularly ones of personal
gain, then he or she will be less persuasive than someone the audience perceives as being objective
...

But some major international brands have been discovered to be paying those blogging, tweeting or
running apparently independent websites without making this clear in an obvious attempt to leverage
this phenomenon
...
com

Click on the ad to read more

Marketing Communications or MarCom or
Integrated Marketing Communications (IMC)

Strategic Marketing

Some advertisers use ‘candid’ television interviews with homemakers in order to enhance their credibility
and eliminate intent to persuade, sometimes asking ‘consumers’ to explain why they buy a particular brand
or asking them to trade their chosen brand for another
...
This source will be more successful in changing audience opinions
...

The credibility of a source is also a function of its perceived status or prestige
...
If a receiver likes a source, it will be more persuasive
...

A source high in credibility can change the opinion of receivers, but available evidence suggests that this
influence disperses in a short time after the message is received
...

This is referred to as the sleeper effect
...
For a low-credibility
source, reinstatement results in less agreement with the source than with no reinstatement, and it is said
that under these circumstances reinstatement negates the ‘sleeper effect’
...
4

The development of Marcoms

Marketing communication practitioners have traditionally focused on the creation and execution of
printed marketing collateral; whereas academic and professional researchers have developed underlying
theory using strategic elements of branding and marketing in order to ensure consistency of message
delivery throughout an organization – the same “look & feel” – stressing the need to reduce incongruity
...

Marcoms is also pivotal within branding, indeed branding can in many ways be said to have driven
interest in advertising theory searching for ever more effective advertising media and messages to
better communicate the brand or corporate positioning
...


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...
Hence, it is vitally important for brand strategists and managers to survey all of their
organization’s brand touchpoints and control for the stakeholder’s or customer’s experience
...

8
...
The conventional media tools, which involve
‘renting’ space on television, newspapers, posters, radio etc
...
Other marketing communications techniques, such as sales promotion, sponsorship and
exhibitions do not involve the commissioning of space or air-time in or on conventional media
...
Marketing effectiveness depends significantly
on communications effectiveness
...
The way a potential buyer perceives the seller’s market
offering is heavily influenced by the amount and kind of information he or she has about the product
offering, and the reaction to that information
...
To many people marketing communications, such
as television advertising, direct mail and poster advertising is marketing
...

Marketing communications, whether above or below the line activity, is collectively just one of the ‘4Ps’ of
the marketing mix
...
No matter how good a firm’s product or service
offering is, the benefits to the consumer need to be communicated effectively
...

Within the context of a general introduction to marketing theory it is not possible to cover the subject
of Marketing Communications in the depth and breadth its role in modern business demands
...
com

Strategic Marketing

Expanding marketing’s traditional boundarie

9 Expanding marketing’s
traditional boundaries
We now see the techniques and principles of marketing applied to almost all organisations and, in fact,
recent governments have encouraged this by introducing market mechanisms into most aspects of
public services
...
NFP
businesses operate in both the public and private sector, just as commercially oriented businesses do to,
so what are some basic differences;
• Combination of goals, i
...
, raise £250,000 from government grants, increase client usage,
find cure for disease, change public attitudes, and raise £750,000 from private investors
...
The owner is not the
beneficiary, as in business marketing
• May need to serve target market that is unprofitable to serve, e
...
Postal service
• Legal advantages, tax deductible contributions, exemptions from sales and real estate taxes,
reduced postal rates
...
Need to define what is being provided, i
...

vocational training, health services, nutritional assistance and community development
...

• Rely on personal selling (volunteer recruiting) and advertising, sponsor ship, Public service
announcements

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...
Indeed politicians of all shades of the political
spectrum now recognize the vital nature of marketing in connecting them – the product – with the
voters – the consumer, and are making ever more effort to understand and segment the voter ‘market’,
using an STP process to position themselves to appeal to the widest possible range of voters and exploiting
sophisticated promotional techniques
...
labour
...
uk/) note particularly that you can ‘join’,
‘volunteer’, ‘donate’, get details on their events and party conference or ‘shop’!
• The Conservative Party website, (http://www
...
com/) where the ability to
communicate via Twitter, YouTube and FaceBook is prominent
...

RUN LONGER
...
GAITEYE
...
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22-08-2014 12:56:57

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...
Note this
area has become prominent enough to have its own sub-classification of marketing, see below
...

In essence NFP organisations need marketing as much as those operating commercially, indeed some
would say they need it even more given they have a large service aspect to the products they market
...
In some cases, not-for-profit organizations form a partnership with a profit-seeking company to
promote the firm’s mission or distribute its products
...
The major categories are as follows;

Ambient marketing; ambient marketing is marketing or advertising wherever customers happen to be,
as part of the immediate surroundings, to me the best example is that of the Spar Restaurant in Mumbai,
India, who scattered life size giant clam shells on the local beaches, which when picked up had an advert
of the restaurant in them
...
com

Strategic Marketing

Expanding marketing’s traditional boundarie

Astroturfing or Astroturf marketing; describes the formal political, advertising, or public relations
campaigns seeking to create the impression of being spontaneous “grassroots” behaviour, hence the
reference to the artificial grass, Astroturf
...

The goal of such a campaign is to disguise the efforts of a political or commercial entity as an independent
public reaction to some political entity – a politician, political group, product, service or event
...
) and covert (disinformation) means
...
Very often the
efforts are conducted by political consultants who also specialise in opposition research
Buzz Marketing; is a word used in word-of-mouth marketing to describe the ‘hype’ amongst the
consumers
...


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In contemporary use it is frequently
used in a broader context to generally refer to any type of marketing effort for social and other charitable
causes, including in-house marketing efforts by non-profit organizations
...

Event marketing: Efforts designed to promote events such as athletic competitions and cultural and
charitable performances
...

Also called Event Creation
...
Whilst
the term is relatively new the fundamental concepts behind it are found in traditional activities such as
field marketing, customer service, special events, product promotions, and PR stunts, where attempts
are routinely made to engage consumers and the public emotionally
...

Guerrilla Marketing: The term originated with Jay Conrad Levinson, first used in his book Guerrilla
Marketing
...
Originally Guerrilla Marketing
involved unusual approaches such as intercept encounters in public places, street giveaways of products,
PR stunts, any unconventional marketing intended to get maximum results from minimal resources
...
The objective of guerrilla marketing is
to create a unique, engaging and thought-provoking concept to generate buzz, and consequently turn
viral, i
...
get the message passed from consumer to consumer as a form of word-of-mouth promotion
...

Grass roots marketing is aimed at reaching people on near personal level, either in person, or via some
sort of media
...


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A good example is the NCT (National
Childbirth Trust), who promote the values of healthy parenting and natural methods of childbirth, but
whom are also a charity working in both the public and private sector
...
There are lots of examples of this ‘personal PR’ to be seen in the tabloid press, but this
also happens in many business to business and academic markets, as well as the more obvious Public
Speakers for hire, who do this as a matter of course
...
g
...
g
...
Not to be confused with ambient marketing
...
Where is there? It is simply anywhere that people are
...
Strictly speaking therefore, Presence Marketing identifies the presence of
customer within a set environment, e
...
retail store, shopping mall
...
The idea is
to change and tailor the promotional material each customer is exposed to specifically
...
Social marketing can be applied
to promote merit goods, or to make a society avoid demerit goods and thus to promote society’s well
being as a whole
...
This does not mean that commercial marketers can not contribute to
achievement of social good
...

Beginning in the 1970s, with the work of Kotler and Zlatzman it has in the last decade matured into a
much more integrative and inclusive discipline that draws on the full range of social sciences and social
policy approaches as well as marketing
...


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...
IMC coordinates the elements of the promotional mix – advertising, personal selling, public
relations, publicity, direct marketing, and sales promotion – to produce a customer focused message that
is consistent and coherent across all media
...
e
...
However, the growth of social media,
Facebook, Twitter, Bebo, Stumbleupon etc
...
In the emergence of Web 2
...

Sports Marketing; began on August 26th 1939 with the first Major League Baseball game ever televised
which directly led to Babe Ruth being the first six-figure athlete in the history of professional sports
...


www
...
com

We do not reinvent
the wheel we reinvent
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...

An environment in which your expertise is in high
demand
...
Implement sustainable ideas in close
cooperation with other specialists and contribute to
influencing our future
...


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Companies use a small portable pack of tissues and brand them with their company advertising
copy, which is given out free, usually outside train and tube stations
...
5 billion) industry
...
This can include the hiring of actors, to ‘talk-up’ a product in public places where
potential consumers are known to congregate, parks, cafes, etc
...
The most famous example was by Sony Ericsson in 2002 when they hired 60 actors in
10 major USA cities, and had them “accost strangers and ask them: Would you mind taking my picture?”
The actor then handed the stranger a brand new picture phone while talking about how cool the new
device was
...

Viral Marketing; Viral marketing and viral advertising refer to marketing techniques that use pre-existing
social networks to produce increases in brand awareness or to achieve other marketing objectives (such
as product sales) through self-replicating viral processes, analogous to the spread of pathological and
computer viruses
...
Viral promotions may take the form of video clips, interactive Flash games,
advergames, ebooks, brandable software, images, or even text messages
...

The goal of marketers interested in creating successful viral marketing programs is to identify individuals
with high Social Networking Potential (SNP) and create Viral Messages that appeal to this segment of
the population and have a high probability of being passed along
...
com



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