Marketing Strategies and Differentiation

What is the goal of strategic planning in marketing?

To align goals, capabilities, and market opportunities

What is benchmarking?

Comparing with best practices to improve

Which Ansoff strategy uses existing products and existing markets?

Market Penetration

In the BCG Matrix, what is a “Star”?

High growth, high market share

Process of Strategic Planning

Organization + KPI’s + Goals/Objectives

Where to compete in the strategic planning?

Arena (Knowing the industry, the competitors…)

A process that maintains strategic fit between:

firm’s goals, its capabilities, and changing market opportunities

Why is strategic planning important?

🙂 : Every time you buy something, you have an experience with the Product/Service, the client needs to be happy with the brand

How does marketing come into the picture?

If they don’t have customers, the brand doesn’t exist. Market = customers

Product vs Market - oriented business definitions

Benchmarking

Comparing the firm’s products and processes to those of competitors or leading firms in other industries to identify best practices and find ways to improve quality and performance.

What do you benchmark?

• The competition of the firm, they sell similar product. The comparison is not only with the direct competition but also with the best in the market

• Determine the objectives and relative importance of:

  • Current profitability

  • Market share growth

  • Cash flow

  • Technological leadership

  • Service leadership

Assessing Competitors

Determine objectives and relative importance of:

• Current profitability

• Market share growth

• Cash flow

• Technological leadership

• Service leadership

• Among others

Competitor’s Strategy

Pay attention to what the competitors are doing

• Firm’s resemblance (is it similar to me and how?), then differentiate

• Strategic group

A firm must identify:

• Value delivered

• P/S quality, features, and mix

• Customer service

• Pricing policy

• Distribution coverage

• Sales force strategy

• Adveritising

• Sales promotion

• Online and social media programs

• R&D

• Manufacturing

• Purchasing

• Financial

Assessing competitor’s strenghts + weaknesses

• What can competitors do?

• Gather information on past: strategies, performance,and goals

• Secondary data (INEGI…)

• Personal experience

• Word of mouth

• Primary research: suppliers, customers, dealers

• Check competitors’ online sites

• Benchmarking

Estimating competitor’s reactions

• What will our competitors do?

• Develop a “competitor mentality” to anticipate moves

Selecting competitors to attack and avoid

• With whom is better to compete?

• Weak competitors

• Strong competitors

• Selecting competitors to attack and avoid/assess their strengths + weaknesses

• Customer value analysis

Customer Value Analysis

1. Determine the benefits and attributes of target customer (what they really value?)

2. What is the importance of such benefits & attributes (rating grade/level). (How much you rate the product based on the benefits)

3. Assess the firm’s performance versus competing offers in those benefits & attributes (Knowing where you are standing)

Eventually everything competes against everything

Competing Partiners

• Good or bad competitors?

• Companies benefit from competitors

• Share product development

• Legitimize new technologies (like the USB-C cable)

• Increase total demand

• Good = Play by the industry rules

• Bad = the opposite; play by their own rules

Finding an uncontested market

Create different P/S with no direct competition = blue ocean

Competitiveness Matrices

Strategic planning is defined as the administrative process to create and maintain a fit betweenthe objectives and resources of the organization and the changing opportunities of the market.

Strategic planning is the foundation of all marketing strategies and decisions. These decisions affect your resource allocation and, ultimately, your long-term financial success.

There are several tools that allow companies to manage the strategic direction of their business.

Ansoff Strategic Opportunity Matrix

It is a way of formulating alternatives by matching products to markets. Companies can explore 4 options

Market Penetration

When both the Market and the Product are current, that is, they already exist, the company applies the Market Penetration alternative, seeking to increase market share with existing customers.

That the same customers buy more of the same product

Market Development

When the Product is current, it already exists, but the Market is new, the company seeks to attract new customers for that product.

That other customers buy the same product

Product Development

When the Market is current, it already exists, but the Product is new

That the same customers buy the new product

Diversification

When both the market and the product are new

Let new customers buy the new product

Portfolio Matrix or BGC (Boston Consulting Group)

Companies must find a balance between their products that allows them to generate the desired global growth and profits, but with an acceptable level of risk.

Some products generate huge amounts of money and others need it to fuel their growth.

The challenge is to find the balance for the best possible long-term performance.

Each product is classified in this matrix based on its growth and market share, present or forecast.

In the BCG Matrix, what is a “Star”?

It is a rapidly growing market leader. It generally produces large profits, although it takes a lot of money to finance its rapid growth.

The best practice is to protect existing market share, reinvest income to perfect the product, improve distribution, and increase promotion and production efficiency.

In the BCG Matrix, what is a “Money Cow”?

You make more money than you need to maintain your market share.

It is advisable to maintain market dominance as a leader and apply technological improvements to the product.

In the BCG Matrix, what is “Unknown”?

It has fast growth, but with low profit margins. It has a low market share in a high growth industry. The unknowns need a lot of money, if they are not supported, over time they can become a dog.

The option is to invest a lot to obtain a greater market share, if it is not achieved, you have to get rid of the product.

In the BCG Matrix, what is “Dog”?

 It has little growth potential and a small market share. Over time, most of them leave the market.

The option is to harvest or discard.

Once the products are classified in the matrix, future resources are assigned to each one according to the most appropriate strategy:

• Build: If the product has the potential to become a star.

• Keep: If the product is a very successful cash cow, the goal would be to maintain market share so that the company can profit from the money it generates.

• Harvest: This strategy is for all products except the stars. The goal is to increase short-term profits without worrying too much about their long-term effect.

• Discard: It is often recommended to ditch low-share products in slow-growing markets. Unknowns and dogs are ideal for this strategy.

McKinsey Matrix, Market Appeal or GE (General Electric)

This model uses the dimensions of Market Appeal and Company Strength. It allows identifying how well the company is positioned to take advantage of market opportunities.

Secondary Information

Information that has been collected for any other purpose, that is, it already exists.

"Data previously collected by others" can be found if we browse the Internet, taking special care that the sources are reliable.

A good example is the databases that the Monterrey TEC has: Passport (Euromomitor), EBSCO

(Business Source Ultimate), Gartner Intraweb, EIU and Springer among others.

Primary Information

Is that once the secondary information has been obtained, the researcher specifically defines what he or she needs to know and collects this type of information through the following four techniques

Original information that is collected for a specific purpose or for a specific research project. "Data generated for the first time by the researcher"

1. Observation

Research method based on four kinds of observation:

• People watching people

• People who observe an activity

• People-watching machines

• Machines that observe an activity

Process for carrying out Observations

Narrow down the problem or situation to observe. Define the important points to record. Go to the place to witness the events when they happen. Record the information. Analyze the information. Present results.

2. Focus Groups

From 7 to 10 people who meet the desired characteristics participate in a group discussion led by a moderator.

Process for carrying out Observations

Narrow down the problem or situation to be investigated. Plan the trigger questions. Recruit by random selection of 7 to 10 people who meet the desired characteristics. Bring them together in a boardroom with equipment to record audio and video. During the session a moderator leads the group discussion. Give a cash incentive or a present to each of the participants. Analyze both verbal and attitudinal information. Present results.

3. Experiments

Method by which the researcher modifies one or more variables while observing the effects that these modifications produce in another variable

4. Surveys

Most popular technique for gathering data. In a survey, the researcher interacts with people to find out facts, opinions, and attitudes.

All the information collected, both secondary and primary, can be classified as quantitative or qualitative.

Qualitative information	Quantitative information
It is objective, descriptive, provides figures, and measures variables.	It is subjective, delves into the problem, provides data, describes motivations, thoughts, and attitudes

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What it means to segment a market?

• Common characteristics, needs, etc.

• Individual?

• Massive?

• … and what is in between?

• Meaningful

• Identifiable

• Brand manager. Marketing mix that is useful to the customers in that segment

• Important?

Segmentation Criteria

• Substantive: size

• Measurable: how many?

• Reachable: communication between brand + customers

Criteria to Segment the customer market

• Characteristics pertaining to customers

• Bad segmentation? =

• 1 variable can be used (age, gender, education, etc.)

• 1 variable = simple to use and understand

• A lot of variables = the opposite

• Trends: more variables = more precision

• Secondary information?

• Geography: region, size, density, weather

• Demographic: age, gender, income, ethnicity, life cycle

• Psychographic: personality (habits and attitudes), motives (emotions), lifestyles (time spent, important things around me, beliefs, education), geodemography (geography + demography + lifestyle)

• Benefits: Which benefits are sought?

• Usage: buy or consume (potential customers, past customers, first-time consumers, irregulars, etc.)

• Segmentation: 80/20

1. Choose the product/service/market

2. Determine the segmentation bases. Managerial insights, creativity, market knowledge; variables?

3. Choose segmentation descriptors. For instance: demographic (age, gender, income)

4. Profile and analysis of the segment. Market size, expected growth, buying frequency, brand usage and loyalty, expected sales, and profit potential

5. (choose) Segment of the market. Natural step in the segmentation process. Impact for the company

6. Design, implementation, maintenance of the marketing mix

Objective to segment a market

1. Non-differentiated objective

   • Massive

   • 1 marketing mix

   • Similar customers/clients

2. Focused Objective

   • Niche selection

   • Efforts towards the niche

   • Maybe more profitable

3. Multi-objective

   • 2 or more segments

   • Same number of marketing mixes

Objective = target

Promotion and Communication Strategies

The promotional strategy is closely related to the communication process. As human beings we attribute meaning to feelings, ideas, facts, attitudes, and emotions. Communication is the process we use to exchange or share meanings.

The communication process consists of several steps. When a company wants to transmit a message to a target audience, it encodes that message using language and symbols that can be recognized by the recipient to whom that message is addressed, and then they send it through a communication channel. Noise in the transmission channel can distort the message that the source intends to transmit.

Reception occurs when the message fits within the receiver's frame of reference. It decodes the message and usually provides feedback to the source.

Normally the feedback is direct in the case of interpersonal communication and indirect in the case of mass communication.

Social media has increased the amount of feedback that businesses receive.

Communication process

The promotion strategy of each company is a plan to optimally use the promotional elements to achieve the marketing goals that are always linked to the overall goals of the company.

Marketing always starts from the global goals to combine the elements of the promotion strategy and make the ideal mix to reach the target market in the most efficient way.

The main function of the promotion strategy is to convince the target customers that the goods and services that the company offers represent a competitive advantage over those of the competition.

Step 1 in developing effective marketing communications

1. Identify the target audience:

   Affect the communicator’s decision on:

   • What will be said

   • How it will be said

   • When it will be said

   • Where it will be said

   • Who will say it

2. Determine the communication objectives:

The buyer might be in any of these steps:

3. Design a message:

• Message content

• Message structure

  • Draw conclusions or leave it to the audience

  • Present strong arguments first or last

  • Present a one-sided argument (positive), or two-sided (pros+cons)

• Message format

  • Print, TV, radio, etc

4. Choosing communication channels and media

• Personal communication channels:

  • Word of mouth (personal or digital)

  • Independent experts, consumer advocates, bloggers

  • Buzz marketing: opinion leaders

• Non-personal communication

  • Newspapers, magazines, direct mail

5. Selecting the message source

• Message delivered by a highly credible spokesperson

Producto

Todo lo positivo y negativo que obtiene cuando una persona realiza un intercambio

Plaza (distribución)

Poner los products a disposición de los clientes en el lugar y el momento que deseen

Precio

Aquello que se sacrifica en un intercambio para adquirir un bien o servicio

Promoción

Comunicación que informa, persuade y recuerda un product a los compradores, con el propósito de influir en la opinión o generar una respuesta

Mezcla promocional

La combinación de herramientas de promoción utilizadas para llegar al mercado metas y cumplir las metas globales de la organización:

• Publicidad

• Relaciones públicas

• Ventas personas

• Promoción de ventas

• Medios Sociales

Non-differentiated objective

• Massive

• 1 Marketing mix

• Similar customers / clients

Focused objectives

• Niche-selection

• Efforts towards the niche

• Maybe more profitable

Multi-objective

• 2 or more segments

• same number of marketing mixes

• objective=target

AIDA

• Attention

• Interest

• Desire

• Action = Buy

Advertising

Massive impersonal and one-way communication about a product or organization that is borne (paid for) by the company

Public Relations

Marketing function that assesses public attitudes, identifies areas in the organization that might interest them, and executes a program of action to gain their understanding and acceptance

Personal Selling

A Purchase situation involving paid personal communication between two people trying to influence each other

Sales Promotion

Marketing activities, other than personal sales, advertising, or public relations, that encourage consumers to buy and increase the effectiveness of distributors

Social Media

• Promotional (or not) tools used to facilitate online conversations between people

  • Paid Media: A kind of promotional tactic that is based on the traditional model of advertising, in which a brand buys space in the media

  • Earned Media: A kind of promotional tactic that is based on the model of public relations or free advertising, which causes customers to talk about products or services

  • Own Media: A New kind of promotional tactic that relies on brands publishing their own content in order to maximize brand equity for customers

Publicity

It is a way of getting the media to disseminate our brand for free

Omnichannel Marketing

Omnichannel Marketing is a digital marketing strategy that consists of harmonizing sales channels, organizing information from all channels to facilitate data management and optimize the purchase strategy.

• Customer-focused

• Puts the customer at the center of all channels for a seamless experience

Multichannel Marketing

• Company-focused

• Starts with your business and trickles down to customers

What is the main purpose of customer value analysis?

Determine what customers truly value

What is a “good competitor”?

Plays by industry rules

Which Ansoff strategy is used when the product is new but the market alredy exists?

Product development

What are the two dimensions of the GE/McKinsey Matrix?

Market Appeal and Company Strength

Which research method involves modifying variables to see their effects?

Experiments

What type of data is collected for the first time by reseacher?

Primary Information

What is the key difference between multichannel and onmichannel?

Company-focused vs Customer-focused