3RD EXAM MARKETING BASED OFF GOOGLE DOCS

The STP process

5 step process, segmentation phase (1-2), targeting phase (3-4), and positioning phase (5).

STP pizza analogy

Think of a pizza,, the whole pizza (mass market), slice into segments, target the best slice(s), and position yourself to grab it before the competiton

Step 1: Establish Overall Strategy or Objectives

Define company vision, mission statement, and objectives clearly.

Conduct SWOT, (strengths, weaknesses, oppourtunities, threats)

ex: Bottcellis objective was to increase sales in a mature industry

Step 2: Use Segmentation Methods

Six methods: geographic, demographic, psychographic, benefits, behavioral, geodemographic

Geographic Segmentation

Based on location like continents, regions, countries, zip codes

Ex: walgreens/cvs choose stores by zipcode analysis; dunkin only offers new england clam chowder only in northeast

Demographic Segmentation

MOST common segmentation strategy, based on age, gender, education, income, race and ethnicity

-easy to identify and measure (collected by the US census)

Ex: elderly friendly websites, women gun buyers, millennial airline perks, gender neutral razors, dollar general targeting wealthy shoppers.

Psychographic Segmentation

How consumers describe themselves in terms of self-values, lifestyle, and self-concept.

-VALS framework: values, attitudes, and lifestyles questionnaire to categorize consumers

Ex: harley davidson targeting young motorcyclists

Benefit Segmentation

Groups customers based on benefits they derive from products

Ex: convenience, economy, prestige; comedy v drama movies; financial institutions targeting people without credit scores

Behavioral Segmentation

Divides customers based on how they use the product

-Occasion segmentation: when product is purchased (lays party pack)

-Loyalty segmentation: rewards for repeat customers (starbucks gold card, panera)

Geodemographic Segmentation

combination of geographic, demographic, and lifestyle characteristics to classify consumers

-"birds of a feather flock together"- people tend to live near others like them

-uses systems like tapestry to create clusters based on location plus demographics plus lifestyle

Step 3: Evaluate Segment Attractiveness

identifiable, substantial, reachable, responsive, profitable

identifiable

can you identify who is in the market? can you find them?

substantial

how big is the target market? is it large enough to be profitable?

reachable

can the market be reached through promotion and distribution? will they know the product exists?

responsive

will the market react positively to the product offering?

profitable

will the segment generate enough profit to justify targeting it

**Segment Profitability Formula

(segment size x segment adoption percentage x purchase behavior x profit margin percentage) - fixed costs

breakdown:

segment size- number of people in segment

segment adopt %-percentage likely to adopt product

purchase behavior- purchase price times number of purchases per year

profit margin %- (selling price-average v costs)/selling price

fixed costs-advertising, rent utlilties, insurance, admin salaries

**Market Share Calculations

company's sales/total market sales

ex- cup of joe has $500M in sales, total market is $2000M -- Market share= 500/2000 = 25%

**Relative Market Share

Ratio between competitors (simplify percentages)

ex- starbucks 60%, mcdonalds 10% -- relative share= 6:1

Step 4: Select Target Market

four marketing strategies, mass marketing (undifferentiated), differentiated targeting, concentrated targeting, micromarketing (one-to-one)

Mass Marketing (undiferentiated)

everyone is potential customer,least cost, rare now- mostly for commodities like steel or iron

"eating the whole pizza in one bite"

Differentiated targeting

target several market segments with different offering for each, more costly

ex, conde nast has GQ, vogue, wired- different magazines for different segments

Concentrated Targeting

Focus on single, primary target market,

ex, cosmetics targeting dry skin OR oily skin specfically

Micromarketing (One to One)

firm tailors product to individual customer needs, most costly, high customization

ex- finacanial advisor creating custom portfolio for one client, cannot be reused for another client

Step 5: Identify and Develop Positioning Strategy

Market positioning

•Defining marketing mix variables so target customers have a clear, distinctive, desirable understanding of what the product does.

Value proposition

•Communicates the customer benefits to be received from a product or service.

Value Proposition Components

target marketing (atheletes), offering name/brand (gatorade), product/service category (sports drink), unique point of difference/benefits (electrolytes)

four main positioning methods

value proposition, salient attributes, symbols, competition

Value proposition (positioning method)

relationship of price to quality (popular method)

Salient Attributes (positioning method)

focus on product attribute most important to target market

Symbols (positioning method)

logos and visual identity (Nike swoosh, Apple bitten apple)

Competition (positioning method)

Position against specfic competitor or entire product category

Perceptual Maps

shows position of brands in consumers' minds using two or more dimensions, think of it as "Marketing Battleship"- you're trying to position where customers want you while avoiding competitors

How to create perceptual map

1. Determine consumers' perceptions of product vs. competitors

2. Identify market's ideal points and size (bigger circle = bigger market)

3. Identify competitors' positions

4. Determine consumer preferences

5. Select the position (where you want to be)

6. Monitor positioning strategy (competitors move too!)

Example Dimensions: Sweet vs. Less Sweet, Healthy vs. Less Healthy; Performance vs. Fashion, Expensive vs. Cheap

Marketing research

uses data to answer questions about consumers, products, markets, and the enviroment

Marketing research process

5-step application of the scientific method that includes

1) Define objectives/research needs

2) Design research

3) Data collection

4) Analyze Data and Develop Insights

5) Develop and Implement Action

1. Define objectives and research needs

Identify specfic questioning to answer BEFORE collecting data

ex- should publix continue investing in curbside pickup and home delivery post-pandemic

2. Design the research

determine

-what type of data is needed

-what research methods will be used?

-surveys, interviews, focus groups, experiments?

**never start collecting data w/o clear questions and a design, otherwise u waste time and money

3.Data Collection

Two types of data (collected in this order)

Secondary data (collected first)- data collected by someone else for another purpose, not for your current study

Primary data (second)- data collected specfically for your current research study

Secondary data types

internal (data alr in the company, so stored in a warehouse and churn rate) and external (U.S. census, syndicated data, scanner data, panel data)

Primary data types

qualitative research: Informal methods providing rich, descriptive insights

quantitative research: structured responses that can be statistically tested

advantages and disadvantages of secondary and primary data

Secondary Data:

✓ Saves time (already exists)

✓ Free or inexpensive (except syndicated)

✗ May not be precisely relevant

✗ May not be timely

✗ Sources may be biased

✗ Methodology may be inappropriate

Primary Data:

✓ Specific to immediate needs

✓ Offers behavioral insights not in secondary

✗ Costly

✗ Time-consuming

✗ Requires sophisticated training

Big Data

data sets too large and complex to analyze with conventional software. Considered secondary data, stored in data warehouse, analyzed with data mining tools

5 Vs of Big Data

Volume (amount of data collected), Variety (different modes/types of data), Veracity (accuracy and reliability), Velocity (how quickly data can be gathered and responded to), Value (usefulness of data)

4. Analyze Data and Develop Insights

*Data- Raw numbers or facts with limited value on their own

*Information- Organized, analyzed, interpreted data that offers value to marketers

Marketing Analytics

Techniques using advanced technologies to improve decision making

4 types of analytics tools, descriptive, predictive, presciptive, active

*data becomes outdated quickly (3-6ms)

What is Descriptive Analytics?

Organizes, tabulates, and displays data in reports, tables, and charts (e.g., Excel, SPSS, SAS)

What is Predictive Analytics?

Uses historical data to forecast the future

What is Prescriptive Analytics?

Uses simulations and optimization to determine the best course of action

What is Active Analytics?

AI algorithms analyzing IoT (Internet of Things) input

5. Develop and implement Action Plan

Write report with FIVE key parts (in order of importance to manager)

executive summart, supplements/appendix, limitations, conclusions, body of report

1. Executive Summary

MOST IMPORTANT - Manager reads this FIRST. Maximum 3 paragraphs: What were the questions? What did you do? What should company do? Be succinct, no "fairy tale."

2. Supplements/Appendix

Manager reads this SECOND if intrigued. Include tables, figures, charts (Excel, PowerPoint, Canva). Must be good at visualizing data!

3. Limitations

Manager reads THIRD. What constraints exist? What can't be done?

4. Conclusions

Key findings and recommendations

5. Body of Report

Manager reads LAST (if at all). Detailed analysis and methodology

research ethics

Three Guidelines:

1. No selling/fundraising under guise of research

2. Support research integrity - avoid misrepresentation or omission

3. Treat clients and suppliers fairly

Watchdog Organizations: Center for Democracy & Technology (CDT), Electronic Privacy Information Center (EPIC)

Professional Standards: American Marketing Association (AMA) provides ethical guidelines

Product

anything that creates value for consumers through voluntary marketing exchange

Types of Products

tangible (physical goods) intangible (services like healthcare) thoughts and ideas (business concepts)

Types of Consumer Products

specialty products/services, shopping products/services, convience products/services, unsought products/services

specialty products/services

Strong preference and will spend considerable effort to search for the best suppliers. EX, lawyers, luxury brands, jewelry

shopping products/services

consumers compare alternatives, EX, apparel, fragrances, appliances, furniture, cars, involves internal and external info search

convience products/services

consumer unwilling to spend effort evaluating, EX groceries everyday necessities, in and out purchases

unsought products/services

consumers don't normally think of buying or don't know about, EX, life insurance, car insurance, parking permit

Product item

one single product. (liquid tide)

Product line

group associated items consumers use together or think of as similar (eg laundry care line: tide, gain, cheer, era, ivory, ariel)

product mix

complete set of all products/services offered by firm (eg P&G has laundry care, baby care, feminine care etc,)

product mix dimensions

breadth and depth

breadth (variety) of product mix

number of product lines offered by firm

wide breadth- P&G has many product lines (laundry, baby, feminine)

narrow breadth- michelin only has tires (one product line)

depth of product mix

number of categories/items WITHIN a product line

-deep: P&G owns 40% of laundry aisle (many items in Laundry care line)

-shallow: P&Gs personal health care has only NyQuil and Metamucil

changing product mix,

four ways to adjust product mix, increase depth, decrease depth, increase breadth, decrease breadth

increase depth

add items to existing product line

ex- P&G added tide evo tiles (laundry sheets) to laundry care line for sustainbility

decrease depth

remove items from product line

ex- newell brands cut 50 yankee candle types; coca-cola cut honest tea and tab, reducing from 400 to 200 beverage brands

increase breadth

add entire product line

ex- canada goose added warm-weather clothing line (previously only cold-weather)

decrease breadth

remove entire product line

ex-P&G sold folgers coffee (4.5 b to smuckers), Pringles (2.7b to kellogg), etc, not because failing but didn't match strat priorities

cannibalization

when one product competes with similar product from same company, hurting sales/profits

ex- P&G carefully prices and markets pampers v luvs, to avoid cannibalization

Branding

Consumers form relationships with BRANDS, not products. Branding is the essence of products

Brand

name, term, design, symbol, or combination that identifies sellers products and differentiates from competition

Brand elements

-Brand names (Nike)

-URLS (uber.com)

-Logos/Symbols (Nike swoosh)

-Characters (mickey mouse)

-Slogans ("just do it")

-Jingles/Sounds (its a small world, oscar mayer jingle)

how brands add value

facilitate purchases (shop by brand like pepsi v coke),

establish loyalty (amazon prime),

protect from competition (chobani buyers ignore cheaper yogurts) ,

brands and assets (listed as monetary assets on brand reports)

Brand Equity

set assets and liabilities linked to brand that add to or subtract from value

4 aspects of brand equity

brand awareness, perceived value, brand associations, brand loyalty

brand awareness

how many consumers are familiar with brand and what it stands for, create through repeated exposure to brand elements

percieved value

relationship between product benefits and costs

brand association

mental links between product benefits and cost

brand loyalty

repeated purchases and emotional connection

benefits- loyalty programs, lower marketing costs, customer recommendations, insulation from competition

****top five global brands

based on financial performance, role in purchase decisions, and brand strength

1. Apple

2. Microsoft

3. Amazon

4. Google

5. Samsung

-Note, coca-cola was 1 for 20 years, P&G isn't on list (uses individual brand names), but pampers and gillette are in top 100

manufacturer/national brands

owned and managed by the manufacturer (coca-cola, nike, kraft)

retailer/store/private-label brands

developed by retailer, available only from that retailer (great value at walmart, publix brand, kirkland at costco)

brand naming strategies

family brand and individual brands

trade off: family brand= less marketing cost but one scandal hurts all, individual brands = more marketing cost but failures isolated

family brand

use corporate name across all products (arm & hammer- toothpaste, laundry, litter)

individual brand

different brand name for each product a company makes (tide, pampers, gillete)

brand extension

using same brand name for new products in same or new markets

line extension

same brand name within same product line (increases depth) EX- lays flavors, tostitos varieties

brand dilution

extension adversely affects perception of core brand, EX- zippo tried womens perfume

co-branding

marketing two brands together, EX- vera-wang plus disney princesses wedding dresses

brand licensing

contractual arrangement to use brand name/logo for fee, Ex- NBA teams logos to clothing manufacturers, barbie career licensing with NASA

brand repositioning (rebranding)

changing brand focus to target new markets or realign with market preferences

like Aunt jemimas to pearl milling company

primary packaging

package consumer uses (toothpaste tube, keurig cup), provides convenience in storage use, consumption

secondary packaging

wrapper/exterior carton containing rpimary package (toothpaste box, keurig box), has UPC label for retail scanners, additional product info

sustainable packaging

less negative enviromental impact, P&G testing refillable containers in Latin America, recyclable bottles made from beach plastic waste