Marketing: Learning how to win

What are the 3 steps to follow regarding how to win?

Diagnosis, strategy, tactics.

What is diagnosis?

The process of identifying and understanding the underlying problem or situation that is affecting a brand, product or organization.

What is strategy?

Given our diagnosis, how are we going to win?

What are tactics?

Steps that will be taken to win.

What is the feedback loop?

It is consists of constant feedback and readjustments.

What is a market?

A group of actual and potential buyers who share a particular need or want that can be satisfied through an exchange.

What is share of wallet?

It is a marketing term referring to the amount of the customer’s total spending that a business captures in the products and services that it offers.

What falls under diagnosis in marketing?

Consumer needs and wants (market orientation), competitor analysis, understanding the micro and macro environment, marketing sizing, research and insights.

What is the difference between direct and indirect competition?

Direct and indirect competition depend on how broadly you define the customer’s need. Direct competitors are business selling similar products that satisfy the same need in a similar way.

What is indirect competition?

Indirect competitors offer different products, but those products can still satisfy the same underlying customer need.

How does marketing myopia connect to direct and indirect competition?

Marketing myopia happens when a business defines its competition too narrowly around its product rather than around the customer need it’s satisfying. Imagine McDonald’s says “we are in the hamburger business.“ Then they see Burger King and say “Yep, that’s our competition.“ That’s a product-focused view. But if McDonald’s instead says they are in the business of providing convenient meals, suddenly their competitive environment becomes much bigger.

Why indirect competition is important?

If you are only looking at direct competitors, you might think, we are doing great, nobody is making a product exactly like ours. Meanwhile, another tech or product could come along and satisfy the same customer need in a completely different way. Suddenly, you’re in trouble.

Where else can competition come from?

New products that enter the market. Substitute products/technologies. Changes in customer behaviour, customers finding a completely different way to satisfy their need. Changing technology.

Where does competition/competitive pressure come from in a market? (Porter’s 5 forces)

1. Rivalry among existing competitors

2. Threat of new entrants

3. Threat of substitute products

4. Bargaining power of suppliers

5. Bargaining power of buyers

These 5 forces determine how competitive an industry is and how much pressure businesses face.

Rivalry among existing competitors?

How intensely are the business that already exist competing with each other?

Threat of new entrants?

This asks how easy is it for new competitors to enter this market? If there are low barriers to entry: there are lots of potential new competitors. High barriers to entry: it is harder for new competitors to enter.

Threat of substitute products?

Looks at how easy it is for a consumer to switch to other products satisfying the same need.

Bargaining power of suppliers?

This asks, how much power do business supplying us have over us?

Bargaining power of buyers?

We ask now how much power do customers/buyers have?

What is share of voice?

It is a way of measuring an amount of advertising presence or strength for a particular brand of product, or essentially, how much is our brand or product talked about compared to our competitors?

What makes a successful marketer?

A successful marketer needs to know and master the environment in which their business operates.

What is the purpose of market research?

It is to help marketing managers and other business people make decisions by providing them with relevant and reliable info. It also helps solves problems, find opportunities and provide superior value. It is expensive but often holds key insights that public data does not.

What are the types of info?

Primary: information collected for the specific purpose at hand.

Secondary: info that already exists elsewhere.

Qualitative: soft

Quantitative: hard

Where to get internal data?

Databases of data from the firms activity. Useful but often difficult to analyze (i.e. Sales and cost data is not always collected to help the marketers but rather the accountants). Data ages quickly. Managing and mining big data is costly and involves sophisticated techniques.

What is marketing intelligence?

It is publicly available info about the marketplace that a business can use to make better marketing decisions. Specifically looking at consumer behavior and competitors actions. With consumer behavior, marketers wants to know are our customers changing what they think, want, value or do? Marketing intelligence allows the company to spot changes in the market before they become major problems or opportunities.

What are competitor actions?

It means to keep an eye on what your competitors are doing. E.g. you notice your biggest competitor has dropped their price. The market intelligence will then be “our competitor changed their price, which could affect customer behavior and therefore our marketing strategy.“

Why is marketing intelligence important?

It helps businesses identify changes, opportunities and threats in the marketplace and respond appropriately.

What are examples of primary research?

Observations, surveys, interviews, focus groups, data mining and experimental research (e.g. adding a new item to the menu in a single outlet and see if people like it before rolling out a national campaign.).

What is an insight?

In marketing, an insight is a deep, actionable understanding of a target market or customer, gleaned from data analysis and research, that reveals a previously unknown or unaddressed truth or need. It's more than just data; it's the "why" behind the numbers, offering a fresh perspective that can be used to drive effective marketing strategies and business decisions.

Market research vs customer insights?

The process of gathering and analyzing customer data for various business purposes. Provides info about all aspects of the market, including customer insights. A source of knowledge and a starting point from which a number of paths can be taken. Customer insights is a multidisciplinary subject that can be found in data gathered from diff sources. The narrative of the customer’s story that can be interpreted to make sense of the data. Can be used to make actionable decisions and provides solutions to business problems.

What are examples of sales metrics?

Actual sales, sales revenue growth, sales mix, salesforce productivity, lead to sale conversion rates, return on loyalty programmes.

What are examples of marketing effectiveness?

Return on marketing investment. Marketing budget. Advertising effectiveness. Awareness

top-of-mind awareness (remembering a product easily without being prompted), ad awareness (showing awareness of a brand's advert). Response rate. Cost of acquisition. Website traffic / Web analytics.

Examples of market metrics?

Relative market share. Revenue market share. Brand/market penetration

–How much a specific target population has adopted a brand after launch.

Brand equity

– Premium that is paid for them based on the brand, over and above the value of the product itself

Customer lifetime value. Share of voice. Share of search.

Examples of consumer perception?

Consumer satisfaction

– E.g., Net Promoter Score (NPS) - how likely they are to recommend the specific product after using it.

– E.g., Rate their experience using a five-point scale.•

Net Sentiment. Quality of service

– E.g., Number of complaints per given period.

Brand tracking

– E.g., awareness, relevance, knowledge, associations, image, loyalty, or brand health. There are a number of organisations that provide brand tracking measures.

Examples of consumer retention?

Survival rate

– Number of consumers maintained from the launch of a product or initiative up to any point in time afterwards.

Churn rate

– Rate at which existing consumers stop purchasing a product or service (usually annually).

Consumer loyalty

– E.g., A business could measure willingness of an existing consumer to buy the same brand in the future if they had to replace their car.

What is marketing information systems?

A marketing information system (MIS) consists of people, equipment and processes to gather, sort, analyse, evaluate, and distribute needed, timely and accurate information to marketing decisions makers.

Examples of some tools:

• MS Excel – don’t underestimate the spreadsheet

• Google AdWords

• Qlickview

• Tableau

Issues to remember?

Be very clear about your research problem and objectives (if you can't state it in a brief measurable terms, you should go back to the drawing board)

Get buy-in up front from those who will be affected by the research.

Choose methodology carefully knowing their strength and weaknesses up front.

Don’t be too ambitious unless you’ve got a lot of money.

Always start with search of secondary data sources. There is often much more than you think but review it critically

Try to link with in–company data

What is a target market?

It is the specific group of customers that a business chooses to focus its marketing efforts on because they are considered the most likely to want to buy its product/service.

What do you need before you can have a target market?

You need to segment the market first.

Market segmentation means dividing the overall market into smaller groups of consumers who share similar characteristics, needs, wants or behaviors. You then choose which segment(s) to focus on as your target market.

What are the basic types of segmentation?

Geographic, demographic, psychographic, behavioral.

What is geographic segmentation?

Dividing a market into different geographical units, countries, provinces, regions, municipal areas cities neighborhoods.

What is demographic segmentation?

Dividing a market into different demographic units. Age, gender, household size, life-cycle, income, occupation, education, religion and race.

What is psychographic segmentation?

Dividing a market into different groups based on things like, social class, lifestyle, personality characteristics.

What is behavioral segmentation?

Dividing a market into groups based on issues like: occasion, benefit, user status, usage rate, loyalty status, buyer readiness stage.

What is the segment characteristics?

Measurable, accessible, substantial, differentiable, actionable.

What are the critiques of LSM segmentation?

It was designed to overcome race as a primary determinant of segmentation for SA marketers (hence “living standards”)

But, as poorer households obtained “assets” (free housing, electricity, water etc) they would purchased better assets (often using social grants and credit)

By doing this they would ”jump” LSM bands even though disposable income didn’t grow

It is a generic form and does not consider product category