SBM L4 - Marketing program_0a0d101ee5e83a2a807a787e4bb41f9e

Learning Objectives

• Identify new perspectives and developments in marketing.

• Describe how marketers enhance product experience.

• Explain the rationale for value pricing.

• List direct and indirect channel options.

New Perspectives on Marketing

• Changes in Marketing Environment: Firms face enormous shifts necessitating changes in strategies and tactics.

New Approaches Embraced by Marketers:

• Rapid Technological Developments: Changing how products and services are marketed and sold.

• Greater Customer Empowerment: Consumers have more influence over marketing and product choices.

• Fragmentation of Traditional Media: Shift in media consumption patterns.

• Growth of Interactive and Mobile Marketing Options: Emphasis on engaging consumers through digital platforms.

• Channel Transformation and Disintermediation: Direct-to-consumer models are gaining traction.

• Increased Competition and Industry Convergence: More players in the market leading to strategic shifts.

• Globalization and Growth of Developing Markets: Expanding target audience.

• Heightened Environmental, Community, and Social Concerns: Growing importance of corporate social responsibility.

• Severe Economic Recession: Impacting consumer spending behavior.

The New Capabilities of the New Economy

Consumers

• Increased Power: Consumers can leverage greater purchasing options, information access, and interaction with brands.

Companies

• Enhanced Communication: Ability to establish direct informational and sales channels.

• Data Collection: Gathering deeper insights about markets and consumers.

• Transaction Efficiency: Automation and customization of marketing efforts.

• Targeted Communication: Permission-based marketing like email and social media.

• Customization: Personalized offerings to meet individual consumer needs.

• Improved Operations: Enhancements in internal communication, recruiting, and training.

Integrating Marketing

• Building Brand Equity: Different marketing strategies contribute to enhancing or detracting from brand equity.

Personalizing Marketing

• Need for Personalization: Expanding internet use and media fragmentation make personalization critical.

Concepts Embraced by Marketers:

• Experiential Marketing: Creating immersive brand experiences that promote engagement.

• Relationship Marketing: Focusing on customer relationships for long-term brand loyalty.

• Mass Customization: Allowing customers to tailor products to their preferences.

• Permission Marketing: Engaging consumers with their consent.

Experiential Marketing

• Definition: Promoting products by linking them with unique consumer experiences.

• Business Types: Raises the level of interaction from commodity to experience-focused marketing.

Advantages of Experiential Marketing

• Expands brand awareness, enhances social media sharing, and reshapes consumer perceptions.

Relationship Marketing

• Focus: Prioritizing customer needs to strengthen brand loyalty.

• Benefits:

1. Customized experiences.

2. Comprehensive brand-building.

3. Enhanced customer retention.

Mass Customization

• Direct Communication: Consumers express their preferences directly to manufacturers.

• Production Efficiency: Cost-effective personalized production methods.

Permission Marketing

• Strategy Overview: Marketing is only conducted with consumers' consent to foster loyalty and reduce clutter.

Reconciling Different Marketing Approaches

• Importance of Different Strategies: Various approaches emphasize distinct aspects of brand equity, suggesting that traditional "4Ps" of marketing may not encompass all factors.

Product Strategy

• Focus on perceived quality, managing customer experiences post-purchase.

Perceived Quality

• Definition: The consumer's perception of a product's overall quality compared to alternatives.

• Quality Dimensions: Includes reliability, durability, style, and design, as well as customer service experiences.

Managing Customers Post-Purchase

• Importance: The second moment of truth involves the consumption experience, critical for retaining customers.

• Aftermarketing: Marketing activities that begin after purchase.

Processes for Enhancing Customer Experience:

• User Manuals: Should be clear and accessible.

• Customer Service Programs: Extend relationships and improve customer retention.

• Loyalty Programs: Foster customer loyalty and engagement over time.

Pricing Strategy

• Role of Price: The only element of the marketing mix that directly generates revenue. Prices are also a reflection of brand value perceptions.

Consumer Price Perceptions

• Pricing strategies should reflect product costs, consumer perceptions, and competitive pricing.

Setting Prices to Build Brand Equity

Key Concepts:

• Value Pricing: Balancing product quality with costs and prices to satisfy consumer needs.

• Communicating Value: Ensuring consumers recognize the value of a brand.

• Price Segmentation: Adjusting prices for different market segments.

Channel Strategy

• Definition: Refers to the network of organizations that make products available for consumption.

Types of Channels:

• Direct Channels: Selling directly to consumers.

• Indirect Channels: Involved third parties such as agents or retail outlets.

Channel Design Considerations:

• Retailers: Impact brand equity significantly due to direct consumer interactions.

• Push vs. Pull Strategy: Manufacturers use targeted strategies to reach consumers effectively.

Direct Channels Advantages:

• Stronger control over sales processes and customer relationships.

Online Strategies**:

• Emergence of multi-channel/omnichannel retailing; combining physical and online presences for customer convenience.