ADVANCED MARKETING

2015/16 1st Sem

TB

Ana Sofia Costa

Anna Shengelia

I. Revisiting Marketing Is
Marketing still the same?
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When Marketing is strategy

(Dawar, HBR, Dec 2013)

Downstream activities are increasingly the basis for

preference and loyalty
center of gravity has tilted downstream

Production-oriented activities are being designed to

maximize output and related efficiency.
Problem? Everyone is doing the same thing!
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When Marketing is strategy

(Dawar, HBR, Dec 2013)

Customers are the core of the business.

Downstream competitive advantage and create

downstream value over purchase, consumption and
disposal cycle.
Shifting from production-oriented companies to marketoriented companies.
More active role for companies: to influence consumers
perception of purchasing criteria and bring new ones.
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When Marketing is strategy

(Dawar, HBR, Dec 2013)

What is strategy?
(Porter, HBR, Nov/Dec, 1996)

Operational effectiveness will hardly sustain competitive

advantages
Strategy derives from strategic positioning

STRATEGY is the creation of an unique and

valuable position, involving a different set of
activities

What is strategy?
(Porter, HBR, Nov/Dec, 1996)

Sustainable competitive advantage

Unique competitive position for the company
Activities tailored to strategy
Clear trade-offs and choices vs competitors
Sustainability comes from the activity system
Operational effectiveness is a given

Competing for the future

(Hamel and Prahalad , HBRPress, 2000)

Success reduces the genetic variety

A learning organization but also an unlearning

organization
Beliefs may become a threat to survival, specially
in fast-changing environments

Marketing as Strategy
(Nirmalya Kumar, HBSPress, 2004)

Do you think that the economic and financial

crisis has underminished the role of Marketing
in the organizations? Have other values and
company functions become more important?
Changes? Adapt?

Market segmentation, targeting

and positioning
What is segmentation?
What is targeting?
What is positioning?

Purpose: focus the firms eforts on the right

customers and provide the organising force for the
marketing-mix elements.
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Bases for segmentation

(Segmentation and Targeting, Gupta, 2014)

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Segmentation revisited
(Yankelovich and Meer, HBR, Feb2006)

Initial idea: inform communication, price, distribution and product

innovation strategies (m-mix).
Initial popular segmentation basis: demographics.
1st shift: tastes and purchasing patterns not neatly aligned with
demographic variables. Significant variation among individuals that
share the same demographic profile. Demographics not effective.
New basis? Psychographics = lifestyles, attitudes, self-image and
aspirations. Emphasize the emotional benefits, not only the functional.

VALS segmentation popular: psychographics became the most accepted

mode of segmentation.
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Segmentation based
on personality traits

www.sric-bi.com/VALS

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Segmentation revisited
(Yankelovich and Meer, HBR, Feb2006)

Phychographics proved to be effective at brand reinforcement

and positioning.
Problem? Campaigns built on psychographics good as moving
viewers emotionally, but not the drivers of comercial activity.
What do companies want? Which markets to enter, what offers
to make, basically which m-mix strategies.
Solution? No segmentation? Remember Blue Ocean Strategy
(BOS): focus on customer commonalities (value innovation
logic).
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Segmentation revisited
(Yankelovich and Meer, HBR, Feb2006/ Tybout and Calder, Kellogg on Marketing, ch 2)

2nd shift: segmentation based on consumers actual purchasing

behaviour (heaviness of use, brand switching, channel selection, )
and their likely behaviour.
Subgroups based on patterns of usage, which are then analysed in
terms of demographic, psychographic and motivational characteristics.
Which are the best customers? Key customer accounts? 80/20 rule;
CLV.

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Customization

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Customer Portfolio Matrix

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Segmentation revisited
(Tybout and Calder, Kellogg on Marketing, ch 2)

Unlike personality traits, which usually endure

throughout life, consumers attitudes, preferences and
behaviour can change quickly. Redefine segments as
market conditions or customer behaviour change.

Segmentation as a dynamic exercise

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Behavioral Segmentation Breakdown

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Behavioural Marketing Segmentation

Technique
RFM: Recency, Frequency, Monetary:
When the customer last placed an order: Recency
How many orders the customer placed over a
period of time: Frequency
How much did the customer spend: Monetary

RFM segmentation correlates well with customers

future purchases.
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Targeting
Targeting decision answers whom to serve and whom not
to serve.
Brand established in product category?
1) target current customers to increase their spending
2) target competitors customers and persuade
switching
3) convince noncategory consumers
Brand new to market? Operational excellence, Product
leadership, or Customer intimacy.
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Positioning
Brand positioning refers to the specific, intended
meaning of the brand in the mind of the targeted
customers.
Competitive offerings (superior)
Customers goals, lifes (relevancy)

The advantage of solving the positioning problem is that it

enables the company to solve the marketing mix problem
Philip Kotler

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The purpose of business is to create

and keep a customer.
Peter Drucker and Theodore Levitt

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Marketing Strategy Formation Process

(Dolan, 2014)

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Marketing-mix
Product need to think in the full set of ways in which
value can be created for customers. Which customers
problem needs solution?
It envolves decisions on all product aspects.

Promotion The tasks comprised in

communications strategy include Market,
Message, Media, Money, Measurement (6Ms).
Decision on Push or Pull strategy.
Budget with the Objective and Task method.

Planning
Mission,

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Marketing-mix
Place Where and how the company decides to go to
market. Decide to achieve 4 tasks: generate product
demand; fulfill that demand ; provide after-sales services;
and transmit feedback from customers to producers.
Choice of channel design and channel management.

Price Whats the value of the product to the customer?

Discriminate price among consumers? What is the
customers price sensitivity?
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