Start with the customer, get customer insights
Get customer insights through integrated marketing, how do you promote it? What do they want? What are they looing for?
By delivering what the customer wants you create profits through delivering satisfaction
○ In sales
Start with the product
“Shout about it and someone will come and get it”
About shouting about products not
Profits through Sales Volume
•Customer concern throughout business V •Convenience comes first
•Know customer choice criteria and match with marketing mix V •Assume price and product performance are the key to most sales
•Segment by customer differences V •Segment by product
•Invest in market research and track market changes •Rely on anecdotes and received wisdom
•Welcome change V •Cherish the status quo
•Try to understand competition V •Ignore competition
•Market spend regarded as an investment V •Marketing spend regarded as luxury
•Reward innovation V •Innovation punished
•Search for latent markets V •Stick with the same
•Being fast V •Why rush?
•Strive for competitive advantage •Happy to be me-too
○ As an organisation you market at
To do that, you have to know about consumer behaviour
○ Marketing towards buyers within companies
Business to business
Industrial companies (massive units to buy cars, or all the equiptment for the oil industry)
Institutions (hospitals, universities)
Profit organisastions vs Non-profit organisations
Tangible that you can see or buy off a shelf
FMCG: fast moving consumer goods, small scale, don’t cost a lot of money for the end consumer
Durables: washing machines, freezers, televisions
○ Products or services?
○ Can be done at a strategic level for an organization as a whole, or on a product level
What’s happening in gov’t? What’s happening at the gov’t level that could influence your market?
□ Recissions? Credit Crunch? Deflation?
□ What are we doing different now that we didn’t ten years ago?
□ What are the new trends?
□ Are people using apps? Should we be getting into apps? Etc.
Create value for customers and build customer relationships
□ Understand the marketplace and customer needs and wants
□ Design a customer-driven marketing strateegy
□ Constuct an integrate dmarketing program that delivers superior value
□ Build profitable relationships and create customer delight and loyalty
Create value from customers in return
□ Capture value from customers to create profits and customer equity
-Long term benefit and trust from the customer in you
□ Importance of relationships
□ Changing environment
-Social commentators have said that marketing urges too much interest in material possessions.
People are judged by what they own and not who they are.
– issues of trust, responsibility
• Too few social goods
-Overselling private goods at the expense of public goods.
• Too much political power
-Businesses lobby politicians to support their interests above the public interest.
○ Bottom part is how the combination of influences creates a decision making process
•Culture is the most basic cause of a person’s wants and behavior.
“..that complex whole which includes knowledge, beliefs, art, morals, custom and any other capabilities and habits acquired by man as a member of society” E.B. Taylor 187
Cultural issues: don’t want to offend or stereotype- have to be sensitive to cultural differences.
HSBC do It well: saying they are global and local: depending on which culture you grew up in will see rug differently.
Within culture are sub-cultures: youth
Roles and family: the toothpaste your family has bought for years likely to influence what you buy
•2 or more people, related by birth, marriage or adoption
•Roles: -Gatekeeper, buyer, decider, user, influencer….
-Family decision making, sibling influence, “family identity bundles” Epp A & Price L (2008) ”
Family identity: A framework of identity interplay in consumption practices” Journal of Consumer Research Vol 35, Commuri & Gentry (2000)
Reference groups and social networks….
• comparative- may compare yourself with others
• aspirational- Aspire to luxury brands.
• opinion leaders/co-creation- personalization of what consumer wants
Age- can you buy alc?,
lifestyle (and changes),
hight self asteem or low,
Personality – unique psychological characteristics (openness, conscientiousness, extraversion, agreeableness, neuroticism) – big 5 scale used to measure personality
Perception and attitudes – brand – Burberry brand almost destroyed by chavs wearing iconic pattern.
Ability & Knowledge
Need to first satisfy basic needs: hunger.
Move up the hierarchy:
Marketing trying to help achieve these needs: e.g. phone for safety or for social needs: social media, or esteem needs: liking photos. Most successful products satisfying needs.
routine: always buy colgate toothpaste because mum did. Difficult to break
limited: hungry: go into shop and pick snack spontaneously- branding is important
extensive: structure of decision process
Info search: need to find out about safety of cars etc. collecting info via car magazines, word of mouth etc
Evaluation of alternatives: look at different options. Can be informal or formal.
Important for marketers: need to know whats important for consumers and where they are finding info.
Purchase: sales assistant not very helpful so may deter you from buying
Post-purchase evaluation: how you feel socially/financially after purchase. Do you feel comfortable. Company may send flowers: makes you feel better- what is going to make consumer happy. Develops on going relationship.
At each stage of decision process marketer needs to know about influences.
Breaks down audience into segments that want your product.
Segmentation: divide total market into smaller segments.
Targeting: select segment to enter- which one most cost effective.
Decide on a value proposition
Differentiation: differentiate the market offering to create superior customer value.
Positioning: position the market offering in the minds of target customers.
“A market segment is a group of individuals, groups or organisations that share one or more similar characteristics which make them have relatively similar product needs.”
Need to make sure segmemts are discreet and reachable
– Urban or rural area
• Demographic variables
sex – dove targets men and women v differently
– stage in the family life cycle- face creams
• Socio-economic variables
– education/social class
•Psychographic variables – more difficult to target
•Product -related variables
– Users v. non-users- tesco clubcard- knows what you have bought and can see what incentives e.g. discounts change your behaviour.
attitude to product
– analysed target market
○ Favourable and unfavourable ways to be perceived
Combination of tangible and intangible attributes, including functional, social and
psychological utilities or benefits
○ Can be an idea, a service, a good, or any combination
Anything that can be offered to a market for attention, acquisition, use or consumption
that might satisfy a want or need
□ Annoying products
□ House insurance, car insurance, taxes
What attributes are my consumers look for
In supermarkets, where you position your price
What is the product made up of, expecctation, how do we make our product different
What the customer thinks about you
The way the design, logo, colours look
Identifies product wihtin market
Signifies quality, style, story
Way it looks and also legal requirements
Calorific value, etc.
PRODUCT SUPPORT SERVICES
What are we offering the ustomer over and above the product
Reinforcing differentiation within market place
○ Processes: how the service is actually delivered; back up systems
○ Physical Evidence: layout, furniture, brochures, signs, etc, certificates, photos
○ Idea generation
NPD: New Product Development; backwards and forwards through various stages to ensure
○ New product planning
○ Idea generation
○ Screening and evaluation
○ Technical development
○ Market appraisal
Faces different marketing conditions
Different marketing objectives become important
Different marketing strategies become applicable
Growth -Maximise market share
Maturity -Maximise profit while defending market share
Decline -Reduce expenditure and milk the brand
○ Four product brand strategies
To the seller
• The revenue that can be generated from the sale of the product.
• The profits and longterm survival of the firm.
• The ability to respond quickly to market conditions.
To the buyer
• Also represents the cost to the customer.
• It can signify the quality of the product or provider.
• It is affected by buying power.
○ Pricing objectives
○ Channel member expectations
Supply chain to the customer
○ Buyer’s perceptions
○ Legal and regulator issues
○ Other marketing mix variables
-Target return objective – sets a specific level of profit, usually stated as a % of sales
or investment. Also called the ROI.
-Profit maximisation –
• seeks to achieve as much profit as possible. ‘To charge what the market will bear’
-Sales growth objective – seeks some level of unit sales, pound sterling/dollar sales or
share of market without referring to profit.
•Market share objective:
-gain some specific share (%) of a market or market share leadership.
•Status Quo oriented:
-Price stability – to meet the competition or even avoid competition.
-Non-price competition – aggressive action on one or more of the Ps other than price.
• assessment of target market’s ability to purchase and
evaluation of price
• determination of demand
• analysis of demand, cost and profit relationships
• evaluation of competitors’ prices
• selection of a pricing policy
• development of a pricing method
• determining a specific price
• Attempts to match or beat competitors’ prices.
• The firm needs to be a low cost producer to compete on price.
• It is particularly evident in industries where product differentiation is difficult.
• It enables the firm to react quickly to competition.
• Can encourage customers to become price sensitive.
distinctive features of the product or service.
• Firms need to be able to distinguish products
or brands, obtain a unique brand image.
• Distinctive features must be of value to the
• Works well when customers are less price
• Enables the firm to build customer loyalty.
• Appeals to those who can afford and most desire the
• Generates much needed cash flow.
• Covers large R&D spend.
• Helps keep demand consistent with production capabilities.
• Competition may be attracted by high price.
• Useful when demand is elastic.
• Useful for low cost producers.
• Less flexible than skimming
• Can be useful if threat of entrants is high.
• Can deter some competitors due to low unit profit.
•Captive product pricing
the modern marketing process, price remains an
important element of the marketing mix both
strategically and tactically
•Many internal and external factors influence
• Decisions on price can affect sales but can also
adversely affect brand and long term future
•In the end, the consumer decides whether the
company has set the right price and they may
differ in the values they assign to different
• Distribution Channel: the means by which products are moved from producer to end consumer
•Channel Intermediaries: someone who’s helping you achieve the goal of delivering goods to end
•Wholesaler: will buy in bulk from one producer and then sell on to another part of the business,
don’t come in contact with consumers, wine wholesaler buys from france then distributes to
• Retailer: deal directly with the end consumer
• Facilitators perform some other function in the distribution of products, make it run smoothly
• Many ways a marketing channel can be built:
○Product features: some need more experts and specialists, so impacts whether you go direct or not
○ Market characteristics
○ Consumer behaviour: what are your consumers doing?, use of the internet for example
○ Environmental forces: pestle analysis
○ Promotion gap: advertising
○ Negotiation gap: negotiating with bulk buyers
○ Ordering gap: efficiency in ordering
○ Financing gap: take on responsibility for financing
○ Risk-taking gap: utilizing experts on risk taking in your area
○ Physical possession gap: chain becomes more fluid an cash is easier to come buy
○ Payment gap: physical possession goes on, payment down the chain is smoother and quicker
Accumulating= developing a stock of similar products
Allocating= Breaking down stock into smaller units
Assorting= Combining products into collections required by customers
which is cost effective so long as they are experts
Distribution via sales representatives or party plan
Internet sales direct from producer or service provider
Producer -> retailer -> consumer
• Producer -> wholesaler -> retailer -> consumer
Channel with three intermediaries, agent acts on behalf of producer or wholesaler to make sale
more direct customer feedback
greater quality control
greater price control
greater geographical coverage
Using all possible outlets (e.g. Coke) Want all the possible outlets, want to be well placed, seen as the brand of choice, convenient and impulsive
Benefits = convenience, impulse
Using proportion of outlets (e.g. make up)
-Chanel, debenhams, harvey nichs: about being selective, may want to limitdistribution
– Want to go somewhere where the sales staff can talk with the consumer
-Resource efficiency, quality control, strategic positioning
Benefits = resource efficient, quality control,
Using very restricted outlets (e.g. Ducati)
– Experience going there
Benefits = resource efficient, quality control,
– Producer -> wholesaler -> retailer -> consumer
Advantages = specialisation, professionalism
Producers risk losing control/end customer contact
Conflicts happen between channel members…
…adversarial negotiations over price (Bertini and Gourville, 2012)
… retailers add new lines, restricting space for original lines
…prdrs/wlrs/rtlrs disagree over responsibilities
To retain advantages of long channels but overcome these problems, firms adopt channel integration activities… corporate, contractual and administered vertical marketing systems
E.g. Shell owns extraction, processing, storage, transport,
Advantages = total channel control (with all benefits of price control, quality control)
Risks = over-extension of expertise
E.g. licensing – Coca Cola contracts local enterprises to make up, bottle and distribute its soft drinks to retailers
E.g. franchising – McDonalds/Ford contract local restaurateurs/car dealers to offer sales/services to end customers
Advantages = Licensors/franchisors control terms with downstream intermediaries, L/Frs gain local knowledge/entrepreneurship
Risks = over-supply, customer response issues
Advantages = de facto control of channel members (without having to bear investment costs of acquisition or
management costs of contracts)
Risks = bad publicity and legal actions e.g. relating to
employee welfare, supplier relations…
marketing advantages to firms (lower costs by
agreeing terms of deal with channel members,
eases management by allowing more control over
what other members do, and can bring upstream
firms closer to end consumers)
BUT can also generate risks…
Over-extension of channel members’ expertise
Transparency and customer response issues
Accusations of market distorting behaviour
marketing mix !
Today we considered marketing/distribution channel
selection, intensity and integration demonstrating the
complex nature of channel management which must
support customer requirements and marketing objectives
in an increasingly complex and global world – not easy!
To inform and educate.
To persuade and influence decisions. – Why my product over others
To remind and stimulate repeat buying.
To reassure before, during and after buying decisions.
can also be a tool.
• Therefore to avoid confusion, I will refer to
Promotion – the P – as Marketing
Communications….(which is often used in text
• Objectives (e.g. awareness, purchase etc)
• Target group – Which group(s) of customers?
• Message – What are you trying to say/ how are you going to say it: rational or emotional themes?
•Personal selling: Personal versus online
•Sales promotion: BOGOFF versus online vouchers, ItsOn sites
•Direct marketing: Post/flyers versus online, email, mobile
•Public relations: Press release versus twitter, memes, viral, WOM,
•Difference is CONTROL: marketer versus customer …
the target audience consistent, consistent and clear
messages about the brand in an increasingly complex
NB: Fundamentally you must start by understanding your brand, understanding your target audience(s) and comms objectives
-Affordable method (increasingly new media usage)
-Competitive-parity method- supermarkets
-Objective-and-task method- Objective to create awareness, make a case for target audience, but it in
front of board
-Other product-specific factors
role of Promotion (P) – or Marketing
Communications – within the marketing mix
• Importantly the role of INTEGRATING
marketing communications to maximise
consistency, clarity and build the desired
BRAND image through all media.
reporting information to help marketers solve
specific problems or to take advantage of
Often referred to as
• Understand customer requirements/trends
• Understand internal influences
• Understand competitive position
• Understand all elements of marketing mix – P’s
• Pre-testing, tracking, post launch/campaign evaluations – planning, implementation and evaluation
• Plan data collection methods and collect the data
– primary or secondary data?
– qualitative or quantitative?
• Analyse the data and interpret the findings
• Report research findings to marketing decisionmakers and implement changes….monitor and improve with further research…
– Accuracy/dependency of the data?
– Qualitative v quantitative?
– When was it collected?
– Purpose of the study?
– Content of the data?
– research that deals with information too difficult or expensive to quantify, such as subjective opinions and value judgements, typically uncovered during interviews or discussion groups.
statistically analysed and results that can be
expressed numerically with a big enough sample
(or census?) to statistically account for
populations’ behaviours, choices, trends etc.
– Advantages -inexpensive, fast turnaround, automated data collection, no interviewer bias, international co ordination
– Disadvantages – respondents ‘universe’. Sampling issues, self completion self selecting bias, technical difficulties
– Advantages – slightly faster than traditional focus groups, avoids dominant personalities, client control, illustrate concepts or web sites, recruitment advantages, international.
– Disadvantages – lose non-verbal aspects, less useful for emotive issues, on-line moderation requires new skills, typing speeds vary, technical problems, sampling issues
• Research fundamental part of the cycle or marketing process
• Its not the fact that you do the research that it is important, it is how you interpret and use it.
• Economies of scale
• International production
• Customer relationships
• Market diversification
• International competitiveness
and Domestic Marketing
-Need a broad strategy that takes into differences and difficulties of an internationalaudience
-The costs for going international
• Cultural differences
• Market Segmentation
-How your segmenting, who decisiion makers are, reflect into strategy
• Monitoring and control
-More difficult to control and monitor what’s going on, understanding the differences in delivering and regulatory demands in different countries
• Physical distribution and place decisions
-Getting your stuff to where it needs to go
-Centralized, urban, how people shop, understand the local area where you sell
• JOINT VENTURE
-Join together with another company that has a foot in the international market
• DIRECT INVESTMENT
• Place – cost, distribution systems vary internationally
• Promotion – affected by cultural issues (i.e. humour,
religious and cultural norms).
• Price – exchange-rate fluctuations.
• People – foreign sales staff can give rise to motivational
• Processes – processes do not necessarily cross national
• Physical Evidence – can be affected by trading practices
and cultural norms.
• Political and legal factors
• Economic factors
•Co-operation versus conflict
•Consumer spending patterns
□ Values beliefs attitudes perceptiions
□ KitKat different tastes and flavours
• Convergence of consumer tastes
• Improved telecommunications and transport systems
• Increased political acceptance of global trading
• Continuing growth of large firms
• Trans-national segmentation (by consumer characteristics)
• Adapt promotion only
• Adapt product only
• Adapt both product and promotion
• Invent new products
• Operational Barriers
• Organisational Barriers
• Product/Market Barriers
• Key is understanding both your new market and new customers – can be very different
• Local expertise and experience is helpful.