Ian was a member of the faculty of the Chartered Institute of Marketing (CIM) for 13 years and was also recently a member of the IBM International Business School. The sequence of the book is designed to logically guide the reader through the learning process of the subject.
Contents
List of illustrations
CHAPTER ONE PART 1
The power of marketing –
Synopsis
Introduction
Although these four ways of improving financial performance can be considered in any permutation or combination, the marketer must understand how they affect the company's strategy. They need to know under what circumstances each combination is best used and which of these strategies has the strongest impact on the outcome.
Strategic focus
For example, in the mobile phone industry, the focus in the first few years was on broadening the reach of mobile users. Increasing mobile phone usage rates was initially achieved by reducing the cost of handsets and subscriptions, as well as the cost of the call, and most recently by allowing people to pay for their calls in advance.
Introducing the product life cycle (PLC)
More and more new customers are attracted to the product and the sales volume starts to increase dramatically. This is the time (point 'A' in Figure 1.2) when plans for repositioning the product should begin to be made.
Strategic focus and the product life cycle
At the saturation and decline stage, the company's emphasis should be on reducing costs to the absolute minimum. In many cases, this means reducing the size of the workforce, which is perhaps the single largest fixed cost a business can have.
Relative potency
In column B, we demonstrate the effect of applying the strategies outlined to the right of the organogram shown in Figures 1.1 and 1.3. Second, this approach tends to blind people in the organization to the power of increasing sales (they see reduced costs as a certainty, but increased sales as only a probability).
The effectiveness /efficiency grid
In other words, the left sides of Figures 1.1 and 1.3 are stronger in terms of their ability to contribute to the outcome than the strategies on the right side. Thus, for a fairly simple profit and loss statement with ratios as shown in column A, the left-hand side strategies in Figure 1.3 are seven times more powerful than the right-hand side.
Effectiveness (Do the right things)
- Environmental sensitivity 2. Tight customer focus
- Customer orientation in all functions 5. Commitment to innovation and
- Recognition of need for organizational adaptation
- Clear product line strategic objectives 9. Tight/loose control system
- Long-term orientation
The top right of the matrix suggests that it is possible for an inefficient company to survive - indeed. In reality, sales and marketing are just two sides of the same coin.
CHAPTER ONE PART 2
The power of marketing – the law of supply and demand
Indeed, marketing can be said to be the least favored option in that as a business concept it is the most difficult to put into practice, requiring special and scarce talent. The problem, however, is that the circumstances in which any alternative to marketing can be adopted are becoming fewer and fewer.
The basic link in the chain
Hard/sellers markets
This legislation keeps competitors out of the 'frame', but if it is removed, they will swarm like bees to the honey pot, to share in the potentially greater profitability. This is one of the fundamental business cycles, it is as old as commerce, and was noted by Adam Smith in his Wealth of Nations.
Surviving oversupply
The periodicity of the cycle depends on the individual characteristics of the industry in question. This is to ensure that the group companies that are going through a difficult time of "soft markets" can be supported by those of the group which at that time are enjoying the best benefit of the "tough markets".
The marketing concept introduced
The hospital dietitian will offer peas that meet the nutritional requirements of the breastfeeding regimen. So far, this argument has established that for optimal business results, a company must adopt a business orientation that corresponds to the phase of the supply and demand cycle that applies to its market at the time.
CHAPTER TWO
How marketing works
These are the company's most valuable asset, the marketer would do well to calculate the lifetime value of each of the customers the company has. Within this customer subgroup (i.e. segment) the marketer must focus on the specific roles people play when making the purchase decision.
Specific group of customers
Most Mont Blanc pens are bought as gifts, drawing our attention to the important distinction between a customer (who pays the bill) and a consumer (the 'user'). Investment decisions, especially for large capital projects, are often strongly influenced by the state of the economy.
Dialogue over time
Where the product is for sale also has something to say about where it is positioned, shirts in Harrods will be seen differently than the same shirts available via a mass market mail order catalogue. But marketing is a 'dialogue' and it is important not to forget that communication is two-way.
Customer’s needs, understood in depth
Nice to have'needs are such aspects of the product as color, style, designer label, etc. Sellers often explain the advantages of their product to the customer with the acronym FAB, i.e.
The competitive differential advantage
We need to understand the customer's decision-making unit and identify exactly who we need to convince of the value of our products or services.). It is essential that the trader fully understands some of the pitfalls of value-driven option selection.
How to develop competitive advantage
The team concept is of prime importance and is reflected in the format of their bonus schemes. If you are better than the competitor, then list the product in the corresponding row under the column indicated by the plus sign (ie +).
Marketing planning
The goal should be to shift this to the left by responding better to customer needs than to those of competitors. And that is the job of the market researcher, which we will explore later in Chapter 7.
CHAPTER THREE
Introducing the new marketing mix: the marketing tools (the four
This is because the four-part mix, as above, does not address the single most important part of the process, ie. targeting (i.e. choosing which specific groups of those we have identified in our segmentation – that we will focus our business towards) – and.
Segmentation
By redefining the market place in which the company operates, the marketer targets those customers that the opponent has neglected. The company can achieve effective communication and address each group selected with a marketing mix unique to that group.
Segment strategy approaches
Your company
All customers
Segments (cherry, niche et al) are homogeneous in the sense that customers within that group have more in common with each other when it comes to their behavior (re. use and purchase) towards the products in question than they do with people in the others . segments. General Motors was a good exponent of this strategy in the car business, or Seiko in watches and Canon in digital cameras.
How to segment
There must be a 'market in that hole' in the sense that the chosen customer group is large enough to be viable and justify the necessary investment. The company must be able to communicate with that segment in the full sense of the word.
The process
Situation - The situation in which company staff may find themselves at a given time, such as a business traveler needing to exchange traveler's checks or obtain currency after the bank is closed, is an ideal target market for exchange offices. The user's job function - for example, the user is a manager, manual worker, CFO, designer, etc.
Segmenting for services
Segmenting for an IT related market
When bridging the large 'gap', the strategy of the aerial work platform or the niche marketer is recommended. Patrollers are usually large companies that are well respected by the rest of the early majority.
Segmentation principles
Is it worthwhile to stay in the company’s current market?
Which new market should the company enter?
How competitive will the company be in the new market?
The Morris Minor Centre originally established itself in Bath when the Morris Minor, and its variants, were finally discon-
The Morris Minor is now seen by some as a classic car, and the Morris Minor Center has made a fortune.
The Classic Connection Ltd specialize in supplying and fitting the appropriate tyres to vintage and classic cars. These vehicles
It is related to the ratio between the number of established companies and the volume/value of the business they do. That's because most potential new entrants can't afford to match the spending of the big two, and if they don't, they won't be heard over the noise of the promotion already in the market.
Competitive product positioning
Positioning should reflect the true attributes of the product and match the preferences and characteristics of the buyer. In Figure 3.9, the eight axis of the spidergram radiate like the spokes of a bicycle wheel from center to center.
Exercise – your positioning
CHAPTER FOUR PART 1
The marketing mix – the ‘product’
What ‘products’ are
Screen size (feature) makes it easier to read (benefit), chip speed (feature) makes it faster and thus saves time (benefit). Because both goods and services provide benefits, and today they are often sold in combination, it is more useful for the marketer to think of the product as a set of benefits that are offered (what some people refer to as an 'offer'), whether these benefits derived from goods, services or a combination of both.
The total product concept
For the airline, it can be the scheduled flight times to the desired destination. Does the airline go direct or will passengers have to change flights at a 'hub', speed of check-in, reliability of baggage handling etc.
CHAPTER FOUR PART 2
The marketing mix – distribution – ‘Your route to market’
However, unlike the other four elements of the marketing mix, distribution decisions often involve the "management" of outside companies, i.e., distribution channel decisions also tend to be much more inflexible than the other elements of the mix, especially when intermediaries are involved.
Background
No matter how good the rest of the mix is, if the customer can't find a place to buy it – either a company that stocks it, or that can order it for them – then all the effort so far is wasted. nothing will be done. to be sold.
The environmental dimension
The structural dimension
Here the distributor usually offers convenience and "one-stop shopping" to the end user. Here the distributor often adds some value to the manufacturer's product by customizing it in some way to meet the specific needs of the end user.
Functions of the ‘route to market’
Some streams flow in only one direction, for example, products flow forward (to the end customer, i.e. 'the value chain') through the channel, payment flows (up the 'food chain') backwards. Some transfers flow in both directions, for example information. Typically, the greater the number of levels in the channel (or 'links in the chain') the more complex the pattern of these flows becomes.
Using intermediaries: advantages and disadvantages
However, this view of the situation undermines and denies the potential of a more open and constructive role for intermediaries. This, in turn, will require an understanding of the behavioral dimensions of distribution channel management.
Managing the distribution channel
However, with the possible exception of (so-called) direct marketing, (also known as database marketing) and the increasing use of the Internet in business-to-business markets, companies that require a 'route to market' often find the decision made for them become The greater the combination (of these factors) the more power (and therefore potential control) is in the hands of the producer.
Power in the chain
A typical response to unacceptable power exercised by one member of the chain will be for the others to 'cheat' and this adds inefficiency to the 'route' and increases its cost. A 'Software & Systems' supplier worked with Finlia to provide the necessary software - which would dictate the design of the 'switches' in the exchange and would drive the base stations etc.
Exercise
CHAPTER FOUR PART 3
The marketing mix – marketing communications and promotion
The most customer-oriented products in the world will fail if the benefits they deliver are not brought to the attention of potential buyers, decision makers, specifiers et al. It is absolutely essential that the communication is carefully tailored to clearly defined target markets and members of the decision-making unit (DMU).
Understanding marketing communications
The emphasis on communication highlights one of the main problems in developing sales promotion campaigns. Communicate more tailored messages that meet specific information requirements and allow a full understanding of the offer.
Public relations and editorial publicity (PR & EP)
The role of advertising and promotion
The contrast in the 'D.A.G.M.A.R' model summarizes the typical situations where either advertising or personal selling tends to dominate the communication mix. There are a number of trends affecting the personal selling role in business-to-business markets – particularly the emphasis on the growing complexity and sophistication of the buying process.
The campaign design process
In this scenario, scores in both columns will be negative or zero, indicating that radical solutions regarding the product concept and extensive communication programs are essential. If we first deal with the ideal world, we will know what to strive for.
BUDGETS ?
When the marketer first begins to design a promotional campaign, there are three 'cornerstones' that must fit intimately. However, the marketer is often first presented with the budgets and now has to see which campaign will afford it and what can be achieved with it.
Objectives
Like their masonry counterparts, they are married by a process of adjusting each in turn so that they fit together as closely as possible.
Campaign
At point "B". the amount as a percentage of business thus devoted to promotion will obviously not be sufficient to support a growing market. At point "C" the amount will obviously be too large and much of it will be wasted.
Target group
First – the creative strategy, sometimes referred to as the 'copy platform', which is a concise 'plain English' statement of what needs to be communicated. Then – the creative execution or treatment, this is how the copy platform will be translated so that it better absorbs, understands and accomplishes the behavior of the target group (i.e. it is in their language and their emotional 'set').
Creative execution/treatment
The aim of a 'burst' campaign is to increase awareness and understanding among the target group through a higher than normal vote share. There is no point in spending a lot of money on promotion if it is invisible to the intended audience.
Testing the execution
The main problem in Figure 4.14 is that the marketer must monitor the campaign's performance in real time. It's too late at the end of the campaign to discover that it didn't work.
CHAPTER FOUR PART 4
The marketing mix – marketing pricing
As we saw in Chapter 1, the whole point of the practice of marketing is to ensure the long-term survival of the company, and survival will only be ensured if the company is profitable in the long run. Price can influence the way customers behave and because 'price' is considered the single biggest indicator of value, it will have an impact on their perceptions of the company's offering versus that of the competition.
Internal accounting based pricing
Like price is a policy, based on an assessment of the effect it will have on the achievement of the company's market/business objectives). So the more revenue a certain part of the business had, the more overhead it actually had.
