Professional Documents
Culture Documents
Jeffrey F. Rayport
Human experience
- a vast advertising medium that can and should be approached strategically
Be a Presence
- marketers must think less about what advertising says to its targets and more about what it does for them
o Advertising campaigns before: beginning --> middle --> end
o Today: advertising and its offerings as a sustained and rewarding presence in consumers lives
- Native content - both text and video that complement commercial messaging and encourage consumers to engage
with it because its more than an ad
o E.g. Demand Media, Skyword, BuzzFeed, Rolex, Fidelity
- Competing for attention by yelling louder is not a sustainable strategy (regardless of message)
- Advice: approach this medium as a landscape composed of four domains
o marketers have placed ads in these domains, but unwittingly or not strategically
Idea in Brief
- persuading through interruption and repetition is increasingly ineffective due to media saturation
Marketing Promotions
Marta Wosinska
Marketing
- The process through which a firm creates value for its chosen customers by meeting those customers needs
o Pricing - way by which a firm can capture a portion of the created value
o Through marketing promotions, the consumer must:
- be aware of the products existence
- sufficiently value the product to choose it over competitive products, or to choose over not buying
- 6 Ms model for communications planning: (S-MMM I-MMM)
o Strategy
- market: to whom
- mission: objective
- message: specific points
o Implementation
- media: vehicles for execution
- money: how much to spend
- measurement: impact assessment
(1) Advertising
- Definition: Paid placement of announcements and persuasive messages in time or space to inform and/or persuade
members of a particular target market or audience about a product, service, organization, or idea
- Distinguish among many tools, which differ on 2 dimensions:
o (1) level of feedback
- one-way messages/broadcast (example: TV)
- instantaneous feedback
o (2) customization
- broadcast reaches millions with the same message
- direct-mail ads can customize/personalize the message
- Change in the popularity of different media because of the following:
o New channels of communication due to technological innovation
o Saturation of traditional media (demand > supply)
- Effects:
o Increase in across-the-board competition for consumers attention
o Difficulty in breaking through the clutter
- Francis Bacon: words, as a Tartars bow, do shoot back upon the understanding of the wisest, and mightily
entangle and pervert the judgment.
- Words and phrases accurately reflect that which we study and that interests us
o Can blind us to important issues
o Have the potential to upset or alienate people
- We should examine the words we use
o If not: those words will alter our understanding of the phenomena that we study, without our awareness
- Marketing scholars have considered discourse, but not critical discourse analysis
o Critical discourse analysis: presupposes a study of the relations between discourse, power, dominance,
social inequality and the position of the discourse analyst in such social relationships (Van Dijk)
o Discourse analysis: what we say, but not the words we say it with
o concern on the vernacular and mass media use of marketing- generally used by uneducated members
of the population, to mean unethical people selling substandard goods at inflated prices or misleading
advertising
- Language impacts the people described and how we treat them
o Research has considered the impact of labels on people (examples: psychological issues, serious medical
diagnoses, ethnic groups)
o Extreme: n word, now acceptable amongst rap and hip hop singers (from an out-group label into an in-
group identifier)
- Marketers should reflect on how the terminology we use impacts on our approach to the study of market phenomena
o Complete lack of people in marketing and consumer textbooks, popular business press, and academic
writing
Firm research
- the firm is a collection of people
- Forms are rational decision makers, ignoring the fact that firms are made up of people
o these people are as fallible as members of any human group
- The firm is an anonymizing noun to avoid stating which people in the firm made the decisions, or on whose authority
they were made
o Responsibility disappears into the firm
o Language used in media: only following orders
- Firms are represented as being free of people
o people being studied are subjects, informants, or respondents
o responses are turned into data
- Dehumanization is likely driven by science envy
o but the strength of social sciences is that they are social, they relate to people and human behavior
o danger of pursuing a hard science approach: dismal science
Rethinking Marketing
Roland T. Rust, Christine Moorman, and Gaurav Bhalla
Stuck in the1960s
- 1960s as the era of mass markets, mass media, and impersonal transactions
o Measurement: Aggregate sales and profitability
o The irony: These firms have powerful technologies to directly interact with customers and to collect
information about them
- Customers expect to interact more deeply with companies to shape the products and services they
use
- Companies must shift their focus from driving transactions maximizing customer lifetime value (CLV)
Cultivating Customers
- Today, there are more options for companies
- Traditional v. Customer-cultivating company
o Traditional companies are organized to push products and brands
o Customer-cultivating companies are designed to serve customers and customer segments, and
communication is two-way and individualized
- B2B Companies (Business to Business)
o Use key account managers and global account directors to focus on meeting customers evolving needs,
rather than selling specific products
- B2C Companies (Business to Consumer)
o View their customer relationships as evolving over time, and they may hand off customers to different parts
of the organization selling different brands as their needs change
Reinventing Marketing
- Boards and C-suites mostly pay lip service to customer relationships while focusing intently on selling goods and
services
o The need for a strategy shift from transactions to relationships
o The need to create the culture, structure, and incentives necessary to execute the strategy
- Reinvention of the marketing department A customer department
o The CCO or Chief Customer Office (formerly CMO)
A powerful operation position, reporting to the CEO
designs and executes the firms customer relationship strategy
oversees all customer-facing functions
Successful CCO: promotes a customer-centric culture and removes obstacles to the flow of customer
information throughout the organization
Must create incentives that eliminate counterproductive mindsets
Accountable for increasing the profitability of the firms customers, as measured by metrics such as
customer lifetime value (CLV) and customer equity, and intermediate indicators (E.g. Word of mouth
or mouse)
o Customer (and segment) managers
Identifies customers product needs
o brand managers (under customer managers) supply the products to fulfill those needs
Requires shifting resources and authority from product managers customer managers
o Product managers should focus on helping customer and segment managers maximize
their profits (instead of their products or brands)
o Customer-facing functions
The customer department assumes responsibility for some of the customer-focused functions that
have left the marketing department in recent years
Customer relationship management (CRM)
o increasingly taken on by companies IT groups because of its technical capability
requirements
o A tool for gauging customer needs and behaviors, which is the central role of the new
customer department
o must be brought into the customer department (along with IT and analytic skills)
Market research
o Internal users of market research extend beyond the marketing department to all areas of the
organization that touch customers
- finance: source of customer payment options
- distribution: source of delivery timing and service
o Scope of analysis shifts from an aggregate view an individual view of customer activities
and value
o shifts its attention to acquiring the customer input that will drive improvements in customer-
focused metrics (examples: CLV, customer equity)
Research and Development (R&D)
o A product should be more about customer needs, not clever engineering
- otherwise, sales will suffer
- example: feature fatigue from packing lots of features into products
o Customers should be brought into the design process through integrating R&D and marketing
o Customer Service
It should be handled in-house, under the customer departments wing
o to ensure high quality of service
o to help cultivate long-term relationships
Building Relationships
- (1) product-manager driven
o product managers
o one-way mass marketing to push a product to many customers
- (2) customer-manager driven
o customer managers who engage individual customers or narrow segments
o two-way communication
o building long-term relationships by promoting whichever of the companys products the customer would
value most at any given time
Conclusion
- Shifting from product-focused to customer-centric will be difficult
o IT department will want to hang on to CRM
o R&D will want its relative autonomy
o traditional marketing executives will battle for their jobs
- It wont happen organically because it requires overcoming entrenched interests
o Transformation must be top down
- Shift is inevitable: only competitive way to serve customers
Market Segmentation
- Consists of dividing the market into groups of (potential) customers (called market segments) with distinct
characteristics, behaviors, or needs
- Aim: to cluster customers in groups that clearly differ from one another but show a great deal of homogeneity within
the group
- allows segments to be served more effectively and efficiently with products that match their needs (compared with a
large, heterogenous market)
- Important things to remember:
o Segments must be sufficiently different from one another
o Segmentation must be based on one or more customer characteristics relevant to the firms marketing effort
o A thorough analysis of the customers is essential
- Two (related) types of segmentation:
o Segmentation based on benefits sought by customers
- ideal: segment customers based on their needs
o Segmentation based on observable characteristics of customers
- Practice: marketers segment based on demographics (gender, age, income), geographic location,
lifestyles, behavioral characteristics (usage occasions)
- easy to identify and address with a marketing message
- works only to the extent that it is correlated with benefit segments
- Requires a bit of experience and creativity
- Complication: there can be multiple acceptable benefit segmentation schemes
- A satisfactory, actionable market segmentation requires multiple iterations and informed compromises from the
marketer
Positioning
- The marketers effort to identify a unique selling proposition for the product
- Arranging for a product to occupy a clear, distinctive, and attractive position relative to competing products in the
minds of target consumers: reflects a competitive differentiation (goes beyond product benefits)
- should answer three questions:
o who are the customers?
o what is the set of needs that the product fulfills?
o why is the product the best option to satisfy those needs?
- considerations for each potential segment:
o how the firm would approach serving each segment
o how the firm wants to be perceived by those customers
- answers should be based on:
o thorough understanding of the customer
o competitive environment
o company itself
o conditions of the market in which it operates
- The positioning statement
o specifies the place the firm wishes to occupy in the target customers minds
o Our (product/brand) is (single most important claim) among all (competitive frame) because (single most
important support).
o primarily directed to potential customers
o guides the development of the marketing plan: solving the positioning problem enables a company to solve
its marketing-mix problem
o The organizing force among the marketing-mix elements to ensure their synergy
Differentiation
- Positioning at needs already sufficiently served by competitors will lead to:
o intense price competition
o no profit for the firm
- Two extreme types of differentiation:
o (1) Vertical differentiation
- All buyers agree that product A is better than product B
- at the same price, nobody will buy product B
- takes advantage of consumers differences in their willingness to pay for quality
- all customers (and potential customers) agree on the relevant dimensions of product quality
- should position products to customers with a specific level of willingness to pay for quality that is not
sufficiently served by a competitor
o (2) Horizontal differentiation
- Products A and B differ in ways independent of buyers overall judgments about their quality levels
- At the same price, some will buy product A and some will buy product B
- positioning strategy uses the fact that consumers differ in their tastes
- should identify the group/s whose need/s are not sufficiently served by a competitor
- Marketers can differentiate their products both horizontally and vertically
o Creativity and marketing expertise have an important role
o Marketers may discover or create a set of needs among customers not yet served or tap into a market
segment previously not regarded as a viable group of customers to serve
- Any element of the marketing mix (Product, Price, Place, Promotion) can be the primary instrument of differentiation
The Role of Brands
- Positioning and brands are linked
o Brands were introduced into the consumers language to make product differentiation concrete
o Brands are assertions that their offering is not like those of their competitors
- may be promises or pledges about attributes of the product
o A brand can assert that it is the category
- Highest goal of a brand builder: to have the noun he has imposed on the language displace the
natural language word (examples: Kleenex, Xerox, FedEx)
o But not all brands come to mean what the marketers have intended
- many brands struggle to denote anything that the consumer finds worthy of notice