Marketing = Study of a Market. Market = Exchange : Buyer / Seller, or even non profit Product Focus Marketing = Increase sales, improve your product, lower your costs and increase your profitability. Inside-Out. Profitabily comes from volume. It's Market share. Customer Focus Marketing = Focus on the customer and competition. Look at what the customer wants and build a product that fills that need. Outside-In. Everybody wants something different. You can't satisfy everybody. You got to find customers and satisfy them = segmentation. Profitabilty comes from value. You can increase prices, build loyalty and sell multiple times. It's customer share. It's more difficult and expensive to get new customers but then it's less expensive to sell again. You can introduce cross selling (if you buy a jean and we try to sell you a belt or a pair of shoes). Profitability = Premium price, Loyalty , Cross selling. Connected community: you got to deliver a really good customer experience so that you can use social media and communities to build a good image of your brand / company / business. It's important to focus on the entire customer experience, not just the moment when they buy your product. Because of economic uncertainty, marketers have to be more authentic, and transparent to be efficient.
3 Principles of Marketing: Customer Value (give great and genuine value to your customer) / Differentiation (why your product is different) / Segmentation, Targeting and Positioning (to focus on the right customers) 4 P's of Marketing: Product, Place, Promotion, Price Product = Seller / Price = Buyer / Promotion = Ways to promote / Place = Place where you buy (physical, online...) It also applies to non profit: Red cross and blood samples: Product = Be good and save lives / Price = Blood / Place = blood mobile truck / Promotion = Ads, campaigns...
Strategic Marketing:
Market Driven Principles: Know your market: know what your customers want and how your competitors provide it Customers have the final say: they are going to chose what they want. They classify product attributes into 3 bundles: Operational, Design and Useful for them. It's the way customers chose what they buy. Commit to being the first in the markets you serve Deliver total quality to guarantee customer satisfaction
Value map: Try to give fair value in 2 bundles, but premium in 1. Fair value line is constantly moving after competitors reactions!
=> Agree on what these 3 dimensions are for your business. They change overtime! These indicators are used to determine fair value! => You can set ST/MT/LT strategies to beat the competition. In mature markets, Performance superiority is high and the operational excellence tends to be high too (prices go down...). Competitors will move on the axes too. Segmentation and Targeting:
Segmenting allows you to deliver the best value to each segment, which is better than to deliver an average value to every segment. Market Segmentation is the process of dividing a market into distinct subsets, where any subset may conceivably be selected as a marketing target to be reached with a distinct marketing mix. Segmentation Methods: Characteristics of the customer: Male/Female, Old/young... Benefits sought: Comfort, Technology, Price... Systematic, product-related behaviors : purchasing behavior, by channel Geographic segmentation (Zip Code, PRIZM..): where you live physically affects your online behavior !
Then you need to choose a segment: What makes a segment attractive? Monitor if the segment match with the product you sell Segment Selection Criterias:
Brand Positioning: Positioning is positioning your brand to meet the needs of the targeted segment. What is a brand ? Traditional: It's a promise of quality Modern: It's whatever the customer thinks it is !
Brand Mantra: The Elevator Speech:
How can you define your brand in 30 seconds? You can define a mental map Brand associations and responses for a specific target. Shows how your brand is perceived. Ask consumers "What comes to your mind when thinking about...?" Then you group brand associations into categories.
Then you take the 5 to 10 concepts or phrases of your brand (Core brand values) and relate them to points of parity + points of difference Mental Map => Core Brand values => Brand Mantra Brand Mantra = heart and soul of the brand / essence of the brand / 3 to 5 words phrases that capture the irrefutable essence or spirit of the brand positioning and brand values Communicate + Simplify + Inspire Used internally to guide decisions = what the brand should or shouldn't be associated with
Designing the Brand Mantra! Brand function describes the nature of the product or service or the type of experiences or benefits the brand provides The Descriptive modifier clarifies its nature The Emotional modifier : how does the brand provide benefits, and in what way
Emotional Modifier Descriptive Modifier Brand Functions Nike Authentic Athletic Performance Disney Fun Family Entertainment Macdonald Fun Family Food
Experiential Branding:
Redefining what a brand is: Differenciation => Experience Promise => Relationship Attributes => Personality Static => Dynamic Mass => individual Awareness => Relevance
Connecting experience to the brand: Experiential Brand Positioning What does the brand stand for Multisensory strategy Different from the competitors Experiential Brand Value Promise Describes what customer gets in experiential terms: Sense Feel Think Act Relate Experiential components: Five senses Consistent experience across senses, create sensory experience that extends acress channels Emotions Appeal to customers inner feelings and emotions, connect mild to strong positive feelings with the brand Cognitive Appeal to the intellect, engage customers creatively, problem-solving experiences, use of surprise, intrigue and provocation Behave Affect bodily experiences, lifestyles, enrich customer lives, show them ways of doing things, alternative lifestyles, can be rational, but can ne motivational, inspirational and spontaneous Social Create feeling of community or belonging; the future ideal self that consumer wants to relate to; broader social system, culture
Experience within the 4 P's: Product built in experiential features Marriott: personal luxury, style, edge, pulse Apple: design, beauty, elegance Place: design, music, fragrance, type of salespeople Sephora, Victoria Secret Promotion: Noteworthy, experiential brand personality Price: auctions (ebay), promotions bags...
Strong Brands Weak Brands Make clear promises that are kept overtime Make vague promises that change Have rich, unique brand equity...strong thoughts and feelings Very general equity and low emotional commitments Are dependable and deliver consistently Have spotty reputations, create doubt Have a loyal franchise Little loyalty, rely on pricing and short-term promotional incentives Superior products and processes Distinctive positioning and customer experience Alignment of internal and external commitment to the brand
Week 2 - BRANDING: Customer Decision Making and the Role of Brand
Shopper Marketing:
Brands need to understand the shopping experience from a shopper POV. People make decisions 24/7 in an omni channel world. Shoppers make: Impulse purchase decisions Decisions on habit, intuition and emotion Decisions based on what they see and miss
Shoppers think in terms of personal relevance: Who is it for? When do you use it? You need to be in their lives. Shopping process is multi-staged/multi-channel.
Stages of the buying process:
Decision making often proceeds in stages. Although real decisions are more complex, simple stage models are useful to understand customer behavior and the marketing actions that are likely to be successful
? YES YES NO ? NO ? Awareness of Need Identify Products Get Information about Products Evaluate Products Purchase Product Use Product(s) Post-Purchase Positive Evaluation Products Word of Mouth The customer journey has become more complex:
The shopping process happens 24/7!
Shopping Process:
Trigger: Need recognition When the prospective customer enters the market (when the toaster breaks) If not a natural need, the marketer needs to create that need THEN people pay attention to the products/brands related to the category Implication: know what the trigger events are and when they might occur or CREATE trigger events! You can Create shopper goals: Halloween, Back to school time, Easter, Christmas Create Email lists: welcome email with promotion Create Urgency: flash sales, one time offers, special promotions Create reminders: help people remember when they have to purchase something Create New Products: iPad for Apple Create New Events: Fashion show for fashion, charity, tastings Create News/Dialogue: Social media. The goal of all these actions is to TRIGGER THE SHOPPING PROCESS!
Information Search Stage:
Consideration set: After they have decided to purchase, consumers come up with different items they could buy, its a consideration set.
Consumers often search for limited amount of information. Evoked set: number of products you can name without help in a specific category.
Ask yourself: How much information will people search for? Formation of Consideration Set:
Connect Online with Offline Experience: A customer looking at a dress on the website would be shown the dress on interactive displays when she enters the store New technology allows retailers to follow customers in the store as they browse (as they can now do online) or when they pick up products. Using online-data, in-store data, location information and predictive analytics: In-Store Personalized Recommendations on displays or through salespeople Traditional advertising creates brand awareness: Purpose: to create top of mind awareness so brand comes readily to mind and is included to consideration set. Example: Big ads in the street: Nike Create Brands through Flagship stores: Offline External Search In Store: What drives attention? Nature of the set: goal driven (Ill buy ketchup VS Ill find something for dinner) Social influences? Very important: Facebook, Twitter, Consumer Reviews, Salespeople Getting Customers Attention:
Capacity is limited Information can be too much! Filters Cocktail party effects Attention is not enough; customers have to get it: you can use striking colors!
Good example of the use of colors to differentiate the quality of products. Choice Overload:
Jam Experiment: More people came to taste the 24 jams, but more people bought jams after the test of the 6 jams. The conversion was better. It shows that choice overload can lead to no choice! Perceived Variety VS Actual Variety: 6 jelly beans flavors: Organized < Disorganized => Disorganized gave the impression of more choice so students picked more jelly beans 24 jelly beans flavors: Organized > Disorganized => Choice overload for disorganized because 24 jelly beans flavors was confusing, or too complex to decide Reconciling the Paradox: Decision process is staged At the assortment stage, variety is good At the choice stage, variety can become complex How to solve that: You can have salespeople, experts, who explain the product: for cheese, wine, computers
The more alignable you make the attributes, the easier it is for the consumer to choose!
It can be done thanks to applications on smartphones
The best way to put products is to put it in a way that is natural for the consumer. If you choose your wine by color of grape, you will appreciate the bottles to be assorted by color of grape. It has to be simple for the consumer to choose so that he is not overwhelmed!
Purchase stage:
Conversion and Purchase: Evaluate the alternatives and pick a brand Importance of fair price Increase accessible variety (multiple purchases)
Mindless shopping (study by DICKSON and SAWYER):
Price awareness: Average time between arriving and departing from product category = 12 seconds In 85% of purchases only the chosen brand was handled, and 90% of shoppers inspected only one size 21% could not offer a price estimate when asked
Only 50% were able to state correct price! 93% did know relative price! Lower, higher or the same as other products in the same category. Reference prices: Consumers do not evaluate price absolutely, but rather relatively. Context Matters! Two kinds of reference prices: External reference price: List Price VS Sale Price, Low price Guarantee Internal reference price: one that is recorded in consumers memory.
Internal Reference Prices:
Memory of price may not be accurate.
If brand is frequently promoted, consumers tend to lower their internal reference point and wont buy it unless its promoted.
Consumers have a notion of fair price Acquisition utility Transaction utility
Asymmetric response to price changes.
Improve sales:
A study showed that interesting and original colors or flavors names increases likelihood of choice.
Post-Purchase:
What does customer satisfaction mean? F (Actual performance Expectations) F (Perceived performance, Will expectations) Should expectations
If Perceived performance equals expectations, they will stay neutral and eventually buy the product again Perceived performance is lower or higher than expectations, they will actively react: social Medias, word of mouth
How does it work?
You have to have high expectations so that customers want to buy, and then to have higher perceived performance so that they are satisfied.
Word of mouth:
Person to person: 9 to 1 rule
Social Media: Social commerce: Pinterest, Facebook Conversation: Twitter, Facebook, Tumblr Images: Instagram, Vine C to C Review Websites: Yelp, Tripadvisor
More than ever, customer satisfaction is essential so that customers spread positive word of mouth.
Messages that Catch on and Get Shared: from Contagious, by Jonah BERGER (2013)
Social Currency: We share what makes us look good
Triggers: we reminded, we share
Emotion: emotional messages are more powerful
Public: making behavior public makes it more catching
Practical value: we like to be useful and informative
Stories: effectiveness depends on celebritys expertness
Shopper Marketing
Need to understand the shopping experience for customers POV Shoppers make impulse purchase decisions Shoppers make decisions on habit, intuition and emotion Shoppers make decisions based on what they see (and miss)
Shoppers think in term of personal relevance (who is it for? When do I use it?)
What is Perception? Its the process of developing an interpretation of a stimulus, or in other words, deciding what a stimulus means. Its the most crucial process in customer behavior for two reasons: What customers perceive is what affects their actions What is perceived is not necessarily what is True Process of Perception: Perception is constructive; people construct interpretations as a function of context The meanings are constructed as needed and are based upon two major factors: The actual stimulus or event: Exposure and Attention (what is salient) Our prior expectations and what we know (perceptual interpretation)
Overview of Perceptual Process:
The Stroop Test:
At the beginning its hard to tell the color of the font, but then you get the pattern. However, its still uncomfortable because our subconscient wants to read the word. We are also sensible to visual illusions: <--> is perceived to be shorter than >--<, whereas its the exact same length. What we perceive often corresponds to our prior expectations: 13 / B example.
Customers give importance to proximity. They think two things are similar if they are shown together. Similarity is very important too. If 2 products look the same, customers will think they are of the same quality.
Studies have shown that people think that a product is better, just by putting the name of a brand on it. Everybody responses to that phenomenon. Thats why Coca Cola is estimated to be worth 70 billion dollars as an asset.
Brand Elements: Choosing a Brand Name:
Brand elements A variety of brand elements can be chosen that inherently enhance brand awareness or facilitate the formation of strong, favorable and unique brand associations: Brand name Logo Symbol Color Character Packaging Slogan You have to ask yourself questions about brand elements: How well do the brand elements work together to provide an identity for the product or service? What would customers think about the product if they only saw the brand elements?
Brand elements choice criteria: Memorable Easily recognized Easily recalled Meaningful Descriptive Persuasive Appealing Fun and interesting Aesthetically Rich visual and verbal imagery Protectable Legally Competitively Adaptable Flexible Updateable Transferable Within and across product categories Across geographical boundaries and cultures
Brand elements choice: Each brand element plays a different role in creating the overall perception: different strengths and weaknesses Brand elements should be used strategically to achieve a balance and impact. Need consistency and integration.
Effect of Brand Names: The brand name is very important and affects the behavior of different people: Consumers: affects likelihood of purchase Employees: affects moral and productivity Firm: can limit opportunities; new products, new regions Investors: can cause subconscious judgments about the companys merits/strengths Type of names:
Value of a Good Name:
Names for New Start-Ups: New businesses need their own websites and most recognizable URLs have already been taken. Solution: invent words (Mibblio, Kaggle, Shodogg, Zaarly) Picking Brand Names in China: Its a huge market so many brands try to adapt their name to Chinese language via specialized agencies:
Brand Elements: Color & Taglines:
Rules about Color: Ultimate goal is to own a color Tiffanys light blue, Mary Kays pink Color can be used to separate product lines
Different viewers experience color differently
Ensuring consistency of color across platforms/media is difficult
Colors can create very strong perceptions: luxury (gold, silver, black, white), gender color (blue, pink)
The appreciation of colors depends on the culture! Orange is less appreciated in the US than in India for example.
Colors have different meanings: Red: stimulate the appetite, also love (passion), excitement Blue: most preferred color by men, productive color, lower appetite Green: tranquility and health, money, nature, fertility (M&Ms) Brown: reliability, boredom, practicality, earth White: purity, innocence, empty, spacious (creates the illusion of space) Black: evil, death, mourning, slimming Yellow: bright, gives you energy, been shown to make babies cry, causes eye fatigue Orange: excitement, enthusiasm, warmth, caution Lavender: calms the nerves, relaxation Purple: loyalty, wealth, success, wisdom Pink: girls color, calming, warm
Role of Symbols: Beware, they can become outdated!
Slogans/Taglines: Can be tailored to a positioning strategy Can remove some of the ambiguity associated with brand and/or symbol Can generate its own equity/emotion (reach out and touch someone) Can reinforce the name or symbol (from sharp minds come sharp products) Tagline basics: Must be short Must be differentiated from competition Must be unique Must be easy to say and remember Cannot have any negative connotations Can be protected and trademarked Evokes an emotional response Types of taglines: Imperative: Just Do It (Nike), Invent (HP), Think Different (Apple) Descriptive: Moving at the Speed of Business (UPS), Bullish on America (Merrill Lynch), Youre in good hands (Allstate) Superlative: The ultimate driving machine (BMW), There is no better way to fly (Lufthansa) Provocative: Got Milk? (Dairy Council) Clever: Drivers Wanted (VW)
Brand Elements: Packaging:
Packaging: Packaging is very important to sell. A lot of researches were done in the 30s, when self-service supermarkets started becoming popular.
Experiment: detergent with circles on the package VS triangles. It went out that people preferred the package with circles, but also believed that it was a better detergent! Packaging can: Influence at the point of purchase Have a continuing influence at the point of consumption
Packaging has multiple objectives: Identify Present information (descriptive and persuasive) Protect and allow transportation Store Aid consumption
Creating Impactful Packaging: Understand that package aesthetics and function are both critical The package has to grab consumers attention in a sea of competing messages But it also has to work well so that consumers will buy again
Know your distribution channels How do retailers view your package? How are channels changing? Which retailers like which package configuration?
Packaging shapes:
Very famous packaging: CK One by Calvin KLEIN which was made for both men and women. We can notice that the logo is symmetric,
These two packages both increased consumption and so the number of sales for Coca-Cola and Heinz. They made it easier for the consumer to consume the last units of the product.
Brand Elements: Persuasion:
Persuasion: Definition: Active attempt to change belief and attitude. Its difficult because customers have prior beliefs. Elaboration likelihood model: Two routes to persuasion Systematic (central) Superficial (peripheral) processing
Use of celebrity spokespeople
Elaboration likelihood model: Central Route to Persuasion: When motivation (involvement), opportunity and ability to process marketing messages are high Focus mainly on central cues in the message
Peripheral Route to Persuasion: When motivation, opportunity, ability and elaboration likelihood are low Focus primarily on peripheral cues in the message
Peripheral cues: Classical conditioning: PAVLOV experiment, or hamburger and coke Reciprocity: you owe me (Robert CIALDINI) Consistency: weve always done it that way Social proof: everybodys doing it Liking: love me, love my ideas Authority: just because I say so Scarcity: quick, before theyre all gone (Lulu lemon)
What makes a good celebrity endorser? General considerations: Celebrity/audience fit Celebrity/brand fit Celebrity attractiveness Practical consideration (cost, celebrity exposure, risk) Social network
High Q-Rating How appealing is this celebrity among those who do know him/her? Ratio of popularity/familiarity Conducted by Marketing Evaluations, Inc.
Transfer of Meaning Model: Celebrities = individuals charged with detailed and powerful meanings Advertising firm chooses celebrity that best represents the appropriate symbolic properties of the product. Consumers derive meaning from celebrities and transfer same meaning to product fMRI scans show that there is more brain activation when products are presented with images of celebrities a visceral reaction to celebrity
Source Models: Source Credibility: Effectiveness depends on celebritys expertness and trustworthiness Source Attractiveness: Effectiveness depends on familiarity, likability and/or similarity Familiarity: knowledge of the source through exposure Likability: affection for the source as a result of the sources physical appearance and behavior Similarity: supposed resemblance between the source and receiver of the message
Example: Tiger WOODS with Nike. He is an expert in golf, so people trust him. Recently he lost some attractiveness, but he still has a lot of Credibility.
Celebs and Models How are celebrities used in advertisements? Explicit mode: I endorse this product Implicit mode: I use this product Imperative mode: You should use this product Co-present mode: celebrity appears with product
Repositioning a Brand:
Repositioning a Brand: How can you keep the brand fresh? Brand equity MUST be actively managed over time! Brand meaning must be reinforced Sometimes brand meaning must be adjusted Branding program will need to be changed and new sources of equity identified and built
5 Rationales for Brand Change:
1. The identity/execution was poorly conceived: can by identified by measures of consumer interest, brand associations, sales 2. The target for the identity/execution is limited: may need to change to reach a broader market 3. The identity/execution has become out of date: markets change such that a working position may become obsolete 4. The identity/execution loses its edge, becomes old-fashioned: consumers and markets change such that positions/executions that were once contemporary become less so 5. The identity/execution has just become tired: same over time may become boring to consumers, losing ability to attract attention. Change can generate news. When you reposition a brand, the most important word is CONSISTENCY. You have to stay close to the brands DNA. Potential Cognitive Inconsistency:
Consistency Theories: the basic idea is that there is a drive to maintain consistency within cognitive systems. Thus, cognitive structures may change in order to increase consistency among elements. Managing Brand Equity: Changing Minds?
Finally, Oldsmobile cars went out of market, because the new marketing strategy wasnt consistent with the brands DNA. Dads arent exciting. Evolving Brand Associations: A brand can evolve more gradually to gain more contemporary associations while maintaining familiarity Symbols: can update without changing meaning Brand name: can change to reflect evolving identity Slogans: easier to change than the name New Products: Can be true to the core identity, but add a modern, innovative element Some companies use what we call a Just noticeable difference, year after year.
Evolving Trademarks: Change Brand Names to Eliminate Constraints: Boston Chicken Boston Market: because they sold more than chicken Weather Channel Weather Companies Starbucks Image
Example of Evolving Brand Image: A brand image is a mental aggregation of cognitive associations, many subliminal.
Budweiser did the same thanks to cool advertisements, sponsorshipsTo seduce fathers and young people too.
Major Points
Consistency over time is very valuable in building strong brands
All brand elements should work in harmony to communicate brand identity
Change is sometimes necessary, but be cautious!
Begin by understanding sources of equity and the current contributions to POP and POD, strength, favorability and uniqueness