Chapter 1

Overview and Strategy Blueprint

Definition of Competitive Marketing Strategy

“A market-oriented strategy that establishes a profitable & sustainable market position for the
firm against all forces that determine industry competition by continuously creating & developing
a competitive advantage from the potential sources that exist in a firm’s value chain.”

Key Elements

Market-oriented: Strategy based upon the needs & wants of the marketplace

Establishes a profitable End goal of strategy to make a profit in the for-profit sector or to
market position: meet alternate metrics (NFP sector)

Establishes a sustainable Marketing strategy not about one-off transactions. Aim is to

market position: find a place in the market

Forces that determine Complex mix of ingredients that create the marketing
industry competition: ‘whirlwind’

Continuously creating & Find a spot where, if need be, the primary challenges can be
developing CA: tackled

Potential sources that exist What value any organisation wants to create using its available
in a firm’s value chain: marketing resources

“Marketing strategy is…a market-oriented approach that establishes a profitable market position
for an organization against all forces that determine industry competition by continuously
creating & developing a sustainable competitive advantage (SCA) from the potential sources
that exist in a firm’s value chain.”

Dress Down Version– “Marketing strategy is an approach to enable an organization to best

use it resources to meet the needs of its customers.”
Marketing Strategy is a Gap Analysis

● The word ‘Strategy’ was initially introduced and defined in the ancient military
dictionaries
● It comes from the Greek word ‘strategos’, strictly meaning a general in command of an
army; it is formed from ‘stratos’, meaning army and ‘ag’, meaning to lead
● Used first time in business literature by William Newman (1951)

The Concept of ‘Strategy’

Generic
- a plan of attack for winning
- a plan for beating the opposition

Organizational
- a plan for achieving organizational
goals
- a plan for securing a competitive
advantage in a given market

Purpose of Strategy
● To set the future direction for the organization
● To state how it is to create value for customers
● To identify what product/s and in which markets the firm will invest its resources
● To describe how it is to perform better than competition

It helps…

- Define the scope of business

- Finding ‘Strategic Fit’ between organisation and its environment
- Identifying a Sustainable Competitive Advantage (SCA)
- Guiding the allocation of resources
Thinking First

Market Orientation
4 Main Ways of Approaching Marketing Strategy

Seeing First
● The importance of seeing the overall decision is sometimes greater than thinking about it
● Insight often only comes after a period of preparation, incubation, illumination &
verification in the cold light of day
● The 'eureka' moment

Doing First

Postmodern view
● Tricksterism– Axe Perfume
● Entertainment– Banglalink, Rc Cola
● Amplification– Fair & Lovely
● Secrecy– KFC, Coca Cola Recipe
● Exclusivity– Chaldal Slottime, Luxury Brand’s Collection
Simple Rules
● How-to rules keeping managers organized to be able to seize opportunities
● Boundary rules help managers pick the best opportunities based on geography,
customers, or technology
● Priority rules are about allocating resources amongst competing opportunities
● Timing rules relate to the rhythm of key strategic processes
● Exit rules are about pulling out from past opportunities

Process and Temporality and the Four Main Approaches to Competitive

Marketing Strategy

What to Choose?
● Thinking First/Market Orientation works best when the issues are clear, the data are
reliable, the context is structured, thoughts can be pinned down & discipline can be
applied
● Seeing First works best when many elements have to be creatively applied, commitment
to solutions is key & communications across boundaries are needed (e.g. in NPD)
● Doing First or simple rules works best when the situation is novel & confusing,
complicated specifications would get in the way & a few simple relationship rules can
help move the process forward
● The Postmodern orientation needs to be continually borne in mind to provide a check on
how, in reality, buyers will interpret the final offering
Marketing Strategy Blueprint

Conclusion
● Seeing First or Doing First are approaches to decision-making that normally need a
sound understanding of Thinking First to be successful
● You need to know the rules before you should break them—you can break all the rules
once you know what they are!

Chapter 2
Marketing Strategy: Analysis And Perspectives

The Concept of ‘Strategy’

Generic
- a plan of attack for winning
- a plan for beating the opposition

Organizational
- a plan for achieving organizational goals
- a plan for securing a competitive advantage in a given market

Strategy help in:

● Defining the scope of business
● Finding ‘Strategic Fit’ between the organisation and its external environment
● Identifying a Sustainable Competitive Advantage (SCA)
● Guiding the allocation of resources
Hierarchy of Strategy

Strategic management may be initiated at any or all of these hierarchical levels of an

organization

Three Levels of Strategy

● Corporate– The overall goals of the business; often expressed in financial terms

● Competitive/Business (SBU)– How to compete in individual product markets and

support the corporate strategy

● Functional– Functional strategies for the organisation’s functional areas in support of

SBUs and corporate strategies

Purpose of Marketing Strategy

● To set the direction of the organization and decide what product/s & in which markets
the firm should invest its resources
● To define how it is to create value for customers
● To describe how it is to perform marketing activities (4Ps) better than competition

Marketing Strategy – Two Perspectives

Marketing strategy at the functional level

● Planning and controlling the marketing activities
● Planning and implementing the 4Ps/7Ps
● Management customer relationship

Marketing as a philosophy/orientation
● Guiding the organization’s overall activities
● Playing a key role in the strategic management process (SMM)
Marketing Orientation
Marketing orientation is a state of mind, or a philosophy, that guides the strategic vision
and future direction of companies. Marketing-orientated firms adopt a proactive search for
market opportunities, use market information as a base for analysis and organizational learning,
and adopt a long-term strategic perspective on markets and brands.

The Interrelationship Between Marketing And Corporate Strategy

Marketing Orientation And Business Performance

Conclusion
● Strategy can be simply defined as a plan for securing a competitive advantage in a given
market.

● Strategy exists at multiple levels in an organisation: corporate, business unit, and

functional levels.

● The marketing concept has a significant role to play in strategy development and
corporate success.

● Competitive marketing strategy aims to establish a profitable competitive position for the
firm against all forces that determine industry competition.

● Strategy making process has been discussed in the literature in such terms as strategic
market planning and strategic market management.
 Chapter 3
Environmental And Internal Analysis:
Market Information And Intelligence

Strategic analysis is concerned with understanding the strategic position of the

organization in terms of its external environment, internal resources, and competencies, and the
expectations and influence of stakeholders

Strategic Marketing Management

The marketing strategy development process aims to answer a complete set of questions:

● Where are we now?

● Where do we want to be?
● How will we get there?
● Did we get there?

Where are we now? Environmental and Internal Analysis

● What are the major trends and probable changes in the marketing environment?
● Who are the main competitors, and how we can differentiate our offerings from
competition?
● Who are the target customers, and what are their needs?
● What competitive advantages and core competencies does the organization have? Can
we sustain it?
The Marketing Environment

Macro (Remote) Environment: PESTLE Model

PESTLE:

● Political Factors
● Economic Factors
● Socio-cultural Factors
● Technological Factors
● Legal Factors
● Environment Factors

A framework that assists in analyzing the external (remote) environment and identifying the
existing opportunities & threats

Micro (Competitive) Environment: 5 Forces Model

The purpose:

● Identify and analyze the key external forces that affect the organization's ability to
achieve its goals and objectives
● Assess the power of each factor and the likely response

Analysis of internal environment

Analysis of Internal Environment
The Purpose–
● Appraise/audit the organization's resources and capabilities,
● Assess the organization's competitive advantages
● Identify the organization's major strengths and weakness

Two Models To Use:

1. Resource Audit
● financial resources,
● human resources,
● physical resources,
● intangible resources

2. Porter’s Value Chain Model: Help analysing Firm’s Competitive Advantage and Core
Competencies

Value Chain Analysis: Identifying Competitive Advantage

Competitive advantage will arise through:
– Providing buyer value comparable to competitors but performing value chain
activities more efficiently – cost-based advantage
and/or
– Performing value chain activities in unique ways that create greater buyer value
than competitors and hence command a premium price – differentiation-based
advantage
Strategic Fit
‘Strategic Fit’ is the effective match and management of the environmental opportunities
and threats while taking into account the organization's strengths and weaknesses

SWOT Analysis
Integrates the internal and external environmental analysis
● Not just a list of SWOT variables!
● SWOT/TOWS Matrix can be helpful
● SWOT/TOWS analysis is the alternative ways in which an organization can use its
specific strengths to capitalise on opportunities or to minimise threats and invest in
available opportunities to overcome its weaknesses

Conclusion
● The strategic marketing management (SMM) process covers 3 areas; strategic analysis,
strategic choice, and strategy implementation
● Strategic analysis involves the collection and analysis of relevant types of information
about the environmental forces and trends, and organizational resources and
capabilities
● The external (macro) environment can be analyzed using the PESTLE model, while the
microenvironment could be examined using Porter's Five Forces model. The internal
environment can be assessed using various models, most notably the ‘value chain’
approach
● The effectiveness of any marketing intelligence system is dependent on the frequency of
collecting, interpreting, and disseminating the information required about the marketing
environment & competition
● SWOT analysis is an important foundation for producing realistic and meaningful
strategic recommendations for the firm’s future directions
 Chapter 4
Strategic Marketing Decisions, Choices, and Mistakes

Strategic choice involves generating a well-justified set of interrelated strategic

alternatives and choosing from them the ones that will contribute to the achievement of the
corporate overall goals and strategic objectives

Where do we want to be? Strategic Decisions

Strategic decisions at the corporate level
● Mission statement,
● Directional strategy (Growth, Stability, Retrenchment)
● Resource allocation

Strategic decisions at the SBU level

● Choosing Generic Strategy; cost leadership, differentiation & focus

Marketing-related strategic decisions

● Products to offer
● Market segments to target
● Positioning strategy
● Competitive stance to take
Directional (grand) Strategies
Resource Allocation: BCG Matrix

General Electric Model

Porter’s Generic Strategies

Bowman's Strategy Clock

Ansoff’s Product/Market Matrix

Competitive Position Tactics

Strategic Advice To Managers To Avoid Failure

Conclusion
● Strategic choice involves understanding the underlying bases guiding future strategy,
and generating strategic options for evaluation and selecting from among them.

● Strategic decisions are usually taken at the corporate level (e.g., directional strategy,
resource allocation), at the SBU level (e.g., generic strategy), and at a functional level in
relation to various functional areas (e.g., marketing, R&D, finance, HR, production, etc.).

● Strategic marketing decisions include products to offer, market segments to target, and
positioning strategies.

● Organizational failure is arguably a product of repeated strategic mistakes and

unsuccessful interactions between the firm and its environment.
 Chapter 5
Segmentation, Targeting, and Positioning Strategies

Introduction
● Market segmentation is vital for company success
● Dividing the market into reasonable segments is the starting point
● Develop a series of strategic goals & strategies to reach the identified target
● This chapter will present possible foundations for effective segmentation & mechanisms

Foundations For Effective Segmentation

● It is unlikely for any company to appeal to an entire market
● Identify segments of consumers
● Tailor offerings to meet the wants & needs of that particular group of consumers
● Market segmentation involves the identification of subgroups of consumers with similar
wants and buying requirements
● This helps the firm configure its marketing mix

Criteria For Identifying Segments

 Geography
• Focuses on the where issue
• Local segmentation is often used by small firms
• Keeps the market confined to a manageable area
• Global segmentation: The company sees the entire world as its appropriate playing field
– Potential for cultural inappropriateness
• We need to also consider topography
– Costs of overcoming physical obstacles

Demographic
• Using a series of demographic variables
– Gender
– Age
– Cohorts of society
• Moments and events in late adolescence / early adulthood (17-23 yrs)
• This may not work globally
– Level of Education
– Level of Income
– Occupation
– Religion
– Ethnicity
– Family size
– Family life cycle stage
• Life conditions that have a potential impact on product/service purchase
decisions
– Social class/status

Psychographic Bases
• Perceptual issues
• Combining individuals who are psychologically similar in their orientation
• Excellent potential for effective targeting segments, understanding how the segments live
their daily lives
• Lifestyle
– The ways in which individuals choose to live their lives
• Personality
– Similar personality types
– Kotler (2003) lists four main variations of personality: compulsive, gregarious,
authoritarian, and ambitious
• Core Values
– Match its core values with those of the segments, building positive associations

VALS Typology
• A multi-based approach to segmentation incorporating both psychological & demographics
is developed by SRI International
• For the US market, SRI identified eight separate groups for segmentation purposes
– Actualizers (10 % of population)
– Fulfilled (11% of population)
– Experiencers (13% of population)
 – Achievers (14% of population)
– Believers (17% of population)
– Strivers (12% of population)
– Makers (12% of population)
– Strugglers (12% of population)

Behaviouristic
• Grouping consumers having similar uses for, and responses to particular products or
services
– Usage rate
– Loyalty level
• Brand insistence, brand loyalty, split loyalty, shifting loyalty, no loyalty
– Creation of special events
– Benefits segmentation
• In terms of key benefits that consumers seek from the use of some
product/service

Cross-Border Segmentation And International Challenges

• A variety of new challenges are faced by companies going outside their country's borders
– Culture is the single biggest challenge
– Study individual segments to determine choice drivers
– Combine secondary data with on-the-ground observations
– Phenomenology – studying consumers as they go through daily activities
– Localization often depends on how similar are the uses of the product in the new
context to the home uses
– Diaspora marketing – using immigrants from the home country as targets in new
international markets

Principles of Market Segmentation

Segmentation Tools
1. Cluster Analysis
2. Conjoint Analysis
3. Discriminant Analysis
4. Multidimensional Scaling

The main tools used are cluster analysis, conjoint analysis, discriminant analysis, and
perceptual mapping–
Cluster Analysis
- It is a multivariate technique
- Within-group differences are minimized and between-group differences are maximized
Conjoint Analysis
- Uses a series of possible product/service attribute combinations

Discriminant Analysis
- Identify a series of variables that help to discriminate the members of one or more
groups

Multidimensional Scaling
- Visually demonstrate how particular consumers view the various offerings

Targeting
• This involves deciding on the segment to serve and the best action plans to reach the
identified segment
• As per Derek F Abell (1980), the firm faces the following choices
– Single-segment concentration
– Selective specialization
– Product specialization
– Market specialization
– Full market coverage

Measuring the effectiveness of target segments

As per Kotler (2003) segments must be
● Measurable
● Accessible
● Substantial
● Differentiable
● Actionable

Trade-off - production and marketing

● Unrestrained marketing
● Production mentality
Targeting Improvement
Before identifying segments, consider whether collective segment traits can be profitable:
● Self-selection– most appropriate for large customer bases with small individual sales
● Scoring models– development of questions that allow scoring to categorize customers
● Dual-objective segmentation– covert unreachable segments into actionable groups
through reclassification

Positioning
● Perceptual position within the mind of the consumer
● Target consumer has a clear & distinctive image in mind
● Keep the brand name at the top of the choice
● Al Reis and Jack Trout - ladder inside every consumer's head for each and every
product & service
● Get to the top rung
● Being on the top of the ladder allows the firm to enjoy consumer franchise

Consumer Franchise
● The ability of the firm to keep its product/brand/company name foremost in the mind of
the target consumer
● It is considered a bankable asset
● Consumer franchise has two components
○ Behavioral
○ Attitudinal

The Positioning Statement

● The positioning statement serves as the foundation for all of the positioning efforts
● The three key components:
– (1) the audience and context
– (2) the value proposition, and
– (3) the action components that will be used by the company to deliver the value
proposition to the audience in the context identified.

Sample Positioning Statement

[Convince] To business managers and professionals engaged in making time-sensitive
decisions about international business,

[That] DHL delivers on time

[Because] its pickup, transportation, and delivery system is wholly owned and managed by
DHL personnel, not by third-party providers.
The 4 C‘s of Positioning
● Clarity: in terms of target market and differential advantage
● Consistency: maintain a consistent message
● Credibility: in the minds of the target customer--they must believe the claim
● Competitiveness: the differential advantage should offer the customer something of
value competitors cannot provide (competitors should be named if possible)

Examples of Positioning Statements

Apple offers …. the best personal computing experience to students,
educators, creative professionals and consumers around the world
through its innovative hardware, software and Internet offerings.

The Chrysler PT Cruiser is an inexpensive, small car, that

is versatile, fun to drive, and will appeal to active singles
and young couples with children who otherwise would have
bought an SUV or a minivan.

Perceptual Mapping: Mars Perceptual Map UK Confectionery Brands

Perceptual Mapping
● It is the visual representation of the different competitive brand offerings/objects of
interest in perceptual space
● It represents a map of various offerings within the minds of the target consumers
● “Perception equals reality”
Positioning and the Importance of Consistency
● The key strategic issue associated with positioning is to present a clear and consistent
message to the target audience
● A company that constantly tinkers with its image stands the chance of confusing its
target market

Latest Thinking: Real-Time Experience Tracking (RET) – Macdonald et al. 2012)

● Ethnography is an effective tool involving observations and personal shadowings of
consumers to gain behavioral insights.
● The customer fills out a survey at the beginning of the month about a particular product
group and brands in the group.
● Customers use their mobiles to record brand interactions throughout the month.
● Four-character codes are used for customer texts reflecting the positivity of each
experience.
● Customers then fill out an online diary with greater detail about their experiences.
● The last step involves a second survey reflecting any changes in the brand resulting
from the interactions.
● This allows the development of touchpoint impact matrices.

Latest Thinking: The Building of Superconsumers (Yoon et al. 2014)

● This approach involves companies targeting their best consumers for further growth to
become superconsumers.
● Avid customers are passionate and interested in new variants.
● Builds on the Pareto Principle (80-20 Rule).
● Superconsumers are heavy users who engage with the brand economically as well as
attitudinally.
● These consumers are valuable because they are already buying the products so they
are easy to reach, they are particularly open to digital marketing efforts, and they are a
rich focus for new product development.

Conclusion
● Companies that approach the process of segmentation, processing, and positioning as a
series of logical steps, enhance their chance of success.
● The company must find appropriate target consumers, understand them, effectively
reach them and grab a position inside their heads.
● The company must also avoid the lure of change for the sake of change and focus on
consistency.
● This requires keeping up with the perceptions of consumers and continuing to build and
maintain a consumer franchise.
 Chapter 6
Branding strategies
● Branding is a major component of product strategy
● The ability to develop and nurture effective brands is probably the single most important
skill set within the marketer’s professional toolkit
● Brands communicate valuable information to the consumer
● To the customer “perception is reality”
● The firm must regularly assess the nature of the brand image

Brand and Industry Structure

● Two important questions raised in this chapter are:
(1) How can we use brand strategy to reduce our overall costs? and
(2) How can brand strategy differentiate our offerings and help us build a
meaningful relationship with our target consumers?

● Strategic brand management requires a sophisticated understanding of industry cost

structure, brand efficiency, and brand profitability consumer perceptions of the brand,
and the potential for differentiation and sustainable competitive advantage.

Branding and Functionality

● American Marketing Association defines a brand as a name, symbol, word, sign design,
or combination that differentiates one or more offerings of a seller or group of sellers
from the competition.

● Brands perform a series of functions for both the buyer and seller.
- For the buyer brands help with product identification, signal quality, provide social
status
- For the seller brands facilitate customer identification, breed customer familiarity,
identify specific product offerings, differentiate offerings, make the offering
distinct, enhance brand loyalty

Brand Identity
● Brand has a core identity, which is its essence.
● The extended identity - psychological and physical aspects.
● A brand can be thought of as a product.
● A brand can also be imbued with organizational attributes (e.g., innovative, young,
socially responsible, etc.) and certain expectations in terms of geographic coverage
(e.g., local vs. global).
● A brand can become synonymous with a particular person.
 ● A brand can also become a symbol.
● A brand is a complex entity, and it potentially means different things to different people.
● Aaker (2004) emphasizes that successful brand companies have a clear idea of their
brand identity.
● The measurement of brand value.
● Compare brand assets and brand liabilities and maintain a strong and viable brand
equity valuation.
● Brand equity comprises five different categories of assets:
○ Brand name awareness
○ Brand loyalty
○ Perceived quality
○ Brand associations
○ Intellectual rights
● A strong foundation for brand equity involves various brand associations that customers
will develop (Aaker,1996a).
● Brand identity is the driving force behind the development of brand associations.

Brand Architecture: A Strategic Management Framework

● A brand portfolio can contain a variety of different types of brands.
● The brand relationship spectrum developed by Aaker & Joachimsthaler 2000b, helps
with brand architectural analysis.
● House of brands at one extreme to branded house at the other
 - P&G and Colgate Palmolive represent a house of brands

● A house of brands allows the company to potentially:

- Avoid incompatible brand associations
- Signal breakthrough advantages
- Own a new product class association
- Avoid channel conflict

Brand Architecture
● The next category after the house of the brand is the endorsed brand.
● Sub-brands are strongly connected to the parent brand and build additional associations.
● Branded house: The corporate name has the dominant driving position for a variety of
product offerings.

Industry Cost Structure: Brand Efficiency and Profitability

● Strategic brand decisions will have an impact on the firm’s profitability
● Operational efficiencies can be achieved by the following:
○ Brand leveraging – attaching the name to other company offerings
○ Co-branding:
– Bringing together two separate company brands to be marketed together to
create a new joint offering and additional value for the customer
– Abratt & Motlana, 2002, suggest that co-branding makes sense for acquisitions
(see Mini Case 6.1)

Brand Valuation Mechanisms

New brand valuation mechanisms
» Advertising turnover- the relationship between advertising expenditure and brand value
» Brand ROI -
Brand ROI = Brand Sales X Net Income
Brand value Brand sales

Differentiation: Consumer Perceptions of Brand and Sustainable

Competitive Advantage
● Customer brand involvement and perceptual connections
- Build strong relationships with customers by enhancing customer experience with
the brand, its personality, and its heritage (Joachimsthaler & Aaker, 1997)

● Brand perceptual reinforcement and revitalization

- Keller (2013, 1999) suggests that brand management must always take a long-
term perspective
- Reinforcement of equity occurs when marketing tactical decisions convey
consistent meanings to the consumer
 - There may be times in a brand’s lifetime when strategic chances will be taken
that may not be successful
■ Revitalizing the brand
■ Brand audit
■ Expanding brand awareness, improving brand image, balancing both old
and new target segments, retiring/consolidating brands

Social Media and Branding

● David Edelman (2010) states that consumers still want distinct brand promises and
value, but the consumer touch points are rapidly changing.

● Consumer decision making has changed to the following four stages:

○ Consideration
○ Evaluation
○ Purchase
○ Enjoyment, Advocacy and Bonding

● Customers are finding new ways to make connections to products/brands.

● Strategic brand manager needs to understand consumer social media habits to

understand important points for connections and bonds to be built with customers.

● Spenner (2010) advocates the use of a “ringmaster” to handle new media for
companies.

● This is an executive who is digitally aware and can coordinate marketing as well as
consumer-facing activities.
 ● Success will be built upon understanding key consumer touch points and focuses a
brand voice with meaningful stories to keep the consumer engaged.

● One key mechanism is Facebook for social media.

● Malhotra, Malhotra and See (2013) suggest that the number of company likes can be
improved by:
○ The use of photos -- Educate the consumer
○ Maintaining topicality -- Connect the brand to human emotions
○ Promote heavily -- Use humor to encourage likes
○ Share brand’s successes -- “Politely” ask for likes

● Facebook provides opportunities to monitor consumer comments since anyone can

respond to brand posts on the wall.

● Sharing on Facebook is similar to “retweeting” on Twitter.

● One major difference between the two is that Twitter is more focused on location and is
a better forum for event-related material while Facebook is better for engaging
consumers in real-time communication.

● The social media focused brand manager must also be monitoring the advent of new
platforms which spring up regularly.

Lovemarks
● Kevin Roberts (CEO , Worldwide operations of Saatchi & Saatchi): Branding is flawed as
brands are not actually making strong emotional connections with the people

● There are six reasons for this :

a. Brands worn out from overuse
b. Brands no longer mysterious
c. Brands cant understand new consumer
d. Brands struggle with old fashioned competition
e. Brands have been captured by formula
f. Brands have been smothered by creeping conservatism

● What is needed is to build an emotional bond with the consumer to such an extent that
he feels a love for the product

● Roberts (2004) provides a comparison of brands and lovemarks in Table 6.1.

● Pawle and Cooper (2006) developed a measure for emotion that combines qualitative
analyses with quantitative measurement to allow metrics to be used for lovemark
assessment.
● They develop a grid for measuring the level of love on one axis and the level of respect
on the other axis (see Figure 6.5)

● They developed scales for measuring emotional, social, cultural and functional
relationships between consumers and brands and combined these with qualitative
projective techniques to gain insight into emotional relationships.

● The way for companies to win over the consumer is to create an approach which makes
the emotional connection and builds a strong emotional bond.

Figure 6.6: Lovemarks Metrics: an Example

The Latest Thinking: Neuromarketing and Sensory Branding
● Neuromarketing links neuromapping and brain function to consumer perceptions,
reactions, and brand choice.
● Developed at Harvard in 1990, it involves examination of mental states and reactions to
marketing stimuli (Sreedevi et al., 2013).
● The base unit is the meme, which is a unit of information stored in the brain which can
be used to influence a particular product choice.
● New approach to branding that involves neuromarketing is sensory branding.
● Connects the brand to consumer senses leading to a lasting emotional connection
between the customer and the brand.
● The more senses that can be brought into the brand experience, the stronger the bond.
● Uses brain imaging studies to probe the interplay between the mind and memory.
● Promising work is being done with smells and touch.

Chapter 11
Marketing Communications
● MARCOMS are central to Porter’s generic cost-differentiation focus strategies
framework & refer to four central types of media:
➔ Advertising
➔ Direct marketing
➔ PR
➔ Sales promotions
● There are two layers to explore in using these four media in MARCOMS strategy relating
to:
➔ What the client wants to ‘say’
➔ ‘How’ you say it

IMC Tools
MARCOMS & Cost
● Short-run a client can spend money on MARCOMS to help justify a price increase or
increase volume, but this will only add to costs
● Medium to long-term MARCOMS can support price through brand preference & provide
some competitive protection for a brand
● Furthermore, increased volume can be encouraged by pointing out new uses for the
brand or by targeting new markets
● Successful MARCOMS can lead to higher sales & in turn economies of scale
● MARCOMS can also directly reduce costs through replacing (or increasing the
efficiency) of an organisation’s routes to markets & in reducing market research

MARCOMS & Differentiation

● Central to spending on MARCOMS

● Despite the conventional wisdom that lots of products & services are at parity, there are
probably more differences in offerings today than ever before
● If you take any consumer or business market, the amount of choice is substantial & often
impossible for buyers to cognitively process
● MARCOMS provides organisations with the possibility of establishing their position with
the market & asserting their distinctiveness
● At heart all organisations, be they for or not-for profit, seek to establish a point of
difference

IMC
“A concept of marketing communications planning that recognizes the added value of a
comprehensive plan that evaluates the strategic roles of a variety of communications
disciplines, e.g., general advertising, direct response, sales promotion & public relations-and
combines these disciplines to provide clarity, consistency & maximum communications impact."

IMC Foundations
MARCOMS Strategic Process

Expand the Problem to a Higher Level

The Task
Isolate, in a simple statement why the advertising will have worked:
● Increase sales
● Generate leads
● Increase/maintain share
 ● Stop decline
● Justify price
● Announce/Launch
● Corporate reputation

MARCOMS Measurement

Types of MARCOMS Objectives

● “Exposure message to ...”
● “Create 40% awareness amongst...”
● “Create attitude/opinion that...”
● “Increase preference amongst...”
● “Encourage trial amongst...”
● “Re-enforce loyalty amongst..”

Exposure
● The desired level of frequency (OTS = Opportunity to See) & coverage to achieve the
advertising objectives
● Most agencies seek an average of 2-3 OTS’s amongst the target market in order to give
advertising a chance to work

Example: 4 Week Campaign

Awareness
Spontaneous: An open-ended question, “tell me of all the major supermarkets that you have
heard of...” “Any more?” “Is that all?”

Prompted
“Which one or ones of the following supermarket chains have you heard of?”
● Tesco
● Sainsbury’s
● Waitrose
● Asda
● Jeffrey’s

Final Evaluation

Finalvaluation
Final Evaluati
Describe Who We’re Talking To

Sources of a Proposition
● product characteristics
● user characteristics
● ways of using the product
● how product is made
● surprising points about the product
● price characteristics
● image characteristics
● satisfying psychological/physiological needs
 ● product heritage
● disadvantages of non-use
● direct comparisons with rivals
● product comparisons
● newsworthiness
● generic benefits

What Proposition Will Do This?

● Specific core benefit brand delivers
● key emotion, reason or blend
● Keep it singular

A good proposition
● Gives Creatives an ‘angle’ or way in
● Forces a strategic choice
● Is single-minded not all encompassing
● Is based on a truth (Rational or Emotional)
● Is original, or expressed in an original way
● Is liberating not limiting
● Isn’t an end-line

MARCOMS Overview

Media Scheduling
1. Reach
2. Creative Scope
3. Media History
 4. Location
5. Distribution Channels
6. Budget

Conclusion
● MARCOMS primarily consist of four media: advertising, direct marketing, PR and sales
promotions, which can be used in marketing strategy either singularly or holistically with
IMC (Integrated Marketing Communications)
● While MARCOMS can enable organisations to reduce costs in the medium to long-term,
their main strategic use is in helping to differentiate and position

Chapter 10
Pricing and Distribution

Chapter at a Glance
● Pricing
● Strategic Options
● Online Pricing
● Implementing Pricing Strategy
● Distribution
● Multi-Channel Marketing
● Grey Marketing
● Price and Distribution Strategies Meet

Introduction
● Pricing and distribution are distinct yet complementary elements in marketing
● Strategically they are difficult to separate
● A premium priced watch cannot be sold at a discount jewellers
● A tractor producer that wants a specific mark-up is going to find it difficult to control
margin if it sells through intermediaries

Effect of Price
Key Elements to Pricing

Strategic Options

Communicating a Price Position – Stella Lager

Buyer’s Perspective of Distribution
● Availability
● Speedy delivery
● Reliable supply
● Range of choice
● Empathy when supply is interrupted
● Convenience
● Service and support
● A good price

Primary Concern of Buyers

Online Proposition
Online retailers increasingly compete at the product level rather than such aspects as range,
choice and service and so incremental costs need to be considered.

Simple Online Proposition

Increase the mark-up when the number of competitors is low and reduce the mark-up when
high.

Online Strategies
● Keep it unpredictable (e.g. Pixmania
makes it very difficult for competitors
to predict its pricing policy and so
extremely hard to undercut.
● Hit and run: undercutting price for a
relatively short period followed by a
return to a higher price point to avoid
being stuck in the middle, e.g. Comet.
● ‘Freeconomics’: pricing cross-subsidisation on the web.
Implementing Pricing Strategy

Distribution Options*

Principle channels
Price & Distribution
● Appropriate strategies for price and distribution should be synchronised
● Clearly it would be a mismatch to distribute high priced luxury handbags in discount
stores and would only confuse potential buyers
● The inherent brand position and direction must be taken into account
● Market position is another factor. A follower brand with a relatively small market share is
likely to follow the price and distribution patterns of leaders and generally be sold at a
lower price and be placed in slightly less favourable positions by distributors
● The product life cycle (PLC) is also a consideration. The PLC is a tool in widespread
managerial use (despite its problems) given it ability to provide some strategic insights

Price & Distribution Strategies

Conclusion
● Value holds the key to both pricing and distribution
● Buyers are savvy and smart, most markets are mature with products and services near
(or at) parity and distribution channels are varied and largely accessible physically
and/or virtually
● Any strategies attempting to ‘rip off’ or over charge will fail and longer-term trust will
evaporate, particularly with the information rich web
● As a consequence of these challenges, price and distribution are likely to remain key
issues in marketing strategy in the immediate future
 Chapter 8
Product Innovation & Development Strategies

Different Kinds of Innovation

NPD Process

Systematic Inventive Thinking

 Chapter 7
Relational And Sustainability Strategies

Relationship Marketing in the B2C Context

● Long-term and intimate relationships between buyers and sellers
● Open communication and the ability to know the customers
● Anticipate changes in wants & needs
● One of the best frameworks to discuss the nature of different customers is the loyalty
ladder, see Fig 7.1

Suspects
● Not yet even mildly warm leads for the selling company
● Are not yet interested in your products or services
● Companies should not spend too much time or effort on this group of consumers
● The firm must develop some kind of mechanism to determine whether the suspect is
worth spending time with
● One such approach is customer equity as posited by Blattberg and Deighton (1996)
Customer Equity
● Each customer’s expected contribution to offset the company’s fixed costs over their
expected lifetime
● Expected contributions to net present value are discounted
● Add together all of the discounted expected contributions across all of the company’s
current customers
● From the customer equity standpoint, the suspect is probably a poor candidate for the
time and effort that would be required for acquisition, and there would be little guarantee
of profitability (see Figure 7.2).

Prospects
● A better candidate would be found in a prospect
● This is a warm lead
● Customer equity would be higher than for the suspect
● Interest is not a guarantee for purchase
● Too much time should not be spent on prospects

Customers
● He is one who has actually bought your product/service
● The game is to increase his purchase frequency and volume
● Are all customers are “good” customers?
● Compatibility management looks to minimize exposure to inappropriate customers.
● Some companies adjust for different customers by using different pricing and venues
 ● Zeithaml Rust and Lemon’s (2001) customer profitability pyramid is an important
approach to ranking & prioritizing customers, on the basis of the impact of the group of
customers on the firm’s profitability

Clients
● They are regular customers
● They have some level of trust in the seller
● Some clients may feel that they are hostages to the seller
● Some clients may be “mercenaries”
● Some clients can act as terrorists if they become unsatisfied
● Monitoring client satisfaction becomes important
● Frequency marketing
● After-marketing

Supporters
● They buy everything you produce that they can use
● You can convert a client into a supporter through great service
● Reward clients for their purchases and loyalty and move them to supporters

Advocates
● They buy the products and services and actively recruit others to do the same
● They are the most valuable
● The company must try and keep them happy
● Loyalty schemes
○ Loyalty schemes can neutralize competitors, broaden brand distribution, enhance
brand image, and increase value
○ Nunes and Dreze (2006) suggest that loyalty schemes can reasonably be
expected to do five things for the companies that use them:
i. keep customers from defecting,
ii. win a greater share of the wallet,
iii. prompt customers to make additional purchases,
iv. provide insight into customer behavior and preferences, and
v. create profit

Partners
● Partnership is when the buyer and seller enter into a joint position of commitment and
the buyer often has to modify the ways in which he/she works to accommodate the seller
● Both parties have a vested interest in the partnership owing to trust and commitment

Customer Love
Building Customer Love

● It is no longer enough just to have a relationship with your customer, you need to
develop the “love” of your customer
● There are seven important steps in building customer love (see Figure 7.3)
● The following are the benefits of achieving customer love
○ Customers who love you take care of you
○ Customers not only recommend you, but they insist
○ Customers forgive our mistakes
○ They will give you candid feedback
○ They will not take legal action against you
○ They will pay more for what you offer