Marketing Notes 2

Marketing Management

Class 3

Target Market Selection – Understand customer demand & then select the segment you want to serve

Prepare competitor capability matrix for a segment.

Ability to conceive a design (R&D, Existing patents & copyrights, access to new technology) and produce (competitor’s product technology and capacity and flexibility)

Competitive advantage (Cost advantage - low cost structure and differential advantage – more benefits at same cost; Both are also called positional advantage). It must result in superior value creation. In order to have competitive advantage, firm must have resource (Patents, trade-marks, brand equity, reputation) & capabilities (effective resource utilization, ex – fast launch of new product) that are superior to those of competitors.

Positioning – Find USP of product against it s competitors, find out what customer needs and which your product should fulfill (why your product is the best). How I place my brand in the mind of customer (High recall value of the brand). Brand is the soul of the product. Hence, it should stay relevant to the product. Product must service the target segment at that particular point in time. No same offerings for 2 different segments.

FAB (Features, Attributes, Benefits) Model – Only talk about benefits to the customer. Example: More car per car

Art of service recovery – Restore Goodwill, enhance service (speed of fixing and how well it is done)

Differentiation – Different because of competitive offering (To avoid price competition)

Test Marketing – Acceptance of my offering by specific segments or by segment of my choice (AIDA Model). It is always beneficial as launching new product involved high cost. Test market should target only certain attributes (Ad, packaging, costs). Hyderabad and Secundrabad are test markets in India (due to different market segments based on language)

1. AIDA – Awareness, Interest, Desire, Adoption (To buy product)

2. AIETA – Awareness, Interest, Evaluation, Trial (New purchase), Adoption (Repeat Purchase)

Test market becomes more unreliable in case of

· Short time – Can’t observe repeat purchase

· Long Time – Competitors might participate and destroy the survey

Concurrent Engineering – Product development happens by giving the improved versions to the customer and taking feedback from him / her at the same time to improve the design till it is made perfect for launching.

AMEX

· $27.7 billion – Card payment and travel related service offered

· Issued travelers cheque, business card, money order – 1958

· Why travelers cheque more important – Company gets an immediate float as against a credit card

· To manage expense in company – Issue corporate credit card. Customized to particular organization.

· Use business analytics to understand customer behavior (Database marketing, closed oop connection with customer and merchant)

Marketing in Downturn

Employee satisfaction and loyalty – Service value – Customer satisfaction and loyalty – Profits & growth

MBNA America – Largest Credit Card lender; works on zero defect principle

Zero Defections: 100% retention of customer

1. Getting the right customers (Segmenting, targeting & getting them) & retain them (positioning and marketing)

2. Affinity Marketing - Affinity marketing traces its recent roots to the 1990s affinity boom, when credit card companies partnered with charities to provide consumers with a charity branded credit card. The charity benefits from increased brand loyalty and brand awareness and a boost to revenues; typically through a fixed commission for each new card. The credit card company meanwhile benefits from increased revenue, generated by more customer relationships.

3. Think of yourself as a customer: Reminding employees to empathize with them

4. Customer retention is like customer satisfaction

5. No correlation between market share and profit. The relation is with Quality of market share

6. High retention rate – High profitability