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Part of Wharton’s Business foundations specialisation Introduction to Marketing on Coursera is a perfect initiation for getting to the root of customer decision-making. Key topics include branding strategies, customer-centric marketing strategy, and new market entry.

I have included my notes I took throughout the course not just for anyone to read but for my own reference to look back on in future, and to give me an opportunity now to review the course.

Firstly a big thanks to Barbara E. Kahn, Peter Fader & David Bell from University of Pennsylvania who put together this course and offered it up to anyone on Coursera

Building Strong Brands

  • Buyers market has product focused marketing (i.e. great products) – product orientation = persuade the customer to what what the firm has
    • Generic Products
    • Lower Cost
    • Profitability Drivers: Market Share
  • Seller market – focus on company – perused the firm to offer what the customer wants
    • Differentiation Products / Services
    • Quality and service
    • Customer Knowledge
    • Profitability Drivers: Customer Share & Loyalty
  • Experience Orientation – Manages customer entire experience with the firm  Connected Community – Customer experience, focus on deeper customer value – social media, transparency
    • Experiential Value
    • Transformation of customer as co-creator of value
    • Profitability Drivers: Buzz Word of Month, Referrals
  • Trust Orientation – Prioritise building of relationship of trust & discipline Economic Uncertainty – Trust, focus on genuine customer value through discipline & flexibility
    • Genuine Value
    • Trust
    • Profitability Drivers: Discipline

3 Principles of Marketing

  1. Customer Value
  2. Differentiation
  3. Segmentation, Targeting & Positioning

4 P’s of Marketing

  1. Product
  2. Place
  3. Promotion
  4. Price

Strategic Marketing

Framework for thinking competitively
Market Driven Principles:
  • Know your markets
  • Customers have the final say
  • Commit to being the first in the markets you serve (i.e. the best at one thing)
  • Deliver total quality to guarantee customer satisfaction.
3 Bundles of Marketing
 
  1. Operational Excellence
  2. Performance Superiority
  3. Customer Intimacy

Image_Exhibit 2_2Source: McKinsey

 

Segmentation & Targeting

Segmentation – identify variables that allow one to cement the market
Targeting – Evaluate the attractiveness of each segment and choose a target segment
Positioning – Identify position concepts for each target segment and select the best and communicate it
Divide the market up into distinct subsets which will be your target and reach that segment with the 4 marketing P’s – Product Place Promotion Price
Segmentation Methods:
Characteristics of the customer
Benefits sought
Systematic, product relation
Geographic Segmentation
Regional Segmentation / Zip Clustering
PRIZM – geographic clusters
Segment Selection
– segment size
– growth of segment
– value of segment
– stability
mkt_attractive_map_lg
Source: Gene2drug

Brand Positioning

What is a brand:
  • trademark for a specific product or service
  • the promise of a company for benefits, quality and value.
  • A relationship
Positioning Statement: 
  • Target segment  – for whom
  • Point of Difference – reason to buy
  • Frame of Reference – points of parity
Positioning is a implemented through 4 p’s marketing:
  • product
  • price
  • promotion
  • place
Position must be defensible
Position requires making choices

 

Point of Parity (POP)
e.g. brand must have to compare to competition – supermarket needs milk.
Point of Difference (POD)
similar to USP – unique selling proposition
SCA – sustainable competitive advantage

 

Brand Mantra –
  • Core of the brand, brand essence
  • 3-5 word phrase that captures the spirit of the brand
  • Consider – Communicate Simply Inspire.

Brand function, descriptive modifier, emotional modified

 

Experiential Branding

Experience is a dynamic result of undergoing living through situation
Connect the company and the brand to the customer and lifestyle.
What a brand is..
  • Differentiation
  • Promise
  • Attributes
  • Static
  • Mass
  • Awareness
  • Experience
  • Relationship
  • Personality
  • Dynamic
  • Individual
  • Relevance
What does the brand stand for..
Multi sensory strategy
difference in something real and valuable from competitors
Experiential brand value promise 
what a customer gets in experiential terms
sense – feel – think – act – relate
Embrace all channels
Five senses, emotions, cognitive, behave, Social
Experience with the 4 P’s – (yes.. I am drilling them in..)
  • product
  • place
  • price
  • promotion.
Characteristics of a Brand
Constancy
Superior
Distinctive – positing & customer experience
Alignment – of internal
Relevant –

 

Product Centric Marketing

What is customer centric / customer intimate?
  • conceptualise
  • development
  • building
  • producing
Goal of business is maximising shareholder value.
Maximise profits through volume and cost reduction.
Key performance indicator:
  • market share
  • cost coming down
  • volume delivered
 
Growth:
  • bring current production to new customers, new geographies and new segments
  • innovation of products
  • extending the current product
Product-oriented organisational structure.
Competitive advantage – product expertise
Cracks in Product Centric Approach
  • Less consumer focused, less social approach
  • less interactive, less customised.
Technology enabled product development > commoditisation – (Very short product lifecycle)
Technology-enabled information flow > smart customers  (customers can find out all about all the productions on the market easily)
Technology enabled delivery > retail saturation  (its very easy to pickup all products and services from all regions)
  • Globalisation
  • Deregulation
Customers want “end-to-end solution” which may require products services  from multiple  vendors
Product / Customer Centricity 
Source: Slideshare

Customer Centricity

Is a strategy that aligns company development delivery of its products and serves around the current and future needs of a select set of customers in order to maximise the long term financial value of the customer to the firm.
Customer centricity requires the company to be willing and able to change its organisational design, performance metrics and employee / distribution incentives structures to focus on this long – run value creation delivery process.
Building long term relationships – not just closing sales and moving on.
Look ahead and figure out who the valuable customers WILL BE..
Living in a customer-centric world.
Over-arching objective for customer centricity is to MAXIMISE THE SHAREHOLDER VALUE for the company
Customer heterogeneity – some customers are much more profitable than other customers.
The past is an imperfect guide to the future.
Focus on future profitability!
Success arises through enhanced and / or more efficient customer acquisition, retention, and development. 
 
Customer-centric organisation structure.
 
customer relationship data can’t be commoditised
The competitive advantage  “relationship expertness” with respect to focal customers
Customer centricity does not suggest that non-focal customers should be ignored. to the country, its important to have a healthy proportion of such customers to add a high degree of stability and robustness to the overall customer based (think of them as cash in an investment portfolio)
Stable predictable customers
Taking this idea further there is a paradox of customers centricity – the more the firm tightens its central focus on a select group of the customers the more it needs its non-focal customers to stabilise the overall mix.
Customer focused –  Make products for the product centric people, then make the rest of the products product centric for the rest of the customers.
Who is the customer? 
Agree on one of the entity is the customer matters more than others.
P&G the customer is the retailer.
Can your organisation come u with a single consensus answer to this question or can you at least reconcile the roles / relationships of the different potential customers?
What are the major barriers to account for? Develop a comprehensive list, ranked by importance / difficult of each barrier.
What resources can the utilise to overcome these barriers?
  • convergent thinking around customer
  • divergent thinking around product
Thoughts about what competitors are doing in this area?
Does it make sense for your organisation to become customer centric? IF so , what should be your immediate goals and medium-term expectations.
Product centric: Apple / Walmart

Direct Marketing

Building the business around the customer
Who knows their customers and what they buy
Aim to determine marketing communications based on past purchases
Constantly determining and leveraging individual customer value

Online / Offline Competition & The Long Tail

Virtual word / real word integration

90% of what is still bought is bought offline.
Online Barriers:
  • delivery time
  • uncertainty about fit feel of the production
  • cost of returns (time and money)
Real word shop do effect virtual stores –  mostly effect popular products, not niche productions
 

THE LONG TAIL

The long tail – the mix of products changes when we offer the customer more and more.
The long tail concepts and economics
Long tail exists due to changes of economics of storage and distribution on the SUPPLY SIDE
 
Long tail itself is endogenous (internal cause or origin) DEMAND SIDE as there are more ways for consumers to discover variety
Old-New Pareto – 80/20 rule.
George Zipf found principle  1/2 then 1/3 etc.
What is range of quality / satisfaction – most likely skew towards the head (popular) section
However – if you filter very specifically to your personal taste you will find a much better product
Ratio of niche products to hits is changing
Distribution efficiency is amplifying (digital, search, internet)
Recommendations / reviews drive search so consumers can get into the tail
Collective value of niche > hits
Long tail is culturally unfiltered by scarcity
Disentangle the supplies side (large product availability) from the demand side (easier for consumers to find and sample production)
Law of natural monopoly – hits get disproportionate share of light users
Law of double jeopardy – unfamiliar things are less well liked
Screen Shot 2015-06-15 at 8.35.48 am

How internet retailing startups grow

  • Customer acceptance of online retail depends on offline costs
  • Sales evolution is structured and predictable
  • Social cognation – form communication and observation effects effects online demand
  • Strong branding (ugly) stands out when you get a package
    • Preference office locations for BRIGHT coloured boxes
  • Migrating to new locations – based on similarities
  • Doppleganger locations

Customers and Digital Marketing

Attract, engage and retain customers subject to
Never pay for to a acquire a customer than you will recoup CLV > AC (Customer lifetime value > Acquisition Costs)
RLV – referral lifetime value.
Key tactic – get customers to refer other customers.
Monologue to conversation (social media)
Amplification – virtual to real world synergy.
Long tail leverage –

Selection and treatment.

Selection effect – people directly referring customers have a better idea of the perfect target customer.
Treatment effect – people who come from referrals are more likely to refer other customers.
Marketing spend as an asset.
Think about a status quo situation that is broken that can be improved
Go to warbyparker.com and think about how this brand executes authenticity and transparency.

Influence and How Information Spreads

Controversial Study on Obesity – Obese people tend to have obese friends.
Elements of networks
Elements of Neighbourhoods
Pathways through information advice resources and support flow between people
Networks can be physical or virtual.
Networks usually exhibit homophily – birds of a feather flock together, friends are similar
Network can be very simply or ultra complex (2pax to hundreds of thousands)
  • nodes (people)
  • connections (between people)
  • constraints  (geographic etc.)
Participation in a network is a choice
We also device how many people we want to connect with and how central we want to be
When our relationships are transitive our friends know each other then we are deeply embedded
6 degrees of separation

Pricing Strategies

 sell one product at a lower price
using product price to send a signal
4 Key areas of pricing:
  1. Floor – lowest price we can sell for (marginal price)
  2. Ceiling – the highest price he is willing to pay for the product.  (Customer willingness to pay)
  3. Competition – can be effected by competitors
  4. Marginal cost – how much cost needs to be raised to make margin for resellers)
5C of marketing
  1. Customers (most important)
  2. Company
  3. Collaborators
  4. Competitors
  5. Context

Financial considerations

Target margin or internal rate of return (IRR)
  • Consistency of product line – Price of camry influenced not just by accord and focus, but also  corolla and avalon
  • Consistency in image – high price retailer or low price discount.
  • Competitor issues
  • Competitor aggressiveness – deep pockets / irrational behaviour
  • Willingness to respond – reduce price change product.
  • Competitor position – market leaders more likely to initiate, followers will imitate
  • Collaborator issues
  • Collaborator incentives – how hard will the york to “push” the product – what kind of support (pull) do they expect
What other functions they will perform – how much influence they have –  (distribution session)
Not just about margins also – return on assets.
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Customer Issues:
Price sensitivity  (price elasticity)
– what drives it
– how can we measure it
How much we can raise it and how that will effect demand.
Phycological issues:
– odd number ends
– mental accounting
– prospect theory – in reference to effects lost aversion,
– diminished sensitivity.
– endowment effect

The 7 M’s of Marketing

  1. Market – target audience
  2. Message Content
  3. Mission
  4. Message design (creative solution)
  5. Media Strategy
  6. Money
  7. Measurement

Brand Messaging & Communication

Perception – The process of developing an interpretation of stimulus (deciding what stimulus means)
What customers perceive is what effects actions
What they perceive isn’t necessary true
Perception is constructive – construct interpretations as a function of context
Constructed as needed, based on:
– actual stimulus (exposure & attention) what is salient
– our prior expectations and w hat we now (perceptual interpretation)

Brand Elements – Choosing a Brand Name

Brand Elements – Enhance brand awareness, facilitate formation of strong favourable unique brand associations (they must work together)
Choice criteria
memorable:
– recognisable
– recalled
meaningful
– descriptive
– persurasive
appealing
– fun and interesting
– ascetically
– rich visual and verbal imagery
protectable
– legally
– competitively (brand image)
adaptable
– flexible
– updatable
transferable
– within across product categories
– across demographics boundaries and cultures
Each elements play a different role in overall perception  – various strengths and weaknesses
Brand elements should be used strategically to achieve a balance and impact
need insistency and integration
Brand elements – advantages and disadvantages
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Brand name hardest to change.
Effect of brand names
Consumers
– affects likelihood of purchase
Employees
– Effects moral and productivity
Firm
– Can limit opportunities (new markets/ products)
Investors
– subconscious judgements on merits / strengths
Types of Names:
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Colour & Taglines:
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Slogans / Taglines
Can be tailored to a position strategy
Can remove some of the ambiguity associated with brand
Can generate its own equity and emotion
reinforce brand ideals
Taglien Basics
  • must be short
  • must be different from competition
  • must be unique
  • must be easy to say and remember
  • cannot have any negative connotations
  • can be protected and trademarks
  • can vote evoke emotion
Types  of taglines –
  • Imperative – tell what to do
  • Descriptive – explains (add more information
  • Superlative – of the highest quality
  • Provocative – evokes emotion
  • Clever –

Brand Elements – Packaging / Persuasion

Can influence at the point of purchase
Can have a continuing influence at the point of consumption
Multiple objectives
– Identify
– Present information
– Protect and allow transportation
– Store
– Aid consumption
Persuasion – active attempt to change belief and attitude
Elaboration Likelihood Model
User of celebrity spokesman
Caveat – difficult.
Elaboration Likelihood Model 
  • Systematic
  • Central Route
When motivation (involvement), opportunity
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 Cues:
  • Classical conditioning
  • Reciprocity: you owe me
  • Consistency: we’ve always done it that way
  • Social proof: everybody’s doing it
  • Liking: love me, love my ideas
  • Authority: just because I say so
  • Scarcity: quick, before they are all gone.
Celebrity Endorser:
General considerations:
  • audience fit
  • brand fit
  • attractiveness
  • practical considerations (Cost, celebrity, exposure, risk)
  • social score
Q-rating – how well are they known, patio of popularity
qscores.com
Transfer of Meaning Model –

Repositioning Brand

Brand equity must be actively managed over time
5 rationales for Brand Change
  1. identity poorly conceived
  2. target is limited
  3. out of date
  4. becomes old fashion /  lost edge
  5. becomes tired
Must consider CONSISTENCY
Potential cognitive inconsistency
Evolving brand associations –
A brand can evolved my gradually
Symbols –
Brand Name –
Slogans –
Change brand names to imitate constraints
 Thank you for reading and I am impressed you made it this far.. there was a lot covered in this course and this is just my take on things, and my personal notes.
I strongly suggest taking the full course Introduction to Marketing over at Coursera
Thanks again to the lectures who certainly put a lot of time and effort into producing this incredible course.

Learnings
Author: Stewart Barrett

Stewart Barrett is an agile, results oriented data driven digital strategist & business focused online marketer with over 10 years’ experience. Passionate about businesses that challenge and disrupt markets, who is inspired and fascinated by the ever-changing world of digital.

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