Introduction to Marketing

What is Marketing?

The study of a market => a frequent exchange between buyers and sellers.

It needs to have an exchange.

Type of exchange: Sellers & Buyers:

Seller`s market: Production: Focus on company: the seller has all the power

Buyer`s market: Marketing: Focus on Customer and Competition

Different marketing for these:

Product focused marketing (product orientation: you have a product and you push it to the
market): Seller`s market: you have a product that customers want and they will come to you; you
should develop that product to the best you can, innovate, reduce cost, focus on the product, sell as
much as you can; profitability will come from the volume (sell as much as you can)=> profitability
leads to bigger market share =>lower costs =>inside out; generic products, Competitive advantages:
lower costs

Customer focused marketing (offer what the customer wants): focus on customer to buy from me
rather than the competition => look what the customer wants and delover a product that meets his
needs => outside in => pick and choose customers (we cannot meet everyone`s needs) => process of
segmentations => profit comes from creating value (increased price premium => customers pay
more for the products they want) and from building customer loyalty and retention (customer
share) + cross selling (other things besides the specific product) => premium price&loyalty&cross
selling; differentiated products/services; Competitive adv: Quality and Service; Customer Knowledge

Customer Experience (experience orientation): manage customer`s entire experience with the firm
(In a connected community, people talk with each other sharing experiences):

It starts and ends before the actual transaction (sell/buy). The marketer has to be authentic,
transparent and focus on the entire customer experience. Experiential value; Competitive Adv:
Transformation; customer as co-creator of value; Buzz, Word of Mouth (WOM), Referrals

Trust Orientation: build a relationship of trust and discipline: Genuine Value; Competitive Adv:
Trust; Discpline& Reduce Costs

3 Principles of Marketing (Essence of Marketing):

- Principle of Customer Value: give them real genuine customer value

- Principle of Differentiation; provide customer value better than the competition
- Principle of Segmentation, Targeting and Positioning: you cannot deliver value to everybody,
you have to segment the market, target the segment you chose and position your brand to
meet the needs of that segment

Tools to deliver the Principles:

4Ps of Marketing:

Product

Place

Promotion

Price

Strategic Marketing: Market-Driven Principles:

- Know your Markets

- Customers have the final say

- Commit to being first in the markets you serve

- Deliver total quality to guarantee customer satisfaction

Value Map

Higher

Premium
Fair
value
INFERIOR VALUE line

Relative Cost to customers Parity

SUPERIOR VALUE
Economy

Lower

Inferior superior

Relative Perceieved Benefits

Segmentation & Targeting & Positioning
Segmentation:
Market Segmentation is the process of diviging 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:
- Divide the market into Characteristics of the Customer (E.G. Cohort Analysis)
- Benefits Sought
- Systematic, Product-Related Behaviours (purchasing behavior, channel, etc)
Segment Selection Criteria
- Segment Size
- Growth of Segment
- Value of Segment
- Stability
- Current Company position within segment
- Ease of entry into the segment

Brand Positioning
What is a Brand?
Formally it is a proprietary trademark for a specific product or service
Conceptually it is a contract from the company to its customers; A promise of specific
benefits, quality and value. A relationship.
It is what consumers tell each other it is.
E.G. 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
IBM: For businesses who need computers, IBM is the company you can trust for all your
needs.
Positioning Statements from Apple E.g. :
1. Target Segments (students, educators)
2. Point of Difference (its innovative)
3. Frame of Reference (the best personal computing experience)
 Brand Mantra The Elevator Speech
Brand Mantra is the essence of the brand and when thinkig about it we can create a mental map,
which portrays brand associations and responses for a target market. Shows how it is actually
perceived.

It is a though association process; ask consumers What comes to mind when you think about V8?

Brand associations are grouped into categories.

What is the essence of the brand mantra? It has three basic parts.

One part is the brand function, it describes the nature of the product or service, it describes the type
of experiences, the benefits that the brand provides.

Then there's the descriptive modifier that further classifies or clarifies the nature of what the brand
is delivering.

And then there's an emotional qualifier that kind of explains exactly what those benefits are. And,
and in what way the brand delivers on them. Now it's probably easiest to give you some examples.

Before I do that though, let me just say again, what the brand mantra is used for. It's used internally
to guide decisions. I think I already mentioned this. It's what the brand should and shouldn't be. By
the way, that's a very important idea. A brand mantra, not only, says what a brand is. But as
importantly it says what a brand is not. And it communicates the baoundries of the brand. It, it, it has
to be short, simple and it should be inspirational. So now we have the examples. these are very
famous ones. Nike, they're global brands, Nike, Disney, McDonald's.
Experiental Branding
What is an experience?
An experience is a process that occurs as a result of living through a situation. Undergoing that
situation. So it's not just a moment in time, it's a dynamic notion where you sense or feel this
experience. as I'm going to define it later, you'll see that it involves all the senses, it's social, it's
behavioral, it's cognitive, it's emotional. It's stimulations that are triggered to the sense that you
think about, that you feel.

they connect the company and the brand to the customer, and they place the the customer action
and the, the individual's actions and purchase occasions in a broader social context. So the
experience includes all of these kinds of things. It's What I've been talking about, up to this point
really, is pretty cognitive, pretty rational. And here's where we bring in the emotions and all these
other things, and I know those of you who know and love brands really understand that brands
are emotional, they're experiential, they're not just this hard and fast cognitive point of view. And so
that's what I, I'm emphasizing here on the point I want to end with in this section, that a brand is an
experience. And so, the things on the left are important. I'm going to talk about those but they
all have to be augmented to be bigger than that. And to embody this experience or emotional
piece. So we talked about differentiation. That's a principle of marketing, to be differentiated, the
point of difference. But now, and today's brand, these rich brands, are not just differentiated, they're
experientially differentiated. So the different, the differentiation is also in the brand experience. It's
not just a single promise. It's a relationship. You, you feel towards your brand, the brands that you
just love. If you're an Apple lover, or you're an Abercrombie lover, or something, you have a
relationship with that brand; it's over time, and it defines you. It's not just brand attributes, these
cognitive at-, or these performance attributes, or these product attributes. It's a personality, you
think the brand almost as a friend. It's not static, it's dynamic. It's not a mass brand, because you're
co-creating with the brand. The brand becomes very individualized. Becomes, very relevant to
you. You're not just aware of this brand, you're aware of how this brand fits into your life. So you can
see by the types of words I'm saying that Really, really strong brands embody all of this emotional
experience. and so when you define these terms, these things that I've mentioned earlier, than
you're not just thinking about brand positioning. You think about experiential brand positioning. So
what does the brand stand for? And it should be a multi-sensory strategy. When you think about
brand positioning, experiential brand positioning, you not only want to think about.

You know, what the DNA is. What the brand mantra is. You want to think what's the smell of the
brand. What's the color of the brand. What's the emotion you feel when you think about the
brand. That's a brand positioning and experiential brand positioning. And, it, it, it needs to be as any
kind of differentiation is, it needs to be distinct from everybody elses. So you don't want all hotels
don't smell the same. All soaps don't smell the same. They have different experiences. And then the
brand promise the mantra again, it's not just three words, you know, cognitive words. It also needs
To describe what that brand promise is in experiential terms. And here's where I'm going to be very
clear of what I mean by experiential, it needs to have senses.

So, it need to be what's the vision of it? What does it look like? What does it smell like? Maybe what
does it taste like? What does it sound like? Is there music associated with it? What does it feel like?
What are the senses? And then, when I say feel here, what I mean is emotions. What, what, how do
you feel about it? Is it a happy brand? Is it a sad brand? Is it a. you know, a tragic brand? What, what,
what are the emotions you feel with this brand? What do you think about it? That's what we've been
talking about. How does it make you behave or act? And relate, its refers to the social environment,
what people, what social contexts, what culture do you consider or do you put this brand in and all
this, this experiential aspect of the brand should be in all channels, all channels should have an
experiential component to it. So just to go over those again. The, the sensuous is across the
five senses, you want to have a consistent experience. The feel part are the emotions. You should
appeal to the customer's inner feelings and build strong emotions to it. The cognitive is the
intellect. The thought process. The intrigue. The surprise. Whatever is, but thoughts. The behave is
the way, how people act around it. It can be inspirational. It can cause you to act in a certain
way. And social is the part of the social system, the culture, that surrounds the brand.

And you want to have these experiential functions delivered through the four P's. We're back to the
four P's. The product, the place, the promotion. Only now, and the price, even. And now we're going
to define each one of these four P's in experiential ways. So let me just give you examples. all of you
know about, I'm sure you've seen this self designed, customized Nike.