introduction to marketing and the global marketplace

8/6/2019 Introduction to Marketing and the Global Marketplace

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Introduction to Marketing and the

Global MarketplaceHeleen Kist

13 October 2010

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Todays session

Marketing 101 Marketing basics

The importance of the customer

Understanding your customer

Traditional marketing

How this changes in a Global marketplace

How marketing is changing

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What is marketing?

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What is marketing?

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The sole purpose of marketing is to sell more to morepeople, more often and at higher prices.There is no other reason to do it.

Sergio Zyman


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The Marketing Mix

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The marketing concept

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Understand your customers' needs and

preferences Groupyour customers into segments based on

their needs and preferences

Target segment(s) you can best meet their needs

and preferences This includes targeting and competitive analysis

Provide superior service or products to meet yourtargeted customers' needs and preferences at

the right price. Get the word out

Develop a trusted brand


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Why focus on customers?

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Product Excellence

Operational Efficiency Customer Intimacy

Competitive edge based on cost (and pricecompetition) is notsustainable in the longterm.

Product leadership is short-lived, too.Technology moves fast and even productsthat are not overtaken are easily replicated.Customer centricity is about long-termrelationships, therefore provides sustainableadvantages.

It also results in added competitiveness inthe other two dimensions

see Treacy & Wiersema: The Discipline of Market Leaders

THREE DIMENSIONS OF

COMPETITIVENESS

All three are important, but you can only

excelin one - and should choose your focus:


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Satisfying customer needs

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Give me (speed, safety, confidence, a positive

experience, success-personal or corporate).

Help me to (get to a destination, connect to a

person/organisation, enhance my life).

Save me (time, money, hassle, risks or hazards,

negative experiences).

THE 3 QUESTIONS TEST

But not all customers are the same..


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Segmentation offers opportunities

Some examples of new segments for men Male spas offering manicures, pedicures, etc. Phillips Bodygroom shaver, designed to remove

hair below the neck


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It identifies your niche

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Even in a mass market world


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Segmentation offers more revenue

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Exact same product, but whole new segment


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Classic segmentation case study

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Early 1990s gasoline price wars

2 price / volume segments Price sensitive customers, USD $700 annual, 20% of

market

Not price sensitive, USD $1200 annual, 80% of market

Response Shifted focus away from pricing onto other differentiators

Added 2 per gallon, annual value USD $118 million


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Segmentation rules of thumb..

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20% of your customers (will) represent 80%

of your profit

Pro

fit

abi lit

y

Typical decile chart each is 1/10thof the total customer base

The price sensitive segment is hardly evermore than 10% of the customer base


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3 Major Segment Strategies

One product to all segments Example, discount airlines one

price, one level of service

One product for one segment Niche markets

Luxury goods typically handled thisway e.g. adventure travel

Multiple products designedfor and targeted at multiple

segments Typical strategy in financial

services and broad basedconsumer products

Example: how many kinds oftoothpaste can you buy?

Effective capturingof consumer

surplus


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The world of proxies, to help targeting

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Customer Profiles (Who they are?)

Sets of (static) attributes allowing reasonable

assumptions, e.g. families with babies need

nappies, teenagers need bright-coloured mobile

phones or companies with vehicle fleets needmotor insurance

Customer Behaviour (What they do?)

Based on assumptions like beer drinkers are morelikely to choose beer over wine or once a

gambler, always a gambler.

Demographic profiles: Grouping people by gender, age,

marital status, education, occupation etc.

Geo-demographic: Adding the spatial dimension in one or

more ways: absolute (North, South, Wales, Leeds), relative

to population concentrations (urban, suburban, rural) or

based on economic regions (Thames Valley).

Psycho-demographic: Introducing attitudinal and emotional

affiliations (nerds, lads, anoraks) often hard to distinguish

from pure demographics (e.g. education, occupation) or from

behaviour types (see below).

In B2B environments the equivalents are vertical sectors andsub-sectors, company size (employees and core business

metrics, e.g. turnover), location(s), target market(s) etc.

Transaction (purchasing) behaviour: Frequent

shoppers/ flyers, bulk buyers, occasional shoppers,

declining custom etc.

Motivation-based behaviour: Impulse buyers, early

adopters, bargain hunters, status seekers.

Lifestyles: Often mixed with demographics, indicate

needs through preferences manifested in everyday

behaviour (a number of popular templates and

commercial databases of pre-scored population).

B2B: Order consolidators, end-of-quarter (end-of-

year) buyers etc.


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It usually looks a bit like this

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#and

value

Attribute, e.g. age, level of consumption, brand loyalty

Attribute,

e.

g.purchasing

ch

ann

el,lev

elofunderstan

din

g


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Once you have customers

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Customer value segments

Most Valuable Customers: Retain

Most Growable Customers: Grow

Marginal customers: Business

as usual?

Service costs

Actual value Strategic value (potential share of customer)

Source: Peppers & Rogers Group


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The challenge for you

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Use market research

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To understand:

Customer habits Customer preferences and needs

Customer insights

Competitor insights

Only then:

Develop your product

Expose them to your product

And then:

Iterate rapidly

Watch what happens

Quantitative

research

Qualitativeresearch


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20 http://www.youtube.com/watch?v=pcj7QT0Abk8
http://www.youtube.com/watch?v=pcj7QT0Abk8http://www.youtube.com/watch?v=pcj7QT0Abk8


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But market research has its limits

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I notice increasing reluctance on the part of marketingexecutives to use judgment; they are coming to rely too muchon research, and they use it as a drunkard uses a lamp post for

support, rather than for illumination.

David Ogilvie


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22 http://www.youtube.com/watch?v=OORnMYoWX9c
http://www.youtube.com/watch?v=OORnMYoWX9chttp://www.youtube.com/watch?v=OORnMYoWX9c


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Market research traps

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Pre-judging the answer

2% of UK customers used Fairly Liquid to wash the dog

Judging at all Procter & Gamble tended to have male brand managers

for feminine pads

Wrong question or wrong forum How often do you beat your wife?

Not seeing for yourself


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The 4th P: Promotion

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When people trust a brand

25 http://www.slideshare.net/nickblack/brand-trust-the-six-drivers-of-trust-2193957


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Fashion / permission marketing

26 Source: Seth Godin

Collectable Christmas ornamentsSold in JulyPermission to send card as reminder$100M sold in 24 hours

You no longer try to find a customer for yourproduct, but a product for your customer


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Todays session

Marketing 101

How this changes in a Global marketplace Global brands Localisation Market entry

How marketing is changing

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Global brands

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Coca Cola top Global brand for 11th year in a row

However, difficult initial international expansion inpost war years:

Coca Cola was outlawed in Fiji

Coordination Office for German Beverageschurned out defamatory pamphlets lie CocaCola, Karl Marx, and the Imbecility of theMasses

Denmark; lobbyists for the brewers chiviedparliament into taxing cola-containing

beverages

Belgium: Contains caffeine on caps ofbottles


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The same rules apply

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Know your customer

There is no such thing as typical Chinese person There is such a thing as a global teenager

Understand their needs

No dishwashing liquid but mustard!

Develop the right product

Water feel important

Price it right

Autodesk priced locally

Choose your brand carefully

If not the same name, same visual?


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But there are additional challenges

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Regulation

Employment issues

Cultural norms

Distribution issues

Unexpected barriers Dishwashing competitor in Poland owned by catholic

church!

Partnering isrecommended


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Todays session

Marketing 101

How this changes in a Global marketplace

How marketing is changing The impact of the internet and social media

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21st Century marketing

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We are all connected now

Crossing the Chasm is becoming easier Fashion/ permission marketing at its best

Source: Emakina

l k


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Viral marketing success stories

33 Source: Emakina

I hi b d hi ?


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Is this a bad thing?

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http://www.youtube.com/watch?v=bTHFXs77hWg

http://www.youtube.com/watch?v=bTHFXs77hWg

S i l di k ti i t h ll
http://www.youtube.com/watch?v=bTHFXs77hWghttp://www.youtube.com/watch?v=bTHFXs77hWg


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Social media marketing in a nutshell

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http://www.youtube.com/watch?v=gza8dvN8Hkc

http://www.youtube.com/watch?v=gza8dvN8Hkc
http://www.youtube.com/watch?v=gza8dvN8Hkchttp://www.youtube.com/watch?v=gza8dvN8Hkc


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Speaker bio

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H l Ki t


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Heleen Kist

Heleen Kist is an independent strategy consultant, based in Edinburgh, specialising in

technology ventures, access to finance and the knowledge economy.

She advises private companies, large and small, on their growth strategies and theexploitation of innovation in sectors ranging from biomedical to new media.

Public sector organisations have relied on her to design, implement and evaluate national andregional access to finance provision to encourage economic development. Notable successesinclude the Scottish Co-Investment Fund and, more recently, the 125m North East JEREMIEfund.

Heleen brings to the table substantial blue chip and international experience. She started hercareer as a technical brand manager at Procter & Gamble. She has a track record of resolvingboard level issues consulting at McKinsey & Company, working in the Netherlands, Belgium,the UK, Sweden, Italy and France. She can also strongly relate to the entrepreneurialcommunity, having run a telecom software start-up which folded during the bust of 2000.

Heleen has a MS in Chemistry from Leiden University in the Netherlands and an MS inManagement Science and Engineering from Stanford University.

While at Stanford, she helped set up the Stanford Technology Ventures Program, and co-wrote The Characteristics of the Entrepreneur (with T. Byers and R. Sutton), TechnologyManagement Handbook, ed. C. Dorff, CRC Press 1998.

She also holds certificates in Corporate Finance and Investment Management and is a COREaccredited mediator.

www.skillcast.co.uk

introduction to marketing and the global marketplace

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