Everything discussed in the lecture about the material and content is explained. A deeper explanation is given of the most important/difficult concepts. The cases and their discussions are included.
Marketing = 4ps?
- Product, price, place, promotion
- Marketing as tactics
- Sales promotions and coupons
- Advertising, logos, brochures
- Marketing as cost (vs. investment)
- The accountability problem
- Surrendered decisions to other dept.
- Pricing, CRM, digital
Marketing is the process of identifying and profitably satisfying customers’ wants and needs
Business strategy is a clear set of plans, actions and goals that outline how a business will
compete in a particular market, or markets, with a product or number of products or services
If companies are bundles of processes designed to deliver customer value: marketing =
strategy
The goals & how to get there
Marketing is changing
- From product-orientation
- Marketing is the execution of business activities aimed at navigating a stream of
products and services from the manufacturers to the consumer(>>>1960)
, - To customer-orientation
- Marketing is the process of identifying and profitably satisfying customer wants
and needs (>>>1990)
“As long as consumption creates value for both consumers and companies, we should
encourage unlimited consumption”
→ we need to rethink this assumption to a system-orientation
Mission statements
Mission statement should give purpose to the company, identity to the brand and act as a
catalyst for innovation at all levels
Financial performance benefits of shared value
1. Enhanced firm reputation
2. Stakeholder endorsement
a. Both internal and external
3. Risk mitigation
4. Improved innovative capacity
a. Via access to knowledge and internal capabilities
, Session 2: Navigating changing markets
Change management → the ‘how’ of change
4 principles of change management
1. Pay attention to market change: be market-driven
2. Control the change process: be market-driving
3. Anticipate reactions to your changes by customers, competitors, etc. (channels,
company, context)
4. Match external changes with internal changes
Marketing is more multiplicative than additive -> if your product is bad, no amount of advertising
is going to complement it (dont mess up on these 4 principles)
New coke
- They were losing market share and risked to give up their #1 position in the market
- Their #1 customer was McDonalds because they wanted to provide everyone with their
favorite soda
- If Coke lost their #1 position in the market, they would have simultaneously have
lost their #1 customer
- In supermarkets, people tended to
1. Be market driven
- Principle: track changes in the market carefully at all times
- Hence, a more appropriate question would have been: why did it take them so long?
- Why did it take coke so long
- Dont fix it if its not broke
- Tunnel vision
Boiling frog syndrome
Frogs will stay in a pan on a fire when the heat is cranked up slowly because the nervous
system filters out small changes
- Gradual changes received too little attention
- Insufficient attention to customers, channels and competitors
- Coke failed to see and understand market changes that took place over a long
period of time
- “Pepsi generation” campaign was started in the 1960s
- Product line expansion started in the 1960s
- Demographic shift to suburbs and associated growth of ‘take-home’
channel started in the 1960s
- Attitude shift among young started in the 1960s
- Characteristics
- Slowness of change
- Possibility to ignore in the short term
, - Certainty to wreak havoc in the long term
- Other examples?
- E.g. starbucks ignoring cultural differences between markets. These are usually
small, but add up the further you move from your home territory
A company should create their strategy guided by market trends and customer needs
instead of the firm’s predictive capacity or current products
2. Be market driving
- Principle: keep tight control of the change process
- Question: which is easier to change? A strong brand or a weak brand?
- Its much easier to change if no one knows you yet because you are in control of
future perceptions → thus, a weaker brand
- A strong brand is difficult to change because its like a huge rock (the stronger the
brand, the bigger the rock). Your company is built on the rock
- Advantages of being on the rock: stability, you see everyone and
everyone sees you (great awareness), very defensive position because
its hard for the competition to climb
- To move it you need a lot of resources and time as you'll move it slowly
- When is the best time to make a change? Constantly (“the time to make
a change is when you don't have to”
- Extensive repositioning of a strong brand is very difficult (due to high awareness levels)
→ need to constantly improve in small steps
- Question: when is the best time to make a change? “The time to make a change is when
you don't have to”
- The attention system indispensable for human functioning → we cannot perceive
everything in our environment (information overload)
- Focus is necessary, but leads to extreme ‘blind spots’
- Attentional blindness: the company is obsessed about Coke losing the No. 1
slot due to a taste problem
- The ‘attention system’ is indispensable for human functioning
- We cannot perceive everything in our environment (information
overload)
- Focus is necessary, but leads to extreme blind spots
- Coke bit into the pepsi challenge of blind taste tests, never realizing they
are insignificant
- Extreme attention to the blind taste tests led them to focus
disproportionally on taste and disregard their biggest company asset
Further implications of attentional blindness
- Focus on taste and blind test combined with asking the wrong questions in +2000.000
consumer surveys
- Coke asked:
- Do you like this taste?
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