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Contemporary Issues in Marketing (Contd). Marketing becoming increasingly difficult today…. Increasingly difficult to find & keep competitive advantage, due to: Rapid copying of products Shortening of PLCs Increased info available to customers

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Marketing becoming increasingly difficult today l.jpg
Marketing becoming increasingly difficult today…

  • Increasingly difficult to find & keep competitive advantage, due to:

    • Rapid copying of products

    • Shortening of PLCs

    • Increased info available to customers

    • Customers growing defence against commercial messages

  • Kotler says that it is still possible to find niches to be filled by imaginative entrepreneurs, e.g., Starbuck

  • Need to spot these niches and fill them in a way that others cannot duplicate

Total 47 slides


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What marketing strategies work best today?

  • Focusing, positioning & differentiation

  • Company needs to define target market carefully

  • Must communicate a unique benefit position

  • Differentiate in a way that competitors will find hard to copy

Total 47 slides


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6 Companies that Kotler admires

  • IKEA, Southwest Airlines, Wal-mart, Target, Home Depot, Dollar General, Aldi’s – these have found innovative ways of lowering price/cost

  • Sony, Toyota, Intel, Starbucks – these have boosted quality to high levels

  • Body Shop, Ben & Jerry’s, Avon, Kraft – these have exhibited social concience

  • Barnes & Noble, Charles Schwab, FedEx – these have innovated the business model

  • Progressive Insurance, Tetra – these have discovered and dominated niches

Total 47 slides


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Total 47 slides


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Mass Marketing

  • Far from dead – Coke, McDonald

  • Today, mass marketers need to be discerning on the channels for communications

  • However, tendency towards segmentation

Total 47 slides


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How to Segment?

  • Demographic, Geodemographic (add geography to demographic)

  • Later, Behavioral (classification according to readiness to buy, motivation, attitude), psychographic (according to lifestyle characteristics)

  • Today, loyalty segmentation (attention to longer staying and profitable customers)

  • Internet facilitates segmentation (these days, web sites dedicated to babies, senior citizens, Hispanics, etc)

Total 47 slides


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Total 47 slides


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New or Old Customers?

  • Historically, companies tried to get new customers

  • Now, companies are paying attention to keeping customers (cost 5 times as much to get new customers)

  • Relationship marketing involves much more than maintaining a customer relationship dept; now, need to consider the concept of “customer share”

Total 47 slides


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Narrowcasting

  • Marketers must move away from broadcasting to narrowcasting

  • People no longer interested in messages received thru TV/radio (unless ad is in an area of interest)

  • Need to define target customers and their media habits; messages then put in focused media

Total 47 slides


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Total 47 slides


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Effective marketing…

  • Effective marketing begins with research into local marketplace to find segments not satisfied with current offerings

  • Company then decides to target segments in which it can provide superior offerings

  • Positioning, next step – companies communicate its offer to target market segments

  • Company cannot position before segmentation & targeting

  • E.g., Volvo realised attractive segment for safe cars. Volvo adopted the “safest car” positioning.

Total 47 slides


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Differentiation

Total 47 slides


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Key ways today to differentiate today

  • Companies need to learn to compete in new ways (be creative)

  • Say, by developing and delivering goods faster, thru better design/styling, augment offer with more benefits

  • E.g., Today, Japan is working to produce more “sensuous” automobiles

Total 47 slides


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Innovation

Total 47 slides


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Innovation is…

  • Not just about better and newer products, but includes developing better systems and business models/products

  • Companies with good marketing and good innovation: Sony, 3M, Pfizer

  • IKEA, South West Airlines, Virgin, Home Depot, Barnes & Noble invented new ways to run old businesses

Total 47 slides


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Landmark Innovations (according to Kotler)

  • Retail: Hypermarket, mega-retailers,

  • Market logistics: FedEx

  • Quality innovations: 6 Sigma, zero-defects, TQM

  • New sales channels: direct mail, telemarketing, online marketing

  • Physical inventions: computers, cell phone, Internet

  • Financial innovations

Total 47 slides


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More…

Total 47 slides


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Marketing Research

  • Online marketing offers opportunities

  • To learn about customers, markets, segments, competitors, distribution channels & trends

Total 47 slides


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Additional skills required by marketing depts today

  • Brand building/positioning skills

  • Database management/data mining skills

  • CRM skills

  • PR and “buzz marketing” skills

  • Event management/experiential marketing skills

  • Direct mail/catalogue and telemarketing skills

Total 47 slides


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Kotler’s Favourite Marketing Thinkers:

  • Walt Disney

  • Ray Croc (McD)

  • Howard Shultz (Starbuck)

  • Ingvar Kamprad (IKEA)

  • Sam Walton (Wal-Mart)

  • Richard Brenson

Total 47 slides


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Companies that interact well with customers

  • Harley Davidson (create community)

  • Easier with good brands (branding is important)

Total 47 slides


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Strength/Weakness of US Companies (Marketing)

  • S: Competitive culture & cost discipline

  • W: Short-term horizon

Total 47 slides


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Total 47 slides


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More on 4Ps

  • 4Ps  4Cs

    • Product  Customer value

    • Price  Customer costs

    • Place  Customer convenience

    • Promotion  Customer communication (not promotion!)

  • Kotler suggests adding 2 more Ps (part of megamarketing tools): Politics & Public Opinion (receptive govt & people)

  • Kotler: advertising overdone, while PR is underdone; direct marketing tools are also rising in importance

Total 47 slides


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Other tools available to marketers today

  • Info

  • Software to manage info

  • Putting marketing plans and approaches on computer so that all Managers have access (company-wide approach rather than marketing dept’s responsibility)

Total 47 slides


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Internet: who will benefit most?

  • Customers

    • Price more transparent

    • Customers able to order more specific version of product

    • Customers less assaulted by intrusive large-page ads

    • For businesses, those that align with new technologies will benefit (Yahoo!)

Total 47 slides


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How has Internet affected 4Ps?

  • Price has become more important

  • Promotion (advertising on Internet still not too effective)

  • But sales promotion more effective

  • Place: some retailers may be affected by online buying

Total 47 slides


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Product

Total 47 slides


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Branding

  • Strong brands will be major defence against price competition

  • Strong brands create trust and image of better quality – customers willing to pay more

  • Concentrate on brand performance not image (image is ceasing to have power)

  • Successful brands of tomorrow: niche brands – brands that deliver unique value (in terms of 4Ps) to a focused segment

  • Think in terms of “brand asset management” – brands of their own PLC. Need for rejuvenation

  • The Internet will still allow branding, but price will also become sensitive

Total 47 slides


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Price

Total 47 slides


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Price

  • Before hypercompetition, globalisation and the internet, superior brands could charge 20-50% more.

  • Today, more likely 10-20%

  • Today, buyers propose what they pay airline tickets, hotels, etc)

  • Internet likely to drive down prices

Total 47 slides


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Price – how to compete with China

  • Short-term: lobby for protection – but not a good solution for long term

  • Long term: search for better ways to offer superior value

Total 47 slides


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Place

Total 47 slides


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Direct selling

  • Direct selling is recommended by Kotler as one of the strategies for “place” (say, thru e-commerce)

  • However, this might be a problem if this is carried out together with a distributor – he might resent this

  • This problem can be dealt with by “brick-and-click” companies

Total 47 slides


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Promotion

Total 47 slides


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TV seems to be losing effectiveness

  • The average American exposed to several hundred messages per day and is trying to tune out

  • Growing advertising clutter, increasing number of channels, availability of zapping mechanisms and reduced TV watching by some groups

  • Challenge: marketers need to consider other methods of consumer attention

Total 47 slides


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Possibilities instead of TV

  • Sponsorships (names on stadiums, whole teams and on individual athletes)

  • Mentions on talk shows

  • Product placement

  • Street level promotion: actors walking in street and asking passers-by to take photos with them on mobile phone

  • Celebrity endorsement

  • Body advertising (college kids agreed to put Dunkin doughnut logos on their forehead during match)

  • PR and word-of-mouth playing greater role

  • Internet?

  • Sales promotion – but don’t overdo it – may “cheapen” the brand image

Total 47 slides


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Advertising

  • Kotler sees 3 choices in view of today’s developments vis-à-vis advertising:

    • Advertise in a number of media channels in the same time slot

    • Advertise on the super bowls (cricket), Olympics and major events that attract wide audience

    • Build giant database with names of customers/potential customers that have greatest interest in company’s offering

Total 47 slides


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PR

  • Kotler thinks more should be spent for PR

  • More chance of getting message through

  • More believable

  • More likely to create “buzz”

    • Buzz marketing likely to rise in importance

Total 47 slides


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Kotler’s Predictions on Media

  • Newspapers will decline in circulation

  • Though TV will continue to attract people, these people will pay less attention to ads

  • The use of radio will increase/

  • Targeted magazines will increase in numbers

  • Billboards will increase in impact (people spending more time in their cars)

  • Internet, email and chat rooms will increase

Total 47 slides


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More…what will online do to retail?

  • Kotler sees decline in travel agents, insurance agents, stockbrokers, car salespeople, bookstores, music stores

  • Retailers need to move from merely carrying goods to “more satisfying store experiences”

Total 47 slides


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What can small stores do with competition from the likes of Walmart?

  • Move to specialty or superspecialty merchandising

  • Distinguish themselves with superior customer service

  • Intimately knowing customers well

Total 47 slides


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Stakeholder marketing Walmart?

  • Companies have moved away from vertical integration to outsourcing

  • Need, therefore, to maintain relationships with stakeholders (suppliers, employees, distributors, Govt, etc) to have win-win situation

  • Mutual trust and selecting/motivating partnerships is key to stakeholder marketing

Total 47 slides


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Internet marketing Walmart?

  • Need to consider (besides just having website):

    • Use Internet to test new products/marketing concepts using online focus groups, consumer panels

    • Assign someone to research competitors’ strategies, tactics and resources on the Internet

    • Use Internet to train/communicate with employees, dealers and suppliers

    • Use website to recruit new employees

    • Distribute coupons and samples using website

    • Monitor chat-room converstions

Total 47 slides


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Kotler’s opinion on why many online companies went bust Walmart?

  • Online marketers may be technically proficient but lack financial & marketing knowledge

  • They fail to build good biz model

  • Main reasons why they went bust:

    • Rushed into market, no proper market research/planning

    • To get customers, spent large amounts on mass marketing

    • Devoted too much effort to get new customers rather than stress loyalty

    • Didn’t understand customer behavior (online surfing/purchasing)

    • Websites poorly designed/poor infrastructure for shipping, etc

Total 47 slides


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What do we do about China? Walmart?

  • Companies can think of China as a great big market (not just a low cost competitor)

  • Based on your strengths/weaknesses, go into China

  • China will need many things

Total 47 slides


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