My notes from Introduction to Marketing (part of Business Foundations Specialization) on Coursera.

Week 1 Marketing strategy and Brand Positioning

Market orientations

Seller’s Market	Buyer’s Market
Focus on company / Product-focused marketing	Focus on customer/segment and competition
Sell as much as you can	Go after some customers / say no to others
Profitability comes from volume	Profitability comes from creating value for selected customers
Wide market	Narrow market / harvest from loyalty

Product orientation

• Persuade customer to want what the firm has
• Generic products
• Competitive advantage is the lowest cost
• Profitability driver is the market share

Marketing Orientation

• Persuade firm to offer what the customer wants
• Differentiated products
• Competitive advantage is quality/service/customer knowledge
• Profitability driver is customer share/customer loyalty

Experience Orientation

• Manage customer’s entire experience with the firm
• Experiential value
• Competitive advantage is transformtaion/customer as co-creator of value
• Profitability driver is buss/referrals

Trust Orientation

• Prioritize building a relationship of trust and discipline
• Genuine value
• Competitive advantage is trust
• Profitability driver is discipline

Principle of Marketing

3 Principles of Marketing

• Principle of Customer Value
• Principle of Differentiation
• Principle of Segmentation, Targeting, and Positioning

4 P’s of Marketing

• Product
• Place (physical, online)
• Promotion (advertising, sales)
• Price

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

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Strategies for leadership

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• Operational Excellence - e.g. tends to have more strict hierarchy
• Performance Superiority - e.g. innovative R&D company
• Customer Intimacy - “yes” culture / consulting

Segmentation and Targeting

Segmentation

Identify variables that allow one to segment the market
Market Segment is the process of dividing a market into distinct subsets

Targeting

Evaluate the attractiveness of each segment and choose a target segment

Positioning

Identify positioning concepts for each target segment, select the best, and communicate it.

Segmentation Methods

Characteristics of the Customer
Benefits Sought (comfort, asthetics)
Systematic, Product-Related Behaviors (purchasing behavior)
Cohort analysis (Boomers, Gen X, Gen Y)
Geographic segmentation
Zip (post code) clustering

Segment Selection Criteria

• Segment size
• Growth of segment
• Value of Segment
• Stability
• Current company position within segment
• Ease of entry into segment
• Ease of competitive entry into segment
• Number and strength of competitors

Create segment attractiveness study

Brand positioning

What is a Brand?

• A trademark
• A promise of specific benefits
• It is what consumers tell each other

Positioning Statement

• Target Segment (For Whom)
• Point of Difference (Reason to Buy)
• Frame of Reference (Point of Pairity, associations consumer views as necessary to be considered credible)

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The Elevator Speech

• 30 sec elevator speech
• Mental map of what your brand is / all associations
• Mental map -> Core Brand Values -> Brand Mantra
• Short three- to five-work phrases that capture the essence or spirit of the brand positioning and brand values

Designing the Brand Mantra

• Used internally to guide decisions - what the brand is and what it is not
• Brand function - the nature of the product or service
• Descriptive modifier - clarifies service nature
• Emotional modifier - how exactly does the brand provide benefits

Brand Mantra Considerations

• Communicate (define business boundaries)
• Simplify (memorable, short)
• Inspire (higher level of meaning)

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Experiential Branding

• Brand stimulates senses, heart and mind
• What do customers get? (sense, feel, think, act, relate)
• Connects the company and the brand to the customer’s lifestyle
• What does the brand stand for?

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Experience within the 4P’s

• Product - build in experiential features
• Place - design, fragrance, music
• Promotion - noteworthy, brand personality
• Price

Characteristics of great brands

• Consistency in delivering in their promise
• Superior products and processes
• Distinctive positioning and experience
• Aligned of all commitments
• An ability to stay relevant

Week 2 Customer Centricity

Product-Centric Approach

• Targets Operational Excellence and Performance Superiority
• The goal of the firm is to maximize shareholder value
• Maximum profits through volume and cost reductions
• Focus on scale
• Key performance indicators such as market share
• Growth through extyending the product
• Product-oriented org structure
• The competitive advantage: product expertise

Cracks in the Product-Centric Approach

• Tech-enabled product development -> commoditization
• Tech-enabled information flow -> smart customers
• Tech-enabled delivery -> retail saturation
• Globalization
• Deregulation
• Customers want “end-to-end solutions”
• Information systems enable customer-level tracking

Customer-Centric Approach

Three Cheers for Direct Marketing

• The individual customer is the unit of analysis
• Know who their customers are and what they buy
• Aim to determine marketing communication based on past purchases
• Constantly determine individual customer value

What is Customer Centricity?

• Targets Customer Intimacy
• Support selected set of customers and get more customers like them
• Maximize long-term financial value
• Align company’s development/delivery activities round selected customers
• Putting valuable customers in the center
• Focus on “Which customers will be valuable in the future?”

Living in a Customer-Centric World

• The goal of the firm is to maximize shareholder value
• Distinguish the profitable customers from the less profitable ones
• Focus on customer profitability (customer lifetime value CLV) rather than past profits
• Success arises through enhanced customer acquisition, retention, and development
• Customer-centric organizational structure
• The competitive advantage - “relationship expertise” with respect to customers
• No company can be 100% customer-centric
• You don’t want to put “all the eggs in one basket”, you should keep less valuable customers, have a healthy balance
• Being customer-centric with some customers, product-centric with the rest

Week 3 Go to Market Strategies

Online/offline competition

• Delivery times
• Uncertainty about quality/fit
• Cost of returns

Friction

• Search friction (finding better deals take extra time)
• Geographic Friction (products available only at specific location)
• Internet reduces friction of search and geography

The Long Tail

• Popular vs niche products
• You want to keep popular products available quickly (offline)
• Our taste becomes more unique because we get access to more products (long tail), not only the most popular onces
• Online offers wide range of selection (long tail)
• Researchers find out that people buy more niche products over internet due to search, recommendation systems, reviews
• Long tail concept can be applied to geographies (main sales in huge cities, less transaction in smaller towns)

Preference Isolation

• Offline stores focus on satisfying needs of majority
• Online aggregates people with different interests and a store can reach scale
• Customers are more likely to buy online if a local market doesn’t have longer sales distribution

How Internet Retailing Startups Grow

• Customer acceptance of online retail depends on offline shopping costs (closer, faster, …)
• Sales evolution in eCommerce is structured and predictable (transactions happen close to the previous sales due to living close to each other/ talking)
• Migrate from “Good” to “Great” requires expansion to niche products (the long tail)

Customers and Digital Marketing

• Never pay more to acquire than you plan to capitalize CLV (customer lifetime value) > AC (Acquisition rate)
• CLV needs to incorporate RLV (residual lifetime value)

Influence and how information spreads

• Six degrees of separation
• Influence spreading out from you will not go more than 3 steps

Pricing strategies

• By making a recognizable product cheaper you send a message that all other products are at a lower price
• Cents in the price mean that a merchast sqeezed all possible places to make it as cheap as possible
• When $44 becomes less popular than $49 (discount from $50)
• Marginal cost (floor), customer willingness to pay (ceiling), competition drops the ceiling, and what is the amount we need to raise the price from the floor to motivate everyone
• Price sensitivity gets affected by ease of comparison, expenditure, shared expenses, price/quality inferences,

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5Cs and Pricing

• Customers (price sensitivity; if I raise price by 1% how much will demand decrease; psychological issues)
• Company (consistency in the product line, image, finance)
• Collaborators (what are incentives)
• Competitors (aggressiveness, willingness to respond, position leader or follower)
• Context (market situation)

The 7ms

• Market (who should I talk to?)
• Message (what should I tell them?)
• Mission (what do we intend to achieve?)
• Message Design (how should I say it?)
• Media Strategy (how do I reach them?)
• Money (how much do I need to spend?)
• Measurement (was it worth it?)

Week 4 Branding

Brand Messaging & Communication

• Perception (The process of developing an interpretation of a stimulus, deciding what a stimulus means)
• What customers perceive is what affects their actions
• What is perceived is not necessarily what is “true”
• People construct perceptions on the fly
• We interpret data based on what we know already
• Shape, color, visual illusions, proximity bias (close -> similar), similarity (if its close to a quality product, it must be of good quality as well)
• Brand is not equal to product

Choosing a brand name

• Brand elements (name, logo, symbol, character, packaging, slogan, color)
• Choice criteria (memorable, meaningful, appealing, protectable, adaptable, transferable, )
• Consistence and integration
• Names are the most difficult to change

Effect of brand names

• Consumers
• Employees
• Firm
• Investors

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Picking brand names is China

• Coca-Cole (Kekoukele - tasty fun)
• Reebok (Rui bu - quick steps)
• Colgate (Gao lu jie - superior cleanliness)
• Cadillac (Ka di la ke - means nothing)

Brand elements

• Rules about color (ultimate goal is to own a color)
• Color can also be used to separate product lines
• Different viewers experience color differently
• Colors can create very strong perceptions (luxury - gold, silver, black, white; gender - blue, pink)
• More “universal” axis (doesn’t change as much from culture to culture) is arousal

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Rules about color

• Red - stimulates the appetite, also love, excitement
• Blue - most preffered by men, productive, curbs appetite
• Green - tranquility and health, fertility, money, nature
• Brown - reliability, boredom, practicality
• White - purity, innocence, empty, spacious
• Black - evil, death, mourning, slimming
• Yellow - bright, gives you energy
• Orange - excitement, enthusiasm, caution, warmth
• Lavender - calms the nerves, relaxation
• Purple - royalty, wealth, success, wisdom
• Pink - calming, warm, girl’s color

Slogan/tagline

• Can be tailored to a positioning strategy
• Can remove some the ambiguity associated with brand
• Can generate its own equity/emotion
• Can reinforce the name or symbol
• Easy to say, unique, short
• Can be protected and trademarked
• Imperative (Just do it)
• Descriptive (You’re in good hands)
• Superlative (The ultimate driving machine)
• Provocative (Got milk?)
• Clever (Drivers wanted)

Packaging

• Package influences perception of a product
• Influences not only at the point of purchase, but also at the point of consumption
• Aesthetics and function are both critical
• Know your distribution channel

Persuasion

• An attempt to change belief and attitude
• Central Route to Persuasion (when motivation to use is high)
• Peripheral Route to Persuasion (when motivation to use is low)
• Preipheral 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 (limited availability)
• Q-rating shows how appealing a celebrity is
• Celebrities = individuals charged with detailed and powerful meanings

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Repositioning a Brand

• Brand must be actively managed over time
• Brand should be consistent, otherwise people will rationalize it however they want
• Introducing changes over time (evolving brand/trademarks)
• Consistency over time is very valuable in building strong brands

5 Reasons for Brand Change

• The identity/execution was poorly conceived
• The target for the identity/execution is limited
• The identity/execution has become out of date
• The identity/execution loses its edge, becomes old-fashioned
• The identity/execution has just become “tired”