Marketing

Competitors who satisfy the same customer need (Smoothies = Fruit = Tablets)

Firms following the same strategy in the market (BMW/Mercedes, Bentley/Ferrari)

• Expanding the total market (new customers, higher usage)
• Protecting the market share against intruders

o   Tactics:

§  Frontal attack

§  Flank attack

§  Encirclement

§  Bypass

§  Guerilla warfare

• Counterfeiter
• Cloner
• Imitator
• Adapter

• End user specialist
• Vertical level specialist
• Customer size specialist
• …

The importance of the right orientation is immense. For example take Apple: Competitors were saying the most attribute they fear about Apple is that they can “forecast” the needs and wants of the customer. Apple produces stuff the customers don’t want… YET. It’s the huge innovation of Apple which makes the firm so successful.

Sustained competitive advantage

• Market offerings deliver a compelling, distinctive customer-perceived value
• Either consider about quality leadership, cost leadership or outpacing

: A market segment consists of a group of customers who share a similar set of needs and wants

• Homogeneous preferences (consumers want the same thing – RARE)
• Diffused preferences (consumers want different things – COMMON)
• Clustered preferences (natural segments // groups with shared preferences – MOST COMMON)

o   Heterogeneous needs and preferences

o   Different buying power and CLV

o   Individualized consumer behavior

o   Make communication more effective

• Cluster Analysis
• Goal of Cluster Analysis: Classify objects according to similarity

o   Measurable

o   Substantial

o   Accessible

o   Differentiable

o   Actionable

= the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market. -> Sustained Competitive Advantage

• Understand the decision – making processes of the market segment (-> lecture 5)
• Identify industry and market competitors, as well as strategic groups (-> lecture 6)

Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competitive brand.

o   Relevant

o   Distinct

o   Believable

o   Feasible

o   communicable

= Associations that are not necessarily unique to the brand, but may be shared with other brands.

• Laddering Method
• Laddering Method: Identify attributes perceived by customers and determine the degree to which they relate to benefits  (= perceived consequences) and values

è How do Customers view the brand?

è Which competitive brands do customers perceive to be their closest competitors perceive to be their closest competitors?

• Multidimensional Scaling
• Multidimensional Scaling: Map the similarities (and differences) of objects in a multidimensional space

• Market offerings have a limited life on the market
• Sales pass through distinct stages, each posing different challenges, opportunities and problems to the seller
• Profits rise and fall at different stages of the product life cycle

• Entering a new market segment
• Adding new models, accessory items, and personalizing options
• Lowering prices to attract the next layer of price-sensitive buyers

Name/term/sign/symbol intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors

§  Identify the maker

§  Create growth opportunities

§  Consumer loyalty

• Brand Equity is the added value endowed on products

Diagnosis based on brand equity measures

è Innovation ( = radically new offering) (Slackline)

è Differentiation ( = Modifying an existing offering) (Nike shoes)

o   Horizontal: Same stage of production

o   Vertical: Different stage of production

o   Lateral: No technological or commercial synergies with current products

è Modification ( = Altering product attributes) (Five-fingers shoes)

è Product Elimination ( = Dropping a product or service)

o   Line Extension (= Existing brand covers a new offering -> new flavor, new color,…)

o   Category Extension (= Existing brand is used to enter a different product category)

80% - 90% of all new offerings are brand extensions

• Avoid the difficulty and costs of coming up with a new name
• Efficiencies across the marketing mix

• Brand name becomes less strongly identified with existing offerings
• Inappropriate extensions can lead to low integrity perception, confusion and frustration

§  Combination of products and services with products and services from another company

§  A market offering can be positioned by virtue of the multiple brands

The sum of the values that consumers exchange for the benefit of having and consuming / using an offering

• Reference Prices
• Price-Quality Inferences
• Price Images
• Price Endings

• Internal:

o   Marketing strategy and goals

o   Marketing mix

o   Cost structure

o   Organizational structure

• External:

o   Market

o   Competition

o   Demand for offerings

o   Other economic factors

• Long-term Perspective ( = Absorption Costing)

è Includes both variable and fixed Costs

• Short-term Perspective ( = Direct Costing)

è Includes only variable Costs

è Fixed Costs / (Selling Price – Variable Costs) (Gleichsetzen:  Kosten = Erlöse )

è Also known as the learning curve: Decline in the average cost with accumulated production experience

The Target Price is based on customer perception of the value of an offering – the value and the price then drive decisions about product quality and design. This Method requires information about the customers’ demand curve (price elasticity of demand)