Introduction to Marketing Mix:

The 4Ps of the Marketing Mix:

Product => quality, packaging, design, brand

Price => retail price, discounts, payment terms, credit terms
Promotion => advertising, public relations, personal selling, emails
Place => retail location, distribution, delivery, downloads.

** The target marketing will affect the 4Ps.

- B2B companies often segment their customers based on the volume of transactions and their
potential value to the firm.
- The concept of the marketing mix emphasizes the fit of the different Ps, as well as the
quantity and size of their interactions. => Consistency is a logical and useful adjustment
between two or more elements.
- Another important point in the relationship elements of the mix is integration. Although
consistency is a necessary feature, integration is an active and harmonious interaction between
the elements of the mix.

** Marketing Mix is the mix of controllable marketing variables that the firm uses to pursue the
desired level of sales in the target market ... Optimization of the marketing mix is achieved by
assigning the amount of the marketing budget to be spent on each element ... to the firm.
Contribution may be measured in terms of sales or profits or in terms of any other
organizational goals"

**Text: To know more

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Development of New Products, Product Levels, Product Lifecycle:

The Job to be Done:

- Sometimes, getting the product perfectly set for the clients’ needs and according to the
clients’ profile is not enough, it is necessary to understand what causes the customer to buy
such product. It is necessary to understand the “job” that arises in people’s lives and leads
them to buy or “hire” a specific product in order to “get the job done”. => In some cases, the
job to be done will give the problem a broader perspective, showing that there are other
competitors, which are not necessarily in the same product category, but that – from the point
of view of the customer – can also get the job done. Ex: milkshake and bagels. -> As a
consequence, there are a lot more competitors and substitutes and the market for such
product, or the “job” to be done, is also much bigger.

New Products: Success and Failure Factors:

- A unique superior product—a differentiated product that delivers unique benefits and a
compelling value proposition to the customer or user—is the number one driver of new-
product success and, hence, profitability. => Delivering products with unique benefits and real
value to users separates winners from losers more often than any other single factor

- However, “reactive products” and “me-too” offerings are the rule rather than the exception.
=> the majority fail to produce large profits.
- The “techie” building a monument to itself also fails -> the technical solution in search of a
market.

Characteristics of superior products:

1) superior to competing products in terms of meeting users’ needs, offer unique features not
available in competitive products, or solve a problem the customer has with a competitive
product
2) feature good value for money for the customer
3) provide excellent product quality relative to competitors’ products
4) offer product benefits or attributes easily perceived as useful by the customer, and benefits
that are highly visible => sometimes managers launch products that are revolutionary but that
address no specific need of the customer, hence offering no relevant benefit.

- Products that cannot ensure its superiority to the competition in the marketplace will not
succeed.
- Products that fall short of claims will get bashed by consumers.
** It is important that not only the objective characteristics of the product are managed, but
also such characteristics as they are perceived => what really matters is how benefits are
perceived by the target consumer.

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Portfolio:

Product Mix Breadth:

- Companies decide to expand the number of product lines offered when there is a favorable
economic opportunity to draw on the company’s existing skills, even if there is little linkage
between the company’s current business.

- However, there is more benefit if the company can develop a new product that connects in
some way to what it already does. Some connections could be:
1 – Undertaking a business whose profit stream will probably correlate negatively with the
profit stream of existing business;
2 – Leveraging a key asset of the company that underlies the current product offerings;
3 – Tapping into complementary-in-use products and thus enabling the firm to be a “total
solutions supplier”.

- In all these cases, there is the need for management to evaluate if there will not be any
negative links, such as competition for scarce resources or anything that could damage the
product mix.

Product Line Depth:

Vertically Differentiated => products vary in their quality and price level;
Horizontally Differentiated => products have the same quality level and are differentiated to
accommodate particular tastes.

- Product line depth

decisions are driven by how many different segments within the target market the firm
chooses to serve. Unless the product line is well managed, management’s desire to serve
customers (or retail partners) with precisely the right product for them can lead to excessively
long product lines.

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Services:

The Difference Between Goods and Services:

- Product => anything that a firm offers which satisfies a particular consumer want or need.
They can be good or services.

* Goods -> physical products. It is possible to test it, assess its quality, check how it feels
* Services -> intangible, which makes it harder to assess them. Ultimately, the only way
to know the quality of a service before experiencing it is through word of mouth; asking friends
and other people that have already tried it. It is really hard to try the service yourself without
actually engaging in the purchase process.
 Services are also inseparable from the consumer, he or she has to be present or take
part in the delivery of the service. Because of that, the consumer has the ability to affect the
outcome of that service.
The variability also impacts the outcome of a service because, unlike mass produced
products that perform exactly the same among themselves, services can vary a lot depending
on the person that is providing it. For this reason, it is important to have persons very customer
oriented and familiar with their tasks. Finally, the fact that the service is consumed at the time
that it is purchased.

Main Differences:
a) Intangibility
b) Inseparability
c) Variability
d) Perishability

The Role of Services in the Firm’s Marketing:

-  it was suggested that marketing moved from a goods-dominant perspective, in which
tangible output and discrete transactions were central, to a service-dominant perspective,
where intangibility, exchange processes, and relationships are central => the service-centered
dominant logic represents a reoriented philosophy that is applicable to all marketing offerings,
including those that involve goods in the process of service provision 

- The fundamental units of exchange in the service-dominant logic are skills and knowledge,
which, therefore, are the source of competitive advantage. In this sense, firms that offer
physical goods may also be offering skills and knowledge => Goods replace services. Hence,
customers are co-creators of value since value doesn’t exist to anyone prior to good or service
usage , which implies that value can only improve if a relationship is established with the
customer with the objective to learn more profoundly what it is that they need and want.
- in the quest for the best offer, manufacturing firms might realize that they should offer not
only goods but also services to improve their customer’s experience. ->  The offering of a
product + service bundle offers many advantages, such as setting up barriers to competitors,
creating a dependency between the firm and its customers, and differentiating the market
offering.

Characteristics that determine how customers will value and use the firm’s bundle:
1) Complementarity => the degree to which the value to the customer increases when the good
and the service are used together.
2) Independence => the degree of dependence a good has on a service to work properly.

The interaction between these two dimensions indicates the existence of four different types of
bundles:

Flexible Bundle => customer can easily buy them separately, but their value can be significantly
increased by combining them in flexible ways.
Peace of Mind Bundle => allows companies to leverage strong brand to attract customers to an
otherwise undifferentiated service, or vice versa.

Multibenefit Bundle => goods and services are often inseparable, so the benefit to the customers
comes from offerings added to the basic one.

One Stop Bundle => the combination does not provide additional value itself. Instead, customers
are attracted by the reliability of service and shopping convenience.

Designing Services Processes:

Developing a Service Blueprint:

- First, it is necessary to identify all the key activities involved in creating and delivering the
service in question, and then specify the linkages between these activities. Initially, it is best to
keep activities relatively aggregate in order to define the “big picture”, which can be done by
adopting a simple flowchart documenting the process from the customer’s perspective.

- Next, more details can be added. Typical service blueprints have the following characteristics:

1) Front-stage activities: involve the overall customer experience, the desired inputs and outputs,
and the sequence. It is what the consumer can see and use to assess service quality.

2) Line of visibility: distinguishes between what customers experience “front-stage” and the
activities of employees and support process “back-stage” where customers cannot see them. ->
Some firms are too focused on operations and neglect the customer’s purely front-stage
perspective.

3) Back-stage activities: activities that must be performed to support a particular front-stage step.

4) Support processes and supplies: many support processes involve a lot of information. The info
needed at each step in the blueprint is usually provided by information systems.

5) Potential fail points: when managers are aware of these fail points, they are better able to
design them out of a process and have backup plans for failures that are not preventable.
6) Identifying customer waits: these can then either be designed out of the process, or if that is
not possible, firms can implement strategies to make waits less unpleasant to customers.

7) Service standards and targets: should be established for each activity to reflect customers
expectations. -> the final service blueprint should contain key service standards for each front-
stage activity, including the estimated time for the completion of a task and maximum customer
wait times in between tasks. Standards should then be used to set targets for service delivery
teams to ensure that service processes perform well against customer expectations.

=> Most service processes can be divided into three main steps:
1. Pre-process stage;
2. In-process stage;
3. Post-process stage.
** People are more upset about a delay during the pre-process or post-process stages than the in-
process stage. Also, the pre- and post-process stages typically are not the core of the service and
customers want efficiency and convenience in those stages.

Communication Strategy:

-  the communications strategy conveys the company’s value proposition to consumers, using
compelling narratives to establish, maintain or modify a brand’s image into consumers’ minds.

The 6M Model:

Strategic Intent – Mission and Market:

- In order to turn prospective buyers into clients, it is necessary to drive down a funnel or the
consumers’ decision-making process.
- In the first three stages, marketer’s goals must be to inform and to build positive attitudes
towards their brands. =>  the mission must state clearly which phase of the decision-
making process consumers is going through.

- After defining the mission of the strategy, marketers must decide which audience
they want to target. If marketers don’t make this decision, they will spend financial
and human resources into “deaf ears”.

Different ways to communicate with an audience:

Mass marketing => the product offered appeals to the whole market, so the message is
directed to the largest number of people, or maybe the product/service is consumed
by a large group, and it would make no difference to segment the message.

Segment marketing => when marketers choose to communicate with their consumers in subsets,
because their products fill different needs for different groups.

Customized Communications => when marketers have the option to choose their audience by
their lifestyle preferences.

C2C marketing => consumers that carry companies’ messages to their social networks or real-
life.

Strategic Intent: Mission and Market

- To establish the strategic intent, managers need to (1) set an objective for the communication
(mission), and (2) define the audience for the communication (market).

- Before consumers will make a purchase, they must be aware of a product’s or service’s
existence and persuaded that it is the best solution for their needs. The mission of marketing
communications can therefore range from facilitating that awareness to actually closing the deal.

- Communication can be proactive, working to further a company’s business goal, or they can be
reactive, responding to communications that consumers initiate about the brand.

- Advertising often serves as a trigger in the problem recognition stage, reminding consumers of
their needs or helping them identify problems they are encountering.
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Mission: Defining Communication Objective

- Understanding what will motivate a consumer to purchase helps marketers focus the mission
of an integrated marketing communications plan.

- Some early marketing models used a funnel analogy to represent the main stages in a selling
process => the Think-Fell-Do process -> a leaky funnel, in which a large number of consumers
fail to progress to the next stage is costly and inefficient.

- Contemporary models reconceptualize the funnel analogy, allowing for variation in purchase
journeys, depending on the type of consumer, product or service category, and purchase
occasion.

- Establishing the specific mission of any marketing communications, then, requires an

understanding of consumers’ position in the purchase journey.

- Consumers are often very good at avoiding marketing communications, especially in their
initial consideration of product choices. To capture attention, therefore, marketing
communications need to deliver engaging and useful content to consumers in convenient places
at appropriate times.

- The objectives of marketing communications for established products that face powerful
competitors might focus on communicating the differentiating features or benefits of a product,
aiming to build knowledge or preference.

- A deep understanding of consumer behavior is essential to understanding the product features

that customers most value or the benefits they most hope to obtain. Setting the mission of a
marketing communications plan outlies the job that needs to be accomplished.

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Market: Defining the Audience

- Defining the audience well is a critical step in designing communications that will speak in
ways that are more resonant and relevant and to which potential customers will be receptive. The
more precisely the audience is defined, the better able managers are to choose the best story to
tell and the right place in which to tell it.

- Defining the audience correctly goes beyond identifying demographics characteristics. It

involves psychographic information, the audience’s needs, preferences, and decision-making
process. Finally, it involves data on shopping and media habits are essential for choosing
promotional tactics and maximizing message placement.

- Today’s consumers are interactive and participatory in marketing communications. They both
co-create and disseminate marketing messages authored by them and by the company. They
regularly provide online assessments of products and services, telling their own consumer
experience in chat rooms and other social media and creating consumer-generated advertising or
brand parody videos that they disseminate via the internet.

- Managers must consider whether the audience is passive or participatory. Some marketing
programs are designed to be one-way and monological or unidirectional, while others adopt a
two-way and dialogical, or bidirectional approach. Still, other programs are multidirectional,
where the firm communicates with consumers, who then communicate with each other; in this
case the audience becomes a misnomer, given the level of interaction and control that consumers
have over the message.

- As marketers work to define their audience, they must also consider the processing style that
consumers are likely to use as they encounter marketing communications.
1) System 1 => our brains operate automatically
2) System 2 => in which we consciously “allocate attention to the effortful mental activities that
demand it.

The elaboration likelihood method (ELM) helps explain how consumers differentially process
and respond to persuasive messages and the effect these different processing paths have on their
attitudes.
- A higher level of cognitive engagement triggers a central route to persuasion.
- The peripheral route to persuasion is the path takes by consumers who do not actively engage
with the message. => these consumers take a shortcut, relying on peripheral cues, such as the
attractiveness of the spokesperson.

Push VS Pull Mkt. Communications:

Push Strategies are designed to motivate distribution channel partners or intermediaries to sell
the product to consumers and thus target the sellers of a product as the audience.
Pull Strategies are designed to build demand with end consumers so that their desire for the
product brings them to the point of sale. -> target the users of the product as th audience.
Marketing Communications:

Strategic Execution: in this part it is decided the message and the media. Marketing
communications must transform the positioning statement into compelling storylines. Sometimes
marketers hire professional storytellers to create stories that entice consumers into buying. => To
help this process, an array of appeals can be used, be them rational or emotional, such as humor,
fear, sexual etc.

Media: marketers must choose which media to use.

ATL (above the line) marketing = has a very broad reach and is largely untargeted => mostly
used for building awareness and goodwill
BTL (below the line)/POS = targets specific groups of people => best used for conversions and
direct response

Advertising => any form of non-personal communication, such as tv, magazines, internet pages,
radio etc.

Sales promotion => incentives for the consumption or purchase of a product or service, such as
experimenting the product in the supermarket, giveaways etc.

Events and Experiences

Public Relations => can be a consulting firm or a department within the company, which is
responsible for managing the brand.

Direct Marketing => direct communication with the customer through e-mail marketing, or
direct mail, active telemarketing services etc.

Personal Sales => all personal interaction with salespeople, clerks or consultants of a company
or brand.
Digital Marketing => entails search engines and social media.

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Strategic Impact: it regards budget -> it is the role of the marketer to ensure the project is
successful and also meets the right KPIs with adequate financing

Money => there are three main methods to allocate budget to communications

1) Advertising-to-Sales Benchmark – setting the budget by default and then deciding what to do
with it. => the return of the ad spent varies a lot from one industry to the other.
2) Closest Competitors – the goal is to avoid being “outshouted” by competitors -> difficult to
measure the result of this strategy because just measuring the share of voice of a company or
brand may not translate into increase sales.
3) Objective and Task Method – means allocating the budget to fit the goals of the company.
Marketers should set their communication goals and then fit their budget accordingly -> the only
one recommended by the authors.

Measurement => it is important to add metrics to analyze each of the elements of message
effectiveness, such as message delivery (reach, impressions, frequency) and message impact,
which translates into ROI – also known as ROMI (return on marketing investment) or MROI
(marketing return on investment).

Common metrics:

1) Advertising: for ads, the most common metric is the number of people reached and impacted
by the ad;
2) Direct marketing: response rate and conversion rate;
3) Sales promotion: increased sales lift – how many of the total sales can be attributed to the
program
4) Personal selling: conversion rate
5) Public relations/event marketing and sponsorship: results are measure by the number of
impressions or people reached by the program.

** Sections 2.3 and 2.4 od the Harvard curriculum for communication.

Strategic Execution: Message and Media

Message – Translating Strategy into Story

- Mkt. communications stories flow from the brand’s value proposition or positioning statement.
Effective mkt. communications translate the positioning statement into a compelling storyline.

What Makes a Good Story?

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Digital Marketing:

Introduction:

In the digital real, marketers have to distinguish between:

- Paid media;
- Owned media; - own website, social media page
- Earned media. – consumers sharing information through their social media platforms

Outbound Marketing: it is when a company actively reaches out to their target consumers, which
is not constrained to digital channels. In the digital real, it is performed with search ads and
display ads.

1) Search Engine Marketing (SEM): it is the strategy in which a company displays their ads in
search engines and their display networks

Inbound Marketing: it is a way to engages consumer by creating content including blogs,

podcasts, white papers, and search engine optimization so that a company is found when
consumers search for information.

=> sometime this chart takes

the form of a funnel, which is called “digital marketing funnel”

1) Social Media
2) Search Engine Optimization (SEO): it is concerned with making the company’s or brand’s
website appear in the first positions of the organic search – different from SEM strategy, which
is done by paying keywords, so your ad appears for consumers.
Marketers cannot pay or bypass the Google index of the web and its page rank to appear
first. What they can do is make sure the company’s website uses the right content, keywords,
ands tags to improve its relevance and authority.
3) Mobile Marketing

** Read pages 3 – 35 digital marketing booklet