Strategic Marketing

ES-BUSI-006283

LECTURE I – INTRO + CH. 1 & 2

Prof. Vincent Lacape

Dr. Annelies Costers

Tuesday 13 February 2024

Strategic Marketing Introduction
PREPATORY COURSE BUSINESS & CORPORATE STRATEGY

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Today’s agenda

Ch. 1: Strategic market management

Ch. 2: Customer analysis

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Chapter 1

STRATEGIC MARKET MANAGEMENT:

AN INTRODUCTION AND OVERVIEW

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 Chapter 1

Key learning objectives

§ Understanding what strategic marketing is
§ Understanding why it is important
§ Understanding what is a business strategy (and its components) is
§ Defining a business scope. In what area they operate, what are they core
products or services (Important wherever you end up working)
§ Defining business scope dynamics. A business can never be static.
§ Understanding what strategic analysisis
§ Understanding why it is important

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Strategic marketing: Introduction

1. WHAT IS MARKETING?
2. WHAT IS STRATEGY?
3. WHAT IS STRATEGIC MARKETING?

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Strategic marketing: Introduction
WHAT IS MARKETING?

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Strategic marketing: Introduction

Marketing is…

‘the activity, set of institutions, and processes

for creating, communicating, delivering, and exchanging

offerings that have value

for customers, clients, partners, and society at large’

(American Marketing Association, 2012 online dictionary)

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 Strategic marketing: Introduction
Marketing is…
‘the management process of
anticipating, identifying and satisfying
customer requirements
profitably’
(The Chartered Institute of Marketing, 2001)

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Marketing is everything and everywhere: Spread your
message, attract an audience

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 ZZ
MEDIA + BU

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Strategic marketing: Introduction

Marketing = Only for products?

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Strategic marketing: Introduction

Marketing = advertising?

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Strategic marketing: Introduction

Marketing = sales?

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 Marketing
≠ Sales

Tends towards long-term satisfaction Tends towards short-term satisfaction

of customer needs. More relational
Time Frame (LTV)
thinking, engage the customer in a
more durable long-term relationship
with a brand or company.
Tends to greater input into customer
design of offering (co-creation)
of customer needs; part of the value
delivery process as opposed to
designing and development of
customer value processes
Tends to lesser input into customer (Baines, Fill, and Page
design of offering (co-creation) (2011) ‘Marketing’)

Tends to high focus on stimulation of Tends to low focus on stimulation of

demand demand, more focused on meeting
existing demand
Cf. relational vs. transactional marketing

By selling something what the business is receiving is validation for their product concept.
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If nobody is willing to pay money there is no need for this product, there is no business.
This is product market fit.

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 Marketing = only ‘for’ profit?
« Marketing is selling people something they don’t need and can’t afford »?
• Marketing is readily used by local governments, churches, museums,
charities, NGOs (who also need to do segmentations) universities, political
parties, zoos, and public hospitals
(all of which operate without profit as central goal)
(Baines et al., 2011: 592)

Changing market
foundation

• Profit isn’t the objective

• E.g., generating awareness, acquiring volunteers, informing people,
collect funding, lobby for changes in legislation and policy, …

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 Marketing = not in times of economic
Strategic marketing: Introduction
crisis? That’s a window of opportunity

‘Don't you dare cut your marketing

budget. That is one of the first mistakes
businesses make during times of
economic crisis.‘
(Lake, About.com marketing)

Procter and Gamble - During the Great Depression they pushed Ivory soap.
Intel - In 1990-1991 during economic difficulty they pushed out the campaign
"Intel Inside".
Heinz, Tesco, Aldi – in Covid pandemic lockdown times

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 Strategic marketing: Introduction
WHAT IS MARKETING?
"Marketing is the process of planning and executing the conception, pricing, promotion,
and distribution of ideas, goods, services, organizations, and events to create and
maintain relationships that will satisfy individual and organizational objectives.“
(Boone and Kurtz, 1998)
WHAT IS STRATEGY?
“The organization’s goal directed decisions and actions in which its capabilities and
resources are aligned with the opportunities and threats in its environment” (Coulter,
2008)
WHAT IS STRATEGIC MARKETING?
The process of making strategic decisions to satisfy the needs of the customer better than
competitors, and to achieve the organizational goals within the given constraints.

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Strategic marketing: Introduction

Collecting the information on

the environment
SWOT

Goal &
Strategy

Implementation Marketing
mix 4P’s

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 Strategic marketing: Introduction

THE ADDED VALUE OF STRATEGIC MARKETING

q Externally oriented (customer, competition etc.) à proactive
q Information-based à learning organization
q A long term view

THUS, STRATEGIC MARKETING MANAGEMENT HAS THE POTENTIAL TO:

q Improve decision making
q Anticipate the consideration of strategic choices
q Force a long-range view
q Provide a management and control system
q Help cope with changes

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 Strategic marketing: Introduction

5 KEY MANAGEMENT TASKS

1. Strategic analysis
2. Innovation
3. Multiple businesses
4. Creating sustainable competitive advantages
5. Developing growth platforms

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Strategic marketing: Introduction

1. Strategic analysis

• Getting information
e.g., customers, competitors, trends

• Filtering information
e.g., impactful trends vs. mere fads

• Converting information into actionable analysis

e.g., allocating resources and creating competencies accordingly

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Strategic marketing: Introduction

1. Strategic analysis

Big Data

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Strategic marketing: Introduction
2. Innovation
• Key to successfully winning in dynamic markets

• Multi-dimensional challenges
• ORGANIZATIONAL CHALLENGE
(create context that supports innovation)
• BRAND PORTFOLIO CHALLENGE
(own the innovation)
• STRATEGIC CHALLENGE
(right mix: incremental to transformational)
• EXECUTIONAL CHALLENGE
(bring it to the market)

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Strategic marketing: Introduction
2. Innovation “People don't want to buy a
quarter-inch drill, they want
• ‘BETTER MOUSETRAP FALLACY’ a quarter-inch hole”
(T. Levitt, HBS).

Product centric thinking

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Strategic marketing: Introduction

“You’re not buying lipstick, you’re buying confience.”

Look at your own purchases. It’s about benefits or emotions

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 Strategic marketing: Introduction

Levitt, T. (2004) Marketing Myopia, Harvard Business

Review, Summer 2004, 138-149

Avoid Marketing Myopia

“Define the business in terms of the basic customer
need rather than the product”

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Strategic marketing: Introduction

« People actually do not buy gasoline. They

cannot see it, taste it, feel it, appreciate it, or really
test it. What they buy is the right to continue
driving their cars and transport themselves »

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 Strategic marketing: Introduction

3. Multiple businesses

• Multiple business units

defined by channels/countries/product categories…

• Decentralization:
• Pro: accountability, fast response, deep understanding, close to markets
• Contra: redundancies, lack of synergies, inefficiencies (lack of scale economies),
confused brands, less brand recognitionà AGGREGATION MOTIVATION

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Strategic marketing: Introduction
Cf. Ch. 7 synergies
3. Multiple businesses
• Home care (e.g. Persil)
• Personal care (e.g. Schwarzkopf)
• Adhesives, sealants, surface treatments (e.g. Loctite)

• Lighters
• Shavers

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 Strategic marketing: Introduction

4. Creating SCAs (Being differentiated)

3 conditions:
• Valued,
• perceivable,
• hard to copy

How?
• Assets, competencies, expertise Cf. Ch. 7
• Organizational synergy

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 Strategic marketing: Introduction
5. Developing growth platforms

• Revitalize core businesses

• Create new business platforms and growth strategies (Chap 12)

NB: sometimes ‘less is more’… (cf. Ch. 14)

5 key management tasks
à Focus in positioning
à Focus allocation of resources and competences to core business -Strategic Analysis
-Innovation
4 main investment patterns:
• Grow
-Managing multiples businesses
• Maintain -SCA
• Milk
-Growth opportunities
• divest

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 Strategic marketing: Introduction

A BUSINESS: DEFINING A BUSINESS SCOPE

= organizational unit with a defined strategy and a manager with sales and profit
responsibility

DIMENSIONS TO DEFINE ‘A BUSINESS’ OR BUSINESS UNITS:

• Product line
• Country or Region
• Channels (Online / Retail etc)
• Segments (Account sizes for example)

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Strategic marketing: Introduction

A BUSINESS STRATEGY

Where to Compete
The product-market investment decision

A Business Strategy

How to Compete
Value Assets & Function area
proposition competencies strategies and programs
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 Strategic marketing: Introduction

WHERE TO COMPETE – THE PRODUCT-MARKET INVESTMENT STRATEGY

q Scope of the business

§ Which products do we offer and which not?
§ Which markets or customer segments are we targeting and which not?
§ Which competitors do we challenge and which do we avoid?
§ What do we do ourselves (make) and what do we outsource (buy)?

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 Strategic marketing: Introduction

Example: Exki restaurants

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 Strategic marketing: Introduction
Example: Exki restaurants
• Which products do we offer and which not?
• Which markets do we serve and which not?
• Which competitors do we challenge and which do we avoid?
• What do we do ourselves (make) and what do we outsource (buy)?

Products: natural, fresh, and ready to consume food products (NOT: French fries)
Market: People who want to have a quick healthy meal (NOT: people who to have an extensive dinner served
by waiters etc.).
Competition: Sandwich bars, fast-food chains (NOT: restaurants awarded with a Michelin star)
Make or buy: Exki has controlled suppliers (NOT: prepare all the food in the restaurant’s kitchen from scratch)

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 Strategic marketing: Introduction

• If you’re currently employed, how would you define the business scope of your
company?
• If you’re currently not employed, how would you define the business scope of the
VUB?

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 Strategic marketing: Introduction

WHERE TO COMPETE – THE PRODUCT-MARKET INVESTMENT STRATEGY

q Scope of the business
§ Which products do we offer and which not?
§ Which markets do we serve and which not?
§ Which competitors do we challenge and which do we avoid?
§ What do we do ourselves (make) and what do we outsource (buy)?

qThe dynamics within this scope: growth directions and investment strategies
§ What products will we offer in the future?
§ Which markets will we serve in the future?
§ With whom do we want to compete?
§ What shifts do we make regarding the make or buy decisions?

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 Strategic marketing: Introduction
Cf. Ch. 10-13
WHERE TO COMPETE – THE PRODUCT-MARKET INVESTMENT STRATEGY
• Scope dynamics: Ansoff matrix

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Strategic marketing: Introduction

Where to Compete
The product-market investment decision

A Business Strategy
Cf. Ch. 8
How to Compete
Value Assets & Function area
proposition competencies strategies and programs

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Strategic marketing: Introduction
HOW TO COMPETE - ASSETS AND COMPETENCIES

q Elements that you do very well (competencies) or that you possess (assets)
that strengthen your position relative to the competition.
q A wide variety of possibilities

q For the basis for a sustainable competitive advantage

Examples
q Zara’s advantage relies on an optimized supply chain and inventory
management > respond to trends (competencies)
q Apple’s capacity to innovate (competency)
q Chanel’s Brand name (Asset)
q Amazon’s customer service and return policies, negotiation power with
suppliers, distribution capacity (competencies)

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Strategic marketing: Introduction
HOW TO COMPETE: ASSETS AND COMPETENCIES

• Strategic competency = what a business unit does exceptionally well, that

has a strategic importance to that business
à usually related to knowledge / process
• E.g., CRM programme, Manufacturing, Promotion, R&D expertise

• Strategic asset = a resource that is strong relative to that of competitors

• E.g., Brand name, Synergies, Location, Symbol

Power relative to competitors:

• Points of difference
• Points of parity

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Strategic marketing: Introduction
HOW TO COMPETE – FUNCTIONAL STRATEGIES AND PROGRAMS

q Central question: How can we deliver the proposed value to the customer?
q Includes manufacturing strategies, distribution strategies, communication
strategies, brand-building strategies etc.

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Strategic marketing: Introduction

Collecting Information
Needed to make decisions
STRATEGIC ANALYSIS
External analysis Internal analysis Chap 6
• Customer Chap 2 • Performance analysis Strategy is a
• Competitor Chap 3 • Determinants strategic continuous and
• Market/submarket Chap 4 options
• Environment Chap 5 evolving
process (see
also feedback
STRATEGIC ANALYSIS OUTPUTS loops)
Opportunities, threats, strengths, weaknesses,
problems, uncertainties

STRATEGY IDENTIFICATION, SELECTION,

IMPLEMENTATION

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Strategic marketing: Introduction

To be
reavaluated
on a
constant
basis

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 Strategic marketing management process

• SMM = a system designed to help management create, change, retain a

business strategy and to create strategic visions

• STRATEGIC VISION = projection of a future strategy(/-ies); provides

direction and purpose for interim strategies and activities

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Chapter 2

EXTERNAL AND CUSTOMER ANALYSIS

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 Chapter 2 – Intro external analysis

Key learning objectives

§ Collecting actionable information to take business decisions
§ Knowing how to identify and deal with strategic uncertainties

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External analysis: Introduction

STRATEGIC DECISIONS
• Where to compete
Product-market investment decision
• How to compete
EXTERNAL Value proposition
Assets & competencies
ANALYSIS Functional area strategies & programmes

IDENTIFICATION ANALYSIS
• Trends/future events • Information-need areas
• Threats/opportunities • Scenario analysis
• Strategic uncertainties
Level of analysis

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External analysis: Introduction

WHY EXTERNAL ANALYSIS?

q An organization interacts with its environment

q An organization responds to its environment

ORGANIZATIONS AS OPEN SYSTEMS

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 External analysis: Introduction

WHAT IS EXTERNAL ANALYSIS?

The process of scanning and evaluating an organization’s external environment.

§ Trends and future events
§ Threats and opportunities
§ Strategic uncertainties

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 External analysis: Introduction

STRATEGIC UNCERTAINTIES
= Unknown elements that affect the outcome of strategic decisions
Some examples:
ON WHAT DOES THAT DEPEND?
STRATEGIC DECISION STRATEGIC UNCERTAINTY

Investing in a specific product market? Will a major firm enter?

Investment in a new technology? Will the technology be replaced soon?

Changing the offering price? How price sensitive is the market?

Investing in off-shore manufacturing? How will the foreign economy develop?

ANALYSIS

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 External analysis: Introduction

DEALING WITH STRATEGIC UNCERTAINTY

q Objective of external analysis is to identify strategic uncertainties

q Strategic uncertainties must be ranked in order to focus analysis
à This rank is a function of IMPACT and IMMEDIACY

q IMPACT
– Extent to which strategic uncertainty involves trends and
events that will impact current and future business (+)
– The importance of the involved business (+)
– The number of involved businesses (+)

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 External analysis: Introduction

DEALING WITH STRATEGIC UNCERTAINTY

q IMMEDIACY
– The strategic uncertainty’s probability of occurrence (+)
– The time span in which the occurrence can be expected (-)
– Available reaction time; relative to need reaction time (-)

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 External analysis: Introduction
1) Should we expand our business overseas to the US? à Will Donald Trump get re-
elected or with the Democrats take over?
2) Should we invest in a branded app with customer tracking facilities? à Will GDPR
restrict direct marketing purposes?
3) Should we further invest in educating teachers? à Will AI take over in education?
4) Should we optimize the fuel efficiency of the current Diesel fueled vehicles in our
portfolio? à Will fossil fuels be forbidden in all city centers?
5) Should we strive for gender balance in boards and committees? à Will gender
movements affect management of organizations?
6) Should we invest in machine learning being a car-manufacturer? à Will self-driving
cars become the new standard?
7) Should we build our in-house competences on neuromarketing, being a market
research agency? à Will consumers be unravelled via their bionic (next to organic)
brain?
…

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 Chapter 2 – Customer analysis

Key learning objectives

§ Understanding what customer analysis is
§ Understanding why it is important
§ Conducting customer analysis
§ Understanding STP
§ Understanding why it is important
§ Knowing to discern between B2C- and B2B- marketing
§ Being able to identify unmet customer needs

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Strategic analysis
THE ROLE OF EXTERNAL ANALYSIS IN STRATEGIC MANAGEMENT

c tu re: Ne
ay ’s le le c x t
Tod Ch. 2 tur
e

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 Segmentation IF YOU TRY MARKETING TO EVERYONE
YOU'LL END UP MARKETING TO NO
ONE
SEGMENTATION
q “THE” customer does not exist
q The total market is heterogeneous
q Market segmentation divides the market in homogeneous subgroups

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Segmentation

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Customer analysis

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 Segmentation

= Market segmentation requires dividing a market

into smaller segments with distinct needs,
characteristics, or behaviors that might require
separate marketing strategies or mixes.

à These groups need a different marketingmix, to ensure that

the elements of the marketing mix are designed to meet particular
needs of different customer groups
Kotler & Armstrong (2017)

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Segmentation Inclusion by Exclusion

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 Segmentation

THE RATIONALE OF SEGMENTATION

q Customers will be more inclined to buy something / take action when doing so
addresses their specific needs (“high perceived value”)
q Different customer segments respond different to marketing offerings
q Every customer (both in a B2C and B2B setting) has needs. The company that fulfills
these needs best (“offers the highest perceived value”) wins the customers.
Organizational competences and assets are different.
q Segmentation also allows for refining the scope of the competitor analysis (Ch. 3 –
strategic groups)

A company cannot satisfy all the different needs, some groups of needs better suit the
companies’ skills and offerings better than other

Conant, Mokwa, and Varadarajan (1990); McKee, Varadarajan, and Pride (1989); Piercy and Morgan
(1994); and Vorhies, Harker, and Rao (1999).

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 STP logic

‘You cannot be everything for everybody’

q Segmentation
i.e., the identification of customer groups that respond differently from other groups to
competitive offerings

q Targeting
i.e., selecting which segment to serve

q Positioning
i.e., implementing marketing strategy to appeal to the chosen segment

“Within a reduced market space, it is possible to create a dominant position

that competitors will be unwilling/unable to attack”
(Aaker & McLoughlin, 2010: 27)

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STP logic

Segmentation Targeting Positioning

3. Investigate 5. Develop positioning

1. Choose criteria for
attractiveness of for each TG
segmentation
segments
2. Profile resulting 6. Create a marketing
4. Choose a target mix for each TG
segments
group

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STP logic

Kotler & Armstrong (2017)

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STP logic

Consumers Consumer needs Company

↔
Company’s offering
SEGMENTATION
Identifying
meaningfully different
groups of customers

TARGETING
Selecting which
Price Promotion
segments to serve

POSITIONING
Implement marketing
strategies to appeal
to chosen target
segments

Place
Product
(distribution)
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 Segmentation
Customer characteristics as segmentation criteria
q B2C
q Geographic
q Demographic
q Psychographic
q Behavioral
q B2B
q Geographic
q Type of organization
q Size of the firm
q Operational characteristics
q Buying methods
q Buying situation

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Segmentation criteria: B2C

GEOGRAPHIC
à Region: area, city, country, nation, counties, …
à Size city: amount of inhabitants
à Population density: urban, suburban, rural,…
à Climate: sea, tropical, …

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Segmentation criteria: B2C

Urban, suburban, rural

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Segmentation criteria: B2C

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Segmentation criteria: B2C

Population density

Region

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Segmentation criteria: B2C

DEMOGRAPHIC
à age/life-cycle stage à education level
à gender à religion
à size family à race
à nationality à family life-cycle stage: single, young family, …
à income à occupation

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 Segmentation criteria: B2C

age

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 Segmentation criteria: B2C

Gender

Versus

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 Segmentation criteria: B2C

religion

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 Segmentation criteria: B2C

Sexual orientation

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 Segmentation criteria: B2C

Life-cycle stage

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Segmentation criteria: B2C

Income

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 Segmentation criteria: B2C

PSYCHOGRAPHIC
à Social Class
à Lifestyle & values
à Personality

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 Segmentation criteria: B2C

VALS=
Values, attitudes, & lifestyle

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 Segmentation criteria: B2C

Social class: Volvo “Luxury for real people”

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 Segmentation criteria: B2C

Social class: Status

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 Segmentation criteria: B2C

Values: Patagonia
(Cause Marketing)

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 Segmentation criteria: B2C

Nike: Colin Kaepernick Ad (September 18)

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NIKE

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Millennials and gen Z like brands who stand up for what they
believe in. They like companies who show they are more than
just a product line (Belief driven buyers)

-Brave piece of advertising, encouraging

us to be courageous by being courageous
themselves in chosing sides, they can’t
afford to be neutral to reasonate with
their target audience
-Consumer LTV in mind
-Increase Brand loyalty
-Focused on the future not the past (Old
people aren’t their core demographics)
-Great brands sell emotions

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 Segmentation criteria: B2C

Gilette: Toxic Masculinity (January 2019)

Nelson Peltz: (Activist investor appointed to the board of P&G Q2 2018)

« The millenials today don’t

trust and are rejecting big
brands, they want an
emotional attachement
(Nelson Peltz 2017) »

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• “Goods and services are consumed as part of culture, and I think it’s just natural that marketers try to place their goods
and services into cultural trends”
• « Detractors have denounced Gillette’s approach as preachy and inauthentic, a desperate attempt to gain sales in the
face of increased pressure from low-cost competitors »
• “Consumers are smart, and you underestimate your audience at your own peril,” “They assumed their target would be
receptive to the message, but it was delivered in a bizarre fashion, towing the line between humor and earnestness.
While the message clicked for some (including many women), it made others feel uncomfortable or downright angry.
And who can blame them? No one likes being told they’re bad and then asked to buy something.”
• « Brands can no longer afford to be neutral if they want to resonate. The luxury of standing in the middle of the road and
saying, ‘Well, I’m not going to take a position’ — I think those days are gone »
https://knowledge.wharton.upenn.edu/podcast/knowledge-at-wharton-podcast/gillette-toxic-masculinity-ad/
• « I believe Gillette’s example illustrates the potential impacts that come with the nuanced choices brands
must make when touching on the big issues of the day. Nike’s choice of Position in the Kaepernick ad
was integral to the brand equity it was seeking to stoke with its urban youth target » Peter Horst

No Villain to
oppose

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 So how did Gillette’s approach play out? The data shows that it
actually broadened their audience.
« Women’s razors are more expensive, society expects women to shave everywhere
and women are frustrated with the whole experience. Engaging women positively in
the shaving industry has been a neglected opportunity. » Jane Zupan

62% female with 75% even under 45

-Women are a key influence of
men’s purchase decision
-Maybe Gillette weren’t targetting
their core demographics

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 Segmentation criteria: B2C
Criteria for segmenting consumer market

1. Independent of the product (i.e., consumer characteristics)

à geographic
à demographic
à psychographic

2. Dependent of the product

à Behavioral: Occasion, searched benefit, usage rate, user status, loyalty,…

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 Segmentation criteria: B2C

BEHAVIORAL
à Buying behavior: price promotion sensitivity, RFM, …
à Occasions: normal day, special occasion,
à Searched benefits: good service, quality, value for money, eco-friendly, …
à User status: no user, normal user, ex-user, new user, …
à Phase of buying probability: plan to buy, no information, informed
à Usage rate: light, heavy user, …
à Loyalty: brand loyalty vs. variety-seeking
à Opinion on product: …

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Segmentation criteria: B2C

Usage rate

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 Segmentation criteria: B2C

Searched benefits: What consumers are looking for when they purchase the product

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 Segmentation criteria: B2C
User status

Email First order

capture discount

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 Segmentation criteria: B2C

Buying behavior / User rate

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 Segmentation criteria: B2C

loyalty

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Segmentation criteria: B2C

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 Segmentation criteria: B2C

Occasion

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WHY META
IS SO
POWERFUL

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 Strategies used to target each segment. Companies spend a lot to identify
their different customer segments, then they can develop specific strategies to
target each group effectively

DIAMOND OF LOYALTY KOTLER’S CRM SEGMENTATION

Brand loyalty,
an important consideration in allocating resources
Usually only loyal to
the cheapest option Profit impact of customer retention, basis of loyalty
management and why big brands spent so much to have data
Knox, S. (1998), ‘Loyalty-Based Segmentation and the Customer Development on this. And why Branding is so important
Process’, European Management Journal, Vol.16, No.6, pp 729-737.
Kotler & Armstrong, “Principles of Marketing”, Pearson.

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Segmentation criteria: B2C

With the Data they collect Netflix knows for

example:
-The type of Movies or Series you watch
-When you hit pause or fast forward
-Your watching Behavior (Are you the type to
watch one episode of something and switch or
watch a full season in one day)
-At what time do you watch
-The type of searches that you hit
-What device do you use to watch etc…

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100 Million dollars was a risky bet but they knew:
-Original UK version of House of Cards was succesful
-Political thrillers are popular on Netflix
-Kevin Spacey is a very popular actor as well as other
main actors and David Fincher the director
-They made 10 different trailers targetting different
customers based on their segmentation
-So many awards nominations and an estimated 2
millions new suscribers on the trimester of the launch

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 Segmentation criteria: B2C

MOTIVATIONS AS SEGMENTATION VARIABLE (What are you looking for in a

product? Think of Marketing Myopia article)

q In terms of consumer behavior motivation reflects the desire for a product,

service, and/or experience
q Motivation is the drive to satisfy a need through the purchase/use of a product,
service and/or experience
q Thus, as motivation drives behavior, it is the ultimate segmentation variable + it
can help to define strategy

Example: business traveller vs. vacationers

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 Segmentation criteria: B2C

DETERMINING MOTIVATIONS
Identify motivations via qualitative research
q Interviews
q Focus groups Means end chain technique
q Case studies (laddering – ‘why?’)
q Etnographic research
Clustering motivations
q Expert (management) panel
Assessing motivation importance
q Trade-off approach (e.g., conjoint analysis; …)

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Segmentation criteria: B2C

FIRST WHY An explaination that has to do with the product attributes

A consequence of this attribute

SECOND WHY

Usually brings up something that deals

with social values
REPEATEDLY
ASKING WHY People often buy products because of the social value
fulfillment they receive from buying this product. Subjective
and matter of perception

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 peers

Source: https://rockresearch.com/understanding-consumer-decision-making-with-means-
end-research/

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 Segmentation criteria: B2C

Ten Universal Values:

1. Self-direction
2. Stimulation Self Direction Stimulation
3. Hedonism
4. Achievement
5. Power
6. Security
7. Conformity
8. Tradition
9. Benevolence
10.Universalism

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 Hedonism Achievement Power Security

Conformity Tradition Benevolence Universalism

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 Targeting

Multiple segments vs. focus strategy?

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 Targeting
-Whole marketing
with one offer
Targeting 3 options: (ignore the
segments)
-Cost effective
-Expands Reach
-Supports brand
recognition

Often more suited for

very competitive
markets

Concentrated on one
segment or niche

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McDonalds –
« Never lost in
translation »

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Targeting

B2C-marketing B2B-marketing
Targeting a ‘consumer market’ Targeting a ‘business market’

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 Segmentation criteria: B2B

SEGMENTATION CRITERIA

q B2B
q Geographic
q Type of organization
q Size of the firm
q Operational characteristics
q Buying methods
q Buying situation

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 Targeting
Imagine you’re the purchasing manager for VUB:
Consumer markets Business markets
Fulfillment of Individual and family needs Organizational needs
Decision makers (#) Relatively few Relatively many
Decision time Relatively short Relatively long
Decision complexity Relatively limited Relatively complex

Purchase size Relatively small Relatively large

Consequences of poor purchase Limited Potentially critical

Nature of purchase Standardized Customized

Switching costs Limited Large
Promotion focus Psychological benefits Utilitarian benefits
Promotion tool Advertising Personal selling
Geographical concentration Relatively dispersed Relatively concentrated

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Anderson & Narus (2004), Business market management

Targeting

Vineyard Wholesalers
Buys grape plants, irrigation Buys barrels of wine,
systems, distillery machines Bottles, stocking space, etc.
etc. Sells bottles wine
Sells barrels of wine

Retailers
Buys bottles of wine,
stocking space, etc.
Sells bottles of wine

Consumer
Buys bottle of wine
Consumes bottle of wine

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STP

1. which segmentation criteria seem

to have been used?

2. which targeting approach is used?

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Targeting

Customer is not necessarily also consumer

Customer ≠ Consumer
Buyer, purchaser, patron, client, shopper Consumer

Buys, purchases, obtains a Consumers, uses the product,

product/service from a shop, website, service
business, another customer (e.g. Ebay)
e.g., mother buys toys e.g., child plays with toys

Cf. push vs. pull marketing

(Baines, Fill, and Page (2011) ‘Marketing’)
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Targeting

Cf. push vs. pull marketing

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Targeting

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 Lect 1
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 Positioning

UNMET NEEDS à opportunities! PERCEPTUAL MAPS

Example market research OUTPUT

INPUT
CUSTOMER SURVEY
1. How do you evaluate[Brand X] in terms of the
following attributes:
a. Low quality High quality
1 7
b. Expensive Not expensive
1 7

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Great Tool for Marketers
-Visual impact
-Communicating where your brand is heading
-Confirm alignement with business and brand strategy
-Identify competitors better

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 Positioning
• Market research: ‘multidimensional scaling’ à ‘perceptual
mapping’
• Example 2
Void in the soft-drinks market?

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Which
d
with th rink category
e attrib is
ute ‘sp associated m
arkling ost
’?

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Which drink category is associated
most with the attribute ‘sparkling’? Step 1: draw the imaginary extension of the
vector ‘sparkling’, in the direction of the vector.

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 Lem
Which drink category is associated on
most with the attribute ‘sparkling’? -l im
es
od
a >s
pa
rk lin
gf
rui
t ju
ice
>c
ola

Step 2:
(a) Identify those drink categories which are
positioned on the map, far in the direction of
the (extension of) the vector ‘sparkling’.
(b) Draw a perpendicular projection of each of
these drinks’ dot onto the (extension of) the
vector ‘sparkling’ to tell exactly which one is
associated most with the attribute
‘sparkling’

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Which drink category is associated
most with the attribute ‘sparkling’?
Answer: ‘lemon-
lime soda’

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Which
d
with th rink category
e attrib is
ute ‘sp associated le
arkling ast
’?

Lect 1
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 Which drink category is associated
most with the attribute ‘sparkling’?

Step 1: draw the imaginary extension of the

vector ‘sparkling’, in the OPPOSITE direction of
the vector, through the origin

Lect 1
08-02-2024 | 138
 Which drink category is associated
least with the attribute ‘sparkling’?

Step 2:
Bot (a) Identify those drink categories which are
t led
wat positioned on the map, far in the opposite
er >
iced direction of the (extension of) the vector
tea
> hot ‘sparkling’.
tea
> hot (b) Draw a perpendicular projection of each of
coff these drinks’ dot onto the (extension of) the
ee
vector ‘sparkling’ to tell exactly which one is
associated least with the attribute ‘sparkling’

Lect 1
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 Which drink category is associated
least with the attribute ‘sparkling’?

Lect 1
Answer: ‘hot coffee’ 08-02-2024 | 140
 Positioning

UNMET NEEDS

Example market research

‘Critical incident technique’
q What product-use experience problems have emerged?
q What is frustrating?
q How does it compare to other product experiences?
q How can the product be improved?
‘Conceptualizing the ideal experience’

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Closing
FURTHER READING FOR TODAY’S CLASS:
• Textbook Ch.1 + 2
• Paper on Canvas:
‘Levitt (2004) ‘Marketing myopia’, Harvard Business Review, July-
Aug, 138-149’

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Closing
QUESTIONS?

Course theory:
Vincent.lacape@vub.be

Group assignments/practice sessions:

Annelies.joke.f.costers@vub.be
Office PL5.3.51 (appointment)

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