ASB 4006 MARKETING STRATEGY (2020/21)

Lecture 4

From ‘Market Research to understand Customers’

to
“Creating Value for Customers”
 Progress through Module
Lect 1 “Marketing – Philosophy or Process?”

Lect 2 “Planning in Marketing Environment”

Lect 3 “Market Research to Understand Customer/Buyer”

- Virgin case questions (a) & (b)

Today Lect 4 “From ‘Market Research to understand Customers’

to “Creating Value for Customers”
- Virgin case questions (c), (d) & (e)

NEXT WEEK “Managing Products & Managing Competition

W/c 02 November is Reading Week

 Why/how Virgin was so successful as
Late Entrant into FinServs?
Questions (a) & (b) – Collaborate 19 October & DiscBrd
- “where did Virgin come from?” - was success because Virgin already
had experience in offering ‘services’?
- FS satisfied same ‘need’ as Virgin offerings that existed at that time?

For Collaborate 26 Oct & DB - Virgin offerings before FS

C. Who were Target customer for each of initial 7 (non FS) offerings

D. How frequently might each offering be purchased? - daily, monthly,

annually? How does this frequency compare to that of purchasing
financial services?

E. Competition facing each of 7 offerings? – names, company size,

how long established, company involvement in other sectors?
The Marketing Environment
Macroenvironment

Economic Political/
Microenvironment legal

Customers
Suppliers

Distributors
Competitors
Social/ Ecological/
cultural Physical

Technological
 Creating Customer Value
Positive Customer Negative
value

Perceived Perceived
benefits sacrifice

Product benefits Monetary costs

Service benefits Time costs
Relational benefits Energy costs
Image benefits Psychological costs
Provider’s perspective - Value Chain
 Providers with different capabilities

Key success factor Our company Competitor 1 Competitor 2

Innovativeness 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Financial strength 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Technical assistance to
customers 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Product quality 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5

Well-qualified workforce 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
Access to international
distribution channels 1 2 3 4 5 1 2 3 4 5 1 2 3 4 5
 Customers with different needs
Market segmentation - identification of individuals or
organizations with similar characteristics that have significant
implications for determination of marketing strategy

Target market
selection

Tailored
Market
Diferentiation marketing
segmentation
mix

Opportunities
and threats
 Value -> Customer Satisfaction
(ServQual Model)

“Satisfaction”

“Deliver” “Communicate”

“Create”

“Understand”
 Perceptual Map of supermarkets
High
A price

Wide Narrow
product product
range G range

X
F
E
Low
price
Competitive Industry Structure (Porter)
Potential
entrants
Threat from
new entrants
Industry
Bargaining competitors Bargaining
Suppliers Buyers
Power Power
Rivalry among
existing firms
Threat of
substitute
products
Substitutes
 Creating Service Offerings

“Three key aspects to creating effective service experiences

for customers:-

- Where the customer best fits in the organisation

- The sort of processes involved (processing people,

possessions, or information)

- Services should be defined from a marketing rather than an

operations perspective” (Lovelock 1991)
 Selecting Target Markets
The choice of which market segment(s) to serve with a The choice
of which market segment(s) to serve with a tailored marketing mix.

Market attractiveness

Competitive Political, social and

Market factors factors environmental
factors
 The process of market segmentation
and target marketing

Disaggregated market Segmented market The target market

1 2 3 1 2 3
c1 c3
c2 c1 c3 c1 c3
c4
c6 c5 c2 c4 c5 c2 Marketing
c4
c5 mix

c7 c8 c7 c6 c8 c7 c6 targeted at
segment 3 c8

The characteristics Grouped into Segment 3 judged

of individual segments with most attractive
customers similar
characteristics
 Segmenting consumer markets
Consumer segmentation

Behavioural Psychographic Profile

Benefits sought Lifestyle Demographic

Purchase occasion Personality Socio-economic

Purchase behaviour Geographic

Usage

Perceptions and beliefs

 Target marketing strategies

 Undifferentiated marketing

 Differentiated marketing

 Focused marketing


Customized marketing.
 Undifferentiated Strategy

Marketing mix Whole market

Post 7Ps Everybody

Office
 Differentiated Strategy
Segment 1
Marketing mix 1
Segment 2
Marketing mix 2

Marketing mix 3 Segment 3

Utilitarian Cust.
M.Mix 1
M.Mix 2 Trendy-Casual
LEVI’s
M.Mix 3 Price shopper

M.Mix 4 Mainstrea
m
M.Mix 5 Traditionalist
 Focused Strategy

Segment 1

Segment 2 Marketing mix

Segment 3

Independent
v ed
r DIY Shops
U n se

Cement Builders
7Ps
Manufacturer Merchants
Un
s erv
ed
National
DIY Chains
 Customized Strategy
ORGANISATION INDIVIDUAL
INDIVIDUAL CUSTOMERS
MIXES
Marketing mix 1
Customer 1
Marketing mix 2
Customer 2
Marketing mix 3
Customer 3

M.Mix 1 Nissan
Industrial
Electronic M.Mix 2 Birdseye
Systems
M.Mix 3 Heinz
Supplier

M.Mix 4
Levis
 Factors used to assess the company’s
capability to compete
Exploitable marketing
assets

Managerial capabilities
and Capability to Cost advantages
commitment compete

Technological edge
 Key tasks in positioning

1. Market segmentation

2. Target market Positioning

3. Differential advantage

Where and how we compete

 Keys to successful positioning

Clarity Consistency

Successful positioning

Credibility Competitiveness
 For Collaborate 26 Oct & DB
Virgin offerings before FS
- similar customer characteristics?
C. Who were Target customer for each of initial 7 (non FS) offerings
Empty Empty
Young Young Middle- nester
At home nester Solitary
couple no parents aged married
single married retired
children parents retired
working

- Records
- Airways
- Megastores
- Radio
- Hotels
- Holidays
- Condoms
 For Collaborate 26 Oct & DB
Virgin’s offerings - similar
Purchase Frequency, & Competitors?
Could Virgin expect to be successful with Financial Services because there
were similarities with their 7 existing offerings - Records, Airways, Condoms,
Megastores, Radio, Hotels, Holidays?
 
D. How frequently might each offering be purchased? - daily, monthly,
annually?
How does this frequency compare to that of purchasing financial services?

E. Competition facing each of 7 offerings? – names, company size, how

long established, company involvement in other sectors?