marketingmanagement octobre 2013 session1 (1)
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Marketing ManagementA Strategic Perspective
Dr Gaël BonninProf. & Researcher Marketing Department RMS
Course Objectives
• Opportunity to enhance core competencies :– Deep understanding of the role of marketing and of its
key components– Ability to design a successful marketing strategy and
to create customer satisfaction and value– Application of marketing concepts to real life business
problems and ability to find solutions (gauged via a case study project) within a group context
– Team work and cohesion– communication in English
2
Grades• Cases (team) • Exam (individual)• Participation (individual, includes individual
preparation of cases)• Individual preparation of cases is
compulsory: 1 page with your name and the issue for the case and possible solutions
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Course Outline
Session 1 – AM Introduction to classMarket Orientation and market knowledge (marketing research, consumer & organizational behavior)
Session 1 – PM Cases: Customer mobile phone + The launching of the super bock ‘mini’
Session 2 – AM Market strategy (market analysis, segmentation, targeting, definition of value proposition)
Session 2 – PM Case: Xiameter
Session 3 – AM Marketing mix 1 : product and price
Session 3 – PM Case study: Unilever
Session 4 – AM Marketing mix 2 : place and promotion
Session 4 – PM Case study: Unilever
Session 5 EXAM
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References
• Readings– Lambin J-J. (2012), Market-driven management: strategic and
operational marketing, Dunod
• Other references– Solomon M.R., Marshall G.W. and Stuart E.W (2011), Marketing: Real
People, real choices, Pearson– Solomon M., Bamossy G., Askegaard S. and Hogg M.K. (2010),
Consumer Behaviour, a European perspective, Prenctice Hall– Malhotra N.K. (2009), Marketing research: an applied orientation,
Pearson
• In french– Goudey A. et Bonnin G. (2011), Marketing pour Ingénieurs, Dunod
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Session 1.The Marketing Concept
& Market Knowledge
1. The marketing concept
2. Understanding consumers
3. Market research
Business model components (Christensen et al, 2006)
Value Proposition• Target customer• Job to be done
• Offering
Profit Formula• Revenue model• Cost structure• Margin Model
• Resource Velocity
Key Processes• Processes
• Rules and metrics• Norms
Key Resources• People, tech, IS, channels, ecosystem, alliances, brands
Market and environmental trends
Market and environmental trends
Market and environmental trends
Market and environmental trends
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Competition for customers
Competition for resources
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The marketing concept
A key premiseThe path to creating value for the firm and it’s stakeholders lies in providing
superior value to customers
AMA 2007
“The activity carried out by organizations and individual , through institutions and process,
that allows to create, communicate, deliver and exchange offers that have value for the
consumers, customers, marketers and the society »
8
The marketing conceptTactic Marketing mix (product,
price, place, promotion)
Strategy Where to compete? (territory/segments)How to compete? (Positioning/value proposition)
CultureMarket
orientation (Norms&Values,
Behavior,
Devices,
e.g. theoretical
equipment, market
information syste
m)
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The Marketing Information System
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http://www.youtube.com/watch?v=H95LrJgrHr8
Decision Process (1)Product-oriented management
Make the product/service Design, procure, make
Sell the product/service price, sell,
advertise/promote, distribute, service
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Choose the Value Segmentation,
market selection, value positioning
Provide the ValueProduct & service
development, pricing,
sourcing/making, distributing
Communicate the Value
Sales force, sales promotion, advertising
Decision Process (2)Marketing-oriented
Value creation and delivery sequence
Strategic Marketing Tactical Marketing (mix marketing)
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Decision process (3) –Market- oriented
MARKET & VALUE
VALUE CHAIN &
RESOURCES/COMPETENCI
ESStrategic orientations, adapted from Trinquecoste, 1999
Detection of a market opportunity
Identify the needed market
competitive advantage
Plan the needed resources and competencies
Detection of a distinctive
competency/ resource
Maintain or increase the existing distinctive
competency
Detect the markets that enable the firm to turn the distinctive competency into
competitive advantage?ALIGNMENT?
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Session 1.The Marketing Concept
& Market Knowledge
1. The marketing concept
2. Understanding consumers
3. Market research
Marketing decisions rest on (implicit) theories of consumer/organization behavior
Consumer
Choose the value
Provide and
communicate the value
Hypothesis for action
Market research
e.g. Design change
What is the influence of shape/color on
purchasing behavior?
e.g.Design change
What methods to choose the best
option?
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• New purchase
• Re-purchase (new features)
• Re-purchase (same)
BUYCLASS
1. Need recognition2. Need features3. Suppliers search4. First selection of suppliers5. Proposal analysis6. Negotiation 7. Choice of suppliers8. evaluation
BUYPHASES
BUYGRID
Organizational Buyer Behavior« MATBUY »
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ENVIRONMENT
ATMOSPHERE - power / dependency - distance (cultural, social)- cooperation / conflict - individual and collective perceptions
Interaction1. Range
- transaction (ST)
-relation (LT) 2. Content
- products / servicesinformation- financial
- social3. Form
- interpersonal- negotiations- adaptations
- mediated flows
Supplier1. Social system
- culture-behavior*
2. Organization- technology- structurestrategy
3. Individuals- objectives
- expectancies-experience
Customer1. Social system
- culture- Behavior*
2. Organization- technology- structurestrategy
3. Individuals- objectives
- expectancies-experience
Organizational Buyer BehaviorThe IMP relational model
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Opinion leader
Buyer User
Prescriber
Decision maker
Organizational Buyer BehaviorRoles in the purchase unit
Payer
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A simplified model of consumer behavior
Decision Process- Need recognition
- Perception- Memorization
- Attitude
Stimuli- Products
- Word of mouth- Advertising
Behavior -Purchase
- Consumption experience- Satisfaction/value creation
Factors affecting the behavior
- Consumer (age, …)- Environment
(culture, family, etc.)
Feedback
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Purchase decision making process
1. Need Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase
5. Post-purchase Evaluation 20
• Need: deprivation sensation stemming from a gap between an actual state and a desired state
• Motivation : strength that drives the consumer to act
Needs and motivation
Desired state
Actual state
Need(explicit/latent)
Information search
Lack of knowledge about
the product
Cost/advantage
ratio <0
Norms
Purchase probability
Non purchase
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Alternatives Evaluation
Attributes selection(colour, price, packaging, etc.)
Brands selection(brands and products)
Performance assessment of the products
based on their attributes
Implementation of the decision rules
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Alternatives Evaluation Attributes Selection
Product attributes
Knownattributes
Unknownattributes
Importantattributes
Determiningattributes
Salientattributes
Assessment Phase Choice Phase
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Alternatives Evaluation Brands and Products Selection
Universal Set
Awareness Set
Consideration Set Consumption Context
Choice Set
Final Choice
Consideration set is the set of brands brought to the consumer’s mind in a particular choice occasion
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Summarizing perceptions of brands: perceptual map
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The formation of attitude
Attitude: relatively global and enduring evaluation of an object, issue, person, or action
The aim of marketing is to change attitudes towards the brand/product
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Cognitive •Beliefs
Affective •Feelings
Conative •Behavioral intentions
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• The models of attitude formation– Compensatory models: multi-attribute model– Non compensatory models : conjonctive, disjonctive,
lexicographic models
Attitude formation
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Attitude formation
The multi-attribute model
Attribute Importance Brand A Brand B Brand C
Price Solidity Design Color
5 3 4 2
2 4 5 2
5 2 2 2
5 3 3 3
46 43 52 4
****
====
1012204
The consumer calculates an attitude for each alternative (sums up (importance of the attribute x evaluation of the alternative for
the attribute) for all the attributes)
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Attitude formation
The conjonctive model
Attribute Minimum threshold
Brand A Brand B Brand C
Price Solidity Design Color
4 3 3 2
2 4 5 2
5 2 2 2
5 3 3 3
4
The consumer eliminates all the brands under a minimum threshold
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Attitude formation
The disjonctive model
Attribute Importance Brand A Brand B Brand C
Price Solidity Design Color
5 3 4 2
2 4 5 2
5 2 2 2
5 3 3 3
4
The consumer selects the most important attribute and then selects the brand(s) with the highest score for the
attribute
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Attribute Importance Brand A Brand B Brand C
Price Solidity Design Color
5 3 4 2
2 5 4 2
5 2 2 2
5 3 3 3
4
Attitude formation
The lexicographix model
The same as the disjonctive model. But, if two brands or more score equally, the consumer selects the following
attribute by order of importance and chooses the brand with the highest score for this attribute.
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Model of attitude formation depends on
RoutineLimited problem
solving process
Extensive problem
solving process
Product complexity Product involvment
Brands’ differentiation
Low High
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Prior Expectations and Norms
Perceived performance
Dissatisfaction
SatisfactionPositive
Negative
DisconfirmationComparison
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Post-consumption (1)Satisfaction
Satisfaction is defined as pleasurable fulfillment. That is, the consumer senses that consumption fulfills some need, desire, goal,
or so forth and that this fulfillment is pleasurable
Post-consumption (2)Value
Perceived benefits
Affective benefits
Instrumental benefits
Relational benefits
identity benefits
Customer Value
Perceived sacrifice
Time costs
Monetary costs
Psychological costs
Energy costs
+ -
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« Perceived value is the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given »
(Zeithaml, 1988)
Value is not perceived quality• Perceived quality: evaluation of the superiority of a product and not
the service to the consumer, • High quality does not lead to consumption, poor quality does not lead
to non consumption
Post-consumption (2)Value in a B2B context
• Labor.
• Energy
• Productivity
Cost decrease Attractiveness for the end customer
Risk decrease
.. /..
New features
3M Repositionable adhesive for diapers P&G
LYCRA : charm, functionality for clothes
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Post-consumption (3) Consumer Loyalty
« Loyalty is a deeply held commitment to
rebuy or repatronize a preferred
product/service consistently in the future,
thereby causing repetitive same-brand or same
brand-set purchasing, despite situational
influences and marketing efforts having the
potential to cause switching behavior » (Oliver,
1997)
37
Post-consumption (3)Consumer Loyalty
Latent loyalty
Brake or Variety seeking
No loyalty
Real loyaltyConviction
Fake loyaltyLazy
satisfaction, inertia,
perceived risk
Purchase behavior
Pre
fere
nce Loyalty scenarii
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Session 1.The Marketing Concept
& Market Knowledge
1. The marketing concept
2. Understanding consumers
3. Market research
The different types of market research
• Strategic market research, control and monitoring of market, segmentation, positioning
• Product : concept, name, packaging, acceptance, taste
• Communication : audience, pre and post tests, media-planning, image
• Price, distribution, sales force• General research on the mix
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The Marketing Research Process
Marketing issue
Research issue and question, purpose
and objectives
Data collectionData analysisInterpretation
of results
Decision Making
Study design
- sampling- Information
gathering methods
(qualitative vs
quantitative)- Data
analysis methods 41
A guideline for research question formulation
• To explore (and understand) a phenomenon
• To describe behaviors and situations• To test (to explain, to predict) the links
between variables• To model some variables and their
marketing consequences, in order to make a decision
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Sources of Information in Market Research
Internal data
External data
Secondary data
standardized marketing data
primary data
Salesorder to payment cyclecost datadata from distribution channeldata from buyers
State departmentsProfessional bodiesNewspapers, books, InternetAnnual reports, balance sheetsPrivate research
Point of sale dataRetailers, wholesalers or consumers panelScanning data
Market surveyObservationExperimental research
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Marketing problem and research question formulation
Case Marketing problem
Research question
Information source
Analysis method
Quebec Government
How to stop the increase in
motorbike crash in Quebec?
Understand the
underlying value system
and the connection with risky
driving
Existing advertisements
Exploratory methods, psycho-semiotic analysis
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Marketing problem and research question formulation
Case Marketing problem
Research question
Information source
Analysis method
Tire producer How to increase the market share
by launching a new product (narrow tire)?
To understand the reason for liking narrow
tiresTo identify and
describe segments with
a favorable attitude
To anticipate the sales for
the new product
Interview, market survey
Market survey
Market survey and existing
data
Exploratory method, content analysis
MDA for preferences
Decision making systems
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Marketing problem and research question formulation
Case Marketing problem
Research question Information source
Analysis method
Car producer
How to position on the market?
To observe, to describe competitors
actions
Panels, market survey
Descriptive methods,
classification, typologic analysis
Consultant firm
Is there a need to improve product quality?
To observe and to describe dimensions
of qualityTo identify explicative variables of customer
satisfaction, To distinguish between
buyers and non buyers
Market survey Descriptive methods, PCA
Explicative methods,
regression and discriminant
analysis
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Marketing problem and research question formulation
Case Marketing problem
Research question
Information source
Analysis method
Food producer
What packaging and what price to
choose for a new
product?
To explain and predict the
most effective mix between
packaging and price
To anticipate sales volume
Experimentation Explicative methods (variance analysis)
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The Real function of a market research
– A decrease in, and not an elimination of, risk– To support a decision already made– To compare between alternatives– To dismiss some alternatives
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Two types of studies
– Qualitative studies• Limited sample• Open-ended
questions• Non quantified data• Analysis based on
intuition, high risk of subjectivity
• Conclusion : suggestion
– Quantitative studies• Large sample,
reasoned choice• Closed questions,
structured questionnaire
• Quantified data• Objective and
formal analysis• Conclusion :
recommendation
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The quantitative studies
• Experimentation• Survey
– Sample– Questionnaire construction– Data analysis
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Outcome Outcome
Usual condition Test condition
Control group Experimentalgroup
Experimentation
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Survey
• Direct communication between the interviewer and the respondent
• Possibility to collect a lot of data on the same person on a single occasion
• Disadvantages depend on the data collection technique (e.g. mail, Internet, face-to-face)
•The Results Will Be Meaningful If–Population has been defined correctly–Sample is representative of the population–Respondents selected are able and willing to cooperate–Questions are understood by the respondents–Respondents have the knowledge, opinions, attitudes, or facts required–Interviewer correctly understands and records the response
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Methods of Data Collection
• Personal Interview
• Telephone Interview
• Mail Survey
• Fax Survey
• E-mail Survey
• Web-based Survey
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Measures in quantitative surveys
• Single-Item Scales : one item to measure a construct
• Itemized-category Scales: options to indicate his/her opinions about the object being measured.
– What is your overall satisfaction with McDonald’s Hamburgers? Very satisfied
Quite Satisfied
Somewhat satisfied
Not at all satisfied
• Rank-order Scales: respondents arrange objects in ascending or descending order with regard to some criterion.
• 54
Multiple-Item Scales : multiple items to measure a construct
Likert scales
• Service is reliable 1 2 3 4 5
• Premises are clean 1 2 3 4 5
• Employee are responsive 1 2 3 4 5
Totally agree
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Measures in quantitative surveys
Totally disagree
Measurement in quantitative survey
• Constant Sum Scale: respondents allocate a fixed number of rating points among several objects to reflect relative preference
• Share 100 points among the following attributes of this brand of PC:
Clock Speed: 30Hard drive size: 20RAM size: 10Price: 40
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• Semantic differential scale:• Give us your opinion about the Financial Times.
– Low price ___ ___ ___ ___ ___ High price– Good local coverage ___ ___ ___ ___ ___ Bad local coverage– Good global coverage ___ ___ ___ ___ ___ Bad global coverage– Regular delivery ___ ___ ___ ___ ___ Irregular delivery
Measurement in quantitative survey
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Pretesting the questionnaire
• Pretesting Specific Questions For• Variation• Meaning• Task difficulty• Respondent interest and attention
• Pretesting the Questionnaire• Flow of the questionnaire• Length
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Qualitative studies
Non-directive interviews
Respondents given freedom to
respond within the bounds of the topics of interest to the interviewer.
Semi-structured interviews
The interviewer attempts to
cover a specific list of topics or sub-areas. The timing, exact
wording and the time allotted to each question is
left to the interviewer’s
discretion.
Focus group
5 to 8 people are interviewed at the same time
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http://www.youtube.com/watch?v=Sfnh5BTQgrI
Qualitative studies
• Projective techniques
– Assumption: individuals are not always disposed to tell the truth. Use other mechanisms (than direct questions) to understand their motivations…
• Observation
– To see what people really do and not what they say they do
60
• The context– The launching by Nestlé of its new instant
coffee in the USA after WWII– Blind tests : taste OK– Poor sales– Market survey (questionnaire) : taste is the
declared problem– How to overcome the paradox?
An example of projective method
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• Diagnosis– A hidden brake to consumption
• How to identify this brake?– Two identical shopping lists (except for coffee
: A = Nescafé instant coffee, B = coffee beans Maxwell House)
– Consumer had to describe the personality of each of the person
An example of projective method
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An example of projective method
• 2 packages of sandwich bread
• 1 can of carrots• Nescafé instant
coffee• 2 cans of peaches• 5 kg of potatoes
• 2 packages of sandwich bread
• 1 can of carrots• Maxwell House
coffee beans• 2 cans of peaches• 5 kg of potatoes 5
kg de pommes de terre
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• Test results– 48% of people think the person with the A list
is lazy (4% for the B list)– 48% said for A person is unable to plan its
purchases and for 12% is spendthrift– For 16% A person are mean wives
An example of projective method
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• Explanation– Purchase motives were not verbalizable– The function of coffee and the role of the woman at that time
• Purchase brake was not the taste but the positioning of the product : a quick to make coffee
• The role of the mother : to take care of her family• Coffee requires know-how, preparation, and shows
how the mother is devoted to her family• The substitution of coffee beans for instant coffee
breaks the links between the mother, her role and her family
An example of projective method
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• Implication– Change of Nescafé ‘s positioning : the
supplementary available time for the mother to dedicate to its family, thanks to the simplification of coffee preparation is put forward
– Two other examples• Beer• Clearasil
An example of projective method
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A Projective Test for a Beer
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A Projective test for Clearasil
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