What is marketing strategy? The process of matching the organisation’s strengths to the customer needs, with the aim of achieving a competitive advantage in the market. The combination of product, price, distribution and promotion most suited to a particular group of consumers. • Goal: the create a sustainable competitive advantage in the market • All the elements of the marketing strategy that lead to the development of the competitive advantage require good understanding of consumer behaviour Marketing strategy process: • 1. Segment: understand consumers a. Determine the dimensions (age, geography, subculture) b. Determine the heterogeneity c. Define the needs & goals 2. Target: choose consumers a. Evaluate each segment in relation to organisational strengths and weaknesses b. Choose the segment with the highest potential for strategic match (organisation strength – customer needs) 3. Position: offer utility differentiate prevent copy a. Designing the company’s offering and image so they occupy a meaningful and distinct competitive position in the target customer’s minds Marketing Levers
What is Consumer Behaviour? The dynamic interaction of cognition, behaviour and environmental events by which human beings conduct the exchange aspects of their lives.
Positioning is implemented by using 4 main marketing mix levers o Product o Communication o Price o Distribution
Understanding the psychological & sociological antecedent of consumer decision process allows prediction of consumer responses This understanding feeds into design of marketing stimuli (product attributes, advertising messages, price signals and distribution channels) that elicit responses desired by the company.
Problem Recognition & Consumer Goals
Problem recognition: the result of the awareness of the difference between the actual and the desired states of being Problem: a need state that requires action to eliminate it Recognition: conscious awareness of a stimulus Need state: represented by the difference between a desired state and an actual state of being Desired state: o Expectation o Aspiration o Social norm Understanding the desired state (the consumer’s goals) can lead to prediction of consumer behaviour, motivation and purchase involvement. • Actual state • Change: •
Awareness: is the conscious knowledge of the stimulus (need state)
Create a desired state - performance Discount/define the actual state – explain difficulty of old product & suggest dangers
Influencing the need states:
Change in the actual state: o Physical & physiological functions o External stimuli o Consumption Change in the desired state o Physiological – hardwired, difficult to change o Cognitive – subject to learning & malleable
Limited by attention – selective Affected by internal & external stimuli
Action: when the discomfort reaches above a certain acceptable threshold, it becomes a motivating force for action. • The motivation to act is stronger the greater the need Goals: are desired states • Play a central role in consumer decision process • Predicting response behaviour requires understanding of consumer goals Consumer goals, actual states and awareness are subject to internal (consumer) and external (marketing) influences Marketing implications Understand which goals are relevant & which match the organisation’s strengths • Consumer implications Involvement: describes how important the decision is to the consumer • Dependent on the value of the goal , high value goals lead to high involvement in the decision process • Results in different types of decision making: (represent different levels of effort) 1. Habitual 2. Limited 3. Extended 1. Aiding problem recognition a. Creation of desired states b. Focus of awareness on unsatisfactory actual states 2. Timing problem recognition a....
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