Transcript Marketing Strategy

Session 5
Consumer Behaviour
& Marketing Strategy
November 21, 2005
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Agenda
Review
 Consumer Behaviour &
Marketing Strategy
 Terry’s Case Study
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Consumer Behaviour
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Learning Objectif
Analyze the interaction between
marketing strategy
and the insights provided by
consumer behaviour research
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Review
Culture & Lyfestyles
Team conclusion
Psychographic
Segmentation Schemes
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AIO (activities, interests & opinions)
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Cohort Analysis (age groups)
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PRIZM (regional lifestyles)
Value-based approach (VALS)
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VALS Framework
 A research and consulting tool
 Built by consumer futurist Arnold Mitchell in the 1970s
 It was developed from the works of Riesman and Maslow
for whom the strongest motivations are first linked to fundamental
needs
 In 1989, VALS was redefined to maximize its ability to pre
dict consumer behaviour. A team of experts from SRI International
, Stanford University and Berkeley University determined that
consumers should be segmented on the basis of enduring
personality traits rather than social values that change
overtime
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The VALS Segments
Segments
Features
Innovators
Successful, sophisticated, take charge people with high
self- esteem. Very active consumers, seek challenges.
characterized by variety. their purchases reflect cultivated
tastes for upscale and niche market.
Thinkers
Mature,satisfied,comfortable, reflective and well educated
people. Actively seek out information.
Conservative,practical consumers. Look for durability,
functionality and value in the products.
Achievers
Goal-oriented lifestyles and a deep commitment to career
and family. Consensus, predictability, stability over
risk,intimacy and self-discovery. Active consumer.Interested
in time saving devices
Young,enthusiastic and impulsive consumers. Seek
variety,excitement, savoring the new and the risky. Spend
Experiencers
high proportion of their income on fashion, entertainment
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The VALS Segments
Segment
Features
Believers
Conservative, conventional people with concrete beliefs based
on traditional, established codes such as moral codes.
Predictable consumers. Choose familiar products and
established brands.
Strivers
Makers
Survivors
Motivated by achievement. Concerned about the opinions and
approval of others. Active and impulsive consumers.
Like stylish product.
Motivated by self-expression. Practical people who have
constructive skills and value self-sufficiency.
Have a Suspicious of new ideas and large institutions such as
big business.
Do not show a strong primary motivation. Cautious
consumers .focus on meeting needs rather than fullfilling
desires. Loyalty to favorite brands, Especially, if they can
purchase them at a discount.
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Lifestyles Research
Weaknesses
Forces
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Identification of
consumer segments
More comprehensive
than demographics,
behavioral and
socioeconomic
measures alone
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It does not consider
segment membership
mobility over time
Weak predictive power
of new patterns
Limited reliability and
transparence of
measurement methods
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The link between
consumer research and
marketing strategy
Strategy
The choices
a company has to do
in order to attain its goals
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What constitutes a winning
marketing strategy ?
Prof Michael Porter of Harvard argues that
“a company doesn’t really have a strategy if it
performs the same activities as its competitors, only
a little better. It is just operationally more effective”
Being operationally excellent is not the
same as having a robust strategy
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Types of strategies
 Cost
Differentiation
(specialization or niche)
 Volume
 Prix
 Technology
 Human Resources
 Relational
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The main objectif of
these strategies is to build
“demand” and therefore,
“profits” for the company
Nine ways to build demand
Products
MARKETS
Existing
Modified
New
Existing
customer
New
geographical
areas
Market
penetration
Product
Modification
New product
development
Geographical
Expansion
Offer and sell
modify products
to new
geographical
markets
Design new
products to
prospects in new
geographic areas
New type of
customers
Segment
invasion
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Offer and sell
modified products
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new types of
Diversification
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Marketing strategy is too
frequently associated or stereotyped as
the outcome of mechanical
application of traditional analytic
frameworks and techniques
(SWOT, portfolio analysis, scenario
analysis etc.) to
highly standardized situations
(growth market, mature markets, etc)
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Swot Analysis
Strengths
 Weaknesses
 Opportunities
 Threats
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Portfolio Analysis & Strategic
Business Units
The boston consulting group box (BCG box)
Stars: high-growth, high-share produts
Cash cow: low-growth,high-share established
products
Question marks: low-share products in highgrowth markets
Dogs: low-growth, low-share products
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Strategic Alliances & Relationships
Client /
Suppliers
Competitors
Market
Relationships
Transactions
Competition
M&A
Vertical
Integration
Concentration
Cooperation
Vertical
Partnership
Strategic
Alliance
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Firms
Relationships
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Consumer Research & Strategy
A choice implies a decision
… A decision implies an action
Consumer research collect and analyse
information that help managers make
better decisions
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Questions to guide the
information gathering needs
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What type of information do you regularly get?
What types of special studies do you request?
What information would you want daily, weekly,
monthly, yearly…
What presse support would you like to see
regularly?
What types of data-analysis programs would
you like to use?
What would be the most helpful improvements in
the company’s marketing information system?
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Types of Information needed
Macro-environment
Demographic, Economic
Lifestyles,
Technological
Political/regulatory
Task environment
Consumer Information
Collaborator Information
Competitor Information
Consumer Behaviour
Company Environment
Sales and market share
Orders and back orders
Costs
Customer profitability by
customer, product, segment,
channel, order size and
geography
Other infomation
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Consumer Research & Strategy
Thoughts /
Attitudes
Marketing
Strategies
Behaviour
On /off line
Emotions
+/-
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Marketing Strategy:
a quick outlook
It specifies a target market
and a related marketing mix
 and
also a relational approach
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Economy
Technology
Society
Place
Product
Economy
Target
Promotion
Competition
Regulation
Consumer Behaviour
Price
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Planning
Analysis
Place
Product
Economy
(customer needs & wants)
(convenience)
Target
Promotion
Price
(communication)
(cost to the consumer)
Control
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Implementation
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Marketing Management
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Analysis
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The company analyze its
markets and marketing
environment. SWOT
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Implementation
The company turns
strategic and marketing
plans into actions.
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Planning
Through strategic
planning the company
decides what it wants to do
with each business unit
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Control
The company measures
and evaluates the results of
marketing plans.
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The core of Marketing Strategy
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Market Segmentation
Targeting
Product Positioning
Communication model
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“Competence in strategy is the
sine qua non of the marketing manager.
Yet even among well-schooled and experienced
managers, strategy failure rates remain
uncomfortable high”
Dale Fodness, Journal of Business Strategy, 2005
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Thinking strategically
about Marketing
Thinking strategies: The use of critical thinking
techniques to improve creative problem-solving skills
Strategic Decision-making: Principles and
techniques to ensure production and implementation
of the best quality strategy
Strategic Competences: The skills that make up
strategic thinking
Communication strategy: The techniques to
reveal and share the substance rather than the
process of marketing strategy
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Components of Marketing ROI
Market
performance
Operational
Performance
Profit
performance
Product awareness
Margin
Returns on assets
Market share
Inventory turnover Earnings per share
Customer satisfaction Capacity utilization Price-Earnings ratio
Customer retention
Service quality
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Product development process
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Case Study Presentation
Terry’s Group
Designing novelty chocolates
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