Module 4: Digital Marketing

“What used to be a matter of identifying needs and communicating benefits now requires us to build immersive experiences that engage consumers.  That means we have to seamlessly integrate a whole new range of skills and capabilities.   It’s easy to get lost among a sea of buzzwords and false gurusselling snake oil.“

This is a paragraph from the great article in Forbes,”4 Principles of Marketing Strategy In The Digital Age”. 

Digital marketing is set to be the future of marketing. The new generation is growing up with internet, mobile phones, tablets and laptops. In order for marketing to be successful, it needs to adjust to the new conditions and requirements.

For more information read: http://www.forbes.com/sites/gregsatell/2013/04/16/4-principles-of-marketing-strategy-in-the-digital-age/

 

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Module 4: The four Ps of Marketing Mix

Each of the four Ps has its own role and tools to contribute to the marketing mix:

  • Product: The goods and/or services offered by a company to its customers Product’s tools: variety, quality, design, features, brand name, packaging, services
  • Price: The amount of money paid by customers to purchase the product. Price’s tools: list price, discounts, allowance, payment period, credit terms
  • Place (or distribution): The activities that make the product available to consumers. Place’s tools: channels, coverage, assortments, locations, inventory, transportation, logistics
  • Promotion: The activities that communicate the product’s features and benefits and persuade customers to purchase the product. Promotion’s tools: advertising, personal selling, sales promotion, public relations

 

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Product

One of the most challenging aspects of product marketing and launching a new product is developing a product marketing strategy. In order to succeed in product marketing and sales you must understand in depth the customer’s psychological needs.

Price

Right price is the key determinant of decision making for customers to purchase a product. Therefore it is too hard to get it right. The demand automatically will reduce if the price it is too high and if it is too low the sales volume may not generate enough revenue to cover the costs.

Thus, it is very important to establish and measure how much the target market can be able to pay for the product. Of course pricing may change depending on the focus of the selecting strategies, it is the most adjustable of all marketing decisions. For example, when promoting a new product, a great strategy is to lower the price in a short time period, in order the customers to try the product and stimulate the interest. Another situation is when we want to stimulate demand. However, researchers discovered that higher price, is a great tool for maximizing revenues. Strong brands like Starbucks, uses the strategy of increasing prince.

In Atlantic Case Study are outline four alternatives for choosing the right price, we used all of them in order to decide for the right price.

  1. Stick with company tradition by charging only for hardware and give the PESA software tool away for free
  2. Charge a price equal to what the customer would pay for four Ontario Zink servers.
  3. Charge a price based on a cost-plus approach to pricing PESA (based on PESA development costs).
  4. Charge a price based on value-in-use pricing.

Last year, I sow this fantastic TED talk by Seth Godin: “How to get your ideas to spread,” and I think it is still worthy to share it.

Seth Godin says: the best strategy to succeed is “being remarkable.” Customers are overwhelmed by advertising, we have to discover a new, unique, remarkable way to market our product/service. This is the only tool for increasing the sales and be successful, by offering something remarkable, not very good, because this is not going to work. 

 

 

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Module 4: Product Lifecycle, Market Lifecycle, Execution Lifecycle

I have been reading about Product Lifecycle quite much. Today I run across one really interesting post in LinkedIn, which is talking about Product Lifecycle, Market Lifecycle and Execution Lifecycle.  Actually the post is an exception from the book Organizational Physics: The Science of Growing a Business.

Product Lifecycle

Product lifecycle has these basic stages: Pilot It, Nail It, Scale It, Milk It, or at any time, Kill It. Not every product makes it through each stage. However, if a product wants to be successful, it must move successively through each stage.

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Market Lifecycle

As every product goes through lifecycle so does every market. The market lifecycle is segmented into the several groups of potential customers you’re selling to: innovators, early adopters, early majority, and late majority/laggards.

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Execution Lifecycle

The basic stages of the execution lifecycle are: birth, early growth, growth, and maturity and from there things descend into decline, aging, and death. The execution lifecycle exists within a dynamic between stability and development.

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The lifecycle stage of the surrounding organization should generally match the lifecycle stage of the products and markets”

The Real Strategic Question You Should Be Asking

The strategic lesson that we can learn from this post is, we should ask the product/market/execution lifecycles: “Where are we now?” For example, if your product is in the Scale it stage, then place it to the Scale it section. So the next question should be: “What should our next strategic move be?”

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Find out more in: https://www.linkedin.com/today/post/article/20140505225822-16037464-lifecycle-strategy-product-market-execution-fit

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Module 3: ThoughtWorks Case Study

ThoughtWorks (TW) is exclusively known for competing in the IT services industry, in the custom application and system integration projects. While most of their clients are small innovative companies, the majority of their work is based on a significant number of Global 1000 worldwide companies, which are interested in multimillion dollar value projects and trust ThoughtWorks because of the Best Practices of Agile methods implemented by Martin Fowler. A talented and motivated workforce enabled TW to do the heavy lifting in every project and carry out the best practices of Agile approach, which in return helped set the course for future ThoughtWorks projects.

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ThoughtWorks Target Market

ThoughtWorks plan is to distinguish themselves from the other competitors in the industry, hence their identified niche market included the Type A firms, which apparently accounts for 30% of the IT companies in the industry. These Type A accounts/clients are pioneers of advanced technologies, already aware of Martin Fowler and his Agile practices, and most importantly, they seek custom application and systems integration through aggressively adopting high-risk strategies with high potential rewards. Furthermore, TW have a limited marketing budget with a limited brand awareness, another reason why focusing on a subset of a market would make more sense. ThoughtWorks focus on establishing a brand for themselves is closely tied to their desire of contracting big audacious projects because they cannot afford to get their best IT consultants involved in these small projects which usually last longer and have little return on investment.

The target segmentation include all three types of companies A, B and C. Type A CIO’s/consultants because they are involved in larger companies and are pioneers in advanced technology and innovation with special affection for Martin Fowler the Agile practices. Whereas targeting Type B and Type C consultants – increases awareness throughout these smaller enterprises about the complex projects that ThoughtWorks handles.

What makes ThouhtWorks different from other competitors

We will use the three types of PODs from the article: “Three questions you need to ask about your brand”, Brand Performance, Brand Imagery and Customer Insight.

  1. Employ most talented and motivated people – Brand Performance or Brand Imagery.

Thoughtworks operates with the most talented and motivated people. One of the biggest contributors of ThoughtWorks’ success, Martin Fowler, shares the insight information about the company’s ability of hiring people. They focus on people with integrity, with real passion in doing quality work, trustworthy, very smart and pleasant to work with. (Brand Imagery) Other than that, ThoughtWorks uses exhaustive interview regimes in which 1 or 2 (0.5% – 1%) of nearly 200 candidates can be hired. The company believes that the most important factor to successful software development is staff quality. ThoughtWorks provides an environment that enables to thrive professionally and personally. (Brand Performance)

  1. Be an industry leader regarding on-time completion  and under budget on projects –Brand Imagery

In a market when nearly 80% of projects are over budget or late, ThoughtWorks is able to complete the projects on time and under budget.

  1. Expert in Software Design & Delivery Methods – Brand Performance or Brand Imagery

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ThoughtWorks for the past 20 years has been envisioning, designing and delivering customer software for their clients.  Martin Fowler and many of the ThoughtWorks talented people have published numerous books and articles supporting their strategies, they also share their experiences and insights at conferences and articles. (Brand Imagery)

Agile Methods – are recognized as the best methods in software development. ThoughtWorks is a pioneer of Agile Delivery Methods on very large software projects and the small ones. They believe that Agile methods are the methods that differentiate them from other companies and they will drive the future of the company higher than the industry average. The chief scientist of ThoughtWorks, Martin Fowler, is considered the leading authority of Agile techniques for software development. He developed a key brand in applying Agile Method to projects of any size. Agile methods have been adopted mostly by the top 1000 IT firms. (Brand Performance or Brand Imagery)

Waterfall – These methods are appropriate when there was little chance of significant changes in business requirements. Waterfall model is often used in software development processes, in which progress is seen as flowing steadily downwards, through the phase of Conception, Initiation, Analysis, Design, Construction, Testing and Maintenance. (Brand performance)

Iterative approach – Iterative approach includes the same steps as Waterfall, but the steps are repeated many times and in smaller increment. The most widely used iterative methodology was The Rational Unified Process. (Brand performance)

  1. Enterprise Architecture- Brand Imagery

ThoughtWorks is a true leader in constructing enterprise application and enterprise integration strategies. Martin Flower was the key figure in this field. His book Pattern of Enterprise Application Architecture is very successful.

  1. Expert in Consulting- Brand Performance

ThoughtWorks advices on anything related with the software design and delivery. They help their clients on solving their problems and see their toughest challenges from different prism. The consultants usually explore the symptoms and the cause of the problematic. The culture in ThoughtWorks is a constant self-evaluation.

  1. Training & Workshops –Brand Performance

These training offers enable managers, analysts, developers and testers to appropriate agile development and project management practices. Workshops help them to understand every aspect of software delivery.

  1. Complete the project on time – Insight (make you a hero)

ThoughtWorks is always in able to complete the projects on time. While other companies have real problem with the fail of the software project because they are late.

Position Statement

For technology professionals, ThoughtWorks is the IT solution provider, whose talented team can get it done on time.

Target Market For technology professionals,
Frame of Reference ThoughtWorks is the IT solution provider,
POD whose talented team
RTBs can get it done on time

 

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Module 3: Brand Loyalty, Brand Story, Big and Strong Brand

One of the most valuable fixed assets of a business is brand. A strong brand counteracts to critics, competitors and increased pressure from channel partner by sustaining price premiums and higher margins. A clear perception of a strong brand is high value and differentiation. Moreover, a strong brand is not easy to be copied.

Here is a quick example of how strong can be a brand. When I lived in USA, I had many choices of Flips in different supermarkets and grocery stores. But I went very far for searching Macedonian Stobi Flips, at International Grocery Stores till I found them at Saraga. I grow up with that brand, they are very tasty, thus I don’t like to change them with other choices. Actually with Stobi Flips I am related emotionally, since I was a kid.

A great brand evokes recognition and value in the eyes of the consumer and also its mission is clear. Brand loyalty has the benefit of lowering advertisement, marketing and distribution costs because loyal customers will search far to find their favorite brand. Thus, when it comes to price increases they are less sensitive.

Chip Bell, expert in how to create a culture which supports long-term customer loyalty says: “Loyal customers, they don’t just come back, they don’t simply recommend you, they insist that their friends do business with you.

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Researchers believe that stories influence our emotions. Emotion is a crucial incitement behind buying decision. Brand story is very important because it demonstrates the company’s core values and differentiation. I think the brand story increases value and respect in the customer’s eyes. Moreover, the brand story inspires loyalty and passion. The brand promotes eco-friendly and liberal image. It is loved by fans.  Thus, if you want to build a successful business with a brand that will create loyalty, you have to have a story because the story is a complete picture made up of feelings and interpretations.

A great example of brand story is Ben & Jerry. The home-made ice-cream has unique flavor combination.

According to the journal “What do you want your brand to be when it grows up: big and strong?,” the attitudes toward a brand consumer equities have an important role in determining a brand’s success while brand size does not dictate behavioral loyalty.

The paper argues that Double Jeopardy relationship is caused by two basic mechanisms:

  • Push mechanisms are marketing activity’s results which have direct influence on customer decisions when purchasing a product or service.
  • Pull mechanisms are marketing efforts result that create a long-term positive customer predisposition toward brand.

Furthermore, there are particular brand’s strengths and weaknesses results relative to competition. Stabile deviations are common and trends in deviations are observed for new and established brands.

In the final section is shown that a BrandDynamics™ System, which is a survey research tool aimed to explain behavioral and attitudinal loyalty, measure of attitudinal loyalty called Brand Strength in the market share has a big relationship with long-term changes. The conclusion of this research journal is that brands can be both big and strong.

For more you can read the journal in this link:  http://www.warc.com/fulltext/JAR/9078.htm

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Module 2: Segmenting Customers

Market segmentation is a marketing strategy of targeting group of customers into subsets of consumers who have common needs and wants. Depending on specific demand and attributes business may develop product differentiation strategies.

There are dozens of ways that a market might be segmented. Choosing a segment depends on the business and the products it offers. Target Market Selection is the evaluation of each market segment’s attractiveness and selection of one or more segments to enter.

 

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A segmentation basis is a set of characteristics or variables that is used to assign potential customers to homogeneous group.

Bases of customers’ segmentation are:

  • Geographic
  • Demographic
  • Psychographic
  • Behavioral

The traditional STP model of Target Marketing is:

STP

 

 

“By embracing the diversity of human being we will find a way to true happiness”

Malcolm Gladwell, the author of the book Blink is my favorite author. I also found very interesting his video in which he talks about segmentation and spaghetti sauce. He says that people want variety, they have different kind of taste, they either don’t know what they want, or how to explain it.

In fact, he explains the revolutionary idea of Howard with the Horizontal Segmentation which in depth understands the needs and wants of customers. Customers are not in able to always explain what they want. Therefore, horizontal segmentation of Dr. Maskowitz says that, there is no good, better or bad products, but different kind of products that suit different kinds of people.

We have to thank Howard Maskowitz for the concept of variability, because he changed the basic and essential way of thinking about how food industry can make customers happy.

He discovered that Pepsi Co was asking the wrong question because they were looking for perfect Pepsi while they should have been looking for the perfect Pepsis.

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Module 2: Starbucks Coffee discussion

Discussing the Starbucks Case study was the most enjoyable thing in this class, probably because I am a big fan of coffee, and coffee in my country is ritual, is an old culture. Therefore, the Starbucks strategies for being successful I can be able to understand in essence.

It is interesting how Howard Schultz became inspired to change the coffee culture of US by bringing the Italian coffee experience in the Starbucks coffee. More interesting is that from an Italian culture idea he made Starbucks, the most popular and the largest coffee in the world. Today Starbucks is the brand leader.

When Schultz traveled to Italy with the Starbucks team, in 1982, he became fascinated with the coffee culture of Milan. He was inspired with great innovation ideas, to set up an espresso bar in the downtown. Shultz wanted the bar to become a long-term vision prototype:

“The idea was to create a chain of coffeehouses that would become America’s “third place.” At the time, most Americans had two places in their lives—home and work. But I believed that people needed another place, a place where they could go to relax and enjoy others, or just be by themselves. I envisioned a place that would be separate from home or work, a place that would mean different things to different people.”

These changes Schultz reached by:

Coffee quality – Offer the best coffee quality in the world by keeping full control of its products and services.

Special Service – partners ensured product quality, speed and connect with customers in order to create the friendly environment.  This connection makes the customers feel valued. Starbucks understand their customer and make them king

Atmosphere – Starbucks idea was to change “Buying coffee as a drink” to “the experience of enjoying coffee”

Partner satisfaction – Howard has made clear that “partner’s satisfaction leads to customer satisfaction”. Starbucks partners were among the highest hourly paid workers. Their policy was giving partners health insurance and stock options.

No other company changed the drinking coffee experience in US. Starbucks efficiently filled a psychological need, which they didn’t even know they needed, until they got it. The great market leader Schultz, made their customers identify with its brand. Things that Starbucks customers value in coffee are: the very high-quality coffee, the service or the “customer intimacy”, the comfortable atmosphere and the cleanliness.

The difference of the early Starbucks customers vs. the more recent one

The recent Starbucks customers have more disposable income and they value the high-quality coffee, the best tasting coffee, the brand they trust and the high quality brand. They judge that is worth paying more for these qualities. However the early Starbucks customers were less well-educated and with lower disposable income, who valued lower prices.

Starbucks is very successful in USA but not us much in Europe

In my opinion the crucial difference is that in USA coffee is seen as a metaphor of working, being more productive while in Europe it is seen much as gathering with friends, relaxing and fun. Furthermore, for Starbucks, getting European customers on their stores won’t be easy because of their old cafe’ tradition.

Another big challenge lies in adjusting the Starbucks experience to appeal to a variety of European tastes and needs, such as trendier atmospheres, variety models of stylish bars, taste sensitivity when it comes to the beverages in which coffee is a main sensitivity and so on. In Europe the most consumed coffee is espresso.

Below is a photo how a typical Coffee Bar looks like in Europe.

 

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