Marketing Strategy
in Service Business
- amegaro@unisa.it -
Programme
• Marketing and Service Marketing: an overview
• Marketing plan
• New marketing strategies approaches: Relationship
Marketing and Many-to-Many network; Experience
marketing; Non-conventional marketing
• New marketing vision: Service Research - from S-D logic &
Service Science to service ecosystems & service systems
Examples
Project work
Agenda: Lesson 2 - Pt.1
• Marketing plan: structure and aims
o Strategic marketing
o Operational Marketing – 4Ps
Examples
The Marketing Plan
2.1
RESEARCH
Systematic, structured process that
involves :
Marketing Planning
Implementing,
evaluating and
controlling
marketing
activities.
Research and analysis of current
and future market and business
situation
Development and Diffusion of firm’s
objectives, strategies and programs,
Segmenting
Targeting
Positioning
…
Marketing
mixControl
RESEARCH
& ANALYSIS
MARKETING
PLANNING
Strategic
marketing
Operational
Marketing for Value Creation &
Diffusion
Mission
STRENGTH Opportunities
THREATSWeaknesses
Analysis of macro-
environment
(scenario)
Analysis of micro-
environment
(market/segment)
Analysis of internal
environment
Goals
Strategy
Marketing mix
Execution
Control
A mission statement is a
short description of
organization’s raison d’être,
of its overall goal and of the
objectives for the future
(VISION).
Segmenting
Targeting
Positioning
…
Marketing
mix
Control
Examples
of mission
statements
Example: PASTA Market
Environmental
friendly
Healthy
Culture and
LifestyleJoy
Traditions
and
Habits
Corporate Strategy: A strategy that
determines the means for the use
of resources in the various
functional areas to reach the
organization’s goals.
Segmenting
Targeting
Positioning
…
Marketing
mix
Control
SWOT Analysis
Underserved markets
Few competitors in your area
Emerging needs for your product-
service
Press/media coverage of your
company
Things your company lacks
Things your competitors do better
than you
Internal Resource limitations
Unclear unique selling proposition
Qualities that separate your firm
from competitors
Internal resources (skills,
knowledge, staff)
Tangible assets: intellectual-capital
property, technologies
Emerging competitors
Changing enviornmental
conditions (law, regulation)
Changing customer’s attitude
toward the company (need)
Negative Press/Media coverage
SWOT Analysis: Example
Segmenting
Targeting
Positioning
Development and maintenance of
strategic alignment between:…
Marketing
mix
Control
• Goals/organization’s capabilites
• Market opportunities/competitor’s
behaviors.
"The marketing strategy lays out target
markets and the value proposition that
will be offered based on an analysis of the
best market opportunities." (Kotler &
Keller)
To guide business process in the short and in
the long run based on users’ expectations and
competitor’s actions.
MARKETING MIX & the 4 Ps
Strategic and Operational Marketing
Marketing Managers
Strategic marketing Operational marketing
Strategic Marketing
2.2.
Strategic Marketing
Tools and techniques required for the analysis, measurement and
selection of dynamic scenario and potential targets for value
proposition.
AIMS
1. To decrease errors;
2. To identify the targets interested in
the offering (or potentially
interested);
3. To codify strategic guidelines to
create or establish/consolidate the
reputation and awareness of the
offering.
S
T
P
1. To identify customers’ needs and expected benefits
2. To classify segments
STP- segmentation, targeting,
positioning
3. To measure segments’ attractiveness, profitability,
accessibility and differences
4. To select target segments
5. To establish the positioning for each target
6. To develop a marketing mix plan for each target
Marketing, Il Marketing Strategico – Capitolo 4, fpolese@unisa.it
Select
& study a
market
Choose
bases
for
segmen-
tation
Select
segmentati
on
variables
Profile
and
analyze
segments
1 2 3 4
STP: segmentation
Segmentation
• Definition: Division of the total market into smaller, relatively
homogeneous groups
S
• Why?
• Levels: Mass, Segment, and Niche
Segmentation Criteria
Mass Market
Segmentated Market
Niche Market
One-to-
one
Market
PersonalizationSegmentation
Geographic
Demographic
Behavioural
Psychographic
SEGMENTATION VARIABLES
Segmentation Criteria
DemographicBehavioural Psychographic
Example: PASTA Market
• Heavy consumers
• Culture of food and
meals consumption
as «rituals»
• Medium interest in
product quality
• High Price sensitivity
TRADITIONALISTS
• Light users
• Low familiarity with
cooking and
«processed» food
• Low interest in
product quality
• Medium Price
sensitivity
POST-MODERNISTS
• Heavy consumers of
organic, lactose-free
and gluten-free food
• Specific requirements
on organoleptic
properties of products
• Low Price sensitivity
HEALTHY CONSUMERS
Marketing, Il Marketing Strategico – Capitolo 4, fpolese@unisa.it
Select and
define
the most
suitable
target(s)
Define the
market(s)
Select
the needs
for each
segment
1 2 3
STP: TARGETING
(2)Targeting
Selection of one or more segments
Targets to “deliver” :
• value propositions
• offering design
• strategies and tactics
b
e
c
o
m
i
n
g
After the analysis of external environment and after
segmentation, companies use the quantitative and qualitative
obtained from data to evaluate and decide the
segments/targets to whom offering can be delivered through
focused marketing actions.
SEGMENTATIONS: How many and which segments are in the
market?
TARGETING: Among the different segments, with whom
should firms create value?
RESEARCH: how does the external environment look like?
Targeting: identification of market(s)
Process that identifies potential markets by analyzing the
marketing opportunities arising from the different segments.
This complex decision should balance:
At the end of the process, firms can choose a target market, that is
the set of customers with homogeneous needs and features that
companies aim at «striking»: the target.
GOALS
EFFECTIVENESS
RESOURCES
EFFICIENCY
Targeting as a process
Market “portion” reached through marketing activity or
campaign, or, in relation to sales, through employees and
salesforce (market share).
After the step of analysis, firms should assess the possible
opportunities deriving from it and identify the possibility to
competitive advantage
Market Coverage
Undifferentiated marketing strategies
Differentiated marketing strategies
Concentrated marketing strategies
Market Coverage: Different
Targeting, Different Strategies
Target: whole market
Offering: single
Marketing plan:
standard
Communication:
undifferentiated
Distribution channels:
Mass
Target: one or more
segments
Offering: differentiated
for each target
Marketing plan: One for
each target
Communication/
Distribution channels:
differentiated for target
Target: a single segment
or a sub-section
Offering: focused
Marketing plan: unique
for the target selected
Communication/
Distribution channels:
tailored for the target
Undifferentiated
Marketing
Concentrated
Marketing
Differentiated
Marketing
Goal: to attract the
highest possible number
of customers
Pros: costs and price
Cons: high competition
Goal: to conquer big
segments of market
Pros: targeted marketing
activities
Cons: high costs (multiple
offering)
Pros: costs reduction;
better knoweldge of the
segment; enhancement
of the image.
Cons: dissolution of
segment or modification
of tastes.
Goal: to «nurture» a
specific market
The brand is too strong to identify the entire market and/or the
segment in consumer’s mind. The brand embodies the whole market.
(1) Undifferentiated marketing
(2) Differentiated (Segmented)
marketing
 Target several segments and design separate offers for each
Coca- Cola (Coke, Sprite, Coca
Zero/ Diet, Fanta, etc)
Armani (Giorgio Armani, Emporio
Armani, Armani Junior, etc)
Toyota (Aygo, Yaris, Corolla,
Prius, Camry, etc)
(3) Concentrated and Niche marketing
 Target one or a couple of small segments with very
specialized interests
Status symbol
Specific
needs
Luxury Goods
The buyer persona is the portrait of a
user who embodies a segment of our
target. It is the generalized
representation of a company's ideal
customer, the starting point for
identifying potential customers.
Defining buyer personas is useful
and makes easier to customize the
content within the strategy. In fact, it
is easier to develop ideas and
customize messages if companies
have a person with defined
characteristics in mind.
Moving towards a personalized
marketing with buyer personas
Divide your target audience and decide who you want to focus on and
who you want your brand or product to reach. You can have more types of
buyer personas to contact.
Step 1: to analyze
• Interviews - Talking to people is the best way to get more ideas about
your typical customers and inspiration for developing content in your
future strategy.
• Questionnaires - You can set up an online questionnaire and email it to
your current customers. You will understand what motivates them the
most in following you and choosing your products.
Moving towards a personalized
marketing with buyer personas
Step 2: to Imagine
What are their names? What do they look like?
Try to give him a name and take an image that can identify a your
typical customer. It will help you to make everything more
realistic. Then identify the age, geographic location, type of job,
hobbies, interests, character, family situation.
Try to find a phrase that can identify his/her personality. A very
useful exercise, essential for developing your marketing
campaign and targeting your messages to personalized
audiences that will be more responsive to topics of interest to
them.
Moving towards a personalized
marketing with buyer personas
Moving towards a personalized
marketing with buyer personas
Marketing, Il Marketing Strategico – Capitolo 4, fpolese@unisa.it
1
STP: (3) POSITIONING
“Position”
the
offering
into the
market
Define the
most
relevant
features
of the
offering
Estabish
how
consumers
should
perceive
the offering
2 3
Positioning defines the way in
which a brand or a firm are
perceived by potential
consumers as different from
competitors
The definition of Positioning
“to create a product image in order to give the brand a
favorable place, in the evaluation of consumers, differentiated
from competitor’s position» (Ries and Trout, 1991)over
Positioning
Main goals:
• Favorable perception of potential buyers;
• Brand Awareness (reputation, notoriety)
Positioning is a tool for the analysis employed by firms to
define the optimal strategy to attain competitive
advantage
Positioning
Positioning
Positioning represents the position
occupied by company's brand in the
consumer's mind, according to the
perception of the latter concerning to
specific reference factors and the value
proposition of competitors.
Positioning
Aim: to define and make perceived the
tangible and intangible attributes of the
product AS A FUNCTION OF RELEVANT
EXPECTED BENEFITS, by DIFFERENTIATING
the offer from that of the COMPETITORS,
in order to create a STABLE PREFERENCE
for the brand / product offered
Positioning: Analysis and Strategies
Positioning involves two different moments:
.
Research for a satisfactory place
for the offering and for the brand
by identifying the tools (marketing
policies) to occupy and defend the
positioning from competitors'
actions
Strategic plan
focus the attention on the identification of the
benefits of the product perceivable by the
consumer with respect to the expected benefits
and assessment of the ability to satisfy them by
the competitor’s offering
Analytic plan
Positioning Strategies
3. Repositioning in relation to competitor’s offerings,
that involves a process of positioning shifting from an
old to a new location in potential consumer’s mind
2. Research and achievement of a new positioning
based on new attributes not yet used or promoted as
new value for consumers;
1. Stabilization of current positioning of the product,
brand or firm in consumer’s mind;
It’s a change in positioning if and when market conditions
change. It usually happens for two reasons:
• To counter new competitors;
• To be more responsive to consumer preferences.
The repositioning must be carried out without creating confusion
in the perception of customers, adopting a specific
communication strategy that is credible and consistent with the
previous image.
The Repositioning
«We’re an organic tea company. A
premium juice company. A coconut
water company. And much more»
Coca-Cola's attempt to reposition itself
as a "good" product also for health,
following the growing attention on the
health risks associated with the
consumption of sugary soft drinks.
The Repositioning
#CocaColaRenew
Positioning
Analytic plan
The main activity is the identification of required benefits:
Strictly connected with product’s
attributes; referred indirectly to the
brand
Referred to product’s and consumer’s
value and to brand’s ability to put
users in relations with the others and
with their reference group
Functional benefits
Symbolic benefits
Example: Pasta Market
Functional
benefits
Symbolic Benefits • Health and physical well-being (weight, fitness)
• Helthy way of life
• Conviviality
• Complete nutrition
• Taste
• Digestibility
Example: Positioning
• Functional benefits of the brand «Nutella»:
- Nutritional properties
• Symbolic benefits of the brand «Nutella»:
- Emotional/hedonistic: delight for taste
- Sentimental: childhood memories
• Functional benefits of the brands «Bulgari and Cartier»:
- Quality of raw materials (stones, emerald, metals etc.)
• Symbolic benefits of the brands «Bulgari and Cartier»:
- Exclusivity
- Status symbol
Example: Positioning
Positioning Map
AIMS:
• understand the perception of consumers and
the existence of correspondence between
consumer preferences and offer positioning
• compare the positioning of competing
products
• identify any ideal free positions
Positioning Maps is a tool that represents graphically the
positioning or perception of each group of competing
products in respect of two specific product characteristics
Positioning Map: car market
LOW PRICE
HIGH QUALITYLOW QUALITY
HIGH PRICE
Display consumer’s
perceptions through a visual
picture of how customers
perceive their brand versus
the competing products or
services on relevant buying
dimensions
Marketing management steps: a
synthesis
1. To identify the bases
to segment the market
2. To profile segments
3. To measure segment’s
attractiveness
4. To select the
segment(s)/ target(s)
6. To define the positioning for
each target
SEGMENTATION
TARGETING
POSITIONING5. To analyze the current
positioning of products and
competitors in customer’s mind
Operational Marketing & The 4 Ps
2.2
Marketing Mix is the set of decisions concerning the kind of
product (e.g. packaging), the price, the place, the
communication that are the marketing variables controllable by
firms, the 4 Ps.
PRODUCT PRICE PLACE PROMOTION
Marketing Mix
N.B.= marketing mix decisions should comply with a «dual
coherence» between:
• Internal (between the different single «Ps»);
• External (coherent with positioning and corporate image).
A product is everything that can be offered to consumers to satisfy
their needs. It can be a physical object and can involve people, places,
institutions, ideas. Products should comply with firm’s proposal to
satisfy the need of buyers.
Packaging, visual identity, brand, accessories
(1) Product
Ingredients, components, raw materials, shape
(service: equipment, structures for delivery)
Basic attributes
Other attributes
It depends on market and product’s vision
and strategies
 commodity or convenience goods: mass consumers goods
(water, pasta, bread and food sector in general) highly
replaceable and low price
 luxury goods (exclusive cars, high quality fashion): targeted
at market niches or at consumers with high spending capacity
Different targeting, different products
 shopping goods: products devoted to customers with
medium spending capacity and that requires careful
evaluation (professional services, travels, services not easily
replaceable)
Example:
Pasta Market
To be effective, the brand should have the following features:
- Originality
- Ease of pronunciation
- Memorability
- To be translatable in other languages
- Coherence with the product
The Brand
It is a name, a symbol, a picture, a logo or a combination of
these elements to identify products and services of one or more
suppliers to distinguish them from competitors’ products.
The Brand
“A brand is a customer experience represented by
a set of images and ideas; it often refers to a
symbol such as a name, logo, slogan, and design
scheme. Brand recognition and other reactions
are created by the accumulation of experiences
with the specific product or service, both directly
relating to its use and through the influence of
advertising, design, and media commentary.”
(American Marketing Association)
The main goals of branding
The main goals of branding
The main goals of branding
The expressive capacity of the brand:
Brand identity: incorporates all the elements used by the
company to convey the characteristics of the brand to the
market, such as name, logo, mission, know-how,
products, prices, advertising and relationship with
stakeholders. It corresponds to the desired image.
Brand image: refers to the perception that consumers
have of the brand, regardless of the company's will. It
corresponds to the perceived image.
The main goals of branding
The Brand identity is the set
of expressive elements used
by the company to
communicate with
consumers, a set of unique
associations that the
company aspires to create
and maintain.
It expresses the way in which
the company presents itself
to consumers and represents
the way in which it intends to
be perceived by the market.
The main goals of branding
The payoff (also tagline) is a
short phrase associated with
a company logo. It completes
its identity, defines the brand
and makes it recognizable
and consistent. The payoff is
an expression that reflects
the identity of the brand; it
tends to be catchy and easily
memorable.
The main goals of branding
The claim, or slogan (also
headline) is an expression
linked to a single advertising
campaign and can serve to
express certain qualities of a
product, the values of a
company or to distinguish
the brand from its
competitors, but is then
abandoned/neglected at the
end of the campaign in favor
of a new claim, which will
accompany the next one.
The main goals of branding
The brand image summarizes the brand positioning,
personality and reputation and affects the purchasing
behavior of consumers. For companies, it is necessary to
consider, to analyze and enhance it, to allow a positive
attitude towards the brand and brand loyalty.
It is the “measure” of the main effort sustained by consumers to
satisfy their needs.
(2) Price
N. B. It is the “P” more influenced by external factors (competition
in the sector) and that depends on the company's ability to
manage the other three variables.
There are no standard procedures to settle prices, but there are
three different orientations that price policies:
• Profit-oriented goals;
• Sales-oriented goals.
Price decisions are based on the long-term, since they refer to
the phase of introduction and can influence the price
throughout the entire lifecycle. There are two main strategies:
Proposal of a price lower than
competitor’s products
Proposal of a price higher than
competitors’ products
New product’s Price
PENETRATION PRICING SKIMMING PRICING
Price higher than market’s expectations
• High profits;
• Low number of early consumers.
Suitable products: innovative
The firm
can keep on
establishing
high prices
SKIMMING POLICY
Price lower than market’s expectations
• High volumes of sales;
• High number of early consumers.
Suitable product: goods not
differentiated from technical viewpoint,
with higher competition and consumers
with high price sensitivity.
Over time, price is stable but
contribution margin increases.
PENETRATION POLICY
The firm can choose to
reduce prices when
attractive segments lose
their potential and can
be re-targeted at
broader segment
New product’s Price
1,19 €
0,67 € 1,95 €
Example:
Pasta Market
2,80 €
The main activities of distribution are:
• Warehouse at the end of the production process;
• Transport;
• Support transactions with customers;
• Promotion and information communication with the customer;
• Selection, assembly, packaging and adaptation of the product in the
final phase of delivery to the customer;
• Negotiation of the conditions of sale;
• Execution of after-sales services (assistance, guarantee, maintenance);
• Acquisition and management of the financial resources necessary to
carry out the activities.
(3) Place: Distribution
Distribution channels are a «set of complex activities needed to deliver
and transfer the product, with the related property right, from
producers to consumers»
Distribution channels permit firms to reach their market.
The decisions related to distribution concern the definition of
the activities that organizations carry out directly and
indirectly.
Direct channel Indirect channel
Activities are managed without
engaging external actors
Producers reach consumers
directly.
(e.g. selling on catalogue, by
phone, through email, e-
commerce)
Some activities are entrusted to third
parties.
Every stakeholder engaged in one of
the activities performs a different
step of distribution channel. The
more individuals are engaged, the
more the number of intermediate
phases in the channel increases.
The composition of Channels
Producer
Producer
Producer
Producer
Consumer
Retailer Consumer
Consumer
Consumer
Retailer
Retailer
Stockist
Stockist Agent
DIRECT CHANNEL
SHORT INDIRECT
CHANNEL
LONG INDIRECT
CHANNEL
Distribution Channels
The source/ sender (a firm or an organization) develops a message (e.g.
an advertising campaign) and send it through given means of
communication (television, press, front-office employees, sales staff etc.
) to the recipients (target-market).
(4) Promotion: Communication
Sender
Encoding
Sender
Decoding
NOISE
Receiver
CodeCode
ChannelMessage Message
Response
Context of Sender Context of Receiver
1. Selection of Receiver
2. Selection of communication goals
3. Development of strategic planning
Communication Strategy
4. Budgeting
5. Development of the message
6. Selection of media
7. Programming times and modalities of action
8. Definition of the standards for performance monitoring
9. Evaluation of effectiveness
• existing consumers
• potential consumers
• acquired consumers
• competitor’s
consumers
• suppliers
• shareholders
• employees
• Salesperson
• intermediaries
• public institutions
• public opinion
1. Selection of Receivers
In the target market Other receivers-stakeholders
(with different roles in the buying
process)
Communication Strategy
Depending on the receivers:
• Encourage the demand
• To inform the market
• Persuade consumers to buy (to guide users’actions by indicating addresses, phone
number, etc.)
• To create or to strengthen the image of a brand/ product
• To boost the institutional image of a brand
To enhance the effectiveness of
strategies, goals should be:
• measurable
• based on market research
• addressed to a defined target
• realistic
• coherent with marketing plan
• supervised periodically
2. Selection of Communication Goals
Communication Strategy
3.Development of Communication Plan (Strategy)
• Main goals related to the total strategy
• Integrated set of communication forms for each stakeholder
• Selection of the concept (creative idea) that should lead the
content of the message
• Selection of communication means and vehicles for each
target
Communication Strategy
4. Budgeting
5. Development of Communication Mix Strategy
• Advertising
• Sales Promotion
• Public Relations
• Sales persons (front-office employees)
6. Development of the Message
Content based on:
• target and marketing goals (tone of voice)
• brand strategies (reputation, image, identity…repositioning)
• stage of product’s lifecycle
Communication Strategy
• 8. Programming of times and modalities
• 9. Definition of standards for performance
monitoring
• 10. Evaluation of effectiveness
7. Selection of Media
Based on:
• The kind of product
• The features of market
• The characteristics of communication
Forms (advertising, sales
promotion, P.R., salesperson)
Communication Strategy
The set of forms (means, instruments) through which businesses
can realize communication
ADVERTISING
SALES
PERSON
SALES
PROMOTION
PUBLIC
RELATIONS
Communication Mix
SALES
PROMOTION
•Mass communication
•Impersonal
•Targeted at consumers and
retailers
•For product revitalization
in the phase of maturity or
decline or to enhance users’
loyalty
•Standard
message
•Rapid
effectiveness
•Nonconstant
message
•Absence of
direct
feedback
Communication
Mix Lever
Man features of
communication
Pros Cons
ADVERTISING •Mass communication
(high size market).
•Impersonal
•For commodity goods in
the phase of introduction
•Targeted at consumers.
•Standard and
measurable
message
•Absence of
direct
feedback
•High general
costs
Communication Mix Levers
Salespersons •Focused one-toone
communication
•Personal
•Usually for
manufacturing
goods
•Targeted mainly at
consumers
(retailers, too)
•Direct feedback •High costs per
contact.
Communication
Mix Lever
Man features of
communication
Pros Cons
Public relations •Mass
communication.
•Impersonal.
•Strengthen brand
image.
•No direct costs
• Reliability of
message
•No direct feedback
•Not controllable/
measurable
message
Communication Mix Levers
Antonietta Megaro
amegaro@unisa.it
THANK YOU
Questions?
Comments?