Marketing Theory
see www.careabout.co.uk/marketing/index.evpx
The Underlying Marketing Theory
If you have been confused by the range of marketing terms used on this site, don't be surprised.
This is because the same marketing terms can, in practice, mean quite different things in different circumstances. It takes experience to know the difference, and experience is the one thing we cannot deliver on this web site.
However, this page looks to start with some basic ideas, and provide a context for the marketing theory.
We are going to look at:-
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How you make people aware of your products
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How you sell your products at the best price, and
- How you keep your customers once you have them
In marketing terms this is about:-
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Targetting
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Branding, and
- Customer Loyalty
We will expand on these concepts as we go along.
Targetting
Making people aware of your products and doing so in the most cost effective manner is about targetting.
That is getting:-
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The Right Message
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To the Right People
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At the Right time
Getting the right message to the right people, is the easy part.
In this case you :-
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Think of the product and who is likely to buy it
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This is your Product and Target Market
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Think about what our product does its Features
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Put yourself in the mind of the target market and consider why they would buy your product, the Benefits
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Think about your Competitors products and how you are going to differentiate your products from theirs in the minds of your target markets
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Think about the most effective communications media, TV, Radio, Direct Mail, Press, Email, PR etc
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This is your Communications Strategy
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Think about a combination of media, this is Multi Channel Marketing
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Test your communications strategy, by starting a Dialogue and measure Cost per Response
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Use this data to develop your Data Strategy
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Different Target markets will respond differently to different messages, this is your Segmentation Model
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As you understand who responds to what you will develop a view as to Why, This is Needs Analysis
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All of the above is Market Research
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This will deliver a view of what people want next, this is Vision
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Vision is the feedback from your External Communications
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Ensuring that your staff are up to speed with that vision, and hence working towards developing products your customers want, is the job of Internal Communications
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The Process of implementing your internal communications is Change Management
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Repeating the above is part of Sustainable Competitive Advantage
At the right time, is about ensuring that your products and services are Front of Mind when the customer takes a Buying Decision.
This begins to move us into the area of THE BRAND
Staying front of mind is about Brand Awareness, the more people who are aware of your brand the more sales you will make. This of course assumes that they are aware of you in a positive light.
Creating awareness of your brand will start a Brand Interaction, customers will purchase your product, and either like it or not.
However this process is often more complex than the customers themselves realise. Let's look at Brands a bit further.
The Brand
How you sell your products at the best price.
David Ogilvy said "Ultimately the value of a brand resides in the mind of the customer"
Junge the Philosopher built on Freuds ideas about Ego and ID and developed the concepts of the Rational and Emotional sides of our psyche. This thinking has proved to be very influential when it comes to Brands.
There are two elements to a Brand. The Rational and The Emotional.
Rational
What is in it for me?
Can I buy this product more cheaply or more conveniently elsewhere?
There is no Brand Loyalty associated with the rational element of a brand. As such products that are differentiated on a purely rational basis will compete on price.
(Given that Gross Profit is a key determinator of Sustainable competitive advantage, this is clearly a poor strategy. This is also why organisations spend so much money on advertising).
Emotional
What does this buying decision say about me?
Does it increase or detract from my status in the eyes of my peers?
See Gucci Case Study
This is why people will pay £100 for the right brand of Trainers, Think about the Armani clothing brand. Cartier jewelery, Ferrari cars, Ducati Motorcycles, In economic terms they all have Quality Goods status. This is the emotional element of the brand.
It is also the emotional element of the brand that delivers Customer Loyalty (see below)
However there is an interaction between th emotional and the rational elements of a brand. The Emotional Brand sits upon Rational Pillars, and each brand interaction or dialogue, with the rational elements either builds upon or detracts from the Emotional Brand. This is why your internal communications are so important.
Customer Loyalty
We have claimed that the emotional side of the brand effects both price and customer loyalty. We know that you will pay more for the same diamond from Tiffany's, than elsewhere. Customer Loyalty is less tangible, however it helps us to see why the emotional elements of the brand are so important when it comes to the whole range of goods. (See BSkyB case study)
Maslow's hiearchy of needs gives another perspective on how we differentiate ourselves from our peers in status terms. We all aspire to do better for our families and our children, Maslow tells us that this is not about money, it is about what we have to offer to our peers,
Ultimately these are the principals upon which the CareAbout Community is built, and we believe are the true determinators of Sustainable Competitive Advantage.
People will respect you if you add value to each and every relationship
This is the basis of Needs Analysis
Thank you for Joining our CareAbout Community
Back to the Marketing.
The Loyalty Ladder
Keeping Maslow in mind, you can see that there is a parallel, between people's relationships with their community, and their relationships with the emotional elements of brands.
You can also see that each brand interaction either builds of detracts from your trust of that brand.
The stages of a relationship with a brand are listed below:-
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Suspect Someone we think will be interested
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Prospect Someone who has expressed an interest
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Customer Someone who has purchased from us
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Advocate Someone who had made multiple purchases
The above categories are an additional segmentation tool for your target markets, and there is some interesting analysis to be had from how quickly certain groups of customers climb the loyalty ladder.
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