marketing 101, understanding marketing basics, and fundamentals

every organization has customers regardless of whether you're a commercial for-profit firm or a non-profit all companies must be seen as relevant to those customers if they want to survive marketing then is getting customers to believe that your products and services are important and that they deliver a better value than the competition's smart companies see marketing as an investment that's because the marketing function may be the most critical in any organization marketing is how companies wage competitive battle in the marketplace if a company doesn't fight the good fight it won't be around long companies that Excel up marketing not only survive but they grow in value but marketing is hard work it's a world of ambiguity and constant challenge think about the things that change for a company for example consumer trends new generations of consumers Millennials for example have different needs than previous generations a good marketer has to adapt to that competition changes new competitors enter the market and the old competitors try new things to take your customers away marketers are also affected by changes in technology innovations in new products as well as new ways to connect with customers especially social media have a dramatic impact on the marketing function but companies are also affected by external factors like the political climate economic conditions as well as the regulatory environment a sudden downturn in the economy stiffer regulations in your industry or a surprise election result might impact consumer behavior you can't predict these changes but you can adapt to them if you have two things a well-thought-out marketing strategy and a written marketing plan a marketing strategy defines which customers you're going after and how you'll change their beliefs about your products and services your marketing plan outlines the specific steps you'll take to implement your strategy having both helps you prepare for the unexpected so you can adapt and refine your marketing programs as needed within an organization think of the marketing function as the hub of a wheel connected to that hub or all the other activities within the company operations sales finance and so on the marketing function coordinates all these other activities to create value for customers it takes talented well-trained people led by experienced marketing leaders look at the most successful companies today and you'll find that they invest in training to keep their marketing skills strong and that's what this course is all about the marketing planning process has four phases in the analysis phase you'll learn about your customers in terms of how and why they buy your product you'll analyze the competition and how they compare it to your company in terms of strengths and weaknesses you'll also analyze the overall market to understand its potential and where the most attractive segments of the market are to earn revenue in the strategy phase you'll use what you've learned to make decisions around segmenting the market targeting specific parts of those segments and ultimately how you will position your products and services to win over customers in the tactical phase you'll create marketing programs to execute your strategy you'll make decisions around your products and services and how they have to perform in delivering benefits to your customers you'll set prices you'll create sales support material and you'll develop a marketing communications campaign and finally is the measurement phase as the name implies this is the part of the process where you find out if you're achieving what you've expected to achieve but it's not just measuring sales it's finding out if you're getting business from the customers you expected to get business from and it's also finding out if they bought your products and services for the reasons you expected the measurement phase helps you know if you're getting a good return on your marketing investments a good marketer is disciplined and doesn't cut corners in the planning process it takes time and lots of hard work but in the end it's worth it good marketers know the value of a diverse and talented team of colleagues to help develop and execute their marketing strategy you'll need to draw on their expertise their market knowledge possibly their resources and their network your team will include colleagues inside the company as well as external partners like advertising and promotional firms let's review the various roles of your cross-functional team first is finance your finance department plays a very important role in making sure you have sufficient budget dollars to execute your plan now may at times feel like the finance guys are there just to cut your budget but believe me they want you to succeed after all the marketing effort is the key to achieving revenue goals without your efforts budgets might have to shrink even smaller making their job even tougher finance partners will also help you in the measurement phase of the planning process they'll help you quantify your AR OMI return on marketing investments and they'll help find ways to improve it in the next business cycle marketing research is another key role you'll need on your team your company may have a separate marketing research department or it may outsource it but either way you'll need their help understanding customer needs testing new product concepts or perhaps testing a new advertising message marketing research can be applied at just about every step of the marketing process so be sure to get their advice on the best way to use this important resource next is your technical team these are the people who develop your products and services they might be engineers or scientists in an R&D department or perhaps software developers it depends on the nature of your business you'll need their help making sure your products and services deliver the right benefits to delight your customers speaking of delighting customers be sure to involve your design team in many companies design is a separate department and they can help make sure your products and services are delivering the right experience for your customers to build and enhance the brand promise most companies have a sales function and you should enlist their help in developing a marketing plan after all they're on the frontline day-to-day and they have a lot of insight about your customers and your competition they'll have ideas about the selling tools they need to succeed be sure to get their input depending on your business you may also want to involve colleagues from manufacturing or operations these are the people who make the products and deliver the service a customer support team for example might have great insights about customer complaints or service issues external partners might include your advertising agency your branding company a public relations firm and perhaps a marketing consultant they're there to help you succeed so make them a part of the team from the very start once you've identified the key players on your team make sure they're aware of your planning schedule that they know their role and they know the expectations that you have for each other in developing a great marketing strategy a formal written marketing plan is a great way to document the planning process it serves many purposes first it captures all the things you and your team have learned about the market the competition and your customers this information is critical because it becomes the supporting evidence for the strategies that you and your team decide to pursue second the plan serves as a tool to help you align the organization marketing involves many people so you'll need to get everyone on board and going in the same direction the written plan becomes a source document to create presentations to conduct training and to give directions to external partners believe me you'll use it a lot finally the written plan lays out a coherent and coordinated set of marketing programs with schedules and budgets so you can run a smooth operation now there are many formats you can use for the written plan but most plans will include the following components an executive summary that gives a brief high-level review of the plan the situation analysis that documents all the data about your company's strengths and weaknesses the market opportunity the competition and of course the customer the strategy section that outlines how you segment the market who you plan to target and how you will position your products and services in the market the tactical programs including what products you will offer what prices you will charge how you will promote your products and how you'll distribute them a financial section that documents your revenue projections and budget requirements an implementation plan that outlines the timing of your programs and who's responsible now to write the plan don't wait until the very end of the planning process I like to start writing it from the very beginning here's a tip that makes that easy create a blank PowerPoint presentation with just the headings of each component on a separate page keep it with you during team meetings as you collect information or make key decisions write or type that into the appropriate slide that helps you keep the document up to date as you move to the process when you have enough written material go ahead and create a first draft but be sure to date the draft as you'll be making regular updates and revisions a written marketing plan is a dynamic document and you should expect to make changes to it as conditions in the market change if you create a great plan and update it regularly it'll help you stay ahead of the competition in marketing you'll often hear the terms b2b and b2c b2b means business-to-business that's where your business is selling products and services to other businesses b2c stands for business to consumer where you're selling goods and services to everyday people like you and me as you begin the marketing planning process it's important to know the key differences between the two keep in mind that the marketing planning process is exactly the same for each but how you execute certain steps in the process will vary let's explore how when people buy products and services they're buying a collection of benefits and you can categorize those benefits into three types functional benefits refer to a product's physical performance economic benefits are related to saving money or saving time and finally our emotional benefits these are related to the psychological feelings you get when using a product perhaps the biggest difference between b2b and b2c marketing is what types of benefits are most important for consumers emotional benefits tend to be most important while for companies the economic cost savings and other financial factors will drive their decisions the other key difference is who's involved in the purchasing process in b2b marketing companies usually have a purchasing department buy goods and services the person involved won't be the one who actually consumes the product or service so they're more logical and unemotional when they make buying decisions that will affect how you market to them consumers on the other hand usually buy products for themselves or for others they make the buying decisions themselves now they too can be quite logical for some purchases but there's usually an emotional involvement here - you'll need to understand these emotions to develop effective marketing strategies it may sound obvious but the first step to developing a marketing plan is to know what business you're in how you decide that can have a big impact on the size of the market you compete in in the intensity of competition you face you can define your core business very broadly or very narrowly or you could define your entire core business around a primary benefit notice that with each change in the core business definition the size of the business opportunity gets bigger that might sound like the way to go the bigger the better right not necessarily with each increasing level of opportunity comes more challenge you have more competition to consider but perhaps even more important is that you have to be good at so many other things you have to decide whether it's better to focus on the things that you do really well and deliver that consistently to your customers or you may want to expand as broadly as you can and try to grow the business my advice is to define your core business just up to the point where you can still leverage your core skills or what are called core competencies if you try to do things that you're not skilled at doing you'll run into trouble you can write a marketing plan for one specific product or service a collection of products or services or for the company's entire family of products and services you should decide this before you start the planning work because how you decide has a dramatic impact on how you go about marketing when you develop a marketing plan for a single product the entire focus is on all the resources and activities needed to get just that product into the hands of prospective customers all your decisions about how you communicate sell and set prices are about that product only even if you have other products to offer that might make sense especially for a brand new product but sometimes it makes more sense to develop your marketing strategy around a family of products or even all of them it's usually much more efficient to spread your marketing dollars across all of your products than concentrating on just one so how do you decide you don't the customer decides this for you why do I say that because in marketing we always want to take the customers perspective you may be selling a product but your identity in the customers mind is represented by brands regardless of whether you're marketing to consumers or the businesses your brand is how customers understand you therefore we base our decision from the outside looking in a brand is essentially the promise that you are making to the customer to deliver a set of benefits brands usually have an identity in the form of a distinctive logo or a name if your company and products are known by one brand such as McDonald's then it would make sense to develop your strategy at this level of the firm if your company is not well known to customers but they know your products brand names very well then it makes more sense to develop your plan around each specific brand you've heard the old saying that customer is always right when deciding on what level to write your plan take the and write the plan around how they understand you and your family of brands Marketing would be relatively easy if it were not for the fact that you always face some type of competition a competitor is anything that once the same thing that you do it can be an individual a company or even a completely unrelated activity that distracts your potential customers away from you you need to understand your competition for a lot of reasons first you need to know which ones to focus on and which ones to avoid you want to stay away from a competitor if they are much stronger than you if you take customers away from a stronger competitor you may trigger a reaction from them that you aren't prepared to handle the intensity of competition will affect the overall potential for success of your business this is why it's important to consider all types of competition when planning your business to ensure that you have the edge over others in your industry you need to compare your strengths and weaknesses to theirs to see how you match up this will help you select the right strategy to win competitors come in three different types direct indirect in what are called substitutes a direct competitor is anyone who is selling the same things you are and delivering the same benefit an indirect competitor sells similar products with different benefits a substitute is any unrelated product or service that a consumer can use in place of your products or services to create a matrix list your company and your competitors across the top down the side list the things that you want to compare things like size market share strengths and weaknesses and especially the key strategy elements like the value propositions what does each company have in terms of key resources and how do they use those resources to acquire and retain customers a competitive matrix will vary a lot depending on the industry if you're in a high-tech industry you'll want to compare R&D activities like spending number of Engineers or number of new products launched in service industries be sure to compare things like how each company delivers the service how they train their employees or how they're rated for their service every industry has certain key factors that every competitor has to pay attention to so it's likely those factors will be the ones you want to compare a word of caution when you collect competitive information use only information that is publicly available never try to get inside information about your competitor that they would consider confidential when you complete the matrix take a close look at it and find some insights that you'll need later when deciding on your strategy what conclusions can you draw from the matrix by considering all the possible ways your customer's needs can be satisfied and creating a strategy for handling the competition you'll create powerful advantages in the marketplace when consumers use a product or service they do so because they seek the bundle of benefits that a particular product or service delivers to complete the product analysis you need to test each feature of your product compared to the same feature on your competitors products you need to determine which feature perform better than the competition which perform the same and which perform not as well when you complete the analysis take a close look are there features that need to be improved are there certain competitors you want to avoid or possibly go after based on product performance later on you'll be choosing a high-performing feature and its benefits to base your marketing strategy on here's why when you outperform the competition on a feature that is important to consumers and they know it guess what you earn a lot of customers and that's what good marketing is all about Marketing is about acquiring and retaining customers so you absolutely have to have a thorough understanding of who they are where they are what they believe about your products and services and how they go about purchasing them good customer analysis starts with deciding on exactly what is a customer how you define a customer will have a big impact on how you go about reaching them you can define them very broadly or you can make the definition very narrow and specific a customer is anyone who's going to replace their wallet within a year you could even be more specific and define a customer around their attitudes and brand loyalty once you define a customer you need to understand what's going on in their minds in terms of what's important to them and what perceptions they have about your products and services versus the competition customers buy things for a variety of reasons but some are more important than others if you know what's most important to them you can appeal to that need when trying to get them to buy or you can try to raise the sense of importance they place on another factor you also need to measure how they rate your product versus others in how it delivers each benefit they may have misperceptions that you need to change you may be able to emphasize a key feature of your product that is better than the competition this analysis will be critical later when you begin segmenting customers in many ways great marketers understand their customers better than they understand themselves a solid customer analysis prepares you to develop solid marketing strategy customers follow a distinct set of steps when buying anything that process may take a matter of seconds such as an impulse purchase in a store or it may take a matter of months such as the purchase of a new home or a car typically though these steps are as follows first is the need recognition phase this is where customers realize that they want something that can be triggered internally for example if a customer is thirsty that will trigger a need for some type of beverage but it can also be triggered externally through advertising or other stimuli if a customer sees a TV commercial for a cold soft drink or perhaps sees a group of people drinking it those could stimulate the customer to want that same drink the need recognition step is very important because without it there won't be a sale the next step is information search once customers feel a need to have something they start gathering information about solutions for that need they get information from a wide variety of sources including commercial advertising internet search while shopping in a store and most importantly from other customers this is a critical step because this is where a customer is most receptive to your marketing message once a customer gathers information they go to the next step which is to evaluate the alternatives customers make choices based on two things what features are most important and which brand does the best job in delivering those benefits customers will make head-to-head comparisons between your product and the competition so it's critical that you give them a complete picture of how your product will best satisfy their needs eventually the customer will narrow their choices down to one brand and they'll go to the next step the purchase phase buying a product may take a matter of seconds such as buying a soft drink in a vending machine or it could take months that might involve negotiations financing training maybe installation complex expensive products usually take a lot longer to buy then your everyday consumer good that you'd find in a grocery store now you might think that the buying process ends here with the final purchase but there's one last step it's called the post purchase behavior phase once customers start using the product or service they compare the results with their expectations that the product work is expected how did the product make them feel when they used it this phase is also critical because customers will share their experiences good or bad with other customers and with the way information spreads through social media that can be really helpful or hurtful to your marketing campaign something else happens at this phase that a marketer needs to be aware of it's called buyer's remorse customers might start having second thoughts on whether it was a good idea to buy the product they start to wonder gee did I pay too much did I really need this product was there a better alternative out there that it should have but instead marketers need to weigh in at this phase and remind the customer that they made a great choice you can do that with advertising either way you don't want to just assume your customer is satisfied reach out and find out great marketers know they have a role to play in each step of the customer buying process they know where these steps take place when they take place and who's involved with these insights you're ready to develop an outstanding marketing strategy analyzing a market means estimating how many potential customers you might be able to sell your products and services to when analyzing any market you want to group customers into four types first are the customers that already buy from you in fact not only do they buy from you they buy exclusively from you and never from a competitor the second group is similar to the first group and that they currently buy your products and services the difference is these customers also buy products from your competitors why that's because for some categories of products customers want choices the clothing market is a good example you almost certainly buy your clothes from many different manufacturers of clothes the market for food is another example the third group of customers are those that buy solely from your competitors and never from you at least not yet and finally the fourth group of customers are those that don't buy your type of product from anyone we call them non category users these potential customers are important because acquiring them gives you a new source of revenue instead of taking market share from a competitor getting these customers helps you increase the overall size of the market now when we estimate the potential number of customers that we might be able to capture for each of these four types we do this so we can decide where we want to concentrate our marketing strategy in marketing it's the old adage fish where the fish are it's a two-step process first we estimate the total number of customers then we make assumptions of what percentage we might convert to our brand once you're done with the market analysis you've completed the analysis phase of the marketing planning process it's time now to start crafting strategy you if you've been following along with the earlier videos in this course at this point of the marketing planning process we've completed the analysis phase we know a lot about our customers we've estimated our market and we're the most potential is we understand our competition and we know how our products and services perform versus theirs it's time to start the strategic phase of our planning to create a marketing strategy you have to perform three steps first is segmentation where you break your customers into homogeneous groups next is targeting where you decide which of these segments to go after and finally is positioning where you determine how you want your customers to think about your products versus the competition so they're more likely to buy yours let's focus first on segmentation breaking customers into groups helps you be efficient with your marketing resources it helps you focus only on the most relevant customers and avoid wasting time and money on the less relevant there are four ways to segment a market the first is demographic this is where you group your customers by their characteristics such as income level age gender or their height and weight it's useful for certain products or services that deliver a benefit specifically tied to that characteristic for example if you're marketing a shampoo for redheads then you would want to group customers by hair color geographic segmentation groups customers by where they are physically knowing where your customers are helps you know where to place stores for example and where to communicate or sell to them behavioral segmentation is grouping customers by the things they do it can be customer related behaviors such as how much they purchase how frequently they purchase or their price sensitivity it could also be behaviors such as hobbies or habits finally there is psychographic segmentation this is grouping people by how they think their attitudes and aspirations especially about the benefits and ultimately the values that we explored in feature benefit laddering an example of psychographic benefit would be need for prestige or need for convenience segmenting this way tends to be very powerful segmentation tells us how we are going to appeal to customers in targeting we make decisions on whom to go after it's a process of narrowing down your audience to a selected group now that may seem like a bad idea after all the whole idea of marketing is to get as many customers as you can right that's true but keep in mind that your marketing message will not appeal to everyone you're better off narrowing down the audience to the most receptive ones then blasting your marketing message to everyone hoping that a few stick you'll waste a lot of money that way so think of targeting as looking for the largest group of customers that are most willing to consider buying your product or service based on your marketing appeal when I do targeting I start with the attitudinal benefit that we selected during segmentation then I test to see if there are any demographic characteristics of people that might be more inclined than others to want that benefit if there are then I want to identify them and market to them I do the same thing with geographic data are certain cities or countries more likely to want that benefit next I consider the behavioral data remember the four customer types we described in the analysis phase I look for two things which of the four groups is large in size and might be most receptive to my marketing message think about how we define our core business how we defined our scope in customer definition and then how we narrow down our audience using various segmentation approaches turning these dowels to tweak our model gives a strategy that defines how we are going to compete and who we are going to compete for we have one final step we have to define what we are going to say to the market to convince them that step is called positioning perhaps the most idea in all of marketing is that of positioning a company's value proposition is the single-minded claim that it makes to change the customers mind and cause them to do something that something could be to buy a product to try a product or to pay a certain price maybe to visit a website or to think about your brand in its benefits in a certain way how you position your product in the market will ultimately determine its success it may seem a little abstract but positioning happens up here in the mind of the consumer think of the consumers mind as a three-dimensional space and in that space they form opinions about products and services in a particular category they have perceptions about which products perform better or worse on certain aspects they consider certain features more or less important than others when deciding what to buy and the good news is as a marketer you can change these beliefs you can move them in a new direction that increases the likelihood of buying your product you do that by making a claim and by supporting that claim with credible reasons to believe or RT B's as we call them let's look at how first we define the current do that is what are the targeted customers doing today with respect to your product and the category you're in given that current do what must their current belief about the products be out there today next given our strategy what is it that you desire customers to do what desired beliefs do you want them to have that will cause them to do the desire do when I say beliefs I mean the beliefs in opinions they have about your primary benefit that you selected at the segmentation step do they think it's important how do they perceive your product versus the competition in delivering that benefit now the hard part given the current belief and where you need to take them to believe the desire belief what claim must you make what's supporting evidence do you have can you bridge that gap or have you overreached a bit Marketing is about changing customers beliefs so they prefer your products and services versus the competition ultimately though we're working towards a financial or other result to support your business the final step of the strategy phase then is to set goals setting goals helps you in two important ways first goals help you decide how much marketing resource you'll need to devote to your tactical programs the more aggressive goal you set the more resources you'll need and second goals help you measure your progress during the marketing campaign to see if you need to make adjustments later in the course I'll show you how to set up key performance indicators or KPIs and how they connect to the goals you set here a marketing goal can be anything that's relevant to the success of the business most companies set a sales revenue goal but it doesn't have to be dollars of revenue you could set goals for number of units sold or perhaps market share or even number of new clients acquired if you're cross-functional team includes a colleague from your finance department consult with him or her on this for a marketing goal to be the most useful it should meet the following criteria first it should be specific if you simply say your goal is to increase market share that would not be specific enough increasing market share from 15% to 17% is much better because it's specific second the goal should be measurable setting a goal that can't be measured will become frustrating for you and the team especially when you try to gauge your progress in reaching it next the goal must be attainable setting an unrealistically high goal won't do you any good in fact it could hurt your campaign by causing you to spend more marketing dollars than is warranted the fourth criteria is relevant that means the goal is directly related to marketing strategy and finally the goal must be time bound meaning that the goal will be achieved during a specific period of time that could be any timeframe you want but most likely you'll set the same timeframe for the same periods of time that your company measures financial results a year or perhaps a quarter or even monthly taken together these criteria spell the word smart and that's an easy and smart way to remember these important goal setting criteria you completing the STP process segmentation targeting and positioning gives you a clearer idea of how you're going to compete who you're going to target and what you're going to say to the market to position your offering now you have to bring that positioning to life and you do that by creating and executing tactical marketing programs in marketing we use four types of tactical programs product and service pricing promotional communications and distribution the last one distribution is sometimes referred to as place because that's where we're deciding the places we need to put our product to get it to customers now taken all together gives us product price promotion and place and you may recognize these as the famous four PS of marketing let's review each one by product and service programs these refer to all of the aspects of how products and services perform their job in delivering benefits it includes things like the design of the product how it feels to use it the packaging of the product and the people and processes involved in dealing with customers it's not just how the product functions but it includes the entire experience of buying and using it that experience should be consistent with your positioning and the brand promise pricing involves two things setting the actual price that customers will pay and communicating those prices in an effective way the price of your product or service implies their value that the consumer should expect from buying and using it promotion includes all the things you say outside of the company to the market this is where you broadcast the value proposition and other information about the product it includes advertising in-store promotions email campaigns social media and sales promotions and finally distribution these are the programs that create an effective pathway to get your product from the factory into the customers hands somebody has to take the product ship it store it place it on the shelves sell it and possibly service it once the sale is made all four p's have to work together to convey the value proposition no one of the four-piece can carry all the load a good marketer uses all the tactical tools available to make the biggest impact possible Marketing is all about delivering value to customers and you do that by offering them the right products and services think of products and services as benefit delivery vehicles there are a collection of various features that create value when customers use them so how do you build the right product or service for that you need to go back to the analysis phase of the marketing planning process from there you'll need the results of your product analysis that's where you did a detailed comparison of how your product compares to the competition's feature by feature you also created the feature benefit ladder that unpack the product to see how features connect to the benefits that customers seek you'll also need the customer analysis especially the market research on what factors are most important to customers when they buy a product as well as the data on how they perceive your brand versus the competition and finally you'll need your marketing strategy as expressed in your value proposition that we covered earlier as a marketer you have to give your development team guidance on four aspects so they build the right product first is what features the product must have to compete against the competition and also satisfy the customer you have two especially guide them on what features or feature to emphasize the most look at your value proposition what benefit are you promising then look at your feature benefit ladder find that benefit on the ladder then move down the ladder to find the set of features that deliver it you want to make sure those features are most evident when the customer uses the product next your development team needs guidance on performance of each feature once again your value proposition should guide you on whether the product needs to work better than the same as or slightly less effectively than the competition also look at your market research if consumers perceive your product as less effective on a particular feature you may need to have the development team increase its performance your development team also needs guidance on design meaning the look and feel of the product or service what does your brand stand for given that what must your product or service look like to express that brand essence finally your team must think of the product or service as an entire customer experience remember the customer buying process from earlier think of each step as a touch point where you as the marketer have an opportunity to figuratively touch the customer with something about your product or service touch points include things like the service customers get in the store and how your products are displayed it also includes things like the packaging and perhaps the instructions on how to use the product everything the customer comes in contact with including things online our touch points based on their experience in each touch point the customer will form beliefs about what your brand stands for whether it's consistent believable and authentic the more authentic the more loyal your customers will become and that's a very good way to build your business setting prices is the quickest of the four-piece but that doesn't mean it's the easiest in fact making a mistake here can be very costly in terms of lost revenue as well as sending the wrong signal to the market about your products and services let's start with some definitions to be successful at pricing you need to understand the difference between a product's cost its price and its value the cost of the product is all the direct and indirect expenses that you experience as the manufacturer to make the product things like raw materials and labor for example price is what a consumer has to pay to acquire the product a price is a signal a piece of information about what you might ask about the value value is what the consumer gets out of the product the collective set of benefits delivered by the product the most common mistake in pricing is setting it based on your costs it may seem counterintuitive but price is unrelated to costs your customer doesn't care what it costs you to produce the product they don't compare your costs to what they pay instead they compare what they pay versus the total value they get from the product if value exceeds price then they'll buy the product and if not they'll ignore the product value-based pricing then is the process of calculating the total delivered value from using the product then setting the price at or just below that amount think of price as a shortcut the price quickly tells a customer a lot about the quality and value but what about the competition and their prices go back to the 5 box positioning tool and look at your value proposition if you're positioning your product is superior to the competition then you should set the price higher than theirs if your product is equivalent to the competition make the price the same and if your product is inferior to the competition set the price lower that's how price becomes a signal of value in comparison to competitors prices price is a signal of value in a powerful part of the 4ps so make sure you put it to effective use in your marketing campaign after you set the price of your product or service you have to communicate it in an effective way that supports your overall strategy a simple framework for this is answering the questions who what why when and where your target audience of course is who you want to communicate to but it's more than just potential customers you also want to make sure your partners such as distributors understand your pricing structure generally speaking you want to make your prices available to the public including competitors they may be setting their prices based on yours what you communicate about pricing is much more than just the dollar amount when a customer first sees the price that's a critical time to remind them of the value they're getting for their money be sure to tell them about any discounts that might apply or any other terms and conditions such as shipping and handling charges you want customers to have a complete and clear picture of your pricing if they're confused about something they may look elsewhere and this is the main reason why you communicate price customers ask themselves a simple question am I getting my money's worth you need to help them answer this question or they'll do it by themselves and they may come up to the wrong conclusion customers try to calculate what they're getting by comparing the total value to the total price paid the easier you make it for them the more they'll understand your offering when you communicate the price that depends on several factors remember the customer analysis and the steps of the buying process we talked about earlier that analysis helps you understand what factors are most important when buying your product if price is the most important factor then you must communicate price very early in the buying process if it's not the most important factor then you want to communicate it later during the phase where customers are evaluating their alternatives the key is to make sure they understand the value they get in all the features of the product or service before they get the price where you communicate price depends on the point of sale and where people go for information about your products if customers do their research online you'll need to have prices on a website either yours or a distributors if your prices change very often or you offer regular discounts it may be best to disclose price at the same location where the customer buys the product think about the touch points of the customer experience and where those occur physically then select a location for disclosing the price that helps the customer make the connection between price and value oh and one final tip pricing is a business activity that is governed by certain laws it's usually a good idea to have your legal advisors review the overall pricing approach to make sure you're in compliance in the 4ps model promotion is where you communicate to the customer to get them to understand something and ultimately to get them to do something to create effective promotional programs follow these steps first determine the objectives of the program second select the message you want to communicate next select the target audience to receive the message then you select the media that will carry the message and finally create the material that you send to the market in this video I'll describe step 1 how to determine the objectives of your promotional effort there are 5 communication objectives that you can try to achieve think of them as levels of awareness first is called basic awareness customers need to know that your product or service exists before they can even consider buying it basic awareness is achieved when the customers simply recognizes your product or service when they see it or hear it mentioned basic awareness is essential for new products or for new features on existing products next is top of mind awareness now the customer not only knows your product but also would recall it first if they were asked to list the names of products in a particular category to achieve this you have to constantly remind customers about your product and that gets expensive but it can be worth it having top of mind awareness can increase your sales significantly once the customer has basic awareness of your product now you want them to have information awareness this is where the customer can actually explain something about your product to others perhaps about its features its performance or how to use the product the fourth objective that you might want to achieve is called image awareness that's achieved when the customer can explain your product and also associate your product with some mental image that image should be closely tied to the brand image you're trying to convey ideally the customer associates some image about themselves when they use or experience your product finally your marketing communication objective might be to cause some type of behavioral awareness where you're suggesting that they actually do something that behavior may be as simple as going to your website or it might be more aggressive such as asking the customer to buy the product notice how these objectives are more complicated and difficult to achieve as we go from basic awareness all the way to behavioral awareness it's typically more expensive as you set more difficult objectives so how do you determine your objective well it depends on two things what does your customer believe and understand about your product now and what is your strategy look back at your customer analysis based on your marketing research you should have some idea about what benefits in a product are most important to customers and you should know how they perceive your products performance in delivering those benefits are there any beliefs about your product that you need to change now look at your five box positioning tool here you'll find the information you need to set objectives especially in the desired belief and desire do and of course in the value proposition itself what are you hoping to communicate and how does that translate into one of our five promotional objectives once you've set the objective for your marketing communications now you need to implement it first select the message you want to communicate then select the target audience to receive the message next select the media that will carry the message and finally create the material that you send to the market the message you send to the market will include the value proposition as well as the evidence of why that claim is true we call these the reasons to believe or are tbs here's what I do to craft the message I imagine I'm standing in front of a group of customers and I'm going to explain my value proposition I know what they already know about my product so I roleplay and actually speak the words that I would use with these customers once I'm satisfied with my message I write it down and edit it sometimes with the help of a professional copywriter next you need to select the target audience this should be easy because you've already done this when performing the targeting step in STP are you communicating to your current loyal customers customers that are new to the category and so on it's important to clarify this when you send the message you need to do it in a way that the target audience knows it's for them the media channel you select depends on the target audience how many of them you want to reach the complexity of the message you're sending in how frequently they need to hear the message marketers have a wide choice of traditional media including television radio print advertising outdoor billboards and digital media which includes social media websites and mobile channels each type of media has advantages and disadvantages TV commercials for example can reach millions of people but it's expensive billboards on the other hand are not that expensive but they're limited in what objectives you can achieve it would be hard to explain how do you a complicated product in a billboard you have to weigh the cost versus the reach meaning how many customers get the message and you have to consider how much information you can send my advice is to match the medium to the message then decide on how many people you have to reach based on your available budget now you're ready to actually create the marketing material to put into the market that might be a new website a print ad or a commercial most companies use the services of a creative advertising agency for this but you'll need to give them guidance on what you want and you do that with a creative brief which I'll cover later in this course social media is an essential part of any marketing plan no matter what business you're in consumers expect a way to learn about your products and share their experiences with others online social media is a powerful way to communicate your value proposition and enhance your brand so what I want to do here is give you guidelines on how to make sure you tie your social media programs to your marketing strategy otherwise you might find yourself in a situation where social conversations are happening that are inconsistent with your value proposition or worse that are sending wrong information about your products and services effective marketers use social media in three ways the first is to listen to the conversations that are taking place the second is to join the conversation and the third is to shape the conversation I call it the listen join and shape model let me explain each of these giant social media sites like Facebook Twitter and LinkedIn as well as the smaller lesser-known sites are great sources of market information but you have to set up systematic ways to monitor these sites to find out what customers are saying to each other you have to put your ear to the ground so to speak let's look at Twitter using the Twitter search function type in the name of your product see what tweets are coming across then mention your product do this for your brand and company name you can also set up automatic monitoring of Twitter for these keywords using tools like HootSuite you can do the same for Facebook and you should set up Google alerts using keywords about your company and perhaps your competitors set up RSS feeds so that any mention of your product or brand on a website is fed to you automatically in an RSS reader once you have the pulse of the social web by listening in look for ways to join the conversation that means get out there and participate in the but you have to do it in an authentic way don't disguise your identity people will respect your comments and your company if you represent yourself and your company honestly you should join the conversation when you have something relevant to say in response to a customer or a potential customer on a social media site you may need to resolve a consumer complaint or perhaps correct some misinformation do this in a friendly helpful way and you'll build a positive reputation for your company here's a tip when dealing with the customer issue online always keep in mind what other customers are going to think about the way you are handling it if you're dealing with a sensitive issue it may be best to ask the customer to contact you offline through traditional customer service support finally you also have an opportunity to shape the conversation share information that supports your value proposition go back to your promotional objectives and create comments on sites that support that objective be careful not to over promote or you'll just annoy people and that defeats the purpose in all cases be sure to follow your company's social media policy on what you can and cannot do on the social web listen join in shape 3 effective ways to use social media and increase the likelihood of success of your marketing strategy building distribution channels may be the most difficult of the four PS depending on your business it's typically the most people intensive aspect of your marketing effort because you have to enlist lots of partners to move your products physically into the marketplace a channel is a pathway that carries things and it may involve many steps along the way three things move through it first as your product typically your product flows from you the manufacturer or reseller through to the hands of the customer occasionally that product might move back the other way in case the customer wants to return it and you have to be set up for that the other thing that moves through the channel is money and it's not just money and credit cards but also all the money related parts of the transaction which may include financing negotiations and perhaps contracting you or your channel partners need to be skilled and available to do these things again depending on your business there's one more thing that flows through the pathway and in some respects it may be the most important thing that is information and it flows in both directions from you to the customer and vice versa the information you send through the channel could be information about your product your prices availability or promotional messages about a new product the channel and all the partners in it play a vital role in communicating your value proposition in the other direction flows information about your customer it might include demographic information about who they are geographic information about where they live perhaps feedback about your product positive or negative earlier in the course I spoke about segmentation you could learn a lot of information about what's important to customers and how they perceive your product versus the competition through this channel you could learn vital information that would help you in a is your market to create your marketing strategy that's assuming that your partners along the way in the channel let you sometimes they like to keep that information for themselves they might see that customer as belonging to them not you if you want access to that wealth of data about your customers you'll have to select your partners carefully and strike the deal with them around collecting and sharing that information and that's where managing channels gets difficult conflict often arises in the channel because the various partners have competing goals your distributors for example may not like your pricing approach so they might set the prices where they want them and that price level might not be consistent with your value proposition they may also be selling competitors products and you have to do a lot of convincing and nurturing to make sure your products get the right amount of attention it takes a lot of work in energy to train and motivate your channel partners to do what's needed to put your strategy into motion but if you do it right you'll have a well-oiled machine to put more great products into the marketplace and earn new customers a distribution channel has three objectives it needs to deliver a product customers want at a convenient location and at convenient times so that your marketing effort is successful the right product means that you have the necessary inventory of product on hand when the customer is shopping that means you have to have all the models and all the styles and sizes and available options that a customer might want at that moment missing just one of these will cause the customer to look elsewhere and you lose the sale the people selling your product need to be skilled at merchandising it and explaining it to customers they might have to demonstrate the product and explain why it's superior to others the right location means that your product is conveniently located and it's easy to find the salespeople have to be skilled at transacting the purchase if you have an online store it too has to be easy to find easy to locate a product and easy to buy from otherwise customers may look for a place that's more convenient your channel must offer quick delivery or fast service it means you have convenient hours of operation and customers don't have to wait to get access to your product if you keep people standing in line too long it erodes the experience they have with your brand and they may abandon you to design a channel you have to decide three things the length the breadth and the depth length of channel means the number of intermediaries between you and the customer you may want to sell direct meaning the channel length is very short it's just you and the customer and it gives you total control of the channel or you may need to go indirect and hire partners to ship warehouse and sell your product breadth of channel means the number of outlets of each type a partner exclusive distribution means you have just a few outlets selling your product a high-end jewelry company like Tiffany's has just a few outlets whereas a company like Starbucks has thousands depth of channel means how much of the channel you own in control versus having a third party do it for you channels are expensive and you might not have the resources or skills to do all of it so you'll usually have to hire others to help imagine you work for a company that makes fine men's wallets let's design your channel you sell wallets in many countries around the world you're a small company so you'll have to use an indirect channel and hire various partners to get products into the marketplace how about breath well given your value proposition you probably want to handpick some exclusive retail distributors in various countries that can explain the benefits of your slim wallets and sell them alongside other clever high quality products the key is to integrate all four p's to create a great tactical marketing program and we'll explore that next the 4ps Marketing is an old and classic idea but still very relevant the mistake you can make is to not have all of them work together you need to create marketing programs that are in sync with each other and support the overall positioning described in your strategy it may seem obvious but it can be more challenging than you think look at your product a common mistake is to over feature the product or service by adding many bells and whistles you may be succumbing to a problem called feature creep you keep adding features to add more value but that value is inconsistent with the value proposition this can be a challenge for Rd or engineering teams who are motivated to make the product amazing you as the marketer have to guide their development to keep it in line with strategy now there may be times when your product development team comes up with an amazing breakthrough a feature that changes the competitive balance they find a way to make your product clearly superior to the competition well in that case it may make sense to accept the change and go back and revise your value proposition to fit the product's profile pricing is another area that gives marketers problems you want to resist this common mistake your product is better than the competition and everyone knows it it's tempting to say hey my product is better than theirs if I price it lower than theirs I'm gonna win big wrong pricing a superior product lower than the competition sends the wrong signal and it confuses customers they'll pay more for more value so make sure it aligned the price up so it communicates more value finally is your promotional part of the 4ps you should promote your product or service only where customers expect to see it it's tempting to put the word out about this great new product or service through mass media to get the widest exposure possible but once again if you promote your product where the customer doesn't expect to see it they may get confused and walk away your value proposition doesn't sink in think of the four PS this way each is an or of a rowboat make sure all are rowing at the same time and speed and you'll get to your final destination a lot faster you an effective marketing plan is one that lays out a coordinated set of strategies and tactics to win in the marketplace at some point in the process you'll need to gain support for that plan and perhaps the most important audience is your senior management they're the ones typically who allocate financial and human resources to various projects in your company without their full support you may end up not getting what you need here are some tips on how to make a big impact with senior leaders when presenting your marketing strategy first try to lead with a story perhaps focus on a customer who had a great result using the product this is a great way to remind people how your products bring value to customers next share what's changed in the marketplace what new threats new products or trends are out there that are creating a challenge we call this creating the burning platform you want people to understand the difficult situation you're up against then share the process you went through to create the marketing plan give credit to your team members it builds your credibility when you've collaborated with a cross-functional team be as brief as possible because you probably won't have a lot of time you should be prepared with different length presentations for example you should have a 10 minute version a 30 minute version and a 1 hour version savvy marketers also know how to present their strategy in 30 seconds or less the so called elevator speech afterall it's all about getting people on board you don't have to share every detail about your plan just the highlights present the market conditions the competitive situation your strategy in terms of who you're targeting and how your positioning approach will convert customers be completely upfront about the weaknesses or risks with your plan you gain trust when you're upfront and honest about potential issues then share your forecasted revenue and budget needs make sure they completely understand your assumptions take your time here if you see that someone has a different view around the assumptions clarify it on the spot not aligning around the assumptions now can create real problems for you later remind them that funding your marketing plan is an investment not a cost assure them that you're committed to getting them a good ROI given their experience be sure to ask them for feedback on ways to improve your plan finish the presentation by asking them for their support it's the old sales adage always asked for the order you're there to get approval so look them straight in the eye and ask for it great marketers show passion and enthusiasm for the products and services they manage if your senior managers see that you're excited and confident you're going to win them over if your company has its own Salesforce or a network of distributors they'll need to understand your marketing strategy after all they play a key role implementing it this is a great opportunity for you to help make sure your plan is successful there are two things that you need to do with salespeople motivate and educate you need to win the hearts and minds of the Salesforce and get them engaged in telling your story correctly if they feel good about your product and confident they can sell it they'll do a great job for you your written marketing plan should have all the information you need to educate your sales team but don't just make copies of the plan and pass it out it's much more effective to create a concise and motivating training session the first thing they need to know is your strategy especially your value proposition they should know who the target market is and they should know where and how to find them share your customer analysis with them what buying factors are most important to the target audience once they understand your strategy give them the tactical tools they need to sell the product first they need to understand how the product works and how it compares feature by feature to the competitor's product if possible have samples of the products so they can work with them hands on side by side next share your pricing strategy and how prices are communicated explain how the price was determined in relation to the value delivered you might get some resistance here because sales people generally like the prices to be low that's why it's essential they understand how pricing supports the overall positioning finally share any selling tools you've created to make their job easier these could include product brochures or tools to demonstrate the product you might even have a suggested selling script for them to use when you conduct training for salespeople here are some suggested tips first you may want to break the team into different experience or skill levels that helps you deliver appropriate information to each group consider using hands-on training and role-playing exercises perhaps let them practice how to demonstrate the product and engage prospective customers speaking of customers see if you can invite some customers to the training if not consider sharing testimonials of customers talking about how much they like the product another good technique is to use one of your most successful salespeople to help with the training let them share a case study of a salesperson who has already sold the product successfully salespeople will see your message is more credible if it comes from one of their own colleagues repetition is the key for training a sales force consider regular webinars as a way to continue to engage the sales force and fine-tune their training finally make sure the sales team has a point of contact if they have questions or concerns if the sales team feels they have your full support they'll work hard to make the product a big success your strategy may include the creation of marketing materials like advertising promotions websites and sales literature if so you'll probably use some type of external agency or an internal team to help you to do a great job for you they need your guidance and you do that with what's called a creative brief a creative brief is a short overview of a creative assignment a good creative brief sets expectations for the project it answers key questions like what needs to be created how will it be used what are the deliverables for the project and when are the deadlines it's like a contract you can find many templates online for creative briefs and in the exercise files I've included a sample that you can follow whatever format you use it should include the following first give an overview of your marketing situation what's the big picture what's going on in the market what's the competition doing are there any opportunities or problems in the market next describe the objective of the creative piece is it a commercial a sales brochure a website and so on give a concise statement of the effect that it should have on consumers then describe the target audience who are we talking to the more precise and detailed you can be the better explain how the audience currently thinks feels and behaves in relation to the product category your brand and your specific product or service next outline the most important thing to say that of course is in your value proposition it's the single most persuasive statement we can make to achieve the objective you should also include the reasons to believe what are the supporting rationale and emotional reasons to believe and by the agency may use these points in the creative piece then describe how you measure success what specific metrics we look at to see if the creative piece is working is it website visits is it units of product sold or it could be something you measure later with marketing research like top of mine awareness complete your creative brief with the schedule and a budget for the project notice that every bit of the information that goes into the creative brief can be found in your marketing plan segmentation targeting positioning consumer analysis communications objectives and so on it's all there but keep in mind that the creative brief should be well briefed don't just hand the agency your marketing plan and expect them to sort through it a creative brief is much more detailed than your plan but very focused on just one specific marketing program in that plan with the proper guidance from a well-written creative brief your support teams will create amazing and effective marketing materials you Marketing takes time and money so it's important that you develop a budget a good budget helps you allocate the right amount of resources to the right marketing programs now there are two ways to develop a budget you can decide on how much you have to spend in total and then allocate it some companies do this by taking a percentage of sales revenue as the total budget for marketing that amount is assigned to different teams and programs I call this the top-down approach the other approaches from the bottom-up each marketing team develops a budget to spend on marketing programs that they think are needed to achieve a revenue forecast those budgets are combined into a company level budget if you recruited a finance member to your marketing planning team they'll be able to tell you what approach your company uses whichever approach you take you still need to decide where to spend the money and how much to spend one thing's for sure you always have a limited amount of money to spend so you probably can't do all the things you'd like to but be careful of a common mistake don't take your limited dollars and spend a little amount on many different programs if you spread your budget too thin you won't give any tactical program a chance to succeed it's better to limit rather than dilute spend on those programs that are likely to be most effective at positioning your product in the market place how much you spend depends on a number of factors earlier we looked at how many customers are in your target audience the more you have to reach the more you'll have to spend we also addressed how to position the product in the market meaning how to change the customer sense of importance and perception about your brand if your positioning is very aggressive and requires the consumer to change behaviors in a significant way you're going to need to spend more money finally look at each of your tactical programs the four piece product price motion and place estimate the required spending in each one for example do you need to spend money to upgrade your product or its packaging how much do you need to spend on marketing communications to reach a sufficient number of people and still achieve the communications objective what are your distributors and salespeople need to do their job effectively once you've estimated what each program will cost you'll probably need to make some tough choices and this is a great time to use the talents of your marketing planning team let them help you decide in my experience a team decision ends up being better than any single individual decision after all you're in this together so put them to work in helping you develop the most effective budget possible before you launch your marketing campaign you want to set up key performance indicators or KPIs for short key performance indicators help you keep track of your overall strategy and your individual marketing programs they alert you when it's time to intervene and take action to get things back on track without KPIs you're flying blind so to speak and you run the risk of falling short of your overall goal to be most effective each KPI should be quantifiable and measurable you can have as many as you want but don't measure a KPI just because you have the data if you're not going to use it don't bother it's a waste of time measure something only if you plan to take action from it that's why we set thresholds around each one each KPI should have a target of what you expect to happen plus a high and low number around that target for those thresholds you and your planning team should agree in advance what action you'll take if those thresholds are exceeded now each KPI should be linked to the key parts of your marketing plan including your goal segmentation targeting positioning and marketing tactics for the goal you might have KPIs around the timing of revenues the type of customers you're converting and whether you're taking customers from the right competitor for segmentation targeting and positioning you want to measure changes in customer beliefs such as importance and perception you may also want to measure their behaviors such as purchase habits customer attrition and retention profile you need to carefully monitor whether you're achieving the market positioning that you had hoped for for marketing tactics you could create a KPI for each of the four PS if needed for example you might have measures around communications objectives sales force effectiveness distributor activity store promotions search engine ratios social media activity pricing and discounting rates product performance waiting times and service complaints good marketers not only reach their financial goals but they also know whether those goals were achieved the way they expected them to be achieved they also take immediate action when they detect something is going in the wrong direction KPIs help you and your marketing team stay aligned and do what's needed to succeed you

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Keywords: marketing, marketing 101, marketing basics, marketing fundamentals, marketing overview, marketing courses, business courses, online education, online learning, online classes, online courses, e learning, elearning, free online courses

Id: A2t-yhFaUC0

Length: 90min 32sec (5432 seconds)

Published: Sun Sep 16 2018