Strategic Marketing and Consumer Behavior

Posted on Feb 24, 2025 in Marketing

Marketing

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing Process

Step 1: Understanding Consumers and the Marketplace: Consumers’ needs and wants are fulfilled by market offerings: combinations of products, services, and information offered to satisfy a need or want. Beware of marketing myopia. Consider brand experiences (e.g., Disney experience). Customers choose among different products based on the expectations about the value and satisfaction. Marketing consists of actions taken to create, build, and maintain desirable exchange relationships.

Step 2: Designing a Customer Value-Driven Marketing Strategy: Two questions arise (e.g., IKEA): Which customers will we serve (target market)? Young people living alone, together, etc. And how can we serve these customers best (value proposition)? “Offer quality products at affordable prices, and to be accessible when people need us.”

Step 3: Preparing an Integrated Marketing Program: Using the 4Ps (Product, Price, Place, Promotion).

Step 4: Building Customer Relationships: By delivering superior customer value and satisfaction, relating with selected customers more interactively, and working together with other departments and partners outside the firm.

Marketing Management Orientations

There are five alternative concepts under which organizations design and carry out their marketing strategies:

Production Concept: Holds that consumers will favor products that are available and affordable (myopia).
Product Concept: Holds that consumers will favor products that offer the most in quality (myopia).
Selling Concept: Holds that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling effort.
Marketing Concept: Holds that achieving goals depends on knowing the needs and wants of target markets and delivering satisfaction.
Societal Marketing Concept: Holds that marketing strategy should deliver value to customers in a way that improves the consumer’s and society’s well-being.

Strategic Planning

Strategic planning is the process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities.

Step 1: Defining a Market-Oriented Mission: Four questions arise: What is our business? Who is the customer? What do customers value? What should our business be? (e.g., Google’s mission is to organize the world’s information and make it accessible; Nike: bring inspiration and innovation to athletes; Walmart: deliver low prices every day).

Step 2: Setting Company Objectives and Goals: Invest in research and design, improving profits, increasing sales or reducing costs, increasing domestic or international sales, etc. (e.g., Nestle’s goal is to be the reference for nutrition, health and wellness, sustainable financial performance, and trust by stakeholders).

Step 3: Designing the Business Portfolio: That is the collection of businesses and products that make up the company (SBU).

Step 4: Planning Marketing: Marketing plays a key role in the company’s strategic plan as it provides a philosophy, provides inputs by helping to identify attractive market opportunities, and designs strategies for reaching the unit’s objectives.

Managing the Marketing Effort

1) SWOT Analysis: Strengths (internal capabilities), Weaknesses (internal limitations), Opportunities (external factors to obtain an advantage), Threats (external factors that challenge the company’s performance).

2) Marketing Planning: Involves choosing marketing strategies that will help the company attain its overall strategic objectives.

3) Marketing Implementation: The process that turns marketing plans into marketing actions to accomplish strategic marketing objectives; it is more important than selecting the strategy.

4) Marketing Control: Evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are attained.

Marketing Environment

Consists of the actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target consumers. It consists of:

Microenvironment: Comprises the actors close to the company that affect its ability to engage and serve customers.

Company: Top management, finance, R&D, purchasing, operations, and accounting.
Suppliers: They provide the resources needed.
Intermediaries: Retailers, wholesalers.
Competitors: We must provide greater satisfaction than competitors do.
Publics: Any group that has an interest in the company’s goals: financial, media, government, etc.
Customers: The aim of the entire value delivery network is to serve target customers and create strong relationships.

Macroenvironment: Consists of the larger societal forces that affect the microenvironment.

Demographic: The study of human populations: age structure (Baby Boomers, Gen X, Gen Y, Gen Z), family structure, education, etc.
Economic: Economic factors that affect purchasing power and spending patterns: income level, income distribution, exchange rates.
Natural: Natural resources that marketers should be aware of: shortages, pollution, etc.
Technological: New technologies can offer exciting opportunities for marketers.
Political: Consists of laws, government agencies, and pressure groups that influence or limit organizations.
Cultural: Affect a society’s basic values, perceptions, preferences, and behaviors: core beliefs, people’s view of themselves/others, etc.

Characteristics Affecting Consumer Behavior

Cultural:

Culture: Growing up in a society, a child learns basic values, perceptions, wants, and behaviors from their family and other institutions.
Subculture: Includes nationality, religions, racial groups, and geographical differences.
Social Class: Society’s relatively permanent and ordered divisions whose members share similar values; it is determined by the level of income, occupation, and level of education.

Social:

Groups and Social Networks: Marketers try to identify the reference groups of their customers. They expose a person to new behaviors and lifestyles, influence the person’s attitudes and self-concept, and may affect the person’s product and brand choices.
Family: Marketers are interested in the roles and influence of every member in the family.
Roles and Status: A role consists of the activities people are expected to perform according to the people around them. Each role carries a status reflecting the general esteem given to it by society (e.g., a woman can play the role of brand manager and mother in her family).

Personal:

Age and Life-Cycle Stage: Marketers often define their target market in terms of life-cycle stage and develop appropriate products for each stage.
Occupation: Marketers try to identify the occupational groups that have an above-average interest in their products (e.g., blue-collar vs. executives).
Economic Situation: Marketers watch trends in personal income, savings, and interest rates.
Lifestyle: A person’s pattern of living as expressed in their psychographical activities and opinions; this can help marketers understand changing consumer values.
Personality: Consumers are likely to choose brands with personalities that match their own (e.g., Jeep = ruggedness, Apple = excitement).
Self-Concept: People’s possessions contribute to and reflect their identities; this is important to understand the relationship between consumer self-concept and possessions (e.g., Apple = if you see yourself as young, laid-back, and cool, you need a Mac).

Psychological:

Motivation
Perception: Process by which people select, organize, and interpret information.
Learning: Describes changes in an individual’s behavior arising from experience.
Beliefs and Attitudes: A belief is a thought about something, and an attitude describes a person’s relatively consistent evaluations, feelings, and tendencies towards an object or idea (e.g., German cars are the best).

Buyer Decision Process

It starts long before the actual purchase and continues long after. It consists of five stages:

Need Recognition: The consumer recognizes a problem or need that can be triggered by internal stimuli (e.g., hunger) or external stimuli (e.g., advertisement). An example is thinking of buying a new car.
Information Search: For example, paying more attention to car ads, cars owned by friends, gathering information in other ways, etc.
Evaluation of Alternatives: The consumer uses information to evaluate alternative brands in the choice set. Some use careful calculations; others buy on impulse. An example is a person who has narrowed their car choices to three brands and is interested in price, warranty, and styling.
Purchase Decision: Once the consumer has ranked brands, they will have purchase intentions (the most preferred). Example: If someone important to you thinks that you should buy the lowest-priced car, you could change your mind. Unexpected events may also change the purchase intention.
Post-Purchase Behavior: After purchasing the product, the consumer will either be satisfied or not.

Buyer Decision Process for New Products

The adoption process is the mental process through which an individual passes from first hearing about an innovation to final adoption. The stages in the adoption process are: Awareness, Interest, Evaluation, Trial, Adoption.

There are five adopter groups:

Innovators (try new ideas)
Early Adopters (adopt new ideas but carefully)
Early Majority (adopt new ideas before the average person)
Late Majority (skeptical, adopt new products after the majority)
Laggards (traditional, adopt the innovation when it has become a tradition)

Marketing Strategy

Marketing strategy is the logic by which the company hopes to create customer value and achieve this relationship. The company decides which customers to serve (segmentation and targeting) and how (differentiation and positioning). Guided by marketing strategy, the company designs an integrated marketing mix (4 P’s). Nowadays, buyers are too numerous, so a company must identify the parts of the market that it can serve best and most profitably; it means designing customer-driven marketing strategies that build the right relationship with the right customers. The four major steps in designing a customer-driven marketing strategy are segmentation, targeting, differentiation, and positioning.

Market Segmentation

There is no single way to segment a market. Marketers have to try different segmentation variables (alone and in combination) to find the best way to view market structure. There are four major variables that can be used in segmentation:

Geographic: Dividing the market into different geographical units (nations, regions, cities, etc.) e.g., Walmart.
Demographic: Divides the market into segments based on variables such as age, gender, family size, education, etc. e.g., Oscar Mayer Lunchables (bacon for children) and Oscar Mayer Deli Creations (bacon for older generations).
Psychographic: Divides buyers based on social class, lifestyles, personality, etc. e.g., Rip Curl is a specialist in clothes providing a certain lifestyle (surf).
Behavioral: Occasions, user status, usage rate, loyalty status, and benefits sought.

The requirement for effective segmentation is that the market segments must be: measurable, accessible, substantial, differentiable, and actionable.

Market Targeting

Now, the firm has to evaluate the various segments and decide how many and which segments it can serve best. It is a two-step process:

Evaluating Market Segments: It must look at three factors: segment size and growth, segment structural attractiveness, and company objectives and resources.
Selecting Target Market Segments: A target market consists of a set of buyers who share common needs or characteristics that the company decides to serve. Market targeting can be carried out at different levels:

Undifferentiated (Mass): The company decides to ignore market segment differences and target the whole market with one offer, focusing on what is common to customers rather than on what is different. Although it is cheaper, usually, this approach doesn’t work because not all consumers want the same.
Differentiated (Segmented): The company decides to target several market segments and designs separate offers for each, hoping for higher sales and a stronger position within each segment. It implies a higher cost but is more effective than mass marketing.
Concentrated (Niche): The company goes after a large share of a small market or a few smaller segments or niches, achieving a strong market position because of its greater knowledge of consumer needs. This strategy is riskier.
Micromarketing: Tailoring products and marketing programs to the needs/wants of specific individuals and local customer segments. It includes local marketing (cities, neighborhoods, etc.) and individual marketing (one-to-one marketing, customized marketing, etc.).

3 & 4: Differentiation and Positioning: The company must decide on a value proposition. A product’s position is the way the product is defined by consumers on important attributes. It consists of three steps: identifying a set of differentiated competitive advantages on which to build a position, choosing the right competitive advantages (superior, important, distinctive, etc.), and selecting an overall positioning strategy (brand’s value proposition: the full mix of benefits on which a brand is differentiated and positioned).

Competitive Strategies According to Miles and Snow

Prospector Strategy: The company is active in the search for new opportunities. High entrepreneurship and high development of new products and new markets (Madonna, Apple).
Analyzer Strategy: Analyzer companies maintain and protect their core business, without giving up the launch of new products and the location and exploitation of new markets (Levi’s: model 501 + incorporation of new trends). Medium entrepreneurship.
Defender Strategy: Characterized by the creation by the company of a stable and sufficient domain for its long-term survival in the part of the market in which it has managed to penetrate; its interest in new opportunities (new products and/or markets) is very limited (Swiffer). Low entrepreneurship.
Reactor Strategy: The company responds late to changes that are occurring; this is an absence of competitive strategy (many SMEs). Zero entrepreneurship.

According to Kotler

Leader Strategy:
- Development of market demand: The leader tries to attract new users, look for new uses, and more use.
- Expansion of its participation (according to ROI to market participation).
- Defense of its current market share from local and/or foreign competition, e.g., diversifying.
Challenger Strategy: (attacks the leader to unseat them)
Follower Strategy: Adopted by companies with a lower position than the leader who think that attacking them would harm them. They do not aspire to be leaders. They align all or part of their decisions with those made by the competition; they pursue peaceful coexistence and the consistent distribution of the market. Characteristics: They effectively use R&D to improve processes and reduce costs; they focus more on profit. Their modest size keeps them away from sales growth and market share objectives. High involvement of the manager. Example: Kaiku.
Niche Specialist Strategy: Companies that operate in specific areas with little appeal to large companies or that target their products to specific segments of consumers. They are not leaders, they do not want to be, but they are not content with following either.

Innovation Strategy

Internal reasons: Improve profits, seek profitability, take advantage of productive capacity. External reasons to innovate: Face the life cycle, compete in the market, meet demand.

Types of innovation: New product, commercialization (distribution, communication, price).

Imitation Strategy

(Companies that enter the market following the success of others with an equal or similar product) are distinguished:

Inventor of the technology
Product pioneer
Market pioneer

Degrees of imitation:

Counterfeits
Legal copies (something is changed in the name)
Superior creative adaptation
Superior imitations: or products with more advanced technology.

Advantages of pioneering companies: entry barriers, favorable aspects, such as the greater probability of recognition and recall, favorable attitude of distributors.

Advantages of follower/imitator companies: lower investment in communication, they benefit from the promotion of the pioneers, adaptation and more market information. Types: low price: the Chinese, it can be done when the technology does not change and innovate in the production process; superior product: it must be adapted to the evolution of demand, exercise of market power: brand that takes advantage of the name to copy and be successful, easy distribution channel, they have a lot of money and market power.

Licensing Strategies

Assignment of rights to use trademarks. Types:

License to manufacture merchandising items with that brand.
License to make promotions to that brand, of a product that already exists.

Strategic Alliances

Relationship with which a connection or integration of the attributes of two or more brands is created to offer a new product or a new image for consumers. Objectives: New segments, distribution channels, and products/markets. Diversify risks. More reputation. Prevent competition. Types:

Distribution alliances: Support in storage and distribution.
Promotion alliances: Coca-Cola and Bacardi. To make themselves known and reinforce their notoriety and reputation.
Production alliances: Ford and Mazda Escort model: reach new segments, increase business volume, and reinforce/modify image.
Brand alliances: To reinforce notoriety and image in the market.
Brand alliances, purchase of licenses: Acquire a license to use a brand from another company. To add value to the products that are already manufactured.

Service Strategies for Intangibles and Added Service Strategies for Tangible Goods

Tangibilize the service.
Identify the service.
Cross-selling.
Use personal promotion media.
Differentiate by quality of service.
Create a solid corporate image.
Industrialization of the service.
Singularization of the service.
Counteract the perishable nature of services.

Added services: Customer service, advice, transportation, installation, repair, financing, warranty.

International Product Strategies

Standardization: Trade the same product in all markets.

Economies of scale: In production, communication, and distribution (pharmacy).
Homogenization of tastes and demand: Interrelation between cultures, development of communications, development of tourism (young people dress = Levi’s).
Consistent and coherent image at the international level: Kodak reels.
Type of product: Industrial.

Adaptation: Marketing the products by modifying attributes to adapt them to the markets where the company operates.

Differences in consumer behavior: Function that the product develops, conditions of use, habits and ways of life (wine).
Differences in the distribution of the product: Purchasing habits.
Local regulations: Product composition, packaging, labeling.

Brand Strategies

Brand + value = brand loyalty, higher prices, greater confidence, protection, security, differentiation (advantages).

Producer strategies:

Marketing under their own brands.
Fixing brands to the parts, materials, components of other products.
Marketing under the distribution brand.

Distributor strategies:

Only manufacturer brands.
Only their brands.
A combination of both.

Strategies common to both:

Basic strategies: single brand vs. multiple brand.
Intermediate strategies: individual brand, source, mother, or guarantee brand, single brand for product line or range.
Other brand strategies: second brands, brand alliances, collective brands.

International Price

Variables controlled by the company:

Objectives: Who sets the price per market?
Costs: Manufacturing, marketing, additional inflation.
Marketing mix strategy: Costs of distribution channels, product, and promotion.

External variables not controlled:

Demand: The value of a product in the market.
Competition: Positions within.
Legal and technical aspects: They make the product more expensive.
Risks, fluctuations, and financial costs: Devalued currencies make everything from outside expensive, and ours look cheap outside.
The “Made In”.

Price-Based Strategy

Export price = domestic price: Provides security, avoids dumping, and adapts to requirements.
Export price lower than domestic: Ensures acceptance, faces local competition, creates economies of scale, requires financial capacity to withstand the pull.
Export price + than domestic: Justified by initial costs, tries to cover the initial cost + margin, only when the product is high.
Differentiated prices: Demand does not perceive the market equally, differentiated marketing strategy.

International Distribution

Indirect export: The buyer is in the market of origin (they come to buy from you in Spain) trading companies.
Direct export: The buyer is in the destination market: representative, agent/importer-distributor, commercial subsidiaries.
Concerted export: Two or more companies join forces to access a foreign market. It implies collaboration with other manufacturers whose mutual interest is based on the increase of sales in foreign markets. International marketing is done between two or more partners.
Manufacturing in other markets: Production in the destination market or in third markets. Production subsidiary abroad, manufacturing contract, licenses.

International Communication Strategies

Steps to develop it: Evaluate marketing opportunities, resource analysis, set objectives, evaluate alternative strategies, assign tasks.

Advertising: Through mass media carried out by an identified advertiser. Advantages: reaches many clients at low cost, favors knowledge abroad, tangible resource transferable from one market to another. Factors to consider: language, legal restrictions, the role of advertising in each market, international media planning.

Promotion: Consists of short-term incentives, additional to the benefits offered by the product or service, to encourage purchase, to the consumer, to the channel, or to the sales teams.

Public Relations: It is a communication technique whose objective is to create good relationships with the various publics with which the company relates to create a favorable feeling, create a good corporate image, and avoid unfavorable information.

Personal Selling: The salesperson is from the destination country; personal interaction allows the emergence of relationships, generates interaction; the salesperson is from the country of origin; very complex products. It adapts to each client, it is interactive.

Marketing Plan

Written document in which, in a systematic and structured way, and after analyzing the environment and the market, the objectives to be achieved in a determined period of time are defined, the strategies and action programs that are precise are detailed. Example: sell x units, increase profitability.

Advantages of using it:

Anticipates changes and opportunities in the environment. SWOT increases the predisposition and preparation of the company for change.
Minimizes non-rational responses to unexpected events.
Reduces conflicts about the destination and objectives of the company.
Forces management to think about the future.
Available resources can be better adjusted to opportunities (opportunity demand for foods without palm oil: focus resources on the development of that range of products).
Better coordination of activities.
A systematic approach leads to higher levels of profitability on investment.

Content

Executive summary (presentation ½ pages).
Situation analysis:
- External analysis, of the market and the competition.
- Internal analysis, of the product portfolio.
- SWOT analysis.
Marketing strategy:
- Mission.
- Marketing objectives (increase sales by 20%).
- Corporate strategies.
- Marketing mix strategies: marketing programs (distribution: online channel to gain new users).
- Financial projections and programming.
- Organization and control of the plan.

a) At a strategic level: The plan must specify the strategies that will guide subsequent marketing programs.

b) At an operational level: The activities (marketing programs) that will lead us to the objectives are explained in a concrete way.

What: Decisions and actions necessary to specify the strategies and complete the objectives defined on: product, prices, distribution, promotion.
When: Calendar to execute the activities.
Who: Responsible for carrying them out.
How much: Budget to carry out each action.

Influential factors in execution:

Organizational structure: It will be more complex (for example, matrix type), as the complexity of the strategy (many products/countries) and the environment (different variables influence) increases.
Management systems: Managers have to incentivize the achievement of the strategic objectives specified in the plan. The plan will be executed better when mixed remuneration systems are chosen if the worker complies with what is indicated.
Human resources: The implications derived from the strategy proposed in the marketing plan in relation to the training and skills required of the staff must be assessed. Internal marketing plays in favor of success.
Company culture: Consolidated and coherent business culture with the plan. It is the set of norms, values, and ways of thinking that characterize the behavior of people at all levels of the organization and that influence the image projected abroad.

Execution of the Marketing Plan

Phase 1: Diagnosis/Analysis: Skill: Having a nose for business. 1. Skills for the diagnosis of problems, identify why the expected results were not achieved.
Phase 2: Execution. Skill: Being decisive: 2- Skills for the effective execution of the marketing plan: resource allocation, budgets and meeting deadlines, control of results, processes and responsibilities, skills for the effective organization of work, interaction and motivation of various publics.
Phase 3: Control. Skill: Wanting to improve. 3- Skills to evaluate marketing planning: develop a philosophy that promotes excellence and general satisfaction with the planning process. Bet on improving more and more.

Evaluation and Control of the Marketing Plan

Evaluation phases: What do we want to achieve? — Expected objectives. What is happening? – Evaluation of results. Why is it happening? – Causes of deviations. What should we do? – Corrective measures.

Types of control:

Annual plan control: Have the objectives been met? Effectiveness. Steps: 1) Establish monthly, quarterly objectives… 2) Analyze their result in the market 3) Determine the causes of important deviations 4) Take corrective measures to close the “gaps” objectives/results.
Profitability control: Has money been made? Typical profitability control tools: analysis by product, territory, customers, by channel.
Efficiency control: Has it been efficient? On the actions of: Sales force: indicators such as number of visits, income per visit, cost per visit, orders per 100 visits, number of new customers, etc. •Advertising: statistics such as cost per thousand impacts, measures of attitude change, opinions of customers about advertising, groups… street marketing and viral marketing. •Sales promotion: % sales in each promotion, cost per sale, etc. Nocilla, Nutrexpa gifts. •Distribution: look for savings by improving inventory control, storage locations, and forms of transportation. •Production.
Strategic plan control: Tools: (1) Marketing audit in order to evaluate and establish corrective measures in the continuous management of the company, in the field of marketing (2) Review of the corporate responsibility of the company in order to check to what extent it has been possible to position the brand/company as a socially responsible entity and, characterized – in part, by the possession of prosocial values.

Marketing Audit

An exhaustive, systematic, independent, and periodic process of the marketing environment, objectives, strategies, and activities of a company or department, whose purpose is to identify opportunities and problem points and recommend an action plan.