1.Introduction to Marketing Mix:

-> DEF MARKET MIX: marketing mix is a set of marketing levers;

• There are more models, the most famous is the 4P.

-> Remembering the market scheme, from Mission, Vision and Purpose we build a strategic market, that is…

• Consistent to corporate strategy,
• Aimed at satisfying customer needs;
• Resulted in the definition of a suited value proposition.

Operational Marketing:

-> DEF: Is the translation of the marketing strategy into decisions.

-> Decisions about:

• Product/ Service/ Experience;
• Price;
• Promotion (communication);
• Place (distribution);

Market demand > Endogenous variables (marketing effort) affecting demand:

• Product/ Service;
• Pricing;
• Distribution;
• Promotion/ Communication;
• Personal selling;

The 4-P model:

-> Is the most famous model, the 4 Ps means:

PROMOTION:

• Personal Selling: one person of the comany goes to sell, by person, products.
• Sales promotion: fidelity card; buy two, take three;

PLACES:

• Outlets:

EXAMPLES: Mentadent solt the toothpast. Then Unilever bought it and they moved to pharmacy to toothpast.

-> The new…

7Ps model:

V.A. Zeithaml & M.J. Bitner

PEOPLE: the front office

-> Employees are important, expecially the one that deliver the service.

• Excellent front end personnel can provide support with clearly known expectation.
• Knowledgable staff adds much value to the service;

PROCESS:

-> DEF: Systems and processes affect the execution of the service.

• Services companies need solid procedures and policies, customer oridented.

PHYSICAL EVIDENCE:

-> DEF: everything customers see when interacting with your business.

How employee dress; How is their behaviour; Layout or interior design;

Physical environement where you provide the product or service; Packaging; Branding.

-> Includes:

• Pjhysical environment where company provides products and sevice;
• Layout or interior design;
• Comapny’s packaging;
• Company’s branding.

-> P.E. refers also to staff and how they dress and act.

-> In the years they added more Ps:

PERMISSION MARKETING:

-> DEF: Permission marketing is the privilege (not the right) of delivering anticipated, personal and relevant messages to people who actually want to get them.

• Be quiet, not use network in a stress way for customers.

PURPLE COW:

-> DEF: Innovation. When the creator of this idea went for the first time in Texas he saw a lots of cow near the city and for him was something new “In NY there’re not the cows”. But after a while the cows fill him up and we said:: “To be as surprise ass before I would wee a Purple Cow!”.

• Comes from Texas.

-> Marketing mix must be designed and implemented according to some fundamental rules:

• 1 ^ Rule: Consistent with customer needs (the product has to bee good, but even cosnistent with customer needs);
• 2 ^ Rule: Consistent with the objectives of competitive advantage;
• 3 ^ Rule: Consistent with the positioning objectives
• 4 ^ Rule: Capable of an effort (marketing investment) appropriate to the objectives of market share
• 5 ^ Rule: Equipped with a solid “internal” consistency among its various components
• 6 ^ Rule: Consistent with general corporate policies

2.Products:

-> DEF: result of the transformation of the materials into goods that have some value to people (economic, aesthetic, symbolic).

• Can be offered on the market to satisfy wants or needs.
• Products that are marketed include physical goods, services, experiences, events, persons, places, properties, organizations, information and ideas” (Philip Kotler).

-> This is a broader view that includes services and incorporates the concept of a commercial offering.

Index:

• Product Classification;
• Product Model;
• Product Concept;

Product Classification:

Durability & Tabngibility:

• Durable goods (clothing, refrigerators, cars, etc.,)
• Non-durable goods (food, soap, etc)
• Services (repairs)

Consumer Goods:

Industrial Goods:

Convenience goods: purchased frequently and with minimum effort. e.g.: cigarettes, newspapers, etc. Staples: purchased on a regular basis -> toothpaste impulse goods: purchased without any planning -> candy bar emergency goods: purchased when a need is urgent -> umbrella during a rainstorm Shopping goods: goods the customer compares on such bases as quality, price and style -> furniture, clothing, major appliances. Specialty goods: have unique characteristics for which buyers are willing to make a special purchasing effort -> Mercedes Unsought goods: goods a customer does not normally think of buying -> smoke detector, gravestones.

Materials and parts (enter the product completely) Raw materials Manufactured materials and parts Capital items (enter the product partially) Long-lasting goods that facilitate developing or managing the finished product Installations; Equipment; Supplies and business services (do not enter the product). Short-lasting goods and services that facilitate developing or managing the finished product.

-> CONSUME MATERIALS: materials that operators use for each customers.

The Product Model:

-> What the company sees is different from what the customers see.

The Product Concept:

-> Product concept expresses:

• What it is;
• What it does;
• Who it is intended for,
• What it signifies for customers;

CHARACTERISTICS from a USER perspective:

CHARACTERISTICS from a PRODUCER perspective:

Functional characteristics: what the product gives and can do, what problems it resolves. Communicated in user language Quality: measured using parameters relating to the particular class of product considered Maintainability: product’s ability to undergo maintenance Design: not only aesthetics Brand: associates the product with the producer, evoking general characteristics of quality, reliability, etc … Packaging: protection during transport and storage, easy to dispose of recycle, appropriate for use of the good it contains and informative/evocative

Operational characteristics: technological-project translation of the functional characteristics Engineering: aims to render the project more suitable to being manufactured using the chosen productive technology. Standardization: Internal: reduces the variety of the components External: fine-tuning of the technical characteristics with the market standard, to broaden possible users Cost structure: production-market system relationship. Variety drives costs, thus it is necessary to face the increase in costs due to augmented complexity: Flexible specialization Standardization Modularization

Quality as Product Objective:

-> DEF: overall ability of a product to satisfy customer expectations.

-> Dimension of quality:

• Durability;
• Reliability;
• Precision;
• Ease of use;
• Product safety;
• Aesthetic pleasure.

Key Element for a Product in marketing:

The product «level» The voice of the customer Product life cycle

Product line assortment Product strategy formulation New product development

1.The Five Product Levels:

• CORE BENEFIT: buy a car to transport yourself from a position to another.
• BASIC PRODUCT: you’re actually buying a product.
• EXPECTED PRODUCT: you know that with the car you can open the window, knowing the temperature outside…
• AUGMENTED PRODUCT: cruise control.
• POTENTIAL PRODUCT: automatic guide.

-> There is a time thematic: what today is Potential Product in few year could become basic product.

2.The voice of the Customer:

• Identify the Voice of the Customer;
• Translate Voice of the Customer into Critical to Quality Characteristics (CTQs):

KANO Model: there is something in the model that must be.

-> DEF: approach to prioritizing features on a product roadmap based on the degree to which they are likely to satisfy customers.

• Rank the CTQs into three categories:
  • Dissatisfier – Must be’s – Cost of Entry;
  • Satisfier – More is better – Competitive;
  • Delighter – Latent Need – Differentiator (smt customers weren’t waiting for);
• Evaluate Current Performance;

3.Product Life Cycle:

-> When a product is launched, 1/8 have success.

-> When a product is sold (Italiy, France) in Esselunga a new product (a reference) only 5/20 remains after 3 years.

-> Sometimes someone develop a problem.

-> Every time a company launch a new product, by definition, is loosing money, in terms of: Marketing, Production, R&D and Time.ù

• A lots of product don’t have success, some have it.

Lifecycle Stage Characteristics:

-> True only if we are developing a new product and we’re entering in a new market.

• At beggining all producer has different products. After long time they become more standardize.

… Company’s Response

PENETRATION PRICE: when companies set a very high price to their new product.

🔗Ansoff

Examples of Product Life Cycle:

PRESELLS: when companies sells products before launch it.

CROWDFOUNDING: collecting money before sell products.

• Rock group: Marillion was the first to do it: “The first noteworthy instance of online crowdfunding in the music industry was in 1997, when fans of the British rock band Marillion raised US$60,000 in donations through an Internet campaign to underwrite an entire U.S. tour.”.

4.Product Line Assortment:

PRODUCT LINE: firm’s total product offering designed to satisfy a single need for target customers.

PRODUCT MIX: firm’s entire range of products (chainsaws, grass trimmer, garden tractor,..)

-> CHAR:

Same function; Same target;

Same channels; Same price range.

-> ES: Samsung: make phones, computer, washing machines, TVs, wearable.

• Their product line is bigger than Apple: premium price products but even low peice
• Their strategy is to cover every segment; Apple want to stay in premium price.
• Apple invest 30 billions in R&D: AI, new camera & self driving cars.

Product Line Decisions:

A) Line analysis	B) Line length
Sales and profit analysis Market analysis	For high market shares -> extension For high margins -> cherry picking (e.g. menabrea winter/ christmas edition)
-> E.g. Milk: Many brands but same producers. Usually 1L milk cost less than 1/2L milk	for promotion: 1/2L milk is never in promotion, 1L always.
C) Line stretching: make an upgrade/downgrade	of the product.
Downward Upward Two-way   -> Upward/ Downward is difficult to do with the same brand.	-> Volvo/ Luftanza are example of trying to upward the products. -> Samsung is one company that can manage the bottom & upside stream; -> Husqvarna: is leader in steel production. Had 2 brands high-level and 8 brands mass market. At a certain point they realized that with this 2 high-brands made 30% of sales and 80% of profitability => Decided to concentrate in these two brands (upward).

5.Product Strategy Formulation:

❓Why have this product?

• Growth: in a stock exchange you need different product to grow.

Quicksilver: they sold shorts, and they wanted to grow, but they couldn’t grow

with only shorts => Started to do t-shirts and other.

• Using excess capacity;
• Market share;
• Target new segment.

-> Key Management Decisions:

Product features: which is the customer target? Related services: how is finance the product, what are the services connected? Product mix; Branding;

Packaging: important in some business because has a big impact in sustainability => is a keyword in sustainability. Product line decisions: when eliminate the produc? When becomes a dogs we should cut the product 🔗BCG.

6.New Product Development:

NEW PRODUCT: is a product new for the company but even for the market.

• Is important to know what is company’s meaning with the new product.

❓How many product do we have to launch this year?

-> Some companies have a division that invent new product (e.g. apple (never

     invent it, copy and improve other’s invention), 3M are leader in post-it, yellow

     jaket and dentist tools (usually other companies are not innovator but follower

     of these. 3M is in high-high place)).

-> Reasons for new product success:

Adaptation of the product to market needs (85%) Austment of the product to the strengths of the company (62%) superiority of the technological product (52%) Supporting the general management towards the new products (45%)

Adaptive organizational structure (15%) Accuracy of the evaluation process (33%)” favorable competitive environment (31%)

-> New Product Failure: 1/8 product have success (general rule)

Overestimation of market size; Poor design; Incorrect positioning: Coca-Cola life; Wrong timing: good problem, wrong timing. -> Natural Atlas was beaten from competitors. Their main strategy was sustainability but product was twice the others. The people didn’t buy it. Now would happen.

Wrong channel; Priced too high; Bad communication: target don’t get the message; Ineffective promotion; Management influence; High development costs; Competition.

3.Services:

-> DEF: activity or series of more or less inangible activities which usually, not always, involve an interaction between the customer and the providing personnel and/ or individuals or goods and/ or systems of the providing entity, for the purpose of providing solutions to a customer’s problem (Giacomazzi, 2002).

• Consist of facts, produced by combination of means or people.
• Has no form or stable structure;
• Cannot be possessed or stored but only provided;
• Normally involves goods and people in a set of organizational and composition rules that establish the proportions, functions, methods and timing of use;
• Is important how processes are costumer oriented.

-> CHAR:

• Intangibility;
• Non-storeability;
• Heterogeneity (variability of quality);
• Variability.

-> E.g. Dinseyland is the first place visited in Europe (Eifel tower 2°,

Colosseo 3°). They have a school in which employees learn how to

get a good service to customers.

Goods: are individual objects, defined and mastered, with an established form and which can therefore be measured at any given moment (Sometimes the service is included).

Services: are actions or retroactions of goods on the subject, of the subject on goods or from goods to other goods.

Some Considerations:

❓  What are Services?          (Source: Prof Keith Perks)

Production and consumption inseparable in services; Benefits without Ownership;

Defined space and facility rentals; Access to shared facilities; Access and use of networks and systems.

Labor, skills and expertise rentals; Rented goods services;

Service in the Global Economy:

• Increasing size of the service sector across the globe;
• The relative share of employment between agriculture, industry and services is changing dramatically;
• Service output is growing rapidly and represents more than 50% of Gross Domestic Product (GDP) in the industrialized countries;
• Government policies, social changes, business trends, globalization, and advances in information technology and communications are among the powerful forces transforming today’s service markets;
• Development of IT and communications;
• Innovations in big data, cloud computing, user generated content, mobile communications, networking technologies, artificial intelligence, and app-based self-service technologies bring service revolution.

Organization Providing Service (Ubiquity of Service):

• Public institutions: police and fire department, post office, public administrations, hospitals, etc.

• Private not-for-profit organizations: schools and universities, charity, museums, etc.
• Industrial organizations: banks, airlines, hotels, law firms, consultancy, telecommunication, etc.

-> SERVICES have also become an important value-adding and differentiating strategy for products manufacturers, distributors and retailers

Reasons to introduce a service:

1. The reduction of product profitability;
2. The (presumed) best margins obtainable with the services;
3. The greater stability of revenues and cash flows that the services can ensure.

Three level of service:

1. Basic services: supply of products;
2. Intermediate Services: Product Repair, Condition Monitoring, Field Service, and Customer Support;
3. Advanced services: pay per use, fleet management, availability agreement and integrated solution.

Components of Service Product:

-> Core Product

• ‘What’ the customer is fundamentally buying
• The core product is the main component that supplies the desired
  experience

-> Supplementary Services:

• The core product is usually accompanied by a variety of other service related activities referred as supplementary services
• Supplementary services augment the core product, both facilitating its use and enhancing its value;

-> Delivery Processes: The processes used to deliver both the core product and each of the supplementary services

-> E.g. Altavelocità Italia:

-> They wanted to sell customers an experience (wasn’t popular

     the experience business idea at that time.).

• Innovation: the train weren’t old;
• Comfort: good & comfortable seats;
• Quality of travel/time: puntuality, clean.

Promise of Service:

-> DEF: An “offer” able to interest, be credible and convince a customer (problem solving) better or in a distinctive way compared to those of competitors.

• Through the promise, the company seeks to ensure distinctiveness in the relationship with the customer.

-> Answer 3 key questions:

What	The performance
To whom	The customer
How	In order to meet customer expectations

Service Management:

-> The quality of the service is given from a total organizational approach.

-> General orientation of company management changes:

• From the benefit based on the product to the total benefit in the relationship with the customer;
• From short-term transactions to long-term relationships;
• From the technical quality of the product to the total quality perceived by the customer.

-> Customers judges the quality of the service he receives based on the quality of the result obtained (good lunch at the restaurant) but also based on the quality of the process through which it passed (waiting times, staff behavior, ordering methods, etc.);

-> Process are important when the customer interacts significantly with the service provider (i.e. for a significant portion of the service production process) and/or when the result of the service is not clearly perceptible/measurable (legal services, doctors, car repairs, teaching);

Elements for Design customer-oriented process:

• know the customer’s expectations;
• identify the expected result;
• engineer the process;
• make the process economical;
• measure customer satisfaction and results;
• improve the process;
• guarantee consistency and quality of service;

Key tasks:

-> DEF: manage various features, with emphasis on processes and care of front-line personnel:

• manage the evidence
• take care of front-line staff
• standardize performance
• planning the activities

4.Experience:

-> DEF:

Customer experience originates from a set of interactions between a customer and a product, a company, or part of its organization, which provoke a reaction. This experience is strictly personal and implies the customer’s involvement at different levels (rational, emotional, sensorial, physical, and spiritual) (Gentile et al., 2007)

Customer experience is defined by the direct contact of the customer with the different touchpoints in order to generate, through the five senses, changes that may be functional, cognitive and emotional in nature. Interaction after interaction, the value perceived by the customer in terms of quality of the experiences tends to enhance (Boaretto et al., 2007)

Role of experience today:

-> Economists have typically lumped experiences in with services, but experiences are a

    distinct economic offering, as different from services as services are from goods.

(Pine and Gilmore, 1998)

❓Why customer experience is so important?

The ability to offer a relevant customer experience is a source of competitive advantage!

-> There are different levels of brand involvement

• Rational/Cognitive
• Emotional
• Sensorial

-> Customer experience as source of competitive advantage:

-> Reach a premium-price:

❓How engage customers?

• Word of mouth;
• Loyalty;
• Customer involvement with the brand (co-creatino, advocacy, etc

Realms of Customer Experience (Pine & Gilmore):

-> Differen kind of expefiences: