MARKETING FINANCIAL

SERVICES
 Participants’ registration (log-
8:30am – 9:00am
in), e-meet & greet

Marketing & Its Concept,

9:00am – 10:00am Financial Services Space &
Banking Products

Business Model & Value

10:00am – 11:00am
Proposition

DAY
11:00am – 11:30am BREAK

1 11:30am – 1:00pm

1:00pm – 2:00pm
Marketing Strategy, Marketing
Orientation

LUNCH BREAK

Customer Acquisition &

2:00pm – 4:00pm Retention, Pricing &
Differentiation

4:00pm – 5:00pm Individual Reflection

THE FACULTY
 25+
Year of work experience
with Tier-1 banks
5+
Advanced Leadership and
Management programs

2
Post-graduate degrees
5+
Active membership of
professional bodies

▪ Left banking at General Management level and Divisional Head at GTBank.

DON OGBONNA, ▪ Faculty head at H.Pearson Associates (Risk and Leadership Consultants).
DBA FCIB
▪ Currently the CEO and lead consultant at Ideal Dabsters Consultants.
4
ISA OMAGU
◼Taught for 3 years post-graduation including the National Youth Service Corp (NYSC)

◼Started professional career at Coopers & Lybrand,

◼Handled Senior Management roles at Equatorial Trust Bank, FSB Plc, NAL Bank plc, and as a
Non-Executive Director at Guaranty Trust Bank (Sierra Leone) Ltd.

◼Resigned from Guaranty Trust Bank as a General Manager to join Glo Mobile Ghana as Chief
Operating Officer

◼Director, Marketing & Sales, Unified Payment Services Limited, a FinTech company owned
by 13 banks in Nigeria

◼Currently, Chief Executive Officer of Pyramids Advisory Limited and Managing Director of
Progress Payments Limited…

BSc, Chemistry PGD & MSc., Economics MBA Master of PhD Business Administration
(with specialization in Entrepreneurship)
Development Finance
5
OUTLINE
a. Marketing and Its Concept
b. Financial Services Space and
Banking Products
c. Business Model and Value
Proposition
d. Marketing Strategy
e. Marketing Orientation
f. Customer Acquisition and
Retention
g. Pricing and Differentiation
h. Technology and Fintech
Incursion
i. Understanding MPR
j. Budgeting
6
LEARNING OUTCOME

1. Grasp the understanding of marketing

fundamentals and develop marketing strategies and
plans
2. Apply and implement key marketing tasks in
today’s constantly evolving world and shape
market offerings
3. Effectively communicate the benefits of financial
services and connect with customers
4. Effectively profile the market and gaps therein in
order to monetise opportunities
5. Effectively understand how and when to make
money

7
PREVIOUS COURSE PARTICIPANTS GOALS

▪ “…to learn about marketing”

▪ “….understand the role of marketing in a business”
▪ “….why is marketing important?”
▪ “….why all managers should understand what marketing entails”
▪ “How do I measure the effectiveness of marketing campaigns..”
▪ Being that I have almost no experience in marketing, I would like to learn
the basic principles of marketing and how to apply them…
▪ I would like to take away an understanding of the marketing process, from
identifying needs through implementation of a campaign.

8
PREVIOUS COURSE PARTICIPANTS GOALS CONT’D

▪ I would like to understand how marketing extends beyond just

advertising.
▪ I would like a better understanding of demographics and how to
identify the appropriate audience to target to increase sales.
▪ I would like to understand why some marketing campaigns are
unsuccessful.
▪ I want to learn the foundations of marketing in order to change careers.
▪ Ethical boundaries and legal responsibilities in marketing.
▪ Self Defense: Understand how marketing is used to manipulate my
thinking... as a consumer and as a decision maker in my company.

9
SOME QUESTIONS THIS MODULE COULD HELP US ANSWER…

▪ Why did GTBank enter the market space in 1991 with friendly counter
and no cubicle?
▪ Why did GTBank name the customer interfacing staff TELLERS and
not CASHIERS?
▪ Why did GLO enter the Nigerian cellular market with Per Second
Billing?
▪ Why do airlines offer cheaper rates when flights are booked online and
ahead of time?
▪ What factors should we consider when repositioning brands?
▪ How do we evaluate the effectiveness of advertising campaigns?
▪ How do we respond to price changes?
▪ How do we fight a price war?
▪ …and many others.
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 ▪ “Marketing is Everything”
McKenna (1991)
WHAT IS ▪ “Marketing is the science and art of finding, retaining and growing profitable
MARKETING? customers”
Kotler & Armstrong, 2001
▪ “Marketing is the process via which a firm creates value for its chosen customers”.
Dolan (2000)
▪ “Marketing is an organizational function and a set of processes for creating,
communicating and delivering value to customers and for managing customer
relationships in ways that benefits the organization and its stakeholders”
-American Marketing Association (2004)
▪ “Marketing management is the art and science of choosing target markets, and getting,
keeping and growing customers through creating, delivering and communicating
superior customer value”.
- Kotler & Keller (2006)
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IS MARKETING A SCIENCE AND/OR AN ART?

“…a classified and systematic body of knowledge…organized around one or

more central theories and a number of general principles…usually expressed in
quantitative terms…knowledge which permits the prediction and, under some
circumstances, the control of future articles”.
- Buzzell (1963 JM): “Is Marketing a Science?”

▪ SCIENCE: Quantitative, Systematic, Scientific Method and Analytical –

Positivist philosophical thinking.

▪ ART: Qualitative, Creative, One size does not fit all, Not predictable –
Interpretivist philosophy.

12
THE NATURE AND SCOPE OF MARKETING

▪ Marketing Vs. Market Orientation: The term “Marketing “ is derived from

“Market”, which can be defined as – “a place where buyers and sellers gather to buy
and sell the products”. But Marketing is not only about selling; because in order to
sell the product we must know the needs (basic requirements) of the customers.
Thus, Marketing is all about identifying the needs of the customers and satisfying
those needs profitably with the help of the product. For example – Procter & Gamble
has identified that people need tasty but low-calorie food and introduced Olestra
(Oats).
▪ Customer Satisfaction Vs. Market Share Pursuit: Today’s customer makes
constant trade-offs between quality, price and benefits necessary. Thus, marketers
must allow customers to dictate product specifications and quality standards.
Marketing efforts must be directed at meeting customer needs, not market shares.
For this, marketers must track customer needs on a continuous basis.

13
 WHAT IS THE AIM OF A MARKETER?

Hierarchy-of -Effects Model

(from Kotler & Keller, pp. 540-41)

UNAWARE OF PRODUCT
OR SERVICE
“ a market er is someone who
seeks a response from anot her • AWARENESS
• KNOWLEDGE
party, called the prospect” • LIKING
• PREFERENCE
(Kotler and Keller 2006, p. 10). • CONVICTION
• PURCHASE

14
WHY IS MARKETING IMPORTANT?
FROM CUSTOMER VALUE TO FIRM VALUE

FIRM VALUE

LINKING CUSTOMER
DOMAIN OF AND FIRM VALUE
PROFITS &
FINANCE CASHFLOW (Essence of MPR)
( Fincon Role)

VALUE OF A
CUSTOMER
DOMAIN
OF
MARKETING
CUSTOMER CUSTOMER CUSTOMER (Profit Centers)
ACQUISITION MARGIN RETENTION
15
FINANCIAL SERVICES
SPACE AND BANKING
PRODUCTS
 VOLATILITY
Refers to the nature, speed, volume, magnitude
and dynamics of change in an industry, market or
organization. The more volatile the environment is,
the more and faster conditions change.
VUCA UNCERTAINTY
The concept is used to Refers to the extent to which organizations can
confidently foresee future events and issues that
describe the chaotic, turbulent may adversely impact organizational performance.
and rapidly changing business The more uncertain the environment is, the harder
it is to predict.
environment that has become
the “new normal” for COMPLEXITY
organizations. Refers to the multiplicity, diversity and
interconnectedness of factors that organizations
need to take into account. The more complex the
environment is, the harder it is to analyse

AMBIGUITY
Refers to a lack of clarity and difficulty of
understanding exactly what the situation is resulting in
a haziness of reality. The more ambiguous the
environment is, the harder it is to impact.
 VISION RISES ABOVE VOLATILITY
When conditions are changing unpredictably, leaders should keep focused on the

VUCA PRIME desired target state and vision. The vision should be a compelling picture of the
future that aligns stakeholders around the purpose of the transformation, the scale of
the ambition and the nature of the benefits.

VUCA Prime is a behavioural

leadership model, first introduced in
2007 by Robert Johansen (a UNDERSTANDING REDUCES UNCERTAINTY
When uncertainty is encountered, explore and experiment in order to
distinguished fellow at the Institute increase understanding of external political, economic, social, technological,
for the Future), to counteract each of legislative and environmental (PESTLE) factors.

the four elements of VUCA with a

specific positive response.

COMPLEXITY
NEGATIVE POSITIVE When faced with the unknown and unpredictable conditions that
can only be understood in hindsight or retrospect, learn to
 Vulnerable  Vibrancy simplify where possible as clarity informs decisions and
decisions enable execution.
 Uncomfortable  Uniqueness
 Confused  Confidence
 Afraid  Adept
AMBIGUITY
When the future contains multiple alternatives, be ready to adapt the
approach to match the desired outcome. Organizational agility is
simply achieved by adopting the practice of collaborate, deliver, reflect
and improve against agreed metrics.
 2021 ECONOMIC HIGHLIGHTS

Economic setbacks to continue despite Fragile GDP growth at 2% Slower growth for Nigerian banks on the
improved oil prices and revenue due on the back of global back of subdued economy despite the 2019
largely to growing insecurity and introduction of COVID 19 CBN introduction of minimum Loan to
insurgencies. vaccine Deposit Ratio (LDR)

Nigerian naira to weaken Economic fundamentals will Slower growth for Nigerian banks on the
more to N430/$ because weaken banks’ credit back of subdued economy despite the 2019
of low foreign exchange appetite. Private sector credit CBN introduction of minimum Loan to
inflows. to grow by 5% Deposit Ratio (LDR)

External debts of
Earnings to grow With Naira devaluation
Credit losses to hover banks shall remain
slowly due to and impairments, some
around 2.5% and NPL manageable even when
impairments in DMBs may require further
to rise to 12% in 2021 dollar supply shall
2020 and 2021 recapitalization.
remain tight.
▪ Source: S&P Global 19
 ECONOMIC REALITIES
▪ Nigerian economy remains vulnerable to external shocks
▪ Nigeria Foreign Exchange Reserves still remain tied to oil prices
▪ Credit risk will continue to rise
▪ Post COVID 19 hit of 2020, profitability is expected to rise gradually in 2021
▪ AMCON Levy shall be a burden in 2021
▪ Persistent pressure on foreign currency balance sheet
▪ Nigerian banks shall overall retain their profitability streak.
▪ Asset quality remains in line with peers globally
▪ Nigeria sovereign rating remains a constrain on Tier One Nigerian banks
▪ Fuel subsidy removal becoming more unavoidable
▪ Electricity tarrif continues to rise
▪ Inflation rate keeps surging and currently at 18.17%
▪ Source: S&P Global
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FINANCIAL SERVICES SPACE IN CONTEXT

21
 BUSINESS SEGMENTATION

Upstream Energy Downstream Energy Shipping Beverages Telecom Financial Institutions

INSTITUTIONAL
BANKING
Midstream Energy Corporate Finance Cement & Mining Treasury Manufacturing Multinationals

State Ministry
Federal Ministries
Departments & Agencies
PUBLIC SECTOR
BANKING
State Government
Federal Agencies LGAs
Accounts
SBUs

COMMERCIAL
Region 1 Region 2 Region 3
BANKING

SME BANKING Region 1 Region 2 Region 3

High Net worth

Individuals
RETAIL BANKING

Platinum Mass Retail

CARD SERVICES
BANKING
FUNCTIONAL MODEL OF A FINANCIAL SYSTEM

Moving Money Moving Money

Paying for goods
Pooling from Today to from Tomorrow to Managing Risk
and services
Tomorrow Today (Credit)
(Saving/Investing)

Decision Support

Infrastructure

Operating Rules (Laws, Contracts, Regulation)

 KEY FACTORS DETERMINING CHOICE OF A BANK
Factors Influencing Banking Choice Decisions
Quick service reputation 100%

Large Branch network 96%

Large ATM Network 90%

Transaction alerts 89%

Personal banking options 79%

FX availability 75%

Website availability 75%

Credit facility availability 74%

Internet options 72%

Product bouquet 71%

Value added services 71%

Mobile phone banking 70%

New Generation Bank 65%

Advertisement vote 62%

Old Generation Bank 51%

Courtesy of Claypol Consult
0% 25% 50% 75% 100% 125%
24
BUSINESS MODEL
AND VALUE
PROPOSITION
VALUE CREATION – DOES IT PAY?

Value
Downward price pressure Price
from competitive substitutes

Feasible Price Range

Our Price

Our Premium

Upward price pressure Marginal

through marketing efforts Cost
Zero
Source: Pricing Design & Implementation

Value Creation Presents Opportunities for Improving Firm 26

Profitability
 COMMUNICATING VALUE

Thinking about value from the customer’s perspective is

essential to communicating in a way that resonates with
customers. It’s also essential to mitigating fear and
uncertainty. This is key in getting people to change from the
status quo to the new alternative.

The most common mistake organizations make when trying to

communicate value is conflating features, benefits and needs.
All three are important to communicate the value your
offering.
THE 3 LEVELS OF VALUE TRANSLATION

1. FEATURES (what it is): features are a physical

description of the product or service. The purpose of
your products features is to provide benefits.
2. BENEFITS (what it does): there are two types of
benefits; process and outcome benefits. Process benefit
are associated with the use of the product e.g. the 3. NEEDS (why it’s important): marketers
machine is easy and safe to operate. Outcome benefits sometimes refer to NEEDS as ‘What is in it
are those that a customer realizes from using the for the Customer?’ At the end of the day,
product e.g. decreased operating cost due to increased customers do not buy a product/service
productivity. because of it’s features or benefits but
because of the needs being met by that
product.
WHY IS VALUE PROPOSITION IMPORTANT?

• Value Proposition refers to the value a company promises to deliver to customers should they choose to
buy their product.

• A value proposition can be presented as a business or marketing statement that a company uses to
summarize why a consumer should buy a product or use a service.
HOW DO WE DEVELOP VALUE PROPOSITION?

• Your value proposition provides an answer to a key question that your potential customer has: “why should I
buy from you?”.

• In understanding the value proposition, there are four basic questions.

• Who are your Customers?
• What is the Problem that the Customers are facing?
• What is your solution to the problem?
• What is your Differentiator?
WHERE IS VALUE PROPOSITION?
WHAT IS VALUE PROPOSITION CANVAS?

• The Value Proposition Canvas is a plug-

in tool to the Business Model Canvas.

• It allows you to describe your Value

Propositions and the target Customer
Segments in more detail and evaluate
the “fit” between the value you intend
to create and the expectations your
customers have.
WHAT IS A BUSINESS MODEL?

A business model describes the rationale of how an organization creates, delivers, and captures value.
THE 9 BUILDING BLOCKS OF A BUSINESS MODEL

CHANNELS
CUSTOMER SEGMENTS VALUE PROPOSITION
Value propositions are delivered to customers
An organization serves one or It seeks to solve customer problems through communication, distribution, and sales
several Customer Segments. and satisfy customer needs with Channels.
value propositions.

CUSTOMER RELATIONSHIPS REVENUE STREAMS KEY RESOURCES

Customer relationships are Revenue streams result from Key resources are the assets required to offer and
Established and maintained with value propositions successfully deliver the previously described elements…
each Customer Segment. offered to customers.

KEY ACTIVITIES KEY PARTNERSHIPS COST STRUCTURE

Some activities are outsourced The business model elements result in

…by performing a number
and some resources are acquired the cost structure.
of Key Activities.
outside the enterprise.
THE 9 BUILDING BLOCKS
CUSTOMER SEGMENTATION
CUSTOMER
SEGMENTS
◼ Customer groups represent separate segments if:
 Their needs require and justify a distinct offer
 They are reached through different distribution
channels
 They require different types of relationships
 They have substantially different profitability
 They are willing to pay for different aspects of the
offer
VALUE PROPOSITION
VALUE
PROPOSITION
 What value do we deliver to the customers?
 Which one of our customer’s problems are we helping to solve?
 Which customer needs are we satisfying?
 What bundles of products and services are we offering to each
customer segment?
DISTRIBUTION CHANNELS DISTRIBUTIO
N CHANNELS
◼ Through which channels do our customer segments want to be
reached?
◼ How are we reaching them now?
◼ How are our channels integrated?
◼ Which ones work best?
◼ Which ones are most cost-efficient?
◼ How are we integrating them with customer routines?
CUSTOMER RELATIONSHIPS

 What type of relationship does each of our customer

segments expect us to establish and maintain with
them?
 Which ones have we established?
 How costly are they?
 How are they integrated with the rest of our business
model?
REVENUE STREAMS

 For what value are our customers really willing to pay?

 For what do they currently pay?
 How are they currently paying?
 How would they prefer to pay?
 How much does each revenue stream contribute to overall revenues?
KEY RESOURCES

o What key resources do our value propositions, distribution

channels, customer relationships and revenue streams require?
KEY ACTIVITIES

◼ What key activities do our value propositions, distribution

channels, customer relationships and revenue streams
require?
KEY PARTNERSHIPS

◼ Who are our key partners?

◼ Who are our key suppliers?
◼ Which key resources are we acquiring from
partners?
◼ Which key activities do partners perform?
COST STRUCTURE

 What are the most important costs incurred by the

value proposition, distribution channels, customer
relationships and revenue streams?
USING SWOT ASSESSMENT ANALYSIS RESULTS TO DESIGN
NEW BUSINESS MODEL OPTIONS
MARKETING
STRATEGY
MARKETING PLAN [MARKETING STRATEGY]

A marketing plan is a report that summarizes

what has been learned about the marketplace,
and outlines the marketing strategy to be
deployed to achieve the desired objective(s).

47
HOW TO CONCEPTUALIZE THE MARKETING PROCESS
Market ing Analysis (The 5 Cs)
Cust omers Company Competitors Collaborators Cont ext

Target Product and

Marketing Market Service
Creat ing Value Segment at ion Select ion Positioning

Market ing Mix (The 4 Ps)

Capt uring Value Product & Service Place/Channels Promotion

Pricing

Sust aining Cust omer Acquisit ion Cust omer Ret ent ion
Value

Profits
48
 CONTEXT
Market ing Analysis (The 5 Cs)
Cust omers Company Competitors Collaborators Cont ext

❑ Political and Legal Factors: The laws and regulations affecting marketers.
❑ Economic Environment: The assessment of economic conditions and business cycles
❑ Social and Cultural Environment: The prevalent norms and values in a given setting
❑ Technological Environment: Scientific knowledge, research, inventions, and innovations that result in new or
improved: goods/services, pricing strategies, promotional vehicles, and/or delivery channels
❑ Natural Environment: Physical environment and natural resources
❑ Current Events

49
CUSTOMERS
Market ing Analysis (The 5 Cs)
Cust omers Company Competitors Collaborators Cont ext

The (qualified available) market is the set of all actual or potential customers that have interest, income, access and
qualifications for the particular offering (Kotler and Keller p.126).
A target market is the subset of all actual or potential buyers of a good/service that a firm wishes to pursue.

THE FUNNEL METAPHOR

Market: 98% of all US Households that own a TV
Target Market: 1% who have purchased a larger TV set and have spent > $1,000.

50
COMPANY
Market ing Analysis (The 5 Cs)
Cust omers Company Competitors Collaborators Cont ext

How can the firm influence the creation and subsequent implementation of marketing strategy?

▪ What business are we in?

▪ What do we wish to accomplish in the markets in which we compete? (corporate objectives)
▪ How will we compete in general, and in those markets in particular? (corporate mission/strategic orientation(s))
▪ What internal resources do we possess (financial, personnel, culture, technical, production, etc.) that can provide a
basis for competitive advantage?
▪ What is our corporate image/reputation?

51
COMPETITORS
Market ing Analysis (The 5 Cs)
Cust omers Company Competitors Collaborators Cont ext

How can competition influence the creation and subsequent implementation of marketing strategy?

“The great genius of capitalism is that you must stay ahead of competition. The outcome of intensely trying to
stay ahead of the competition is a boon for the consumer” ~ Fred Smith, CEO of FEDEx (2/13/07)

52
COLLABORATORS

Cust omers Company Competitors Cont ext

Collaborators

How can collaborators influence the creation and subsequent implementation of marketing strategy?

◼ Suppliers (upstream businesses)

◼ Intermediaries (downstream businesses that assist in getting product to market, including: distributors, independent reps, retailers
and facilitators).
◼ Other facilitators (marketing research firms, ad agencies, banks, venture capitalists, consultants, etc.)
◼ Complementors (providers of associated goods and services)

“In business, as in war, “know yourself” and “know your enemy” have long been rules number one and two. But a third maxim – “know your friends” – is steadily
moving up the list. The focus on supply chain management is an example of this principle at work”. [Yoffie & Kwak, Sep 2006 HBR]
53
5Cs – MARKETING ANALYSIS

Company Customer Context

1. What business are we in? 1. What need are we addressing? 1. Polit ical and Legal Fact ors - The laws and regulat ions
2. What do we wish t o accomplish in t he market s 2. What is t he size of t he pot ent ial affect ing market ers.
in which we compet e? market? 2. Economic Environment
3. How will we compet e in general, and in t hose 3. Who is our t arget cust omer? 3. Social and Cult ural Environment - The prevalent norms
market s in part icular? (Corporat e 4. What are t he defining charact erist ics of t he and values in a given set t ing.
4. Technological Environment -
Mission/St rat egic Orientation(s)) t arget cust omer?
Scientific
4. What int ernal resources do we possess • Buying habit s knowledge, research, invent ions, an d innovat ions t hat
(financial, personnel, cult ure, technical, • Demographics result in new or improved: goods/services, pricing st rat egies,
production, etc.) that can provide a basis for • psychographics promot ional
compet it ive advantage? • Use pat t erns vehicles, and/or delivery channels.
5. What is our corporat e • Purchase mot ivat ions 5. Nat ural Environment - Physical environment and
image/reputation? natural resources.
• Price sensit ivit y
6. Current Event s
• Brand disposit ion

Competition Collaborators
1. Who compet es wit h us in meet ing t he 1. Who are we enlist ing t o help us?
cust omer need? 2. Are we adequat ely mot ivat ing t hem?
2. What skills and resources do they possess? 3. Suppliers - Upst ream businesses
• Product qualit y 4. Int ermediaries - Downst ream businesses t hat assist in get t ing product t o
• Sales effect iveness
• market , including: Dist ribut ors, Independent
Operations
• Relat ionships wit h collaborat ors Reps, Ret ailers, and facilit at ors.
• Product port folio 5. Ot her facilit at ors - market ing research firms, ad agencies, banks,
• Brand equit y vent ure capit alist s, consult ant s, et c.
3. What is t heir t arget market ? 6. Complementors - Providers of associated
4. What is t he compet it ions’ cost st ruct ure? goods and services
5. What is t heir share of t he market ?
54
MARKETING ANALYSIS FRAMEWORK
Product Price Place Promotion
Company •What is the product •How does the company •Where does the company •What are the ways
portfolio? approach pricing? sell? promotion is done? Push,
• Is the product unique? •Do the skills for “pricing •Are there any special pull, etc
•Does company have capacity for right” exist? resources, skills or •Is there a philosophy for
product innovation? •Do we possess cost relationships that we can measuring effectiveness - %
• What strengths do we have? leadership in this space? leverage to gain advantage? sales, ROI, ROA, etc

Customer • Who is our target customer? •How price sensitive is the •Where does the customer •How does customer access
•What need does this product customer? make his purchases? promotions?
satisfy? •who makes the buying •What are the most
• Are we creating value ? decision? effective promotions?

Collaborators •Where are they in the value •How is price affected by •What are the channel •What promotional
chain? collaborator actions? implications? opportunities are offered?
•Do they have the resources to •What are the margin
integrate into the product space? expectations of retailers,
wholesalers, etc

• Who are the competitors? •What is the pricing •Does the competition use •How does the competition
Competitors • What are their strengths? strategy? similar channels? promote its goods or services?
•What is the competitive • Are they creating value? •What is the relationship •
focus? •How much value is being between channel players and
•What is our/their competitive captured? competitors?
advantage?

Context •What regulatory, technological, • Are we in a recession? • What factors impact place •How does context affect
social & cultural or legal issues •Are there pricing – e.g., zoning laws, promotions? – e.g., regulations,
are relevant? restrictions, caps, etc? restrictions to sale, etc laws, culture, etc
•What sector, larger economy or
global issues are of interest?
55
MARKETING STRATEGY PLANNING PROCESS
Segmentation &
Targeting
Context

Customers SWOT

Strengths Opportunities Product Place

Company Strategy External

Target
Internal
Factors Planning Factors Market

Price
Weaknesses Threat s Promo
Competitors

Collaborators
Differentiation &
Positioning
56
THE NEW MARKETING PARADIGM
OLD MARKETING PARADIGM NEW MARKETING PARADIGM
• Unique customer – segment of 1
Customer • Average customer • Increasingly sophisticated, affluent
• Growing customer confidence • Global
• Demanding & confident about the future • Faced with many choices

• Mostly local • Global

Competitor • Focused on average customer • Networked organizations
• Uses market intelligence

• Suppliers, Channels
• Used for creating products, • Partners in value delivery Network
Collaborator reaching customers • Join in value creation

• Mass customization
• Mass production • Dynamic
Context • Scarcity, pent up demand • Globalization
• Static, local relevance • Deregulation

Company • Sale orientation • Customer relationship orientation

• Reengineered for value creation & delivery
• New product development • Learning organization
• Network organization
• Market intelligence focus
57
TOP 5 KEY MARKETING TASKS TO INCREASE SALES

◼ Generate awareness
It takes a tremendous amount of activity to generate awareness of your company.
Your prospects and customers need to know you, and like what you can do for them. Got a
marketing strategy to do this?
◼ Develop necessary marketing material needed for sales
Marketing teams are usually best positioned to work with the customer’s point of
view and incorporate it into the company’s message. Marketing, not Sales should develop
materials such as a media kit, white papers, benefit statements and FAQ documents.
◼ Develop your target market
Marketing and Sales need to develop the target market as a team. Yet this is often
not the case. Coordinating on the size and scope of this market is vital, so that hiring activities
are scaled appropriately.
◼ Develop inbound leads
First, both inbound and outbound leads are needed for successful lead generation.
However, I believe inbound lead generation falls under Marketing, while outbound can fall
under Sales.
◼ Define your ideal customer profile, lead definitions, and prospect buyer personas
Agreement on these definitions can bridge the gap between Sales and Marketing by
helping both groups become aware of who the company’s best prospects are.
58
THE 7P’S OF MARKETING
PORTER’S FIVE FORCES FRAMEWORK AND MARKETING
POSITIONING

◼ Porter's Five Forces of Competitive Position Analysis were developed in 1979 by

Michael E Porter of Harvard Business School as a simple framework for assessing and
evaluating the competitive strength and position of a business organisation.

◼ This theory is based on the concept that there are five forces that determine the
competitive intensity and attractiveness of a market. Porter’s five forces help to identify
where power lies in a business situation. This is useful both in understanding the
strength of an organisation’s current competitive position, and the strength of a position
that an organisation may look to move into.

◼ Strategic analysts often use Porter’s five forces to understand whether new products or
services are potentially profitable. By understanding where power lies, the theory can
also be used to identify areas of strength, to improve weaknesses and to avoid mistakes.

60
INDUSTRY ANALYSIS – PORTER’S 5 FORCES

61
INDUSTRY ANALYSIS

How can competition

influence the creation and
subsequent
implementation of
marketing strategy?

62
INDUSTRY VALUE CHAIN & PROFITABILITY

63
PORTER’S VALUE CHAIN

64
MARKETING IN PRACTICE

B2B MARKETING STRATEGIES

• Content Marketing
• Inbound Marketing
• Social Media Marketing
• Search Engine Optimization
• Search Engine Marketing/PPC
• Account Based Marketing (ABM) and Retargeting
• Earned Media and PR
• Referral Programs
• Industry Events
• Conversational Marketing
MARKETING IN PRACTICE

B2C MARKETING STRATEGIES

• Social Networks and Viral Marketing

• Paid Media Advertising
• Internet Marketing
• Email Marketing
• Direct Selling
• Point-of-Purchase (POP) Marketing
• Co-Branding, Affinity, and Cause Marketing
• Conversational Marketing
• Earned Media/PR
• Storytelling
MARKETING
ORIENTATION
SERVICE AND CUSTOMER ORIENTATION

▪ Consumer (or customer) orientation is the focal issue (or central theme) in today’s
marketing practices.
▪ There are four pillars of the modern marketing concept –
◼ Consumer orientation, also called consumer satisfaction
◼ Target market
◼ Integrated marketing (B-Spoke)
◼ Profitability
◼ Consumer orientation is a key to achieve business goals. A firm can achieve
marketing goals by concentrating on customer satisfaction. Those companies who
actualize consumer orientation can achieve better marketing performance.

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CUSTOMER PERSONALITY TYPES

◼ If you want to consistently win deals, you cannot sell a product the way you would like to be sold to.
You have to adapt your strategy to the buyer’s personality type.

TYPES OF BUYERS & THEIR PERSONALITY TYPES

1. Assertive
2. Amiable
3. Expressive
4. Analytic
THE ASSERTIVE CUSTOMER
THE AMIABLE CUSTOMER
THE EXPRESSIVE CUSTOMER
THE ANALYTIC CUSTOMER
 CUSTOMER
ACQUISITION
AND
RETENTION
CUSTOMER ACQUISITION & RETENTION

A successful marketer should work constantly to find out what the

customer wants and develop products that satisfy customer demands.

Customers are the lifeblood of your company, so it is crucial to

maximise customer satisfaction. Some degree of customer turnover is
inevitable, but successful marketers will always retain repeat
customers.

It costs about five times more to bring in a new customer than to keep
an existing one.
THE RESPONSE HIERARCHY MODELS

The best way to convert new clients and There are five Models of Response
maximise leads is through Hierarchy that explain the consumer
communicating value. The Response behaviour across three awareness
Hierarchy Models explain how stages – the Cognitive stage,
consumers respond and behave to the Affective stage and Behavioural stage.
advertising process. The Models The five models are:
provide a complete understanding of 1. AIDA Model
the responses of a customer through all 2. Hierarchy-of-Effects Model
the stages of his path – from being 3. Innovation-Adoption Model
unaware of the product to the purchase 4. Information Processing Model
action. 5. Operational Model
THE FIVE MODELS
THE AIDA MODEL

◼ The AIDA model is the most popular one, hence this is what we
will focus on.

◼ The AIDA Model which stands for Attention, Interest, Desire

and Action; is an advertising effect model that identifies the
stages that an individual goes through during the process of
purchasing a product.
 ATTENTION

 Attention is the first step in marketing or advertising because the first thing a marketer needs
to do is attract the attention of the customers. You can do this by:

 Creating advertisements in unexpected situations or locations (guerrilla marketing)

 Creating shock in advertisements through provocative imagery
 Using intensely targeted messages
 INTEREST/CONSIDERATION

◼ Interest is the second step where the consumer is aware that the product or service exists. Here, the
marketer must work on increasing the potential customer’s interest level. You can do this by:

 Focusing on what is interesting about your product/service

 Focusing your message on the needs of your target market
 DESIRE

 Desire is the third step which happens after the consumer is interested in the product or
service. The goal here is to ensure that the consumers desire the product and moving their
mind set from “I like it” to “I want it”. You can achieve this by:

 Helping your customers realize why they “need” your product or service
 Using Infomercials to show how the products can be used in several creative situations
 ACTION

 The last step and the ultimate goal of the marketer is to drive the receiver of the marketing
campaign to initiate action and purchase the product or service. You can do this by:

 Using a call to action at the end of your advertisement

 CUSTOMER RELATIONSHIPS: WHY IT MAKES ECONOMIC SENSE

▪ Targets high customer satisfaction

~ Fornell, et al. ‘Customer Satisfaction & Stock Prices: High Prices, Low
Risk’. Journal of Marketing, Vol 70, pg. 3-14, 2006.
▪ Better tailored value proposition
▪ More loyal customers
▪ Avoided cost of finding new customers
▪ Stable returns
▪ Higher terminal value of business

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PRACTICAL STRATEGIES

1. Offer quality products

2. Let your product delivery/packaging be attractive
3. Cultivate good people skills
4. Know your customers
5. Let prospects try samples of your product (if possible)
6. Be willing to change/adapt
CRM: RETENTION STRATEGY

◼ Customer Relationship Management strategy is a company-

wide plan for business growth, revenues/profit optimization and
cost reduction towards enhanced customer relationships and
retention. Many choose to do this with the help of CRM
technology.

◼ You may have heard the expression that “the customer is king”.
When creating a CRM strategy, it’s not a bad idea to bear this in
mind as you build it to manage the interactions with your
current and potential customers.
◼ Interactive Customer Call Center – This is one of the ways
businesses engage their customers on 24/7 basis thereby
providing them continuous service support.

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 CRM STRATEGY IMPLEMENTATION

 Run a complete audit- This includes reviewing external and internal processes, studying the
market, analysing the competition, and conducting a SWOT analysis — an analysis of your
company’s strengths, weaknesses, opportunities, and threats.
 Outline sales process- Map out customer journey by identifying the different pipeline stages
prospects pass through, and find out who is responsible for what on your sales and marketing
teams.
 Define your CRM Goals- Define SMART goals for your CRM team before you even think
about looking for new software. SMART is an acronym for:
 Specific
 Measurable
 Achievable
 Relevant
 Time-bound

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BENEFITS OF CRM STRATEGY
❑ Leverage data to improve productivity- With a CRM
platform, you can consolidate customer data collected from
different departments, such as marketing, sales, and customer
service, and let your team access all data from a single
dashboard.

❑ Deliver personalised customer experiences- Personalization

improves the customer experience. An improved customer
experience drives revenue and customer loyalty.

❑ Reduce costs and automation- With a CRM, you can save a

whole lot of time and money by automating repetitive,
administrative tasks, such as feeding lead data into your
pipeline. Instead of manually typing in data, you can set up
your lead capture forms for automatic data syncing.

❑ Track campaign performance- Monitor team’s performance

to ensure the CRM solution is helping to achieve set
organizational goals.

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 PRICING AND
DIFFERENTIATION
ESSENCE OF PRICING

Well designed pricing mechanism allows …

❑ Customer discrimination
❑ Incentive coordination (collaborators)
❑ Effectively deal with competition
❑ Integrate with firm’s (company) ongoing marketing efforts

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PRICING OBJECTIVES
Pricing Objective Comments

Survival Usually a short run objective where the aim is to cover variable costs and some fixed costs

Maximum Current Profit Requires knowledge of the demand and cost functions. Firm estimates profits at different
price points and selects the choice that maximizes profits

Maximum Market Share Effective in price sensitive markets and instances where higher sales volumes lead to
(Penetration Pricing) lower unit costs e.g., Glo
Maximum Market Approach used to “skim” highest revenue by tapping value from various segments.
Skimming Introductory pricing is high and falls over time e.g., new technology products

Product – Quality Price products & services just high enough to reinforce high levels of perceived quality,
Leadership taste and status, but not be out of consumer’s reach e.g., affordable luxuries – BMW,
Victoria’s Secrets, Starbucks coffee

Other Objectives Non profit organizations and public institutions usually have other pricing objectives –
partial cost recovery (Universities), full cost recovery (some Hospitals), etc

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PRICING PROFITABILITY AND DECISION MAKING
◼ Three things can happen when establishing a product price.
1. A price set too high is a lost sale that could have been profitable at a lower
price.
2. A price set too low is rewarded with unprofitable work.
3. Only when a price is set appropriately does a company make both a sale
and a profit.
◼ Just as activity-based costing and activity-based management revolutionized
the cost accounting world, activity-based pricing will bring a disciplined
approach to developing pricing.
◼ Activity-based Pricing - Examines the relationships between price, cost and
sales volume and how this relationship effects profitability. Pricing for
Profitability joins the disciplines of marketing, economics, business strategy,
engineering and cost accounting to achieve maximum profitability.

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PRICING STRATEGIES

Int ernal Fact ors EXT ERNAL

FACT ORS
1. Marketing 1. Nature of
Object ives Market &
2. Market ing Mix Pricing Demand
Strategy 2. Competition
Decisions
3. Costs 3. Economy
4. Organizational
4. Resellers
considerations
5. Government

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PRICE SETTING

Determine
SELECT THE PRICING Estimate costs
Demand
OBJECTIVE

Select t he final price Select the pricing Analyze competitors

st ruct ure & levels strategy costs, prices & offers

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RESPONDING TO PRICE CHANGES

No Hold current price;

Has compet it or cut cont inue t o monit or
price? compet it or's price

Yes
Reveal cost advant age
Will lower price negat ively No
affect our market share and
profit s?

Non - Price
Form st rat egic alliances wit h
Yes collaborat ors

No
Can/Should effect ive Improve qualit y
act ion be t aken?

Yes
Reduce Price

Price
Launch “ low price”
flanking brand

Use complex pricing act ion – offer

bundled price, promos

Adapted from (1) Principles of Marketing, Kotler & Armstrong, 2005 & (2) How to fight A Price War, Rao et al, 2000
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THANK YOU