Marketing Digital

Digital Marketing is the promoting of brands using the Internet, mobile and other interactive channels. Digital Marketing is the practice of promoting products and services using digital distribution channels to reach consumers in a timely, relevant, personal and cost-effective manner. Whilst digital marketing does include many of the techniques and practices contained within the category of Internet Marketing, it extends beyond this by including other channels with which to reach people that do not require the use of The Internet. As a result of this non-reliance on the Internet, the field of digital marketing includes a whole host of elements such as mobile phones, sms/mms, display / banner ads and digital outdoor. Previously seen as a stand-alone service in its own right, it is frequently being seen as a domain that can and does cover most, if not all, of the more traditional marketing areas such as Direct Marketing by providing the same method of communicating with an audience but in a digital fashion.

Digital Marketing – Pull vs. Push
There are 2 different forms of digital marketing, each of which has its pros and cons.
Pull
Pull digital marketing technologies involve the user having to seek out and directly grab (or pull) the content via web search. Web site/blogs and streaming media (audio and video) are good examples of this. In each of these examples, users have a specific link (URL) to view the content.
Pros:
No restrictions in terms of type of content or size as the user determines what they want.
• No technology required to send the content, only to store/display it.
• No regulations or opt-in process required.
Cons:
• Considerable marketing effort required for users to find the message/content.
• Limited tracking capabilities – only total downloads, page views, etc.
• No personalization – content is received and viewed the same across all audiences
Push
Push digital marketing technologies involve both the marketer (creator of the message) as well as the recipients (the user). Email, SMS, RSS are examples of push digital marketing. In each of these examples, the marketer has to send (push) the messages to the users (subscribers) in order for the message to be received.
Pros:
• Can be personalized -- messages received can be highly targeted and specific to selected criteria – like a special offer for females, 21 years old or over and living in California.
• Detailed tracking and reporting – marketers can see not only how many people saw their message but also specific information about each user such as their name as well as demographic and psychographic data.
• High Return on Investment (ROI) possible – if executed the right way, push messaging can help drive new revenue as well as brand reinforcement.
Cons:
• Compliance issue – each push messaging technology has its own set of regulations, from minor (RSS) to heavily controlled (email and text messaging)
• Requires mechanism to deliver content – the marketer has to use an application to send the message, from an email marketing system to RSS feeders.
• Delivery can be blocked – if the marketer does not follow the regulations set forth by each push message type, the content can be refused or rejected before getting to the intended recipient.

Digital Marketing and Multi-Channel Communications
While digital marketing is effective when using one message type, it is much more successful when a marketer combines multiple channels in the message campaigns. For example, if a company is trying to promote a new product release, they could send out an email message or text campaign individually. This, if properly executed, could yield positive results. However, this same campaign could be exponentially improved if multiple message types are implemented. An email could be sent to a list of potential customers with a special offer for those that also include their cell phone number. A couple of days later, a follow up campaign would be sent via text message (SMS) with the special offer. Push and pull message technologies can also be used in conjunction with each other. For example, an email campaign can include a banner ad or link to a content download. This enables a marketer to have the best of both worlds in terms of their marketing messaging.

Digital Marketing Terms
Banner Ad, An advertisement that appears on a Web page, most commonly at the top (header) or bottom (footer) of the page. Designed to have the user click on it for more information (see Microsite)
Blacklisted, A blacklisted notice means that the message may not have been delivered due to be flagged on one of the major lists that keep tabs of known spammers. Different ISPs use different blacklists to block mailings from being delivered to their clients. It can be a temporary ban or a permanent one, depending upon the list.
Blocked, A blocked notice means that the message did not get through due to being considered spam by the subscriber’s ISP. This may be due to being on a blacklist or because the message contains a domain that is already being blocked.
Blog, Shortened from “web log” a blog is a user-generated Web site where entries are made in journal style and displayed in a reverse chronological order.
Campaign, A campaign is a specific message being sent to a specific group of recipients.
CAN SPAM Act The CAN SPAM ACT is a series of federal laws that must be followed by all email marketers. Those found in violation of the laws can be subjected to major penalties. For more information, go to http://www.spamlaws.com/federal/index.shtml
Click Through, The number of times people clicked on the links in your message. This is often referred to as CTR (Click Through Rate). Note: you must have enabled click through tracking in the campaign in order for this to be recorded.
Digital Brand Engagement, Brand and consumer interaction through the Internet. This includes all aspects of dialogue through the social web and on the brand's own website.
DMA Market, DMA stands for Designated Market Area, which is often associated with the entertainment industry. DMAs are usually counties (or sometimes split counties) that contain a large population that can be targeted, such as New York City, Los Angeles or Chicago.
Email Service Provider (ESP), Outside companies like mobileStorm that send bulk emails on behalf of their clients to prevent their messages as being labeled as spam or blocked entirely.
False Positives, Legitimate messages being labeled as “spam” Can cost companies potentially millions in potential lost revenue if not dealt with correctly.
GPRL, The Global Permanent Removal List consists of records that are automatically removed from a particular database. Almost all email service providers (ESP) or multi-channel messaging companies maintain these lists for their clients.
Instant Messaging, Instant messaging (often shortened to IM) is a type of communications service that enables you to create a kind of private chat room with another individual in order to communicate in real time over the Internet.
Keywords, Used in conjunction with SMS messages. A user types a short code and matching keyword in order to be added to a mobile club or database.
Microsite, A mini Web site design to promote a specific portion or brand from a larger corporate site. Used often with contests or as a landing page for a specific promotion.
Open Rate, This is a ratio determined by the number of people who opened your email against the total number of people to whom you sent the message. Typically, this number will be low for large campaigns and higher for more targeted campaigns.

Opt-In List, Email marketers have databases of subscribers to their newsletters, featuring these subscribers' email addresses and names. Such a list is known as an opt-in list (and is thus CAN-SPAM compliant; see above for info on the CAN-SPAM act) because users choose to receive the emails. This is in contrast to spam email, which is unsolicited.
Personalization, Personalization gives you the ability to create a customized message for each person in your database. Can be addressed by first/last name, city, state, zip, etc.
RSS, RSS or Real Simple Syndication is technology designed to allow users to subscribe to a specific content feed and be automatically alerted when new updates are available.
RSS Reader, Application used to subscribe and monitor selected RSS content feeds.
Short Code, A short code is a 5 digit number that is used to send and respond to text messages. They can either be a random set of numbers or a “vanity” number tied to a specific brand or number pattern.
SMS, SMS (Short Message Service) is a one-way text message sent via a cell phone. It is usually received via the subscribers' text message inbox on their cell phone and can be a maximum of 160 characters per message.
Social Bookmarking, Social Bookmarking is a popular way to store, classify, share and search links that are combined into a single site for easy access.
Spam, An email message that is unwanted by the recipient. Legitimate emails can sometimes be incorrectly identified as spam and is a growing problem.
Streaming Technologies, Communication channel such as video and audio that is accessed online. Can be a pre-stored clip to access as well as a live feed that is streamed like an online broadcast.
Subscriber, A person who signs up to receive messages from a particular company or entity.
Targeting, Targeting allows you to send a message to people based on specific criteria from your subscriber database.
Voice Broadcast, Sending a pre-recorded voice messages to a large set of phone numbers at the time same. Can either be a voice call (meaning the recipient must answer the call for the message to play) or voice mail (meaning the message will play only if the recipient doesn’t answer )
Widget, A small graphical device that does a highly focused, often single, specific task. Web widgets can be embedded in web pages or run on the desktop of a PC (Windows or Mac) using software such as Apple's Dashboard software or Yahoo! Widgets Engine.

Marketing Internet Article

Article marketing is a type of advertising in which businesses write short articles related to their respective industry. These articles are made available for distribution and publication in the marketplace. Each article contains a bio box and byline that include references and contact information for the author's business. Well-written content articles released for free distribution have the potential of increasing the authoring business' credibility within its market as well as attracting new clients.

Background
Article marketing has been used by professionals for nearly as long as mass print has been available. In paper-print form (as opposed to online forms), article marketing is utilized commonly by business owners as a means of obtaining free press space. A local business provides useful content to the newspaper free of charge, and in return the newspaper prints the business' contact information with the article. Because newspapers and other traditional media are expected to present content on limited budgets, this arrangement is generally advantageous for all parties involved. For example, an accounting firm may market itself by writing an article entitled "The Top 10 Ways to Avoid Being Audited" and offering it to the local newspapers several weeks prior to tax season. Similarly, a roofing company may offer radio stations a concise article entitled "How to Avoid Ice Damage to Your Roof this Winter" shortly before the winter season.

Online article marketing
With the rise of e-commerce and Internet marketing, article marketing has made a move to the online world as well. As in traditional forms of media, online article marketing has served the dual role of providing publishers with what amounts to free content, and advertisers with similarly free advertising. The website where an author can post an article is known as an article directory. The primary reason an author can post an article without cost is that the directory owner places advertising on each article page and collects the revenue generated from the advertising. The article directory site gradually increases its own search engine popularity as more articles are posted, benefitting both the author and the directory owner with increased visitor numbers and therefore article page views. However unlike the off-line version, there are additional dimensions to article marketing online. Most notable among the differences is the use of articles for search engine optimization. Articles are written to target particular keyword niches, and distributed to content publishers that cater to those markets. Authors are able to target their audience with informative content, sent to an already-interested group of readers. Many online article marketers enjoy the low cost of this type of advertising and so have written hundreds and sometimes thousands of articles. One online article writer has written 12,900 articles. These prolific article authors also enjoy abundant backlinks (i.e., links pointing back to the business' website). When the articles are distributed via RSS, the exposure to the authoring business and number of backlinks is increased greatly. Because of this, article marketing has been the victim of junk content over the past few years. It's important that article marketers be careful not to abuse the Internet and post poor quality content on the web just for promotional purposes; smart article marketers use scientifically proven techniques that dig deep into their own businesses and their readers' concerns and needs and tactfully persuades them to click through to their web sites. Another article marketing option available is where the author can choose to take control of the advertising space on the page where his article is posted. With this option the author has the choice to either have no advertising to compete with the article, or to have control over the advertising on the page along with the revenue generated.

Web 2.0
Article marketing has become increasingly popular as a marketing method under the Web 2.0 generation of business on the Internet. Many subjects have gained popularity through viral propagation of articles via social networks such as Facebook and LinkedIn. The sudden popularity of article marketing has caused an overall reduction in quality in many subjects, mainly due to individuals writing low-quality articles as a quick way of achieving exposure. Efficient use of article marketing as a form of promotion requires invested effort in writing high-quality, relevant articles.[1]

Article marketing and search engine optimization
Search engine optimization (SEO) deals with the order in which webpages are ranked when keywords or phrases are typed into search engines. The higher a page is ranked, the more likely that page will draw a greater number of site visitors. For company websites, increased traffic often translates into increased sales, and article marketing has proven to be useful and effective for several leading Internet marketing ventures. One method of SEO encompasses the idea that a website's rank in search engines will rise as it obtains more backlinks. Therefore, writing and distributing articles that contain a link to a business owner's website within the bio box should result in more links back to that website. Theoretically this process will increase that website's rank within search engines. This theory has led to a trend in online marketing toward writing articles solely for SEO purposes, and are commonly referred to as reprint articles. This trend has been matched by a wide selection of article marketing directory websites which accept, vet, and provide redistribution of such articles to online publishers. The free distribution of articles has, however, led to a large amount of duplicated content appearing on websites across the Internet. The quality of articles can also suffer as some authors seek a large quantity of backlinks at the possible expense of content quality.[2] Recently there is a new breakthrough in the article marketing technique. This new breakthrough minimizes the possibility of duplicated content across internet. The technique involves proprietary algorithm based on article spinning method. Unique Article Wizard is an example of article distribution center that use this method. Using this technology, completely unique articles can be shown in many article directory, such as those shown in Gigantesque Articles Directory.

References
1. ^ [Kwan, K. (2008), Entrepreneurial Steroids: Article Science that Triples 3X CTR and PUMPS Sales & ROI, 6WRiters Publishing Group]
2. ^ [Kwan, K. (2008), Entrepreneurial Steroids: Article Science that Triples 3X CTR and PUMPS Sales & ROI, 6WRiters Publishing Group]

Marketing For Internet

Internet marketing, also referred to as i-marketing, web marketing, online marketing, or eMarketing, is the marketing of products or services over the Internet. The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it not only refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems. Internet marketing ties together creative and technical aspects of the Internet, including design, development, advertising, and sale. Internet marketing also refers to the placement of media along different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. In 2008 The New York Times working with comScore published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found the potential for collecting data upward of 2,500 times on average per user per month.[1]

Business models
Internet marketing is associated with several business models:
• e-commerce — goods are sold directly to consumers (B2C) or businesses (B2B),
• publishing — the sale of advertising,
• lead-based websites — an organization generates value by acquiring sales leads from its website, and
• affiliate marketing — A process in which a product or service developed by one person is sold by other active seller for a share of profits. The owner of the product normally provide some marketing material ( sales letter, affiliate link, tracking facility).
There are many other business models based on the specific needs of each person or business that launches an Internet marketing campaign.
One-to-one approach
The targeted user is typically browsing the Internet alone, so the marketing messages can reach them personally. This approach is used in search marketing, where the advertisements are based on search engine keywords entered by the user. And now with the advent of Web 2.0 tools, many users can interconnect as "peers".
Appeal to specific interests
Internet marketing and geo marketing places an emphasis on marketing that appeals to a specific behaviour or interest, rather than reaching out to a broadly-defined demographic. "On- and Off-line" marketers typically segment their markets according to age group, gender, geography, and other general factors. Marketers have the luxury of targeting by activity and geolocation. For example, a kayak company can post advertisements on kayaking and canoing websites with the full knowledge that the audience has a related interest. Internet marketing differs from magazine advertisements, where the goal is to appeal to the projected demographic of the periodical. Because the advertiser has knowledge of the target audience—people who engage in certain activities (e.g., uploading pictures, contributing to blogs)— the company does not rely on the expectation that a certain group of people will be interested in its new product or service.

Geo targeting
Geo targeting (in internet marketing) and geo marketing are the methods of determining the geolocation (the physical location) of a website visitor with geolocation software, and delivering different content to that visitor based on his or her location, such as country, region/state, city, metro code/zip code, organization, Internet Protocol (IP) address, ISP or other criteria.

Different content by choice
A typical example for different content by choice in geo targeting is the FedEx website at FedEx.com where users have the choice to select their country location first and are then presented with different site or article content depending on their selection.

Automated different content
With automated different content in internet marketing and geomarketing the delivery of different content based on the geographical geolocation and other personal information is automated.

Advantages
Internet marketing is relatively inexpensive when compared to the ratio of cost against the reach of the target audience. Companies can reach a wide audience for a small fraction of traditional advertising budgets. The nature of the medium allows consumers to research and purchase products and services at their own convenience. Therefore, businesses have the advantage of appealing to consumers in a medium that can bring results quickly. The strategy and overall effectiveness of marketing campaigns depend on business goals and cost-volume-profit (CVP) analysis. Internet marketers also have the advantage of measuring statistics easily and inexpensively. Nearly all aspects of an Internet marketing campaign can be traced, measured, and tested. The advertisers can use a variety of methods: pay per impression, pay per click, pay per play, or pay per action. Therefore, marketers can determine which messages or offerings are more appealing to the audience. The results of campaigns can be measured and tracked immediately because online marketing initiatives usually require users to click on an advertisement, visit a website, and perform a targeted action. Such measurement cannot be achieved through billboard advertising, where an individual will at best be interested, then decide to obtain more information at a later time. Internet marketing as of 2007 is growing faster than other types of media. Because exposure, response, and overall efficiency of Internet media are easier to track than traditional off-line media—through the use of web analytics for instance—Internet marketing can offer a greater sense of accountability for advertisers. Marketers and their clients are becoming aware of the need to measure the collaborative effects of marketing (i.e., how the Internet affects in-store sales) rather than siloing each advertising medium. The effects of multichannel marketing can be difficult to determine, but are an important part of ascertaining the value of media campaigns.

Limitations
Internet marketing requires customers to use newer technologies rather than traditional media. Low-speed Internet connections are another barrier: If companies build large or overly-complicated websites, individuals connected to the Internet via dial-up connections or mobile devices experience significant delays in content delivery. From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try on" tangible goods before making an online purchase can be limiting. However, there is an industry standard for e-commerce vendors to reassure customers by having liberal return policies as well as providing in-store pick-up services. A survey of 410 marketing executives listed the following barriers to entry for large companies looking to market online: insufficient ability to measure impact, lack of internal capability, and difficulty convincing senior management.[2]

Security concerns
Information security is important both to companies and consumers that participate in online business. Many consumers are hesitant to purchase items over the Internet because they do not trust that their personal information will remain private. Encryption is the primary method for implementing privacy policies. Recently some companies that do business online have been caught giving away or selling information about their customers. Several of these companies provide guarantees on their websites, claiming that customer information will remain private. Some companies that purchase customer information offer the option for individuals to have their information removed from the database, also known as opting out. However, many customers are unaware if and when their information is being shared, and are unable to stop the transfer of their information between companies if such activity occurs. Another major security concern that consumers have with e-commerce merchants is whether or not they will receive exactly what they purchase. Online merchants have attempted to address this concern by investing in and building strong consumer brands (e.g., Amazon.com, eBay, Overstock.com), and by leveraging merchant/feedback rating systems and e-commerce bonding solutions. All of these solutions attempt to assure consumers that their transactions will be free of problems because the merchants can be trusted to provide reliable products and services. Additionally, the major online payment mechanisms (credit cards, PayPal, Google Checkout, etc.) have also provided back-end buyer protection systems to address problems if they actually do occur.

Broadband-induced trends
Online advertising techniques have been dramatically affected by technological advancements in the telecommunications industry. In fact, many firms are embracing a new paradigm that is shifting the focus of online advertising from simple text ads to rich multimedia experiences. As a result, advertisers can more effectively engage in and manage online branding campaigns, which seek to shape consumer attitudes and feelings towards specific products. And just what is the critical technological development that is fueling this paradigm shift? The answer: Broadband. In March 2005, roughly half of all American homes were equipped with broadband technology. By May 2008, broadband technologies had spread to more than 90% of all residential Internet connections in the United States. When one considers a Nielsen’s study conducted in June 2008, which estimated the number of U.S. Internet users as 220,141,969, one can calculate that there are presently about 199 million people in the United States utilizing broadband technologies to surf the Web. As a result, all 199 million members of this burgeoning market have the ability to view TV-like advertisements with the click of a mouse. And to be sure, online advertisers are working feverishly to design rich multimedia content that will engender a “warm-fuzzy” feeling when viewed by their target audience. As connection speeds continue to increase, so will the frequency of online branding campaigns.

Effects on industries
Internet marketing has had a large impact on several previously retail-oriented industries including music, film, pharmaceuticals, banking, flea markets, as well as the advertising industry itself. Internet marketing is now overtaking radio marketing in terms of market share.[3] In the music industry, many consumers have been purchasing and downloading music (e.g., MP3 files) over the Internet for several years in addition to purchasing compact discs. By 2008 Apple Inc.'s iTunes Store has become the largest music vendor in the United States.[4] The number of banks offering the ability to perform banking tasks online has also increased. Online banking is believed to appeal to customers because it is more convenient than visiting bank branches. Currently over 150 million U.S. adults now bank online, with increasing Internet connection speed being the primary reason for fast growth in the online banking industry. Of those individuals who use the Internet, 44 percent now perform banking activities over the Internet. Internet auctions have gained popularity. Unique items that could only previously be found at flea markets are being sold on eBay. Specialized e-stores sell items ranging from antiques to movie props.[5][6] As the premier online reselling platform, eBay is often used as a price-basis for specialized items. Buyers and sellers often look at prices on the website before going to flea markets; the price shown on eBay often becomes the item's selling price. It is increasingly common for flea market vendors to place a targeted advertisement on the Internet for each item they are selling online, all while running their business out of their homes. The effect on the advertising industry itself has been profound. In just a few years, online advertising has grown to be worth tens of billions of dollars annually.[7][8][9] PricewaterhouseCoopers reported that US$16.9 billion was spent on Internet marketing in the U.S. in 2006.[10] Internet marketing has had a growing impact on the electoral process. In 2008 candidates for President heavily utilized Internet marketing strategies to reach constituents. During the 2007 primaries candidates added, on average, over 500 social network supporters per day to help spread their message.[11] President Barack Obama raised over US$1 million in a single day during his extensive Democratic candidacy campaign, largely due to online donors.[12]

References
1. ^ Story, Louise and comScore (March 10, 2008). "They Know More Than You Think" (JPEG). http://www.nytimes.com/imagepages/2008/03/10/technology/20080310_PRIVACY_GRAPHIC.html. in Story, Louise (March 10, 2008). "To Aim Ads, Web Is Keeping Closer Eye on You". The New York Times (The New York Times Company). http://www.nytimes.com/2008/03/10/technology/10privacy.html. Retrieved on 2008-03-09.
2. ^ Mediapost (Blog) - Why Marketers are Not Investing Online (2/13/2008)
3. ^ Businessweek - Advertising Goes Off the Radio (2006-12-07)
4. ^ iTunes 'biggest US music seller' (2008-04-04)
5. ^ Ian Mohr Daily Variety. Reed Business Information February 27, 2006 "Movie props on the block: Mouse to auction Miramax leftovers"
6. ^ David James People Magazine Time, Inc. February 24, 2007 "Bid on Dreamgirls Costumes for Charity"
7. ^ eMarketer - Online Ad Spending to Total $19.5 Billion in 2007 (2007-2-28)
8. ^ The Register - Internet advertising shoots past estimates (2006-09-29)
9. ^ Internet Advertising Bureau - Online Adspend (2007-06-18)
10. ^ PricewaterhouseCoopers reported U.S. Internet marketing spend totaled $16.9 billion in 2006" (Accessed 18-June-2007)
11. ^ "Spartan Internet Consulting - Political Performance Index (SIPP)" (Accessed 28-June-2008)
12. ^ "Center For Responsive Politives Fundraising Profile Barack Obama" (Accessed 28-June-2008)

Marketing Segmentation

Every company or small / home business exists for the purpose of providing their product or service to the market place. With this point in mind it is sometimes baffling not to mention amazing that a great deal of businesses do not spend time on market segmentation (or niche marketing and we will use the terms interchangeably) as a regular part of their business strategy planning sessions. Companys often asking about how to do market segmentation and some of the many answers to that question will be addressed here. Failure to focus on implementations of market segmentation essentially means that the given business may well end up selling their product or service A market segmentation of people or organizations sharing one or more characteristics that cause them to have similar product and/or service needs. A true market segment meets all of the following criteria: it is distinct from other segments (different segments have different needs), it is homogeneous within the segment (exhibits common needs); it responds similarly to a market stimulus, and it can be reached by a market intervention. The term is also used when consumers with identical product and/or service needs are divided up into groups so they can be charged different amounts. These can broadly be viewed as 'positive' and 'negative' applications of the same idea.
"Positive" market segmentation
Market segmenting is the process that a company divides the market into distinct groups who have distinct needs, wants, behaviour or who might want different products & services <(Aminjonov Mirhabibjon, "Marketing Introduction"(2009))> Broadly, markets can be divided according to a number of general criteria, such as by industry or public versus private although industrial market segmentation is quite different from consumer market segmentation, both have similar objectives. All of these methods of segmentation are merely proxies for true segments, which don't always fit into convenient demographic boundaries. Consumer-based market segmentation can be performed on a product specific basis, to provide a close match between specific products and individuals. However, a number of generic market segment systems also exist, e.g. the Claritas Prizm system provides a broad segmentation of the population of the United States based on the statistical analysis of zip codes.
The process of segmentation is distinct from targeting (choosing which segments to address) and positioning (designing an appropriate marketing mix for each segment). The overall intent is to identify groups of similar customers and potential customers; to prioritize the groups to address; to understand their behaviour; and to respond with appropriate marketing strategies that satisfy the different preferences of each chosen segment. Revenues are thus improved. Improved segmentation can lead to significantly improved marketing effectiveness. Distinct segments can have different industry structures and thus have higher or lower attractiveness (Michael Porter). With the right segmentation, the right lists can be purchased, advertising results can be improved and customer satisfaction can be increased leading to better reputaion.
Successful Segmentation
Successful segmentation requires the following
• homogeneity within the segment
• heterogeneity between segments
• segments are measurable and identifiable
• segments are stable over time
• segments are accessible and actionable
• target segment is large enough to be profitable
Variables Used for Segmentation
• Geographic variables
o region of the world or country, East, West, South, North, Central, coastal, hilly, etc.
o country size/country size : Metropolitan Cities, small cities, towns.
o Density of Area Urban, Semi-urban, Rural.
o climate Hot, Cold, Humid, Rainy.
• Demographic variables
o age
o gender Male and Female
o family size
o family life cycle
o education Primary, High School, Secondary, College, Universities.
o income
o occupation
o socioeconomic status
o religion
o nationality/race (ethnic marketing)
o language
• Psychographic variables
o personality
o life style
o value
o attitude
• Behavioral variables
o benefit sought
o product usage rate
o brand loyalty
o product end use
o readiness-to-buy stage
o decision making unit
o profitability
o income status
• Technographic variables [1]
o motivations
o usage patterns
o attitudes about technology
o fundamental values
o lifestyle perspective
o standard of living
o profit is there in busines from the existing clients
When numerous variables are combined to give an in-depth understanding of a segment, this is referred to as depth segmentation. When enough information is combined to create a clear picture of a typical member of a segment, this is referred to as a buyer profile. When the profile is limited to demographic variables it is called a demographic profile (typically shortened to "a demographic"). A statistical technique commonly used in determining a profile is cluster analysis. Other techniques used to identify segments are algorithms such as CHAID and regresion-based CHAID and discriminant analysis. Alternatively, segments can be modelled directly from consumer preferences via discrete choice methodologies such as choice-based conjoint and maximum difference scaling
Top-Down and Bottom-Up
George Day (1980) describes model of segmentation as the top-down approach: You start with the total population and divide it into segments. He also identified an alternative model which he called the bottom-up approach. In this approach, you start with a single customer and build on that profile. This typically requires the use of customer relationship management software or a database of some kind. Profiles of existing customers are created and analysed. Various demographic, behavioural, and psychographic patterns are built up using techniques such as cluster analysis. This process is sometimes called database marketing or micro-marketing. Its use is most appropriate in highly fragmented markets. McKenna (1988) claims that this approach treats every customer as a "micromajority". Pine (1993) used the bottom-up approach in what he called "segment of one marketing". Through this process mass customization is possible.
Using Segmentation in Customer Retention
Segmentation is commonly used by organizations to improve their customer retention programs and help ensure that they are:
• Focused on retaining their most profitable customers
• Employing those tactics most likely to retain these customers
The basic approach to retention-based segmentation is that a company tags each of its active customers with 3 values:
Tag #1: Is this customer at high risk of canceling the company's service? (Or becoming a non-user)One of the most common indicators of high-risk customers is a drop off in usage of the company's service. For example, in the credit card industry this could be signaled through a customer's decline in spending on his card.
Tag #2: Is this customer worth retaining?This determination boils down to whether the post-retention profit generated from the customer is predicted to be greater than the cost incurred to retain the customer.[2]
Tag #3: What retention tactics should be used to retain this customer?
For customers who are deemed “save-worthy”, it’s essential for the company to know which save tactics are most likely to be successful. Tactics commonly used range from providing “special” customer discounts to sending customers communications that reinforce the value proposition of the given service.
Process for tagging customers
The basic approach to tagging customers is to utilize historical retention data to make predictions about active customers regarding:
• Whether they are at high risk of canceling their service
• Whether they are profitable to retain
• What retention tactics are likely to be most effective
The idea is to match up active customers with customers from historic retention data who share similar attributes. Using the theory that “birds of a feather flock together”, the approach is based on the assumption that active customers will have similar retention outcomes as those of their comparable predecessors.[3]From a technical perspective, the segmentation process is commonly performed using a combination of predictive analytics and cluster analysis.
Price Discrimination
Where a monopoly exists, the price of a product is likely to be higher than in a competitive market and the quantity sold less, generating monopoly profits for the seller. These profits can be increased further if the market can be segmented with different prices charged to different segments (referred to as price discrimination), charging higher prices to those segments willing and able to pay more and charging less to those whose demand is price elastic. The price discriminator might need to create rate fences that will prevent members of a higher price segment from purchasing at the prices available to members of a lower price segment. This behaviour is rational on the part of the monopolist, but is often seen by competition authorities as an abuse of a monopoly position, whether or not the monopoly itself is sanctioned. Examples of this exist in the transport industry (a plane or train journey to a particular destination at a particular time is a practical monopoly) where Business Class customers who can afford to pay may be charged prices many times higher than Economy Class customers for essentially the same service. Microsoft and the Video industry generally also price very similar products at widely varying prices depending on the market they are selling to.
References
1. ^ Journal of Advertising Research (Volume 28, No.2, April/May 1988:pg 38)
2. ^ Gupta, Sunil (2005). Managing Customers as Investments. Wharton School Publishing, 2005.
3. ^ Mind of Marketing "What is customer segmentation?"
• Day, G. (1980) "Strategic Market Analysis: Top-down and bottom-up approaches", working paper #80-105, Marketing Science Institute, Cambridge, Mass. 1980.
• McDonald, Malcolm and Dunbar, Ian (2004). Market Segmentation: How to do it, how to profit from it. Butterworth-Heinemann, 2004.
• McKenna, R. (1988) "Marketing in the age of diversity", Harvard Business Review, vol 66, September-October, 1988.
• Pine, J. (1993) "Mass customizing products and services", Planning Review, vol 22, July-August, 1993.
• Steenkamp and Ter Hofstede (2002) "International market segmentation: issues and perspectives", Intern. J. of Market Research, vol 19, 185-213

• Wedel, Michel and Wagner A. Kamakura (2000). Market Segmentation: Conceptual and Methodological Foundations. Amsterdam: kluwer. Market segment

Marketing Mix

The Marketing mix is generally accepted as the use and specification of the "four P's" describing the strategic position of a product in the marketplace. One version of the marketing mix originated in 1948 when James Culliton said that a marketing decision should be a result of something similar to a recipe. This version was used in 1953 when Neil Borden, in his American Marketing Association presidential address, took the recipe idea one step further and coined the term "Marketing-Mix". A prominent marketer, E. Jerome McCarthy, proposed a 4 P classification in 1960, which has seen wide use. The four Ps concept is explained in most marketing textbooks and classes.

Definition
A"Marketing Mix" is the set of controllable, tactical marketing tools that work together to achieve company's objectives, they are: product, price, promotion and place. Although some marketers have added other P's, such as personnel, packaging and physical evidence by Magrath for service-based industries, public relations and political power by Kotler, and packaging by YS Chin, the fundamentals of marketing typically identifies the four P's of the marketing mix as referring to:

• Product - A tangible object or an intangible service that is mass produced or manufactured on a large scale with a specific volume of units. Intangible products are often service based like the tourism industry & the hotel industry. Typical examples of a mass produced tangible object are the motor car and the disposable razor. A less obvious but ubiquitous mass produced service is a computer operating system.
• Price – The price is the amount a customer pays for the product. It is determined by a number of factors including market share, competition, material costs, product identity and the customer's perceived value of the product. The business may increase or decrease the price of product if other stores have the same product.
• Place – Place represents the location where a product can be purchased. It is often referred to as the distribution channel. It can include any physical store as well as virtual stores on the Internet.
• Promotion – Promotion represents all of the communications that a marketer may use in the marketplace. Promotion has four distinct elements - advertising, public relations, word of mouth and point of sale. A certain amount of crossover occurs when promotion uses the four principal elements together, which is common in film promotion. Advertising covers any communication that is paid for, from and cinema commercials, radio and Internet adverts through print media and billboards. One of the most notable means of promotion today is the Promotional Product, as in useful items distributed to targeted audiences with no obligation attached. This category has grown each year for the past decade while most other forms have suffered. It is the only form of advertising that targets all five senses and has the recipient thanking the giver. Public relations are where the communication is not directly paid for and includes press releases, sponsorship deals, exhibitions, conferences, seminars or trade fairs and events. Word of mouth is any apparently informal communication about the product by ordinary individuals, satisfied customers or people specifically engaged to create word of mouth momentum. Sales staff often plays an important role in word of mouth and Public Relations (see Product above).

Broadly defined, optimizing the marketing mix is the primary responsibility of marketing. By offering the product with the right combination of the four Ps marketers can improve their results and marketing effectiveness. Making small changes in the marketing mix is typically considered to be a tactical change. Making large changes in any of the four Ps can be considered strategic. For example, a large change in the price, say from $19.00 to $39.00 would be considered a strategic change in the position of the product. However a change of $130 to $129.99 would be considered a tactical change, potentially related to a promotional offer. The term "Marketing Mix" however, does not imply that the 4P elements represent options. They are not trade-offs but are fundamental marketing issues that always need to be addressed. They are the fundamental actions that marketing requires whether determined explicitly or by default.
The Four P's is also being replaced by the Four C's model, consisting of consumer, cost, convenience, and communication. The Four C's model is more consumer-oriented and fits better in the movement from mass marketing to niche marketing.[1][2] The product part of the Four P's model is replaced by consumer or consumer models, shifting the focus to satisfying the consumer. Pricing is replaced by cost, reflecting the reality that price is set by the market, not necessarily by the firm (if the price is too high, the firm will not sell enough and be forced to lower the price). Thus, the firm must focus on cost considerations rather than on what the correct price is to set. Place is replaced by the convenience function. With the rise of internet and hybrid models of purchasing, place is no longer relevant. Convenience takes into account the ease to buy a product, find a product, find information about a product, and several other considerations. Finally, the promotions feature is replaced by communication. Communications represents a broader focus than simply promotions. Communications can include advertising, public relations, personal selling, viral advertising, and any form of communication between the firm and the consumer.

References
• Kotler, Philip, Keller, Lane (2005) "Marketing Management", Prentice Hall, ISBN 0131457578.
• Barlon, Kimuli. (2006) "The concept of the marketing mix" Presentation on marketing management, vol 1, September, 2006, pp 2–7-Turku university -Finland - The same article can also be found in: Schwartz, G. (ed), Science in Marketing, John Wiley, New York, 1965, pp 386–397 - and also in: Enis, B. and Cox, K. (1991) Marketing Classics, A selection of influential articles, Allyn and Brown, Boston, 1991, pp 361–369.
• Bitner, J. and Booms, B. (1981) Marketing strategies and organizational structures for service firms, in Donnelly, J. and George, W. Marketing, American Marketing Association, Chicago, 1981.
• Borden, N. H. (1964), “The Concept of the Marketing Mix”, Journal of Advertising Research, June, Vol. 4, pp. 2–7. Available in Schwartz G. Science in Marketing. John Wiley & Sons, NY 386-97
• Culliton, J. W. (1948), The Management of Marketing Costs, Graduate School of Business Administration, Boston, Mass: Harvard University.
• Frey, A. (1961) Advertising, 3rd ed., Ronald Press, New York, 1961.
• Hammer, M. and Champy, J. (1993) Reengineering the Corporation: A Manifesto for Business Revolution, Harper Business Books, New York, 1993, ISBN 0-06-662112-7
• Hughes, M. (2005) "Buzzmarketing: Get People To Talk About Your Stuff", Penguin/Portfolio, New York, 2005 Website
• Lauterborn, R (1990) "New Marketing Litany: 4 Ps Passe; C words take over", Advertising Age, October 1, 1990, pg 26.
• McCarthy EJ (1960) Basic Marketing: A Managerial Approach. Homewood IL: Irwin.
• McCarthy, J. (1960 1st ed.), Basic Marketing: A managerial approach, 13th ed., Irwin, Homewood Il, 2001.

Marketing Plan

A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. It can be for a product or service, a brand, or a product line. Marketing plans cover between one and five years. A marketing plan may be part of an overall business plan. Solid marketing strategy is the foundation of a well-written marketing plan. While a marketing plan contains a list of actions, a marketing plan without a sound strategic foundation is of little use.
The marketing planning process
In most organizations, "strategic planning" is an annual process, typically covering just the year ahead. Occasionally, a few organizations may look at a practical plan which stretches three or more years ahead. To be most effective, the plan has to be formalized, usually in written form, as a formal "marketing plan." The essence of the process is that it moves from the general to the specific; from the overall objectives of the organization down to the individual action plan for a part of one marketing program. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages - and is amended.
Marketing planning aims and objectives
Behind the corporate objectives, which in themselves offer the main context for the marketing plan, will lay the "corporate mission"; which in turn provides the context for these corporate objectives. This "corporate mission" can be thought of as a definition of what the organization is; of what it does: "Our business is …". This definition should not be too narrow, or it will constrict the development of the organization; a too rigorous concentration on the view that "We are in the business of making meat-scales," as IBM was during the early 1900s, might have limited its subsequent development into other areas. On the other hand, it should not be too wide or it will become meaningless; "We want to make a profit" is not too helpful in developing specific plans. Abell suggested that the definition should cover three dimensions: "customer groups" to be served, "customer needs" to be served, and "technologies" to be utilized [1]. Thus, the definition of IBM's "corporate mission" in the 1940s might well have been: "We are in the business of handling accounting information [customer need] for the larger US organizations [customer group] by means of punched cards [technology]." Perhaps the most important factor in successful marketing is the "corporate vision." Surprisingly, it is largely neglected by marketing textbooks; although not by the popular exponents of corporate strategy - indeed, it was perhaps the main theme of the book by Peters and Waterman, in the form of their "Superordinate Goals." "In Search of Excellence" said: "Nothing drives progress like the imagination. The idea precedes the deed." [2] If the organization in general, and its chief executive in particular, has a strong vision of where its future lies, then there is a good chance that the organization will achieve a strong position in its markets (and attain that future). This will be not least because its strategies will be consistent; and will be supported by its staff at all levels. In this context, all of IBM's marketing activities were underpinned by its philosophy of "customer service"; a vision originally promoted by the charismatic Watson dynasty. The emphasis at this stage is on obtaining a complete and accurate picture. In a single organization, however, it is likely that only a few aspects will be sufficiently important to have any significant impact on the marketing plan; but all may need to be reviewed to determine just which "are" the few. A "traditional" - albeit product-based - format for a "brand reference book" (or, indeed, a "marketing facts book") was suggested by Godley more than three decades ago:
1. Financial data --Facts for this section will come from management accounting, costing and finance sections.
2. Product data --From production, research and development.
3. Sales and distribution data - Sales, packaging, distribution sections.
4. Advertising, sales promotion, merchandising data - Information from these departments.
5. Market data and miscellany - From market research, who would in most cases act as a source for this information. His sources of data, however, assume the resources of a very large organization. In most organizations they would be obtained from a much smaller set of people (and not a few of them would be generated by the marketing manager alone).
It is apparent that a marketing audit can be a complex process, but the aim is simple: "it is only to identify those existing (external and internal) factors which will have a significant impact on the future plans of the company." It is clear that the basic material to be input to the marketing audit should be comprehensive. Accordingly, the best approach is to accumulate this material continuously, as and when it becomes available; since this avoids the otherwise heavy workload involved in collecting it as part of the regular, typically annual, planning process itself – when time is usually at a premium. Even so, the first task of this annual process should be to check that the material held in the current facts book or facts files actually is comprehensive and accurate, and can form a sound basis for the marketing audit itself. The structure of the facts book will be designed to match the specific needs of the organization, but one simple format - suggested by Malcolm McDonald - may be applicable in many cases. This splits the material into three groups:
1. Review of the marketing environment. A study of the organization's markets, customers, competitors and the overall economic, political, cultural and technical environment; covering developing trends, as well as the current situation.
2. Review of the detailed marketing activity. A study of the company's marketing mix; in terms of the 7 Ps - (see below)
3. Review of the marketing system. A study of the marketing organization, marketing research systems and the current marketing objectives and strategies. The last of these is too frequently ignored. The marketing system itself needs to be regularly questioned, because the validity of the whole marketing plan is reliant upon the accuracy of the input from this system, and `garbage in, garbage out' applies with a vengeance.
 Portfolio planning. In addition, the coordinated planning of the individual products and services can contribute towards the balanced portfolio.
 80:20 rule. To achieve the maximum impact, the marketing plan must be clear, concise and simple. It needs to concentrate on the 20 percent of products or services, and on the 20 percent of customers, which will account for 80 percent of the volume and 80 percent of the profit.
 7 P's: Product, Place, Price and Promotion, Physical Environment, People, Process. The 7 P's can sometimes divert attention from the customer, but the framework they offer can be very useful in building the action plans.
It is only at this stage (of deciding the marketing objectives) that the active part of the marketing planning process begins'. This next stage in marketing planning is indeed the key to the whole marketing process. The "marketing objectives" state just where the company intends to be; at some specific time in the future. James Quinn succinctly defined objectives in general as: Goals (or objectives) state what is to be achieved and when results are to be accomplished, but they do not state 'how' the results are to be achieved.[3] They typically relate to what products (or services) will be where in what markets (and must be realistically based on customer behavior in those markets). They are essentially about the match between those "products" and "markets." Objectives for pricing, distribution, advertising and so on are at a lower level, and should not be confused with marketing objectives. They are part of the marketing strategy needed to achieve marketing objectives. To be most effective, objectives should be capable of measurement and therefore "quantifiable." This measurement may be in terms of sales volume, money value, market share, percentage penetration of distribution outlets and so on. An example of such a measurable marketing objective might be "to enter the market with product Y and capture 10 percent of the market by value within one year." As it is quantified it can, within limits, be unequivocally monitored; and corrective action taken as necessary.
The marketing objectives must usually be based, above all, on the organization's financial objectives; converting these financial measurements into the related marketing measurements.He went on to explain his view of the role of "policies," with which strategy is most often confused: "Policies are rules or guidelines that express the 'limits' within which action should occur."Simplifying somewhat, marketing strategies can be seen as the means, or "game plan," by which marketing objectives will be achieved and, in the framework that we have chosen to use, are generally concerned with the 7 P's. Examples are:
1. Price- The amount of money needed to buy products
2. Product- The actual product
3. Promotion (advertising)- Getting the product known
4. Placement- Where the product is located
5. People- Represent the business
6. Physical environment- The ambiance, mood, or tone of the environment
7. Process- How do people obtain your product

In principle, these strategies describe how the objectives will be achieved. The 7 P's are a useful framework for deciding how the company's resources will be manipulated (strategically) to achieve the objectives. It should be noted, however, that they are not the only framework, and may divert attention from the real issues. The focus of the strategies must be the objectives to be achieved - not the process of planning itself. Only if it fits the needs of these objectives should you choose, as we have done, to use the framework of the 7 P's. The strategy statement can take the form of a purely verbal description of the strategic options which have been chosen. Alternatively, and perhaps more positively, it might include a structured list of the major options chosen. One aspect of strategy which is often overlooked is that of "timing." Exactly when it is the best time for each element of the strategy to be implemented is often critical. Taking the right action at the wrong time can sometimes be almost as bad as taking the wrong action at the right time. Timing is, therefore, an essential part of any plan; and should normally appear as a schedule of planned activities.Having completed this crucial stage of the planning process, you will need to re-check the feasibility of your objectives and strategies in terms of the market share, sales, costs, profits and so on which these demand in practice. As in the rest of the marketing discipline, you will need to employ judgment, experience, market research or anything else which helps you to look at your conclusions from all possible angles.

Detailed Plans and Programs
At this stage, you will need to develop your overall marketing strategies into detailed plans and program. Although these detailed plans may cover each of the 7 P's, the focus will vary, depending upon your organization's specific strategies. A product-oriented company will focus its plans for the 7 P's around each of its products. A market or geographically oriented company will concentrate on each market or geographical area. Each will base its plans upon the detailed needs of its customers, and on the strategies chosen to satisfy these needs. Again, the most important element is, indeed, that of the detailed plans; which spell out exactly what programs and individual activities will take place over the period of the plan (usually over the next year). Without these specified - and preferably quantified - activities the plan cannot be monitored, even in terms of success in meeting its objectives.It is these programs and activities which will then constitute the "marketing" of the organization over the period. As a result, these detailed marketing programs are the most important, practical outcome of the whole planning process. These plans therefore be:
• Clear - They should be an unambiguous statement of 'exactly' what is to be done.
• Quantified - The predicted outcome of each activity should be, as far as possible, quantified; so that its performance can be monitored.
• Focused - The temptation to proliferate activities beyond the numbers which can be realistically controlled should be avoided. The 80:20 Rule applies in this context too.
• Realistic - They should be achievable.
• Agreed - Those who are to implement them should be committed to them, and agree that they are achievable. The resulting plans should become a working document which will guide the campaigns taking place throughout the organization over the period of the plan. If the marketing plan is to work, every exception to it (throughout the year) must be questioned; and the lessons learned, to be incorporated in the next year's planning.
Content of the marketing plan
A marketing plan for a small business typically includes Small Business Administration Description of competitors, including the level of demand for the product or service and the strengths and weaknesses of competitors
1. Description of the product or service, including special features
2. Marketing budget, including the advertising and promotional plan
3. Description of the business location, including advantages and disadvantages for marketing
4. Pricing strategy
5. Market Segmentation
Medium-sized and large organizations
The main contents of a marketing plan are:
1. Executive Summary
2. Situational Analysis
3. Opportunities / Issue Analysis - SWOT Analysis
4. Objectives
5. Strategy
6. Action Program (the operational marketing plan itself for the period under review)
7. Financial Forecast
8. Controls

In detail, a complete marketing plan typically includes:
1. Title page
2. Executive Summary
3. Current Situation - Macroenvironment
o economy
o legal
o government
o technology
o ecological
o sociocultural
o supply chain
4. Current Situation - Market Analysis
o market definition
o market size
o market segmentation
o industry structure and strategic groupings
o Porter 5 forces analysis
o competition and market share
o competitors' strengths and weaknesses
o market trends
5. Current Situation - Consumer Analysis [4]
o nature of the buying decision
o participants
o demographics
o psychographics
o buyer motivation and expectations
o loyalty segments
6. Current Situation - Internal
o company resources
 financial
 people
 time
 skills
o objectives
 mission statement and vision statement
 corporate objectives
 financial objective
 marketing objectives
 long term objectives
 description of the basic business philosophy
o corporate culture
7. Summary of Situation Analysis
o external threats
o external opportunities
o internal strengths
o internal weaknesses
o Critical success factors in the industry
o our sustainable competitive advantage
8. Marketing research
o information requirements
o research methodology
o research results
9. Marketing Strategy - Product
o product mix
o product strengths and weaknesses
 perceptual mapping
o product life cycle management and new product development
o Brand name, brand image, and brand equity
o the augmented product
o product portfolio analysis
 B.C.G. Analysis
 contribution margin analysis
 G.E. Multi Factoral analysis
 Quality Function Deployment
10. Marketing Strategy [5] - segmented marketing actions and market share objectives
o by product,
o by customer segment,
o by geographical market,
o by distribution channel.
11. Marketing Strategy - Price
o pricing objectives
o pricing method (eg.: cost plus, demand based, or competitor indexing)
o pricing strategy (eg.: skimming, or penetration)
o discounts and allowances
o price elasticity and customer sensitivity
o price zoning
o break even analysis at various prices
12. Marketing Strategy - promotion
o promotional goals
o promotional mix
o advertising reach, frequency, flights, theme, and media
o sales force requirements, techniques, and management
o sales promotion
o publicity and public relations
o electronic promotion (eg.: Web, or telephone)
o word of mouth marketing (buzz)
o viral marketing
13. Marketing Strategy - Distribution
o geographical coverage
o distribution channels
o physical distribution and logistics
o electronic distribution
14. Implementation
o personnel requirements
 assign responsibilities
 give incentives
 training on selling methods
o financial requirements
o management information systems requirements
o month-by-month agenda
 PERT or critical path analysis
o monitoring results and benchmarks
o adjustment mechanism
o contingencies (What if's)
15. Financial Summary
o assumptions
o pro-forma monthly income statement
o contribution margin analysis
o breakeven analysis
o Monte Carlo method
o ISI: Internet Strategic Intelligence
16. Scenarios
o Prediction of Future Scenarios
o Plan of Action for each Scenario
17. Appendix
o pictures and specifications of the new product
o results from research already completed

Measurement of progress
The final stage of any marketing planning process is to establish targets (or standards) so that progress can be monitored. Accordingly, it is important to put both quantities and timescales into the marketing objectives (for example, to capture 20 percent by value of the market within two years) and into the corresponding strategies. Changes in the environment mean that the forecasts often have to be changed. Along with these, the related plans may well also need to be changed. Continuous monitoring of performance, against predetermined targets, represents a most important aspect of this. However, perhaps even more important is the enforced discipline of a regular formal review. Again, as with forecasts, in many cases the best (most realistic) planning cycle will revolve around a quarterly review. Best of all, at least in terms of the quantifiable aspects of the plans, if not the wealth of backing detail, is probably a quarterly rolling review - planning one full year ahead each new quarter. Of course, this does absorb more planning resource; but it also ensures that the plans embody the latest information, and - with attention focused on them so regularly - forces both the plans and their implementation to be realistic. Plans only have validity if they are actually used to control the progress of a company: their success lies in their implementation, not in the writing'.
Performance analysis
The most important elements of marketing performance, which are normally tracked, are:
[Sales analysis
Most organizations track their sales results; or, in non-profit organizations for example, the number of clients. The more sophisticated track them in terms of "sales variance" - the deviation from the target figures - which allows a more immediate picture of deviations to become evident.. `Micro- analysis', which is a nicely pseudo-scientific term for the normal management process of investigating detailed problems, then investigates the individual elements (individual products, sales territories, customers and so on) which are failing to meet targets.
Market share analysis
Few organizations track market share though it is often an important metric. Though absolute sales might grow in an expanding market, a firm's share of the market can decrease which bodes ill for future sales when the market starts to drop. Where such market share is tracked, there may be a number of aspects which will be followed:
• overall market share
• segment share - that in the specific, targeted segment
• relative share -in relation to the market leaders
• annual fluctuation rate of market share
Expense analysis
The key ratio to watch in this area is usually the `marketing expense to sales ratio'; although this may be broken down into other elements (advertising to sales, sales administration to sales, and so on).
Financial analysis
The "bottom line" of marketing activities should at least in theory, be the net profit (for all except non-profit organizations, where the comparable emphasis may be on remaining within budgeted costs). There are a number of separate performance figures and key ratios which need to be tracked:
• gross contribution<>net profit
• gross profit<>return on investment
• net contribution<>profit on sales
There can be considerable benefit in comparing these figures with those achieved by other organizations (especially those in the same industry); using, for instance, the figures which can be obtained (in the UK) from `The Centre for Interfirm Comparison'. The most sophisticated use of this approach, however, is typically by those making use of PIMS (Profit Impact of Management Strategies), initiated by the General Electric Company and then developed by Harvard Business School, but now run by the Strategic Planning institute. The above performance analyses concentrate on the quantitative measures which are directly related to short-term performance. But there are a number of indirect measures, essentially tracking customer attitudes, which can also indicate the organization's performance in terms of its longer-term marketing strengths and may accordingly be even more important indicators. Some useful measures are:
• market research - including customer panels (which are used to track changes over time)
• lost business - the orders which were lost because, for example, the stock was not available or the product did not meet the customer's exact requirements
• customer complaints - how many customers complain about the products or services, or the organization itself, and about what
Use of marketing plans
A formal, written marketing plan is essential; in that it provides an unambiguous reference point for activities throughout the planning period. However, perhaps the most important benefit of these plans is the planning process itself. This typically offers a unique opportunity, a forum, for information-rich and productively focused discussions between the various managers involved. The plan, together with the associated discussions, then provides an agreed context for their subsequent management activities, even for those not described in the plan itself.
Budgets as managerial tools
The classic quantification of a marketing plan appears in the form of budgets. Because these are so rigorously quantified, they are particularly important. They should, thus, represent an unequivocal projection of actions and expected results. What is more, they should be capable of being monitored accurately; and, indeed, performance against budget is the main (regular) management review process. The purpose of a marketing budget is, thus, to pull together all the revenues and costs involved in marketing into one comprehensive document. It is a managerial tool that balances what is needed to be spent against what can be afforded, and helps make choices about priorities. It is then used in monitoring performance in practice. The marketing budget is usually the most powerful tool by which you think through the relationship between desired results and available means. Its starting point should be the marketing strategies and plans, which have already been formulated in the marketing plan itself; although, in practice, the two will run in parallel and will interact. At the very least, the rigorous, highly quantified, budgets may cause a rethink of some of the more optimistic elements of the plans.

References
1. ^ Abell, "Defining the Business: The Starting Point of Strategic Planning"
2. ^ "The Marketing Imagination"
3. ^ J. B. Quinn, "Strategies for Change: Logical Incrementalism" (Richard D. Irwin, 1980)
4. ^ Quick MBA Marketing plan based on consumer and competitor analyses
5. ^ Marketing plan basics Table of marketing targets, actions, means and results
• H. A. Simon, Rational decision making in business organisations, 'American Economic Review'
• J. Pfeffer and G. R. Salancik, 'The External Control of Organizations'

Marketing Customer Satisfaction

Customer satisfaction, a business term, is a measure of how products and services supplied by a company meet or surpass customer expectation. It is seen as a key performance indicator within business and is part of the four perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete for customers, customer satisfaction is seen as a key differentiator and increasingly has become a key element of business strategy.[1] There is a substantial body of empirical literature that establishes the benefits of customer satisfaction for firms.

Measuring customer satisfaction
Organizations are increasingly interested in retaining existing customers while targeting non-customers;[2] measuring customer satisfaction provides an indication of how successful the organization is at providing products and/or services to the marketplace. Customer satisfaction is an ambiguous and abstract concept and the actual manifestation of the state of satisfaction will vary from person to person and product/service to product/service. The state of satisfaction depends on a number of both psychological and physical variables which correlate with satisfaction behaviors such as return and recommend rate. The level of satisfaction can also vary depending on other options the customer may have and other products against which the customer can compare the organization's products.
Because satisfaction is basically a psychological state, care should be taken in the effort of quantitative measurement, although a large quantity of research in this area has recently been developed. Work done by Berry (Bart Allen) and Brodeur between 1990 and 1998 defined ten 'Quality Values' which influence satisfaction behavior, further expanded by Berry in 2002 and known as the ten domains of satisfaction. These ten domains of satisfaction include: Quality, Value, Timeliness, Efficiency, Ease of Access, Environment, Inter-departmental Teamwork, Front line Service Behaviors, Commitment to the Customer and Innovation. These factors are emphasized for continuous improvement and organizational change measurement and are most often utilized to develop the architecture for satisfaction measurement as an integrated model. Work done by Parasuraman, Zeithaml and Berry (Leonard L) [3]between 1985 and 1988 provides the basis for the measurement of customer satisfaction with a service by using the gap between the customer's expectation of performance and their perceived experience of performance. This provides the measurer with a satisfaction "gap" which is objective and quantitative in nature. Work done by Cronin and Taylor propose the "confirmation/disconfirmation" theory of combining the "gap" described by Parasuraman, Zeithaml and Berry as two different measures (perception and expectation of performance) into a single measurement of performance according to expectation. According to Garbrand, customer satisfaction equals perception of performance divided by expectation of performance. The usual measures of customer satisfaction involve a survey [4] with a set of statements using a Likert Technique or scale. The customer is asked to evaluate each statement and in term of their perception and expectation of performance of the organization being measured.

Methodologies
The University of Michigan's American Customer Satisfaction Index (ACSI) is a scientific standard of customer satisfaction. Academic research has shown that the national ACSI score is a strong predictor of Gross Domestic Product (GDP) growth, and an even stronger predictor of Personal Consumption Expenditure (PCE) growth. On the microeconomic level, research has shown that ACSI data predicts stock market performance, both for market indices and for individually traded companies. Increasing ACSI scores has been shown to predict loyalty, word-of-mouth recommendations, and purchase behavior. The ACSI measures customer satisfaction annually for more than 200 companies in 43 industries and 10 economic sectors. In addition to quarterly reports, the ACSI methodology can be applied to private sector companies and government agencies in order to improve loyalty and purchase intent. The Net PromoterR score is a management tool that can be used to gauge the loyalty of a firm's customer relationships. It serves as an alternative to traditional customer satisfaction research. Companies obtain their Net Promoter Score by asking customers a single question (usually, "How likely is it that you would recommend us to a friend or colleague?"). Based on their responses, customers can be categorized into one of three groups: Promoters, Passives, and Detractors. In the net promoter framework, Promoters are viewed as valuable assets that drive profitable growth because of their repeat/increased purchases, longevity and referrals, while Detractors are seen as liabilities that destroy profitable growth because of their complaints, reduced purchases/defection and negative word-of-mouth. Companies calculate their Net Promoter Score by subtracting their % Detractors from their % Promoters.
The Kano model is a theory of product development and customer satisfaction developed in the 1980's by Professor Noriaki Kano that classifies customer preferences into five categories: Attractive, One-Dimensional, Must-Be, Indifferent, Reverse. The Kano model offers some insight into the product attributes which are perceived to be important to customers. Kano also produced a methodology for mapping consumer responses to questionnaires onto his model. SERVQUAL or RATER is a service-quality framework that has been incorporated into customer-satisfaction surveys (e.g., the revised Norwegian Customer Satisfaction Barometer[5]) to indicate the gap between customer expectations and experience. J.D. Power and Associates provides another measure of customer satisfaction, known for its top-box approach and automotive industry rankings. J.D. Power and Associates' marketing research consists primarily of consumer surveys and is publicly known for the value of its product awards.
Other research and consulting firms have customer satisfaction solutions as well. These include A.T. Kearney's Customer Satisfaction Audit process[6], which incorporates the Stages of Excellence framework and which helps define a company’s status against eight critically identified dimensions. One of the newest and most innovative customer satisfaction measurement methodologies is called Gustometria. Gustometria is realtime measurement of customer and employee satisfaction. Customers are invited to answer a short survey by touching the "gustometer" screen with their fingers. The responses are collected immediately by the Gustometria servers which tabulate the results in real time. Management can then log into their private website and use the sophisticated business intelligence reports which are built in to the Gustometria system. Most innovative contact centers make increasing use of multi-media surveys including web, email and telephone surveys. Although extremely challenging, many have introduced automated voice surveys at the end of a call, provided by companies such as VIRTUATel. These use IVR technology, whether hosted or on-premise, to collect the valuable feedback data collection. However, the real power of such surveys is in making use of sophisticated data analysis techniques to drive powerful Performance Management to increase customer retention and revenue per-customer rates[7].

References
1. ^ Gitman, Lawrence J.; Carl D. McDaniel (2005). The Future of Business: The Essentials. Mason, Ohio: South-Western. ISBN 0324320280.
2. ^ John, Joby (2003). Fundamentals of Customer-Focused Management: Competing Through Service. Westport, Conn.: Praeger. ISBN 9781567205640.
3. ^ Berry, Leonard L.; A. Parasuraman (1991). Marketing Services: Competing Through Quality. New York: Free Press. ISBN 9780029030790.
4. ^ Kessler, Sheila (2003). Customer satisfaction toolkit for ISO 9001:2000. Milwaukee, Wis.: ASQ Quality Press. ISBN 0873895592.
5. ^ Johnson, Michael D.; Anders Gustafssonb, Tor Wallin Andreassenc, Line Lervikc and Jaesung Cha (2001). "The evolution and future of national customer satisfaction index models". Journal of Economic Psychology 22 (2): 217-245. ISSN 0167-4870.
6. ^ Bluestein, Abram; Michael Moriarty; Ronald J Sanderson (2000). The Customer Satisfaction Audit. London: Prentice Hall. ISBN 9780273647072.
7. ^ VIRTUATel

Marketing Corporate Strategy

marketing strategy is most effective when it is an integral component of firm strategy, defining how the organization will successfully engage customers, prospects, and competitors in the market arena. Corporate strategies, corporate missions, and corporate goals. As the customer constitutes the source of a company's revenue, marketing strategy is closely linked with sales. A key component of marketing strategy is often to keep marketing in line with a company's overarching mission statement, Basic Teory :
1. Target Audience
2. Proposition/Key Element
3. Implementation
4. The Five D's

Tactics and actions
A marketing strategy can serve as the foundation of a marketing plan. A marketing plan contains a set of specific actions required to successfully implement a marketing strategy. For example: "Use a low cost product to attract consumers. Once our organization, via our low cost product, has established a relationship with consumers, our organization will sell additional, higher-margin products and services that enhance the consumer's interaction with the low-cost product or service."
A strategy consists of a well thought out series of tactics to make a marketing plan more effective. Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill market needs and reach marketing objectives[5]. Plans and objectives are generally tested for measurable results.
A marketing strategy often integrates an organization's marketing goals, policies, and action sequences (tactics) into a cohesive whole. Similarly, the various strands of the strategy , which might include advertising, channel marketing, internet marketing, promotion and public relations can be orchestrated. Many companies cascade a strategy throughout an organization, by creating strategy tactics that then become strategy goals for the next level or group. Each one group is expected to take that strategy goal and develop a set of tactics to achieve that goal. This is why it is important to make each strategy goal measurable. Marketing strategies are dynamic and interactive. They are partially planned and partially unplanned. See strategy dynamics

Types of strategies
Marketing strategies may differ depending on the unique situation of the individual business. However there are a number of ways of categorizing some generic strategies. A brief description of the most common categorizing schemes is presented below:
• Strategies based on market dominance - In this scheme, firms are classified based on their market share or dominance of an industry. Typically there are three types of market dominance strategies:
o Leader
o Challenger
o Follower
• Porter generic strategies - strategy on the dimensions of strategic scope and strategic strength. Strategic scope refers to the market penetration while strategic strength refers to the firm’s sustainable competitive advantage.
o Product differentiation
o Market segmentation
• Innovation strategies - This deals with the firm's rate of the new product development and business model innovation. It asks whether the company is on the cutting edge of technology and business innovation. There are three types:
o Pioneers
o Close followers
o Late followers
• Growth strategies - In this scheme we ask the question, “How should the firm grow?”. There are a number of different ways of answering that question, but the most common gives four answers:
o Horizontal integration
o Vertical integration
o Diversification
o Intensification
A more detailed scheme uses the categories [6]:
• Prospector
• Analyzer
• Defender
• Reactor
• Marketing warfare strategies - This scheme draws parallels between marketing strategies and military strategies.

Strategic models
Marketing participants often employ strategic models and tools to analyze marketing decisions. When beginning a strategic analysis, the 3Cs can be employed to get a broad understanding of the strategic environment. An Ansoff Matrix is also often used to convey an organization's strategic positioning of their marketing mix. The 4Ps can then be utilized to form a marketing plan to pursue a defined strategy.

Marketing in Practice
The Consumer-Centric Business There are a many companies especially those in the Consumer Package Goods (CPG) market that adopt the theory of running their business centered around Consumer, Shopper & Retailer needs. Their Marketing departments spend quality time looking for "Growth Opportunities" in their categories by identifying relevant insights (both mindsets and behaviors) on their target Consumers, Shoppers and retail partners. These Growth Opportunities emerge from changes in market trends, segment dynamics changing and also internal brand or operational business challenges.The Marketing team can then prioritize these Growth Opportunities and begin to develop strategies to exploit the opportunities that could include new or adapted products, services as well as changes to the 7Ps.
Real-life marketing primarily revolves around the application of a great deal of common-sense; dealing with a limited number of factors, in an environment of imperfect information and limited resources complicated by uncertainty and tight timescales. Use of classical marketing techniques, in these circumstances, is inevitably partial and uneven.
Aldred Riachi Ph.D Developed a new strategic approach called the Five D's of competitive Advantage. The model emphasized on adopting the following: Develope, Distinguish, Diagnose, Decisiveness and Doctrine.
Thus, for example, many new products will emerge from irrational processes and the rational development process may be used (if at all) to screen out the worst non-runners. The design of the advertising, and the packaging, will be the output of the creative minds employed; which management will then screen, often by 'gut-reaction', to ensure that it is reasonable.
For most of their time, marketing managers use intuition and experience to analyze and handle the complex, and unique, situations being faced; without easy reference to theory. This will often be 'flying by the seat of the pants', or 'gut-reaction'; where the overall strategy, coupled with the knowledge of the customer which has been absorbed almost by a process of osmosis, will determine the quality of the marketing employed. This, almost instinctive management, is what is sometimes called 'coarse marketing'; to distinguish it from the refined, aesthetically pleasing, form favored by the theorists.