A structure for taking a big, complicated problem and breaking it down into smaller questions
Customer purchase decision making process
- AIDA:
- Attention
- You need to get the customer’s attention somehow – a snappy email heading, a referral, etc
- Interest
- Now that you have the customer’s attention, you need to get them interested in your offering – what are the advantages/benefits of your product?
- Desire
- When the customer’s interest piqued, you need to convince the customer that they want your product
- Action
- With the customer desiring your product, they take action o purchase the product
- Attention
- REAN:
- Reach
- Customer is aware of your product
- Engage
- Customer is engaged an considering your product
- Activate
- Customer takes action to purchase the product
- Nurture
- Customer has purchased the product, and now it’s your responsibility to nurture this relationship
- Reach
- Point of these frameworks is to understand purchase behaviour as a cycle wherein the customer must first be aware of your product, then they have to evaluate it against their needs and competitors’ offerings, and then they finally purchase it
- Useful in discussing how you would market a new product
- Getting the customer’s attention will be fairly easy, but the action part (getting the user to actually switch from your competitor to you) will be more difficult
Marketing Mix
- The 4Ps
- Product
- Should cater to a customer’s wants/needs
- Price
- Price will determine how many and what type of customers purchase the product
- Pricing can be more complex for online products and services as compared to physical products
- For example, an online storage service could have a one-month free trial followed by discounted pricing for non-profits, with additional “a la carte” purchases for an automatic backup utility
- Promotion
- Promotion encompasses all forms of advertising, PR, word of mouth, and sales staff
- Place
- Physical product’s distribution can include things such as online sales through Amazon, opening own stores, and sales through own website
- Greater distribution is not always better, many companies prefer to control the sales experience by limiting the sales channels
- For online products, “place” might be a single website, o rit might include bundling the product with another company’s offerings
- Product
- For online products, promotion can become very complex – a lot of products are competing for the customer’s attention, and advertising is often insufficient to drive sales
- Framework is useful to discuss the different elemtns of a marketing plan for a new or existing product
SWOT Analysis
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SWOT, used to analyze companies and products:
- Strengths
- Internal factors that benefit a product – can include the costs, product features, company culture, reputation, infrastructure, or other aspects
- For example, in consideration. of launching Kindle, one of Amazon’s greatest strengths would be that it is already a place where customers buy books online
- Internal factors that benefit a product – can include the costs, product features, company culture, reputation, infrastructure, or other aspects
- Weaknesses
- Internal factors that introduce challenges for a product
- For example, if a web company were to consider creating a physical device, a weakness might be that it doesn’t have experience with distribution
- Internal factors that introduce challenges for a product
- Opportunities
- External focus, relates to factors such as market growth, technology changes, competition, and legal regulations
- For example, the growing cost of healthcare creates an opportunity for a product that gives better insight into one’s health
- External focus, relates to factors such as market growth, technology changes, competition, and legal regulations
- Threats
- External challenges a product faces
- For example, the unpredictability in energy usage regulation poses a threat for many clean energy products
- External challenges a product faces
- Strengths
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Can help not only whether a company should pursue an opportunity, but also what strategies would further that pursuit
Situation Analysis
- The Five Cs**,** used to provide an overview of the environment for a product or decision:
- Company
- Encompasses all aspects of a company, including its products, culture, strategy, brand reputation, strengths, weaknesses, and infrastructure
- Competitors
- Competitors include direct competitors, potential competitors, and substitute products
- A discussion could encompass market share, tradeoffs, positioning, mission, and potential future decisions
- Customers
- Includes aspects such as demographics, purchase behaviour, market size, distribution, and partnerships
- A discussion might include what makes particular collaborators valuable and how they enable success
- Climate
- Company
- This framework can guide discussions on whether a company should launch a product and what the company’s strategy should be
Industry Analysis