Subject Module - Elective CIAKL II - Class 07

EUROPEAN COURSE IN ENTREPRENEURSHIP FOR THE CREATIVE INDUSTRIES
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Benchmarking

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Benchmarking
Quality management has introduced the notion of good practices implementation.
Good practices are those that have proven to provide results. How can we learn about
good practices? We do it internally (monitoring internal processes provides
information about the results and the best practices that led to them). The other way
to learn is through benchmarking.
“Benchmarking is the art of learning from companies that perform certain tasks better
than other companies”.1
Benchmarking means selecting:
• Which functions to benchmark
• Which key performance variables to measure
• Which companies to study
And then implement and monitor results.
Market research
Market research approaches: observation, focus groups, survey research, behavioural
data, and experiments.
The customers
• Characteristics and behavioural analysis: cultural, social and personal factors
(age, occupation and economic circumstances, personality and lifestyle values);
• Early adopters (primary demand) or later users (secondary demand)
• How often and in what quantities they will buy the product/service.
• How much they will pay for it
The competitors
• Determine the business competition: competitors of identical size and location,
identical products and services;
• Study their objectives, competitive advantages and weaknesses;
• Assume a defensive or attack strategy toward competitors;
• Predict their reaction to a new competitor; determine how to be a step ahead;
• Exercise benchmarking at all times
Product/service
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Kotler, Philip, Keller, Kevin, Marketing Management 12 edition, 2006

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Understanding customers and having a great knowledge of the competitor’s
standpoint is crucial to sales success, as well as a starting point to setting our own
product or service strategy. It’s also useful to keep in mind classification,
characteristics and differentiation of products and services.
Product/service levels
• Core benefit: the service or benefit the consumer is really buying
• Basic product: the product that only provides the benefit
• Expected product: it has the attributes the customers expects
• Augmented product: exceeds customers expectation (brand positioning)
• Potential product: differentiation takes place
Product/service classifications
• Durability: tangible endurable (one or a few uses) and durable goods
(survive many uses)
• Tangibility: services are intangible and require more quality control and
supplier credibility
• Use: convenience, shopping, speciality and unsought goods
Product differentiation
• Form: shape, size, physical structure
• Features: supplements to the basic product function
• Performance
• Conformance quality: meeting the promised specifications
• Durability
• Reliability: probability that the product won’t fail in a specific time period
• Reparability
• Style
Service characteristics
• Intangibility
• Inseparability: services are produced and consumed simultaneously
• Variability: services depend on who provides them, when and where they
are provided
• Perishability: in a traditional point of view, services cannot be stored.
However, if we can understand VOD, SMART TV APPS, and other kind of
cloud services, we may consider a new perspective for the perishability of
services, because they can have a time limit to be consumed.
Managing service quality
• Customers’ expectations: avoiding gaps between consumer expectation
and management perception or service delivery
• Service quality model: reliability, responsiveness, assurance and empathy

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• Monitoring services regularly and taking corrective measures when needed
in order to top the competitors offer.
• Satisfying customer’s complaints
• Satisfying employees provides strong positive attitudes and excellent
services
Product/service value chain;
Development and production requirements
• Components, sub-products
• Equipment
• Human resources
• Other resources
• Suppliers
• Sub-contractors
• Packaging
• Distribution
Product/service in entertainment industry special factors
• Unusually extended time frame between original idea, production and
delivery
• Unusual number of players and stakeholders in the development and
production process
• A product may also be a sub-product which may rely on other independent
sub-products
• A product could be the final result of several independent sub-products,
which makes it liable to uncontrolled delays
• Distribution channels often involve/comprise different entities
SWOT
The SWOT analysis is a well-known technique for evaluating existing elements
and factors in the market. The entrepreneur should try to identify the Strengths,
and Weaknesses of his business, and also identify the main Opportunities and
Threats to face. This tool is helpful to analyze the market, to define the strategic
planning, and to set objectives for the organization. When using this tool it’s
important to consider that Strengths and Weaknesses are relative to the
organization/business and Opportunities and Threats are relative to the market.
• Strengths: characteristics of the business/project team that represent an
advantage over others
• Weaknesses (or Limitations): are characteristics that give the team a
disadvantage regarding other competitors

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• Opportunities: external opportunities to improve performance (e.g. make
greater profits) in the environment
• Threats: external elements in the environment that could mean trouble for
the business/project
Identify Market Opportunities. The graphic helps to identify Market
Opportunities in three steps and it’s also a simplified view of how entrepreneurs
should develop their analysis with the purpose of identifying gaps between supply
and demand, and to have a first impression on how the Business Model Definition
can be developed.

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SEGMENTATION
TARGET
POSITIONING
ANSOFF MATRIX
BRANDING

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What is STP Marketing?
STP Marketing, also known as Segmentation, Targeting and Positioning is a marketing process
with chronological steps based on customer behavior, needs and expectations, in order to identify
the most attractive markets, or the most attractive parts of one market. We may look at it as a
slicing process that splits the market in homogeny groups/clusters, with the same needs,
expectations and life style, along with many other criteria, that can be more or less appropriate
depending on the marketing objectives.
To understand the problems and needs of people/organizations, whether we are focused on B2C
(business to consumer) or B2B (business to business), in every segment of the market we can
determine exactly which benefits are more suitable and therefore design affordable products and
services to each one, trying to be increasingly profitable and adapted to customer satisfaction.
This process, if done properly, creates a competitive advantage as we are creating a marketing
plan designed specifically for costumers who’ll most likely buy our products or services.
Segmentation
Break the market down into separate segments composed with customers with similar claims,
needs and buying habits as well as geographic locations, or any other kind of criteria, depending
on the objectives and evidences the market displays.
Targeting
After the segment or segments are identified, targeting the market is the next step of the STP
process. It’s important to identify who are the consumers and to determine the segment
attractiveness considering its growth potential, and after that, try to grab a major part of the
market share, or in the case of a small segment, all of it.

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Positioning
Positioning is a process meant to define a territory in the market, but specially, to create a space
in the consumer’s mind that merges the values and purposes of the organization, defining and
creating a brand that collects and aggregates all verbal and distinctive features through an image
that allows the public to place the product in a universe of similar ones and enables the public to
distinguish them from each other.
When positioning a product, it's important to understand and identify the marketing mix to
ensure that you’re putting the right product in the correct place, pricing it competitively, and
promoting it to the right segment. It’s also very important to consider the different geographic
locations and regions as well as the respective public’s needs and expectations.
Criteria for evaluating market segments
To ensure the market segments are correctly delimited by the organization, merged with the
objectives, or even which objectives must be defined, it’s important to use the basic guidelines
and criteria to split the market in segments to evaluate which will turn out to be usable and
available as potential target markets.

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Criteria for Segmentation
EVALUATION
CRITERIA
WHAT IS IT? WHY IS IT IMPORTANT?
Homogeneous
This means that the
consumers allocated to each
segment should be similar in
some relevant way
This is the basis of market segmentation – that
the consumers in each segment are similar in
terms of needs and/or characteristics
Heterogeneous
Each segment of consumers
should be relatively unique, as
compared to the other
segments that have been
assembled
This demonstrates that the consumers in the
overall market have been effectively divided into
sets of differing needs
Measurable
Some form of data should be
available to measure the size
of the market segment
Measurements are very important to evaluate the
overall attractiveness of each segment
Substantial
The market segment should be
large enough, in terms of sales
and profitability, to warrant
the firm’s possible attention
Each firm will have minimum requirements for the
financial return from their investment in a market,
so it’s necessary to only consider segments that
are substantial enough to be of interest
Accessible
The market segment should be
reachable, particularly in
terms of distribution and
communication
Each segment needs to be able to be reached and
communicated with, on an efficient basis
Actionable
practical
The firm needs to be able to
implement a distinctive
marketing mix for each market
segment
The range of segments identified generally needs
to be defined according to the capabilities and
resources of the organization, so segments that
are very specialized may not be appropriate
Responsive
Each market segment should
respond better to a distinct
marketing mix, rather than a
generic offer
The key outcome of the STP process is to develop
a unique marketing mix for a specified target
market, if the segment will not be more
responsive to a distinct offering, then the segment
can probably be combined with another similar
segment

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Evaluate the attractiveness of each segment
In order to make a decision with low risk about which market and segment you must choose, it’s
important to evaluate the attractiveness of each one and to gather information to take strategic
and profitable decisions.
The following four steps allow you to identify important information to evaluate the general
attractiveness of a segment, and provide some support to make a decision.
Four steps to evaluate segment attractiveness
Segmentation based in Consumer Behavior
Other criteria to segment the market is to use considerations based in consumer behavior. There
are many factors and premises that we can use to focus our segmentation in our costumer/user,
as they are who we want to satisfy.
The following chart, have 14 main questions and some factors and criteria that you may consider
using on your segmentation process.
Questions Factors
1
Who is our consumer?
How can he be characterized?
Gender
Age Group
Income Level
Professional Category
Social Class
Level Education / School
Other
2
Geography/location where the purchase and
consumption are due
Region
Country
City
Village

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Questions Factors
3
Consumer behavior and socio-psychological
characteristics?
Lifestyle
Sociocultural attitudes
Behavior Patterns
Reference Group
Individual contexts
Group contexts
Professional contexts
4 Who's Buying?
Customer (himself)
Mother / Father
spouse
Professional Buyer
Agent
5 Who In�luences the purchase?
Prescriber
Consultant
Opinion leader
Experts
Social group
Reference group
Friends
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What is the frequency of use and / or
purchase?
Daily
Weekly
Monthly
Quarterly
Annual
Occasional
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What needs, interests, desires and likes to
satisfy?
Basics
Rationals
Security
Affection
Statute
Pro�it
Economic
Financial
Ef�iciency
Other
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Which parameters of choice and preference
the purchaser uses?
Price
Quality
Functionality
Usability
Con�idence
Routine
Attributes / Features speci�ic
Other
9
What is the nature of the relationship
between buyer and supplier?
Loyalty
Buyer Unstable
Competition / Call
Social group
other

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Questions Factors
10
What type of buying behavior makes the
consumer / buyer?
Impulsive
Convenience
Comparative
Default
11 How big are the consumers / buyers?
Large =?%
Medium =?%
Small? =?%
% per volume
Value per volume
Value per purchase
Number of purchasing’s
% per purchase continued
12
What is the average value of purchases?
(in €)
By act
By period
By customer dimension
13
What is the degree of trust and brand
in�luence?
Strong
Preferential
Weak
14
What is the degree of dif�iculty to access and
address the Customer?
large
small
direct
indirect

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Ansoff matrix
Every business seeks profit, which usually means resorting to sustainable efficient
management and growth strategies. The Ansoff matrix helps to define market and
product growth strategy
• Market penetration: Increased market share in an existing market with an existing
product. Possible case scenarios are taking advantage in some competitor’s exit or
responding to an increasing demand.
• Market development: Using an existing product in a new market, as for example,
in international expansion
• Product development: Using an existing gap in the market to develop and offer a
new product in that already existing market. Customer oriented companies usually
take customers suggestions and develop products to satisfy their needs.
• Product/Market diversification: New product in a new market, for example,
entering a new segment with a new product. It could be the case of vertical
integration where the corporation buys a suppliers company, hence entering in a
new market.

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Branding
Brand A brand is an idea, the summing up of the product or service experience in the
mind of the consumer – it’s a perception.
• Positioning Brands have transformed the process of marketing into one of
perception-building. That is to say that image is now everything. Consumers make
the buying decisions based around the perception of the brand rather than the
reality of the product.
• Value proposition and promise A brand includes a value proposition and a
promise of quality/satisfaction. The branding cycle is complete only after the
consumer experiences it and confirms the validity of the proposal.
• Positioning Branding is conquering and maintaining territory in the mind of the
consumer.
• Emotion Branding offers a response at the most emphatic and perennial level in
the relationship with the consumer: the power of great ideas and emotion. The
objective is to create lovemarks, an emotional attachment that often has little to
do with the quality of the product. The power of branding is “loyalty beyond
reason” (Kevin Roberts 20…).
• Brands model A brand evaluation model developed by Millward Brown and WPP,
related to brand strength, which involves a serious of steps for the brand
development:
o Presence: Do I know about it?
o Relevance: Does it offer me something?
o Performance: Can it deliver?
o Advantage: Does it offer something better than others?
o Bonding: Nothing else beats it
• Brand Resonance Brand building can be viewed as an ascending, sequential series
of steps, from bottom to top:
1. Association of the brand with a specific product or need set in the customer’s
mind
2. Firmly establishing the brands meaning and association with
tangible/intangible set of brands

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3. Linking the right feelings and judgements of the costumers with the brand
4. Create and intensify a loyal bond between brand and customer
Brand element choice criteria
o Memorable How easily is the brand remembered or recognized? Short
names help.
o Meaningful To what extent does the brand suggest something about the
product or the person who might use it
o Likeability Is it likeable visually, verbally and in other ways?
o Transferable Can the brand be used to introduce new products in the
same or different categories?
o Adaptable and updatable to new ages and behaviors
o Protectable with trademark rights and not easily copied

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Vision and mission: where and how
For new companies the starting point for strategy setting is some underlying idea of why
the business exists.
Disney’s core purpose is to make people happy, not to make movies or build theme parks.
Nokia’s mission is connecting people, not to produce cell phones.
A distinction is sometimes made between vision statements and mission statements. A
vision statement is an articulation of what the company wishes to become or where it
seeks to go.
A mission statement is the definition of corporate purpose, an achievement guide, and
often defines the area of business in which it’ll compete. Some companies have separate
statements of mission and vision.
Success key drivers
Key drivers can be defined as main attributes and resources that the corporation has or
processes that enable her to improve business and guaranty success. They should be
applicable, relevant and verifiable. Corporations may define success key drivers for global
improvement or specific processes of the organization: customer relation, leadership,
profitability. An example of key drivers for excellence is given by Five Star:
• Focused and aligned leaders
• Skilled and motivated workforce
• Integrated talent management system
• Continuous improvement
• Enabling technologies

Subject Module - Elective CIAKL II - Class 07

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Subject Module - Elective CIAKL II - Class 07