Lecture 2
Emerging economy: an economy in which the country is becoming a developed nation often driven
by relatively high economic growth and a rapid expansion of trade and investment flows.
- EEs are home to a growing middle class of consumers
- Per capita income rises, as well as saving and investment, which stimulates further growth
Emerging countries
- The center of gravity in the world economy is changing – most growth comes from emerging
countries
- There is a global battle for talented and skilled people – open economies tend to do better in
the long run
- Fast-growing countries put more pressure on the environment, but many are now leading
the way with renewable investment and research
- Fast-changing comparative advantage is likely to wide trade imbalances and fuel
protectionist sentiment
- Capital flows where the risk-adjusted expected returns are highest
World economy used to be dominated by the G7. More and more the E20 are coming up. The E20
did not primarly grow because of investments of the G7.
eMNCs -> Emerging market multinationals
Big picture framework
STP Execute
Segment Product
Main variable Search
Dynamic variable Experience
Target Credence
Business objective Marketing Source of volume Price
TA description
Entity objective Earn share Value or
Goal Position
Retention Demand- competitive
Competence 5 box
Acquisition stimulation Place
Positioning
Product
statement
Place Evaluate
Time
Promotion
Awareness
Information
Image
Behavior
Step 1 – business objective
Ask the following questions:
- Who are we? (fundamental identity) -> from what perspective should the company develop
its marketing strategy given how customers think about the firm
o Customers -> how do they think of us?
o Company -> how do we organize our brands?
o Competition -> who is included in our competitive analysis?
, - What are we good at? (core competence)
Core competence leads to strategic
assets and in turn strategic assets lead
to customer benefits.
- Where are we going? (goal)
o Primary function: serve as a decision aid
o Second function: define performance criteria
o Goals should be measurable, time-dependent, single-minded, realistic etc.
- What is our main business? (core business) -> in terms of customers not in terms of
products
Brand: a collection of beliefs; a core belief a customer holds about the product or service
Branding strategies:
- Distinct branding: company creates different brands for the different products and services
that it offers
- Hybrid branding: a combination of distinct branding and umbrella branding throughout the
company (3M)
- Umbrella branding: all products are branded under the same brand (Sony)
Step 2 - marketing objective
A firm should focus on customers instead of products. Customer loyalty is a driver of company
profits.
Customer loyalty: the combination of repeated purchases and attitude towards the brand, so both
behavioral and attitudinal. 3 types of customer loyalty:
1. Heart – emotional connection with the brand. People define themselves with the brand: “I
am an apple person”.
2. Head – rational attachment to the brand. People will talk about the benefits of the brand.
People buy a volvo car because it is the safest.
3. Hands – buy the product out of habit.
A high customer retention rate indicates
- The overall health of the firm
- Product/service performance
- Customer loyalty
Customer acquisition activities
- Goal is to obtain a long-term customer
- Acquisition creates brand awareness, brand trial, and product switching
- Key metric for determining the value of customer acquisition is the customer lifetime value
calculation
o Customer lifetime value (CLV): the total net present value of current and future
profits that a particular customer will generate over the lifetime of his/her
relationship with the firm
Emerging economy: an economy in which the country is becoming a developed nation often driven
by relatively high economic growth and a rapid expansion of trade and investment flows.
- EEs are home to a growing middle class of consumers
- Per capita income rises, as well as saving and investment, which stimulates further growth
Emerging countries
- The center of gravity in the world economy is changing – most growth comes from emerging
countries
- There is a global battle for talented and skilled people – open economies tend to do better in
the long run
- Fast-growing countries put more pressure on the environment, but many are now leading
the way with renewable investment and research
- Fast-changing comparative advantage is likely to wide trade imbalances and fuel
protectionist sentiment
- Capital flows where the risk-adjusted expected returns are highest
World economy used to be dominated by the G7. More and more the E20 are coming up. The E20
did not primarly grow because of investments of the G7.
eMNCs -> Emerging market multinationals
Big picture framework
STP Execute
Segment Product
Main variable Search
Dynamic variable Experience
Target Credence
Business objective Marketing Source of volume Price
TA description
Entity objective Earn share Value or
Goal Position
Retention Demand- competitive
Competence 5 box
Acquisition stimulation Place
Positioning
Product
statement
Place Evaluate
Time
Promotion
Awareness
Information
Image
Behavior
Step 1 – business objective
Ask the following questions:
- Who are we? (fundamental identity) -> from what perspective should the company develop
its marketing strategy given how customers think about the firm
o Customers -> how do they think of us?
o Company -> how do we organize our brands?
o Competition -> who is included in our competitive analysis?
, - What are we good at? (core competence)
Core competence leads to strategic
assets and in turn strategic assets lead
to customer benefits.
- Where are we going? (goal)
o Primary function: serve as a decision aid
o Second function: define performance criteria
o Goals should be measurable, time-dependent, single-minded, realistic etc.
- What is our main business? (core business) -> in terms of customers not in terms of
products
Brand: a collection of beliefs; a core belief a customer holds about the product or service
Branding strategies:
- Distinct branding: company creates different brands for the different products and services
that it offers
- Hybrid branding: a combination of distinct branding and umbrella branding throughout the
company (3M)
- Umbrella branding: all products are branded under the same brand (Sony)
Step 2 - marketing objective
A firm should focus on customers instead of products. Customer loyalty is a driver of company
profits.
Customer loyalty: the combination of repeated purchases and attitude towards the brand, so both
behavioral and attitudinal. 3 types of customer loyalty:
1. Heart – emotional connection with the brand. People define themselves with the brand: “I
am an apple person”.
2. Head – rational attachment to the brand. People will talk about the benefits of the brand.
People buy a volvo car because it is the safest.
3. Hands – buy the product out of habit.
A high customer retention rate indicates
- The overall health of the firm
- Product/service performance
- Customer loyalty
Customer acquisition activities
- Goal is to obtain a long-term customer
- Acquisition creates brand awareness, brand trial, and product switching
- Key metric for determining the value of customer acquisition is the customer lifetime value
calculation
o Customer lifetime value (CLV): the total net present value of current and future
profits that a particular customer will generate over the lifetime of his/her
relationship with the firm
