Competitive dynamics for marketing strategists

Time for strategic decisions.

Strategic 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. 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. A good marketing strategist should be drawn from market research and focus on the right product mix in order to achieve the maximum profit potential and sustain the business. 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 actions implemented.

Strategic Marketing Planning Process

Strategic decisions

Directional (sub)strategies

Portfolio Planning Tool 1
BCG Matrix (1970) - Strategic framework for resources allocation

Portfolio Planning Tool 2
GE model

Portfolio Planning Tool 3
Shell/A&H 3*3 Matrix

Back to the basics:Porter's competitive strategies

Requirements for generic strategies

Applying the best marketing strategy for every different situation

Back to the basics again: Ansoff for diversification

Critical factors for success/KPI's

Timing

Competitive position strategy

Failure, an unknown word 

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A Facebook for my Brand : Fan Pages and KPI's

Facebook fan pages can be regarded  as a virtual brand community. They are specialized, non geographically bound communities and they are based on a structured set of social relations among admirers of a brand. Therefore the theoretic explanations for a brand community are also suitable for explaining the fan page phenomenon. Social identity and  symbolic interactionism theories show that interaction with members of a reference group can lead to a strong feeling of belonging to this group (in this case the brand community) which in turn can lead to stronger buying behavior and positive brand attitude.

But how can we be sure that being a member of a facebook fan page has an impact on a brand admirer's buying behavior and brand attitude? Researchers from the University of Mannheim actually designed an experiment and assumed that members of the BMW fan page show stronger buying behavior and brand attitude than non-members and that within members, buying behavior and brand attitude are even stronger for active members than for passive ones.In order to carry out the experiment they conducted an online survey among 840 BMW admirers.

The BMW Fan Page Survey

Membership and interaction were expected to influence psychographic dependent variables (brand loyalty, brand commitment) and economic dependent variables (purchase intention, willingness to cross-buy and  positive word of mouth). Willingness to cross-buy was polled in three categories, which were lifestyle products (e.g. apparel), financial services (e.g. leasing or insurance offers) and original BMW spare parts. Purchase intention was polled in two categories, which were automobiles and BMW car repair services. In order to analyze the influence of membership and interaction, two separate experiments were carried out. In the first study, respondents were split into  members (n=210)  and  non-members (n=630) according to the membership of the German BMW fan page. The non-members became the control group and members became the experimental group.

Furthermore, members had to answer questions about their usage of the BMW fan page . Using these responses, a weighted interaction level was determined for each member. A cut-off value was then applied to the weighted interaction level to classify members of the BMW fan page either in passive or active members. While passive members don't or rarely interact with the fan page, active members display a higher level of interaction.

Influence of Membership

In order to analyze the influence of membership on the dependent variables,  the nonmembers and members of the Facebook fan page were compared with each other. Non-members (n=215) were recruited in BMW internet forums to make sure they are admirers of the brand. In order to be able to analyze variances of members and non-members, the groups need to be about the same size (max factor 1.5). That is why a sample of n=315 was randomly drawn out of the total number of the BMW fan page members (n=630).

Then the data was analyzed using a multivariate analysis of variance (MANOVA) in order to examine differences between the responses of the two groups. The mean values were calculated and compared between the groups to evaluate whether membership and interaction do have an influence on the dependant variables. The F-Values of MANOVA indicate that there are differences between the groups. These values ranged from F = 23,608 to 89,195 woth significant values of p=0.00, allowing to proceed with the interpretation of MANOVA.


A comparison of the mean values of the two groups proved that there are significant differences between non-members and members  of the BMW fan page for all 10 dependent variables. Specifically, membership has a strong positive influence on the affective variables brand  trust, brand  loyalty, brand commitment and positive word of mouth (∆ between +0.646 and +0.733, average ∆ = +0.675). Its influence on the conative variables brand satisfaction, purchase intention (for both product and repair services), and willingness to cross-buy (for lifestyle products, financial services and spare parts) is also strong (∆ between +0.395 and +0.985, average ∆ =  +0.682). The highest difference of mean values exists for  purchase intention (∆ =  0.985)  and willingness to cross-buy (∆ = 0.923).

Influence of Interaction

Having analyzed the influence of membership, the next step was to look more closely at the members of the BMW fan page, with the objective of determining whether the level of interaction on Facebook fan sites has any impact on the dependent variables. For this purpose, the four types of interaction with the fan page (writing posts, clicking the “Like” button, uploading photos or videos and sharing photos or videos with other users) were weighted to determine the level of interaction. Based on this level, members of the BMW fan page with a low level were then classified as passive and with a high level of interaction as active members.

The two groups were also analyzed using a MANOVA. Unlike the first pass, the second one did not deliver significant F-values for all 10 constructs. While most of the constructs had values between F = 4,815 to 23,668, purchase intention (for both product and repair services) and brand satisfaction failed to deliver satisfying p-values (p = 0.065, 0.758 and 0.425).


The comparison of the mean values of the two groups makes it clear that the significance of the MANOVA F-tests stem from the differences between the groups. Specifically, interaction has a positive influence on the affective constructs brand trust, brand loyalty,  brand commitment and positive word of mouth (∆ between +0.160 and +0.316, average ∆ = +0.233). Its influence on the conative variable willingness to cross-buy (for lifestyle products, financial services and spare parts) is  also positive (∆ between +0.164 and +0.379, average  ∆ =  +0.248). An influence on brand satisfaction and purchase intention (for both product and repair Services) was not observable as can be seen from the p-values. Highest mean value differences were seen in willingness to cross-buy for lifestyle products (∆ = 0,379) and brand loyalty (∆ = 0,316).

These two KPI's

The results show that being a member of a Facebook fan page has a strong influence on both affective and conative variables. Non-members show lower brand attitude and buying intention than members do. Membership as a key performance indicator can thus be used to assess intended buying behavior (conative component) and emotional affinity of customers to the brand (affective component).

Interaction has an influence on the affective dependent variables as well as partly on willingness to cross-buy. But while membership has an influence on all dependent variables, an influence of interaction on purchase intention and brand satisfaction was not observable. Interaction lacks a significant influence on the conative dependent variables. It can be assumed that interacting with a Facebook fan page does not influence such variables like purchase intention and brand satisfaction since there are other factors playing a more important role in buying a car or being satisfied with it. In the case of brand satisfaction, it is likely that whether a  customer is satisfied with the brand or not depends on the  performance  of the  brand  and not necessarily by how he interacts with the fan page. If the brand performs above the customer's expectation then brand satisfaction will follow. Interaction as a key performance indicator can thus only be used to assess emotional closeness to the brand BMW but not intended buying behavior of members.

The findings of this survey also show that membership and interaction do have a strong influence on brand admirers. The number of members of a fan page and the level of their interaction can therefore be considered as key performance indicators which actually have an economic value for the company using them. The findings also have implications for companies wanting to use a fan page on Facebook. Companies need to implement and monitor these two KPIs in order to evaluate whether their efforts on Facebook are successful or not. This means that companies need to follow these two KPIs closely when conducting a marketing campaign on Facebook in order to evaluate whether said campaign was successful or not. Companies should also focus on acquiring new members for their fan pages since it has been shown that membership has an impact on brand attitude and buying behavior.

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