Class 1

Opening remarks

• Difference between segmenting and targeting:
• Segment = divide → then make a decision based on tradeoff to whom you should target
• Strategy as tradeoffs we’re going to make to create value and then tactics are how

Levi’s Case Study

• Confirmation bias more acute when you have less degrees of freedom. So if you’re further ahead in the product development process. If you have made 90% of the decisions, you can really change much and you’re likely not to eliminate all sunk costs

Mark Ritson: This is a critical point in marketers’ relationship with data privacy

Marketers have fallen for classic product-oriented thinking and assumed that, just because they have the data and technology for targeted advertising, it’s what their market wants.

www.marketingweek.com

• As the focus group participants shuffle out of what was, probably, one of the longest hours of their lives, Goldstein turns to a colleague sitting next to him and says: “But once they see the suit, on a hanger, a little asterisk will go off in their head and they will think that Levi’s can also make a good suit too.” He leaves more determined than ever that his new product is a winner.
• Become too infatuated w/ the product and believe it can convert customers rather than listening to the market

GSTIC → Levi’s

• Strategy:
• Target Market + Value Prop
• TGT = 5Cs; customer most important
• Google example: You have searchers who you then collaborate w/ ads
• Value Prop:
• Tactics:
• Ps: The 7 Ps used to make sense:
• Communication: Media + Budget + Message

In his mind the brand is tactical

Competitor ?s

1. What customer need does your offering aim to fulfill → who are the customers w/ that need
1. In this case, it’s Q2
2. What are they buying today
1. Today, they’re buying tailored suits. If we don’t introduce our offering, who will they buy from? Competitors are defined by the customer segment you choose and those entities serving those persons.
2. Can we create superior value over our competitors
1. He brought up a great point that if we’re competing w/ Hagar then our price is too high… but if we’re against Armani, now we’re too low + not enough ad spend and brand prestige
2. Can they create value for them and can they create value for us
1. Compatibility + attractiveness
3. Why would customers change behavior

Interesting point: Employee attrition matters and engineers want to work on fun projects. So his point about why the VW originally produced the bug was the engineers were engaged.

Segmentation is exhaustive so that you can make your thinking clearer.

People often use info as a drunk man uses lamp posts

So you’re saying there’s a chance

Based on the Levi's PDF document, here's a summary of the key concepts:

G-STIC Framework for Marketing Strategy

The document presents Professor Alexander Chernev's G-STIC framework - a systematic approach to business problem-solving that includes:

• Goal: The ultimate criterion for success
• Strategy: Target market (5 Cs) + Value proposition (3 Vs)
• Tactics: Market offering (7 Ts) - the specific implementation details
• Implementation: The logistics of creating the offering
• Control: Process of monitoring goal progress

The 5 Cs (Target Market Analysis)

• Customers: Who has the need you're trying to fulfill?
• Company: What resources enable you to fulfill the need?
• Competitors: What other offerings serve the same customer need?
• Collaborators: What entities will work with you?
• Context: Sociocultural, technological, regulatory, economic, and physical environment

The 3 Vs (Value Proposition)

• Customer Value: What value does the offering create for target customers?
• Company Value: What value does it create for the company?
• Collaborator Value: What value does it create for collaborators?

The 7 Ts (Market Offering/Tactics)

• Product, Service, Brand: Core offering components
• Price, Incentives: Economic factors
• Communication, Distribution: Go-to-market execution

Levi's Tailored Classics Case Study

The document uses Levi's failed attempt to enter the men's suit market as an example, showing how:

• Target was Q2 consumers seeking elegant self-image
• Price point ($160) created positioning problems - too expensive vs. casual wear competitors, too cheap vs. high-end suit makers
• The Levi's brand created customer confusion about quality expectations for suits
• Focus groups revealed customer skepticism, but leadership suffered from confirmation bias

Key Strategic Insights

1. Systematic Problem-Solving: Use frameworks rather than gut feel
2. Brand as Liability: Established brands can hurt when targeting different segments
3. Market Research: Validate offerings before launch
4. Customer-Centric: Strategy must start with genuine customer needs
5. Competitive Context: Success depends on creating superior value vs. relevant competitors

The framework emphasizes that marketing strategy requires making deliberate tradeoffs about target customers and value creation, followed by tactical execution through the marketing mix.