Chapter 1: What Is Marketing Flashcards
Market Offering
A combination of products, services, information or experiences offered to a market to satisfy a need or want
Purpose of market offerings
To create a brand experience
Marketing Myopia
When a business lacks insight into how it is catering to it’s customers
Customer-perceived value
The difference between all benefits and costs (in the eye of the customer) of a market offering compared to competitors offerings
Customer satisfaction
The extent to which perceived product performance matches customer expectations
Exchange
The act of obtaining a desired object from someone by offering something in return
Relationship
Actions taken to build and maintain desirable exchange relationships with target audience
Market (Business Management)
The set of all actual and potential buyers of a product or service
Market (Economics)
The abstract mechanisms whereby supply and demand confront each other and deals are made
Strategic planning
The process of developing and maintaining a strategic fit between the organisations goals and capabilities
Strategic Business Units (SBUs)
a fully-functional unit of a business that has its own vision and direction.
Product or Market Combination (PMC)
a unique combination of a product for a specific group of customers.
Levels of planning within a market strategy
1) Concern or company
2) Strategic Business Units (SBUs)
3) Product or Market Combination (PMC)
Strength within SWOT analysis
Internal capabilities that may help a company reach its objectives
Weakness within SWOT analysis
Internal limitations that may interfere with a company’s ability to achieve its objectives
Opportunity within SWOT analysis
External factors that the company may be able to exploit to its advantage
Threat within SWOT analysis
Current and emerging external factors that may challenge the company’s performance
Vision statement
outlines the company’s long-term goals and aspirations for the future in terms of its long-term growth and impact on the world.
Mission statement
a simple statement about the goals, values, and objectives of an organization.
Marketing management
The art & science of choosing target markets and building profitable relationships with them
3 important questions within marketing management
1) Target Market —> What customers will we serve?
2) Value proposition —> How can we serve these customers the best?
3) Company objective —> What is the value you want to realise for your company?
Customer lifetime value
Value of the entire stream of purchases a customer makes over a lifetime of patronage
Importance of customer lifetime value
- 5x cheaper to keep an existing customer than to acquire a new one
- Transactions may not always be profitable in the beginning (cost of acquisition) but become very profitable thanks to the length of the customer retention
- An emotional bond makes the customers come back
Marketing management process
- Market is analysed
- A strategy is defined
- The market is Segmented
- A target market is chosen
- A positioning is chosen
- The marketing mix is defined
- The marketing mix is implemented & evaluated
STP process
The defining of the group of customers you can serve in a decent & profitable way
Segmentation
Dividing a market into distinct groups of buyers who have different needs, characteristics or behaviours and who might require separate products or marketing programs
Targeting
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
Positioning
Give the product/brand a clear/distinctive/desirable place in the minds of the target consumers relative to competing products through a clever marketing mix
Types of segmentation
- Geographic segmentation
- Demographic segmentation
- Psychographic segmentation
- Behavioural segmentation
Geographic segmentation
- Countries/regions
- Population/city size
Demographic segmentation
- Age
- Family life cycle stage
- Ethnic group
- Gender
- Income
- Occupation
Psychographic segmentation
- Lifestyle
- Personality
- Social class
Behavioral segmentation
- Usage rate
- Brand loyalty
- Occasions
- Benefits sought
- User status
Different targeting approaches
- Micromarketing
- Niche marketing
- differential marketing
- mass marketing
Buyer persona
A fictional profile of your ideal customer based on market research
Micromarketing
Individual, personalized, local (ex: Nutella w personal name on packaging)
Niche marketing
1 marketing mix for a niche
Which targeting approach is common in start ups?
Niche marketing
Differentiated marketing
Different marketing mixes for different segments
Which marketing mix is more expensive (research, planning, channel management) but better for long term results?
Differentiated marketing
Mass marketing
1 marketing mix for the whole segment
Brand perceptual map
A graph that displays how the brand is perceived in the market
USP
Unique Selling Point
What is a limitation to the use of the brand perceptual map?
The brand perceptual map only has 2 axes, reality is much more
Positions in a market
- Market leader
- Challenger
- Market follower
- Niche company
Market leader
Company with the highest market share, determines price levels, innovative, largest promotional budget
Challenger
2nd biggest company in market, fights for market share
Market follower
Company that wants to keep its current position in the market
Niche company
Company that picks a small and well-chosen segment
Which company within a market determines price levels
Market leader
Which company within a market fights for market share
Challenger
Which company within a market tries to maintain it’s position
Market follower
Production concept
Consumer will favour products that are available and highly affordable
In what year was the production concept founded?
1900
What is the management focus of the production concept?
- Improving production (goal = mass production)
- Improving distribution efficiency (goal = largely available at low price)
What are the different marketing management orientations
- Production concept
- Product concept
- Selling concept
- Marketing concept
- Societal marketing concept
- Sustainable marketing concept
Product concept
Consumers will not buy enough of the firm’s product unless it undertakes a large-scale selling and promotion effort
In what year was the product concept founded?
1915
What is the management focus of the product concept?
- Improving products
- Attention for marketing myopia
Marketing concept
Achieving organisational goals depending on:
- knowing the needs and wants of the target group(s)
- satisfying these needs better than competitors do
- building a long-lasting relationship with customers
In what year was the marketing concept founded?
1960
What conditions need to be met for the marketing concept to work?
- customer-driven companies: start from the desires and needs (consumer minded)
- market research needs to be an essential part of company policy
- Meeting existing and latent needs of consumers
- sense and response philosophy
- continual effort to find the right product for their customers
- competitor analysis
Societal marketing concept
A company’s marketing decisions should take into consideration:
- consumer’s wants
- company requirements
- society’s interests
- corporate social responsibility (CSR)
In what year was the societal marketing concept founded?
1975
Corporate social responsibility (CSR)
a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public.
Sustainable marketing concept
Seeks ways to profit by serving immediate needs and the best long-run interests of their consumers and communities
In what year was the sustainable marketing concept founded?
2005
Market strategy
The marketing logic by which the company hopes to create this customer value and achieve these profitable relationships
4 P’s
- Product
- Price
- Place
- Promotion
4 C’s
- Customer solution
- Customer cost
- Convenience
- Communication
7 P’s (extended mix for services)
- Product
- Price
- Place
- Promotion
- People
- Physical Evidence
- Process
Customer satisfaction
The extent to which the perceived product performance matches customer expectations
What happens when product performance < expectations
Customer is dissatisfied
What happens when product performance = expectations
Customer is satisfied
What happens when product performance > expectations
Customer is delighted
Customer relationship management (CRM)
The overall process of building and maintaining profitable customer relationships by delivering superior customer value and customer satisfaction
Consumer-generated marketing
A marketing strategy that utilises user-created material to promote and market the brand and its products
Value chain
The series of internal departments that carry out value-creating activities to design, produce, market, deliver and support a firm’s products
Share of customer
The portion of the customer’s purchasing that a company gets in its product category (similar to market share)
Customer equity
The total combined customer lifetime values of all of all of the company’s current and potential customers
Butterfly customers
Short term customers with high profitability
True friend customers
Long term customers with high profitability
Stranger customers
Short term customers with low profitability
Barnacle customers
Long term customers with low profitability
What type of customer has the highest profit potential?
True friend customers
What type of customer has the lowest profit potential?
Stranger customers
