Lecture 2 Flashcards
3C’s
Customer: Who we are serving & what they want most
Company: What we do best
Competitor: Who is competing with us? How to differentiate from them & keep competitive advantage.
STP
Segmentation
Targeting
Positioning
Segmentation
What customer groups/ segments are there withing the market? Customers differ on -Demographic: Income levels -Lifestyles/shopping behaviors -Interests
Targeting
Which segment(s) should you target?
Positioning
How should our product be perceived and remembered by customers? (value proposition)
4P’s - Marketing Tactics
Product, Place, Price, and Promotion
Product
Product design & development
Place
Distribution channel: how the product comes from the business to the customer
How to manage the relationship with the channel members
Price
What are the best pricing scheme and optimal price levels?
Promotion
How to communicate the product to potential customers?
Advertising, personal selling, direct marketing, public relations, sales promotion
Marketing Analytics
Generating and analyzing data to support marketing decision making Examples: Identify customers need and their weight Competitors and their market position Facilitating product design Choose sales channel Determine optimal pricing Estimate and compare the effect of promotion strategies
Marketing Stratgey
How can a firm earn sustained, superior returns?
-By building a business structure that creates the maximum value
Marketing Strategy - Values created by a Business Structure
Value Created Customer Supplier Firm
by a Structure = Surplus + Profit + Profit
Customer Surplus =
Value to Customer - Product Price - Purchase Cost
Purchase Cost: searching, payment, transport, time, storage, etc.
Supplier Profit =
Price of Supply - Cost to Supply
Cost to supply: R&D, manufacturing, inventory, transportation, etc.
Firm Profit =
Product Price - Price of Supply - Production Cost
Production Cost: R&D, manufacturing, promotion, inventory, transportation, etc.
A Resource Based View of the Firm
Maximize value to Customer—>Serve Consumer Needs
Minimize Costs—>Find the most efficient business format
Keep comprehensive advantages to earn sustained profits—>Develop Resources
Consumer Needs
No Need=No Purchase
First need to identify consumer needs
(Articulated and Unarticulated (Opportunity Here))
To find unarticulated needs–Find Consumer Pain Points
Consumer needs can be “created”
-Think ahead of them: anticipate consumer needs before most consumers have them
-Technological advance
-Caveat: Whether the need is “big” enough
Most efficient Business Format
Minimize Costs:
-reduce costs to purchase/supply (Airbnb)
-allocate “costs” at the most efficient part/step (IKEA)
Suppliers: Materials, multi sourcing to reduce
supply costs
IKEA: Employees, Inventory, Display
Customers
Developing Resources
Competition - How can we gain sustainable competitive advantage?
Competitive advantage often comes from the first-mover advantage (This can break down by being overcome by too many competitors)
Question–> You do this by developing a “resource”: need to satisfy two conditions
- Can increase the value to customers or can reduce costs - Competitors cannot gain it in a short time
Developing Resources
How to make the competitive advantage more stable?
Competitive advantage based on a single resource is not stable. With time, it can be gained by competitors.
SO
Develop new resources based on new ones. Resources should be complimentary, -reducing the cost of other resources and increasing the value of other resources
