Lecture 2

Question 1

3C’s

Answer 1

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.

Question 2

STP

Answer 2

Segmentation
Targeting
Positioning

Question 3

Segmentation

Answer 3

What customer groups/ segments are there withing the market? 
Customers differ on
-Demographic: Income levels
-Lifestyles/shopping behaviors
-Interests

Question 4

Targeting

Answer 4

Which segment(s) should you target?

Question 5

Positioning

Answer 5

How should our product be perceived and remembered by customers? (value proposition)

Question 6

4P’s - Marketing Tactics

Answer 6

Product, Place, Price, and Promotion

Question 7

Product

Answer 7

Product design & development

Question 8

Place

Answer 8

Distribution channel: how the product comes from the business to the customer
How to manage the relationship with the channel members

Question 9

Price

Answer 9

What are the best pricing scheme and optimal price levels?

Question 10

Promotion

Answer 10

How to communicate the product to potential customers?

Advertising, personal selling, direct marketing, public relations, sales promotion

Question 11

Marketing Analytics

Answer 11

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

Question 12

Marketing Stratgey

Answer 12

How can a firm earn sustained, superior returns?

-By building a business structure that creates the maximum value

Question 13

Marketing Strategy - Values created by a Business Structure

Answer 13

Value Created Customer Supplier Firm

by a Structure = Surplus + Profit + Profit

Question 14

Customer Surplus =

Answer 14

Value to Customer - Product Price - Purchase Cost

Purchase Cost: searching, payment, transport, time, storage, etc.

Question 15

Supplier Profit =

Answer 15

Price of Supply - Cost to Supply

Cost to supply: R&D, manufacturing, inventory, transportation, etc.

Question 16

Firm Profit =

Answer 16

Product Price - Price of Supply - Production Cost

Production Cost: R&D, manufacturing, promotion, inventory, transportation, etc.

Question 17

A Resource Based View of the Firm

Answer 17

Maximize value to Customer—>Serve Consumer Needs

Minimize Costs—>Find the most efficient business format

Keep comprehensive advantages to earn sustained profits—>Develop Resources

Question 18

Consumer Needs

Answer 18

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

Question 19

Most efficient Business Format

Answer 19

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

Question 20

Developing Resources

Competition - How can we gain sustainable competitive advantage?

Answer 20

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

Question 21

Developing Resources

How to make the competitive advantage more stable?

Answer 21

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