Marketing Flashcards
Marketing:
marketing is a activity, set of institutions and processes for creating, communicating, delivering and exchanging offers that have value for customers and society at large
Importance of marketing:
Increase sales/profit
Increase awareness
Make consumers/customer trust
Develop an ideal customer/ customer profile
Build a powerful brand
NEW – doing „good“
Create customer value
Selling vs marketing philosophy:
– Selling focuses on the needs of the seller; marketing on the needs of the buyer.
– Selling is preoccupied with the seller’s need to convert his product into cash; marketing with the idea of satisfying the needs of the customers by creating, delivering, and communicating product or service.
Marketing philosophy
Customer-centred, ‘sense-and-respond’ philosophy
The marketing concept
– The purpose is not to find the right customers for your products, but the right products for your customers
The customer concept
– Shaping separate offers, services, and messages to individual customers
Value driven:
Objective: Make the world a better place
Enabling forces: New wave technology
how companies see the market :Whole human wit mind and heart
Key marketing concepts: Values
Corporate, vision, values
Marketing guidelines: functional , emotional and spiritual
Value propositions: Many to many collaboration ,
Product centric marketing
Objective: sell products
Enabling forces: industrial revolution
how companies see the market :mass buyers with physical needs
Key marketing concepts: product development
Marketing guidelines: product specification
Value propositions: functional
one to many transaction
onsumer oriented marketing
Objective: satisfy and retain customers
Enabling forces: nformation technology
how companies see the market :smart consumer with heart
Key marketing concepts: diffrentiation
Marketing guidelines: nctional and emotional
Value propositions: One to one transaction
- Building a brand or creating a product is not difficult but rather convincing people to choose your products over other alternatives
- ability to understand customers path to purchase and focus on customer centricity
- only value you are able to create is the value that comes from your customers “ create value to capture value from customers“
- Peter Drucker “the purpose of a business is to create and keep a customer ”, “ business enterprise has only to functions marketing and innovation, marketing and innovation create results whilst the rest only produce costs” process of cost production to value creation
Path to purchase
see slides
Marketing funnel:
awareness → interest → consideration → conversion
Path to purchase:
Purchase funnel: need arousal → fulfilment
Path to purchase: arousal → step → point of influence → step → fulfilment
Customer concept:
Conduct of all marketing activities where the individual customer is the central unit of analysis and action
High and low degree of customer goodness: which customers are worth the efforts
Customer profitability: 80-20 rule ( 80 % of profits come from top 20% of customers )
When having negative contribution customers: they can have large influence or reference value
Value based marketing:
Value for a customer → customer satisfaction → customer loyalty → value of the customers
Process which targets interactions between customers and companies, starting from market driving orientation, managing existing customers over time to maximise financial benefits
Keeping a customer is cheaper than getting a new customer
On first purchase the full cash flow potential is not evolved
Customer centric companies:
Analysis:
market demand, path to purchase, customer profile
Planning: segmenting, targeting, positioning
Execution: value proposition ( pricing ), promotion and placement
Control: customer satisfaction, customer loyalty, customer engagement value ( customer goodness )
Customer goodness is the concept that not all companies are equally as good for a company, this can be directly through profits or indirectly through influence
Customer self:
Two approaches to pursue, one is maximising shareholder wealth or to benefit customer convenience, called customer self
Forecast demand
Usage gap and competitive gap
comparing your product with your competitors’ products in terms of features, market position etc
Gap potential for the market and current usage of market
Companies forecast vs market forecast: the difference is the competitive gap/ potential for a company in a business
Market forecast vs market potential is the usage gap
Forecast demand TAM, SAM, SOM
acronyms for three metrics to describe the market your organisation operates in — Total Addressable Market, Serviceable Addressable Market, and Serviceable Obtainable Market.
Forecast demand ATAR:
ATAR: trial volume and repeat volume for the first year
a structured technique with the purpose of assessing new products or services with regard to their potential adoption rate or sales numbers.
Market sizing “big market to build a big company”
They focused on the size of the market, dynamics of the market, nature of competition, because if you don’t attack a big market you cant build a big company
Sequoia doesn’t choose people and but a market
Sequoia rarely invests into a market if there is only one product
Sequoia taught founders to outsource since they were inexperienced and only needed to know technological aspects and marketing to asses the market dynamics
Market sizing & sales forecasting
Number one reason to not get funding is that people do not believe projections so you have to close the distance/gap between what you believe can do and proof that you can do that
TAM, SAM, SOM
A market analysis is about potential customers and not actual customers
SOM: share of market divided by SAM ( inner circle )
Number of leads: How do you push customers into; awareness set, consideration set, choice set, purchase
Capable of driving through marketing funnel to get from SAM to SOM
SAM Serviceable addressable market: reachable market
Customers that you are actively capable of servicing as you deploy activities
Usually defined by distribution channels
With apps marcom activities are pushed to target customer through marketing funnel
Total set of customers that you actively pursue through commercialization
TAM: Total Addressable market: the whole market/ potential market
Company demand analysis see slides
Market demand analysis see slides
market sizing see slides
why its so difficult for established players see slides
Alternative methods of access to market demand
Surveys of buyer intentions
market test research
Past sales analysis
expert analysis
need, want, demand
Need: basic biological and psychological motive
Want: one way that society has taught us that the need can be satisfied
Deand: are wants for specific products backed by the ability to pay
Objective of marketing:
create awareness that needs exist not to create needs
Role of marketing with needs, wants and demand:
Identifies needs, guides wants, promotes demand
Why is important to assess market demand:
you can adjust production, price, expansion, see the size of the market
Define strategy
Forecast investments
Production planning
Market:
is a group of consumers ( consumer centric approach )
Potential market:
those in a total population who have an interest in acquiring your product
Available market: Those in the potential market who have the money, interest and access to buy the product
Target market:
the part of the market that the company decides to pursue
Market share formula
= Sales / market demand if all players
Calculation for market growth for non durable goods
Potential sales = N x %P x O x D
N= population, P = % of people with need, O = occasions of use ( if one year than write nothing ), D = dose ( kilograms for example )
Calculation for market growth for durable goods
Potential sales = 1st purchase + substitute
Potential substitution = nits in use / average life time
Services under trial
Sales = trial + convert
Trial = potentials x %of trial rate x number of purchases
Convert = trailers x% of convert to pay x number of purchases
Services under subscription
Total Sales = existing - cancelling + new subscriptions
Churn rate = number of cancellations / number of subscribers
