Marketing Flashcards
1
Q
Importance of marketing
A
Marketing is too important to leave it to the Marketing Department.=
~David Packard (entrepreneur)
2
Q
Marketing funnel
A
1) awareness
2) intrest
3) consideration
4) conversion
3
Q
Path to purchase:
A
1) inital consideration set
2) active alauation (information gathering )
3) Moment of purchase
4) post purchase experience ( ongoing exposure )
5) trigger –> loyalty look
Example: smartphones
-36% of market share through loyalty loop
- 1.5 brands in their mind
- customers add 0.9 new brands while shopping
- in store sales people and past experience ( number one influence at moment of purchase )
4
Q
80-20 Rule / Pareto Rule:
A
80% of the proût usually comes from 20% of the customers
5
Q
Customer creation
A
1) value for customers
2) customer satisfaction
3) customer loyalty
4) value of the customer
6
Q
Customer growth
A
1) acquire
2) keep
3) grow
7
Q
Customer goodness
A
= profitability of a customer ( including indirect profitability ( refferal )
= revenue - acquisition costs - serving costs
All from customer
8
Q
Two opposing strategy approaches
A
Maximising shareholder wealth –> exploiting a means to an end
customer goodness –> use cash to grow customers
9
Q
Customer centrcs approach
A
keeping customers is vital because they influence others, don’t need to be acquired anymore, value is captured
10
Q
Approach of a customer centric company
A
1) analysis
- Market demand
- path to purchase
- customer profile
2) planning
- segmenting
- targeting
- positioning
3) execution
- value proposition: pricing
- GTM communication
- GTM channel
4) control
- customer satiasfaction
- customer loyalty
- customer engagement value
11
Q
Consumer needs:
A
Needs;I need food
Wants; I want a burger
Demands; i can afford a burger king
12
Q
Transformation of customer wants
A
1) Customer want technology and performance:
- enthusiasts; 2.5%
- early adopters; 13.5%
2) CHASM
3) Customer want solutions and convenience;
- early majority, pragmatics 34%
- late majority, conservatives 34%
- laggards, skeptics 16%
13
Q
TAM, SAM, SOM
A
TAM; total adressable market
- whole market/ dream
SAM: serviceable adressable market
- eachable market, achivable
SOM: Share of market.
- sales / sam ; actual sales
14
Q
Forecasting market demand: TAM, SAM, SOM
A
Diffrence between SAM & SOM = competitive gap
- looked at point of planned expenditure
Diffrence between: SAM & TAM = usuage gap
- looked at point of planned expenditure
Company demand line below total market demand line
Complete market demand is caused wgen reach total marketing expenditure
15
Q
How to quantify the market value
A
1) define the customer profile and geographic area
- exp: market for eco friendly washing machines
- customer profile; eco friendly households that own a washing machine
- geographic area: Northern Italy
2) estimate the amount of potential buyers
- Number of potential buyers = households in northern italy x percentage of ecofriendly households that own a washing machine
3) estimate the average quantity bought per customer annually
- 13 kg of washing machine powder
4) estimate the average price per quantity unit
- 3.5$ per kg
5) compute the annual market volume,
- annual market volume = number of potential buyers x average quantity
6) compute the annual market value
- annual market volume x average price
16
Q
Alternative methods to assess market demand:
A
- Survey of buyers intentions and/or sales peoples opinion
- Market test research
- Past-sales analysis
- Expert interviews
17
Q
Market share formula
A
sales / market demand ( all comapnies )
18
Q
Consumer insights
A
Consumer insight = Interpretation used by businesses to gain a deeper understanding of how their audience thinks and feels
19
Q
TRAC tool for consumer insights
A
Fundamental Truth:
- is this a deep truth
- does it reflect something significant in your customers life
Relevant to brand:
- can it be made meaningful to your brand or business
- can your brand or business own it or apply it
Attraction:
- does it strike a cord with your customers
- does it connect with your customers emotionally
competitively differentiated idea that leads to change in behaviour and mindset:
- does it lead to a competitively differentiated idea
- is it actionable
- does it cause your customer to act differently
20
Q
key questions to customer analysis
A
- Who buys our product or service?
- Who makes the decision to buy the product?
- Who influences the decision to buy the product?
- How is the purchase decision made? Who assumes what role?
- What does the customer buy? What needs must be satisfied?
- Why do customers buy a particular brand?
- Where do customers go or look to buy the product or service?
- When do customers buy? Any seasonality factors?
- How is our product perceived by customers?
- What are customers’ attitudes toward our product?
- What personal factors might influence the purchase decision?
- Do customers’ lifestyles influence their decisions?
Consumer insight = Interpretation used by businesses to gain a deeper understanding of how their audience thinks and feels
21
Q
Market research
A
Market research = Systematic design, collection, analysis, and reporting of data to a specific marketing situation facing the company
22
Q
Objective of market research
A
Objective of market research: Production of insight into the customer9s attitudes and buying behaviour
23
Q
Research process:
A
1) objective of research
2) research question
3) research approach/ data collection methods
4) data collection analysis
24
Q
Research strategies
A
Research strategies:
- Exploratory research: Gather preliminary information that will help define the
problem and discover its real nature - Descriptive research: Describe the marketing problems, situations and the market (e.g. attitudes of consumers)
- Causal research: Test hypothesis about cause-effect relationship
25
Types of market research
Qualitative
- when: deep understanding of motivations, explicit attitudes, mechanics of resarch
- results; conceptual, emphasis on meaning of results
- analysis: multidisciplanary ( psychology, sociology )
- plus: deep understanding & flexible
- risks: subjective interpretation, small number of insights,
Quantitive
- when; quantify, explicit attitudes, mechanics of decision
- results; structured, numeric
- analysis; summarising a bunch of interviews
- plus; objective, scalable, straightforward
- risks; over simplification, rigidity
26
Further classification of market research:
Primary
- experimental
- field & lab studies
- non experimental
- surveys, focus groups
Secondary
- internal
- external
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Primary & secondary research
Primary research = Gathering of original data directly from sources
- More useful, but also more expensive
Secondary research = Gathering of existing data collected by others
- Less useful, but also less expensive
28
Buying decision process:
Pre purchase stage:
1) Marketing stimmuli & other stimuli
2) customer psychology & consumer characteristics
Purchase stage:
3) buying decision process
4) purchase decision
See page 150
29
Consumer characteristics that affect buying decisions:
Cultural: cultyre, subculture, social class
social: family, reference groups, roles & satus
Personal: age, occupation, lifestyle
Psychological: motivation, perception, belief
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Elements of Value pyramid
1) functional: saves time, makes money
2) emotional: therapeutic value, design
3) life changing: hope, motivation
4) social impact; self transcendence
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Motivation
Motivation = Internal drive that influences consumer behaviour
32
Laddering
Laddering = Research technique that aims at detecting underlying motivations in consumers buying decisions
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Elements of laddering
1) attributes
2) benefits
3) values
34
Motivation theories
Freuds Theory
People's motivations are largely unconscious and understanding them requires exploring both stated and hidden cues, open using techniques like laddering, to trace motives from instrumental to terminal ones.
Maslows Theory
Human needs are organised hierarchically, with physiological, safety, social, esteem, and self- actualisation needs. People priori4se satisfying their most important needs before moving to the next.
Herzbergs Theory
The two-factor theory distinguishes dissatisfies (causing dissatisfaction) from satisfiers (causing satisfaction), emphasising that merely eliminating dissatisfies is not enough to motivate a purchase; satisfiers must also be present, guiding sellers to avoid dissatisfies and identify key motivators in the market.
35
4 motivational processes that influence consumer response
* Motivation: Internal drive that influences consumer behaviour
* Perception:
- Selective attention (tendency for people to screen out most of the information to which they are exposed)
-Selective distortion (tendency for people to interpret informatioon in a way that will support what they already believe)
-Selective retention (tendency to remember good points made about a brand they favour and forget good points about competing brands
* Learning: Learning (through classical conditioning and operant conditioning) is produced through interplay of drives, stimuli, cues, responses and reinforcement
* Memory: Short-term and long-term memory, memory encoding, and memory retrieval
36
Path-to-purchase from different perspectives:
Business: nedd --> need fulfilment
Customer: need --> step --> point of inclunce --> need fulfilment
37
Purchase funnel advanced see slide 154
- generate awareness: news release, social media
- genereate leads: industry trend reports, demos & how to videos
- nature leads: seminars, request for sales, pricing
- maintain loyalties: new letters
38
Rule of 27
Rule of 27:
It takes at least 27 impressions of a brand before a prospect even responds
39
AAARRR funnel
Awarness: impressions, click rate, visits
- brand awarness obkectives
Acquistion: new leads, SEM, app downloads
- Increase traffic
activation: new trial startups, product sales, push notification
- activation of micro influencers and early adopters who give feedback
Retention: customer aquistion rate, decrease customer churn rate
- retargeting and remarketing, increase number of daily active users
Revenue: retargetings ads, customer
acquistion costs, customer life time value
Refferal: ent prometer refferals, socail shares
40
Customer touch point
Customer touch point = Any occasion on which a customer encounters the brand and product from a casual experience to personal or mass communications to casual observance)
41
CRM
Customer relationship management (CRM) = Process of carefully managing detailed information about individual customers and all customer "touch points" to maximise loyalty
42
CRM framework
4-step CRM framework: 1. Identify your prospects and customers. 2. Differentiate customers in terms of their needs and their value to your company. 3. Interact with individual customers to improve your knowledge about their individual needs and to build stronger relationships. 4. Customise products, services, and messages to each customer.
43
Persona
Persona = Representation of an ideal customer based on demographic, behavioral, and psychographic data
44
Planning process
1) segmenting
2) targeting
3) positioning
45
Segmenting
Division of diverse markets into smaller, homogenous groups with similar needs, wants, purchase behaviour
46
Importance of segmenting to marketing success
Identifying and satisfying the right market segment is key to marketing success because it does not make sense to go after all customers because of customer goodness. If you get segmenting wrong, you get everything wrong. Never outsource the planning process!
47
Bases of segmenting ( how to cut the cake )
* Demographic (age, gender, income, social status, family)
* Psychographic (lifestyle, interests, activites, values, personality, attitude)
* Geograpahic (country, city, density, climate, area, population)
* Behavioural (benefits sought, usage, occasion, user status, engagement)
48
Macro vs. micro segmenta&on:
* Macro segmentation = Division of a market into broad, high-level segments based on large-scale characteristics
* Micro segmentation = Further subdivision of the segments into smaller, more specific groups based on detailed criteria
49
Homogeneous vs. heterogeneous approach:
* Homogeneous approach: Finding similarities between people in the same cluster
* Heterogeneous approach: Finding similarities between people in different clusters
50
Ex-ante vs. ex-post approach: %%%%%%
* Ex-ante approach: Making predictions and decisions based on forecasts and expectations. Segmenting
* Ex-post approach: Analysis of past events and outcomes to gain insights and evaluate performance. Needs
51
Marketing mix
Marketing mix: elements used by a company to influence customers and meet needs of customer ( product, price, promotion, placement )
52
Targerting
Targeting = Selection of specific segments of a market to focus marketing efforts to meet the unique needs of those segments
53
5 targeting criteria:
1. Measurability:
The size, purchasing power, and characteristics of the segments can be measured.
2. Sustainability:
The segments are large and profitable enough to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing program.]
3. Accessibility:
The segments can be effectively reached and served.
4. Differentiability:
The segments are conceptually distinguishable and respond differently to different marketing-mix elements and programs. If married and unmarried women respond similarly to a sale on perfume, they do not constitute separate segments.
5. Accountability:
Effective programs can be formulated for attracting and serving the segments.
54
Targeting matrix
x axis: Market segments attractiveness:
y axis: organisations capabilities of servicing segment
if both a & y axis are high target market
55
Targeting strategies
1) single segment concentration: red bull
- 1 dot
2) product specialization: coca cola
- 3 dots in same row
3) market specialisation: supermarket
- 3 dots in same row vertically
4) selective specialization: toyota
- 2 dots at random ponts
5) full market coverage: amazon
- undifferentiated marketing
- different marketing
56
Different product line strategies:
* Multi-segment product line strategy:
Offering multiple product variations, each tailored to meet the specific needs of different customer segments (e. g. Toyota)
* Single-segment product line strategy:
Serving a single, specialized market segment with a highly specialized product (e. g. Red Bull)
Target sequencing = Iden4ûca4on of the order of segments to pursue ûrst, second, and . so on (ooen considering factors like market size, growth poten4al, compe44ve
. landscape, and resource availability)
ebl (supermarket)
Linus
57
Target sequencing -
Identification of the order of segments to pursue first, second, and . so on (after considering factors like market size, growth potential, competitive landscape, and resource availability)
58
Sgement vs targeting vs target segmenting
take pool of people and ivdide into groups = segmenting
focusing only on 1/3 of group for exmaple = targeting
having diffrent plans for the group and dividng again = target segmenting
59
Positioning
Positioning = Creating a unique and compelling brand image or perception to effectively differentiate a product in the minds of a specifc target market
60
Positioning map
split map by two variables: value driver 1, value drive 2 eg. price & quality.
- then put your productr adn the competitors products on the map
61
Brand
word, name, symbol etc. legally registered as a trademark, used by manufacture or merchant to identify its products distinctively from others of the same type and usually prominently displayed on its goods, in advertising etc.
62
Example of brand positing map see slide 160
63
Brand mantra template:
For (target market), (brand) is a brand of (consumer's frame of reference) that offers (benefits) and is different when compared to (main competitors) because (reason why). For [a target segment], the [concept] is [the primary claim] because [it is the single most important factor].
64
Primary and secondary brand associationbuilding
Primary: competitors, attributes, benefits, values, usage occasion, target customers, product category,
Secondary: country of origin, spokespersons, characters ( licensing ), other sources ( awards ), company, other brands, events, distribution channel
65
Brand value management process
1) Defining brand position
2) Builiding brand positionung
3) managing brand positioning
4) measuring brand performance
66
Brand touchpoints
Pre purchase experience: website, advertising, collateral
Purchase experience: product assortments. point of purchase displays, sales force
Post purchase experience: product quality, loyalty programs, billing, customer service
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Kellers Brand Pyramid Model:
1) identity: salience
- branding objective; deep, broad brand awareness
2) meaning: performance, imagery
- branding objectives; points of parity & differentiate
3) response: judgements, feelings
Branding objectives; positive, accesible reactions
4) relationship: resonance
- branding objectives; intense active loyalty
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guidelines to defining brand strategy
Guidelines to deûning the branding strategy:
1. Decide on the number of levels
- Principle of simplicity: Employ as few levels as possible.
2. Decide on the levels of awareness and types of associations to be created at each level.
- Principle of relevance: Create abstract associations that are relevant across as many individual items as possible.
- Principle of differentiation: Differentiate individual items and brands.
3. Decide on how to link brands from different levels for a product.
- Principle of prominence: The relative prominence of brand elements affects perceptions of product distance and the type of image created for new products.
4. Decide on how to link a brand across products.
- Principle of commonality: The more common elements shared by products, the stronger the linkages
69
Brand extensions
Using a successful brand name to introduce a new or modified product in a different category, benefiting from brand recognition but needing careful . alignment with brand identity and customer expectations
70
Life extensions
Expanding a brand's offerings within the same product category, potentially risking brand overextension and cannibalisation
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Pricing
pricing is the moment of truth.--> Key decision point for the customer
Pricing is the only element that produces revenues and not costs. It is the easiest to adjust and communicates the company9s intended value posi4oning of product and brand.
72
Performance formula
( price x quantity ) - ( FC + ( UVC x quantity )
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Framework for pricing decisions
Celling price
customers assessment of unique features
orienting point
competitors prices and substitute prices
costs
floor price
See page 163 for graph
74
Pricing process
1) selecting price objective
2) assetsment
- demand, costs, competitors
3) determining price emthod & level
4) price managemnet and control
75
Pricing methods
1) competitor orientation
- pure parity
- dynamic parity
- discount pricing
- preminum pricing
2) cost orientation
- cost plus pricing
- break even analysis
- mark up pricing
3) Demand orientation
- elasticty
- buyers response
- fishbin
- conjoint
- evc
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pricing strategeis
Skimming: rice follows customers willingness to pay
- > short term profits ( + )
- attract competition ( - )
penentration pricing: pricing follwos suppliers cost fnction
- discourages competition
- less short term profits
77
PED
measure of pesonsiveness of demand to changes in prices of goods and services
PED > 1 eleastic
PED < 1 Inelastci
PED = 1 unit elastic
78
Common pricing mistakes
Using old industry margins
* Failure to revise price to capitalise on market changes
* Selling price independently of the rest of the marketing mix
* Failure to vary price by product item, market segment, distribution channels, or
purchase occasion
79
Value proposition
Value proposition = Unique benefits and value a product or service offers to its customers, differenytiating it from competitors in the market
80
Models of decision making:
Fishbein model:
Consumer selects the alterna4ve with the highest score computed on the basis of all its key anributes weighted for importance
Conjeunctive model:
Consumer sets a minimum acceptable cutoû level for each anribute and chooses the ûrst alterna4ve that meets the minimum standard for all anributes
Lexicographic model:
Consumer chooses the best based on its perceived most important anribute
Elimination by aspects model:
Consumer compares brands on an anribute selected probabilis4cally (where the probability of choosing an anribute is posi4vely related to its importance) and eliminates brands that do not meet minimum acceptable cutoûs
81
Pain and gain theory
Pain-Gain Theory:
Individuals make decisions by weighing the anticipated pain or effort associated with an action against the expected benefits or gains of that action
82
Product life cycle
1) r&d
2) introduction
3) growth
4) maturity
5) decline
83
Market development strategies:
1) increasing penetration on current customers
a) increasing purchased quantities
b) increasing usage frequency
- identify: new models of usages, identifying new models of usage with new occasions of usage, multichannel management
2) broadening current customer base
a) new value proposition
b) new segments through product brand repositioning
- multi channel management
c) brand extensions
84
Dimensions of a product:
1) core product: Basic product; focus on purpose of which product is intended
2) generic product: all qualities of a product
3) expected product: all benefits consumers expect from a product
4) augumented product: factors which set product apart from competition eg. brand
5)potentoial product: what the product could be transformed into
85
Tpes of marketing
Product- centric Marketing
- Objectives Sell products
- enabling forces: industrial revolution
- companies see market: mass buyers
- key concepts: product deveopment
- Markeitng guide: product specification
- value prop: functional
- interaction: one to many
Customer centric marketing
- Objectives satisfy and retain
- enabling forces: info technology
- companies see market: mind and heart
- key concepts: differentiation
- Markeitng guide: product positioning
- value prop: functional & emotional
- interaction: one to one
Value drive marketing
- Objectives make world better
- enabling forces: new technology
- companies see market: heart, spirit
- key concepts: values
- Markeitng guide: vision
- value prop: spiritual etc.
- interaction: many to many collaboration
86
Customer concept
customer concept
The conduct of all marketing activities
belief that the individual customer is the
central unit of analysis and action
87
Company forecast for non durable goods
N x %P x O x D
population x need x occasion x use
88
Comapny forecast for durable goods
Potential Substitution =
(replacement)
Units in use / Average life
89
Company Sales FORECAST streming & subscription
Sales t2 = trial + convert
Trial: Potentials x % of Trial Rate x Number (of Purchases)
convert: Trialers x % of Convert to Pay
x Number of Purchases
90
Forecast services under subscription
Total = existing - canceling + new
Churn Rate (%) = # Cancellations /
# Subscribers
91
Stimuli response model/ black box
The Stimulus-Response Model
Another model of consumer behaviour, called the stimulus-response or “black box” model, focuses on the consumer as a thinker and problem solver who responds to a range of external and internal factors when deciding whether or not to buy.
92
How to identify the positioning
Identify FOR, POP, POD, USP
- FOR - frame of reference know your competitors
- POP- points of parity: meet market standards
- Pod-points of difference: differentiate ( all aspects that differentiate you )
USP - unique selling proposition, the reason why you differentiate ( summary of differentiation where only focus on some of those )
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