Module 2 Exam Flashcards
Marketing Definition
Process of creating value for customers and building strong customer relationships in order to capture value/money from customers in return
3 Main Marketing Steps
- Scope the Market (analysis)
- Plan the Marketing (strategies)
- Implement the Marketing (marketing mix/tactics)
Facets of Knowing the Customer
Wants/Needs Expectations Behaviors/Preferences Perceptions of Alternatives Attitudes/Hopes
Market
A group of end users with an need and the desire and the means to fill it
4 Bases of Market Segmentation
Demographic: age, gender, income, zipcode
Needs: overcoming pain points, challenges
Psychographic/Attitudinal: personality traits, lifestyle, interests
Behavioral: consumption intensity/frequency, channel preferences, category spending
Customer Segmentation
Grouping customers on the basis of a shared demographics, psychographic, need, behavior or all of the above combined so that marketers can use the same messages and media across large numbers of them
Benefits of having More Segments
Greater message relevance to each segment
Benefits of having Fewer Segments
Greater marketing spending efficiency
Customer Lifetime Value
Projected lifetime dollar value of each customer
Helps prioritize relationships and investment
Focuses on long-term relationship health
Customer Lifetime Value Inputs
- Average customer spend on your brand per unit of time
- Length of average customer relationship with your brand
- Unit of time
Types of Info Leading to Customer Insights
Demographics Psychographics Wants/Needs Usage Behavior Decision Drivers/Barriers
Sources of Customer Info
Internal Sources: - Employees - Sales data - Usage data External Sources: - Customer advisory boards - Third party/syndicated research - Market research - Social media
Characteristics of Successful Marketers
- Deeply understand customers and their priorities
- Use customer insights to group customers for efficiency and effectiveness
- Know their customer lifetime value to prioritize investment in key target audiences
- Design and invest in programs that deliver compelling and authentic customer experiences tailored to customer priorities
Profitability/Loyalty Matrix
- True Friends (high profitability and loyalty)
- Butterflies (high profitability, low loyalty)
- Barnacles (low profitability, high loyalty)
- Strangers (low profitability and loyalty)
True Friends (high profitability and loyalty)
Customers: refer one brand in the category and generally pay full price
Marketers: Invest to turn them into brand advocates
Butterflies (high profitability, low loyalty)
Customers: Have a few brands they choose from based on something other than price
Marketers: Invest to get increase share
Barnacles (low profitability, high loyalty)
Customers:Have a preferred brand, but only buy it when there is a deal or special offer
Marketers: Invest to make them profitable
Strangers (low profitability and loyalty)
Customers: Have no preferred brand, and choose strictly on price
Marketers: Avoid investing
Strategic Planning Process Steps
- Define Mission
- Set objectives/goals
- Design business portfolio
- Develop marketing strategy
SMART Metrics
Specific Measurable Aggressive Realistic Time-Bound
Growth Share Matrix
Market growth rate plotted against relative market share
Product/Market Expansion Matrix
- Diversification (new product and market)
- Product Development (new product, current market)
- Market Development (current product, new market)
- Market Penetration (current product and market)
Diversification (new product and market)
Selling completely different products or services to an entirely new market or customer type
Product Development (new product, current market)
Developing and cross-selling new products to customers you already sell to
Market Development (current product, new market)
Selling more of what you currently offer in new markets or to new types of customers
Market Penetration (current product and market)
Selling more of what you currently offer to more customers like your current ones
Marketing Strategy Compenents
- Underpinnings of a brand’s or business unit’s relevance
- Value proposition
- Positioning
- Key ideas to be communicated (Messaging)
- What success looks like (SMART goals, objectives, milestones)
Relevant Brand Components
- Customers can’t live without them
- Customers can depend on them
- Innovate consistently
- Inspire customers
Value Proposition
Understanding what is relevant to customers helps marketers articulate how their capabilities enable creation of products or services to address customer needs
3 Questions of Value Proposition
- Who Are We? (capabilities/expertise brand brings)
- What Do We Do? (key aspects of their offerings)
- Why Does it Matter? (customer needs addressed/how customer lives are bettered)
Positioning
Relative to competing offerings
Defines credibility, relevancy, and differentiates firm to target audience
Basis of external messaging
Positioning Framework
Target
Reference Frame
Key Benefit
Reasons to Believe
Questions of Positioning
- Who Are We Talking To? (which consumers can we help most? all/some?)
- What is the Category of Reference Frame? (which companies provide the same benefits)
- What is the Key Benefit? (how are customers helped and what needs are addressed)
- What are Reasons we Believe the Brand can Deliver? (what makes your ability to deliver key benefit credible? what are must haves? what is unique about us?)
Positioning Statement Formula
For TARGET, XYZ brand is the CATEGORY/FRAME OF REFERENCE that KEY BENEFIT because it (of course has TABLE STAKES, but) is the only one that has DIFFERENTIATORS
Touchpoints
Shape impressions and build engagement
Marketers try to determine value of touchpoints as they lead to a sale
Helps give credit for sale and allocate future resources
Marketing Funnel Steps
Awareness - Hearing about potential solutions (ads)
Consideration - Researching and evaluating (product advisors)
Trial/Purchase - Initial trial/purchase and usage (coupons)
Loyalty - Repeat purchase and loyalty (loyalty programs)
Advocacy - Potential advocacy (reviews/recs)
SWOT Analysis
Strengths, weaknesses, opportunities, threats
Strengths/weaknesses are internal (could address with time and money)
Opportunities/threats are external (environmental and affects all players)
Financial Marketing Objectives
Describe effect marketing will have on top/bottom lines
Non-Financial Marketing Objectives
Any non-financial objectives that are believed to drive long term value
Strategic Initiatives
Most important things a business must do in order to deliver on its marketing objectives
Usually 3-5 strategies
4 Ps (conversion drivers)
Also called marketing mix Product Promotion Price Place
Price examples
List price Discounts Allowances Payment Period Credit Terms
Place examples
Channels Coverage Assortments Locations inventory Transportation Logistics
Promotion examples
Advertising
Personal selling
Sales promotions
Public relations
Product examples
Variety Quality Design Features Brand name Packaging Services
Action Programs (tactics)
Highlight precisely how the strategic initiatives will happen
Include specific changes in the 4 Ps
Primary Sources of Marketing Info
Customer Feedback Surveys Hypothesis Tests Social Media Research Interviews Transaction Data Ethnography Focus Groups Sales People/Employees
Quantitative Research Techniques/Instruments
Surveys
Behavioral Tracking
Questionnaire
Meters/scanners
Qualitative Research Techniques/Instruments
In-depth interviews Online focus groups Ethnography Online bulletin boards/communities Discussion guide Participant pre-work Journal/diary
Measuring Awareness
Find out by asking potential customers
Unaided - Not giving them a list and asking to name brands in the market
Aided - Giving a list and asking to name brands in the market
Measuring Consideration and Trial/Purchase
Asking customers
Asking which of following brands people have considered buying.
Then asking which of considered brands has the customer used
Measuring Loyalty
Ask how many category purchases were of target brand in the last year (repeat buying)
Asking which brand the customer buys most often (loyalty)
Asking if customer has ever recommended target brand (advocacy)
2 Key Conversion Metrics
Acquisition Conversion:
- How well the brand converts awareness to trial
- (Ever Used)/(Aided Awareness)
Retention Conversion:
- How well brand converts trial into repeat users or loyal users
- (Currently Use)/(Ever Used)
3 Types of Media
Earned Media:
- Mentions, shares, reposts, reviews
Paid Media:
- Pay per Click, display ads, retargeting, paid influencers, paid content promotion, social media ads, TV, outdoor, print, radio
Owned Media:
- Website, mobile site, blog site, social media channels, stores, channel partners
Marketing Return on Investment (MROI)
Formula:
Customer Lifetime Value - Marketing Investment)/(Marketing Investment
Brand Architecture
Goal is to optimize hierarchy, linkages, and roles of brands within portfolio in support of business strategy
How different products/services under the business’s umbrella relate
Clear Brand Architecture Benefits
Clarity:
- Gives coherent face to offering and business strategy and distinguishes brands within the portfolio
Efficiency:
- Enables brand and marketing leverage
Growth:
- Extends credibility form existing, successful brands to new offerings
Equity:
- Extends equity by defining the relationships between brands
Outside-In View of Brand Architecture
Brand architecture does not need to line up with internal organizational structures as it is mostly for external purpose
House of Brands
Independent brands, each maximizing meaning to customers and impact on the market - not linked to parent brand (P&G and Unilever)
Ex. P&G has sub-brands such as Old Spice, Tide, and Oral-B
Branded House
Single master brands spans entire set of offerings - linked to parent brand (FedEx and Virgin)
Ex. FedEx has both FedEx Ground and FedEx Express
Hybrid
Mix of “branded house” and “house of brands”
Ex. Amazon has amazon.com, AWS, and Zappos
Pros and Cons of all Branding Models
House of Brands
- Pros: Builds equity in strong stand-alone brands and insulates brands from one another
- Cons: Requires significant marketing investment to build awareness and drive usage
Hybrid
- Pros: Leverages strong master brand and protects diverse businesses
- Cons: Requires planning to avoid customer conversion and dilution of master brand or stand-alone brands
Branded House
- Pros: Results in strong master brand and maximum marketing efficiency
- Cons: Difficult to extend into new categories and exposes whole portfolio risks from any one channel
3 Guiding Principles to Decide Optimal Brand Architecture
Coverage:
- Cover the market and target customer segments with fewest brands possible
Separation:
- Ensure room or differences between brand offerings so customers can find the solution that addresses their needs easily
Efficiency:
- Address distinct customer needs while leveraging brand development and management costs
Revisiting Brand Architecture
Changes in strategic direction or important new capabilities
Triggers:
- Declining relevance with customers
- M&A
- Internal competition for investment dollars
- Corporate and product brand confusion
- Brand over-stretch beyond credibility
