Marketing Test 1

Front 1

marketing roadmap

Back 1

1. mkts.: determine and reccomend which mkts. to address

2. segments: target and identify mkt. segments

3. direction: see strategic direction and positioning

4. offer: design marketing offer

5. support: secure support from other functions

6. control: monitor and control execution and performance

Front 2

customer-driven mkt. strategy -- objectives

Back 2

for each product do we want?
- mkt. share -- L/T
- profits -- S/T

Front 3

takeaways -1

Back 3

Takeaways
• Determine target and value proposition before
marketing mix
• Focus on benefits to customer, not product features
• Customers are attracted by brands they associate y y
with who they want to be, not who they are.
• Quantitative analysis is as important as creativity to
successful marketing

Front 4

customer-driven mkt. stategy --
core strategy for each product/service

Back 4

1. customer targets - broad vs. narrow mkt. -- which segments to go for

2. competitor targets - who are they? how should they be positioned?

Front 5

customer targets - two dimensions

Back 5

1. mkt. attractiveness
2. competitive position

Front 6

competitor targets

Back 6

identifying competitors

broadest: products competing for the same customer dollar
broad: product offering the same benefit to customers
narrow: product category or industry
narrowest: mkt, segment competition

Front 7

competitive framing

Back 7

comparison with individual direct competitor

product from superiority

out of product form

implied or claimed uniqueness

Front 8

comparison with individual direct competitor

Back 8

opportunity implications: one can substitute for another

customer implication: compare us

"sprite is better than 7-up"

Front 9

product form superiority

Back 9

opportunity implications: the whole lemon-lime product form

customer implication: the best choice when drinking lemon-lime soda

"sprite is the best lemon-lime soda"

Front 10

out of product form`

Back 10

opportunity implications: the cola product form

customer implications: the alternative to drinking cola

“7-up, the uncola”

Front 11

implied or claimed weakness

Back 11

opportunity implications: all beverages?

customer implications: no other drink quite like it

"sprite, the real thing, the only one, etc"

Front 12

Takeaways

Back 12

• Must make tradeoff between market share and
profits.
• Define competition as broadly as possible.p y p
• Reward customers based on their (lifetime) value to
you.

Front 13

PESTLE forces

Back 13

Political
Economic
Sociocultural
Technological
Legal/Regulatory
Environmental (physical)

what is a threat for one company industry is often an opportunity for another

key is anticipating changes in forces and determining strategy to adress

Front 14

subprime mortgages

Back 14

losers: homeowners, cities and towns, some investment banks, some savings and loan banks

winners (in ST): mortgage brokers, real estate agents, some investment banks

Front 15

Takeaways - 3

Back 15

• Environment has strong effect on behavior by consumers and
marketers. Important marketing ethical issues—harm is not just
to individuals but can also hurt society.
• What is a threat for one company/industry is often an
opportunity for another.
• Key is anticipating changes and determining strategy to
address proactively.

Front 16

importance of good marketing research

Back 16

good research can win elections

obama campaign:

old way: soccer moms
new way: iphone owners with masters degrees who shop at costco and get freq. flyer miles for purchases

Front 17

research order

Back 17

start with exploratory of descriptive research

follow with surveys, panels, etc.

Front 18

new ways to do research

Back 18

neuroscience
prediction mkts.
ethnographic

Front 19

biases when conducting research

Back 19

sampling: ex - phone book

response: ex - interviews

selection: ex - call in poll

order effects: order in which questions are asked

Front 20

Takeaways - 4

Back 20

Match research strategy with objective
Ideally, want to gather information on behavior—rather than
demographics or intentions
Don’t assume that you know your customer—need to continuously
monitormonitor

Front 21

evolution of marketing strategies

Back 21

era: good old days -- mass mkt. -- large segments -- niche segments -- customer centric

orientation: customer orientation -- product orientation -- mkt. orientation -- customer orientation

organization: mom and pop -- product organization -- mkt. orientation -- customer organization

mom and pop and customer organization are linked

Front 22

product centric vs. customer centric

Back 22

product centric -- customer centric

product focus -- customer focus
transactions -- relationships
mkt. share -- share of customer
product profitability -- customer profitability
brand loyalty -- customer loyalty
product lifecycle -- customer lifecycle
new product development -- customer development

Front 23

two mkt. perspectives

Back 23

trad marketing -- share of mkt.
customer centric -- share of customer

x=cust. reached
y=cust. satisfied

SEE CHART!

Front 24

potential customer info.

Back 24

calculate customer value to firm

segment or tier customers

target customized offers: right product, right time, right place, right price

predict and prevent customer attrition: develop models to figure out at risk and lapsed clients

build customer loyalty

Front 25

challenges of customer info.

Back 25

customer data is hard to collect, clean, combine, and centralize

firms are organized around products and mkts., not customers
- org. incentives are not usually aligned with customer centric marketing

amt. of data is massive and usually requires detailed analysis
- marketers are usually bad analytics and statisticians are usually bad at marketing

Front 26

satisfaction and loyalty

Back 26

customer satisfaction -- customer delight -- customer loyalty

Front 27

longevity vs. profitability

Back 27

HP, ST: butterflies
LP, ST: strangers
HP, LT: true friends
LP, ST: barnacles

Front 28

customer dashboard

Back 28

reality: relationship bt satisfaction, loyalty, and profitability are complex

they are not the same and they are not equal

Front 29

how to measure customer value

Back 29

revenue: easiest to measure, reflects past behavior, does not consider costs

margins >> profitability: considers revenues and costs, reflects past behavior, can be hard to measure

lifetime value: considers full lifecycle of customer from start to end, forward look, hardest to measure (need need cost/rev. info. and need to be able to forecast future behavior)

Front 30

customer research -- industry trends

Back 30

industry becoming more concentrated

large firms doing better than small

outlook for future suggests cont. slow growth

Front 31

client/project profitability

Back 31

dollar volume = revenues

rev. - costs/revenues

dollar margin after 0 ($ MAZ) = revenues - direct costs - sales costs

percent margin after 0 (% MAZ) =
(rev. - direct costs - sales costs)/rev.

Front 32

takeaways - 5

Back 32

Customers are assets
A business has a portfolio of
customers
Increase the return / lower risk
by managing the mix or portfolio
of customers

Front 33

buying process

Back 33

1. recognizing problem
2. acquiring info.
3. evaluating alternatives
4. making a choice
5. post purchase processes

Front 34

need recognition

Back 34

what needs to different product types satisfy?

from least to most valuable:
- psysiological needs: hunger/thirst
- safety needs: safety, protection
- social needs: sense of belonging, love
- ego needs: self esteem
- self-actualization: self fulfillment

Front 35

decision rules

Back 35

linear: weighted average of attributes using importance weights

lexicographic: compare of the single most important attribute

conjunctive: choose cut-off points for each attribute; eliminate brands that do not make cut-off

disjunctive: choose cut-off points for relevant attributes; if brand is above cut-off for any one attribute, keep it under consideration

decisions rules...
- can be combined
- depend on content/product: how complex/important is decision?
- depend on person: level of motivation/involvemen, level of expertise

Front 36

takeaways - 6

Back 36

Consumers adapt behavior to situation understandwhat choices
they are likely to make in a given situation
Very hard for people to change behavior—need to make it easy for
them to purchase/use your product—got Milk
Perceivedvalueishigherforproducts/servicesthatmeet“higher”Perceived value is higher for products/services that meet higher
needs

Front 37

internal orientation

Back 37

firm focuses primarily on what goes on inside the firm and less on customer needs and other things going on outside

depts. conflict

Front 38

operations orientation

Back 38

focuses on reducing unit costs

not good for new products -- operations can conflict with marketing goals

Front 39

4 principles of marketing

Back 39

selectivity and integration

customer value

differntial advantage

integration

Front 40

exchange basis of markets

Back 40

firm must deliver greater value to customers than competitors do

customers reward firms with greater customer value by buying their products

good for price-sensitive customers

Front 41

sales orientation

Back 41

focuses on S/T sales volume

set prices low

can come across as low quality

Front 42

finance orientation

Back 42

focuses heavily on ST profits

avoids expenditures with LT payoff

Front 43

technology orientation

Back 43

focuses on RD&E and pays little attention to customer value

marketing has small role and product planning can be inadequate

Front 44

market segments

Back 44

groups with similar needs that value similar elements with similar levels of priority

Front 45

marketing offer

Back 45

total benefit package firm offers to customers

Front 46

marketing mix

Back 46

4 P's & S

Product
Promotion
Place (aka distribution)
Price
Service -- can be key distinguishing asset

Front 47

two types of support

Back 47

support for design
support for implementation

Front 48

principle of selectivity and concentration

Back 48

selectivity: marketing must carefully decide where firm should target it's efforts

concentration: firm should concentrate its efforts against those targets

firm must choose its battles -- where to target its resources

Front 49

principle of differential advantage

Back 49

firm should offer customers something that they want but cannot get elsewhere

Front 50

integration

Back 50

at the customer: firm must be integrated on what it plans to offer the customer and how

at the firm: functions must be integrated

Front 51

profit margin

Back 51

value customer brings to the firm in one year

Front 52

defection/churn

Back 52

inverse of retention

Front 53

ways to increase LTV

Back 53

increase margin that firm earns

increase retention rate/reduce defect rate

reduce discount rate

Front 54

increasing margin

Back 54

customer selection
customer satisfaction and loyalty
customization
reduce operating costs
increase prices

satisfied customers can help increase margin through:
referrals
signals: getting high profile clients
learning: to attract more customers
network externalities: more customers can add value for existing ones

Front 55

matinence expenses

Back 55

offering current customers greater value

can be more effective than having customer defect

Front 56

cross selling

Back 56

selling more products, offering upgrades

Front 57

80:20 rules

Back 57

80% of firms profits come from 20% of its clients

modifications:
80:20:120 rule
20:80:20 rules: 20% of firms revnue comes from 80% of clients, which accounts for 20% of losses

Front 58

market insight

Back 58

market structure

market and product evolution

environmental fores

industry forces

Front 59

market myopia

Back 59

defining mkt. to narrowly b/c of bias or insufficient data

Front 60

categorizing product offerings

Back 60

product class: type
product form: come within product class
product line: group of related products a firm offers
product item: unique identification of an exact product

Front 61

product life cycles

Back 61

mature: last the longest
product-class/form: shorter

Front 62

indirect competitors

Back 62

offer benefits similar to firm, but in a different way

functional substitues: xerox vs. printer, fax, etc

Front 63

forward integration

Back 63

supplier becomes a new direct competitor by conducting operations the firm currently performs

Front 64

backward integration

Back 64

buyer becomes competitor by conducting operations the firm currently performs

Front 65

macro-level consumers

Back 65

org. units, mfgrs., wholesalers, govt. entities, and families that purchase products or services

Front 66

micro-level consumers

Back 66

people within macro-level that influence or have decision making authority

Front 67

recognized needs

Back 67

customers understand their needs

expressed: customers ask for advice to satisfy needs
non expressed: customers do not express need out of embarassment

Front 68

features & attributes vs. benefits vs. values

Back 68

design elements that are of great concern to engineers

benefits: something in product that satisfies needs

value: something product provides that has a broader scope than the benefit

Front 69

maslow's hierarchy

Back 69

5 major types of needs: physical, safety and security, social, ego, and self-actualization

Front 70

functional benefits and values

Back 70

provide functional benefits and values that meet basic expectations

Front 71

psych. benefits and values

Back 71

deals with status, affilation, risk, security needs, etc.

can go hand in hand with functional

Front 72

economic benefits and values

Back 72

concern financial elements such as price and credit terms

ex: wal-mart for low price

Front 73

economic value for customer (EVC)

Back 73

competitve product's price, + the added value of firm's product

Front 74

search benefits

Back 74

consumer reports, test driving

Front 75

use benefits

Back 75

little data on value before seeing it

ex: concert performance

Front 76

credence benefits

Back 76

data on value is not known until long after service

ex: after a medical procedure

Front 77

linear compensatory model

Back 77

most widespread approach to choosing

good performance in one area cancels out bad performance in another

Front 78

environmental influences

Back 78

culture, social class, family, situation, etc.

Front 79

individual influences

Back 79

economic resources, lifecycle stage, etc.

Front 80

status orientation

Back 80

desire for approval and opinions from others

Front 81

action orientation

Back 81

social/phyiscal side or risk taking

ex: fast cars

Front 82

market strategy

Back 82

what the firm will do and what it wont

how to attract, retain, ad grow customers in the face of competitors trying to do the same thing

Front 83

performance objectives

Back 83

articulate firm's goals for the mkt. segment

Front 84

startegic objectives

Back 84

what the firm is trying to acheive

qualatative and directional by nature

Front 85

operational objectives

Back 85

quantative, apply numbers the direction of strategic objectives

Front 86

strategic focus

Back 86

how to allocate resources

Front 87

positioning

Back 87

at heart of mkt. segment strategy

requires that the firm makes 4 decisions
1. select customer targets
2. frame competitive targets
3. design value propistion
4. articulate reasons to belive

Front 88

selecting customer targets

Back 88

1. structure of dist. system

2. targeting levels within dist. system

3. targeting individuals

Front 89

value proposition

Back 89

at heart of positioning

why should target clients prefer firm's product over a competitor's?

ex:
ipod: take music with you
wal-mart: always low prices

Front 90

marketing mix

Back 90

product
advertising
promotion
strategy
distribution
service
price