Marketing Strategy #1 – Flashcards
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marketing strategy formation
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overall long term goals; customer selection and value creation
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market planning
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formation of shorter term pland to pursue long-term goals outlined during marketing strategy formation stage
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programming, allocation, budgeting
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short term (annual or even shorter) strategy to distribute resources effectviely in pursuit of marketing strategy/ marketing plan
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implementation
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executing tactics in pursuit of strategy developed over the prior three steps
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monitoring and auditing
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evaluating the results of marketing tactics
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analysis and research
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- gathering all neccesary data needed to redesign marketing strategies or tactics - all steps interact and rely on other steps
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marketing strategy formation process
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the process of forming and executing a marketing strategy that involves analyzing the market, making decisions on your aspiration and actions/tactics, and evaluating the results 1. Analysis (5C's) 2. Decisions (Aspriation, Action plan) 3. Outcomes (customer/sales)
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goal of marketing strategies
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Profits!! profits= revenue-costs revenue= sales volume x price profits- (sales volume x price)- costs
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fixed costs
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costs that remains the same regardless of how many units are produced
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variable costs
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additional costs incurred to the production of additional units
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unit margin
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difference between per unit revenue and per unit variable cost (does not account for fixed cost)
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breakeven
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how many sales needed to recover fixed costs
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the customer
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- good marketing strategies always begin with the customer - without customer, there is no value, no revenue, and no profit - many businesses fail by not prioritizing the customer and their behavior and ensuring that value is created
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customer behavior
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how customers make the decision to purchase products (the process by which decisions are made)
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customer value
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- why customers choose to purcahse a product - what do customers recieve with their purcahse
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drivers of consumer behavior
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- the product under consideration - the context in which the buying takes place - the people involved in the buying process
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cognitive decision making
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- driven by the mind (deliberative and information based) - product types and context (utilitarian and search goods)
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search good
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can tell quality of product before actually buying it (ratings, reviews, characteristics)
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utilitarian good
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not exciting, fufills need ex. dishwasher, refridgerators
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emotional decision making
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-driven by heart - based less on "rational' desires and more subjective - hedonic, publicly consumed goods
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hedonic goods
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products you enjoy ex. movies
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publicly consumed goods
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buying something because others will see you using it , says something about you ex. Apple vs PC
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cognitive (communications and promotions to customers)
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cognitive processing requires facts and figures, greater proof of product capabilities, and an expert salesforce - very common in B2B
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emotional (communications and promotions to customers)
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emotional processing requires the ability to tie the product with emotions - try to develope a feeling - the promotion becomes part of the value of the product
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product
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product design often arises from the emotional or cognitive nature of consumer processing
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place
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more emotional/ hedonic products often need greater availability to ensure they are purcahsed
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involvement
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product involvement is the mental resources and commmitment that a cusotmer allocates towards the purcahse of a product
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factors that increase involvement
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- cost to the customer - risk of making a bad decision - importance of the category to customers and enjoyment - longer purchasing window - can be either cognitive or highly emotional purchases - differs over time, between consumers, and by context
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lower involvement tends to favor...
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larger firms
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optimizing
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is when customers attempt to make the best choice often requires substantial involvement
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satisficing
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when customer simply attempt to make a "good enough" choice low involvement
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push
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marketing through channel (low marketing involvement) ex. best shelf space
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pull
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convince (high marketing involvement) try to get customers to want your product and seek out your specific brand
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compensatory decision making
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consumers consider all elements and attributes of a purchase when trading off between attributes occurs later in search process
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non-compensatory
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narrow down by attributes happens early in search process
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Pre-purchase decision making
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all steps taken that lead to the decision to purchase prior to purchase 1. trigger 2. evaluation of alternatives 3. promotions used to move through each stage
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trigger
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"i need to make a purchase" especially important in markets with limited options
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evaluation of alternatives
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- starts with total set of alternatives - limited by either compensatory or non-compensatory processes - results in a choice set - generally more compensatory at this stage ( total set - awareness set - consideration set - choice set- decision)
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promotions used to move through each stage
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different promotions are more important at different stages
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purchase decision making
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- final move from choice set to single purchase - involves how purchase will occur (direct/indirect/online)
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post-purchase decision making
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-consumers usage of the product and satisfaction with the product after purchase (attempt to improve likelihood of repeat purchases & WOM) - teaching proper usage - ensuring support for potential problems
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examples of post purchase marketing
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- loyalty cards - customer service - service recovery
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initiator
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begin the search for new product
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gatekeeper
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experts that control access to information
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decider
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actually make the purchasing choice
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influencer
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serve to influence and modify the process by which deciders make decisions
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purchases
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purchase the product
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users
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consume the product
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value proposition
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a statement about what makes the firms products attractive to customers - foundation - total set of benefits offered to customers CUSTOMERS PERSPECTIVE
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core competency
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some characteristic or asset of the firm that adds to customer value and is difficult or impossible for other firms to imitate FIRMS PERSPECTIVE
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types of value
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- functional -social - economical - experiential
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functional value
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value provided by the actual functioning of the product - products can be considered a collection of attributes - attribute needs to reach threshold level primary: car moving secondary: leather seats in car
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conjoint analysis
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marketing research technique meant to find the importance of attributes by making customers tradeoff between attributes
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economic value
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ability to provide a benefit for a lower cost than alternatives - secondary form of value - need to provide some other benefit (generally functional)
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heterogeneity of value
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customers often vary their perception of product value have to consider distribution and not just the average when determining customer value for your product
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experiential value
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- difficult to quantify form of value (often emotionally driven)
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factors that effect experiential value
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- branding -design - customer experience - customer service
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branding
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signals of quality, status, image, consistency, signals of placement, and often a signal to others
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brand value
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brands are a secondary form of value themselves - could add to functional value by providing quality assurance - could add to social value by providing a signal to those that observe your consumption
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brand equity
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the total value of the brand to the firm
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design
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- aesthetically pleasing - can be delivered directly - also can work with social value (conversation pieces)
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customer service
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great customer service can deliver value even in the face of terrible experiences front line employees: immediately responsible for a quality experience are often the lowest paid, least experienced, and least trained automation of service: many younger people prefer technology to interactions with people
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emotional benefits
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products can have emotional benefits - make you feel like a better person - make you think that you are supporting your area, university, etc.
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emotional appeals
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- brand value - design - customer service - emotional benefits "feel good" - nostalgia - family/guilt - family/ nostalgia
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social value
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- gain value as others buy a product or observe you purchasing a product - preference formation (seek confirmation that we are right and that product is high quality)
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social capital
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- can enhance reputation through online communication - also can gain social capital through purchase and display of certain products
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social relationships
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- can become closer to others through online or offline communication - simply improving social relationships can be a form of value ex. facebook, twitter
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company analysis
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- analysis of the company and its abilities to operate in the focal market - based on: assets, potential assets, historic performance - only consider internal capabilities
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core competency
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- significantly contributes to the creation of customer value - difficult for competitors to imitate
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collaborator analysis
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- need to understand external companies or other entities that are necessary for the creation of value - need to consider goals, strategies, and incentives of all collaborators (could have conflicting long term goals) - some firms have chosen to formalize the process of discovering collaborators
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collaborator definition
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cover capabilities not possessed by the company - closeness and access to customers - manufacturing capabilities - transportation/logistics - expertise in creating components - access and expertise in procuring raw materials
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competitor analysis
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- analysis of all potential competitors for our product (serve same primary functional value, doesn't have to be in the same market- substitutes) - competitors each have interest and unique relationships
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context analysis
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analyze other relevant aspects of the context in which the product will be released - loosely controlled by firm - legal issues - cultural issues - current events - technological innovations
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Aspiration
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use customer data to uncover potential segments other analyses inform us of how to target and position the product
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segmentation
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process of grouping customers based on similar needs - method of eliminating customer heterogeneity - starts with customer analysis
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why segment?
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provide more value lower costs
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segmentation benefits to the organization
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- identification of unfulfilled needs - better product design - more targeted promotions - increased customer satisfaction
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segmentation benefits to the customer
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- convenience and time savings - tailored products and services - relevant offers - personalized experience
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common segmentation variables
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- geographic - demographics - psychographics - behavioral - benefits sought
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geographic
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country, region, city, urban/rural, climate
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demographics
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age, income, gender, generation, marital status, family size, occupation, education, ethnicity, religion
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psychographics
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lifestyles, personality, activities, interests, opinions
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behavioral
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usage rates, loyalty, product knowledge, involvement, purchase occasion, buying stage
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benefits sought
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convenience, value, safety, status
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who
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very common demographic characteristics least useful cheaper and easier
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what
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observe behavior
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why
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based upon value received
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useful segments
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identifiable and accessible substantial and stable
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targeting
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selecting a specific segment (or segments) that the firm will primarily address with their marketing efforts allows firm to focus on a specific group of customers and provide more value to those customers
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targeting over time
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mass production, mass marketing technological innovation more niche and one-to-one marketing
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mass marketing
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targeting all (or nearly all) potential customers effective for... - production efficiency - quality control - shelf/space distribution
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positioning
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once you have targeted a segment, now you need to position your offering to serve that segment plan to brands position: - prices? - which attributes? - how do we promote the product? - which methods should we use to distribute the products?
