MK323 Midterm

value cocreation

consumers act as collaborators with a manufacturer or retailer to create the product

customer relationship management (CRM)

focuses on identifying and building loyalty among the firm's most valued customers

upstream strategic decisions

- where is the market opportunity

- who are the target customers?

a producer focused selling concept makes profits through _________ ____________

sales volume

marketing plan

what are the 3 phases and 5 steps in the marketing plan?

planning phase

1. define business mission + objectives

2. conduct situation analysis (SWOT)

implementation phase

3. identify + evaluate opportunities

4. implement marketing mix + allocate resources

control phase

5. evaluate performance using marketing metrics

business mission (objectives)

sets growth goal in specific, measurable business terms

strategy

specifies means to achieve objective, characterized by a specific target market and marketing mix (4 Ps)

tactics

details day-to-day operational decisions essential to overall success of marketing strategies

metrics

assess success by measuring key results in terms of changes (yearly, monthly)

bcg growth-share matrix

describe stars from the bcg growth-share matrix

- require heavy resource investment

- as growth slows, will move to heavy generators of resources and become cash cows

describe cash cows from the bcg growth-share matrix

- already received heavy investments

- excess resources can be spun off to products that need it

marketing

activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

marketing mix (4 Ps)

1. Product

2. Price

3. Promotion

4. Place

B2B marketing

selling products from business to business

B2C marketing

selling products from business to consumer

downstream strategic decisions

- what are the benefits customers want?

- how should the product be priced

true or false: marketing has shifted focus from consumer to producer

false

- producer to consumer

a consumer focused marketing concept makes profits through ______________ ______________

customer satisfaction

describe question marks from the bcg growth-share matrix

- require significant resources

- must decide to infuse with resources generated by cash cows so they become stars or withdraw resources to phase out

describe dogs from the bcg growth-share matrix

- not destined for stardom

- should be phased out unless needed to complement or boost sales of another product or for competitive purposes

strategic growth matrix

describe market penetration from the strategic growth matrix

increasing consumption frequency often a key to growth

- ex. Arm + Hammer putting reminders on packaging to replace baking soda

describe product development from the strategic growth matrix

firms develop products to leverage brand, add revenue within current target market

- ex. Old Spice launched line of men's grooming products

describe market development from the strategic growth matrix

explore demand in new markets for growth

- ex. Dunkin' expanded internationally

describe diversification from the strategic growth matrix

new products in new markets means more complexity

- ex. 3M releases new product innovators

marketing strategy

identifies target markets, related marketing mix, and bases to build sustainable competitive advantage

sustainable competitive advantage

advantage over the competition that is not easily copied and can be maintained over a long period of time

4 strategies to develop sustainable competitive advantage

1. customer excellence

2. operational excellence

3. product excellence

4. locational excellence

STP

segmentation, targeting, positioning

market segmentation

dividing market into groups of customers with different needs, wants, or characteristics

target marketing

evaluates each segment's attractiveness and decides which to pursue

market positioning

defining marketing mix to give customers a clear, distinctive, desirable understanding of what the product does in comparison to competing products

integrated marketing communications (IMC)

encompasses a variety of communication disciplines to provide clarity, consistency, and maximum communicative impact

5 steps of marketing research process

1. defining objectives + research needs

2. designing research

3. data collection process

4. analyzing data + developing insights

5. action plan + implementation

primary data

gives insight about local, specific context

secondary data

collected prior to start of focal research project, gives broader context

data collected from the US census would be an example of _____________ data

secondary

data collected from an interview on the OneClub would be an example of _________________ data

primary

qualitative data

aim for explanation, context, surprises, new ideas, insight

- ex. focus groups, reviews, interviews, social media

quantitative data

aim for prediction, generalizability, quantifying

- ex. surveys, A/B tests, sales data

syndicated data

secondary data available for a fee from commercial research firms

observation

examining purchase and consumption behaviors by video or tracking customer's movements electronically

survey

systematic means of collecting information from people using a questionnaire

questionnaire

document with a set of questions designed to gather information from respondents and accomplish objectives

unstructured v. structured questions

open ended to answer with own words v. closed ended for evaluation

experimental research

systemically manipulates one or more variables to determine which variables have a causal effect on other variables

what are the advantages and disadvantages of primary research?

advantages- specific to needs, offers behavioral insights

disadvantages- costly, time-consuming, requires training

what are the advantages and disadvantages of secondary research?

advantages- time-saving, free/inexpensive

disadvantages- not precise/timely/original, may be biased

big data

data sets too large and complex to analyze with conventional data management software

data warehouse

large computer files that store big data

data mining

statistical tools to analyze variables in big data databases

5 Vs of big data

1. volume

2. variety

3. velocity

4. veracity

5. value

marketing analytics

analyzes data for marketer to improve decision making, optimize returns, and make appropriate customer-related decisions

descriptive analytics tools

help firms organize, tabulate, and depict available data into easy-to-understand visuals

- ex. excel

predictive analytics tools

rely on historically available data to forecast the future

prescriptive analytics tools

analyses that use simulations, which ask a series of what if questions and optimization techniques to find the best result

active analytics tools

AI algorithms used to analyze input gathered by the Internet of Things

- ex. amazon alexa

neuromarketing

examining consumers' brain patterns to determine responses

convenience sampling

no guarantee each member of the population will have the same chance of being included

- ex. you survey everyone in one Core class

probability sampling

every member of the population has a known, non-zero probability of being selected

- ex. you survey BU students randomly selected by BUID

STP process

segmentation

1. set objective or strategy

- SWOT

2. select key segmentation variables

3. create segmentation tree + grid

- estimate size, reachability

targeting

4. evaluate segment attractiveness

5. select target market

positioning

6. identify + develop positioning

- establish value proposition

geographic segmentation

where customers live

- ex. country, region, state

demographic segmentation

easily measured, objective characteristics

- age, gender, income

_______________ segmentation is the most common way to define segments because they are easy to identify and reach

demographic

psychographic segmentation

how customers describe themselves

- ex. eco-friendly, dairy-free, health-conscious

3 components of psychographics

1. self-values

- goals for life

2. self-concept

- image of oneself

3. lifestyles

- way one lives

benefit segmentation

benefits consumers derives from products

- ex. nutrition, texture, taste

behavioral segmentation

how consumers use a product

- ex. heavy/light user

occasion segmentation

type of behavior segmentation based on when a product is purchased/consumed

loyalty segmentation

type of behavioral segmentation that invests in loyalty initiatives to retain most profitable customers

market basket analysis

mathematical modeling techniques that determines association between a group of items usually purchased

geodemographic segmentation

combines geographic, demographic, and lifestyle characteristics to classify consumers

what 5 descriptive criteria do marketers look at when determining if a segment is worth pursuing?

is the segment identifiable, substantial, reachable, responsive, and profitable

undifferentiated targeting strategy (mass marketing)

no need to develop separate strategies for different groups

differentiated targeting strategy

target several market segments with a different offering for each

concentrated targeting strategy

single, primary target market to focus all energy on

value proposition

communicates benefits to be received and provides reasons to purchase

main value proposition components

1. target market

2. offering name or brand

3. category or concept

4. unique point of difference/benefit

perceptual map

displays the position of products or brands in the consumer's mind

6 positioning steps

1. determine perceptions and evaluations in relation to competition

2. identify market's ideal points and size

3. identify competitors' positions

4. determine consumer preferences

5. select position

6. monitor positioning strategy

segmentation tree

5 steps of consumer decision-making process

1. need recognition

2. information search

3. alternative evaluation

4. purchase

5. post-purchase

the greater the discrepancy between a _________ state and ___________ state, the greater the need recognition

needy; desired

functional needs

pertain to performance of product/service

psychological needs

pertain to personal gratification consumers associate with product/service

internal information search

buyer examines their own memory and knowledge through past experiences

external information search

buyer seeks information outside their personal knowledge base

internal locus of control

believe they have some control over outcomes of their actions, thus engage in more search activities

external locus of control

believe that fate or other external factors control all outcomes

5 types of risk

1. performance

2. financial

3. social

4. physiological/safety

5. psychological

universal set

all possible choices for a product category

retrieval set

brands or stores readily remembered

evoked set

alternative brands or stores a consumer would consider when making a purchase decision

true or false: a company wants to be a part of the universal set

false:

- evoked set

evaluative criteria

consists of salient (important) attributes about a particular product

determinant attributes

important features that competing brands or stores are perceived to differ

consumer decision rules

criteria that consumers use to consciously or subconsciously select from several alternatives

compensatory decision rule

consumer trades off one characteristic against another such that good compensates for bad