JRE 410: Markets and Competitive Strategy - Lecture 5

This flashcard set covers the fundamentals of marketing, the marketing process (STP and the 4Ps), portfolio analysis tools (BCG Matrix and Expansion Grid), and consumer behavior concepts from JRE 410 Lecture 5.

Marketing (Textbook Definition)

The activity for creating, communicating, delivering and exchanging offerings that benefit the organization, its stakeholders and society at large.

B2B

Marketing focused on business customers (Business to Business).

B2C

Marketing focused on consumer-type customers (Business to Consumer).

Requirements for Marketing

$2$ or more parties with unsatisfied needs; desire and ability to satisfy these needs; a way for the parties to communicate; and something to exchange.

Market

People with the desire and ability to buy a specific product.

Social Marketing

Marketing designed to influence behavior of individuals in which benefits accrue to individuals or society, not to the marketer (e.g., Health Canada anti-smoking campaigns).

Intel Inside

Launched in $1991$, it was the first trademark in the electrical component industry, designed to build consumer confidence in microprocessor quality.

Needs

Psychological deprivation, such as the basic requirements for food and shelter.

Wants

Needs shaped by culture and the individual personality, such as choosing a burger versus tofu.

STP

The second step of the marketing process, standing for Segmenting, Targeting, and Positioning.

Market Segmentation

The process of describing customer heterogeneity and dividing the market into distinct groups.

Targeting

Choosing which specific customer segments to serve.

Positioning

Identifying key benefits of an offering and points of difference with rivals to define how to serve the market.

Marketing Mix (The 4 P’s)

The tools used to develop a marketing program: Product, Price, Place, and Promotion.

Frequency Marketing Programs

Programs that reward customers who buy frequently or in volume to encourage brand concentration.

Club Marketing Programs

Programs that offer members special discounts and create member communities, such as PlayStation Home.

Market Orientation ($1990\text{s}$)

The practice of continuously collecting information on customers and competitors to increase customer value and satisfaction.

Customer Experience Management ($2000\text{s}$)

Managing customer interactions everywhere to ensure they are positive, satisfied, and loyal in a customer-centric organization.

BCG Growth-Share Matrix

A portfolio analysis tool that classifies products based on Market Growth Rate and Relative Market Share into Stars, Question Marks, Cash Cows, and Dogs.

Stars (BCG Matrix)

Products in the portfolio with high market growth rate and high relative market share.

Cash Cows (BCG Matrix)

Products in the portfolio with low market growth rate and high relative market share.

Question Marks (BCG Matrix)

Products in the portfolio with high market growth rate but low relative market share.

Dogs (BCG Matrix)

Products in the portfolio with low market growth rate and low relative market share.

Market Penetration

A growth strategy focused on selling more current products in existing markets.

Market Development

A growth strategy focused on selling existing products in new markets, either geographic or new segments.

Product Development

A growth strategy focused on selling new products in existing markets.

Diversification

A growth strategy focused on selling new products in new markets.

Consumer Purchase Decision Process

The $5$-step process including: Problem recognition, Information search, Evaluation of alternatives, Purchase decision, and Post-purchase behaviour.

Cognitive Dissonance

Post-purchase anxiety experienced by a consumer after making a buying decision.

High Involvement Purchase

A purchase that is expensive, has serious personal consequences, or reflects on social image, requiring extensive information search.

Market Leader Strategy

A strategy to encourage habitual purchase by keeping quality high, using reinforcing ads, and avoiding stock-outs.

Challenger Strategy

A strategy to encourage variety seeking through coupons, trial offers, and "try something new" advertisements.

Psychological Influences

Internal factors influencing purchase decisions: motivation, learning, personality, values/beliefs, perception, and lifestyle.

Socio-Cultural Influences

External factors influencing purchase decisions: influential people, family, reference groups, culture, social class, and subculture.

Situational Influences

Contextual factors influencing purchase decisions: reason for purchase, temporal effects, social setting, physical setting, and antecedent state.