Marketing exam two

Segmentation

puts buyers into groups that have common needs and respond similar to marketing actions; benefits company and customer, delivers value to the customer, does NOT exploit them

why segment for businesses?

1) identify unfulfilled needs (canes example, founder saw need for college students to have cheap and good food and good jobs) 2)better product design (canes placed in college towns and suburbs for tired and poor customers like families and students) 3) targeted promotions 4) higher customer satisfaction

why segment for customer?

1) convenience and time saver (canes has a simple menu, fast and easy to order) 2)tailored products and services (i want chicken fingers and fries, or ex cheescake factory so expensive because they have so much on their menu, expensive to store inventory) 3) relevant offers(canes located on college campus or suburbs, easy to feed kids- only one option) 4) personalized experience (canes everyone loved high value, employees are high value and kind etc)

value

enables companies to taylor their offer to consumer groups, identify market opportunities, and improve satisfaction by enhansing convinience, revenue, etc

segmenting consumer markets 3 sections

who, what, why

segmenting consumer markets: who

are the customers, demographics, psychographics(spotify intrests), geographics (mcdonalds changes from country to country)

segmenting consumer markets: what

have the customers done, usage and loyalty (canes calls customers caniacs)

segmenting consumer markets: why

are they buying it, needs, preferance, decision process

criteria when selecting target segments*

1)market size 2)expected growth 3) competitive position 4) cost to reach 5)company fit

criteria when selecting target markets: market size*

needs to be large enough to be profitable (ex whiteclaw's market is 25% of men who don't like beer and all people over 21)

criteria when selecting target markets: expected growth*

if small now, you must expect growth (ex whiteclaw tied into growth in market with sparkling waters growth!)

criteria when selecting target markets: competitive position*

the less competition, the more attractive the market (ex whiteclaw was only alcohol seltzer drink)

criteria when selecting target markets: cost to reach*

don't waste money if its too hard to access (whiteclaw used social media targeting new drinking generations)

criteria when selecting target markets: company fit*

segment should fit with company objectives (company owns whiteclaw also owns mikes hard lemonade)

market positioning

position is a cold hearted, no nonsense statement of how you are perceived in the minds of your prospects (marketing consultant harry B)

perceived value

example with all 8 water brands and how WE describe them

*value =

perceived value-perceived costs; is NOT the same as benefits

positioning statement

how you wish to be concieved, NOT a slogan, used internally only-ex managers, 1-2 most important benefits, what makes product different from competition

4 elements of a positioning statement

1) define target market 2) the value 3) evidance 4) the competitve set

4 elements of a positioning statement: target market

for who, when, and where, particular type of person, usage scenario, and location

4 elements of a positioning statement: the value

what value, unique claim brand offers from customers viewpoint

4 elements of a positioning statement: evidance

why and how, provide customers with proof of claims

4 elements of a positioning statement: competitive set

relative to whom, who are the competitors (ex: job interview= other people in the room)

product life cycle*

the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline

product class

the entire product catagory of industry

product form

variations of a product within product class

product modification

alter one or more of a products characteristics, quality, performance, appearance; increase value and sales

market modification

strategies that company uses to find new customers, increase products use with existing customers, or make new use scenarios

Tradeup

add value to product with more features

tradedown

reduce products number of features, quality, or price

points of difference

attributes or benefits that consumers associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand want to be 10% differnent

points of parity

Associations that are not unique to the brand but can be shared with other brands, points that are similar, want to be 90% same

sunny d example points of parity and difference*

shows brand effectiveness, who buys it-parent, why-kids want it, whats good-vitamin d, evidance-of the vitamin d, competition- other OJ doesnt compare, all shown in the compercialf

vitamin water example points of parity and difference

Competition is yoga, therapy, product is healthy, point of difference has vitamins making it healthy compared to other drinks, uses athlete to show its for sporty people point of parity shows its a sport drink

product life cycle- intro *

BRAND AWARENESS/ INFORM+ EDUCATE

Early adopters, technology seeking customers (value from trying new technology), get social value from owning it first; awareness, social proof and educate (ex costco samples, have celebritys in ads)

Product Life Cycle -Growth*

PERSUADE

sales rise and a product / service becomes more popular with greater market share; social proof and awareness

Product Life Cycle - Maturity*

REMIND

The stage where sales begin to peak and slow down, potentially as competitors enter a market; remind users of product (coke comercial polar bears and picnics that remind you)

Product Life Cycle - decline *

PHASE OUT

The stage where sales are falling and profits decline, CHOICE to reposition or bankrupt (ex: subways repositioning as healthy food)

social proof example

dr approved, #1 reccomended

product types- high learning

slow to start then peak, technology or iphone at start took time to understand

product types- low learning

peak like upside down U, simple to use, no need to educate (food or clothing, smartphone is now low learning) marketing can be fun and simple like the AI ad for apple this year

product types- fashion product*

can come and go over and over again, things like jeans(skinny, bell bottom etc) or scrunchies

product types- fad product*

comes out of no where, quick to peak and then never seen again, (ex: gangnam style, fidget spinner, labubu, hydroflasks)

brand equity*

the competitive value a brand name gives to a product beyond the functional benefits provided, people will pay extra for same product just because of name not benefits (starbucks example pricing)

brand personality*

think of a brand as a person, high quality, clean; set of traits people attribute to a product as if it were a person

what counts is how a brand is PERCIVED in eyes of CUSTOMERS

(ex zara personality is sleek, cutting edge, professional)

brand effectiveness

what counts is how a brand is percieved in the eyes of a customer and not how a company views it

promotion

Communication by marketers; awareness, information, attitude, call to action

awareness*

coke's share a coke campaign, ads on billboards or arenas (youre not actually going to read the details but it makes u aware the product exists)

information*

infomercials, print ads in magazines, instructional videos like the 2007 iphone ad on how to use

attitude*

nike had image of lifestyle/ identity, use celebrities, ethical marketing

call to action*

asks the customer to do something, do in growth or end of growth phase ex: new customer gets $200, sign up now to get ____

customer engagement

optimise this with cogntive, emotional, and behavioral investment that consumers make in interactions with a brand (you remember only 5/2000+ ads a day)

marketers must do this to be effective

stay consistent and aligned

strategic intent: mission

What are the objectives of the communication?

Strategic Intent: Market

To whom is the communication addressed?

Strategic Execution: Message

What is the story to be communicated/message told

Strategic Execution: Media

Where and how will the story be delivered?

Strategic impact: Money

How much will be spent to communicate?

Strategic impact: Measurement

How will impact be assessed? (how many ppl walk into our store, what is conversion rate, who views our website each day etc)

Ways to Address Audience: mass

ex: superbowl commercials, ton of people, not all are target audience, everyone is aware

Ways to Address Audience: segment

ex: podcast, know all people watching are similar

Ways to Address Audience: customized

ex: cable tv ads aren't random they are customized to customers on channel, its expensive and time-consuming, but 1:1 communication with target consumer

Ways to Address Audience

mass, segment, customized, consumer to consumer

Ways to Address Audience: Consumer to consumer

trustworthy, word of mouth communication, free ex: ice bucket challenge, or supreme clothes

inbound

consumer COME TO YOU, consumer driven, free, yet time-consuming, and you wait for people to come (blog, social media, SEO rank on Google, consentual email blast)

outbound marketing

YOU GO TO CONSUMER, not waiting for response, downfall costs money and many uninterested, marketer driven sales, (tv and print ads, text blast, telemarket, email blast to unapproved lists)

advertising*

PAID placement of item by a sponsor (pay fb pay newspaper)

direct marketing*

customized marketing, email marketing, ads that follow you on internet

consumer promotion*

give consumers a push to buy, using tools such as premiums, coupons, promotional products, samples, coupons, rebates, and displays (mcdonalds promotion 2 for 1 example )

Personal Selling*

person to person sales, people need someone to help them understand, sell TVS, sell cell phones

product placement

way to reach consumers who don't look at ads, put product in a game, in a movie or show, forcing you to watch (transformers new camero car launced and advertised)

demographics

Describe population based on a set of selected characteristics (ex, canes is college students, family in suburbs)

Psychographics for canes

people who are busy and on the go, short of time or money

white claw success

first to target new market, new gen, bubbly water, men who liked to drink but didn't like beer, want masucline and people who like to have drinks to bring to go but don't like beer, due to its unhealthiness etc, but like low alc rate, dont want wine or liquor

targeting involves

Evaluating attractiveness of each market segment, Selecting one or more segments to pursue, establish and communicate the distinctive benefits of the market offering (ex: know customers come to gas station in the am you can tell them every morning we will have fresh donut and coffee ready)

positioning statement skeleton

for TARGET MARKET brand X is the only brand among all COMPETITOR SETS that has a VALUE CLAIM because they have REASON TO BELIEVE VALUE

what is a product

anything that is offered to a market for consumption that satisfies a need, provides value

tangible product

cars, phone, laptop

intangible product

service, nothing in hands of customer, legal advice, dr checkup, education

characteristics of services

intangibility, inseparability, inconsistency, inventory

Effective service inventory...

balances demand, scheduling, and profitability

process of new product development*

1) strategy development 2) idea generation 3) Idea screening 4) Business analysis 5) product development 6) Test marketing 7)Product launch

most expensive and risky stage of product development*

PRODUCT LAUNCH ex method soap bottle shape didn't do well once launched no one bought COST millions and hurt REPUTATION

Reasons for New Product Failures *=main ones discussed

1. Insignificant differences*

2. Incomplete market and product protocol before product development starts

3. Not satisfying customer critical needs*

4. Bad timing

5. No economical access to buyers

6. little market attraction *

7. Poor execution of the marketing mix: brand name, package, price, promotion, distribution

8. bad product quality

New Product Failures: not satisfying customer critical needs

example of keruig kold, beverage machine made cold pops, not needed compared to buying simple cold beverages, recalled entire product

New Product Failures: little market attraction

example of 3D TVS, not needed by consumers and didn't attract a large audience

lifestyle commercials

connect people with a specific lifestyle or identity, shapes viewers attitudes toward a brand

celebrity endorsements

leverage celebrity influence to endorse products, transfers celebrities appeal toward a brand

CSR campaign (corprate social responsibility)

highlight a brands commitment to ethical practices and charity, fosters a positive brand image through social responsibility

CTA (call to action) ads

coupons, social media offers, search engine marketing (sem) all offering new customers get $200 or sign up now for ____, etc

ethical marketing

there is a difference between knowing your customers and KNOWING your customers (ex: talk about mt dew, then have mt dew ad on your phone is creepy)

segments of holiday gas station

1) am group 2) pm group 3) noon group 4) weekend 4)only gas ~find target market, who is most profitable of all these segments?

what does segmenting do

creates value for company and customers

why are clear brand positioning statements powerful

they help consumers categorize where brands fit compared to competitors

mc donalds coffee example*

shows their product is good quality (points of parity) uses good beans also shows how cheap their product is (points of difference)

fad v.s. trend*

fad could last weeks-months, trends last years, marketers need to bet on if its a fad or trend

LG fad v.s trend scenario

2010 LG had touch phone, LG thought that smart phones would be a fad, lost out on millions because phones became a trend/way of life, discontinued phone production

brand equity allows what*

a higher price due to brand name, starbucks, lululemon, apple

brand repositioning*

the changing of a brands image and moving it to a new area (ex: subway image changed to be healthy, then changed to be retro hip brand targeting younger people)

unique characteristics of a service

intangability, inseperablility, inconsistency, inventory