MK ALL

What is marketing?

Marketing is the art and science of creating value by designing and managing successful exchanges.

Why shift focus from producer to customer?

Marketers Achieve Higher Profits when focus shifted from Producer to Customer. ie. Apple: profits through sales volume much less profitable than profits through customer satisfaction

Upstream | Strategic Decisions

• where is the market opportunity?

• what are unmet needs?

• who are the target consumers?

• what alternatives do customers have?

Downstream | Tactical Decisions

• what benefits resonate with customers?

• how should product be priced?

• how will customers gain access?

• how will customers gain awareness?

how does marketing create value?

Product: develop a variety of offerings, including goods, services, and ideas, to satisfy customer needs

how does marketing capture value?

pricing: determine how much customers are willing to pay and assess whether a profit can be made at that point

how does marketing communicate value?

promotion: inform, persuade, and remind buyers about a product or service to influence attitudes, drive purchase

how does marketing deliver value?

place: place, or supply chain management, describes activities necessary to get the product to the right customer when a customer wants it

• Value-oriented marketers constantly measure

Option A

the goal of efficiency against the price charged by competitors.

Option B

the problem of price maximization against cost-efficiency.

Option C

promotional effectiveness against ethical advertising standards.

Option D

the desire to achieve against the need for a stable source of supply.

Option E

perceived customer benefits against the costs of their offerings.

Option E

perceived customer benefits against the costs of their offerings.

Value-oriented marketers constantly measure the benefits that customers perceive against the cost of their offerings. They use available customer data to find opportunities to better satisfy their customers’ needs, keep down costs, and develop long-term loyalties.

• What is a core aspect of marketing?

Option A

Creating a product that everyone will want to buy

Option B

Making product, place, promotion, and price decisions

Option C

Satisfying as many needs as possible

Option D

Increasing the company’s profit

Option E

Setting prices lower than all competitors

Option B

Making product, place, promotion, and price decisions

Most of these answers are too broad. Marketers don’t generally try to sell to everyone, and they don’t necessarily strive to have the lowest price. Instead, they select customers they can successfully serve and design a marketing mix (product, place, promotion, and price) to meet those needs.

• Which element of the marketing mix is most relevant to the activity “capturing value”?

Option A

purchasing

Option B

product

Option C

place

Option D

promotion

Option E

price

Option E

price

The marketing mix activities are promotion (communicating value), product (creating value), price (capturing value), and place (delivering value)

• The marketing goal of getting the “right quantities to the right locations, at the right time” relates to

Option A

performing service marketing.

Option B

managing the supply chain.

Option C

managing the workflow process.

Option D

managing price and performance.

Option E

communicating the value proposition.

Option B

managing the supply chain.

Supply chain management is the set of approaches and techniques that firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and other firms involved in the transaction (e.g., transportation companies) into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, and at the right time, while minimizing systemwide costs and satisfying the service levels required by the customers

The fundamental goal of marketers when creating goods, services, or combinations of both is to

Option A

serve all consumers.

Option B

stimulate short-term sales.

Option C

operate according to government regulations.

Option D

defeat the competition.

Option E

create value.

Option E

create value.

While some of the other answers are things that marketers and their firms have to consider, the fundamental purpose of marketing activities is to create value for consumers.

marketing plan: 3 phases

1. planning phase

2. implementation phase

3. control phase

planning phase

1. business mission and objective

2. situation analysis + SWOT

implementation phase + marketing strategy

3. identify opportunities: segmentation, targeting, positioning

4. implement marketing mix: product, price, place, promotion

control phase

5. evaluate performance using marketing metrics

1. business mission and objectives

must be specific, actionable, measurable, and have a set time frame

2. situation analysis + swot

analyze how a firms strengths and weaknesses allow firm to leverage opportunities and deflect threats

3. indentify opportunities

define customer by segment; identify positioning that appeals to this target

4. implement marketing mix

activate marketing mix to bring positioning to market`

5. evaluate performance using marketing metrics

metrics used to assess a business depends on the company’s overall strategy. metrics may include sales revenue, year over year revenue growth, return on marketing spending, market share, awareness, social media engagement, etc.

growth share matrix

ansoff matrix

_______________ refers to the process of dividing the market into groups of customers with different needs, wants, or characteristics.

1. Option A

   Allocation

2. Option B

   Positioning

3. Option C

   Market Segmentation

4. Option D

   Target marketing

5. Option E

   Value capture

1. Option C

   Market Segmentation

The process of dividing the market into groups of customers with different needs, wants, or characteristics—who therefore might appreciate products or services geared especially for them—is called market segmentation.

If a firm wants to develop a sustainable competitive advantage, it should

1. Option A

   copy the innovative features of other firms that are attractive to customers.

2. Option B

   increase its marketing budget so that it outspends its competitors.

3. Option C

   examine its operations and customer relations to identify significant things competitors cannot easily copy.

4. Option D

   begin an aggressive campaign to buy up competitors.

5. Option E

   arrange to meet with competitors to discuss how to avoid direct competition.

1. Option C

   examine its operations and customer relations to identify significant things competitors cannot easily copy.

A sustainable competitive advantage comes from doing things that add value and that are not easily imitated by competitors. The other options do not achieve this objective.

Price should be based on

1. Option A

   name-recognition for the brand.

2. Option B

   the image the product confers to the consumer.

3. Option C

   how well the product fits with what has been advertised about the product.

4. Option D

   the cost to create the product.

5. Option E

   the value the customer perceives as a good “deal” for the product they receive.

1. Option E

   the value the customer perceives as a good “deal” for the product they receive.

As part of the exchange process, a firm provides a product or a service, or some combination thereof, and in return, it gets money. Value-based marketing requires that firms charge a price that customers perceive as giving them a good value for the product they receive

When positioning products relative to competitors’ offerings, firms typically are most successful when they focus on opportunities

1. Option A

   that build on their strengths relative to those of their competition.

2. Option B

   where customer excellence can be substituted for product excellence.

3. Option C

   in international markets.

4. Option D

   where value-based pricing can be ignored.

5. Option E

   for diversification.

1. Option A

   that build on their strengths relative to those of their competition

Firms typically are most successful when they focus on opportunities that build on their strengths relative to those of their competition

The process of defining the marketing mix variables so target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products is known as

1. Option A

   allocation

2. Option B

   value creation

3. Option C

   market positioning

4. Option D

   market segmentation

5. Option E

   target marketing

1. Option C

   market positioning

Market positioning involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products.

primary data

gives insight about local, specific context:

can be quantitative as in surveys, and qualitative as in interviews or focus groups

secondary data

gives broader context

seeks reputable source such as US Census, national associations, library databases

qualitative data

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

appropriate for product development

may inform quantitative data collection

ie. focus groups, reviews, interviews, social media

quantitative data collection

aim for prediction generalizability, quantifying

how many? how much? how often? at what price?

ie. surveys, A/B tests, sales data

research steps

define objectives and research needs

design research

data collection process

analyze data and develop insights

action plan and implementation

define objectives and research needs

to better understand customer experience

designing the research

observe customer experience

data collection process

focus groups, interviews, observations, secondary data from NDP, Nielsen, Sales data, surveys

analyze data and develop insights

organize, interpret qualitative data

analyze relationships within numerical, sales data

summarize survey responses

action plan and implementation

take steps to strengthen operations

when conducting in-depth interviews

we are searching for insights that surprise use

ask unstructured, open-ended questions

identify themes, supported by verbatims

what kind of insights would you seek with qualitative?

• what characteristics and behaviors of the customers most likely buy?

• what is the nature of the problem they want to solve?

• what is the search process?

• what influenced their choice?

• what are their judgements, associations, thoughts, preferences?

• what else would customers consider?

what kinds of predictions would you make with quantitative research?

• are younger or older consumers more likely to buy?

• are men or women more likely to buy?

• what attracts customers to purchase? Benefit A or B?

• at what price is purchase intention highest?

surveys

useful tools to make predictions about US market

probability sampling

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

ie. surveys sent to students from randomly generated BU ID numbers

non-probability sampling

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

is. Questrom students pass around surveys in their classes of 50

When consumers are unable to articulate their experiences,________ becomes particularly useful in understanding consumers’ preferences.

1. Option A

   surveying

2. Option B

   a focus group

3. Option C

   Observation

4. Option D

   primary data mining

5. Option E

   in-depth interviewing

C. Observation is especially helpful if people are unable to explain their experiences and preferences. Instead of asking them to think about these issues, people’s actual behavior can be observed.

What kind of tools help marketers make sense of data and use it to make appropriate business decisions?

1. Option A

   observation

2. Option B

   data publication

3. Option C

   churn

4. Option D

   syndicated data

5. Option E

   marketing analysis

E. Marketing analytics is used to make sense out of data. In particular, marketing analytics uses advanced technologies and models to gather data, so that marketers can improve their decision making, optimize their returns, and make appropriate customer-related decisions.

Which statement is true about quantitative research?

1. Option A

   It confirms insights and hypotheses generated via qualitative research.

2. Option B

   It includes focus group interviews.

3. Option C

   It revises the research objective based on data mining.

4. Option D

   It is always conducted using primary data collection.

5. Option E

   It offers conclusions that are always correct.

A

Which statement best describes secondary data?

1. Option A

   Secondary data will always meet the researchers’ needs.

2. Option B

   Secondary data are those data collected to address specific research needs.

3. Option C

   Secondary data collection is always extremely time-consuming and expensive.

4. Option D

   Secondary data include only qualitative research.

5. Option E

   Secondary data are pieces of information that have been collected prior to the start of the focal research project.

E. Secondary data are pieces of information that have been collected prior to the start of the focal research project. Secondary data include external as well as internal data sources and might come from free or very inexpensive external sources

In the Coke-New Coke market research, 54 percent of consumers, in a blind taste test, preferred the New Coke formula to the existing formulation. This is an example of a(n)________ marketing research method.

1. Option A

   qualitative

2. Option B

   syndicated

3. Option C

   observational

4. Option D

   quantitative

5. Option E

   invalid

D. Quantitative research is numeric/statistical in nature, as in this case where the precise percentage of consumers preferring one option to the other was measured. Formal studies such as specific experiments, scanner and panel data, or some combination of these are quantitative in nature.

target segmentation selection

1. set objective/strategy

2. select key segmentation variables

3. create segmentation tree and grid

4. evaluate segment attractiveness

5. select target market

6. identify and develop positioning

set objective/strategy

informed by SWOT

select key segmentation variables

determine relevant characteristics

create segmentation tree and grid

estimate size, reachability of segments

evaluate segment attractiveness

assess segment potential

select target market

identify segment of focus

identify and develop positioning

establish value proposition

bases for segmentation

who- geographic, demographic

what- behavior

why- benefits, psychographic

who- geographic, demographic

location

age

income

education

profession

industry

marital status

what- behavior

usage

loyalty

deal proneness

responsiveness to marketing mix

why- benefits, psychographic

needs

preferences

decision processes

lifestyles

personality

social networks

types of targeting

undifferentiated/mass

differentiated/multimarket

concentrated

micromarketing

undifferentiated/mass targeting

no differentiation among segments

differentiated/multimarket

multiple segments simultaneously- design different products to meet the needs of different segments (sports cars, minivans, SUVs, etc.)

concentrated

single segment- small firm or firms with a unique product ie. porsche, ferrari

micromarketing

custom, one-to-one

positioning

set of strategies used to ensure that an offering occupies a distinct and valued place in the minds of the target segment

“how does my offering deliver value to my target customer better than the competition?”

perceptual map

shows positioning of product relative to competition in target segment’s mind

When evaluating the attractiveness of the segment, if a segment is expected to react positively to the firm’s offering, we say that the segment is

1. Option A

   reactive

2. Option B

   responsive

3. Option C

   substantial

4. Option D

   reachable

5. Option E

   identifiable

B. For a segmentation strategy to be successful, the customers in the segment must react similarly and positively to the firm’s offering. This is referred to as a responsive segment.

What would be used in calculating the profitability of a segment?

1. Option A

   segment size

2. Option B

   geographic segmentation

3. Option C

   product positioning

4. Option D

   demographics

5. Option E

   segment perceptions

A. A calculation of segment profitability uses segment size, estimated segment adoption percentage, purchase behavior (frequency and price), profit margin percentage, and fixed costs.

Marketers often employ a combination of segmentation methods, using________ to identify and target their customers, and________ to design products and messages to appeal to them.

1. Option A

   undifferentiated targeting; differentiated targeting

2. Option B

   lifestyle segmentation; geographic segmentation

3. Option C

   loyalty segmentation; demographics

4. Option D

   demographics and geography; lifestyle or benefit segmentation

5. Option E

   loyalty segmentation; geodemographics

D. Knowing what benefits customers are seeking or how the product or service fits a particular lifestyle is important for designing an overall marketing strategy, but such segmentation schemes present a problem for marketers attempting to identify specifically which customers are seeking these benefits. Firms often employ a combination of segmentation methods, using demographics and geography to identify and target marketing communications to their customers, then using benefits or lifestyles to design the product or service and the substance of the marketing message.

What is a key element of a value proposition statement?

1. Option A

   the ability to the mass market

2. Option B

   the financial state of the company

3. Option C

   the target market

4. Option D

   the price of the product or service being offered

5. Option E

   the location of the company headquarters

C. The value proposition statement consists of a target market, an offering or brand name, a product or service category or concept, and the unique point of difference or benefits.

Psychographics is the segmentation method that delves into how consumers

1. Option A

   describe themselves.

2. Option B

   allocate scarce incomes to a variety of goods and services.

3. Option C

   value their livelihoods.

4. Option D

   adjust to demographic changes.

5. Option E

   believe other people see them.

A. Psychographic segmentation is the one that delves into how consumers actually describe themselves. Usually marketers determine (through demographics, buying patterns, or usage) into which segment an individual consumer falls.

decision-making process breakdown

need recognition

information search

alternative evaluation

purchase

post purchase

marketing funnel

awareness

interest

desire/consideration

action/puchase

re-purchase, loyalty

need recognition

need state, desired state

information search

internal search, external search

alternative evaluation

evaluative criteria, determinant attribute

purchase

action

post purchase

positive, negative

need recognition- trigger

a gap between actual and desired situation

if gap is big enough, it can trigger a reaction

triggers may be self generate or prompted by marketing

information search → consideration set

universal set → retrieval set → evoked/consideration set

universal set

ie. all winter coat brands known and unknown to consumer

retrieval set

brands consumers can easily recall from memory

evoked/consideration set

brands consumer would consider purchasing (positive association)

evaluative criteria

all the criteria you are considering

determinant attribute

the criteria among choices that overrides all other attributes

compensatory rule

consumers evaluate products by weighting their beliefs about products’ attributes according to importance

non-compensatory rule

a product’s weakness on one attribute cannot be offset or “compensated” by strong performance on another attribute

choice architecture

people are more likely to stick with the default than switch → setting full option as default is most profitable

optimizing purchase

make purchase process faster and easier to avoiding choice overload and decision paralysis

influences on consumer decision making

marketing mix

psychological factors

social factors

situational factors

marketing mix

product

price

place

promotion

psychological factors

motives

attitudes

perceptions

learning

lifestyle

social factors

family

reference groups

culture

situational factors

purchase situation

sensory situation

temporal state

high involvement

extended problem solving- consumers are high involvement decision makers when they percieve risks in decision

low involvement

habitual decision making- low involvement consumers rely on cues, brand, loyalty

limited problem solving- impulse buying

Big-box retailers regularly move products from one aisle to another. They also put personal-care products in the pharmacy area, many aisles away from the grocery products. Consumers who spend more time walking through the store are likely to buy things they hadn’t planned to buy, or make

1. Option A

   impulse purchases

2. Option B

   ritual consumption purchases

3. Option C

   extended problem-solving decisions

4. Option D

   affective alternative decisions

5. Option E

   routine problem-solving decisions

A. A common type of limited problem solving is impulse buying, a buying decision made by customers on the spot when they see the merchandise. It is a form of limited problem solving.

Marketers are particularly interested in postpurchase behavior because it

1. Option A

   involves both compensatory and noncompensatory consumers.

2. Option B

   involves both actual and potential customers.

3. Option C

   avoids situational conflicts.

4. Option D

   offers insights into information search methods.

5. Option E

   involves actual rather than potential customers.

E. Unlike prepurchase behavior, postpurchase behavior reflects the characteristics of actual customers. Satisfied customers may be a source of future purchases and/or positive word of mouth.