Marketing Test 1

10 most common perceptions people have about marketing

1. marketing is advertising

2. marketing is sales

3. marketing is evil

4. great products don’t need marketing

5. marketing lies

6. marketing is just for large companies

7. marketing is a waste of money

8. marketing is a job of the marketing team

9. only creative people can do marketing

10. marketing is to create a customer

customer acquisition vs retention

acquisition- acquire a new customer

retention- getting an old customer to buy again

Consumer lifetime value

value of the entire stream of purchases that a customer would make over a lifetime or patronage

Ex: losing a customer could lose you $50,000 in future sales

Customer Relationship Management (CRM)

process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction

Marketing

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

value has to be something that has functional, experiential, symbolic, or emotional value

want

form that needs take as they shaped by culture and individual personality

things you do not need for survival

need

State of deprivation- physical, social, individual

demand

wants backed by buying power

marketing myopia

focusing on only existing wants and losing sight of underlying customer needs

ex: insurance sells safety, not a piece of paper

Feature, Advantage, Benefit

what a product has

what features do

why customers buy

Ex: Anti-aging lotion features collagen, an advantage is that it reduces wrinkles, and the benefit is more confidence in oneself

Process of marketing planing (know structure and components)

Macro factors- PEST

Political-laws and gov pressure can change marketing

Economic-impact businesses and expansion (2008 crisis)

Social- buying patterns of different groups and societies

Technology-automation and innovation (new products, dramatic changes in marketplace, concern for saftey for new products)

Micro factors- 3 C analysis

understand the….

company

competitor

consumer

Gartner Hype Cycle

Age Brackets

Baby boomer: 1946-1964

gen x: 1965-1979

gen y (millennial): 1980-1994

gen z: 1995-2009

gen alpha: 2010-2024

market oriented mission statement

defines the business in terms of satisfying basic customer needs

core competency

harmonized combination of multiple resources and skills that distinguish a firm in the marketplace

business model

describes the rationale of how an organization creates, delivers, and captures value

business model canvas

used as a tool to create and analyze the business model

Monetization strategies for digital products and services

• one time transaction- pay to download an app

• e-commerce- earn margins by selling-amazon

• subscriptions

• ads-supported-youtube

• Freemium- charge users for premium features off a free product- Spotify

Boston Consulting Group (BCG) Matrix

• star- new product wanted in fast growing industry (Apple watch or airpods)

• cash-cow- well established and steady flow of money, hope is to get a lot of “milk” from here to fund other things (iphone)

• question marks- have potential but require significant investment to increase market share and become stars (vision pros)

• dogs- do not generate much profit and drain resources- try to phase these products out (IPod- old and outdated)

Product Market expansion grid

market penetration- toothbrush head

product penetration- electric toothbrush

market development- korean tooth brush

diversification- mouth wash

Growth Strategies (3)

compete more effictively

satisfy stakeholders

attract top talent

Marketing Return on Investment (ROI)

a measure of managerial effectiveness and efficency

Net Profit before income tax/total marketing investment

=1 is break even

You’re doing great Ethan and Patrick!

Halfway!

Pioneer advantage

Pioneers get an advantage in being the first, but it is not gaurenteed they will be the best in the market

Indirect competition

competitors that offer different products or services but fulfill similar needs or solve similar problems for the target audience

Ex: Bookstores and Nintendo both compete for entertainment

3 competitive strategies

product leadership

operational excellence

customer intimacy

Market Leader

expand the market or customer range by adding products

Market challenger

Attack competitor

Challengers attack strategies (5)

1) Frontal-match opponent directly

2) Flank- attack weakness of leader

3)Encirclement attack- take a wide slice of enemy territory

4) Bypass attacks- attack easier markets or broaden products

5) Guerrilla attack- small, intermittent attacks to secure footholds

Defense Strategies

1) Position defense-ignore opponent

2) Flank defense- attack weakside (washmouth example)

3) Preemptive defense- leader attacks before enemy starts offense

4) counteractive defense- respond w/counterattack when attacked

5) mobile defense- stretch out domain over new territories for future defense

6) contraction- become smaller

Almost done 🙂

Utility Maximization

individuals and companies seek to achieve the highest level of satisfaction from their economic decisions

NOT FULL PROOF
Consumers do NOT gather all available information, make rational decisions, purchase best value, or have common traits and motivations

Types of consumers: influencer

Buy it ASAP

Types of consumers: Initiator

I’ll buy it for my Dad

Types of consumers: Decider

Okay go buy it, but don’t overspend

types of consumers: buyer

Send the link I’ll use my card

types of consumers: end user

Looks good, I’ll use it

4 factors influencing consumer behavior

• cultural

• social

• personal

• psychological

culture

subculture

behaviors, values, perceptions from family or other important institutions

group of people within a culture

Each generation has slightly different core values shaped by events that occur in their lifetimes

Innovation Diffusion Curve- know percentile and characteristics

Innovators 2.5%- venturesome and try new things

Early Adopters 13.5%- adopt new ideas carefully

Early Majority 34%- deliberate, adopt new ideas before average person

Late Majority 34%- skeptical, majority of people must try it

Laggards 16%- tradition-bound and suspicious of change

Selective attention

tendency to screen out most info they are exposed to

selective distortion

people interact with info that will support what they believe

selective retention

remember good points made about brand they favor and forget good points about competing brands

Attitudes

a persons evaluations, feelings, and tendencies toward an object or idea

involvement

persons perceived relevance of the object based on inherent needs, values, and interests

Elaboration likelihood Model (ELM MODEL)

Two forms for how people are persuaded

High involvement- pay attnetion to central product, elaboration, deep thought

low involvement- peripheral, non-product info, shallow thoughts, brand attitude

5 model of purchase making decision

needs-recognition- consumer wants and needs

information search- personal, commercial, public, experiential sources

evaluation of alternatives- “consideration set”- brands must be included in consideration or customers won’t be bought

purchase decisions- what, where, when, how much

post purchase behavior- satisfied/dissatisfied

Net promotor score

Subtract the total of positives (10/9) from negatives (0-6) for total. NUMBER CAN BE NEGATIVE

ex: 25 happy, 15 not happy

nps= 25-15=10

Consideration set

SWOT

strengths, weaknesses, opportunities, threats