Marketing Strategy: Customer Decision Journey & STP Framework

Flashcards covering key marketing concepts from the lecture including System 1 vs System 2 thinking, customer decision journeys, segmentation criteria, targeting strategies, and the Chase Sapphire Reserve case study.

System 1 Thinking

A fast, automatic, emotional, and shortcut-driven mode of decision-making used for frequent choices.

System 2 Thinking

A slow, analytical, effortful, and rational mode of decision-making.

Heuristics

Mental shortcuts that enable quick decision-making, such as relying on brand familiarity or assumptions about quality.

Word of Machine

The emerging product discovery model where artificial intelligence algorithms evaluate and recommend specific products directly to consumers.

Customer Decision Journey (McKinsey)

A circular framework describing the buying process through consider, evaluate, buy, and enjoy/advocate/bond phases, incorporating a loyalty loop.

Customer Experience Journey

The complete sum of experiences, interactions, and touchpoints a customer navigates when engaging with a company or brand.

Paradox of Choice

The phenomenon where offering too many product options increases initial attraction but leads to decision deferral and lower final purchases.

Nudge

Intentional subtle design or messaging cues, such as displaying limited inventory alerts, used to reduce purchase friction and prompt action.

Customer Delight

A high level of customer satisfaction created when an experience exceeds expectations through joy and unexpected positive elements.

Micro-influencers

Content creators with smaller, highly engaged followings who provide higher perceived authenticity for brand endorsements than major celebrities.

HENRYs

An acronym standing for 'High Earners, Not Rich Yet,' representing upwardly mobile, affluent consumers.

Market Segmentation

The strategic process of dividing a potential market into distinct groups that share similar needs and respond to targeted marketing propositions.

STP Framework

A core strategic marketing process consisting of Segmentation, Targeting, and Positioning.

Demographic Segmentation

Grouping consumers based on measurable population characteristics such as age, gender, income, and generational cohort.

Psychographic Segmentation

Grouping consumers based on internal attributes like lifestyle, values, personality traits, and interests.

Behavioral Segmentation

Dividing consumers according to measurable actions, including usage frequency, spending habits, and brand interactions.

Firmographics

Organizational attributes used for B2B market segmentation, such as industry, firm size, ownership type, and purchasing structure.

Persona

A descriptive profile representing a customer segment, used by marketers to humanize target audience data.

Targeting

The evaluation and selection of one or more specific market segments to focus organizational resources and tailored value propositions upon.

Majority Fallacy

The error of automatically targeting the largest market segment, which often suffers from heavy competition and market saturation.

Chase Sapphire Reserve

A premium credit card launched by Chase targeting affluent millennial travelers ('HENRYs') using non-traditional marketing, high point values, and distinct product design.