MKTG Final Exam

Market Segmentation

Dividing a market into distinct groups based on characteristics to tailor products and marketing strategies.

SWOT Analysis

Evaluating a company's internal strengths and weaknesses, and external opportunities and threats to make strategic decisions.

Perceived Value

The worth customers assign to a product or service, often higher than its actual cost.

Positioning Statement

Describes how a brand differentiates itself from competitors in the minds of consumers.

Product Development

Process of creating new products or improving existing ones to meet customer needs and solve problems.

Branding

Establishing a unique identity for a product or service to differentiate it in the market.

Pricing Strategy

Plan that determines how a company sets prices for its products or services.

Promotional Elements

Various tools and tactics used to communicate with customers and promote products or services.

Media Types

Different channels used for advertising, such as TV, radio, social media, each with its advantages and disadvantages.

What are the 4 steps in the marketing process?

1. Research 2. Segmentation and positioning 3. the 4 Ps (product, price, place, promotion) 4. Sell the product

What are the business benefits for segmentation?

1. Identification of unfulfilled needs 2. Better product design 3. more targeted promotions 4. increased customer satisfaction

What are the customer benefits for segmentation?

1. Convenience and time savings 2. tailored products and services 3. relevant offers 4. Personalized experience

Why do marketers use targeted promotions?

Saves money and time

Why segment?

It brings value, it creates and delivers value.

Real Value

Actual cost

Perceived value

What customers think the value is (often higher than the real value, if its higher than the customers real value, they will buy).

What is SWOT and how is it used?

SWOT: Strengths, Weaknesses, Opportunities, and Threats. It is a current overview of where the company is at. Strengths and weaknesses are inside the company, and opportunity and threats are external. UNDERSTAND INSIGHTS AND TRADEOFFS

What are the different ways to segment markets?

Demographics, geographics, psychographics, behavioral. + usage, (needs, preferences, decision process)

Demographics

Basic characteristics: Gender, ethnicity, age, religion, education

Geographics

Physical location: Urban vs suburban, country / region

Psycographics

Personality

Behavioral

Customer behavior: Purchase behavior, usage.

Usage

Recency, frequency, loyalty, profitability. Target the most loyal and the most profitable (usually the same group)

Needs, preferences, decision process

Requires research, but if you know these, you can create the perfect marketing mix.

Needs

If you understand what they want, need, and how to go about it, you have to position your perceived value.

Targeting

How do you know which segments to target? You cannot target all segments. YOU CAN’T MARKET TO EVERYONE, IF YOU TRY, YOU WILL BE MARKETING TOWARDS NO ONE.

How do you know which segments to target?

Need to 1. evaluate attractiveness of each market segment 2. Selecting one or more segments to pursue. 3. Designing marketing programs to serve segments.

Criteria in selecting target segments?

1. Market size (needs to be large enough and profitable) 2. Expected growth (if it is small now, must expect growth) 3. Competitive position (less competition, more attractive) 4. Cost to reach (don’t waste money) 5. Company fit (segment should fit w/ company objectives).

Cost to reach

You don’t want to waste your money on promoting the wrong ways (white claw example) → needs to have growth.

Positioning

How you are perceived in the mind of you consumers.

Value formula

Value = perceived benefits - perceived costs

Value in marketing:

Marketing is understanding your consumers and delivering that perceived value. Value is all in the mind of the consumers.

What are the 4 elements to a positioning statement?

1. Defining the target market (who? when? where?)

2. The value (what value?)

3. The evidence (why and how?)

4. The competitive set (relative to whom?)

What happens if a company needs to reposition?

A company would reposition and then have to answer the question of what is the unique value that we are going to give to the customers.

Product

Anything that is offered to a market for consumption that satisfies a need. It provides value and solves a problem.

Characteristics of services?

1. intangibility (can’t touch)

2. Inseparability (simultaneous creation and consumption)

3. Inconsistency (Starbucks drinks can taste different)

4. Inventory (there isn’t really any inventory)

Steps in new product development process?

1. Strategy development

2. Idea generation

3. Idea screening

4. Business analysis

5. Product development

6. Test marketing

7. Product launch

Reasons for new product failures

• Insignificant points of difference

• Incomplete market and protocol before product development starts

• Not satisfying a need on a critical factor

• Bad timing

• No economical access to buyers

• Too little market attractiveness

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

• Poor product quality

Example of new product failure

Google glasses → The market was not attractive; people didn’t see it as a need or a want. (Lesson: Think ahead about what failures you might encounter).

Points of difference

Attributes or benefits consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competing brand.

Points of parity

Associations that are not necessarily unique to the brand but may be shared with by others.

Product life cycle stages

1. Introduction (wanting to inform people on the product)

2. Growth (persuading people)

3. Maturity (reminding people about your product)

4. Decline (to phase out)

Maturity

How to get customers to engage: reminding tactic

• Commercials/marketing serve to remind consumers that the product exists

• More fun and exciting commercials

• Consumers already know what the product is

Product life cycle in decline, what should we do?

2 choices

1. Discontinue brand

2. Repositioning: Change brand image to try and restart and make it successful again

(subways athletes instead of Jered)

Different types of products

• High learning products

• Low learning products

• Fashion product

• fad product

High learning product

Tesla, iPhone: People are reluctant because they don’t know enough about it; companies need to educate/guide consumers (tech)

Low learning product

Low involvement purchases, no worrying about buying it / how to use it (iPhone Face ID commercial)

Fashion product

Fashion is the one thing that comes and goes (trends)

Fad Product

Silly bands, fidget spinners: Super fast upwards but then can immediately decline.

Brand Equity

Added value a brand name gives beyond product benefits

• gives brand competitive advantage

• Consumers are often willing to pay a higher price for brand equity

Brand personality

A set of human characteristics associated with a brand name

What counts for branding?

Is how a brand is perceived in the eyes of customers. NOT how it is viewed by the company

Pricing equation

Pricing = perceived value, not real value

Why can brands like supreme charge $200 for a shirt?

Because supreme is perceived as high value and luxury, so it can charge high prices.

When do consumers purchase?

Consumers purchase when perception of value is greater than price. Customers care about value more than the price.

What are the 3 steps to cover before you decide your pricing strategy

1. What is the goal of the product or business

2. Conduct a through market pricing analysis. Similar to step 1, what’s your company’s position in the market? Think Tesla vs Walmart

3. Analyze your target audience.

Psychology of Pricing: Decoy effect

Common tactic at restaurants (it costs them nothing for a combo but we are willing to pay the few extra dollars)

Psychology of Pricing: Anchoring

Discount stores; They will slap a sticker over the original tag so you can see the original price, and how much you are saving.

Psychology of Pricing: fair and Switch

Black Friday. When you bring them into the store with super deals and they end up buying something else.

Communications

Process of conveying message to others. Requires source, message, channel of communication, receiver, encoding, and decoding

Integrated marketing communication

Designing marketing communications programs that coordinate all promotional activities to provide a consistent message across all audiences

Why promote?

1. Awareness

2. Information

3. Attitude (or image)

4. Call to action

Promotional Mix

The combination of one or more communication tools used to (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product

Promotion decision process

Planning, implementation, evaluation

Inbound marketing

Consumer driven, timely, content rich, solution based. EX: Blogging, social media, SEO, Podcasting, Email blasts to approved lists

Outbound marketing

Marketer driven, disruptive, hard sell, product based. EX: Broadcast and print advertising, cold calling, telemarketing, trade shows, email blasts to purchased lists.

Product advertising

Focused on selling a product or service.

• Pioneering (informational)

• Competitive (persuasive)

• Reminder