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What is Value? (ch2)
the perceived benefits that a customer receives from a product or service in relation to its cost. (value = quality/price)
How can marketers create value? (ch2)
by discovering what consumers want and then delivering those wants by utilizing the 4 Ps.
What is SWOT analysis? (ch2)
an analysis on a business’ strengths, weaknesses, opportunities, and threats. marketers can use the analysis to monitor the external and internal marketing environment of a business.
Explain with the help of a Apple how marketers can use the SWOT analysis. (ch2)
Appple
STRENGTH: strong brand reputation, continuous product innovations, hardware, and vigorous financial performance
WEAKNESS: expensive prices, dependence on iPhone sales, and limited customization
OPPORTUNITY: emerging markets can expand to India and china, services growth like monetizing apple music, apple tv, and apple arcade
THREATS: intense competition like Samsung and Google, rapid technology advancements, termination of their electric car
After conducting the SWOT analysis you can understand how to create a marketing plan using each aspect of the analysis. Capitalize on strengths, address weaknesses by seeking partnerships, leverage opportunities, and mitigate threats by doing more research and planning accordingly.
What are strategic business units (SBUs)? (ch2)
are businesses that can be planned separately from the rest of the company. They have their own set of competitors and a manager that’s responsible for strategic planning and profit performance.
they have 3 characteristics: (1) it’s a single business or collection of related businesses that are planned separately from the rest of the company; (2) it has its own set of competitors; (3) it has a manager responsible for strategic planning and profit performance.
How can marketers assess SBUs? (ch2)
they can asses it by using a:
SWOT analysis
market analysis
competitive analysis
What is the BGC matrix? (ch2)
a strategic management tool used by marketers to analyze their product portfolio based on two dimensions: market growth rate and relative market share. (Questions, Stars, Dogs, Cash Cows)
Explain with the help of an example how marketers can use the BGC matrix. (ch2)
Disney's parks have a high relative market share, but a low market growth rate; therefor it would be categorized as a "cash cow". Now that we know that Disney's parks are categorized as a cash cow, we can use the diagram to infer that the parks are well established, but our opportunities are limited because we have low market growth.
What is the definition of marketing research as per the American Marketing Association (AMA)? (ch3)
the function that links the consumer, customer, and public to the marketer through information — information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions'; monitor marketing performance; and improve understanding of marketing process.
What are some purposes that marketing research can fulfill as identified in the AMA definition of marketing research? (ch3)
define problem, develop research, collect information, analyze information, present findings, make decision.
What are the six macro-environmental factors that provide opportunities/threats for companies? Describe each of the 6 macro-environmental factors with relevant examples. (ch3)
DEMOGRAPHIC: an aging population in many developed countries has led to increased demand for healthcare services
ECONOMIC: during an economic recession, consumer spending tends to decrease, impacting various industries such as luxury goods, travel, and real estate
SOCIO-CULTURAL: trend toward sustainability and eco-consciousness has led to increased demand for environmentally friendly products and practices
NATURAL: events like hurricanes, earthquakes, floods, wildfires, and tsunamis that can disrupt supply chains and infrastructure
TECHNOLOGICAL: the emergence of 5G technology has the potential to revolutionize industries such as telecommunications, IoT, autonomous vehicles, and augmented reality
POLITICAL-LEGAL: trade tariffs imposed by governments can impact industries involved in international trade, such as the automotive industry’s response to tariffs on imported steel and aluminum
What is customer lifetime value (CLV)? (ch4)
the net present value of the stream of future profits expected over the customer’s lifetime purchases.
What are three main parameters in the CLV calculation equation? What do each of the 3 main parameters in the CLV equation signify? (ch4)
CLV = ((m*r)/(1-r*WACC)) - CAC
m = margin while alive (dollar value of variable profits)
r= retention rate
CAC= customer acquisition cost
WAC= weighted average cost of capital (used as discount rate for investments)
In the Blue Apron case, which of the three CLV parameters should the company focus on in order to increase CLV? Why? (ch4)
the most immediate and impactful focus should likely be on Retention Rate (r). Here's why:
Retention Rate because high retention rate will produce
More customers continue to use the service over extended period of time increasing purchase frequency/recurring purchases.
Longer customer lifespans will contribute more to CLV and be more familiar and loyal to Blue Apron
The longer customers stay, the Customer Acquisition Cost will reduce. retaining existing customers is cost effective
What is the marketing funnel of attracting and retaining customers? (ch4) what is the principle of it? how to intervene to make people loyal?
1. Target Market
2. Aware: "i have heard of the brand."
3. Open to Trial: "i am open to trying the brand but have not done so."
4. Trier (non-rejecters): "i have tried the brand and would use again but have not done so in the past 3 months."
5. Recent User (once in past 3 months): "i have used the brand in the past 3 months but am not a regular user."
6. Regular User (at least once every 2 weeks): "i am a regular user but this is not my most ofter used brand."
7. Most Often Used: "i use this brand most often even though i do use other brands."
8. Loyal: "i always use this brand as long as it is available."
What are the five most important facets of managing a customer base? (ch4)
1. Reduce customer defection
2. Increase customer longevity
3. Share of wallet & cross/upselling
4. Terminate low-profit customers
5. Focus on high-profit customers
What are the four prominent ways to build customer loyalty? (ch4)
1. Close interaction
2. Loyalty programs
3. Institutional ties
4. Valuable brand communities
What are the four factors influencing consumer behavior? explain with help of examples. (ch5)
1. Cultural
Society we're raised in shapes us: religious food restrictions
2. Social
Who we're around changes our behavior: my mom says drugs are bad, so i don’t do drugs
3. Individual
Who we are shapes our behavior. I'm a female so I'm more likely to buy specific vitamins for women.
4. Psychological
How we think/perceive changes our purchase behavior. someone might want to buy a ferrari because they seek status and prestige
What are the five steps in the consumer decision making process? (ch5)
PROBLEM RECOGNITION
INFORMATION SEARCH
EVALUATION OF ALTERNATIVES
PURCHASE DECISION
POSTPURCHASE BEHAVIOR
Explain the consumer decision making process from the perspective of a buying laptop. (ch5)
1. Problem recognition
I now need to do computer work on the go
2. Information search
Googling about laptops, seeing what friends have
3. Evaluation of alternatives
Should I go with Apple, Dell, or Toshiba?
4. Purchase decision
Apple is the most reliable, I'll go with a iMac
5. Postpurchase behavior
The iMac was expensive but I'm happy I got it because now I fit in with everyone else that has an iMac
What are four ways of segmenting consumers? (ch6)
'Just describe yourself tbh'
Geographic: from california, north cal
Demographic: older gen z, female,
Psychographic: liberal, athlete
Behavioral: will buy clothes if they’re on clearance not full price
What is positioning? (ch7)
the space a brand owns in consumers' minds relative to that of its competitors.
Provide an example of a brand that has a differentiated positioning and explain which distinctive codes help the brand be distinctly identified by consumers. (ch7)
Target has a value proposition that others can’t match, “expect more, pay less.”
has a red target symbol that distinguishes themselves from their competitors, has a modern and inviting layout that anyone can recognize is target.
What are points-of-differences (PODs)? (ch7)
Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand.
What are the three criteria for PODs? (ch7)
Distinct
Important
Sustainably deliverable
What are points-of-parity (POPs)? (ch7)
Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands.
Sort of like industry standards.
What is perceptual mapping? (ch7)
when you create a graph with a variety of products/services and compare it against other products/services in the same industry.
How is perceptual mapping helpful in identifying successful brand positions? (ch7)
Your X and Y axis are things like: Budget - Expensive, Family - Sports,
Tasty - Healthy, Lower Price - Higher Quality, Limited
Selection - Wide Variety, Functional - Fun, etc.
It is helpful for identifying gaps in the market. The gaps are where marketers could place their brands.
What is the diffusion process? (ch9)
The process by which a new idea or new product is accepted by the market.
What are the five categories of adopters? explain with the help of an example. (ch9)
- Innovators: Eager to try new ideas and products, even at a
risk.
- Early adopters: Desire to earn the respect of others,
especially through advocating new products to others.
- Early majority: Weigh the pros and cons before adopting a
new product and rely on information from early adopters.
- Late majority: Adopt a new product because most of their
friends have already adopted it.
- Laggards: Primarily motivated by low prices/large discounts.
What are the six product characteristics affecting rate of acceptance and diffusion? (ch9)
Complexity
Compatibility
Relative Advantage
Observability
Trial-ability
Costs/Risks of Trial
Explain how each of the six product characteristics could affect the acceptance and diffusion of EVs. (ch9)
How complex is a product to use? How compatible is it with other existing technology? What its perceived superiority to existing alternatives (relative advantage)? What are its observable benefits? How easy is it to try the product? What does it cost me to try?
With EVs, everyone will have a different list of pros and cons that will affect how they perceive eclectic vehicles. Generally speaking, EV have complexity (easy to use - it's still a car), relative advantage (no gas $), observability (saving money, shiny new car), and trialability (test drive/try the car at home with some sellers) as pros that will benefit their rate of acceptance and diffusion into the market.
What is a product life cycle (PLC)? What are the four distinct stages in a PLC? (ch9)
the process of a product's growth, maturity, and decline over time. Its four stages are: introduction, growth, maturity, and decline.
How does profitability differ across the four PLC stages? Explain with the help of an example. (ch9)
a good indicator of where a product currently is in its life cycle.
For example, Electric Vehicles are currently in the growth phase as more people are purchasing them and switching to electric due to ever-increasing gas prices. A point of maturity would be when they're very common and their profitability is relatively consistent rather than making big gains year over year. Eventually, their profitability will decline as whatever rises to replace EVs in the future gets introduced into the market.
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