marketing exam

Marketing

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

Production concept

Internal capabilities of the firm

Product concept

Feature of the product

Selling concept

Aggressive sales techniques and belief that high sales result in high profits

Marketing concept

Satisfying customer needs and wants while meeting organizational objectives

Business portfolio

Collection of business, brands or products that a company own

●Ex: Disney – Entertainment; Sports; Experiences

Strategic business units (SBUs)

One distinct business or product lines within that portfolio that can be planned separately

Build

increase investment/share (probably Question Mark/Star)

Hold

maintain the current position (probably Cash Cow)

Harvest

reduce investment and maximize short-term cash (Except

Star)

Divest

Sell or discontinue (probably Dog/ Question Mark)

The 3 C’s - The market environment

o Company

o Competition

o Customer

The 4 P’s – The actions company can take

o Product

o Price

o Promotion

o Place

STP

o Segmentation, Targeting and Positioning are the foundations

Customer Heterogeneity

All customers are different in

terms of their need/want

o Individual differences

o Life experiences

o Functional needs

o Self-identify/image

o Marketing activities

What is a segment?

• A group of consumers that are similar on one or more dimensions

• Similar (homogenous) within group, different (heterogeneous)

between groups

Geographic Segmentation

• Urban/Rural

• Region

• State

• Country

• Time zone

Demographic Segmentation

• Age

• Age

• Gender

• Income

• Occupation

• Family size

• Education

• Religion
“Who they are”

Psychographic Segmentation

• Values’ Goals

• Needs

• Pain points

• Interest

• Lifestyles

• Personality

• Social status
“Why they buy”

Behavioral Segmentation

• Usage level

• Purchase habit

• Loyalty

• Responsiveness

• Spending habit

• State

• Time zone

• 
  

• “How they buy”
  
  

Differentiable

Separation of customer types between segments

Measurable

Segment membership can be identified; characteristics,

size and growth of segments can be measured

Substantial

Must be profitable to service the segment

Accesible

Segments can be (or will be) serviced by the company’s

product or service

Actionable

The company can use a mix of the 4 P’s to target

Requirements for Effective Segmentation

Targeting

The process of evaluating segments and selecting one or

more segments as the focus of certain marketing mix

decisions (4P)

Competitive fit

Can we deliver the right product, at the right price, in the right place

better than competitors?

Market potential

Is the segment large enough and does it have sufficient purchasing

power?

Profitability trade-offs

Cost/Profit tradeoffs of serving multiple segments?

Undifferentiated

Mass marketing

Differentiated

Segmented marketing

Concentrated

niche marketing

Micro

Local/individual marketing

Cannibalization

“A loss of sales of an existing product caused by

the introduction of another product from the

same company.”

Product (Targetting strategies)

Customization, different features

Price (Targetting strategies)

price discrimination

Promotion (Targeting Strategies)

Advertising, media selection

Place (Targeting strategies)

distribution channels

Positioning

The firm’s effort to create a distinct and valued position in consumers’ minds

Position

The place a brand occupies in consumers’ minds relative to competitive offerings

Competitive advantage

an advantage over competitors gained by offering greater customer value

Frame of reference

The category or set of alternative against which consumers compare a brand

Points of Parity (POP)

What customers expect

Points of Difference (POD)

What makes the brand stand out

Positioning statement

brings the major decisions together

Consumer needs

A state of deprivation

• Physical needs — food, clothing, safety

• Social needs — belonging, affection

• Individual needs — self-expression, knowledge

Customer wants

• The specific ways to satisfy these needs

• Need when shaped by culture and individual personality becomes wants

Customer demands

• Wants for specific products or service

• Human wants that are backed by buying power

Consumer Decision Process

Recognition of Need → Information Search → Evaluation of Alternatives → Purchase Decision → Post-Purchase Evaluation

Need Recognition

• Need or want for a particular product/service

• Occurs when buyers are faced with an imbalance between actual and desired states

• Triggered when consumer is exposed to external stimulus

Information Search

Search information to help identify alternative products

External Information Search

Process of seeking information in the outside environment

Evaluation

Weighing the pros and cons of each product

Attributes often compared:

• Price

• Performance/features

• Design/brand image

Purchase

Consumer decides:

• Whether to buy

• What to buy

• How to pay

• When to buy