Marketing Management Quiz 1 Major Concepts

4 Myths of Marketing Myopia

1. Growth is assured by an expanding and more affluent population

2. No competitive substitute for the industry’s major product

3. too much faith in mass production & in advantages of dealing unit costs as output rises

4. Preoccupation to controlled scientific improvement and manufacturing cost reduction of a product

Core Question Managers Should Ask Themselves and What Mistake is Made When Answering?

What business are we in? — Answering too narrowly

Difference in Selling & Marketing

Selling: needs of the seller - converting product into cash

Marketing: needs of the buyer by means of a product that serves them

Dangers of Overly Strong Research & Development

• marketing gets shortchanged/neglected

• management becomes top-heavy with engineers, biasing toward research/production over marketing

• the org sees itself as "making things" not satisfying needs;

• customers get treated as unpredictable/inconvenient "not the problem"

• marketing becomes a stepchild

Two sets of decisions in marketing strategy formation (& what they cover)

Aspiration Decision: what value the product will represent to what kind of customer (what the firm hopes to achieve in a market): STP:

• Segmenting the market (identify groups to serve)

• Targeting, (selecting a group to address)

• Determining Positioning in customers’ minds (what should they think)

Action Plan Decision: The four P’s of the Marketing Mix (they must mix together to form a cohesive plan):

• Product Offered 

• Promotion: Communication to the customer about the product

• Place: mechanisms to distribute the product to the customer

^All create value for customers

• Price: primarily a way for the firm to capture some of the value that is has created

Shapiro’s 6-part Marketing Process

• Marketing Strategy Formation: Overall long-term goals and basic approach to the marketplace. Decisions on which customers to serve, customer wants to address and best way to create value for customers 

• Marketing Planning: Planning varies by industry, dynamic situations - plans regularly reworked, stable situations - basics of plan might extend over 2-3 years

• Programming, allocating, and budgeting: set near-term objectives & detailed plans (once a year), how resources will be allocated to the necessary activities. 

• Implementation: execute step 3

• Monitoring and Auditing: Evaluate results against goals, corrective action plans developed if needed. 

• Analysis & Research: gather needed data from inside and outside the company to support steps 1-4. This data should be gathered before executing each of the first four steps and should be ongoing

The 5 C’s

• Customer

• Company

• Collaborators 

• Competition 

• Context

Porter’s 5 Forces

Used to analyze a company’s industry:

1. Industry competitors

2. Potential entrants

3. Availability of substitutes

4. Buyer power

5. Supplier power 

SWOT

Strengths, Weaknesses, Opportunities, Threats

Tokenism

Role Entrapment:

Performance Pressure:

Boundary Heightening:

4 Elements of an effective positioning statement

Target customer, customer's wants, product type/category, key benefit delivered

Four types of conflict occurring between customer segments

1. Functional conflict: occurs when one customer segment impedes another segment’s ability to enjoy a brand’s products or services

2. brand-image conflict: source of value and self expression, when a brand attracts a new segment it can threaten authenticity, credibility, or purpose of the brand for other customers

3. user-identity conflict: arises if customers in one segment think they can’t use the brand to reliably signal their affiliation with a particular group b/c another segment has become associated with the brand 

4. ideological conflict: when a segment has values or beliefs that differ from or clash with those of another segment.

3 Strategies for resolving customer segment conflict

1. separate the segments: give each segment the space it needs to get what it wants from the bend without conflicting w/ other segments

2. create a hierarchy: turns incompatible relationship into a more manageable leader follower one often via subbrands

3. fire a segment: can be painful as you forgo a segment’s revenue. Long term risk of losses  from unresolved conflict makes the trade off worthwhile.

Divergent vs. Collaborative Value in the segment-relationship framework

Divergent = each segment gets independent, unrelated value from the brand (e.g., Timberland's blue-collar vs. fashion buyers)

Collaborative = one segment's value depends on the other segment's use of the brand (e.g., eBay buyers/sellers)

Define Value to the customer

A trade-off between perceived benefits and perceived sacrifice.

2 Prerequisites before a customer will purchase a product

1. Perceived Benefits outweighing sacrifice

2. Highest value within the consideration set of products (difference in benefits and sacrifice

VRIO

Selling Approach of product-centric and customer-centric firms

Product-centric asks "how many customers can we sell this product to?"

Customer-centric asks "how many products can we sell to this customer?"

4 organizational barrier standing between product-centricity and customer centricity

Structure

Culture

Processes

Financial Metrics