Marketing 201 - Part 2

Love, swing, hate groups

\-Love: understands benefits

\-Swing: biggest opportunity

\-Hate: ignores

*Sell to the swing group through the eyes of the love group*

Ways to segment the market (most used to most usefu;)

\-Geographic

\-Demographic

\-Psychographic

\-Behavioral

5 characteristics of segmentation

\-Measurable: individuals can be assigned a segment and be counted

\-Accessible: individuals can be reached through the promotion and distribution channels

\-Durable: segment membership and size are constant over time

\-Substantial: segment is large enough to make products profitable

\-Meet unique needs: needs sought by thee segment membership are homogenous within each segment and different across segments

Targeting

Selecting one or more of these groups to sell to

Ways to position (most used to most useful)

\-How you are ***as good*** as the competition

\-How you ***beat*** all the competition

\-How you are ***loved by popular people***

\-How you fit ***consumer’s lifestyles***

\-How you deliver what is ***most valued***

Positioning methods

\-Perceptual mapping: helps understand how consumers perceive brands

\-Gap analysis: compares brands on the importance and performance of their features and benefits

\-Hierarchical values analysis: elicit distinctions, pyramid down, ladder up

Unique selling proposition (3 parts)

\-Each ad must make a proposition to the customer

\-The proposition must be the one that the competition either cannot or does not offer

\-Proposition must be so strong that it can move the masses and pull new consumers to the product

4 types of shoppers

\-Brand loyal shoppers: high brand sensitivity, low price sensitivity

\-Deal shoppeers: high brand sensitivity, high price sensitivity

\-Price shoppers: low brand sensitivity, high price sensitivity

\-Convenience shoppers: low brand sensitivity, low price sensitivity

Product price / Consumer benefit Matrix

Competitive angle

\-Unique or different

\-Makes a personal connection

\-Lifts consumer over a hurdle

5 questions to sharpen the competitive angle

\-Need to believe: what pain point does this address?

\-Reason to believe: how effective is the demonstration of this in capturing the imagination of the target audience?

\-Dominate situations: in which usage or buying situations does the product dominate in a way that delivers superior value?

\-Quantifiable support: what are the relevant facts and figures?

\-Unique product claim: how is this product better or different than its closest competitor?

Product life cycle

\-Introduction stage

\-Growth stage

\-Maturity stage

\-Decline stage

Types of brands

\-Functional: superior performance or economy

\-Image: desirable image

\-Experienital: unique, engaging experience

Types of business products

\-Materials and parts

\-Capital items

\-Supplies and services

Types of consumer products

\-Convenience products: candy bars, cereal

\-Shopping products: smartphones, TV, phone plan

\-Specialty products: designer clothes, fine dining

\-Unsought products: cemetery plots, life insurance

Product Item

Specific version of a product, such as a Honda Civic

Product line

Closely related items competing in the same general product category, such as the Honda CR-V or Accord

Product mix

All products offered by the company, such as Honda lawnmowers or scooters

Levels of a product

\-Core product: personal benefit that makes the product valuable

\-Actual product: the tangible part of the product that defines it and sets it apart from the competitors

\-Augmented product: the services that complement the actual product and core product

Product adoption process

\-Innovators: first to try new ideas, have more money and education

\-Early adopters: first to follow innovators’ lead, wait for a green light from innovators

\-Early majority: product must be proven to be successful, and must complement their way of life

\-Late majority: skeptical of innovations and buy new products when they are the only reasonable alternative

\-Laggards: buy new products only when the alternatives are no longer available

New product development process

\-Idea generation

\-Idea screening

\-Concept testing: most critical stage

\-Marketing strategy

\-Business analysis

\-Product development

\-Test marketing

\-Commercialization

Types of brand names

\-Invented brand names: good because there are no preconceived ideas or conflicts with trademarks

\-Compound brand names: may not have a strong emotional connection, but they are clear on the functional benefits of the brand

\-Ambiguous brand names: challenging because name on its own has no meaning, but they can still be good with marketing and money

\-Brand names that fizzle: evoke negative thoughts and result in failed products

Three goals of a brand

\-Resonate with customers

\-Differentiate from competitors

\-Motivate employees

Building brand equity

\-Brand awareness: consumers know about the brand

\-Brand image: consumers have a definite impression of the brand

\-Brand loyalty: consumers only purchase their favored brand

\-Brand equity: brand loyalty is transferred to new products

4 characteristics of services

\-Intangibility: experiences are intangible and subjective

\-Inseparability: provider and service are inseparable

\-Variability: services can be inconsistent

\-Perishability: services cannot be “saved” like products

7 P’s of Service Marketin

\-Product, price, place, promotion

\-People: service providers

\-Process: how the service is provided and delivered to each customer

\-Physical environment: can provide evidence of quality

Service marketing triangle

5 determinants of service quality

\-Reliability

\-Responsiveness

\-Assurance

\-Empathy

\-Tangibles

How customers determine value

\-Reference prices

\-Competitors

\-Substitutes

\-Marketing efforts

Unit contribution

Unit price - unit variable cost

Total contribution

unit contribution x total number of units sold

Total costs

Fixed costs + variable costs

Total revenue

Price x Quantity

Total cost

Fixed cost + (unit variable cost x quantity)

Profit

Total revenue - total cost

Break even volume

Fixed cost / (price-unit vc)

Percent margin

Price - unit vc / price

Elastic vs inelastic

\-Elasticity is the percentage change in quantity demanded relative to a percentage change in price

\-If something is elastic, that means a small change in price results in a large change in quantity demanded

Price skimming

Selling at a high price to begin with and make costs

Price penetration

Selling at a low price to gain market share

Four pricing approaches matrix

\-Cost plus pricing: company accounts total cost and then adds on margin needed to make the return; ignores customers and competitors

\-Competitive pricing: similar to cost-plus but better because it takes into account what competitors are charging

\-Value pricing: charge a price high enough to capture customer value, but not so high as to encourage competition

\-Golden goose pricing: charges the highest price a buyer is willing to pay

Push strategy

Pushing the product out to the consumer by making products readily available through various channels of distribution

Pull strategy

Pulling the customers to your product

Promotional mix

\-Advertising

\-Sales promotion

\-Personal selling

\-Public relations

\-Direct marketing

Personal selling

\-Two-way communication between a buyer and a seller designed to influence a purchase decision

\-Main components are persuasion, customer assistance, and mutual benefits

Advertising objectives

\-Cognitive: build awareness

\-Affective: gain interest and liking

\-Behavioral: stimulate action

Measuring effectiveness of an ad

\-What percentage of people remember the ad and product?

\-What percentage of people remembering the product can also remember the brand?

\-What percentage of people remembering the product and brand can also remember the key benefit?

Traditional media marketing vs social media marketing

\-Traditional media is one-way communication

\-Social media is used to reach “active receivers” who will become influential by sharing the brand with friends

3 objectives of social media marketing

\-Reach: build awareness

\-Engage: customer retention

\-Convert: drive sales by winning new customers

Buyer persona

\-A sketch or composite picture of the ideal customer who buys or may buy a firm’s products

\-Created by talking to and following everyday people who use, purchase, or may buy your product or services

Why use social media?

\-Greater flexibility

\-Credible

\-Can build awareness and interest at a lower cost