Unit 1 Marketing Assessment and Strategy Prep Guide

Fundamentals of Marketing and Strategy

  • Marketing Definition: The comprehensive process of identifying specific customer needs, creating products or services to meet those needs, delivering value to the target audience, and promoting those offerings.

  • The Seven Functions of Marketing: Effective marketing requires covering all seven core functions rather than focusing solely on advertising. These functions include:

    • Pricing.

    • Distribution.

    • Selling.

    • Product/Service Management.

    • Marketing Information Management (MIM).

    • Finance.

    • Promotion.

  • Marketing Mix (The 4 Ps): The strategic combination of Product, Price, Place, and Promotion used by a business to market its offerings effectively.

  • Marketing Information Management (MIM): The systematic process of collecting and analyzing data regarding customers, market trends, and competitors. This data is used to inform smart business decisions, such as a grocery delivery app studying reorder patterns to plan future promotions.

  • Unique Selling Proposition (USP): A specific feature or benefit that distinguishes a product from all of its competitors, providing a reason for customers to choose that brand over others.

  • Marketing Plan: A formal written strategy for a product or service. It encompasses research, strategy, budget, and implementation.

    • Executive Summary: A short summary located at the very front of the marketing plan. Although it is the first section a reader sees, it is typically written last.

    • Action Plan Requirements: For a list of tactics to be considered a usable action plan, it must include a specific timeline and a budget.

Economic Utilities

Economic utility refers to the value or satisfaction a consumer receives from a product. There are four primary types:

  • Form Utility: Value added when a business transforms raw materials into a finished, useful product for the consumer.

  • Possession Utility: Value added by making it easier for a customer to own or acquire a product.

    • Examples include offering loans, financing options, "buy now, pay later" checkout features, or digital payment methods like Apple Pay.

  • Time Utility: Value created by making a product available when the customer needs it.

    • Example: A 24-hour pharmacy that never closes provides Time Utility, not Place Utility, because the value is derived from the hours of availability.

  • Place Utility: Value created by having a product in a convenient location where the guest or customer is already located.

    • Example: A hotel installing mini-fridges stocked with snacks in every room creates Place Utility because the guest does not have to travel elsewhere to find physical goods.

Strategic Analysis Tools

  • SWOT Analysis: A framework used to evaluate a business based on internal and external factors.

    • Internal Factors: Strengths (SS) and Weaknesses (WW) are elements the business can directly control.

    • External Factors: Opportunities (OO) and Threats (TT) are outside forces to which the business must respond.

  • PESTLE Analysis: An external analysis tool used to evaluate macro-environmental factors that impact a business. These include:

    • Political.

    • Economic.

    • Social.

    • Technological.

    • Legal.

    • Environmental (e.g., a juice company switching to recyclable bottles due to ocean plastic pollution).

  • SMART Goals: A framework for setting effective business objectives.

    • Specific: Clearly defined (e.g., "200 new followers").

    • Measurable: Quantifiable results.

    • Achievable: Realistic expectations.

    • Relevant: Aligned with business needs.

    • Timely: Includes a deadline or timeframe (e.g., "before the end of the month" or "within 60 days").

Market Structure and Competition

  • Market Size: The total combined sales of every business competing within a specific market.

  • Market Share: The percentage of total market sales held by a single company.

    • Calculation: Market Share=Company SalesTotal Market Sales\text{Market Share} = \frac{\text{Company Sales}}{\text{Total Market Sales}}

    • Example: If a market totals $80×106\$80 \times 10^6 in sales and one company earns $16×106\$16 \times 10^6:         1680=0.20→20%\frac{16}{80} = 0.20 \rightarrow 20\%

  • Direct Competition: Occurs between rival brands selling nearly identical products to the same buyer groups (e.g., two rival smartphone brands).

  • Indirect Competition: Occurs when businesses sell different types of products but compete for the same customer need or the same "discretionary dollar."

    • Example: A coffee shop and a canned energy-drink brand are indirect competitors because they both meet the customer's need for caffeine/energy.

  • Non-Price Competition: A strategy where a company competes on factors other than price, such as quality, service, or reputation.

    • Example: A furniture company that cannot match big-box store prices but retains customers through free design consultations and lifetime warranties.

Customer Segmentation and Perception

  • Market Segmentation: The process of dividing a broad market into smaller groups based on shared traits:

    • Geographic: Location-based segmentation.

    • Demographic: Based on statistics like age, gender, or income.

    • Psychographic: Based on values, hobbies, beliefs, and lifestyles (e.g., focusing ads on sustainability and minimalism rather than age).

    • Behavioral: Based on how customers interact with the product.

  • Product Positioning: The way a brand is perceived in the minds of customers relative to its competitors. It is a psychological concept, not a physical one.

    • Note: Rearranging a physical window display is considered merchandising or display, not product positioning.

    • Pricing can influence positioning; for instance, a skincare company may price a lotion at $45\$45 instead of $15\$15 so shoppers associate the higher price with higher quality.

  • Customer Journey: The chronological stages a customer moves through when interacting with a brand. The correct sequence is:

    1. Awareness: Seeing an advertisement.

    2. Interest: Researching the product online.

    3. Purchase: Buying the product.

    4. Retention: Continuing to use the product or staying with the brand.

    5. Advocacy: Recommending the product to friends.

Corporate Identity

  • Mission Statement: Explains the current purpose of the company and why it exists today.

  • Vision Statement: Outlines what a company aspires to become or achieve in the future.