Untitled Flashcards Set

Competition & Business Environments

• Who is My Competition?

  • Companies selling the same product (cheap vs. premium versions).

  • Companies making substitutes for your product.

  • Companies competing for customer budgets (e.g., streaming services vs. movie theaters).

  • Startups with disruptive technology.

• Category Captain: A leading brand in a retail category that helps retailers decide which products to stock.

• Challenges in Understanding Customer Needs:

  • Needs change constantly.

  • Customers may not know what they want.

  • Consumer behavior varies by product, context, and people involved.

Marketing Strategies & Tools

B2B vs. B2C Marketing

Trends in B2B Marketing

• Inside Sales Force: Handles simpler sales remotely.

• Outside Sales Force: Deals with complex sales and builds relationships.

• AI in B2B: Used for lead generation, customer profiling, and sales predictions.

Macro Trends in Marketing

• Demographic: Aging population, changing family sizes.

• Social: Health, sustainability concerns.

• Technological: AI, online shopping growth.

• Economic: Inflation, recession risks.

• Political: Government regulations, trade policies.

Corporate Growth Strategies

1. Market Penetration: Selling more of existing products to current markets.

2. Product Development: Creating new products for existing customers.

3. Market Development: Expanding into new markets with existing products.

4. Diversification: Entering completely new markets with new products.

BCG Matrix (Business Growth Tool)

BCG Matrix Pros:

• Easy to use

• Helps decide where to invest
  BCG Matrix Cons:

• Assumes all businesses are independent

• High market share ≠ always profitable

Segmentation & Targeting Strategies

• Segmentation Methods:

  • Geographic (location-based)

  • Demographic (age, gender, income)

  • Psychographic (lifestyle, values)

  • Behavioral (buying habits)

• Targeting Approaches:

  • Niche Market: Focuses on small, specialized groups.

  • Mass Market: Tries to reach everyone (e.g., Coca-Cola).

  • Growth Market: Targets fast-growing segments.

Positioning & Repositioning

• Physical Positioning: Based on real product features (e.g., battery life).

• Perceptual Positioning: Based on customer perception (e.g., luxury branding).

• Repositioning: Changing how a brand is seen in the market (e.g., Garmin shifting from car GPS to fitness devices).

Consumer Insights & Post-Purchase Management

• How to Get Consumer Insights:

  • Surveys, focus groups, digital tracking, social media analysis.

• Why Post-Purchase Management Matters:

  • Impacts customer satisfaction, loyalty, and brand reputation

Industry Attractiveness & the PC Industry

Industry attractiveness determines if a market is profitable and worth entering. A common tool used for this is Porter’s Five Forces:

1. Threat of New Entrants – Can new companies enter easily? (PC industry: Moderate – high costs but some new brands emerge).

2. Bargaining Power of Suppliers – Do suppliers have control over pricing? (PC industry: Low – multiple suppliers like Intel, AMD).

3. Bargaining Power of Buyers – Can customers demand lower prices? (PC industry: High – many brands to choose from).

4. Threat of Substitutes – Are there alternatives? (PC industry: High – tablets, smartphones replacing PCs).

5. Industry Rivalry – How intense is competition? (PC industry: High – Dell, HP, Apple, Lenovo constantly competing).

What Makes an Opportunity Attractive?

A business opportunity is worth pursuing when it meets these criteria:

✔ Proprietary Advantage – The company has something unique (e.g., a patent, strong brand).
✔ Difficult to Imitate – Other companies can’t easily copy the business model (e.g., Apple’s brand ecosystem).
✔ Economic Viability – The company’s model makes financial sense (e.g., many dot-com businesses failed in the 2000s because they lacked profitability).

Focus Groups: Pros & Cons

Pros:
✅ Provides deep insights into customer preferences.
✅ Encourages real-time discussion for better understanding.
✅ Helps companies test ideas before launching products.

Cons:
❌ Expensive and time-consuming.
❌ Small sample size = not always representative.
❌ Groupthink – people influence each other’s opinions.

👉 Alternative Methods for Customer Insights

• Surveys (larger sample size, cheaper).

• Social media analysis (real-time, unfiltered opinions).

• Data analytics (tracks actual buying behavior).

Challenges in Understanding Customer Behavior

1. Customers are diverse – Different people want different things.

2. Behavior changes by product and situation – A person buys coffee differently than they buy a car.

3. Social influences matter – Friends, influencers, and media shape buying choices.

Why Manage Post-Purchase Outcomes?

After buying a product, customers:

• Feel happy = brand loyalty (good reviews, repeat purchases).

• Feel buyer’s remorse = negative perception, refunds, bad word-of-mouth.

👉 Managing post-purchase experiences helps:

• Improve customer satisfaction.

• Reduce returns and complaints.

• Strengthen brand loyalty.

Dark Sides of Marketing to Youth

👎 Concerns:

• Overconsumption (kids pressured into buying things they don’t need).

• Unrealistic body images (beauty standards, fitness ads).

• Addiction to technology (targeted ads in gaming and social media).

🛑 How Countries Are Protecting Youth:

• Limits on junk food advertising (UK bans unhealthy food ads for children).

• Stricter data privacy laws (COPPA in the U.S. protects children’s online data).

• Bans on deceptive marketing (Sweden bans direct advertising to kids under 12).

Segmentation: Why It’s Important

✔ Populations are aging or shrinking – companies need new ways to grow.
✔ Customers are more diverse and picky – mass marketing doesn’t work.
✔ Microsegmentation allows companies to target specific needs.

Types of Market Segmentation

1. Geographic – Based on location (e.g., McDonald's menu varies by country).

2. Demographic – Age, gender, income (e.g., luxury brands target high-income consumers).

3. Psychographic – Lifestyles, values (e.g., eco-friendly brands appeal to environmentalists).

4. Behavioral – Buying habits (e.g., frequent vs. occasional coffee drinkers).

5. Benefit-Sought – What people want (e.g., whitening toothpaste vs. cavity protection).

Assessing Segment Attractiveness

🔍 Use these criteria:
✔ Substantial – Big enough to be profitable.
✔ Reachable – Can be targeted through ads.
✔ Responsive – Customers will actually buy.
✔ Profitable – Good revenue potential.
✔ Identifiable – Clear who belongs in the segment.

Three Targeting Strategies

1. Niche Market Strategy – Focuses on small, specialized groups (e.g., luxury watches).

2. Mass Market Strategy – Targets everyone (e.g., Coca-Cola).

3. Growth Market Strategy – Focuses on fast-growing segments (e.g., electric cars).

Positioning: Physical vs. Perceptual

🔹 Physical Positioning: Based on real product features (e.g., battery life, horsepower).
🔹 Perceptual Positioning: Based on brand image and consumer perception (e.g., Rolex = luxury, even if cheaper watches exist).

👉 Benefits of Physical Positioning:
✅ Easy to compare features.
✅ Useful for new product development.

👉 Limitations of Physical Positioning:
❌ Customers often care more about perception than features.
❌ Not always meaningful (e.g., megapixels in cameras don’t always = better pictures).

What is a Value Curve?

A value curve is a graph showing how different brands compare on key attributes. It helps companies:

• Find competitive advantages.

• Identify opportunities for differentiation.

• See where they are weak vs. competitors.

Positioning vs. Repositioning

✔ Positioning – Creating a brand image from scratch (e.g., Tesla as innovative and high-tech).
✔ Repositioning – Changing how a brand is seen (e.g., Old Spice going from an “old man” brand to a cool, young brand).

Consumer Insights & Business Benefits

🔍 Why They Matter:

• Help design better products.

• Improve marketing effectiveness.

• Increase customer satisfaction and loyalty.

How to Get Consumer Insights:
📊 Surveys & Focus Groups – Ask people directly.
💻 Social Media Monitoring – Track trends.
📈 Data Analytics – Look at customer behaviors.

Product-Centric vs. Customer-Centric Business Models

🏭 Product-Centric – Focuses on what the company makes (e.g., Kodak making film instead of adapting to digital cameras).
👤 Customer-Centric – Focuses on what customers want (e.g., Netflix using data to suggest personalized shows).