Podcast
Questions and Answers
What is the primary purpose of customer segmentation in market research?
What is the primary purpose of customer segmentation in market research?
Which of the following best describes the concept of TAM, SAM, and SOM in market analysis?
Which of the following best describes the concept of TAM, SAM, and SOM in market analysis?
What is a Unique Selling Proposition (USP) primarily used for?
What is a Unique Selling Proposition (USP) primarily used for?
In Strategic Positioning, what is the main goal of understanding physical evidence?
In Strategic Positioning, what is the main goal of understanding physical evidence?
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How does customer experience management optimize the service process?
How does customer experience management optimize the service process?
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What is the primary purpose of market segmentation?
What is the primary purpose of market segmentation?
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What does the acronym TAM SAM SOM stand for in market analysis?
What does the acronym TAM SAM SOM stand for in market analysis?
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What is a Unique Selling Proposition (USP)?
What is a Unique Selling Proposition (USP)?
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Strategic positioning is primarily concerned with which of the following?
Strategic positioning is primarily concerned with which of the following?
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Customer experience management focuses on which key aspect?
Customer experience management focuses on which key aspect?
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Study Notes
Marketing Definition
- Marketing is the process of creating, communicating, delivering, and exchanging value for customers, clients, partners, and society.
Key Marketing Functions
- Creating: Product or service development based on customer needs and desires.
- Communicating: Advertising, branding, and promotions communicating the product's value.
- Delivering: Channel and logistics ensuring the product is available when and where the customer needs it.
- Exchanging: Transactions of goods/services for value, whether through physical stores, e-commerce, or other platforms.
Evolution of Marketing
- Production Orientation (Late 19th - Early 20th Century): Focused on mass production and efficiency. Demand was higher than supply, so companies produced and expected customers to buy. Focused on quality and innovation, assuming customers would naturally prefer superior products.
- Sales Orientation (1920s - 1950s): Companies began focusing on aggressive sales tactics and advertising to push products.
- Marketing Orientation (1950s - Present): Companies began understanding customer needs and desires. Companies started making products based on market research.
- Societal Marketing Orientation (Late 20th Century - Present): Emphasizes long-term customer relationships, societal well-being, sustainability, and corporate social responsibility (CSR).
Understanding Customers
- Customer-Centric Marketing: Understanding customer behavior, preferences, and pain points helps in designing tailored products and services.
- Segmenting the Market: Dividing the market into segments to target specific groups more effectively.
- Meeting Expectations: Customers expect more from the product, they expect seamless, personalized experiences across all touchpoints.
Adapting to the Market Environment
- Competition: Companies must constantly monitor competitors and adjust marketing strategies to differentiate and stay relevant.
- Technology: Technological advancements can disrupt the industry, helping brands evolve quickly.
- Regulations: Companies must adapt to product safety, advertising, and environmental regulations.
Service Marketing Considerations
- Customer Experience: Mapping the customer journey to identify critical touchpoints and optimizing the process for maximum satisfaction.
- Automation and Technology: Automating processes where possible (self-services, online check-ins) enhances efficiency and customer satisfaction.
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Physical Evidence: The tangible elements that help customers to evaluate service quality.
- The Importance of Tangible: Even though service is intangible, physical evidence (uniforms, web-design) is required to provide reassurance to customers.
- Brand Image and Physical Cues: Physical evidence helps reinforce brand identity and signal quality.
- Online Physical Evidence: Social Media, websites, etc. These are essential to deliver a complete and consistent service.
Differences between Service and Products
- Intangibility: Service can't be seen or touched before purchase.
- Inseparability: Produced and consumed simultaneously, requiring customer interactions.
- Variability: Service quality may vary depending on who is delivering it.
- Perishability: Service can't be inventoried.
Market Research
- Market research is the process of gathering, analyzing, and interpreting information about the market, customers, and competitors.
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Key Uses:
- Identifying customer needs and preferences.
- Understanding market trends and competitive dynamics.
- Reducing risk in decision-making.
Market Research Role
- Gathering Customer Insights: Understanding customer needs, preferences, behaviors, and pain points for product development.
- Assessing Market Opportunities: Identifying potential markets, untapped segments, and emerging trends.
- Improving Product Development: Analyzing competitor products, market insights, and customer feedback to enhance products.
Market Research for Decision-Making
- Product Development: Conducting research to determine product feasibility, market fit, and customer preferences.
- Customer Segmentation: Identifying different customer groups based on demographics, psychographics, and behaviors to tailor marketing efforts.
- Market Positioning: Analyzing competitors, target markets, and value propositions to ensure market relevance and competitive advantage.
Qualitative Research
- Focuses on understanding motivations, emotions, and behaviors.
- Common Methods: Focus groups, in-depth interviews, observations.
Quantitative Research
- Involves collecting numerical data to identify patterns and predict trends.
- Common Methods: Surveys, polls, experiments.
Cross-Functional Collaborations
- Product development and innovations
- Pricing strategies
- Employee engagement and branding
Marketing's Collaborative Touchpoints
- Operations: Demand forecasting, product specifications, ensuring supply chain alignment with promotional campaigns.
- Finance: Allocating budgets, pricing strategies, and resource investments in new markets.
- HR: Ensures that workforce is trained to deliver the brand promise.
Market Segmentation Criteria
- Accessibility: Can you effectively reach and serve the targeted segments?
- Fit: Does the segment align with your business objectives and strengths?
Positioning
- Crafting a distinct image or offering to the selected segments.
Positioning Strategy
- Unique Selling Point (USP): A key differentiator that makes your brand stand out.
- Positioning Strategy: Create a distinct image or message around your product to stay in customer minds.
Market Sizing (TAM, SAM, SOM)
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Total Addressable Market (TAM): The total demand for a product or service if there were no competitors or limitations.
- Calculation: Multiply the number of potential customers by the average revenue per customer.
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Serviceable Available Market (SAM): The portion of TAM that the product or service can target.
- Calculation: TAM filtered by the specific market you can reach and serve with your current offerings.
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Serviceable Obtainable Market (SOM): The portion of SAM that your business can actually capture.
- Calculation: SAM filtered by the expected market share based on competition and the company's capacity.
Practical Applications of Market Sizing
- Business Planning: TAM, SAM, SOM help businesses to estimate potential revenue and growth.
- Investment Decisions: Investors use this metric to gauge the viability and scalability of the business.
- Strategic Focus: Helps to prioritize which market segments to focus on based on opportunity size and competition.
7Ps (Services)
- 4Ps (Price, Product, Place, Promotion)
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People: The employees who attract customers.
- Employees as Brand Ambassadors: Frontline staff directly impacts the customer experience, from greetings to service delivery.
- Customer-Centric Approach: Training employees to align with the company's brand promises and values is key.
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Process: The system and processes that deliver the service experience.
- Operational Efficiency: Processes in service delivery must ensure consistency and quality across all customer touchpoints.
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Description
Explore the essential concepts of marketing, including its definition, key functions, and historical evolution. This quiz covers topics such as product creation, communication strategies, delivery channels, and the exchange process in marketing. Test your understanding of how marketing has developed over the years.