Marketing Concepts Quiz

Customer Definitions

• A customer is a person or business that buys something from a third party.
• A customer can also be a person or business that buys goods or services from another business.
• Businesses often prioritize the customer and follow the adage "the customer is always right."
• Customers are crucial as they generate revenue.
• Businesses often monitor customer interactions with each other.

Customer vs. Consumer

• Consumers use or use up products and services.
• Consumers purchase products for their own needs.
• Consumers cannot resell the products/services.
• Consumers frequently engage in self-employment activities.

Types of Customers

• Loyal customers: Less numerous but promote more sales and profit. They revisit the organization repeatedly. They want individual attention. They expect polite and respectful treatment.
• Discount customers: Frequent visitors, only patronize when discounts are available. Often associated with smaller businesses.
• Impulsive customers: Difficult to convince, purchase things on impulse or whim. They do not have specific things on their list.
• Need-based customers: Product-specific and habitual. Positive interaction is essential to keep these customers satisfied.
• Wandering customers: Least profitable, mostly new to an industry, visit suppliers irregularly. They are likely looking to find the best deal.

Who Isn't a Customer?

• "Clients" are customers who have ongoing relationships with a supplier.
• Professionals hired for services are considered "clients," not customers.

Considering Customers

• Businesses regularly review customer profiles to improve marketing and stock strategies to attract the most customers.
• Businesses improve their marketing and advertising plans by understanding customers' needs and wants and adapt products/services accordingly.

Customer Worth

• Sales depend on customers.

Customer Satisfaction

• Understanding customer complaints, feedback, and opinions yields important insight for product/service improvement.

Internal and External Customers

• External customers: Individuals and entities who pay for the company's products/services.
• External customers are not directly connected to the organization, but make purchases from them.
• Internal customers: Employees or partners in the company. Internal customers often provide services or products to external customers.
• Stakeholders/shareholders are people who rely on other people in the company to provide products/services to external customers.

Value Proposition

• A simple declaration of product/service benefits for customers.
• A value proposition communicates unique benefits.
• It differentiates itself from the competition.
• A value proposition often consists of 2-3 sentences.

Mistakes to Avoid in VP Development

• Using jargon
• Ignoring competition
• Being too generic
• Straying from the target market
• Not testing the VP
• Being synonymous with competitors
• Too much focus on features

Market, Target Market

• Market refers to the overall group of consumers who desire or have need for a specific product/service.
• Target market: a specific group of customers being sought out by a specific technopreneur.

Market Analysis/Research

• Market analysis: A process of collecting data that helps determine a business will cater to customers' needs.
• Market research: A methodical way of gathering feedback to see if a product/service is viable to be offered to the market. Market research gets feed back directly from the customers.
• Primary research: Experts in a target market are interviewed to collect new data.
• Secondary research: Data from previous sources (internal, external) is used.
• The different dimensions for market analysis include:
• Market size
• Market segment
• Market trends
• Market profitability
• Industry structure
• Distribution channels
• Key success factors
• Market size: Studies the current and potential volume of the selected market to see if the anticipated results are within expectations.
• Market sizing methods:
• Bottom-up (examines variables to determine the business needs).
• Top-down (determines the overall market and figures out how much the company can control).

Competitive Advantage

• Producing products or services better and more cheaply than rivaling companies.
• Pricing, branding, cost structure, quality of service, distribution network, intellectual property, and customer service are common factors.

Competitor Analysis

• Needs constant analysis to create effective marketing strategies.
• To understand the prices, strategies, promotions, offers, and competitor market share
• Types of competitors:
• Direct: Offer same products or services as your business.
• Indirect: Operate in the same category but offer different products/services to solve similar problems.
• Replacement: Offer alternative products/services to solve similar problems from the same category.
• Ways to identify competitors:
• Market research
• Keyword research
• Analyzing Google searches
• Monitoring social media conversations
• Customer feedback

5 Skills

• Identifying target market
• Understanding target market.
• Segment target market.
• Identifying competitive landscape
• Estimating demand

Competitive Strategies

• Market Leader: Expands total demand, protects current market, expands market share
• Market Challenger: Uses full frontal attack, or indirect attack to gain more market share.
• Market Follower: Follows other firms to hold market share.
• Market Nicher: Focuses on serving small market gaps and specialties.

Positioning

• A marketing strategy used to differentiate a company from competitors and highlight its uniqueness.
• Market position: A company may be a leader, challenger, follower, or nicher in a specific market.