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Questions and Answers
What is the primary focus of marketing?
What is the primary focus of marketing?
What is the acronym for the marketing plan?
What is the acronym for the marketing plan?
What is the 3V market value principle?
What is the 3V market value principle?
What is the first step in defining a marketing plan?
What is the first step in defining a marketing plan?
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What is the purpose of the SWOT framework?
What is the purpose of the SWOT framework?
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What is the primary focus of the mission statement?
What is the primary focus of the mission statement?
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What is the ultimate criterion for measuring success?
What is the ultimate criterion for measuring success?
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What is the primary goal of identifying value in marketing?
What is the primary goal of identifying value in marketing?
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What is the main difference between B2C and B2B marketing?
What is the main difference between B2C and B2B marketing?
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What is the purpose of analyzing competitors in marketing?
What is the purpose of analyzing competitors in marketing?
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What is the main focus of the 5 C's in target market strategy?
What is the main focus of the 5 C's in target market strategy?
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What is the primary characteristic of core values in a company?
What is the primary characteristic of core values in a company?
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What is the key principle of customer obsession in marketing?
What is the key principle of customer obsession in marketing?
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What is the primary goal of a company's mission statement?
What is the primary goal of a company's mission statement?
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Which of the following is a characteristic of the 'Bias for action' leadership principle?
Which of the following is a characteristic of the 'Bias for action' leadership principle?
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What is the primary purpose of the SWOT framework?
What is the primary purpose of the SWOT framework?
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Which element of the customer decision journey involves fulfilling an active need?
Which element of the customer decision journey involves fulfilling an active need?
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What is the primary difference between a need and a want?
What is the primary difference between a need and a want?
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Which level of Maslow's pyramid is associated with personal security and employment?
Which level of Maslow's pyramid is associated with personal security and employment?
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What is the primary characteristic of the 'Satisfying' heuristic?
What is the primary characteristic of the 'Satisfying' heuristic?
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What is the primary purpose of a company's vision statement?
What is the primary purpose of a company's vision statement?
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What motivates a customer to make a purchase?
What motivates a customer to make a purchase?
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Which model of new product adoption assumes that adoptions follow a normal distribution pattern?
Which model of new product adoption assumes that adoptions follow a normal distribution pattern?
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What determines the segment size in customer segmentation?
What determines the segment size in customer segmentation?
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What is the ultimate goal of targeting in marketing?
What is the ultimate goal of targeting in marketing?
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What is the purpose of a company's value proposition?
What is the purpose of a company's value proposition?
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What guides all strategic and tactical decisions in marketing?
What guides all strategic and tactical decisions in marketing?
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What is the main focus of marketers who focus on the attributes of their offerings?
What is the main focus of marketers who focus on the attributes of their offerings?
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What type of framing emphasizes the benefits of a product as they relate to a specific category?
What type of framing emphasizes the benefits of a product as they relate to a specific category?
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What is the primary benefit of positioning?
What is the primary benefit of positioning?
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What is the term for the value generated by customers over their tenure with the company?
What is the term for the value generated by customers over their tenure with the company?
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What is the primary advantage of collaborations?
What is the primary advantage of collaborations?
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What is the term for the strategy of creating a separate brand to combat low-price rivals?
What is the term for the strategy of creating a separate brand to combat low-price rivals?
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What is the term for the strategy of offering a range of products at different price points?
What is the term for the strategy of offering a range of products at different price points?
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What is the term for the share of customers who prefer a particular brand?
What is the term for the share of customers who prefer a particular brand?
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What is the main goal of planned obsolescence?
What is the main goal of planned obsolescence?
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What is the difference between SaaS and traditional software?
What is the difference between SaaS and traditional software?
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What is employee empowerment?
What is employee empowerment?
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What is the goal of strategic pricing?
What is the goal of strategic pricing?
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What is price elasticity of demand?
What is price elasticity of demand?
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What is penetration pricing?
What is penetration pricing?
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What is price segmentation?
What is price segmentation?
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What is the goal of auctions?
What is the goal of auctions?
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What is brand image?
What is brand image?
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What is brand equity?
What is brand equity?
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Study Notes
Marketing Fundamentals
- Marketing is about creating and managing value, not just tactics
- Identify, design, communicate, and deliver value to customers
- A marketing plan should be Actionable, Relevant, Clear, and Succinct (ARCS)
Value Principle
- The 3V market value principle involves optimal value proposition (OVP)
- OVP consists of customer value, collaborator value, and company value
Market Definition
- The market is defined by customer needs
- Market types: B2C (business to customer), B2B (business to business), C2C (customer to customer)
Target Market Strategy
- Analyze the 5 C's: Customer, Collaborators, Competitors, Company, and Context
Competitor Analysis
- Use the 5 Forces framework to analyze competitors
- The 5 Forces: Rivalry among existing competitors, Threat of new entrants, Bargaining power of suppliers, Threat of substitute products, and Bargaining power of buyers
Company Culture and Values
- Core values are independent of the economic or competitive environment
- Core values stand the test of time
- Examples of core values: Customer obsession, Ownership, Invent and simplify, Bias for action, Frugality
Mission and Vision
- Mission defines why a company exists (main goal, long-term view)
- Vision defines what the company wants to become (image of the future)
SWOT Analysis
- Strengths and Weaknesses (company analysis)
- Opportunities and Threats (market analysis)
Goal Setting
- A goal is the ultimate criterion for measuring success
Marketing Principles
- Marketing is about creating and managing value, focusing on identifying, designing, communicating, and delivering value.
Marketing Plan
- ARCS: Actionable, Relevant, Clear, and Succinct
- Goal, Strategy, Tactics, Implementation, and Control
3V Market Value Principle
- Optimal Value Proposition (OVP): Customer Value, Collaborator Value, and Company Value
Market Definition and Types
- Market is defined by customer needs
- Market types: • B2C (Business to Consumer) • B2B (Business to Business) • C2C (Customer to Customer)
Target Market Strategy
- 5 C's: Customer, Collaborators, Competitors, Company, and Context
Competitor Analysis
- Five Forces: • Rivalry among existing competitors • Threat of new entrants • Bargaining power of suppliers • Threat of substitute products • Bargaining power of buyers
Company Culture and Values
- Core values: • Independent of the economic or competitive environment • Timeless
- Amazon's core values: • Customer obsession • Ownership • Invent and simplify • Bias for action • Frugality
Mission, Vision, and Goal Setting
- Mission: Defines why a company exists, with a long-term view
- Vision: Defines what the company will look like, as an image of the future
- Goal setting: Defines focus and performance benchmarks
- Goal: The ultimate criterion for measuring success
SWOT Framework
- Strengths and Weaknesses (Company Analysis)
- Opportunities and Threats (Market Analysis)
Marketing Offering and KPI
- Marketing offering: OVP (Optimal Value Proposition)
- Attractiveness: Designing value
- Awareness: Communicating value
- Availability: Delivering value
- KPI (Key Performance Indicator): Measures how effectively a company achieves key business objectives
The Customer Decision Journey
- Need: Physiological or psychological requirement for wellbeing
- Want: Specific expression of a given need
- Preference: Benefits expected from a given product, brand, or service
- Customer decision journey: • Active need • Search • Evaluate • Choose • Purchase • Use • Again
Maslow's Hierarchy of Needs
- Self-actualization
- Esteem
- Love and Belonging
- Safety needs
- Physiological needs
Information Search and Choice
- Modernity and Postmodernity
- Information sources: • Internal sources (past experiences, memory) • External sources (friends, reviews, advertising)
- Selective memory
- Involvement
- Choice: A trade-off between benefits and costs of multiple options
- Rational model and Bounded rationality
- Satisficing heuristics
- Lexicographic heuristic
Purchase and Consumption
- Purchase decisions can be influenced by unavailability, budget constraints, urgent needs, and cognitive dissonance
- Impulsive purchases involve immediate need, whereas delayed purchases involve careful consideration
- Consumption and satisfaction involve the actual use of the product
New Product Adoption
- Roger's model is a descriptive model that assumes a normal distribution pattern, but this may not always be the case
- Customers can be innovators in one domain and laggards in another
- Moore's model is discontinuous and requires different marketing strategies for different customer segments
- Target customers are critical to the new product adoption process
Target Market and Value Proposition
- The target market defines the environment in which the company aims to create value
- The value proposition defines the benefits and costs for the company, its customers, and its collaborators
- The market offering is the actual good that creates value in the target market
Segmentation and Targeting
- Segmentation involves grouping customers into segments with similar needs
- Segment size depends on customization costs
- Targeting involves identifying customer needs and fulfilling them with the company's offering
Company Value and Customer Loyalty
- Company value is generated by customer revenues, costs, communication, and information value
- Customer loyalty involves both affective and behavioral commitment
- The path to loyalty involves satisfaction, managing dissatisfaction, building relationships, and rewarding customers
- Switching costs, brand communities, and reward programs can increase customer loyalty
Positioning and Differentiation
- Positioning involves identifying the primary benefit of the offering
- Differentiation involves creating a competitive advantage that is meaningful to customers
- Framing benefits can be need-based, category-based, user-based, or competitive
Customer Equity and Strategic Value
- Customer equity is the value generated by customers over their tenure with the company
- Strategic value is indirectly generated value that may produce a loss that is recovered by other offerings
Collaborations and Market Position
- Collaborations can have pros (effectiveness, cost efficiency, flexibility, and speed) and cons (loss of control, loss of competences, and empowering competition)
- Market position can be defined in terms of share of market, share of mind, and share of heart
Pioneering and Market Strategies
- The benefits of pioneering include being first to market, but drawbacks include free riding, incumbent inertia, and market uncertainty
- Vertical extension involves changing both price and benefits, while horizontal extension involves changing functionalities or features
- Fighting-brand strategy involves creating a brand to combat low-price rivals, while sandwich strategy involves simultaneous upscale and downscale
- Good-better-best strategy involves a three-tiered product line with additional product development and management costs
Obsolescence
- Generation obsolescence: new products make old products inferior, leading to termination of support
- Product obsolescence: forcing users to repurchase, generating revenue through frequent updates
- Component obsolescence: used to increase post-sale assistance, generating additional revenue
Managing Services
- SaaS (Software as a Service) model: subscription-based, accessible on multiple devices
- Traditional software model: one-time fee, limited to a single device
- Empowerment: shifting decision-making power from management to frontline employees, who own the problem until resolved
Employee Motivation
- Intrinsic motivation: driven by interest and enjoyment of the task itself
- Extrinsic motivation: driven by the outcome or reward resulting from doing the task
Pricing
- Strategic pricing: prices determined by strategy, not just profit margins
- Price elasticity of demand: percentage change in quantity sold relative to the percentage change in price
- Company costs: considering both fixed and variable costs to determine a profitable price
- Economies of scope: total cost decreases as the number of different goods produced increases
- Pricing based on costs: markup pricing is less strategic, with price driving costs rather than the opposite
- Penetration pricing: low initial price to attract high sales volumes, often used in competitive markets
- Skim pricing: high initial price to maximize margins, often used in markets with low competition
- Loss-leader pricing: low price for a product to increase sales of other offerings
Price Segmentation
- First-degree price segmentation: different price for each customer based on needs, price sensitivity, and prior purchase
- Second-degree price segmentation: different unit price for different quantities
- Third-degree price segmentation: different price for different customer segments
Reference Price Effects
- Internal reference price: based on prior purchases
- External reference price: based on competitive offerings
Auctions and Pricing Wars
- Auctions: used when there is uncertainty about the optimal price
- Reverse pricing: customers pay what they want
- Price wars: occur when there is low differentiation, economies of scale, low customer loyalty, and detrimental to profit
Illegal Pricing Practices
- Predatory pricing: selling at a low cost to drive competitors out of business
- Price fixing: companies conspiring to set prices
Branding
- Brand image: designing and sustaining a mental image in people's minds
- Brand motto: articulating the brand positioning to customers, often taking the form of an imperative, descriptive, declarative, superlative, or provocative statement
- Brand character: a fictional personality that embodies the brand essence
- Product design: a brand identifier that distinguishes the brand from other products
Branding Strategies
- Umbrella branding: a single brand strategy
- Sub-branding: creating multiple brands under a single umbrella, e.g., Coca-Cola, Coca-Cola Zero, and Coca-Cola Diet
- Endorsement: partnering with another brand to increase credibility, e.g., Marriott and Nestle (Kit Kat)
Brand Power and Equity
- Brand power: the ability to influence the behavior of customers, employees, and collaborators
- Semantic brand score: measuring brand importance and associations
- Brand equity: the monetary value of the brand, measured through cost, market, and financial approaches
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Description
This quiz covers fundamental marketing concepts, including value creation, marketing plans, and market types. Learn about the 3V market value principle, ARCS, and customer needs.
