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KAPITEL 1: What is marketing fundamentally about? - Identifying and meeting human and social needs - Harmonizing with organizational goals What is the American Marketing Association's formal definition of marketing? - Activity, set of institutions, and processes for creating, communicating, d...

KAPITEL 1: What is marketing fundamentally about? - Identifying and meeting human and social needs - Harmonizing with organizational goals What is the American Marketing Association's formal definition of marketing? - Activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings of value What does effective marketing Management involve? - Choosing target markets - Getting, keeping, and growing customers - Creating, delivering, and communicating superior customer value What is the social definition of marketing? - Marketing as a societal process to obtain needs and wants - Creating, offering, and exchanging products and services of value What role does marketing play in society according to a social definition? - Delivering a higher standard of living What themes have become important in modern marketing thought? - Co-creation of value among consumers and businesses - Importance of value creation and sharing How do managers sometimes mistakenly view marketing? - As the art of selling products According to Peter Drucker, what is the aim of marketing? - To make selling superfluous - To know and understand the customer so well that the product sells itself What should ideally result from effective marketing? - A customer ready to buy - The product or service simply needs to be made available What was the marketing success behind the Nintendo Wii, Apple iPad, and Toyota Prius attributed to? - Careful marketing homework - Understanding consumers, competition, and external factors affecting cost and demand What is marketing management? - The art and science of choosing target markets - Getting, keeping, and growing customers through superior value creation How does marketing create value for society at large? - By creating, communicating, delivering, and exchanging offerings What is a key characteristic of effective marketing management? - Thinking about means to achieve desired responses from other parties What is an example of marketing making selling superfluous? - Designing products so well that they fit customer needs and sell themselves What do great marketing strategies rely on beyond just selling skills? - Designing the right product - Conducting thorough marketing research What often surprises people about the role of selling in marketing? - Selling is not the most important part of marketing - It is only the tip of the marketing iceberg What are the ten domains typically involved in marketing? - Goods - Services - Events - Experiences - Persons - Places - Properties - Organizations - Information - Ideas As economies advance, what does a growing proportion of activities focus on? - Production of services What do many market offerings mix together? - Goods and services (eg, a fast-food meal) What type of events do marketers promote? - Time-based events like trade shows, artistic performances, company anniversaries, global sporting events, and local events such as craft fairs and farmers' markets How can firms create and market experiences? - By orchestrating several services and goods (eg, Walt Disney World’s Magic Kingdom) What do place marketers aim to attract? - Tourists, residents, factories, company headquarters Who are some place marketers?  - Economic development specialists, real estate agents, commercial banks, local business associations, advertising and public relations agencies What do properties in marketing refer to? - Intangible rights of ownership to real property (real estate) or financial property (stocks and bonds) Why do organizations use marketing? - To boost their public image and compete for audiences and funds What does marketing information involve? - Disseminating knowledge produced, marketed, and distributed by media, think tanks, government, business entities, and educational institutions What is a marketer? - Someone who seeks a response (attention, purchase, vote, donation) from another party What are marketers skilled at? - Stimulating demand for their products What additional goals do marketers have beyond stimulating demand? - Influencing the level, timing, and composition of demand to meet organizational objectives Traditionally, what was a "market"? - A physical place where buyers and sellers gathered to buy and sell goods How do economists describe a market? - A collection of buyers and sellers who negotiate transactions involving a particular product or product class What are the five basic markets? - Resource markets - Manufacturer markets - Consumer markets - Intermediary markets - Government markets What do manufacturers do in the basic market flow? - Go to resource markets, buy resources, turn them into goods and services, and sell finished products to intermediaries How do consumers participate in the market flow? - Sell their labor and receive money to pay for goods and services What is the role of the government in the market flow? - Collects tax revenues to buy goods from various markets and provides public services How do marketers view industry and market? - Industry: Group of sellers - Market: Customer groups What are some examples of different types of markets - Need markets (diet-seeking market) - Product markets (shoe market) - Demographic markets (Millennium youth market) - Geographic markets (Chinese market) - Voter markets, labor markets, donor markets What are the four flows connecting sellers and buyers? - Goods and services, communications from sellers - Money and information from buyers Why must there be an effective top line for a healthy bottom line? - Financial success depends on marketing ability to generate sufficient demand How does marketing contribute to society? - Introduces new/enhanced products - Builds demand, creating jobs - Supports socially responsible activities What must marketers decide in a rapidly changing environment? - Features, prices, and markets - Advertising, sales, online and mobile marketing spending What risks do companies face if they fail to monitor customers and competitors? - Risk of falling behind in innovation - Struggle for survival - Failure to improve value offerings and marketing strategies Why is innovation in marketing critical? - Keeps companies competitive - Stimulates new ideas - Satisfies employees, stockholders, suppliers, and channel partners Which groups within a company should senior management encourage for fresh ideas? - Employees with youthful or diverse perspectives - Employees far from headquarters - Employees new to the industry How has RB (formerly Reckitt Benckiser) innovated in the household cleaning products industry? - Generates 35% of sales from products under three years old - Encourages multinational staff to dig deeply into consumer habits - Rewards excellent performance What are the four major market forces influencing the business environment today? - Technology  - Globalization - Physical Environment - Social Responsibility How has technology impacted marketing? - Rapid rise of e-commerce, online and mobile communication, AI - Massive amounts of data available - New business models like Netflix, Amazon, Airbnb, Uber What have advances in data analytics and AI enabled companies to do? - Better understand customers - Tailor offerings to consumers' needs - Democratize technology for smaller companies How has technology affected traditional marketing activities? - Example: Roche using iPads for real-time data entry in sales force How has globalization transformed the business environment? - Eroded geographic and political barriers - Created opportunities for communication, collaboration, and data mining - Made the world a level playing field for competitors What does Thomas Friedman's phrase "The World Is Flat" signify? - The world has become interconnected - Example: McDonald's orders being processed remotely What impact has globalization had on the US workforce? - Need to update specialized skills - Create superior products to stay competitive How has globalization affected demographic trends and markets? - Increasing multiculturalism - Growth of middle class in developing markets, especially Asia How do companies adapt innovation and product development to globalization? - Applying ideas and lessons from one country to another - Example: GE's portable ultrasound scanners What are the significant changes in the physical environment affecting businesses? - Climate change - Changes in global health conditions How can climate change impact business models? - Affect yields of crops - Influence seasonal activities - Cause disruptions like rising sea levels How can changes in health conditions affect businesses? - Influence operations of pharmaceutical and health-related companies - Impact food, tourism, hospitality, and transportation industries How does globalization increase the risk of pandemics? - Increased global travel - Greater probability of localized diseases spreading globally How does corporate social responsibility benefit companies? - Differentiates from competitors - Builds consumer preference - Achieves sales and profits What ethical dilemmas do companies face in marketing? - Balancing convenience and sustainability - Managing material aspirations and environmental impact How must marketers approach modern challenges? - Think holistically - Develop fully integrated marketing programs - Consider broader consequences in the marketplace What are the four major forces shaping today's markets? - Technology - Globalization - Physical Environment - Social Responsibility What are some key aspects of new consumer capabilities? - Use of online resources for information and purchases - Mobile connectivity for on-the-go activities - Social media for sharing opinions and loyalty - Active interaction with companies - Rejecting inappropriate or annoying marketing - Extracting more value from shared assets How do consumers use online resources? - Compare product prices and features - Consult user reviews  - Order goods online 24/7 How do consumers use mobile connectivity? - Research products - Shop for groceries, gifts, etc - Engage in social causes and disaster relief What role does social media play for consumers? - Keeping in touch with family and friends - Touting products and services - Engaging in politics How can consumers interact with companies? - Receive marketing and sales-related communications - Scan barcodes and QR codes - Use company apps for better interaction What can consumers do if they find marketing inappropriate or annoying? - Screen out online messages - Skip commercials - Avoid marketing appeals through mail or phone How do consumers extract more value from shared assets? - Share bikes, cars, clothes, etc - Benefit as both consumer and producer in a sharing economy What are some new capabilities for companies? - Use the internet for information and sales channels - Collect richer market information - Reach consumers quickly via social media and mobile marketing - Improve purchasing, recruiting, training, and communications - Enhance cost efficiency How can companies use the internet effectively? - List products and services online - Engage consumers through websites and social media - Offer customized products How do companies collect richer market information? - Conduct marketing research online - Gather data on customer purchases and preferences - Use recommendation engines for personalized suggestions How do companies reach consumers via social media and mobile marketing? - Send targeted ads and coupons - Utilize GPS for location-based marketing How can companies improve their internal and external communications? - Recruit new employees online - Use internet training products - Employ social media for customer engagement How can companies enhance cost efficiency? - Compare prices and purchase materials online - Improve logistics and operations What are some changes in the new competitive environment? - Deregulation - Privatization - Retail transformation - Disintermediation - Rise of private labels - Emergence of mega-brands What is deregulation and its impact? - Loosening of industry restrictions - Creates greater competition and growth opportunities What is privatization and its impact? - Conversion of public companies to private ownership - Increases efficiency What is retail transformation? - Store-based retailers face competition from various channels - Emphasis on marketing an experience rather than just products What is disintermediation? - Intervening in the traditional flow of goods - Emergence of "brick-and-click" retailers What are mega-brands? - Strong brands extending into related product categories - Example: Apple and Samsung in computing, telecommunications, and consumer electronics What is holistic marketing? - Recognizes and reconciles the scope and complexities of marketing activities  - Offers an integrated approach to managing strategy and tactics What are the four broad components of holistic marketing? - Relationship marketing - Integrated marketing - Internal marketing - Performance marketing Why must marketing be more holistic and less departmental? - To achieve wider influence in the company - To continuously create new ideas - To gather and use customer insights effectively What is the focus of relationship marketing? - Building mutually satisfying long-term relationships - Focusing on customers, employees, marketing partners, and the financial community What is a marketing network? - A unique company asset - Consists of the company and its supporting stakeholders - Built on mutually profitable business relationships What is the ultimate goal of relationship marketing? - To earn and retain business through strong relationships How do companies achieve profitable growth in relationship marketing? - Focusing on the most profitable customers, products, and channels - Building strong customer loyalty - Estimating individual customers' lifetime value What is the concept of integrated marketing? - Coordinating all marketing activities and programs - Creating, communicating, and delivering consistent value and message for consumers How should integrated marketing communications be managed? - Must reinforce and complement each other - Deliver a consistent brand message at every contact point Why is interdepartmental teamwork important in integrated marketing? - Manages key processes like product innovation, customer acquisition, and retention - Ensures every employee impacts the customer What is internal marketing? - Hiring, training, and motivating employees to serve customers well - Ensuring marketing activities within the company are as important as those outside What does internal marketing require from senior management? - Clear communication of the company's marketing orientation and philosophy - Ensuring all departments work together to achieve customer goals How does internal marketing impact employee engagement? - Motivates all employees to support the marketing effort - Regular internal communications and training emphasizing customer service What is performance marketing? - Understanding financial and non-financial returns from marketing activities - Considering legal, ethical, social, and environmental impacts What is the "triple bottom line" in performance marketing? - Financial performance - Environmental impact - Social impact Why are marketers asked to justify their investments in performance marketing? - To demonstrate financial profitability - To build the brand and grow the customer base What intangible assets are crucial for performance marketing? - Brands - Customer base - Employees - Distributor and supplier relations - Intellectual capital What metrics are used in performance marketing - Brand equity - Customer lifetime value - Return on marketing investment How does relationship marketing impact customer loyalty? - Builds strong customer loyalty through tailored offers and services - Focuses on profitable customers How does integrated marketing ensure effectiveness? - Each marketing activity designed with others in mind - Coordination of various channels to improve overall impact What is a key task for any business in relation to marketing?  - Defining the role of marketing in the organization - Deciding on the overarching philosophy for marketing efforts - Organizing and managing the marketing department - Building a customer-centric organization to deliver value to stakeholders What is the production concept in marketing? - Consumers prefer products that are widely available and inexpensive - Focuses on high production efficiency, low costs, and mass distribution When is the production concept particularly useful? - In developing countries - When expanding the market What does the product concept propose? - Consumers favor products with the highest quality, best performance, or innovative features - Managers may focus excessively on product features over market needs What is the "better-mousetrap" fallacy? - Belief that a better product alone will attract customers - Overlooking the importance of pricing, distribution, advertising, and sales What does the selling concept emphasize? - Consumers and businesses won’t buy enough without aggressive selling - Common with unsought goods and overcapacity situations What are the risks of hard selling under the selling concept? - Customers may not return - Potential for negative word-of-mouth and complaints - Assumes repeat purchases from coaxed buyers When did the marketing concept emerge and what does it focus on? - Emerged in the mid-1950s - Customer-centered, sense-and-respond philosophy - Developing the right products for customers What is the key to achieving organizational goals according to the marketing concept? - Being more effective than competitors in creating, delivering, and communicating customer value How did Theodore Levitt differentiate between the selling and marketing concepts? - Selling focuses on the needs of the seller - Marketing focuses on the needs of the buyer - Selling converts products into cash; marketing satisfies customer needs What is the market-value concept? - Recognizes the breadth and interdependencies of marketing activities - Emphasizes a broad, integrated perspective How does the market-value concept differ from traditional marketing roles? - Traditional marketers were intermediaries transmitting customer needs to functional areas - Market-value concept involves every functional area focusing on creating value How should companies define their business according to the market-value concept? - As a customer-satisfying process - Rather than in terms of their products or industries What example illustrates the market-value concept in terms of customer needs? - Transportation is a need - Products like horse and carriage, automobile, railroad, airline, ship, and truck meet that need How can viewing businesses in terms of customer needs suggest growth opportunities? - Identifies additional ways to satisfy enduring customer needs - Expands potential markets How can the market-value view redefine a company's market? - Broader market definition - Competing with a wider range of products How would Pepsi define its market from a product-focused view? - Target market: everyone who drinks carbonated soft drinks - Competitors: other carbonated soft drink companies How would Pepsi define its market from a market-value view? - Target market: everyone who might drink something to quench their thirst - Competitors: companies marketing noncarbonated soft drinks, bottled water, fruit juices, tea, and coffee What are examples of companies that have moved from a product definition to a market-value definition? - Table lists such companies - Examples not specified in the provided text What does adopting a market-value view require from companies? - Focusing on creating value for customers, the company, and its collaborators - Seeing business activities as interconnected and aimed at satisfying customer needs Why is the structure of the marketing department crucial? - Determines the ability to create market value - Influences the performance of individual marketers - Affects the creation of a high-performing marketing team What are the ways to organize a modern marketing department?  - Functionally - Geographically - By product or brand - By market - In a matrix What is a functional organization in marketing? - Functional specialists report to a chief marketing officer - Includes various specialist roles such as marketing planning, logistics, direct marketing, social media, and digital marketing managers What is the main advantage of a functional marketing organization? - Administrative simplicity What are the challenges of a functional marketing organization? - Developing smooth working relationships - Inadequate planning as the number of products and markets increases - Coordination problems due to competing claims for budget and status How is a geographic organization structured? - Organizes sales force along geographic lines - Hierarchical structure: national sales manager, regional sales managers, zone managers, district sales managers, and salespeople What is the role of area market specialists in a geographic organizations - Support sales efforts in high-volume markets - Adjust marketing mix for specific regions - Prepare local annual and long-range plans When is a product or brand organization useful? - When producing a variety of products and brands - When products are quite different or numerous What is the structure of a product or brand organization? - Group product manager supervises product category managers - Product category managers supervise specific product and brand managers What are the functions of a product manager? - Develop long-range and competitive strategy - Prepare annual marketing plan and sales forecast - Work with advertising, digital, and merchandising agencies - Manage support of the product among sales force and distributors - Gather intelligence on product performance and market needs What are the advantages of a product-management organization? - Concentrate on developing cost-effective marketing programs - React quickly to new products in the marketplace - Provide product advocates for smaller brands What are the disadvantages of a product-management organization? - Managers may lack authority to carry out responsibilities - Short-term planning and involvement - Fragmentation of markets - Focus on building market share over customer relationships What is category management? - Managing brands by product categories - Ensuring adequate resources for all categories - Dealing with retail trade along similar lines What are the advantages of category management? - Addresses logistics and role of private-label products - Defines strategic role within the store - Increases product and category sales What is a market organization? - Develops products and services to target distinct markets - Organizes marketing activity to meet distinct customer group needs What are the responsibilities of market managers? - Develop long-range and annual plans for their markets - Judge market growth and profitability - Coordinate with functional services What is a customer-management organization? - Deals with individual customers rather than mass markets or segments - Higher accountability for relationship quality - Greater employee freedom to satisfy individual customers What is a matrix organization in marketing? - Employs both product and market managers - Costly and often creates conflicts - Requires clear focus and accountability What are the roles of corporate marketing groups in a matrix organization? - Assist top management with opportunity evaluation - Provide consulting assistance to divisions  - Help promote the marketing concept throughout the company What are the disadvantages of the matrix structure? - High cost of supporting managers - Conflicts over authority and responsibility for marketing activities - Potential lack of clear focus and accountability What did David Packard of Hewlett-Packard observe about marketing? - "Marketing is far too important to leave to the marketing department" - Everyone in the organization must consider the customer impact in decisions Why is it beneficial for a company to have an organizational unit in charge of marketing activities? - Manages all company marketing activities - Oversees day-to-day operations What role do the CEO and CMO play in marketing? - CEOs recognize marketing's role in building strong brands and loyal customer bases - CMOs manage marketing activities and report to the CEO What steps can a CEO take to create a market- and customer-focused company? - Convince senior management of the importance of being customer-focused - Hire strong marketing talent - Facilitate in-house marketing training programs - Align reward systems with strategic goals - Exemplify strong customer commitment What are the responsibilities of a CMO? - Lead all marketing functions - Manage product development, brand management, communication, market research, sales, promotion, distribution, pricing, and customer service How has the role of the CMO changed in the 21st century? - Must handle digital technologies - Requires strong quantitative and qualitative skills - Needs an independent, entrepreneurial attitude - Must capture the "voice" of consumers - Understand how marketing creates value What are the three driving forces changing the role of the CMO according to George Day and Robert Malcolm? - Predictable marketplace trends - Changing role of the C-suite - Uncertainty about the economy and organizational design What are the five priorities for any successful CMO? - Act as the visionary for the company's future - Build adaptive marketing capabilities - Win the war for marketing talent - Tighten alignment with sales - Take accountability for returns on marketing spending What is perhaps the most important role for any CMO? - Infuse a customer perspective in business decisions affecting customer touch points - Have a global focus and experience What is the significance of customer insights for a CMO? - Provide a global perspective - Increase cultural sensitivity - Increase flexibility How does a company's success depend on departmental coordination? - Success depends on how well departments coordinate activities - Must "think customer" and work together to satisfy customer needs and expectations What role does the marketing vice president or CMO play in coordinating internal marketing activities? - Work through persuasion rather than authority - Coordinate marketing with finance, operations, and other functions Why do many companies now focus on key processes rather than on departments? - Departmental organization can be a barrier to smooth performance - Appoint process leaders who manage cross-disciplinary teams What is the role of process leaders in a company? - Manage cross-disciplinary teams including marketing and salespeople - Ensure smooth performance across different departments Why must marketers work closely with customer insights and data analytics teams? - To understand the needs of individual customers - To provide positive customer experiences from start to finish Why is collaboration with different communication agencies important for marketers? - To reach consumers effectively and cost-efficiently - Work with traditional advertising, social media, publicity, and event-management companies Why must marketers work closely with a company's channel partners? - To deliver offerings to the right place at the right time - Includes both brick-and-mortar and e-commerce spaces What challenge do CMOs face with respect to the factors for success?  - Success factors are many and varied - Need to balance qualitative and quantitative skills - Must integrate consumer insights with bottom-line understanding How do companies ensure their reward systems align with strategic goals? - Develop systems to create market value - Focus on building a satisfied, loyal customer base How do companies benefit from having centralized training facilities? - Sharpen marketing skills - Examples include McDonald's, Unilever, and Accenture Why has creating a superior customer experience become a priority for companies? - Proliferation of products, services, and brands - Increased consumer knowledge about market offerings - Consumers' ability to influence public opinion What is the first step to creating stakeholder value according to most companies? - Re-envisioning the organization to focus on creating long-term customer value How does Jeff Bezos define Amazon's customer-centricity? - Customer-driven focus aids proactivity - Internally driven to improve services, add benefits, lower prices, and invent before necessary - Builds trust and drives rapid improvements in customer experience What is considered obsolete by managers who see customers as the only true "profit center"? - The traditional organization chart with the president at the top and customers at the bottom How do successful marketing companies transform the traditional organization-hierarchy chart? - Customers are the top priority - Frontline people serve customers next - Service managers support frontline people - Top management hires and supports good service managers What must managers at every level do to develop a customer-oriented company? - Be personally engaged in understanding, meeting, and serving customers What is one characteristic of a customer-centric organization? - Companies founded on a customer-focused business model How have digital technologies changed consumer expectations of companies? - Consumers expect companies to listen and respond, not just connect, satisfy, or delight them What role did marketers traditionally play in companies? - Intermediaries understanding customers' needs and transmitting their voice to functional areas In a networked enterprise, what must marketing now do? - Integrate all customer-involving processes - Ensure customers see a single face and hear a single voice What realization have many companies come to about being market and customer driven? - They are often product and sales driven instead What is required to transform into a true market-driven company? - Developing a passion for customers - Organizing around customer segments instead of products - Understanding customers through research Why is being customer-oriented not enough for companies today? - Companies must also be creative to differentiate and maintain margins How can companies build capability in strategic innovation and imagination? - Assemble tools, processes, skills, and measures for generating new ideas What should companies do to stimulate new ideas and foster imagination? - Create inspiring work spaces Why must companies be alert to trends? - To capitalize on emerging opportunities and avoid missing market shifts What mistake did Nestlé make regarding market trends? - Late to see the trend towards coffeehouses What beverage trends did Coca-Cola initially miss? - Fruit-flavored drinks, energy drinks, and designer water brands What can cause market leaders to miss trends? - Being risk averse - Obsession with protecting existing markets and resources - Prioritizing efficiency and profit over innovation What is a major advantage of a customer-driven focus according to Jeff Bezos? - Builds trust with customers and drives rapid improvements in customer experience What is Deadly Sin #regarding marketing programs? - Company lacks market focus and customer-driven approach What are signs of Deadly Sin #1? - Poor identification and prioritization of market segments - Lack of market segment managers and customer-centric training programs What are solutions for Deadly Sin #1? - Advanced segmentation techniques  - Prioritizing segments - Establishing clear company values emphasizing customer satisfaction What is Deadly Sin #2 regarding marketing programs? - Company lacks understanding of target customers What are signs of Deadly Sin #2? - Outdated customer studies - Declining sales compared to competitors - High levels of customer returns and complaints What are solutions for Deadly Sin #2? - Conducting sophisticated consumer research - Using analytical techniques and customer relationship software What is Deadly Sin #3 regarding marketing programs? - Company lacks understanding of competitors What are signs of Deadly Sin #3? - Focus on near competitors, ignorance of distant competitors and disruptive technologies What are solutions for Deadly Sin #3? - Establishing competitive intelligence offices - Hiring competitors' employees - Monitoring disruptive technologies What is Deadly Sin #4 regarding marketing programs? - Company fails to manage relationships with stakeholders effectively What are signs of Deadly Sin #4? - Unhappy employees, dealers, and investors - Reluctance of good suppliers to partner with the company What are solutions for Deadly Sin #4? - Shift from zero-sum to positive-sum thinking - Improve management of employee, supplier, distributor, dealer, and investor relations What is Deadly Sin #5 regarding marketing programs? - Company struggles to find new opportunities What are signs of Deadly Sin #5? - Failure to identify exciting new opportunities - Many launched ideas fail What are solutions for Deadly Sin #5? - Establish a system for stimulating new ideas What is Deadly Sin #6 regarding marketing programs? - Deficient marketing planning process What are signs of Deadly Sin #6? - Inadequate marketing plan format - Lack of financial implications estimation for different strategies What are solutions for Deadly Sin #6? - Establish standard marketing plan format - Include components like SWOT, budgets, and controls What is Deadly Sin #7 regarding marketing programs? - Weak product and service policies What are signs of Deadly Sin #7? - Many losing products, excessive services giveaways, poor cross-selling What are solutions for Deadly Sin #7? - Track weak products and services for improvement or removal - Offer and price services differently - Improve cross-selling processes SUMMARY: What is marketing? - Organizational function for creating, communicating, delivering value - Managing customer relationships for mutual benefit What are the markets in which companies operate? - Resource markets - Manufacturer markets - Consumer markets - Intermediary markets - Government markets What are the major market forces that have transformed today's marketplace? - Technology - Globalization - Social responsibility - Physical environment What is the holistic marketing concept? - Focus on breadth and interdependencies  - Considers everything in marketing - Components: relationship, integrated, internal, performance marketing What are the five competing concepts under which organizations can conduct business? - Production concept - Product concept - Selling concept - Marketing concept - Market-value concept How do companies organize their marketing departments? - Functional - Geographic - Product/brand - Market - Matrix structure What is the importance of collaboration between departments in marketing? - Executives in all departments should think like marketers - Marketing department should understand other departments' needs What are the characteristics of a customer-centric company? - Market-driven - Focus on individual customer needs - Making competition irrelevant How should a company succeed in delivering value to customers? - Focus on delivering superior value - Benefits the company and collaborators KAPITEL 2 What is essential for developing successful marketing strategies? - Blend of discipline and flexibility - Constant improvement and adaptation What is the core of any successful marketing strategy? - Development of an enduring value proposition - Addressing real customer needs What are the key areas for strategic planning in marketing? - Managing company’s businesses as investment portfolio - Assessing market’s growth rate and company’s position - Developing viable business model What are the three levels at which marketing planning and management occur? - Corporate - Business unit - Specific market offering What are the four planning activities companies undertake? - Defining corporate mission - Building corporate culture - Establishing strategic business units - Allocating resources to each SBU What are the characteristics of a good mission statement? - Focuses on specific goals - Stresses major policies and values - Defines major markets served - Takes a long-term view - Short, memorable, and meaningful What is corporate culture, and why is it important? - Shared experiences, beliefs, norms in an organization - Hard to change but key to market success What are strategic business units (SBUs)? - Single or related businesses that can operate separately - Have own competitors and responsible manager How does management allocate resources across business units? - Assessing competitive advantage and market attractiveness - Deciding whether to grow, harvest, or hold on to businesses - Using portfolio models and metrics for decision-making What are the two key components of marketing strategy? - Target market - Value proposition What are the five factors that make up the target market? - Target customers - Collaborators - Competitors  - The company - Context What role do target customers play in the market? - Define the central focus of market activities - End users in B2C markets, other businesses in B2B markets - Should create value for the company and collaborators Who are collaborators in the target market? - Entities working with the company to create value for target customers - Provide complementary resources to help fulfill customer needs How should companies choose collaborators? - Based on the resources they offer to fulfill customer needs - Collaboration involves outsourcing resources lacking in-house How should companies view competitors? - Avoid myopic view based on traditional industry terms - Understand competitors' objectives, strategies, and behavior What role does the company play in the target market? - Develops and manages market offerings - Each strategic business unit manages its own offerings What factors does the context encompass? - Sociocultural - Technological - Regulatory - Economic - Physical How does context impact a company's ability to create market value? - Dramatically affects operations and market strategies - Recent developments like AI, trade wars, pandemics force companies to rethink operations What does the choice of target customers determine in the market? - Specifies competition, collaborators, and company resources - Outlines the context in which market value is created Why is the selection of target customers crucial? - Foundation for building a successful business model - Determines all other aspects of market strategy What does the 5-C framework represent? - Target customers at the center - Collaborators, competitors, and company in the middle - Context on the outside What does the sociocultural context encompass? - Social and demographic trends - Value systems, religion, language, lifestyles What is included in the technological context? - New techniques, skills, methods for developing and delivering offerings What does the regulatory context involve? - Taxes, tariffs, product specifications, communication regulations What comprises the economic context? - Economic growth, inflation, interest rates, money supply What factors are part of the physical context? - Natural resources, geographic location, climate trends, health conditions What does the Five Forces framework identify? - Industry competitiveness based on five factors - Bargaining power of suppliers and buyers, threat of new entrants and substitutes, rivalry among existing competitors How does the Five Forces framework define industry competitiveness? - Increased competition with higher bargaining power of suppliers and buyers - Greater threat of new entrants and substitutes, intensified rivalry among competitors How does the Five-C framework compare to the Five Forces framework? - Both facilitate market analysis - Five-C framework defines the market based on customer needs rather than industry What does the Five-C framework focus on? - Customer needs and market value creation How does the Five-C framework define competitors? - Based on their ability to fulfill customer needs and create market value Why is the concept of substitutes considered superfluous in the Five-C framework? - Substitutes are seen as cross-category competitors fulfilling a particular need - Not concerned with whether competitors operate within the same industry What is the relevance of the Five Forces framework for marketers? - Useful for analyzing competitive structure within industries Why is the Five-C framework more useful for analyzing market value creation? - Focuses on customer needs and market perspective  - Considers customer needs rather than a specific industry What factors does the Five Forces framework consider? - Bargaining power of suppliers - Bargaining power of buyers - Threat of new entrants - Threat of substitutes - Rivalry among existing competitors What is the main focus of the Five Forces framework? - Analyzing industry competitiveness How does the Five-C framework differ from the Five Forces framework in defining competitors? - Five-C framework defines competitors based on their ability to fulfill customer needs - Five Forces framework defines competitors based on industry boundaries What perspective does the Five-C framework take in defining the market? - Market perspective based on customer needs Why is the concept of substitutes considered differently in the Five-C framework? - Substitutes are seen as competitors fulfilling specific customer needs - Industry boundaries are not the focus How does the Five-C framework influence marketing strategy? - Helps in understanding and meeting customer needs effectively - Guides market value creation strategies based on customer-centric approach What are the three types of value to consider when developing market offerings? - Customer value - Collaborator value - Company value What factors determine customer value? - Target customers' needs - Benefits received and costs incurred - Benefits and costs of alternative offerings What does the collaborator value proposition explain? - Why collaborators would choose the company's offering over alternatives How is company value defined? - Relative to all benefits and costs associated with the offering - Affinity with company goals and other opportunities What does the market value principle emphasize? - Creating value for target customers, collaborators, and the company - Viability of the business model What are the three sets of questions posed by the market value principle? - What value does the offering create for target customers? - What value does it create for the company's collaborators? - What value does it create for the company? What is the significance of an optimal value proposition? - Balances value for customers, collaborators, and the company - Enables the company to achieve its strategic goals Why is failure to create superior value for any market entity detrimental? - Leads to an unsustainable business model - Dooms the business venture How does Starbucks create market value? - Customers: Functional and psychological benefits - Collaborators: Monetary payments, consistent demand - Company: Revenues, profits, brand building What are the seven tactics for developing market value? - Product, service, brand, price, incentives, communication, distribution How does the product differ from the service? - Product: Tangible or intangible, grants ownership - Service: Intangible, without ownership rights What is the aim of branding? - Identify and differentiate products/services - Create unique value beyond product/service What is meant by incentives in the market offering? - Targeted tools to enhance value by reducing costs or increasing benefits - Includes volume discounts, price reductions, coupons, etc How is communication related to the market offering? - Informs target customers, collaborators, and stakeholders about the offering What does distribution encompass in the market offering? - Channels used to deliver the offering to target customers and collaborators How are the seven marketing tactics categorized? - Value-design: Product, service, brand, price, incentives - Information-value and delivery-value: Communication, distribution  How does the customer perceive value creation? - Attractiveness, awareness, availability of the offering What does the 4-P framework in marketing represent? - Four key decisions: Product, price, promotion, place What are the limitations of the 4-P framework? - Doesn't distinguish between product and service - Doesn't regard brand as a separate factor - Treats promotion as a single activity How does the 7-T framework improve upon the 4-P framework? - Distinguishes product, service, brand - Separates incentives and communication - Replaces place with distribution, offering a more accurate approach What does setting a goal do for a company? - Guides all company activities - Acts as a beacon for company actions What are the two key decisions involved in setting a goal? - Identifying the focus of company actions - Specifying performance benchmarks What are monetary goals based on? - Outcomes like net income, profit margins, earnings per share, return on investment What are strategic goals centered on? - Nonmonetary outcomes important to the company's strategy - Increasing sales volume, brand awareness, social welfare What is the "triple bottom line" concept? - Focuses on people, planet, and profits - Considers legal, ethical, social, and environmental impacts What do quantitative benchmarks specify? - Specific milestones to be achieved - Can be stated in relative or absolute terms What do temporal benchmarks identify? - Time frame for achieving specific benchmarks - Influences strategy, tactics, resources, and costs What does implementing the company goal require? - Specification of goal focus, quantitative benchmark, and temporal benchmark - Helps fine-tune strategy and tactics What does the strategy denote? - The value the company intends to create in a specific market - Includes target market and value proposition What are the components of the target market? - Customers, competitors, collaborators, company, context What are the three components of the value proposition? - Customer value, collaborator value, company value What are the seven attributes of tactics in the marketing mix? - Product, service, brand, price, incentives, communication, distribution What does implementation entail? - Translating strategy into tactics - Developing company resources, the offering, and commercial deployment What is resource development in implementation? - Securing competencies and assets needed for the offering - Includes infrastructure, suppliers, employees, products, brands, channels, capital What does offering development involve? - Designing the product, specifying the service, building the brand, setting prices and incentives, designing communication, procuring distribution channels What is commercial deployment in implementation? - Establishes the offering in the market - Involves timing, resources, scale, and selectivity of the market launch What is the purpose of initial selective deployment? - Allows assessment of market reaction - Can focus on specific segments before full rollout How does the marketing plan aid in deployment? - Defines the primary market and outlines activities for initial launch - Specifies timing and processes for expanding to other markets What is the G-STIC framework? - Goal-Strategy-Tactics-Implementation-Control - Guides marketing planning and management How does setting a goal contribute to the G-STIC framework? - Sets the foundation for strategy and tactics - Guides the entire marketing planning process Why are controls important for a company? - Ensure alignment of actions with strategy and tactics - Enhance effectiveness and cost efficiency - Assess return on marketing investment What is the primary function of controls? - Inform whether to stay the course, modify strategy and tactics, or abandon current actions What are the two key components of controls? - Evaluating company performance - Monitoring the market environment What are some common performance measures for evaluating a company's performance? - Sales metrics, customer readiness-to-buy metrics, customer value metrics, distribution metrics, communication metrics What does evaluating the company's performance reveal? - Adequate progress or performance gaps - Guides whether to continue with current action plan or modify it What is the purpose of monitoring the market environment? - Identify changes in market context - Seize opportunities and counteract threats How do controls enhance business agility? - Coordinate company actions with market conditions - Enable timely response to changes How have companies like Amazon and Google benefited from monitoring the market environment? - Realigned business models to take advantage of technology-driven innovations - Gained ground over competitors What is the purpose of a marketing plan? - Direct and coordinate all company marketing efforts - Communicate company's goal and proposed course of action to stakeholders How does the marketing plan differ from the business plan? - Marketing plan focuses solely on marketing activities - Business plan addresses marketing along with financial, operations, HR, and technological aspects What are the main functions of a marketing plan? - Describe company's goal and proposed action - Inform relevant stakeholders - Persuade decision makers of viability of goal and action plan What are the key components of the marketing plan? - Executive summary, situation overview, G-STIC section, control measures, exhibits What is the purpose of the executive summary in a marketing plan? - Provides a streamlined overview of the company's goal and proposed action What does the situation overview in a marketing plan evaluate? - Environment in which the company operates - Current and potential markets What does the G-STIC section in a marketing plan include? - Goal, strategy, tactics, implementation, control procedures How do exhibits contribute to the marketing plan? - Streamline the plan by presenting tables, charts, and appendices Why do marketing plans need updating? - To remain relevant in changing market conditions - Reflect changes in company's strategy, tactics, and environment What are some reasons for updating a marketing plan? - Changes in target market demographics, competitive environment, company collaborators, company itself, market context How have companies like McDonald's and Walmart adapted their marketing plans? - Introduced healthier options in response to changing customer preferences - Became multichannel retailers to compete with online retailers What is the purpose of conducting a marketing audit? - Identify overlooked opportunities and problem areas - Recommend actions to improve company's performance What is the purpose of the Executive Summary in a marketing plan? - Provide an overview of the situation, the company’s goal, and proposed course of action What does the Situation Overview section of a marketing plan include? - Overview of the current/potential customers, collaborators, competitors, and context - Identification of relevant opportunities and threats What are the components of the Goal section in a marketing plan? - Primary Goal: Define the company’s ultimate goal and key performance benchmarks - Market Objectives: Define focus and benchmarks for customer, collaborator, company, competitive, and context objectives What does the Strategy: Target Market section of a marketing plan define? - Customers: Needs to be fulfilled, customer profile - Collaborators: Key collaborators and their strategic goals - Company: Business unit, core competencies, current product line, market position - Competitors: Competitive offerings  - Context: Economic, technological, sociocultural, regulatory, and physical contexts What does the Strategy: Value Proposition section of a marketing plan define? - Customer value proposition, collaborator value proposition, and company value proposition - Includes positioning strategy and statement for each What does the Tactics section of a marketing plan outline? - Key attributes of the market offering: Product, service, brand, price, incentives, communication, distribution What does the Implementation section of a marketing plan define? - Resource development: Key resources needed - Offering development: Processes for developing the market offering - Commercial deployment: Process for bringing the offering to target customers What is the purpose of the Control section in a marketing plan? - Identify metrics for assessing the offering’s performance and monitoring the environment - Includes performance evaluation criteria and analysis of the environment What is included in the Exhibits section of a marketing plan? - Market research data, financial analyses, offering specifics, and implementation details to support specific aspects of the plan SUMMARY: What is market-oriented strategic planning? - Process of aligning organization’s objectives, skills, and resources with changing market opportunities - Aims to achieve target profits and growth What are the three levels of strategic planning? - Corporate, business unit, and market offering What does corporate strategy involve? - Defining corporate mission - Establishing strategic business units (SBUs) - Allocating resources and assessing growth opportunities What does strategic planning for individual business units involve? - Defining mission - Analyzing external opportunities and threats - Analyzing internal strengths and weaknesses - Crafting market offerings What are the two levels of marketing planning and management? - Company or business unit level - Offering level What are the five main steps of marketing planning from the perspective of designing an offering? - Setting a goal - Developing the strategy - Designing the tactics - Defining the implementation plan - Identifying control metrics What does setting a goal involve? - Identifying the focus of company’s actions - Defining quantitative and temporal performance benchmarks - Translating ultimate goal into specific market objectives What does the strategy define? - Value created by the company in a particular market - Target market and value proposition - Five Cs: customers, collaborators, company, competitors, and context What do tactics outline? - Specific activities to execute a given strategy - Key attributes of the company’s offering What does the implementation plan involve? - Developing necessary resources - Developing the actual offering - Deploying the offering in the target market What does the control in marketing planning do? - Delineates criteria for evaluating goal progress - Articulates process for analyzing changes in the market environment What is the core of a marketing plan? - G-STIC framework What should a marketing plan include? - Executive summary, situation overview, exhibits - Actionable, relevant, clear, and succinct content Why should marketing plans be periodically updated? - To remain relevant in changing market conditions What is a marketing audit? - Comprehensive examination of the marketing aspect of an offering or a company’s marketing department What are the characteristics of an effective marketing audit?  - Comprehensive, systematic, unbiased, periodic What does a marketing audit entail? - Goal audit, strategy audit, tactics audit, implementation audit, and controls audit How does the marketing audit differ from the marketing plan? - Marketing plan faces forward toward future actions, while marketing audit consolidates past, present, and future by examining current and past performance What is the purpose of conducting a marketing audit? - To identify overlooked opportunities and problem areas - To recommend a plan of action to improve marketing performance KAPITEL 6: Why do companies need to identify market segments? - To effectively connect with customers in diverse markets - To satisfy unique needs and wants of different customer groups What are the steps for effective targeting in marketing? - Segmentation - Targeting - Developing a value proposition and positioning What does segmentation involve? - Identifying distinct groups of buyers with differing needs and wants What is targeting in marketing? - Process of identifying customers for whom the company will optimize its offering What is the logic behind targeting? - Mass marketing ignores segment differences, while targeted marketing addresses different consumer needs and wants - Targeted marketing leads to better design, pricing, communication, and delivery of products/services What is undifferentiated marketing? - Ignores segment differences and targets the whole market with one offer - Eg, Henry Ford's Model-T Ford in one color What is targeted marketing? - Sells different products to different market segments - Eg, Estée Lauder markets different brands to different consumer tastes What is one-to-one marketing? - Each market segment comprises a single customer - Companies tailor offerings, messages, and media to individual customers What is mass customization? - Meeting individual customer requirements on a mass basis - Offering individually designed products, services, programs, and communications What are examples of mass customization? - MINI Cooper's online configurator - Coke's Freestyle vending machine - Customized experiences in airlines, hotels, and rental car agencies What is strategic targeting? - Focuses on customers whose needs the company can fulfill by customizing its offerings to their needs What is tactical targeting? - Identifies ways to reach strategically important customers effectively and cost-efficiently How do strategic and tactical targeting differ? - Strategic targeting prioritizes value creation and capture - Tactical targeting focuses on reaching all strategically important customers effectively What is the goal of strategic targeting? - Yield a better fit between the offering’s benefits and the customers’ needs What is the goal of tactical targeting? - Reach all strategically important customers effectively and efficiently What questions do strategic and tactical targeting seek to answer? - Who are the customers that the company can establish a mutually beneficial relationship with? - How can the company reach these customers most effectively and efficiently? What is strategic targeting? - Directed by the company’s capability to meet customer needs effectively - Requires a tradeoff between potential customers to focus on those who offer superior value What are the two key questions when evaluating target customers? - Can the company create superior value for these customers? - Can these customers create superior value for the company? What is target compatibility? - Reflects the company’s ability to outdo the competition in fulfilling target customers’ needs - Depends on resources and capacity to create superior customer value What are essential resources for successful targeting? - Business infrastructure - Access to scarce resources - Skilled employees  - Technological expertise - Strong brands - Collaborator networks What are core competencies? - Sources of competitive advantage contributing to perceived customer benefits - Difficult for competitors to imitate - Applicable in a wide variety of markets What is target attractiveness? - Reflects the ability of a market segment to create superior value for the company - Customers must contribute value monetarily and strategically What is monetary value? - Consists of customer revenues and costs of serving target customers - Influenced by market size, customer buying power, pricing power, competition, and context factors What is strategic value? - Nonmonetary benefits that customers bring to the company - Includes social value, scale value, and information value What is social value? - Reflects the influence of target customers on other potential buyers - Customers may impact opinions of others via social networking What is scale value? - Benefits derived from the scale of the company’s operations - Companies may target low-margin customers to build user networks for future growth What is information value? - Worth of the information that customers provide - Helps design, communicate, and deliver value to other customers with similar needs What is the objective of tactical targeting? - Determine which customers to target and which to ignore - Determine cost-efficient ways to communicate and deliver offerings to selected target customers What factors are involved in defining the customer profile? - Demographic, geographic, behavioral, and psychographic descriptors What are demographic factors? - Include age, gender, income, occupation, religion, ethnicity, and more - For companies targeting other companies, factors are referred to as firmographics What are geographic factors? - Reflect the physical location of target customers - Can be relatively enduring or dynamic, influenced by the ubiquity of mobile devices What are behavioral factors? - Describe customers’ actions, including prior experience, purchase frequency, loyalty, and more - Include online versus offline purchases, decision-making roles, and customer decision journey stage What are psychographic factors? - Involve aspects of an individual’s personality, such as attitudes, values, interests, and lifestyle - Link observable and unobservable characteristics of target customers Why are psychographics important? - Sharpened by the use of online communication and e-commerce - Help companies understand customers’ moral values, attitudes, interests, and lifestyles How do social media companies and retailers utilize customer data? - Construct actionable psychographic customer profiles - Link demographic, geographic, and behavioral data with values, attitudes, interests, and lifestyle What is tactical targeting? - Focuses on identifying demographic, geographic, psychographic, and behavioral characteristics of target customers - Complements strategic targeting by making value-based segments observable How do strategic and tactical targeting complement each other? - Strategic targeting focuses on creating market value - Tactical targeting identifies observable characteristics of target customers How does a company align customer value with the customer profile? - Links value-based customer segments with observable characteristics of customers - Considers factors like credit scores, demographics, geolocation, and purchase behavior What are the main principles of tactical targeting? - Effectiveness: Reach strategically viable customers and make them aware of the offering - Cost efficiency: Target communication and distribution to selected customers only What are personas? - Detailed profiles of hypothetical target consumers - Include demographic, psychographic, geographic, or behavioral information How are personas used in marketing? - Help incorporate a well-defined target-customer point of view in marketing decision making - Aid in visualizing target customers and understanding their responses What is single-segment targeting? - Marketing to only one particular segment  - Offers deep knowledge of segment needs and operating economies through specialization Give an example of single-segment targeting - Porsche targeting sports car enthusiasts - Enterprise focusing on low-budget, insurance-replacement market What does an attractive niche segment look like? - Has distinct needs and is willing to pay a premium for satisfying them - Small but profitable with growth potential and limited competition What is multi-segment targeting? - Developing offerings targeting multiple smaller customer segments - Requires unique offerings for each segment How does a firm minimize risk in multi-segment targeting? - By diversifying offerings across different customer segments - Focusing on different products and/or markets What is product specialization? - Selling a certain product to several different market segments - Carries the risk of being supplanted by new technology What is market specialization? - Concentrating on serving many needs of a particular customer group - Builds a strong reputation among the customer group What mistake do companies often make in multi-segment targeting? - Not aligning the attributes of their offerings with the distinct value sought by target customers in each segment - Creating offerings based on product development capability rather than explicit customer needs Why is it important to tailor offerings in multi-segment targeting? - Ensures offerings address the needs of each targeted segment - Prevents competition among offerings for the same customer segment What are the benefits of aligning offerings with customer needs in multi-segment targeting? - Prevents customer confusion - Enhances the success of the multi-segment targeting strategy How does Best Buy utilize customer personas? - Developed five customer personas to guide the redesign and relaunch of GeekSquadcom - Personas include descriptions like "Jill," "Charlie," "Daryl," "Luis," and "Nick" How did Campbell Hausfeld use consumer profiles? - Developed eight consumer profiles, including a female do-it-yourselfer and an elderly consumer - Helped successfully launch new products such as drills with specific features How does Allegiant Air target niche customers? - Focuses on distinct needs of niche customers - Offers benefits that competitors overlook What are the main principles of single-segment targeting? - Gain deep knowledge of segment needs - Achieve operating economies through specialization What is market segmentation? - Divides a market into well-defined slices - Consists of groups of consumers with similar needs or profile characteristics What are the common types of segmentation? - Demographic, geographic, behavioral, and psychographic Why are demographic variables popular with marketers? - Associated with consumer needs and wants - Easy to measure How do marketers use age as a demographic variable? - Group customers into different generations - Tailor products and services based on generation-specific needs How does stage in the life cycle affect market segmentation? - Reflects major concerns like marriage, divorce, or buying a home - Presents opportunities for marketers to address specific life stage needs What role does gender play in market segmentation? - Men and women have different attitudes and behaviors - Marketers tailor products and messages based on gender differences How is income used in market segmentation? - Segments consumers based on their purchasing power - Income does not always predict the best customers for a product Why is race and culture important in market segmentation? - Reflects different needs and wants among ethnic and cultural segments - Requires targeted marketing activities to cater to diverse needs What is geographic segmentation? - Divides the market based on geographic units like nations, states, or neighborhoods - Tailors marketing programs to local customer groups How do marketers use behavioral segmentation? - Divides buyers based on their actions and behaviors  - Considers variables like user status, usage rate, loyalty status, and occasions What is psychographic segmentation? - Divides buyers based on psychological traits, lifestyles, or values - Considers attitudes and motivations rather than just demographics How is user status used in behavioral segmentation? - Classifies consumers into nonusers, potential users, first-time users, regular users, and ex-users - Helps in understanding different marketing strategies required for each group What role does usage rate play in behavioral segmentation? - Segments markets into light, medium, and heavy product users - Heavy users often account for a high percentage of total consumption How does buyer-readiness stage affect market segmentation? - Reflects the different stages consumers go through in the buying process - Requires tailored marketing efforts to move consumers from awareness to purchase What is loyalty status in behavioral segmentation? - Divides consumers based on their brand loyalty - Helps in targeting efforts to retain loyal customers and increase share of purchases among other segments How are occasions used in behavioral segmentation? - Distinguishes buyers based on when they develop a need, purchase, or use a product - Reflects different needs associated with different occasions How does psychographic segmentation differ from demographic segmentation? - Considers psychological traits, lifestyle, and values rather than just demographic characteristics - Reflects underlying needs and motivations What is the VALS framework? - Classifies US adults into eight primary groups based on psychological traits and resources - Helps in understanding consumer motivations and resources for targeted marketing How is psychographic segmentation used in targeting the LGBT market? - Targets consumers based on sexual orientation and gender identification - Requires initiatives to be LGBT-friendly and sensitive to diverse needs Why is psychographic segmentation important in marketing? - Reflects consumer attitudes, lifestyles, and values - Helps in crafting targeted marketing strategies beyond demographics What are some common segmentation variables for business markets? - Demographic factors - Operating variables - Purchasing approaches - Situational factors - Personal characteristics What are examples of demographic factors in business market segmentation? - Industry - Company size - Location What are examples of operating variables in business market segmentation? - Technology - User or nonuser status - Customer capabilities What are examples of purchasing approaches in business market segmentation? - Purchasing-function organization - Power structure - Nature of existing relationship What are examples of situational factors in business market segmentation? - Urgency - Specific application - Size of order What are examples of personal characteristics in business market segmentation? - Buyer–seller similarity - Attitude toward risk - Loyalty What major questions should business marketers ask in determining which segments and customers to serve? - Which industries to serve? - What size companies to serve? - What geographic areas to serve? How can a rubber-tire company further segment within a chosen target industry? - By company size - By purchase criteria What are examples of purchase criteria segmentation in business markets? - Government laboratories needing low prices and service contracts - University laboratories needing equipment requiring little service - Industrial labs needing highly reliable and accurate equipment  Why is finding sectors with growth prospects crucial for business marketers? - Identifies most profitable customers and promising opportunities - Ensures business sustainability and success According to Chris Anderson, what shift in consumer buying patterns has been observed due to the advent of online commerce? - Shift from "hits" to "niches" - Increased value in the long tail What is the "long tail" concept in consumer buying patterns? - Distribution of product sales weighted towards few "hits" and many low-selling items - Majority of products generate minimal sales What is the traditional focus of the mass market in product sales? - Generating "hit" products in the head of the distribution curve - Neglecting low-revenue market niches in the long tail What is the "80-20" rule in consumer product sales? - 80% of revenue is generated by 20% of products - Reflects focus on "hit" products in the head of the curve How does Chris Anderson challenge the traditional view of consumer product sales with the long tail theory? - Asserts that lower-selling products in the long tail contribute significantly to revenue - Proposes a "50-50" rule where half of the revenue comes from lower-selling products What are the three premises of the long tail theory proposed by Chris Anderson? - Lower distribution costs - Greater variety of products available online - Ability to tap into niche markets unreachable through traditional retail channels How does e-commerce support the premises of the long tail theory? - Increased inventory and variety online - Lower search costs for niche products due to online information and recommendation systems How have larger companies benefited from the long tail? - Offering increasingly varied products with viable sales volumes - Expanding product range due to lower costs of design, communication, and delivery What challenges remain in certain industries despite the long tail phenomenon? - Categories with complex production or high inventory costs - Automotive, aircraft, and shipbuilding industries rely on mass-produced offerings What critiques have been raised against the long tail theory? - Hits are valuable to both content creators and consumers - Long tail products often originate from a small concentration of online aggregators What challenges do poor recommendation systems pose to the long tail theory? - Obscure and hard-to-find products in the long tail disappear before generating sufficient sales - Inventory and handling costs may outweigh financial benefits for physical products What is the significance of the "head" in consumer product sales? - Concentration of hits which are valuable to both content creators and consumers - Critiqued as being of higher quality than long tail products SUMMARY: What is targeting in marketing? - Process of identifying customers for optimization of company offerings - Prioritizes certain customers for design, communication, and delivery of offerings What are the two types of decisions involved in targeting? - Strategic targeting - Tactical targeting What factors guide strategic targeting decisions? - Target compatibility - Target attractiveness Define target compatibility and target attractiveness in strategic targeting - Target compatibility: Company's ability to create value for customers - Target attractiveness: Customers' potential to create value for the company What principle guides strategic targeting decisions regarding value creation? - Company should create superior value for customers compared to competitors - Identify markets where the company has superior resources relative to competitors What is tactical targeting and what factors does it involve? - Involves identifying effective and cost-efficient ways to reach viable customers - Links value-based segments to observable characteristics such as demographic, geographic, psychographic, and behavioral factors What are the key factors guiding tactical targeting decisions? - Effectiveness: Company's ability to reach all target customers - Cost efficiency: Company's ability to deploy resources to reach only target customers What is segmentation in marketing and what purpose does it serve? - Categorization process grouping customers based on relevant differences for targeting - Enables development of offerings for entire segments rather than individual customers CHAPTER 7: What is the significance of strategic brand management? - Ensures each offering represents distinct value to the target market - Requires understanding of consumer needs, company capabilities, and competitive actions How does T-Mobile exemplify the benefits of a unique market position? - Demonstrates success through carving out a distinct position in the marketplace What is the process of developing a value proposition? - Discover different needs and consumer groups - Target satisfying needs in a superior way - Develop value proposition and position offerings for target customers What are the three domains in which an offering can create value? - Functional - Psychological - Monetary Define functional value and provide examples - Benefits and costs related to offering's performance - Examples: Performance, reliability, durability, ease of use What does psychological value encompass and in which categories is it important? - Psychological benefits and costs beyond functional benefits - Important in luxury and fashion categories What constitutes monetary value and its role in marketing? - Financial benefits and costs associated with the offering - Includes price, fees, discounts, and rebates How is customer value calculated across different dimensions? - Total customer benefit: Perceived value of functional, psychological, and monetary benefits - Total customer cost: Perceived bundle of costs incurred in obtaining and using the offering What is the customer value proposition based on? - Difference between benefits customers receive and costs they assume for different choices How can marketers increase the value of an offering? - Raise functional, psychological, and monetary benefits - Reduce corresponding costs What does the value proposition include? - Cluster of benefits promised by the company - Goes beyond core offering positioning What is customer value analysis and its steps? - Reveals company's strengths and weaknesses relative to competitors - Steps: Identify attributes, assess importance, evaluate performance, monitor over time What alternatives does a seller at a disadvantage have according to customer value analysis? - Increase total customer benefit - Decrease total customer cost Define positioning in marketing - Designing offering and image to occupy distinctive place in target market's minds What is the goal of effective positioning? - Instill brand in consumers' minds to maximize benefits to the firm What are the components of effective positioning? - Rational and emotional aspects appealing to both head and heart What is the brand substitution test used for? - Measure effectiveness of brand positioning - Determines if marketing activities would work equally well with a competitor's brand What should a well-positioned brand be? - Distinctive in meaning and execution - Balanced between present and future aspirations What is crucial in positioning strategy? - Define and communicate similarities and differences between brand and competitors What are the key aspects of choosing a frame of reference for positioning? - Identifying target market and relevant competition - Establishing optimal points of parity and difference based on frame of reference What are Points of Difference (PODs) in branding? - Attributes or benefits that differentiate a brand from competitors - Strongly associated with the brand, positively evaluated by consumers How can establishing meaningful Points of Difference benefit a company? - Can provide financial payoffs and increase customer loyalty - Example: O2 rebranding leading to increased acquisition, loyalty, and revenue What is brand authenticity and its importance in differentiation? - Extent to which consumers perceive a brand as faithful to its essence - Authentic brands evoke trust, affection, and strong loyalty Give examples of brands with multiple Points of Difference (PODs) - Apple (design, ease of use, irreverent attitude) - Nike (performance, innovative technology, winning)  - Southwest Airlines (value, reliability, fun personality) What are the criteria for determining if a brand association can function as a Point of Difference? - Desirability, deliverability, and differentiability - Example: Select Comfort's Sleep Number beds meeting consumer comfort needs What is the role of a company in ensuring deliverability of brand associations? - Must have internal resources to create and maintain desired associations - Product design and marketing should support desired brand image What are Points of Parity (POPs) in branding? - Attribute or benefit associations shared with other brands - Three forms: category, correlational, competitive Describe category Points of Parity (POPs) and provide an example - Attributes or benefits essential to a credible offering in a product category - Example: Travel agency offering air and hotel reservations, leisure packages advice What are correlational Points of Parity (POPs) and how do they arise? - Potentially negative associations arising from positive associations for the brand - Arise when attributes that make up POPs or PODs are inversely related Explain competitive Points of Parity (POPs) and their importance - Associations designed to overcome perceived brand weaknesses compared to competitors - Help the brand achieve competitive parity and maintain consumer trust How can brands effectively align Points of Difference (PODs) and Points of Parity (POPs)? - Identify multiple frames of reference if competition widens - Develop positioning based on combined robustness or prioritize competitors What is the significance of straddle positioning for brands? - Allows brands to create multiple Points of Difference and Points of Parity - Expands market coverage and potential customer base What risks are associated with straddle positioning? - Brand may not be viewed as legitimate player in either category if associations are not credible - Example: Early personal digital assistants failing to straddle categories effectively How should brands choose specific benefits as Points of Parity (POPs) and Points of Difference (PODs)? - Analyze and develop carefully, focusing on two or three defining factors - Follow the "80–20" rule, ensuring high applicability to 80% of products carrying the brand What are perceptual maps used for in branding? - Visual representations of consumer perceptions and preferences - Identify unmet consumer needs and marketing opportunities based on brand perceptions What are Points of Difference (PODs)? - Attributes or benefits that differentiate a company’s offering from the competition - Strongly associated with a brand, positively evaluated by consumers, and not found to the same extent with competitors Give examples of Points of Difference (PODs) - Louis Vuitton: Most stylish handbags - Energizer: Longest-lasting battery - Fidelity Investments: Best financial advice and planning What is brand authenticity? - The extent to which consumers perceive a brand to be faithful to its essence and reason for being - Creates trust, affection, and strong loyalty Provide examples of authentic brands - Hershey’s, Kraft, Crayola, Kellogg’s, Johnson & Johnson - Welch’s: Focuses on local sourcing of ingredients What are some characteristics of strong brands? - Multiple points of difference - Examples: Apple (design, ease of use, irreverent attitude), Nike (performance, innovative technology, winning), Southwest Airlines (value, reliability, fun personality) What are the three criteria for a brand association to function as a point of difference? - Desirability, deliverability, and differentiability Explain the criteria for a desirable brand association - Must be personally relevant to consumers - Consumers need compelling reasons to believe in the benefit - Can be supported by patented, branded ingredients Describe the criteria for a deliverable brand association - Company must have resources to create and maintain the association - Product design and marketing must support the association What is the importance of differentiability in a brand association? - Consumers must see the association as distinctive and superior to competitors Define Points of Parity (POPs) - Attribute or benefit associations not necessarily unique to the brand but shared with other brands Give examples of Points of Parity (POPs) types - Category, correlational, competitive points of parity Explain category points of parity - Attributes or benefits essential to a legitimate offering within a product or service category Describe correlational points of parity - Potentially negative associations arising from positive associations for the brand What are competitive points of parity? - Associations designed to overcome perceived weaknesses compared to competitors’ points of difference What are the core strategies for creating a sustainable competitive advantage? - Differentiate on an existing attribute, introduce a new attribute, build a strong brand Explain differentiating on an existing attribute - Stressing quality, price, customer service, or performance compared to competitors Give examples of introducing a new attribute - TOMS "buy one, give one" program, PepsiCo's all-natural Sierra Mist, Uber's cash-free payment How can a strong brand create a sustainable competitive advantage? - Gives customers a reason to choose the offering, influences perceptions beyond product characteristics What are the key aspects of crafting a positioning statement? - Target customers, key benefit, category membership, points of parity, and points of difference What is the role of narrative or storytelling in positioning a brand? - Provides richness and imagination for consumers, communicates brand values and benefits effectively What is the importance of focus and consistency in marketing for small businesses? - Critical due to limited resources and budgets - Helps establish brand identity and recognition Give an example of a small business focusing on product performance advantage - Dropbox: Offers convenient single-folder approach for storing files across devices Why is it important for small businesses to focus on building one or two strong brands? - Limited resources often mean they can only effectively manage a couple of brands - Consistency in brand associations is crucial for brand recognition Provide an example of a small business with strong brand associations - Volcom: Associated with the "Youth Against Establishment" credo rooted in snowboarding and surfing cultures How can small businesses encourage product or service trial? - Through sampling, demonstrations, or other means to engage consumers - Example: See's Candies allows walk-in customers to sample candies in the shop Explain the importance of a cohesive digital strategy for small businesses - Allows them to have a larger profile and reach than they might otherwise - Social media, online advertising, and e-commerce are essential components Give an example of a small business with a successful digital strategy - Urbane Apartments: Utilizes social media, resident-penned blog, and active profiles on various platforms What methods can small businesses use to create buzz and a loyal brand community? - Word of mouth, public relations, social networking, low-cost promotions, and sponsorship - Example: Evernote utilizes passionate ambassadors among its users to spread the word Why is it important for small businesses to employ a well-integrated set of brand elements? - Maximizes brand equity and enhances brand awareness and image - Includes brand names, logos, and packaging What is the significance of secondary associations for small businesses? - Cost-effective shortcut to building brand equity, signaling quality or credibility - Example: Smartwater's endorsement deals with celebrities drove success Provide an example of a small business leveraging secondary associations - Smartwater: Clever marketing and endorsement deals with celebrities contributed to its success Why is creativity paramount for small businesses in branding? - Helps find new ways to market products and engage consumers - Essential for standing out in a competitive market What are some branding guidelines for small businesses? - Find a compelling product performance advantage - Focus on building one or two strong brands - Encourage product trial - Develop a cohesive digital strategy - Create buzz and a loyal brand community How do small businesses find success despite limited resources? - By focusing on key branding strategies and being creative in marketing approaches How can small businesses effectively manage brand associations? - By consistently reinforcing key associations across marketing channels and over time What role does product trial play in building brand loyalty for small businesses? - Encouraging consumers to experience the brand firsthand can lead to increased loyalty and word-of-mouth marketing What are the benefits of a cohesive digital strategy for small businesses? - It allows them to have a larger online presence and reach a wider audience - Helps establish credibility and engagement with customers Why is it important for small businesses to create buzz and a loyal brand community? - Word-of-mouth marketing and brand loyalty can be powerful tools for growth, especially with limited marketing budgets What factors should small businesses consider when employing brand elements? - Brand names, logos, and packaging should be memorable, meaningful, and consistent with the brand's identity How can small businesses leverage secondary associations to build brand equity?  - By associating with persons, places, or things that signal quality or credibility, small businesses can enhance their brand image and recognition SUMMARY: What is a key aspect of marketing strategy? - Development of a value proposition and positioning an offering to target customers What are the three domains across which an offering creates value for consumers? - Functional value, psychological value, and monetary value What is the value proposition based on? - The difference between benefits customers receive and costs they assume regarding the company's offering Define positioning in marketing strategy - Designing a company's offering and image to occupy a distinctive place in the minds of target customers How do consumers determine the value of an offering? - Relative to a frame of reference used to assess its benefits and costs What are points of difference and points of parity in positioning strategy? - Points of difference: Unique attributes or benefits of the company's offering - Points of parity: Attributes or benefits shared with the competition What is competitive advantage in marketing? - A company's ability to perform in ways competitors cannot or will not match, giving customers a reason to choose their offering What are the three core strategies for creating a competitive advantage? - Differentiating on an existing attribute, introducing a new attribute, and building a strong brand What is a positioning statement, and what are its key aspects? - It communicates an offering's positioning to everyone in the organization - Key aspects include category membership, points of parity, points of difference, and a narrative conveying the offering's positioning CHAPTER 10: What is branding? - Branding is the process of endowing products and services with the power of a brand, creating differences between products Define brand according to the American Marketing Association - A brand is a name, term, sign, symbol, or design intended to identify the goods or services of one seller or group of sellers and differentiate them from competitors What is the ultimate purpose of a brand? - To create value for consumers, the company, and its collaborators, going beyond the value created by the product and service aspects of the offering What are the main roles of branding throughout history? - Identify goods, distinguish them from competitors, and improve consumers' lives while enhancing the financial value of firms How do consumers perceive brands? - Brands reside in the minds and hearts of consumers as perceptual entities, reflecting their views and idiosyncrasies What are examples of successful brands that have become indispensable to customers? - JCrew, Gucci, Chanel, and Louis Vuitton Where can branding be applied? - It can be applied to physical goods, services, stores, places, organizations, or ideas What functions do brands perform for consumers? - Brands promise reliability, set expectations, reduce risk, simplify decision making, and express personal identity What functions do brands perform for firms? - Brands simplify product handling, provide security of demand, create barriers to entry, and influence consumer willingness to pay higher prices What is brand equity? - Brand equity is the monetary value of a brand, reflecting the premium placed on a company's valuation due to its ownership of the brand How is brand equity measured? - Through methods such as the cost approach, market approach, and financial approach, assessing the brand's contribution to future earnings What is brand power? - Brand power, or customer-based brand equity, reflects the degree to which the brand influences consumers' thoughts, feelings, and actions What are the benefits of brand power for firms? - Improved product perception, greater loyalty, less vulnerability to competition, larger margins, and more effective marketing communications What is a brand mantra? - A three- to five-word articulation of the heart and soul of the brand, guiding internal and external actions to represent the brand effectively What are the criteria for a good brand mantra? - It should communicate uniqueness, simplify the essence of the brand, and inspire relevance to employees What are brand elements? - Devices that identify and differentiate the brand, such as logos, names, slogans, and symbols What factors should be considered when choosing brand elements? - Memorability, meaningfulness, likability, transferability, adaptability, and protectability What roles do brand elements play in brand building? - They help with recall, persuasion, awareness, and building associations, contributing to brand equity How can brands protect their brand elements? - Through registered trademarks, patents for manufacturing processes, and copyrights for packaging designs What strategic function does brand equity serve for marketers? - It provides a vital bridge from the past to the future, guiding marketing decisions and investment in consumer brand knowledge What is the significance of brand characters in marketing? - Brand characters have a long history in marketing and serve to reinforce brand qualities, enhance likability, and make brands interesting and fun  Give examples of brand characters and their associated brands - Keebler elves for cookies, Aflac duck for insurance, Michelin Man for tires, M&M’s spokescandies, Pillsbury Doughboy, and Mr Peanut What qualities do brand characters possess? - Brand characters have human characteristics, enhancing likability and making the brand more relatable to consumers How are brand characters introduced to consumers? - Brand characters are typically introduced through advertising and can play a central role in ad campaigns and package designs What are some examples of animated brand characters? - Pillsbury Doughboy, Peter Pan (peanut butter), Tony the Tiger, Snap, Crackle, & Pop Give examples of live-action brand characters - Juan Valdez (Colombian coffee) and Ronald McDonald How do brand characters help brands break through marketplace clutter? - Brand characters are colorful, rich in imagery, and communicate key product benefits in a soft-sell manner, avoiding problems associated with human spokespeople What advantages do brand characters offer over human spokespeople? - Brand characters don’t demand pay raises or misbehave, offering the opportunity to shape the brand's personality and facilitate consumer interactions How do brand characters adapt to the digital world? - Brand characters play an increasingly important role in digital marketing, with successes like Mr Peanut in viral videos leading to the introduction of new product lines What is the marketing strategy behind Michelin’s Bibendum character? - Bibendum represents safety for the family and achieves 80 percent awareness worldwide, with advertising use boundaries set by Michelin through a "Passport" for the character What role do M&M’s spokescandies play in marketing? - M&M’s spokescandies are an integral part of all advertising, promotion, and digital communications for the brand How do brand characters contribute to brand personality? - Brand characters offer the opportunity to shape the brand's personality, making it more relatable and engaging for consumers What is the history of Mr Clean's presence on social media? - First introduced in 1957, Mr Clean has amassed over a million Facebook fans, demonstrating the enduring appeal of brand characters in the digital age What is the role of brand characters in ad campaigns and package designs? - Brand characters can play a central role in both ad campaigns and package designs, helping to reinforce brand qualities and enhance consumer engagement What are some examples of soft-sell marketing approaches using brand characters? - Michelin's Bibendum character avoids aggressive sales pitches, focusing instead on conveying safety and family-friendly qualities How do brand characters facilitate consumer interactions? - Brand characters make brands more relatable and engaging for consumers, facilitating interactions and building brand loyalty What is the impact of brand characters on consumer perception? - Brand characters help break through marketplace clutter and communicate key product benefits in a memorable and engaging way, enhancing consumer perception of the brand What are the benefits of using brand characters in digital marketing? - Brand characters can drive engagement and virality in digital marketing campaigns, contributing to brand awareness and product visibility Give examples of brands that have successfully leveraged brand characters in digital marketing - Mr Peanut's success in viral videos led to the introduction of a new peanut butter line, dem