Marketing Preparation Final Exam PDF

Marketing Preparation Final Exam **Week 2** 1. **TAM, SAM, SOM Framework:** - **TAM (Total Addressable Market):** The overall revenue opportunity available if a product/service captured 100% of the market. - **SAM (Serviceable Available Market):** A subset of TAM tha...

Marketing Preparation Final Exam **Week 2** 1. **TAM, SAM, SOM Framework:** - **TAM (Total Addressable Market):** The overall revenue opportunity available if a product/service captured 100% of the market. - **SAM (Serviceable Available Market):** A subset of TAM that a business can realistically target based on its business model. - **SOM (Serviceable Obtainable Market):** The portion of SAM the business can achieve with its current capabilities. 2. **ATAR Model:** - Breaks down market potential into components: Awareness, Trial, Availability, and Repeat. - Useful for predicting first-year sales volume by estimating how many people will try and continue to use the product. 3. **Competitive and Usage Gaps:** - Identifying gaps where customer needs are unmet or competitors fail to provide solutions. - Example: Launching an eco-friendly detergent that addresses sustainability concerns. 4. **Big Markets are Key:** - Importance of targeting large, dynamic markets for sustainable growth. - Insights from Sequoia Capital emphasize market over team quality: a strong market can uplift even average execution. 5. Market Share % - Market Share%= My Sales/Market Demand(Total of all players) **Week 3** **Key Concepts:** - **Creating value for the customer is not about your product it is about how your product makes the customer feel** 1. **Consumer Behavior Analysis:** - Answers questions like \"Who buys?\", \"What motivates their purchase?\", and \"Where and when do they shop?\" - Example: The *Sheba cat food case* illustrates how emotional appeal and targeted promotions increased awareness and repeat purchases, reversing a sales decline. 2. **Path-to-Purchase Model:** - Stages include: - Awareness: Recognizing a need (e.g., car owners needing eco-friendly tires). - Evaluation: Considering options and gathering information (online reviews, social media). - Purchase: Making a decision based on perceived value. 3. **Maslow's Hierarchy of Needs:** - A framework to understand motivations driving consumer behavior. - Products can align with different levels of needs, such as safety (insurance) or self-actualization (luxury goods). - **Physiological:** Basic needs like food, water, shelter. - **Safety:** Security, financial stability. - **Love/Belonging:** Social connections. - **Esteem:** Respect, achievement. - **Self-Actualization:** Personal growth, creativity. **Stimuli, Black Box of the Customer, and Buyer Response** **1. Stimuli** Stimuli are external triggers that initiate a consumer\'s decision-making process. They can be classified into **marketing stimuli** and **environmental stimuli**: 1. **Marketing Stimuli**: - These include the **4 Ps of marketing**: Product, Price, Place, and Promotion. - Examples: - A well-designed ad campaign (Promotion). - A limited-time discount (Price). - Attractive product packaging (Product). **Explanation:** Marketers craft these stimuli to capture attention and influence consumer behavior. For example, a bold \"50% off\" banner at a store taps into consumers\' urgency and value-seeking behavior. 2. **Environmental Stimuli**: - Factors outside the company's direct control that can still influence consumer behavior. Examples include: - Economic conditions (e.g., a recession influencing budget-conscious purchases). - Technological advancements (e.g., the rise of e-commerce). - Social and cultural trends (e.g., a shift towards sustainability). **Explanation:** Even if external factors cannot be controlled, businesses can adapt their strategies to align with these influences, such as promoting eco-friendly products in response to sustainability trends. **2. Black Box of the Customer** The \"Black Box\" refers to the internal mental and emotional processes of a consumer that marketers cannot directly observe but significantly affect their decisions. It includes: 1. **Buyer Characteristics**: - **Personal:** Age, occupation, income, and lifestyle. - **Psychological:** Motivation, perception, beliefs, and attitudes. - **Social:** Reference groups, family influence, and roles. **Explanation:** A marketer selling sportswear must understand how athletes (with motivation for performance) differ from casual gym-goers (motivated by appearance). 2. **Decision-Making Process**: - The **pre-purchase stage** involves recognizing needs, gathering information, and evaluating alternatives. - The process is shaped by psychological factors: - **Motivation:** Why the consumer acts, often driven by unmet needs. - **Perception:** How consumers interpret marketing messages, influenced by selective attention and retention. - **Beliefs and Attitudes:** Existing views about brands or products. **Example:** A consumer might ignore ads (selective attention) unless they align with their belief system, like promoting health benefits for someone prioritizing wellness. **3. Buyer Response** The buyer response refers to the visible outcomes of the stimuli processing within the Black Box. These include: 1. **Product Choice**: - The decision about which product to purchase among available options. - **Example:** Choosing an iPhone over an Android based on brand loyalty or perceived innovation. 2. **Brand Preference**: - The brand that aligns most closely with the consumer\'s expectations or self-image. - **Example:** Someone purchasing Nike because they associate the brand with high performance and motivation. 3. **Purchase Timing**: - Decisions influenced by factors such as discounts, seasonality, or urgency. - **Example:** Buying a winter jacket during Black Friday sales to save money. 4. **Purchase Quantity**: - How much a customer buys based on perceived value or situational needs. - **Example:** A family purchasing bulk groceries for a better per-unit price. 4. **Marketing Research Approaches:** **Explanation:** These methods ensure campaigns are based on solid insights, not guesswork. **Week 4** **Key Concepts:** 1. **Segmentation Variables:** - Geographic: Region, climate. - Demographic: Age, income, education. - Psychographic: Lifestyle, values. - Behavioral: Purchase frequency, brand loyalty**.** 2. **Ex-Ante Approach to Segmentation:** - Defines segments before analyzing customer data, based on assumed preferences**.** - **Example: In the chocolate market:** - Younger consumers (9-15) prefer fun packaging. - Health-conscious adults (25-45) prioritize ingredients. **Advantages** Uses available information, less expensive compared to ad hoc marketing researches. Can be easily transformed in operative recommendations **Disadvantages** Secondary data might not be available. Sought benefits are deducted from ex ante criteria and not directly observed into the market **Explanation of the Ex-Post Approach** 1. **How It Works:** - **Data-Driven:** Uses actual purchase patterns, usage statistics, or responses to marketing efforts to create segments. - **Cluster Analysis:** A common statistical technique employed to group customers with similar behaviors, needs, or characteristics. - **Emergent Segments:** Segments are discovered through analysis rather than predefined categories. 2. **Steps Involved:** - **Data Collection:** Gather quantitative and qualitative data through surveys, transaction records, social media activity, etc. - **Analysis:** Use methods like clustering or regression to identify distinct groups within the dataset. - **Segment Identification:** Label segments based on their dominant traits (e.g., \"Budget Shoppers,\" \"Luxury Enthusiasts,\" \"Eco-Conscious Buyers\"). - **Tailored Marketing:** Develop marketing strategies targeted at each segment\'s unique preferences. 3. **Example:** - A grocery chain uses loyalty card data to track purchase habits. Analysis reveals: - **Segment 1:** \"Health-Focused Shoppers\" -- Buy organic and gluten-free items. - **Segment 2:** \"Convenience Seekers\" -- Purchase ready-made meals and snacks. - **Segment 3:** \"Bargain Hunters\" -- Focus on discounted and bulk-buy items. With these insights, the chain tailors promotions: - Organic produce discounts for health-focused shoppers. - Bundle deals on snacks for convenience seekers. - Loyalty points on bulk purchases for bargain hunters. 3. **Perceptual Maps:** - Visual tools to compare brand positioning on dimensions like price and quality. - Helps identify gaps and opportunities in the market. **Week 5** The STP framework (Segmentation, Targeting, Positioning) forms the cornerstone of strategic marketing, enabling firms to identify, evaluate, and serve specific market segments. **Key Concepts:** 1. **Targeting** - After segmentation, targeting selects the segment(s) to focus on based on attractiveness and fit with the company's goals - Single Segment: Focusing on one niche. - Multi-Segment: Serving multiple groups with tailored offerings. - Mass Marketing: Undifferentiated, large-scale appeal. - **Measurability:** Can the segment's size and purchasing power be measured? - **Substantiality:** Is the segment large and profitable enough to serve? - **Accessibility:** Can the segment be effectively reached? - **Differentiability:** Do segments respond differently to marketing? - **Actionability:** Can actionable strategies be developed for the segment? 1. **Positioning Statement:** - Positioning determines how a product is perceived in the minds of target consumers relative to competitors. **Key Positioning Concepts:** 1. **Positioning Statement:** - Template: "For \[target market\], \[brand\] is a \[category\] that \[benefits\] because \[reason\]." - **Example:** For health-conscious adults, Fitbit is a fitness tracker that helps monitor activity levels because of its cutting-edge health technology. 2. **Points of Parity (POPs):** - Attributes or benefits similar to competitors. - **Example:** All smartphones have cameras and app ecosystems. 3. **Points of Difference (PODs):** - Unique benefits or attributes that distinguish a brand. - **Example:** Tesla\'s differentiation is its fully electric, self-driving technology. 4. **Unique Selling Proposition (USP):** - The key reason customers choose one product over another. - **Example:** Domino's USP is "Delivery in 30 minutes or it's free." 5. **Perceptual Maps:** - Graphical representation of consumer perceptions of brands/products. - **Axes Examples:** Price vs. Quality, Basic vs. Luxury. **Week 6** The value proposition defines the unique benefits that customers gain from using a product or service **Key Elements:** 1. **Customer Jobs:** What tasks or goals the customer is trying to achieve. - Example: For busy professionals, a meal delivery service helps save time cooking. 2. **Customer Pains:** Challenges or obstacles faced during the customer's journey. - Example: Poor quality, high cost, or inconvenience. 3. **Customer Gains:** Positive outcomes or unexpected benefits from using a product. - Example: Convenience, cost savings, or enhanced lifestyle 1. **Value Proposition Canvas:** - Customer Pains: What challenges or risks do customers face? - Customer Gains: Desired benefits or unexpected delights. - Example: A fitness app addressing \"lack of time\" pain by offering 10-minute workouts. 1. - 2. - 3. - 4. - 5. - 2. **Pricing Strategies:** Pricing is a crucial part of the marketing mix and impacts profitability and positioning. **Key Pricing Approaches:** 1. **Cost-Plus Pricing:** Adding a markup to production costs. - Example: Manufacturing costs \$10/unit; markup is \$5 → Selling price = \$15. 2. **Penetration Pricing:** Setting low initial prices to capture market share. - Example: Netflix initially offered free trials and low subscription rates. 3. **Skimming Pricing:** High initial prices targeting early adopters. - Example: New iPhones launch at premium prices. 4. **Value-Based Pricing:** Based on customer perceptions of value rather than costs. - Example: Rolex prices reflect luxury and exclusivity. 5. **Dynamic Pricing:** Prices fluctuate based on demand, competition, or timing. - Example: Uber's surge pricing during peak hours. **Week 7** Focuses on how companies communicate with consumers to build relationships, establish brand identity, and drive sales. **Key Concepts:** **Components:** 1. Advertising: Paid promotions across various media. - Example: TV ads, social media campaigns. 2. Sales Promotion: Short-term incentives to encourage purchases. - Example: Coupons, discounts, limited-time offers. 3. Public Relations: Building a positive image through earned media. - Example: Press releases, sponsorships. 4. Direct Marketing: Personalized messaging directly to customers. - Example: Email campaigns, SMS offers. 5. Interactive Marketing: Engaging with customers via digital platforms. - Example: Social media Q&A sessions. 6. Word-of-Mouth Marketing: Encouraging organic customer recommendations. - Example: Referral programs. 7. Personal Selling: Direct interaction between sales representatives and customers. - Example: B2B software demos. 1. **Integrated Marketing Communications (IMC):** - Ensures consistent messaging across channels like advertising, PR, and direct marketing. - Example: Nike's \"Just Do It\" campaign integrates storytelling across TV, print, and social media. 2. **Communication Objectives:** 3.  **Differentiate:** Position the brand uniquely. 4.  **Inform:** Educate about features and benefits. 5.  **Persuade:** Convince customers to purchase. 6.  **Reinforce:** Build loyalty and repeat purchases **Week 8** Discusses leveraging digital platforms to enhance marketing performance and track results in real-time. **Key Concepts:** 1. Digital Marketing Channels: 2. Search Engine Marketing (SEM): Paid ads on search engines. 3. SEO (Search Engine Optimization): Enhancing website visibility organically. 4. Example: A blog with keywords like "best running shoes" improves rankings. 5. Paid Search Ads: Appear at the top of search results. 6.  Social Media Marketing: Engaging audiences on platforms like Instagram and TikTok. 7. Example: Influencer partnerships for brand endorsements. 8.  Email Marketing: Personalized, direct communication. 9. Example: Monthly newsletters with exclusive discounts. 10.  Display Advertising: Banner ads on websites. 11. Example: Retargeting ads reminding users of abandoned carts. 1. **CTR (Click-Through Rate):** Percentage of people who click on an ad. 2. **CPA (Cost per Acquisition):** Cost to acquire one customer. 3. **CPL (Cost per Lead):** Cost to generate one lead. 1. **Inbound Marketing:** Attracting customers through valuable content. - Example: Blog articles or free eBooks. 2. **Outbound Marketing:** Pushing messages to customers. - Example: Cold emails or banner ads. **Week 9 and 10** Examines distribution strategies and the sales force\'s role in delivering value to customers. **Key Concepts:** 1. **Channel Types:** 2. 3. 4. **Sales Force Management:** **Sales Funnel Stages:** - **Marketing Qualified Leads (MQLs):** Potential customers showing interest. - **Sales Qualified Leads (SQLs):** Ready-to-buy prospects. **Sales Force Compensation:** - Outcome-Based: Commission-heavy pay structures. - Behavior-Based: Fixed salaries with close supervision 5. **Distribution Strategy** 1. - 2. - 3. -