MKT 100 Principles of Marketing Running Notes PDF

MKT 100: Principles of Marketing Running Notes Chapter 1: - Creating Value - Collaborating with suppliers and customers to create offerings that have value to customers - Communicating value - Describing your offerings and learning from custome...

MKT 100: Principles of Marketing Running Notes Chapter 1: - Creating Value - Collaborating with suppliers and customers to create offerings that have value to customers - Communicating value - Describing your offerings and learning from customer responses - Delivering value - Getting those offerings to the customers in ways that optimised that value that was promised - Exchanging value - Trading value for your offerings (money or trading) - Value - everything a customer gets for what they give up in return for the benefits gained - If the customer perceives that they received more from the brand/company in exchange for what they gave up to the brand/company, they perceive to have received value in that exchange VALUE = BENEFITS - COSTS (price & non-financial) - Positioning - 4 P Marketing - Product - functionality, brand, packaging, services - The offerings which are created - Price - list price, discounts, bundling, credit terms - Communication of the offerings - Place - channel, inventory, logistics, distribution - Getting the product to a point where the customer can access it - Promotion - advertising, sales force, publicity, sales promotion - The monetary amount charged for the product - Product / Service Strategy  - Creating goods and services that companies offers to customers and clients - Price Strategy - Communicating benefits to customers and delivering the offering in exchange for a transaction with the customer - Promotion Strategy - Communicating to customers by describing the offering and its value - Place (Distribution) Strategy - Delivering your offer by getting it into the hands of the user and making sure that they know how to get the most out of it - Evolution of marketing - Production orientation era - Whatever you can produce will be sold - Sales orientation era - Assembly line production - Faster, cheaper - Sell as much as possible - Product orientation era - Wanted to spend money after war - Advertising and sales promotions - Market orientation era - Connecting with consumers and focusing less on the product alone - Feedback and listening to consumers - Collecting consumer information and sharing the information across the company - Across the company because different departments need to understand how the market is changing and what they need to do to adapt - Using the information for creating value, ensuring customer satisfaction, developing customer relationships - Social media era (value era) - Engaging directly with consumers  - Use most appropriate apps and social media platforms to engage with customers and develop relationships - Encourage participation and engagement - Building communities and networks - Enable new ways to influence purchasing decisions - Gaining customer feedback through quick surveys and comments on social media platforms in order to improve their product or service - Marketing oriented - Companies which seek to satisfy their customers wants and needs - They recognise that realise that exchange must be profitable for the company to be successful - Production oriented - Industrial Revolution - Believing that the best way to compete is by reducing production costs - Selling oriented - 1920s until after WWII - Believing that its necessary to push products heavily in order to sell them - Product oriented - Focusing on product innovation and product differentiation in order to increase their sales - Value orientation - Emphasising creating value for customers and serving each customer’s specific needs - Criticisms of marketing - Creates wants that aren’t always needed creating demand for things that customers don’t actually need causing them to spend more money than they should - Sustainability in marketing - Social responsibility is still prevalent in marketing and it involves engaging in practices that do not diminish the earth’s resources - Handling the end of life and disposal of products - Ethics and social responsibility  - When businesses fail society, society will fail them in return by punishing them or revoking their licences - Service dominant logic - Putting the emphasis on the value of the offering instead of the product - Metrics - Technology has increased the amount of information available to companies so they can evaluate their performance based on customer data - The global environment - Businesses are influenced by global issues Chapter 2: - Strategic planning process - Conducting a situational analysis and developing the organisation’s mission statement, objectives, and strategies - Evaluating the internal environment - Resources (financial and technological ect.) - Capabilities (personnel and processes) - Corporate partnerships (distribution and suppliers) - How does your organisation compete with others from an internal perspective - SWOT Analysis - How do you capitalise / leverage the strengths in the decision to be made? - How do you address / compensate for the weakness in the decision to be made? - How do you take advantage of the opportunities in the decision to be made? - How do you mitigate / minimise the threats in the decision to be made? - Developing objectives - What your organisation wants to accomplish in a given time frame  - Objectives help guide and motivate a company’s employees and give its managers reference points for evaluating the company’s marketing actions - Strategies - The means to the ends, the game plan, or what a company is going to do to achieve its objectives - Tactics - Specific actions, such as coupons, television commercials, banner ads, and so on, taken to execute the strategy - Market penetration strategies - focus on increasing a company’s sales of its existing products to its existing customers - Product development strategies - creating new products for existing target customers - Market development strategies - focus on entering new markets with existing products - Diversification strategies - Entering new markets with new products or doing something outside a company’s current businesses - Sustainable competitive advantage - Local excellence - Creating an advantage through the number of locations or online presence - Operational excellence - Improving company operations through supplier relationships, supply chain management, and efficient operations - Product excellence - Offering products and services with a high perceived value and effective branding and positioning - Customer excellence - Developing value-based strategies for retaining customer loyalty and providing excellent customer service - Corporate level plans - Top executives will develop strategic plans for the corporation as a whole - Strategic business units - Products or business lines within organisations which have their own competitors and profit centre - SBU mission statements and strategic plans are known as business level plans - Functional level - Each department or function may also have their own strategic plans which are functional level plans - Categories of SBUs or products - Stars (SBU or product) - High market growth rate and a high relative market share - Cash cows (product) - Low market growth and high market share - Question marks (products) - Low relative market share in a high growth rate market - Dogs - Low market growth and low relative market share - Evaluating the external environment (PESTC) - Political/legal environments - Industry specific - Government policies, regulations structures, and regulations, - Competitive regulations - Political trends - Economic environment - Taxation issues - Domestic economic trends - Current domestic - Global economic trends regulation - Taxation issues - Environgestation - Market and trade cycles regulations - Market distribution trends - Employment law - Disposable income - Consumer protection - Job growth /unemployment  - Inflation - Replaceh funding - Consumer confidence technology index - Maturity of technology - Socio-cultural environment - Manufacturing capacity - Media views - Information and - Laws affecting social communications factors - Consumer buying - Brand, company, technology technology image - Technology acresation - Consumer buying patterns - Intellectual property issues - Demographics - Rate of obsolescence - Lifecycle changes - Software innovations - Population shifts - Competitive environments - Education - Potential new entrants Trends/fads - Supplier bargaining power - Living standards - Buyer bargaining power - Technological environment - Competitive intensity - Technology development Chapter 3: - Consumer behaviour looks at why people acquire products and services - The consumer purchase decision process - A rational step by step approach to decision making - However, often consumers don't act in rational ways which may cause us to reconsider the information - Need / want recognition - At the recognition stage, marketers make potential customers aware how their products and services add value and would help satisfy customer’s needs or wants - Search - Finding information on different product or service alternatives - If your previous knowledge does not provide you with enough information about your options you’ll want to research further alternatives - Evaluation  - Evaluative criteria is used to decide which alternatives might be your best options - Companies will try to differentiate their products in order to make the evaluation easier for consumers to choose their product - Choice - Once you have considered all of the alternatives, you will have to decide which one to purchase - Post purchase use evaluation - Post purchase dissonance - when a purchase does not meet your expectations at all - Marketing research - What a company uses to answer specific questions - Steps to conducting market research - Defining the problem - Look at potential causes in order to narrow down the parameters of the study to the information that you actually need in order to make a good decision about how to fix or improve the problem - Designing the research - Primary data - collected firsthand, using hands-on tools - Qualitative research - Exploratory research design - useful when investigating a problem that you want a better understanding of - Depth interview - one on one research - Focus group - groups of people brought together to discuss marketing research topics with one another - Ethnography - interviewing, observing, and filming people while doing everyday activities - Quantitative research - Descriptive research design - gathering hard numbers to describe or measure a phenomenon - Who, what, when, where, why - Standardising questions so that every research participant receives the same information - Casual Research  - Examines the cause and effect relationship allowing researchers to answer ‘what if’ questions - Designing experiments with controlled variables in order to track the effects of the conditions that buyers experience - Field experiments and test markets - conducted in natural settings to test buyers behaviour in the ‘real world’ - Design the data collection - Questionnaire design - Most questionnaires follow this format: - Describe the study - Basic warm up questions - Progression into more detailed questions - In depth questions about the research - Questions about the participant should be placed at the end (age, residence, education) - Thank the participant for participating in the survey - Questionnaires should not lead the participants, questions should be unbiased - Specify the sample - Define the population which needs to be studied - Sampling frames can be put together using customer lists - Larger samples usually create more accurate results - Collect the data - Online and mobile surveys - Telephone and mail methods (more expensive but more reliable) - Cameras to observe behaviour - Analyse the data - Clean, explore, and organise the data - Write the research report and present its findings - Research reports traditionally have these elements - Title page - introduction - Table of contents - Executive summary - Methodology and limitations - Findings section  - Recommendations section - Secondary data - collected by someone else or that you have collected for another purpose - Libraries and databases which contain relevant information which has been previously collected by others - Who gathered this information? - For what purpose? - What does the person or private or public sector organisation that gathered the information have to gain by doing so? - Was the information gathered and reported in a systematic manner? - Is the source of the information accepted as an authority by other experts in the field? - Does the article provide objective evidence to support the position presented? - Market share and market analytics - Market share: Market Share represents the sales made by a company as a percentage of all the sales made by the entire market. This calculation can be made in terms of the revenue made through sales, or in terms of units sold - Unit Market Share - % = firm’s sales (units) / market sales (units) - Revenue Market Share - % = Firm’s $ / Market $ x 100 - Relative Market Share - % = firm sales / largest competitor x 100 - Concentration ratios - Top 3 or 4 firm’s market shares percentage - If greater than 67% = high concentration, not competitive - - If lower than 67% = low concentration, competitive - Herfindahl - This index is another market concentration metric and is calculated by taking the sum of the squares of the individual market shares of all the players in the market  - The higher the Herfindahl Index goes, the more the market is dominated by large players. This indicates low competitiveness. On the other hand, an index value that is close to 0 indicates a competitive market Chapter 4: - B2B VS B2C - Volume of Transactions: B2B markets involve many more transactions than B2C markets, with companies purchasing various parts and services before producing consumer goods. - Complexity of Products: B2B products can be very complex, sometimes custom-built or retrofitted, including high-cost items like construction equipment, real estate, military gear, or cruise liners. - High Value per Customer: A single B2B customer can account for significant business, such as suppliers to auto manufacturers like Tesla or Toyota, which makes each relationship critical. - Complicated Buying Dynamics: In B2B, multiple stakeholders are involved in purchasing decisions, making the buying process more intricate and high-stakes. - Lengthy Sales Cycles: Larger, high-dollar purchases like commercial jets can take years to finalise due to their complexity and risk factors for the buyer. - Demand for Standards: Business buyers expect products to meet strict standards, sometimes testing numerous options before making a decision (e.g., Five Guys testing 18 types of mayonnaise). - Personal Selling: B2B sales involve much more personal interaction, with salespeople calling on business customers frequently and sometimes having direct access to office space within the customer’s company. - Market Characteristics  - Derived Demand: Demand for B2B products comes from consumer demand. If consumer demand decreases, the demand for business products also declines. - Fluctuating Demand: Small changes in consumer demand can have significant impacts on businesses throughout the supply chain, creating a "bullwhip effect" where minor consumer shifts cause large fluctuations in B2B sales. - Bullwhip Effect Example: Cisco experiences large demand fluctuations based on slight changes in Google's router needs. A 10% change in Google's router requirements could lead to a dramatic shift in Cisco's sales. - Monitoring Consumer Trends: B2B companies, even though they don’t sell directly to consumers, monitor consumer buying patterns to anticipate changes in demand and adjust accordingly. - Influencing Consumers: Some B2B companies, like Intel, attempt to influence consumer preferences in order to indirectly drive demand for their products by encouraging consumers to prefer certain components (e.g., "Intel Inside"). - Branding Strategy: Intel uses branding (e.g., TV commercials and stickers on computers) to encourage consumers to care about the components inside their products, which can influence manufacturers to choose Intel chips. - Product Characteristics - Technical Nature of Products: B2B products, such as manufacturing equipment and machinery, tend to be more technical and complex compared to consumer products, often requiring specialised knowledge for purchasing and use. - Raw Materials and Semi-Finished Goods: Businesses often purchase raw materials (e.g., wheat for Kellogg’s cereal) or semi-finished goods (e.g., Samsung SSDs for Apple iPhones). Raw materials need further processing, while semi-finished goods are assembled without additional processing. - Focus on Delivery, Service, and Financing: B2B buyers prioritise reliable delivery times, availability of technical support and parts after the sale, and financing options due to the typically high costs of purchases. - Buying process characteristics - Complex Buying Decisions: The B2B buying process is more complex due to the involvement of multiple individuals and the technical nature of the products being purchased. - Bidding Process: Businesses often request bids from potential sellers, allowing multiple suppliers to compete for large purchase contracts. - Formal Buying Process: B2B purchases are typically formalised, involving a buying team that specifies clear criteria and objectives for the product purchase. - Long-Term Relationships: Sellers in B2B markets aim to build close, long-term relationships with buyers to secure ongoing business and future contracts - Marketing mix characteristics - Positioning - 4 P Marketing - Product - functionality, brand, packaging, services - Price - list price, discounts, bundling, credit terms - Place - channel, inventory, logistics, distribution - Promotion - advertising, sales force, publicity, sales promotion - Promotion Strategy: B2B markets often rely heavily on personal selling, using technical or professional salespeople to explain complex products and close sales, unlike B2C markets that may focus on mass advertising. - Focus of Communication: In B2B, communication is focused on technical aspects of the product, while in B2C, the emphasis is often on building brand awareness.  - Price Negotiation: In B2B markets, prices are frequently negotiated between buyers and sellers, and may include trade or quantity discounts, which is less common in consumer markets. - B2B Buyers - Producers - purchase goods and services that they transform into other products and/or services - Resellers - sell goods and services produced by other firms without materially changing them - Governments - Business-to-government (B2G) markets, or when companies sell to local, state, and federal governments, represent a major selling opportunity, even for smaller sellers - Institutions - Institutional markets include nonprofit organisations such as the Canadian Red Cross, churches, hospitals, charitable organisations, private colleges, civic clubs, and so on. Like the government and for-profit organisations, they buy a huge quantity of products and services - Who makes purchasing decisions? - Complex Decision-Making: In B2B markets, multiple individuals and roles are often involved in purchasing decisions, making it complex to identify who holds decision-making power.  - Targeting Decision-Makers: Sellers focus their efforts on those who have the ultimate authority to decide, such as professors in the case of college textbooks, not the end buyers (students). - Indirect Targeting: Publishers may offer deals or promotions to end buyers (students or bookstore managers), but their primary focus remains on the key decision-makers (professors). - Varied Decision-Makers: Different professors have varying levels of decision-making authority, some choose their own books, while others may rely on course coordinators, deans, or department chairs to decide. - Sales Process Complexity: The B2B sales process can feel like a scavenger hunt, as salespeople must identify who in the organisation holds influence over the final purchasing decision. - Business buying process - Need recognition - Someone recognizes that the organisation has a need that can be solved by purchasing a good or service - Product specification - The group of people brought together to help make the buying decision put some parameters around what needs to be purchased - Describe what they believe is needed, the features it should have, how much of it is needed, where, and so on - Supplier search - People involved in the buying process seek out information about the products they are looking for and the vendors that can supply them - Each vendor that makes the cut is sent a request for proposal (RFP), which is an invitation to submit a bid to supply the good or service  - Vendors formally present their products to the people involved in the buying decision - Proposal analysis & supplier selection - During this stage, the RFPs are reviewed, and the vendor or vendors selected - RFPs are best evaluated if the members agree on the criteria being evaluated and the importance of each criterion - Different organisations will weigh different parts of a proposal differently, depending on their goals and the products they purchase - Organisations may choose a single supplier for efficiency and volume discounts, but using multiple suppliers reduces risks and fosters competition to maintain better service and pricing - Order specification - The order includes the agreed-upon price, quantities, expected time of delivery, return policies, warranties, and any other terms of negotiation - The order can be made on paper, online, or sent electronically from the buyer’s computer system to the seller’s - Performance assessment - The buying unit might survey users of the product to see how satisfied they were with it - Some buyers establish on-time performance, quality, customer satisfaction, and other measures for their vendors to meet, and provide those vendors with the information regularly, such as trend reports that show if their performance is improving, remaining the same, or worsening - Factors affecting the buying processes - Buying centres are groups of people within organisations who make purchasing decisions  - Large organisations often have permanent departments that consist of the people who, in a sense, shop for a living - Purchasing agents responsible for finding offshore providers of goods and services often take trips abroad to inspect the facilities of the providers and get a better sense of their capabilities - Other players - Initiators are the people within the organisation who first see the need for the product - Users are the people and groups within the organisation that actually use the product - Influencers are people who may or may not use the product, but have experience or expertise that can help improve the buying decision - Gatekeepers are people who will decide if and when you get access to members of the buying centre - Decider is the person who makes the final purchasing decision - B2B Buying Situations - Straight Rebuy: A company purchases the same product in the same quantity from the same supplier, skipping search and evaluation steps unless there are changes in quality or delivery. Sellers prefer this for its reliable revenue and low effort but must maintain good service to avoid losing the account. - New-Buy Situation: Occurs when a company purchases a product for the first time, requiring all stages of the buying process. It is time-consuming and involves evaluating multiple vendors and soliciting RFPs. - New-to-the-Organization Buy: This occurs when a purchase is new to the people involved, though the organisation may have previously owned similar products (e.g., a school district building a new high school for the first time in years).  - Modified Rebuy: The company buys a previously purchased product but with changes, such as different quantity, packaging, or customization. It may or may not involve the same seller, and buyers often solicit bids from other suppliers to encourage competition. - Seller Strategy: Sellers may try to convert straight rebuys into modified rebuys to increase sales, identifying unmet needs or problems through regular customer engagement. - Buying Situation Influence: The type of buying situation (new-buy, straight rebuy, or modified rebuy) determines which steps in the buying decision process are followed. - Buying culture - Autocratic Culture: One person in the buying centre makes the final decision, despite input from multiple participants. - Consultative Culture: One decision-maker consults with other members of the buying centre before making the final decision. - Democratic Culture: Decisions are made by a majority vote within the buying centre, with no single decision-maker. - Consensus Culture: All members of the buying centre must agree on the decision, requiring unanimous consent. - Importance for Marketers: B2B marketers need to understand the buying culture and decision-making style to target and influence the appropriate decision-makers effectively. - Interpersonal Dynamics: Office politics and power struggles within the buying unit can influence purchasing decisions, potentially leading to choices that don't best meet organisational needs. - Personal Factors: Overwhelmed buyers may simplify decisions by favouring vendors they like, even when vendors score similarly in evaluations. - Brand Influence: A strong brand can help sellers sway buyers, as seen with companies like IBM, which built a reputation that influenced purchasing decisions. - Strategic Approach: B2B marketers gather detailed customer information to build relationships and strategically influence purchasing outcomes - Relationship commitment is defined as a belief that a relationship with a business partner is so important that it is worth maximum effort at maintaining it indefinitely - Relationship trust occurs when one of the business partners has confidence in the other partners reliability and integrity - Business Marketing Relationships: Unlike consumer marketing, which is often transactional, business marketing focuses on long-term relationships built through multiple interactions. - Types of Interactions: These interactions include transactions, negotiations, discussions, and customizations, which are less common in consumer marketing. - Industrial Marketing and Purchasing (IMP) Group: They emphasize the importance of understanding the relationships between companies, not just individual transactions, as value is created through continuous interactions between buyers and sellers. - Network Approach: In B2B marketing, relationships extend beyond individual buyer-seller interactions to a broader network of connected businesses. - Cooperation: Success in B2B marketing is often achieved through collaboration with other businesses within the network, rather than working in isolation. - Focus: The emphasis is on how businesses can leverage relationships and cooperation within the network to achieve greater outcomes. Chapter 5: - Target Market: The specific group of people or organisations that a business decides to sell to. - Targeted (Differentiated) Marketing: Customising marketing efforts (offering, promotion, price) for different customer segments. - Mass Marketing (Undifferentiated Marketing): Selling the same product with the same price and promotion to everyone, often using broad, widespread approaches. - Mass Marketing Analogy: Like a "popcorn approach"—blasting out promotional messages widely across multiple mediums. - Targeted Marketing Analogy: Like "shooting a dart" aiming specifically at a carefully chosen customer segment with a tailored message. - Benefits of segmenting and targeting markets - Avoid head-on competition with other firms trying to capture the same customer segments. - Develop new offerings and expand profitable brands and product lines. - Remarket older, less-profitable products and brands. - Identify early adopters. - Redistribute money and sales efforts to focus on your most profitable customers. - Retain “at-risk” customers in danger of defecting to your competitors. - Switching Service Providers: Changing service providers (e.g., hair stylist) involves time, effort, and the risk of not getting the service right, which illustrates the challenges of acquiring new customers. - Customer Relationships: Building strong relationships with existing customers is often easier and more profitable than finding new ones. Businesses invest in maintaining relationships through social media and personal engagement (e.g., Twitter, Facebook). - Social Media Engagement: Companies, including small ones, use platforms like Facebook and Instagram to interact with customers, provide updates, and build brand loyalty (e.g., San Remo Bakery's social media presence). - Customer Profitability: Not all customers are equally profitable. Some businesses intentionally "untarget" or reduce focus on unprofitable customers, tailoring their marketing efforts towards more profitable segments. - One-to-One Marketing: This approach is about personalising marketing to the individual customer, recognizing that businesses need to focus on meeting customer needs and building collaborative relationships. It contrasts with mass marketing by targeting specific customers more precisely. - Establish short-term metrics to evaluate the consequences of your efforts - Identify your customers - Differentiate among your customers - Interact with your customers, targeting your best ones - Customise your products and promotional messages to meet their needs - Dartboard Analogy: One-to-one marketing is like a dartboard approach, but with a more precise and "sharpened" focus on understanding customer preferences and needs. - Future of Marketing: One-to-one marketing, proposed by Peppers and Rogers, envisions a future where marketing is highly personalised and customer relationships are more collaborative than transactional, moving away from mass marketing - Segmentation Types: Sellers can target either consumer markets, business-to-business (B2B) markets, or both, depending on their focus. - Multiple Segmentation Bases: Firms often use multiple segmentation criteria (demographics, psychographics, behavior) to get a comprehensive understanding of their customers and create value. - Characteristics for Segmentation: Examples include size preferences (e.g., big-and-tall stores), medical conditions, hobbies, etc., to better serve distinct customer groups. - Segmentation Process: The process starts by understanding customer needs and identifying differentiating factors that group similar customers into segments. Multiple segments may exist within a single market. - Example: The printer market serves different segments with varying needs, such as basic black-and-white printers for students and high-quality color printers for photographers or designers. Each segment is approached with tailored marketing strategies. - Segmentation, Targeting, Positioning (STP): Marketers go through steps to identify market segments, select target segments, and develop positioning strategies that align with the specific needs of those segments - GooDPUB - Geographical, demographic, psychographic, usage, benefits - The criteria for selecting target markets include: - Identifiability: Can you clearly identify the customers within the segment, ensuring distinct needs that are not overlapping with other segments? - Accessibility: Can the segment be reached through geographic, political, legal, technological, or social means, and can persuasive communication be used to connect with them? If a segment is less accessible, can you find a way to reach them (e.g., Unilever hiring local women in rural areas)? - Responsiveness: Will customers within the segment respond positively and similarly to your marketing efforts? If not, it is not an attractive segment.  - Size: Is the segment large enough to be profitable considering operating costs? Larger populations, like in China, can still provide profitability even with a smaller percentage of car ownership. - Growth: Is the segment growing? A growing segment like India’s middle class is attractive for long-term profitability - Competition: Is the market too crowded, or can you differentiate your offering? For example, IBM exited the crowded computer market and sold to Lenovo due to declining profitability. - Resources: Does your company have the financial and operational resources to compete in the segment, especially in capital-intensive markets like wind power? - Fit with Mission: Does the target market align with your firm’s mission and objectives? For instance, TerraCycle, which specialises in sustainable products, wouldn’t align with running a coal-fired power plant - Target-Market Strategies: Choosing the Number of Markets to Target - Mass Marketing: - Efficiency: Mass marketing is efficient because it doesn’t require tailoring products or services to different groups. It saves on costs and resources. - Problem: The issue arises because not all buyers are alike, and if competitors offer better-targeted products, businesses may lose customers. - Example: Henry Ford’s approach to mass production and marketing proved successful for a time but lacked the ability to address diverse consumer needs. - Multi-Segment Marketing: - Strategy: This approach involves targeting multiple segments with tailored offerings to meet their distinct needs. It helps businesses spread risk and cater to various customer groups.  - Example: Marriott International targets different market segments with sub-brands like: 1. Marriott Courtyard: Over-the-road travellers. 2. Ritz-Carlton Hotels: Luxury travellers. 3. Marriott Conference Centers: Businesses hosting small to mid-sized meetings. 4. Marriott ExecuStay: Executives needing month-long accommodations. 5. Marriott Vacation Clubs: Customers looking for timeshares. - Benefits: - Adapts to demographic and market changes. - Helps businesses respond to economic downturns by allowing customers to "trade up or down" among brands. - Mitigates risks associated with product life cycles by offering varied options. - Concentrated Marketing: - Strategy: Targeting a very narrow market segment with a focused offering. Often used by smaller firms with limited resources. - Risks: If the single market segment experiences a downturn, the firm could be significantly affected. - Example: Auto parts suppliers for major automakers (like GM and Ford) suffered when those companies faced a sales slump. To mitigate risk, these suppliers began diversifying into wind turbines, aerospace, and construction. - Niche Marketing: - Strategy: A more extreme form of concentrated marketing, focusing on a very small, specialised segment. - Goal: To dominate a small market rather than compete in a larger one. - Example: A company may target a highly specific consumer need, like eco-friendly products for a particular type of customer. - Microtargeting: This advanced form of niche marketing uses data to isolate and target individuals with extreme precision. Originally used for political campaigns, like the 2008 U.S. Presidential election, it involves gathering vast amounts of personal data for tailored outreach. - Ethical Concerns: Microtargeting raises privacy issues due to its use of extensive personal data.