Marketing Test 2
brand positioning statement format
(brand name) is the (product category or segment) for (psychographic target market) that offers (primary benefit) because it has (specific features that provide evidence of benefit). -brand name -product category/segment -psychographic target market -primary benefit -specific features that evidence benefit describes the reputation that your firm would like your product or service to have among targeted customers in a market relative to competitive offerings. • A positioning statement contains: - Description of target market segment - A category frame of reference relative to competition - The customer value proposition (promise & proof) including relevant points of parity and points of difference • A positioning statement is an internal document used for planning purposes!
value proposition
- a 2-3 sentence statement that tells a prospect what is most worthwhile and memorable about your offering. Contents: • a promise or claim in the form of 1 shattering value plus 2-3 secondary value elements • proof or reason to believe in the form of evidence or arguments supporting each promise
where do ideas come from?
-Internal -executives, employees, engineers etc -External -customers (analyze customer reactions) -competitors -suppliers
New products must have....
-Legit value proposition -Differentiate from existing options
-Doctors were surveyed to find out what brand of butter substitute they recommend for their patients -No brand - 80% -Brand A - 5% -Brand B - 4% "More doctors recommend Brand A than any other brand" is this ethical?
-This is UNETHICAL to say because it is deliberately deceptive -Focus on meaningful points of difference: 1% difference between Brand A and B is not a meaningful point of difference to consumers -Try to find some other meaningful point of difference. Doctors recommendations might not be a good point, maybe there is some other factor that differentiates your butter.
Positioning
-define the marketing mix (4ps) such that targeted consumers have a clear, distinct, and desirable view of the product/service relative to the competition
Target market and pros/cons
-designing a product for a specific group of consumers who are most likely to want your product/service -Advantages: -know where the consume, what the consume, and how -Disadvantage: -it's challenging and requires thought -Hinges on knowing what value your product provides and who is interested in that value proposition -Target market might be defined by demographic, psychographic (lifestyle), and/or behavioral variables
basic concepts of positioning
-position is the physical and perceptual place that a product or service occupies ..... (see notes)
marketing research
-process of defining a market problem and/opportunity and... -systematically collecting and analyzing information and... -recommending action
Purchase decision process
1 Problem recognition 2 Info search 3 Alternative evaluation 4 Purchase decision 5 Post purchase behavior
5 steps for market research
1 define the problem 2 develop research plan (specify constraints) 3 collect relevant info 4 develop findings (best way to share) 5 take marketing action (what should we do)
Between the new-to-the-world and repositioning endpoints are...
1. brand extensions 2. line extensions 3. existing offerings that have been improved 4. reduced price offerings
Ways a brand can position itself in the heart/mind of target consumers
1. feature/benefit (trident layers is gum sandwich) 2. use/application (paypal for online shopping) 3. by user (USAA military insurance) 4. by product/service category (family chef > restaurant, electric cars) 5. by competitor (less expensive, works better) 6. price/quality (tiffany has best diamonds) 7. by cultural symbols (mickey mouse = disney)
Customers perceive brands in terms of benefits Levels of Benefits:
1. functional (performance based) 2. experiential (sensory based) 3. Psychological (emotion based) 4. Symbolic (value based) can be viewed differently by different customers
concept of PLC
1. products have limited lifespans 2. sales pass through distinct stages (introduction, growth, maturity, decline) 3. profits rise and fall at different stages 4. different strategies are required in each stage
Questions to ask before conducting marketing research
1. why is info needed? (only collect if necessary) 2. budget and timeframe 3. what kind of data to collect? (primary, secondary - qualitative, quantitative) 4. how data is collected (focus groups, interview, survey) 5. Sampling method to use (probability/random, or non-probability/voluntary) 6. How will data be analyzed 7. How is data incorporated into decision makeing/by who
cost of acquiring a new customer vs retaining an existing customer
5-10 x higher to acquire a new customer, so you want to increase retention rate and decrease defection rate
category
A category is a grouping of products or services based upon their attributes or the benefits they provide. It determines the source and nature of competitors (product attributes and customer benefits)
Purchase Decision Process Step 3
Alternative Evaluation After clarifying: • Criteria for use in decision • Creating a group of brand names that meet need • Developing consumer value perceptions Create evaluative criteria: • Both objective and subjective factors Then, create consideration set
elements of, and influences on, your search for the things you buy
Filling a need or satisfying a want? Will you gather outside info? Criteria to evaluate options? How will you decide? who else is involved? Personal factors? Psychological factors? External/situational/social factors? When and where will you purchase? Post-purchase evaluation?
Purchase Decision Process Step 2
Information Search • Internal search - scan your memory - do what you've always done. Source of a lot of brand loyalty. External search - need new information *If new category--high risk if wrong decision is made. Sources of external information personal, public, market dominated
Focus of marketing in 4 stages of PLC
Introduction: create product awareness and establish market growth: building brand preference/gaining market share maturity: protect share and increase profitability decline: new features added or discontinued assumes finite lives, should be used for descriptive purposes
market segment VS market segmentation
Market Segment is a group of customers that have similar wants and needs. Market Segmentation is the process of partitioning customers into groups on marketing-relevant bases
why segment?
One offering does not satisfy the needs of all customers - Compromise leads to satisfying no one - Customization is not feasible - Focusing on a group is a more manageable task
position vs positioning
Position is the physical and perceptual place that a product or service occupies in a target market relative to customer needs and competitive offerings. Positioning is the practice of establishing a desired reputation for a product or service among targeted customers relative to the competition in a market.
Purchase Decision Process Step 1
Problem Recognition Begins when there is a difference between a person's ideal and actual situations that are big enough to trigger action. • Triggers can be functional or social • Marketed by comparative claims or creating awareness of issues • Satisfying a "Want" or a "Need" • Out of stock • Dissatisfaction • New needs or wants
Purchase Decision Process Steps 4 and 5
Purchase How? When? 5. Post-purchase behavior • Consumer compare product to his/her expectations • Companies market to alleviate post-purchase doubts • Cognitive dissonance • Seek support for your decision
Foundation of marketing strategy
STP: segmentation targeting and positioning -Segmentation: groups of similar people -Targeting: which segment is the most attractive -Positioning: What benefits might we highlight
consumer behavior
The actions a person takes in purchasing and using product and services, including the mental and social processes that proceed and follow these actions.
Customer lifetime value analysis
The financial worth of a customer the net present value of the cash flows attributable to a customer over the length of his purchase history with the firm, less total acquisition and retention costs.
In order to segment the marketplace successfully, heterogeneity of segments is important. Why?
There is no such thing as a product that can be sold to everyone because everyone has different wants/needs/preferences. Therefore companies can't target everyone at once, they have to find the type of customers (based on psychographic or demographic traits) that would most value their product in order to successfully market and sell to them
Question every consumer asks themselves
What's in it for me?
studies show that business students and students of the social sciences have similar demand for health insurance, yet insurance companies decided to segment the market by major anyway. This would be a bad idea because... This is also an example of a segmentation strategy being implemented while failing to meet the criteria of....
a bad idea because the segments will not likely respond differently heterogeneity
social responsibility
an organizations obligation to maximize its positive and minimize its negative impact on society
psychographics
assumes the products a person purchases and the media they consume reflects the indiv.'s personality, values, interests, and lifestyle. its more difficult to obtain and expensive
value =
benefits / costs
top two box score
captures the percentage of respondents who say they "definitely will buy" or "probably will buy" companies often wont launch something that doesn't receive a top two box of 75 or more
you just bought a suit and are agonizing about whether you got the right color. This is an example of
cognitive dissonance
the value of market research
comes from the insights that can be mined from raw data
Marketing is the process of...
creating, maintaining, and improving mutually valuable relationships
secondary data
data that already exists and is collected from internal or external sources (not specific to your research) fast, easy, inexpensive Internal sources: P&L, balance sheet external: government, books, internet
Lord and Taylor segments based on income, they are applying what kind of segmentation?
demographic
pros and cons of demographic info
easy to obtain (age, gender, income, education) BUT its broad based and doesn't take into account how humans are different
-Crescent Pure's main value components are...
energy enhancing, hydrating, and all organic -other factors: taste, price
Targeting
evaluating the attractiveness of the various segments and zeroing in on one or more requires identification of a match between what the brand offers or can offer, and what a particular consumer segment values
consumers follow each of the steps to the consumer decision making process when they purchase goods T/F
false
generational cohorts rarely have shared experiences within the cohort T/F
false
when the $2 billion toothpaste market has products that are for stronger enamel, other products for teeth whitening, and others for gum care, they are showing what kind of segmentation?
feature or benefits
price ethics concerns of marketing
fixing discriminating gouging
marketing research is all about the process of
gaining insights that can be used to create superior marketing strategies
textbook page 52
go memorize that chart
place ethics concerts of marketing
gray marketing slotting abuse of power
marketers should not engage in any behavior with the potential to....
harm consumers harm relationships with consumers harm host communities harm the company's future cash flows
Purchase decision stage
how will you decide what to buy? routine or impulsive? Limited problem solving Extended problem solving
good segmentation should produce clusters that are:
identifiable measurable sizable accessible actionable
understanding =
influence
the psychology of marketing
is called the study of consumer behavior (learning the who what when where how and why)
the disadvantage of demographic segmentation is
it doesn't take into account how people of the same demographics might be different
Problems with questions asked in market research questionnaires
leading questions unclear answers/no basis of comparison relevant to research two questions in one ambiguous questions
What an effective marketing manager needs to know
market related info (size, demand, competitor market share) STP info (segments, growth rates, benefits desired, target customers demographic) product/service related info (ratings of brands, packaging trends, new products) price info (elasticity of demand, acceptable prices) place info (innovation and trends, site selection, offline/online purchasing) promotion info (sales promo response rates, advertising recognition)
Business textbook publishing has decided that all of its customers are not similar enough to respond to one marketing mix. in particular, some of its accounts are huge universities and others are tiny colleges. The procedure of dividing this market into identifiable, smaller groups is called
market segmentation
the number of gallons of diet pepsi sold in a month in missouri divided by the total number of gallons of soft drinks sold in missouri in that month is the measure of diet pepsi's:
market share
market research vs marketing research
market: analysis of markets (size, segments, growth) marketing: used to pinpoint problems and identify solutions (study of consumers, demographics, decision making, beliefs)
the unique blend of product, distribution, promotion, and pricing strategies designed to produce mutually satisfying exchanges with a target market is the
marketing mix
when selecting target markets, firms should attempt to:
match their competencies to a segment's attractiveness
Ethics
moral principles and values that guide the conduct of individuals and organizations the difference between what you have a right to do and what is the right thing to do
NPD
new product/service development key to customer value creation because it helps a firm meet the evolving needs and wants of its target consumers especially important in industries with short PLC sampling is common in new P/S
positioning
once a company zeros in on a segment(s).... *answers the whats in it for me Q* Define the marketing mix (4Ps) such that targeted consumers have a CLEAR, DISTINCT, and DESIRABLE view of the product/service relative to the competition it must decide which of the brand's benefits will appeal most to consumers in those segments tells what it stands for and what value it promises to deliver and differentiates from competitors
primary data
original data collected directly by marketer Two types: Qualitative: preliminary and exploitative small # respondents, in depth info. No statistical significance. Selected by convenience interviews/conversations Quantitative: statistically significant conclusions, lots of participants probability sampling surveys/questionnaires/experiements
share of wallet
percentage of total spending in a category that a company captures from existing customers place higher value on relationships than transactions exp: if someone spends $20 on beverages and $10 is Pepsi, then they are 50% share of your wallet
the objective of marketing strategy
persuade target consumers to move from where they are, over some hurdle to purchasing the brand
To create a sample using __________________ sampling, a researcher might say "put all the names through the computer and select every hundredth name to put on mailing survey list
probability sampling
when Ira attended his first quant class, he realized he needed a better calculator otherwise he wouldn't be successful. What stage of the consumer purchase decision process was he in?
problem recognition
when ford motor Co. aims its advertising for its escape SUV at "young at heart, adventurous, young professionals" they are using what kind of segmentation?
psychographic
when ben and jerrys treat its first time customers differently from its loyal customers, this is an example of what segmentation?
purchase situation
promotion ethics concerns of marketing
reinforcement of stereotypes unrealistic ideals
advantage of secondary data
relatively inexpensive and readily accessible
product/service ethics concerns of marketing
safety targeting
"Top Line" "Bottom line"
sales revenue (boosting top line id a main goal of marketing) profit (increase profit by inc. rev or dec. costs)
key to communicating the right value proposition to the right customer, leading to strong relationships and business success
segmentation targeting positioning STP
how a company can increase revenue without raising prices
sell more units by: 1. selling more of current offerings to existing customers 2. finding more customers 3. developing more products "more purchases, more people, more products"
traits of attractive segments
sizeable offer growth potential produce positive ROI provide brand differentiation
Ultimate goal of market research
strategic direction! (not secret insights)
advantage of primary data
tailored to meet a firms specific research needs
segments should be based on...
the opportunity to maximize return on investment and profitability
segmentation
the process of dividing a market of consumers into separate smaller groups that are similar commonly segment by demographic or psychographic
theory of diffusion of innovation
the rate and rationale for the adoption of new products, practices, and ideas
in a SWOT analysis, what category is represented by the entry of a major new competitor into the marketplace
threat
TCO
total cost of ownership purchase price + cost of operation
The wake alumni from newell brands described the brand pyramid for two products. the brand pyramid described the target market of the brand and the key brand attributes T/F
true
Types of information marketers want to know about consumers to deliver the right benefits to the right customers:
who are they in terms of demographics? Do they make decisions quickly or deliberately? Stages of decision making process? Sequence of stages? who and what are influences on the decision? who do they talk to about it after purchase?
the first question a market researcher should ask when considering a study is:
will the research be useful? what do we do with results?
where does the understanding of consumer behavior start?
with consumers in the marketplace
