Marketing 301 Exam 2

What are the major steps in designing a customer driven marketing strategy?
1. Market segmentation
2. Targeting
3. Differentiation
4. Positioning
Market Segmentation
Dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviors that require separate marketing strategies or mixes
Targeting
The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.
Differentiation
Differentiating the market to create superior customer value
Positioning
Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the mind of target consumers
Types of Segmentation
1. Geographic (Nations, regions, urban/rural etc)
2. Demographic (Age, gender, income, ethnicity)
3. Psychographic (social class, lifestyle, personality)
4. Behavioral (occasions, benefits, user status, usage rate, loyalty status)
Occasion Segmentation
ex. Easter M&M’s
Benefit Segmentation (Benefits Sought)
ex. 4 types of Gillette razors, each with different benefit

1. Venus embrace: for those who want the perfect shave
2. Venus Breeze: gets job done easily
3. Venus Divine: Moisturizes skin in the process
4. Simply Venus: most affordable

Segmenting Business Markets
Same as segmenting consumers, but with businesses instead; Think how GE has different business- Utilities, financial services, oil & gas etc
Segmenting International Markets
Segmenting countries by geographic location, economic factors, political factors, cultural factors etc
Requirements for Effective Segmentation (MASDA)
Market segments must be:

-Measurable
-Accessible
-Substantial
-Differentiable
-Actionable

Target Market
a set of buyers sharing common needs or characteristics that a company decides to serve
Undifferntiated (Mass) Marketing
ignore market segment differences and go after whole market with one offer (usually not as effective as segmenting/niche mktg)
Differentiated (Segmented) Marketing
target several market segments and design seperate offers for each
Concentrated (Niche) Marketing
Going after a large share of one or few segements or niches.

Ex. Whole foods

“A whole foods shopper is more likely to boycott Walmart than shop there”

Micromarketing
Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segements; includes:
-local marketing
-individual marketing
Competitive advantage
Self explanatory, advantage over other products/services
Product Position
The way the product is defined by customers- the place the product occupies in the customers mind relative to competition
Value Propostion
The full mix of benefits on which a brand is positioned
answers the question “Why should I buy your brand?”
Possible value propostions
1. More for more (best product, highest price)
2. More for the same
3. Same for less (same products for less $, ex Walmart)
4. Less for much less
5. More for Less (this is the winning value proposition)
Steps in strategic planning
1. Define the company mission (biz level)
2. Setting company objectives/goals (biz level)
3. Design business portfolio (biz level)
4. Plan marketing and other functional strategies (market level)
mission statement
statement of company’s purpose-what it wants to accomplish; should be market oriented

ex. Chipotle

Chipotle’s mission isn’t to sell burritos. Instead, it promises “food with integrity”

Difference between horizontal and vertical differentiation
Vertical: one product is clearly better
Horizontal: “Better” is a matter of opinion
business portfolio
the collection of businesses that makes up the company
strategic business unit
can be a company division, a product line, or even a single product; things that make up a company

ex Disney’s business divisions are SBU’s
-theme parks
-movies
-merchandise etc

BCG growth/share matrix
vertical axis: growth rate
horizontal axis: market share

four categories:

1. Stars (high growth, high share)
2. Question marks (high growth, low share)
3. Cash cows (low growth, high share)
4. Dogs (low, low)

criticisms of bcg matrix
difficult, time consuming, costly, focus on classification of business units more than strategic planning
product/market expansion grid
a way to identify company growth opportunuties through
1. market penetration
2. market development
3. product development
4. diversification
Market penetration
increasing sales of existing products into existing markets (product doesn’t change)
Market develoment
finding new markets for existing products
Product development
new products for existing markets

ex under armor- “charged cotton”

Diversification
new products, new markets
value chain
each part of the process, from manufacturing to delivering the finished good to the customer, adds value
value delivery network
ex.

Today, Toyota’s car doesnt compete with Ford’s car, its entire value chain competes with Fords

Marketing Mix aka “4 P’s”
1. product (variety, quality, design, features etc)
2. price (list price, discounts, payment period etc)
3. place (locations, coverage, inventory, logistics etc)
4. promotion (ads, public relations, sales promotions)
4 C’s (customers point of view)
1. Product = Customer solution
2. Price = Customer Cost
3. Place = Convenience
4. Promotion = Communication
SWOT Analysis
strengths, weaknesses, opportunities, threats
Marketing planning
know how a marketing plan essentially looks; basically how a company plans on reaching their target market(s)
Marketing implementation
Turning the marketing plan into action
Marketing Control
Measuring the results of your marketing plans/strategies
Marketing ROI
return on marketing investment:

Net return/costs of investment= ROI

Strategic planning is a ____process between internal and external goals/opportunities
“matching”
Examples of products/services/experiences
product- ex nike sneaker
service- ex haircut
experience- ex going to disneyland
3 levels of product
1. core customer value
2. actual product
3. augmented product
roduct level 1: core customer value
“what is the customer really buying?”

ex if they buy a blackberry, theyre really buying freedom to email on the go

Product level 2: Actual Product
ex an Ipad and its features, design, quality etc
Product level 3: Augmented Product
shit that comes along with product

ex ipad, comes with warranty, product support etc

consumer product
product bought by final consumers for personal consumption. Include:

-convenience products
-shopping products
-specialty products
-unsought products

convenience product
frequent purchase, little shopping effort, high distribution, low price, mass promotion

ex toothpaste, toilet paper

shopping product
less frequent purchase, higher price, selective distribution, advertised by both producer/reseller

ex TV’s, appliances, clothing

specialty product
think luxury items, more targeted advertising, higher price etc

ex rolex

unsought product
price and distribution vary, very little intersest, very aggressive advertising
ex life insurance, red cross blood donations
industrial product
ex a machine to help produce another product
Branding
ex,

Coke vs Pepsi blind taste test- results were 50/50
When cans were marked coke and pepsi, consumers chose coke by a margin of 75/25. This is an example of brand association

product line
group of products that are closely related/function in a similar manner

ex marriot product line of hotels
nike product line of shoes & apparel

product mix width
the set of all product lines a company offers for sale

ex campbell’s has:
-healthy beverages line
-baked snacks line
-simple meals line

product mix length
total number of items in a product line

ex campbell’s simple meals product line carries:

-campbells soup
-wolfgang puck soup
-pace tomato sauce etc

product mix depth
varieties within the product line

ex campbell’s
-chunky soup
-condensed soup
-healthy request soup

consistency
how closely the product lines are related in terms of end use
Brand equity
the differential effect that knowing the brand name has on a customer

a brand has positive brand equity when they prefer a brand over a unbranded version

Brand positioning
a brand can position themselves based on attributes, benefits, and beliefs and values
co-branding
using brand names of 2 different companies on the same product
Brand development strategies
1. Line extensions
2. Brand Extension
3. Multibrands
4. New Brands
line extension
ex- honey nut cheerios, frosted cheerios, etc
brand extension
snoop dogg introducing pet toys
Multibrands
Pepsi owns sierra mist, mtn dew, dasani
New Brands
ex toyota introducing scion to completely new target market