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BU 121 > Reaching the Customer > Flashcards

Reaching the Customer Flashcards

1
Q

State the positioning statement

A

“Our (product/brand) is (single most important claim), among all (competitive firms) because (single most important supports)”

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2
Q

What is the goal of positioning?

A

To occupy a clear, distinctive and attractive place, relative to competing products, in the minds of target consumers

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3
Q

What is the significance of the second key to success?

A

You need to convince the customer that the product provides that unique benefit through consistent marketing strategy: This is significant because your strategy needs to be reflected throughout all aspects of your organization and be consistent in its message

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4
Q

Explain how the value proposition and the positioning statement affect the consistency of a company

A

They are clear, concise statements of product’s benefits and uniqueness; they act as a glue that keeps decisions consistent and guides the development of the marketing strategy

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5
Q

What is an example of a company that didn’t change their product, but changed their marketing to change the perception?

A

Baby carrots. They wanted to make carrots an exciting snack, so their changed their packaging and their marketing to look like junk food, which affected their sales, as well as changing their location (both grocery stores and in vending machines at schools)

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6
Q

What are the 4P’s?

A

Product, price, promotion, place

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7
Q

What is total product concept?

A

The entire experience the customer has with the product through: branding and packaging (promotion); service and warranty (customer relationship); delivery, credit, atmosphere image/reputation, and location (place); price

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8
Q

What affects the “product” segment of the 4P’s?

A

Product classification, product life cycle, product adoption curve, product offering (total product concept), branding, and customer relationships

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9
Q

What is an example of a product that was not consistent in its marketing and delivery? How did that effect its sales?

A

The Toyota Scion: targets young people who want a fun, stylish first car. The car is smaller, colorful, and customizable, and the price matches the market. Its promotion matches relatively well. However, it’s place (distribution) is at the Toyota dealerships: the place does not match its proposition statement because young people do not want to buy their car at the same place their parents buy their “boring” cars. They might feel intimidated walking into a car dealership to buy a car for the first time. Therefore, their sales suffered significantly

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10
Q

How do you know how to market your product to your customers?

A

You need to know how your customers behave when buying your product: do they spend a lot of time? money? Do they treat it like a convenience good? How would that impact your marketing/distribution?

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11
Q

What are the three components of the “marketing concept”, from which the total product concept is derived?

A
  1. Focusing on customer wants, so the organization can distinguish its product(s) from competitive offerings
  2. Integrating all the organization’s activities, including production, to satisfy these customer wants
  3. Achieving long-term goals by satisfying customer wants and needs legally, responsible, and ethically
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12
Q

What is the purpose of the marketing (total product) concept?

A

To have a customer vs. production orientation - to be customer-centric vs. company-centric

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13
Q

Why do we use the 4A’s instead of the 4P’s?

A

The 4A’s are laid on top of the 4P’s to turn marketing into a much more customer-oriented focus instead of a company-oriented focus

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14
Q

What are the 4A’s?

A

Acceptability, Affordability, Accessibility, Awareness

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15
Q

What are the two aspects of acceptability? Describe each

A
  1. Functional: does it address the jobs customers need done? Does it function in a way that meets customer needs?
  2. Psychological: do I feel good when I use this product? Does it meet my social/emotional needs?
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16
Q

What are the two aspects of affordability? Describe each

A
  1. Economic: can customers afford this product?

2. Psychological: are customers willing to part with this amount of money/time/convenience/effort for this product?

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17
Q

What are the two aspects of accessibility? Describe each

A
  1. Availability: is it easily available for customers to purchase?
  2. Convenience: is it convenient for customers to reach? (eg. can it be shipped to Canada, or only in the states? How far do you have to drive to get it?)
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18
Q

What are the two aspects of awareness? Describe each

A
  1. Product knowledge: are customers aware that your product is out there and available for them?
  2. Brand awareness: can customers recognize your product? Do customers trust your brand?
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19
Q

Define acceptability

A

The extent to which the firm’s total product offering meets and exceeds customer needs and expectations

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20
Q

Define affordability

A

The extent to which customers are able and willing to pay the product’s price - monetary and non-monetary

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21
Q

Define accessibility

A

The extent to which customers are able to readily acquire and use the product

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22
Q

Define awareness

A

The extend to which customers are informed regarding product characteristics, persuaded to try it, and reminded to repurchase

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23
Q

Why do the 4A’s matter?

A

They focus on the values that matter most to customer/set of conditions that must be fulfilled. It focuses on why and how vs. what

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24
Q

What are the four roles that customers play?

A
  1. Seeker
  2. Buyer
  3. Payer
  4. User
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25
Q

Explain how customers can act as a seeker (connection to awareness)

A

Customers seek information about your company and about your product. To be successful as a company you need to build out awareness. Customers need to be educated and inspired to act, inspired to move into the next role

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26
Q

Explain how customers can act as a buyer (connection to accessibility)

A

Once customers are excited about your product, it needs to be conveniently available for them to purchase

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27
Q

Explain how customers can act as a payer (connection to affordability)

A

The product needs to be affordable for your customers (economically and psychologically)

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28
Q

Explain how customers can act as a user (connection to acceptability)

A

The product needs to be a product that the customers are going to use and are willing to spend time/money on

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29
Q

What are the 6 guidelines for using the 4A’s?

A
  1. Market Value Coverage (MVC) is the goal
  2. The A’s are multiplicative
  3. The A’s are additive
  4. The A’s are dynamic instead of static
  5. The A’s are integrative and can move in tandem
  6. Sequencing matters
  7. You can leverage all resources to increase MVC
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30
Q

Describe the concept of Market Value Coverage

A

It is a measure of how well the overall marketing strategy succeeds in ensuring that potential customers become actual customers (how many of your potential customers are converted into sales)

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31
Q

Describe how the A’s are multiplicative

A

Acceptability x affordability x accessibility x awareness: if you ignore any of the A’s, it will be zero and your product will not succeed. You need at least a little bit of all the A’s in order to be successful

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32
Q

Describe how the A’s are additive. Give an example

A

Even though the A’s are multiplicative, the dimensions are each are additive. Sometimes high levels of one of the components can offset a lower level of another dimension. Eg. High heels: there are more psychological benefits than function benefits, but they are still very successful

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33
Q

Describe how the A’s are dynamic instead of static

A

You have to revisit the A’s regularly to make sure that you are still meeting consumer needs at their level: you cannot assume that they stay consistent without any monitoring

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34
Q

Describe how the A’s are integrative and can move in tandem

A

Everyone in the company / on the team needs to work together to help the A’s improve and help your company succeed

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35
Q

Describe how the A’s are sequential

A

The order of the A’s is important to customers and gaining customers: you need to build awareness, then accessibility, then affordability, then acceptability

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36
Q

Describe how you need to leverage all resources to increase MVC

A

You need to leverage all members of your team - don’t segregate different teams or different areas of your business. Remember that marketing doesn’t just do marketing, and sales doesn’t just do sales; all areas influence each other. Make sure your team is working together as a whole

37
Q

What is a “brand”?

A

A brand is more holistic than just the logo itself; instead, it is a collection or perceptions in the mind of the consumer (not just the logo, name, and communication; it is both emotionally and psychologically as well)

38
Q

What does an effective brand strategy create?

A

Brand equity

39
Q

What should a brand name communicate? Give some examples

A

Value proposition: Mop & Glo, Beautyrest, Eveready, Off!, turtle wax, covergirl cosmetics, etc.

40
Q

What are the five things you need in order to build brand loyalty/brand insistence? What building block does each connect to?

A
  1. Value (affordability; revenue streams)
  2. Accessibility (channels)
  3. Awareness (channels)
  4. Relevant differentiation (acceptability; value proposition and positioning)
  5. Emotional connection (customer relationships)
41
Q

Describe the concept of value in terms of brand loyalty

A

Does the brand deliver a good value for the price? Is it affordable for the customer?

42
Q

Describe the concept of accessibility in terms of brand loyalty

A

Is it convenient for customers to get their hands on the product?

43
Q

Describe the concept of awareness in terms of brand loyalty

A

Is this product the preference of your customers? Is it the first one that comes to their minds?

44
Q

Describe the concept of relevant differentiation in terms of brand loyalty

A

Is your brand unique or different in customer-relevant, customer-compelling ways?

45
Q

Describe the concept of emotional connection in terms of brand loyalty

A

Can your customers identify with your brand on an emotional level? When they care about your product, they will advocate for it

46
Q

Do loyalty programs create loyalty? Explain

A

No. Loyalty is about advocacy. In order to have loyal customers, those customers need to talk about your products, promote your products, and suggest to other people that they buy your products

47
Q

How is loyalty measured?

A

Net Promoter Score: surveys ask customers how likely they are to recommend the brand/product to another user. These values get added up to create the net promoter score.

Loyalty can also be measured by Lifetime Customer Value (CLV)

48
Q

How can loyalty be created by opportunities disguised as threats?

A

By responding quickly and effectively to customer complaints, companies can show customers that their voices are heard and valued, especially if they take those comments and use them to make changes in the company. This can create loyal customers who value the company’s respect for their customers

49
Q

What affects the “price” segment of the 4P’s?

A

Pricing objectives, pricing strategies, pricing approaches (how to set prices)

50
Q

What are the three things to consider when building your price (triangulate)?

A
  1. Your costs
  2. Your competition (what your competition is doing; are you selling at a discount, are you selling a better product)
  3. Feedback from customers and value chain partners (how much money do your partners expect to get from your profits)
51
Q

Do your target market / price projections have to be perfect?

A

No: they have to be credible. You have to prove that the numbers make sense

52
Q

Why does market potential not equal sales forecast?

A

You forecast depends on your plan and your scalability. How do you make people exposed to your product? How can you reach out to customers?

53
Q

Describe top-down forecasting

A

You start with a very broad definition of your target market, and then you continually narrow it based on different features your product offers and the needs it will be meeting. Even then, the market potential will not equal the sales forecast; you need to consider how often similar products are purchased, what switching costs will be, whether it will be difficult to adapt to your product, and where you are selling it

54
Q

Describe bottom up forecasting

A

Tells you what you’re actually capable of doing: you start with how many of stores sell similar products, then how many have shelving space for your products, then how many they must sell to meet your target, and how many will they accept from you to sell. Check to see if these numbers make sense for your business

55
Q

Which is more credible, top-down or bottom-up forecasting? Why?

A

Bottom-up, because it’s based on your own capability

56
Q

What are the four assumptions that companies base their sensitivity analysis on?

A
  1. Breakeven (compare market value numbers to breakeven)
  2. Largest/smallest/average competitors
  3. Similar product launch (compare the success of similar product or similar companies; assuming they launched recently)
  4. Capacity (you cannot do more than you are capable of doing)
57
Q

What affects the “place” segment of the 4P’s?

A

Channels and intermediaries, alternative arrangements, functions of channels, intensity of distribution, decisions and implication

58
Q

What is accessibility affected by?

A

Place and distribution decisions: stable good? shopping good? luxury good?

59
Q

Explain how accessibility can be a critical decision

A

“Place” decisions can be difficult to reverse if you change your mind later because of contracts, rental costs, filled warehouses, etc.

60
Q

What kinds of decisions must you make in terms or marketing intermediaries/channels of distribution?

A

What do you offer and how does it get to your customer segments? Direct or indirect? Consumer or business? etc. No matter what you do, these choices must fit with your product and your business plan

61
Q

What are the implications of selling through an intermediary?

A

You must get them to agree to carry your product (you have to sell it to them as well as to the consumer). You will lose at least some control over how it’s sold and what kind of effort is made into its sales

62
Q

What are two possible solutions to convince intermediaries to sell your product?

A

Push or pull promotion

63
Q

Describe the push promotion strategy

A

You focus on the channel members and give them the most motivation to sell you product as much as possible. You push the channel member to sell your product as much as you want them to

64
Q

Describe the pull promotion strategy

A

Instead of focusing on channel members, get the consumer really focused on your product so that they ask the distributors for it, and the distributor will be pressured to supply the product to meet demand

65
Q

What is a possible solution to maintain your desired profit margin even through selling through an intermediary?

A

Because the intermediary can dictate the final selling price (MSRP: manufacturer’s suggested selling price), you can use demand backward pricing to determine what you should sell it as to your intermediary to still sell it to the customer at the same price

66
Q

Will demand backward pricing lead to a lower profit?

A

Not necessarily; it depends on your product. It may not make sense to pay for all of your own channels, stores, staff, and warehouses. In other cases, it may make more sense to have complete control over those business procedures

67
Q

What affects the “promotion” segment of the 4P’s?

A

Objectives, promotional mix, factors affecting the mix, start-up strategies

68
Q

What are the four different elements that make up promotion?

A
  1. Advertising
  2. Personal selling
  3. Sales promotion
  4. Publicity
69
Q

Describe the “advertising” element of promotion

A

It is any form of non-personal sales presentation of a long-term nature that is paid for by an identified sponsor. This is NOT a one-way conversation with the consumer

70
Q

Describe the “personal selling” element of promotion

A

Face-to-face conversations or telephone conversations with customers

71
Q

Describe the “sales promotion” element of promotion

A

Paid for, non-personal like advertising (however, they have a short life, unlike advertising). Eg. Giveaways, samples, deals, sales, etc.

72
Q

Describe the “publicity” element of promotion

A

Can be very good for a company, but it can also be very bad

73
Q

What has to always be the same, no matter what kind or combination of promotion a company chooses?

A

There always has to be consistent messaging between all the different forms of awareness/promotion

74
Q

What are the objectives of advertising?

A
  1. Create AIDA (awareness, interest, desire, action)

2. Communicate the value proposition to position to product in the consumer’s mind

75
Q

What is the key of advertising?

A

The key is to sell products, not just to create a creative advertisement. You want to communicate your brand in a ways that leads to sale

76
Q

What is virality?

A

number of shares / number of views

77
Q

What is valuable virality?

A

invited friends x % conversion rate

78
Q

However, remember that just because something is viral doesn’t mean that you have a lot of sales. Give an example of a company that showcases this idea

A

Evian commercial: there were lots of shares of their commercial because it was funny and cute, but nobody could remember what the ad was actually trying to sell. The commercial did not create advocates for the product, so the sales went down

79
Q

What is the product adoption curve?

A

A curve showing at what rate people are willing to try your product

80
Q

What are the five stages of the product adoption curve?

A
  1. Innovators
  2. Early Adopters
  3. Early Majority
  4. Late Majority
  5. Laggards
81
Q

Describe the “innovators” stage

A

A very small group of people (innovators) are willing to come on board and beta test things for you

82
Q

Describe the “early adopters” stage

A

The people who love having the new and greatest things / being ahead of the game / being the first ones with the new product. They’re ok that the product is not completely smoothed out yet

83
Q

Describe the “early majority” and “late majority” stage

A

The customers who tend to wait until a new product is proven and plenty of people are using it. They need to know that a product actually works before they adopt it because they don’t want to make bad decisions

84
Q

Describe the “late majority” stage

A

An older group who typically buys only proven products with good price points. This group waits for the price to come down, which means that for the product to become a commodity

85
Q

Describe the “laggards” stage

A

They tend to purchase the product only if they absolutely have to; in other words, they are skeptical that the product is necessary to solve their problem at any price. This group is the non-customers. To entice them to buy will mean making the product significantly cheaper, easier to use, and with no switching costs

86
Q

What will happen to your product and to your marketing over the course of the different product adoption stages?

A

You will most likely add new products / variations of products over the course of the adoption life cycle, as well as send a different message to consumers

87
Q

What happens in the product adoption curve if you are selling a technology?

A

You will get some early people, but then you will hit a wall (“the chasm”). You need to be ready and prepared for it financially and in terms of your expectations

88
Q

What can you do to get across “the chasm” with a new technology?

A

You can pivot and find a different niche that you can target; if you get enough niches, you can cross the chasm and get into more general acceptance and sales

89
Q

What is the hardest part of dealing with “the chasm” when selling a new technology?

A

Dealing with the Tornado that arrives with the sudden flurry of demand

BU 121 (5 decks)

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