Basic Concepts, Segmentation, Targeting, Positioning, Global Marketing Flashcards
What are the main segmentation variables?
Geographic: nations, states, regions, counties, cities, or neighbourhoods
Demographic: age, family size, family life cycle, gender, income, occupation, education, religion, race, generation, nationality, and social class
Psychographic: psychological/personality traits, lifestyle, values (innovators, thinkers, achievers, experiencers, believers, strivers, makers, survivors)
Behavioural: needs and benefits, decision roles, user and usage, loyalty status, attitude
What are the requirements for effective segmentation? In accordance to MASDA.
Segments should be:
* Measurable: size and purchasing power
* Accessible
* Substantial: large and profitable enough to serve; homogenous group with tailored marketing program
* Differentiable
* Actionable: effective programs can be formulated
What are segmentation variables for B2B markets?
Demographic: industry, company size, location
Operating variables: User or no user status, Technology, Customer Capabilities
Purchasing approaches: purchasing-function organisaiton, power structure
Define STP.
Segmentation: identify customer segments based on demo, psycho, geographic and behavioural criteria
Targeting: select target segments
undifferentiated, differentiated, focused or customised marketing
Positioning: identify positioning concept within each target segment
Define marketing and its importance.
- Acceptance of new products
- Inspire enhancement in existing products and services
- Building strong brands and a loyal customer base
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large.
What are steps in the marketing process.
- Understand the marketplace and customer needs.
- Design a value-driven strategy
- Construct an integrated marketing program that delivers superior value.
- Engage customer, build profitable relationship and create customer delight.
Define the core marketing concepts: needs, wanrs, demands.
Needs = basic human requirements, e.g., air, food, water, clothing, shelter
Strong needs for recreation, education and entertainments
Wants = needs become wants when they are directed to specific objects that might satisfy the need
Demands = wants for specific products backed by the ability to pay
- Needs preexist – markets shape wants (along with other societal factors)
- Type of needs: stated needs, real needs, unstated needs, delight needs, secret needs
Define the 4 Ps.
Product: Design, technology, usefulness, value, packaging, quality, branding, warranties, accessoires
Price: skimming, penetration, psychological, loss leader, cost-plus, etc.
Place: retail, wholesaler, mail, internet, direct sales, etc.
Promotion: offers, advertising, endorsements, user trials, gifts, competition, etc.
Define the additional 3 Ps in marketing.
People: employees, management, company culture, customer service
Processes: creativity, discipline, and structure brought to marketing management; especially for services
Physical evidence/environment: smart, interface, facilities, comfort
What is the value chain?
= tool for identifying key activities that create value and costs in specific business
Maximising value exploration by
identifying new customer benefits
company competence space: utilising core competencies from its business domains and managing business partner
becoming sufficient in CRM, internal resource management, and business partnership management
What are core competencies?
1) source of competitive advantage and makes a significant contribution to perceived customer benefits
2) has implications in a wide variety of markets
3) is difficult for competitors to imitate
Explain the VALS framework.
main diemnasion: consumer motivation adn consumer resources
Primary motivations: ideals, achievement, self-expression
* Those motivated by ideals are primary guided by knowledge and principles
* Those motivated by achievement look for products and services that demonstrate success to their peers
* Those whose motivation is self-expression desire social or physical activity, variety and risk
Explain the VALS framework.
main diemnasion: consumer motivation adn consumer resources
Primary motivations: ideals, achievement, self-expression
* Those motivated by ideals are primary guided by knowledge and principles
* Those motivated by achievement look for products and services that demonstrate success to their peers
* Those whose motivation is self-expression desire social or physical activity, variety and risk
How can companies establish an effective positioning in the market?
- Study competitors as well as actual and potential customers
- Identify competitors’ strategies, objectives, strengths, and weaknesses
Developing a positioning requires the determination of a frame of reference
– by identifying the target market and the resulting nature of the competition
– and the optimal points-of-parity and points-of-difference brand associations
What does an internal analysis in positioning require?
Analysis of resources, capabilities, and core competences
Resources = all assets, organisational processes, firm attributes, knowledge etc. that enable the firm to improve its efficiencies and effectiveness
Capabilities= complex bundle of resources through which comapneis achieve superior coordination of functional activities and processes to provide valuable products/services
Core competencies = combination of capabilities that critically underpin the firm’s competitive advantage
What are the characteristics of competitive advantage?
VRIO
Value
Rareness
Imitability
Organisational exploration
How do companies conduct external analysis?
Microenvironemnt: Porter’s five forces
> Suppliers, competitors, customers, the public
Macroenvironment: PESTEL
Political, economical, social, technological, ecological, legal factors
Define the PESTEL framework.
Political: government stability, interventions, economical systems, etc.
Economical: population development/aging, income, economic growth, inflation rate, interest rate, labour cost, unemployment
Social: language, religion, values, customs and traditions, eduction, CSR
Techonological: innovation, existing technology, government spending on research
Ecological: climate change, pollution, raw materials, scarce resources, recycling
Legal = tariffs, legal system, product safety, competitive regulation, codes of practice
Define Porter’s five forces.
New entrants: entry barriers like eos, brand identity, switching cost, capital requirements, access to inputs, learning curve, governmental policy
Bargaining power of suppliers: differentiation of inputs, switching cost, substitute products, forward integration
Substitution: switching csot, buyer propensity to substitute
Buyer power: buyer concentration, swichting, buyer informaiton, price sensitivity, product differences, brand identity
Rivalry/Competition: industry growth, fixed csots, product differences, exit barriers
How can companies identify and analyse competition?
- Determine the competitive frame of reference = defines which other brands a brand competes with > focus for competitive analysis
- Identify competitors: category membership
- Closest competitors > those seeking to satisfy the same customers and needs and making similar offers
- Latent competitors > may offer new or other ways to satisfy the same needs
Identify competitors by using both industry- and market-based analyses
* Industry = group of firms offering a product or class of products that are close to substitutes for one another number of sellers; degree of product differentiation; presence or absence of entry; mobility, and exit barriers; cost structure; degree of vertical integration; degree of globalisation
* Market = competitors defined as companies that satisfy the same customer need
Analyse competitors using SWOT Analysis and benchmarking
Explaing SWOT analysis.
Strength: internal, e.g., people, time management, organised, creativity, skills
Weaknesses: internal, e.g., self-doubt, inexperience, people, skills
Opportunities: external, e.g., social media, networking, international market, product development
Threats: external, e.g., price competition, copyright, trends changing, etc.
Why do companies go global? Define proactive and reactive motives.
Proactive = based on firm’s interest in exploiting unique competences or market possibilities
* Profit and growth goals: selling more or buying cheaper
* Managerial urge: ability to take risks, experience
* Technology competence/unique product
* Foreign market opportunities: attractiveness, knowledge of customers, marketplace
* Economies of scale: more output > reduce unit cost
* Extended sale of seasonal products, e.g. sun screen
* Proximity of international customers/psychological distance
* Tax benefits: either higher profit or produce at lower cost in foreign market
> Problem: may overlook barriers that could hinder profits (expected and initialised profit can be different), e.g. changes in exchange rates, hidden and fluctuating costs, etc.
Reactive = emerge from pressure/competition; firms react under pressure or threats in its home market or foreign market and adjusts to them
* Competitive pressure
* Small domestic market and lack of domestic demand: extending the product life, some less developed countries may still find this product attractive prolong the life cycle of the product
* Overproduction or excess capacity
* Unsolicited foreign orders
* Possibility to extend sales of seasonal products
* Proximity to international customers or psychological distance: social factors, political, etc. may let the geographical distance appear smaller; less geographic boundaries
What factors should companies review before deciding to go abroad?
Development of a global marketing strategy based on similarities and differences between markets (understand how markets operate)
Worldwide diffusion (learning) and adaptations
Transfer of knowledge and best practices across markets
What factors drive companies to go gloval and what are the risks
Factors that drive a company into the international area:
* Some international markets present better profit opportunities than the domestic market
* Larger customer base to achieve economies of scale
* Reduce dependence on any one market
* Counterattack global competitors in the home market
* Customer go abroad and require international service
Weight several risks:
* Understand foreign preferences; offer a attractive product
* Understand the business culture
* Do not underestimate foreign regulations that incur unexpected costs
* Managers with international expertise
* Foreign country may change commercial laws, devalue its currency, undergo a political revolution and expropriate foreign property
