Lecture 1

Question 1

marketing

Answer 1

art & science of creating value by designing & managing successful exchanges

Question 2

dual value creation

Answer 2

process by which companies create value for customers & build strong customer relationships in order to capture value from customers in return

Question 3

ways offering can deliver value to customers

Answer 3

functional
monetary/economic
psychological

Question 4

ways offering can deliver value to company

Answer 4

revenue but also CLV, user base

Question 5

product orientation

Answer 5

• try to increase market share and lower price, build distribution network and increase profits
• often devolves into competing on 2 dimensions (price & quality

Question 6

sales orientation

Answer 6

make people want stuff

Ex. use of clever ads, jingles

Question 7

demand orientation

Answer 7

desires of customers should guide firm actions (find out what people want 1st, then make it)

• made possible w/ good research/data analytics
• BUT, stifles innovation, customers don’t know what they want, all companies making the same thing & same price stifles competition

Question 8

competitor orientation

Answer 8

looking outward to competitors, using game theory and mgmt strategy

• takes eye off customer

Question 9

customer centricity

Answer 9

AKA market orientation, value marketing
- aligning ENTIRE co development and delivery of offering w/ current and future needs of select group of customers in order to max their LT financial value to firm

understand AND anticipate needs; focus marketing on more valuable members
-understand, attract, and keep most valuable customers

Question 10

customer centricity as an outside-in strategy

Answer 10

start w/ customer: their current & future needs, any pain points they have w/ current offering standards

Question 11

how is customer centricity different from demand orientation?

Answer 11

it also looks @ FUTURE needs of a select group of target customers (usually the most loyal customers)

Question 12

what customer centricity IS NOT

Answer 12

having CRM – data does not automatically mean insights; you have to have insights AND understand needs to be customer centric

Question 13

strategic analysis

Answer 13

use 5 C’s: customer, company, collaborators, competitors, context

-used to define target market

Question 14

5C’s: company

Answer 14

development of distinctive and hard to imitate resources
SWOT analysis (SW = internal factors) (OT = external factors)

• resources of strategic biz unit managing offering enables fulfillment of customer needs

Question 15

5C’s: customer

Answer 15

customer needs, key decision and value drivers, segmentation, CLV, targeting

• needs co aims to fulfill using offering (B2B or B2C)
• has influence on defining other 4 C’s, changing this would change all the rest

Question 16

5C’s: collaborators

Answer 16

partners/suppliers/distributors

leveraging strengths to reach common goals & create value for target customers

Question 17

5C’s: competitors

Answer 17

all those aiming to fulfill same customer need (don’t ignore substitutes!)

market space, positioning

positioning = how firm’s offerings are perceived relative to competitor’s offerings

Question 18

5C’s: context

Answer 18

market potential, market attractiveness
P = political and legal
E = economic
S = social
T = technological

Question 19

OVP

Answer 19

3V model
-optimal value proposition - intersection of company, collaborator, and customer value; value delivery is balanced across 3 entities

• has to deliver value superior to competition

Question 20

tactical

Answer 20

4P’s / marketing mix - defining attributes of actual offering that’ll create market value (tools to deliver OVP)
product, price, promotion, place

Question 21

marketing plan steps

Answer 21

1. situational analysis = 5C’s
2. strategic options/objectives = STP (segment, target, position)
3. Implementation & Eval = 4P’s, metrics, forecasts and budgets

*GSTIC

Question 22

4P’s: product

Answer 22

offering: product, service, platform

- key functional characteristics & perhaps includes brand

Question 23

4P’s: price

Answer 23

how we communicate and extract value; price charged for benefits received

Question 24

4P’s: promotion

Answer 24

how to communicate value to customers

- incentives (monetary or nonmonetary to enhance offering value) and communication to current and potential customers

Question 25

4P's: place

Answer 25

how we deliver offering; distribution | - channels thru which it's delivered to customer

Question 26

focus on the customer

Answer 26

customers want the *benefit* | not all customers are equal; focus on most valuable

Question 27

why rethink product-centric approach?

Answer 27

- technology: product lifecycles are way shorter, you can't enjoy innovation for as long - global competition; increasingly borderless environments means more markets but also more competition - customer power: customers can find cheaper options immediately

Question 28

value proposition

Answer 28

- defines value the offering aims to create for relevant market participants - co's expectation of value it'll create; an ideal representation of benefits customer will receive from offering

Question 29

value relationships

Answer 29

creating and capturing value b/w co, customer, collaborators | 3 value relationships on co. side, 3 on competitive side

Question 30

top-down approach to biz model

Answer 30

- start with customer analysis (ID need to be satisfied) or co resource analysis (to ID core competencies/strategic assets that could create competitive advantage) - ID target market and create OVP

Question 31

bottom-up approach to biz model

Answer 31

- start with product development (deliberate R&D process, incorporating new advancements in tech) - ID target customers and unmet needs

Question 32

when to update a biz model

Answer 32

when one of the 5C's changes, or when value proposition for relevant entities is no longer optimal

Question 33

GSTIC

Answer 33

- goal = ultimate criterion for success; ID focus and benchmarks - strategy = 5C's; ID target market and value proposition - tactics = 4P's - implementation = define infrastructure, business processes and implementation schedule to outline logistics of strategy and tactics - control = evaluating progress and analyzing change

Question 34

setting goals

Answer 34

- focus: monetary or strategic (not mutually exclusive) - benchmarks: quantitative (relative or absolute) or temporal - market objectives: more specific goals outlining changes in behavior of 5C's that'll enable ultimate co goal attainment temporal goals, aka setting a timeline, is a key strategic decision bc strategy adopted to implement goals is often contingent on time horizon

Question 35

defining implementation

Answer 35

- biz infrastructure = functional/divisional teams, organizational structure - biz processes = managing flow of info, goods, services, and $$; market planning, resource mgmt, mktg mix mgmt - schedule = optimal timing and sequence to perform individual tasks to optimize effectiveness and cost-efficiency

Question 36

controls

Answer 36

- performance evaluation of outcomes of actions w/r/t goals set; ID any gaps and modify accordingly - environmental analysis = make sure action plan is optimal w/r/t operating environment (look for new opportunities or potential threats)

Question 37

when to update market plan

Answer 37

- performance gaps (caused by inaccurate info or assumptions, logic flaws, implementation errors) - change in target market (5 C's)

Question 38

creating company value

Answer 38

process of capturing value derived from market exchange in which co creates value for customers and collaborators - monetary - strategic (functional and psychological)

Question 39

managing profit by incr. sales rev

Answer 39

- best for LT profitability - incr sales volume: managing customer adoption (market growth = customers new to category, or stealing market share) and customer usage (market penetration = focus on current customers) - optimize price: consider customer price elasticity bc that affects sales volume change; "price" also includes monetary incentives, prices throughout retail channel

Question 40

managing profit by decr costs

Answer 40

- decr COGS, R&D, mktg, cost of capital - achieve economies of scale (lower per-unit cost bc of greater manufacturing and sales volume), move up the learning curve (becoming more productive), achieve economies of scope (synergies among different offerings in portfolio)