Mastering Core Business and Marketing Concepts

Posted on Jan 4, 2026 in Business Administration and Management (BAM)

Essential Marketing Concepts

Market Sizing and Segmentation

Defining Market Potential (TAM, SAM, SOM)

  • TAM (Total Addressable Market): The total possible market size.
  • SAM (Serviceable Available Market): The relevant or targetable segment of the TAM.
  • SOM (Serviceable Obtainable Market): The realistically reachable share of the SAM that your business can capture in the short to medium term.

Jobs to Be Done (JTBD) and Segmentation

JTBD describes what the customer wants to achieve in their life, what progress they are trying to make, and what problem they are hiring the product to solve.

Segmentation:

  • Age
  • Geographic location
  • Lifestyle

Understanding the Customer

Creating a Customer Persona

A customer persona defines a fictional representation of your ideal customer, including:

  • Name, Age, Location: Basic demographic information.
  • Description/Role: What they do.
  • Lifestyle: Their habits and interests.
  • Problem: The core issue they face.

Key Customer Drivers

  • Trigger: What makes the customer start looking for the service (the frustration point).
  • Criteria: Factors the customer uses to choose your product/service over alternatives.
  • Pains: Concerns or worries the customer has before making a purchase.
  • Gains: The positive results the customer expects to achieve.

Product Strategy

Five Dimensions of a Product

  1. Core: The fundamental benefit the customer is buying.
  2. Generic: The basic version of the product or service.
  3. Expected: What customers normally expect (minimum requirements).
  4. Augmented: Extra features that differentiate the product from competitors.
  5. Potential: Future possible improvements or transformations.

The Product Life Cycle (PLC)

The PLC describes the stages a product goes through from introduction to decline:

  1. Introduction: The first time the new product or service is presented. Requires high marketing investment to create awareness and trust.
  2. Growth: If the product is successful, demand increases, leading to increased production. Marketing focuses on differentiation.
  3. Maturity: Often the most profitable stage. Production and commercialization costs decrease.
  4. Decline: Product sales diminish due to market saturation and the appearance of alternative products. Focus may shift to product development or discontinuation.

Pricing Strategies

Effective pricing involves psychological tactics and strategic positioning:

  • Rule of Nine: Using prices ending in 9 (e.g., $9.99) to suggest a lower price point.
  • Anchoring: Establishing a reference point. The first price seen will affect the perception of subsequent prices.
  • Differentiation: If prices are too similar, it is more difficult for customers to make buying decisions.
  • Bundling: Grouping products together, which usually performs better than selling them separately.
  • Decoy Effect: Offering three different options where one option makes another look significantly more attractive.
  • Reframing Value: Presenting costs in smaller, more manageable units (e.g., cost per day instead of cost per year).

The Customer Journey Stages

The customer journey is typically divided into three key stages:

  1. Lead (Pre-Purchase)

    In this first stage, we learn about the customer’s feelings and needs before purchasing the product or service. An objective here is Desire, meaning the customer is eager to buy the product.

  2. Customer (Purchase Experience)

    In this stage, we focus on the experience the customer has when they actually buy the product or service. An objective here is Purchase, the act of buying the product.

  3. Fan (Post-Purchase)

    In the final stage, the customer experiences the post-purchase phase, where they have the product or service and know how it works. An objective here is Promotion, encouraging recommendations or reviews about the product or service.

The Marketing Mix (4 Ps)

The 4 P’s—Product, Price, Place, and Promotion—contribute to a comprehensive marketing strategy. Defining and determining each element helps businesses understand customer needs and solve their problems by offering the best options.

While it is not possible to please everyone, the goal is to satisfy the selected target segment. Balancing all four elements is crucial for focusing on what is truly important for customer needs and company goals.

Objectives, Metrics, and KPIs

Marketing objectives are the bridge between strategy and execution. When they are well-defined and SMART (Specific, Measurable, Achievable, Relevant, Time-bound), they turn customer-centric thinking into focused actions and measurable results.

A Metric is any quantifiable measure used to track an activity, while a KPI (Key Performance Indicator) is a specific type of metric directly linked to a strategic business objective and considered crucial for success.