When a competitive market becomes controlled by a monopoly, the price ________ and the output ________.
Marketing Strategy | Consumer Psychology | Segmentation, Targeting, + Positioning | ||
What is Marketing?The activity, set of institutions + processes for creating, communicating, delivering + exchanging offerings that have value for customers, clients, partners + society at large What can be marketed?fundamental purpose of Marketing is to create value by developing a variety of offerings. Product: any good/service/ idea -Consumer goods/services -B2B goods/services -Not-for-profit marketing -Idea, place, + people marketing Marketing Creates ValueValue:benefits customer received from buying good/service. Value proposition:marketplace offering that fairly + accurately sums up the value that the customer will realize if he purchases product/service Value from customers perspectiveCustomer perspective:Value is the ratio of costs (price) To benefits (utilities) Value proposition includes the whole bundle of benefits the firm promises to deliver, not just the benefits of the product itself, Every customer = different Value from the Seller’s PerspectiveMaking a profitable exchange, earning prestige among rivals, taking pride in doing what a company does well, making positive changes in the community How to create a Competitive Advantage1. Identify what one does well2. Turn distinctive competency into benefitCustomer Excellence:Strategic focus on delivering exceptional value + service to customers, Involves understanding customer needs, preferences, + behaviors, Aim to provide personalized experiences that meet or exceed customer expectations, Goal: Build strong customer relationships, loyalty, + advocacy, Consistent delivery of outstanding service, support, + solutions Locational Excellence:gaining a competitive edge through strategic physical location, Advantage can come from being in a high-traffic area, prime demographic region, or aligning with target market preferences, focus on using the benefits of the location to attract customers + boost sales Product Excellence:differentiating through quality, uniqueness, + innovation, focus on creating products that excel in features, performance, durability, + value, aim to consistently deliver superior + innovative products, establishes a reputation for excellence, attracting customers who value these attributes. Operational Excellence:focuses on optimizing internal processes + resources, aims to achieve efficiency, cost-effectiveness + high quality outcome SWOT ANALYSIS:
| Consumer Decision Making Process1. Need recognition: difference in actual state & ideal state causes this2. Search for info: survey env. For approp data to make reasonable decision3. Evaluation of alternatives: compare4. Purchase decision: buy product5. Post-purchase evaluation: consumer satisfaction/dissatisfaction after purchaseMaximizers:seek best, compare decisions w others, spend more time & energy, unhappier w outcomes Satisficers:accept good enough, don’t obsess over other options, happier System 1:Intuitive mind System 2:Analytical mind Heuristics: rules of thumb, e.G. Price-quality, country, brand familiarity Cognitive Bias:systematic error in thinking that occurs when people are processing & interpreting info and affects decisions & judgments they make. Confirmation Bias:favoring info that conforms to ur existing beliefs & discounting info that doesn’t conform. Anchoring Bias:rely too heavily on very 1st piece of info u learn Availability Heuristic:placing greater value on info that comes quickly to mind
| Market fragmentation:diverse & consist of different segments, reflecting different needs, wants, responses to marketing messages & behavior 1. Segmentation: Identify & describe market segments2. Targeting: Evaluate segments & decide which to go after3. Positioning:develop a marketing mix that will create a competitive adv in the minds of the selected target market Types of Market SegmentationGeographic segmentation:groups based on where they live (country, region) Demographic segmentation:age, gender, income, education Psychographic segmentation:behavior, lifestyle, attitudes & interests Behavioral segmentation:Occasion segmentation, loyalty segmentation
Segment profitability = (segment size * segment adoption % * purchase behavior * profit margin %) – fixed costs Positioning:marketing strat to influence how a particular market segment perceives good/service in comparison to competition Stages in Positioning:1. Analyze competitors’ positions2. Have a competitive advantage3. Modify the marketing mix (4 P’s)4. Evaluate | ||
Pricing + Retail | Promotion | |||
Price:assignment of value, or the amount the consumer must exchange to receive the offering (money, goods, services, favors, votes, anything else that has value to the other party) Considerations in setting price:
Pricing Strategies:Price Based on Demand:based on estimates of the quantity a firm can sell at different prices Cost Based Pricing:set price based on cost to produce, distribute, sell plus a fair rate of return Price Based on Comp:price near/at/below/above comp Demand curves
Demand Based Strategies:Price Skimming:High initial price for new products, targeting early adopters. Gradually lowered over time to attract broader customer base. Penetration Pricing:Low initial price to quickly gain market share. Aims for rapid adoption, buzz creation, and long-term profitability. Dynamic Pricing:Flexible strategy adjusting prices based on market conditions, demand, competition, time, customer behavior, and inventory. Common in travel, hospitality, and e-commerce. Price Discrimination:Different prices for different customer segments based on willingness to pay, usage, purchase duration, etc. (airlines, cars, hotels) Geo-based Pricing:Adjusting prices based on customer preferences, costs, competition, & market conditions in different locations to maximize demand and profits. Value-based Pricing:Prices set based on perceived value to the customer, considering factors like brand, quality, service, and convenience. Focuses on customer’s estimated worth rather than costs/competition. Psychological Issues in Pricing:buyers expectations, price-quality inferences Variable Costs:Vary w production vol. Fixed Costs:Unaffected by production vol Total Cost:Sum of variable & fixed costs Break-Even Analysis:
| AIDA Model:
Attention:Capture attention with images, bold text Interest:Raise curiosity to stimulate desire to learn more Desire:Convince the consumer they want/need the product Action:Prompt the consumer to make a purchase Attitude toward the ad → attitude toward the brand → purchase decisions Means End Framework:
Typical personal values:comfort, freedom, accomplishment, security
Emotional:makes us feel differently Fear, social, humor, sexual, romantic, endorsement, popularity appeal Informational:relate to consumer’s practical need for the product | 1. Positioning in the market:pride themselves on being a little fun, disruptive. Little bit wild, wacky and out there. Products are all founded in the natural space, they do everything with a natural ethos in mind. 2. Product development:new products for current consumers: they focus on bar soaps but other self-care products. They have partnerships w/ Disney, Warner Brothers, Microsoft, Blizzard, Activision. Find products that their customer base would want. 3. Added value:the extra characteristics of a product that make consumers choose that product or service over the competition, finding scent profiles that guys really like and provide a unique shower experience, have really high natural standards | ||
