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Midterm

Chapter Summaries for Midterm A short summary of all the chapter readings required for the midterm (big time-save so you don't have to re-read them!)

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Department
Marketing
Course
MKTG 2030
Professor
Leah Carter- Schneider
Semester
Winter

Description
Marketing Notes Chapter 1:  Companies that succeed over their competitors begin with a simple value proposition that is based on a deep understanding of their customers (their marketing strategy - the #1 factor that accounts for an organization’s success)  Winning organizations execute their marketing strategy flawlessly  Marketing is a disciplined process to solve business problems  Marketing process: o 1. Understand customers  Customer needs  Customer segments  Target customer o 2. Create customer value (marketing mix)  Product strategy  Pricing strategy  Channel strategy  Marketing communications strategy o 3. Deliver customer value  Sales execution  Cross-functional alignment o 4. Manage customer value  Customer satisfaction measurement  Segment review  Customer review  Product mix review  Market segmentation: what customers do we want to serve?  The ten tasks of marketing: o Identify opportunities o Segment and target markets o Develop a marketing strategy o Implement the marketing strategy o Assess and innovate o Provide a competitive advantage to the sales force o Build a customer-focused business o Make marketing accountable o Be a change agent within the organization Chapter 2:  Develop a deep understanding of customers: o Talk to your customers whenever and wherever you can o Use data you already have o Establish clear standards for research  Smart companies are not happy to merely understand customer needs: they create them  Marketing research techniques: o Secondary research: research that has already been conducted by someone else  You may find the answer to the question you are researching, making it unnecessary for you to do the research yourself  Gives you tips on what has already been done, what gaps exist in knowledge and what traps to avoid  Quicker than primary research, possibly free o Focus groups: a guided discussion with a group of respondents such as customers  Flexibility to change course depending on the answers given by the respondents  Clients can see their customers in action behind the one-way mirror  Forum for generating ideas, testing product concepts and testing marketing communications messages o Depth interviews: a one-on-one in-depth discussion with a respondent o Ethnography: a technique where the researcher becomes a customer to learn more about customer needs and value drivers o Surveys: quantitative method of data collection by questionnaires  Asks three kinds of questions: what do you think, what do you do and who are you? o Problems with using marketing research tools to understand customer needs is that customers may not know what their needs are, or they may not be able to articulate them  Strategies of companies that succeed by not doing any formal marketing research: o “Ready, Fire, Aim” o Co-create value with the customer o Treat the whole world as your research firm o Create new market space  Look across substitute industries  Look at different customer roles  Look across complementary goods and services  Appeal to a customer need your competitors have not thought about  Buying centre: the group of customers involved in the decision making  Basic care variables: the price of entry in any industry (the bare minimum) Chapter 3:  The opposite of market segmentation is mass marketing  Mass marketing ignores customer needs by providing all customers with only one offer  Today, there is no such thing as a mass market – business success depends on segmenting markets in a way that is different from competitors and then selecting the best target segments to serve  Dangers of not segmenting customers: o The business ignores customer needs and treats all customers the same: by trying to be all things to all people, the business ends up satisfying no one o The business wastes resources: if it offers all its customers only one value proposition, it is wasting its resourced by either over-serving or under-serving customer needs (e.g. a prenatal centre with both new and veteran parents offering only one-on-one consulting or only brochures) o The business tries to be all things to all people: the business does not give its customers a reason to want to do business with it o The business is not giving the sales force any direction: salespeople do not know what to offer, what to withhold or which customers to target (as a result, they often give the customer too much without charging for the value they create, or they drop the price to secure the contract)  Basic principles of market segmentation: o A business exists to be profitable: segmenting and targeting customers enables a business to dramatically improve its profitability o All customers are not created equal o We cannot be all things to all customers: because all customers are not created equal based on their needs and their attractiveness to you, it makes no sense for a business to treat all customers the same  Segmenting customers by geography or demographic variables is wrong  Psychographic segmentation: a method of classifying individuals into nine psychological types based on their lifestyles, attitudes, interests and personality (efficacy is limited to advertising and brand reinforcement)  The best way to segment customers is by not only examining their needs but also the needs of the business by examining customer attractiveness  Usage segmentation is useful for segmenting on the internet o Occasionalization: segmenting customer groups by their individual behaviour at a point in time, not by demographics or psychographics, and not by aggregate online behaviour (recognizes that customers have different moods and use the internet for different reasons at different points in time)  Common pitfalls in segmenting customers: o Over-segmenting: makes it hard to satisfy the needs of each segment in a unique fashion and puts an enormous strain on the firm’s resources o Targeting too many customers with one offering: certain customers’ needs are not being met o Relying on the easiest segmentation methods: segmentation methods based on geography or demographic variables o Relying on complex segmentation approaches: segmentation should be understood by all within a business o Segmenting by product, not by market: does not take into account customer needs o Using the same segmentation as competitors: will not let you differentiate yourself in the marketplace o Always targeting the largest segment: the largest customers may not be the most profitable o Forgetting that segments chang
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