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MKT 302 Part I (Decisions of a Marketing Manager (other frameworks include…

- - - - --> strategic assets --> consumer benefits (aka products)
      - requires continuous investment
      - caveats: acquisitions, non-existent ccs (limits ability to thrive), ambiguous ccs
    - - marketing myopia: tendency to define biz based on products rather than consumer benefits
        
        selling is not marketing (selling focuses on producer/seller needs, marketing focuses on customer needs)
        
        solution: pay attn to customers and all relevant stakeholders to company, focus on their needs and categories relative to them
    - - quantifiable, temporal benchmark, realistic, consistent
      - can be overly ambitious or focused
    - - Branding Strategies
        
        umbrella - fam of products that all deliver same benefit, high efficiency/simplicity, low flexibility
        
        advantage: ability to extend brand w consumer trust
        
        product line extension (parent --> sub)
        
        category extension
        
        branded variants
        
        why brand extensions: alleviate consumer boredom, billboard effect, pricing breadth, lower cost than trying to launch new brand ($30M vs. $5M), capitalize on placebo effects (eg. different version of Red Bull), risk minimization (reduced risk for product or career failure)
        
        distinct - several products w distinct meanings/brand names/logos/target audiences, high flexibility, low efficiency/simplicity (eg. ABC Fam, Unilever)
        
        hybrid
      - relevance: important for parent brands
  - - - Retention
        
        CRM = "Customer Relationship Management" (philosophy and tool)
        
        Customer Lifetime Value - assumption that customers become more valuable over time, presents value of future profits generate by one customer
        
        Retention Marketing
        
        persuasive advertising --> remind customers that you're better than the competition
        
        reminder advertising - emphasis on brand over product
        
        Intelligent alien test - if alien watches ad and can't tell you what product is, it's retention-focused
        
        loyalty programs - incentive for consumer to not shop around, makes ppl feel special, least effective among most loyal, NOT emotional
        
        application of Goal-Gradient Hypothesis --> goal pursuit intensifies the closer we get to that goal/clearly defined end state (makes is wanna keep going)
        
        capable of...
        
        create barriers to exit (some sort of lock-in)
        
        win greater share of wallet
        
        encourage purchases that wouldn't normally happen
      - Acquisition
        
        Acquisition Marketing
        
        awareness advertising
        
        persuasive advertising --> leverage awareness of market leader
        
        "Acquisition bias" - too much focus on acquisition (might be less profitable than focusing on current customers)
        
        "Cost per acquisition bias" - too much focus on reducing cost of acquisition
      - factors to consider: biz obj, revenues from A vs. R customers, don't neglect one over other
      - R ~5x cheaper than A
      - 80/20 rule - need to acquire 5 cust in order to get 1 loyal cust
    - - Recency-Frequency_Monetary analysis (RFM) determines current customers based on purchase behavior, diff companies have diff RFM cutoffs
        
        for company-customer interactions w no monetary exchange, retention = customer transact w company
      - Determining size of customer base depends on setting
        
        contractual - observe time at which cust becomes inactive (eg. cancel subscription)
        
        noncontractual (aka transactional) - no observation of when cust becomes inactive
        
        short-term vs. long-term cust: butterflies, strangers, true friends, barnacles
        
        barnacles: measure size and share of wwallet
        
        share of wallet - % fo cust's spending within category of specific product/company
        
        low share of wallet: try to up-sell or cross-sell
        
        size of wallet - total $ cust spends on certain product category
        
        low size of wallet => cust not valuable to company stop retention efforts
        
        distinguish based on internal and external data, calls for CRM strategies
        
        Customer Loyalty
        
        origins
        
        deliberate assessments of quality/value (head loyalty)
        
        habit (hand loyalty), can be disrupted by packaging innovation
        
        emotional attachment (heart loyalty)
        
        benefits
        
        barrier to entry (time to respond to competitor innovations
        
        pricing (price premiums -- cust will pay more for your product bc of brand typically by ~40-60 cents), protects against price attacks (aka discounts/rebates by other companies)
        
        drawbacks
        
        consumers believe loyal customers deserve lower prices
        
        loyal cust more knowledgeable about product offerings/prices in past => price sensitivity
  - - - stimulate demand - bring ppl into category, category leader benefits most
        
        retention
        
        stimulate heightened usage among current customers (go upscale, create new category, stimulate usage/highlight new uses)
        
        acquisition
        
        create new category, emphasize category benefits
      - steal share via taking customers directly from competition, convincing multi-brand users to be more loyal to us,
        
        frontal attack => attack on main variable
        
        flank attack => attack on dynamic variable
        
        imitation brands
        
        can sometimes create/result in category ambiguity
    - - main (points-of-parity) - benefit that each category member must offer, category leader dominates
      - dynamic (points-of-difference) - benefits that non-market leaders offer to steal share from leader
    - - People outside of category, our customers, competitor's customers, multi-brand customers
  - - - focus groups - qualitative research, informal/semi-structured group interviews, disc about possible product additions/modifications
        
        pitfalls: peer pressure can lead to misleading results, social normative influence (unreliable results for goods consumed in private), ppl don't know what they want, can't be used for everything
      - Info Acceleration tests - allows consumers to imagine world w RNP (really-new-to-the-world product) that requires more immediate investment decisions, eg. VR, augmented reality
    - - choice-based, rating-based, ranking-based
      - benefits: determine which attributes matter most to indiv consumers, price different attribute levels, predict product choices, predict market potential/share, informs design/pricing/segmentation
    - - Alpha - product tested in lab
      - Beta - at-home used for specified period of time
      - Gamma - indefinite at-home use
    - - hazards: costly, hard to find perfectly representative test markets (eg. representation for rural areas), competitors can disrupt test markets (might try to fight you w discounts), competitors can monitor performance/plan accelerate response
      - A/B Testing - randomized, controlled trial where participants are randomly sorted into groups (eg. blue "learn more" button vs. green "learn more" button
      - ALTERNATIVE: Pre-Test Markets - simulation in which participants exposed to product ads (you and competitors) and sent into simulated store to make purchases
        
        purchase likelihood, repurchase likelihood (questionnaires, surveys, interviews)
        
        ASSESSOR simulated test market - inexpensive, structured method to examine effectiveness of advertising/sampling
        
        limitations: everyone is exposed to ad, product is accessible to all, models don't shed light on potential implementation problems and ignore competitive reactions
        
        awareness index (function of how enjoyable ad is, strength of engagement, how well branded it is) vs. persuasion score (function of presence of news, ad's relevance, presence of differentiating msg, credibility): ideally high awareness and persuasion, awareness > persuasion
    - - When do we start profiting? Determining the BEV (Breakeven Volume)
        
        determine fixed costs, revenue, (BEVprice) and variable costs (volunit variable costs, UVC = variable costs/vol) at BEV
        
        unit margin = price - UVC
        
        BEV = fixed costs/unit margin
        
        Breakeven Market share = BEV/total vol within category
      - note: value network = sys of partnerships/alliances that firm creates to source, augment, and deliver its offerings (eg. retailer -- will cut into margin but also adds value for end user)
  - - - segment - group of consumers sharing characteristic that should increase their responsiveness to marketing effort
        
        need to segment everyone in the market (but do not pursue every one)
        
        best type of segmentation: attitude seg. (thoughts/feelings/desires/aspirations) --> translates to needs that can be fulfilled profitably
        
        pros: can be good predictors of behaviors
        
        cons: data more difficult to collect/can be inaccurate, attitudes can change over time
        
        can create polarizing content!
        
        good segmentation variable: identifiable, substantial, accessible, stable, differentiated, actionable, tied to core competence
        
        unattractive segment: contains several strong or aggressive competitors, low entry barriers and high exit barriers
      - segment when: value from customization > costs of developing separate offerings
        
        high cost of customization --> companies tend to develop offerings that serve larger segments
        
        low cost of customization --> easily tailored for smaller segments
        
        balance between target market size and prob of conversion (inversely related)
    - - caution when targeting vulnerable segments w potentially harmful products: those incapable of making informed decisions at time of purchase
    - - 5-Box Positioning Statement
        
        Current Belief
        
        Current Behavior
        
        Consumer Proposition
        
        Desired Belief
        
        Desired Behavior
      - positive vs. negative statements: negative, "prevention-focused" statements tend to be more powerful
      - caveats: sometimes link between beliefs and behavior not straightforward, sometimes weak link between consumer prop and updated beliefs
  - - - advertiising
      - sales promotions
      - PR
      - direct/interactive marketing
      - personal selling - face2face com to increase prob of purchase
    - - Marketing: analytical, long-term, strategic, pull
      - Sales: interpersonal, short-term, tactical, push
        
        push marketing - sales force and trade promotion $ to induce intermediaries to carry/promote/sell product to users, appropriate for low brand loyalty in category and brand choices made in store
        
        pull marketing - marketing that makes consumer seek out product, ideal for high brand loyalty/involvement in category
      - Connecting the two
        
        measuring differences: sales easier to measure than brand equity
        
        steps for better integration: disciplined com, joint assign/rotating jobs, provide incentives for sales force to provide feedback, appoint CRO (Chief Revenue Officer) or COO (Chief Customer Officer)
  - - - ways to articulate/reinforce positioning: change quality, design, packaging, sizes, warranties, return policy
        
        packaging: identifies brand, conveys descriptive/persuasive info, facilitate product transportation and protection, assist at-home storage, the "five-second" commercial, can be sourec of info/differentiation
      - Product Life Cycles: products have limited life, pass thru distinct stages, require different marketing/financial/manufacturing strategies in each life-cycle
        
        intro --> growth --> maturity --> decline
        
        intro: slow sales growth, profits nonexistent, light competition, gain trial by early adopters, attn on quality control
        
        growth: rapid market acceptance, substantial profit improvement, aggressive competitors,
        
        maturity: slowdown in sales growth bc product has achieved acceptance w most potential buyers, profits affected by high competition, focus on new product platforms to re-introduce growth
        
        decline: sales+profits decline, focus on profits rather than sales/share, reduced marketing budget
      - 5 Product Level Model (from inside circle to outside): core benefit, generic product, expected product, augmented product, potential product
      - Product Attributes: search (can be eval prior to consumption), experience (evaluated after consumption), credence (cannot be evaluated even after consumption)
        
        search: price, MPG, screen size, memory, appearance, etc.
        
        experience --> companies will often try to make experience attributes more tangible (eg. free samples)
        
        credence: cannot be eval by cust (eg. health benefits, auto repairs if you're not a mechanic, medical procedures, etc.)
        
        how to indicate that product possesses credence attributes: high price to signal high quality, quality seals, ads
      - Products and Brands
    - - ways to articulate/reinforce positioning: change list price, discounts, repayment period, financing terms
    - - ways to articulate/reinforce positioning: change size of sales force, ad campaign
    - - ways to articulate/reinforce positioning: change where we're available, # of intermediaries
- - - - mobile ethnographies
    - - most common linkages can be summarized in hierarchical value map
    - - MRI --> neuroimaging can be better than self-reports
      - EEG
      - eye-tracking
  - - - internal - ability to confidently draw causal conclusions (i.e. how clean is the experiment? Is it free of confounds?)
      - external - ability to generalize from research setting to other contexts