Marketing objectives and summaries

Segmentation, Targeting and Positioning

• Objectives and Recap Questions
• Outline the different methods of segmenting a market.
• Describe how firms determine whether a segment is attractive and therefore worth pursuing.
• Articulate the difference among targeting strategies: undifferentiated, differentiated, concentrated or micromarketing.
• Determine the value proposition.
• Define positioning and describe how firms do it.
• What are the various segmentation methods?
• What is a perceptual map?
• Identify the six positioning steps.
• Summary
• There is no one ‘best’ method to segment a market. Firms may choose psychographic, geodemographic, benefit and behavioural segmentation.
• It is recommended that several criteria be used to determine a segment’s attractiveness. A segment must be identifiable, substantial, reachable, responsive and profitable.
• Targeting strategies include undifferentiated, differentiated, concentrated and micromarketing
• Targeting strategies include undifferentiated, differentiated, concentrated and micromarketing.
• A firm’s value proposition communicates the benefit(s) a product offers consumers.
• Positioning refers to how consumers think about a product in relation to a competitor’s offerings.
• When developing a positioning strategy, a perceptual map is often used to outline how the firm’s product is perceived in comparison to their competitors’ products

Product and Branding Decisions

• Summary
• The core customer value of the product includes brand name, quality level, packaging and additional features
• Consumer products tend to fall into four groups –specialty, shopping, convenience and unsought.
• Breadth, or variety, entails the number of product lines, whereas depth is the number of categories within one specific product line.
• Brands enable people to make decisions more easily and encourage customer loyalty.
• Brand equity comprises brand awareness, brand associations, brand loyalty and the concept of perceived value.
• Firms need to decide if they should offer a manufacturer or private label brand, a corporate brand versus a collection of brands and/or individual brands.
• They also need to decide if they want to reach new markets or extend the current one, co-brand with another brand or license their brands to other firms.
• A brand extension uses the same brand name for a new product in new or existing markets.
• A line extension is an increase of an existing product line by brand.
• Packaging and labels help to sell the product and facilitate its use.
• Objectives and Recap Questions
• Describe the components of a product.
• Identify the types of consumer products.
• Explain the difference between a product mix’s breadth and a product line’s depth.
• Identify the advantages that brands provide to firms and consumers.
• Explain the various components of brand equity.
• Determine the various types of branding strategies used by firms.
• Distinguish between brand extension and line extension.
• Indicate the advantages of a product’s packaging and labelling strategy
• What is the difference between product mix breadth and product line depth?
• Why change product mix breadth?
• Why change product line depth?
• How do brands create value for the customer and the firm?
• What are the components of brand equity?
• What are the differences between manufacturer and private-label brands?
• What is co-branding?
• What is the difference between brand extension and line extension?
• What is brand repositioning?

Developing New Products

• Objectives and Recap Questions
• Identify the reasons firms create new products.
• Describe the different groups of adopters articulated by the diffusion of innovation theory.
• Describe the various stages involved in developing a new product.
• Explain the product life cycle.
• What are the reasons firms innovate?
• What are the five groups on the diffusion of innovation curve?
• What factors enhance the diffusion of a good or service?
• What are the steps in the new product development process?
• Identify different sources of new product ideas
• What are the stages in the product life cycle?
• How do sales and profits change during the various stages?
• Summary
• Firms need to innovate to respond to changing customer needs, present declines in sales, diversify their risk and respond to shorter life cycles.
• The diffusion of innovation theory can help firms predict what types of customers will buy their products
• These types include innovators, early adopters, early majority, late majority and laggards
• When firms innovate, they go through several steps
• Idea generation
• Concept testing
• Product design
• Test market
• Product launch
• The product lifecycle helps firms make marketing decisions on the basis of the products stage in its life cycle
• Knowing where a product is in its lifecycle helps managers to determine its specific strategy

Services - The Intangible Product

• Objectives and Recap Questions
• Describe how the marketing of services differs from the marketing of products
• Discuss the four gaps in the Service Gaps Model.
• Examine the five service quality dimensions.
• Explain the zone of tolerance.
• Identify three service recovery strategies.
• What are the four marketing elements that distinguish services from products?
• Why can’t we separate firms into just service or just product sellers?
• Explain the five service gaps identified by the Gaps Model
• List at least two ways to overcome each of the four service gaps
• Why is service recovery so important to companies?
• What can companies do to recover from a service failure
• Summary
• Services are any intangible offering that involves a deed, performance or effort that cannot be physically possessed.
• Services are intangible, inseparable, heterogeneous and perishable
• Services require the use of cues, atmosphere and images to convey benefit of value
• The four service gaps are the knowledge gap, the standards gap, the delivery gap and the communications gap which combine into the total gap.
• Customers generally use the following five dimensions to determine service quality; reliability, responsiveness, assurance, empathy and tangibles.
• The zone of tolerance refers to the area between customers' expectations regarding their desired service and the minimum level of accepted service
• Service recovery involves listening to the customer, finding a fair solution and resolving problems quickly.

Pricing Concepts for Establishing Value

• Objectives and Recap Questions
• Know the four pricing orientations
• Explain the relationship between price and quantity sold
• Explain price elasticity
• Describe how to calculate a product’s breakeven point
• Indicate the four types of price competitive levels.
• Identify three methods that firms use to set their prices.
• Explain the difference between price skimming and market penetration pricing.
• Identify tactics used to reduce prices to consumers.
• Identify tactics used to reduce prices to businesses.
• What are the five Cs of pricing?
• Identify the four types of company objectives.
• What is the difference between elastic and inelastic demand?
• How does one calculate the breakeven point in units?
• How have the internet and economic factors affected the way people react to prices?
• What are the three different strategies for setting pricing?
• How can you use value-based strategies for setting prices?
• What pricing strategies should be considered when introducing a new product?
• What are some consumer-oriented pricing tactics?
• What are some B2B-oriented pricing tactics?
• Summary
• The four pricing orientations include profit-oriented, sales-oriented, competitor-oriented and customer-oriented.
• When prices go up quantity sold generally goes down, however with some products such as prestige ones, demand can actually increase with price.
• Price elasticity measures the extent to which changes in price affect demand.
• A break-even point occurs when the units sold generates enough profit to cover the total costs of producing those units.
• There are three types of price competitive levels –monopoly, monopolistic competition, and an oligopolistic competitive market.
• The three methods that firms use to set their prices are cost-based, competitor-based and value-based.
• Price skimming strategy is used when the product is perceived as breaking new ground, to signal high quality, limit demand and recoup investment quickly.
• Market penetration strategy builds sales and market share quickly to discourage other firms from entering the market.
• Marketers use a range of tactics to provide lower prices to customers, including markdowns, quality discount, seasonal discount, coupons, rebates, price bundling, leader pricing and price lining.
• Firms use a range of tactics to reduce prices to businesses including seasonal discounts, cash discounts, quantity allowances and zone pricing.

Supply Chain Management and Logistics

• Objectives and Recap Questions
• Understand the importance of marketing channels and supply chain management.
• Understand the difference between direct and indirect marketing channels.
• Describe how marketing channels are managed.
• Discuss the four factors manufacturers should consider as they develop their strategy for working with retailers.
• Outline the considerations associated with choosing retail partners.
• List the three levels of distribution intensity.
• Describe the various types of retailers.
• Identify the benefits and challenges of stores and multichannel retailing
• What is the difference between an indirect and a direct marketing channel?
• What are the differences among the three types of vertical marketing systems?
• How do firms develop strong strategic partnerships with their marketing channel partners?
• How does merchandise flow through a typical marketing channel?
• What activities occur in a distribution center and what technologies facilitate those activities?
• Why have just-in-time inventory systems become so popular
• What issues should manufacturers consider when choosing retail partners?
• What is the difference between intensive, exclusive, and selective levels of distribution intensity
• What strategies distinguish the different types of food retailers?
• What strategies distinguish the different types of general merchandise retailers?
• Are organisations hat provide services to consumers retailers?
• What are the components of a retail strategy?
• What are the advantages of traditional stores versus internet-only stores?
• What challenges do retailers face when marketing their products through multiple channels
• Summary
• Marketing channels allow companies to get their products to the appropriate outlets in sufficient quantities to meet consumer demand.
• Using a direct marketing channel, a customer can purchase goods directly from the manufacturer.
• More commonly, manufacturers choose to offer their goods through an intermediary such as a retailer.
• The more closely aligned the marketing channel members are, the less likely there will be significant conflict.
• Manufacturers determine which retailers should carry their products, and then work with them to develop a business strategy.
• Manufacturers often start with a level of vertical integration, the strength of the retailer and the strength of the brand.
• Distribution intensity includes intensive, exclusive and selective.
• Retailers fall into three categories –food, general merchandise or services.
• Retailer formats include supermarkets, warehouse clubs, convenience stores, department stores, discount stores, speciality retailers, chemists, category specialists, extreme value and off-price stores.
• If a retailer adopts a multichannel strategy, it can exploit the benefits and mitigate the limitations of each channel and expand its overall market presence.

Customer Relationship Management

• Objectives and Recap Questions
• Describe customer relationship management (CRM) and its role in supporting business operations.
• Describe the three phases of CRM.
• Describe, with examples, the types of CRM systems.
• Identify the benefits and challenges of CRM and how to measure its success.
• Critique the future of CRM