Mod 3

• Marketing is about knowing the customers and starts with identifying their needs to create a value proposition
• Value Proposition (VP) states why a customer should buy a certain product or service
• A value proposition must address customer problems directly, have quantifiable benefits, and differentiate from competitors
• Unique Selling Proposition (USP) refers to how you will sell the product or service to customers
• Marketing research is a process to understand customers' intricacies and the industry they are in
• Market Size is the number of buyers and sellers in a particular market
• Market Intelligence includes customer profiling and guides entrepreneurs on strategies and tactics
• Market Segmentation groups customers based on demographic, psychographic, geographic, and behavioral factors
• Secondary target market are customers with less purchasing power who can be converted with effective marketing strategies
• Market Segmentation:

  • Demographic: groups customers based on income, social class, occupation, gender, age, religion, and ethnicity
  • Psychographic: groups customers based on perceptions, way of life, motivations, and inclinations
  • Geographic: groups customers based on location and cultural factors
• Talking to customers involves establishing a market research design for qualitative or quantitative responses
• The Interview:

  • Unstructured Interview: informal and allows free answers
  • Structured Interview: follows a set of questions and produces quantitative data
• Observation can be done by a human or machine observer to record information as it occurs
• Examples of Human Observation:

  • Customer purchase patterns
  • Mystery Shopping
• Examples of Machine Observer:

  • Video Cameras or CCTV
  • Traffic counter
  • Web Analytics
  • Barcode Scanners
  • GPS Technology
• The 7Ps of Marketing:

  • Product
  • Place
  • Price
  • Promotion
  • People
  • Packaging
  • Processing
• Bundling:

  • Refers to combining two or more products or services into one package at a reduced price
• Penetration Pricing:

  • Setting low prices initially to increase market share
  • Prices will eventually be increased once the desired market share is achieved
• Skimming:

  • Initially setting high prices and then lowering them to reach a wider market
• Competitive Pricing:

  • Benchmarking prices with competitors
• Product Line Pricing:

  • Pricing different products or services within a product array at varying price points
• Psychological Pricing considers the psychology and positioning of price in the market
• Premium Pricing refers to setting a very high price to reflect elitism and superiority
• Optional Pricing refers to adding an extra product or service on top of the original to generate more revenue
• Cost-based Pricing - the basis of markup is the cost of sales
• Cost Plus Pricing - the markup is based on a certain percentage of cost
• Promotion involves presenting the products or services to the public and how these can address the public's needs, wants, problems, or desires
• The main goal of promotion is to gain attention
• Promotional Tools:

  • Advertising: type of communication that influences the behavior of a customer to choose the product or service of the entrepreneur over the competitors
  • Selling: the act of trading a product or service for a price or a fee
  • Sales promotion: short-term promotional gimmicks with practical incentives and appealing activities to entice customers to buy the product or avail the service
• • Public Relation: image-building initiatives of the entrepreneur to make the business reputable to stakeholders such as target customers, government agencies, business partners, media, and the public
• Examples of Human Observation:

  • Customer purchase patterns: used to understand the buying behavior of customers
  • Mystery Shopping: researcher pretends to be a customer of their own business or a competitor's
• Examples of Machine Observer:

  • Video Cameras or Closed-Circuit Television (CCTV)
  • Traffic counter: used to determine foot or vehicular traffic in a location to decide where to install tarpaulin, signage, or billboards
  • Web Analytics: tracks website performance, visitor numbers, accessed content, and other relevant information
  • Barcode Scanners: read product codes to understand customer purchase behavior and generate sales information
  • GPS Technology: tracks vehicles and pedestrians for out-of-home advertisements exposure
• Probability Sampling:

  • Technique where samples have equitable or nonzero chances of being selected from a population
• Nonprobability Sampling:

  • Samples are not given equal chances of selection, instead chosen based on accessibility or researcher's personal choice