What is marketing?
Marketing is the management task that links the business to the customer by identifying and meeting the needs of customers profitably. By getting the right product, at the right price, to the right place at the right time.
Hierarchy of Objectives
Purpose: what is the reason this organization exists?
Mission: what do we do?/Vision: what is our ideal reality?/Value: what do we believe in?
Corporate Objectives: quantifiable expressions of the company’s corporate goals, growth is the key objective
Departmental Objectives: each function aligns with corporate goals and develops an actionable plan, objectives of departments much be aligned between them as well
Individual Objectives: tied to corporate and departmental objectives, tailored to each individual
a) At which level of the hierarchy of objectives does marketing fit?
b) What are examples of marketing objectives?
a) At the level of departmental objectives, based on the set objectives an appropriate marketing strategy is developed and outlined in the marketing plan
b) increase sales, increase market share, grow brand awareness, increase customer retention, launch new product
Name four competitive marketing strategies.
First Mover (advantage)
Market Coverage/ Fighter Brand
Framing the Game/ Underdog Positioning Strategy
What are the main forces affecting price points/ while setting prices?
1. competition and elasticity (consumer price sensitivity)
2. ease of comparison
3. preferences/WTP (conjoint analysis very common)
Briefly describe the two dynamic pricing approaches (price penetration and price skimming).
Price Penetration: starting with a low price, increasing it over time
benefits: securing market positing, and gain market share, makes sense in markets with high switching costs, entry deterrence
Price Skimming: starting with a high price, then lower price over time
useful for products with higher consumer heterogeneity and durable products, requires high differentiation, common for tech products
Consumer psychology: describe the principle of Veblen goods and price-quality inferences and give an example.
Veblen goods: good that raises in appeal when fewer people have it, conspicuous consumption (e.g. Ferrari, Birkin bag)
Price-quality inferences: higher price is associated with higher quality, drives attention to the product (ex. wine)
What is price discrimination?
Introduce costly redemption of discounts, to induce self-selection by consumers. Barriers that make it harder for some consumers to get the discount than for others.
Ex. Coupons: information search (consumers need to look for lower prices, make an effort, consumer self-selection)
Ex. Price matching: store search (consumer self-selection)