DEFINITIONS
DEF: means that consumers in a market have different needs, preferences, behaviors, or responses
Heterogeneity
What is one of the ways to generate new product ideas?
Inquiry, observation, crowdsourcing, social media, AI
In the Ford v Ferrari what was Ford's initial problem?
Problem: Change in consumer preferences/context (baby
boomer generation) are causing a decline in sales
List 5 phases of adopters
Innovators, early adaptors, early majority, late majority, laggards
or
Enthusiasts, visionaries, pragmatists, conservates, skeptics
What is a motivated project goal?
“In my marketing plan, I am proposing to do <X>
because it will increase some stakeholder value.”
• <X> is a set of tactics
“In my marketing plan, I am proposing to do <X>
because it will increase some stakeholder value. It will
increase stakeholder value because of some factor
<Y>.
• <Y> is the logic of your market analysis
Definition: reflects the brand-related perceptions and beliefs held by consumers
Brand meaning
What do you do when your project is in the chasm between the early adopters and early majority?
Hyper targeted campaign and widespread after the chasm
New Product: Nike currently sells high-end performance running shoes.
They introduce a new version of their best-selling shoe with:
A lighter foam sole
Improved arch support
A redesigned upper for better breathability
The shoe is marketed to the same target customer (serious runners), sold in the same stores, and priced slightly higher than the previous version.
Product Improvement
What does m stand for in the CLV equation
m = margin
Give me a 5C analysis of Texas A&M
Customers: smart kids, likes cults, 18-22
Company: Sell college degrees to kids
Competitors: Baylor, Alabama, Community College, etc
Context: Higher education or football/sports
Collaborators: Professors, high school advisors, etc.
Definition: To provide direction and focus for your brand, product, and company
Goal of a Marketing Plan
What is a company's breakeven analysis when
The sell 500 units for $10,000
with VC at $2 a unit and FC of $250
Around 14 items
The Lego ideas page asking customers to submit their own ideas is an example of what?
crowdsourcing
What were some ways that search engine optimization has helped business besides trend predictions?
Increased organic traffic, Redo customer demographic, better marketing insight, competitive advantage, brand awareness and trust, user experience, international attention, local growth
Why is acquisition cost important when looking at customer value?
It is important because customer lifetime value is high acquisition cost. It's what happened with Blue Apron slide 21 Starbucks.
CLV = m(r/(1+i-r))- AC
Definition: the net present value of all future streams of profits that a customer generates over the life of his/her business
Customer Lifetime Value
You own a tennis club where the annual membership fee is $300. The
average club member spends $100 a year at the club (tennis balls, drinks,
snacks, etc…). The average contribution margin on these expenditures is
60%. On average, people who join a tennis club have a playing career of 6
years. Historically, 80% of the members in a given year rejoin in the following
year. Based on this information what is the expected long-term profitability
of a customer?
Lifetime value of a tennis club
member
Assume fees are due at the end of the year
1062
What was going on with Starbucks customer base in 2002? And what was the primary demographics? What was the solution?
Customer segments were too different from old vs new customers.
1992 customers were very loyal to Starbucks and preferred the 3rd space
2002 customers- wanted fast customizable coffee
What has changed in 2002?
– Drinking Starbucks as a routine (vs. as a ritual)
– Tend to be in a rush (vs. tend to linger)
– Starbucks on the way to work (vs. sanctuary)
– Starbucks is convenient (vs. social ambience)
What are the ways to drive profits without decreasing costs and describe the how that would look?
Slide 57 on CLV
Revenues - (price, Volume)
Volume- (current, new customers)
New - (New to the category, competitors customer)
What are the 4P's and what do they each do/give an example of each one?
Product, Price, Place, Promotion
Product- product, service, brand
Price- discount, allowance, payment period
Place- distribution
Promotion- incentive, communication
DEF: The foundation of the framework, where you define the objectives of you marketing efforts
What are Goals?
Give me an example of Anthropological methods in the observation stage of new products.
- Anything observing in natural environments
- how people shop, observe the use of products, study routines
What was going on with Chase Saphire and what were the segments of consumers they targeted?
Wanted to rival American Express and break away from Citi status.
Pros: attracted millennials who were more risk adverse, influential card
Went for HENRY, millennials, affluent
and- self-aware, recovering credit users, and prosperous and content
What percentage of products are truly new?
5-10%
Find the monetary value of the student and explain why it matters. (Present Value equation of discounted Cash flow)
A private university wants to estimate the financial value of a graduate student.
Annual tuition = $30,000
Program length = 2 years
Discount rate = 10%
Tuition is paid at the end of each year
What is the present value of one graduate student
$52080
Knowing the present value of a student helps the university determine how much it can afford to spend on recruitment, scholarships, and marketing while remaining profitable