M1: Creating Market Value

• The selection of target customers determines all other aspects of the market: the scope of the competition, potential collaborators, company resources necessary to fulfill customer needs, and the context in which the company will create market value. A change in target customers typically leads to a change in competitors and collaborators, requires different company resources, and is influenced by different context factors.
• The key marketing principle states that an offering should create superior value for target customers and collaborators in a way that benefits the company. The key marketing principle can also be depicted by drawing a Venn diagram featuring the optimal value proposition (OVP) at the intersection. Creating a competitive advantage is already reflected in the notion of creating superior (relative to the competition) value. The ultimate purpose of creating a competitive advantage is to create superior customer and collaborator value.
• The value proposition and positioning are not tactics; they are key components of a company’s strategy, which is then implemented through a specific combination of the marketing tactics. In the same vein, people and personnel are an integral part of the company rather than a part of an offering’s tactics.
• 3As: attractiveness, awareness, & availability
• Option A is inaccurate because the SWOT analysis is not directly related to brand equity (although, if applied to a company’s brand—rather than the company as a whole—it could be used as one of the inputs in assessing brand equity). Option C is inaccurate because identifying a company’s competitors is one of the inputs into the SWOT framework (where competitors are classified as either an opportunity or a threat) rather than an insight derived from using the framework. In the same vein, Option D is inaccurate because consumer trends are one of the inputs into the SWOT framework (classified as either an opportunity or a threat) rather than an insight provided by the framework.
• Customer objectives involve customer-centric actions such as increasing purchase frequency, switching from a competitive product, and making a first-time purchase in a product category. Company (internal) objectives focus on actions such as improving product and service quality, reducing the cost of goods sold, and streamlining research-and-development costs. Collaborator objectives involve actions such as providing greater promotional support, better pricing terms, and extended distribution coverage. Competitive objectives involve actions such as creating barriers to entry, securing proprietary access to scarce resources, and circumventing a price war. Context objectives involve actions such as changing the laws, regulations, and tariffs.

• But target and Walmart are doing just fine

We choose our customers and that defines our approach