Ch6. Marketing and Operations Management — Core Subjects for the Consulting Exam

Marketing Strategy — STP

Segmentation:
Demographic, geographic, psychographic, and behavioral criteria
Identify internally homogeneous, externally distinct groups

Targeting:
Undifferentiated strategy: single offering for the full market
Differentiated strategy: separate offerings per segment
Concentrated strategy: full focus on one segment

Positioning:
Define a differentiated position relative to competitors
Establish a place in the customer's perception
Use a positioning map to visualize

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Marketing Mix — 4Ps

Product:
Product Life Cycle: Introduction → Growth → Maturity → Decline
Brand strategy
Product line extensions

Price:
Cost-plus vs. market-oriented pricing
Skimming (premium) vs. penetration (low price)
Psychological pricing

Place (Distribution):
Direct vs. indirect channels
Channel length and width
Brick-and-mortar and online

Promotion:
Advertising, personal selling, sales promotion, PR
PUSH vs. PULL strategies

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Operations Management Essentials

Production Systems:
Intermittent (job-shop): custom orders, variety of products
Continuous: standardized, high-volume production

Quality Management:
TQM: Total Quality Management — organization-wide
Six Sigma: 6σ = 3.4 defects per million opportunities (DPMO)
ISO 9001: International standard for quality management systems

Inventory Management:
EOQ: Economic Order Quantity (ordering cost = holding cost)
JIT: Just-in-Time (minimize inventory)
Safety stock: buffer against demand uncertainty

Process Design:
Product layout: continuous production (assembly line)
Process layout: intermittent / job-shop production

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Key Concept Cards

STP = Segment · Target · Position ★★★★★ : Segmentation → Targeting → Positioning — in that order. Memory hook: Always STP, never skip steps

4Ps = Product · Price · Place · Promotion ★★★★★ : The foundational marketing mix framework. Memory hook: Every marketing decision maps to one of the 4Ps

Six Sigma = 3.4 DPMO ★★★★☆ : 3.4 defects per million opportunities. Memory hook: 6σ = 3.4 PPM

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Practice Quiz

Q. When is a skimming pricing strategy appropriate, and when is a penetration strategy better?

Skimming (premium): Best for new products targeting early adopters with low price sensitivity. Price is lowered over time as the market matures. Penetration (low): Best when rapid market share capture is the goal, economies of scale are achievable, or you want to deter competitive entry. Skimming builds a premium position; penetration prioritizes market share above all else.

Q. What conditions are required for a JIT (Just-in-Time) system to work?

Stable, predictable demand. Reliable, on-time suppliers. Flexible production systems. Multi-skilled workers. With no inventory buffer, any supply disruption halts production. JIT was pioneered by Toyota in the automotive industry and remains the gold standard in lean manufacturing.