Marketing and Strategy Foundations
What the exam tests
Marketing and Strategy Foundations tests segmentation, targeting, positioning, value propositions, pricing, channels, and competitive strategy. Questions often ask which option best fits a chosen segment or defends a competitive advantage.
Core rules
- Segmentation groups buyers by needs or behavior; targeting selects attractive segments; positioning creates a distinct place in the customer's mind.
- A value proposition states the benefit, for whom, and why it beats alternatives.
- Porter's generic strategies are cost leadership, differentiation, and focus. Being stuck in the middle can erode returns.
- Five forces analyze rivalry, new entrants, substitutes, supplier power, and buyer power.
- Customer lifetime value compares expected contribution over the relationship with acquisition and retention costs.
Worked example
A subscription service earns 120 contribution per year. Retention is 80%, the discount rate is 10%, and acquisition cost is 200. A three-year CLV is 120 + (0.8 x 120 / 1.1) + (0.8^2 x 120 / 1.1^2) = 120 + 87.27 + 63.47 = 270.74. Net of acquisition cost, CLV is 70.74. If retention falls, the value falls quickly because later cash flows shrink and are discounted.
Traps
Do not confuse features with customer benefits. Do not target every segment and call it strategy. Do not ignore acquisition cost when judging CLV. Do not assume a price cut always builds share profitably.