Marketing and Commercial Management
Marketing is the system for creating, communicating, delivering and capturing value. Master segmentation, targeting and positioning: segment on needs or behaviour rather than demographics alone, select segments by size, growth, fit and accessibility, and position on attributes customers genuinely trade off. Know the 4Ps (product, price, place, promotion) and the extended 7Ps for services (people, process, physical evidence). On pricing, distinguish cost-plus, value-based, skimming and penetration; penetration pricing is a deliberate low launch price, not predatory pricing below cost to eliminate rivals. Understand the funnel from awareness to purchase to retention, customer lifetime value (CLV), customer acquisition cost (CAC), and the CLV-to-CAC ratio. Brand equity, product life cycle, and channel intensity (intensive, selective, exclusive) complete the picture.
Traps: high market share versus high share of wallet; confusing gross margin with contribution margin when evaluating a promotion; treating a lift in clicks as revenue; ignoring cannibalisation in line extensions; computing CLV without retention or a discount rate.
Worked rule: campaign break-even equals fixed campaign cost divided by unit contribution margin. A 10,000 campaign with 25 contribution per unit needs 400 incremental units to pay back.
Example: if annual margin per customer is 60 and customers stay five years on average, simple CLV is about 300. Against a CAC of 90 that is a 3.3 to 1 ratio, generally healthy.