chapter 8 Flashcards
(19 cards)
resource trade offs
A situation under which firms combine all of the marketing mix allocation decisions.
resource slack
The potentially utilizable resources a firm possesses that it could divert or redeploy to achieve organizational goals.
data era
A period in which firms start using historical data that reveal the link between their past resource trade-off decisions and outcomes, such that they could determine the actual effects of certain resources on specific outcomes.
anchoring and adjustment heuristics
A decision- making process where an individual generally uses a prior expectation (anchor) with which to form beliefs, and updates the belief (adjustment) based on new data
that change the prior expectation.
percentage of sales method
A budgeting method where a firm sets its marketing budget as a percentage of its past revenues.
percentage of profits method
A budgeting method where a firm sets its marketing budget as a percentage of it past net income.
historical method
A budgeting method where a firm sets its marketing budget based on some mix of past practices.
competitive parity method
A budgeting method where a firm sets its marketing budget by comparing itself to its competitors.
intervention
An action whose effectiveness is to be tested in a controlled experiment.
outcome
The expected consequence due to
an intervention in a controlled experiment
design
The features and setting within which an intervention’s effect on an outcome is studied in a controlled experimental setting.
control condition
The subsample/group within a controlled experiment which does not receive the intervention or stimulus.
internal validation
A set of checks that allows one to decide an experiment is well designed in the controlled setting.
external validity
A set of checks that allows one to decide an experiment is well designed to replicate outside the controlled setting.
response model
A mathematical model that tracks the relationship between a firm’s marketing efforts and economic outcomes.
marketing elasticity
A unit- free measure of the percentage change in a marketing outcome, due to a 1% increase in marketing efforts or investment.
financial metrics
include ratios that can be easily converted to monetary outcomes, such as net profit, return on investment, or target sales volume
marketing metrics
reflect customers’ attitudes, behaviors, or mindsets, such as awareness, satisfaction, loyalty, or brand equity. They offer a sense of why marketing might pay off.
intermediate metrics
provide more insight than the ultimate financial outcome; they are “closer” to the customer.
