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404 - Marketing Management > Lectures 4-6 > Flashcards

Lectures 4-6 Flashcards

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1
Q

What theory explains why customers hate small fees more than higher prices?

A

Prospect Theory — loss aversion and framing.

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2
Q

What barrier might stop a customer after putting items in their cart?

A

Purchase or experience barrier in the customer journey.

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3
Q

How does Google’s Micro-Moments strategy influence digital marketing?

A

It targets intent-rich moments with useful, fast content.

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4
Q

Why does integrating multiple costs into one line work?

A

It reduces perceived pain by leveraging loss integration.

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5
Q

What does CLV help marketers calculate?

A

The long-term value a customer brings, guiding acquisition budget.

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6
Q

Why is waiting in line perceived as worse than paying more?

A

Perceived pain outweighs gain; perception is reality.

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7
Q

Why is customer journey mapping crucial to growth?

A

It identifies behavioral bottlenecks and friction points.

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8
Q

Why might high perceived risk kill a sale despite interest?

A

Perceived pain outweighs expected gain.

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9
Q

What concept explains people choosing “good enough” instead of optimal?

A

Satisficing — a type of effort optimization.

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10
Q

In AIDA, what separates desire from action?

A

Trust, value proof, or removal of last-mile friction.

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11
Q

Why do brands segregate promotions but integrate costs?

A

To leverage framing — gains feel bigger when separated.

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12
Q

What is a customer persona used for?

A

To personify target segments for more relevant messaging.

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13
Q

Why is marketing myopia risky in innovation?

A

It focuses on product features rather than customer benefits.

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14
Q

What does regression analysis help marketers identify?

A

Relationships between marketing inputs and outcomes.

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15
Q

Why is “I don’t know the brand” a major barrier?

A

It reflects an awareness or trust gap in the journey.

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16
Q

How does perceived gain vary between customers?

A

It depends on reference point and prior experience.

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17
Q

What’s the CLV impact of increasing retention rate by 10%?

A

CLV increases significantly — it’s a compounding effect.

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18
Q

Why does zero marginal cost digital content improve CLV economics?

A

It allows scalable customer acquisition with minimal cost.

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19
Q

What kind of journey barrier is “I don’t think it’s worth the hassle”?

A

Experience or psychological cost barrier.

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20
Q

What do conjoint studies reveal?

A

The relative value customers place on specific attributes.

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21
Q

Why do companies map the funnel from attention to action?

A

To identify where drop-offs happen and optimize accordingly.

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22
Q

What is the role of a trigger in the consumer journey?

A

It initiates the evaluation process (e.g., a life event or unmet need).

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23
Q

Why use behavioral segmentation instead of demographics alone?

A

It’s more predictive of actual buying behavior.

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24
Q

What role do influencers play in customer behavior barriers?

A

They may reinforce or block action based on opinions or influence.

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25
What does framing a product as “premium” accomplish?
It elevates perceived gain and sets a higher reference point.
26
What pricing tactic makes $9.99 feel cheaper than $10?
Charm pricing — a form of psychological pricing.
27
What is the danger of penetration pricing for luxury brands?
It can erode perceived value and damage positioning.
28
What pricing model charges low up front, then monetizes via upgrades?
Freemium pricing.
29
What is price elasticity of demand?
The sensitivity of demand to price changes.
30
What’s the benefit of bundling multiple services at one price?
Integrates perceived losses and simplifies decision-making.
31
What strategy is at play when airlines raise prices closer to takeoff?
Dynamic pricing based on demand elasticity.
32
What’s the risk of constant discounting in pricing?
It trains consumers to wait for sales and erodes brand value.
33
What pricing strategy leverages exclusivity and social status?
Prestige pricing.
34
How does anchoring influence pricing decisions?
It sets a reference point that shifts perceived value of other options.
35
What pricing tactic offers a decoy to make another product look better?
Decoy pricing — a type of relative framing.
36
What is value-based pricing?
Pricing aligned with customers’ perceived benefits, not costs.
37
How does cost-plus pricing differ from value-based?
It adds a fixed margin to cost, ignoring perceived value.
38
Why might pricing segmentation be profitable?
It captures more surplus from customers with different WTP.
39
How does dynamic pricing relate to fairness perception?
It can appear unfair or opportunistic if not framed transparently.
40
Why is skimming pricing effective for new tech products?
Captures value from early adopters willing to pay a premium.
41
What happens when demand is inelastic?
Price increases cause smaller decreases in quantity sold — margins increase.
42
What does a break-even analysis calculate?
The point where total revenue equals total costs.
43
What is versioning in pricing strategy?
Offering multiple versions of a product at different price points.
44
What type of segmentation is offering student discounts?
Third-degree price discrimination.
45
Why are subscriptions often more profitable than one-time purchases?
They increase customer lifetime value through repeat revenue.
46
What makes a price seem unfair to a customer?
Lack of transparency or comparison to past prices.
47
How can payment method affect perceived price?
Credit card payments feel less painful than cash due to abstraction.
48
What is psychological cost in pricing?
The mental burden of making a difficult or high-stakes purchase.
49
Why might a firm offer “pay what you want” pricing?
To generate buzz or test perceived value in early stages.
50
What does surge pricing depend on?
Real-time demand and supply changes (e.g., rideshares).
51
What is brand equity?
The additional value a brand name gives beyond functional product benefits.
52
What is a product line extension?
Adding new variations to an existing product category.
53
What is the risk of downward line stretching?
Brand dilution or undermining premium positioning.
54
What is umbrella branding?
One master brand used across multiple product categories.
55
What is the Brand Relationship Spectrum used for?
To guide how independently brands should be managed in a portfolio.
56
What are points of parity?
Features your product shares with competitors to meet basic expectations.
57
What are points of difference?
Unique attributes that distinguish your product from rivals.
58
What is perceptual mapping?
A visual tool to plot how customers perceive competing brands.
59
What is brand architecture?
The system for organizing brands in a portfolio.
60
What happens if a brand extends too far outside its core identity?
Risk of consumer confusion and reduced trust — brand dilution.
61
What is a house of brands strategy?
Each product has its own brand identity (e.g., P&G).
62
Why would a firm use a sub-brand?
To leverage the master brand’s equity while signaling product differentiation.
63
What is cannibalization?
A new product reduces sales of an existing offering.
64
Why is product lifecycle management important?
Different stages require different marketing strategies.
65
What stage of the PLC needs heavy investment but low sales?
Introduction.
66
When is competitive pricing pressure highest in the PLC?
Maturity stage.
67
What is line consistency?
The degree to which products are related in use or branding.
68
What is product mix width?
The number of different product lines a company offers.
69
What is repositioning a product?
Changing how a product is perceived in the minds of consumers.
70
What is the goal of brand positioning?
To own a distinct, valued place in the customer’s mind.
71
What’s the danger of high brand loyalty in a changing market?
Resistance to innovation or brand evolution.
72
Why might a firm drop a product in the decline phase?
To focus resources on higher-margin or growing products.
73
What is product depth?
The number of variants within a single product line.
74
What is co-branding?
Two brands collaborate to offer a combined product.
75
What does brand extension risk depend on?
Fit with existing brand associations and customer expectations.
76
How can firms frame free shipping to boost sales?
By framing it as a gain or adding it conditionally (e.g., “free over $50”).
77
What is the economic rationale for CLV-based pricing?
High CLV justifies higher CAC (customer acquisition cost).
78
Why do customers perceive added fees as worse than base price increases?
Framed as losses — triggers stronger aversion.
79
What brand architecture allows full separation of positioning?
House of brands.
80
How can perceptual mapping help resolve cannibalization concerns?
Shows overlap in perceived position between SKUs.
81
Why might a brand offer both premium and budget versions of a product?
To segment markets via product line stretching.
82
What is a customer insight derived from observing store behavior?
Ethnographic or observational insight — not survey based.
83
What drives experiential value in a service?
Emotional reactions, environment, service design.
84
What does “segment viability” require?
Measurability, accessibility, profitability, and relevance.
85
What is a reason not to extend a successful brand?
Misalignment with core promise or strategic focus.
86
Why should marketers track repeat purchase rates?
Indicates satisfaction, retention, and CLV potential.
87
How can free trials increase CLV?
Reduce acquisition friction and increase conversion.
88
What is a margin multiplier in CLV?
Adjusts margin based on retention rate and discount rate.
89
Why is understanding journey "barriers" key to marketing?
It allows targeted strategies to move users forward.
90
What does “context” in 5Cs refer to?
External forces like technology, regulation, and economy.
91
What’s the effect of increasing perceived gain but not reducing pain?
May not improve perceived value if pain remains high.
92
What is an example of a collaborator in value creation?
Retail partners, ad agencies, logistics providers.
93
How can a brand re-establish relevance during maturity?
Repositioning, new messaging, or updated offerings.
94
What tactic encourages choice through “limited time” offers?
Scarcity-based framing.
95
What’s the danger in over-relying on customer feedback?
It may reflect what they say, not what they do — behavior matters more.
96
How can marketers increase “conversion” at evaluation stage?
Reinforce value, reduce friction, provide social proof.
97
Why might a startup avoid brand extensions early?
It risks confusing positioning and diluting brand identity.
98
How does pricing affect product positioning?
Price signals quality and helps frame customer expectations.
99
What is a unique risk of dynamic pricing algorithms?
Lack of transparency or perception of exploitation.
100
Why is brand trust so crucial in experiential categories (e.g., travel)?
It reduces perceived risk and increases willingness to pay.

404 - Marketing Management (6 decks)

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