Lectures 7-9 Flashcards
(50 cards)
What are the six elements of the 6M Model of Marketing Communications?
Mission, Market, Message, Media, Money, Measurement
Explain the difference between a Push and a Pull strategy in communications.
Push uses trade channels (e.g., sales promotion); Pull targets end users via advertising.
What does Elasticity in advertising refer to?
The responsiveness of awareness or sales to changes in advertising spend.
Define Marginal Decreasing Returns in advertising.
Each additional dollar spent yields a smaller increase in awareness or sales.
Why is long-term advertising effect critical for brand-building?
It builds sustained awareness and loyalty beyond immediate sales.
How does the “Be There, Be Useful, Be Quick” strategy work?
Targets consumers in real-time with relevant offers, e.g., Red Roof Inn during flight delays.
Difference between same-side and cross-side network effects?
Same-side: users prefer more users on their side; cross-side: users prefer more users on the other side.
Define a platform business model.
A system enabling multi-party transactions, increasing value with more users (network effects).
What is the value unit in a platform model?
The core element of value exchange around which interactions occur.
How do network effects create barriers to entry?
More users increase value, making it hard for competitors to attract users.
Difference between direct and indirect network effects?
Direct: value increases with more same-side users; indirect: value increases via cross-side users.
What is double marginalization?
When both manufacturer and retailer add markups, leading to higher prices and reduced sales.
How do channel conflicts arise in hybrid systems?
Different channels (e.g., online, physical) compete for sales, causing friction.
Role of channel design in control, cost, and coverage?
Balances ownership/control, costs, and market reach for optimal value capture.
Key functions of marketing channels?
Bulk-breaking, spatial convenience, variety, transportation, service, credit, product modification.
Why is distribution breadth crucial for CPG firms?
Wider distribution boosts market potential more than other marketing elements.
KPIs to track in channel strategy?
Sales volume, market share, profitability, customer satisfaction, channel costs.
When benefit from owning distribution?
When control and brand integrity outweigh costs, e.g., luxury or B2B firms.
Define hybrid channel and its pros/cons.
Mix of direct and indirect channels; pros: reach and segmentation; cons: conflicts, complexity.
Difference between platform and pipeline models?
Platforms connect multiple sides for value exchange; pipelines move products linearly.
What is network mobilization?
Growing user base to trigger network effects and platform value.
Break-even sales for a new salesperson?
Cost ÷ Contribution margin (e.g., $168,000 ÷ 66.7% = $251,874).
Renault elasticity example: GRPs vs. awareness?
Awareness increased with more TV GRPs, showing elasticity of advertising.
What is the A/S Ratio method?
Advertising budget as a ratio of anticipated sales.
