Marketing management summary definitions Flashcards
(209 cards)
1
Q
Business portfolio
A
The group of different products, brands or SBUs owned by a company and having different income generating and growth capabilities
2
Q
SBU
A
Single business unit or a collection of related businesses planned separately from the rest with own set of competitors and own responsibility for strategic planning and profit performanc
3
Q
Mission statement
A
Is a statement of why an organization exists and what its overall goal is.
4
Q
Characteristics of a good missions statement
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Market rather than product oriented
Stress companys major poicies values and culture
Take a long term view
Stated in brief, with flexibility and distinction
5
Q
Portfolio analysis
A
Can be conducted to assess the potential of a firms strategic business units. This is done witha BCG matrix
6
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BCG matrix
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Graph of relative market share and market growth rate
7
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BCG matrix (stars)
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Are high growth, high share businesses or products
8
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BCG matrix (Cash cows)
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Are low growth high share businesses or products
9
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BCG matrix (question mark)
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Are low share business units in high g rowth markets
10
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BCG matrix (dogs)
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Are low growth low share businesses and products (enough to maintain themselves though)
11
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Ansoff matrix
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Focuses on business growth in potential new market
12
Q
-
A
-
13
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Market development
A
Company growth by increasing sales of current products to current market segments without changing the product
14
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Market developments
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Company growth by indentifying and developing new market segments for current company products
15
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Product developemtns
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Company growth by offering modified or new products to current market segments
16
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Diversification
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Company growth through starting up or acquiring businesses outside the companys current products and markets
17
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Value chaing
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Is the series of internal departments that carry our value creating activiteis to design, produce, market and deliver
18
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Marketing strategy
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Is the marketing logic by which the company hopes to create customer value and achieve profitable relationships
19
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Market segmentation
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Dividing a market into distinct groups of buyers who have different needs characteristics or behaviors and who might require separate marketing strategies or mixes
20
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Marketing targeting
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The process of evaluating each market segments attractiveness and selecting one or more segments to enter
21
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Positioning
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Arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the mind of target consumers
22
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Differentiation
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Actually differentiation the market offering to create superior customer value
23
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Marketing mix
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the set of tactical marketing tools – product, price, place and promition – that the firm blends to produce the response it wants in the target market
24
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Five marketing management functions
A
Analysis, planning, implementation, organization and control
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Marketing return on investment
Is the net return from a marketing investment divided by the cost of the marketing investment
26
2 ways for a firm to obtain new products
Acquisition (buying a whole company, patent or license)
New product development
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Customer centred new product development
Focuses on finding new ways to solve customer problems and create more customer satisfying experiences
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Team based new product development
Is a new product development approach in which various company departments work closely together, overlapping the steps in the product development process
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Product life cycle (PLC)
Is the course of a products sales and profits over its lifetime (typically slow rise, preak, falls off
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PLC five stages
Product developemnt, introduction, growth, maturity, decline
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Customer based pricing
Setting price based on buyers perceptions of value rather than on the sellers cost
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Good value pricing:
Offering just the right combination of quality and good service at a fair price
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Value added pricing
Attached value added features and services to differentiate a companys offers and charging higher prices
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Cost based pricing
Setting prices based on the cost of producing, distributing and selling the product plus a fair rate of return for the effort and risk
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Cost plus pricing
Adding a standard mark up to the cost of production
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Break even pricing (tarket return pricing)
Firm tries to determine the price at which it will break even or make the target return it is seeking)
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Competetive based pricing
Setting prices based on competitors strategies, price, costs, and market offers
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Pure competition market
Market consists of many buyers and sellers trading in uniform commodity, such as wheat, copper or financial securities. No single buyer or seller has much effect on the going market price
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Monopolistic competition market
The market consists of many buyers and sellers trading over a range of prices rather than a single market price. A range of prices occurs because sellers can differentitate their offers to buyers
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Oligopolistic competition Market
The market consists of only a few large sellers. Because there are few sellers, each seller is alert and responsive to competitors pricing strategies and market moves
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Pure monopoly market
The market is dominated by one seller, pricing is handled differently in each case
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(price skimming)
setting a high price for a new product to skim maximum revenues later by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales
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Market penetration prices:
Setting a low price for a new product in order to attract a large number of buyers and a large market share
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Product line pricing
Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitiors prices
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Optional product pricing
The pricing of optional or accessory products along with a main product
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Captive product pricing
Setting a price for products that must be used along with a main product, such as blades for a razor and games for a video game console
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By product pricing
Setting the price for by-products in order to make the price of the main product more competitive.
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By product pricing
Setting a price for by products in order to make the main products price more competetive
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Product bundle pricing
Combining several products and offering the bundle at a reduced price
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Segmented pricing
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
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Psychological pricing
Pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product.
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Promotional pricing
Temporarily pricing products below the list price and sometimes even below cost, to increase short run sales
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Geographical pricing
Adjusting prices to account for the geographic location of customers
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Dynamic pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
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International pricing
Adjust prices for international market
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Joni is a
bitch
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Supply chain
Consists of upstream and downsteram partners.
upream from the company is supplies they need
Downstream are markets
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Channel level
A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
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Indirect marketing channels
A marketing channel containing one or more intermediary levels
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Conventional distribution channel
Consists of one or more independent producers, wholesalers, and retailers, each aiming to maximize its own profits.
Very little control over each others --> no means to resolve channel conflict
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Vertical marketing system (VMS)
consists of producers, wholesalers and retailers acting as a unified system (due to contracts or one has so much power the others must follow)
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Corporate VMS
Integrates successive stages of production and distribution under single ovwnership
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Contractual VMS
Consists of independent firms at different levels of production and distribution that join together through contracts to obtain more economies or sales ipmact
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Administered VMS
Leadership is assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members
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Multichannel distribution system
A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
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Supply chain management
Managing upsteam and downstream value added flows of materials final goods and related information among suppliers
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Integrated logistics management
The logistics concept that emphasizes teamwork, both inside the company and among all the marketing cahnnel organizations
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Third party logistics provider
An independent logistics provider that performs any or all of the functions required to get a clients product to market
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Five C's of the marketing mix
Company, Customers, Competitors, Collaborators, and context.
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Three parts of positioning statement
Frame of reference, primary benefit and target customers
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Veblen good
Demand increases as price increases
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Price elasticity + formula
The sensitivity to changes in price
1) Demand2- demand1/ Demand1 = Percentage change in demand
2) Price2-Price1/Price1 = Percentage change in price
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Price framing
Refers how the offer is communicated to the consumer
Example: Price is 4,99 instead of 5
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Psychological pricing
The pricing that considers the psychology of prices not simply the econoics
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Two mechanisms that relate to the left-digit bias
1) consumers want to reduce cognitive costs and do not read the cents ending
2) Consumers came to associate 99endings with sales or low price
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Compromise effect
An increase in the choice share of focal option after it becomes intermediate following addition of a new extreme option to a set
(You evaluate prices relative to the prices of other products)
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PWYWP (Pay what you want to pay)
A participative pricing mechanism in which consumers have maximum control over the price they pay. This leads to higher perceived control and attracts more attention
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Promotion mix
The specific blend of communications tools that the company uses to communicate customer value and build customer relationships
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Push strategy
Pushes products to the final consumer
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Pull strategy
Attempts to attract attention of customers and builds up desire within these
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Promotion mix typology
5 Promotional tools:
Advertising, sales promotion, personal selling, public relations and direct and digital promotion
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Advertising pros
Broad reach, positive inference-making (in terms of size popularity and success) and an experinec that stimulates each five senses
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Advertising cons
Difficult in estimating effectiveness, High expenditures and limited persuasiveness
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Sales promotion
Short-term incentives to encourage the purcahse or sale of a product/service
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Sales promotion pros
Attracts attention, creates engagement, effective in boosting sales in the short run
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Sales promotion cons
Short-lived positive effects, can affect price expectation, ineffective in building brand equity
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Personal selling
Personal customer interactions by the firms sales force to engage customers, make sales and build customer relaionships
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Personal selling pros
Relative high effectiveness, real time feedback from customers, possible to build long-term relationship
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Personal selling cons
Costly, principle-agent problems (agnecy theory)
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Public relations
Relate to building good relations with the companys various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavourable rumours, stories and events
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Public relations pros
Engagement, (potentially) high effectiveness
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Public relations cons
Coordination issues
- Separate departments
- DIfferent audienes
- Different performance metrics
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Digital marketing
The application of the internet and related digital technologies, toegether with traditional communications to achieve marketing objecting
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Segmenting and tergeting is done in the following areas
Demographic, geographic, psychographic and behavioural
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Digital marketing mix consists of the following 4 things
Product, Price, Place and promotion
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Decoy effect
the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.[1] An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others. In other words, in terms of specific attributes determining preferences, it is completely dominated by (i.e., inferior to) one option and only partially dominated by the other. When the asymmetrically dominated option is present, a higher percentage of consumers will prefer the dominating option than when the asymmetrically dominated option is absent. The asymmetrically dominated option is therefore a decoy serving to increase preference for the dominating option.
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Three categories of incentives
Consumer incentives (coupons, loyalty programs etc), Incentives given to the companys collaborators, often channel partners (Price cuts, volume discounts, allowances and co-op advertising), and incentives given to the companys employees (bonuses, rewards and contests)
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Optimal value proposition consists of a balance of
Company value, customer value and collaborator value
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Customer incentives consist of 2 kinds of incentives
Monetary incentives and non monetary incentives
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Monetary incentives (consumer)
Aim to reduce an offerings costs by providing customers with a monetary inducement to purchase the offering.
Includes: Coupons, Rebates, Price reductions and volume discount
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Non-monetary incentives (consumer)
Typically aim to enhance the value of the offering.
Includes: Premiums (bonus products or services), Prizes, contests or loyalty programs
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Managing purcahse timing
Time-sensitive incentives can encourage customers to purchase a companys offering in a time fram consistent with the companys goals. (Temporary price reductions)
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Optimizing the value of the offering to different segments
A company might offer incentives to selectively enhance the value of an offering for particular customer segments
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Responding to a competitors promotion
Companies often attempt to lure customers by offering incentives, which, in turn, forces other companies serving these customers to respond by offering similar incentives
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Monetary incentives (collaborator)
Payments or price discounts given as encouragement to purcahse the product or as an inducement to promote the product to customers.
Includes: slotting allowance (an incentive paid to a distributor to allocate shelf space for a new product)
stocking allowance
Cooperative advertising allowance
Market development allowance
Display allowance
Spiffs
Volume discount/rebate
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Spiffs
Incentives such as cash premiums, prizes or addtitional commissions given directly to the salesperson (rather than the distributor) as a reward for sellinga particular item
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Stocking allowance
An incentive paid to a distributor to carry extra inventory in anticipation of an increase in demand
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Nonmonetary incentives (collaborator)
Contests (performance based rewards (vacations trips etc.))
Bonus merchandise
Buyback guarantees (buy back stock if its not sold)
Sales support and training
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Company incentives
Focused on target customers and collaborators, companies often offer incentives to motivate and reward their own personnel
Includes: Contests, monetary bonuses, employee recognition awards, free goods and services, vacation and travel incentives, prizes, sweepstakes and games
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Collaborator incentives summary definition
are offered to members of the distribution channel and
can have multiple objectives: (1) to gain distribution coverage, (2) to encourage
channel members to stock the offering at certain inventory levels (to avoid stockouts or to transfer the inventory from the manufacturer to distributors), and (3) to
encourage channel members to promote the company’s offering. Similar to
customer incentives, trade incentives are either monetary (discounts and
allowances) or nonmonetary (contests and bonus merchandise)
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Customer incentives summary definition
serve one of two goals: temporarily increasing sales
volume by giving target customers an additional reason to buy the offering, or
serving as a segmentation tool by selectively enhancing the value of the company’s
offering for target customers. Customer incentives can be divided into two
categories: monetary incentives that typically aim to reduce an offering’s costs
(coupons, rebates, price reductions, and volume discounts), and nonmonetary
incentives, which often aim to enhance the offering’s benefits (premiums, prizes,
contests, and loyalty programs)
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Run-of-press coupons
Coupons that appear in the actual pages of newspaper
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Slippage
The percentage of customers who fail to redeem a promotional offer made with the purchase
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Trade allowance
A broad range of trade incentives, including slotting allowances, stocking allowances and advertising allowances, offered as a reward for conducting promotional activities on behalf of the manufacturer
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Managing communication involves seven key decisions
setting the communication goal, articulating the communication strategy, developing the message, selecting the media, developing the creative solution, implementing the communication campaign, and evaluating the campaignn results
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Communication goal
Identifies the criteria to be achieved by the communication campaign within a given time
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Communication strategy
Identifies the target audience and the value proposition to be communicated to this audience
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Media
Are the means used by the company to communicate its message
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Creative solution
involves the exectuion of the companys message.
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key aspects of the creative solution
The type of appeal used in the campaign, the execution style
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Two decisions in setting a goal
The focus of the communication campaign and identifying the specific performance bechmarks to be reached
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Performance benchmarks
Provide measurable critera for success
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Traget audience
Defines the recipient of the communication campaign
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Value proposition
Defines the value that the communication campaign aims to convey to target customers
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Product- and service-related messages
Inform target customers of the characteristics of the companys products and services
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Brand related messages
Focus on the identity and the meaning of the copanys or offerings brand
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Price-related messages
Communicate the offerings price
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Incentives-related messages
Communicate the incentives associated with the offering, such as temporary price reductions, volume discounts, rebates, coupons and premiums
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Distribution-related messages
highlight the offerings availability in distribution channels
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(Media budget) Goal driven approach
Is based on a n estimate of the resources required to achieve the companys strategic goal. Takes into account factors such as the number of customers reached through a single exposure to the companys message per media dollar spent and the average number of exposures necessary to create awareness
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(Media budget) Percentage-of-sales
Approach implies setting the budget as a percentage of the companys sales revenue
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(Media budget) Competitive-parity
Approach implies setting the budget at par with that of a key competitor. The approach in which the budget is set proportionally to the desired share of total media expenditures in a given category is also referred to as share-of-voice budgeting
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(Media budget) legacy approach
Implies budgeting based on prior year expenditures
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(Media budget) affordability approach
Implies setting the budget based on resources available for promotiaonal activities
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(Media type) Advertising
Involves nonpersonal marketing communications in which the company develops the message and absorbs most of all of the media costs.
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(Media type) Public relations and social media
Involve communications by third parties that are not directly controlled by the company. Unlike advertising, with public relations the company does not pay for the media nad therefore cannot control the content of the message
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(Media type) Direct marketing
Involves individually targeted communications typically designed to elicit a direct response
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(Media type) Event sponsoring
Invloves backing events and activities of interest to the offerings target customers
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(Media type) Product-based communication
Is embedded in the product itself, such as product labels, signs and packaging
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(Media scheduling) Pattern
Communication can be continuous, concentrated, or intermittent.
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(Media scheduling) Frequency
Reflects the number of times target customers are expeosed to a particular message over a given period
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(Media scheduling) Reach
Reflects the number of target customers who are exposed to a particular message at least once in a given period
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(Creative solution)
Involves translating the companys message into the language of the selected media formate, such as tv, print, radio or online
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(Creative solution) Appeal
Refers to the approach used to communicate the companys message
Information based appeals
Emotion based appeals
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(Creative solution) Execution style
Refers to the method used to convey a particular appeal using the language of the selected media format
148
Setting up the organizational infrastructure
Identify the relevant collaborators and forming a team to manage the campaign
149
Setting up the organizational process
Involves identifying the specific actions to be taken during preproduction, production and postproduction
150
The scheduling process
Involves deciting on the timing and the optimal sequence in which individual tasks should be performed to ensure effective and cost-efficient execution of the communication campaign
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Exposure
Reflects the number of times a given advertisement has been seen by the target audience
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Comprehendsion
The degree to which the target audience understand the ad
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Recall
The degree to which the target audience remembers an advertisement
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Persuasion
The degree to which the advertisement is able to strengthen or change preferences of the target audience
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Intent
Reflects customers mental disposition to act favorably toward the offering, such as buy the product, visit the store or contact the company
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Behavior
Reflects the impact of an advertisement on repsondents
157
Media type
Measuring the effectiveness of a communication campaign is also a function of the particular media type
158
Awareness formula
Advertising reach x frequency of exposure/Number of exposures necessary to create awareness
159
Affiliate marketing
A communication strategy that involves revenue sharing between advertisers and online content providers
160
Awareness rate
Te number of potential customers aeware of the offering rleative to the total number of potential customer
161
Carryover effect in advertising
Impact of an advertising campaign that extends beyond the time frame of the campaign
162
Comparative advertising
Advertising strategy whereby a given offering is directly compared with another offering
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Cooperative advertising
Advertising strategy in which a manufacturere and a retailer jointly advertise their offering to consumers.
164
Cost per point formula
Advertising cost/Gross rating point
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Gross rating point GRP + formula
A measure of the total volume of advertising delivery to the target audience
GRP = reach x Frequency
166
Net promoter score
a popular metric designed to measure customers word of mouth about a company.
<6 = detractors
7/8 = Passives
9/10 = Promoters
167
Share of voice + formula
A companys communication expenditures relative to those of the entire product category
Share of voice = An offerings communication expenditures/Product categorys communication expenditures
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Target rating point
A target rating point is a metric used in marketing and advertising to compare target audience impressions of a campaign or advertisement through a communication medium relative to the target audience population size
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Wearouts
A decrease in the effectiveness of a communication campaign from decreased consumer interest in the message, often resulting from repetition
170
four levers that make productivity increases
| both predictable and manageable.
Targeted offerings
Optimized automation, tools, and procedures.
Performance management
Sales force deployment.
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Direct Marketing channels
Producers selling products directly to customers
Is a marketing channel that has no intermediary levels
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Including agents
Agents can be very helpful when launching a new product
Producer --> Agent --> Wholesaler --> resailer--> final customer
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Three dimensions in the relationship between producers and distributoers
Logistics, Financials and information
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Drawbacks of working with a distributor
They have all your client information and some distributors refuse to share information about end clients
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Multichannel marketing
the blending of different distribution and promotional channels for the purpose of marketing. Distribution channels include a retail storefront, a website, or a mail-order catalogue. Multichannel marketing is about choice.
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types of context
Sociocultural, technical, physical, regulatory and economic
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Types of marketing 3
One for all mass marketing, Segment based marketing and One for each- one to one marketing
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Tactical segmentation
grouping customers based on their demographics and behavior.
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Tactical targeting
laying out the channels to be used to communicate and deliver the offering to strategically viable customers.
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Typical segmentation groups
Relevance, exclusivity, Similarity or comprehensiveness
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Experience attributes
Can only be revealed through consumption
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credence attributes
Quality never revealed even through consumption
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confirmation bias
seeking or interpreting of evidence in ways that are partial to existing beliefs, expectations, or a hypothesis in hand.
184
3 different brand valuations
Forbes, Interbrand and Brandirectory
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Positive effect of opening umbrella brand
Cross-category reputational effects through higher order associations
•
Stronger brands are characterized by lower (i.e. less negative) price elasticity
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Negative effect of umbrella branding
Too many stock keeping units
carrying the same brand name
lead to lower perceived variety in
the store
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Gabor grangr method
Asking people if they would buy a product at a range of different prices
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Van Westendorp method
At what price would you consider the product to be a bargain, a great value for money?
* At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?
* At what price would you consider the product as starting to get expensive, but you would still consider buying it?
* At what price would the product be so expensive that you would not consider buying it?
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Choice based conjoint
Choose between different pairs/triads of options (allowing for no choice)
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Rank based conjoint
Rank multiple options from most to least preferred
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Rating-based conjoint
Rate multiple options on a scale, e.g. from 0 to 100
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Price formula
Total cost/Market value +Markup
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Break even pricing volume formula
Volume = Fixed cost/ (Price -Variable costs)
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Market penetration
Setting a low price for a new product in order to attract a large number of buyers and a large market share
195
Just below pricing
Pricing just below whole euros 99 endings for example
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Communication goal focus
Awareness, interest, Desire and action
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Public relations how
Press relations, relations with employees, community relations, Lobbying, investor relations and relations with donors
198
Mere-measurement effect
when asked to provide purchase intentions, consumers are more likely to choose brands for which they hold positive and accessible attitudes...
199
Self-selection problem
People are not randomly assigned to like a page. Like the brand more? More likely to like, to follow and to buy
200
Five flows in the marketing channel
Poduct flow, negotiation flow, Ownership flow, information flow and Promotion flow
201
Selective distribution
```
only distribution points that meet minimal
quality criteria (location, image, volume)
```
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intensive distribution
As many dstribution points as possible
203
Five Common Causes of Channel Conflict
Goal incompatibility
• Unclear roles and rights
• Differences in perception
• Intermediaries' dependence on manufacturer
• (Too) many intermediaries going after the consumer
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Predatory pricing
Undercutting hte price for a project when you are the larger firm to drive another out of business
205
Price fixing
It is an agreement among firms in an industry to set up prices at certain levels
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bounce rates
Percentage of times a given page was the only page viewed
207
loss aversion
People tend to put more weight on losses than wins
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Not balanced
means that for some attribute levels people will make more ratings/choices than for others. As a result, you will get more precise information about consumer valuation for some attribute levels than for
others.
209
Not orthogonal
means that for some pairs of attributes certain attribute
levels co-occur in your cards at above-chance rates (e.g., when price is high, quality more likely to be high as well in the profile cards).
