AFM 207 Flashcards
What is marketed
Persons, goods, experiences, event, information, idea, services
who markets?
marketers do so to get attention, purchases, donations, or votes
Key customer market
Global, business, consumer, government
marketing requires an exchange
communication and delivery for money and informaiton
Marketing requires decisions relating to….
4 Ps
Product includes:
brand, quality, features, packaging, warranty
Price includes:
list price, discount, allowances, cost, payment period, credit term
Promotion includes:
advertising, sales promotion, personal selling, public relations, direct marketing, and digital media
Place includes:
marketing channel, distrubution intensity, location (online or retail), supply chain, logistics
what is a model?
stylized representation of reality that structure our thinking about how the world works
Issues using a model
- hard to retreieve relevent mental models in a given situtation
- limitions - overpresent, underpresent, malrepresent
types of models:
verbal, box and arrow, mathimatical, graph
ATAR Model:
awarness, trial, availability, repeat
=potential buyers x awarness (%) x aware and try (%) x availability x repeat (1+r) x profit
Model benefits:
- offers in sights
- align management belief with marketing policy
- don’t need hard data
- enables large model ROI
What is marketing?
acitivity and process for creating, communicating, and delivering offers that have value for customers and society at large
Need vs. want
need: when a person feels deprived of the basic neccessities of life
want: particular way in which a person chooses to fulfill their need (based on culture, personality, and knowledge)
STP Approach:
Segmentation, targeting, and positioning
what is STP used for
decision process used to identify and select groups of potential customers
what is segmentation in STP:
whose needs are the same and whose are different
what is targeting in STP
who can be reached profitably
what are the 2 steps to segmentation:
- segment the market
- describe the market segment that helps us determine how to serve them
what are the 3 steps in targeting
- evaluate the attractiveness of each segment and opportunities
- select 1 or more segments to serve
- find and reach target customers
what are the segment bases:
geographic, demographic, psychographic (how customers describe themselves), behavioural
what are examples of psychographic segments and behavioural segments?
P: lifestyle, value, self-concept, personality
B: loyalty, usage rate, benefits sought, user status
Criterion for effective segmentation (3):
- size and growth
- structural characteristics
- product and market fit
effective segment: product-fit examples
fit, relation with other segments, profitability
Effective segment: structural characteristic examples
competition, segment saturation, protectability, environmental risk
what is a target market:
group of people for which an organization designs, and implements a marketing mix intended to meet the needs of that group
Targeting strategies (4)
- mass (everyone)
- multisegment
- concentrated (niche/1 segment)
- micro (individual)
what is a position?
the place the product occupies in consumer mind relative to competing products.
positioning methods:
- value
- product attribute
- benefit/symbolism
- competition
How does a positioning map work?
place competitors on a map and position yourself along the same dimensions. the closer you are, the fiercer the competition
Mapping methods in marketing (3):
Perceptual, preference, joint-space
what are attribute-based perceptual maps:
from customer evaluations of competing products along with pre-specified attributes
4 steps for attribute-base perceptual maps:
- identify an attribute
- obtain perception data from the target segment
- select a perceptual mapping method
- plot
Mapping brands:
brands that are close on the map are close competitors
what are preferences:
they allow customer to choose among alternatives but they do not indicate which attributes should be changed to better a product
what does an ideal point preference map look like?
Negative quadratic
what does a vector preference model look like:
linear graph
Joint-space mapping:
it incorporates both perception and preference
What is differentiation?
Creating tangible/non-tangible differences in 1 or more attributes between your product and a competitor’s
what is positioning?
set of strategies a firm develops to differentiate its offerings in the minds of its customers
What are the different eras of marketing:
- production era (products will sell themselves)
- sale-oriented era
- market-oriented era: focus on what the customer wanted
- value-based era: focus on creating greater value than competitors
what is are customer values?
they mean different things to different people and are measured by what a customer exchanges for various options
Types of benefits
economic, functional, psychological
types of prices:
monetary, perceived risk, inconvenience
List Maslow’s hierarchy, bottom-up:
Physiological, safety, social, esteem, self-actualization
Customer value measurements (3):
Objective, perceptual, and behavioural
What tests are done for objective measures:
- Internal engineering: done by managers based on lab test
- indirect survey: query customers about the value they place on a need/want
- field-value in use: customer + supplier conduct value assessment
Perceptual measures (unconstraint) tests:
- focus group: 5-10 customer convene to talk about their thoughts on a product
- direct survey: customer do a survey with a description of potential offering
- importance rating: respondents receive a set of attributes and rate according to importance
what tests are done for constraint, and perceptual measures:
- conjoint analysis: respondents provide an overall rating for each set of potential offering
- benchmarking: The best available competitive product will serve as the benchmark
what are behavioural measure tests:
- Choice modelling: using past behaviour to infer or estimate the value of product characteristics
- Data mining: using existing customer data to cross-match with other data pertaining to customer characteristics
what is the customer lifetime value (CLV):
total profit to expect from a client during the time that a firm remains in a relationship with them
Total CLV components (2):
economic value and relationship value
Segmentation by CLV and relationship duration:
High CLV and duration: true friends
High CLV and short duration: butterfly
Low CLV and higher duration: Barnacles
Low CLV and duration: strangers
Objectives for CLV:
- retention
- improved customer selectivity
- meet competitive imperatives
- boost cost efficiency
How to improve CLV:
- reduce defects
- increase longevity
- attempt to alter low-profit customers
- focus on high-profit customers
What is a product for marketers:
anything that can be offered to a market to satisfy a need or want
What makes up the complexity of a product (3):
- actual product
- core customer values
- related services
What is the Boston Consulting Group’s portfolio relating to markets:
high growth and market share = stars
high growth, low market share = ?
low growth and market share = dogs
low growth and high market share = cash cows
Growth strategies relating to market vs product:
Existing product and market: market penetration
Existing product and new market: market development
New product and market: Diversification
New product and existing market: product development
What can price signal?
Its a complex issue that requires complex thinking
- too low signals bad quality
- too high means lower value
what is cost-oriented pricing?
firms determine price based on cost + markup or fixed amount
this only makes sens if avg cost per unit is consistent and cost elasticity is constant over time
what is competition-oriented pricing?
based on what competitors are pricing their products.
this is used when it’s a homogenous commodity (ex. water or oil)
What kind of market does competition-oriented pricing cause?
Price-stagnent market:
Increasing price = loss of market share
decreasing price = everyone else follows
No one wins a price war
what is demand-oriented pricing?
price is a function of demand, if demand goes up then so does price - and vice versa
What is the Gabor Granger model?
customers indicate buying intention for a product at different prices (using a scale). answers are then transformed into probabilities
list the pros and cons of the Gabor Granger model
Pros: simple, one measurement, proven method
Cons: no margin or error, assumes data accuracy, assumes optimal price is listed
what is revenue management?
art/science of selling the right product to the right person at the right price and time
How do you price discriminate (4)?
- estimate demand for level or service
- demand arrive over time
- allocate remaining space to maximize revenue and meet our criteria
- subject to situation-based constraints
What is advertising?
It’s 1-way communication with a large amount of people and it’s impersonal
what are the types of advertising budgets?
Affordable method: set budget based on what you can afford
Precent of sale method:
competitive method: set budget to match competition
Objective method: defined the objective and estimate its cost
Model-based approach
Describe sales promotions between manufacturers, retailers and consumers
Manufacturer -> retailer: case allowance, contests, display allowance
Manufacturer -> consumer: coupon, price pack, value pack, refunds, samples
Retailer -> consumer: price cut, display, ads, retailer coupons, free goods
Describe the distribution components starting from a supply chain.
The supply chain will give goods to a supplier or producer (a supplier can then give the goods to a producer).
Producer can give the goods to a distribution channel or consumers (distribution channel would then give the goods to the consumer).
Name some pricing strategies:
Cost-oriented, competition-oriented, demand-oriented, value-based, price discrimination
