BDSMM-21 Flashcards
1
Q
What is a commodity business?
A
A firm which sells commodity goods and materials that are freely traded. Ex: Rice, coffee, grain, metals.
2
Q
What is competitive advantage?
A
Achievement of superior performance through:
- Differentiation to provide superior customer value
- Managing to achieve lowest delivered cost
”- Being faster”
“- Being better”
“- Being closer”
3
Q
What is meant by customer satisfaction?
A
The fulfilment of customers’ requirements or needs
4
Q
What is meant by customer value?
A
Percieved benefits minus percieved sacrifice
5
Q
What is effectiveness?
A
“Doing the right thing”, making the right strategic choice
6
Q
What is efficiency?
A
“Doing things right”, a way of managing business processes to a high standard.
- Usually concerned with cost reduction
7
Q
What is an exchange?
A
act or process of recieveing something from someone by giving something in return
8
Q
What are the four P’s? Describe them!
A
- Place: Distribution channels to be used, outlet locations, methods of transportation
- Price: Amount of money paid for a product or agreed value placed on exchange by buyer and seller
- Promotion:
- Product: good or service offered or performed by an organisation or individual, which is able to satisfy customer needs
9
Q
What are latent markets?
A
Markets not yet served by existing products or service offers. Present opportunities for market oriented companies.
10
Q
What is meant by market orientation
A
Companies with market orientation focus on customer need as primary drivers for organisation performance
11
Q
What is meant by the marketing concept?
A
Achievement of corporate goals through meeting and exceeding custoer needs better than the competition
12
Q
What is a marketing mix? What is it made up by?
A
It is a framework for the tactical management of the customer relationship. Includes the four P’s in case of product and the 7 P’s in case of service.
13
Q
What are the additional 3 P’s for products classified as services? Describe them!
A
- Process: How do the customers get the service?
- People: The staff that deliver the service
- Physical evidence: The environment in which the service is delivered.
14
Q
What is a non-commodity cost?
A
Other charges that make up part of the cost but that are not in themselves commodities. Ex: Parts of electricity charge that is not electricity.
15
Q
What is a non-commodity business?
A
A business involved in facilitating processes and exchanges, but are not in themselves commodities. Ex: In UK national Grid owns the electricity transmission system.
16
Q
What are touch points?
A
Contact points where customers interact with a firm
17
Q
What is meant by corporate social responsibility?
A
Ethical principle that an organisation should be accountable for how its behaviour may affect society and the environment
18
Q
What is environmental scanning?
A
The process of monitoring and analysing the marketing environment of a company
19
Q
What are responses to changes in the firms environment?
A
- Ignorance: No change is made.
- Delay: Delay action once force is understood. Can be caused by bureaucratic processes that stifle swift action.
- Retrenchment: Tackles efficiency problems but ignore effectiveness issues.
- Gradual strategic repositioning: Gradual, planned and conscious adaptation to changing marketing environment
- Radical strategic repositioning: Involves changing direction of the entire business. Much riskier than gradual SP.
20
Q
What is the macroenvironment and what is it made up by?
A
A number of broader forcesthat affect not only the company but also other factors in the microenvironment. Can use the PESTLE to analyse.
21
Q
What makes up a PESTLE-analysis?
A
Analysis of several environments/factors:
- Political:
- Economical:
- Social/cultural:
- Technological:
- Legal:
- Environmental:
22
Q
What makes up the microenvironment?
A
The actors in the firm’s marketing environment:
- Customers
- Suppliers
- Distributors
- Competitors
23
Q
What are the five dimensions of the buying decision? (key questions for identifying the customer)
A
Who buys / Who is important? How do they buy it? Where do they buy? When do they buy? What are their choice criteria?
24
Q
What is the buying centre? What are the 5 roles?
A
The group that is involved in making the buying decision (aka decision-making unit). “Who buys?”
- Initiator
- Influencer
- Decider
- Buyer
- User
25
What is meant by the consumers choice criteria? What are the four categories of choice criteria? Give examples.
The various attributes and benefits a consumer uses when evaluating products and services.
Can be technical (reliability), economic (price), social (status) or personal (self-image)
26
How do you use choice criteria when developing a product?
If you know a certain buying centres choice criteria the product can be developed to fit that group. For example, if style/looks are more important than performance.
27
What are the steps of the consumer decision-making process? Give examples of marketing implications for each step.
"How do they buy it?"
- Need recognition:
Awareness of consumer problems can create opportunities for building competitive advantage and planning strategies to overcome any need inhibitors. Stimulating need recognition can initiate the decision-making process.
- Information search:
Knowing where consumers look for information to help solve their decision-making can aid marketing planningOne objective is to ensure that the company's bran appears in the consumers awareness set.
- Evaluation of alternatives:
Consumer highly-involved means company has to provide more information about positives of product. Consumer low-involved, company has to advertise a lot in order to get top-of-mind awareness.
- Post-purchase evaluation:
Consumers might experience cognitive dissonance after buying. May need reassurance. Marketing communication initiatives can act as positive reassurance.
28
What is the difference between high-involvement and low-involvement situations?
High: Consumer is more likely to carry out extensive research and thought as to whether they will buy the product
Low: Consumer carries out simple evaluation using simple choice tactics. This type of purchase situation may become habitual.
29
What are the three types of buying situations? What does each type imply from a marketing perspective?
- Extended problem-solving: provide information-rich communications. Inhibited by time pressure. Four factors critical affecting involvement crucial: Self-image, perceived risk, social factors, hedonistic influences.
- limited problem-solving: Stimulate need to conduct a search or reduce risk of brand-switching
- habitual problem-solving: use repetitive advertising to create awareness and reinforce already positive attitude
30
What are the six types of personal influences?
- Information processing: process by which a stimulus is received, interpreted, stored in a memory and later retrieved. Two key aspects: perception and learning.
- Motivation: the relationship between needs,
drives and goals. Maslow’s hierarchy
of needs.
- Beliefs and attitudes: Belief is thought that person holds about a product or a service. Attitude is overall favourable or unfavourable evaluation of a product or service
- Personality: inner psychological characteristics of individuals that lead to consistent responses to their environment.
- Lifestyle: pattern of living as expressed in a person’s
activities, interests and opinions.
- Lifecycle and age: Consumer behaviour might depend on the stages reached during their lives.
31
What are the different types of customer needs?
- Physical: Food, sleep, housing
- Social: Group affiliation
- Psychological: the individual and self-fulfillment
32
What does a market consist of?
- Seller: Offers/supply
- Buyer: Demand
- Meeting: physical or virtual
- Regulations / Norms: How does it work? Laws. Stand in line
- Other stakeholders: Greenpeace, Amnesty, neighbors (to specific marketplace)
33
What is a situational analysis? What levels?
- Environment (macro): PESTLE
- Micro environment: competitors (who are their, strengths, weaknesses, strategies), market, industry (porters five forces), customer .
- Company: SWOT
34
What is included in the microenvironment?
- Market analysis: Understand market size, growth rates and trends
- Industry analysis: To evaluate and learn to understand the "rules" and structure of the idustry where you are active
- Competitor analysis: To evaluate and learn to understand competitors' strengths, weaknesses and reaction patterns
- Customer analysis - To understand current and prospective customers' behavior
35
Define what is included is a market analysis.
- Size: current and potential
- Growth
- Profit potential: See industry analysis
- Cost structures in the industry: What is the distributions of cost for the main cost drivers
- Distribution structures: "from the mine to the customer"
- Trends and development
- Critical success factors / Key success factors
36
Define what is included is an industry analysis.
- Porters five forces: Used in order to understand the profit potential for an industry
- Critical sucess factors: same as in market. Identified to understand for a company to be successful within a certain industry
37
Define what is included is a competitor analysis.
Five key questions:
1. Who are our competitors
2. What are their strengths and weaknesses?
3. What are their strategic objectives and thrusts?
4. What are their Strategies?
5. What are their response patterns?
38
Define what is included is a company analysis.
- SWOT analysis: only includes resources/capabilities that are valued by customers! (resources, adaptability, possibility to change, market communication, product portfolio analysis)
- Strengths (internal -controllable)
- Weaknesses (internal -controllable)
- Opportunities (external - uncontrollable)
- Threats (external - uncontrollable)
39
What are the personal influences that affect consumer behaviour?
- Information processing: Processing and learning
- Motivation
- Beliefs and attitudes
- Personality
- Economic circumstances
- Lifestyle
- Lifecycle and age
40
What does the consumer decision making process look like?
- Need recognition
- Search for information
- Evaluation of alternatives
- Purchase decision
- Post-purchase evaluation
41
What are the marketing information systems?
Marketing information systems is part of marketing analytics. Being able to show that the marketing works.
- Internal continuous data: Financial data. Profitability (product, customer, distribution channel). Customer behaviour.
- Internal ad-hoc data: Data for specific purpose. Changes due to promotional activities. Introduction to new products.
- Environmental scanning: data related to macroenvironment. Monitor changes in macroenvironment. Long-term perspective.
- Marketing research: Data related to markets and market offers. Shorter-term perspective. External continuous data sources or ad-hoc data
42
What are the stages in marketing research process?
- Research planning: Initial contact (with person performing market research). Research brief (requirement when someone else performs research for you), Research proposal (Objective - What will be done - Timetable - Costs).
- Exploratory research ("test run" to fine tune): Preliminary exploration of research area. Used to avoid quality deficiencies. Can be performed as secondary research etc
- Main data collection considerations: Research approach (qualitative and/or quantitative research), sampling process, survey methods, questionnaire design
- Data analysis and interpretation
- Report writing and presentation: In order to really understand the data, we need some kind of interpretation of this data.
43
What is the process of market segmentation and targeting?
- Understand the requirements and characteristics of individuals/organisations (the market): can use market research here
- Divide the market into market segments: Leads to input for developing marketing strategies. No/few rules
- Choose market segment to target: Look for many customers and few competitors. Create a differential advantage (something that is hard to copy/develop).
44
What are the requirements for effective segmentations?
- Measurability: Size, purchasing power, profits of market can be measured
- Accessability: The market segment can be reached and served
- Substantiality: Is the market sufficiently large or profitable
- Actionability: Effective programs / offers can be designed for attracting and serving a segment
45
What is target marketing?
- When you decide which segment or which segments to serve
| - Design a marketing strategy for each segment
46
What is positioning? What does it include?
- What target market: Where we want to competet
- Differential advantage: How we wish to compete
-Includes: Customers and Competitors.
47
What is the Four C framework? when is it used?
- Used to find keys for successful positioning.
- Clarity: Positioning idea is clear in terms of target market and differential advantage
- Consistency: Stay consistent in messages to market.
- Credibility: Differential advantage chosen must be - credible in minds of target customer
- Competetiveness: Differential advantage should have a competitive edge. Something soought for but not delivered yet.
48
What are differences between B2B marketing and business to consumer marketing?
- Few actors (suppliers and customers): usually lead to long term relationships and strong network (if happens is a differential advantage)
- Complexity of buying is often high. Buying decisions are made primarily on economic and technical criteria
- Each market is unique: Creates high information/understanding demand to be successful in the markets
- Different criteria
- Risks and uncertainty affect more
- Often very specific requirements apply
- Prices are negotiated
-More complex situation!! Need to be more knowledgeable generally
49
What is the decision-making process for B2B?
- Recognition of a need/problem
- Determination of a specification
- Search for potential sources
- Acquisition and analysis of proposals
- Evaluation of proposals and selection of suppliers
- Selection of an order routine
- Performance feedback and evaluation
50
How do you segment B2B markets?
- Profile organisations and their buyers
- Macrosegmentation: Size, Industry, Geographic location
- Microsegmentation - More detailed level: Choice criteria, Decision-making unit structure, Decision-making process, buy class, purchasing organisation, organisational innovativeness
51
What is meant by customer retention strategy? How?
Keeping and getting customers.
- Target customers for retention: target high-value, frequent use and loyalty prone customers.
- Bonding: create bonds with customers. Ex: value point systems, large discounts when buying in bulk.
- Internal marketing: training, communicating with and motivating internal staff.
- Promise fulfillment: Make realistic promises and make sure to fulfill them by enabling staff to deliver them
- Building trust: Create trust through two-way communication, keep in touch with customer. Especially important with services because intangible (customers can't see/feel product before purchase)
- Service recovery: Solve problems and keep problems from happening. Ex: comp bad food at restaurant.
52
What is a product?
Anything that is capable of satisfying customer needs.
53
What levels make up the product.
- Core product: product itself
- Actual product: part of experience of product. Features, packagin, styling
- Augmented product: extended product. Warranties, installation, delivery, brand, service
54
What are the stages and marketing implications of the product life cycle?
- Introduction: Low sales, high cost per customer, financial losses, innovative customers, few competitors.
- Growth: Increasing sales, cost per customer falls, profits rise, increasing number of customers, more competitors
- Maturity: Peak sales, cost per customer lowest, profits high, mass market, stable number of competitors
- Decline: Falling sales, cost per customer low, profits fall, customer base contracts, number of competitors fall
55
What is the Boston growth share matrix? What are the groups called?
- Describes a product strategy: Matrix of cash generation and market growth rate (low to high)
- Build: Build sales and/or market share - STARS
- Hold: Hold sales and market share - CASH COWS
- Harvest: When market shares and sales fall, profit margins maximised - (some) PROBLEM CHILDREN and DOGS
- Divest: When products and sales drop - (some) PROBLEM CHILDREN and DOGS
56
What is the Ansoff matrix?
- Related to strategic thrusts
- Matrix describes from existing to new markets and products.
- Market penetration: existing, existing
- Product development: existing market, new product
- Market development: new market, existing product
- Diversification: new market, new product
57
What is the price triangle?
Impacts the price we can set on the products.
- Customer: The customers willingness to pay and their needs, can be affected not only by the product but also by the image. Appears in auctions.
- Competition: Based on what prices competitors have on similar product or services. This has to be used when positioning the company in a way that you intend to compete on the price dimension
- Company: The actual costs to produce plus margin
58
What are the pricing methods?
- Cost-oriented (B2B): what does it cost to produce and sell?
- Competitor oriented: based on competitors
- Market-oriented: based on customers.
Don't have to use all of the critera to set a price.
59
What is the benefits of using channel intermediaries?
- Reconciling the needs of producers and consumers
- Improving efficiency
- Improving accessability
- Providing specialist services
60
What is included in a channel strategy?
Involves three decisions:
- Channel selection (which channel to choose, deends on): *market: buyers prefer certain kind of shop, geographical, *producer: able to handle selling?, *product: where is suitable to sell product, *competitive: ex contracts that don't allow selling at certain store
- Distribution intensity: *Insesitive: proucts need to be available at right time (soft drinks), *selective: limited selection of outlets in area (luxury items, items that need knowledge), *Exclusive: extreme version of selective, items that can only be bought at certain stores (brands), often little market, high status
- Channel integration: *Conventional: Push and pull, compete about visibility, place, effort, *Franchising: Manufacturer, Wholesaler, retailer. *Channel ownership/Vertical integration: Bigger companies, ex Volvo selling own cars at own store
61
What is the AIDA model?
- Attention
- Interest
- Desire
- Action
62
What are the parts of the promotional mix?
- 3 main types
- Mass marketing: Advertising, sales promotion, public relations
- Direct marketing: Personal selling, exhibitions, direct marketing
- Digital marketing: Digital promotions and social media communication, evaluate the advertisement
63
What influences the promotional mix?
- Available resources
- Strategy: Push or pull
- Buyer readiness stage - where in decision process customers are
- Product life cycle
- Market size and concentration
- Product characteristics
64
Describe direct marketing strategies
- Marketing directly to customer: tele-marketing, direct-mail marketing, catalogue marketing, direct response television marketing DRTV
- integrated direkt marketing
65
What are implications for marketing planning in a digital world?
- Grow sales: wider distribution, greater product range
- Add value: greater convinience, 24/7 access, more information
- Get closer to customers: Online market research, monitor chatrooms
- Save costs
- Extend brand online
66
What are the 3 Ps of the service mix?
- People: Customer first attitude, key in services because of inseparability
- Process: Procedurec/mechanisms of getting the service, app
- Physical evidence: Tangible evidence to select (ambience, design, layout) and to remember (towels, chocolate, memorabilia)
67
What is intangibility?
- Highly related to physical evidence
- Pure services can't be seen, tasted, touched, smelled before purchase
- Hard to evaluate before purchase
- Solution: use tangible cues (photos, testimonials, checklists), provide evidence of service quality
68
How do we manage service quality? (what are the 4 causes of perceived poor quality?)
4 causes of poor percieved quality
- Misconception: We do not understand what customer expects
- Inadequate resources: we can't/don't provide resources to meet customer expectations
- Inadequate delivery: deliver poor/inconsisten service quality (poor selection, training,rewarding staff)
- Exaggerated promises: We promise more than we can deliver
69
How do we manage service productivity? How?
- balance between Productivity and Quality
Improve P without compromising Q:
- Technology: ATMS increase prouctivity while reducing waiting time, bar code scanning etc
- Customer involvement in production: self-scanning, self-service
- Balancing supply and demand: perishability of services
70
How do we manage service staff?
- Selection of right staff from beginning
| - Maintaining motivated workforce through: empowerment, recognition, rewards, suitable support systems
71
Benefits for the organisation of good customer relationship?
- Increased purchases
- Lower cost
- Limited value of a customer
- Sustainable competitive advantage
- Word of mouth
- Employee satisfaction and retention
72
What are the benefits of good relationship for customer?
- Riskt and stress reduction
- Higher-quality service
- Avoidance of switching costs
- Social and status benefits
73
Who are the stakeholders? What does the stakeholder theory state?
- States that the company needs to act responsibly towards the stakeholders in a company. "we are not alone as acompany"
- Shareholder
- Communities
- Customers
- Employees
- Suppliers
74
What is the pyramid of social responsibility? In what order?
- (base, first responisibility): Economic: Maintaining strong, competitive position. Operating att high level of efficiency + effectiveness. Aiming at high levels of profitability.
- Legal: Must follow laws and regulations.
- Ethical: The company must fulfil the responsibilities that the society expects even if they are not regulated by laws.
- Philantropic: responsibilities that are not required from the society, but desired. Ex. Sponsorship to art and sports, support to local schools, donations to charity etc.
Not all companies need to reach the philantropic or ethical level. Won't have same competitive advantages as other companies.
75
Why do we need a business model?
- Way to visualise how a business plans to make money now and in the futire based on the situation we are in.
76
What is the business model canvas?
- Value propositions: are the core. Bundle of products and services that that create value for customers.
- Customer segments: defines different groups of people/organisations that company wants to serve.
- Channels: How company communicates with and reaches customers segment with value proposition. Are customer touch points.
- Customer relationship: types of relationships company establishes with specific customer segments. Range from personal to automatic.
- Revenue streams: cash the company generates from customer segment (only earnings = revenue-cost)
- Key resources: most important assets needed to make business model work. Can be; physical, financial, intellectual, human.
- Key activities: most important things a company must do to make business model work.
- Key partnerships: network of suppliers and partners that makes business model work.
- Cost structures: most important costs
77
What makes up porter's five forces and why is it used?
Used to understand the profit potential for an industry.
- Potential entrants: is the threat of new competitors that enters the market for the first time.
- Buyers: is the customer’s bargaining power.
- Substitutes: is the threat from companies providing a product or service that could replace your product/service for customers.
- Suppliers: is the supplier’s bargaining power.
- The industry: is the degree of rivalry in the industry/branch.
78
What are the choice criteria for B2B?
- Quality: TQM (Total quality management)
- Price and lifecycle costs
- Continuity of supply
- Percieved risk
- Office politics
- Personal liking/disliking
79
What is the process of developing a business over time? 3 steps.
- Designing an initial model
- Iteratively adapting the initial model in response to market feedback
- Scaling the model once it is “nailed” (developed and validated)
80
Why is a SWOT analysis used? What analysis does it lead to? Give example.
- To find the strategic position of a company.
| - conversion or matching analysis
81
What is competitive positioning? What are the 3 key elements?
- Target markets: Where we want to compete.
- Competitor targets: The organizations against which a company chooses to compete directly.
- Competitive advantages: The achievement of superior performance through differentiation to provide superior customer value, or by managing to achieve lowest delivered cost.
82
How can customer service standards be improved in physical distribution? Describe ways of doing this.
- Product availability (e.g by increasing inventory levels).
- Improving order cycle time (e.g. faster order processing).
- Raising information levels (e.g. faster order processing).
- Raising flexibility (e.g. fast reaction time to problems)
83
How do you perform a competitor audit? What are the key success factors?
By comparing the key success factors in a table, valuing them from 1-5, comparing your company to the competition.
- Innovativeness
- Financial strength
- Technical assistance to customers
- Product quality
- Well-qualified workforce
- Access to international distribution channels
84
What are strategic thrusts? What are the alternatives?
- Defines the future direction and areas of potential growth for a business. Which markets to target, what products to sell.
- Market penetration: Penetrate existing market with existing product
- Product development: Increase sale in the
current market by improving existing products
or develop new.
- Market development: Is used to sell current
products in new markets. Ex. New geographical areas or new market segments.
- Enter new markets (diversification): To develop new products for new markets. This is the riskiest strategy but can be necessary when the company’s
current activity has low chance of future growth.
85
What are strategic objectives?
- Must be decided for each product to be able to plan its development
- Build: build sales and market share
- Hold: hold sales and market share
- Harvest: when market shares and sales fall, profit margins maximised.
- Divest: when products and sales are dropped or sold
86
What are the 4 competitive strategies?
- Differentiation: broad aspect. Focus on one or more criteria to target many buyers
- Cost leadership: To have lowest cost in an industry and therefore be able to deliver reasonable prices or even lower prices than competitors.
- Differentiation focus: Focus on one or more criteria to target one or small number of segments
- Cost focus: To seek cost advantage in one or small number of segments (often price-conscious consumers)
87
What are the selection criteria for B2B?
- Quality
- Price and lifecycle costs
- Continuity of supply
- Percieved risk
- Office politics
- Personal liking/disliking
88
What are the different types of B2B purchases?
- New task: No/litte previous experience in the company, lots of information needed
- Straight rebuy: buying previously purchased iten from judged and acceptable suppliers
- Modified rebuy - between two above
89
What is inseparability?
- Highly related to People
- Simultaneous production and consumption (ex. concert)
- Selection, training and rewarding of people important
90
What are the Characteristics of services?
- Intangibility: pure services can't be seen, touched, smelled before bought/consumed
- Inseparability: Simultaneous production ad consumption
- Variability: Execution of service is dependent on mood of both staff and customer, and location/situation
- Perishability: consumption can't be stored for later
