Chapter 2 and 3: Market Analysis and Marketing Strategy Flashcards
1
Q
What should be the management’s objective in all cases?
A
- To generate a sufficient demand (enough customers) or incidents of use or purchasing.
- To generate a sufficient appeal that generates a willingness to pay (based on alignment with the needs of the respective market) and
- To generate appropriate delivery and handling costs
… in the relevant markets
2
Q
What is the definition of a market?
A
Places where supply and demand meet
3
Q
In which forms can markets occur?
A
These places can be
- real in the form of a specific geographical space (traditional market place, fair or mall)
- institutional in the form of a stock market that can be accessed electronically or from a distance
- or virtual in the form of a data system (e.g. electronic buying places like eBay)
4
Q
What are the three characteristics of a market?
A
- Information, products and services are exchanged
- prices are set
- and contracts are negotiated
…in markets.
5
Q
When is a transaction achieved on a market?
A
A transaction is achieved if one partner (buyer) places a higher value on a piece of information, product or a service than the other partner (seller).
6
Q
Which are the individual steps of a market transaction? What can be identified based on them?
A
Using a market is never free of cost; sometimes substantial transaction costs arise.
==> These can be identified based on the individual steps of a market transaction.
- Initiation:
Costs for information and selection of transaction partners - Negotiation:
Costs for negotiating, writing contract and completing contracts - Settlement:
Costs for coordinating, controlling and customizing the contract.
7
Q
What does a customer system consist of?
A
Consists of a customer and the social elements influencing him that can be depicted in a stratigraphic model.
8
Q
What is created on every level of a customer system?
A
A customer benefit is created on every level.
9
Q
Which levels does the customer system consist of?
In what forms do the customer benefits come on every level of the customer system?
A
Buyers’ community:
Structures and infrastructure like distribution systems or markets, which create efficiency on the level of the buyers’ community.
Co-customers:
Atmosphere on the level of the co-customers
Co-decision makers:
Security on the level of the co-decision makers.
10
Q
Which phases does the repeat-purchase cycle comprise?
A
Customers are subject to processes in their purchasing behavior:
The repeat-purchase cycle comprises the phases of
- initial purchase,
- usage,
- repeat purchase,
- complementary
- and replacement purchase
==> If customers are satisfied and trust a provider, they tend to buy more and different products from him.
11
Q
What is the share of wallet?
A
The share of total expenditure a customer spends with a particular company
12
Q
What is “word of mouth”?
A
Satisfied customers lead to the acquisition of new customers via “word of mouth”
13
Q
What is cross selling?
A
If one succeeds in selling not only more but also different goods and services by cross selling (the sale of new kinds of products to existing customers, for example when a post office sells stationary or books), the customer return increases even more.
14
Q
Why did the focus in marketing shift from individual transactions to integrated and long-term customer relations?
A
After initial high investments in acquisition and in the first transaction, costs decrease gradually thorugh standardization. (One knows the customer, knows what he wants and can build on a relationship of trust)
During this process, the customer’s critical attitude often diminishes as well. Subsequently, servicing and warranty costs decrease.
15
Q
Why do intermediaries become necessary?
A
In more complex markets, intermediaries (Vermittler) are necessary to overcome distances, to provide support services that address problems or challenges or to handle payment and information flow.
16
Q
Which are the main categories of intermediaries?
A
- Brokers
- Architects
- Classic retailers and wholesalers
17
Q
What do brokers do, what are examples for brokers?
A
Brokers mediate between demanders and suppliers by among other things exchanging information and pooling demanders and goods and services.
Example: Insurance Brokers who create risk-management packages for insurance clients, real estate brokers or financial market brokers
18
Q
What do Architects do as intermediaries?
A
Advise individual customers and negotiate with suppliers, in doing so they represent the customer
19
Q
What do classic retailers and wholesalers do as intermediaries?
A
connect suppliers and buyers and take on logistic, collection, consulting and range-of-goods functions for their own accounts
20
Q
What is an intermediary’s contribution?
A
An intermediary’s contribtution is the reduction of transaction costs.
21
Q
Which distinctions between markets are there and why is the distinction important?
A
Due to the market players’ different ways of reacting, the distinction between I-markets (instituional markets) and C-markets (end-customer or consumer markets) is important
22
Q
What is an I-market?
A
In I-markets (also called B-markets) it is mostly committees making decisions, or at least individuals who have to answer for their decision to committees.
A factual situation is essential; definite arguments like benefits and costs are critical.
However, a political dynamic often arises from the involvement of committees with their formal and informal power structures for example when a purchasing has to be convinced.
23
Q
What are C-Markets?
A
In C-Markets (also community markets), purely mateiral cost-benefit considerations are not the only decisive factors.
Rather, purchasing decisions are based on psychological benefits like affiliation with a group or community or a contribution to identity establishment.
24
Q
What are G-Markets?
A
There are also G-Markets (government/state markets)
25
What does a benefit result from?
A benefit is the result of the satisfaction of a need.
26
What is the definition of a need?
Needs can be understood as perceived shortages that the buyer craves to satisfy.
They occur against the background of external influences (information or peer group and internal influences (attituted, motives, learning processes etc.)
27
What is the definition of a motive?
Underlying driving forces that can be explained by internal factors (e.g. psychological values such as personal goals) and contribute to identity.
Motives change due to external influences such as social change and internal influences such as customer experience and changed values.
Motives such as status, act as goals or underlying driving forces from which specific needs line one for a big house can be deduced.
28
Between which needs does Maslow make a distinction in the pyrimadi model?
- Psychological needs
- Safety needs
- Love and belonging
- Esteem and
- Self-actualization
29
What is a transformation society?
The predominant motive (a person's dominant internal driving force) is to do whatever it takes to come closer to one's self concept.
People try to reduce the distance between their current perception of self and the desired self-concept for example by consuming status goods in the form of specific cars or by learning new skills and sports.
30
What is the homo economicus? According to this concept, through what does a customer make their decisions?
The decision models underlying the neo-classical economic concepts assume a homo economicus
According to this concept a customer decides through:
- Known and measurable goals and
- Known and regarding goal-related decisions, assessable alternatives
31
Why is the Homo Economicus under criticism?
However these assumptions apply only in rare cases.
- Often the goals are unclear, or additional hidden goals which the person does not recognize or blocks out, play a role.
- Also, in most cases, some alternatives are unknown and/or cannot be fully assessed
With this in mind, purchase decistions are not purely rational decisions but decisions, with a bounded rationality.
32
Which two main research tools regarding purchasing decisions are there?
- Decision process research
focuses on the sequence of secondary decisions.
"about the tracking of decision processes"
- Behavioral-scientific decision research
Examines the mechanisms operating during the formation of a decision.
The focus is on secondary perception, learning and behavioral processes.
33
What does SOR stand for in the standard model? What does this model say?
Internal and external stimuli (S) lead to organism (O) preferences and basis attitudes via object variables such as perception, learning and categorization processes.
These can be external stimuli in the form of marketing tools such as discounts and advertising messages or internal stimuli such as changes in values.
The customer's behavioral response (R ) is derived from this process.
34
What are Feedback reactions?
They often play an important role in behavioral-science models; it includes actual cycles (for example in the form of learning processes)
Input variables lead to information needs and to information behavior.
==> This information is organized, assessed and saved.
35
What is the attribution mechanism?
The attribution mechnism through which causes are attributed selectively play a special role.
Causes are attributed in one's perception in such a way, that preferably, no dissonance with internal convictions occurs.
(if someone has a positive image of a tour operator or a hotel, he will link his bad experiences with the weather or the local population (explanatory attribution)
If the same person experiences something positive, he will link it with the hotel for example (due to their internal conviction).
36
What is the theory of reasoned action?
Concerns itself with the predictability of those deliberate behaviors and supposes that individuals incorporate all the relevant available information for their behavioral decisions and act according to their intentions.
The individual's attitude and positive and negative associations influence his behavioral intention (attitude toward the behavior) and also the subjective norm (e.g. peer-group pressure)
37
What is the approach of "perceived behavioral control as an influence factor"?
In this enhanced approach, they assume that the more positive the attitude toward the behavior and the subjective norm and the higher the perceived behavioral control is, the more intense the behavioral intention of a person will be. (If you believe you can study well and that there are no obstacles hindering you, then you will be more likely to study regularly)
There are different barriers between behavioral intention and actual behavior, for example disposable income (money left after taxes).
It is important to note that traditional market research methods usually just inquire into the behavioral intention.
Only observarion and customer tracking can identify the actual customer behavior.
38
What are the three main questions one should ask themselves when launching a new product?
1. Quantitive demand volume
2. Needs of individual customers or market segments
3. Decision behavior, meaning the customer's reaction to the applicatio of marketing tools
39
What are the two different market research methods
Qualitative and Quantitive
Qualitative = develop "theory"
Quantitve = verify "theory"
40
What are examples for qualitative market research methods?
- Observation
- In-depth/group interview
- Analysin texts and documents
41
What are the two different types of quantitive market research methods and what are examples for them?
Primary (generating new data)
==> surverys (perception - "stated") and big data analysis (real behavior - "revealed")
Secondary (utilization of already existing data)
==> Data analysis e.g. trend analysis
42
Which four different market sizes are there?
- Market Capacity
- Market Potential
- Market volume
- Market share
43
What is the market Capacity?
A theoretical maximum size: it indicates the theoretical capacity of a market without regard to prices and purchasing power.
Market capacity is a quantity that can change depending on the size of the market base (number of users).
(How many people could realistically be potential users but also how big the amount is, the company can produce or serve)
Non-financial!! (everyone that does sport)
44
What is the market potential?
the equivalent of demand for a good or service at a specific price (people who want to buy it (feel the need for it) but also those who have already bought it ==> everyone that feels the need for the product)
45
What is the market volume?
Comprises the sum of all the actually realized turnovers of all the suppliers on the market.
In cases in which market supply is adequate, market potential and market volume correspond with each other.
If the production capacities of all suppliers are insufficient (e.g. with innovations), the market volume is smaller than the market potential.
What all the other competitors are profiting.
46
What is the market share?
A KPI that puts a company's own production or sales volume in proportion to the total market.
As a key indicator it is of major strategic importance because in many markets, the competitor with the biggest market share has advantages for example regarding brand awareness, production costs and network effects.
=> Therefore market share has an important function in most marketing objectives and correspondingly in marketing-controlling cockpits.
47
Which research services for which size is offered by industry organizations or market research institutions?
Usually industry organizations or market research institutions offer research services for the market volume.
48
How is the market capacity determined?
Market capacity is usually estimated based on projections in reference to other markets.
Example:
Market capacity for flat-screen TVs can be extrapolated by multiplying a theoretical maximum number of TV sets in households by the number of households today or in the future.
49
How is the market potential determined?
For market potential, complex interviewing techniques are often applied for estimating it.
The objective is to not just ask about a theoretical need for something customers do not yet know abou, but to simulate a buying situation that is as up-to-date as possible.
50
What is a conjoint measurement?
Methods like conjoint measurement can even determine customers' willingsness to pay for particular product features.
For that, researchers present respondents with theoretical selection sets of alternative products that have different features and prices.
From their selection of different products one can extraolate customers' assessment of individual features via an analytical procedure.
51
What is the difference between states preferences and revealed preferences?
Surveys only gather the stated preferences (the perceived behavioral intention, what people declare) and not the revealred preferences (the actual impact of needs or marketing tools)
==> Influences like socially desired behavior or unidentified internal motives can sometimes lead to significant differences between behavioral intention and actual behavior.
52
What is a trend?
A new development direction or tendency.
53
What is a megatrend?
Large "global, socio-economic or structural processes that we as individuals cannot influence or change and that we have to deal with in the future".
(Examples: Climate change, urbanization, digitalization, aging population, globalization, individualism)
54
Why is trend research so important on a strategic level?
On a strategic level it makes it possible to recognize threats in different environmental areas, such as the shif of global economic growth dynamics from West to East or to Asia and the changed market conditions resulting from that and adjust planning.
55
Why is trend research so important on a marketing level?
On a marketing level, developments and changes in customer needs have to be observed.
56
Which methods for trend research are there?
- Trend scanning
- Semiotics
- Trend monitoring
- Trend scouting
- Future laboratories
- Scenario planning
- Delphi Method
57
What is trend scanning?
media analysis, for example by analyzing newspapers and magazines for their interpretation of the world and deducing trends from that
58
What are semiotics?
interpreting signs, for example specific languages, ways of expression like drawings or text message abbreviations
59
What is trend monitoring?
Observers monitoring the development of a particular group or scene
60
What is trend scouting?
Interpreting the development of a particular group or scene, strongly influenced by a trained and experienced observer
61
What are future laboratories?
concentrating experts from different fields in workshops for a limited amount of time to present and interpret different points of view and expectations for the future
62
What is scenario planning?
Identifying possible scenarios and weighing developments that might result, including potential consequences
63
What is the Delphi Method?
Includes expert questionnaires in several rounds
The result of the first round of questions are analyzed, summarized and returned to the experts who are then asked to revise the first responses. This corrects errors and focuses arguments)
64
Which are the trend categories?
- Hype
- Fashion phenomenon
- Medium-term trend
- Long-term basic trend
65
What are some of today's important basic trends?
- Ageing of population
- Liberalization in both commerce and society
- Technologization
- Differentiation of society
- Multi-optionalization
- Individualization and search for identity
- Scarcity of natural resources
66
How do trends develop?
New trends are often the result of different, interacting developments in the environment.
==> Therefore networked thinking in systems has established itself as a method for identifying trends.
An example is the development of the scooter market in switzerland.
67
What is the paper computer?
A method for analyzing and interpreting the influence of individual elements on the system as a whole.
In a matrix, the individual elements are depicted on horizontal and vertical lines.
The connections and their importance can be drawn from the vertical line (influences from) to the horizontal line (influences on)
Simple ways of evaluation such as adding the influence of a specific element on all other elements (e.g. horizontal sum) allow for interesting conclusions.
68
For what are there market cultivation costs?
For customer acquisition and also retaining them
69
Which two different views (SWOT Analysis) are considered?
On a company level, strengths and weaknesses are analyzed in reference to all company functions such as funding/capital resources or strategic abbilites/core competencies
In the opportunities/threats analysis trends like a tightening credit policy are considered on a company level
On the marketing level, analysis is about product advantages and disadvantages or strengths and weaknesses in reference to achieving marketing objectives (e.g. achieved customer satisfaction)
On a marketing analysis level, demand trends and computer behavior are important in the analysis of opportunities and threats
70
What is the USP?
Characteristics or elements of products that can be a strength and an opportunity can be called a "unique selling proposition".
USPs are outstanding product advantages in the market.
During a trend for lighter snacks, a special low-fat baking process can be a USP.
71
What is the definition of a marketing strategy?
Defines the general directions and approaches for reaching the marketing objectives.
Can be understood as the implementation of the company strategy at the marketing level.
It determines the company's behavior on the sales market by generally defining
- target markets,
- differentiation from competitors,
- positioning
- and application of marketing tools.
72
A marketing strategy comprises statements regarding what?
- Target markets
(Which target markets with which products and which goals?)
- And the application of marketing tools
(What tools or tool groups should be used with which objectives and to what purpose?)
73
What is the marketing strategy the basis for?
The marketing strategy itself is the basis for controlling the application of different marketing tools and also for performance and innovation processes.
74
What is the starting point for marketing strategies?
Marketing objectives
Inside a company, objectives are differentiated in goal hierarchies.
==> The entire goal hierarchy has to agree with the overall corporate objectives:
75
What is legitimacy?
To begin, an enterprise or an organization must serve it s purpose in society and the economy for example by providing cheap and high quality semi-finidshed products or by meeting transport needs.
Fulfilling this purpose leads to the perceived legitimacy of the enterprise.
76
What is viability?
Second, the enterprise has to ensure it s value for the various stakeholders.
If the stakeholders continute to contribute to the enterprise it s continued existence and viability are secured.
Viability Definition: an organization's ability to adjust to constantly changing environmental conditions.
77
The role of business processes is to contribute to overall corporate objectives. How?
1. first by providing goods and services for customers to fulfill the company's purpose and
2. second, to enable a sufficient value to reach the goal of committing and compensating stakeholders (at least in companies fully operating in the market without state subsidies).
two objectives: performance for securing customer value and added value
78
What is important for organisations that benefit from subsidies?
For organisations that benefit from subsidies or other contributions by third parties that are not end users, the goods and services have to appear meaningful and necessary to those third parties.
==> Example: This is the case for public transport where customer payment (tickets) hardy ever cover all the costs of the organisation. That is why if their services are required by the population and ordered by government bodies, these companies receive public subsidies
79
What are the two types of objectives?
Static and dynamic
80
What are static objectives?
Are about short-to-medium-term results and contributions to overriding objectives
81
What are dynamic objectives?
Ensure the long-term ability to reach the tatic marketing objectives.
82
What is sales volume dependent on?
Sales volume depends on whether the product characteristics meet customer needs and whether products are readily available.
83
What do average prices of the products depend on?
Average prices depend on the products' quality and/or on how well they meet customer needs.
Prices also depend on positioning.
==> A product that is positioned upscale via a brand creates higher willingness to pay.
(Example: Clothes market. Brand positioning may enable strikingly different prices for products with similar costs of raw materials.)
Marketing costs also have a big impact on costs (e.g. in the form of advertising or commissions).
Performance costs are also relevant.
84
How do the performance costs behave when the product is getting more and more differentiated?
The costs of goods and services increase the more they are differentiated to individual preferences.
The more customized products are, the higher the consumers' willingness to pay because the products better satisfy consumers' needs.
BUT at the same time perfomance costs increase due to more complex production processes (Example: if machines or production lines frequently have to be adjusted for specific product versions).
85
What are the potential advantages of a high market share?
- The more established product sells better due to higher relevance on the market
- The good or service can be produced more cheaply because of the large output.
- Dominance effects can be achieved, especially with network products.
86
What is network economics?
the "exponential increase in value of a network (here defined as the participant's ability to create added value) in relation to the number of participants"
In many markets, the product with the highest market share is the one that is presented in retail chains, achieves the broadest distribution (because it is the most attractive for retailers too) and creates the greatest value for customers (because they can find retailers in most places or customers who also need the product)
87
What does the "upselling strategy" show?
The positioning strategy's directions of development make it possible to influence willingness to pay.
Example: Upselling strategies
They position their brands and goods and services more and more upscale to be able to mark up prices in the long term
==> Promptin customers to buy more high-grade models or product versions raises average prices of all sales.
88
What is the learning curve effect?
Ensues with higher output figures meaning that, for example more intelligent designs or better structured performance processes can be developed which in turn reduces expenses.
==> long-term cost savings through learning
89
What is the economies of scale?
Scale effects through cheaper production of larger quantities
90
What relevance do the learning curve effect and economies of scale have?
Economies of scale and the learning effect are powerful motors that shape the development of whole industries.
In many industries (for example in traditional production industries but also in modern service and network industries such as hotel chains and airlines) one can see consolidation trends.
91
What are consolidation trends?
The average company size continues to increase due to small companies going out of business or mergers and takeovers.
92
What is a market segment?
Can be a group of consumers with the same needs and/or similar reaction to the application of marketing tools
93
What is the ideal segmentation degree dependent on?
The ideal segmentation degree is relative to the segmentation costs and the segmentation benefit
94
Definition of segmentation degree
The size of the ideal segments (ten, one hundre, or thousands of customers)
95
Definition of segmentation costs
Costs für specific versions and seperate market cultivation
96
What are the benefits of segmentation?
Willingness to pay for better-suited, more specific products
97
What are the benefits of differentiated marketing?
- Recognition in the market
The product becomes identifiable by assigning it to individual target markets
- Customer involvement
Assignment to a sub-market makes it possible to build a deeper customer relationship
- Higher customer value
Product features can be specifically tailored to the precise needs of the respective customers.
- Higher marketing efficiency
Market nurturing tools can be used in a segment-specific way.
98
What are criteria for market segments?
Market segments can be defined by different criteria
- Motives
(e.g. golf players, single-family home owners)
- Socio-demographic characteristics
(e.g. age, gender, religious affiliation, profession, income)
- Geographic characteristics
(rural or urban residence)
- Psychographic characteristics
(values such as liberal or conservative, individualistic)
99
What are the criteria for selecting a market segment?
Criteria for choosing a market segment and hence the positioning of a company or product;
- Market size (Market capacity, potential, volume, share)
- Nurturing costs
- Strategic significance of a market segment
100
How is the segmentation done? How did it change over the years?
Segmentation should be guided by purchase behavior and benefit.
However, with the mentioned dissolution of structures and norms in the course of globalization and individualization, socio-demographic segmentation criteria become less important.
==> Today, one's gender or age group is no longer indicative of a person's value or consumption behavior.
Nowadays, needs are much stronger, and they are determined for example by stage of life, purchase situation or a person's psychographic makeup.
101
Which is the main question for market segmentation?
Which criterion offers the most exact and the most reasonable - based on the size of the resulting market segments - differentiation mechanisms?
The ability to be operationalized also has to be considered
(Example: whether the resulting segments can be cultivated sensibly with marketing tools or whether communication channels like special magazines exist in the segment.)
102
What are the requirements for market segmentation characteristics?
- Purchase behavior relevance
==> Does the chosen market segmentation seperate segments with different purchase behavior?
- Significance for the application of marketing tools
==> One has to be sure the chosen market segments can be differently cultivated with marketing tools
- Accessibility
==> A company has to be able to concentrate its marketing efforts on the chosen segment via communication and distribution channels
- Measurability (operationalization)
==> The question is whether the segmentation can be defined statistially so that individual segments can be measured.
- Temporal stability
==> Criteria should have significance over a longer period because planning segment-specific marketing operations and penetrating a segment take time and funding.
- Profitability
==> Segementation criteria are supposed to define segments that can be cultivated economically.
103
What is the decision tree? Through which stages do we go when segmentations are operationalized?
Often segmentations are operationalized via several stages.
In practice, the principle of the decision tree has proved itself:
1. During the first stage, the criterion that best differentiates sale- and behavior-relevant sement is applied.
2. During the next stage, sub-segments are formed based on secondarily important criterion.
104
What are cluster analyses?
Today, multivariate, statistical techniques like cluster analyses make it possible to define market segments with statistical methods.
These techniques arrange customers into homogenous groups based on their motives (self-declared or externally observed) or their purchase behavior.
105
Which are the criteria when deciding to target which market?
- Market size
- Handling costs
- Strategic significance of a market
106
What are handling costs?
Costs for performance adjustments and marketing (Example: special commissions in distribution)
107
What is the definition of "positioning"?
A position defined by the characteristics attributes of a brand, product or service or a strategic business area in a multi-dimensional feature space.
Apart from brands, goods and services, strategic business units or whole companies can have a specific position in a multi-dimensional feature space based on the perceived characteristics attributes.
A positioning has to build on the strengths of the offer and address relevant needs in the chosen target market.
A positioning can be charted or described verbally.
108
Which three shells does a design of a brand have?
Core:
Brand essence
(the brand's substance)
Core Brand identity
(e.g. reliability)
Extended brand identity
(e.g. particular lifestyle)
109
Which steps does the initial purchase consist of?
1. Contact phase
2. Evaluation phase
3. Purchase
110
What is the difference between traditional marketing and transactional marketing?
Traditional marketing focused largely on initial purchase.
The goal had virtually been achieved once a product or service was sold
Today, one speaks of transactional marketing.
The initial acquisition of a customer is several times more expensive than selling additional goods and services to an existing satisfied customer.
111
What do modern marketing concepts focus on?
Modern marketing concepts focus on building long-term customer relationships.
(relational marketing)
112
What does a customer have to interested in, when wanting to maximize customer-perceived long-term customer value?
1. The customer being able to use the product correctly and being satisfied with it during the usage phase.
Marketing tools like after-sales service that teach customers how to handle a new product or device or inform them about the use are essential.
Continuously maintaining a positive emotional relationship to the purchased object is also important.
2. Guiding the customers into repeat-purchase cycles with as little friction as possible.
One prequisite for that is satisfying usage pahse from the customer's point of view.
It is also important to accomodate changes in customer needs and provide adequate products.
113
Which are the two basic tasks in terms of the buying cycle?
- Customer acquisition
- Customer retention
114
What are the challenges in customer acquisition depending on an industry's maturitiy stage: Emerging industries
- The providers are often not yet consolidated.
Example Snowboards:
At the start of the snowboarding boom there were a large number of relatively small, independent manufacturers.
- Market penetration or the exhaustion of market potential is still small
The strategy for customer acquisition had to focus on acquiring previous non-users and new customers
115
What are the challenges in customer acquisition depending on an industry's maturitiy stage:
Mature industry (high degree of concentration)
- The market volume is close to the market potential
==> That is why the focus of customer acquisition has to be on the winning of competitors' customers
Example airline business:
The European market is divided between three globally operating alliances
116
What is another distinction in customer acquisition other than the industry's maturity stage?
High-involvement decisions
Low Involvement decisions
117
What are high-involvement decisions?
Extensive purchase decisions, in which customers distinctly perceive product differences based on high information activity and expertise.
==> These customers take their time.
Purchase can even be a leisure activity and generates benefit itself.
118
What are Low involvement decisions?
Customers don't spend a lot of time when deciding on a product to buy, maybe even delegate it to one's children for example.
119
How can you not determine if it's a high-involvement or a low-involvement decision?
Whether a purchase decision is a high-involvement decision or not does not solely depend on the product category.
Example: Buying a car can be a low-involvement decision for someone who delegates it to one's children for example or the garage owner.
For another customer buying a new car is a center of interest in which the person invests a lot of time.
120
What is the goal of customer retention?
- Either to retain existing potentials
(continually generating repeat purchases and preventing customer migration)
- Or expand them
121
What is the definition of customer migration rate?
What percentage of customers change to other suppliers, what percentage of customers leave other suppliers
==> Influencing this rate can also be a relevant marketing objective
122
What is the strategy of expanding existing potentials about?
- increasing share of wallet
- word of mouth
- intensifying the number and rhythm of repeat purchases for example by increasing usage.
123
Acconrding to what factors does the focus on marketing tool application and the objective regarding individual tools differ?
The factors include
- The phase of the buying cycle
- The focus on customer acquisition or customer retention
- and the manifestation of the market constellation
124
What is a tool strategy about?
A tool strategy is about determining the focus, the objective and the temporal coordination of individual marketing tools in a marketing mix.
125
What is the definition of the Marketing Mix?
The selection of marketing tools on their quantitive and qualitve level regarding the achievement of long-term strategic and short-term operational marketing and coorporate objective in a given period.
126
Which are the the 4Ps?
- Promotion (communication tools)
- Placement (placement or distribution tools)
- Price (pricing and contracting tools)
- Product (product design)
127
What does the tool applicatio depend on?
Phase of buying cycle
Maturity of industry
Involvement
Customer retention objective
128
What is a pull strategy?
works by a tool application during which customer need is created through communication and product characteristics.
129
What is a push strategy?
rely on availability and contracting to virtually "push" a product into a market.
