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Marketing Management > EXAM 1 > Flashcards

EXAM 1 Flashcards

1
Q

Why is marketing valuable?

A
  • Marketing lends itself to financial success
  • Marketing builds demand for products
  • Marketing creates jobs
  • Marketing builds strong brands and loyal customers (intangible assets) which add value to a firm
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2
Q

What is marketing?

A
  • Identifying and meeting human and social needs

- Creates, communicates, delivers, and exchanges offerings that have value for customers

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3
Q

What is marketing management?

A
  • The art and science of choosing target markets
  • Getting, keeping, and growing customers
  • Creating, delivering, and communicating superior customer value
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4
Q

What can be marketed?

A

Goods, services, events, experiences, people, places, properties, organizations, information, ideas

-Anything that creates value for customers

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5
Q

How is value delivered?

A

Value is created by a producer and delivered to consumers in the form of a ‘core value unit’

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6
Q

What is a marketer?

A
  • Someone who seeks a response (attention, purchase, vote, donation, etc.) from another party (the prospect)
  • They try to estimate demand in order to meet a company’s objectives
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7
Q

Negative demand

A

When consumers dislike the product and may even pay to avoid it

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8
Q

Nonexistent demand

A

When consumers are not aware of or not interested in your product or service

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9
Q

Latent demand

A

When consumers have a strong need for a product that does not yet exist or they are unable to identify it/afford it

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10
Q

Declining demand

A

When consumers buy a product with less and less frequency

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11
Q

Irregular demand

A

When consumer purchases vary on a seasonal (or other trend) basis - aka: fluctuating demand

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12
Q

Full demand

A

When demand and supply are balanced

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13
Q

Overfull demand

A

When the supply cannot satisfy the demand (supply shortage)

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14
Q

Unwholesome demand

A

When the demand for a product has a negative effect on society (ex: demand for cigarettes)

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15
Q

4 types of customer markets

A
  • consumer markets
  • business markets
  • global markets
  • nonprofit and gov. markets
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16
Q

Difference between needs, wants, and demands

A

Needs: a basic human requirement, such as food, air, water, clothing

Wants: a specific object that might satisfy the need (not backed by an ability to pay)

Demands: want for a specific product backed by an ability to pay

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17
Q

Does marketing create or satisfy needs/wants?

A

Opinions vary on this.

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18
Q

Segmentation

A

Identifying and profiling distinct groups of buyers - can be based on demographics, psychographics, etc.

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19
Q

Target markets

A

The segments that present the greatest opportunity

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20
Q

Positioning

A

Establishing the image or identity of a brand or product so that consumers perceive it in a certain way

Products are often positioned in relation to other products on the market

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21
Q

Value proposition

A

A set of benefits that satisfy consumer needs

Is often a statement that a company uses to summarize why a consumer should buy a product or use a service

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22
Q

Offerings

A

A combination of products, services, info, and experiences offered to your customers.

An offering is more than the product itself and includes elements that represent additional value to your customers, such as availability, convenient delivery, technical support or quality of service.

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23
Q

Brands

A

Are specific offerings from a known source.

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24
Q

Paid media

A

Includes TV ads, magazine ads, display ads, paid searches, and sponsorships

-Usually not as trusted by the consumer but liked by the company because they have full control

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25
Q

Owned media

A

Is developed and put of by the company itself. Includes a company’s own brand brochure, website, blog, Facebook page, or Twitter account

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26
Q

Earned media

A

Includes word of mouth, buzz, or viral marketing

-Usually trusted more by consumers but can be risky for the company because they have no control

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27
Q

Impressions

A

When a consumer views a communication

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28
Q

Engagement

A

The extent of a customer’s attention and active involvement with a communication

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29
Q

Value

A

A combination of quality, service, and price (QSP: customer value triad)

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30
Q

Satisfaction

A

A person’s judgment of a product’s perceived ‘performance’ in relationship to their ‘expectations’

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31
Q

Supply chain

A

A channel stretching from raw materials to components to finished products to final buyers

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32
Q

Competition

A

All the actual and potential rival offerings and substitutes a buyer might consider

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33
Q

Forces of change in our current marketplace

A

Technology, globalization, changing demographics, and social responsibility

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34
Q

New customer capabilities

A
  • Using the internet for information gathering and purchasing aid
  • Being able to search, communicate, and purchase on the move
  • Tapping into social media to share opinions and express loyalty
  • Actively interacting with companies
  • Rejecting marketing they find innappropriate
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35
Q

New company capabilities

A
  • Using the internet as an information tool and sales channel
  • Collecting fuller and richer information about markets, customers, prospects, and competitors
  • Reaching customers quickly and efficiently through social media, mobile marketing, targeted ads, coupons, and information
  • Improved cost efficiency
  • Improved purchasing, recruiting, training, and internal/external communications
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36
Q

How channels are changing in today’s marketplace

A

Disintermediation: reduction in the use of intermediaries between producers and consumers

EX) investing directly in the securities market rather than through a bank

Retail transformation: a shift towards online shopping has forced brick and mortar stores to adapt

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37
Q

Factors that have heightened competition in the marketplace

A
  • Private brands
  • Mega-brands
  • Deregulation
  • Privatization
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38
Q

Price dispersion

A

When you vary the price of a product across sellers

This is harder to do now that customer’s can easily price match on their phone (it has almost disappeared completely)

EX from class: Fisherman in South India used to sell only to their local markets. Prices of the same product would vary greatly across markets - this was very inefficient and led to a mismatch between supply and demand. After the introduction of mobile phones, fisherman could communicate and coordinate where to sell their fish. Prices across all the markets stabilized. Profits rose and average price paid fell, proving that technology can promote social welfare.

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39
Q

Showrooming

A

The practice of visiting a store or stores in order to examine a product before buying it online at a lower price.

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40
Q

Webrooming

A

When consumers research products online before going into the store for a final evaluation and purchase.

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41
Q

Holistic marketing

A

A business marketing philosophy which considers business and all its parts as one single entity and gives a shared purpose to everyone involved.

Recognizes the breadth of interdependency

Connects internal marketing, integrated marketing, performance marketing, and relationship marketing into one.

EX) CVS ending the sales of tobacco because it doesn’t align with their overall image of a health company

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42
Q

Relationship marketing

A

Aims to build mutually satisfying long-term relationships with key constituents to earn and retain their business

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43
Q

Integrated marketing

A

An approach to creating a unified and seamless experience for consumers to interact with the brand/enterprise

‘the whole is greater than the sum of its parts’

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44
Q

Internal marketing

A

Hiring, training, and motivating employees who want to serve customers well

Promoting a company’s objectives, products and services to employees within the organization. The purpose is to increase employee engagement

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45
Q

Performance marketing

A

A comprehensive term that refers to online marketing and advertising programs in which advertisers pay marketing companies when a specific action is completed; such as a sale, lead or click.

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46
Q

Indicators of financial accountability

A

Sales revenue, brand and customer equity, customer satisfaction, product quality

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47
Q

Types of social responsibility

A

Ethics, environment, legal, community

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48
Q

Societal marketing

A

Preserving or enhancing customers’ and society’s long-term well-being

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49
Q

Traditional vs Modern Four P’s

A

Traditional:
Product, price, place, promotion

Modern:
People, processes, programs, performance

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50
Q

Tasks of a marketing manager

A

Develop market strategies

Capture marketing insights

Connect with customers

Build strong brands

Create/deliver value

Create long-term growth

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51
Q

Examples of new technology in marketing

A

RFID has allowed marketers to measure a consumer’s purchasing journey in a store and shopping patterns

Finding: when consumers spend more time in a store, they become more purposeful

EX) Netflix has interactive episodes

EX) race to make it to a shoe store before the sale on your phone counts down

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52
Q

Value delivery process

A
  1. Choose the value
    - Use STP marketing
  2. Provide the value
    - Identify specific product features, prices, and distribution
  3. Communicate the value
    - Use the internet, advertising, sales force, etc. to announce and promote the product

(steps go from before the product exists to after it is delivered and gets feedback)

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53
Q

Value chain

A

The process of activities by which a company adds value to a product/service

Ever firm is a synthesis of activities performed to design, produce, market, deliver, and support its products

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54
Q

Breakdown of the value chain

A

Support activities

  • Firm infrastructure
  • Human resource management
  • Technology development
  • Procurement

Primary activities

  • Inbound logistics
  • Operations
  • Outbound logistics
  • Marketing and sales
  • Service

Margin

*Reference diagram

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55
Q

Market-sensing process

A

All activities in gathering marketing intelligence and acting on the information.

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56
Q

New offering realization process

A

Focuses on all the activities in research, development and launching new quality offerings

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57
Q

Core business process

A

Is an idealized construct intended to express an organization’s “main” or “essential” activity.

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58
Q

Customer acquisition process

A

Focuses on locating a target market

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59
Q

Customer relationship management process

A

Focuses on maintaining your current customer base

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60
Q

Fulfillment management process

A

All the activities in receiving and approving orders, shipping out on time and collecting payment.

Also focuses on collecting consumer feedback

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61
Q

Core competencies

A

A defining capability or advantage that distinguishes an enterprise from its competitor

3 characteristics:

  • Are a source of competitive advantage
  • Has applications in a wide variety of markets
  • Is difficult for competitors to imitate
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62
Q

3 steps of realigning a business

A
  1. Redefine the business concept or big idea
  2. Reshape the business scope
  3. Reposition the company’s brand identity
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63
Q

VRIO framework

A
  • Valuable
  • Rare
  • Inimitable
  • Organized

By satisfying this criteria, you will uncover and protect your resources and capabilities, giving you long-term competitive advantage

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64
Q

Sustained competitive advantage

A

When you meet all 4 factors of the VRIO framework

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65
Q

3 roles of strategic planning

A
  • Manage the business as an investment portfolio
  • Assess the market’s growth rate and the company’s position in that market
  • Establish a strategy
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66
Q

3 steps of running a business

A

Plan
-corporate, division, business, and product planning

Implement
-organizing and implementing

Control
-measuring results and taking corrective action

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67
Q

3 types of growth opportunities

A

Intensive growth

  • improving existing business
  • introducing a new product, entering a new market, or further developing your own competency

Integrative growth

  • growth outside of your current range
  • a company increases its sales and profits through vertical, horizontal & concentric integration within its industry
  • can include mergers and acquisitions

Diversification growth

  • adding unrelated business
  • entering into a new market or industry in which the business doesn’t currently operate, while also creating a new product for that new market.
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68
Q

Product market expansion grid (type of intensive growth)

A

Market-penetration strategy
-gaining more market share using the current market and current products

Market-development strategy
-developing new markets for a current product

Product-development strategy
-developing a new product for a current market

Diversification strategy
-developing new products for new markets

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69
Q

Types of integrative growth

A
  1. Horizontal integration
    - increasing the production of goods or services at the same part of the supply chain
    - can be done with internal expansion, acquisition, or merger

Benefits: economies of scale and increasing your consumer base

Disadvantages: risk of losing distinguishing parts of your brand

  1. Vertical integration
    - when a company controls more than one stage of the supply chain
    - backward vs. forward

EX) Disney is involved in both vertical and horizontal integration, allowing it to become a monopoly

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70
Q

Diversification growth

A

Is a good idea to pursue when opportunities exist outside the present businesses

Should be done when the industry is highly attractive and the company has the right mix of business strengths to succeed

EX) Disney now works with: licensing characters, publishing fictions, entering the broadcast industry, theme parks, vacation and resort properties

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71
Q

The importance of downsizing

A

Downsizing can free up resources and reduce costs

Companies should prune, harvest, or divest tired old businesses to reduce costs

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72
Q

Business mission

A

A broad goal that goes along with the company’s overall goals

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73
Q

SWOT analysis

A

Strengths
-core competencies that are superior to the competition

Weaknesses
-core competencies that are inferior to the competition

Opportunities
-areas of high profitability

Threats
-challenges posed by unfavorable trends or developments

Used to evaluate the environment

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74
Q

MOA: market opportunity analysis

A

Questions to ask in determining if a market opportunity exists:

  • Can we articulate the benefits?
  • Can we locate the target market and reach them with cost-effective media and trade channels?
  • Does our company possess or have access to the critical capabilities and resources needed to deliver consumer benefits?
  • Can we deliver the benefits better than competitors?
  • Will the financial rate of return meet or exceed our required threshold for investment?
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75
Q

Opportunity Matrix

A

One side: success probability

Other side: attractiveness

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76
Q

Threat Matrix

A

One side: probability of occurrence

Other side: seriousness

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77
Q

Goals

A

Objectives that are specific in magnitude and time

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78
Q

Manage by objectives

A

A personnel management technique where managers and employees work together to set, record and monitor goals for a specific period of time

Objectives must be arranged hierarchically

Objectives should be quantitative

Objectives must be consistent

Objectives require tradeoffs, like short-term profits vs long term growth

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79
Q

Strategic formulation

A

The process by which an organization chooses the most appropriate courses of action to achieve its defined goals

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80
Q

Porter’s generic strategies

A

Includes

  • Cost leadership: you target a broad market (large demand) and offer the lowest possible price
  • Differentiation: you target a broad market (high demand), but your product or service has unique features. With this strategy, you make your product as exclusive as possible, making it more attractive
  • Cost Focus: you target a niche market (little competition, ‘focused market’) and offer the lowest possible price
  • Differentiation Focus: you target a niche market (little competition, ‘focused market’) and your product or service has unique features. This strategy often involves strong brand loyalty among consumers
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81
Q

Mckinsey’s Elements of Success

A

Hardware: easier to define or identify

  • Strategy: the plan devised to maintain and build competitive advantage over the competition
  • Structure: the way the organization is structured and who reports to whom
  • Systems: the daily activities and procedures that staff members engage in to get the job done

Software

  • Shared Values: the core values of the company that are evidenced in the corporate culture and the general work ethic
  • Style: the style of leadership adopted and common way of thinking
  • Staff: the employees and their general capabilities
  • Skills: the actual skills and competencies of the employees working for the company
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82
Q

Feedback and control

A

It is more important to do the right thing than to do things right

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83
Q

Example of Netflix’s response to changing technology

A

When DVD mailing started to die, he separated this market from the streaming market in order to adjust to changes in the market

84
Q

Marketing Plan

A

A written document that summarizes what the marketer has learned about the marketplace and indicates how the firm plans to reach its marketing objectives

Can be written for a:

  • brand
  • product line
  • product
  • customer groups
  • company
85
Q

Marketing strategy vs tactics

A

Strategy: lays out the firm’s mission, target markets, and value propositions based on the best market opportunities

Tactics: specifies the marketing activities, including product features, promotion, pricing, channel, and service (actual means used to gain an objective)

86
Q

Objectives of a marketing plan

A

Define the current business situation

Define problems and opportunities facing the business

Establish objectives

Define the strategies and programs necessary to achieve the objectives

Pinpoint responsibility for achieving product objectives

Encourage careful and disciplined thinking

87
Q

Time horizons of marketing plans

A

Most plans are 1 year plans, because there is a desire to reevaluate the environment frequently

This can be expensive, time consuming, and stray from a long-term goal focus

88
Q

Contents of a marketing plan

A 
Executive summary
Situation analysis
Marketing strategy
Marketing tactics
Financial projections
Implementation controls
Marketing research
Specifications for internal and external relationships
Action plans and schedules

These will vary according to the firms, authors, intended audience, etc.

89
Q

Evaluating a marketing plan

A

Is it: simple, succinct, complete, realistic?

90
Q

6 forces in the broad environment

A

Demographic, economic, socio-cultural, natural, technological, political-legal

91
Q

Demographic environment

A

Includes:

  • population growth (usually divided into generations)
  • population age mix
  • ethnic and other markets
  • educational groups
  • household patterns (increasingly less traditional)
92
Q

Economic environment

A

Includes:
-purchasing power (income, savings, debt, credit)

-consumer psychology (ex: recessions change
spending patterns; reference groups/opinion leaders influence spending)

-income distribution (ex: US household income is mostly from 25-100,000)

93
Q

Sociocultural environment

A

Includes:
-views of ourselves, others, organizations, society, nature, and the universe

  • core cultural values: persist a long time, are passed from parents to children, and are reinforced by social institutions
  • subcultures: groups with shared values, beliefs, preferences, and behaviors emerging from their special life experiences or circumstances
  • Some are more fixed, others change over time
94
Q

Natural environment

A

Includes:
-Corporate environmentalism

Trends to be aware of:
-Shortage of raw materials, increased cost of energy, increased pollution, changing role of government

Green marketing isn’t always successful because many companies have lied about it and aren’t truly green

EX: Tesla’s gigafactory that generates clean energy

95
Q

Technological environment

A

Trends:

  • accelerating pace or change
  • unlimited opportunities for innovation
  • varying R&D budgets
  • increased regulation

EX: Stitch Fix, an online personalized wardrobe and stylist

96
Q

Political-legal environment

A

Includes:
-laws, government agencies, pressure groups

Trends:

  • increased business legislation: protecting consumers and companies from unfair competition
  • growth of special-interest groups (ex: consumerist movement)

EX: Trade war with US and China

97
Q

Types of markets

A

Potential market: consumers with sufficient interest, but not sufficient income

Available market: consumers with sufficient interest and income

Target market: the qualified, available market that the company decides to pursue (most marketing effort is concentrated here)

Penetrated market: set of consumers who are currently buying the company’s products

98
Q

Market demand

A

Is not a fixed number, but a function of stated conditions, such as geographical area, time periods, etc.

Demand is affected by: marketing expenditure and economic conditions

99
Q

Market share

A

The portion of a market controlled by a particular company or product.

100
Q

Market-penetration index

A

Compares the current market demand and potential market demand

Market penetration can also be a measure of one company’s sales as a percentage of all sales for a product

101
Q

Shared-penetration index

A

A low number means the firm can greatly expand its market share. A high number means it will be hard to improve the current market share.

102
Q

Market forecast

A

It projects the future numbers, characteristics, and trends in your target market. A standard analysis shows the projected number of potential customers divided into segments.

103
Q

Market potential

A

Is the entire size of the market for a product at a specific time. It represents the upper limits of the market for a product. Market potential is usually measured either by sales value or sales volume.

104
Q

Company demand

A

A specific corporation’s portion of the overall market’s purchasing interest for a good or service over a given time frame.

105
Q

Company sales forecast

A

Is the process of estimating future sales

106
Q

Company sales potential

A

The highest market share that a product can reasonably be expected to achieve within a given time frame.

107
Q

Total market potential

A

Max sales to all firms in an industry during a given period, under a given level of marketing effort and environment conditions

= (potential # of buyers) x (avg quantity purchased) x (price)

108
Q

Chain-ratio method

A

A method of calculating total market demand for a product in which a base number, such as the total population of a country, is multiplied by several percentages, such as the number in the population above and below certain ages

109
Q

Ways to estimate area market potential: for a city, state, region, etc.

A

Multiple-factor index (used for B2C markets): It is a forecasting method that identifies market factors that correlate with market potential and combines them into a weighted index

110
Q

BDI: brand development index

A

BDI = ($ brand sales per capita in a territory)/($ brand sales per capita nationally) x 100

Round to the nearest whole number
National avg = 100

111
Q

CDI: category development index

A

CDI = ($ category sales per capita in a territory)/($ category sales per capita nationally) x 100

Round to the nearest whole number
National avg = 100

112
Q

Ways to estimate current demand

A

Look at industry reports

Buy market research reports

Identify competitors and overall sales

Use surveys of buyers’ intentions

Gather the opinions of your sales force

Look at past-sales (ex: time-series analysis)

Linear equations can be used as a predictor

113
Q

Marketing research

A

The function that links the consumer, customer, and public to the marketer through information

Info is used to:

  • identify and define marketing opportunities and problems
  • refine and evaluate marketing actions
  • monitor marketing performance
  • improve understanding of marketing as a process
114
Q

Who does marketing research?

A

Marketing departments in large firms

Everyone in small firms

Marketing research firms

  • syndicated service research firms (not done for a specific client)
  • custom marketing research firms (design studies for you)
  • specialty-line marketing research firms (provide specialized research)
115
Q

Steps of the marketing research process

A
  • define the problem and research objective (make sure it isn’t too broad or narrow)
  • design the method for collecting info
  • collect the data
  • analyze the results
  • communicate findings
  • make the decision
116
Q

Exploratory research

A

Used to identify the problem and suggest possible solutions

117
Q

Descriptive research

A

Is used to describe characteristics of a population or phenomenon being studied. It does not answer questions about how/when/why the characteristics occurred

EX) quantifying demand

118
Q

Causal research

A

Used to test cause-and-effect relationships

119
Q

Secondary data

A

Collected for another purpose

Already exists

Low-cost

120
Q

Primary data

A

Freshly gathered data for a specific purpose or project

Costly

How to collect it:

  • questionnaires
  • qualitative measures
  • technological devices
121
Q

Observational research

A

Pro: observing people in action (real behavior)

Doesn’t answer WHY people act the way they do

Con: bias in interpretations; must wait for behavior to occur

122
Q

Focus groups

A

Selecting small samples of people to test

Pros: quickly collect info and generate new ideas

Cons: is not very representative; can be biased (groupthink)

123
Q

Survey research

A

Directly asking for people’s opinions

Can be done online, in-person, by phone, etc.

Pro: cheap, quick, and more representative

Con: biased/leading questions, scale used, survey burnout

124
Q

Behavioral research

A

Is the study of the many variables that impact the formation of one’s habits

EX: store-scanning data

EX: consumer databases

Pro: large amounts of data; actual purchases

Con: large amounts of data = more time/money

125
Q

Experimental research

A

Is the most scientifically valid and meant to capture the cause and effect relationships

Pro: establish cause-effect relationship

Con: lacks generalization to population; highly contrived

126
Q

Types of questionnaire questions (close-ended)

A

Dichotomous (question w/ 2 possible answers)

Multiple choice

Likert scale (states level of agreement)

Semantic differential (scale based on 2 opposite words)

Importance scale (rating the importance of an attribute)

Rating scale (rating an attribute from poor to excellent)

Intention to buy scale

127
Q

Types of questionnaire questions (open-ended)

A

Completely unstructured (open to any response)

Word association (write the first word that comes to mind)

Sentence completion

Story completion

Picture (ex: fill in dialogue on a cartoon)

Thematic Apperception Test (TAT) (make up a story based on what they see in a photo)

128
Q

Questionnaire do’s and dont’s

A
  • Use unbiased questions (don’t lead them into answers)
  • Make the questions simple and specific
  • Avoid jargon and shorthand
  • Don’t use sophisticated vocabulary
  • Avoid ambiguous words, such as usually or frequently
129
Q

Other qualitative measures

A

Word association (for brands)

Laddering (why? why?) – ask a series of increasingly specific why questions

Projective techniques (“bubble exercises” – having people fill in a speech bubble based on an image) – provide an ambiguous stimulus

Visualization (collages) – use photos to depict your perceptions

Brand personification ask people to describe a brand as if it were a person

ZMET approach – gives insight into a consumer’s subconscious to deeply understand them

130
Q

Technological forms of research

A

Galvanometer – measures interest or emotions

Tachistoscope – flashes an advertisement for fractions of a second and the consumer responds with everything they recall

Eye-tracking

Facial detection

Skin sensors

Brain wave scanners

Full body scanner

GPS

Neuromarketing

131
Q

How to gather your research sample

A
  1. Choose your sampling unit (who you will survey)
  2. Choose the sample size (larger is usually better)
  3. Choose the sampling procedure (how you pick your respondents)

Probability Sampling: is a sampling technique in which sample from a larger population are chosen using a method based on the theory of probability

132
Q

Ways to contact your research participants

A

Mail (low response rate)
Phone
In-person
Online

133
Q

Pros/cons of online research

A

Pros:

  • Wide reach
  • No geographic barriers
  • Collect info quickly
  • Inexpensive
  • Versatile
  • People may be more honest and thoughtful

Cons:

  • Small
  • Skewed
  • Excessive turnover
  • Tech problems
  • Some low income/rural populations have smaller chance of participating
134
Q

Marketing metrics

A

Are used to directly assess the effects of a marketing campaign

135
Q

Marketing-mix modeling

A

Analyzes data from a variety of sources to understand more precisely the effects of the the specific marketing activities

Looks at causal relationships and how marketing actions impact consumer actions

Uses statistical analysis on sales and marketing data to estimate the impact of various marketing tactics (marketing mix) on sales, and then forecast the impact of future sets of tactics

EX of data analyzed:
-retailer scanner data, company shipment data, pricing, media, promotion spending data, multivariate analyses

Cons:

  • Focuses on incremental growth instead of baseline sales or long-term effects
  • Limited integration of important metrics
  • Fails to incorporate metrics related to competitors, trade, or sales force
136
Q

Marketing dashboard

A

A reporting tool that displays marketing analytics, KPIs, and metrics using data visualizations

Shows interconnected performance drivers across an organization

Uses color-coding, charts, tables, etc.

Includes a customer-performance scorecard and stakeholder-performance scorecard

137
Q

External measures of marketing metrics

A 
Awareness
Market share
Relative price
Number of complaints
Consumer satisfaction
Distribution/availability
Total number of customers
Perceived quality/esteem
Loyalty/retention
Relative perceived quality
138
Q

Internal measures of marketing metrics

A 
Awareness of goals
Commitment to goals
Active innovation support
Resource adequacy
Staffing/skill levels
Desire to learn 
Willingness to change
Freedom to fail
Autonomy
Relative employee satisfaction
139
Q

International marketing decisions

A

Decide:

  • Whether to go abroad
  • Which markets to enter
  • How to enter the market
  • Which marketing program to use
  • Organization of the marketing plan
140
Q

Factors that draw companies into the international arena

A
  • Better profit opportunities
  • Larger customer base to achieve economies of scale
  • Reducing dependence on any one market
  • Counterattacking global competitors
141
Q

Factors to consider when going abroad

A
  • Understanding foreign preferences
  • Understanding foreign cultures
  • Underestimating foreign regulations
  • Lacking managers with international experience
  • The possibility that the foreign country changes commercial laws, devalues currency, or expropriates foreign property
142
Q

Ways to enter a foreign market

A

Waterfall approach:
-when the firm gradually enters various countries, one by one

Sprinkler approach:
-when the firm enters many countries simultaneously (requires a lot of resources)

Born global:

  • when a firm is international from the start
  • usually common for tech firms and online ventures
143
Q

Factors in evaluating potential markets

A
  • Many companies prefer entering neighboring countries because this gives them a greater degree of control
  • Psychic/cultural proximity: the more familiar the language/culture is, the easier it will be to expand
  • Operating in fewer countries allows you to have deeper penetration in these markets
144
Q

Developing markets

A

BRICS: Brazil, Russia, India, China, South Africa

CIVETS: Colombia, Indonesia, Vietnam, Egypt, Turkey, South Africa

145
Q

Five modes of entry into foreign markets

A

Direct investment

Joint venture

Licensing

Direct exporting

Indirect exporting

146
Q

Indirect exporting

A

Working through independent intermediaries

Advantage: lower investment required

Disadvantage: low control, easy to misunderstand the foreign market, company has limited info

Examples:
-Domestic-based export merchants: buying products and selling them in different countries

  • Domestic-based export agents: selling in foreign markets for a commission
  • Cooperative organizations: conduct exporting activities for different manufacturers
  • Export-management companies: manage a company’s exporting for a fee
147
Q

Direct exporting

A

Handing one’s own exports

Examples:
-Domestic-based export department: department in your own firm handles exports

  • Overseas sales branch: handles sales, distribution, warehousing, promotions, etc.
  • Traveling export sales representative: are home-based sales reps who travel
  • Foreign-based distributors or agents: are 3rd parties that have rights to represent the company in foreign spots
148
Q

Licensing

A

Home company (licensor) issues a license to a foreign company (licensee) to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty

Disadvantage: When the license ends, the licensee can become a potential competitor

Advantage: divides the workload

149
Q

Franchising

A

Offers a complete brand concept and operating system

150
Q

Joint ventures

A

Foreign investors join local investors in a joint venture company in which they share ownership and control

Advantages:
-acquire the knowledge of foreign market via partners

Disadvantages:

  • partners disagree over investment
  • prevent a multinational company from carrying out specific manufacturing and marketing policies on a worldwide basis.
151
Q

Direct investment

A

The foreign company can buy part or full interest in a local company or build its own manufacturing or service facilities

Advantages:
-cost, firm’s image, local relationship, full control

Disadvantages:
-larger risk (e.g. devalued currencies, worsening market, policy changes)

152
Q

Acquisition

A

Many companies choose to acquire local brands for their brand portfolio

153
Q

Prod and cons of a globally standardized marketing program

A

Advantages

  • Simple
  • Not a lot of work, time, or money required
  • It guarantees a consistent brand image
  • Uniformity of marketing practices
  • Economies of scale

Disadvantages

  • Fail to adapt
  • Ignores differences in consumer needs, wants, and usage
  • Probably isn’t a good fit for all markets
  • Ignores differences in brand development process
  • Ignores differences in legal environment
154
Q

Pros and cons of a globally adapted marketing program

A

Pros:
-Adapts to various cultures

Cons:
-Expensive and time consuming

155
Q

Globalization’s impact on global marketing

A

New technology has led to the convergence of lifestyles

Products are becoming more standardized because the world is becoming more homogenous

156
Q

Hofstede four cultural dimensions

A

Individualism vs collectivism
-In collectivist societies, individual self-worth is rooted in the social system rather than individual achievement

High vs low power distance

Masculine vs feminine

Weak vs strong uncertainty avoidance

157
Q

How brands position themselves around cultural differences

A

EX: Honda

  • In Japan, the attractiveness of the car was emphasized
  • In America, the functionality of the car was emphasized
158
Q

Elements you can adapt to various markets

A 
Product features
Labeling
Colors
Materials
Sales promotion
Prices
Advertising media
Brand name
Packaging
Advertising execution
Advertising themes

EX: McDonald’s adapting their menu in each country

159
Q

Which products are usually highly standardized?

A

High end products

160
Q

Various ways to invent global products

A

Backward invention:
-Reintroducing earlier product forms, but adapting them to a foreign country’s needs

Forward invention:
-Creating new products to meet a need in another country

161
Q

Global communication strategies

A

You should adapt your communication so that it is legally and culturally acceptable

You must vary the message so that it appeals to diverse audiences

Personal selling tactics will also vary

162
Q

Comparative advertising

A

Is a marketing strategy in which a company’s product or service is presented as superior when compared to a competitor’s

163
Q

3 choices for setting prices

A

Uniform price everywhere

Market-based price

Cost-based price

164
Q

Why did Target fail in Canada?

A

The discount market is fairly saturated

Stores weren’t up to par with Target’s US look

Less ideal locations (small, hard to access)

Failure in channel management (struggle with distribution challenge, stock-out)

They were overambitious (124 stores in 10 months)

165
Q

Pitfalls of global marketing

A

Insufficient research

Over-standardization

Poor follow-up - must monitor progress continually

Narrow vision

Rigid implementation - forced compliance will often destroy commitment to a project

166
Q

Why is Louis Vuitton so successful?

A

It has efficient management practices

Quality products that were tailored to local markets

Production and quality controls

They target Japan as a key market for luxury brands

Consumer behavior in Japan:

  • Group-oriented
  • Pressure to possess luxury stuff
  • What you own is a form of social expression
167
Q

What is a brand?

A

A name, term, sign, symbol, or design intended to identify the goods or services of one seller and differentiate them from competitors

Can be more functional and tangible; can be more symbolic and intangible

A brand is a promise between the firm and the consumer

168
Q

How brands help consumers

A

It sets expectations

It simplifies decision making

It becomes part of someone’s identity and takes on personal meaning

EX: Advil vs generic ibuprofen
-about 25% of consumers will still buy Advil, even though its more expensive, because the brand communicates quality, safety, and reliability

Consumers often can’t even tell the difference between products when not given the brand name

169
Q

How brands help firms

A

They simplify product handling

They offer legal protection

They create brand loyalty

They secure competitive advantage (gives a barrier of entry)

170
Q

How to get more revenue by establishing loyalty

A

Loyal customers make you more money than new customers. For this reason, it can be smart to start your pricing low and gathering loyalty, THEN increasing your prices. At that point, more loyal customers will be willing to pay the high price point

171
Q

Branding

A

The process of endowing products and services with the power of a brand

172
Q

What does branding teach a consumer?

A

WHO the product is (brand ID)

WHAT the product does

WHY consumers should care

173
Q

Advantages of a strong brand with high brand equity

A

Improved perceptions of product performance

Greater trade cooperation

Greater loyalty

Larger margins

Less vulnerability to marketing crises

More elastic consumer responses to price drops

Possible licensing opportunities

Improved employee recruiting and retention

174
Q

Customer-based brand equity

A

This expresses the effect that brand knowledge has on a consumer’s response to marketing campaigns

Each consumer’s response is different and reflects their brand knowledge

175
Q

Drivers of brand equity

A

Brand elements:
-Brand name, logo, symbol, character, spokesperson, etc.

The product itself and its marketing

176
Q

Brand elements should be:

A 
Memorable
Meaningful
Likable
Transferable
Adaptable
Protectable
177
Q

Indirect approach to measuring brand equity

A

Attempts to assess potential sources of customer-based brand equity by measuring brand knowledge (i.e., brand awareness and brand image)

Useful in identifying what aspects of brand knowledge cause the differential response that creates customer-based brand equity

178
Q

Direct approach to measuring brand equity

A

Attempts to measure customer-based brand equity more directly by assessing the impact of brand knowledge on consumer response to different elements of the firm’s marketing program

Useful in determining the nature of the differential response

Assess the actual impact of brand knowledge on consumer responses

179
Q

Brand reinforcement

A

Requires that a brand is always moving forward

Getting those consumers who have tried a particular brand to become repeat purchasers along with attracting new users

180
Q

Brand revitalization

A

The marketing strategy adopted when the product reaches the maturity stage of product life cycle, and profits have fallen drastically. It is an attempt to bring the product back in the market and secure customers

This falls somewhere between total reinvention and going back to the basics

181
Q

Brand extensions

A

Introducing new products under a firm’s existing strong brand names

When deciding to extend a brand, consider the following:

  • does the parent brand have strong equity?
  • is the parent brand a good fit for the new product?
  • will creating a new brand be more profitable in the long-term?
  • what implications will the extension have for the parent brand?
182
Q

Pros/cons of brand extensions

A

Pros:

  • Cost of developing new brand is saved
  • It increases brand image
  • The risk perceived by the customers reduces

Cons:

  • may lead to loss of reliability if a brand name is extended too far
  • the new product may generate implications that damage the image of the core/original brand
183
Q

STP: segmentation, targeting, positioning

A

Segmentation:
-identify market segments

Targeting:
-select market segments by evaluating the attractiveness of each

Positioning:
-create a competitive advantage

184
Q

Mass marketing vs target marketing

A

Mass marketing tries to reach as many people as possible, while targeted marketing attempts to reach a specifically defined and profiled audience.

185
Q

Benefits of STP

A

Marketing resources are focused to better meet customers’ needs and deliver more value to them

Customers develop preferences for brands that better meet their needs and deliver more value

Brand/supplier loyalty leads to increased market share and creates a barrier to competition

Fewer marketing resources are needed over time to maintain share due to brand or supplier loyalty

Profitability increases

186
Q

Market segment

A

A group of customers who share a similar set of needs and wants

Must have heterogenous needs and wants

Must cluster into specific groups within which members’ needs are more similar to those of fellow customers in that group than those in other groups

The overall costs of serving customers in each segment must be equal to less than the prices they are willing to pay

187
Q

Market segmentation

A

Evaluating the attractiveness of each segment and selecting those segments that you can serve effectively and profitably

188
Q

Bases for segmenting consumer markets

A

WITHIN a group: homogenous characteristics

ACROSS a group: heterogeneous characteristics

189
Q

Types of segmentation

A

Geographic

Demographic

Psychographic

Behavioral

Occupation

Religion

Usage rate (light, avg, or heavy user)

Behavioral occasions

Life Stage (a person’s major concern, such as marriage, buying a home, etc.)

Product benefits sought by consumers (quality, low price, etc.)

**It is important that you adjust the marketing program to recognize key consumer differences

190
Q

Nielsen Claritas’ PRIZM (Potential Rating Index by Zip Markets)

A

Is a geo-clustering approach to segmenting markets

It divides people into 68 distinct lifestyle segments (called PRIZM clusters)

Based on:
Education and affluence
Family life cycle
Urbanization
Race and Ethnicity
Mobility

EX: Money and Brains - city dwellers with advanced degrees, a few kids, and a fashionable home

191
Q

VALS Segmentation System

A

Buyers are divided into groups on the basis of psychological/personality traits, lifestyles, or values

192
Q

More ways to segment markets

A

Marketers divide buyers into groups on the basis of their knowledge of, attitude toward, use of, or response to a product

Needs-based segmentation

Benefits-based segmentation

193
Q

How to evaluate a segment’s attractiveness

A

Look at its size and growth

Look at the competition and saturation

See if you can protect it from environmental risk

See it it’s a good fit for your company

See if it is profitable

194
Q

Types of market coverage

A

Concentrate on a single segment (most attractive one)

Provide one offering to many segment

Provide a range of offerings to a specific segment

Select segments in which to specialize

Cover the whole market (all offerings to all segments)

195
Q

Customer self-selection

A

Common in retail settings

196
Q

Discriminant analysis

A

A tool used to assess the adequacy of a classification

Requires identifying a small subset of variables that can be used to assign customers to segments

197
Q

USP (unique selling proposition)

A

Something that only you can offer

198
Q

Positioning

A

Requires that you build USPs and occupy a distinct position in the minds of target consumers

199
Q

Value proposition

A

A reason why the target market should buy a product/service

Can often be written in 1 or 2 sentences

200
Q

Competitive frame of reference

A

Defines which other brands a brand competes with and which should thus be the focus of competitive analysis

Firms should usually broaden their competitive frame to look at more advantageous comparisons

201
Q

Key success factors

A

Customer awareness

Product quality

Product availability

Technical assistance

Selling staff

202
Q

PODs (points of difference)

A

Attributes/benefits that consumers strongly associate with a brand, positively evaluate, and believe they could not find to the same extent with a competitive brand

Strong brands have multiple PODs

203
Q

POPs (points of parity)

A

Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands

The brand is “good enough”/ as good as its competitors

204
Q

Perception Maps

A

Are visual representations of consumer perceptions and preferences

Used to answer:

  • How do our customers view our brand?
  • Which brand do these customers perceive to be our closest competitor?
  • What product and company attributes are most responsible for these perceived differences?
205
Q

Positioning statement

A

An expression of how a given product, service, or brand fills a particular consumer need in a way that competitors don’t (usually a few sentences)

The statement is directed towards potential customers

Marketing Management (1 decks)

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