Marketing Flashcards
Name four tools for analysing the company and its environment
PEST (macro)
Porter’s Five Forces (micro)
SWOT analysis (internal/micro)
Value Chain analyis (internal)
Explain SWOT analysis
Analysis of micro and internal environment to help focus on key issues and start planning.
Internal: Strengths and weaknesses
External: Threats and opportunities
Give examples of the two internal SWOT factors
Strengths - any aspect of your business that adds value to your product or service
E.g. specialist marketing expertise, new innovative product or service, business location, quality processes and procedures.
Weaknesses - e.g. lack of marketing expertise, undifferentiated products or services, business lcoation, poor quality of goods or services, damaged reputation.
Give examples of the two external SWOT factors
Opportunities: strategic alliances, new market segments offering improved profits, new international market, a market vacated by an ineffective competitor.
Threats - new competitor, price wars, competitor with new innovative product or superior channels of distribution, taxation introduced on your product or service.
Principles of SWOT
- Be realistic and specific. Keep it short and simple, avoid complexity and over-analysis
- Distinguish between where your organisation is today and where it could be in the future
- Apply SWOT in relation to your competition, ie better than or worse than your competition
- SWOT is subjective
Describe Value Chain Analysis
Systematic approach to examine the development of competitive advantages.
Value chain consists of a series of activities that create and build value, culminating in the total value delivered by an organisation (using Porter’s value chain).
Should analyse your and others’ value chains, as you might learn something from others.
Draw the value chain used for value chain analysis.
Secondary activities (ICH-TP):
- infrastructure of the company (e.g. fast decisions in a small company)
- human resources
- technology development
- procurement
Primary activities: inbound logistics => operations => outbound logistics => marketing and sales => service
Right hand side: margin
NB: you need the primary activities to get the product onto the market.
Explain Porter’s Five Forces Analysis
This helps contrast a competitive environment. It focuses on the single, stand-alone business or Strategic Business Unit (SBU) rather than a single product or range of products.
Diagram:
Middle circle: competitive rivalry - much competition? 1600 beer brands in Germany
Top arrow: Threat of new entrants - easy to enter the market = high threat?
Right arrow: Bargaining power of buyers - few buyers (e.g. car parts)?
Bottom arrow: Threat of substitute products (electric cars? alcopops?)
Left arrow: Bargaining power of suppliers (Many/few? Can they set the price?)
PEST analysis (macro environment)
Political
Economic
Socio-cultural
Technological
If PESTLE
Add Legal and Environment
If STEEPLE
Add Ethics
Definition: branding
a name, term, sign, symbol, design or a combination of these that identifies the products or services of one seller/group of sellers, and differentiates them form those of competitors.
Brands represent consumers’ perceptions and feelings about a product and its performance.
= picture a consumer has in their mind when they think of a company or their product
= economical value.
What does brand strategy deal with?
- Brand positioning
- Brand name selection
- Brand sponsorship
- Brand development
5.
Describe brand positioning
Marketers must position brands clearly in customers’ minds at any of three levels:
- Product attributes
- Product benefits
- Beliefs and values
What should a brand name do?
BAQEDET-COR
- Suggest the products benefits and qualities (Australian airline: Emu)
- Be easy to pronounce, recognise and remember
- Be distinctive
- Be extendable
- Translate easily into foreign languages (Chevrolet–Nova: no va (Spanish))
- Be capable of registration and legal protection
Brand development:
What is a product line?
A group of products that are closely related to each other because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.
What are the four possible brand development decisions
Line extension (existing brand name, existing product category)
Brand extension (existing brand name, new product category)
Multibrands (new brand name, existing product category)
New brands (new brand name, new product category)
Line extension: what is it, and give an example
Line extension (existing brand name, existing product category)
Use: new forms, sizes and flavours of an existing product category (brand differentiation)
E.g. Kelloggs: Cornflakes, FrootLoops, frosties, Special K
Brand extension: what is it, and give an example.
Brand extension (existing brand name, new product category)
E.g. Nestlee: Lion brand for both cereals and icecream
Multibrands: what is it, and give an example
Multibrands: New brand introduced in the same product category
E.g. UniLever: Premium - Ben and Jerries icecream, Mid-tier - cornetto, family value - Kolorix
New brands: what is it, and give an example
New brands (new brand name, new product category)
E.g. Dr August Oetker KG: Radberger Pils, Papa Giuseppi frozen pizza
What is the process of market segmentation?
- Divide
- Evaluate
- Select
4.
Definition: Market segment
- Customers
- Who respond in a similar way
- To a given set of marketing efforts
What are the criteria for effective segmentation?
MAPA:
Measurability: Can the company measure size and purchasing power of the segment?
Accessibility: Can the company reach and serve the chosen segment?
Profitability: Is the chosen segment large and profitable enough?
Actionability: Does the company have sufficient resources to implement effective marketing programs to enter the chosen market segment?
Name five types of market segmentation
1) Geographic
2) Demographic
3) Psychographic (personality, lifestyle)
4) Behavioural (motivation)
5) Using multiple segmentation bases
Describe the modern marketing concept
Market
customer’s needs (starting point)
market research
marketing instrument (means)
Making profit by satisfying customers’ needs sustainably (aim)
Geographic segmentation
Why? How?
Why: Geographic conditions influence culture and behaviour, e.g. climate, soil, mountains, water impacts on:
agriculture (availability of food, working conditions)
transportation
population density…
How:
Large scale geographic areas: ethnic groups, national, cultures develop with similar values and behaviour, often due to lack of contact with outside world.
Small scale geographic areas: Neighbourhoods develop with similar lifestyles
Geographic segmentation: advantages and disadvantages
Advantages: Relatively easy to find data, and to divide into distinct segments.
Disadvantages: Not always a good predictor of behaviour
Geographic segmentation: examples
- Starbucks - more desserts and larger, more comfortable cafes in the South of the USA, where customers arrive later and stay longer
- Knorr and Maggi sauces – more variety in South-West Germany (who love sauce) compared to Northern German
- Debitel – offer only pre-paid phone contracts in areas where people are less likely to pay promptly
How can you divide the market into groups based on demographic segmentation?
- Gender (car dealer)
- Age (biological, social…)
- Generation (war gen v digital natives)
- Life cycle stage (full nest, empty nest)
- Family size (big cars, family sized Quakers cereal bars)
- Social class (income, wealth, power and skill) - very wealthy people (Gucci, Dior) vs very poor people (Charity Die Tafeln distributes food to the poor)
- Income (affordability)
- Occupation (medical equipment)
- Education
- Religion (food, special occasions)
- Race
- Nationality…
Why divide groups based on demographics?
- Biological reasons: female hygiene products, diapers
- Financial reasons: ability to pay, willingness to pay
- Cultural reasons: boys don’t play with dolls, Ramadan –can’t eat/drink
- Cohort reasons: shared experience, e.g. WWII, East German socialism
Describe psychographic segmentation
Segmenting by:
Lifestyle: mode of living as reflected in activities, interests, opinions
Personality (HAM): habits, actions, mannerisms.
Self concept: Subjective thoughts or feelings a person has about themselves
Psychographic segmentation: advantages and disadvantages
Advantages: Sometimes a good predictor for purchasing behaviour.
Lifestyle helps get beneath customer’s skin, relevant for promotional messages.
Brands enhance self-concept.
Disadvantages: Difficult to find secondary data or to carry out primary research (measurement). Challenging to divide into distinct segments.
What is behavioural segmentation based on?
occasions: when buy, when use
benefits sought: looks vs value-seeking (athletics wear)
user status: experience - non-user, first-timer, regulars
usage rate: how often a product is bought or used
loyally. Burger King- 20% patrons eat 60% food
Loyalty status: how often a buyer re-buys or considers re-buying the product/brand. E.g. Mac fanatics
What are the three levels of a product
Support services: delivery, installation, guarantees, after-sales-service
Product attributes: brand name, quality, design, packaging, country of origin
Core product features: functional features, performance, technology
Describe the product life cycle
Introduction: low sales, negative/low profit, basic product
Growth: rapidly rising sales, rising profits, new product features, extensions, service, warranty
Maturity: peak sales, high then lower profits, diversifying brand and models
Decline: declining sales, declining profits, phase out weak items
What are the individual product decisions:
Product attributes
Branding
Packaging
Labelling
Product attributes: what decisions can be made?
- Product innovation (invention)
- Product modification
a. Variation (replace the old product)
b. Differentiation (different variations on the product – peanut MandMs, chocolate MandMs) - Product elimination
- Product diversification
a. Horizontal (link between old & new products but has nothing to do with the production process, e.g. Apple computers & smart phones)
b. Vertical (related to production process, e.g. butcher buys pig farm then a restaurant, a paper factory sells books, a café sells books)
c. Lateral (product has nothing to do with the old product, e.g. Camel – tobacco then clothing)
Name and describe a tool to help with product attribute decisions
BCG Matrix
Y-axis: market growth
Y-axis: market share
In the squares: poor dog (kill), question marks (prioritise or disinvest), stars, (invest), cash cow (milk it)
What is packaging, and what functions does it have?
Example of success?
What: Designing and producing the container or wrapper for a product
Functions:
- Market the brand
- Protect the elements
- Provide convenience and ease of use
- Ensure product safety
- Address environmental concerns
Tomato ketchup: 4 months after introduction of the new package: +12% sales
What functions does labelling have?
- Identifies product or brand
- Describes several things about the product
- Promotes the product through attractive graphics
What special roles does labelling have?
- Unit pricing (price per kg…)
- Open dating (best before…)
- Nutrition facts (calories, fat…)
Describe the new-product development process
- Idea generation
- Idea screening (is it good enough?)
- Concept development and testing
- Marketing strategy
- Business analysis
- Product development
- Test marketing
- Commercialisation
NB: trend to involve customers in developing products.
E.g. McDonalds => competition for new burger flavour
Vitaminwater => flavour creator => 10,000 label designs, FaceBook likes, word of mouth – for $US 5,000
What is a product mix?
All the product lines and items offered
What product mix decisions are there?
Consistency (with Unilever example):
Width = number of different product lines - e.g. home care, personal care, beverages and ice cream
Length = total number of items in product lines
e.g. dove soaps, bodywash, handwash, face care
Depth = number of versions of each item
e.g. Different types of deodorant: aloe vera, cotton dry etc
Communication policy: what are its two main functions
Inform and motivate
Describe the information functions of communication policy
• Provide information about the:
o existence of a product
o advantages of a product
• Remind people of a product – e.g. Schöfferhofer – same ad for years
Describe the motivation function of communication policy
- Motivate to buy
- Confirm the purchase (reduction of cognitive dissonance – post-purchase evaluation – feeling opposite emotions – guilt (expensive) and happiness (got the shoes!)).
People like harmony. So:
o In store: Tell them it look amazing, will last ages
o Online: Repeat advertisement in the package
Describe challenges of communication policy
- Information overload
- Intensified communication competition: it’s now cheap online so everyone can afford it
- Reactance to adverts - consumers don’t buy a product because of the advertising
Describe the communication mix
Classical communication instruments (above the line): advertising - print, TV, radio, outdoor
Non-classical communication instruments (below the line): public relations, sales promotion (2nd is free), sponsorship, event marketing, exhibitions/trade fairs, product placement, direct marketing, viral marketing, social media marketing.
What is the marketing mix made of?
Product, price, place, promotion policies
Describe the marketing management process
- Analysis of the internal and external environment
- Strategic business planning – business purpose, corporate culture, corporate philosophy
- Strategic marketing planning – marketing objectives, market segmentation, marketing strategies
- Operative marketing planning – marketing mix
- Implementation
- Evaluation
Who makes up the internal, micro and macro environment?
Internal: company
Micro-environment: public, suppliers, customers, intermediaries, competitors
Macro-environment: demographic factors, natural environment, economic factors, technological factors, political factors, cultural factors
Draw the strategic triangle of marketing
Middle: market orientation
Top: Supplier (company)
Bottom left: Customer
Bottom right: Competition
Define marketing research
a. Analysis of marketing activities re: effect of the 4Ps
b. Analysis of the sales markets re: market potential, sales potential, market volume
What is the marketing research process?
1) Marketing problem (e.g. bad company image, level of brand awareness, will a new product be a success?)
2) Identification and definition of information demands
3) Determination of the sources of information (primary/secondary research)
4) Determination of the market research design (e.g. case study, cross section study, panel study, experiments)
5) Configuration of the survey framework (who, when, where, how…)
6) Acquisition of information (going into the field!)
7) Editing and evaluation
8) Presentation and reporting
Define market research design, provide examples of market research designs
Empirical procedures used to answer marketing-relevant questions. They set the framework in which occasionally various assessment methods can be used.
- Case study – qualitative – focus on a few brands
- Cross-section study – look at all brands, or a representative sample.
- Panel study – ask the same people at three time intervals => measure trend, effect of marketing activities, e.g. household study
- Experiment – Hassloch – try it in the field
What are assessment methods? Provide examples.
Assessment methods are methods of generating primary data. They include:
- Survey – (knowledge, opinions, attitudes) – verbal statements by a test person
- Observation – (behaviour)
- Content analysis – look at blogs, facebook etc (nb: trend towards user generated content)
- Neuromarketing
Describe some popular survey types
Focus groups: with a personal moderator / chat forum
Personal interview: PAPI (paper and pencil interview) / CAPI (computer assisted personal interview)
Telephone interviews: TI (telephone interview – Germany has 95% telephone coverage) / CATI (computer assisted telephone interview)
Written surveys: Mail survey (post) / online survey (79% internet coverage in Germany)
How are marketing questions differentiated?
o Question content: facts, skills, demographics, assessment, evaluation, attitude, action/behaviour
o Answer options: open questions, closed questions, combined
o Filter questions: Eliminate specific questions for specific subjects
o Control questions: check the correctness of previous questions
o Leading questions: e.g. what’s your attitude as a modern woman towards abortion?
What market research services do consultants offer?
- Exclusive studies – onetime or periodic custom studies conducted exclusively for one client – adapted to that client’s problem
- Multi client studies – usually basics studies, conducted either once or periodically for a variety of clients
- Combination – multi client study with a certain number of exclusive questions
Why is neuromarketing used?
Sometimes the response has nothing to do with the stimuli - only by using neuromarketing can we really know what is going on in their head.
What impact do emotions have?
the true and powerful decision makers…It’s emotions that generate value.
What is the consumer decision making process
- Problem recognition – Master thesis, computer broken, need a new one
- Information search – ask friends, google
- Evaluation of alternatives – battery life, price, time it takes to turn on
- Purchase decision – buy it
- Post-purchase evaluation – was it a good decision?
What does problem recognition result from?
result of discrepancy (better or worse) between desired state & actual state
What does the level of desire to resolve a problem depend on?
- Magnitude of discrepancy between actual and desired state
- Relative importance of the problem
3.
What types of purchasing decisions are made in supermarkets?
specifically planned decision (shopping list) - specific brand/item was planned
generally planned decision - product category was planned
Substitute decision - change in store to a functional substitute (e.g. pepsi not coke)
Unplanned decision
- Reminder purchases - remember you need it
- Impulse purchases - buys it with little or no deliberation as a result of a sudden, powerful urge to have it.
What variables influence in-store decisions?
- Point of purchase (POP) or point of sale (POS) displays
- Price reductions and promotional deals
- Store layout
- Store atmosphere
- Sales personnel
What influences buyer characteristics and behaviour?
External: culture, sub-culture, demographics, social status, reference groups, family, marketing activities
Internal: perception, learning, memory, motives, personality, emotions, attitudes
This influences consumer buyer characteristics and behaviour, which influences their self-concept and lifestyle, which influences their decision making process.
What is a strategy?
Goal + plan (how to get there)
What is a corporate mission?
Written declaration of an organisation’s core purpose and focus that normally remains unchanged over time.
Short to medium term
What is a corporate vision?
An aspirational description of what an organisation would like to achieve or accomplish in the mid-term or long-term future. It’s intended to serve as a clear guide for choosing current and future courses of action.
Name three types of consumer decision making
Habitual - e.g. type of cereal
Limited - e.g. selecting restaurant meal
Extended - e.g. buying a car or house.
These are determined by the level of purchase involvement – the level of concern for/interest in the purchase process, once the purchase process has been triggered by the need to consider a particular purchase.
Describe corporate culture
- Based on: evolved values, norms, symbols and rituals and often shaped by top management.
- A strong and united corporate culture leads to internal cohesion and motivation for organisational members.
Describe corporate philosophy
- From: business purpose and corporate culture.
- Reflected in: general beliefs, behaviour policy guidelines and guiding principles.
- Has direct impact on behaviour of organisational members and thus a strong influence on corporate marketing. Sets the context for marketing-related decisions.
Name 4 types of marketing strategies
- Market field strategies (novelty of product and market)
- Market parcelling strategies (degree of differentiation in market cultivation)
- Market stimulation strategies (way of influencing a market)
- Competitive strategies (relative position of the company towards the competitors)
Name four types of market field strategies
a. Market penetration (existing product, same market) => sell more
b. Market development (existing product, new market)
c. Product innovation (new product, existing market)
d. Diversification (new product, new market)
Name two market parcelling strategies
a. Mass marketing strategy (mass market, undifferentiated marketing mix)
b. Market segmentation strategy (different marketing instruments for different market segments)
Name two market stimulation strategies
a. Preference strategy (quality products)
b. Price-volume strategy (low prices)
Name four competitive strategies.
a. Market leader strategy (market leader) => maintain or increase market leadership
b. Challenger strategy (aiming for market leadership)
c. Follower strategy (copy market leader without becoming market leader themselves)
d. Niche occupation strategy (smaller companies focusing on market niche so far disregarded by other suppliers)
What is post purchase evaluation?
Comparison between expectations of the product’s capabilities and the product’s real capabilities
