Marketing management Flashcards
1
Q
Value proposition
A
Defines the value that an offering aims to create for the relevant participants in the market
2
Q
Four key entitiees
A
Customers, the company, its collaborators, and its competitors
3
Q
The optimal value porposition consists of
A
Company value, customer value, collaborator value
4
Q
Seven tactics defining the marketing mix
A
Product, service, Brand, price, incentives, communication, distribution
5
Q
Bottum up business model generation
A
- stems from a deliberate research and development process which leads to improvement of a particular product or product feature
- Can also stem from advancement in technology that are not company specific and are available to all companies
6
Q
Targeting
A
The process of identifying customers from whom the company will optimize its offering
7
Q
One for each strategy
A
Developing something different for both clients
8
Q
Customers vary in two main aspects
A
- their needs and resources
2. Their readily observable characteristic
9
Q
Strategic targeting
A
Identifying which customers to serve and which to ignore
10
Q
Customer revenues
A
Involve money received from customers for the right to own and/or use a companys offering
11
Q
Costs of serving target customers
A
Involve expenses necessary to tailor the offerings benefits to fit target customer
12
Q
Product line value
A
Reflects the synergies between the focal offering and the offerings in the companys product line
13
Q
Scale value
A
Refers to the benefits received from the scale of the companys operation
14
Q
Communication value
A
Reflects customers potential to influence other buyers
15
Q
Information value
A
Reflects the worth of the information provideed by customers
16
Q
Target compatibility
A
Reflects the companys ability to fulfill the needs of target customers better than the competitors
17
Q
Synergistic offerings
A
Are a strategic asset to the degree that they facilitate customer acceptance of related company offerings
18
Q
Access to capital
A
Provides the company with resources to carry out different aspects of its strategy and tactics
19
Q
Tactical targeting
A
Is similar to strategic targeting in that it also involvess identifying target customers. However, unlike strategic targeting, which aims to determine which customers are target and which to ignore, tactical targeting aims to identify an effective selected target customers. The key aspects of tactical targeting are discussed in more detail below
20
Q
Key segmentation principles
A
Relevance, similarity, exclusivity and comprehension
21
Q
Developing a value proposition
A
The value that an offering aims to create for its target customers
22
Q
Customer value as a marketing concept
A
Understanding the essence of customer value and identifying its key domains is essential for the development of a viable marketing strategy
23
Q
An offering can create value across three domains
A
Functional, psychological, and monetary
24
Q
Functional value
A
The benefits and costs directly related to an offerings performance
25
Psychological value
The psychological benefits and costs associated with the offering
26
Monetary value
The monetary benefits and costs associated with the offering
27
An offerings ability to create value is determined by three key factors
1. the attributes defining the companys offering
2. the relative importance of these attributes for target customers
3. the offerings performance on these attributes
28
Reference point dependence
Reflects the fact that consumers often do not have well articulated preferences and that their evaluations of market offerings depend on the decision context
29
Diminishing marginal value
The utility from improving an offerings performance on the same dimension doees not increase in a monotonic fashion
30
Strategies for creating superior customer value
1. improve the offerings performance on a given attribute
2. add a new attribute on which the offering has an advantage
3. Increase the perceived importance of an attribute on which the offering has an advantage
31
Need based framing
Directly links the benefit of the offering to a particular customer need
32
User based framing
Defines the offering by associating it to a particular type of buyer
33
Category based framing
Defines the offering by relating it to an already established product category
34
Competitive framing
Defines the offering by explicity contrasting it to competitors offerings and typically highlighting those aspects of the offering that differentiate it from the competition
35
Product line framing
Defines the offering by comparing it to other offerings in the companys product line
36
Positioning on functional benefits
Aims to create functional value by emphasizing a particular aspect of an offerings performance
37
Positioning on psychological benefits
Emphasizes the psychological value associated with the offering
38
positioning on monetary benefits
Emphasizes the monetary value associated with the offering
39
Single beneift positioning
Involves emphasizing the value delivered by the one (primary) attribute the company bleievs will most likely provied customers with a compelling reason to choose its offering
40
Multi benefit positioning
Emphasizes the benefits delivered by the offering on two or more attributes
41
Holistic positioning
Emphasizes the overall performance without highlighting individual benefits, enticing custoemrs to hcoose the offering based on its performance as a whole rather than on particular benefits
42
Search attributes
Products and services are associated with the least amount of uncertainty are typically identifiable through inspection before purcahse
43
Experience
Products and services carry greater uncertainty and are revealed only through consumption
44
Credence
Proudcts and services have the greates amount of uncertainty and their quality is not truly revealed even after consumption
45
Performance
Products vary in their performance on different attributes
46
Consistency
Ensuring that in kind products and services are identical and consistent with specifications
47
Compatibility
Refers to the degree to which an offering is consisten with certain already existing standards and complementary products
48
Brand identity
Includes the identifying characteristics of the brand, such as brand name, logo, symbol, character, slogan, jingle, product design, and packaging. Should be unique, memorable, likeable and consistent with other brand elements
49
Brand meaning
Reflects the brand related perceptions and beliefs held by the buyers: it reflects buyers understanding of the value proposition associated with a particular brand
50
The five C's
Customer, company, collaborators, competitors, and context
51
Brand Hierarchy
Should different offings in a companys product line be positioned as individual brands or should share the same brand name
52
Individual branding
Involves creaing separate brands for each product or product line
53
Umbrella branding
involves using a single brand for all fo a companys products
54
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55
Brand repositioning
Reasons: respond to a change in target customers, reach a new target market, counteract a change in competitors branding strategy or to respond to legal challenges
56
Brand extension
Using the same brand name in a different context such as a different producta category or different price tier
57
Vertical brand extension
Stretch the brand to a product or service in a different price tier
58
Horizontal brand extension
Applying the brand to a different products category
59
Brand equity
is the differential effect that knowing the brand name has on the customer response to
the product and its marketing.
60
Brand equity and brand power
A key driver of brand equity is the brands power. Brand power reflects the brands ability to differentiate the offering from the competition and create customer value through meaningful associations. Unlike brand equity, which reflects the value of the brand to the company, brand power reflects the value a brand creates in the minds of customers
61
Cost based approach (brand equity)
Involves calculating brand equity based on the cost involved (E.g. Marketing research, advertising, and legal costs) if the brand needs to be created form scratch at the time of valuation
62
Market based approach for calculating brand equity
Involves calculating brand equity based on the difference in the cash flows generated from the branded product and a functionally equivalent but nonbranded product, adjusted for the costs of creating the brand.
63
Brand equity formula
Sales revenue(brand) -Sales revenue (generic) - branding costs
64
Financial approach
Involves calculating brand equity based on the net present value of the cash flows derived from the brands future earnings. This approach typically involves three key steps: (1) estimating the companys future cash flows, (2) Estimating the contribution of the brand to these cash flows, and (3) adjusting these cash flows using a risk factor that reflects the volatility of the earnings attributed to the brand.
65
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66
Brand audit
A comprehensive analysis of a brand most often to determine the source of brand equity
67
Brand essence
The fundamental nature of the brand also referred to as brand promise. Brand essence distills the meaning of the brand into one key aspect the positioning of the brand. One way to think about brand essence is to think of the ness of the brand, such as “Apple-ness”
68
cobranding
Branding strategy that involves combining two or more brands, typically from different product categories
69
copyright
: A legal term describing rights given to creators for their literary and artistic works
70
Fighting brand
A downscale brand introduced to shield a major brand from low price competitors
71
Generification
Colloquialized use of brand names (e.g. in reference to the products they are associated with). The use of brand name as a generic term can lead to the loss of a companys right to the exclusive use of that brand name
72
House of brands
a strategy where each brand has its own brand identity, often representing a separate demographic, need, or occasion
73
Industrial property
A type of intellectual property that involves (1) inventions, (2) industrial designs and (3) identity marks such as trademarks, service marks, commercial names and designations
74
Intellectual property
: The legal entitlement attached to the expressed form of an idea, or to some other intangible subject matter
75
private labeling
Branding strategy in which an offering is branded by the retailer
76
Regional brand
A brand available only in a particular geographic region
77
Cost based pricing
: Involves setting prices using the companys costs as a benchmark. For example, in cost- plus pricing, an offerings final price is determined by adding a fixed markup to the cost of the offering
78
Competitive pricing
Calls for using competitors prices as benchmarks. A popular version of this approach referred to as competitive parity pricing, involves setting the offerings price in a way that puts it at parity with that of competitors
79
Demand pricing
Calls for setting prices based on customers willingness to pay for the benefits afforded by the companys offering
80
When setting prices, a manager must consider five key factors
: Target customers, the companys goal and resources, its collaborators, competitors, and the context in which the company operates
81
Skim pricing
Involves setting a higher price to “skim the cream” off the top of the market, represented by customers who seek the benefits delivered by the offering and are willing to pay a relatively high price for it.
82
Skim pricing is appropriate in cases when
1) Demand is relatively inelastic
2) There is little or no competition
3) Cost is not a direct function of volume and significant cost savings are not achieves as cumulative volume increases
4) Being the market pioneer is unlikely to result in a sustainable competitive advantage
5) The company lacks the capital required for large scale production
83
Reference price effects
To assess the price of a given offering, people typically evaluate it relative to other prices, which servea s reference points. By strategically choosing the reference price, a company can frame the price of its offering in a way that makes it more attractive.
84
Price quantity effect
People are more sensitive to changes in price than to changes in quantity
85
Price tier effects
People encode prices in tiers, such that an item priced at 1.00$ is typically encoded in the 1§+ price tier whereas 2$ is 2”+ price tier
86
Price ending effects
Customers perception of prices is also a function of price endings. For example price ending in “9” often create the perception of discount, whereas prices ending in “0” might create the perception of quality
87
Product line effects
Because many offerings are available as part of a companys product line, their relative prices can influence the demand for those offerings. (a group of related products under the same brand name manufactured by a company)
88
Offering differentiation (price wars are more likely to happen when...)
Price wars are more likely when offerings are undifferentiated and can be easily substituted
89
Cost structure (companies are more likely to engage in price wars when...)
Companies are more likely to engage in price wars when significant econoies of scale can be achieved by increasing volume
90
Market growth (Price wars are likely to happen...)
Price wars are more likely to occur when markets are stagnant, and to grow sales a company has to steal share from its direct competitors
91
Customer loyalty (price wars are more likely to happen...)
Companies are more likely to engage in price wars in markets in which customers are price sensitive and their switching costs are low
92
Fixed cost effect
Price reductions have an exponential impact on profitability. To illustrate, in the absence of an increase in sales volume, reducing the price of an offering with a 10% profit margin by 1% will result in a 10% decrease in operating income
93
Competitive reaction
Because in most cases competitors can easily match price reductions, they are rarely sustainable. Firms with similar cost structures can quickly lower their prices in response to a competitor’s action.
94
Increased price sensitivity
Price wars often result in a shift in customers’ future price expectations, such that the lowered prices become the reference points against which future prices are judged
95
Brand devaluation
Emphasis on price tends to erode brand power. This effect is exacerbated by the heavy price-focused communication campaigns that tend to accompany most price wars (because a company needs to promote the low price so that it can generate sufficient incremental volume to offset the lost profits resulting from the decrease in price).
96
Circumventing price wars
1) Verify the threat of a price war
2) Evaluate the likely impact of the competitors actions
3) Develop segment specific strategies to address the competitive threat
97
Predatory pricing
A strategy that involves selling below cost with the intent of driving competitors out of business.
98
Price signaling
(1) Pricing strategy that aims to capitalize on price–quality inferences (higher priced products are also likely to be higher quality). Primarily used when the actual product benefits are not readily observable (also known as prestige pricing); (2) Indirect communication (direct price collusion is prohibited by law) between companies aimed at indicating their intentions with respect to their pricing strategy
99
Brand management
process of designing and sustaining a mental image
in people’s minds that enables the company to identify its offerings, differentiate them from the competition,
and create distinct market value.
100
brand referents
elements the company wants to link to brand
| name in consumers’ minds
101
Brand valuations interbrand
Financial performance, Role in purchase decision, competetive strength
102
Brand valuations Brandirectory
financial performance, Brand investments, brand equity
103
Brand valuations Forbes
Financial performance
104
Brand activism
Taking a stance to something in an eg ad
Minimal benefits but high risk
105
Positive effects of umbrella branding
Cross-category reputational effects through higher-order associations
Stronger brands are characterized by lower (i.e. less negative) price elasticity
106
Negative effect of umbrella branding
Too many stock keeping units carrying the same brand name lead to lower perceived variety in the store
107
Product life cycle
Product development, introduction, growth, maturity, decline
108
Different stages of product adopters
Inovator (few), early adopter (few), mainstream adopters(many), laggign adopters(few)
From innovator to lagging adopters education and income slowly declines.
109
value-based pricing
setting a price based on buyers’ perception of
value. Pricing begins with analyzing consumer needs and value
perceptions, and the price is set to match the perceived value.
110
Gabor grangr pricing
Would you buy product x at price y
111
Van vestendrop method
At what price would you consider the product to be a bargain, a great value for money?
At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?
At what price would you consider the product as starting to get expensive, but you would still consider buying it?
At what price would the product be so expensive that you would not consider buying it?
112
Conjoint analysis
Create multiple product profiles
• Ask to choose between options, rank, or
report the value (e.g. 0-100)
• Complex in execution and analysis
• Quantifies the value of each attribute
113
Choice based conjoint analysis
Choose between different pairs/triads of options
| allowing for no-choice
114
Rank based conjoint analysis
Rank multiple options from most to least preferred
115
Rating based conjoint analysis
Rate multiple options on a scale, e.g. from 0 to 100
116
Balanced profile cards
attribute values appear equal number of times (within attribute)
117
Orthogonal profile cards
attribute values NOT correlated with each other
| 42
118
segmentation
Segmentation means dividing a market in certain types of segments that you could later target with
your marketing strategy. Segmenting can be done by several categories:
119
Butterflies (portfolio)
High profitability but only short term
120
True friends
Both high profitability and highly loyal
121
Strangers
Not profitable and merely for a short term
122
Barnacles
Very loyal but not so profitable
123
mission statement
Why an organization exists and what its overall goal is
124
Cash cow
low market growth high market share
125
Star
High market growth high market share
126
Dog
Low market growth low market share
127
Question mark
Low market share high market growth
128
Profit margin formula
Profit/sales
129
Net market contribution formula
sakes- cost of goods old - marketing expenses
130
Marketing return on sales formula
Net marketing contribution / sales
131
Marketing return on investment
Net marketing contribution / marketiing expenses
132
Meso environment
External actors close to the company that influence the possibilities to serve consumers ; actions of the company haev direct influence on the meso environment
133
Micro environment
Actors insidde the company that have an influence on the marketing funcioning of the company
134
Macro-environment
External, big societal powers that influence the possibilities to serve consumers
135
line extention
Extending an existing brand name to new forms, colours, sizes, ingredients or flavours of an existing product category
136
Multibrands
Adding new brand to an existing product category
137
brand extention e
Extending an existing brand name to new product categories
138
to find perceived value of an offering you can
1) self reported WTP
| Conjoint analysis
139
Price elasticity formula
Demandt2-demandt1/demandt1 = percentage change in demand (same for price)
140
top down business model
starts with a broader consideration of the target market and the
relevant value exchange, which is then followed by designing a specific offering (What new
can a product bring into the market?)
141
4 p framework
Product price place promotion
142
red ocean
intense competition in this market
143
Blue ocean
Little competition because it is difficult to get resources
144
agglomeration
a process process that aims to group individual buyers into
segments by focusing on the similarities in their needs and resources with respect to
the company’s offering
145
Comprehensiveness (segmentation principles)
segments should include all potential customers in a given
| market, such that each customer is assigned to a segment
146
Exclusivity (segmentation principles
customers in each segment should be different (heterogeneous) from
those in other segments
147
loss aversion
aspect of the value function
extends the principle of reference- point
dependence to assert that people value the
positive (gains) and negative (losses) deviations
from the reference point in a different fashion,
placing more weight on losses than gains
(indicated by a steeper bottom line).
148
The diminishing marginal value
principle states that the value function is not linear
but concave. Improving the offering’s
performance will have greater impact on
its subjective value at a lower level of
performance; as the offering’s overall
performance improves, further improvements
will have progressively decreasing impact.
149
Equal-weight heuristic
presents that a buyer might evaluate only the most important attributes, without taking into account the performance of the options on all attributes.
150
Lexicographic heuristic
presents that buyer might consider only the most important attribute describing the choice options and select the option with the highest value on that
attribute
151
comparative framing
competetive framing and product line framing
152
Non comparative framing
Need based framing
user based framing
category based framing
