Marketing Management Flashcards
MM
skimming pricing
trying to keep the price as high as possible
penetration pricing
trying to keep a moderately set price as long as possible - after the product gets older/out-to-date the price lowers
price differentiation
charging a different price to different sorts of customers
cross price elasticity
formula: ε_A_=
how the price of one product is sensitive to the change of quantity of another product
= Δ quantity A [%] ÷ Δ price B [%]
price elasticity of demand
formula: ε=
how the price of product is sensitive to the change of quantity
= Δ quantity [%] ÷ Δ price [%]
freemium
pricing model where the user starts for free and after some time must pay for continuing
subscription
pricing model where the user “pre-pays” using of the service
pay-as-you-go
pricing model where the user pays only for the real usage of the product, not just for having the opportunity
dynamic pricing
price changes based on some factors
auction
finding out the price by competition
cost+ pricing
Possible problems
setting price by adding some margin to the actual product value
may have problem to capture the desired target segment
competition oriented pricing
Possible problems
setting price by comparing the product with the competitors
depends on how well the competitors have set their prices
value based pricing
Possible problems
setting price by finding the equilibrium
best option → no problems; it may be difficult to do all the research
goods-dominant logic
market model, where there is one producer and one customer
service-dominant logic
market model, where every actor creates some value and they exchange it
conjoint analysis
evaluating the features together at once (multicriterial decision making)
equalization price
difference between the price of the product I want and some other one I refer to
revenue
formula: r=
amount of gross income produced through sales of products
= sales [№] × unit price [$]
margin
formula: GPM=
difference between the price of a product and its cost
= (revenue - COGS) /100
push communication
‘pushing’ the products to the customers through the distribution channel
pull communication
creating awareness of the product or brand so the customers buy the product
profit
formula: p=
difference between revenue and costs
= revenue - fixed costs
customer respond index (CRI)
How to calculate it?
reflects the efficiency of marketing communication
Multiply the percentages:
* How many targeted can recall the ad later (are aware of it)? [%]
* How many of them can recall the info later? [%]
* How many of them will be convinced to buy the product? [%]
* How many of them will really buy the product? [%]
advertising elasticity
formula: ε=
how the demand reacts to ads expenses
Δpurchases change ÷ Δad expenses change
break-even point
How to calculate it?
where the loss changes to profit
0 = quantity × (price per unit - COGS) - fixed costs
market share
MS =
percentage of a market’s total sales, earned by a particular company over a specified period
= quantity ÷ demand
price elasticity
how much the demand reacts to change in price
product should be
- Important
- Perceived
- Defendable
- Economical
minimum valuable product
the minimum needed to make someone buy it
margin per unit =
price per unit - COGS
total margin =
margin per unit × quantity
profit =
= total margin - fixed cost
= quantity × margin per unit
= quantity × (price per unit - COGS) - fixed costs
scalable business
business with growing number of customers while the fixed costs remain the same
business model
start point
should be
how an organization creates, delivers, and captures value
idea how to satisfy the market
- repeatable
- scalable
marketing mix
the goals should be
- Vision
- Mission
- Goals
- Strategy
- Actions
SMART:
* Specific
* Measurable
* Actionable
* Relevant
* Timely
PESTLE analysis
What is it good for?
- Political
- Economical
- Social
- Technological
- Legal
- Environmental
to summarise the macroeconomic conditions
market oriented strategy
- Segmentation - dividing the (relevant) market into groups
- Targeting - choosing the desired target group (segment)
- Positioning - setting the activities in the company to satisfy the target segment(s)
V2C
when is it used?
it should be
value to customer
the company provides something valuable for the customer
for creating value proposition
- Important
- Perceived
- Defendable
- Economical
channel efficiency
how many transactions are made
push marketing strategy
aiming to attract the potential customers via distribution channels - to push the product through the channel
pull marketing strategy
aiming to attract the potential customers directly - pull them to the product
multichannel marketing
advertising on multiple places separately
omnichannel marketing
combined advertising on multiple places
based on its elasticity
absolute change of some dependent variable
e.g. absolute change in sales after changing the ad expenses
absolute change = its initial value × Δvalue × elasticity
change in sales = initial sales × Δsales × advertising elasticity
gross rating points
gross rating exposure =
- for pulsing approach the exposure
- for heavy-up approach the exposure
- Evaluate the impact of an advertisement
- Percentage of target market reached
multiplied with exposure frequency
= Σ(percentage of target group reached each day × exposure amount)
- always remain the same (±)
- peaks during the season
retail media
the retailers promote the product for the supplier
healthy revenue
the company’s revenue comes from all customers equally
unhealthy revenue
some customers are making more profit for the company than others
product-oriented value creation strategy
- The company focuses on innovating the product
- customers’ needs solved within a single business unit
customer-oriented value creation strategy
- The company focuses on satisfying customers’ needs
- customers’ needs solved across different business units
market-oriented value creation strategy
- The company focuses on satisfying markets’ needs
- customers’ needs solved across different business units
customer lifetime value
CLV =
value of all cash flows associated with a particular (type of) customer
= ∑(t=0)[(period t’s cash flow × retention rate per t)/(1 + average costs)^t] -CAC
customer equity
connection with CLV
CE =
value of the whole customer base
CE = ΣCLV
= № of existing customers × their revenue + № of future customers × (their revenue - aquisition costs per customer)
Customer and Enterprise Valuation Approach (CEVA)
- a method for estimating the firms value from the customers behaviour towards the company instead of the aggregated firm’s data
- Combination of CLV/CE
development strategy
- Vision
- Mission
- Goals
marketing leadership pillars
- Strategy
- Implementing
- Evaluation
persona
where is it used?
stereotypic representative of the (target) segment
for implementing (segmentation, targeting, positioning)
cross selling
providing a comprehensive offering for the customer
marketing triangle
- Customer
- Company
- Competitors
reverse pricing
when the price offering is made by the customer
steps for developing a persona
what benefits are relevant?
- define benefits for the customer
- define the job to be done - what does the customer want/need
- find the pains of the customer
- connect with the relevant gains
- add some characteristics of the customer - age, sex, social status, job…
- functions
- social, emotions
- economy
- health, safety
- comfort
- environment
value proposition
what is it based on?
consists of
an offering which is designed to solve the target customers’ pains, give them relevant gains, and do the job they need to be done
based on persona
- gain creators
- pain relievers
- offering (description)
value co-creation through interconnected activities
- service dominant strategy
- everyone creates some value
- if the ‘value makers’ cooperate, the value for the customer may be greater
- a×b > a+b
innovation measurements
types of innovation
- technological
- customer’s needs fulfillment
- radical - high technological innovaveness, high customer innovativeness
- technological breakthrough - high technological innovaveness, low customer innovativeness
- market breakthrough - low technological innovaveness, high customer innovativeness
- incremental - low technological innovaveness, low customer innovativeness
