Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Integrative Revision > Marketing & Sales > Flashcards

Marketing & Sales Flashcards

1
Q

Price differentiation

A
  • charges different customer segments altered prices for the same offering (different segments with different WTP)
  • segments must be separated
  • fencing: controlling access to segments (e.g. Student ID), urgency (flight booking for business and private travellers), versioning, different languages

Segments

  • individual price maximised: each customer willing to pay their individual amx. price
  • self-organizing: customer decide which segment they belong to (quality based or quantity based)
  • customer criteria-based: customer naturally belongs to special segment due to individual characteristics (sex, age…)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Bundling

A

join offerings together to sell them as a single unit

+ decreasing price elasticity: combine high and low elasticity
+ single prices can be concealed
+ price increase can be concealed

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Penetration

A

Product introduction in new markets where initially prices are low to attract customers and gain market share in short time

  • high price sensitivity, WTP = low
  • strong competition: low prices as entry barriers
  • scale economies can be created
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Skimming

A

Product introduction in new market where prices are high: after high price segment is satisfied, reduce prices and address next segment

  • high prices don’t attract competitors
  • sales volume inelastic
  • decreasing marginal costs due to experience when prices drop
  • high perceived customer value
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Low pricing

A

Products: focus on basic function, limited portfolio
Price: stable and low, simple pricing, no discounts
Customer: WTP = low, highly price sensitive, low loyalty
Distribution: few channels, low-cost locations
Communication: price is key, low-cost channels (social media)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Premium pricing

A

Product: excellent quality, brand and innovation important, portfolio with added value (services)
Price: stable and high, occasional special offers, simple pricing
Customer: WTP = high, high loyalty, less price sensitive
Distribution: selected channels (exclusive stores)
Communication: quality and value, channels represent value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Medium pricing

A

Product: medium quality, medium price, good functionality, differentiated
Price: stable, special offers important to create demand, complex pricing (bundling)
Customer: WTP = medium, low loyalty, high price sensitivity
Distribution: many different channels
Communication: high efforts, quality over price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Cost oriented pricing

A

Costs are basis (fixed and variable)

  • mark up
  • mark down
  • traget ROI
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Competition oriented pricing

A

Competition as price leaders/followers

  • going rate pricing
  • auction-type pricing
  • predatory pricing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Market oriented pricing

A

Perceived value determines price

  • TCO Total cost of ownership
  • Yield and Revenue Management
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Price elasticity

A

In % = change in until/change in price

E>1: elastic demand, units change more than price
E<1: inelastic demand, units change less than price
E=0: some products bought at any price

Low elasticity is preferred: flexible prices, easier demand forecasting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Price and Volume effect

A

Price effect: loss of revenue due to price decrease
Volume effect: increase in units sold due to price decrease

Volume >Price –> higher total revenue (elastic demand)
Price > Volume –> lower total revenue (inelastic demand)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Optimal price

A

Profit and contribution margin achieve maximum considering change in demand (due to volume effect)
Optimal price = (max. price + VC)/2

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Price & Demand

A
  1. each price leads to different level of demand and supply
  2. intensity of demand reaction after price change can vary
  3. Price and units sold impact profit
  4. delay reaction between change demand and change in supply (hog cycle)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Gossen’s law of diminishing marginal utility

A

WTP decreases with each unit consumed (the more units consumed, the less is the marginal utility for an additional unit)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Price Management Process

A
  1. Understand environment, market, competiton
  2. determine company and pricing objectives
  3. estimate demand, supply and price
  4. decide on pricing method
  5. select pricing strategy
  6. fix the final price
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Customer perceived value

A

True value: customer has all information (= cost of next best alternative + performance differential)
Perceived value: customer doesn’t have all information
WTP: max. price a customer is willing to pay for an offering (different customers have different willingness to pay)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Discounts

A

Channel, Strategic, Promotional, Tactic, Cash, Rebates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

What is a price

A

Compensation given in return for certain amount of goods/sevices
Measured in monetary units
represent value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Product differentiation

A 
Form & Features
Quality
Design & Style
Services
Packaging
Labelling
Warranty & Guarantee
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Value layers

A

Core/generic offer
Expected offer
Augmented offer
Potential offer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Classification of market offerings

A

Materiality: tangible, intangible
Durability: durable, non-durable, perishable
Substitute or complement
B2B (industrial products) or B2C (convenience products)

23
Q

Market offering

A

anything offered on a market, delivers desired value and satisfies needs, intangible and tangible elements, consists of set of attributes

24
Q

Marketing

A

Process by which company created value for customers and build strong relationships to capture value from customers in return

25
Q

Strategic Fit

A

3 pillars
Market needs and conditions
Organizational Resources
Marketing strategy

26
Q

Marketing Principles

A
  1. Focus on the customer
  2. Only compete in market where you can establish a competitive advantage
  3. Customers don’t buy products, they buy benefits
  4. Marketing is too important to leave it to a marketing department
  5. Markets are heterogeneous
  6. Markets and customers constantly change
27
Q

Value delivery sequence

A

Choose value
Deliver Value
Communicate value

28
Q

Marketing approaches

A

Product push: develop product with competencies & resources and push it to market (high risk of failure)
Customer lead: develop product they need (blind focus, easily copied by competitors)
Resource-based: considers internal capabilities and customer need –> product fits both

29
Q

Kano-Model

A

Expected needs - must requirements, dissatisfies (cause dissatisfaction if not existent)
Normal needs - should requirements, satisfiers (satisfied/dissatisfied depending on existence/absence)
Exiting needs - can, delight’s (no dissatisfaction, but increased purchase likelihood if existent)

30
Q

Who is the customer

A

Initiator, Influencer, Decider, Purchased, User/Consumer

31
Q

Understanding customers

A 
Who is involved in buying
Where do they buy
When do they buy
Why do they buy
What are choice criteria
How do they use
32
Q

Factors influencing buying behaviour

A

Cultural: values, perceptions, preferences, nationalities, religions, racial groups, social class
Social: reference groups, family
Psychological: Maslow’s hierarchy of needs

33
Q

Negatively originated purchase motives

A

Problem removal
Problem avoidance
Incomplete satisfaction
Normal depletion

34
Q

Positively originated purchasing motives

A

Sensory gratification
Intellectual stimulation or mastery
Social approval

35
Q

Brand related buyer groups

A 
Brand loyal
favourable brand switchers
other brand switchers
other brand loyals
new category users
36
Q

Competitor analysis

A

Direct vs indirect

Threat of entrants or substitutes –> Industry competition –> strategic groups

37
Q

Components of competitor analysis

A

Competitors current and future objectives + current strategy + resource profile = predict competitors future strategy

38
Q

Market segmentation

A

dividing market into smaller segments with distinct characteristics, needs and wants that require distinct market offerings

  • demographic
  • psychographic
  • behavioral
39
Q

Market attractively criteria

A

Customer criteria: number of customers, demand consistency, bargaining power
Competition criteria: kind and amount of competiton
Economic criteria: exit and entry barriers, investments…
Environmental: regualtions, social acceptance

40
Q

Positioning

A

psychological impression left by company, product or service in the minds of its market partners (how market partners perceive own performance compared to competitors)

41
Q

Competitive advantage

A

Contribution to create value for customers
Uniqueness to the firm
Inimitability for competitors

42
Q

Creating competitive advantage

A

Differentiation in terms of: product, distribution, promotion, price, brand

43
Q

Cross price elasticity

A

= change in units/change in price of competition

E>1 –> substitutes: price decreases, units decrease
E<1 –> complements: price decreases, units increase
E0= –> independent

44
Q

Product lifecycle

A

Market offerings have limited that that follows a certain pattern –> different challenges and strategies for each phase
Introduction, Growth, Maturity, Decline

Example:
Pricing strategy: penetration/skimmin –> reduce to gain market share –> match or beat competition –> reduce price further
Marketing emphasis: create product awareness –> establish high market share –> generate profit –> minimise marketing expenses

45
Q

Types of customer

A

Innovators
Early adopters
Middle/late majority
Laggards

46
Q

Exit scenarios

A
  • Differentiation of products and stead innovation
  • Reverse positioning: stripping down products to core functions and look for new ways to differentiate
  • Breakaway positioning: move to another product category by changing customer perception (e.g.: swat watch - more than one watch)
47
Q

innovation

A

= any good, service or idea someone perceived as new

Invention: creation of new idea/concept
Innovation: turning a new concept into commercial success or widespread use

48
Q

Incremental innovation

A

Gradual, continuous improvements on existing products

  • no change of core functions
  • no new markets
  • attract new customers with higher value or lower prices or both
49
Q

Sustaining Innovation

A

Significant improve that aims to sustain position in existing market (e.g. Römerquelle added flavours to mineral water)

  • improve performance (not functions) of existing product
  • increasingly high profits in long run
  • attract higher paying customers or offer value at lower prices
50
Q

Disruptive innovation

A

new products or services that disrupt existing market (e.g.: touchscreen on phone)

  • new solution making offerings more affordable
  • initial lower performance improves over time
  • small segment in the beginning - success needs time
51
Q

Radical innovation

A

Technological breakthrough transforming industries, creating new markets

  • significant resistance in the beginning
  • e.g.: internet, electricity, airplanes
52
Q

Requirements for success

A

Openness to new ideas and failures, unique and superior market offering, speed (so competitors can’t catch up)…

53
Q

Failing…

A 
Market: too small and immature
No demand
Time: too early or late
Technical failures
No innovative, open-minded cultures
Financials: low ROI, no profit
54
Q

Innovation process

A
  1. Generating ideas
  2. Screening ideas
  3. Business analysis
  4. Development of product
  5. Testing product
  6. Commercializing product

Integrative Revision (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions