midterm 2 Flashcards
ch 6 Cost advantages
- Variable cost advantage
lower VC per unit, volume is the key, scale/scope/learning effects - Marketing Cost Advantages
advantages from product line extensions, marketing cost scope effect - Operating Cost Advantage
ch 6 differentiation adv
1.Product advantage
features, performance, reliability, etc…
2. Service advantage
meaningful sustainable service advantage
3. Reputation advantage
superior brand equity, leads to customer attraction and premium price
ch 6 brand advantage and profitability
the stature of brand names adds a dimension of appeal that is an important customer benefit for many less price-sensitive, more image conscious consumers
ch 6 marketing comp advantages
- market share
advantage based on market dominance rather than differentiation or cost, logic or habit - product line
broad product line = more prospective customers, emerging and growing stages - channel
build key relationship with distributors (control market access)’
ch 6 competitive strategy based on a knowledge advantage (4)
- customer reactive strategy (overreaction to customer demands due to limited competition knowledge — extensive customer knowledge, limited competitor knowledge)
- oblique strategy (leverages a knowledge advantage with respect to customers and competitors - extensive customer knowledge, extensive competitor knowledge)
- inside the box strategy (based on minimal or limited knowledge of comp and custs)
- compeitor reactive strategy (overreaction to competitor moves due to limited customer knowledge— extensive comp knowledge)
CH 6 competitor intelligience (CI) def and sources
developing a strong competitive position is critical , use perceptual maps (based on surveys of cust ratings between brand, sets of comps, and ideal product ratings), CI opens the dor for well timed effective strats
sources of CI: trade press, trade shows, financial reports, industry reports, customers, suppliers
ch 6 industry analysis components (5)-bc cps
barriers to entry/exit: technology, legal, low cost manufacturer, specialized assets, strategic importance
customer buying power: size, concentration
supplier selling power: switching costs, commodity vs specialized
product substitutes
competitor rivalry : intensity, strength
ch 6 competitive forces that shape comp position and profitability —summary
competitive advantage (cost advantage, diff, marketing advantage)
competitor intelligence (perceptual map, comp benchmarking, intelligence sources)
industry attractiveness (comp entry/exit, buyer/supplier power, subs/price rivalry)
ch 6 comp benchmarking steps
identify a key area of competitive weakness
identify a benchmark company
track the benchmark company’s process advantage
ch 7 branding & benefits
branding: name, symbol used to identify the course of a product
benefits of branding: high brand awareness, emotional connection, brand loyalty, price premiums, product line extensions
ch 7 market share & product pos
market share=product position * marketing efforts
where product position is product differentiation, price, product breadt, new products, service quality, brand image
& marketing effort is sales force, physical distribution, retailing and merchandising, customer support, sales promotions, media advertising
ch 7 name product positioning strategies
- differentiation and positioning
- branding and brand mgmt strats
- brand and product line strategies
ch 7 explain differentiation and positioning 4 ways
- product differentiation (quality, performance, reliability)
- service differentiation (reliability, extended service, reputation)
- brand diff (brand status)
- low cost of purchase (low price or low transaction cost)
ch 7 explain branding and brand mgmt strats
brand identity : market orientation
brand encoding: names, images, colours, founding names, fictional names
brand assets and liabilities
brand equity
ch 7 explain brand and product line strats
umbrella and flanker brands
product line extensions
bundling and unbundling
product elimination
ch 7 brand assets and brand liabilities
brand assets: brand awareness, emotional connection, brand loyalty, product line extensions, price premium
brand liabilities: customer dissatisfaction, product or service failures, questionable practices, poor record on social issues, negative associations
ch 7 brand name starts
brand name strats: founder name, functional, invented, experiential, evocative
ch 7 broad vs narrow product line
broad product line: more selling ops for sales force and channel members, potential for higher share of waller, upsell potential, more profitable in emerging and growing markets
narrow product line: must be focused in marketing efforts
ch 7 product line development , product line extensions names
- umbrella brands
- flanker brands
how do flanker brands benefit from umbrella brands? brand awareness, known quality, market reach, product mix
new brands - pl extension: vertical brand-line extensions: same market, new flavours (kit kat extension overdose)
horizontal brand-line extensions : adding complimentary products
new product-market brand extensions L enter new markets to exploit brand rep (honda)
co-branding: leverage a strong brand with another (tide/febreeze)
ch 8 cost vs market based pricing
cost based pricing: start with cost and desired margin and make up along channel to a customer selling price
market based pricing : price is set based on a comp advantage and value and discounts and costs deducted to arrive at company margin
ch 8 value based pricing (4) VPPC
- value in use pricing (based on CLC costs, acquiring owning using maintaining and disposing)
- perceived value pricing (based on value provided when comparing price and benefits relative to competitors) aka how much of a price premium can business obtain and deliver meaningful customer value
- performance based pricing (based on customer preferences for different levels of price and performance/positioning)
- customerization value pricing (unbundle product features and price each one, customers then select features and price, value package savings)
ch 8 price margin mgmt
mckinsey waterfall (costs that cut into the company’s bottom line, discounts/promotions/etc)
pocket price (the amount the business receives)
pocket price bandwidth (diff channels = diff BW, look beyond avg pocket price, identify needless price leakage)
ch 8 skim penetration
high at first then lower
favourable conditions: considerable differentiation, quality sensitive customers, sustainable advantage, few competitors, few ssubsitutes, difficult compeitor entry
ch 8 penetration pricing
low at first
favourable conditions: no or limited differentiation, price sensitive customers, no sustainable advantage, many competitors, any substitutes, easy competitor entry ‘
ch 8 single segment pricing, multi segment pricing
single segment pricing : value based strategy, total cost approach, L-C savings at premium price
multi-segment pricing: used during growth, maximize for multiple customer segments
ch 8 plus one pricing, reduced focus pricing, harvest pricing
plus one pricing (mature market): companies eventually copy features, comparable to competition in every aspects. +one ie volvo safety, lexus performance
reduced focus pricing: mature stage, price increases,, reduce volume but increase margin
harvest pricing: decline stage
ch 9 channel map
channel map: a diagram of the types of purchase points a business uses
each channel produces a diff level of sales revenue and costs (transaction costs, commissions, discounts to intermediaries)
each channel to the market produces a diff level of sales revenue and has its own set of costs. the channel costs may include discounts to intermediaries, transaction costs, and commissions —> pocket price
ch 9 three areas of performance will the choice of channel impact?
customer value, sales revenue, profitability
ch 8 channel must do well in (3)
- customer reach (volume): chosen based on nature of business, plc stage, target market
- operating efficiency (cost to serve): a)direct channels=higher margins but the business absorbs the cost of channel mgmt and all marketing costs. b)indirect=lower margins but lower channel mgmt and marketing costs
- service quality (retention): direct=control of contact points, indirect forces the business to depend on intermediaries
ch 9 direct channel systs
best option for sales comms and customer interaction but the costs are high and increasing
even when a firm uses a mixed approach they usually maintain their key profitable customers under a direct system
ch 9 indirect channel systs
firms use them bc they cant serve smaller customers with a direct appproach profitably
when to used mixed channel systs? when distinct target markets need to be served simultaneously, often used with specialized and technology products that require local availability of service
ch 9 alt b2b marketing channel (also explain VARS and OEMS)
prefer a direct approach BC more control and specialized knowledge, serve clients needs better
value added resellers (VARs): purchase a variety of components from various manufacturers and sell them as a system (bundles)
original equipment manufacturers (OEMs): creates a new product from manufactured components it buys (GM)
you’re doing great!
yay
ch 9 how channels can build value (3)
delivering product benefits : product quality, product assortment, product form
delivering service benefits: after-sale services, availability/delivery, transaction services
improving cost efficiency: ex. making a product readily available
ch 9 3 comp advantages from channel systems
a. sales force advantage: better, more informed, enough to properly service the market
b. sales productivity: built when there are high quality products, broad line of products, and efficient sales admin systems
c. distribution advantage: share of distributors outlets
ch 9 leveraging digital marketing channels
the ability a world of prospective customers at a low marketing cost has led nearly every business, large and small, to invest in digital marketing
ch 10 objectives of marketing comms
- brand image comms (establish an emotional connection—impact=attitude)
- brand information comms (interest arousing, motivate target to retain and acquire more info—impact=cognitive)
- brand action comms (seeking customer action/buy or try the product—impact=behaviour)
ch 10 social media marketing objectives and outcomes BIP
- brand building : deepen customer relations ships and engage in community conversations
- information exchange: share experiences, encourage word of mouth, understand product usage and benefits
- problem solving: gather and provide customer feedback, resolve customer complaints
ch 10 message frequency
the average number of times an audience is exposed to a message over a period of time , links to advertising awareness
ch 10 CRI, effective comms do … (3)
effective comms…. (1) build awareness (2) creating comprehension among T.M (3) creating an intent to purchase among a good portion of the target
Customer response index=% exposed * % aware * % comprehend * % not interested
ch 10 cause of low levels of customer response (5)
1.poor media selection and/or limited exposure frequency -low ad exposure
2.ineffective ad content and/or insufficient ad frequency -low and comprehension
3.insufficient ad frequency and or ineffective content -low ad recall
4.weak value proposition and or insufficient ad frequency low intentions to take action
5. insuff ad frequency and or action not clearly specified -low levels of desired action
ch 10 building customer awareness and comprehension to target market (3)
- media selection
reach-% of target market that will be exposed to the message at least once in a given period - Message frequency
too many=irritation, too few=low awareness and comprehension, concentratedVSdistributed - ad copy
based on target market needs, familiar sits, integrated with benefits
ch 10 push comms
directed at intermediaries (market coverage and distributor push)
sales incentives, channel financing, coop advertising, channel marketing
audience: channel customers and influencers
push objectives: build channel interest, purchase, inventory, and marketing efforts
ch 10 pull comms
directed at consumers (customer preference and loyalty)
media advertising, social media, sales promotions, direct marketing
audience: customers and potential customers
pull objectives: build end consumer awareness, loyalty, purchase, interest
ch 10 advertising elasticity
advertising elasticity=%change sales / % change ad expense
percent change in sales on volume per 1 percent change in advertising effort
PLC-introductory (build awareness, comprehension and interest, demand might be small)
growth-greatest op for sales growth using ads
