What is Marketing Performance Management? Flashcards
Kapitel 1
What are the primary objectives of private companies in terms of performance?
Survival, profitability, and growth are fundamental goals.
How are performance objectives divided?
Into quantitative objectives (e.g., profit maximization, market share) and qualitative objectives (e.g., competitive advantage, employee satisfaction).
Why are financial performance measures critical?
They are quantifiable, aligned with company goals, integrate multiple types of information, and communicate with stakeholders.
What key financial ratios are essential for evaluating marketing performance?
Liquidity Ratios: Measure short-term financial stability (e.g., current ratio).
Asset Management Ratios: Indicate efficiency in asset use (e.g., inventory turnover).
Profitability Ratios: Show returns (e.g., Return on Sales (ROS), Return on Assets (ROA), Return on Equity (ROE))
Why is cash flow a more reliable measure than accounting profits?
Cash flow reflects actual money available and considers the time value of money, unlike accounting methods, which may vary by valuation choices.
What is the role of future cash flows in asset valuation?
Was ist die Rolle zukünftiger Cashflows in der Bewertung von Vermögenswerten?
An asset’s economic value equals the discounted future cash flows it can generate, either for consumption or reinvestment.
Der wirtschaftliche Wert eines Vermögenswertes entspricht den diskontierten zukünftigen Cashflows, die er entweder für den Verbrauch oder die Wiederanlage generieren kann.
Why is firm value considered the ultimate metric for marketing performance?
It’s forward-looking, comprehensive,
cash-oriented, and dynamic (accounts for time value of money).
What method is often used to estimate firm value?
The Discounted Cash Flow (DCF) method, which sums the present value of cash flows over a forecast horizon and a residual value beyond this horizon.
How is Weighted Average Cost of Capital (WACC) relevant to firm value?
WACC reflects the company’s cost of equity and debt, adjusted for tax, guiding investment decisions by showing required returns.
Der WACC spiegelt die Eigen- und Fremdkapitalkosten des Unternehmens wider, angepasst an Steuern, und leitet Investitionsentscheidungen, indem er die erforderlichen Renditen aufzeigt.
What is the main goal of Marketing Performance Management (MPM)?
MPM evaluates the economic impact of marketing actions, aiming to support decisions that maximize profit contributions.
What are the three main tasks of MPM?
Decision-making:
Strategic: Long-term, fundamental decisions.
Tactical: Short-term, adaptable decisions.
Integration:
Aligns goals across different departments (inside the company) (e.g., finance, production) and stakeholders (outside the company) (e.g., suppliers, customers).
Communication:
- Focus information on economic variables (costs, consumers, time, etc.)
- Basis for communication with other divisions, especially top Management and finance
What is MPM not?
MPM is not the same as marketing controlling, planning, capital budgeting, operations research, or market research.
What business disciplines support MPM?
MPM integrates:
corporate finance, management accounting, and financial reporting
to connect marketing actions with the financial health of a company.
Which sciences support MPM, and why?
Economics: Provides principles like market efficiency.
Psychology: Helps in understanding consumer behavior.
Statistics and Mathematics: Offer tools for analyzing and predicting marketing outcomes.
What are some key theories that support MPM?
Attitude Formation: Explains how consumers develop positive or negative feelings toward products.
Stochastic Consumer Behavior
Models: Predict consumer behavior using probability.
Market Response Models: Analyze how markets react to different marketing activities.
What is the concept of ‘attitude’ in consumer behavior?
An attitude is a predisposition to respond in a positive or negative way toward an object or person, influenced by beliefs, emotions, and intentions.
Eine Einstellung ist eine Neigung, auf ein Objekt oder eine Person positiv oder negativ zu reagieren, beeinflusst durch Überzeugungen, Emotionen und Absichten.
What does the Linear-Additive Attitude Model explain?
This model explains attitudes as a sum of weighted beliefs and evaluations.
(FORMEL)
What are the ‘Ideal Point Model’ and ‘Self-Congruence Model’?
Ideal Point Model: Compares an object’s attributes with an ideal reference.
Self-Congruence Model: Matches consumer self-image with brand image.
How is customer satisfaction defined?
Satisfaction results from comparing expected vs. perceived performance:
Positive Disconfirmation: Performance exceeds (übertrifft) expectations → Satisfaction
Negative Disconfirmation: Performance falls short → Dissatisfaction
What does Attribution Theory suggest about dissatisfaction?
Dissatisfaction arises when consumers view a negative experience as
stable (permanent), external (caused by the supplier),
and uncontrollable.
Unzufriedenheit entsteht, wenn Verbraucher eine negative Erfahrung als stabil (dauerhaft), extern (verursacht durch den Anbieter) und unkontrollierbar betrachten.
What are ‘stochastic models’ in marketing?
These models use probabilistic theories to analyze brand choice, purchase timing, and frequency.
E.g. Choice Models
with(out) deterministic component, e.g. Markov-models, discrete choice models
What are the types of ‘Brand Choice Models’?
Utility Theory: Consumers maximize utility from brand attributes.
Logit Model: Predicts choice based on probability, often applied to brand preferences.
How is ‘purchase incidence’ modeled?
By the hazard rate model, which estimates the likelihood of purchase at a specific time, given no prior purchase.
What do Market Response Models assess?
These models evaluate how marketing inputs (e.g., promotions) impact outcomes like demand and market share.
E.g. additive models, multiplicative models…
What types of response functions exist?
Linear Models: Assume consistent returns from marketing efforts.
S-Shaped Models: Represent initial slow growth, acceleration, and eventual saturation.
What role do elasticity and market share play in these models?
Elasticity measures the sensitivity of demand to changes in marketing input, while market share helps understand competitive impact.
Die Elastizität misst die Empfindlichkeit der Nachfrage gegenüber Veränderungen im Marketingeinsatz, während der Marktanteil hilft, den Wettbewerbseinfluss zu verstehen.
What is the main goal of managing marketing assets?
To create and enhance firm value through assets like brand and customer relationships.
Unternehmenswert durch Vermögenswerte wie Marken und Kundenbeziehungen schaffen und steigern.
What are the key theories on how market share impacts financial performance?
Efficiency Theory: Larger firms benefit from economies of scale.
Market Power Theory: High market share firms have better bargaining power.
Quality Theory: Market share may signal product quality.
Competitor Orientation: Some firms may sacrifice profit to weaken competitors.
What requirements must an asset meet to contribute to firm value?
Welche Anforderungen muss ein Vermögenswert erfüllen, um zum Unternehmenswert beizutragen?
Assets should be transferable,
rare,
hard to imitate, and without perfect substitutes.
Why is brand equity essential in marketing performance?
Brand equity helps to sustain competitive advantage and adds measurable value to the firm.
Markenwert trägt zur nachhaltigen Sicherung des Wettbewerbsvorteils bei und fügt dem Unternehmen messbaren Wert hinzu.
What is the Simon-Sullivan Model?
A method to value brands for financial reporting, integrating brand perceptions and financial metrics.
Eine Methode zur Bewertung von Marken für die Finanzberichterstattung, die Markenwahrnehmungen und finanzielle Kennzahlen integriert.
What are strategic options to build brand equity?
Options include
focusing on brand awareness,
loyalty programs, and differentiation.
What is Customer Lifetime Value (CLV), and why is it important?
CLV estimates the total profit a customer will bring over their relationship with the company, guiding marketing investment.
What does empirical research suggest about marketing assets and firm value?
Assets like brand equity and customer satisfaction are significant drivers of firm value, with customer-related assets often having a closer link to financial performance than brand-related assets.
Vermögenswerte wie Markenwert und Kundenzufriedenheit sind wichtige Treiber des Unternehmenswerts, wobei kundenbezogene Vermögenswerte oft eine engere Verbindung zur finanziellen Leistung aufweisen als markenbezogene Vermögenswerte.
How can CLV be applied in practice?
By segmenting customers based on their CLV, companies can allocate resources effectively and target high-value customers.
What is the purpose of using Market Response Functions in marketing?
Market Response Functions help determine the optimal intensity and allocation of marketing efforts to maximize profit.
What is the ‘Profit-optimal Marketing-Mix Intensity’?
This identifies the ideal level of investment in each marketing-mix element (like price or promotion) to achieve maximum profitability for a product or campaign.
How is ‘Marketing Return on Investment (ROI)’ calculated?
Marketing ROI is determined by dividing the net profit generated from a marketing investment by the cost of the investment.
Why is ‘Optimal Budgeting’ important?
Optimal budgeting allocates funds to various marketing activities based on their projected effectiveness, ensuring resources are used efficiently.
What are the key areas of marketing-mix management?
The key areas include:
Price Management: Setting competitive and profitable prices.
Communication Management: Engaging with customers through advertising, social media, and promotions.
Product Management: Developing and enhancing product features to meet market demands.
Distribution Management: Choosing channels to deliver products efficiently, including direct marketing and partnerships .
Why is ‘Optimal Budgeting’ important?
Price adjustments can directly influence sales volume, profit margins, and overall demand, making it essential to balance competitive pricing with profitability.
What is ‘Communication Management’ in marketing?
It involves strategies for promoting the product, maintaining brand image, and engaging with customers through various communication channels to build brand awareness and loyalty.
Why is ‘Product Management’ significant for marketing success?
Effective product management ensures that a product meets consumer needs, remains competitive, and evolves with market trends.
Why is ‘Distribution Management’ significant for marketing success?
Distribution management ensures that products reach consumers through the right channels, maximizing accessibility and convenience, which is critical for market penetration.
What is a market reaction model?
A market reaction model describes the dependence of target variables (e.g., sales) on the intensity of a marketing mix instrument. It models the interactions between dependent and independent variables, often based on econometric methods.
Ein Marktreaktionsmodell beschreibt die Abhängigkeit von Zielgrößen (z. B. Umsatz) von den Intensitäten eines Marketingmix-Instruments. Es modelliert die Interaktionen zwischen abhängigen und unabhängigen Variablen, meist basierend auf ökonometrischen Methoden.
Name three market reaction models and their characteristics.
Linear model: Constant marginal effects; unrealistic due to lack of scale effects.
Multiplicative model: Decreasing marginal effects; accounts for variable interactions.
Oversaturation model: Negative marginal effects; difficult empirical validation.
Lineares Modell: Konstante Grenzwerteffekte; realitätsfern, da keine Skaleneffekte.
Multiplikatives Modell: Abnehmende Grenzwerteffekte; berücksichtigt Variableninteraktionen.
Übersättigungsmodell: Negative Grenzwerteffekte; schwierige empirische Validierung.
What requirements must be met for market-based assets to increase firm value?
Welche Anforderungen müssen erfüllt sein, damit marktbasiertes Vermögen den Unternehmenswert steigert?
Convertibility: Usable for securing and increasing cash flows.
Rarity: Difficult for competitors to access.
Inimitability: Difficult for competitors to imitate.
Non-substitutability: No equivalent substitute available for competitors.
Konvertierbarkeit: Nutzbar zur Sicherung und Steigerung des Cashflows.
Seltenheit: Schwieriger Zugang für Wettbewerber.
Unnachahmlichkeit: Schwierigkeit der Nachahmung durch Konkurrenten.
Nicht-Ersetzbarkeit: Kein gleichwertiger Ersatz für Konkurrenten verfügbar.
How is customer satisfaction created according to the confirmation-disconfirmation paradigm?
Customer satisfaction results from a comparison between expected (erwarteter) and perceived (wahrgenommener) performance.
Three possible outcomes:
Negative disconfirmation: Dissatisfaction (P < E)
Confirmation: Indifference (P = E)
Positive disconfirmation: Enthusiasm (P > E)
What functions do brands serve for customers, and how do they add to firm value?
Information efficiency: Brands facilitate information processing.
Risk reduction: Brands reduce the risk of making wrong purchase decisions.
Ideal benefit: Brands provide an intangible benefit.
For companies, this leads to premium pricing, reduced advertising costs, acceptance of new products, and increased entry barriers for competitors.
Informations-Effizienz: Marken erleichtern die Informationsverarbeitung.
Risikoreduktion: Marken mindern das Risiko von Fehlkäufen.
Ideeller Nutzen: Marken bieten einen immateriellen Nutzen.
Für Unternehmen führt dies zu Premium-Preisen, geringeren Werbekosten, Akzeptanz neuer Produkte und erhöhten Eintrittsbarrieren für Konkurrenten.
How does Keller (1993) define customer-based brand equity?
Customer-based brand equity is the differential effect of brand knowledge on consumer response to brand marketing. It consists of brand awareness, brand image, and the strength of associations.
Kundenbasierter Markenwert ist der differenzielle Effekt des Markenwissens auf die Kundenreaktion gegenüber Marketingmaßnahmen der Marke. Dieser setzt sich aus Markenbewusstsein, Markenimage und Assoziationsstärke zusammen.
What theories can explain the creation of customer satisfaction besides the confirmation-disconfirmation paradigm?
Attribution theory: Examines the causes of disconfirmation.
Equity theory: Considers the ratio of input to output in the exchange relationship.
Why do investors empirically prefer corporate branding strategies?
Corporate branding strategies reduce advertising and marketing costs, facilitate brand extensions, and provide economies of scale. Disadvantages include the risk of cannibalization and the impact of a brand crisis on the entire company.
Unternehmensmarkenstrategien reduzieren Werbe- und Marketingkosten, erleichtern Markenerweiterungen und bieten Skaleneffekte. Nachteile sind die Gefahr von Kannibalisierungseffekten und der Einfluss einer Markenkrise auf das gesamte Unternehmen.
Is customer satisfaction a marketing asset?
Yes, satisfaction is a marketing asset, because its a generation of additional and substainable value = relational asset (result of the relationship between companies and customers) + enhances cash flows
What are the main functions of a brand for customers?
Information Efficiency: Brands make it easier for customers to process information and make decisions.
Risk Reduction: Brands reduce the risk of making poor purchase decisions by providing reliability and consistency.
Ideal Benefit: Brands offer non-material, emotional, or symbolic benefits, enhancing the customer experience.
