question

unit market share

answer

unit sales (#)/total market unit sales (#)

question

revenue market share

answer

sales revenue ($)/total market revenue ($)

question

purpose of unit market share and revenue market share

answer

indicator of product or brand market competitiveness

question

market concentration

answer

3 or 4 firm concentration = sum of 3 or 4 largest market shares

question

Herfindahl Index (HI)

answer

sum of squared market shares of all players =.__ (not a %)

question

purpose of HI

answer

indicator of overall market competitiveness

question

unit margin

answer

selling price - total cost per unit

question

margin %

answer

unit margin/selling price

question

purpose of margin %

answer

to determine the value of incremental sales and to guide pricing and promotion decisions

question

markup %

answer

unit margin/cost per unit

question

contribution per unit

answer

selling price - variable cost

question

contribution margin

answer

contribution per unit/selling price

question

break even volume

answer

fixed costs/contribution per unit

question

break even revenue

answer

fixed costs/contribution margin %

question

payback period

answer

period of time required to recoup initial investments

question

promotional lift

answer

promo avg/baseline

question

breakeven price

answer

(total fixed costs/# of units) + unit variable cost

question

profit

answer

total fixed costs + total variable costs + (investment x ROI)/ # units

question

relatively inelastic

answer

0 to -1

question

relatively elastic

answer

< -1

question

perfectly elastic

answer

-infinity

question

market skimming

answer

high initial prices -steeper demand curve -competitors won't be able to enter the market easily and undercut the high prices

question

penetration pricing

answer

low initial prices -flatter demand curve -attract a larger number of buyers for a larger market share -can use in captive product pricing scenarios

question

product line pricing

answer

price steps between products in same product line

question

optional-product pricing

answer

optional products along with basic product

question

product-bundle pricing

answer

several products combined

question

captive product pricing

answer

products that must be used along with another product -inexpensive razor, expensive blades

question

demand-minus pricing

answer

wholesale price = retail price/(%markup +1) -wp is retailer's cost of goods

question

chain markup pricing

answer

manufacturer's price = (retailer's price)/(%retail markup + 1))/(%distributor's markup +1)

question

value

answer

total perceived benefit/price

question

off-price retailers

answer

lower selling price through lower buying prices, changing collection of merchandise -JCPenny

question

discount stores

answer

sell merchandise at lower prices through lower margins

question

vertical conflicts

answer

occur between different levels of the same channel -franchisee and franchiser

question

horizontal conflicts

answer

occur among firms at the same level of the channel -two car dealers

question

vertical marketing systems

answer

channel members act as a unified marketing distribution system contractual -independent firms join together to obtain economies of sales impact corporate administered -ex. P;G's power over grocer retailers

question

conventional (independent) distribution systems

answer

-channel members are independent -members include producers, wholesalers, and retailers, each seeking to maximize profits -little control over other members -no formal means for assigning roles and resolving conflict

question

multichannel distribution systems (aka hybrid marketing channels)

answer

a single firm sets up two or more types of marketing channels to reach one or more customer segments -address consumer and product heterogeneity

question

why are intermediaries used

answer

1. bulkbreaking 2. grading 3. assorting 4. distribution economies (Sears) -offer the firm more than it can achieve on its own -efficiency in making goods available to target markets -match supply from producers to demand of consumers

question

distribution channel members

answer

manufacturer -> intermediaries -> customers

question

tightwads vs. spendthrifts

answer

across all samples (N>20,000) tightwads outnumber spendthrifts by 3:2 ratio -tightwads save more and have less debt than spendthrifts at each income level

question

opportunity cost

answer

what you could be spending that $100 on -but customers often fail to spontaneously assess the oc of money -brain needs a way to compare delayed, intangible outcomes to immediate, tangible ones SOLUTION: pain of paying -how consumers actually consider purchases IS THE PLEASURE FROM THE PRODUCT > THE PAIN OF PAYING

question

gains are more valued when segregated

answer

segregate gains -itemize all things you get in a package -unexpected extra services/gifts have a disproportional impact

question

losses are more acceptable when integrated

answer

aggregate losses -add shipping into cost of order -include dessert or beverage with meal -one price for the whole set

question

reference price

answer

standard of comparison against which an observed price is compared experience dependent -what is the fair price to you -what is the most often charged price context dependent -regular retail price -what's around you

question

the perception of price

answer

we perceive prices in CONTEXT -we use reference prices

question

endowment effect

answer

willingness to pay does not equal willingness to spend

question

odd-even pricing

answer

selling price of $99 compared to $100

question

coupons and rebates

answer

those customers who are more price elastic will tend to use the coupon/rebate more often when they purchase the product than those who are less price elastic

question

third degree price discrimination

answer

different customer segments are charged different prices because of different WTP within the segment -student discounts, early bird specials, coupons

question

second degree price discrimination

answer

customers are charged one price for the first block of units they purchase then a different price for the second block occurs when surplus inventory sold off at lower price common in industries where fixed costs are high and variable costs are low ELECTRCITY, WATER, GAS

question

first degree price discrimination

answer

firm segments the market at the level of the individual consumer and charges each consumer his/her reservation price closest example is negotiating price, car dealerships

question

price discrimination

answer

market must be divisible into sub-markets and demand conditions must be different exists when the same product is sold for different prices, that are not attributable to differences in the cost

question

brand personality

answer

people anthropomorphize brands -sincerity -excitement -competence -sophistication -ruggedness

question

the case of non-profits

answer

perceived competence drives WTP -consumers are less likely to buy the same product from a non-profit than for profit BUT subtle cues promoting the credibility erase this effect

question

brand laddering

answer

building brand concepts that can tell a cohesive story and ultimately project self-worth for the consumer -at the apex is increased self worth

question

badge brands

answer

brands that the customer proudly wears

question

brand promise

answer

marketer's vision of what the brand must be and do for consumers basically, the brand proposition

question

multibrands hybrid

answer

many products carry the same name, but some don't Marriot and Ritz

question

multibrands branded house

answer

everything the company sells is under the same brand Sony and At;t

question

multibrands

answer

branded house hybrid house of brands

question

why do firms brand

answer

to move beyond commodities and to reduce the primacy of price in the consumer decision process

question

role of brands

answer

-signify quality -create barriers to entry -secure price premium -serve as competitive advantage

question

brand

answer

the accumulation of a consumer's emotions, experiences, and beliefs about a product or service

question

the product life cycle

answer

-slow growth -rapid growth (profit peaks) -slowing down (sales peak) -rapid decline

question

Yellowtail

answer

looked at non-customers - beer and ready-mix cocktail drinkers

question

labelling

answer

identifies product or brand describes the product promotes product through graphics

question

strategy canvas (value curves)

answer

an analytical tool to capture the current state of play in the existing market space

question

Blue Ocean

answer

about creating value in a new way that didn't exist before not about creating value by offering more of the same ex. Yellowtail wines -fastest growing wine in the history of the US and Australia

question

new brand

answer

different quality or positioning usually goes down in quality, harder to move up in quality

question

brand extension

answer

same quality and positioning extending a brand name works best when the "fit" is good -complimentary of use -functional attributes -same user segment -similar manufacturing and image

question

multibrands house of brands

answer

owns a lot of brands p;g

question

pepsi challenge

answer

1/2 of participants said they liked coke more 1/2 preferred coke in an anonymous taste test (behavioral preference) BUT there was no significant correlation between stated and behavioral preference -coke greater DLPFC activation

question

Noah's winery wine

answer

labeled from either California or North Dakota -they expected toolkit Cali more so they did and they also ate more of their meals -same wine

question

brand equity

answer

arises from differences in consumer response to a product when a brand is present the added value that a brand gives to its products -a set of brans assets and liabilities linked to a brand that add or subtract from the product value

question

the madrid system

answer

agreement with 85 countries to review and allow a bundle of trademark protections in different international jurisdictions

question

trademark

answer

signify source or serve as badge of origin

question

brand sponsorship options

answer

national brands (kellogg's) private brands (Schnuck's) -growing in popularity -55% of people said they shopped at private brands licensed brand co-brand (Nike ipod sport kit)

question

line extension

answer

low cost/low risk way to address different consumer segments and heterogenous consumer needs -con is that it reduces brand loyalty/confuses customers

question

product line length

answer

all of the different brands

question

product line width

answer

all of the different categories within a company

question

augmented product

answer

installation, delivery, credit, warranty, after-sale services

question

actual product

answer

brand name, quality level, design, features, packaging

question

core product

answer

value proposition

question

customer view of products

answer

a bundle of tangible and intangible BENEFITS

question

seller view of products

answer

a bundle of tangible and intangible ATTRIBUTES designed to provide benefits to the customer

question

examples of product types

answer

commodities shopping goods consumer packaged goods services

question

search marketing

answer

internet advertising is becoming more important because people are spending more time online and more people are seeking information from the web you can improve your company's search standing either in organic searches, sponsored searches, or both

question

search marketing tools allow you to

answer

target local customers run experiments on your webpages accurately track response rates

question

search engine optimization (SEO)

answer

improving traffic to your website via organic searches how you get on the list -a web page crawler finds the page (googlebot) -the page is indexed (all of the meaningful page text is stored) -the query processor searches for keywords in the text, yields a list of relevant terms (google considers over 100 factors in its page rank algorithm you have to use unique and accurate pages titles, make use of the meta-tag, make the URL's meaningful, make your website easy to navigate

question

search engine marketing (SEM)

answer

increasing traffic to your website via paid placement google adwords -priced via second-price auction -billions of auctions run every week -google's main source of revenue ($59 billion) QUALITY SCORES ARE IMPORTANT the price to be paid is price1 = (Bid2xQuality2)//Quality1

question

clickstream

answer

records of individuals' movements through time at web sites

question

advertising

answer

any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor

question

perception of marketing

answer

commercials are a subset of advertising, which is just a subset of marketing

question

reach

answer

a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time

question

frequency

answer

a measure of how many times those in the target market who are exposed the message encounter the message

question

by 2019...

answer

digital and tv ads will be the most popular

question

how much does a Super Bowl advertisement cost to run

answer

4.5 million dollars in 2015

question

ranking of advertising spenders in the US

answer

proctor and gamble spend the most

question

advertising message strategies

answer

informational transformational

question

creative decision filters

answer

brand filters communications filters campaign filters

question

benefits filter (do the dew)

answer

does the ad communicate the brand's benefits in a compelling manner? -thirst quench -energizing or exhilarating feeling from drinking mountain dew

question

symbolism filter (do the dew)

answer

does the proposed ad evoke brand symbolism -historically mountain dew has symbolized masculinity based on unrestrained instincts, taking risks, and creating fun

question

resonance filter (do the dew)

answer

will the ad resonate with the target customer? -18 year old males who live in more rural and blue collar areas -secondary target: 20-39 year old males

question

story filter (do the dew)

answer

is it simple, understandable, entertaining, creative, original

question

product integration filter (do the dew)

answer

is the product a central component of the story?

question

campaign extension filter

answer

does the ad fulfill a role in the broader campaign? -do the dew campaign, want to continue but freshen -consistent elements of do the dew: dew dudes, melodramatic, extreme sports excursions, pop culture parodies, rock music to animate athletics, playful do the dew signature

question

the AIDA model

answer

many advertisements do a great job of getting attention and holding interest, but do not arouse desire or obtain action Get Attention Hold Interest Arouse Desire Obtain Action

question

integrated marketing communications (IMC)

answer

with IMC, the company carefully integrates and coordinates its many communication media to deliver a clear, consistent, and compelling message about the organization and its product or service

question

promotion tools

answer

advertising personal selling -trade shows, sales presentations sales promotion -discounts, coupons direct marketing -catalog, telemarketing, internet public relations -press lobbies, events

question

IMC management

answer

360 degree campaign -consistency in message -variation in mode -complementarily

question

above the line promotion

answer

promotes brand equity mass media promotion -television, radio, newspaper

question

below the line promotion

answer

immediate incentive to purchase non-media communication or advertising easier to measure ROI

question

cottonelle

answer

how do you roll -over or under

question

coke zero

answer

for men

question

diet coke

answer

for women

question

the mere exposure effect

answer

familiarity breeds liking people express undue liking for things merely because they have been exposed to them

question

advertising rules and regulations

answer

the federal trade commission (FTC) regulated most advertising -no "bait and switch" -no deceptive pricing FDA regulates food and drug categories -disclosure of side effects in drug advertising

question

ocean spray

answer

more food energy actually meant more calories

question

personal selling

answer

the interpersonal part of the promotion mix can include: -face-to-face communication -telephone communication -video or web conferencing pros: personal, flexible, persuasive cons: expensive, not always consistent

question

major roles of salespeople

answer

critical link between firm and customers -match company interests with customer needs in the exchange -salespeople are the company -often the only link between customers and firm

question

motivated reasoning

answer

people are not great judges of their own ethicality -motivated reasoning and self-serving biases we can't help but be motivated by our own best interests

question

self-serving biases

answer

physicians don't believe they are influenced by financial arrangements with pharma when asked to report the percentage of household tasks that they perform, married couples' estimates total above 100%

question

when are consumers/managers most likely to behave unethically

answer

when they see themselves in a "hole" -cheating on taxes when owe money

question

what to do about unethical behavior?

answer

1. independent audits 2. be an ethical consumer 3. promote mortality in the workplace

question

corporate culture

answer

you can make money without doing evil (google) -google only displays ads that are relevant, don't accept pop-up ads, clearly identified sponsor links low price but not at any price (ikea) -ikea suppliers must meet several criteria about working conditions and environmental responsibility maintain zero-water and sell environmentally friendly products (Walmart) -impact: packaging and light bulbs

question

the publicity test

answer

would I want to see this action that I am about to take on the front page of the local paper or in a national magazine

question

the moral mentor test

answer

could I share an honest and transparent account of my motives with the person I admire most?

question

the golden rule test

answer

would I like to be on the receiving end of this action and all its potential consequences?

question

red oceans

answer

all the industries in existence today (the known market space)

question

blue oceans

answer

all the industries not in existence today -not about technology innovation -incumbents often create blue oceans - and usually within their core businesses -company and industry are the wrong units of analysis - instead STRATEGIC MOVE -creating blue oceans builds brands unknown market space, untainted by competition example: Cirque de soliel or yellowtail

question

beacons

answer

track what a user is doing on the page, including what is being typed or where the mouse is moving

question

retromarketing

answer

marketers get more by playing hard to get -customers want exclusivity (Harry Potter and beanie babies) -entertainment -tricksterism -secrecy -amplification

question

marketing myopia

answer

you have to define your business correctly -compact cars in detriot were selling well, but the auto companies there refused to change and lost millions of customers to other small-car manufacturers

question

behavioral loyalty

answer

I intend to keep going to x regularly

question

attitudinal loyalty

answer

better than behavioral (super loyal)

question

customer relationship management (CRM) strategy

answer

acquisition activities retention activities enhancement activities -cross sell or up sell

question

RFM analysis

answer

past behavior is predictive of future behavior -RFM at sears showed that they needed to shift their focus from acquisition to retention

question

prospect theory

answer

a theory that attempts to describe how people make decisions between alternatives, or prospects 1. changes are evaluated with respect to reference points 2. losses loom larger than gains 3. diminishing marginal returns

question

consumers often assess satisfaction by comparing

answer

expectations and performance

question

fungibility

answer

when units of goods are perfectly equivalent and completely exchangeable (money is not always fungible)

question

affect

answer

umbrella term for different emotional (affective experiences)

question

types of affect

answer

emotions (intense, short duration) and moods (less intense, longer duration) vs. cognitions (thoughts and evaluations, I think...)

question

integral affect

answer

when the source of emotion is related to the decision

question

incidental affect

answer

when the source of emotion is not related to the decision bridge story

question

business to business

answer

demand is less elastic

question

marketing segmentation

answer

geographic, demographic (age, gender, family), psychographic (social class, lifestyles), behavioral

question

when not to use segmentation

answer

when consumer preferences are fairly homogenous

question

secondary data

answer

collected for other purposes -internal sources (previous studies) -external sources (government sources, commercial, internet) our of date, too general, not relevant but fast and low cost

question

internal data

answer

WalMart looked ahead and stocked up on beer and strawberry poptarts

question

primary data

answer

data collected specifically for the purpose at hand qualitative -observational, ethnographic research, focus groups quantitative -more common in later stages, often used to test specific hypotheses (surveys and experiments)

question

reliability

answer

whether a test yields consistent results from one time to another

question

validity

answer

the degree to which the content of a test actually reflects the domain its supposed to cover

question

random assignment

answer

in terms of experiment and causal inference, you only need random assignment

question

random selection

answer

hard to achieve -taking findings from your sample and interpreting to what extent they matter to your population

question

internal validity

answer

ability to draw causal inferences -is the experiment free of confounds? -give people unlabeled cups of soda

question

external validity

answer

ability to generalize from research setting to other contexts in the real world -give people labeled cups of soda

question

relationship between external and internal validity is

answer

negative

question

negative correlation

answer

high with low values -running a 5k (training and time)

question

positive correlation

answer

high with high values or low with low

question

correlation and causation

answer

correlation does not equal causation

question

frequency

answer

the number of times an average person in the target market who sees an ad is exposed to the ad

question

cash cows

answer

low growth, high share businesses or products they generate a lot of money that the firm uses to pay its bills and support other SBUs that need investment

question

selling concept

answer

consumers will buy products only if the companies promote/sell these products

question

marketing concept

answer

focuses on needs/wants of the target market and on delivering value better than competitors do

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