Marketing equations – Flashcards

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
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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 %
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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
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perfectly inelastic
answer
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
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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
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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
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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
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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
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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
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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)
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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
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product line width
answer
all of the different categories within a company
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augmented product
answer
installation, delivery, credit, warranty, after-sale services
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actual product
answer
brand name, quality level, design, features, packaging
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core product
answer
value proposition
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customer view of products
answer
a bundle of tangible and intangible BENEFITS
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seller view of products
answer
a bundle of tangible and intangible ATTRIBUTES designed to provide benefits to the customer
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examples of product types
answer
commodities shopping goods consumer packaged goods services
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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
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search marketing tools allow you to
answer
target local customers run experiments on your webpages accurately track response rates
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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
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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
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clickstream
answer
records of individuals' movements through time at web sites
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advertising
answer
any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
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perception of marketing
answer
commercials are a subset of advertising, which is just a subset of marketing
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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
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frequency
answer
a measure of how many times those in the target market who are exposed the message encounter the message
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by 2019...
answer
digital and tv ads will be the most popular
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how much does a Super Bowl advertisement cost to run
answer
4.5 million dollars in 2015
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ranking of advertising spenders in the US
answer
proctor and gamble spend the most
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advertising message strategies
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informational transformational
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creative decision filters
answer
brand filters communications filters campaign filters
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benefits filter (do the dew)
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does the ad communicate the brand's benefits in a compelling manner? -thirst quench -energizing or exhilarating feeling from drinking mountain dew
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symbolism filter (do the dew)
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does the proposed ad evoke brand symbolism -historically mountain dew has symbolized masculinity based on unrestrained instincts, taking risks, and creating fun
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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
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story filter (do the dew)
answer
is it simple, understandable, entertaining, creative, original
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product integration filter (do the dew)
answer
is the product a central component of the story?
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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
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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
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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
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promotion tools
answer
advertising personal selling -trade shows, sales presentations sales promotion -discounts, coupons direct marketing -catalog, telemarketing, internet public relations -press lobbies, events
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IMC management
answer
360 degree campaign -consistency in message -variation in mode -complementarily
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above the line promotion
answer
promotes brand equity mass media promotion -television, radio, newspaper
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below the line promotion
answer
immediate incentive to purchase non-media communication or advertising easier to measure ROI
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cottonelle
answer
how do you roll -over or under
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coke zero
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for men
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diet coke
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for women
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the mere exposure effect
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familiarity breeds liking people express undue liking for things merely because they have been exposed to them
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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
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ocean spray
answer
more food energy actually meant more calories
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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
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major roles of salespeople
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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
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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
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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%
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when are consumers/managers most likely to behave unethically
answer
when they see themselves in a "hole" -cheating on taxes when owe money
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what to do about unethical behavior?
answer
1. independent audits 2. be an ethical consumer 3. promote mortality in the workplace
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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
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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
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the moral mentor test
answer
could I share an honest and transparent account of my motives with the person I admire most?
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the golden rule test
answer
would I like to be on the receiving end of this action and all its potential consequences?
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red oceans
answer
all the industries in existence today (the known market space)
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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
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beacons
answer
track what a user is doing on the page, including what is being typed or where the mouse is moving
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retromarketing
answer
marketers get more by playing hard to get -customers want exclusivity (Harry Potter and beanie babies) -entertainment -tricksterism -secrecy -amplification
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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
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behavioral loyalty
answer
I intend to keep going to x regularly
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attitudinal loyalty
answer
better than behavioral (super loyal)
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customer relationship management (CRM) strategy
answer
acquisition activities retention activities enhancement activities -cross sell or up sell
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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
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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
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consumers often assess satisfaction by comparing
answer
expectations and performance
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fungibility
answer
when units of goods are perfectly equivalent and completely exchangeable (money is not always fungible)
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affect
answer
umbrella term for different emotional (affective experiences)
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types of affect
answer
emotions (intense, short duration) and moods (less intense, longer duration) vs. cognitions (thoughts and evaluations, I think...)
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integral affect
answer
when the source of emotion is related to the decision
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incidental affect
answer
when the source of emotion is not related to the decision bridge story
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business to business
answer
demand is less elastic
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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
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validity
answer
the degree to which the content of a test actually reflects the domain its supposed to cover
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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
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internal validity
answer
ability to draw causal inferences -is the experiment free of confounds? -give people unlabeled cups of soda
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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)
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positive correlation
answer
high with high values or low with low
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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
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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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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
perfectly inelastic
answer
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)
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line extension
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low cost/low risk way to address different consumer segments and heterogenous consumer needs -con is that it reduces brand loyalty/confuses customers
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product line length
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all of the different brands
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product line width
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all of the different categories within a company
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augmented product
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installation, delivery, credit, warranty, after-sale services
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actual product
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brand name, quality level, design, features, packaging
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core product
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value proposition
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customer view of products
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a bundle of tangible and intangible BENEFITS
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seller view of products
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a bundle of tangible and intangible ATTRIBUTES designed to provide benefits to the customer
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examples of product types
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commodities shopping goods consumer packaged goods services
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search marketing
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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
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search marketing tools allow you to
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target local customers run experiments on your webpages accurately track response rates
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search engine optimization (SEO)
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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
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search engine marketing (SEM)
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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
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clickstream
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records of individuals' movements through time at web sites
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advertising
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any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor
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perception of marketing
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commercials are a subset of advertising, which is just a subset of marketing
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reach
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a measure of the percentage of people in the target market who are exposed to the ad campaign during a given period of time
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frequency
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a measure of how many times those in the target market who are exposed the message encounter the message
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by 2019...
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digital and tv ads will be the most popular
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how much does a Super Bowl advertisement cost to run
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4.5 million dollars in 2015
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ranking of advertising spenders in the US
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proctor and gamble spend the most
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advertising message strategies
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informational transformational
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creative decision filters
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brand filters communications filters campaign filters
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benefits filter (do the dew)
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does the ad communicate the brand's benefits in a compelling manner? -thirst quench -energizing or exhilarating feeling from drinking mountain dew
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symbolism filter (do the dew)
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does the proposed ad evoke brand symbolism -historically mountain dew has symbolized masculinity based on unrestrained instincts, taking risks, and creating fun
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resonance filter (do the dew)
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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
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story filter (do the dew)
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is it simple, understandable, entertaining, creative, original
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product integration filter (do the dew)
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is the product a central component of the story?
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campaign extension filter
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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
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the AIDA model
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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
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integrated marketing communications (IMC)
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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
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promotion tools
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advertising personal selling -trade shows, sales presentations sales promotion -discounts, coupons direct marketing -catalog, telemarketing, internet public relations -press lobbies, events
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IMC management
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360 degree campaign -consistency in message -variation in mode -complementarily
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above the line promotion
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promotes brand equity mass media promotion -television, radio, newspaper
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below the line promotion
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immediate incentive to purchase non-media communication or advertising easier to measure ROI
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cottonelle
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how do you roll -over or under
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coke zero
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for men
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diet coke
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for women
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the mere exposure effect
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familiarity breeds liking people express undue liking for things merely because they have been exposed to them
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advertising rules and regulations
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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
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ocean spray
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more food energy actually meant more calories
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personal selling
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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
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major roles of salespeople
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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
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motivated reasoning
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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
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self-serving biases
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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%
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when are consumers/managers most likely to behave unethically
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when they see themselves in a "hole" -cheating on taxes when owe money
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what to do about unethical behavior?
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1. independent audits 2. be an ethical consumer 3. promote mortality in the workplace
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corporate culture
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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
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the publicity test
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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
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the moral mentor test
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could I share an honest and transparent account of my motives with the person I admire most?
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the golden rule test
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would I like to be on the receiving end of this action and all its potential consequences?
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red oceans
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all the industries in existence today (the known market space)
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blue oceans
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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
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beacons
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track what a user is doing on the page, including what is being typed or where the mouse is moving
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retromarketing
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marketers get more by playing hard to get -customers want exclusivity (Harry Potter and beanie babies) -entertainment -tricksterism -secrecy -amplification
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marketing myopia
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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
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behavioral loyalty
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I intend to keep going to x regularly
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attitudinal loyalty
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better than behavioral (super loyal)
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customer relationship management (CRM) strategy
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acquisition activities retention activities enhancement activities -cross sell or up sell
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RFM analysis
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past behavior is predictive of future behavior -RFM at sears showed that they needed to shift their focus from acquisition to retention
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prospect theory
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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
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consumers often assess satisfaction by comparing
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expectations and performance
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fungibility
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when units of goods are perfectly equivalent and completely exchangeable (money is not always fungible)
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affect
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umbrella term for different emotional (affective experiences)
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types of affect
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emotions (intense, short duration) and moods (less intense, longer duration) vs. cognitions (thoughts and evaluations, I think...)
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integral affect
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when the source of emotion is related to the decision
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incidental affect
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when the source of emotion is not related to the decision bridge story
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business to business
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demand is less elastic
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marketing segmentation
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geographic, demographic (age, gender, family), psychographic (social class, lifestyles), behavioral
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when not to use segmentation
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when consumer preferences are fairly homogenous
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secondary data
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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
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internal data
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WalMart looked ahead and stocked up on beer and strawberry poptarts
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primary data
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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)
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reliability
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whether a test yields consistent results from one time to another
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validity
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the degree to which the content of a test actually reflects the domain its supposed to cover
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random assignment
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in terms of experiment and causal inference, you only need random assignment
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random selection
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hard to achieve -taking findings from your sample and interpreting to what extent they matter to your population
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internal validity
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ability to draw causal inferences -is the experiment free of confounds? -give people unlabeled cups of soda
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external validity
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ability to generalize from research setting to other contexts in the real world -give people labeled cups of soda
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relationship between external and internal validity is
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negative
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negative correlation
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high with low values -running a 5k (training and time)
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positive correlation
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high with high values or low with low
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correlation and causation
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correlation does not equal causation
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frequency
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the number of times an average person in the target market who sees an ad is exposed to the ad
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cash cows
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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
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selling concept
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consumers will buy products only if the companies promote/sell these products
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marketing concept
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focuses on needs/wants of the target market and on delivering value better than competitors do