12498378
Description
Flashcards by Nora Mahrer, updated more than 1 year ago
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Created by Nora Mahrer
about 6 years ago
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| Question | Answer |
| A definition of Marketing by P. Kotler is... | Marketing is the social and managerial PROCESS by which individuals and groups obtain what they need and want through creating an exchanging products, services and value with others |
| Maslow Pyramid! The 5 basic human requirements are? | 1. Physiological needs (water, food..) 2. Safety needs 3. Belongingness and love needs (friend) 4. Esteem needs (prestige) 5. Self-actualization (full potential, creative activities) |
| Marketing is all about creating value for customers. As the first step in the marketing process, the company must fully understand consumers. Customer needs are what? example: "I am hungry" | Human needs are states of felt deprivation. They include basic physical needs (Maslow) |
| Customer wants are? | Needs + Culture + Personality Wants are the form human needs take as they are shaped by culture and individual personality. An American needs food but wants a Big Mac. |
| Customer demands are? | wants + buying power Given their wants and resources, people demand products and services with benefits that add up to the most value and satisfaction. |
| Marketing myopia (railroad example in slides W2, p.24) | The mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products. |
| Name 5 Marketing Management Concepts (1-3. are product centered, 4. customer c., 5. society c.) | |
| Name 3 marketing types | 1. Product: Marketing for goods and services 2. Profit: Classical (Profit-), or Non-profit marketing 3. Customer: B2B (70% of sales) or B2C |
| Defining marketing’s role in company-wide strategic planning. Name the 5 steps of strategic planning: | 1. Define the company mission 2. Setting company/business objectives and goals 3. Designing the business portfolio (marketing objectives like increasing brand name relevance or develop a specific service) 4. Creating the marketing strategy & program 5. Marketing activities (z.B. Networking events, partnerships) |
| Example of Product vs. Market oriented business definition | Revlon Product oriented: We sell cosmetics Market oriented: We sell lifestyle, hopes and dreams |
| Analyzing current business portfolio with the BCG (Boston consulting group) a growth-share matrix. The market growth rate in a BCG matrix is an indication of market attractiveness. 1. Name the 4 areas within market growth rate and relative market share. 2. repeat the calculation exercise Volkswagen W2, p.57 | Questionmark: Non profit, Very high investment requirements. Star: High profit, High requ. investments, Modest net cash flow Dog: negative profits, Disinvestment, Cash flow will be positive from disinvestment proceeds or savings Cash Cow: High profit, Low required investment, High net cash flow |
| whats the main goal of marketing? | Create value for and with customers and build customer relationships |
| 5-Step model of the strategic marketing process | |
| The aim of marketing is? by Peter Drucker a management guru.. | "The aim of marketing is to emphasize customer WANTS and NOT customer NEEDS" |
| A firm that uses the selling concept takes an ________ Approach. | inside-out (The Inside-Out approach is guided by the belief that the inner strengths and capabilities of the organisation will make the organisation prevail/sich durchsetzen). |
| The societal marketing concept seeks to establish a balance between what? | consumer short-run wants and consumer long-run welfare |
| A church targeting different demographic groups to increase attendance is an example of? | non-Profit marketing |
| What is the Product/market expansion grid? | A portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification. (also called Ansoff-Matrix) |
| explain from the product/market expansion gird the 4 areas: *market penetration *market development *product development *diversification | 1.Market penetration Company growth by increasing sales of current products to current market segments without changing the product. 2.Market development Company growth by identifying and developing new market segments for current company products. 3.Product development Company growth by offering modified or new products to current market segments. 4. Diversification Company growth through starting up or acquiring businesses outside the company’s current products and markets. |
| Marketing strategy involves two key questions. Which ones? | Which customers will we serve (segmentation and targeting)? and How will we create value for them (differentiation and positioning)? |
| The marketing mix consists of everything the firm can do to influence the demand for its product. The many possibilities can be collected into four groups of variables. the 4 P's are? | product price place promotion 4 P's consists of tactical marketing tools blended into an integrated program that actually engages target customers and delivers the intended customer value. |
| Market capacity / potential | Possible capacity of the market at a certain price level and optimal application of marketing instruments (in units or value). |
| Market volume or Market value | Total sales of all providers combined, measured in units or value. |
| Market saturation | The ratio of the actual market volume (or value) divided by the market capacity/potential |
| Market share | A company’s sales revenue divided by the total sales revenue available in that market (by volume or value) |
| Relative market share | Sales volume ($ or units) of the company, divided by the sales volume of the largest competitor |
| Market size assessment: explain the 3 methods | 1. Method of Analogy 2. Chain Ratio Method 3. Expert opinions |
| Method of Analogy How does this ratio look like? | Pick a country at same stage of economic development as the country of interest and the market size is known. The relationship between the demand for a product and a particular indicator (e.g. the demand for a related product) is similar in both countries. Example Ukraine, Poland p. 10, W2 |
| Chain Ratio Method Explain with an example of Japan | It starts with a very rough-base number as an estimate for the market size. The base number is then systematically fine-tuned by applying a string of relevant percentages to come up with the closest estimate for the total market potential. |
| Expert opinions | Experts can be used to estimate the market size. A good option might be to consult different experts to avoid biases. |
| The difference between Microeconomic environment and Macroeconomic | The microenvironment consists of the actors close to the company that affect its ability to engage and serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, publics. The macroenvironment consists of the larger societal forces that affect the microenvironment—demographic, economic, natural, technological, political, and cultural forces. |
| Microeconomic environment of Marketing the 6 actors are? | *The company *Suppliers *Marketing intermediaries *Competitors *Public *Customers (most important actor) |
| Topic Microeconomic environment marketing: Customers. The company might target any or all of five types of customer markets. Five types? | *Consumer markets *Business markets buy goods and services for further processing or use in their production processes. *Reseller markets buy goods and services to resell at a profit. *Government markets consist of government agencies that buy goods and services to produce public services or transfer the goods and services to others who need them. *International markets consist of these buyers in other countries, including consumers, producers, resellers, and governments. |
| Topic Microeconomic environment marketing: Publics. The 7 groups are? | Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives. • Financial publics (influences the company’s ability to obtain funds) • Media publics (carries news, features, editorial opinions) • Government publics (issues of product safety, truth in advertising) • Citizen-action publics (con- sumer organizations, environmental groups) • Local publics (neighborhood residents and community organizations) • General public (general public’s attitude toward its products and activities) • Internal publics (workers, managers, volunteers, and the board of directors) |
| Topic Microeconomic environment marketing: Marketing intermediaries. 1. What's that? 2. Name 4 firm types. | Firms that help the company to promote, sell, and distribute its goods to final buyers. They include resellers, physical distribution firms, marketing services agencies, and financial intermediaries. |
| Macroeconomic environment (consists of broader forces that affect the actors in the microenvironment.) PESTEL framework explain the 6 factors | Political Economic Social Technological Environmental Legal |
| Macroeconomic environment – PESTEL framework Social and Cultural Factors | Demographic changes • Value change = ecological thinking • Cultural change = digital nomads • Changes of family structure • Change in workforce |
| PESTEL-Analyse Consumer trends 10 hot consumer trends from 2017 | 1. AI everywhere 2. Setting the pace for Internet of Things 3. Pedestrians drive autonomous cars 4. Merged reality 5. Bodies out of sync 6. The smart device safety paradox 7. Social silos 8. Augmented personal reality 9. The privacy divides 10. Big tech for all |
| SWOT pulls together external/ internal analysis The purpose of SWOT is to find ways/strategy in which your company can best use its strengths to take advantage of attractive opportunities in the environment. | |
| TOWS Analysis Formulate strategies based on SWOT Analysis | |
| Market Research Process The 4 steps are? | 1. Defining Problem & Research Objectives 2. Developing the Research Plan 3. Implement the plan+collect the data 4. Analyze, interpret & report the findings |
| Market Research Process: 1. Defining Problem & Research Objectives | • Assess market potential for product or service • Assess consumer acceptance for new marketing mix • Evaluate usage & attitudes towards a brand or product range |
| Market Research Process: 2. Developing the Research Plan | Develop a plan for gathering information needed efficiently. • Secondary research • Primary research: Qualitative, Quantitative • Research methods: Observation, Survey • Sampling plan: Who? How many? How chosen? |
| Difference Primary vs. Secondary research data | Secondary data consist of information that already exists somewhere, having been collected for another purpose. Primary data consist of information collected for the specific purpose at hand. (e.g. Eye tracking is a method) |
| Market Research Process: 3. Implement the plan+collect the data | «Field phase» • Identify and contact target group • Collect data (e.g. questionnaire, focus group, individual interview...) |
| Market Research Process: 4. Analyze, interpret & report the findings | • Analyze the data • Compare findings vs. hypotheses • Deduct marketing approaches and business decisions or further research need |
| Nonprofit organizations | • It exists mainly for a charitable purpose and for public benefit • They are usually exempted from corporate tax Most non-profits are by definition, less concerned with profit than they are with meeting some particular need in society. |
| THE MARKETING MIX is a tool used by businesses and Marketers to help determine a product or brands offering. Explain the extended 7 Ps. (1981 by Booms & Bitner ) | Product Price Place Promotion People Processes Physical Evidence |
| Explain ::Product:: form the Marketingmix | The Product should fit the task consumers want it for, it should work and it should be what the consumers are expecting to get. |
| Explain ::Place:: form the Marketingmix | Place – The product should be available from where your target consumer finds it easiest to shop. This may be High Street, Mail Order or the more current option via e-commerce or an online shop. |
| Explain ::Product:: form the Marketingmix | The Product should always be seen as representing good value for money. This does not necessarily mean it should be the cheapest available; one of the main tenets of the marketing concept is that customers are usually happy to pay a little more for something that works really well for them. |
| Explain ::Promotion:: form the Marketingmix | Advertising PR Sales Promotion Personal Selling Social Media are key communication tools. These tools should be used to put across the organisation’s message to the correct audiences in the manner they would most like to hear, whether it be informative or appealing to their emotions |
| Explain ::People:: form the Marketingmix | All companies are reliant on the people who run them from front line Sales staff to the Managing Director. Having the right people is essential because they are as much a part of your business offering as the products/services you are offering. |
| Explain ::Processes:: form the Marketingmix | The delivery of your service is usually done with the customer present so how the service is delivered is once again part of what the consumer is paying for. |
| Explain ::Physical Evidence:: form the Marketingmix | Almost all services include some physical elements even if the bulk of what the consumer is paying for is intangible. For example a hair salon would provide their client with a completed hairdo and an insurance company would give their customers some form of printed material. Even if the material is not physically printed (in the case of PDFs) they are still receiving a “physical product” by this definition. |
| The 8th P of the Marketing Mix is? | Productivity & Quality - This P asks “is what you’re offering your customer a good deal?” This is less about you as a business improving your own productivity for cost management, and more about how your company passes this onto its customers. |
| Marketing is what at a conceptual level? | At a conceptual level, marketing represents a philosophy or approach to management that places the customer right at the centre of everything that an organisation does. |
| Marketing is what at a functional level? | At the functional level, it is that part of the organisation which gathers research, helps design new services, prices them, distributes them and ultimately promotes them to the consumer. |
| Is Ethics an Additional Marketing Mix "P" for non-profits? | The study of ethics involves determining right from wrong. • It is different from legal implications • Some actions may not be illegal how ever they may be unethical. (• Many authors argue that ethics is a separate component) *Sargeant (2009) believes ethics should be integrated in the previous 7Ps and everything that nonprofit does. |
| 4 Factors Affecting Consumer Behavior | 1) Cultural (culture, subculture, social classe) 2) Social (groups, social network, role&status and family the most important consumer-buying organization) 3) Personal (age, occupation, lifestyle, economic situation, hobbies) 4) Psychological (beliefs, attitudes, motivation, learning) |
| Consumer Behavior.. There are different factors of culture: Explain subcultures | Subcultures are groups of people within a culture with shared value systems based on common life experiences and situations. (hipster, rocker, vegan..) |
| Consumer Behavior.. There are different factors of culture: Explain Social classes | Social classes are society’s relatively permanent and ordered divisions whose members share similar values, interests, and behaviors. • Measured as a combination of occupation, income, education, wealth, and other variables • Major (American) Social Classes: Upper Class, Middle Class, Working Class, Lower Class |
| Consumer Behavior.. There are different social factors: Explain Groups | − Membership Groups: Groups with direct influence and to which a person belongs − Aspirational Groups: Groups an individual wishes to belong to − Reference Groups: Groups that form a comparison or reference in forming attitudes or behavior |
| Consumer Behavior.. There are different social factors: Explain Social Networks | Social Networks: − On- and offline social networks − Buzz marketing, Social media sites, Virtual worlds − Word of mouth & Opinion leaders |
| Consumer Behavior.. There are different personal factors: Explain Economic situation & Lifestyle | − Economic situation, determined by trends in spending, personal income, savings, interest rates. − Lifestyle is a person’s pattern of living as expressed in his or her psychographics (AIO: activities, interests and opinions). |
| Consumer Behavior.. There are different psychological factors: Explain the term Perception | Each of us receives, organizes, and interprets the 5 human senses sensory information in an individual way. Perception is the process by which people select, organize, and interpret information to form a meaningful picture of the world. |
| Explain the Perceptual Process | |
| Explain cognitive strain | Only the smallest part of the available information is perceived and processed. Off all available information (stimuli) at the POS, only 0.0004% (that is less than one tenth of a percent!) are perceived and processed. Scientific research shows that human beings perceive and process only 2% of all information communicated through mass media |
| Consumer Behavior.. There are different psychological factors: What are the human's 5 senses? | 1. Sight (ambient marketing) 2. Smell (used in stores, packages) 3. Sound (Ambient marketing with selected playlists, Faster boarding process on planes) 4. Texture/Touch (Touching things influences consumption decision, higher quality is oftentimes associated with certain surfaces) 5. Taste |
| There are different psychological factors: Explain the connection to consumer behavior with beliefs and attitudes | −A belief is a descriptive thought that a person has about something based on knowledge, opinion, and faith. −An attitude describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea. |
| Involvement *Involvement is a person’s readiness and willingness to search, perceive, process and store information. Trommsdorff (2009) Explain the influencing factors (what determines a persons involvement?) and consequences (how does involvement affect behavior?) | |
| Consumer buying behavior is determined by the level of involvement within a purchase decision. Where do this 4 products belong to? Insurance ( as marketing manager provide information), Cereal (focus on visibility), Jeans (emotional experience), Rolex (mixed positioning) | |
| Marketing communication with low involvement. Explain the goal, content, length, tone, style, timing etc. | Goal of the message: Stay top of the mind Content of the ": say just something Length ": short Tone ": Emotional Communication style: Pictures and music Repetition: High (TV...) Timing: Always (TV again..) Interaction with: POS aka. point of sale Communication |
| Marketing communication with high involvement. Explain the goal, content, length, tone, style, timing etc. | Goal of the message: Convince Content of the ": Describe USP (unique selling proposition) Length ": Long Tone ": Fact-based Communication style: Text Repetition: few Timing: Before and during purchase Interaction with: Individual salesperson |
| Customer insight trough data collection.. primary market research: Explain qualitative and quantitative data inkl. methods. | Qualitative data: exploratory or subjective information (opinions, judgements; small number of respondents). Methods: Focus groups, in-depth interviews, observation, expert interviews etc. Quantitative data: data that can be statistically analyzed and results which can be expressed numerically (large sample size). Methods: Structured surveys (via personal/ face-to-face interviews, telephone, online, postal/mail), experiments etc. |
| Market research Observation methods Name 4 areas where a observation can be done. | 1) Human behavior (Child plays with toy) 2) Physical objects (Garbage analysis in different living areas (high vs. low income) 3) Mechanical observation (video, tracking system, radio & tv monitoring) 4) Content analysis (how much and which type of information is used in advertisements, newspaper articles, social media etc.) |
| A buyer's decisions are influenced by ________ such as the buyer's age and life-cycle stage, occupation, economic situation, lifestyle, personality, and self-concept. | personal characteristics |
| ________ is the most basic determinant of a person's wants and behavior. | Culture |
| What role do the four Ps play in consumer behavior? | The four Ps are the marketing stimuli that affect buyer behavior: marketers use product, price, place, and promotion to attract the targeted consumers. |
| Companies can research many aspects of buying decisions. The most difficult to identify is... | why they buy |
| Nationalities, religions, geographic regions, and racial groups are all examples of? | Subcultures |
| Explain the 4 marketing Stimuli Ps and 4 other stimuli | Marketing stimuli consist of the four Ps: product, price, place, and promotion. Other stimuli include major forces and events in the buyer’s environment: economic, technological, social, and cultural. |
| Explain the difference between Complex Buying Behavior and Dissonance-Reducing Buying Behavior | Complex buying behavior *high consumer involvement in a purchase *significant perceived differences among brands. Example: expensive watch Dissonance-reducing buying behavior *high involvement in a purchase *few perceived differences among brands. Example: expensive carpet |
| Name the 4 Types of Buying Decision Behavior. Some purchases are simple and routine, even habitual. Others are far more complex, involving extensive information gathering and evaluation | Complex Buying Behavior (car) Dissonance-reducing buying behavior (carpet) Habitual buying behavior (barilla pasta) Variety-Seeking Buying Behavior (food) |
| The Buyer Decision Process Name the 5 stages | 1) need recognition 2) information search 3) evaluation of alternatives 4) purchase decision 5) postpurchase behavior (evtl. cognitive dissonance) Marketers want to be involved throughout the entire buyer decision process. |
| Postpurchase Behavior.. Explain Cognitive dissonance (Buyer discomfort caused by postpurchase conflict) | Almost all purchases result in cognitive dissonance, or discomfort caused by postpurchase conflicts. Every purchase involves compromise. So consumers feel uneasy about acquiring the drawbacks of the chosen brand and about losing the benefits of the brands not purchased. |
| Difference between market segmentation and market targeting? | What customers will we serve? Major segmentation variables: geographic, demographic, psychographic, and behavioral Targeting: Which customers will the company serve? Evaluating each market segment’s attractiveness and selecting one or more segments to enter. |
| Geografic segmentation | Dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods. |
| Behavioral segmentation | Dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product. |
| Socio-demographic Segmentation | Dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation. (needs change due to life-cycle & situation) |
| Segmenting Business Markets vs. Consumer Markets | |
| Effective Segmentation (Buyers of salt could be divided into blonde and brunette. But hair color does not affect the purchase of salt.) To be useful, market segments must be.. name 5 | • Measurable • Accessible • Substantial: A segment should be the largest possible homogeneous group worth pursuing with a tailored marketing. • Differentiable. • Actionable: Effective programs can be designed for attracting and serving the segments. |
| Explain Koller's STP-Marketing process | Market Segmentation Market Targeting Product Positioning |
| Target Market is a set of buyers sharing common needs or characteristics that the company decides to serve. Market-Targeting Strategies: Name 4 different | *Undifferentiated (mass) marketing *Differentiated (segmented) marketing *Concentrated (niche) marketing *Micromarketing (local or individual marketing) |
| Market-Targeting Strategies Explain: *Undifferentiated (mass) marketing *Differentiated (segmented) marketing | Undifferentiated marketing targets the whole market with one offer. *Mass marketing *Focuses on common needs Differentiated marketing targets several different market segments *Individual offers for each segment *Achieve higher sales and stronger position *More expensive than undifferen- tiated marketing |
| Market-Targeting Strategies Explain: *Concentrated (niche) marketing *Micromarketing (local or individual marketing) | Concentrated marketing targets a large share of a smaller market. *Limited company resources *Knowledge of the market Micromarketing is the practice of tailoring products and marketing programs to suit the tastes of specific * individuals and * locations. |
| Value Creation for targeted customers Explain the 4 steps | |
| Decide on a value proposition Explain Differentiation | Marketers need to think through the customer’s entire experience with the product or service. It needs to differentiate along lines that matter to customers. How will we serve them? |
| The differentiation and positioning task = Value Proposition (Creating differentiated value for target segments and deciding which positions the brand wants to occupy in those segments.) Why should I buy your brand? 3 steps are necessary.. | 1) identifying a set of differentiating competitive advantages on which to build a position 2) choosing the right competitive advantages 3) selecting an overall positioning strategy The company must then effectively communicate and deliver the chosen position to the market. |
| Positioning Maps are? | In planning their differentiation and positioning strategies, marketers often prepare perceptual positioning maps that show consumer perceptions of their brands versus those of competing products on important buying dimensions. |
| Product Positioning is? | The way a product is defined by consumers on important attributes— the place the product occupies in consumers’ minds relative to competing products. |
| What is a disadvantage of using a differentiated marketing strategy? | The costs of doing business increase. |
| "Companies that rely on a few segments for all of their business will suffer if a segment turns sour." Is this statement true about the concentrated marketing strategy? | yes |
| Products and Service classifications name the two classes: | Products and services fall into two broad classes based on the types of consumers who use them: 1. consumer products 2. Industrial product A product bought by individuals and organizations for further processing or for use in conducting a business. |
| Marketing Considerations for Consumer Products a brief overview of the 4 types in this class... | |
| Consumer Products There are 4 classifications based on how consumers go about buying the products. | Convenience product Customers usually buy frequently, immediately, with minimal comparison/ buying effort. (food) Shopping product Time consuming process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style. (games, hotel services) Specialty product A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. (cars, camera, cosmetic surgery) Unsought product A consumer product that the consumer either does not know about or knows about but does not normally consider buying. (life insurance, preplanned funeral) much advertising and personal selling needed. |
| The important decisions in the development and marketing of individual products and services. (The focus of 5 decisions to create core customer value.) | * Attributes *Branding *Packaging *Labeling *Product Support Service |
| Product and Service Attributes the benefits that it will offer.. | Benefits are communicated and delivered by product attributes such as 1. Product quality is one of the marketer’s major positioning tools. 2. features 3. style and design |
| Packaging (a tool to communicate product values) & Labelling | Packaging involves designing and producing the container or wrapper for a product. Labels identify the product or brand, describe attributes, and provide promotion. |
| Three Levels of Product Product planners need to think about products and services on three levels. Each level adds more customer value. | |
| Explain Core Benefit the core product (1st level) | What is the buyer really buying? When designing products, marketers must first define the core, problem-solving benefits or services that consumers seek. iPad not just a tablet: entertainment, self-expression, productivity, and connectivity with friends and family. |
| Explain actual product (2nd level) | At the second level, product planners must turn the core benefit into an actual product. They need to develop product and service features, a design, a quality level, a brand name, and packaging. |
| Explain augmented product (3rd level) | Finally, product planners must build an augmented product around the core benefit and actual product by offering additional consumer services and benefits. |
| Services Marketing Explain the four service characteristics (Services are intangible & created through direct interactions with customers.) | |
| Service Characteristics Explain Service intangibility & Service inseparability | Service intangibility Services cannot be seen, tasted, felt, heard, or smelled before they are bought. • Difficulty to promote benefits: sell a promise • Limited unit measurements makes pricing difficult • Consumers cannot take possession Service inseparability Services are produced and consumed at the same time and cannot be separated from their providers. • Consumers must be present during delivery • Other customers can affect service outcome • Service employees are critical (ensure the same level of quality) |
| Service Characteristics Explain Service variability & Service perishability | Service variability/heterogenity The quality of services may vary depending on who provides them and when, where, and how they are provided. • Difficulty to deliver consistent quality • Limited standardization opportunities • Customization opportunities (at high cost) Service perishability Services cannot be stored for later sale. • Time- and place- sensitive demand • Facilities & equipment idle |
| Service profit chain | The chain that links service firm profits with employee and customer satisfaction. |
| Extended Marketing Mix: 7 Ps | 1. Product 2.Price 3.Place 4.People 5. Promotion 6. Physical evidence 7. Process |
| Brand architecture There are 3 types | Single or product brand: One brand for a single product (Nutella, red bull) Family brand: One brand for a product group (knorr, Nivea) Umbrella or corporate brand: One brand for all products and services from a company (google, apple, Siemens) |
| An increasing number of retailers and wholesalers have created their own ________, also called store brands. | private brand (Private brands exist primarily because they tend to be lower in price than their counterparts e.g. migros Budget) |
| Which Marketing Instruments are especially important for Service Providers? hint: think on the 7 Ps. | physical evidence processes people |
| ________ represent(s) consumers' perceptions and feelings about a product and its performance. | Brands |
| 1) The manufacturer’s cost per toaster is given by the following: 2) Now suppose the manufacturer wants to earn a 20 percent markup on sales. The manufacturer’s markup price is given by the following: | 1) unit cost = variable cost + (fixed costs/unit sales) $10 + ($300,000/50'000) = $16 2) markup price = unit cost/(1 - desired return on sales) = $16/(1 - 0.2) = $20 |
| Value - Demand curve | p (x) = a + bx x: volume / quantity (Demand) p: Price per piece (Value) |
| price elasticity describes what? | describes the effect of a change in price on overall demand (inelastic vs. elastic). |
| 3 Elements of strategic pricing strategies | Value-based pricing strategy Competition-based pricing strategy Cost-based pricing strategy |
| Customer value-based pricing | Setting price based on buyers’ desires of value rather than on the seller’s cost. Value-based pricing means that the marketer CANNOT design a product and marketing program and THEN set the price. Price is considered along with all other marketing mix variables BEFORE the marketing program is set. |
| Cost-bades pricing | The company designs product, adds up the costs of making the product, and sets a price that covers costs plus a target profit. Marketing must then convince buyers that the product’s value at that price justifies its purchase. |
| With a Cost-bades pricing strategy the seller always whats to minimize production costs? | NO! Costs set the floor for price, but the goal isn’t always to minimize costs. In fact, many firms invest in higher costs so that they can claim higher prices and margins. The key is to manage the spread between costs and prices— how much the company makes for the customer value it delivers. |
| Value-Based Pricing vs. Cost-Based Pricing | |
| Competition-based pricing | The marketer sets prices in accordance with competitors. Prices may be below, at the, or above the market, depending on customer loyalty, services provided, image, real or perceived differences between brands or stores, and the competitive environment. In setting prices, the company must also consider competitors’ prices. The company must be certain to give customers superior value for the price. |
| Cost Based Pricing («Cost Plus») Cost based methods price calculation based on variable costs | cost of material and supply of product A + cost of production + other costs (warehousing, development etc.) + costs of administration and sales = variable costs of product A above calculation needed in order to calculate cost plus price: variable unit costs of product A + Contribution margin (in %) = Cost plus price |
| variable unit costs | variable costs (product A) / production volume (product A) |
| break-even volume | fixed cost/ (price - variable cost) $300,000/ ($20 - $10)= 30000 pieces |
| Market-skimming pricing (price skimming) example: Apple with introduction from iPhone | Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales. The product’s quality and image must support the higher price, and enough buyers must want the product at that price. Secondly, the costs of producing a smaller volume cannot be so high that they cancel the advantage of charging more. Finally, competitors should not be able to enter the market easily and undercut the high price. |
| Market-penetration pricing example: Samsung used this strategy to quickly build demand for its mobile devices in fast-growing emerging markets. | Setting a low price for a new product in order to attract a large number of buyers and a large market share. The market must be highly price sensitive so that a low price produces more marketgrowth. Second, production and distribution costs must decrease as sales volume increases. Finally, the low price must help keep out the competition, and the penetration pricer must maintain its low-price position. Otherwise, the price advantage may be only temporary. |
| How to vary the price Price Differentiation Concept Name 7 concepts.. | Individual = auctions (ricardo) Benefit based = first class (dropbox) Quantity based = Quantity discount (rising % discount) Bundling = Holiday packages, macdonalds menu Person based = student prices Region based = country prices Time based = weekend prices |
| When theaters vary seat prices due to audience preferences for seats in coveted rows, they use ________ pricing. | location-based |
| Segmented pricing is only effective when ________. | the cost of segmenting does not exceed the revenue obtained from the price difference. |
| Consumers are less likely to use price to judge the quality of a product when they ________. | have experience with the product |
| Price Elasticity Reaction of the market to price Under certain circumstances customers are less price-sensitive Name 5 | • When the price is only a small part of the total cost of obtaining, operating and servicing the product • there are few or no substitutes or competitors • they only slowly change buying habits • they think higher prices are justified • they do not readily notice the price |
| When does it help to use the price as an indicator of quality? 7 ideas | • when quality is important • customers have only few experience with the product category • objective product quality is difficult to asses • prestige product (provides social benefits) • customer wants to simplify the complexity of the decision • perceived differences in quality between alternatives • time pressure |
| Explain cognitive, affective and conative communication goals | - cognitive (informational): brand awareness, knowledge. (booking.com with hotel rating, number of rooms, location, price) - affective (emotional): liking, preference (booking.com with fabulous, best seller, pictures) - conative (behavioral): trial, purchase |
| AIDA model It identifies cognitive stages an individual goes through during the buying process for a product or service. The letters stand for? | 1. Awareness (Attract the attention of the customer, brand awareness) 2. Interest (Raise customer interest by focusing on product benefits) 3. Desire (Move the consumer from 'liking' it to 'wanting it') 4. Action (Lead customers towards taking action) |
| A company’s total promotion mix—also called its marketing communications mix.. what is it? | The promotion mix is the marketer’s bag of tools for engaging and communicating with customers and other stakeholders. It consists of the specific blend of advertising, public relations, personal selling, sales promotion, and direct marketing tools. |
| The five major promotion tools in the marketing communications mix are defined as follows: | Advertising Sales promotion Personal selling Public Relations Direct and digital marketing |
| Explain advertising | Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, TV spots, billboards, catalogues, mass mailings, brochures etc. |
| Explain Public Relations (PR) | Building good relations with the company’s various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events. Examples: press releases, press conferences; personal dialogue (in the course of conventions); specific explanatory material for selected groups, relationship management with journalists |
| Explain Promotions | They are temporally limited, short-term supportive incentives (e.g., in the course of a new product launch) to encourage the purchase or sale of a product or a service. -Consumer promotions (free samples) -Sales promotions (support material) -Trade promotions (trainings, provision of display material) |
| Explain Sponsoring | Systematic support of persons and/or organizations in the realm of sports, culture, social service through money, goods, or services • Quid pro quo: Spill-over-effects, „do good and talk about it“ |
| Explain Product Placement | surreptitious advertising (Schleichwerbung) Companies incorporate a product or brand in another work, such as a film or TV program, with a specific intent to promote said product. Examples: movie, TV show, novels, music, computer games |
| Explain Event Marketing | Aim of company/product presentation to a limited audience (expert audience, B2B audience) or to the interested public Examples: sports and cultural events, press conferences, seminars, conventions; participation at trade fairs and exhibitions (trade fair marketing sometimes separated from event marketing) = e.g. Redbull |
| Explain Direct & Indirect Marketing | Directly through personal addressing in order to enter into an immediate communication with the individual customer • indirectly as a basis for a dialogue in the second step • Examples: production and distribution of catalogues, customer magazines, flyers |
| Explain Personal Selling | Mainly used with complex problem solutions with high degree of customization (e.g. consumer goods in high need of explanation or B2B goods/services) Examples: sales conversations, sales presentations, presentations at trade fairs, customer club meetings. |
| Explain Ambush Marketing | Ambush marketing is a marketing strategy in which an advertiser "ambushes" an event to compete for exposure against competing advertisers. Unter Ambush Marketing (auch Parasite Marketing) versteht man Marketingaktivitäten, die darauf abzielen, die mediale Aufmerksamkeit eines Großereignisses auszunutzen, ohne selbst Sponsor der Veranstaltung zu sein. |
| Give the definition of Integrated marketing communications (IMC) | Carefully integrating and coordinating the company’s many communications channels to deliver a clear, consistent message about the organization and its products. The company’s goal should be to deliver a consistent and positive message at each contact. |
| Advertising strategy | The strategy by which the company accomplishes its advertising objectives. It consists of two major elements: creating advertising messages selecting advertising media |
| Companies are doing less ________ and more ________ as a result of the explosive developments in communication technologies to better target smaller customer segments. | mass marketing digital marketing |
| Retail shopping is changing. Name the 5 biggest technologies that will affect your shopping experience | 1. Beacons (bridging online and physical experience) 2. Facial Recognition (identify who buys a lot when entering the store) 3. Robot Shopping Assistant (but also for supply chain) 4. Smart Mirrors 5. Auto/Self Checkout |
| Relationships in the Supply Chain Explain Up- and Downstream | Upstream from the company is the set of firms that supply the raw materials, components, parts, information, finances, and expertise needed to create a product or service. Downstream marketing channel partners, such as wholesalers and retailers, form a vital link between the firm and its customers. |
| Producers use intermediaries to improve efficiency in making goods available to target markets. How do channel partners add value ? | In making products and services available to consumers, channel members add value by bridging the major time, place, and possession gaps that separate goods and services from those who use them. |
| Direct and indirect channel levels. Whats the difference? | Direct marketing channel A marketing channel that has no intermediary levels. (producer to consumer) Indirect marketing channel A marketing channel containing one or more intermediary levels. (producer, wholesaler, retailer, consumer) |
| Indirect channel pull-strategy | 1. Producer gives information regarding Product/brand (Stimuli) 2. End user wants the product (Reaction) 3. Distributor includes the product (Reaction) |
| Indirect channel push-strategy | 1. Producer gives financial and non financial incentives (Stimuli) 2. Distributor includes the product in his sales mix (reaction). Positions the product against competitor brands (Stimuli) 3. End user buys the product / brand (Reaction) |
| Multichannel distribution marketing occurs when a single firm sets up two or more marketing channels to reach one or more customer segments. Whats the advantage and disadvantage? | +) with new channels the company gains opportunities to tailor its products and services to the specific needs of diverse customer segments. -)multichannel systems are harder to control, and they can generate conflict as more channels compete for customers and sales. |
| Whats ZMOT? | Zero moment of truth refers to the point in the buying cycle when the consumer researches a product, through pre-shopping, in-store or in-home. |
| Explain Omni-Channel-Marketing | Organizations must employ omni-channel marketing methods to meet customers where they are. Consumers expect more personalized communication with companies through the various channels they use (physical store, online via websites and mobile apps, through physical and virtual catalogs, and through social media). |
| Marketing channel design | Requires analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating those alternatives: 1. Types of intermediaries 2. Number of intermediaries 3. Channel member responsibilities |
| Number of intermediaries Three strategies are available: intensive distribution, exclusive distribution, and selective distribution. | |
| A ________ is made up of the company, suppliers, distributors, and customers who partner to improve the performance of the entire system. | value delivery network |
| A ________ is a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer. | channel level |
| How do companies select channel members? | 1. evaluate each channel member's qualifications and select those who best fit its channel objectives. 2. use economic criteria (evaluate each channel member’s years in business, other lines carried, location, growth and profit record, cooperativeness, and reputation) |
| Customer Relationship Management a definition | The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction. - build up long-term relations (customer acquisition) -intensify the relation over time (customer development) -to maintain and continue (customer retention) |
| Measurement of Customer Value explain the One-dimensional model | 1. ABC analysis 2. customer break-even analysis 3. activity based costing |
| Measurement of Customer Value explain the Multi-dimensional model | 1. Customer portfolio 2. RFM model 3. Scoring model 4. CLV customer lifetime value |
| Explain the ABC-Analysis | Items that have different levels of significance and should be handled or controlled differently. The items are grouped into three categories (A, B, and C) in order of their estimated importance. 'A' items are very important. Cumulative share of turnover % to cumulative customer share % "20% of customers ("A-list clients") account for 80% of turnover" |
| Customer portfolio explain the graph of segmentation by value and conversion probability | |
| RFM Model Recency, Frequency and Monetary value | |
| Explain the Customer Lifetime Value (CLV) formula Future turnover and costs as basis for customer equity Der Wert, den ein Kunde über die gesamte Zeit seiner Kundschaft für ein Unternehmen darstellt. | Die Dauer der Geschäftsbeziehung T wird mit 10 Jahren angesetzt. Entsprechend beträgt der Kalkulationszinssatz 10 %, also 0,1 zur Einsetzung in die Formel. Alle zwei Jahre kauft der Kunde sich ein neues Smartphone im Wert von 400 Euro (eT). Der Hersteller wendet 50 Euro (aT) pro Jahr für die Kundenpflege in Form von Korrespondenz, Telefongesprächen und Email auf. Da eT und aT Werte sind, die sich auf den Zeitraum des Kundendaseins beziehen müssen, werden sie vorab gerechnet: 5 * 400 ergibt 2000 Euro, und 50 * 10 ergibt 500 Euro. Nun werden die Werte in die CLV-Formel eingesetzt. CLV= (2000 – 500 / (1 + 0,1)*10) |
| Direct and digital marketing what is it? | Engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships. |
| Name the 8 Success-factors in a circle of social media marketing (need to know by heart for exam) |
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| Success factors of social media marketing: receiver-oriented communication (in the success-factor circle) | Shift from transmitter-oriented to receiver-oriented communication. Understanding of the language and needs of the target group. Language: local dialects, slang |
| Success factors of social media marketing: Relevance (in the success-factor circle) | Lists, Learn, Act, Control -Understanding the needs of the customer -Understanding of the mood in the interaction process |
| Success factors of social media marketing: Implementation of 4 Cs (in the success-factor circle) | Continuity, Consistency, Consequence, Competence Influencing factors: clearly defined guidelines, quality control, courage and time, budget |
| Success factors of social media marketing: using all customer touch-points (in the success-factor circle) | The entire customer life cycle is taken into account (not just sales), The company sphere is known and will be taken into account Influencing factors Development of Customer Journeys, quality monitoring, Focus on linking touch-points |
| Success factors of social media marketing: consistent orientation on results (in the success-factor circle) | Measurement and controlling of marketing activities, Key performance indicators (KPIs), Assessment of the profit contribution |
| Success factors of social media marketing: value-oriented customer management (in the success-factor circle) | Customer Lifecycle segmentation is important for measurement and controlling of marketing activities. |
| Success factors of social media marketing: expectation management (in the success-factor circle) | clear communication of possibilities, willingness to listen |
| Describe the development of personas, Ecosystem-Maps, Customer Journeys and Empathy Maps | |
| 1. How are companies taking advantage of interactive technologies to tap consumers for message ideas and actual ads? 2. What are the benefits and disadvantages of consumer-generated advertising? | Companies can now search existing video sites such as YouTube, set up their own Web sites, create accounts on social networks such as Facebook, and sponsor ad-creation contests. 2. Consumer-generated advertising offers companies an inexpensive way to gather new perspectives on their products and develop insights into how their products are used and seen by actual consumers. -Can lead to conflicting, or even negative, messages about a brand due to lack of control over material. |
| The AIDA model identifies the characteristics of an effective ________. | marketing message AIDA: Attention, Interest, Desire and Action. The AIDA model is widely used in marketing and advertising to describe the steps or stages that occur from the time when a consumer first becomes aware of a product or brand through to when the consumer trials a product or makes a purchase decision. |
| Example of personas (maybe important for exam) | |
| Explain the term Personas | Personas are a way to group customers. It is focused on goals, objectives and frustration. It helps to build empathy to impact people and it gives more information than just to grouping customers. |
| value-demand curve P = 42 - 0.75 * x p=price, x=quantity 1. What is 42? 2. The saturated market is? 3. If P=30, how many x? | 1. It’s the maximum price. When x is zero. Then 42 is the price where the product becomes too expensive. 2. P = zero: saturation market price is 56 (42/0.75) 3. x=16 |
| The price is the most effective profit driver in the marketing mix? | yes |
| Goods which are characterized by an elastic demand are particularly suitable to increase prices on them? | NO! elasticity means customer can substitute to other products. so there is pressure on the price to hold it as low as possible (Consumer goods are elastic, Luxury goods are not elastic) |
| What is the main value retailers add to products? | Retailer transforms manufacturer's huge offerings into more consumer friendly products (a wide choice of small quantities for consumer) |
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