Marketing Exam 2

What are the 3 C's of brand positioning?

Consumer analysis (relevant, resonant, realistic), Competitive analysis (distinctive, defensible, durable), Company analysis (feasible, favorable, faithful)

What are the benefits of segmentation to the customer?

Convenience and time savings, tailored products and services, relevant offers, personalized experience. Leads to compelling customer experiences.

What are the brand hierarchy levels?

Corporate brand > family brand > individual brand > individual item or model (modifier)

What three main broad strategies are created by the two axes (advantage and target scope) in competitive advantage?

Cost leadership (competitive advantage by having the lowest cost of operation in the industry), differentiation (uniquely desirable products and services that serve broad market needs), and focus (specialized service in niche market).

What are the determinants of customer-based brand equity?

Customer is aware of and familiar with the brand, customer holds some strong, favorable, and unique brand associations in memory.

Using the pottery barn example, is usage a good segmentation variable to use?

Customers that have bought recently, buy frequently or spend lots of money at Pottery Barn, may be the most receptive to a promotion. In fact, direct marketers use the acronym RFM (recency, frequency, monetary) to describe these factors.

What is brand salience?

Deep, broad brand awareness. Who are you?Salience means awareness. Depth of brand awareness (ease of recognition and recall, strength and clarity of category membership) Breadth of brand awareness (range of purchase consideration, range of consumption consideration.)

What is "Diversification" in the Ansoff Matrix?

Diversification is serving new customer segments with new offerings. Highest risk because the company has no experiences with either the new market or new offering but also has the highest potential reward for the organization (creating new future revenue streams.)

What is differentiable in segmenting a market?

Dividing the market into segments does no good if all the segments respond the same to different marketing strategies.

What is "Market Penetration" in the Ansoff Matrix?

Market penetration is serving more customers within the current customer segments with more of the same offerings. Represents lowest risk because the organization has experience with the current market segments and current offerings. Lowest potential reward because of low revenue streams.

What are the four sections of Ansoff matrix?

Market penetration, market development, product development, diversification.

What is accessible in segmenting a market?

Marketers must be able to reach and serve the segment.

What is actionable in segmenting a market?

Marketers should be able to develop strategies that can attract certain market segments to their firms' goods and services.

What two markets does segmentation deal with?

Mature markets and undeveloped (immature) markets.

What does RFM mean?

Means if you have bought recently from somewhere, frequently from somewhere, or spend a lot of money somewhere then you get out high on their mailing list.

What are the offensive brand elements?

Memorable (easily recognizable, easily recalled), meaningful (credible and suggestive, rich visual and verbal imagery), appealing (fun and interesting and aesthetics).

What is a "brand"?

Name, term, sign, symbol, or design, or a combination of them (brand elements), intended to identify the goods and services of one seller or group of sellers and differentiate them from those of competition.

Are segments created by firms?

No, they are uncovered. The market consists of consumers with heterogeneous segments, regardless of whether or not a firm decides to segment the market.

What is benefit positioning?

Pampers diapers: Our softest diaper ever wraps your baby in comfort and protection. Oral B toothbrushes: Bends and adjusts with the contours of your teeth to remove more plaque.

What is brand performance and imagery?

Points of parity and difference. What are you? Brand Performance= features and benefits (primary characteristics and supplementary features, product reliability, durability, and serviceability, service effectiveness, efficiency, and empathy, style and design, and price) Brand imagery= personality (user profiles, purchase and usage situations, personality and values, history, heritage, and experiences)

Products vs Brands

Product - anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want Brand - the "stuff "that adds other dimensions to a product that differentiate it in some way from other products designed to satisfy the same need

What is "Product Development" in the Ansoff Matrix?

Product Development i serving the current customer segments with the same offerings the organization already produces.

What are "question marks" in the Boston Consulting Group matrix?

Question marks are offerings that are capturing a relatively smaller percentage of the market share, btu are in a highs-growth market. We would like to invest very carefully into these offerings, trying to figure out how we can capture more market share in a high-growth market, but also have to know when to abandon offerings thar are never going to be able to capture a relatively high percentage of the market share.

What are the two primary metrics which we use to determine the Boston consulting groups matrix?

Relative market share and market growth rate.

How does the brand resonance pyramid go (Bottom to top)?

Salience, performance/imagery, judgements/feelings, resonance

What is demographic segmentation?

Segmentation that divides markets by characteristics such as age, gender, income, education, and family size

What is geographic segmentation?

Segmentation that divides markets into groups such as nations, regions, states, and neighborhoods.

What is psychographic segmentation?

Segmentation that divides markets using demographics, psychology, and personality traits.

What is brand positioning?

The art of staking out a particular piece of mental real estate for a brand in the customers' mind by crafting and communicating a differential positioning statement.

What do the horizontal and vertical axis' of the SWOT analysis represent?

The horizontal axis of this matrix represents positive versus negative factors while the vertical axis represents internal versus external factors.

What is the horizontal axis of the Ansoff matrix?

The horizontal axis separates the analysis grid into existing products (offerings) that the organization already currently offers and new products (offerings) that the organization could potentially build and offer.

What are the components of brand equity?

brand awareness, perceived value, brand associations, brand loyalty.

What is RFM?

recency, frequency, monetary

Why do Brands matter for consumers?

reduce risk (ease identification of product source, assign responsibility to product maker, signal level of quality, create relationship with product maker), reduce search cost (ease identification of product), serve as internal or external symbolic device (create feelings of affinity, create communities)

What is a value proposition?

the set of benefits or values it promises to deliver to consumers to satisfy their needs

What is the majority fallacy?

- pursuing the majority segment is considered a "fallacy" because the largest segment where the competition seems to be the most intense is not always the most profitable - neglecting the smaller, less typical segments that may have less competition

What are the 4 essential components of a positioning statement?

1. For whom, for when, for where? 2. What value (consider economic, functional, experiential, and/or social)? 3. Why and how? 4. Relative to whom?

What is SWOT analysis?

AKA situation analysis. It provides an internal look into the firm's strengths and weaknesses, as well as an external look at their opportunities and threats. (Don't confuse marketing tactics as opportunities) (Don't confused organizational weaknesses as threats)

What is an immature (undeveloped) market?

A larger proportion of potential but uncommitted customers make up the market. In an immature market, a new entrant can target potential but uncommitted buyers without being perceived as a threat to incumbent competitors.

Market Segmentation

A process by which all potential buyers are divided into groups that have different wants, needs, behavior, cost sensitives and other factors that require variation in the marketing mix (4Ps.)

What is stable in segmenting a market?

A segment should be stable over a long enough period of time that any marketing effort would be successful and profitable.

What is a positioning statement?

A strategic document that communicates the unique value the brand would offer to a particular target market segment. They distill the brand's value proposition into a compelling answer to the question, "Why should I buy?"

What is unique selling proposition?

A type of value claim that offers a prospective customer a specific, unique, and superior reason to purchase a product.

What are brand elements?

A variety of brand elements can be chosen that inherently enhance brand awareness or facilitate the formation of strong, favorable, and unique brand associations: brand name, logo, symbol, jingle, character, packaging, slogan.

What is consumer judgements and feelings?

Accessible, positive reactions. What about you? Consumer judgements= how is it different from others? (brand quality (value, satisfaction), brand credibility (expertise, trustworthiness, likability), brand superiority (differentiation). Consumer feelings= how relevant to my life? (brand consideration (relevance), feelings (fun, excitement, security, social approval, self-respect))

What are the defensive brand elements?

Adaptable (flexible and updateable), protectable (legally, competitively), transferrable (within and across product categories, across geographical boundaries and cultures)

What two axes are usually used in Competitive Advantage?

Advantage and Target Scope

What is identifiable in segmenting a market?

An organization should be able to identify customers in each segment and to measure their characteristics, such as demographics or usage behavior.

How can one differentiate a product so that it would appeal to the target segments?

By using any of the marketing variables: product, price, place (distribution channel), and/or promotion (communication.)

What are "cash cows" in the Boston Consulting Matrix group?

Cash cows are offerings that are capturing a relatively high percentage of the market in a low growth (i.e. not growing quickly market.)

What is a mature market?

Competitors have captured most customers within the market.

What are "dogs" in the Boston Consulting Group matrix?

Dogs are offerings that are capturing a relatively smaller percentage of the market share and are in low-growth markets. Typically, we want to abandon (close down or "divest") these offerings so that we can use resources to invest in other high potential offerings (Stars or maybe Question Marks) within our portfolio. At times, organizations hold onto Dogs when they represent something significant to the external branding of the organization (e.g., serve as a flagship product that customers expect to see out there in a market to drive affinity and sales for other offerings.)

What is feature positioning?

Dove soap: Contains 1/4 moisturizing cream. Organic Valley milk: Produced by family farmers without antibiotics, synthetic hormones, or pesticides.

What are some segmentation variables for consumer products?

Geographic, demographics, psychographics, behavioral, benefits sought.

What are some segmentation variables for business markets?

Geographic, firmographics, buying approach, behavioral, benefits sought.

What is segmentation?

Group customer with similar needs into customer segments and then determines the characteristics of customers in those segments.

What are the characteristics of a useful segmentation?

Identifiable (should be able to identify customers in each segment and to measure their characteristics such as demographics or usage behavior), Substantial (targeting a big enough segment to serve profitably), Accessible (segment needs to be reachable through communication and distribution channels independent of other segments), Stable (stable over a long enough period of time), Differentiable (consumers in a segment should have similar needs, and these needs should differ from the needs of consumers in other segments), Actionable (should be able to create products and marketing programs for attracting and serving customers in the segments identified.)

What are the benefits of segmentation on the organization?

Identification of unfulfilled needs, better product design, more targeted promotions, increased customer satisfaction. Leading to sustainable profit growth.

Why do Brands matter for companies?

Identify products to ease handling and tracing, legally protect unique features, position product within competitive markets provide competitive advantage, establish longer-term relationships with customers, enjoy greater brand loyalty, usage, and affinity, increase marketing communication effectiveness, recieve greater trade cooperation and support, yield licensing opportunities, support brand extensions, command larger price premiums, increase financial returns.

What is consumer-brand resonance?

Intense, active loyalty. What about you and me? Brand resonance= means more than the category. Behavioral loyalty (frequency and amount of repeat purchases), attitudinal attachment (love brand (favorite possessions; "a little pleasure"), proud of brand), sense of community (kinship, affiliation), active engagement (seek information, join club, visit web site, chat room)

What is brand culture?

It evolves as various authors create stories that involve the brand . 4 primary types of authors: the firms (which shapes the brand through all of its product-related activities) popular culture (through use in film and television, celebrity endorsements, news events, and even parody), customers (who develop and share their own stories through product interaction), influencers or non customer opinion leaders.

What is communication strategy in segmenting?

Knowing the target audience for a product helps advertising agencies design appropriate ads and choose the right media.

What are the effects of brand awareness?

Learning advantages (create the memory node), consideration advantages (make the cut into the consideration set), choice advantages (increase the chance of selection (avoid being voted off))

What is value positioning?

Loreal Cosmetics: Because you're worth it. Michelin Tires: Because so much is riding on your tires.

What is salesforce and channel strategy in segmenting?

Many companies set up different channels with different sales teams to target each segment.

What is "Market Development" in the Ansoff Matrix?

Market development is serving new customer segments with the same offerings the organization already produces.

What are the steps to segmenting a market?

Selecting a market or product category, choose a basis or bases for segmenting the market (WHO buys- demographics, geographic, psychographics; WHAT customers do- usage, loyalty, profitability; WHY customers make decisions- needs preferences, decision-processes), Select segmentation descriptors (e.g., families with children under the age of 6 in rural communities), Profile and analyze the segments (i.e., conduct research and gather intelligence to learn more), Select target markets* (which segments are the best match for what the organization can and wants to do), and Design, implement, and maintain appropriate marketing mixes (4 Ps).

What does the horizontal axis of "Boston Consulting Group's Matrix" represent?

Separates the analysis grid into "high" and "low" relative market share which represents the percentage of market share that the offering captures in a given market relative to the market share of other offerings in the organization's portfolio.

What does the vertical axis of "Boston Consulting Group's Matrix" represent?

Seperates the analysis grid into "high" and "low" Market Growth Rate, which represents current rate of growth for the market in which that offering is sold.

What is a niche strategy?

Small firms or firms with a unique product may choose to focus on a single segment.

What does "stars" mean in the Boston Consulting Matrix?

Stars are offerings that are capturing a relatively high percentage of the market share in a high growth (i.e. growing quickly) market.

What four sections does the "Boston Consulting Group matrix" have?

Stars, Cash Cows, Question Marks, Dogs

What is the competitive advantages strategic analysis tool?

The organization could either focus on creating a unique offering in the marketplace to serve unique or special needs of particular customer segments (Product Uniqueness), or the organization could focus on continually lowering the cost of operations and capture more profit (or "margin") from every transaction and/or pass along those cost savings to customers in the form of lower prices relative to competition (low cost or cost advantage). Additionally, the organization needs to decide on the scope of the target markets it wants to serve (Target Scope) and could decide to serve the needs of the broader market place or focus on smaller, narrower customer segments that have extremely specialized needs.

What is positioning?

The place a product occupies in consumers' minds, relative to competing products or brands with the goal of developing a specific marketing mix to influence potential customers' overall perception of the brand, product line, organization in general.

What is substantial in segmenting a market?

The segments must be large enough for the firm to make a profit by serving them.

What is brand equity?

The set of assets linked to brand's name that adds or subtracts from the value of that product or service. It can be negative or positive. Negative brand equity causes customers to react less favorably to promotion of a product or service when the brand of that product or service is identified. Positive brand equity causes customers to react more favorably to a product or service when the brand is identified.

What is customer-based brand equity?

The value created by the brand comes directly from the response of the customers (there is a perceived or actual difference, customers are aware of the brand and the difference, customers respond positively to the brand marketing) Represents the "added value" endowed to a product as a result of past investments in the marketing of a brand. Provides direction and focus to future marketing activities.

What is the vertical axis of the Ansoff matrix?

The vertical axis separates the analysis grid into existing markets (those customer segments the organization is already serving) and new markets (those customer segments not yet served by the organization).

What is the Ansoff Matrix?

This strategic opportunity matrix matches products (or offerings, including services, more generally) with markets (i.e. customer segments.)

Using the pottery barn example, is benefit a good segmentation variable to use?

This usually comes in handy for athletic footwear companies because they can target specific people for things such as shoe cushioning. It could be useful for PB in other aspects but not as useful as the other.

Template Positioning Statement

To customers who are (target summary), our product offers (most important claim) relative to (competitive alternatives) support (most important support). Example: To the tradesman who uses his power tools to make a living and cannot afford downtime on the job (target), DeWalt professional power tools (product) are more dependable (point of difference) than other brands of professional power tools (competition) because they are engineered to the brand's historic high-quality standards and are backed by Black & Decker's extensive service network and guarantee to repair or replace any tool within 48 hours (support).

brand building tips

Understand that customers own your brands, don't take shortcuts with brands- relationships take a ling time to build, brands should have a duality (head and heart), brands should have a richness, visualize the resonance you hope to achieve.

What is the "Boston Consulting Group's Matrix"?

Used by managers to predict future cash contributions for strategic business units (SBUs) by plotting the current performance of the organization's offerings in the market place based on two primary metrics.

What is pricing strategy in segmenting?

Using airline example: Airlines segment their customers into leisure and business travelers. Leisure travelers are price-sensitive, while business travelers care more about schedule, frequent flier miles, and the ability to book at the last minute.

What is product strategy in segmenting?

Using example of GAP: GAP mapped out a product-line strategy based on its consumers' shared values but has differentiated its offerings based on age, aspirations, and income. Compare GAP and Old Navy.

What is customer management strategy in segmenting?

Using them RFM strategy (memorize it) Airlines' loyalty programs reward their best customers by offering them free upgrades, lounge access, and priority boarding.

What is a perceptual map?

Visual method of understanding your brand's positioning relative to competitors, along factors that are important to a particular customer segment.

What is wrong with the low cost/narrow target scope approach?

When an organization attempts to operate at a lower cost structure, relative to competition, it requires them to reduce per unit cost in order to maximize the margin. to do that successfully, they must try to spread fixed costs (e.g., the cost of building the manufacturing plant) over as many units as possible. So keeping a narrow target market doesn't work because spreading many units is necessary.

What is "BRAND"?

Which creates a certain amount of awareness, reputation, prominence, or loyalty-including the sensory, emotional, rational, and cultural images that you associate with a company or a product.