MARK 4900 Test #2

rating

% of TV households (whether they have the TV on or not) that are tuned to a specific TV show or radio station

share

% of TV households (who are watching TV) tuned to a specific program during a specific time--ex. people watching American Idol at specific time

benefits/ downfalls of Twitter

-benefits: easy to favorite and retweet--quickest WOM -downsides: limited control of rumors

benefits of standardization

-cost savings (economies of scale; experience cuve effects) -easier communication, coordination, and control -uniform brand, image, quality and service-->iPhones look same across world so commercials can be the same

how can we measure the effectiveness of advertising?

-purchase intentions -market share -objective: look at diff. metrics

channel-specific traffic (referral traffic)

-source: Google Analytics -bounce rate vs. exit rate

conversion rate

-source: Google Analytics -to measure the profitability of your overall marketing efforts (ex. completing a checkout on an e-commerce site or how many ppl visited the site that actually bought the product)

3 conditions for successful price discrimination

1. different consumer segments with diff. price sensitivities (consumers who are more (less) price-sensitive pay a lower (higher) price 2. must be able to identify which segment consumers are in, or get them to tell you indirectly 3. must prevent resale b/t segments (otherwise low-price segment can make money by reselling to high-price segment)

which startegy is best for: 1. snow ski, 2. toy, 3. breakfast cereal

1. pulsing 2. heavy up 3. continuous

reasons for going global

1. strategic reasons (foreign markets with profit opportunities or stagnant/shrinking domestic markets) 2. reacting to global competition (large firms have lower costs due to economies of scale) 3. risk management (spread business risk across a wider market base, to earn foreign currency, lower tax on export earnings)

how many ways can you reposition?

2

the MDS study measures brand perception along how many dimensions in Markstrat?

3

how many R&D projects can be specified for each of the 2 markets

5

what's the best global brand?

Apple; automotive and tech brands are top ones

if Twitter has higher bounce rate than FB, which do you want to put more money in?

FB

which social media outlet is the largest?

FB

T/F: the dimensions used in the MDS study are the same for the Sonite and Vodite market

False

what is a top-line goal?

MS inc.

unit contribution eq.

P-VC

T/F: spending on nearly all forms of advertising declined with digital advertising a notable exception

True

harvest strategy ex.

Windows XP/Windows 7: some consumers wanted XP, they would pay more to keep XP vs. getting W7; it's used when subsequent price inc. results in only a modest decrease in volume (e.g. profitable niche market)

if you want to generate sales and web traffic what advertising should you use?

a combo of Search Engine Marketing, Google+ and email marketing...not social media

brand-action communication is used for what type of product

a product that would want to advertise deals, promos, lower P, or coupons; to track how many ppl used it

sales promo

a short-term inducement of value offered to arose interest in buying a good or service (ex. coupons or rebates)

indirect channel

achieve the lowest out-of-pocket marketing and sales expenses, but the new price is much less than from direct channels

types of product promos

advertising, personal selling, public relations, sales promo, direct marketing

direct marketing

any form of direct communication with the consumer designed to induce a response in the form of order, enquires, or visit (ex. catalogues, e-mail, or telephone)

skimming

based on the idea that people that buy early in the PLC are less price sensitive; best when: intro stage or dec. demand

consumer survey

brand awareness: the proportion of individuals who have unaided recall of a brand name; purchase intention: the proportion of individuals who would select a brand as their first choice, if they were buying within a year; check shopping habits (make commerical team and channel choices); provide market shares and industry sales by consumer segment

3 social media marketing objectives

brand building, info exchange, and problem solving

how do you find out price elasticity?

by looking at past purchase history

direct channel

capture most of the end-user price, but cost is higher; price is highest and you have to pay 100% of transportation

how to see if communication effects are working

check brand awareness and attribution recall

how to see if sales effects are working

check market share or purchase intention

when making commerical team decisions, where should you look?

check shopping habits

industry benchmark study

company profit and loss statements; to anticipate whether competition will launch new brands

exit percentage

counts the number of ppl who left your site after visiting this same page, but they could have been browsing other pgs. beforehand

what is the most imp. factor in channel performance?

customer reach (volume)

factors of channel performance

customer reach, operating efficiency (cost to serve), and service quality (retention)--ex. buying Chanel from that store vs. at Wal-Mart...there's a value to that

inelastic demand

customers are not sensitive to price changes; demand remains relatively the same (-1<PE<0)

elastic demand

customers are sensitive to price changes; demand falls as the price increases (PE<-1)

if you have neg. brand contribution, you need to do what?

cut expenses (ex. cut advertising) or inc. revenues

brand building

deepen customer relationships and engage in conversations with the brand community

brand-information communications

designed to create interest and offer info in order to achieve high recall among target customers of key product attributes that differentiate the brand

brand-action communications

designed to stimulate potential customers to take action, such as contacting the company, visiting the company's website, obtaining a free sample, and trying or buying the company's product

brand-image communications

designed to trigger an emotional response that builds a strong connection b/t the brand and the image the company wants to create among its target audience

most businesses prefer which channel and why?

direct channel bc they get alot of money (profits are alot better and higher margin)

share of voice

ex: socialmention.com -what % of mentions within your industry goes to your brand? -sentiment: positive, neutral or negative

T/F: when business is bad, a price cut will stimulate sales

false

T/F: when business is good, a price cut will capture greater market share

false

the "right" level of involvement in foreign market depends on what?

financial resources, tolerance for risk (ex. Coke taking more risk in China), expertise in region, and past international experience

problem solving

gather customer feedback, provide customer service, and resolve customer complaints (ex. Twtter)

is price cutting good or bad?

generally not in the best interests of the firm unless sales volume will increase; better strategy: to build value into the product offering at the same (or even higher) price

what was Reed Supermarket case main point?

get people in stores by dec. price on specific products

when the % change in volume is (blank) the % change in price, we have an elastic price

greater than

net profit $ eq.

gross margin-SG&A or revenue*net profit %

gross margin % eq.

gross profit/revenue

gross margin $ eq.

gross profit=revenue-COGS

barriers to standardization

hetrogenity inc. with multiple brands

brand-information communication is used for what type of product

high quality printer company: comparing low class printer to theirs (saying they are ppl friendly and economical); talked about features and about product; advertising they are most cost effective than other printers

top down results in...

higher priced purchases

ex. of price discrimination

hotel rooms

penetration

immediate appeal to mass market, best when: growth/maturity stage, inc. demand than skimming

what is a bottom line goal?

inc. profit

benefits of using YouTube

it's free, it's easier to share to get a wider reach; you can watch it over and over again vs. TV comercial you can't; have power for marketing control (and FB, but not twitter)

when the % change in volume is (blank) the % change in price, we have an inelastic price

less than

defensive strategic market plans

likely to be implemed in the later stages of a product-market life cycle: hold/protect share positon, optimize/monetize position, harvest/divest share position; goal: profit maximization

how do you tell which brand has highest % margin?

look to see which one has lowest base cost

bottom up price presenations result in...

lower price purchases

is Paramont Clean Edge mainstream or niche?

mainstaream bc it's easier to enter market and inc. brand awareness

which scenario in the Clean Edge cse study had more cannibalization: mainstream or niche?

mainstream

who shares cost in an indirect channel?

manufacturer shares cost with retailer

positioning factors

market needs, competitive brands, feasible range, devlopment budget (ex. battery life, design, no. of features, display size, proces. power)

what would be a good measure of competitive position?

market share

distribution segment

market shares by channel and brand, relative sizes of the channels

what are good measures of market attractivness?

market/segment growth; purchase intensions; market growth rate

pull communications (examples/target audience/objectives)

media advertising, social media, sales promos, direct marketing; target audience: customers and potential customers; pull objectives: build end-customer awareness, interest, purchase, & loyalty

net profit %

net profit $/revenue

should you use feasible study?

no bc it takes an entire period..

for mature products, do you need to inc. advertising?

no, inc. commercial team

is Super Bowl ad recall greater than a normal ad recall?

no, it's less

digital marketing ad weakness

not clear metrics on how to track or measure (ex. email: click-thru rate for ex. to measure or how many people open)

when is MDS available to us?

not until 3 brands are in market

attractive markets are most likely to warrant an (blank) strategic market plan to improve competitive advantage and share position

offensive

OEMs

origional equipment manufacturers; creates a new product manufactured from components it buys (ex. Dell, IBM, Ford); purchases parts such as tires and windows and prepares it before sold to consumer

multidimensional scaling

perceptual maps providing 3 dimensions that are ideal pts for each segment

buyer's perspective on pricing considerations

percieved value and price sensitivity

do people spend more money on FB or Twitter and why?

ppl want FB over Twitter b/c of limited control of twitter

market-based pricing

price is set based on competitive advtantage and value; discounts & costs deducted to arrive at a company margin (most companies use this method for consumer-based market)

customerization value pricing

price is set by unbundling a product's features or performance levels and then allowing customers to select the features and performance that they want

performance-based pricing

price is set on the basis of customer preferences for different levels of price and performance

percieved-value pricing

price is set on the basis of the value that customers realize

value-in-use pricing

price is set to provide customer with an attractive savings after considering the cost of ownership

why does segmented or price discrimination inc. profits compared to changing the same price to all customers

profit inc. b/c firm takes more consumer surplus

semantics scales

provide data about physical attributes based on a semantic differential questionaire; brand perception; ideal values and relative importance of each characteristic for each segment (ex. features, battery, etc.)

gross rating points

reach (expressed as a percentage of the total market) multiplied by frequency (GRP)--used for TV mostly

what are benefits of pulsing strategy?

reduce the cost and reduce the potential for overexposure

dollar sales eq.

revenue=p*q

push communications (examples, target audience, and objectives)

sales incentives, channel forecasting, co-op advertising, and channel marketing; target audience: channel, consumers and influencers; objectives: build channel: interest, purchase, inventory, and marketing efforts

where can you find the ideal values for each physical characteristics?

semantics scales studies

information exchange

share experiences and exchange info to encourage word-of-mouth and to better understand product usage and benefits

characterstics of good marketing plan

simple, specific, realistic, complete

cost-based pricing

starts with cost and desired margin and is marked up along the channel to a customer selling price

steps for creating a digital marketing plan

step 1: define your target audience step 2: define your objectives of digital marketing step 3: prioritize your digital tactics and change just one or 2 networks at a time step 4: create clear, consistent content step 5: measuring results (ex. Google Analytics)

life-cycle value pricing

taking the value-in-use pricing one step further. price is set with respect to the total cost of ownership over the life cycle of a product

economic factors

target margin, cost of other projects, devlopment budget, impact of physical characteristics (ex. base cost)

fighter brand

targeting diff. segments; protect market share; fighting as price competitor and useful for premium brand company

frequency

the avg. number of times an indiv. is exposed to an ad

cost per thousand

the cost of advertising divided by the number of thousands of individuals or households who are exposed (CPM)--used for online ad such as banner (ex. # of people who click banner as or paid search)

reach

the number of diff. people or households exposed to an ad

how did iPod lauch their price tiered products?

they launched iPod with a high price and captured high end market, then later added Touch at a higher price and Nano/Shuffle at lower prices

what was key success of Old Spice campaign?

they shot 180 commercials aired on Youtube without media costs

what would happen if Altrius maintains the status quo?

they will lose market share b/c of changes in consumer and aggressive competitors

social media is good for what?

to raise brand awareness and improve customer services

reduce-focus pricing

to take out product from market, you have to remove inventory from market--so change (inc. price) to remove all price sensitive consumers

COGS

unit cost*Q or rev-GM $

should you lower elastic prices?

use caution, if percent margins are low, a lower price will increase sales but often result in lower sales revenue and unit volume

brand-image communication is used for what type of brands (and give brand ex.)

used for well-known or mature brands such as Nike; don't need to put a lot of words, instead put a picture of runner

what's an ex. of price discrimination?

using 75 cent coupon (ex. different price sensitivites, consumers self-select by clipping or downloading coupon, consumers unlikely to resell or exchange coupons, except very high value ones--can send consumers coupons with their names on them)

offensive strategic market plans

usually growth oriented: invest to grow, improve position, enter new market (market share/growth)

VARS

value added resellers; purchase complete product (ex. engine) that OEM has gotten all parts for and assembled; often provides the total bundled system

when you want to have an offensive plan but have to go to defensive plan...what could be the cause of that?

when you don't have enough money (limited resources)

they prefer direct but usually sell through who and why?

wholesalers bc they have a more refined list of customers and better reach to certain customers; they share expenses; distribution cost and transportation lower and you can store your product at warehouses (ex. if you're selling bigger product)

bounce rate

will measure the number of users who landed on a certain page and left without visiting any other pages

is a 0.94 correlation b/t advertising expenditures and sales for apparel high?

yes

you should say your message before a minute elapses bc why?

you lsoe over 50% of customers before a minute