MKT 443 Exam 1

MarkStrat Quiz 2: The perceptual map study is based on the MDS study:

True

MarkStrat Quiz 2: The similarity of R&D projects will have an impact on costs:

True

How the lifecycle model of dynamics works, pros/cons

"Ok" First Approximation - uses generic stages of growth and their position in the lifecycle assumes all customers, markets, products, and industries move through the same set of stages as they mature (intro, growth, mature, decline) Pros - Easy to apply, makes common sense Cons - not every market goes through the same cycles, more complicated than that, can miss trigger points or migration patterns, inaccurately predict, slide 15-20, module 3

Evolution of approaches for managing customer dynamics

- Lifecycle Approach - Dynamic Customer Segmentation - Customer Lifetime Value

First Four Principles of Marketing

1. All Customers Differ 2. All Customers Change 3. All Competitors React 4. All Resources are Limited

Criteria for an ideal segment

1.Based on customer needs (customer care) 2.Different than other segments (little crossover competition) 3.Differences match firm's competences (firm can execute within resource constraints) 4.Sustainable (can keep customers) 5.Customers are identifiable (can find targeted customers) 6.Financially valuable (valuable in the long term) -slide 8, module 2.2

MarkStrat Quiz 1: If you have no units in inventory, you ask your production department to produce 100,000 units and the demand is 140,000 units, you will be able to sell:

120,000

MarkStrat Quiz 2: The MDS study measures brand perception along how many dimensions:

3

MarkStrat Quiz 1: How many customer segments are in the Sonite market:

5

How the dynamic customer segmentation works (implemented through AER), pros/cons

AER Model - segments a firm's existing customers on the basis of their similar, expected migration patterns Evaluates existing customer's behaviors/needs in each AER stage to understand temporal differences Pros - doesn't assume every customer at any given segment is in the same life cycle slide 22, module 3

Customer centricity

Aligning your brand with the needs/preferences of the consumers - Is key to an effective marketing strategy and in managing customer heterogeneity

Decisions guided by each First Principle

All Customer Differ --> Managing Customer Heterogeneity All Customers Change --> Managing Customer Dynamics All Competitors React --> Managing Sustainable Competitive Advantage All Resources are Limited --> Managing Resources Tradeoffs

Definition of customer dynamics

Changes in customer's preferences that differ over time their needs/wants change over time or due to specific events -slide 5, module 3

MarkStrat Quiz 1: Market Research Reports are free:

False

MarkStrat Quiz 2: The higher the resolution, the lower the base cost:

False - higher resolution = high costs

MarkStrat Quiz 2: An online query will be more accurate than a feasibility study for an R&D project:

False - not as accurate

Markstrat Questions - Basic definitions/decisions in MarkStrat (what is the commercial team, how does the production plan work, etc.)

Look in handbook

Markstrat Questions - Consequences of own-brand or competing-brand repositioning

Look in handbook

Markstrat Questions - Differences between competing in Sonite and Vodite markets

Look in handbook

Markstrat Questions - Dynamic nature of segments' ideal points

Look in handbook

Markstrat Questions - Purpose of key market research studies (MDS, Semantics, etc.)

Look in handbook

Markstrat Questions - Ways to reposition a brand

Look in handbook

MarkStrat Quiz 1: The product MOST is manufactured by firm:

M

MarkStrat Quiz 2: The Convenience of a brand is based mostly on:

None of these - It is mostly based off of design, number of features, and battery

Definitions of perceptual maps, preference maps, joint maps

Perceptual Maps - 2D or 3D display of customer's perceptions of the competing alternatives in the market Preference Maps - 2D or 3D display of customer's preferences of attributes Joint Maps - a map containing both the customer's perceptions and preferences Relating to MarkStrat - perceptual map is where our products are in minds of consumers, preference map is where consumer's ideal attributes are, and a joint map is consisting of both which is what we see in MarkStrat slide 13, module 2.2

MarkStrat Quiz 2: Customers make purchase decisions based on:

Their perception

Actual vs perceived offerings

Understand that customers will perceive the product different than from what it actually is - perceptions companies focus to position - important aspect of positioning

Appropriateness of lifecycle, dynamic customer segmentation, and CLV models vis-à-vis focusing on large or small segments

more complex models are better for dealing with smaller segments, more basic models (lifecycle) are better for dealing with broader segments

MarkStrat Quiz 2: The obsolete inventory is sold to a:

trading company

Five key components of the definition of marketing strategy

- Consists of (guides) Decisions and Actions - Builds/Leads to a Sustainable Differential Advantage - Must be relative (relating to) competitors - Advantage must be present in the minds of consumers (takes a customer perspective) - Creates Value for Stakeholders

Components of a positioning statement

- Who are the customers? - What are the set of needs that the product or service fulfills? - Why is this product/service the best option to satisfy your needs (relative to competition or substitute; support for why)? This statement is the roadmap for a plethora of implementation decisions involved in marketing a product (both inside and outside the company) slides 22-23, module 2.2

Necessary conditions for sustainable competitive advantage

1. Customers Care 2. Do "it" better than competitors 3. Hard to Duplicate -slide 19 of module 1

Sources of customer dynamics

1. Discrete Life Events (marriage, first child, etc.) 2. Typical Lifecycle (aging) 3. Learning Effects (experiences with & knowledge of a product, switching costs - overcoming the learning curve) 4. Product Lifecycle (prototypical changes in customers' purchase criteria) 5. Constantly Changing Environmental Context (societal or regulatory changes) slides 7-8, module 3

Five sources of customer heterogeneity

1. Individual Differences (inherent - favorite color) 2. Life Experiences (culture differences, growing up) 3. Functional Needs (need for different features, affordability, etc.) 4. Self-Identity/Image (college apparel, how we identify/brand ourselves) 5. Marketing Activities (marketers can affect the customer's preferences - fast and furious films, past films affect what they want to see in new films) -slide 4, module 2.1

GE Matrix for segment desirability

2 factors - 1. Market Attractiveness (potential within the market) + 2. Competitive Strength (competitive position/how strong are we to go after them) best segments are the ones that rate high in both categories slide 6, module 2.2

MarkStrat Quiz 1: The battery life characteristic for the Sonite brands is between:

24 - 96 Hours

MarkStrat Quiz 1: The maximum number of Sonite brands a firm can market at any given time is:

5

MarkStrat Quiz 1: Your marketing budget is used each period to invest in:

All of these (Market Research, Sales Force, Advertising)

MarkStrat Quiz 2: There is only one way to re-position a brand: through advertising.

False - can also reposition a brand through R&D (usually when distance between current and desired perception is too large)

MarkStrat Quiz 1: There are 4 distribution channels available: Specialty Stores, Mass Merchandisers, Online Stores and Direct Sales Force.

False: there are 4 - DSF isn't one of them

Inputs and Outputs of the MP #1 framework

Inputs (3 C's) : - All Potential Customers - Your Company - You Competitors Inputs lead to 'managing customer heterogeneity' which creates the outputs Outputs (STP) : - Industry Segmentation - Target Segments - Positioning Segments -slides 9-11, module 2.1

- Latent vs Manifest customer differences

Latent: exist in customers mind or "hidden" (no supplier is offering that product so preferences aren't known - this could be relevant to "smart hat" or "Vodite Market") Manifest: observable differences (purchase history)

Roles of corporate and marketing strategy

Marketing Strategy Consists of: - Growing Market Size - Grow Mkt Share - Better Prices and Margins - Reduce Costs Corporate Strategy: More financially focused ("how your firm will be financed", "your debt to equity ratio") - slide 9 of module 1

Definition of marketing strategy

Marketing Strategy consists of the decisions and actions focused on building sustainable differential advantage, related to competitors, in the minds of customers, to create value for stakeholders.

MarkStrat Quiz 1: Your overall objective in Markstrat is to maximize:

SPI (Stock Price Index)

MarkStrat Quiz 1: What does distribution coverage refer to?

The number of stores carrying a given brand

Definition of customer heterogeneity

The variation among customers in terms of their needs, desires, and subsequent behaviors heterogeneity means 'differences' -slide 3, module 2.1

How to perform segmentation

based on underlying needs, not descriptors Segmentation is done based off of needs (Need-Based Segmentation) - examples: needs, wants, benefits, solutions to problems, usage situation, usage rate, decision processes, past behavior NOT descriptors like age, income, education, lifestyle, etc.) slide 22, module 2.1

MarkStrat Quiz 2: A completed R&D project can be used to modify existing brands and:

Introduce a new brand

Appropriate strategies for each AER stage

A - focus on the onboarding - leads to higher cross-selling and loyalty and lower costs E - provide new and enticing offers to them to keep them happy and prevent them from entering the retention stage/leaving R - What not to do - make it difficult for them to switch (negative word of mouth and lower loyalty) - build a strong relationship with them and enhance brand loyalty that builds self-identity slides 22-26, module 3

Definitions of 3 stages of AER

Acquisition - begins with first contact, when customers have similar needs. "prospecting stage" - educating and informing them upfront through onboarding can lower costs, increase cross-selling, and increase retention Expansion - firms trying to upsell or cross-sell to expand sales with existing customers. Also need to anticipate and adapt to future migration paths. Can help customers from maturing and considering competitors. Retention - even after a while and with new offerings, relationships can grow stagnant. consumers often want to try something new just because it's different. slides 22-26, module 3