MKTG 490 Markstrat quiz
Cognitive development, component benchmarking
2 models of brand equity
Growth stage
2nd stage of lifestyle perspective
semantic, multidimensional, conjoint
3 studies that provide information on how to reposition a brand
customers, brands, products
3 things to prioritize when facing trade offs
company dashboard, financial report, production report, r&d report, decision review, feedback
6 components of company results
acquisition cost for customer in $
AC
Net earnings
CAM - market research studies - R&D - interests paid - ECP
Contribution after marketing (CAM)
CBM - advertising media - advertising research - commercial team costs (your decisions).
Competitive Advertising
Competitive advertising budgets are given by firm, by brand and by consumer segment. The breakdown by brand and consumer segment is also provided. All brands marketed in the current period are included in the study. See Figure 30 for an extract of this study.
Available since
Completed projects only. This is the period when the project was completed.
acquisition, expansion, retention, contagion
Customer management decisions (AERC)
Exceptional cost or profit (ECP)
Exceptional items such as brand withdrawal costs.
shoppers
Good product knowledge through extensive product comparison. • Demand high quality-price ratio • Quite price-sensitive.
acquisition funnel stats
How many prospects • Cost per prospect • Quality score of each prospect • What percent convert to paying customers • What is cost of conversion • What efforts can help get us prospects • What efforts can help convert prospects • What is the cost & ROM on these efforts?
Interests paid
Interest paid on loans granted in previous periods.
data research and analysis, STP, Marketing mix
Markstrat components
professionals
Personal and professional usage • Look for high quality, high-performance and easy-to-use products • Can afford expensive products
Additional graphs
The charts and graphs listed above are given in the main report of the study
Financial report
This report provides you with revenues, costs and profit information at the company, market and brand levels.
pressure & disruption
competitors react
Market research studies
costs of the market studies purchased during the period (your decision).
income split
estimates the present value of firm's income attributable to brand; but uses reported earnings, which can be manipulated
discount rate as %
i
minimum base cost
is the cost below which it is impossible to manufacture the future product without taking productivity gains into account.
sonite
product category o
Market Forecast
provides estimates of the expected market size in one period and in five periods.
goals
quantifiable objectives for a given period
purchase intentions - market shares
sales lost
Commercial Team experiment
set up by increasing the size of the commercial team in each channel in a selected regional market
brand contribution
the amount of contribution, or revenue minus all expenses
knowledge
the extent the customers are familiar with the brand
esteem
the regard customers have for the brand's quality, leadership, and reliability
customers, company, competitors
3 C's of data research and analysis
potential sales, existing inventory, production flexibility
3 aspects of estimating manufacturing need
Intelligence generation, Intelligence dissemination, Responsiveness
3 components market orientation measures
market and competitive news, company and competitive results, market research studies
3 components of annual report
brand awareness, purchase intentions, and market share
3 data sections of the consumer survey
specialty stores, mass merchandisers, online stores
3 distribution channels
price premium, income split, royalty relief
3 estimation of brand equity
utility, brand, service relationship
3 levels of value to customer
return on investment, return on assets, customer portfolio value
3 strategy or goal level control loop metrics
customer, company, strategy/goal
3 types of control loop metrics
followers, early adopters, innovators
3 vodite segments
Maturity-saturation stage
3rd stage of lifestyle perspective, Dog eat Dog: Few new buyers or applications, offering become standardized, market consolidates, aggressive pricing - Marketing tactics: cross sell, lower costs, reimagine & leverage for next evolution (ipod to iphone to ipad) - Goals: increased frequency of usage, find new growth path
product, place, promotion, pricing
4 P's of marketing mix
relative advantage, competition, dynamics, uncertainty
4 components of strategy
customers are different, customer change, competitors react, resources are limited
4 fundamental problems
knowledge, relevance, esteem, differentiation
4 pillars of component benchmarking
relationships, response, meaning, identify
4 stages of brand development
identity, meaning, response, relationship
4 stages of cognitive devlopment
introduction, growth, maturity-saturation, decline
4 stages of lifestyle perspective
Decline stage
4th stage of lifestyle perspective
issue, SWOT, Goals, tactics, metrics
5 aspects of planning control loop of marketing strategy planning process
market, performance, benchmarking, brand charts
5 categories of graphs
Market share, Sales growth, Net contribution, Cumulative net contribution, R & D investments
5 optimization aspects of Markstrat
sell out, disruptive innovation, market shifts, competition, manage products not customers
5 reasons companies die young
explorers, professionals, shoppers, high earners, savers
5 sonite segments
number of features, design, battery life, display size, processing power, base cost
6 attributes of sonite products
resolution, energy efficiency, carbon footprint, connectivity, number of apps, base cost
6 features of Vodite product
awareness, word of mouth, satisfaction, retention, share-of-wallet, customer lifetime value
6 types of customer level control loop metrics
price, production, advertising, commercial team, order marketing research, perceptual advertising
6 types of decisions
Customer lifetime value/CLV
A form of customer-centric accounting where firm's value is the sum of cash flows accrued over each customer's "lifetime" Captures "true" contribution by accounting for: Customer heterogeneity and dynamic effects (varies by individual (segment) and discounts future profits) Tensions and tradeoffs among AER strategies (does acquisition tactic lead to retention failures?)
Brand maps
Additional charts and graphs are available in the study. Brand maps provide a graphical representation of ideal values and brand perceptions on two dimensions at a time. Five maps are provided in the study.
lifestyle perspective
Approximation of Customer Dynamics • Assumes that customers evolve with products & industries in a sequential set of "stages" • Applies a standard set of marketing tactics at each stage
equity
Assets - Liabilities=
m(r/(1+i-r))-AC
CLV formula
Importance of characteristics
Finally, respondents are asked to rate the importance of each characteristic in their purchasing decision
explorers
Highly interested in Sonite product • Demand high performance products • Quite price sensitive
Inventory costs
Inventory holding cost + Inventory disposal loss
Inventory disposal loss
Loss incurred when selling inventory to a trading company because of a product upgrade or brand withdrawal. Units in inventory x Unit transfer cost x Inventory disposal cost in % (given in the market news report).
revenues
Number of units sold x Average selling price. The selling price is equal to the retail price (your decision) minus the distributors' margin.
Cost of goods sold (COGS)
Number of units sold x Unit transfer cost. The transfer cost is equal to the base cost of the underlying R&D project minus the productivity gains.
customer centric firm
Organizational alignment to the customer. Empathy for the customer drives organizational design. Input: specific customers' needs Define the firm from the customers' point of view Action: orients all decisions to unifying central purpose Vision/mission Structure Culture Metrics How might CC factor into HR? Output: customer satisfaction, service quality, loyalty, NPS
Ideal values
Respondents are also asked to indicate their preferred (also called "Ideal") value on each scale. The reported results are summarized in a table such as the one in Figure 26, using the mean value for each segment.
Brand perceptions
Respondents are asked to rate each brand on a scale from 1 to 7 according to the way they perceive the brand
Contribution before marketing (CBM)
Revenues - COGS - inventory costs
sustainable competitive advantage
SCA
supply side/ inherent value
Similar to economies of scale (e.g., pre internet newspaper) but for supply networks • The more exclusive suppliers to one host, fixed costs and production costs fall, suppliers cant leave, "host" benefits • Netflix and AirBnB
Physical Characteristics
The physical characteristics of the future product. This data is given in the relevant units for each characteristic, e.g. gigaflops for processing power or kilograms for carbon footprint.
Perceptual Maps
The study gives the minimum number of dimensions that are sufficient to provide a good fit to the data
Ideal value evolution
The study monitors the evolution of consumer needs over time. The preferred values on each scale over the past 3 years are recorded and displayed in a table for each consumer segment,
Industry Information
This is a short report showing the evolution of economic variables such as inflation rate and GNP growth rate, and providing the cost for the next period of items such as market research studies, commercial people, holding units in inventory or the disposal of inventory units in the case of a product withdrawal or upgrade. All cost calculations are done for you by the simulation. So you should not need to look at the report in detail.
Platform of brand
This is the name of the brand that is based on this project. This column is void for projects that are not yet or no longer in use.
Decision Review
This report recalls the decisions that your team made at the beginning of the current period: brand management, commercial team management, R&D projects and the market research studies purchased
Estimated Communication Dimensions and Message Quality
This section provides an estimate of the dimensions that have been used by all brands in their communication, as well as an estimate of the message quality. Higher message qualities are obtained with higher advertising research budgets.
Research & Development Report
This set of reports provides information on all R&D projects launched in the previous periods.
Competitive Commercial Team
This study estimates the size of competitive commercial teams by firm, brand and channel, and how the teams are allocated to brands and channels
Inventory holding costs
Units in inventory x Unit transfer cost x Inventory holding cost in % (given in the market news report).
Influence of Product Characteristics on Perceptual Dimensions
We will see in the chapter Positioning and Research & Development that the MDS study is useful in positioning brands. This is why it is important to relate the three dimensions identified by the MDS study to the most important physical characteristics of the category. An indication of the influence of product characteristics on perceptual dimensions is provided in a table such as the one in Figure 29
margin stats
What is average revenue per user • What is average cost to serve • How consistent is our margin across our entire customer portfolio • Should we segment by: • product lines • how long they have been a customer • cost to serve • needs or demographics • How can we expand average revenue? • How can we decrease cost to serve? • What is cost and ROM of efforts to change these? • Does change hurt acquisition or retention efforts?
retention stats
What percent of cohort is retained each year • Is this percent stable • Does it change over time (year 1 vs year 3) • Is it consistent across Customer types (should we track by segment) • Are there any particular "triggers" that increase or decrease defection likelihood? • How can we increase retention rate? • What is cost and ROM of these efforts? • Do these efforts add to cost to serve or impact acquisition success
demand side/value from other users
With each new user, all existing users benefit • Telegraph Facebook.
market orientation
a measurable company wide competency of staying on top of the ongoing changes in the marketplace
Conjoint Analysis
a statistical technique used to calculate the value - also called utility - attached by consumers to varying levels of physical characteristics and/or price.
Consumer Survey
a survey questionnaire administered to 3,000 individuals during the simulated period
planning, implementing, controlling
alternative marketing strategy planning process
Points of difference
are the attributes that make your brand unique. It is your competitive advantage. It is what your brand slogan should reflect.
points of parity
are those elements that are considered mandatory for a brand to be considered a legitimate competitor in its specific category
15 years
average lifespan of company
Consumer Panel
based on a sample group of over 500 consumers whose buying behavior is believed to be representative of the entire market
royalty relief
based on hypothetical cost of licensing the brand or revenue share from selling through another company's salesforce (e.g., IBM & Box). Estimated from similar arrangements.
Research & Development
budgets allocated to R&D projects during the period (your decision).
micro change
change in desires, needs and uses
size, cost
commercial team decisions
share price, tobin's Q
company level control loop metrics
price premium
compares branded vs. unbranded products to determine increases (or decreases) in customer willingness to pay
Industry Benchmarking
compiles general information from annual reports about each of the Markstrat competitors
segmentation analysis
consists of dividing the market into groups of customers where Customers within group have very similar needs Customers across groups have different needs
macro change
culture & politics
dynamics
customer change
heterogeneity
difference in customers
tactics
executable behaviors that facilitate goal acheivement
introduction stage
first stage of lifestyle perspective, Trial & learn. Exhilarating or exhausting - Marketing tactics: - Stimulate trial: advertising, samples, PR - Educational onboarding: co-learning, adapting, and fixing - Goal: Find narrow target "product-market-fit" and perfect for target
GE/McKinsey/BCG matrix
has 2 axis', segment attractiveness, and brand/product relative strength, with 4 different categories based on their position on the axis'
Stars
high segment attractiveness, high relative strength, must grow
must upgrade or liquidate
high segment attractiveness, low product strenghts
required budget
is the budget required to finish the project, i.e. the additional budget that must be invested to ensure that the project will be completed in the following period. You may attempt to finish the project with a lower budget but its successful completion is not guaranteed
current base cost
is the one that you entered in the R&D decision form when specifying the project
cumulative budget
is the total budget that has been allocated to this project over time
dogs
low relative strength and low segment attractiveness, must retire
cash cows
low segment attractiveness, high relative strength, must hold
margin=(revenue-costs to serve)
m
return on marketing
outcome/cost
Distribution KPIs
part of the scorecard, Overall distribution coverage; distribution costs, in million dollars and in percentage of revenues; estimates of lost sales due to insufficient commercial efforts.
R&D KPIs
part of the scorecard, R&D expenses, in total and in each market; number of completed R&D projects, in total and in each market.
Marketing KPIs
part of the scorecard, Total market share, in volume and value; market share in each market; number of marketed brands, in total and in each market; number of brands leading in a segment
Financial KPIs
part of the scorecard, Total revenues; revenues in each market; revenues from new brands (other than your two initial brands); Total contribution after marketing (CAM); CAM generated by each market; CAM generated by new brands; net contribution, in million dollars and in percentage of revenues.
Production KPIs
part of the scorecard, Volume sold; volume produced; units in inventory; inventory costs; estimates of lost sales due to production shortage.
vodite
product category e
Multidimensional scaling of brand similarities and preferences
provides a joint space configuration obtained with non-metric multidimensional scaling.
Distribution Panel
provides continuous tracking of product sales to consumers based on information gathered at the retail point-of-sale
Semantic scales
provides data based on a semantic differential questionnaire administered to 600 individuals
Competitive Advertising and Commercial Team Estimates
provides estimates of the advertising and commercial budgets spent by the companies in each market during the simulated period.
Market & Competitive News
provides general and financial data on the industry, on the competing firms and on marketed brands. This is publicly held information; i.e. all competing firms have access to the same documents. The news consists of three or four sections, depending on the availability of Vodite brands.
Industry Dashboard
provides you with a one page summary of key performance indicators at firm and brand levels such as stock market data, retails sales and market shares in value and volume, revenues and contribution. The layout will vary over time, especially when the first Vodite brands are put on the market
company dashboard
provides you with a one page summary of the key performance indicators of your firm and your brands such as stock market data, market shares in value and volume, revenues and contribution. The layout will vary over time, especially when you introduce your first Vodite brands
Production Report
provides you with information on the number of units produced, the number of units in inventory and on production costs for each of the brands marketed in the period.
Market report
provides you with the market shares (in units and in dollar value), the volume sold and the retail sales of all marketed brands (Sonites or Vodites). Volume and retail sales are given for the current period, and the variation with the previous period is provided as well. Newly launched or upgraded brands are flagged. The physical characteristics, base cost and price of all marketed brands are given as well. Again, newly launched or upgraded brands are flagged.
retention rate as a %
r
opportunity cost
resources are limited
Advertising experiment
s conducted by increasing advertising budgets in a selected regional market. The results of the study are used to project the level of awareness and the market share that would have been achieved nationwide by each brand with the same increase in advertising and if competitive actions had remained unchanged.
Utility charts
show the utilities attached to four arbitrary levels in each dimension included in the study
Scorecard
shows the evolution of key performance indicators of your company in Finance, Marketing, Production, Distribution and R&D
Relative importance of price and physical characteristics
shows the relative importance of price and the three physical characteristics that are perceived as most important in the market
relevance
the extent to which customers find the brand to be relevant to their unique needs
differentiation
the extent to which the brand is seen as distinct
