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