PBM Final
Switching Cost Effect
Buyers are less price sensitive, the higher the costs (monetary and non-monetary) of switching suppliers
Unique Value Effect
Buyers are less price sensitive, the more they value unique attributes that differentiate your product (Heinz emphasizes importance of thickness in ketchup)
Expenditure Effect
Buyers are more price sensitive when the expenditure is a large amount (for business buyers) and a large proportion of their incomes (for households)
Fairness Effect
Buyers are more sensitive to a product's price when it is outside the range they perceive as "fair" or "reasonable" (gasoline)
Inventory Effect
Buyers' ability to hold an inventory of a product for later use substantially increases their sensitivity to temporary price deviations (canned food)
5 C's
Company, Customers, Collaborators, Competitors, Context; answers "Analyze this" type questions; Company internally focused while the rest are external
Positioning Map
A tool that helps marketers place products in a market by graphically illustrating consumers perceptions of competing products within an industry
Customer Experience Mapping
AKA "journey map," a visualization of how your customers experience a journey such as shopping for a product, calling customer support or using a product for the first time; a qualitative research technique used to understand the customer buying cycle from beginning to end; understanding the customer experience could lead to insights about how to effectively market to customers, and about their "pain point," which could lead to new services to address them; shows the experience through customer's eyes
Time Series Analyses
A method used in forecasting sales that involves analyzing past sales data and the impact of factors that influence sales (long-term growth trends, cyclical fluctuations, seasonal variations).
Compromise Effect
Add an Alternative So That You Become the Compromise (Middle Man)
Attraction Effect
Add an Asymmetrically Dominated Alternative (Decoy with less benefits but high price)
A/B Testing
Experimental design that permits a manager to evaluate the effect of two experimental factors; Version A might be the currently used version (control), while version B is modified in some respect (treatment); needs to have a control, randomization, and some sort of measurement; commonly used in digital marketing to test elements such as copy text, layouts, images, and colors
Behavioral Segmentation
Identify customer behaviors driving relationship profitability and lifetime value (Recency, Frequency, Monetary Value) Pros: Good for targeting for sales, service, retention actions Cons: Tells you what they did, not why they did it
3-Circle Analysis
Venn diagram with overlapping circles representing what customers value, what our company offers, and what competitors offer; overlapping areas answer point of difference with competitor, points of parity with competitor, and competitor's points of difference
Google Correlate
What Google search patterns correspond with real-world data trends (e.g. your sales); helpful for forecasting new durables
Ingredient Brand
a brand that is incorporated into another brand as a selling feature (Intel Inside)
Sub-Brand
a brand under an existing parent brand (Courtyard Marriott)
Sponsored Search
Pay-per-click tactic that displays your ads in the sponsored search results at the top, along the side, and across the bottom of search results pages for searches that relate to your keywords
Net Promoter Score (NPS)
a commonly used forward-looking metric of performance collected via a survey of current customers; the basic idea is that a firm's/brand's best customers act as evangelists and promote it to others; these actions are countered by detractors, a group that accounts for the majority of negative word-of-mouth comments; customers are asked, "How likely is it that you would recommend [Firm X, or Product Y] to a friend or colleague?," typically on an 11-point scale; = % of Promoters (9s and 10s) less % of Detractors (0 through 6s)
Chain-Ratio Method
a forecasting (or market sizing) method where a base number (e.g. # of potential customers, # of households) is multiplied by a chain of related percentages and/or rates; the idea is to break a complex problem into pieces
A-T-A-R Model
a new product adoption framework to forecast market share for frequently purchased products; follows from a hierarchy of effects framework: become aware -> try it -> buy it if I can find it, or it's distributed -> if satisfied, then adopt; breaks a complex task into component parts, which can be measured separately and have their own marketing plan components
Brand Personality
a set of human characteristics associated with a brand name
Hierarchy of Effects
a stepwise process where a consumer moves from unaware -> aware -> knowledgeable -> interested -> intention -> purchase; we can measure each stage and the root cause of a low value at a given stage as linked to marketing actions (e.g. high interest but low purchases likely means a distribution issue)
Pulsing
a superior communication style to low and steady as it creates moments of peak performance that don't suffer from monotony
Concept Test
a test to evaluate a new-product idea, usually before any prototype has been created; used in Conjoint Analysis
Multi-dimensional Scaling
a type of exploratory data analysis that reduces large amounts of data into easy-to-visualize structure to help the analyst find structure (visual representation) in a set of distance measures, e.g. dis/similarities, between brands.
Scan-Back Trade Promotions
a type of trade deal which gives retailers a discount on units sold during the promotion period rather than on units bought (as would be the case with off-invoice trade promotions); do not cause excess ordering or forward-buying and generate higher retail sales through lower retail prices; incentive is based on what the retailer sells
Product Benefits
actual factor (cost effectiveness, design, performance, etc.) that satisfies what a customer needs or wants
Display Ad
ads shown in websites, which can be banner ads, rich media ads or text ads.
Sponsored (Paid) Search
advertiser's specify keywords they wish to target and the maximum prices they are willing to pay; sponsored search ads are listed in special sections near algorithmic results; advertiser pays if a user clicks on the ad; issues include poor targeting, cannibalization (user would normally click on algorithmic ling), and overly aggressive bidding relative to margins on the product
Value-Oriented (Demand-Oriented) Pricing
aligning price with value delivered; price is set primarily on the perceived value to the customer, rather than on other approaches to pricing such as the actual cost of the product, the market price, competitors' prices, or the historical price; this supports a market-oriented business model
Paid Media
brand pays to leverage a channel such as display ads, paid search, or sponsorships
Private Label
branded items produced exclusively for one store.
Perceived Substitutes Effect
buyers are more price sensitive the higher the product's price compared to the price of perceived substitutes (Crest sells WhiteStrips as a substitute for professional teeth whitening)
Owned Media
channel a brand controls such as website or blog
Segment Descriptors
characteristics that help us find and reach segments; variables that are related to segments and assist in describing, identifying, and targeting a segment; these are often demographics
Bases of Segmentation
characteristics that tell us why segments differ (e.g., needs, preferences, decision processes); the "true" underlying reasons for segments such as benefits sought or decision processes; because because these are often difficult to observe, a second step is employed to profile the resulting segments using more easily observed variables to assist in finding and reaching the segments
Earned Media
consumer becomes the channel through WOM, buzz, and viral
Bass Diffusion Model
describes new product adoption (durables or technology goods) by presenting a rationale of how current adopters and potential adopters of a new product interact; the basic premise of the model is that adopters can be classified as innovators or as imitators and the speed and timing of adoption depends on their degree of innovativeness and the degree of imitation among adopters; S-shaped adoption curves with a sharp point of inflection result when imitation is high
Positioning
designing your offering and image to occupy a distinctive place in the mind of the customer
Parent Brand
existing brand that gives birth to brand extension (Toyota Camry)
Pre- and Post-Promotion Dips
in frequently purchased goods sales increase above their "normal" level during a promotion period; this period of increased sales is often preceded and followed by periods where sales are below their normal level; reasons include consumers anticipating the promotion and stockpiling; on average about 2/3 of the sales increase during a promotion period are incremental after netting out these effects
Social Media
independent and commercial online communities where people congregate, socialize, and exchange views and information
Push Strategy
strategies aimed at getting products into the dealer pipeline by offering inducements to dealers, retailers, salespeople (e.g. distribution allowances); this is contrasted with a pull strategy whereby a manufacturer relies mainly on product advertising or consumer sales promotions; uses the manufacturer's sales force, trade promotions, or other means to induce channel intermediaries to carry, promote, and sell the product to end users; appropriate when brand loyalty is low, brand choice is made in store, the product is an impulse purchase, and the product's benefits are understood
Waterfall Pricing
larger sizes should have a lower per-unit price than smaller sizes; rationale includes perceived fairness and loading up pantries (household inventory) in order to lock out competitors
Benefit Stack
list the benefits your company offers
Decision-maker Stack
lists the customer's decision makers, specifying their concerns, motivations, and power bases
Cluster Analysis
technique for grouping objects (usually customers in marketing applications) such that the objects are relatively homogeneous within a group, and the groups are heterogeneous with respect to each other; a common use is in segmentation where we want to group together customers with similar needs
Conjoint Analysis
technique for inferring a customer's preferences from choices or rating of products; decomposes preferences into utilities associated with each attribute or feature for an individual customer
Brand Essence
the brand's promise expressed in the simplest, most single-minded terms (i.e. Disney = Magic); the most powerful ones rooted in a fundamental customer need.
Off-Invoice Trade Promotions
offering a TPR to retailers for a short duration with no limits on purchase qty.; incentive applies to units purchased/what the retailer buys; retailers trade-off costs of carrying excess inventory against gain from lower purchase price
Customer Lifetime Value
the discounted sum of all future customer revenue streams minus product and servicing costs and re-marketing costs; useful for getting firms to think of customers as assets and for instilling a more long-term (versus short-term transactional) perspective (as we discussed in the Brita case)
Behavioral Re-Targeting
online advertising is targeted to consumers based on their previous Internet actions, in situations where these actions did not result in a sale or conversion; an example is tagging an online user who visits a brand's website (which is taken to mean they have some engagement with the the brand), and then serving the brand's ads more frequently to that user as they browse the Internet
Creative Brief
outlines instructions to a creative team, who is often from an outside agency; 3 components: consumer insights, communication strategy, and execution; good briefs show discontent with the status quo and a vision of being better off through the brand
Emotional Benefits
perceived factor (image, popularity, reputation, etc.) that satisfies what a customer needs or wants
Share-of-Voice
percentage a brand's communications has in comparison to the marketplace (i.e. it and its competitors)
Product Attributes
physical or qualitative differences in the products themselves
Corporate Brand
the use of a firm's own corporate name to brand all of its product lines and products.
Factorial Experiment (Multi-Variate Experiment)
experimental design that permits a manager to evaluate the combined effect to two or more experimental factors when used simultaneously; full factorial designs evaluate every level of one factor at all levels of all other factors; fractional factorial designs reduce the number of treatments needed by say allowing only main effects (i.e. no interaction effects) for the experimental factors to be considered
Ethnographic Observation
form of observation where you observe consumer using product in normal usage; look out for nonstandard uses, interactions with environment, customization, intangibles, and unarticulated needs
Saturation
point at which communications effort becomes ineffective due to its exposure to the market
Threshold
point that communications effort needs to reach before awareness becomes truly effective
Customer Benefit Ladder
probing questions to move from attributes to underlying values
Brand
promise made to the consumer, built and reinforced over time in their hearts and minds; goal of marketer is to build and maintain this through marketing activities that move the customer along a continuum of commitment
Fractional Factorial Experiment
reduces the number of treatments needed in a factorial experiment by say allowing only main effects (i.e. no interaction effects) for the experimental factors to be considered
Market Mix Model (Marketing Response Model)
refers to the mix of controllable marketing variables (tactics) available to managers; relates some measure of marketing performance such as sales or marketing share to marketing mix variables; the purpose includes understanding the relative effect of each variable and assisting with resource allocation across marketing mix elements
Google Trends
relative frequency of Google search terms; relative intensity over time of various topics consumers are seeking information about; can be useful for understanding macro or aggregate trends in consumer needs
Consumption Expandability Effect
size of per-unit discount should be great if people consume more when they have more on hand; rationale: account for inventory effect on consumer behavior
Stock-Out Effect
size of per-unit discount should be lower if the economic or psychological costs of stock-outs are high; rationale: Less price sensitive when stock-out costs are higher
Lead Users
unmet needs inspire these users to tinker with products, seeking customized improvements; along the way, they just might come up with new product ideas that plenty of other users eventually will want to buy; arrive ahead of adoption curve
Quasi-Market Tests
used by AC Nielsen BASES, a forecasting model for new frequently purchased products based around hierarchy of effects
Generic Brand
general name for a product rather than a specific brand name given by the manufacturer
Algorithmic Search
guarantees optimality, sacrifices efficiency
Loyalty Ladder
helps a company determine how much time and money to spend on relationships with various customers
Pass-Thru
how much of a trade promotion gets passed through to consumers by the retailer
4 P's
Price (What I give up), Product/Service (Brand, Package, Form, Quantity, Logo, Color, Size, etc.), Promotion (Advertising, Consumer Promotions, Trade Promotions), Place/Distribution (Gaining access to markets; answers "How should we do it?" type questions
Difficult comparison Effect
Price sensitivity is lower when it's difficult to compare alternatives (An alternative pain reliever whose chemical formula is different than your usual brand)
Price-Quality Effect
Products where price itself adds value (e.g., image, exclusivity) (AmEx Gold Card)
MaxDiff
Measures most/least important or most/least appealing. Determine choice preferences
Attitudinal Segmentation
More complete understanding of underlying decision processes; Pros: Helps support development of a differentiating message; Cons: Data collection effort
End-Benefit Effect
The more sensitive buyers are to the cost of the end benefit, the more price sensitive they are to products that contribute to that (Position premium gasoline as worth it for your car)
Positioning Statement
"To [target group, users, needs], [brand name] is the brand of [competitive framework] that [point of differentiation benefit] because [reason to believe]. The brand character is [brand character]."
Affiliate Marketing
An internet-based marketing strategy in which a business rewards individuals or other businesses (affiliates) for each visitor or customer the affiliate sends to its website
S-shaped Response Functions
S-shaped with an intercept above zero to account for awareness created through means other than just advertising; the initial flat part captures the threshold effect, then we have increasing returns; the relationship then ultimately exhibits decreasing returns as it gets harder and harder to find potential customers who are unaware; implications are that it supports resource allocation decisions
STP
Segmentation, Targeting, and Positioning; answers "What should we do?" type questions
Email Marketing
Sending highly targeted, highly personalized, relationship building marketing messages via email
Shared-Cost Effect
The smaller the portion of the purchase price buyers must pay themselves, the less price sensitive they are (Doctor's visits that are partially covered by insurance)
Natural Experiment
the experimental conditions (i.e. units which receive treatment) are determined by nature or other factors outside the control of the experimenter; there is no random assignment to a treatment group; these are not controlled experiments
Brand Equity
the marketing effects or outcomes that accrue to a product with its brand name compared to those that would accrue if the same product did not have the brand name; its significance relates to helping firms more formally value the brand as an important intangible asset
Cohort Analysis
the process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values and behaviors; analysis of age effects (consumption changes when people grow older), cohort effects (consumption behavior remains constant within a generation), and period effects (environmental factors associated with a particular point in time)
