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Marketing Management Review 1
Chapters 1,2,16 Flashcards
55
Marketing
Undergraduate 3
02/04/2013

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Term
Marketing
Definition
Creating, communicating and delivering value to the target market at a profit.
Term
Product
Definition
Goods, services, or ideas that satisfy customer needs.
Term
Price
Definition
Decisions and actions that establish pricing objectives and policies and set product prices: margins, pricing, discounts, allowances, VALUE.
Term
Place
Definition
The ready, convienant, and timely availability of products; channel choice; inventory, distribution, warehousing, order processing, materials handling, transportation.
Term
Promotion
Definition
Activities that inform customers about the organization and its products; advertising, personal selling, public relations, sales promotion, word-of-mouth.
Term
MSRP
Definition
Manufacturer Suggested Retail Price; the end price to the consumer.
Term
Gross Margin Formula
Definition
Selling Price (aka Revenue)-Variable Cost
Term
ACSI
Definition
American Customer Satisfaction Index; show that customer satisfaction is a leading indicator of company financial performace.
Term
Satisfaction Formula; Definition
Definition
Perception-Expectation; Consistent quality and continuous improvement; leading indicator (predictor) of operating performance.
Term
Mantra
Definition
A commonly repeated word or phrase.
Term
Marketing's Mantra
Definition
Increased customer satisfaction leads to increased customer retention which leads to increased sales and/or revenue, which leads to increased profit and shareholder wealth.
Term
CSI Scale; Definition
Definition
0-20 Very Dissatisfied; 20-40 Dissatisfied; 40-60 Somewhat Satisfied; 60-80 Satisfied; 80-100 Very Satisfied;
Customer satisfaction index is a forecast of future revenues and profits; An index number, however, is just a benchmark.
Term
De-averaging CSI
Definition
Provides a wide-angle view of customer satisfaction and allows managers to see more completely the opportunities for improvement.
Term
New Customers vs. Retained Customers
Definition
It is 5 times more expensive to acquire a new customer than to keep an existing customer.
Term
Customer Base Formula
Definition
Retained customers+ Lost customers
Term
Percentage Change Formula
Definition
new-old
__________
old
Term
LTV
Definition
The discounted sum of all future customer revenue streams minus product and servicing costs and remarketing costs; the expected NPV of the cash flows from a customer relationship.
Term
Customer Lifettime Value
Definition
Increases expontentially with increases in Customer Retention.
Term
Average Customer Life
Definition
5 years
Term
Customer Life Formula
Definition
1/(1-Customer Retention)
Term
Loyal Customers
Definition
High performance in all 5 aspects of customer loyalty.
Term
Repeat Customer
Definition
Great customers that buy often but score lower on purchase amount, product reference, and customer recommendation.
Term
Captive Customer
Definition
Have a long customer history and average purchase amount but would leave if they could, as they are dissatisfied captive customers.
Term
New Customers
Definition
Score low on all aspects of customer loyalty as they do not yete have the customer history to access their customer loyalty.
Term
Unprofitable Customers
Definition
Score low on all 5 aspects of customer loyalty.
Term
Customer Value Strategies
Definition
Attract new customer to grow market share--grow market demand by bringing more customers into the market and enter new markets to create new sources of customer volume.
Term
(4) Market Growth Strategies
Definition
Market Penetration; Market Development; Product Development; Diversification
Term
Market Penetration
Definition
(Current Products; Current Markets) Aggressive marketing mix; Increase Customer usage rates; Attract competitor customers
Term
Market Development
Definition
(Current Products; New Markets) Appeals to new markets; New Geographic; New users.
Term
Product Development
Definition
(New Products; New Products) Add/modify product features; Create several quality levels.
Term
Diversification
Definition
(New Products; New Markets) Concentric: marketing synergies; Horizontal: new products to same market, but unrelated; Conglomerate: no relationship.
Term
Total Revenue Formula
Definition
Selling Price*Quantity
Term
Customer Volume Formula
Definition
Market Demand*SOM %*units/time frame
Term
Margin/customer Formula
Definition
Revenue/unit-VC/unit
Term
Gross Margin/Profit Formula
Definition
Customer Volume*Margin/unit
Term
Net Marketing Contribution Formula
Definition
Gross Profit-Marketing Expenses; helps to look at a product alone to decide whether to keep or loose the product.
Term
Net Profit/Income Formula
Definition
NMC-Operating Expenses (fixed costs)
Term
Assets affected by Marketing Strategies
Definition
Accounts Receivable; Investment in Inventory; Investment in Fixed Assets
Term
Accounts Receivable Formula; Definition
Definition
Customer service affects payment speed; Customer volume*revenue per customer*% days outstanding
Term
Inventory Formula; Definition
Definition
Market demand affects inventory levels; channel choices determine who stores inventory; customer volume*VC per customer*% days in inventory
Term
Fixed Assets
Definition
Correlated to sales volume, thus marketin decisions impacts assets and ROA
Term
(2) Options for Profitability Measures
Definition
Increase NMC; Reduce operating expenses. These choices impact ROS and net profit or sales
Term
Average Cost Formula
Definition
Total Costs-Units Sold
Term
Total Variable Costs Formula
Definition
Unit Variable Costs * Units Sold
Term
Unit Contribution Formula
Definition
Total Revenues - Total Variable Costs
Term
Total Revenues Formula
Definition
Selling Price per unit* units sold
Term
Break even point
Definition
Where Total Costs = Total Revenues
Term
Unit break even formula
Definition
dollar break-even/unit price
Term
Dollar break even formula
Definition
Break even * unit price
Term
Unit break even formula
Definition
FC/(SP-VC)
Term
Financial metrics
Definition
internal performance metrics
Term
Marketing metrics
Definition
external performance metrics
Term
Marketing return on investment (ROI)
Definition
NMC/Marketing sales and expenses * 100%
Term
Marketing return on sales (ROS)
Definition
Tells what portion of sales are marketing profits--a benchmark. NMC/Sales * 100%
Term
Sign that a product is profitable
Definition
The NMC is profitable
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