Term
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Definition
Creating value for customers
Building strong customer relationships
Capturing value from those relationships |
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Term
| Needs vs Wants vs Demands |
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Definition
Need: state of felt deprivation
Wants: the form needs take shaped by culture and individual personality
Demands: wants backed by buying power |
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Term
Customer Needs
Customer Types |
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Definition
Today's Business: Articulated needs and Served types of customers
Unexploited Opportunities: served/unarticulated, unserved/articulated, unserved/unarticulated |
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Term
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Definition
Customer Relationship Management
Building relationships by delivering satisfaction |
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Term
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Definition
| perceived benefits minus the costs relative to competition |
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Term
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Definition
1 Reduces cost to acquire new customers
2 Reduces cost to serve existing customers
3 Helps firm identify unprofitable customers
4 Facilitates experimenting/learning
5 Helps firms measure ROMI
6 Allows firm to focus marketing budget |
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Term
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Definition
Form Database: Identify key info, set up a system
Select Customers: select most profitable long term segments
Relationship Strategies
Monitor Results: satisfaction measures
Customer Lifetime Value CLV |
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Term
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Definition
CLV = ((M - c)/(1 - r + i)) - AC
where
M = margin generated in period t
c = retention costs for period t
i = discount rate
r = retention rate (probability of keeping the customer)
AC = acquisition cost of new customer |
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Term
| Company-wide strategic planning |
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Definition
Corporate level
Defining company mission -> setting company objectives -> designing business portfolio ->
business unit / market level
planning marketing and other functional strategies |
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Term
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Definition
Market Growth Rate : Market Share
High:High = star product
Low:High = cash cow
High:Low = potential star product
Low:Low = dog |
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Term
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Definition
Orchestrating the marketing mix to deliver value to a particular market segment
Target market + 4 Ps |
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Term
| Sustain Value (Harvard Marketing Framework) |
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Definition
CRM:
Customer acquisition - Customer Retention
- Profits - |
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Term
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Definition
Markets : Products
Existing:Existing = Market penetration (increase purchase frequency, increase purchase amounts)
Existing:New = product development (new feature, brand extension, new brand)
New:Existing = Market Development (geographic, demographic, usage occasion)
New:New = diversification (new product for a new consumer base) |
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Term
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Definition
Gross Sales
-Trade (store/discount expenses; shelving, coupons)
-----------
Net Sales
-Product Costs
-Overhead
-Transportation
-Warehousing
-----------
Gross Margin
-Ads & Promotions
-Market Research
-----------
Contribution Margin
-G&A (misc expenses)
-----------
Operating Income |
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Term
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Definition
Gross Margin
-----------
Net Sales |
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Term
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Definition
Contribution Margin
-----------
Net Sales |
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Term
| Secondary vs Primary Research |
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Definition
Secondary: Using information that has already been collected for another purpose
Primary: collecting information with a specific purpose |
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Term
| Market Research Problem: 5 steps |
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Definition
1 Define the problem
2 Design the research project
3 Collect data
4 Analyze data
5 Prepare results |
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Term
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Definition
Exploratory: informal, qualitative, observation
Descriptive: surveys, panels
Causal: experiments, models and stimulants |
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Term
| Characteristics affecting buyer behavior |
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Definition
| Cultural (culture, social class) -> Social (family, roles and status) -> Personal (age, occupation, lifestyle)-> Psychological (motivation) -> Buyer |
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Term
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Definition
Psychological motivation:
Physiological -> safety -> social -> esteem (recognition) -> self-actualization |
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Term
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Definition
Stimuli: 4 Ps (marketing), economic, technological, social (other)
------Buyer's Black Box-------
Response: buyer attitudes, buyer preferences, the purchase (what, when, where, how much) |
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Term
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Definition
No empirical evidence
Very little relevance with marketers
"People want to believe in it because they have dissonance" |
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Term
| Consumer Behavior Process |
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Definition
Problem Recognition: perceiving a need
Information Search: seeking value
Evaluation of Alternatives: assessing value
Purchase: buying value
Post-purchase evaluation: consuming, experiencing, or using value |
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Term
| Multi-Attribute Model of Attitude |
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Definition
Ao = Sumproduct of b e
where
Ao = attitude toward a product
b = the importance weight of the attribute
e = evaluation assigned to a particular attribute |
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Term
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Definition
Identify company's competitors
Assess competitor's objectives, strategies, SW and reaction patterns
Select which competitors to attack or avoid |
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Term
| How to identify competitors |
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Definition
Industry: look at the specific products or services provided
Market: look at the customer groups serviced
Form: direct competitors
Category: competitors that make the same type of product
Generic: competitors that fill the same needs
Budget: "share of wallet, share of stomach" |
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Term
| How to assess competitors (4) |
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Definition
what are their objectives
what is their current strategy? (Annual Plan + 4Ps)
what's their SWOT
How do you match? Compare Plan + 4Ps and SWOT
**Multi-step thinking: expected future strategies |
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Term
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Definition
| The spot between your Customer's Needs and Company's Capabilities that your Competitor's Offerings can't service |
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Term
| Customer-Driven Marketing Process |
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Definition
(come up with a)Basis for Segmentation
Develop Profiles (for segments)
Measure Attractiveness (of segments)
Choose Target
Differentiate Offering
Choose Position |
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Term
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Definition
Geographic (least useful, most used)
Demographic
Psychographic (lifestyle, personality, attitudes)
Behavioral - mose useful, least used (usage situations, benefits) |
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Term
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Definition
Differentiable - must behave differently
Substantial - must be large enough to be profitable
Identifiable - measurable
Accessible - reachable with marketing mix
Responsive - must respond to marketing mix differently |
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Term
| Person-by-Usage Occasion Segmentation |
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Definition
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Term
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Definition
Depends on 4 Cs AND
Profitability potential: market size, anticipated market growth, current and anticipated competition, consumer behavior |
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Term
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Definition
Just as good as competition (most used)
Beat competition
Loved by popular people
Fit consumer's lifestyles
Deliver what's most valued (most useful) |
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Term
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Definition
| For TARGET MARKET the NAME OF PRODUCT is SINGLE MOST IMPORTANT CLAIM among all COMPETITIVE FRAME because REASON TO BELIEVE |
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Term
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Definition
| Anything that can be offered in a market for attention, acquisition, use or consumption that might satisfy a want/need |
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Term
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Definition
| Represent what buying the product/service will do for the customer |
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Term
| Core-Actual-Augmented Product |
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Definition
Core Product: core customer value
Actual Product: brand, quality, features
Augmented Product: warranty, support |
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Term
| Steps in Product Decisions |
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Definition
Product Attributes
Branding
Packaging
Labeling
Product Support & Services |
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Term
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Definition
Functional: protect, inform
Strategic: influence choice, reinforce brand, differentiate, advertise |
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Term
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Definition
| Perception that exists in the minds of your consumers about your relevance and promise of value. |
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Term
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Definition
Personality (toughest but most important - loyalty peaks here)
Values of User
Emotional Benefits (important)
---------------
Functional Benefits
Attributes |
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Term
| Whats makes a good brand name? (6) |
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Definition
-suggest benefits
-simple and easy to remember
-distinct
-extendable (Amazon's brand lends itself to more than books)
-translates well in other languages
-legally defensible |
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Term
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Definition
Brand Name:Product Category
Existing:Existing - Line extension
Existing:New - Brand extension
New:Existing - Multibrands
New:New - New brands |
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Term
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Definition
Brand Identity
-Visual Elements
1-Picturing
2-Symbolizing
3-Animating
-Verbal Elements
1-Naming
2-Wording
3-Describing
-Visceral Elements
1-Sound
2-Texture
3-Scent |
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Term
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Definition
-Intangibility
-Inseparability: can't be separated from providers
-Variability: quality depends on who provides when/where/how
-Perishability: can't be saved later, so how to even out demand is an issue |
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Term
| New Product Development Process (8 STEPS) |
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Definition
Idea Generation
Idea Screening
Concept Development/Testing
Marketing Strategy Development
Business Analysis
Product Development
Test Marketing
COMMERCIALIZATION |
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Term
| Brainstorming Techniques (6) |
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Definition
-Defer judgment
-Encourage wild ideas
-Build on ideas
-Be visual
-Stay focused
-One conversation at a time |
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Term
| Chain-Ratio Forecasting Technique |
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Definition
Total Population
---------------
Population Eligible for Product
---------------
Population that will try product
*fractional repeat purchase rate
---------------
Units repurchased in first year
---------------
Total Units purchased first year |
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Term
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Definition
Innovators - risk takers
Early Adopters - opinion leaders
Early Majority - deliberate adopters
-----------(chasm)
Late Majority - skeptical
Laggards - tradition bound |
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Term
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Definition
Advertising
Promotion
Personal Selling
Public Relations
Direct Marketing |
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Term
| Communication Model (6 Ms) |
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Definition
Strategy
Market: to whom is the communication addressed?
Mission: what is the objective of the intervention?
Message: what are the specific points to be communicated?
Implementation
Media: which?
Money: how much?
Measurement: how? |
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Term
| AIDA Model: Advertising Objectives |
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Definition
Cognitive: build awareness, Attention
Affect: gain Interest, Desire
Behavioral: stimulate Action |
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Term
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Definition
| Objective, assignment, consumer insight, advertising strategy |
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Term
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Definition
Capture the attention
Imply a meaningful benefit
Announce product news
Harmonize with visual |
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Term
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Definition
Stop, Intrigue, Involve
Deliver benefit
relevant |
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Term
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Definition
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Term
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Definition
Samples
Coupons
Rebates
Price packs
Premiums
Specialty Advertising
Point-of-purchase
Event Marketing |
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Term
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Definition
Where your product is sold
ALSO all entities that participate in the flow of products from the manufacturer to the consumer |
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Term
| Illegal Pricing Strategies (4) |
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Definition
Predatory Pricing
Price Fixing
Price Maintenance
1st degree price discrimination |
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Term
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Definition
Make goods available:
in the right locations
in the right quantities
when customers want them |
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Term
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Definition
Break bulk
Provide assortment
Hold inventory
Offer services
Market Efficiency |
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Term
| Conventional vs Vertical Marketing System |
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Definition
Conventional
Producer -> Wholesaler -> Retailer -> Consumer
Vertical
Producer/Retailer/Wholesaler -> Consumer |
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Term
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Definition
Employee type and density
Merchandise type and density
Fixture type and density
Sound
Odors
Visual Factors |
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Term
| Product Life Cycle Strategies (3) |
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Definition
Market Modifying: find new uses, new markets for your product
Product Modifying: create new products within your brand
Marketing Mix Modifying: change one of 4Ps |
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Term
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Definition
Capture as much value as possible without inviting over-powering competition
Price between CoGs and perceived value |
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Term
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Definition
| Revenue(Net Sales) - VC(CoGS) |
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Term
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Definition
| Gross Margin as a percent of Net Sales |
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Term
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Definition
| Gross Margin as a percent of VC(CoGS) |
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Term
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Definition
Determine Pricing Objective
Estimate Demand
Estimate Costs
Analyze Competitors Price and Offering
Select a Final Price |
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