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MKT 480 test 1

Terms in this set (40)

Market base - why do we care?
Market-based businesses are more profitable. Understanding and responding to the market are not marketing's responsibility, rather all of the company. (concept market orientation/era). The organization should be structure to fit markets rather than products. (marketing myopia).
Benefits companies realize by having a customer focus
Customer-focused organizations not only outperform their competition over the long term by consistently delivering higher levels of customer satisfaction, they also realize higher profit over the short run.
Forward vs backward looking indicators
Customer satisfaction is a forward looking metric for us. Backwards is reacting.
Understand customer satisfaction indexes
Customer satisfaction is a forecast of future revenues and profits. To determine the CSI for a sampling of customers, compute the average of the customers' satisfaction ratings.
Net sales formula
Net sales= (avg. selling price x channel discount) x (mkt demand x mkt share)
Internal vs. external views of performance
Internal performance metrics: financial metrics
External performance metrics: marketing metrics.
Net marketing contribution (NMC) formula
NMC= gross- (mkt costs + advertising costs + sales costs)
Marketing return on investments (MKT ROI) formula
MKT ROI= (NMC/MKT and sales exp.) x 100%
Marketing return on sales (MKT ROS) formula
MKT ROS= (net marketing contribution/ sales) x 100%
Market development index (MDI) formula
MDI= current market demand/market potential x 100
Market share index (MSI) formula
MSI= aware x attractive x price OK x intended to buy x purchase)
Share development index (SDI) formula
SDI= (market share index/ share potential index) x 100
Factors of market development
-price too high
-unrecognized need
-poor awareness
-lacks performance
-hard to use
-cannot use
-not available
Forces that shape market growth
-need
-risk
-buying
-observation
-trail
Types of variables used in surveying customers
-Nominal scale- numbers are no more than labels and are used solely for identification. The only acceptable mathematical operation is to count number of responses which can provide us with a mode. (The most frequently checked category. Except for binary items, M/F average 1.8 doesn't say anything.)
-Ordinal scale- number possess the property of rank order. We can perform two mathematical measurements of ordinal scales: mode and median (the category into which the 50th percentile response falls).
-Interval scale- property of rank order and the differences in scale values can be meaningfully interpreted. Can acquire the mode and median as well the mean and standard deviation (the degree of deviation of numbers from their mean. Note: we cannot say thinks life "twice as likely" because our starting point (usually 0 or 1) is arbitrary.
-Ratio scales- possess the characteristic of the interval scale plus the rations of numbers on these scales have meaningful interpretations (a good cross-check is for a "meaningful" zero). EX. What is your annual income before taxes? _____
Types of customer loyalty
-Loyalty customers- high performance in all five aspects of customer loyalty.
- Repeat customers- great customers that buy often but score lower on purchase amount, product reference, and customer recommendation.
-Captive customers- have a long customer history and average purchase amount but would leave if they could.
-New customers- score low on all aspects of customer loyalty as they do not yet have the customer history to assess their customer loyalty.
-Unprofitable customers- Score low on all aspects of customer loyalty. Type types with two very different implication in how we approach them.
Market space
Virtual market place. Is an integration of several market places through technology.
Market potential
The total amount of a product that customers will purchase within a specified period at a specific level of industry-wide marketing activity
market demand
the demand by all the consumers of a given good or service
market share
a company's product sales as a percentage of total sales for that industry
Market potential types of innovation
-Continuous innovation- steady improvements to a product.
-Disruptive innovation- major improvements to a product.
-Discontinuous innovation- new technology replaces a product.
Market Life Cycle customers
-innovators
-early adopters
-early majority
-late majority
-laggards
Product life cycle
-Introduction
-Early growth
-Late growth
-maturity
-decline
Information search - sources
-public sources
-personal sources
-commercial sources
Customer collaboration and ideation - types used
-mass collaboration: open-ended group collaboration and information exchange.
-Crowdsourcing: focuses problem solving and product idea generation
-Collaborative websites and wikis: facilitate an information-sharing environment.
-New and innovative solution: for challenging processes and problems resulting in product improvements.
The segmentation process
1. needs-based segmentation
2. segment identification
3. segment attractiveness
4. segment profitability
5. segment positioning
6. segment strategy "Acid Test"
7. Marketing mix strategy.
Segment positioning - value proposition
the key benefits a firm seeks to provide target customers.
Segmentation Strategies
-mass-market strategy
-large-segment strategy
-adjacent-segment strategy
-multi-segment strategy
-small segment strategy
-niche-segment strategy
-sub-segment strategy
Sources of Competitive Advantage
cost advantage, differentiation advantage, marketing advantage
Product Scope
The features and functions that characterize a product, service, or result. Refers to the number of different items your company offers for sale.
Marketing Cost Advantage
Providing a product or service at a lower cost than the competition
Competitive benchmarking
The comparison of an organization's processes with those of competing organizations.
1. Identify a key area of competitive weakness.
2. Identify a benchmark company
3. Track the benchmark company's process advantage
Competitive strategy based on knowledge advantage
-Inside-the-box strategy (little or no customer knowledge and competitor knowledge)
-Competitor reactive strategy (Limited customer knowledge. extensive competitor knowledge)
-Customer reactive strategy (Extensive customer knowledge. limited competitor knowledge)
-Oblique strategy (Extensive customer knowledge and competitor knowledge)
Customer value
the relationship between benefits and the sacrifice necessary to obtain those benefits
Lifecycle cost
Research, development, engineering, manufacturing, post sale service, and disposal cycles. Cost control throughout the value chain. EX. targeting cost, kaizen costing, abc.
Conjoint analysis
technique used to develop an understanding of the attributes that guide consumer preferences by having consumers compare product preferences across varying levels of evaluative criteria and expected utility.
Pros: identifies tradeoffs that consumers make when evaluating serval attributes together (realistic), can find hidden preferences even the respondents down know about.
Cons: Can be complex, can be too simple.
Inbound vs. Outbound Marketing
Inbound marketing is a proven way to generate leads, drive sales and grow your business. It is less expensive than traditional marketing.
Outbound marketing is expensive because they are usually broadcasting to a mass audience even if they aren't in the target demographics.
Sources of Value Creation
low cost, service experience, innovation. Adds value beyond the stated benefit of providing a solution to a company's problem.
Unit cost and experience curve (scale, scope, and learning effects)
-Scale effect: large unit volume allows for production and purchasing economies that lower the per-unit manufacturing cost of a product.
-Scope effect: a business can lower the avg. unit cost of all products by adding product that have similar manufacturing processes and that are made of the same material as its other products.
-Learning effects: each unit produced provides additional learning and the opportunity to build the next unit more efficiently.
Research types
-Exploratory research- gathering preliminary information that will help define the problem and suggest hypotheses.
-Descriptive research (survey)- generating information to better describe marketing problems, situations, or markets and show associations between variables.
-Casual research- testing hypotheses about cause and effect relationships
-Observational research- can obtain information that people are unwilling or unable to provide. Cannot be used to observe feelings, attitudes and motives, and long-term or infrequent behaviors (EX. Garbageology)
-Survey research gathering primary data by asking people questions about their knowledge, attitudes, preferences and buying behaviors. pros: attitude, preference, intentions. cons: social desirability, memory, respondent time.
-Focus group- involve inviting 6-12 people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. Goldilocks number. Great for multiplicative learning, however can be biased and can be very prone to social desirability bias.
-Online marketing research- collecting primary data online through internet surveys, online focus groups, web-based experiments, or tracking consumers' online behavior. Pros: speed and low cost, lowest cost per respondent of all contact methods, good flexibility and completions rate due to interactivity. Cons: difficulty in controlling sample, getting respondents to participate.
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