midterm 2

Question 1

ch 6 Cost advantages

Answer 1

1. Variable cost advantage
   lower VC per unit, volume is the key, scale/scope/learning effects
2. Marketing Cost Advantages
   advantages from product line extensions, marketing cost scope effect
3. Operating Cost Advantage

Question 2

ch 6 differentiation adv

Answer 2

1.Product advantage
features, performance, reliability, etc…
2. Service advantage
meaningful sustainable service advantage
3. Reputation advantage
superior brand equity, leads to customer attraction and premium price

Question 3

ch 6 brand advantage and profitability

Answer 3

the stature of brand names adds a dimension of appeal that is an important customer benefit for many less price-sensitive, more image conscious consumers

Question 4

ch 6 marketing comp advantages

Answer 4

1. market share
   advantage based on market dominance rather than differentiation or cost, logic or habit
2. product line
   broad product line = more prospective customers, emerging and growing stages
3. channel
   build key relationship with distributors (control market access)’

Question 5

ch 6 competitive strategy based on a knowledge advantage (4)

Answer 5

1. customer reactive strategy (overreaction to customer demands due to limited competition knowledge — extensive customer knowledge, limited competitor knowledge)
2. oblique strategy (leverages a knowledge advantage with respect to customers and competitors - extensive customer knowledge, extensive competitor knowledge)
3. inside the box strategy (based on minimal or limited knowledge of comp and custs)
4. compeitor reactive strategy (overreaction to competitor moves due to limited customer knowledge— extensive comp knowledge)

Question 6

CH 6 competitor intelligience (CI) def and sources

Answer 6

developing a strong competitive position is critical , use perceptual maps (based on surveys of cust ratings between brand, sets of comps, and ideal product ratings), CI opens the dor for well timed effective strats
sources of CI: trade press, trade shows, financial reports, industry reports, customers, suppliers

Question 7

ch 6 industry analysis components (5)-bc cps

Answer 7

barriers to entry/exit: technology, legal, low cost manufacturer, specialized assets, strategic importance

customer buying power: size, concentration

supplier selling power: switching costs, commodity vs specialized

product substitutes

competitor rivalry : intensity, strength

Question 8

ch 6 competitive forces that shape comp position and profitability —summary

Answer 8

competitive advantage (cost advantage, diff, marketing advantage)
competitor intelligence (perceptual map, comp benchmarking, intelligence sources)
industry attractiveness (comp entry/exit, buyer/supplier power, subs/price rivalry)

Question 9

ch 6 comp benchmarking steps

Answer 9

identify a key area of competitive weakness
identify a benchmark company
track the benchmark company’s process advantage

Question 10

ch 7 branding & benefits

Answer 10

branding: name, symbol used to identify the course of a product
benefits of branding: high brand awareness, emotional connection, brand loyalty, price premiums, product line extensions

Question 11

ch 7 market share & product pos

Answer 11

market share=product position * marketing efforts

where product position is product differentiation, price, product breadt, new products, service quality, brand image

& marketing effort is sales force, physical distribution, retailing and merchandising, customer support, sales promotions, media advertising

Question 12

ch 7 name product positioning strategies

Answer 12

1. differentiation and positioning
2. branding and brand mgmt strats
3. brand and product line strategies

Question 13

ch 7 explain differentiation and positioning 4 ways

Answer 13

1. product differentiation (quality, performance, reliability)
2. service differentiation (reliability, extended service, reputation)
3. brand diff (brand status)
4. low cost of purchase (low price or low transaction cost)

Question 14

ch 7 explain branding and brand mgmt strats

Answer 14

brand identity : market orientation
brand encoding: names, images, colours, founding names, fictional names
brand assets and liabilities
brand equity

Question 15

ch 7 explain brand and product line strats

Answer 15

umbrella and flanker brands
product line extensions
bundling and unbundling
product elimination

Question 16

ch 7 brand assets and brand liabilities

Answer 16

brand assets: brand awareness, emotional connection, brand loyalty, product line extensions, price premium

brand liabilities: customer dissatisfaction, product or service failures, questionable practices, poor record on social issues, negative associations

Question 17

ch 7 brand name starts

Answer 17

brand name strats: founder name, functional, invented, experiential, evocative

Question 18

ch 7 broad vs narrow product line

Answer 18

broad product line: more selling ops for sales force and channel members, potential for higher share of waller, upsell potential, more profitable in emerging and growing markets
narrow product line: must be focused in marketing efforts

Question 19

ch 7 product line development , product line extensions names

Answer 19

1. umbrella brands
2. flanker brands
   how do flanker brands benefit from umbrella brands? brand awareness, known quality, market reach, product mix
   new brands
3. pl extension: vertical brand-line extensions: same market, new flavours (kit kat extension overdose)
   horizontal brand-line extensions : adding complimentary products
   new product-market brand extensions L enter new markets to exploit brand rep (honda)
   co-branding: leverage a strong brand with another (tide/febreeze)

Question 20

ch 8 cost vs market based pricing

Answer 20

cost based pricing: start with cost and desired margin and make up along channel to a customer selling price

market based pricing : price is set based on a comp advantage and value and discounts and costs deducted to arrive at company margin

Question 21

ch 8 value based pricing (4) VPPC

Answer 21

1. value in use pricing (based on CLC costs, acquiring owning using maintaining and disposing)
2. perceived value pricing (based on value provided when comparing price and benefits relative to competitors) aka how much of a price premium can business obtain and deliver meaningful customer value
3. performance based pricing (based on customer preferences for different levels of price and performance/positioning)
4. customerization value pricing (unbundle product features and price each one, customers then select features and price, value package savings)

Question 22

ch 8 price margin mgmt

Answer 22

mckinsey waterfall (costs that cut into the company’s bottom line, discounts/promotions/etc)

pocket price (the amount the business receives)

pocket price bandwidth (diff channels = diff BW, look beyond avg pocket price, identify needless price leakage)

Question 23

ch 8 skim penetration

Answer 23

high at first then lower
favourable conditions: considerable differentiation, quality sensitive customers, sustainable advantage, few competitors, few ssubsitutes, difficult compeitor entry

Question 24

ch 8 penetration pricing

Answer 24

low at first
favourable conditions: no or limited differentiation, price sensitive customers, no sustainable advantage, many competitors, any substitutes, easy competitor entry ‘

Question 25

ch 8 single segment pricing, multi segment pricing

Answer 25

single segment pricing : value based strategy, total cost approach, L-C savings at premium price multi-segment pricing: used during growth, maximize for multiple customer segments

Question 26

ch 8 plus one pricing, reduced focus pricing, harvest pricing

Answer 26

plus one pricing (mature market): companies eventually copy features, comparable to competition in every aspects. +one ie volvo safety, lexus performance reduced focus pricing: mature stage, price increases,, reduce volume but increase margin harvest pricing: decline stage

Question 27

ch 9 channel map

Answer 27

channel map: a diagram of the types of purchase points a business uses each channel produces a diff level of sales revenue and costs (transaction costs, commissions, discounts to intermediaries) each channel to the market produces a diff level of sales revenue and has its own set of costs. the channel costs may include discounts to intermediaries, transaction costs, and commissions —> pocket price

Question 28

ch 9 three areas of performance will the choice of channel impact?

Answer 28

customer value, sales revenue, profitability

Question 29

ch 8 channel must do well in (3)

Answer 29

1. customer reach (volume): chosen based on nature of business, plc stage, target market 2. operating efficiency (cost to serve): a)direct channels=higher margins but the business absorbs the cost of channel mgmt and all marketing costs. b)indirect=lower margins but lower channel mgmt and marketing costs 3. service quality (retention): direct=control of contact points, indirect forces the business to depend on intermediaries

Question 30

ch 9 direct channel systs

Answer 30

best option for sales comms and customer interaction but the costs are high and increasing even when a firm uses a mixed approach they usually maintain their key profitable customers under a direct system

Question 31

ch 9 indirect channel systs

Answer 31

firms use them bc they cant serve smaller customers with a direct appproach profitably when to used mixed channel systs? when distinct target markets need to be served simultaneously, often used with specialized and technology products that require local availability of service

Question 32

ch 9 alt b2b marketing channel (also explain VARS and OEMS)

Answer 32

prefer a direct approach BC more control and specialized knowledge, serve clients needs better value added resellers (VARs): purchase a variety of components from various manufacturers and sell them as a system (bundles) original equipment manufacturers (OEMs): creates a new product from manufactured components it buys (GM)

Question 33

you’re doing great!

Answer 33

yay

Question 34

ch 9 how channels can build value (3)

Answer 34

delivering product benefits : product quality, product assortment, product form delivering service benefits: after-sale services, availability/delivery, transaction services improving cost efficiency: ex. making a product readily available

Question 35

ch 9 3 comp advantages from channel systems

Answer 35

a. sales force advantage: better, more informed, enough to properly service the market b. sales productivity: built when there are high quality products, broad line of products, and efficient sales admin systems c. distribution advantage: share of distributors outlets

Question 36

ch 9 leveraging digital marketing channels

Answer 36

the ability a world of prospective customers at a low marketing cost has led nearly every business, large and small, to invest in digital marketing

Question 37

ch 10 objectives of marketing comms

Answer 37

1. brand image comms (establish an emotional connection—impact=attitude) 2. brand information comms (interest arousing, motivate target to retain and acquire more info—impact=cognitive) 3. brand action comms (seeking customer action/buy or try the product—impact=behaviour)

Question 38

ch 10 social media marketing objectives and outcomes BIP

Answer 38

1. brand building : deepen customer relations ships and engage in community conversations 2. information exchange: share experiences, encourage word of mouth, understand product usage and benefits 3. problem solving: gather and provide customer feedback, resolve customer complaints

Question 39

ch 10 message frequency

Answer 39

the average number of times an audience is exposed to a message over a period of time , links to advertising awareness

Question 40

ch 10 CRI, effective comms do … (3)

Answer 40

effective comms…. (1) build awareness (2) creating comprehension among T.M (3) creating an intent to purchase among a good portion of the target Customer response index=% exposed * % aware * % comprehend * % not interested

Question 41

ch 10 cause of low levels of customer response (5)

Answer 41

1.poor media selection and/or limited exposure frequency -low ad exposure 2.ineffective ad content and/or insufficient ad frequency -low and comprehension 3.insufficient ad frequency and or ineffective content -low ad recall 4.weak value proposition and or insufficient ad frequency low intentions to take action 5. insuff ad frequency and or action not clearly specified -low levels of desired action

Question 42

ch 10 building customer awareness and comprehension to target market (3)

Answer 42

1. media selection reach-% of target market that will be exposed to the message at least once in a given period 2. Message frequency too many=irritation, too few=low awareness and comprehension, concentratedVSdistributed 3. ad copy based on target market needs, familiar sits, integrated with benefits

Question 43

ch 10 push comms

Answer 43

directed at intermediaries (market coverage and distributor push) sales incentives, channel financing, coop advertising, channel marketing audience: channel customers and influencers push objectives: build channel interest, purchase, inventory, and marketing efforts

Question 44

ch 10 pull comms

Answer 44

directed at consumers (customer preference and loyalty) media advertising, social media, sales promotions, direct marketing audience: customers and potential customers pull objectives: build end consumer awareness, loyalty, purchase, interest

Question 45

ch 10 advertising elasticity

Answer 45

advertising elasticity=%change sales / % change ad expense percent change in sales on volume per 1 percent change in advertising effort PLC-introductory (build awareness, comprehension and interest, demand might be small) growth-greatest op for sales growth using ads