group brand
Not a store name, by across a variety of products. (President's Choice)
customer retention cost
cost of retaining one loyal customer (loyalty programs, discounts)
brands & inferences
People have a perceived idea about brand. Should *extend* or build upon that idea.
ex: Arm & Hammer: inference (cleans, deodorizes), extend brand to toothpaste, cat litter
ex: Arm & Hammer: inference (cleans, deodorizes), extend brand to toothpaste, cat litter
advantage of private label (umbrella brand)
- Reinforcement of store name throughout store (CVS, CVS, CVS...)
- Retailer absorbs mktg and inventory investments. (Heightens margin, but also a risk)
- Distribution and shelf placement guaranteed! (Best place to put to the right of eye-level)
- Retailer absorbs mktg and inventory investments. (Heightens margin, but also a risk)
- Distribution and shelf placement guaranteed! (Best place to put to the right of eye-level)
habitual buyers
Buy a brand out of habit. Can be more easily swayed to change. (Strategic because will then continue to buy that brand; build lifetime value.)
post purchase decisions
- satisfaction or dissatisfaction: very important
- repeat business is core of making profit
- costs less to keep a customer than to make a new one
- "level" of satisfaction is very subjective, can be based off of performance, value
- repeat business is core of making profit
- costs less to keep a customer than to make a new one
- "level" of satisfaction is very subjective, can be based off of performance, value
time-length of PLC phases
Can vary. For example, refrigerators and microwaves have very long maturity phase.
retail outlets
ex: Nike stores, Apple stores
Don't always make $$ (exception, Apple), but a giant advertising billboard.
Don't always make $$ (exception, Apple), but a giant advertising billboard.
forecasts
forecasts market, segment growth and value
micro segmentation
- Narrow down segments into 1 person: customized for every individual. (ex. Amazon)
blue ocean strategy
Blue ocean is an area with no competitors.
- might be an opportunity, OR an area with no consumers.
- might be an opportunity, OR an area with no consumers.
price-lining
Having similar products at various price points. (With small variation in design)
ex: Cuisinart, Whirlpool, KitchenAid
ex: Cuisinart, Whirlpool, KitchenAid
exclusive brand
A private, store-created label (not the store name) for ONE type of product.
- Creates feel that it's a real brand, exclusive to store, sometimes partner with celebrities
- Creates feel that it's a real brand, exclusive to store, sometimes partner with celebrities
unit contribution
actual amount you're making on one unit.
REVENUE-VARIABLE COST.
(e.g. sell for $6, cost us $4, unit cont = $2)
REVENUE-VARIABLE COST.
(e.g. sell for $6, cost us $4, unit cont = $2)
depreciation
accounting for a large fixed cost over time.
divide total cost by the number of years it should be depreciated across.
divide total cost by the number of years it should be depreciated across.
cannibalization
introduction of a new product that steals market share or profit from OWN firm's existing product, rather than a competitor's
consumer studies
Figures out intent, awareness, etc.
factors for skim v. penetrate
- perceived relative advantage (if very apparent, penetrate)
- compatability w/ existing practices (if new/radical, skim)
- complexity (complex: skim)
- ability to try innovation (hard to get done: skim)
- observability of benefits (very apparent: penetrate)
- limitations of company's ability to cover costs of skimming or penetrating
- compatability w/ existing practices (if new/radical, skim)
- complexity (complex: skim)
- ability to try innovation (hard to get done: skim)
- observability of benefits (very apparent: penetrate)
- limitations of company's ability to cover costs of skimming or penetrating
factor analysis
- takes many variables and boils them down into main groups
"sporty" group, "fun to drive" group, "appeals to women" group
"sporty" group, "fun to drive" group, "appeals to women" group
four "fit" tests for brand
- fits target market (age/gender)
- highlights product benefits (e.g. FedEx and fast)
- culture (where sold, ex. Chevy Nova sounds like "no-go" in Spanish)
- legal (can only have one trademark within a product category, like Apple Records and Apple Computer)
- highlights product benefits (e.g. FedEx and fast)
- culture (where sold, ex. Chevy Nova sounds like "no-go" in Spanish)
- legal (can only have one trademark within a product category, like Apple Records and Apple Computer)
quantifying satisfaction
Satisfaction or dissatisfaction ONLY occurs when there is a difference between expectations and actual performance.
e.g. Expected really great meal at Le Bec Fin, only moderate. Expected really lousy @ Philly Diner, wasn't too bad.
e.g. Expected really great meal at Le Bec Fin, only moderate. Expected really lousy @ Philly Diner, wasn't too bad.
product placement
Showing brands in movies, TV shows, and video games. (Paid endorsement)
brand relationships
Consumers have a contract with a brand. They buy, expect value and what they see the brand as standing for. Brand gets their loyalty.
customer-centric model
Target is surrounded by the 4Ps (mktg mix); everything optimized to meet the customer's wants and needs.
odd-even pricing
odd: ends in cents (infers that its cheaper)
even: ends in whole dollars (infer that it's higher quality, more expensive)
even: ends in whole dollars (infer that it's higher quality, more expensive)
marketing mix
A blend of 4Ps to tactically achieve a goal.
channel conflict: vertical
producer: wants to sell most of own goods
wholesaler: wants to sell most of goods
retailer: wants to sell at the highest margin
^ Varying goals.
wholesaler: wants to sell most of goods
retailer: wants to sell at the highest margin
^ Varying goals.
customer lifetime value
value of the entire stream of purchases that a customer would make over their lifetime.
CLV = [unit contr * units purchased a year for 1 customer]* years as customer
- variable costs already accounted for; this is purely profit
CLV = [unit contr * units purchased a year for 1 customer]* years as customer
- variable costs already accounted for; this is purely profit
divest
total withdrawal from marketing expenses
media trends
tv - falling
radio - stable
magazine - stable
internet - shooting up
newspaper - dropping slightly
radio - stable
magazine - stable
internet - shooting up
newspaper - dropping slightly
umbrella brand
- Carries store name. (Staples)
administered VMS
"detroit model"
Tightly clustered and controlled suppliers. (You have strong influence and virtually tell them what to do in order to get you as a customer, but you don't actually own them.)
- Basically run, but not own.
Tightly clustered and controlled suppliers. (You have strong influence and virtually tell them what to do in order to get you as a customer, but you don't actually own them.)
- Basically run, but not own.
customer acquisition costs
cost of acquiring one customer (through direct mail, samples, discounts)
reference prices
- Consumers have ideal base price they are willing to pay.
ex: Taco Bell too expensive, re-priced based on reference prices.
ex: Taco Bell too expensive, re-priced based on reference prices.
plc applies to..?
For an entire *industry* or *product category*, not a brand.
ex. cd players, mp3 players (not just iPod)
ex. cd players, mp3 players (not just iPod)
intensive coverage
- distribution through as many reasonable outlets as possible
- low selling effort
- easy to stock
- low selling effort
- easy to stock
skim vs. penetrate
SKIM: high price, low promotion, selective place
- for complex, riskier, education-necessary products
PENETRATE: low price, high promotion, high variety of place
- easy to use, "small leap", understandable products
- for complex, riskier, education-necessary products
PENETRATE: low price, high promotion, high variety of place
- easy to use, "small leap", understandable products
new way: segmentation
- divide market into subsets of consumers with common needs and characteristics
- select one or more of them to target
- position w/ unique mktg mix
- select one or more of them to target
- position w/ unique mktg mix
disruptive pricing effect
Lowers prices 15% across the board to cause trouble for local businesses. (Could be clarified as predatory pricing?)
market share
market share = our sales/ total market sales.
Can be in volume (# of units), or value (% of dollar sales).
Can be in volume (# of units), or value (% of dollar sales).
introduction strategies
- trial sales lead to repeat sales (cheaper to keep repeat than to attain)
- skim
- penetrate
- skim
- penetrate
social marketing
programs seeking to increase acceptability of a social idea, cause or practice
ex. drunk driving awareness, seat belts, voting, pollution
ex. drunk driving awareness, seat belts, voting, pollution
disintermediation
Cut out intermediaries (but still need their function)
- e-commerce (cuts out some of the wholesaler/retailer part: self sale on own website)
- channel commerce
radiohead offers direct download.
Many stores are being disintermediated.
- e-commerce (cuts out some of the wholesaler/retailer part: self sale on own website)
- channel commerce
radiohead offers direct download.
Many stores are being disintermediated.
market segmentation
identifying bases to divide up the market
- develop profiles for each segment
- develop profiles for each segment
"Me Too" strategy
Generic-like, but mimics leading brand in packaging AND quality. (CVS)
- Often equally as effective, but at a much lower price. Often supplied by the same provider, except they're forced into it by retail power.
- Often equally as effective, but at a much lower price. Often supplied by the same provider, except they're forced into it by retail power.
calculating value of a brand
Subtract real estate, inventory. Coke = $65B, Microsoft/IBM = $57-8B.
Value of a brand is measured by willing to pay x amount more than generic, or how willing to go out of way to find branded.
Value of a brand is measured by willing to pay x amount more than generic, or how willing to go out of way to find branded.
GRP
gross ratings points: % of target audience reached
e.g. Ad shown 5 times, reaches 50% audience each time has 5*50% = 250 GRP.
e.g. Ad shown 5 times, reaches 50% audience each time has 5*50% = 250 GRP.
price-quality inferences
higher price = higher quality
"the soft"
The value between cost of factory product and final retailing price. (Essentially, all the potential profit that can be gained.)
Intermediaries (Li & Fung) try to snap up as much of this as possible.
Intermediaries (Li & Fung) try to snap up as much of this as possible.
break-even volume
The number of units required to break even.
BEV = fixed costs/ unit contribution.
Useful in deciding new investments. It'll take up x units in order to break even of the fixed costs it takes to make them.
BEV = fixed costs/ unit contribution.
Useful in deciding new investments. It'll take up x units in order to break even of the fixed costs it takes to make them.
e-commerce pricing
opens to a wider audience, especially for select luxury items in which desired customers and spread about geographically
cluster analysis
- attempts to maximize the ratio: between group variance/within group variance
(??)
(??)
stp
segmenting, targeting, positioning
5Cs
1. company: strengths, weaknesses, location, employees
2. customers: who, what they want, current satisfaction
3. competitors: leader? their strengths & weaknesses
4. collaborators: who can we partner up with to make up for our S/Ws?
5. context: recession, expansion, legal context, etc. (especially relevant with internt'l markets)
STRATEGIC.
2. customers: who, what they want, current satisfaction
3. competitors: leader? their strengths & weaknesses
4. collaborators: who can we partner up with to make up for our S/Ws?
5. context: recession, expansion, legal context, etc. (especially relevant with internt'l markets)
STRATEGIC.
heuristics for product selection
"Rules of thumb" people use to choose what to buy.
- price (high vs. low, may believe price correlates with quality)
- habit (stick with something they're familiar with)
- normative (do what others do, go with the #1 brand that more people use)
- more is better (more features, size for value, etc.)
- price (high vs. low, may believe price correlates with quality)
- habit (stick with something they're familiar with)
- normative (do what others do, go with the #1 brand that more people use)
- more is better (more features, size for value, etc.)
profit impact
profit impact = (unit cont. * # of units sold) - fixed costs
Essentially, how much we made from selling units (after var. costs removed), minus the extra fixed costs.
Essentially, how much we made from selling units (after var. costs removed), minus the extra fixed costs.
distribution trends
Growth in direct mktg.
**Downstream power shift** retailers now have a ton of power.
**Downstream power shift** retailers now have a ton of power.
inferior goods strategy
Provide generics, lesser quality AND lower price.
- The bad quality gets people. Out of favor now.
- The bad quality gets people. Out of favor now.
brand equity
- "value" or worth of a brand
- the value of the brand name often exceeds the value of actual "objects" that a company owns (hard assets)
- makes a HUGE difference in willingness to pay
ex: coca cola, one of the biggest brands. Microsoft wants to buy Yahoo for the brand, not the servers or anything.
ex: people willing to pay 2x (over generic?) for their preferred brand of peanut butter or beer. If think they are getting preferred brand, actual fMRI show that emotional centers in brain are being activated.
- the value of the brand name often exceeds the value of actual "objects" that a company owns (hard assets)
- makes a HUGE difference in willingness to pay
ex: coca cola, one of the biggest brands. Microsoft wants to buy Yahoo for the brand, not the servers or anything.
ex: people willing to pay 2x (over generic?) for their preferred brand of peanut butter or beer. If think they are getting preferred brand, actual fMRI show that emotional centers in brain are being activated.
private labels
Stores create own brands.
e.g. Trader Joe's
e.g. Trader Joe's
packaging
ex. Coca Cola bottle, Tiffany's box
Iconic, as important as the brand logo.
- Colors play a part: blue seems sleek, snappy, clean, crisp and cold. Glass seems more high end, important.
- Quantity: 6pack versus "high quality" single unit items.
Iconic, as important as the brand logo.
- Colors play a part: blue seems sleek, snappy, clean, crisp and cold. Glass seems more high end, important.
- Quantity: 6pack versus "high quality" single unit items.
CPM
Cost to reach each 1000 people.
product life cycle stages (5)
1. product development
2. introduction
3. growth
4. maturity
5. decline
2. introduction
3. growth
4. maturity
5. decline
market positioning
- develop a mktg mix to place product in desired position for the target segment
% premium
Also the "percent markup."
% premium = (sale price/ variable cost)-1
E.g. We're selling the product at 125% of the cost to make. We've marked up by 25%.
% premium = (sale price/ variable cost)-1
E.g. We're selling the product at 125% of the cost to make. We've marked up by 25%.
bundling
Putting together related products:
- introduce to new products
- charge more
- perceived "more value"
- introduce to new products
- charge more
- perceived "more value"
loyalist buyers
Have some sort of emotional attachment to a brand. Less likely to switch brands. Very good lifetime value.
target marketing
- develop measures to choose which segments are the most attractive (easy to reach, most numerous)
payment pricing
Give price in payment amounts, not full price. (e.g. cars)
brand personality
Goes beyond brand image: personifies it.
(Think Apple/PC)
In five determined dimensions:
- sincerity
- excitement
- competence
- sophistication
- ruggedness
(Think Apple/PC)
In five determined dimensions:
- sincerity
- excitement
- competence
- sophistication
- ruggedness
commercial product placement
ex: Google pays to be announced at the end of other companie's commercials
public relations
Good communication with ALL public (customers, stockholders, gov't, suppliers)
- can't always control media's message, or interest in your deeds
ex: Dove Campaign for Real Beauty. Created a lot of positive free press.
- can't always control media's message, or interest in your deeds
ex: Dove Campaign for Real Beauty. Created a lot of positive free press.
skimming
- start slow, then grow
- extract maximum value from group that already wants product the most (minimal attainment costs)
- can make the most profit at the beginning
- early adopters can then educate others, "trickle down"
- HIGH STARTING PRICE
- extract maximum value from group that already wants product the most (minimal attainment costs)
- can make the most profit at the beginning
- early adopters can then educate others, "trickle down"
- HIGH STARTING PRICE
internal vs. external validity
In experimental studies, we control the factors and conditions. There is internal validity in that we can be sure there is a cause & effect relationship.
However, because it is controlled, it may not mimic real life situations and we lose external validity. Unrealisitic results.
However, because it is controlled, it may not mimic real life situations and we lose external validity. Unrealisitic results.
sunk costs
Unrecoverable past expenditures.
Ex: R&D, already spent. Shouldn't be factored into the decision, since there is no way to get it back.
Ex: R&D, already spent. Shouldn't be factored into the decision, since there is no way to get it back.
conjoint analysis
- Analyzes relative importance of an attribute by forcing tradeoffs.
Would you rather have this or that?
Possibilites of one attribute on x, preference on y.
Would you rather have this or that?
Possibilites of one attribute on x, preference on y.
competitor intelligence
studies where your product is in comparison to competitors (where on perceptual map, how they are doing financially)
retail price
What the consumer pays.
critera for good segmentation
- homogeneous within (should have similar qualities on attributes you choose)
- heterogeneous between (different segments should be different on your attributes)
- substantial (big enough to be worthwhile)
- operational (accessible, identifiable)
- stable (if it takes 10 years to manufacture, group may no longer exist)
- heterogeneous between (different segments should be different on your attributes)
- substantial (big enough to be worthwhile)
- operational (accessible, identifiable)
- stable (if it takes 10 years to manufacture, group may no longer exist)
channel conflict: horizontal
Multiple outlets on the same level (like selling through grocery, versus warehouse/clubhouse.) Problem with maintaining business & margins.
segmenting: geography
:: Geographical
- region, city size, density, climate, zip code (readily available, and ppl actually tend to be homogeneous in one zip code)
(Walmart picks large towns, non-city regions)
- region, city size, density, climate, zip code (readily available, and ppl actually tend to be homogeneous in one zip code)
(Walmart picks large towns, non-city regions)
two part pricing
set-up fee, and then monthly fee
direct vs. indirect elicitation
direct: ask them directly, Q&A
indirect: infer their desires from past behavior
* Direct elicitation are not always useful. Customers may not know what they want, or what they want (coupled together) is not feasible.
indirect: infer their desires from past behavior
* Direct elicitation are not always useful. Customers may not know what they want, or what they want (coupled together) is not feasible.
distribution studies
studies where product is available, where it is being purchased
branded variants
Asking retailers to make an exclusive version for your store.
(extra tracks on CDs for Target)
(extra tracks on CDs for Target)
caveat emptor
"buyer beware"; now there are Consumer Bill of Rights.
advertainment
Program is built around a sponsor; e.g. TV shows (Apprentice, American Idol).
Major differentiator: sponsor comes first, THEN show story is built around it.
Major differentiator: sponsor comes first, THEN show story is built around it.
how to segment
- cluster analysis
- factor analysis
- factor analysis
captive pricing
camera and film, razors and blade
qualitative research
- depth interviews
- focus groups
- ask about brands and metaphoric meanings (ZMET)
ex: Cheerios and family
- focus groups
- ask about brands and metaphoric meanings (ZMET)
ex: Cheerios and family
corporate vertical mktg system
Combines stages of production under one management. E.g. own the fabric, design, manufacturer and retail outlets for a clothing comp.
- Advantage: control every stage, can often maintain margins
- Disadvantage: inefficient if need to produce high scales, expensive to expand, may still not unify goals across channels, reduces flexibility (you now have hard assets)
- Advantage: control every stage, can often maintain margins
- Disadvantage: inefficient if need to produce high scales, expensive to expand, may still not unify goals across channels, reduces flexibility (you now have hard assets)
purchase decision cycle (4)
1. use heuristics to determine choice
2. actually buying it
3. using the product
4. outcome: reinforces or doesn't reinforce brand
The last step (positive or negative reinforcement) alters the heuristic used to determine, whether that choice tactic is a good one.
(ex. I used "want to try smthg new" as a choice tactic, it paid off so I'll consider that again OR it failed, I will never try smthg new again.)
2. actually buying it
3. using the product
4. outcome: reinforces or doesn't reinforce brand
The last step (positive or negative reinforcement) alters the heuristic used to determine, whether that choice tactic is a good one.
(ex. I used "want to try smthg new" as a choice tactic, it paid off so I'll consider that again OR it failed, I will never try smthg new again.)
fixed cost
A cost that doesn't vary by the number of units being produced.
Ex: cost of machinery, fixed labor costs, advertising.
Ex: cost of machinery, fixed labor costs, advertising.
personal selling
- Sales force are in direct, face-to-face contact with customer (e.g. b2b)
- high cost
- slow, ineffective to reach large number of individual customers. Must ensure sales force maintain company aims.
- builds stronger, more personal relationships with customers
- high cost
- slow, ineffective to reach large number of individual customers. Must ensure sales force maintain company aims.
- builds stronger, more personal relationships with customers
segmenting: psychographic
- "lifestyle", such as outdoorsy, couch potatoes, city people, young urbanites
exclusive coverage
- through a single middleman/retailer
- high influence on final sale price/style
- high margins
- limited reach
- selection of only one middleman in each geographic area, usually involves an agreement
- high influence on final sale price/style
- high margins
- limited reach
- selection of only one middleman in each geographic area, usually involves an agreement
word of mouth
- create a buzz, viral mktg
- most influential
- general, norm way of making a decision
- most influential
- general, norm way of making a decision
swot
Strengths, weaknesses, opportunities, threats.
segmentation benefits
- allows established companies to expand into new (sub)markets (ex: Gap into Old Navy, Banana Republic)
- allows new companies to find niche (ex: Snapple teas, fruit drinks)
- identify SPECIFIC needs and wants of groups (ex: ethnic groups have different hair product needs)
- reposition existing products (ex: gaming systems from kids to YA/brain age)
- determine appropriate media; can better communicate to audience
- allows new companies to find niche (ex: Snapple teas, fruit drinks)
- identify SPECIFIC needs and wants of groups (ex: ethnic groups have different hair product needs)
- reposition existing products (ex: gaming systems from kids to YA/brain age)
- determine appropriate media; can better communicate to audience
dynamic pricing
e.g. Google Adwords
How much are YOU willing to pay?
How much are YOU willing to pay?
0 sum market
"a full pie" - If you gain one dollar, someone else loses it. There is no new wealth to be created.
push
Push products through distribution channels. Get wholesalers into it, who get retailers into it, who try and push it to the customers.
selective coverage
- through multiple but not all reasonable outlets
- less retail loyalty; but allows company to limit price competition
- most popular, ability to avoid working with those wholesalers who make small orders, demand too much service, poor credit, don't do satisfactory job
- less retail loyalty; but allows company to limit price competition
- most popular, ability to avoid working with those wholesalers who make small orders, demand too much service, poor credit, don't do satisfactory job
CRM & Segmenting
customer relationship management
- by microsegmenting, really identifies the wants and needs of (almost) each individual customer to build lifetime value
- identify the group/person, differentiate, interact and customize
ex: Harrahs - tracks where, when, what they gamble on and provides appropriate bonuses
Amazon - tracks browsing history and offers suggestions
- by microsegmenting, really identifies the wants and needs of (almost) each individual customer to build lifetime value
- identify the group/person, differentiate, interact and customize
ex: Harrahs - tracks where, when, what they gamble on and provides appropriate bonuses
Amazon - tracks browsing history and offers suggestions
other segmenting demographics
- sociocultural (culture, relgion, social class, family life cycle)
- situation of use or purchase (time, objective, location, end user versus buyer)
- benefit (what are they trying to get out of your product)
- situation of use or purchase (time, objective, location, end user versus buyer)
- benefit (what are they trying to get out of your product)
80/20
80% of purchases come from 20% of people.
(ex: ~75% of beer consumed by 25% of people who drink beer)
(ex: ~75% of beer consumed by 25% of people who drink beer)
strengths & weaknesses of private brands
1. Can create impression of wide selection by having more brands.
2. Replace second or third leading brands in shelf space.
3. Exclusive distribution: repeat customers.
4. Can go outside your "inference realm" with a named brand.
BUT
1. People may not associate brand's quality with your store necessarily.
2. No existing brand equity (costly to start up)
3. scale: need to have enough brands to make worthwhile to put people into it
2. Replace second or third leading brands in shelf space.
3. Exclusive distribution: repeat customers.
4. Can go outside your "inference realm" with a named brand.
BUT
1. People may not associate brand's quality with your store necessarily.
2. No existing brand equity (costly to start up)
3. scale: need to have enough brands to make worthwhile to put people into it
CRM
customer relationship management.
maintain relationship w/ customer, "dialogue, not monologue"
- individualized needs, figure out who buys what and when, "learn the customer"
maintain relationship w/ customer, "dialogue, not monologue"
- individualized needs, figure out who buys what and when, "learn the customer"
4. evaluation
Look at awareness, purchase intention, perceptions.
- Gets cut the most often by small budget companies.
- Gets cut the most often by small budget companies.
channel based
often for raw materials, base price on where distributed and how far to reach desired channels
penetrate
- "Big Bang", mass market from the beginning
- maximize number of early adopters
- requires more starting resources
- target to everyone at a low price
- maximize number of early adopters
- requires more starting resources
- target to everyone at a low price
brand recognition
When recognize a brand, have a relationship with it.
Can be positive (Oh, I know this brand. it's great!) or negative (Oh, I know this brand. I don't use it.)
Two way risk: once recognized, have opinions about it.
Can be positive (Oh, I know this brand. it's great!) or negative (Oh, I know this brand. I don't use it.)
Two way risk: once recognized, have opinions about it.
promotion irony
word of mouth (and public relations) are most influential in advertising, but the least controllable
4Ps
Product
Price
Place
Promotion
- Used tactically as a part of a strategy, not strategy itself.
Price
Place
Promotion
- Used tactically as a part of a strategy, not strategy itself.
commodity
Refers to any product that is essentially undifferentiated. This means that there is no difference in the product regardless of which company you buy from. Milk is generally said to be a commodity.
Problem: when your comp is asked to supply a private label, run the risk of commoditizing it b/c you're supplying the exact same product.
Problem: when your comp is asked to supply a private label, run the risk of commoditizing it b/c you're supplying the exact same product.
validity vs. fidelity
Actual factual quality of data, versus the intent or image given off by presentation of facts.
Government seems to care more about latter; "paternalistic."
Government seems to care more about latter; "paternalistic."
breaking bulk
Sell large amount to a distributor (not end user, b/c end user doesn't need that much), so the distributor can break into smaller chunks and sell it where it needs to go.
guerilla marketing
Deliver mktg where we're not expecting it = more likely to pay attention.
- effective for a few uses, then gets old
- effective for a few uses, then gets old
managing expectations
- Don't overpromise, overdeliver. (e.g. shipping with Amazon. Tell will take longer, deliver faster for higher satisfaction.)
segmenting: demographics
- age, eduction, cohort ("a generation"), occupation, sex, marital status, income
opportunity cost
Value of the next best choice that you're giving up. Doing this "cost" me x dollars, which was the value of the next best opportunity.
DON'T include opportunity costs when assessing profitability, unless it's certain you would have gained it.
DON'T include opportunity costs when assessing profitability, unless it's certain you would have gained it.
CMO
chief marketing officer; over 50% of the fortune 1000 companies have CMO positions
IMC
integrated marketing communications
- Try to integrate sales promotions, personal selling, public relations and word of mouth
- Try to integrate sales promotions, personal selling, public relations and word of mouth
promotional cues
stores put extreme discount on items, but expecting to make sales because you buy other stuff as well
ex: grocery (limit 1 on good deals), you buy other stuff too
ex: grocery (limit 1 on good deals), you buy other stuff too
metric
A way to measure something.
tests for brand name
say
spell
read
remember
spell
read
remember
skim/penetrate later trends
Skim: starts out as high price, low promotion. Will lower price and increase promotion to beat out new competitors.
Penetrate: starts out low price, high promotion. Will decrease promotion b/c most customers already attained, end introductory prices and raise them (less coupons).
Final, sustainable positions: LOW, LOW for basic commodities. HIGH, HIGH for luxury items.
Penetrate: starts out low price, high promotion. Will decrease promotion b/c most customers already attained, end introductory prices and raise them (less coupons).
Final, sustainable positions: LOW, LOW for basic commodities. HIGH, HIGH for luxury items.
old way: mass marketing
- same product for everyone
- same mktg mix
- advantage: efficiency (only have to do things one way)
- same mktg mix
- advantage: efficiency (only have to do things one way)
pull
Get grassroots customers excited, who then demand retailers and wholesalers to get it. Requires higher spending to get consumers into it.
% margin
The margin is 1-(var. cost/price per unit).
E.g. The variable cost of us to make one is 40% of the final selling price. Our margin is 60%. (Of the final selling price, 60% of it is our profit.)
E.g. The variable cost of us to make one is 40% of the final selling price. Our margin is 60%. (Of the final selling price, 60% of it is our profit.)
variable costs
Costs that vary directly with the number of units being produced.
Ex: materials, sometimes labor if by unit.
Ex: materials, sometimes labor if by unit.