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MKT 300 (Ross)
Exam 1
| Question | Answer |
|---|---|
| Keep in mind the distinction between a core competence and a strategic asset, and which leads to which. | |
| How we define our core business influences who we need to consider as competitors. If Coke is in the soda business, their chief competitor is Pepsi. If Coke is in the refreshment business, their chief competitor is tap water. | |
| Why is it so hard to catch a cab on a rainy day? | |
| How are current customers identified based on RFM criteria? | . |
| How is heart loyalty different from a favorable attitude? | Heart loyalty can be thought of as emotional attachment. For example, favorable attitudes can be developed without interaction with the product. Emotional attachment requires interaction with the product. |
| How is emotional attachment distinguished from satisfaction? | Satisfaction is more episode‐specific. I can have a nice cup of Jello pudding and be satisfied. However, it would take several years of satisfying pudding episodes before I become emotionally attached to the Jello brand. |
| Sometimes, customers take advantage of big sales and never shop from us again once prices return to normal levels. We actually lose money on those transactions. Why shouldn’t we attempt to eliminate those customers entirely? | / |
| Psychologists routinely find that the closer people are to their goal, the more quickly they work to accomplish the goal. How can this insight help us design reward program punch cards? | / |
| What is the distinction between main and dynamic variables? | / |
| When the category leaders stimulate demand for the category, how does it help competitors? | competitors enjoy free‐rider benefits, and new competitors may be attracted to the category. Still, it’s better than the alternative of stealing share from a smaller competitor. |
| Why is the Pepsi Challenge such an alien environment? | / |
| When would electric shocks hurt less: after ingesting a pain pill that you’re told retails for $0.25 or after ingesting a pain pill that you’re told retails for $2? (The pain pill is the same (inactive) placebo in both cases.) | / |
| Why isn’t 100% the optimal market share? | / |
| When launching a new product, we will want to perform at least what two types of calculation? | estimating our long‐run market share and our breakeven volume |
| How can we estimate the long-run market share? | by examining the product’s performance in an actual test market (e.g., Test Market USA), or in a simulated “ASSESSOR” test market |
| What is the ASSESSOR sequence? | / |
| Why does segmenting on demographic variables potentially limit growth? | / |
| According to the VALS framework, who has higher resources: Thinkers or Makers? | / |
| How do Fox News and MSNBC demonstrate that segmenting based on attitudes can produce (profitable) polarization? | / |
| Know how to interpret responses to surveys designed to perform a conjoint analysis. | |
| Know how to plot the market from the perspective of non‐category‐leaders. | |
| What is targeting? | Targeting is an exercise in perspective‐taking. We want to select a randomly selected member of our segment, step into their shoes, and see the world as they see it. This exercise can help to reveal more fundamental strategic problems. |
| What is one weakness of traditional positioning statements? | One weakness of traditional positioning statements is that they fail to take into account what people currently believe about the brand. |
| What is the different between a perception problem and an importance problem? | If people are confused about what category we’re in, that’s a perception problem. If people underestimate the quality of our goods, that’s a perception problem. If people aren’t prioritizing the need(s) we satisfy, that’s an importance problem. |
| Is the 5-box statement only relevant when current beliefs are negative? | the 5‐box positioning statement isn’t only relevant when current beliefs are negative. If current beliefs are positive, we want to “fire up the base,” and try to extract even more profit from current customers. |
| How are the links between beliefs and behavior not always straightforward? | I may believe exercise is a good thing, but not have the motivation to do it. Likewise, consumer propositions do not always lead to desired beliefs. We don’t believe everything we hear. |
| Know how our strategic quadrant and category definition influence the total number of potential bodies and our 5‐box positioning statement. | |
| Know how to perform a bodies to beliefs to behaviors to bucks analysis. | |
| What is the sequential logic of The Big Picture? | Business Objective -> Marketing Objective -> Source of Volume -> STP (Segment, Target, Population) -> Execute (Product Service, Price, Place, Promotion) -> Evaluate |
| What are the four possible branding strategies? | Retail/Corporate Brands, Multiple Distinct Brands (Distinct Branding), Hybrid Brands, and Umbrella Brands |
| What are the advantages of retaining an existing brand for new products (umbrella)? | efficiency (reduced cost, only need awareness of product and not brand, reduced production/packaging costs), positive expectations, try something new in the family, renew interest/affection |
| What are the disadvantages of brand extensions? | brand dilution |
| What are the advantages of distinct branding strategy? | flexibility (can pursue new customer segments), minimizes damage from product failures |
| What is the tradeoff between distinct and umbrella branding? | Distinct is high in flexibility and low in efficiency/simplicity. Umbrella branding is low in flexibility and high in efficiency/simplicity |
| What are the three subsections of the business objective? | fundamental entity, competence, and goal |
| What does core competence do? | it leads to sustainable competitive advantage and generates strategy assets, which in turn generate benefits for consumers |
| What would be the short-run and long-run effects on profits if Coke stopped investing in marketing? | In the short-run, profits would increase because Coke is not spending money on marketing. Long-run effects would be a decrease in profits because they could lose customers. |
| What is the difference between sales and marketing? | Selling focuses on the seller's needs. Marketing focuses on the buyer's needs (understanding the consumer well so that products sell themselves and focusing on raising awareness as opposed to active selling) |
| What are the two primary purposes of goals? | to simplify decision-making and create a performance benchmark |
| What are the attributes of beneficial goals? | Arranged from most to least important, quantifiable whenever possible, realistic, and consistent |
| What is the RFM analysis? | Recency-Frequency-Monetary analysis to define purchase behavior and current customers |
| What are the three types of brand loyalty? | Heart, head, and hand |
| Brands tend to differ on what five dimensions? | sincerity (down to earth/honest/wholesome), excitement (daring/spirited/imaginative), competence (reliable/intelligent), sophistocation (upper-class/charming), and ruggedness (outdoorsy/tough) |
| What can counteract a rational appeal made to a head loyal? | consumers may not devote more costly thinking and consumers may counter0argue to reduce dissonance |
| Why are loyal customers a burden, then more valuable over time? | they care costly i the beginning because it costs more to influence and initially maintain customers |
| What are some of the benefits of brand loyalty? | it can be a carrier to entry, it allows time to respond to competitor innovations, it allows protection against price attacks, and are the source of price premiums |
| What is a price premium? | the extra amount a loyal customer will pay just to have a certain brand |
| In commercials, what difference is visible between acquisition and retention marketing objectives? | acquisition advertising builds awareness and retention focus less on the product |
| What can loyalty programs do? | keep customers from defecting, consolidate purchases/win greater share of wallet, prompt customers to buy more and/or sooner, and yield some insight into behavior/preferences |
| What are the relationships between elements of business objective and marketing objective? | focus on acquisition: new product development, marketing (core competence), revenues and share (primary goal); focus on retention: customer service, market research (core competence) and profit (primary goal) |
| What are the disadvantages of test marketing? | quite costly, not very predictive of full market performance (hard to find representative test markets, competitors can disrupt test markets, and competitors can monitor performance plan response) |
| What is Assessor? | A inexpensive and surprisingly predictive simulated test market method to examine the effectiveness of advertising (step 1: ad exposure, step 2: simulated shopping trip, step 3: free samples, step 4: second simulated shopping trip) |
| What is the Unit Margin? | Price - Unit Variable Costs (where Unit Variable Costs = VC / Total Volume) |
| What is the Breakeven Volume? | Fixed Costs/Unit Margin |
| What is the Breakeven Market Share? | BEV/Total Volume |
Created by:
rhiplay104
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