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Definition
| used for a different purpose than the one they were invented to serve. |
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Term
| “Necessity is the mother of invention.” |
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Definition
| most inventions were not developed to meet a pressing need but were developed by hobbyists and tinkerers to satisfy their curiosity. |
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Inventors are good innovators
True
False |
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Definition
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Term
| according to corporate executives where do innovations comes from |
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Definition
either marketing research (into customer wants and needs) or research that leads to the development of new technologies.
These assumptions are often true and these sources of innovation are indeed worth investing in, but there is a flaw in thinking they are the only sources of innovation that matter. |
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Term
| Business Model Innovation |
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Definition
| This is about developing new business models as Apple did with their iPod MP3 player and the Apple store. It was not a matter of new technology, but a new combination of products and services offered in an innovative way. |
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Term
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Definition
| In the past, design was often thought of as an afterthought or as being purely aesthetic, but many companies now see it as a “robust path to innovation.” They use the example of Oxo, a household solution company. (Read about them.) |
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Term
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Definition
The “House of Brands” Approach is carried on by those companies who have more than one brand in their respective portfolios.
The companies keep the brands separate from each other rather than emphasizing corporate unity.
This is often a difficult approach to maintain. Marketing each brand separately can be costly. |
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Definition
| The “Branded House” Approach involves uniting the products under a single house brand. That can offer advantages, but it can also place boundaries on innovation. |
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Definition
The Brand System Approach
This approach is built around the common essence of a brand.
They use the example of the Virgin company that owns an airline, a music store, a cola, a cell phone carrier, and other things, yet has an overarching essence of freedom and individuality. |
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Term
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Definition
The “sandwich” referred to is a method of responding to competition that involves introducing new products that compete with them on the basis of brand while maintaining or improving high quality/higher priced brands.
• The sandwich has two layers:
• Introduce a lower-priced economy option.
• Keep your regular product at its current price or increase its quality and price |
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Term
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Definition
| Economic, Functional, Psychological |
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Definition
| • Value isn’t just about price. It’s about savings which could include savings in money, time, or human resources. They refer to the “cost of thinking.” |
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Definition
| Quality as a function of design features. |
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Definition
| Quality associated with brand image, “emotional value.” Psychological value goals would be things like “total satisfaction” or “peace of mind.” |
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| One Macro Factor in Pricing |
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Definition
Primary Strategic Objective (Is it profitability or market share?)
If the primary goal is profits, “a company will price less aggressively and seek those market segments that are willing to pay premium prices.”
If increasing share is more important “(at least in the short term) a more aggressive pricing and spending strategy may be adopted to attract a larger number of customers. |
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Term
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Definition
Include materials and labor, but shipping, carrying costs, and sales commissions also have to be considered.
These are the pricing floor. Some products (e.g. loss leaders) may be sold below cost to generate traffic, but you need to offset it by increased sales of other products.
Variable costs are fixed per unit, but vary with the number of units produced.)
Contribution Margin = Price - Variable Cost |
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Term
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Definition
| The costs of running the business. (USAIIRD: Utilities, Salaries, Advertising/Marketing, Insurance, Interest, Rent/Lease/Mortgage, Depreciation) |
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Term
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Definition
| are generally less vulnerable to competitive pricing than smaller brands |
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Term
| When Competition Increases: |
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Definition
From Introduction to Growth Stage:
In new markets, competition is not really a problem, but price pressure increases when more companies enter the market and customers become more knowledgeable. |
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Term
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Definition
When market growth slows down and companies are fighting over market share, price competition becomes more intense
When companies are more differentiated by non-price factors, they are more protected from competitive pressures.
Market leaders are generally less vulnerable to competitive pricing than smaller brands |
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Term
Value and price are not necessarily the same thing
True
False |
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Definition
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Term
| Their definition of value |
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Definition
| “Value is defined as the perceived worth in monetary units of the set of economic, functional/technical, and psychological benefits received by the customer in exchange for the price paid for a product offering, taking into consideration available competitive offerings and prices.” |
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Term
Distribution Channel
Indirect Channels: |
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Definition
| Ubiquitous products like soft drinks, chewing gum, and light bulbs have little choice but to rely on local retailers |
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Term
Distribution Channel
Direct Channels: |
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Definition
| Products like books and CDs are easy to purchase online, which makes it difficult for brick and mortar companies to complete on the basis of price. |
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Term
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Definition
| Colluding with competitors to set prices. |
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Term
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Definition
| Selling goods below cost to drive competitors out of business |
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Term
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Definition
Charging different prices to different customers.
Applies to sales of two or more purchasers.
Applies to goods only, not services.
Goods must be of like grade and quality.
There must be reasonable probability of competitive injury. |
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Term
| Promotional Discrimination |
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Definition
The provision of allowances, services, or facilities
In connection with the resale of the supplier’s goods
Not available to all competing customers on proportionally equal terms |
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Term
| When Advertising is Appropriate |
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Definition
• When the market is large and individual customers are not easy to identify.
• When the brand has “news” value.
• When it is a deterrent to new entrants.
• When it communicates to the audience that the brand is substantive (a big deal), to retailers that the brand will receive support to stimulate sales, and to investors that the firm believes in its own product enough to invest in it (so they should too). |
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Term
| Not appropriate for a business to market when? |
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Definition
| a few large an easily identified customers. |
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Term
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Definition
| Assumes customers make reasoned brand comparisons based on what is in their long-term memory (They mention the two-store model of memory) “Two-store” model of memory: Working and Long-Term Storage. Information stored into long-term memory is available to customers when they make judgments. (They place products into categories and remember differences |
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Term
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Definition
| When customers make quick judgements based on surface cues like advertising or packaging (or intuition). (they mention heuristics and perceptual cues. But what does that mean?) |
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Term
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Definition
Assumes the way consumers process information determines how they respond to it.
• Some might be persuaded by an ad that includes some negative information about a product if they thought it was more truthful.
• They mention “where the consumers’ attention is focused, how much thinking is required, and even what product features are emphasized” as factors in how they process ad information.
(Based on the way the person experiences and interprets the message.) |
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Term
| Creative strategies to Influence Impact: |
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Definition
Incongruity: (the unexpected) draws attention to a message.
(They mention the Apple ad of the woman with the hammer as an example:
Humor: also serves to enhance relevance and attention. (Budweiser)
Threat: also enhance attention but people can react to fear in unexpected ways. (anti-smoking) |
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Term
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Definition
• 1) The Hard Sell: “Buy this brand, get this benefit.” (Rolaids spells relief.)
• 2) The Big Idea: A recurring theme throughout the ads. (e.g. Coors’ cold refreshment)
• 3) Story Grammar: Assumes people store information in the form of GOAL/PROBLEM>SOLUTION>OUTCOME (Not as effective with technical brands because it seems inauthentic. Imagine characters reciting a list of technical specs to their friends.)
• 4) Comparison: Some advertisers believe it should be used by followers and not leaders. If leaders use it, it could be seen as advertising for their competitors.
• 5) Spokespeople: Celebrity spokespeople can help bring attention to a brand, but this could be a liability of they are involved in scandals. Icons like the Geiko gecko and Tony the Tiger avoid this for the most part.
• (Has the “scary clown” idea tarnished poor old Ronald McDonald? That would be an interesting premise for a commercial: Clowns protest their portrayal by the media. “All we did was try to make children happy, and look what they did to us?”)
• 6) Message Repetition: Can aid memorization or wear viewers out if repeated too often. |
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Term
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Definition
| An ad that draws attention and promotes elaboration may not be persuasive if customers don’t remember which brand it goes with. Linkage to the brand and benefit must be clear. |
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Term
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Definition
• Customers are asked to recall ad content in as much detail as possible. A problem is that they might be recalling things they already knew. Recalling a brand doesn’t necessarily mean they view it positively. (Example: Ad said car comes with a tool kit. Probably because it breaks down so often.)
• Asking consumer to list brand benefits is more useful. Top-of-mind awareness is another type of awareness. |
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Term
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Definition
The following evaluation methods were discussed:
• Having customers rate brands on affective dimensions like good-bad, like-dislike and their feelings about the brand’s price and quality.
• Impact of advertising on brand intentions can be conducted in both lab settings and in test markets (in which different ads are released to different markets and impact on sales is compared).
• Online advertising is measured by click-throughs. Placing different ads on different sites could be used to measure both ad executions and placement |
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Term
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Definition
Celebrities and icons
Message repetition |
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Term
| Media Strategies: Moment and Mindset |
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Definition
Moment: Presenting the message when it is likely to be relevant.
Mindset: Presenting the message where it is likely to be relevant. |
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Term
The cost of advertising per customer is lower than the cost of personal selling per customer.
True
False |
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Definition
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Term
The selling prices of goods that are purchased through direct distribution channels are usually higher than those of goods purchased through indirect channels.
True
False |
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Definition
False
Goods bought from direct channels are usually lower because there is less mark-up added by middlemen. |
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Term
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Definition
| Good hiring and training programs are in place to recruit and maintain a quality salesforce. |
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Term
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Definition
| Performance management (evaluation) systems provide sales managers with the information to provide timely direction to correct problems or support good performance. |
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Term
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Definition
| Compensation and incentive programs provide an external source of motivation for salespeople |
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Term
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Definition
| Salespeople and managers are supported by information systems that provide them with the data they need to make good and timely decisions. |
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Term
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Definition
| Role of the salesforce in the organization structure is clearly understood and articulated. |
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Term
Defined
(relationship btwn sales and marketing) |
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Definition
| The sales and marketing departments have rules that determine who is responsible for which aspects of the job so that they don't infringe on each other's territory. ("Good fences make good neighbors" idea.) |
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Term
Aligned
(relationship btwn sales and marketing) |
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Definition
| The departments have clear but flexible boundaries and engage in joint planning and training. |
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Term
Undefined
(relationship btwn sales and marketing) |
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Definition
| Sales and marketing only get together when they have disputes to resolve. They focus on their own agendas unless conflict arises. There is no proactive collaboration. |
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Term
Integrated
(relationship between sales and marketing) |
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Definition
| The sales and marketing departments share systems, performance metrics, and rewards. They behave as though they will rise or fall together. |
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Term
In discussing deliberative judgments (in the Advertising Strategy chapter), Rucker and Sternthal elaborate on the "two-store memory model." What are the two stores?
Walmart and Target.
Basic understanding and personal experience with the brand.
Working memory and long-term memory (which they refer to as long-term store).
Thinking and feeling. |
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Definition
| Working memory and long-term memory (which they refer to as long-term store). |
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Term
It is generally a good idea to reveal the advertiser's brand throughout the advertisement unless the advertiser wants to surprise the customer at the end because the product differs from what they have offered in the past.
True
False |
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Definition
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Term
Which of the following describes metacognitive judgments?
The subjective experience that results from how the information is processed by the viewer. (Does including a negative detail in the ad hurt the message or make the advertiser seem more honest?)
Quick judgments based on characteristics of a product like packaging. (The text refers to heuristics and perceptual cues. Coffee in a brown package is perceived to be stronger.)
Judgments based on product and brand information that is stored in long-term memory and becomes part of a bank of information the customer can draw upon.
Judgments based on information hidden in the advertisement that the customer is not aware of. (e.g. sexy pictures hidden in the ice cubes of a glass of gin) |
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Definition
The subjective experience that results from how the information is processed by the viewer. (Does including a negative detail in the ad hurt the message or make the advertiser seem more honest?)
P.S. Metacognitive judgments sound subliminal, but are not in the same class as figures hidden in ice cubes. Those have not proven to be effective, by the way. |
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Term
The ability to correct problems (in a sales channel or elsewhere) by threat of punishment (e.g. firing, reprimands) is called coercive power.
True
False |
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Definition
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Term
Channel intensity is the number of participants in a distribution channel and products like sodas and chewing gum are in high intensity channels because they are available pretty much everywhere.
True
False |
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Definition
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Term
What are the layers of the sandwich in the sandwich strategy chapter?
A higher-priced, higher-quality item and a somewhat more moderately priced one without as many features.
Consumer products and business products.
Cheese and meat.
Product and service. |
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Definition
| A higher-priced, higher-quality item and a somewhat more moderately priced one without as many features. |
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Term
The use of incongruity (the unexpected) was recommended in the chapter on advertising strategy because it gets customers' attention.
True
False |
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Definition
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Term
According to Gal in Chapter 15 of Kellogg ("From the Wheel to Twitter"), inventors are usually fantastic innovators.
True
False |
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Definition
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Term
Gal, in Chapter 15, thought companies should spend their energies creating new products from scratch rather than looking for existing inventions they can find new commercial applications for.
True
False |
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Definition
False
The statement was false. He thought they should spend more time looking for commercial applications of existing inventions. |
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