Marketing Management: The Big Picture Chapter 1-6

Channel leader
A company that holds the greatest power in the distribution channel; as a result, it is able to set standards for how the channel will be managed and bring channel members together around key activities and behaviors.
Core competence
Key organizational skills that drive sustainable growth. The core competence is the source of differentiation for the firm.
Ethical practice
Our ongoing effort to act in accordance wit the guiding moral principles we have identified that reflect our assessment of right and wrong and to consider the impact of our actions.
Ethics
the moral judgements, standards, and rules of conduct by which we live.
Expected value analysis
A technique that can help us estimate the potential impact of our actions in a systematic manner by considering the probability of an event and the value of the outcome.
Fundamental entity
Our choice of fundamental entity determines the perspective from which we will conduct our strategic analysis, whether it be brand by brand or from a more global, corporate point of view.
Goal
Company goals function as success criteria and also help prioritize our actions and our allocations of resources.
Strategic focus
The key intersection of customer and competitive attention that represents our best strategic opportunity.
The Big Picture Framework
An integrated framework designed to help you analyze and address the myriad marketing problems you will face during your career.
Brand
A name, term, sign, symbol, or design, or a combination of them which is intended to identify the goods or services of one seller or a group of sellers, and to differentiate them from those of competitors. In practice, the brand is synonymous with the overall benefit the company promises to deliver to its customers.
Core business
The core business of the firms is the central focus of a company’s activity
Core competence
A skill of the firm that is pervasive throughout the organization and can lead to a sustainable competitive advantage.
Distinct branding
A branding approach whereby the company creates different brands for its different products and services
Fundamental entity
the bran level from which we conduct the strategic analysis. The Fundamental Entity might be the Corporate Brand, a Brand Line, or a Product Brand, depending on the company’s brand structure.
Hybrid branding
A branding approach that combines two brands – the corporate brand plus separate brands – to designate differences in product or service lines
Strategic asset
A strategic asset is a resource of the company that is supported by a core competence and is critical to differentiating the brand
Umbrella branding
A branding approach whereby the company uses just one brand for all of its products and services.
Customer acquisition
a series of activities designed to bring new customers to our brand or franchise, including awareness creation, information delivery, and activities designed to encourage trial
Customer Lifetime Value (CLV)
The total net present value of current and future profits that a particular customer will generate over the lifetime of his or her relationship with a frim. CLV = m x r/(1 + d – r), where m is the $ margin per customer, r is the retention rate, and d is the weighted average cost of capital of the company or discount rate.
Customer loyalty
customer loyalty is generally defined as the combination of repeat purchases and commitment to a brand on the part of a customer; both attitudinal and behavioral components are necessary for loyalty to exist.
Customer relationship management (CRM)
a set of processes to manage the connection between the company and the customer
Customer retention
Activities designed to help keep customers longer
Hand loyalty
customer loyalty characterized by habitual repurchase and low interest in product information, that is low commitment to the brand
Head loyalty
customer loyalty based on specific benefits of a brand, such as product performance
Heart loyalty
customer loyalty based on personal identification with the brand
Recency, frequency, and Monetary value (RFM)
Analysis which ranks customers by examining how recently they have purchased (recency), how often they purchase (frequency) and how much they spend (monetary) with the company
Switching costs
The costs customers will incur if they switch companies, including financial costs but also the cost of time to apply for a new service or learn to use a new product and the emotional cost of the uncertaininty or working with a different company
4 Bs: Bodies, beliefs, behaviors, bucks
The foundation of any sound strategic marketing investment is thoughtful analysis of the target audience we are trying to reach (bodies), the beliefs we are trying to change (beliefs), the behavioral change we hope will result from the belief change (behaviors), and the financial impact of that behavioral change (bucks).
Benefit-based category definition
the business category (or market) is the field within which companies deploy their products and services and customers satisfy needs through the purchase of products and services. Traditionally, companies defined business categories by adding up their sales of particular types of products; today we do it by adding up the revenues of products that fill a particular customer need.
Comparative advertising
refers to the practice of advertising products or services relative to other products sold by competitors rather than in absolute terms.
Consideration set
A list of companies or brands that are simultaneously considered by consumers seeking to make a purchase based on a need they have identified or a benefit they are seeking to obtain. As consumers engage in research of a category, they may discover options that were not in their initial consideration set.
Cost of entry
The cost of entry into a category is the minimum acceptable product or service standard that a company must be able to deliver in order to be considered by consumers in that category as being part of their consideration set in that category.
Earn share strategy
A competitive strategy characterized by comparisons to a company or group of companies (market segment)
Features war
When both parties engaged in competition retaliate in succession, their competition is called a features war if they primarily compete by trying to improve each other’s product features, or a price war if they primarily compete on price.
Forward buying
The practice of purchasing retail inventory in quantities exceeding current demand, usually motivated by suppliers’ offers of temporary discounts.
Household penetration
The percentage of a particular group who use a particular product, product type, or a service. For example, the household penetration of smartphones in the U.S. in June 2013 was 56%
Main benefit
The primary customer benefit emphasized by the market leader of a category. The main benefit becomes a “cost of entry” in the category because companies wishing to enter that market have to deliver the main benefit to an acceptable level in order to be considered part of the category.
Path to purchase
the stages that a customer goes through in identifying a need and eventually purchasing, using, and evaluating a product purchase.
Porter’s 5 Forces
A framework advance d by Michael Porter that provides a systematic means of quickly assessing the competitive space by highlighting the primary external factors that drove company performance. The five forces are: supplier power, buyer power, threat of competitive entry, threat of substitute products, and threat from existing competitors.
Source of volume
A process by which we attribute customer purchases to groups of consumers in each of the strategic quadrants; retention/stimulate demand, retention/earn share, acquisition/stimulate demand, acquisition/earn share
Stimulate-demand strategy
The market leader’s strategy based on growing the category. This is done either by attracting non-users to the category (acquisition) or by motivating current customers of the brand to purchase more or to pay more (retention).
Strategic quadrants
The strategic quadrants are a 2×2 that results from a combination of the marketing objective decisions (customer focus) and the source of volume choice (competitive focus). There are four strategic quadrants: acquisition/stimulate demand, retention/stimulate demand, acquisition/earn share, retention/earn share.
Viral marketing
A communications tactic intended to increase awareness using social med as opposed to traditional paid advertising. This awareness spreads like a virus as users come in contact with one another and “infect” their friends and associates with information about a product.
Aspirational variables
variables that reflect beliefs and attitudes about the future: the wishes, hopes, and dreams of our target audience.
Attitudinal variables
variables that describe the thoughts, feelings, and beliefs of consumers. Marketers have implicitly used attitudinal segmentation strategies for years by appealing to consumers’ needs for safety or self-esteem or desire to be “hip” or “cool”
Behavioral segmentation variables
variables that describe the specific actions of consumers or potential consumers
Categorical variables
a categorical variable like gender, occupation, or martial status that is used to represent discreet types, or categories, or numerical categories on a scale.
Continuous variables
Variables that can take any value within the scale used to measure them (not simply the whole numbers on the scales, but including fractions)
Demographic variables
Those variables that we can physically observe and measure such as age, gender, educational status, household size, income, marital status, and geographic information like country of origin, population income, and population density
Dynamic benefit
The benefit used by a competitor to take share from the category leader
Life-stage marketing
Life-stage marketing more generally refers to the practice of adapting marketing messages and offerings to customers’ specific life phases.
Main benefit
The primary benefit provided by the category that and that differentiates the category leader.
Millennials
The generation born between 1980 and 2000 (appx). Millennials are sometimes referred to in the media as “Generation Y”
Psychographic variables
Variables that combine demographics, personality, values, attitudes, interests, and lifestyles of consumers for segmentation purposes.
Segmentation
The process of identifying a group of customers who share at least one characteristic that will make them more responsive to our marketing message
Stereotyping
The practice of considering any individual in a segment or population as a representative of the population as a whole by emphasizing physical or demographic variables to draw unrealistic and potentially offensive conclusions regarding attitudes and behaviors
VALs
Acronym for Values, Attitudes, and Lifestyles, VALs is a system for grouping consumers according to certain attitudes and demographics (Together known as psychographics) in order to predict their response to marketing and advertising initiatives
Benefit plot
A graphic showing importance and perception ratings. Sometimes these plots are also called perceptual plots
Competitive plot
A plot of just a couple of benefits that define our specific market space and help us locate brands in that space.
Customer experience map.
A tool that reviews the customer experience with a particular brand or an entire product category and the factors which influence that experience.
Derived importance
Also called “revealed” importance as the researcher uses statistics methods to estimate importance indirectly, based on answers to other questions rather than by asking directly.
Main and dynamic benefit plot
A benefit plot that illustrates the basis of competition in a particular market space by showing target customers’ perceptions of the different brands’ performance of the main and dynamic variable.
Panel data
information regarding customers’ behavior and attitudes toward products and services that is collected from a group of consumers (a panel) over time. This enables the researched to track trends among a group of consumers
Perception and importance plot
A benefit plot that illustrates the relative importance of the key benefits in the market space and how customers perceive each of the brands’ performance on those key benefits.
Revenue market share
the revenue of our brand divided by the total revenue corresponding to all brands in a category within a specific time frame
Stated importance
perceptual estimate obtained from a survey in which customers are asked directly to rate the importance of a benefit or product attribute.
Strategic customer insights
Information about customers or potential customers that holds special value to our firm given our capabilities and marketing strategy
Target audience description
A rich description of a member of the market segment we are pursuing, leveraging demographic, behavioral, and attitutudinal characteristics.
Targeting
the process by which we locate and describe specific groups of customers who we hypothesize are most likely to be interested in obtaining the benefits we offer through products and services
Unit market share
the number of units sold by our brand divided by the total number of units sold in a category within a specific time frame.