Marketing Instruments Practice Flashcards

Comprehensive vocabulary flashcards based on the 'Marketing Instruments' lecture series covering basic definitions, strategic analysis tools, product and brand management, and the promotional mix.

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (American Marketing Association 2021).

Strategic marketing ….?

Asks „What“ and „Why“

Operational marketing…?

Ask „How“ and „when“

Marketing & Innovation

Marketing & Innovation

Laut Peter Drucker:

Businesses have only two functions that produce results: Marketing & Innovation, all other are costs.

Product elimination

Product elimination means stopping the production, marketing and sales of a product.

A company removes a product from it‘s portfolio when it‘s no longer useful or profitable.

What are the risks associated with eliminations?

Risks associated with elimination:

losing loyal customers, negative public reaction, market gaps, short-term revenue loss

What are the benefits associated with such eliminations?

Benefits associated with eliminations:

lower costs, more focus on succesful products, stronger brand image, high efficiency in the portfolio.

Brand

A brand is a name, term, design, symbol or a combination of these that identifies the products or services of one seller or group and differentiates them from those of competitiors.

BRAND: what people feel and think about what you sell

Core customer value

Core customer value:

A product is more than just a product.

It‘s buying entertainment, self-expression, productivity and connectivity

Customer journey

A customer journey is a complete path a customer takes from first hearing about a product to buying it… It‘s the full buying experience.

Especially useful for new products…

Customer journey TOUCHPOINTS

5 touchpoints during Customer journey:

Awareness

Consideration

Purchase

Retention

Advocacy

What is a Product

„A product is a anything that can be offered to a market for attention, use or consumption that might satisfy a want or need“

— Kotler & Armstrong

What is a brand strategy?

A brand strategy aims to strengthen the brand‘s perception in the environment, to create an emotional connection between brand and it‘s consumers, to build brand loyalty.

What is a marketing strategy?

A marketing strategy is the plan a company develops to market it‘s products or services in order to achieve it‘s marketing objectives, such as revenue/profit.

Ansoff matrix: Market penetration

Market penetration:

existing market, existing customers - if f you need quick sales

• sell more of the same product to the same customers

• Discounts, loyalty cards

• Example: run a promotion to increase repeat purchases

Ansoff Matrix: Product Development

Product development: new market, existing customers - If customers ask new things

• make a new product for your current (existing) customers

• Example: a new flavor, or a cup to go

Ansoff Matrix: Market Development

Market Development: exisiting market - new customers - If your products fits other places

• sell your existing products to new customers

• Example: export to another country

Ansoff Matrix: Diversification

Diversification: new market, new customers - If you have strong reasons & resources

• New product in a new market

• Example: new business line or bundle

• Start a new service that targets a different market

„Do nothing case“ Ansoff Matrix

Do nothing case means keeo the current strategy unchanged. It is the lowest-effort option but risks losing ground, if competitors innovate or market change.

Rank the risk of the Ansoff Matrix

Lowest risk: Market penetration

• small changes, quick results

Medium risk: Product Development and Market Dev.

• Need some investment or market work

Highest Risk:

• big change, needs most resources

Marketing Mix

The set of tactical marketing tools—Product, Price, Place, and Promotion—that the firm blends to produce the response it wants in the target market.

Strategic Marketing (portfolio management)

Strategic Marketing, focus on long-term decisions about the future of the product portfolio ($3-5$ years and more) with the objective of securing or expanding market position, asking the questions "What?" and "Why?".

Tools: PLC, product positioning, Portfolio Matrix/BCG

WHAT IT DOES:

• decide which product to invest in

• Which product to launch or eliminate

• Align portfolio with market trends & customer needs

• Manage risk profitability

FOCUS: Market and Competition

Operational Marketing (portfolio management)

Operational marketing focuses on the short term performances (up to $1-2$ years) of excisting products using quantitave data

TOOLS

• key metrics analysis

• Contribution margin analysis

• Customer satisfaction

WHAT IT DOES:

• identify weak products

• Improve existing products

• Reduce costs

• Fix quality issues

FOCUS: internal performance

Vision

Vision, is a company or brand addressing where the organization wants to go to provide orientation for employees and customers.

Mission

A market-oriented current statement of the organization's purpose—what it wants to accomplish in the larger environment.

Should be meaningful and emphasize the companys strengths.

SMART Goals

A framework for setting objectives: Specific, Measurable, Achievable, Realistic, and Time-oriented.

SMART: we want to increase our insta follower count by 20% within the 6 months to improve brand awareness among gen-z customers

STEEPLE

A marketing theory used to analyze how

Sociocultural, Technological, Economical, Environmental, Ethical, Political, and Legal

external factors impact an organization.

STEEPLE step by step 7(Stk)

Sociocultural

Technological

Economical

Environmental

Political

Legal

Ethical

Product elimination (two types of criteria)

1) Quantitative Criteria (Measurable, financial reasons)

• Products sells less

• Falling market share, competition is stronger

• Product barely makes profit

• Product uses too much capacity and ressources

2) Qualitative criteria (Non financial reasons)

• better alternatives appear

Product becomes outdated

• Customers no longer want it

• Product harms the brand (image)

• Legally no longer allowed (eg. energy drinks)

SWOT Analysis

SWOT-analysis is a framework that compares a company‘s internal strengths and weaknesses with external opportunities and threats.

• it helps with decision making

• Identifies competitive position

• Supports strategic planning

TOWS Matrix

A strategic framework used to derive actions by matching internal strengths/weaknesses with external opportunities/threats (e.g., S/O, S/T, W/O, W/T).

Porter’s Five Forces

A framework developed by Michael E. Porter in $1979$ to analyze the competitive dynamics of an industry and guide strategic decision-making.

Cost Leadership

A generic strategy that involves being the lowest-cost producer across a broad sector or industry.

Differentiation

A generic strategy where a company strives to be unique in its industry in dimensions valued by buyers, allowing it to charge a premium (higher) price.

Customers willing to pay more for your products and services eg. Apple

Know and detect the criteria of a strong brand and it‘s value

1. Recognition

   easy to recognize, provides orientation, remains memorable, uses visual elements

2. Loyalty

   has loyal customer who make repeat purchases and actively recommend the brand to others

3. Differentiation

   clearly stands out from the competition and offers a unique value propositiob that makes it more attractive

4. Value creation

   leading to higher sales and the ability to charge premium prices = trust and quality

Why do resellers/traders/retailers do create private labels?

Private labels are chepaer to produce and allow retailers to keep a larger share of the profit compares to selling manufacturer brands and benefit from consumer-shifts toward cheaper alternatives during price increases.

• Price increase, pushes consumers to buy private label products

Name the different brand types

Manufacturer brand = owned by producer

Private label = owned by retailer

Licensing = brand name used by others for a fee

Co-branding = Two Brands on one product

Blue Ocean Strategy

instead of fighting other companies for the same customers, you change the product or service so new customers want it. The goal is to give more value to customers while keeping costs as low.

basically, making a new market where there is little or no competition.

Ansoff Matrix

A product-market matrix used to identify strategic directions for growth…

It shows 4 ways a company can grow by combining products and market (existing or new).

1) Market Penetration

2) Product Development

3) Market Development

4) Diversification

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Service

An activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything.

Convenience Products

Convenience products are Consumer products and services that the customer usually buys frequently, immediately, and with a minimum comparison and buying effort (e.g., fast food, news paper, candy)

Shopping Products

Shopping products are Consumer products and services that the customer compares carefully on suitability, quality, price, and style (e.g., furniture, cars).

Specialty Products

Specialty products are Consumer products and services with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.

For example: medical services, designer clothes…

Unsought Products

Unsought products are Consumer products that the consumer does not know about or does not normally think of buying (e.g., life insurance, blood donations).

Industrial Products

Products purchased for further processing or for use in conducting a business, including materials, parts, capital items, supplies, and services.

Product Mix Width

The number of different product lines a company carries.

Product Mix Length

The total number of items the company carries within its product lines.

Product Mix Depth

The number of versions offered of each product in the product line.

Product Line

A group of products that are closely related because they function in a similar manner, are sold to the same groups, or fall within given price ranges.

Line Filling

Adding more items to the present product line range (e.g., adding different screen sizes to a smartphone line).

Line Stretching

Extending a product line beyond its current range (e.g., moving from smartphones into tablets or watches).

Product Variation

Product variation:

The product remains the same, you just change it slightly. But the product line does not increase.

Typical changes: design, color, material or updates

Examples: Apple iPhone 11, 12,

CocaCola, same drink new packaging

Product Differentiation

Product Differentiation is, that you add new versions of a product to the line.

That means, the product line increases. The goal is to reach more customer segments and increase market share.

Typical forms: New size, new model, new version for a customer group

Example: iPhone SE (günstigere Alternative), iPhone Pro Max

Cola Zero, Cola Light

Challenges of Product Variation

• higher development costs

• Shorter PLC

• Customer confusion

• Inventory issues

Challenges of Prodcut Differentiation

• higher marketing costs

• Shelf space limitations

• Higher unit costs

Product Life Cycle (PLC)

A model used to analyze the stages of a product's market life, typically from introduction and growth to maturity and decline.

It describes the sales and profit pattern of a product over time.

Why Product Life Cycle matters

PLC helps companies decide when to invest, when to modify a product, when to elimnate it, how to allocate marketing budget, how to position the product in each phase

Phases of PLC

0) Product Development (before launch)

Product is being developed, tested, designed

No sales, only COSTS

1) Introduction

Low sales, high marketing costs, no profit

But the product just launched

2) Growth

Sales rise fast, profits increase, fast growth

3) Maturity

SALES PEAK, competition is strong, profits stable OR falling

4) Decline

Sales fall, profits drop

Why companies should start developing new products?

1) If competitors launch new products, your company must innovate to stay competitive.

2) New consumer trends: changes in lifestyle, behavior or preferences create demand for new products (people want healthier drinks = sugar free options)

3) New technologies: new product become possible

4) New Customer needs and wants: customers develop bew expectations or problems that need solution (they want sustainable packaging = eco friendly dabba)

5) Research results: findings can lead to new product ideas

6) Demographic development: aging population = more medial devices

7) Change in legal requirements: new laws force to innovate (Ban on plastic straws)

Customer Jobs

Customer Pains

Customer Gains

These 3 elements help companies understand what customers really need, so they can design valuable products or services

Customer Job

Customer jobs is what they try to achieve

• A student‘s job is to submit an essay on time

Customer Pain

Customer pain are obstacles, risks, negative outcomes. These are the problems customers face.

• my laptop battery dies during class

Customer Gains

Customer gains are the results, customers want to achieve or the benefits they desire

• A laptop that lasts all day long without charging

Describe Pain relievers and Gain creators

Pain relievers describe how the product/service minimizes the pain.

Gain creators describe how they create value for the customers.

ABC Product Classification

A method to categorize inventory based on value:

A-Products (~$70–80\%$ value),

B-Products (~$15–25\%$ value),

and C-Products (~$5–10\%$ value).

Technology-push (Innovation logics)

(They create something new and then try to find customers for it)

A product innovation approach driven by the further development of existing products and trends to generate customer needs.

Risk: no market demand

Example: Vr headsets

Market-pull (Innovation logics)

A product innovation approach that identifies undiscovered customer needs first and develops products to serve them.

(Identfiy customer need snd based on that knowledge develop products)

• customers have a problem or need

Risk: limited innovation potential

Example: customers want fast delivery: amazon prime

Typical reasons why products fail

• market size was overestimated

• Market research wasnt done properly

• Poor design

• Incorrecr positioning

• Overpriced

• Launched at the wrong time

• Too high production costs

Companies must understand their consumers, markets and competition and must develop products that deliver value to customers.

Media

Media refers to the channels used to communicate messages and reach target audiences

Traditional media: newspaper, magazines, television

Digital media: social media, websites, blogs

Types of advertising (Promotional mix)

1) informative ads: educate customers about value, features, or new products (tell the market about the new product)

2) Persuasive ads: builds preference and encourages to buy now

3) reminder advertising: keeps reminding customers where to buy the product, maintaining customer relationships and keep reminding

Product Innovation: Stage gate approach (3 begriffe)

Objectives: Attractiveness, Feasiabilty, Economic viability

5 Stages Gate Approach

1) Idea generation

2) Concept development

3) Business Modelling

4) Product development

5) Commercialization

Quellen der Ideengewinnung

Intern: R&D, Customer service, Beschwerdemanag, Sales

Kunde: direkte Befragung, Fokusgruppen, Beobachtung

Extern: Wettbewerb, Beratung, Experten

Persona

A persona is a fictional but realistic representation of a typical user.

Personas are used in the concept phase, to desin and test product ideas, ensure user centered development and help teams consider customer needs through out the innovation process.

Private Label

A brand created and owned by a reseller (retailer or trader) of a product or service.

Co-Branding

A strategy where a provider marks a product with two or more established brand names owned by different companies.

Ingredient Branding

A brand policy for components, parts, or raw materials (e.g., Intel) that are recognized as branded products by the target group.

Line Extension

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category.

Brand Extension

Extending an existing brand name to new product categories.

Corporate Brand

A branding strategy (or Branded House) where one unified brand name is used across multiple product categories (e.g., Apple, Google).

House of Brands

A branding strategy where the corporate brand is hidden and each product is assigned its own brand name and positioning (e.g., Procter & Gamble).

Brand Equity

The value of a brand based on uniqueness, loyalty, and meaning from the perspective of the target group.

Brand value

Brand value is influenced by financial, psychological and social benefits as well as uniqueness, meaning, market share, loyalty abd pricing power.

Dimension: Image, Core, Success

Example: Apple

HOW can companies measure brand value?

Companies can measure brand value:

• behavioural, how customers perceive the brand

• Financial methods, costs + profit

• Hybrid, combine customer performance + financial performance

Comparison is relative!

But the most famous brand valuation method: Interbrand

It shows the economic contribution of the brand to company value

Earnings x Strength multiplier = Brand Value

High brand relevance and

Low brand relevance

High brand relevance: Lifestyle + Money (Cars, Clothes, sports = emotional + identity)

Low brand relevance: Commodities + Price (Toilet paper, raw materials, fruits) = nobody cares about brand

When do companies need to measure the value of a brand?

Companies need to measure the value of a brand:

• strategic planning & investments

• Financing

• Marketing success measurement

• Licensing & franchising

• Maßnahmen, die UN nutzen um ihr Markenportfolio anzupassen

1) New brand strategy

• to enter a new market, target new customer segment

• Respond to competitive pressure, differentiate more strongly

2) Rebranding (an existing brand is updated or changed)

• new logo, design, name, positioning, communication style

• McDonalds, Facebook zu meta

3) Secondary brands (supporting sub brand alongside main brand)

• happens when a company aquires another company

• A sub brand is needed for differentiartion

• A product line needs additional segmentation

• Nivea = Nivea Men

4) Consolidation (Brands are merged, reduced, or eliminated)

• reasons: too many brands, confusiin, declining sales, cost pressure

• Example: Unilever reducing small brands and focusing on Dove, Axe…

Employer Branding

A company’s image as an employer, focusing on building a reputation as an "employer of choice" to attract and retain talent.

Employer branding: Candidate journey

Awareness (they discover the company)

Interest

Application

Interview

Hiring

Onboarding

Promotion

A subset of marketing communication focusing on activities and tools designed to persuade customers to purchase or support a product, service, or brand.

Push Strategy

A promotion strategy using the sales force and trade promotion to push the product through channels to final consumers.

Pull Strategy

A promotion strategy spending heavily on consumer advertising and promotion to induce final consumers to buy, 'pulling' the product through the channel.

Advertising

Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor.

Public Relations (PR)

Building good relations with the company’s various publics by obtaining favorable publicity and building a good corporate image.

Personal Selling

Personal interaction by the firm's sales force for the purpose of engaging customers, making sales, and building customer relationships.

Sales Promotion

Short-term incentives to encourage the purchase or sale of a product, described as saying "buy it now" (e.g., coupons, discounts).

Direct and Digital Marketing

Immediate, personalized, and interactive promotional tools (e.g., direct mail, social media) suited to highly targeted marketing efforts.

Owned Media

Communication channels under high control of the company with low cost, such as a company website or newsletter.

Paid Media

Communication channels requiring payment where the company has medium control, such as TV commercials or trade show placements.