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129 Cards in this Set

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With whom did the formation of Adidas begin? Where, and in what year?
Rudolf and Adolf Dassler
1920, West Germany
Rudolf and Adolf Dassler: Who was the Business Man and who was the Innovator?
Rudolf: Business
Adoff: Innovator
Adidas rose to prominence in ____ by _____ _____. This is considered the day that ______ ______ were born.
1935, Jesse Owens, sports endorsements
When the Dassler brothers had a fight, they split and became what 2 companies?
Adolf: Adidas
Rudolf: Puma
What 2 things did Adidas's Marketing Strategy do?
1) Set the standard for marketing in this industry
2) Caused other companies to copy Adidas
Adidas's marketing strategy put focus on: (4)
Kinesiology
Product Line
Endorsment Contracts
Liscensing Agreements
(Marketing Strategy)
The science dealing with the interrelationship of the physiological processes and anatomy
Kinesiology
(Marketing Strategy)
Adidas was the first company to develop this.
An extensive product line.
(Marketing Strategy)
When the company pays an athlete to use or wear their product. The brand is identified with a logo which needs to be simple yet distinctive. Tends to be more effective than an ad because seeing the "real thing" increases credibility.
Endorsement Contracts
(Marketing Strategy)
Adidas Negotiated these with small foreign firms to produce their shoes
Licensing Agreements
What are the 3 economic advantages of licensing agreements?
1) Maybe paying fewer taxes
2) Labor is cheaper
3) Since Adidas doesn't own the factories, it keeps cost low
What is the break even point?
The point where sales=expenses and
profits= zero
What is the contribution margin?
selling price- var cost
What is Potential Profit?
Cost Volume Profit
(Revenue- Fixed Cost-variable Cost)
"Criticism of Licensing Agreements" If a company doesn't use licensing agreements, then their break even point will be ____ and they will not be able to compete.
Higher
Mostly focused on working conditions in overseas factories including low wages and long hours, child labor, and unsafe working conditions
criticism
Who used this for Market Research (Merchants of cool video)
- Go to person's habitat to find out who they are -
MTV
MTV's created teenage male, crude, loud, obnoxious
"Mook"
A management practice in which organizations seek to engage in activities that have a positive effect on society and promote a public good
Social Responsibility
A position taken by an organization to protect or enhance the natural environment as it conducts its business activities. ex: walmart does this a lot
environmental stewardship
(America's Running Culture)
one of the best runner's in the world
Steve Prefontaine
(America's Running culture)
Won the marathon in the 1972 Olympics
Frank Shorter
What school was the Track Powerhouse? Who was the coach?
University of Oregon, Bill Bowerman
Who is the CEO of Nike today?
Phil Knight
Between Knight and Bowerman, who was the innovator and who was the Business man?
Knight: Businessman
Bowerman: Innovator
Knight was the sole distributor of _____ and ______
Tigers and Asics
Bowerman and Knight started ______
Blue Ribbon Shoe co.
Where a firm will place its products along a line of attributes
Linear city Model
(Linear City Model) Knight saw a big gap where there was no ____ shoes.
Running
Where a firm would locate it's "presence" given the distribution of potential consumers (ex: knowing there are a lot of consumer's in oregon)
Location Model
Nike is named after what?
The greek goddess of victory
Nike's logo was created by ____ ____.
Carolyn Davidson
What are 2 extremely important innovations of Bowerman?
Waffle Sole and making running shoes out of fabric instead of leather.
In 1981, Nike had ____% of the Shoe Market.
50
Nike did what six things?
1) expanded product line
2)Good use of endorsement Contracts
3) Contracted with Asian Factories for Production
4) Emphasizing research and development
**5) Created Advisory Boards and Research Committees
**6)Distribution channels
What did Nike do that adidas did not?
Created Advisory Boards and Research Committees
and
*****Used Distribution Channels
Who endorsed Nike?
Michael Jordan
When Nike went into small towns to sell shoes
Distribution Channels
(Merchants of Cool)
MTV's teen female
Midriff
When the media sells and image and then the teens sell it back
Feedback Loop
What is the Mean-End Chain?
(Means) Attributes-> (Means) Benefits-> Values (Ends)
This explains how attributes cause benefits which fulfill value.
Means-End Chain
Marketers try to figure out what customers ____.
Value
One type of knowledge consumers have about products or brands
- Physical, tangible, measurable
Attributes
Positive consequences of product use
"Benefits"
(Type of Benefit)
Provide immediate physiological outcomes. Ex: padding and support on shoes= injury free runs
Functional Benefit
(Type of Benefit)
Benefits that make one feel a certain way
-Feel stronger= better able to cope
Psychological Benefit
(Type of Benefit)
Benefits are integrating
Ex: Join a Club
Social Benefits
The end state that consumers are tyring to achieve in their lives such as health and self-fulfillment
Ex: Nelly and people trying to be like him
Values
___ ____ ____ by linking product attributes and benefits to values- the marketer is associating the product or brand with a sub-culture
Values Define Cultures
Enduring beliefs about desirable outcomes that transcends specific situations and shape ones behavior
Values
What are the two parts to Value?
Instrumental Value and Terminal Value
(Type of Value)
Refers to a pattern of behavior in how consumers use products which leads to a different demand for products
Ex: wearing shoes to run vs someone wearing just to go to class
Instrumental Value
(Type of Value)
The end of the means end chain. Ultimately what the consumer wants to achieve.
* Can say brand is value Expressive
Terminal Value
What company did Rebok start out as?
Fosters
In 1982, Nike became what in America?
#1 most profitable company
Why was Fosters not able to compete with Adidas and Nike?
They didn't have licensing agreements.
Two grandson's of Fosters wanted to make a trendier shoe. The created ____ after a _____.
Reebok, gizelle
In 1979 ___ ___ came from America and found Reebok. He brought it to North America and got the distribution rights.
Paul Fireman
What was the most expensive running shoe on the market and how much did it cost in 1979?
Reebok, $60
How much did Paul Fireman purchase Reebok for in 1981?
$700,000
Reebok created a shoe called the _____ which was created for aerobic and dance exercises.
The Freestyle
Reebok anticipated what three major trends?
1) Aerobic/dance exercise movement
2)Increasing involvement of women in exercise
3)Extension of athletic wear to casual wear
What problem did Reebok end up facing?
Why?
A pricing problem with the "Pump" because it was $130.
What question should you ask when changing price?
How much more inventory do I need?
What are the Determinants of elasticity? (4)
1) Number of substitutes available
2) How much time you have to respond
3) Share of budget involved in purchase decision
4)Necessity of Luxury
(Determinant of Elasticity)
-the more substitutes we have the higher the elasticity because people can easily switch from product to product
Number of substitutes available
(Determinant of Elasticity)
-If it is something you need right away you will probably buy it, but if you have to think about it, you probably won't or are way less likely to
How much time you have to respond
(Determinant of Elasticity)
% of income it will take to buy something
Share of budget involved in purchase decision
(Determinant of Elasticity)
Posibility of:
Absolutely have to have, buy no matter the price
Necessity of Luxury
Price elasticity of demand=
%change in quantity demanded/ %change in price
In Price Elasticity of Demand, if over 1 it is _____ _____ if under 1 it is _____ _____.
Elastic, Inelastic
When consumers are not sensitive to prices.
Inelastic Demand
In inelastic demand, the change in quantity demanded is ___ than the change in price.
less
The higher the prices, the lower the demand is.
Elastic demand
Rebok thought the had what type of demand for the "pump?"
Inelastic
In Elastic Demand, the % change in quantity demanded is ____ than the % change in price.
greater
products that have a high price and that appeal to status conscious customers.
Demand increases as price ____.
Demand decreases as price ____.
Prestige Products,
Increases
Decreases
What was the first Mistake Reebok made?
The pricing of the "Pump" was too high.
When Retailers tried to cut the price of the "Pump" what happened?
Reebok said they would cut off the supply, they ended getting charged with price fixing by the federal government.
Measures the rate of response of quantity demanded of one good, due to a price change of another good.
Cross Price elasticity
Consumers purchase more of a good when the price of an alternative (similar) good increases
substitute
a price rise in one good causes the demand for both goods to fall
Complements
Measures the responsiveness of the quantity demanded of a good to the change in income of the people demanding the good.
Income Elasticity
As income increases quantity demanded decreases.
Ex: Ramen over Steak
Inferior goods
As income increases quantity demanded increases
ex: more expensive running shoes
vacations
eating steak over ramen
Normal Goods
What is the second Mistake Reebok made?
Very High Cost:
Operating Cost (32.7%) compared with Indrustrial Average (27%)
In Mistake #2 for Reebok, What made operating costs so great?
1) Reebok spent too much money on endorsement contracts and sporting event sponsorships
2) Holding Cost for inventory was too great
What does Reebok's Mistake number 3 relate to?
The relate to Footlock, the key retailer.
Marketers going to retail establishments to build a relationship with the retailer
Account Managers
Account Managers participate in ____ _____, which is also the developing of long term relationships and an atmospher of trust.
Relationship Marketing
Reebok hired people that lacked experience in the ____ _____
Shoe Industry
Footlocker wanted an ___ ___ from Reebok. (This was a marketing strategy)
Reebok said ____
Exclusive Shoe

No
Reebok wasn't working with the key retailer because they were distributing shoes to whom?
Discounters near footlocker
Ways that a product or brand links to the culture
means-end-chain
What was Nike's problem?
The cultural context changed but Nike did not.
What shoe company took better advantage of cultural trends?
Reebok
Another way of talking about brand loyalty is in terms of _____.
Involvement
customers aren't sensitive to changes in price (Reebok thought they had brand loyalty but they did not)
inelastic demand
Major account management should be geared towards developing ____ _____.
long-term relationships
Adidas bough Reebok in 2006 for ____.
38 Billion
When merging two brands, cutbacks are made in marketing, workers, and cut out costs so there is more profit
Cost Synergies
A buying situaion in which business buyers make routine purchases that require minimal decision making. ex: copy paper, the secretary places the same exact order every week
Straight Rebuy
Categorizes a previously made purchase that involves some change and that requires limited decision making.
ex: instead of ordering all white paper, order colored paper.
Modified Rebuy
A new business to business purchase that is complex or risky and that requires extensive decision making.
Ex: if you want to buy a smartboard and have never bought one
New Task Buy
The business practice of buying a particular product form only one supplier.
Ex: buying all supplies from staples
Single Sourcing
The business practice of buying a particular product from several different suppliers
ex: buying supplies from staples, office max, office depot
Multiple Sourcing
A trading partnership in which two firms agree to buy from one another
ex: Gm-> Borge Warner motors
Reciprocity
a business practice in which a buyer firm attempts to identify suppliers who will produce products according to the buyer firm's specifications
Ex: create a product and try to find someone to buy it
Reverse Marketing
A type of trade in which goods are paid for with other items instead of with cash.
Ex: Milashian Government bought 25 locomotives and paid with palm oil
Countertrade
A marketing stategy that supports enviromental stewardship by creating an environmentally founded differential benefit in the minds of consumers. Ex:Talking about what you are going to do to save the environment
Green Marketing
Marketing activities in which firms seek to have their corporate identity linked to a good cause through advertising public service and publicity
Ex:Telling people that we are supporting cause that is good for other people
Cause Marketing
The tendency to prefer products or people of one's own culture.
Ethnocentrism
Specific rules dictating what is right, wrong, acceptable or unacceptable.
Norms
A norm handed down form the past that controls basic behaviors.
Ex: division of labor in a household dictate hour at which we eat
Custom
Customs with a strong moral overtone
Ex: cannibalism is wrong where we live: eating dogs is wrong in our culture
Mores
Norms regarding the conduct of everyday life
Ex: What utensils we have on the table, the way we do things
Conventions
Three types of Norms?
Customs, Mores, and Conventions
These costs Change
Variable Cost
These costs stay the same
Fixed Cost
What is the equations for contribution margin?
Selling price- variable cost
What is the breakeven equation?
total fixed costs/ Contribution margin
What is the equation for potential profit?
Revenue-Variable cost-Fixed cost
How do you find Revenue?
Selling price x volume
How doyou find variable cost?
Variable cost per unit x volume
The man was forced to quit coaching because he refused to wear nike, lived w/Nike facotr workers. Discovered Nike was full of sweatshops
James keety
Who is the ceo of nike?
Mark Parker
Who endorsed nike skateboard shoes in 2003
Paul Rodriguez Jr.
What are sneaker collectors called?
"sneakerheads"