Markets And Consumers Test 3 Notes

Front 1

What is a classic oligopoly example?

Back 1

Adidas, Nike, and Reebok

Front 2

Two brothers

Back 2

Adolf and Rudolf Dassler

Front 3

Adolf (Adi)

Back 3

was better at innovating new products which really helped him come out on top

Front 4

When the brothers split what were they?

Back 4

Adolf was Adidas and Rudolf was Puma

Front 5

Guiding principles for running shoes

Back 5

sport specific design, prevent injury, and durable

Front 6

How were running shoes innovated?

Back 6

4 spiked running shoes, nylon shoes, injected spike, and interchangeable spikes

Front 7

Kinesiology

Back 7

physiological processes and body anatomy with respect to movement

Front 8

Marketing strategy of Adidas

Back 8

Kinesiology (how doe shoes help performance) and benefit target segment

Front 9

How did Adidas focus on benefitting the target segment?

Back 9

different athletes have different needs so we need a broad product line (this was their marketing concept)

Front 10

Product line

Back 10

group of similar products with range of attributes targeting related market segments

Front 11

Products within a product line

Back 11

have some characteristics, customers, and/or uses in common and may share technologies, distribution channels, prices, services and other elements of the marketing mix

Front 12

Brand extension

Back 12

leveraging brand equity; easier for you to find connection between positive things and your brand, easier for you when you are expanding your product

Front 13

Endorsement

Back 13

confirmation, approving testimony

Front 14

Why use endorsement contracts?

Back 14

sports promo making public aware of innovation

Front 15

Example of sports promo

Back 15

Jesse Owens and Muhammad Ali

Front 16

Sponsorship

Back 16

advertising that seeks to establish deeper association (and long term) and integration between an advertiser and event or activity

Front 17

Outsourcing

Back 17

purchasing goods/services that could be performed in-house

Front 18

Division and specialization of effort

Back 18

core competency (efficiency) and access world-class capabilities (better service)

Front 19

Underpinning for outsourcing

Back 19

division and specialization of effort, economies of scale, reduce labor costs

Front 20

Why outsource (check and see if this is right…)

Back 20

change in competitive landscape, technology, and degree of competition

Front 21

Why would it be best to keep things in house? (reasons not to outsource)

Back 21

avoid contact costs, avoid taxes and regulations, extend market power, supply more assured, and protect proprietary information and brand

Front 22

Extend market power

Back 22

you are extending the reach of your company, you’re handling everything in house

Front 23

Example of extend market power

Back 23

when the tsunami hit Japan, people who manufactured more in house had the advantage because you’re not dependent on others

Front 24

Another example of extend market power

Back 24

You may buy farms for the products you need instead of buying from other farmers

Front 25

B-E point

Back 25

quantity of output at which company doesn’t lose money or make profit

Front 26

Break even

Back 26

you aren’t making money but you aren’t losing money

Front 27

Variable costs

Back 27

increase (decrease) as volume of production rises (falls)

Front 28

Fixed costs (Indirect)

Back 28

Incurred in general operation of business, whether or not any sales made. Not directly attributable to costs of production

Front 29

Variable costs examples

Back 29

cost of raw materials, hourly wages

Front 30

Fixed costs

Back 30

you will have these no matter what

Front 31

Fixed costs examples

Back 31

equipment, buildings, land, electricity, salaries, and other utilities

Front 32

To the left of the break even point

Back 32

loss

Front 33

To the right of break even point

Back 33

profit

Front 34

Find contribution per unit

Back 34

difference between price firm charges and variable costs per unit(AVC)

Front 35

CPU

Back 35

Price – AVC

Front 36

B-E point

Back 36

Total fixed costs (TFC) / CPU

Front 37

Price = $100 AVC = $75 TFC = $200,000, what is CPU and BE point

Back 37

B-E point = $200,000 ÷ $25 = 8,000 units, CPU = $100 - $75 = $25

Front 38

Lower TFC

Back 38

no investment in factories

Front 39

Lower AVC

Back 39

division and specialization of labor, experience effect, economies of scale

Front 40

Benefits

Back 40

TFC and AVC lower-sell fewer units and more profitable

Front 41

Girl who made the swoosh design received what

Back 41

$35 for the design

Front 42

Nike marketing strategy

Back 42

endorsement contracts, sourced with Asian factories, emphasized R&D (over 100 scientists), research committee and advisory board (coaches, athletes, trainers, and physicians…design, health, and performance), broader product line (140 models), and more extensive distribution channel

Front 43

Means-end chain

Back 43

nike connects to runners

Front 44

In means-end chain, a brand that is successful

Back 44

can link its attributes to values more easily (Attributes – benefits – values)

Front 45

Attributes

Back 45

characteristic of a product (tangible and intangible)

Front 46

Hedonic pricing model

Back 46

know how much attributes worth, bundle attributes into product

Front 47

Nike attributes

Back 47

weight, tread design, padding, support, and color

Front 48

Benefit

Back 48

a positive consequence of product use

Front 49

Knowledge about the product

Back 49

functional, psychological, social

Front 50

Functional knowledge

Back 50

direct tangible outcome

Front 51

Psychological knowledge

Back 51

how they make you feel

Front 52

Social knowledge

Back 52

how others view you

Front 53

Nike benefits

Back 53

faster runs (functional), sure footing (functional), injury free (functional), feel stronger (psychological), cool (social)

Front 54

Values

Back 54

enduring beliefs about desirable outcomes that transcend specific situations and help shape behavior

Front 55

Ideal end states

Back 55

instrumental and terminal

Front 56

Instrumental end state

Back 56

ambitious (hard-working), independent (self-reliant), and competent

Front 57

Terminal end state

Back 57

personal gratification, social recognition, and comfortable life

Front 58

Nike values

Back 58

social contacts (friends), active lifestyle, good health, self-esteem, and self-actualization

Front 59

Reebok

Back 59

spiked running shoes, African gazelle, and the vector

Front 60

Reebok in the US

Back 60

Reebok was in the UK but not the US until 1980s it was introduced in the US as running shoes

Front 61

Reebok with women shoes

Back 61

there were a lot of unisex products and Reebok was the first to introduce women’s shoes and products

Front 62

Reebok’s market strategy focus

Back 62

women, aerobic exercise movement, and casual wear

Front 63

Involvement

Back 63

construct used to understand decision making

Front 64

At the tipping point, what is quantity demanded?

Back 64

elastic

Front 65

Price change

Back 65

influences quantity demanded (elastic) or has little effect on quantity demand (inelastic)

Front 66

Absolute value

Back 66

>1 (demand elastic), =1 (unitary price elasticity), and <1 (demand inelastic)

Front 67

Elasticity

Back 67

the degree by which one economic variable changes in response to the change in another economic variable

Front 68

3 factors that affect price elasticity

Back 68

number of substitutes, time, and share of budget

Front 69

The more _____ people become to a brand you will see more inelasticity in that as long as the company raises the price, you still buy about the same amount

Back 69

brand loyal

Front 70

More elasticity when the process of buying has

Back 70

high involvement

Front 71

Consumers & retailers

Back 71

retailers try to sell what consumers need and want

Front 72

Price fixing

Back 72

artificially raising prices

Front 73

Most well known brands have _____ (this is very similar to price fixing, there is a fine line, but they leave the retailer enough leeway to keep them happy)

Back 73

MSRP

Front 74

Problems

Back 74

profits and costs, Sales growth decline and lower profits, Slow to react and spending based on higher growth rate

Front 75

Pricing strategy

Back 75

customers not buying, retailers mad, oversupply

Front 76

Mismanage relationship

Back 76

couldn’t lower prices and price fixing

Front 77

Relationship marketing

Back 77

account manager responsible for developing long-term relationships with high levels of service and trust

Front 78

Big things to remember

Back 78

price elasticity of demand

Front 79

BCG Growth-Market Share Matrix

Back 79

stars, cash cows, question markes, and dogs

Front 80

Stars

Back 80

high share, high growth

Front 81

Cash cows

Back 81

high share, low growth

Front 82

Question marks

Back 82

low share, high growth

Front 83

Dogs

Back 83

low share, low growth

Front 84

Classical conditioning

Back 84

unconditioned stimulus, unconditioned response, neutral stimulus, pairing, conditioned stimulus, and conditioned response

Front 85

Unconditioned stimulus

Back 85

evokes an emotional response

Front 86

Unconditioned response

Back 86

emotion from UCS

Front 87

Neutral stimulus

Back 87

brand (package, colors, logo, product)

Front 88

Pairing

Back 88

UCS + NS

Front 89

Conditioned stimulus

Back 89

NS now symbol of something else

Front 90

Conditioned response

Back 90

emotion from CS (feel good and buy)

Front 91

3 factors that make classical conditioning work or work better

Back 91

strong UCS the better, pairing the UCS and NS, and repetition

Front 92

Involvement

Back 92

tends to increase or decrease attitude toward something due to your personal investment

Front 93

When looking at involvement from a brand loyalty perspective it _____ price elasticity (makes the product more inelastic). You are so brand loyal that you are still willing to buy nike (within reason).

Back 93

decreases

Front 94

The more time you have

Back 94

tends to increase elasticity

Front 95

The share of your budget

Back 95

tends to make demand more elastic

Front 96

The higher number of substitutes

Back 96

tends to make demand more elastic

Front 97

Price elasticity of demand and involvement have what type of relationship?

Back 97

indirect

Front 98

Dual distribution

Back 98

you are under a brand (like NIKE) and you develop more than one product line that is aimed at a particular retailers

Front 99

Example of dual distribution

Back 99

running shoes