REVIEW SHEET M300 Midterm Exam Fall 2014 Video camera monitoring for exams Video cameras may be used to monitor the room during student assessment activities including but not limited to exams tests and quizzes Video recordings may be used to investigate or support disciplinary action All access to and use of video equipment and recordings will follow applicable IU policies Coverage Whatever we covered in class before Midterm Exam 1 Lectures up to Thu Oct 2 2014 2 All the homework so far include CLV analysis SPAN analysis Cannibalization problem Scotch Magic Tape Regression analysis ZAZA s ice cream breakeven analysis The following topics represent most potential areas for questions not all inclusive 1 Breakeven Analysis Why How i e be able to work the formula and understand how the breakeven point changes when different variable are manipulated Break Even Analysis BEA number of units necessary to reach profitability BE Point units Fixed Costs Unit Price Unit Variable Costs includes unit Cost to Attract CTA and Cost to Serve CTS CTS costs associated with helping the customer stay a customer tech support manuals training etc CTA costs associated with gaining new customers promotions initial training etc 2 The product market expansion grid be able to classify the four types of strategies and understand how to employ each of the strategies Penetration Strategy Increase Frequency of use among existing customers using existing products Sales Promotion and usage expansion Market Development Strategy Find new customers in new markets New customers same products Widen the Distribution Network Promotion to build demand Ex City bank giving 100 for opening checking acct Product Development Strategy Develop new products for existing customers New Products Same Customers Ex Applebees changes menu often Diversification Strategy Develop new products for new customers New products New Customers Ex Porche offers 4 door SUV 1 3 Brand equity and four branding strategies line extension brand extension multi branding and new branding Brand Extensions new products in unrelated product categories that often carry the same brand name If a firm has a successful product it often offers product line extensions PLE or new products that closely resemble the firm s existing products 4 Different types of brands private brands manufacturer brands generic brands and how they differ from each other Generic Brand a name that becomes a generally descriptive term for a product Private brand a brand name owned by a retailer or wholesaler middleman Private brands offer their owners control over advertising promotion and price but lack the national recognition of manufacturer brands 5 Five big marketing segmentation bases and how to use them Base 1 Geography dividing the overall market into groups based on geography Most products derive the majority of their sales from a very small number of regions Base 2 Demographics dividing consumers into groups based on sex income age occupation race religion education etc Base 3 Psychographics or Lifestyle variables dividing the population into homogeneous groups based on behavioral and lifestyle profiles developed by analyzing consumer activities interests and opinions AIO and values attitudes and lifestyles VALS through surveys Base 4 Usage Segmentation dividing a population into groups based on purchase frequency and usage level Base 5 Benefit Segmentation dividing a population into groups based on the benefits they seek in the product or service 6 Different types of value that firms can create for customers Form Value Utility provided by changing raw material to finished product Created by production but influenced by marketing Time Value Making product more available when the customer needs it Possession Value Enhancing ability of customer to acquire and use product over time Free samples at Costco Place Value Make product available where the customer needs it Information Value Providing relevant info about the product Service Value Providing excellent service on an ongoing basis 2 7 Cannibalization Analysis How i e be able to work the calculations and draw conclusions Cannibalization A manufacturer must avoid damaging cannibalization or the theft of sales from existing products by a new product in the product line Test marketing can determine the degree of cannibalization that may occur T score abs Price per unit or cost standard error Test product line Test new product Before Test Product line Cannibalization vice versa 8 Marketing theorist Theodore Levitt s four points about marketing concept in the very first lecture There are no commodities all products can be differentiated Products are problem solving tools Consumers think more about holes and thirst than drill bits and colas There is a bias toward the measureable sales profit etc Firms should also attempt to measure more difficult phenomenon like customer satisfaction fun and friendliness Make the intangible reputation and brand equity or the power of the brand more tangible to consumers 9 Regression analysis how to calculate T score standardized coefficients how to interpret regression results etc T score abs Price per unit or cost standard error 10 Product life cycle different stages marketing strategies and draw conclusions Overall objective of these stages Introductory stage Increase awareness and stimulate trial of the new product Growth stage Build consumers preference for its brand With an increase in competitors marketers must distinguish their products by giving consumers a reason to buy their products Example when coke introduced it Fruitopia fruit drinks in the early 1990 s it emphasized mind body and planet by introducing the ads as Welcome to Fruitopian life 3 Mature stage The objective is to defend market share and extend the project life cycle A common way to hold market share it to offer pricing benefits to consumer in the way of promotions 11 Different types of marketing anything can be marketed people idea place event organization etc 12 What is a brand Brand equity Brand name symbol or design used to identify the products and differentiate them from competitive offerings A brand name is the words or letters of the brands A brand mark is the pictorial part of the brand Brand Equity the added value to the firm the channel or the consumer with which a brand endows a product Farquhar 1996 13 Perceptual map how to interpret and draw conclusions etc 14 Market share market growth MSMG matrix be able to