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MPM (Subject) / Concepts of marketing performance Management (Lesson)
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- What are requirements of marketing assets and firm value? Convertible - Asset can be used to exploit opportunites for generating and maintaining firm value Rare - Asset is not available for rivals Imperfect imitable - it is difficult to imitate the asset No perfect substitutes - Rivals do not possess strategically equivalent convertible assets
- What are relational and intellectual assets? Relational assets - Outcomes of the relationship between a firm and its key external stakeholders : Brand Equity (customers), Channel equity(channel members) Intellectual assets - Outcomes of the types of knowlege a firm possesses about the market environment : Facts, perceptions, beliefs, assumptions, and projections of market and competitive conditions.
- What are opportunities for leveraging market based assets? Lower costs, e.g. lower sales and service costs Attain price premiums through higher perceived value of the offering Generate competitive barriers through the augmentation of customer loyalty Provide a competitive edge by making other resources more productive(synergies), e.g. satisfied customers are more responsive to marketing efforts provide strategic options, e.g. for brand extensions, co operations
- What is a brand? " A distinctive image of a product or service anchored in the consumer's mind"
- What is brand relevance in category? Brand Relevance in Category (BRiC) is defined as the extent to which customer decision making is influenced by the brand compared to other decision criteria, e.g. purchase convenience, price, etc. Antecendents: Brand Functions, e.g. Risk reduction, social demonstrance Consequences :Brand price premium, brand loyalty, brand equity
- What is the Idea behind the simon-sullivan-model? Brand equity is an intangible asset that has a fair price at the capital market and therefore brand equity becomes part of the financial market value of a firm. --> Decomposition of financial market value of a firm Tangible Assets (Physical replacement of a firms tangible assets) Intangible brande equity other intangible assets
- What is the basic idea for brand valuation for financial reporting? Future cash flows of a brand c ontain all brand-related cash flows by definition The brand equity share of the discounted cash flows separates the financial value of the brand the brand equity share is composed of the relative brand image (magnitude of brand image in the consumer's mind) and the weight of the brand (importance of the brand for the purchase decision) the calculation of the brand equity share results from assuming utility maximization behaviour
- What are the requirement criteria for brand valuation for financial reporting? Future oriented (Are future cash flows included in the evaluation? Objectivity (Valuation approach apparent? Separation of the brand revenues valid?) Completeness (Does the model include a volume and price premium?) Comparability (Can the model be applied across companies/countries and are the results stable over time?) Simplicity (Can non experts apply the model and is the model robust?) Cost-effectiveness (Does the model deliver reliable results in short t erm and is the application economic?)
- What is the Brand strategy Positioning? - Basic task for each brand management - active formation of a brand's position in the relevant market - creating positive brand associations Brand equity impact -> Investment in brand building
- What is the Brand strategy Brand extension? - Growth with existing brands in old or new product categories - Transfer of brand associations Brand equity impact -> Skimming
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- What is the Brand strategy Brand cooperation? - Joint appearance of two or more brads - Bundling of brand associations Brand equity impact -> Skimming
- What is the Brand strategy Global Branding? - Standardization of the global brand appearance - Standardization of brand associations Brand equity impact -> Investment in brand building
- What are the advantages and disadvantages of Corporate Branding? Supply side. Economies of scale + lower total costs of adv/promotion + lower costs of creating brand equity + LOwer costs of new product introductions + Demand Easier extension of brands + Efficient means to communicate to various stakeholders + Higher cannibalization among firms brands likely - Limits on firms ability to expand in some categories -
- What are the advantages and disadvantages of House of brands? Supply Can command larger retail shelf place + No ecnomies of scale in marketing - Higher costs of adv/promotion - Significantly higher costs of new product introductions - Demand Lower cannibalization + Distinctly customzied brands can be offered +
- What is the basic idea behind the approach of Rust, Lemon and Zeithaml? Focus of all marketing actions on the increase of customer equity (Customer equity = Sum of CLV of all customers of the firm) Customer equity consists of three (sub)assets : (1) Brand equity, (2) Value equity, (3) Relationship equity Valuation of marketing actions in this approach based on their long-term ROI Markov model as main theoretical background for calculating the impact of marketing actions on customer equity
- What is Value equity? "Customer's objective assessment of the utility of a brand, based on perceptions of what is given up for what is received" Drivers: Quality Price Service
- What is Brand equity? "Customers' subjective and intangible assessment of the brand, above and beyond its objectively perceived value" Drivers Awareness Attitude Ethical standards Nationality of a firm Advertising
- What is relationship equity? "Incremental tendency of the customer to stick with the brand, above and beyond the customers' objective and subjective assessment of the brand, arising from relationship management" Drivers Appreciation Treatment Affinity Community Loyalty programs
- What is the customer-based brand equity (Keller) ? "Customer-based brand equity is defined as the differential effect of brand knowledge on consumer response to the marketing of the brand."