Questions to test your knowledge – MKT443

Exam 2 Material
Lecture 9 – Product Innovation and Crowdsourcing
1. What’s the key for new product success?
a. A good match between a new product and market need
2. What are the key advantages and disadvantages that first-movers have compared with the later
entrants?
a. Advantages ​- established market position, higher consumer awareness, influence how
product attributes are valued, customer “lock in”
b. Disadvantages ​- have to develop market and educate customers, followers “Free ride”
--------​Strong R&D firms better off pioneering while strong marketing better off following
3. What are the four stages of Product Life Cycle (PLC)?
a. Introduction​ -​ ​no profits b/c recovering from R&D costs
b. Growth - ​profits increase and peak
c. Maturity -​ sales peak
d. Decline -​ market shrinks and sales/profits fall
4. Who are the five categories of product adopters in the innovation diffusion process
a. Innovators -​ risk takers and seek change. first to buy products
b. Early adopters - ​prestige oriented opinion leaders. have high social status, money, and
education.
c. Early majority - ​leading segment of the market (⅓) above average social status. come
during growth stage
d. Late majority -​ followers of early majority… skeptical about innovation.. below average
social status (also about ⅓)
e. Laggards - ​conservative, price conscious segment, aversion to change agents.. olders and
most traditional
5. Who typically are the opinion leaders?
a. Early adopters
6. What is the tipping point regarding whether a new product can enter the mainstream market
and become successful?
a. Between winning early adopters and early majority (Valley of death)
7. Why do customers resist to adopt new products and how to speed up the rate of new products
adoption (understand what each element means and direction of effect)
a. Advantage ​(+)​ - extent of benefits offered compared to existing alternatives
b. Compatibility ​(+)​ -​ relationship with past experience and current lifestyle
c. Complexity ​(-​) -​ implies greater learning requirements
d. Observability ​(+)​ ​- extent that the relative advantage is observed and communicated
e. Risk (​-​) -​ physical, financial, and psycho/social risk
f. Divisibility ​(+)​ - ​ability to try on a limited basis and revert to old products
8. How does open innovation different from traditional way of innovation?
9. What is crowdsourcing?
a. A company post a problem online​ →​ people offer solutions ​→ w ​ inning ideas rewarded
→ ​company uses output for it’s gain
10. What are the benefits and problems of crowdsourcing?

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 a. Benefits ​- problem solved w/ little cost.. payment by results.. turns customers into
designers and marketers
b. Problems -​ quality, no time constraint.. IP leaks.. deciding what to keep in house

Lecture 10 –Brand Strategy

1. What are the three characteristics of an effective brand association?
a. Favorable
b. Strong
c. Unique
2. Why do customers need a brand?
a. reducing​ ​perceived​ ​risks…​ ​reducing​ ​search​ ​costs
3. Why do firms need a brand?
a. intangible asset b/c it produces revenue… distinguish firm’s offering from those of
competitors… in a way adds value for customers
4. What are the three components of brand equity?
a. Brand Awareness -​ establish and build brand awareness
b. Brand Associations -​ favorable, strong, and unique
c. Brand Loyalty ​- staying loyal to the brand
5. Examples of brands with high equity?
a. Coke, Pillsbury, Geico, Taco Bell, Nike
6. What are the criteria when designing/choosing a good brand element?
a. Meaningful -​ credible and suggestive… rich visual and verbal imagery
b. Appealing -​ Fun and interesting… aesthetics
c. Adaptable - ​flexible and updatable
d. Protectable ​- legally and competitively
e. Transferable -​ within and across product categories.. across geo boundaries & cultures
f. Memorable -​ easily recognized and recalled

Lecture 11 –Marketing Implementation and Control

1. What is marketing implementation?
a. the process of executing the marketing strategy by creating and performing specific
actions that will ensure the achievement of the firm’s marketing objectives
2. What is intended strategy?
a. what the firm wants to happen
3. What is realized strategy?
a. the strategy that actually takes place
4. Why are the intended strategy and the realized strategy different?
a. marketing strategy /implementation was inappropriate or unrealistic… internal or
external environments changed substantially between development of marketing
strategy and its plan
5. What are the reasons for failure in implementing the intended strategy?
a. widespread political behavior within the SBU.. lack of commitment to buy in marketing
strategy decision.. absence of particular skill.. high levels of competitive rivalry
6. Marketing implementation is often problematic because the people or department that plans
and implements the marketing strategy are different. Typically who is responsible for planning
the strategy and who is responsible for implementing the strategy?
a. Devised by top management
b. Implemented by frontline employees

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 7. What are the five steps to schedule marketing activities?
a. Identify the specific activities to be performed
b. Determine the time required to complete each activity
c. Determine which activities must precede others
d. Arrange the proper sequence and timing of all activities
e. Assign responsibility

Lecture 12 –Marketing Performance Assessment (MPA)

1. What are the differences between financial metrics and marketing metrics?
2. Financial metrics
a. Profit, expenses, asset management(accounts receivable), shareholder metrics
b. Internal
3. Marketing metrics
a. Market, customer, competitiveness, marketing profitability (roi, ros)
b. External
4. Hard metrics
a. sales units/revenue… product/customer profitability.. (relative) market share… profits..
5. Soft metrics
a. customer satisfaction… net promoter score… brand health check… awareness
6. What are the most popular soft measures of overall performance metrics from the MSI member
survey?
a. overall product/sbu performance… marketing mix… what they would like to measure
better/at all… what they are currently working on
7. If sale revenue is $100 million, margin is 50% and marketing & sales expenses is $10 million,
calculate the net marketing contribution, marketing ROS and marketing ROI.
[hint: these equations below will be given during the exam, please bring your traditional calculator if
needed, please refer to Lecture 12 on BL for an example]

Relevant formula below will be giving during the exam:

Gross profit = sales x margin (%)

Marketing ROS= (Net Marketing Contribution /Sales) x 100%

Marketing ROI= (Net Marketing Contribution / Total Expenses) x 100%
- Net marketing contribution ​= gross profit - total expenses

NPS = %Promoters (9-10) - %Detractors (0-6)

Cases
Tesla​: 
● Silicon Valley founders 
● Advantages 
○ In house manufacturing 
○ Direct sales 

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 ○ Diverse employees 
○ Future growth market 
● Disadvantages 
○ High operating cost 
○ Conflict with dealership lobbies 
○ Lack of automotive experience 
○ Small niche market 
● Tesla VS BMW VS Audi 
○ Tesla will continue to grow 
○ Short term not a rival, long term major industry competitor  
● Barriers to entry 
○ Experience 
■ Lack of automotive experiences 
○ Economies of scale 
■ Didn’t own their own manufacturing facilities 
○ Capital requirements 
■ Large amount of money required to design cars 
■ Needs 10.5 mil by 2020 for targets 
● Entry strategy 
○ Target niche markets 
○ Elon musk sold his startups Zip2 and Paypal to finance Tesla 
● Electric vehicle industry 
○ Cars of the future, environmentally friendly  
● Tesla has many competitive advantages 
● Regardless of barriers to entry has been successful  
 
Samsung 
● ,,,  
Sephora Direct 
● Founded in France as perfume shop in 1969 
● Purchased by Louis Vuitton  
● Marketing mix 
○ Print catalogs, window displays 
○ Major sales in april and holiday season 
● Trends  
○ Growing social media, online shopping, and beauty insiders (influencers) 
● Cuts  
○ Catalogs, direct mailing, and investment in animation 
● Utilizes facebook to help advertising/customer relationships 
● Moved to online mobile application