Strategic Marketing and Value Creation
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Questions and Answers

Which of the following is NOT a way that strong customer relationships can increase firm revenue?

  • Lower defection rates
  • Cross into new categories & buy new offerings
  • Greater share of wallet
  • Increased brand awareness (correct)

    • How do strong brands impact firm revenues?

  • By increasing brand awareness and lowering marketing expenditures to acquire customers
  • By increasing price premiums and lowering costs of debt
  • By increasing brand consideration and likelihood of purchase (correct)
  • By decreasing customer acquisition costs and increasing customer satisfaction

    • Which one of these is NOT a way that marketing assets affect the future value of a firm’s cash flow?

  • Firm’s cash flow is less volatile
  • Firm’s cash flow arrives faster
  • Firm can receive higher cash flow levels
  • Firm’s cash flow is more vulnerable (correct)

    • What is one way that strong brands can create company value by decreasing costs?

    <p>Lower employee acquisition costs, pay &amp; turnover (C)</p> Signup and view all the answers

    Name a way that strong customer relationships can create company value by decreasing costs.

    <p>Lower customer acquisition costs (C)</p> Signup and view all the answers

    What is one way brands can create company value by increasing revenue?

    <p>Price premiums (C)</p> Signup and view all the answers

    Which one of these is NOT a way that marketing assets can create value for companies?

    <p>Lower costs of debt (C)</p> Signup and view all the answers

    Which of the following is an example of how markets value marketing assets?

    <p>Brand assets are used for licensing opportunities (A)</p> Signup and view all the answers

    Which of the following are NOT considered to be marketing assets?

    <p>Financial assets (C)</p> Signup and view all the answers

    Which of the following is not a way that strong customer relationships can create company value by decreasing costs?

    <p>Protection against rival switching strategies (C)</p> Signup and view all the answers

    What is the ultimate purpose of marketing?

    <p>To create value for customers, the firm, and shareholders (D)</p> Signup and view all the answers

    Which of the following is NOT a characteristic of strategic marketing assets?

    <p>They are easy for competitors to imitate. (B)</p> Signup and view all the answers

    How do intangible marketing assets compare to tangible assets in terms of their impact on a firm's financial performance?

    <p>Intangible assets can lead to lower sales and service costs. (C)</p> Signup and view all the answers

    Which of the following is NOT a benefit of strong customer relationships?

    <p>Higher price premiums (A)</p> Signup and view all the answers

    What is the main advantage of having strong brands in terms of competition?

    <p>They can be leveraged to introduce new products and extensions. (B)</p> Signup and view all the answers

    Which of the following is NOT considered a strategic marketing asset?

    <p>Production capacity (A)</p> Signup and view all the answers

    How can intangible marketing assets contribute to a firm's growth?

    <p>By creating barriers to entry for competitors (A)</p> Signup and view all the answers

    What is the primary reason why strategic marketing assets are important for sustainable competitive advantage?

    <p>They are difficult for competitors to imitate. (B)</p> Signup and view all the answers

    Flashcards

    Purpose of Marketing

    The main goal of marketing is to create value for customers, the firm, and shareholders.

    Intangible Assets

    Resources that are hard to create, imitate, or purchase, providing competitive advantage.

    Tangible Assets

    Physical resources like plants and equipment that have clear costs and benefits.

    Competitive Advantage

    Intangible assets provide sustainable advantage over competitors.

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    Customer Equity

    The value derived from strong customer relationships and brand loyalty.

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    Barriers to Competition

    Intangible assets make it difficult for rivals to compete effectively.

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    Price Premiums

    Strong brands can command higher prices due to perceived value.

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    Growth Options

    Intangible assets allow brands to expand into new product categories.

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    Brand Equity

    The value added to a product by having a well-known brand name.

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    Lower Defection Rates

    Reduced likelihood of customers leaving the brand or switching to competitors.

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    Share of Wallet

    The percentage of a customer's total spending within a category that goes to one brand.

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    Cross-selling

    Encouraging customers to purchase additional products or services.

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    Faster Cash Flows

    The speed at which a firm receives cash from customers and sales.

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    Less Volatile Cash Flows

    Cash flows that are more predictable and stable over time.

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    Customer Stability

    The ability of a business to maintain a loyal customer base over time.

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    Intangible Marketing Assets

    Non-physical assets like brand reputation and customer relationships that create value.

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    Study Notes

    Marketing Activities and Value Creation

    • Marketing's ultimate purpose is to create value for customers, the firm, and shareholders.

    Strategic Marketing Assets (Intangible Assets)

    • These assets are difficult to create and imitate.
    • Competitors find it hard to identify or purchase substitutes.
    • These assets are crucial for generating sustained competitive advantages.

    Intangible vs. Tangible Assets

    • Tangible assets (e.g., plant and equipment) enhance productivity. Leverage these to create superior product features and higher pricing. Modern plants/equipment improve employee productivity.
    • Intangible assets (e.g., customer and brand equity) create strong customer relationships, leading to lower sales costs and improved perceived value of offerings. Customer loyalty increases switching costs. Strong brands help launch new extensions.

    Firm's Most Important Strategic Assets

    • Customer equity and brand equity are a firm's most important strategic assets.

    Impact of Customer & Brand Equity on Firm Revenues

    • Strong customer relationships lower the rate of defection and increase customer share of wallets.
    • Customers cross into new categories and buy new offerings. Customers endorse the firm.

    Kantar/Brand Z 2023 Most Valuable Global Brands

    • A visual representation (likely a graphic) of the most valuable global brands. Data may be present showing brand rankings and valuations.

    How Strong Brands Impact Firm Revenues

    • Increased brand consideration leads to an increased likelihood of purchase decisions. This allows for price premiums and bigger growth options. Brand strength also leads to stronger endorsements.

    Effect of Marketing Assets on Future Value

    • Marketing assets lead to faster cash flow (arrival), higher cash flow levels, less volatile cash flow, and reduced vulnerability.

    Faster Cash Flows

    • These are driven by faster brand retrieval, faster purchase decisions, and faster responses to marketing spending.

    Higher Cash Flows

    • These are achieved through lower marketing research & new product development costs. Lower expenditure on acquiring customers, and better human capital (lower employee compensation). Lower costs of debt also helps. Larger relationship investments contribute.

    Less Volatile & Less Vulnerable Cash Flows

    • These are secured by greater customer stability, protection against rival switching and entry strategies, and protection against internal mistakes.

    How Intangible Marketing Assets Create Company Value

    • The presentation likely delves into the benefits of intangible assets, with specific example of outcomes and impacts on financial performance.

    How Customer Relationships Create Company Value

    • Improved financial performance (financial payoff). Increased revenue, decreased costs, faster cash flows, reduced volatility, and vulnerability. These derive from lower defect rates, increased customer share of wallet, stronger endorsements, better human capital and lower R&D and employee costs.

    How Brands Create Company Value

    • Increased revenue is generated via price premiums, increased brand consideration, high likelihood of purchase decisions, bigger growth options, stronger endorsements and more licensing opportunities.
    • Lower costs come from lower customer acquisition costs, reduced employee costs, faster brand retrieval, and a faster responses to marketing expenditure

    How Markets Value Marketing Assets

    • Customers are recognized as assets, particularly in high-growth companies. Marketing assets are critical in firm acquisitions. Brand assets support licensing strategies.

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    Related Documents

    How Marketing Activities Create Value For Companies PDF

    Description

    Explore the key concepts of strategic marketing, focusing on the creation of value for customers, firms, and shareholders. Understand the differences between tangible and intangible assets, as well as the significance of customer and brand equity in building competitive advantages. Test your knowledge on how these elements contribute to successful marketing strategies.

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