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Marketing Exam 1 pt1
Intro to Marketing Exam 1
| Term | Definition |
|---|---|
| Marketing | The activity, set of institutions, and processes for creating, capturing, communicating, delivery, and exchanging offerings that have value for customers, clients, partners, and society at large |
| Marketing is about... | Satisfying customer needs and wants, creating a worthwhile exchange in which everyone is better off |
| The Marketing Mix | Product, price, place, promotion |
| 1900s approach to marketing | Production-oriented (a good product will sell itself). |
| World War-era approach to marketing | Sales-oriented (war efforts meant companies could finally produce more than people could buy, so emphasis on personal selling/ads) |
| Post-WWII approach to marketing | Market-oriented (focusing on consumer wants/needs instead of war efforts, consumers had ability to choose based on price/quality/convenience/etc., marketing was born) |
| 2000s approach to marketing | Value-based (marketing is more than giving people what they want/need; you have to make yourself valuable relative to price) |
| Value co-creation | Working with a consumer to meet their needs--e.g. when investment advisors work with their clients, when Nike lets people design their own shoes |
| Marketing strategy | Identifies a firm's target market, the four Ps, and bases on which the firm plans to build a sustainable competitive advantage |
| Sustainable competitive advantage | An advantage over the competition that is not easily copied and can be maintained over a long period of time |
| Why make a marketing strategy? | You and others need to know where you're headed + how to get there, keeps you on track, helps plan for necessary inputs like money and time |
| Four macro strategies that help deliver value/develop sustainable competitive advantages | Customer excellence (earning customer loyalty and having excellent service), operational excellence (efficiency through ops/supply chain/HR management), product excellence (having high perceived value and good branding/positioning), locational excellence |
| Marketing plan step one: mission/objectives | Make a mission statement and objectives, general planning |
| Marketing plan step two: SWOT/situation analysis | |
| Marketing plan step three: segmentation, targeting, and positioning (STP) analysis | Segmentation = how to divide your customers into groups? Targeting = which segments should you try to reach? Positioning = how should you market yourself through the marketing mix to these segments? |
| Marketing plan step four: implement the marketing mix and allocate resources | Value creation products (value is key to success), value capture (products must be priced appropriately), value delivery (product must be accessible), value communication (integrated marketing and communications conveys the value proposition) |
| Marketing plan step five: evaluate performance | Whom do we hold accountable, what metrics do we use (revenues, sales, profits, comparisons to other companies, market share, growth rate), when will you check these things? |
| Market penetration growth strategy | Using the existing marketing mix to attract new customers to the target market or encourage existing customers to patronize the firm more. Generally requires increased advertising/distribution/etc. |
| Product development growth strategy | Offering a new product/service to a firm's current target market. |
| Market development growth strategy | Aiming to reach new markets with your current products |
| Diversification growth strategy | Introducing a new product or service to a new market. Can be related or unrelated to current offerings. |
| The four Es of online/social media marketing | Excite (personalized content, contests), educate, experience, engage (develop relationships, but be careful not to do anything bad--e.g. H&M) |
| The information effect | The outcome of social media in which information is spread throughout networks. The amount can be overwhelming--what should marketers do with it all? |
| The connected effect | The outcome of social media that satisfies humans' need to connect with others--people share their own interests and learn about the interests of others. |
| The network effect | The outcome of social media in which, every time a person or business posts information, it spreads instantaneously. The size and credibility of the poster determines the influence. E.g. celebrities getting paid to post about a product. |
| The dynamic effect | The outcome of social media that describes the way information is exchanged through back-and-forth engagement (e.g. you can tweet at a company to ask a question) and the way online communities can evolve |
| The timeliness effect | The outcome of social media that deals with the fact that we expect 24/7 content/support--can a company provide it? |
| Why do people use apps? | To relax, socialize, shop, accomplish tasks like managing finances/their health/etc., prepare/organize, discover information, and express themselves |
| How to engage customers on social media | Listen (using sentiment analysis), analyze (using analytics tools), do |
| Conscious marketing | Entails a sense of purpose that's higher than generating profits. Includes recognizing marketing's greater purpose, considering stakeholders and their interdependence, conscious leadership, and ethically-based decisions |
| The stakeholders in conscious marketing | Employees (need to create a healthy work environment), customers (respect their privacy, don't market cigarettes to kids, etc.), marketplace (good practices often cause other companies to follow), society, environment |
| Sherman Anti-Trust Act | Forbids contracts/combinations/conspiracies in the restraint of trade (basically price-fixing, although it's not explicitly stated), forbids actual monopolies or attempts to monopolize |
| Clayton Act | Passed after Sherman Anti-Trust Act wasn't as effective as hoped. Says you don't have to prove a monopoly actually harmed someone for it to be illegal. |
| Robinson-Patman Act | You can't charge different prices to different purchasers of the same product. (You can give quantity discounts, but you can't charge someone more just because they're a smaller seller.) |
| Consumer Product Safety Commission | Federal government agency that issues recalls, makes sure things are safe, etc. |
| Lanham Act | Prohibits trademark infringement, trademark dilution, and false advertising |
| Trademark Law Revision Act | Amends the Lanham Act to permit a person who has a bona fide intention to use a trademark in commerce to apply to register the trademark |
| Distribution regulation | Stores can't carry only one brand (unless it's their own store), you can't tell customers "You can ONLY buy from me," no intentional geographic monopolies, you can't say "You're not allowed to buy this unless you buy something else" (tying arrangement) |
| The FTC can... | Stop ads, fine companies, require corrective ads |
| Promotion regulation | You generally can't host promotions that threaten to harm consumers |
| Caveat Emptor | The "buyer beware" mindset, common until the 1960s |
| Consumer Bill of Rights | The right to safety, to be informed, to choose, to be heard |
| Social responsibility | Profit responsibility (for owners/shareholders), stakeholder responsibility (for consumers/employees/suppliers/etc.), societal responsibility |
| Moral idealism | Certain individual rights or duties are universal, regardless of the outcome |
| Utilitarianism | The greatest good for the greatest number is the morally correct option |
| The immediate marketing environment | competition, corporate partners, company, corporate partners |
| Macroenvironmental factors | Culture (price/product/place/promotion), demographics, social trends (health, environmental friendliness, privacy), technology, economic situation (macro and micro), political/regulatory environment |
| Consumer behavior | The actions a consumer takes in purchasing and using products and services. Stems from psychological, economic, and neurological factors. |
| Step one of the purchase decision process: need recognition | Perceiving a difference between actual state and ideal state. Can be consumer-driven (you personally notice a problem) or marketer-driven (the company convinces you there's a problem) |
| Functional needs | Related to the performance of a product or service. e.g. how nice of a car do you need? also e.g. everyone has to pay taxes--how can H&R Block convince people to let them help meet this functional need? |
| Psychological needs | Related to the personal gratification customers associate with the product/service. (A purse is a functional need, a $5,000 purse is a psychological need.) |
| Step two of the purchase decision process: information search | Researching various options--the length/intensity of this step depend on the importance of the decision |
| Internal information search | Examining your own memories and knowledge about available brands, past experiences, preferences, etc. |
| External information search | Gathering information from the world--talking with friends, looking at media outlets, visiting marketer-dominated resources |
| Problems with information search | Boundaries (when do you stop/how much is enough?), limits on cognitive resources, not orderly and feedback can occur at any time |
| Factors impacting the information search process | Perceived benefits v. cost of search (is it worth the time /effort to research this?), locus of control (does it matter how much information I gather?), actual or perceived risk (performance, financial, social, physiological/safety, psychological) |
| Optimal choice sets | People are more likely to stop and sample if there are more options, but they sample about the same number of options, and they are more likely to buy if there are fewer options |
| Step three of the purchase decision process: evaluation of alternatives | Sifting through the available choices |
| Evaluative criteria | Objective and subjective attributes of a brand or a product |
| Universal set | Includes all possible choices for a product category. Not actually used IRL. |
| Retrieval sets | Brands/products that can be brought forth from memory |
| Evoked set | All options that a customer says they would consider |
| Consideration set | All options that are under consideration |
| Determinant attributes | Product/service features that are important to the buyer and on which competing brands/options are perceived to differ. |
| Consumer decision rules | The rules/criteria that consumers use to quickly and efficiently select between options |
| Compensatory decision rule | Assumes that the consumer, when evaluating goods, trades off one characteristic for another, and the good characteristics compensate for the bad |
| Multi-attribute utility theory | A compensatory model for decision-making that involves assigning a weight to each criterion, multiplying that by the ranking you assign to each option in each category, and summing the totals. |
| Noncompensory decision rule | When consumers choose product on the basis of one characteristic, regardless of the others. |
| Satisficing | Choosing the option that's just good enough for low-stakes decisions |
| Elimination by aspects | Setting minimum criteria and refusing to look at anything outside of that |
| Alternative choice by aspects | Choosing one or two important criteria and finding the best few options based on these aspects |
| Step five of the purchase decision process: purchase decision | Deciding where and when to buy--based on convenience, price, reputation, etc. |
| The Endowment Effect/the Thaler Effect | People value things they already own more highly than things they don't. (This isn't so much the case for professional buyers and sellers, though.) |
| Prospect Theory | If two identical prospects are put forth , the one presented in terms of gains sounds far more attractive |
| Effects of the environment on purchase decisions | The presentation/location of items (e.g. food in a lunch line) impact what we buy, and the default option impacts what we buy |
| Anchoring and adjustment | Numbers we hear first can impact how we perceive value/how much we're willing to pay, etc. |
| Step five of the purchase decision process: post-purchase behavior | Important to pay attention to if you want to create loyal repeat customers |
| Post-purchase dissatisfaction | Is it because expectations were too high or the quality was too low? |
| Post-purchase cognitive dissonance | People like to feel like smart consumers, so regret after a purchase causes distress--marketers put forth a lot of effort to reinforce the idea that you made a smart choice, especially for expensive, infrequent, or risky purchases |
| Motivation | Physiological, safety, social, personal, self actualization. Important to appeal to the correct level--generally the lower the better |
| Self-concept | How people see themselves and believe others see them--actual v. ideal |
| Reference group | One or more people who a person uses for comparisons regarding beliefs, feelings, and behaviors--affect purchase decisions by offering information and enhancing a consumer's self-image |
| Situational factors that impact purchase behavior | Purchase situation (for whom are you shopping?), shopping situation (atmosphere/salespeople/samples/crowding), temporal situation (time of day, your mood, etc.) |
| Perception | The process by which we select, organize, and interpret information to form a meaningful picture of the world (selective perception = ignoring opposing viewpoints, selective comprehension = filtering information so it's consistent with your beliefs, ) |
| Risk | We think low-probability things are more likely to happen than they are and vice versa |
| Attitudes | Learned predisposition to responding to something in a particular way--cognitive component (our belief system), affective component (emotions), and behavioral component (actions we take based on how we feel) |
| Beliefs | Subjective perceptions of how something performs on different attributes |
| Changing minds | Marketers want to influence beliefs about the attributes of a brand, perceived importance of attributes, what attributes are available |
| Membership group | A group you belong to |
| Dissociative group | A group you want to maintain distance from |
Created by:
ejrasmus
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