Exam 1 Flashcards
The Marketing Concept
- focusing on consumer needs
- integrating all activities of the organization
- achieving long run profitability through consumer satisfaction
AMA definition of marketing
Process of planning and executing: -conception -pricing -promotion -distribution of goods to create exchange values to satisfy objectives
Positioning
Psychological concept of:
The place a brand occupies in the mind of the consumer
Current AMA Definition of Marketing
The activity, set of institutions, and process for creating, communicating, delivering and exchanging offerings that have value
Consumer Sovereignty
The individual consumer is the ultimate authority on what is best
Societal Marketing Concept
- societal consequences of satisfying consumer needs for private for profit businesses
Societal Marketing Concept purpose
Achieve long run objectives of the organization by balancing consumer satisfaction and needs of society
Social Marketing
Programs by government and nonprofits to discourage bad consumer behavior (cigaret smoking)
OR
Encourage beneficial consumption (exercise)
Strategic Marketing Planning
1) business definition - the consumer needs that the organization satisfies
2) business objectives - what is to be accomplished, quantitative level to be achieved, and time frame
3) determine marketing strategy - what is the marketing mix
Marketing Mix
Product
Price
Promotion
Place
Also known as the 4P’s
What is a consumer product?
Every want-satisfying attribute a consumer thinks in making a purchase both psychological and physical
Defines a product from consumers viewpoint
Perception
To see, hear, touch, taste, smell, or sense internally, something and to derive meaning from it
Perception depends on….
Previous experience, motivation, and information
Positioning depends on…
Individual consumers perception of the benefits of the product
Product life cycle
Development
Consumer goods classification
Convenience
Shopping
Specialty
Convenience goods
Goods consumer buys frequently and with little effort
Consumer purchasing decision process of convenience goods
Routine buying behavior
Low involvement and brand loyalty
Price has inelastic demand
Promotion is by manufacturer
Intensive distribution
Consumer purchase decision process
Problem recognition
Shopping goods
Goods purchased less frequently that consumers make comparisons
Consumer purchasing decisions of shopping goods
High involvement
Minimal brand loyalty
Attributes are important for heterogeneous goods
Price is important for homogenous goods
Promotion by retailer
Selective distribution
Limited or extensive problem solving decision process
Problem recognition
Specialty goods
Goods that have unique characteristics or brand identification
Specialty goods buying process
High involvement and brand loyalty
Price has inelastic demand
Promotion shared by manufacture and retailer
Exclusive distribution
Promotion
Advertising
Sales promotions
Publicity
Public relations
Personal selling
External environmental factors
Economic Political Competitive Legal Cultural Ecological Social Technological
Market segmentation
Process of dividing large heterogeneous markets into smaller homogeneous subsets of people with similar needs and differing responsiveness to market mix offerings
Target market
Homogenous segment of market that marketer directs a specific program
Target audience
Group of people other than typical prospects who influence the purchase of the product
Segmentation approaches
Mass marketing/undifferentiated marketing/market aggression/total market approach
Segmented marketing
Direct marketing
Niche marketing
Segmentation tools
Demographics
Geographic
Psychographic
Behavioral
Demographic variables
Age Gender Income Occupation Education Family size Stage of family cycle Religion race and ethnicity
Geographic variables
Global/local
Urban/rural
Country-region-state-SMSA-census
Climate
Psychographic variables
Lifestyle
Social class
Personality
Behavioral variables
Desired benefit User status User rate Brand loyalty Occasions or critical event Readiness to buy Attitude towards product
Consumer responses approach to segmentation
Benefit desired User status User rate Loyalty Occasions Readiness to buy Attitude toward product
Consumer characteristic approach to segmentation
Demographic
Geographic
Psychographic
Perfect competition market
Many small firms
Homogenous product
Monopolistic competition market
Many small firms
Differentiated product
Oligopoly
Few large firms
Homogenous or differentiated product
Monopoly market
One large firm
Only product
Elements of economics
Scarcity
Choice
Market price
Opportunity cost
efficiency
Economic analysis
Positive: what is
Neutral, value free
Normative: what ought to be
Policy
Market demand
The various quantities of a good that consumers are willing and able to buy at given prices
What determines demand
Price
Income
Preferences
Prices of substitutes
Transitive preference ordering
Mathematical property of the consumers preference
If a > b, and b > c, then a > c
Behavioral Postualte
Consumer who makes consistent choices
Market supply
Quantities of a good that a firm is willing and able to produce at given prices
What determines supply
Price of product
Cost of production
Technology
Short run vs long run
Price elasticity of demand
Elasticity =
Relative change in price
What determines elasticity
Number and closeness of substitutes
Importance in consumers budget
Price elasticity of demand
E = 0 Perfectly elastic
E < 1 Inelastic
E = 1 Unity
E > 1 Elastic
E = infinity Infinitely elastic
Arc elasticity
P1 - P2/ 0.5(P1-P2)
Cereus Paribus
Holding all other things equal
Externalities in economics
A divergence between private and social costs and benefits results in market failure
Marketing market demand
Total volume that would be bought by a defined customer group in a defined geographical are in a defined time period in a defined marketing environment under a defined marketing program
Pareto optimality
When economy is in equilibrium, no consumer can be made better off without making another consumer worse off
Social class
Division of society into a hierarchy of groups so that members of each class have the same status
An individuals relative position in society
Social STATUS
Relative rankings of members within each social class in terms of wealth, income, occupation, home ownership, and education
An individual’s relative position within a social class
Subjective measure of social class
Subjective - self perception
Reputational - perception of others
Objective - single variable: occupation
Feudalism
Born into position of society
Nobility, clergy, serf
Primary labor market
Steady, stable, and riding source of income with opportunity for social mobility
Secondary labor market
Inferior social status, insecure employment, bad working conditions, but not always low paying (seasonal construction job)
Marketing definition of culture
Sum of learned beliefs, values, and customs that serve to direct consumer behavior of a particular society
What defines a value
Few in number
Enduring
Guide for appropriate behavior
Not tied to object or situation
Widely accepte
