Lecture 2: Understanding the Consumer (Part 1) Flashcards
What is the formula for customer value?
Total benefits - total costs
Types of customer value
Functional, economic, and psychological
Why is the hierarchy of needs important?
Successful marketing rests on understanding what drives people
What are the components of the hierarchy of needs?
Self-transcendence -> self-actualization -> esteem -> love/belonging -> safety -> physiological
What are the deficiency needs?
Physiological, safety, love, social
What are the growth needs?
Self-transcendence and self-actualization
What does deficiency needs have?
Diminishing marginal utility
What is self-actualization?
The process of achieving our full potential
What is self-transcendence?
Expansion of personal boundaries.
What is cross-compensation?
One group of customers pays for the service.
Profits from this group are used to subsidize the service for another,
underserved group
What is Market Intermediary?
The social enterprise acts as a market
intermediary, or distributor, to an expanded market.
What is independent support?
Funds are used to support social programs to
the beneficiary.
Which element of value in the pyramid is best for growing revenue?
Quality
Which customer value is the most stable source for competitive advantage?
Psychological value.
What is self-positivity bias?
Thinking bad things happen to other people but not to us.
