MARK 3001 Test 1 Flashcards
What is marketing?
Meeting customer’s needs profitably.
Satisfies customers’ needs and wants.
Exchange between buyers and sellers is…
Mutaully Benefical
Mutually Beneficial.
Do buyers always exchange money?
No, time and energy.
What are the 4 Ps of marketing?
Place, Product, Price, Promotion.
What does ‘Product’ mean in the 4 Ps?
Create value by developing a variety of offerings, including goods, services, and ideas to satisfy customer needs.
Example: Nike shoes, iPad, Hydroflask, grocery delivery services.
What is ‘Price’ in the 4 Ps?
Everything a buyer gives up, including money, in exchange for the product or service.
Example: Frontier promises low fare but you pay for that service.
What does ‘Place’ refer to in the 4 Ps?
Marketing processes necessary to get the product to the right customer at the right time.
Example: Starbucks expands storefronts constantly.
What is ‘Promotion’ in the 4 Ps?
Communication that informs, persuades, and reminds potential buyers about a product or service to influence their buying.
What is the marketing mix?
Set of decisions that the firm uses to respond to the wants of its consumers.
Creates values through price, product, place, and promotion decisions.
How does marketing create value?
Builds relationships with partners and customers, gathers and analyzes information about customers and competitors, balances benefits and costs, and leverages technology.
What does B2B stand for?
Business to business.
Example: Keurig sells machines for office use.
What does B2C stand for?
Business to consumer.
Example: Keurig sells machines to consumers on its website.
What does C2C stand for?
Consumer to consumer.
Example: eBay.
What is Sustainable Competitive Advantage (SCA)?
An advantage over the competition that is not easily replicated and can be maintained over a long period of time.
Think of it like a wall built through marketing efforts.
What is Customer Excellence (SCA)?
Achieved when a firm develops strategies for training loyal customers and provides outstanding customer service.
Example: Disney’s magic bands.
What is Operational Excellence (SCA)?
Achieved through efficient operations, excellent supply chain management, and strong relationships with suppliers.
Example: Walmart’s competitive operational advantage.
What is Product Excellence (SCA)?
Achieved by developing products with high perceived value through effective branding and positioning.
Examples: Apple, Google, Microsoft.
What is Locational Excellence?
Achieved by having a strong physical location and/or Internet presence.
Example: Starbucks’ high density of stores.
What does S stand for in SWOT?
Strengths - characteristics of a business that give it an advantage over its competitors.
What does W stand for in SWOT?
Weakness - characteristics of a business that put it at a disadvantage relative to its competitors.
What does O stand for in SWOT?
Opportunities - elements in a company’s external environment that allow it to formulate strategies to improve performance.
What does T stand for in SWOT?
Threats - elements in the external environment that could endanger the business.
What is Portfolio Analysis Methods (BCG)?
Classifies products into a two-by-two matrix based on market share and growth rate.
What are Stars in BCG?
High Growth, High Market Share products that often require heavy resource investment.
Example: Apple Watch.
What are Cash Cows in BCG?
Low Growth, High Market Share products that have already received heavy investments.
Example: iPad.
What are Question Marks in BCG?
High Growth, Low Market Share products that require significant resources.
Example: iPhone.
What are Dogs in BCG?
Low Growth, Low Market Share products that should be phased out unless needed for competitive purposes.
Example: iPod Touch.
What are Growth Strategies?
4 basic strategies used to grow based on the decision to enter markets or develop new products and services.
What is Market Penetration Strategy?
Existing Product or Service in current markets that encourages current users to consume more.
Example: Starbucks Rewards.
What is Market Development Strategy?
Existing Product or Service in new markets targeting different consumers.
Example: Pedialyte expanding to endurance athletes.
What is Product Development Strategy?
New Product or Service in Current Markets that innovates to meet changing needs.
Example: Dove’s expansion into deodorants.
What is Diversification Strategy?
New product or service in New Markets, which is the riskiest strategy.
Requires extensive research.
Who are the types of firm stakeholders?
Employees, Customers, Marketplace, Society.
What is Conscious Marketing?
Entails a higher sense of purpose beyond making a profit.
4 principles include recognition of marketing’s greater purpose.
What is the recognition of marketing’s greater purpose?
It involves considering the greater purpose of marketing beyond profit, focusing on ethical and social responsibilities.
What is the presence of conscious leadership?
It involves creating a corporate culture that prioritizes ethical decision-making and stakeholder engagement.
What does understanding that decisions are ethically based imply?
It means recognizing that business decisions should align with ethical standards and values.
What is Corporate Social Responsibility (CSR)?
CSR is an element of conscious marketing that refers to voluntary actions taken by a company to address ethical, social, and environmental impacts.
Are CSR actions mandated by law?
No, CSR actions are voluntary and not mandated by any law or regulatory body.
What is the triple bottom line in CSR?
It includes ethical performance, social performance, and environmental performance.
What are some common CSR activities of well-known companies?
Common activities include establishing charitable foundations, partnering with nonprofits, supporting minority rights, and adopting responsible marketing practices.
What is the immediate environment in marketing?
It consists of factors that directly influence consumers, including company capabilities, competitors, corporate partners, and the physical environment.
What do successful marketing firms lean into?
They lean into their core competencies, which are unique capabilities that distinguish them from competitors.
What defines a corporate partner in a immediate environment?
Any party that works with a focal firm can be considered a corporate partner.
capabilties of the company
company’s competitors
physcial environment in which the consumer live
What do demographics refer to in Immediate Environment ?
Demographics are characteristics of human populations used to identify consumer markets.
ex: age, gender, income, education, and ethnicity.
How does age influence consumer behavior?
Consumers exist in generational cohorts, which can lead to similar purchasing behaviors due to shared experiences.
What is the impact of gender on consumer behavior?
Shifting traditional gender roles influence purchasing decisions, with women outperforming men academically.
How does income affect consumer purchasing power?
A consumer’s purchasing power is directly tied to their wealth, influencing their spending habits.
Why is education important in demographics?
Education is related to income and is increasingly important for survival in the global economy.
What is the significance of ethnicity in demographics?
Ethnicity influences consumer behavior, with a significant portion of U.S. population growth expected from minority communities.
What are social trends in a microenvironment?
Social trends shape consumer values and include factors like sustainability, health and wellness, and ethical sourcing.
How does technology impact marketing in Macro Environment?
Technology influences marketing through new products, communication methods, and retail channels.
What is the impact of the economy on consumer decisions in Macro Environment
?
The state of the economy affects both large and small purchasing decisions.
What does the broader political environment encompass in Macro Environment?
It includes political parties, government organizations, and legislation that firms must understand and comply with.
How does culture influence consumer behavior in Macro Environment?
Culture shapes shared meanings, beliefs, and values that affect buying decisions.
What are the steps in the consumer decision process?
- Need Recognition
- Information Search
- Alternative Evaluation
- Purchase and Consumption
- Post Purchase
What is need recognition in the consumer decision process?
It is the realization by consumers that they want to move from their current state to a desired state.
What are functional needs? (Need Recognition)
Functional needs are basic requirements related to the performance of a product or service.
What are psychological needs? (Need Recognition)
Psychological needs relate to emotional gratification associated with a product or service.
Can products address both functional and psychological needs?
Yes, products can satisfy both types of needs.
What is an example of a psychological need met by personal care products?
Feeling confident or fashionable in a new clothing purchase.
How can products address consumer needs?
Products can satisfy both psychological and functional needs.
Example: luxury bags.
What is internal search in the consumer decision process? (Search for Information)
Buyer’s own memory or past consumption experiences and existing knowledge of a product or category.
What is external search in the consumer decision process? (Search for Information)
Seeks to fill gaps from internal searches through personal experiences, product or service websites, social media, product reviews, and media.
What factors affect consumer search?
- Perceived benefits vs. costs.
- Locus of control.
What does ‘perceived benefits vs. costs’ refer to?
It questions whether it is worth the time and effort to search for information about a product or service.
What is the locus of control in consumer behavior?
Consumers with an internal locus of control believe they can influence outcomes and engage in more search activities, while those with an external locus feel outcomes are controlled by fate.
What are the five types of risks that can delay or discourage a purchase?
- Performance risk.
- Financial risk.
- Social risk.
- Psychological (safety) risk.
- Psychological risk.
What is performance risk?
The perceived danger inherent in a poor performing product or service.
Example: ‘This might not work how I want it.’
What is financial risk?
Associated with monetary outlay, including the initial cost of purchase and costs of using the item or service.
Example: ‘Can I really afford this?’
What is social risk?
Fears that consumers have regarding how others might perceive their purchase.
Example: ‘Are people going to make fun of me?’
What is psychological (safety) risk?
Refers to the fear of actual harm if the product does not perform properly.
Example: ‘Am I going to get hurt?’
What is psychological risk?
The risk associated with how people will feel if the product or service does not convey the right self-image.
Example: ‘How will I feel about myself?’
What are attribute sets in consumer decision-making?
Consumer’s mind organizes and categorizes alternatives into relevant sets: universal sets, retrieval set, and evoked set.
What is a universal set?
Includes all possible choices for a product category.
Example: all shampoo brands.
What is a retrieval set?
Brands or stores that can be readily brought forth from memory.
Example: brands that come to mind when thinking of shampoo.
What is an evoked set?
Various brands or stores that consumers would actually consider when making a purchase.
Example: brands of shampoo you’d consider buying.
What are compensatory decision rules?
Weights characteristics against each other, allowing good characteristics to compensate for bad.
What are non-compensatory decision rules?
Based on one characteristic.
Example: cheapest gas.
What do retailers calculate to measure effectiveness?
Retailers calculate their conversion rate.
What is the goal of post-purchase behavior?
To create satisfied customers who become loyal to the product or service, purchase again, and spread positive word of mouth.
What are the three possible post-purchase outcomes?
- Customer satisfaction.
- Post-purchase cognitive dissonance.
- Customer loyalty (or disloyalty).
How can companies ensure customer satisfaction?
By setting realistic expectations.
What is post-purchase cognitive dissonance?
Known as buyer’s remorse, it is the internal conflict arising from an inconsistency between two beliefs after a purchase decision has been made.
What factors increase the likelihood of post-purchase cognitive dissonance?
More likely for products that are expensive, infrequently purchased, do not work as intended, or have high levels of risk.
What is post-purchase customer loyalty?
Creating a loyal relationship where customers will only buy certain brands and shop at certain stores.
What can lead to undesired post-purchase behavior?
Negative word of mouth and rumors can lead to reputational damage.
What is the STP process in marketing?
Segmentation
1. establish strategy & objectives
2. generate consumer segments
Targeting
3. evaluate segments
4. select target market
Positioning.
5. identify & develop positioning
What is the first step in the STP process?
Establish strategy and objectives by articulating the vision or objectives of the company’s marketing strategy.
What should the marketing strategy be based on?
Current SWOT-like assessments of the environment.
Example: plant-based beef made for meat eaters.
What are some methods to segment the market?
- Geographic.
- Demographic.
- Psychographic.
- Benefit.
- Behavioral.
What does evaluating segment attractiveness involve?
Determining whether a segment is worth pursuing using several descriptive criteria.
What does it mean for a segment to be identifiable?
Firms must identify who is within their market to design products or services that meet their needs.
What is the importance of substantiality in market segments?
A segment must be large enough or have sufficient buying power to justify the investment in pursuing it.
What does it mean for a segment to be reachable?
The target market must be accessible through communication and distribution channels.
What does it mean for a segment to be responsive?
The segment must respond positively to the marketing efforts.
What does it mean for a firm’s offering to be responsive?
Customers must respond positively to the firm’s offering.
Key Question: Will our offering uniquely meet this consumer need?
What should a firm do if it cannot provide products to a market segment?
If a firm cannot provide products and services to the segment, it shouldn’t be targeted.
Ex: don’t target vegetarians who dislike the taste of beef.
What is the importance of profitability in market segmentation?
Firms need to assess potential profitability of each segment, both current and future.
What are the four different targeting strategies firms can use?
- Undifferentiated (mass marketing)
- Differentiated
- Concentrated
- One-to-One (micromarketing)
What is undifferentiated targeting?
Used when everyone might be considered an equally probable customer.
Mass Marketing
What is differentiated targeting?
Target several market segments with a different offering for each.
What is concentrated targeting?
Firm has a single, primary target and focuses all energy on meeting that market’s needs.
What is one-to-one (micromarketing) targeting?
Tailoring a product or service to suit an individual customer’s needs.
What is the goal of identifying positioning?
Defining marketing mix variables so target customers have a clear, distinctive, and desirable understanding of the product’s value proposition.
What is a value proposition?
The benefits a customer receives from a product or service.
A good value proposition clearly articulates why a consumer would want to buy the product.
What are positioning strategies focused on?
How the product or service affects the consumer and how it is better than competitor’s products and services.
What are the steps to develop positioning?
- Plot themselves and their competition on perceptual maps.
- Identify the market’s ideal points and size.
- Identify competitors’ positions.
What is geographical segmentation?
Organizes customers into groups based on where they live, such as country, region, state, city, or zip code.
What is demographic segmentation?
Groups consumers according to easily measured, objective characteristics such as age, gender, income, and education.
What is psychographic segmentation?
Delves into how consumers describe themselves, how they choose to spend their time, and what motivates them.
What is benefit segmentation?
Groups consumers based on the benefits they derive from products or services.
What is behavioral segmentation?
Divides consumers based on their previous purchases of goods or services.
What is occasion segmentation?
Based on when a product or service is purchased or consumed.
Ex: Frito-Lay makes individual serving of chips for lunch boxes and family size bags for parties.
What is loyalty segmentation?
Creates groups of repeat customers, as loyal customers are more profitable in the long run.
Ex: airline mileage or hotel point reward programs.
What is market basket analysis?
Leverages data on consumer purchases to understand buying habits.
What do firms know about loyal customers?
Firms know loyal customers are more profitable in the long run.
What is an example of a reward program for loyal customers?
Airline mileage or hotel point reward programs.
What is Market Basket Analysis?
Market Basket Analysis leverages data on consumer purchases to determine which products are most often purchased together.
How can Market Basket Analysis be used?
It can be leveraged to generate segments with similar purchase patterns.
What is an example of Market Basket Analysis in action?
Target found out about a high school girl being pregnant before her parents.
What influences our decision making?
Psycholgical Factors
Social Factors
Situational Factors
Marketing Mix
Psychological Factors
Motives
Attitudes
Perception
Learning and Memory
Lifestyle
Motives- Psychological Factors
need or want that is strong enough to cause the person to seek satisfaction
Maslow’s Hierarchy of Needs → illustrating human needs
Physiological needs: basic biological necessities of life like food, drink, sleep and shelter
Safety: needs pertain to protection and physical well-being; basic safety and physiological needs must be met first
Love: needs relate to our interactions with others and our need for connection with friends and partners
Esteem: allow people to satisfy their inner desires and cause us to seek status, respect, and recognition
Self-actualization: occurs when you feel completely satisfied with your life and feel you’re reaching your true potential
Attitudes
person’s enduring evaluation of his or her feeling towards an object or idea, and how a person behaves based on that evaluation
Attitude consists of 3 components:
- Cognitive component (belief) reflects our believe system, or what we believe to be true
- Affective component(emotions) involves emotions; what we feel about the issue at hand, including our likes or dislikes
- Behavior component (actions) pertains to the actions we undertake based on what we know and feel
Cognitive dissonance → when there isn’t agreement across components, can be uncomfortable
Ex: i don’t like marvel movies, i’m kind of over Ryan Reynolds
Perception- Pscyhological
process by which we select, organize, and interpret info to form a meaningful pic of the world
ex: Assign meaningful to info such as symbols, colors, and packaging based on our cultural influences
Learning and Memory - Psycholoigcal Factors
Learning –> to a change in a person’s thought process or behavior that arises from experience
Memory → encoding, storage, and retrieval of info
Encoding: transforming details into storable info
Storage: new info is incorporated into our existing knowledge base
Retrieval: when we access that info
Info learned and storage in memory assists in decisions making
Lifestyle – Psycholgical
The way consumers spend their money/time and make decisions based on actual or perceived lifestyle
Ex: North Face consumers; some seek out their products for outdoor environments (actual lifestyle) or other purchase it because they like the way it feels or looks (perceived lifestyle)
Social Factors
Family
Many purchase decisions are made about products or services that the entire family will consume or use
Reference Groups → one or more person whom an individual uses as basis for comparison regarding beliefs and behaviors
Consumers have various reference groups: family, friends, coworkers, celebrities, online influencers
Situational Factors
factors specific to the situation that override, or at least influence, psychological, and social issues
Situational factors are related to:
- Purchase situation
Ex: you may select items intended to be gifts using different criteria than you do for yourself
- Sensory situation
Visual → refers to colors, lightning, brightness, size, shape
(First sense triggered)
Eye-catching retail and packaging presentation can cause unnoticed options to enter consumer’s considerations set
Auditory
Feeling can evoked through consumer’s hearing or auditory sense
Creating a positive retail environment increases time spent in stores, and as a result, purchases
Olfactory
Certain scents → positively impact a consumer’s retail experience
Ex: Cinnabon and Auntie Anne’s → scent of their products
Tactile
Consumer’s need to leverage their sense of touch will vary based on the product
Ex: consumers are more likely to test a sweater or towel for softness using touch
Taste
Critical importance for retailers selling food and beverages, as well as restaurants
Limited problem solving
occurs during a purchase decision that calls for, at most, a moderate amount of effort and time
