marketing Flashcards
what Is marketing
the activities, processes, and strategies used to promote, sell, and distribute products or services to customers
What can be marketed:
Goods
Services
Places
People
Ideas
Organisations
What marketing should be:
Marketing = creating value for all stockholders
Orientation: external/customer focused
Goal: profit through customer satisfaction (determine the needs and wants of groups of customers. Deliver the desired benefits more effectively than competitors.)
what are 4 types of orientation towards the market place
Production Orientation - do what it takes to cut costs
Product Orientation - design a technically superior product
Selling Orientation - sell more of what we make
Marketing Orientation - meet customer’s needs better than competitors
what are Stated needs
These are the things that customers specifically say they want. It’s like when you go to a store and tell the salesperson exactly what you’re looking for. For example, you might say, “I want a phone with a good camera.”
what are Latent Needs
Hidden desires and unexperienced requirments which are the key to unlock new opportunities for growth and differentiation
what are Functional Needs
definition: These are the practical or utilitarian needs that a product or service fulfils. It’s about what the product does and how well it performs its basic functions.Example: A smartphone with a good camera, long battery life, and fast processing speed addresses functional needs.
what are Emotional Needs
Definition: These are the psychological or feelings-based needs that a product or service satisfies. It’s about how the product makes the customer feel or the emotional connection it creates.
Example: A smartphone that makes a person feel stylish, confident, or connected to others addresses emotional needs.
what is formula for customer value
Customer Value = perceived benefits - perceived sacrifice
what are 2 types of benefits
tangible: a cup of delicious coffee
Intangible: soft couch, relaxing music, polite barista.
what are 2 components of costs
1.Cost of acquisition - expenses incurred in obtaining a product or service
2.Cost of use - expenses associated with using and maintaining a product or service. It includes operational costs, maintenance, repairs, and any other costs incurred during the lifespan of the product or service.
what are 4 Aspects of marketing easy to get wrong
-Attending to wrong type of market research (focusing on research methods or data that may not provide relevant or useful insights for the specific goals of a business)
-Focusing on internal capabilities, not the customer needs
-Overpromising
-Diluting the brand (brand fails to fullfill customers’ expectations and, as a result, they negatively perceive the company’s value, quality and authenticity)
what is consumer behaviour
actions and decision-making processes that individuals go through when searching for, purchasing, using, evaluating, and disposing of products and services
what are 3 components of consumer behaviour
1.Value creation and customer needs
2.Consumer decision-making process
3.Attitudes and perceptions
what is Study of consumer behaviour
study of the process involved when customers select, purchase, use and dispose of products, services, ideas, experiences.
tell about Dimond-water paradox
The paradox of value (also known as the diamond–water paradox) is the contradiction that, although water is more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.
tell about Labour Theory of Value (stated by Adam Smith)
the value of something is based on the amount of work put into making it. If it takes a lot of effort to create, it’s considered more valuable. This idea suggests that fair trades would involve exchanging goods or services based on the labour invested in them.
what is the difference between modern marketing recognising value and Labour Theory of Value by Adam Smith
Unlike the labour theory of value, which suggests that the value of a product is based on the labour required to produce it, modern marketing recognizes that value is inherently tied to the customer’s subjective experience and perspective.
why is value subjective
Value is subjective because it depends on the individual perceptions, preferences, and priorities of consumers.
what are 5 types of value
- Consumer value
- Functional value
- Economic value
- Experiential value
- Social value
what is Consumer value
the overall perceived benefits of a product or service in relation to its cost. It includes both functional aspects (how well the product/service meets practical needs) and emotional aspects (how it makes the consumer feel).
what is Functional value
practical benefits and utility that a product or service provides to customers. It emphasises the tangible attributes and features that meet the basic functional needs and solve specific problems for consumers.
what is Economic value
pure price of the product
what is Experiential value
enjoyment, pleasure, and positive feelings that consumers derive from their interaction with a product, service, or brand (design,brand,service).
what is Social value
making positive contributions to society and the world, not just selling products. It’s about making choices that help people and the planet.
how does diamond-water paradox connects to Consumer value
People are willing to pay more for diamonds (low practical use but high perceived value) than for water (high practical use but low perceived value).
how does diamond-water paradox connects to Functional value
Water has high functional value due to its essential role in survival, while diamonds have lower functional value as they are not necessary for basic needs.
how does diamond-water paradox connects to Economic value
Despite water being vital, its abundance lowers its economic value. Diamonds, being scarce, have higher economic value due to their rarity.
how does diamond-water paradox connects to Experiential Value
Diamonds offer experiential value through the emotions and status associated with owning them. Water’s experiential value is immediate, providing essential benefits for life.
what are the 4 steps of consumer-decision process
1.Need recognition
2.Information search (Memory based options/Stimulus based options)
3.Evolution & Choice, purchase
4.Post choice evaluation
what is need recognition step
when a consumer recognizes a gap between their current situation and a desired one. This recognition triggers a need for a product or service to address the deficiency.
what is Information search (Memory based options/Stimulus based options) step
consumers seek information about available options to fulfil that need.
a)Memory based options: Choosing a restaurant based on positive memories of previous visits or selecting a familiar brand because of past satisfaction.
b)Stimulus based options: choosing a restaurant based on a current promotion or advertisement or buying product due to info on the package
what is Evolution & Choice, purchase step
Consumers compare the gathered information to make a decision on the best option
what is Post choice evaluation
After making a purchase, consumers assess their satisfaction with the chosen product or service. This evaluation influences future decisions and brand loyalty.
what is perception
process by which people select, organise, interpret information
what is selective retention
people are more likely to remember information that supports what they already think or feel, while filtering out or forgetting information that contradicts their existing views.
what is selective distortion
the tendency for people to interpret information in a way that supports previously established beliefs or perceptions.
what is selective attention
ability to concentrate on certain information while ignoring other.
what is Basic perception
how your brain makes sense of what you see, hear, touch, taste, and smell. It’s about taking in information from your senses and understanding what’s happening around you.
How does a consumer process competitive brand information and make a final value judgment
via traditional multi-attribute model: Consumers evaluate products by
weighting beliefs about products’ attributes according to importance
what is gold standard model
what conscious, rational decision maker would do
how can we influence preference for our product, following traditional multi-attribute model
- Change consumer beliefs about our attributes, either by
redesigning or by changing perceptions
2.Change consumer beliefs about competitors attribute
3.Change consumers’ importance weights (encourage
consumers to attach more importance to the attributes
our brand excels in
4.Call attention to neglected attributes, or shift the buyer’s
ideals.
what are Deviations from Multi-attribute model
- Non-compensatory models:
a)Elimination by aspects: People set minimum requirements for certain features and eliminate options that don’t meet these requirements.
b)Familiarity/awareness:People stick to what they know or are aware of instead of thoroughly evaluating all options.
2.It’s all relative: Context effects:
In a multi-attribute model, People might avoid trading off safety for a lower price, even if a more detailed model suggests it.
In reality, context matters:Example: Compromise Effect: People might pick a mid-priced option when it’s presented with higher-priced options, even if they wouldn’t choose it in isolation.
what is compromise effect
psychological phenomenon where people tend to choose the middle option when presented with a range of choices.
what does statement “consumers are not an island” mean
emphasises the idea that consumers are not isolated or completely independent entities in their decision-making processes.
what is Core Competency (intangible)
unique strengths, capabilities, and knowledge that an organisation possesses, setting it apart from competitors.
- something a company does very well
-provides customers with major benefits
-not totally copiable
what are Strategic business units (SBU)
a type of business that is part of a larger organization but functions as if it is its own entity
what are problems with SBU
- Underinvestment in Core Competencies ( when pursuing SBU objectives, there’s a risk of underinvesting in core competencies that are critical for the success of the entire organisation)
- Imprisoned resources (talent, technology, or knowledge, may become “imprisoned” SBUs, rather than being shared across the organisation to enhance core competencies)
- Bounded innovation (innovation activities within SBUs are constrained to specific areas rather than being shared across the entire organisation)
criteria Core Competencies
1.Provides access to a wide variety of markets, can be reused widely for many products and markets.
2.Makes substantial contribution to the perceived customer benefits of the end product.
3.Difficult for competitors to imitate.
identifying competitors
-Narrow and broad competitors
-Now & Later
-You can choose your competitive set (via positioning, distribution, pricing)
-You have more to say about who are your competitors if you are late entrant
what are 4 levels of competition
-direct (Diet Pepsi/Diet Coke)
-category (Fruit flavoured colas/ regular colas)
-generic (water, tea, coffee)
-budget (chips, ice cream, video game rental)
what are 2 Analytic methods for identifying closest competitors
customer judgement and purchase records
what does customer judgement include
-Similarity & Benefit ratings (Customers compare products or services based on how similar they are and the benefits they offer.)
-Consideration Sets (Customers create a set of options they’re considering before making a decision)
-Substitution by use (customers think about whether they could use one product or service in place of another)
what do purchase records include
-Switching (When a customer changes from using one product or brand to another.)
-Cross-elasticity of demand (How the quantity demanded of one product changes in response to a change in the price of another product. Example: If the price of tea increases, and as a result, people start buying more coffee, there is a cross-elasticity of demand between tea and coffee.)
what are the components of marketing strategy (STP)
-Segmentation
Identify segmentation variables and segment the market
Develop profiles of resulting segments
-Targeting
Evaluate the attractiveness of each segment
Select the target segments
-Positioning
Identify positioning tactics for each target segment
Select, develop, signal and maintain the chosen positioning concept
what Is effectiveness
refers to the degree to which marketing efforts achieve their intended objectives or goals. Are we achieving our marketing goals? (customised strategy)
