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)
what is efficiency
achieving maximum output with the minimum input or resources. Are we achieving our goals with minimal expenditure or resources? (mass market)
why should we segment?
1.competing organisations
2. difficult to satisfy with one product
3.aggregation
4. limited resources
what is aggregation
concept of market segmentation that assumes that most consumers are alike.the strategy is to focus on the broadest possible number of buyers to appeal to universal product themes.
what is fallacy of aggregation
Sometimes grouping different customers together might overlook important differences.
what is horizontal segmentation
selling a product to a wide spectrum of consumers (like basic T-shirt, which is owned by everyone)
what is vertical segmentation
narrows your selling focus to target consumers in a smaller demographic.(like uniform for doctors)
segmentation should be at the same time:
- Mutually exclusive
- Collectively exhaustive
what is mutually exclusive
segments should be distinct and separate from each other. In other words, individuals or entities should belong to only one segment and not overlap with others.
what is collectively exhaustive
the combination of all the segments should cover all people in a given market.
what are 6 typical segmentation criteria
- Geografic (urban/rural, concentrated/non-concentrated)
2.demografic: age, income, gender, education, occupation
3.purchasing: frequency of purchase.
4.situational: personal or gift, order size.
5.Beliefs, attitudes: attitudes and values, social context, activities and interests.
6.needs: needs, willingness to pay.
what is Incremental value
extra value gained by making a small, gradual improvement or change.
when is segmentation beneficial
Segmentation is useful when incremental value for specific groups brings more value than the cost of creating those versions. (efficiency)
what is targeting
The process of evaluating segments
and selecting one or more segments as the focus of marketing mix offerings
what is undifferentiated marketing (mass market)
company creates a single product or service offering and promotes it to the entire market
MARKETING MIX➡️WHOLE MARKET
what is Differentiated marketing
segmented marketing or targeting multiple segments, is an approach where a company creates distinct products or services and develops specific marketing strategies for different customer segments.
MARKETING MIX 1➡️ SEGMENT 1
MARKETING MIX 2➡️ SEGMENT 2
MARKETING MIX 3➡️ SEGMENT 3
what is Customised marketing (personalised marketing)
approach where a company tailors its products, services, and marketing strategies to meet the specific needs and preferences of individual customers
MARKETING MIX 1➡️ CUSTOMER 1
MARKETING MIX 2➡️ CUSTOMER 2
MARKETING MIX 3➡️ CUSTOMER 3
Focused marketing (niche marketing)
a company directs its efforts toward a specific, well-defined segment of the market
MARKETING MIX➡️SEGMENT
what it importance-performance model
a useful tool in examining targeting
what are 4 steps of importance-performance model
- Who to target
- Customer focus
- Company focus
- Competitive focus
what is “who to target” step
Aim your product at people who might want to buy it
what is “customer focus” step
Figure out what people really care about in your product
what is “company focus” step
Ask yourself how good you are at providing what people care about
what is “competitive focus” step
Check how well other companies are doing what you’re doing
what is Inter-Segment conflict
conflicts that arise between different segments within an organisation. These conflicts arise due pursuing conflicting goals, communication breakdown, competition for customers(if targeting same audience😡)
what is Inter-segment synergies
positive interactions and collaborations that occur between different segments within an organisation.(shared knowledge, fostering innovation)
what is cannibalisation
one product eat up sales of other product (internal competition, product overlap)
what is the reason to introduce new product, even though cannibalisation will occur?
“If I don’t introduce new product and eat all old product’s customers, my competitors will do that”
what is Vertical differentiation in marketing
offering products with different levels of quality, features, or performance.
how can vertical differentiation prevent cannibalisation
By creating clear distinctions between products in terms of their attributes, companies can minimise cannibalisation
which 3 factors should I consider in order to occupy POSITION in a market
1.The customers - what attributes matter to them.
2.The company - unique sustainable attributes.
3.The competitors - a differential advantage that ideally cannot be easily matched.
tell about 5 box positioning statement
current behaviour - current belief - consumer proposition - desired belief- desired behaviour
marketing mix (tactics)
Place(distribution) - deliver value
Product - choose value
Price - capture value
Promotion - communicate value
what is the structure for traditional positioning statement
To (target audience), (our brand) is (the concept) that provides (what the dynamic variable is or does) because (reason).
Example: To young, soft-drink consumers who have little time for sleep, Mountain Dew is the soft drink that gives you more energy that any other brand because it has the lightest level of caffeine.
what is tagline
memorable articulation of positioning statement
what is Belief perseverance
people’s held beliefs are hard to change, even if you provide evidence that the belief is false
what is Curse of knowledge
when you know a lot about something, it becomes hard to remember what it’s like not to know it. (when you know a lot, who think that everybody knows this aswell)
what is Belief perseverance
people’s held beliefs are hard to change, even if you provide evidence that the belief is false.
what is the prominence paradox
Idea that means sometimes things are better when they come from unexpected places (wine from Ukraine, sushi from Rotterdam)
through which 4 stages does a product go in The typical product lifestyle model
- Introduction
- Growth
- Maturity
- Decline
tell about specifics of introduction stage
very low sales, non-existing profit, competition Is very light, trying to gain trial be early-adopters, really serious quality control
tell about growth stage
rapid market acceptance, sales and profit are dramatically growing, competitors enter aggressively
tell about maturity stage
slowdown in sales growth, profits are stable or decline, focus on introducing new products to recall growth
tell about decline stage
profit and sales decline, focus turns to profit, rather than the sale share, reduce budget of marketing (If a product is no longer as popular, the company might reduce spending on advertising for that model)
how do customers evaluate (eatable) products (3 stages)
- search for attributes (can be evaluated before consumption)
- experience attributes (evaluated after consumption)
- credence attributes (can never be evaluated)
what are credence attributes
nutritional content of food
How do companies convince customers that their product has promised credence attributes?
High price to signal high quality
Advertising
Branding
what is the difference between branding and advertising
Branding is how a company presents itself, like its personality and style. Advertising is when a company tries to tell you something specific about its products or services. Branding is like the company’s character, and advertising is like its voice.
what are the kinds of value surplus
producer surplus - receiving more money for the product sold, than it costed to make it
customer surplus - paying for the product less, than the max. Willingness to pay
unrealised value - the difference between max. WTP and true value (the functions of a product that weren’t used or recognised)
what are the ways to increase producer’s surplus
- cut the cots for producing a product
- Increase the price for the product (cutting into consumer’s surplus)
- increase the WTP(cutting into unrealised value) But there’s not always gonna be unrealised value to cut into
what is the ideal price
max WTP for each person
what is Price discrimination
putting different prices to different people for the same thing, even if it doesn’t cost more to make
what are 3 degrees of price discrimination
1st degree: charging each person to their max WTP
2d degree: decrease the price for people who buy a lot or in bulk
3s degree: Charging different prices to different “classes” of buyers
what does it mean Determining demand
how much of a product or service consumers are willing to buy at different prices
what is price elasticity of demand
the way quantity of a product demanded depends on the change in its price (how sensitive are customers to the price change)
what are factor leading to less price-sensitivity
-when buyers are less aware of replacement
-the purchase Is small in comparison to customer’s budget
-prestige products
-individual differences (tightwads and spendthrifts)
how modern ways of payment affect consumers’ price sensitivity
payments with cards decrease the person’s price sencivity
what are some more pricing techniques (3)
- Loss leader pricing (cheap bottle of milk)
2.Competitive pricing (stealing share from competitors) - Markup pricing
what to do if someone is using competitive pricing against you
- cost advantage (make our prices even lower)
- scare buyers away from low-priced options by highlighting problems
3.offer bundles (Look at all this stuff you’re getting for the price)
tell about place from the marketing mix
involves decisions about where and how to make the product available (distribution) to the target customers
what is channel
pathways through which a product travels from the producer to the consumer. It encompasses all the intermediaries, such as wholesalers, retailers, and other distribution entities that play a role in getting the product to the end user.
Manufacturer➡️Wholesaler➡️Retailer➡️Consumer
who Is a wholesaler
Anyone who sells goods to other businesses, rather than directly to customers, is a wholesaler.
how are wholesalers helpful?
-help manufacturers reach many small businesses at a lower cost
- hold inventory, decreasing the risk for retailers
- have savings for retailers due to buying in discounted bulks
-reducing the search time for customers
what is channel coordination problem
when retailer makes price as high as possible as well as the manufacturer. It’s like both the store and the maker are trying so hard to make a big profit that it actually pushes away customers who would buy if the price was more reasonable.
the solution of channel coordination problem
vertical integration
some problem with vertical integration solving the problem of channel coordination
-reduces variety among product
-one person may not know how to do these two jobs at the same time
what are 2 types of vertical integration:
1.forward vertical integration: company acquires a segment (or segments) after it in the supply chain
2.backward vertical integration: company acquires a segment (or segments) behind it in the supply chain
what are channel characteristics
Length (number of intermediaries) indirect/direct
Breadth (ease of assessing product, number of outlets) exclusive/mass distribution
Depth (degree of vertical integration) minimal/maximal
what is hybrid channel strategy
Sometimes, businesses like to use both their own stores (direct) and let others sell their stuff (indirect). But it’s not possible to be mass and direct at the same time.
what is Promotion
-Make customers aware of offering
-Make offering attractive to customers
what is the creative brief
document that includes background
info on the brand, category, targeted segment(s), budget, goals
what does ad agency’s creative team team do with that doc
interprets creative brief and proposes
a campaign
what is customer purchase funnel
Awareness➡️Consideration➡️Preference➡️Purchase➡️Loyalty➡️Advocacy
what are advertising objectives
- Awareness
-Capture attention
-Introduce new products (introduction stage of Product Life Circle) - Consideration
persuade/compare, use when a lot of competition - Remind (maturity stage)
what is marketing communications mix
- Advertising (print, web, broadcast ads; packaging)
- Consumer promotions (gifts, samples)
- Events and experience (party in the name of new product launch)
4.Public relations (PR) (creating a positive image, telling good stories, and dealing with any not-so-good stories)
what are Marketing communications Goals
- Achieve an information goal (increase awareness ab piece of info)
-Achieve an image goal
-Achieve behavioural goal
what is Product placement
sneaky way to show off a product. Instead of a regular ad, the product is quietly placed in movies, TV shows, or other stuff you watch or read.
what is Tailored message
customised note crafted to fit exactly what a particular group of people or individuals are interested in (personalised emails, special discount based on buying history, location-based offers)
what is Native advertising
is like a chameleon as it blends into the content you’re reading or watching, so it looks like it belongs there.
what are some limitations of behavioural observations
-inability to tell what was persons motivation to purchase a product (someone might buy it because they think it is gives experiential value, some because of functional value)
-two different types of behaviour may arise from different things: consuming food/having sex
This leads to misunderstanding of consumer behaviour, which can make behavioural predictions less accurate.
what is Consumer neuroscience
scientific study of consumer behaviour via psychological and neuroscientific methods
what is Neuromarketing
commercial use of neuroscience insights to better understand consumer responses to different kinds of brand, product, service related communication efforts
what are 3 inventions for neuroscience
1.Electroencephalography (EEG)
2.Transcranial Magnetic Stimulation (TMS)
3. Functional Magnetic Resonance Imagining (FMRI)
tell about Electroencephalography (EEG)
brain scanner cap that helps us understand what’s happening in the brain. It’s great for seeing changes in the brain really quickly (like in milliseconds), and it’s not too bulky or expensive.
Benefits:
Temporal Resolution: It’s awesome at catching changes in the brain super fast.
Portability and Cost: It’s not too big or pricey, making it handy for different situations.
limitations:
Spatial Resolution: But, it’s not so good at pinpointing exactly where those changes are happening in the brain.
tell about Transcranial Magnetic Stimulation (TMS)
uses magnetic fields to stimulate nerve cells in the brain
Benefits
portability: It’s like a portable brain wand, easy to take wherever needed.
“Causal” Inferences: It lets us work with specific brain areas to see what happens, giving us clues about how those areas work.
Limitations:
Limited Depth: It can’t go too deep into the brain; it’s more like a surface-level spell.
Spatially Non-Specific: It affects a general brain area but doesn’t show specific spots very precisely.
tell about Functional Magnetic Resonance Imagining (FMRI)
measures brain activity by detecting changes associated with blood flow
Benefits:
Excellent Spatial Resolution: It’s fantastic at showing exactly where things are happening in the brain.
Good Temporal Resolution: It also captures changes fast.
Limitations:
Expensive
Controlled Environment: It prefers a quiet and controlled setting, not as flexible as other brain tools.
