MIDTERM Flashcards
What is marketing (AMA definition)?
The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create exchange and satisfy individual and organisational objectives
How do firms achieve long term goals of doing good for the world at large while benefiting the firm and its customer?
Firms need to develop a marketing plan that specifies marketing activities for a specific period of timme
How is a marketing plan broken down?
how the product or service will be conceived or designed, how much it should cost, where and how it will be promoted, and how it will get to the consumer
What are core aspects of marketing?
- marketing affects stakeholders
- marketing is about satisfying customer needs and wants
- Marketing entails an exchange
- marketing creates value through product, price, place, and promotion decisions
- marketing can be performed by individuals and organizations
What is an exchange?
the trade of things of value between buyer and the seller so that each is better off as a result
What is the marketing mix aka 4 P’s?
Product, price, place, and promotion. Controllable set of decisions or activities that the firm uses to respond to the wants of its target markets
What is product? (4 P’s)
The goods or services offered by a business to meet customer needs.
Ex: Apple iPhone
What is the difference between goods & services?
Goods are tangible and services are intangible
What are ideas?
thoughts, opinions, and philosophies - intellectual concepts that can be marketed
Ex: groups promoting bicycle safety - exchange of value happens when children listen to the safety presentation & wear helmets
What is price? (4 P’s)
The amount customers pay for the product or service
What is place? (4 p’s)
All the activities necessary to get the product to the right customer when the customer wants it.
- Encompasses both supply chain & marketing channel management
What is promotion? (4 P’s)
The methods used to communicate the product’s value and persuade customers to purchase
Ex: Oatly began promotion by offering their milk at coffee shops and encouraging them to educate their customers about the superior properties of oat milk in coffee
What is the difference between supply chain management and marketing channel management?
Supply chain includes all the operational aspects of manufacturing & moving & storing merchandise, while marketing is concerned with developing and maintaining partners and relationships within the supply chain
What is the importance of supply chain management in regards to marketing?
Need a strong and efficient supply chain system to make sure company can keep up with consumer demand.
What is b2b?
business to business - selling merchandise to another business
ex: keurig selling machines for office use
What is b2c?
business to consumer - process of selling to consumers
What is c2c?
consumer to consumer
Ex: ebay, depop, poshmark
What is the production-oriented era?
believed a good product would sell itself. 1900s - 1920s. manufacturers were concerned with product innovation, not with satisfying needs
What is sales oriented era?
Happened between 1920 - 1950.. Production & distribution techniques became more sophisticated. Great Depression & WW2 conditioned consumers to consume less or manufacture stuff themselves. Firms overproduced so became sales oriented –> depended on heavy doses of personal selling & advertising
What is market oriented era?
1950s - 1990s. Post WW2 so manufacturers turned from focusing on the war effort toward making consumer products. Customer became king & firms discovered marketing
What is value-based marketing era?
Turn of the 21st century. Focus on building value (idea of what you get for what you give)
What is a way marketers have tried to build value?
They have used a relational orientation where they think of customers as relationships rather than transactions
What is customer relationship management?
A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customer
What is technology augmented era?
Last era. Firms are turnings to various digital, mobile, robotic, AI to augment their value. Turning point was possibly COVID-19
What is value cocreation?
Customers collaborate with other members of the supply chain to create a product/service that appeals mostly to them & offers optimal value
What are the four main activities that value stems from?
marketing analytics, social and mobile marketing, and ethical & societal dilemmas
What does a marketing strategy identify?
A firm’s target market, a related marketing mix, & the bases on which the firm plans to build a sustainable competitive advantage
What are the four macro strategies firms used to build their sustainable advantage?
Customer excellence, operational excellence, product excellence, locational excellence
What makes up a marketing plan?
composed of an analysis of the current marketing situation, its objectives, the strategy for the four P’s, and the appropriate financial statements
What does a marketing plan represet?
The output of a three-phase process: planning, implementation, and control
What does the planning phase in the marketing plan require?
For managers to define the firm’s mission & vision & assess the firm’s current situation - helps answer what business are we in now?
What does the implementation phase in the marketing plan require?
The firm specifies in more operational terms how it plans to implement its mission and vision, specifically to which customer groups does it wish to direct its marketing efforts & how does it use its marketing mix to provide good value?
What does the control phase in the marketing plan require?
Firm must evaluate its performance using appropriate metrics to determine what worked, what didn’t, and how performance can be improved in the future
What is SWOT analysis?
Strengths, weaknesses, opportunities, and threats. Occurs during the second step in the strategic planning process, the situation analysis. Internal (strengths & weaknesses), External (opportunities & threats)
How does a firm choose which consumer group to pursue with its marketing efforts?
Marketers must go through a segmentation, targeting, and positioning process. Segmentation tree, perceptual map, and segmentation grid
What is portfolio analysis?
A management tool used to evaluate the firm’s various products & businesses & allocate resources according to which products are expected to be the most profitable for the firm in the future - refers to the BCG matrix we reviewed in class
What are the four basic growth strategies?
market penetration, market development, product development, and diversification
What is market penetration?
directs the firm’s efforts toward existing customers & uses the present marketing mix. Attempt to get current customers to buy more
What is market development strategy?
Firm uses current marketing mix to appeal to new market segments - international expansion
What is product development growth strategy?
Involves offering a new product or service to the firm’s current target market
What is a diversification strategy?
Takes place when a firm introduces a new product/service to a new customer segment. Sometime relates to the firm’s current business (ex: women’s clothing selling to men)
What are the steps in the consumer decision process?
- Need recognition: consumers simply realize they have an unsatisfied need/want they hope to address
- Begin to search for information to determine how to satisfy that need
- Alternative Evaluation Stage: assess the various options available to them to determine which is the best for their purposes
- The purchase stage involves obtaining and using the product
- Post purchase stage: they determine whether they are satisfied or dissatisfied with their choice
What is the difference between functional and psychological needs?
Functional needs pertain to the performance of a product/service. Psychological needs pertain to the personal gratification consumers associate with a product and/or service
What are factors that affect information search?
The type of product/service dictates whether people can make an easy, quick decision or instead must undertake significant research to find their best purchase option.
Person’s perception of benefits vs costs also determine the effort they undertake
Locus of control influences their info search actions
What do marketers hope will happen after a purchase?
They are hoping customer will be satisfied, leading to customer loyalty a positive post purchase outcome
What are the factors that affect the consumer decision process?
Marketing mix elements, social factors (family, reference groups, and culture), psychological factors (motives, attitudes, perceptions, learning, and memory, and situational factors (specific purchase situation, a sensory situation, or temporal state)
How does involvement influence the consumer decision process?
More involved consumers tend to engage in extended problem solving - will gather lots of information, scrutinize it carefully, and then make their decisions with caution (trying to minimize any risk they may confront)
Less involved consumers often engage in limited problem solving, undertake impulse purchases, or rely on habit
Is there a best method to segment a market?
No, if a firm wants to identify its customers easily, demographic/geographic segmentation will probably work. If it’s trying to see why customer will buy offering - psychographic, but it all depends
How do firms determine whether a segment is attractive?
- customer should be identifiable
- market must be substantial enough to be worth pursuing
- market must be reachable
- firm must be responsive to the needs of customers in a segment
- the segment must be profitable
What is an undifferentiated strategy?
Uses no targeting at all and works only for products/services that most consumers consider to be commodities
What is the difference between differentiated and a concentrated strategy?
differentiated targets multiple segments, while concentrated only targets one
What kind of firms use differentiated strategy?
Larger firms w/ multiple product/service offerings
What kind of firms use concentrated strategies?
Smaller firms/those with a limited product/service offering
Explain micromarketing strategy
Marketing strategy that tailors their product/service offering to each customer (custom-made)
Large manufacturers are beginning to experiment with this
What does a value proposition communicate?
It communicates the customer benefits to be received from a product/service and thereby provides reasons for the customer to want to purchase it
What does a value proposition consist of?
consists of attributes of a product or service that are desired by the target market but not available from competitors
Define positioning in the STP
refers to how customers think about a product, service, or brand in the market relative to the competitors’ offerings
How do firms position products?
focus on offering’s value, most important attributes, symbols, comparison of the firm’s offerings with competitors
How do firms develop a positioning strategy & perceptual map?
- They determine consumers’ perceptions & evaluations of the product/service in relation to competitors
- They identify the market’s ideal points & market sizes for those products/services
- Identify competitors’ positions
- Determine consumer preferences
- Select the position
- Monitor positioning strategy
What are the five steps in the marketing research process?
- Define objectives & research needs
- Designing the research project, researches identify the type of data that are needed (whether primary/secondary)
- Deciding on the data collection process & then collecting data
- Analyze & interpret the data & develop insights
- Develop & implement an action plan
What are the various secondary data sources?
compromises information that has been collected from outside sources (ex: internet)
What are the various primary data collection techniques?
Qualitative:observations, in-depth interviews, and focus groups.
Quantitative: surveys, scanner, panel, and experiements
What is the difference between secondary research and primary?
Secondary is quicker, easier, and less expensive. Info for secondary can be dated, biased, or not specific enough. Primary research can be designed to answer specific questions, but can be expensive + time-consuming
What are the 5 V’s of big data?
volume, variety, velocity, veracity, and value dimensions
What is velocity in the 5 V’s?
Big data are collected & can be analyzed and accessed quickly
What is veracity in the 5 V’s?
Suggests that big data users must evaluate the accuracy and reliability of the collected data
What is value in the 5 V’s?
The more valuable the data to users, the better it is
What tools are used to analyze the big data?
descriptive, predictive, prescriptive, and active
What does descriptive analytics do?
Help firms organize, tabulate, and depict their available data
What does predictive analytics do?
Rely on historically available data to forecast the future
What does prescriptive analytics do?
Use simulations to find most effective/best result
What does active analytics do?
Use AI algorithms that are used to analyze input gathered by the Internet of Things
What components combine to produce the core customer value of a product?
Brand name, quality level, packaging, and additional features
What are the 4 groups that consumer products tend to be classified in?
speciality, shopping, convenience, and unsought products
What is a product mix’s breadth?
Breadth or variety entails the number of product lines that a company offers
What is a product line’s depth?
Depth involves the number of categories within one specific product line
What are the components of brand equity?
It summarizes the value that a brand adds or subtracts from the offering’s value. It comprises brand awareness, brand associations, and brand loyalty. Also encompasses the concept of perceived value
What are the various types of branding strategies used by firms?
Decide whether to offer manufacturer and/or private-label brands, they have a choice of using an overall family brand or a collection of product line/individual brands, can extend current brands to new products, firms can co-brand with another brand, can license their brands to other firms, reposition as marketplace changes
What is brand extension?
Using the same brand name for a new product that gets introduced into new or the same markets
What is a line extension?
An increase of an existing product line by the brand
Why do firms create new products?
Firms need to innovate to respond to changing customer needs, prevent declines in sales from market saturation, diversify their risk, can help firms improve their business relationships w/ suppliers and respond to short product life cycles
What is the diffusion of innovation theory?
can help firms predict which types of customers will buy their products/services upon introduction and later as they gain more acceptance in the market
How to market for services?
enhance service delivery with tangible attributes, like a nice atmosphere or price benefits. services get produced & consumed at the same time, so must work quickly
What are the components of a service strategy?
4 P’s + 3 other P’s: presentation, personnel, and processes
What are the four gaps in the service gaps model?
- knowledge gap –> difference between customers’ expectations & the firms perception of those expectations
- standards gap –> dif between firm’s perceptions of customer’s’ expectations & the service standards it sets
- delivery gap –> same thing as above, to close need to have adequate training & empowerment of employees
- communication gap –> actual service provided vs what is promised, closed by managing customer expectations & promising only what they can deliver
What are the five service quality dimensions?
- tangibles are the elements that go along with the service (magazines in a waiting room)
- empathy entails the provider’s recognition & understanding of needs
- assurance, reflects service provider’s own confidence in abilities
- responsiveness means the provider notes consumers’ desires & requests and then addresses them
- reliability refers to whether the provider consistently provides an expected level of service
What is the zone of tolerance?
the area between customers’ desired service & the minimum level of service they will accept. difference between what the customer really wants and what they will accept before going elsewhere
How do firms assess customers’ zone of tolerance?
determining the desired and expected level of service for each service dimension, their perceptions of how well the focal service performs and how well a competitive service performs, and the importance of each service quality dimension
What are three service recovery strategies?
- listening to customers and involving them in the service recovery
- providing a fair solution
- resolving the problem quickly
How to calculate revenue?
Price * Quantity
What are upstream decisions?
Strategic, high level planning. Help define what and why
What are examples of upstream decisions?
product innovation, defining brand’s mission, identifying potential customers
What are downstream decisions?
More tactical, focused on executing the strategy by engaging with customers & driving sales. Help define the how
What is market share?
% of a market accounted for by a specific entity
What is strategy?
how objective will be achieved
What are stars in market share BCG diagram?
They have high market growth rate & high relative market share. Think of airpods or apple watch
What are tactics?
day to day operations to succeed objective
What are cash cows in market share BCG diagram?
They have high market share, but low market growth rate. (Ex: milking a cow to get revenue - laptops)
What are dogs in market share BCG diagram?
Low market growth rate, low relative market share. Good item when created, but no longer used. Ex: iPod
What are question marks in market share BCG diagram?
Low market share, but high growth rate. Launched a product and unsure on how it will go. Ex: Vision Pros
What is market growth rate?
annual rate of growth of the specific market in which product is in
Why does probability sampling provide better predictive validity?
Every member of the population has a known, non-zero probability of being selected
What is convenience sampling?
no guarantee each member of the population will have the same chance of being included
Ex: only giving out surveys in Questrom
What do perceptual maps help with?
help see the white space - what matters to consumers, what makes you different, and what do consumers perceive of your brand
What is the positioning statement template?
For (target market) who (statement of need/opportunity), the (product name), is a (member of this category) that (delivers a differentiating benefit) and is unlike (primary competitors)
What does internal search mean?
searching within own knowledge
What is the universal set?
possible options available for a purchase decision, including ones a consumer isn’t aware of
What is the retrieval set?
a group of brands that readily come to mind when considering a purchase
What is evoked set?
a smaller subset of brands a consumer actively considers when making their final decisions - marketers goal is to be here
What is compensatory decision making?
trade-off approach, might have a bad attribute, but a really good benefit making up for it
What is non compensatory decision making?
if the option fails to meet the minimum criteria, it’s eliminated. No trade-ff
What is cognitive dissonance?
disconnect between values and something that happened - think of in class restaurant example
When is something kept in your long term memory?
if it’s relevant to you, it resonates, and is repetitive
Explain the hierarchy of effects model a purchase funnel (AIDA model)
Awareness (customer knows about your product) –> Interest –> Desire (creates emotional connection)–> Action. Model is broken into cognitive, affective, and behavioral
Explain affective, behavioral, and cognitive impact
Cognitive: Saw someone get eaten by a lion - awareness
Affective: Feel scared of lions (your emotions)
Behavioral: Only go out at night to avoid lions (actions bec of cognitive & affective)
What is Maslows hierarchy of needs?
consumers pay attention to products that help them to fulfill a relevant goal. Start with basic necessities, until you get to self-actualization (highest self)
How does BASES model work?
You begin with what consumers will say they will do (consumer response data), then you remove bias to compute adjusted purchase intent, then you adjust for what the marketer will do to influence consumers (awareness, advertising, distribution, ACV), and finally you assess financial impact (estimate manufacturer revenue using manuf selling price)
What is ACV?
All commodity volume, indicates how widely a product is distributed across all stores. The higher, the more stores carrying the product
When finding your target market number for BASES model, what rule should you use?
Use the 80/30 rule. Use 80% of definitely buy responses and use 30% of probably buy responses
Should you use open ended questions in a marketing survey?
No - they are hard to analyze
What scales should you use in marketing survey?
Fixed alternative scale (can be specific & quantifiable), dichotomous scale (yes/no - structured data), important scale (low to high value), opposites
What are double barreled questions?
Asking two things in one - “Do you like socks and scarves?”. Don’t ask these
What questions should you not include in a marketing survey?
double barreled, non exhaustive, non-mutually exclusive, leading questions
What is market saturation?
Other people will flood into market if low barrier to entry. Important because you will need to differentiate
What are the steps in the product development process?
idea generation, concept testing, product development, market testing, product launch, and evaluation of results
What is continuous innovation in the degree of new consumer learning needed model?
it is the low range of the scale.. it requires no new learning by consumers
What is dynamically continuous innovation in the degree of new consumer learning needed model?
It disrupts consumer’s normal routine but does not require total new learning
What is discontinuous innovation in the degree of new consumer learning needed model?
It is on the high end of the range. it requires new learning and consumption patterns by consumers . High risk, but high reward
What are premarket test?
Customers exposed, customers surveyed, and firm makes decision
What is test marketing?
Mini product launch, more expensive than premarket test, market demand is estimated
What are common mistakes when developing a product?
wrong market, little market research/unclear differentiation, product is too new/different, product is too expensive, not enough money for marketing
Why do you not make a lot of money in the beginning of a product launch?
You usually overspend on marketing & deal with various upfront costs
Who are innovators/enthusiast in the diffusion of innovation curve?
They start the popularity off when trying to get consumers to adopt to new technology.
Who are early adopters/visionaries in the diffusion of innovation curve?
They wait for reviews, but still want to be front of line for product
Who are early majority/pragmatists in the diffusion of innovation curve?
They are interested in trends, waiting for product to be more solidified
Who are conservatives/late majority in the diffusion of innovation curve?
They don’t give up till socially it feels weird they don’t have the product. Driven by FOMO
Who are laggards/skeptics in the diffusion of innovation curve?
They need to be convinced to buy product. Usually last ones to buy the product
What factors predict adoption of product?
relative advantage (extent to which the new product is superior to existing product), compatibility (extent to which the new product does not clash with existing values, behaviors, habits), complexity (extent to which the new product is complex, difficult to understand), trialability (extent to which new product can be experimented with and tried on a limited basis), and observability (extent to which people can observe the benefits of the new product)
