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48 Cards in this Set

  • Front
  • Back
What is marketing?
The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual organizational objectives.

The study of exchange
Marketing's first task:
Discover consumer needs.
Marketing's second task:
Satisfying consumer needs.
Find the right combination of:
product, price, promotion and place
Four different orientations in the history of American business.
Production era - Produce it and let the consumers come to you.
sales era - Produce it, then get consumers to buy it.
Marketing concept era - Find out what customers want, then produce it.
market/ value orientation era - Understand and create value for customers
An organization that has Market/ Value orientation focuses its efforts on:
1.Continuously collecting information about customers' needs and competitors' abilities
2.Sharing this information with all departments
3.Using the information to create customer value
Environmental Scanning
Acquiring info outside organization to identify and interpret potential trends
Why is tracking trends important?
Helps identify potential new product opportunities.
May explain consumer behavior.
Three levels of strategy in an organization
Corporate strategy- vision, corporate goals, philosophy and culture
Business strategy- Mission, business goals, competitiveness
Functional Strategy- Information systems, finance, R&D, Marketing, Manufacturing, Human Resources
List the five forces in Porter's five forces model
Industry competitiveness
Availability of substitute products
Potential entrants (new competition)
Supplier power
Buyer power
Porter's five forces: Industry competitiveness
Intensity of current competitors
Low intensity = higher profitability
Industry has low intensity when:
There are few firms,
similar strategies, high product differentiation.

Eg: commercial aircraft
Porter's five forces: Availability of substitutes
Customers can choose a different product as a substitute
- Few or high substitutes = higher profitability
Examples of products with few substitutes
Gasoline, medication
Examples of products with many substitutes
Fresh veggies, tech products
Porter's five forces: Threat of potential entrants
High barriers to entry = higher profitability
- High barriers to entry exist when:
- High capital requirements
- Economies of scale are present
- High product differentiation
- Network externalities

Eg - the auto industry
Porter's five forces:
supplier and buyer power
Lower bargaining power of suppliers/ buyers = higher profitability
Lower bargaining power when:
High numbers
Low information
Boston consulting group growth share matrix information
Star - industry leader
Question mark - not industry leader, but in a growing market
Cash cow - low industry growth, but very profitable, lots of sales
Dog - low growth, low market share
Good strategic orientation focuses on:
Products - tangible goods
Top down strategy development
Maximizing efficiencies and profit - involves standardization and often short term perspective
Need for service strategic orientation
Growing economic importance
- services account for over 2/3 of US GDP and is growing
- over 80% of US labor works in service
- Manufactured components outsourced
Information/ knowledge
- Now the key source of competitive advantage
- Easy access has led to commoditization of goods
Service Strategic orientation
Focus on:
- Services
- Bottom up strategic development - the consumer as a partner
- Maximizing organizational learning - using customers, suppliers, distributors, etc
Service orientation implications
Change in marketing's normative values
- Goods - centered view values tangibility, standardization and non perishability
- Services - centered view values customization, co production and continuous customer involvement
-Exchange value determined by the customer
List the consumer buying process
Problem recognition
information search
evaluation of alternatives
purchase decision
post purchase behavior
innate needs
Things that you need without any influence from society: phyiological needs such as food, water, etc
Acquired needs
Needs acquired from one's cultures/ society
A trio of needs
Power - individual desire to control environment
Affiliation - Need for friendship, acceptance, belonging
Achievement - Need for personal accomplishment
Maslow's hierarchy of needs
Physiological needs
Safety and security needs
social needs
ego needs
self actualization
Identification of alternatives is determined by:
-The ability to recall past experiences
- The consumer's confidence in recalled info
- The costs of collecting more info
Consumer buying process - information search
- internal sources
- group sources
- Marketing sources
- Public sources
- Experiential sources
Evaluation of alternatives (including establishing criteria with which to make the evaluation)
-Can be a single criterion or multiple criteria
-Multiple criteria typically are not weighted equally in a decision
- Consumers' evaluations are often incorrect due to inexperience or bias
Consumer buying process: Alternative evaluation
-Product/ service features or attributes
- Importance
-Comparison - by attribute
-Comparison - by alternative
Consumer buying process: Purchase decision
- Specific product features
- Where/ when to make purchase
- How to take possession
- Method of payment
Consumer buying process:
Postpurchase behavior
Postpurchase doubt is common because each of the alternatives considered has both advantages and disadvantages
Doubt typically increases with:
-the importance of the purchase
-the degree of similarity between the item selected and the item rejected
Doubt can be reduced by:
-Reassuring buyers through ads and personal communications
-providing quality post sale service
Costumer satisfaction =
actual performance - expectations = satisfaction

Raise satisfaction by lowering expectations
List factors that might affect the buying decision process
- The prospect can withdraw at any stage
- Stages may overlap
-Consumers are often involved in several buying decisions simultaneously
- The consumer's involvement level, the effort exerted, can vary
3 types of decision making
Routine decision making
Low involvement
Few if any alternatives considered
Example - most supermarket items
Limited decision making
medium involvement
several alternatives considered
example - small household appliances
Extensive decision making
high involvement
Time and effort spent
information search and alternative evaluation
Example - automobile purchase
Correlational inferences
Associations (negative or positive) between two attributes

Positive- the better the look of a car, the better its performance

Negative- the higher the cost of a car, the better the performance
Ice cream study example of correlational inferences
Fancy ice cream co. published nutritional info prior to it being legal and it actually helped sales because people wanted to see that the ingredients were real. They associated high fat with better taste.
Country of origin effects
If something is made in a certain country, it must be good (or bad)
Used to ease cognitive effort

A shortcut in the decision making process.

Example: Instead of comparing mp3 players on all features, one might just look at the ones under $175, or just buy the one with more memory, or just buy the ipod, etc

Can result in faulty evaluation processes called biases.
Hot guy
Fast car
Hot girl

Nurse or baseball MVP
nurse- a much more common profession
Availability Bias
The tendency to use information that is readily available

Beer and fast food - people likely to buy based on ad most recently seen.

People likely to buy a home security system after a co-workers house was robbed
If you sample a word from the english language, is it more likely to have a K as the third letter or first letter?

How about an re at the beginning or at the end?
K as the third letter

re at the end
Anchor and adjustment
First information becomes bias (the anchor) from which we adjust based on new info

Often we don't adjust enough.

MSRP is a common ploy in marketing