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48 Cards in this Set
- Front
- Back
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What is marketing?
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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 |
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Marketing's first task:
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Discover consumer needs.
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Marketing's second task:
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Satisfying consumer needs.
Find the right combination of: product, price, promotion and place |
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Four different orientations in the history of American business.
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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 |
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An organization that has Market/ Value orientation focuses its efforts on:
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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 |
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Environmental Scanning
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Acquiring info outside organization to identify and interpret potential trends
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Why is tracking trends important?
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Helps identify potential new product opportunities.
May explain consumer behavior. |
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Three levels of strategy in an organization
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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 |
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List the five forces in Porter's five forces model
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Industry competitiveness
Availability of substitute products Potential entrants (new competition) Supplier power Buyer power |
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Porter's five forces: Industry competitiveness
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Intensity of current competitors
Low intensity = higher profitability |
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Industry has low intensity when:
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There are few firms,
similar strategies, high product differentiation. Eg: commercial aircraft |
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Porter's five forces: Availability of substitutes
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Customers can choose a different product as a substitute
- Few or high substitutes = higher profitability |
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Examples of products with few substitutes
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Gasoline, medication
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Examples of products with many substitutes
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Fresh veggies, tech products
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Porter's five forces: Threat of potential entrants
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High barriers to entry = higher profitability
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- High barriers to entry exist when:
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- High capital requirements
- Economies of scale are present - High product differentiation - Network externalities Eg - the auto industry |
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Porter's five forces:
supplier and buyer power |
Lower bargaining power of suppliers/ buyers = higher profitability
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Lower bargaining power when:
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High numbers
Low information |
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Boston consulting group growth share matrix information
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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 |
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Good strategic orientation focuses on:
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Products - tangible goods
Top down strategy development Maximizing efficiencies and profit - involves standardization and often short term perspective |
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Need for service strategic orientation
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Growing economic importance
Services - services account for over 2/3 of US GDP and is growing - over 80% of US labor works in service Outsourcing - Manufactured components outsourced Information/ knowledge - Now the key source of competitive advantage - Easy access has led to commoditization of goods |
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Service Strategic orientation
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Focus on:
- Services - Bottom up strategic development - the consumer as a partner - Maximizing organizational learning - using customers, suppliers, distributors, etc |
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Service orientation implications
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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 |
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List the consumer buying process
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Problem recognition
information search evaluation of alternatives purchase decision post purchase behavior |
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innate needs
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Things that you need without any influence from society: phyiological needs such as food, water, etc
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Acquired needs
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Needs acquired from one's cultures/ society
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A trio of needs
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Power - individual desire to control environment
Affiliation - Need for friendship, acceptance, belonging Achievement - Need for personal accomplishment |
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Maslow's hierarchy of needs
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Physiological needs
Safety and security needs social needs ego needs self actualization |
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Identification of alternatives is determined by:
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-The ability to recall past experiences
- The consumer's confidence in recalled info - The costs of collecting more info |
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Consumer buying process - information search
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- internal sources
- group sources - Marketing sources - Public sources - Experiential sources |
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Evaluation of alternatives (including establishing criteria with which to make the evaluation)
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-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 |
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Consumer buying process: Alternative evaluation
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-Product/ service features or attributes
- Importance -Comparison - by attribute -Comparison - by alternative |
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Consumer buying process: Purchase decision
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- Specific product features
- Where/ when to make purchase - How to take possession - Method of payment |
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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 |
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Costumer satisfaction =
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actual performance - expectations = satisfaction
Raise satisfaction by lowering expectations |
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List factors that might affect the buying decision process
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- 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 |
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3 types of decision making
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-Routine
-Limited -Extensive |
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Routine decision making
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Low involvement
Few if any alternatives considered Example - most supermarket items |
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Limited decision making
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medium involvement
several alternatives considered example - small household appliances |
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Extensive decision making
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high involvement
Time and effort spent information search and alternative evaluation Example - automobile purchase |
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Correlational inferences
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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 |
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Ice cream study example of correlational inferences
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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.
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Country of origin effects
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If something is made in a certain country, it must be good (or bad)
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Heuristics
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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. |
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Hot guy
Fast car Hot girl Nurse or baseball MVP |
nurse- a much more common profession
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Availability Bias
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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 |
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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 |
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Anchor and adjustment
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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 |
