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324 Cards in this Set

  • Front
  • Back
The trade of things of value between buyers and sellers so that each is better off.
To serve both buyers and sellers, Marketing seeks to
1. To discover the needs and wants of prospective customers
2. Satisfy the needs and wants
4 different orientations in the history of American business
1. Production era(1800 - 1920)
2. Sales era (1920-1960)
3. Marketing era (1960-1990)
4. Customer era (1990 - today)

Each era has its own business worldview or paradigm
A set of asumptions, concepts, values, and practices that constitute a way of viewing reality of the community that shares them.
The overall perspective from which one sees and interprets the world.
The collection of beliefs about life and universe held by an individual or a group.
What is the goal of business?
Find a customers (Marketing Activities)
Keep the customers (Operation Activities)
(Acquire, Retain and Reward)
AMA Definition of Marketing
An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways the organization and its stakeholders.
Marketing (Definition from Textbook)
The process of developing, pricing, promoting, and distributing goods, services, and ideas to satisfy the needs of consumers.

*Marketing is NOT about advertising or selling.
The key to discovering and satisfying customers' needs is ...
the idea of exchange = each must be better off after the trade
Selective Listening
The tendency of customers to filter out all marketing noise when they are satisfied with the current condition.
The only approach that works today is...
Win-Win: Each party should be better off after the trade of things of value. You cannot create value for customers and build relationships any other way.
People with both the desire and ability to buy a specific product
Target Market
One or more specific groups of potential customers toward which an organization directs its marketing program.
The first task in any Marketing
Discovering customers' needs
The challenge of discovering customer needs
Nearly 94% of the 33,000 new consumable products (food, beverage, health and beauty, etc.) introduced each year do not succeed over the long run!
Solution to the challenge of discovering customer needs
Focus on Customer benefits.
Learn from the past.
A needs occurs when a person feels psychologicallydeprived of basis necessities, such as food, clothing, and shelter.
A felt need that is shaped by a person's knowledge, culture, and personality
Consumers' needs and wants
Marketing does not create person's needs but shape a person's wants.
To satisfy consumers' needs, firms must...
focus on their Target Market
The 4Ps: Controllable Marketing Mix Elements
1. Product
2. Price
3. Promotion
4. Place
Marketing Mix
The marketing manager's controllable factors - Product, Price, Promotion, and Place - that can be taken to solve a marketing problem.
Environmental Factors
Uncontrollable marketing factors such as social, economic, technological, competitive, and regulatory forces.
Customer Value
Buyers' benefits including quality, price, convenience, on-time delivery, and before- and after-sale service
3 strategies for customer value & building customer relationships
1. Best Price
2. Best Product
3. Best Service
Examples for 3strategy applications to build customer value and customer relationships
Best Price: Wal-Mart, Costco, SW Air, Dell
Best Products: Starbucks, Nike, Microsoft, J & J
Best Service: Lands End, Nordstroms, Home Depot
Relationship Marketing
Linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.
Marketing program
Plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.

Choice(s) from 3strategies
1. Best Price
2. Best Product
3. Best Service
Success Principle
Successful people have an insatiable to pursue what they do not know, and apply it to their life.

Less successful people, would rather talk about what they know, rather than pursue what they don’t know.
Law of unintended consequences
You don't know what you don't know
Marketing Program for Rollerblade
Three key benefits for customers
1. Fun
2. Fitness and health
3. Excitment
Four market segments for Rollerblade
1.Aggressive segment
2.Fitness segment
3.Recrational segment
4.Children segment
Marketing Mix element in marketing program
Each segment in the firm might have different Marketing Mix Element (4Ps) as its strategy
An organization can't satisfy the needs of all consumers, so it must focus on one or more subgroups, which are...
Target Market
Marketing Concept
Idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization's goal
Market Orientation
Focusing organizational efforts to collect and use information about customers' needs to create customer value
Societal Marketing Concept
View that organizations should satisfy the needs of consumers in a way that provides for society's well-being
Ultimate Consumers
people who use the goods and services purchased for a household
Organizational Buyers
Manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.
The 3 levels of strategy in organizations
1. Corporate
2. Business Unit
3. Functional
4. Department
The reward to a business firm for the risk it undertakes in offering a product for sale
Corporate strategies include;
Industry Dynamics
Competitive Analysis
Business Definition
Business Strategy
Values – Culture
Corporate Strategy Development
Deciding the scope and purpose of the business, it's objectives, initiatives, and resources necessary to implement.
A radical change in business models.
Southwest Airlines, Jet Blue
Firms become innovative with respect to their business models
Marketing Strategy
Guided by corporate strategy but this must be a two-way street. Marketing must inform corporate strategist about external changes in the market that identifies opportunities and threats.
Business Definition
The most important decision a business makes, and the process a business goes through to define and position itself in its competitive emvironment.
Business Definition implies...
that we will serve certain customers but no others, that we will provide certain products but not others.
Value Migration
migration of business from one to another
Shift in firms' business definition
As firms become more market oriented, strategy has shifted to reinventing the business model to deliver superior customer value
Example of Railroad Industry
“We are in the Railroad Business”
Describes the failure in developing its business definition which narrowed their view and falied to compete with other transportation systems.

Business Def. should have been
"We are in Transportation Business."
A principle, standard, or quality considered worthwhile and desirable. Values are defining. A value communicate what is important. Value form culture in organization.
Everyone and every organization has values. They are either intentionally defined and become the framework for how the organization operates, or they simply evolve.
A guiding image of success
Power of Vision
When people feel connected to something with a purpose greater than themselves, it inspires them to reach levels they otherwise would not achieve.
Important ability in leadership
The ability to cast vision to motivate people in the direction of a common cause is a critical component of Leadership
A statement of the organization's scope, often identifying its customers, markets, products, techonology, and values.
A mission statement should be...
Clear, Succinct, representation of the enterprise's purpose for existance. It should incorporate socially meaningful and measurable criteria.
Disney “To make people happy.”

Mary Kay “To give unlimited opportunity to women.”
Wal-Mart “To give ordinary folk the chance to buy the same thing as rich people.”
3M “To solve unsolved problems innovatively.”
These are the examples of...
Mission statements
It converts the mission statement into targeted levels of performance to be achieved, often by specific time.
Successful Principle regarding Goals
You cannot control outcomes, you can only control activites that lead to outcomes
Goals should be;
Sales (dollars or units)
Market Share
Customer Satisfaction
Employee Welfare
Social Responsibility
- These are the types of...
Strategic Directions must focus on...
1. Customers
2. Competencies
3. Competitors
An organization's special capabilities including skills, technologies, and resources that distinguish it from other organizations. It should be distinctive enough to provide competitive advantage, a unique strength relative to competitors, often besed on cost, quality, time, or innovation.
Example: Lands' End's unconditional gurantee for its producs and acceptance of any return is an example of...
Customer focus of the firm which set its strategic direction.
Business Portofolio Analysis
The quantified performance measures and growth targets to analyze a firm's strategic business unit as though they were a collection of separate investments.
Business Portofolio consists of 4 measurements, which are...
1. Cash Cow: Low Market Growth Rate and High Relative Market Share
2. Stars: High market growth rate and high relative market share
3. Dogs: Low Market growth rate and low market share
4. Question Marks: Low market share and high market growth rate
Cash Cows
SBUs (strategic business units)that typically generate large amounts of cash, far more than they can invest profitably in their own product line. They have a dominant share of a slow-growth market and provide cash to pay large amount of company overhead and to invest in other SBUs.
SBUs with a high share of high-growth markets that may need extra cash to finance teir own rapid future growth.
Questionmarks / Problem Children
SBUs wich a low share of high growth market. They require large injection of cash just to maintain their market share, much less increase it. Managers need to choose the right one to invest.
SBUs with a low share of low-growth markets. Although they might generate enough cash to sustain theselves, they do not hold the promise of ever becoming real winners for the firm.
4 alternative strategies for SBUs
1. Build
2. Hold
3. Harvest
4. Divest
Purpose of Business
To build its Sustainable Competitive Advantage, which is attained through building a good relationship with customers
Market Product Analysis
The way to view growth opportunities in terms of markets and products (Current Product and New product, Current market and new market)
Market Penetration
Increasing sales of present products in its existing market (Current Product in a current market)
- Market Product Analysis
Market Development
Selling existing products to a new market
(Current Products to new markets)
Product Development
Selling a new product to a existing market
(New products to existing markets)
Developing new products and selling them in new markets.
(New products to new markets)
4 alternative strategies to expand the revenue
1. Market penetration
2. Market development
3. Product development
4. Diversification
The most failed strategies of 4 alternative strategies attained from a Market-Product Analysis is...
Strategic Marketing Process
Approach whereby an organization allocates its marketing mix resources to reach its target markets
Marketing Plan
Road map for the marketing activities of an organization for a specified future period of time
Strategic Marketing Process consist of;
1. Planning Phase
(--> Marketing Plan)
2. Implementation Phase
(--> Result)
3. Control Phase
Planning phase of marketing process involve;
1. SWOT situation analysis
2. Market-product focus and goal setting
3. Marketing Program
Situation Analysis
taking stock of where a firm or product has been recently, where it is now, and where it is headed.
SWOT analysis
Organization's appraisal of its internal Strengths and Weaknesses and its external Opportunities and Threats
Step 1 in the Planning phase of the Strategic marketing process include the following processes;
Situation SWOT Analysis
1. Identify industry trends
2. Analyze competitors
3. Assess own company
4. Research customer
Step2 in the Planning phase of the Strategic marketing process include the following processes;
Market-product focus and goal setting stage
1. set market and product goals
2. select target market
3. find points of difference
4. position the product
Step3 in the Planning phase of the Strategic marketing process include the following processes;
Marketing program stage
1. Develop the program's marketing mix (4P)
- Price strategy
- Product Strategy
- Promotion strategy
- Place strategy (distribution )
2. Develop the budget by estimating revenues, expenses, and profits
Strength in SWOT analysis describe...
the firm's favorable & internal factor
Weakness in SWOT analysis describe...
the firm's unfavorable & external factor
Opportunity in SWOT analysis describe...
Favorable & External factor of the firm
Threats in SWOT analysis describe...
Unfavorable & External factor concerning the firm
"Consumer concern with fatty desserts; B&J customers are the type who read new government-ordered nutrition lables." This is the example of...
Threats (External & Unfavorable factor the firm possess)which is analyzed through SWOT analysis.
Elements of Marketing Mix that comprise a cohesive marketing program;
1. Product strategy: features, brand name, packaging, service, warranty
2. price strategy
3. promotion strategy: advertising, personal selling, sales promotion, publicity
4. Place strategy: outlets, channels, coverage, transportation, stock level
Profit is a reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm's total expenses are subtracted from total sales.
Organizational Culture
A set of values, ideas, and atitudes that is learned and shared among members of an organization.
Market Share
The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
Market segmentation
the aggregating (sorting) potential buyers into groups, or segments, that have common needs, and will respond similarly to a marketing action
Step2 of the planning phase in the strategic marketing process, the firm can identify its target by...
Market segmentation.
Points of differences
Those characteristics of a product or service that make it superior to competitive substitutes.
In the process of Market-product focus and goal setting, it is important to find...
Points of difference
(Those characteristics of a product that make it superior to competitive substitutes)
high quality, long life, reliability, ease of use, and low cost
Marketing Strategy
the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it.
Marketing tactics
Detailed day-to-day operational decisions essential to the overall success of marketing strategies.
Implementation Phase of the Marketing strategy process includes;
1. Obtaining resources
2. designing the marketing organization
3. developing schedules
4. executing the marketing program
"Launch a new product targeted at GenY" this is the example of...
Marketing strategy decision
"Form a cross-functional team to work on the gadget" this is the example of...
Marketing tactics
Success is..
doing a whole bunch of little things, right, over a long period of time.
Environmental Scanning
Process of acquiring information on events outside the organizxation to identify and interpret potential trends
Environmental trends typical arise from 5 sources;
1. Social
2. economic
3. technological
4. competitive
5. regulatory forces
Environmental forces affect
-its suppliers
-its customers
Social Forces
the environment includethe demographic characteristics of the population and its values. Changes in these forces can have a dramatic impact on marketing strategy.
A population according to characteristics such as age, gender, ethnicity, income and occupation
Mature household
household headed by someone over 50 years of age
Population Shifts in 1990s
A major regional shift in the U.S. population toward western and Sun Belt states occured in the 1990s. (Nevada, Arizona, Colorado, Utah, Idaho grew significantly)
Population shits within states
CMSA: Consolidated metropolitan statistical area, conrtining PMSA

PMSA: primary metropolitan statistical area, containing MSA

MSA: Metropolitan Statistical Area (the Center of the city)
Racial and Ethinic Diversity impact on marketing
marketers who recognize and respond to diversity in the U.S. population will be rewarded for their efforts because consumer needs will be better satisfied.
a set of ideas and valued that are learned and shared among the members of a group
Baby boomers
Generation of children born between 1946 and 1964
Generation X
members of the U.S. population born between 1965 and 1976
Generation Y
Americans born after 1976, the year that many baby boomers began having children
Generation or Age cohort
a group of persons who experienced a common social, political, historical, and economic environment.
Cohort Analysis
The process of describing and explaining the attitudes, values, and behaviors of an age group as well as predicting its future attitudes, values, and behaviors.
Mature Market
Age groups of age 50 and over;
- Babyboomers (1946-1964)
- Postwar (1928-1945)
- WWII generation (19221927)
- Depression (1912-1921)
- Pre-depression (before 1912)
Age groups
- Babyboomers (1946-1964)
- Gen.X (1965-1976)
- Gen.Y (1977-Now)
- Millenials
Four segments in mature market
- Healthy Indulgers (7 million, rapidly growing)
- Ailing Outgoers (18 million)
- Health Hermits (20 million)
- Frail Recluses (18 million)
Pre-depression Generation
born before 1930
living through Depression, WWII, and witnessing radical social, economic, and technologic change throughout their lives.
Pre-depression Generation's attributes
- conservative
- concerned with financial and personal security
Attrbutes of Depression Generation
born between 1930-1945
- grown up with music and TV
- 60's music
- active lifestyle
- breaking with sterepotypical old cutomers
Babyboom generation
Born between the end of WWII and 1964
80million (preceding more than 2 of the formar generations combined)

- influenced by JFK assasination
- Vietnam War, cold war
- recreational drugs
- the sexual revolution
- the enregy crisis
- rapid growht of divorce
- Beatles, Rock'n roll, beachboys
Babyboomers' attributes
Compared to formar generations, babyboomers are...
- higher income
- higher education
- more tech savvy
- difining retirement differently
Marketer's view of Babyboomers;
- strong market for "anti-aging" products, travel, and financial services
- often alienated by overly youth-oriented appeals in ads.
Generation X
- born between 1965 and 1976
- Grown up in the difficult economic condition in the U.S.
- first generation to be raised by mainly dual-career households
Marketers' view of generation X
- consumers who are self reliant, entrepreneurial, supportive of racial and ethnic diversity and better education than any previous generation.

- Xgen women are more educated than Xgen men
- Xers are getting married, having families and facing the pressure of these events
- Reaching Xers requires special attention to media, especially online.
Generation Y (echoboom generation)
- characterized by strong sense of independence and autonomy
- assertive, self-reliant, emotionally and intellectually expressive, innovative, and curious.
- muti-racial generation, with black and hispanic often being fasion leaders
Attributes of Generation Y
-compose of 2 markets; teens and twenty's
-expected to have the highest education of previous generations with the income levels to follow
- very tech savvy with media option including internet, cell phones, and video games
- a strong market for automobiles with brands
e.g. Toyota creating edgy and affordable models such as the Scion to target them
- the newest generations born after 1994 with estimated 62 million people by 2010
- Tweens: marketers are increasingly targeting older millenials (8-14)going after early loyalty and hefty allowances (e.g. DKNY)
Income, expeditures, and resourcevs that affect the cost of running a business or household
Economic forces
- Macroeconomic conditions
- Microeconomic conditions
Consumer income include;
- Gross income
- Disposable income
- discretionary income
3 major economic forces include;
1. Macroeconomic conditions
2. Microeconomic conditions
3. Consumer income
Macroeconomic forces include;
inflation, unemployment, all other dynamic effects of economy
Gross income
total amount of money made in one year by a person, household, or family unit
Disposable income
Money that remains after paying taxes. (gross income - taxes)
Discretionary income
money that remainsafter paying for taxes and necessities. Used for luxury items such as vacations, etc.
Most discretionary income is holded by;
baby boomers
Technological forces
inventions from aplied science or engineering research.
Techonology have significant impacts in marketing in ways that;
1. derease in cost lead to declined price, which lead customers to assess value on the basis of other dimensions such as quality, service, and relationships
2. development of new product
3. changes in existing products and the ways they are produced may be changed
information-and-communication-based electronic exchange environment occupied by digitized offerings.
activity that uses electronic communication in the marketing of goods or services
Recent development in technologies that significantly affected marketing are;
- internet
- intranet
- extranet
- e-commerce
- market space
Alternative firms that could provide a product to satisfy a specific market's needs
4forms of competitions are;
1. pure competition
2. monopolistic competition
3. oligopoly
4. pure monopoly
Small businesses in the U.S. should be considered to be...
all firm's competitors
Regulations that are made to protect competition are;
- Sherman Antitrust Act
- Clayton Act
- Robinson Patman Act
Product-related legislations that are meant to protectcompanies are;
- Patent law
- Copyright law
- Digital Millennium Copyright Act (1998)
Product-related legislations that are meant to protect consumers are;
- Nutritional Labeling
- Consumer Product Safety Act (1972)
- Consumerism
Product-related legislations that are meant to protect both companies and consumers are;
- Landham Act
- Trademark Law Revision Act
- Madrid Protocol
- Federal Dilution Act
Distribution-related legislations are;
- Exclusive Dealing
- Requirement Contracts
- Exclusive Territorial Distributorship
- Tying Arrangement
an alternative to government control where an industry attempts to police itself
About 80 percent of start-up businesses fail within five years. What reasons explain Flyte Tyme’s continuing success?
- Artists selection based on the target which is determined through marketing analysis.
- Domain knowledge
- Purely based on “the best idea wins”
The 15% of the U.S. population born between 1965 and 1976 is classified as;
X generation
72 million Americans born between 1977 and 1994 are classified as;
Y generation
Muticultural Marketing consists of;
Combination of marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyle of different races.
Ristrictions state and federal laws place on businesses with regard to conduct of its activities
Grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
The moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas.
The mental lens through which you interpret reality.
A filter you use to put things into context and develop an appropriate respones.
A society's values and standards that are enforceable in the courts.
Current Perceptions of Ethical Behavior;
There has been a public outcry about the unethical practices of businesspeople. Public opinion polls show:

58% of U.S. adults rate ethical standards of business executives as “fair” or “poor.”
b. 90% think white-collar crime is “very common” or “somewhat common.”
c. 76% say the lack of ethics in businesspeople contributes to tumbling societal moral standards; only the U.S. government is viewed as less trustworthy than corporations.
Possible reasons for the current state of perceived business ethical conduct;
1.Increased pressure on businesspeople to make decisions in a society characterized by diverse value systems.
2. Growing tendency for business decisions to be judged publicly by groups with different values and interests.
3. Ethical business conduct may have declined.
A framework for understanding ethical behavior consists of;
- societal culture and norms
- business culture and industry practices
- corporate culture and expectations
- personal moral philosophy and ethical behavior. This is influenced by the culture defined above (Societal, Business, Corporate culture)
An individual's worldview is typically...
Developed by 13
shaped by age of 20
Difficult to be changed after 20
Societal culture
Culture serves as a socializing force that determines what is morally right and just.
The set of values, ideas, and attitudes that are learned and shared among members of a group.
Moral standards can be...
different in different cultures, which can create moral dilemmas between different societies
Societal values affect..
ethical and legal relationships among individuals, groups, business institutions, and organizations.
In the U.S., the unauthorized use, reproduction, or distribution of another’s intellectual property (copyright, trademark, or patent) is...
both unethical and illegal.
Business Cultures
The effective rules of the game, the boundaries between competitive and unethical behavior, and the codes of conduct in business dealings.
Business Culture deal with two major ethical issues;
1. Ethics of exchange
2. Ethics of competition
Ethics of exchange
Exchange between a buyer and a seller should result in both parties being better off after a transaction.
caveat emptor
The legal concept of "let the buyer beware", which was believed before 1960s.
Consumer Bill of Rights
Codified the ethics of exchange between buyers and sellers, including right to
to be informed,
to choose, and
to be heard.
(outlined by JFK in 1962)
The U.S. Consumer Product Safety Commission checks the safety of 15,000 consumer products.
This is one of the protection for consumer outlined in
Consumer Bill of Right
Marketers have a responsibility to give consumers complete and accurate information about products and services. This is protected consumers right in...
Be informed
Consumer Bill of Rights
Consumers should have access to public-policy makers to make complaints about products and services.This is protected right outlined in...
Be heard
Consumer Bill of Rights
Ethics of competition
1. Espionage
2. Bribery
3. Kickbacks
the clandestine collection of trade secrets or proprietary information about a company’s competitors. It is both illegal and unethical.
trespassing, theft, fraud, misrepresentation, wiretapping, searching competitors’ trash, and violations of written and implicit employment agreements with non-compete clauses are the examples of...
Bribes & Kickbacks
Giving and receiving bribes (when money is paid before an exchange occurs) or kickbacks (when money is paid after an exchange occurs) is considered unethical behavior in American business culture.
Federal Trade Commission
A commission that plays an active role in educating consumers and businesses about the importance of personal information privacy on the internet.
Corporate Culture
The shared values, beliefs, and purpose of employees that affect individual and group behavior.
The dress, manner of work, and compensation of its employees reflect...
Corporate Culture
Codes of ethics
A formal statement of ethical principles and rules of conduct.
Workers sometimes violate ethics codes because of ...
how they perceive the behavior of top management and co-workers.
Employees who report unethical or illegal actions of their employers
8 Governing Ethical Principles
1. Fiduciary principle
2. property
3. reliability
4. transparency
5. Dignity
6. fairness
7. citizenship
8. responsiveness
Diligence, Loyalty is outlined in..
Fiduciary principle
Protection, Theft are mentioned in...
property principle
contracts and committment is mentioned in...
the reliability principle
Truthfulness, Deception, Disclosure, Candor, Objectivity of the firm is mentioned in...
the transparency principle
Respect for the Individual, Health and Safety, Privacy and Confidentiality, Use of Force, Associatiation & Expression, Learning & Development, Employment Security is mentioned in...
the dignity principle
Fair Dealing, Fair Treatment, Fair Competition, Fair Process is mentioned in ...
the Fairness principle in the 8 governing ethical principle.
Law & Regulation, Public Goods, Cooperation with Authorities, Political Noninvolvement, Civic Contribution are mentioned in..
the citizenship principle
Addressing Concerns, Public Involvement is mentioned in...
the responsiveness principle
Ethical choices are based on...
the personal moral philosophy of the decision maker.
A person’s moral philosophy is:
Learned through the process of socialization with friends and family, and by formal education, influenced by the societal, business, and corporate culture.
One's conscious determines.
The Stewardship Principle
Whoever is a good steward with the “little things”, will be rewarded with more. (Opportunities, Responsibilities, Compensation, Recognition)
Moral Idealism
moral philosophy that consider certain indvidual rights or duties as universal, regardless of the outcome
Moral philosophy that focuses on the "greatest good for the greatest number"
- View assessing the costs and benefits of the consequences
Social Responsibility
Idea that organizations are part of a larger society and are accountable to that society for their actions.
Profit Responsibility
A Company has a simple duty - maximizing profits for their owners or stockholders.
Stakeholder responsibility
the obligations an organization has to those who can affect achievement of its objectives (customers, employees, suppliers, and distributers)
It occurs when a company makes excessive profits, usually by taking advantage of a shortage of supply to charge extremely high prices.
Cause Marketing
Tying the charitable contributions of firm directly to sales produced through the promotion of oneof its products.
Green Marketing
Marketing efforts to produce, promote, and reclaim environmentally sensitive products.
Social Audit
Systematic assessment of a firm's objectives, strategies, and performance in the domain of social responsibility
Subjective, relative to particular groups
objective and universally valid
Consumer Behavior
actions a person takes in purchasing and using products and services
Purchase Decision Process
stages a buyer passes through in making choices about which products or services to buy;
1. Problem recognition
2. Information search
3. evaluation of alternatives
4. purchase decision
5. postpurchase behavior
Problem recognition
= perceiving a need
The initial step in the purchase decision, occurs when a person realizes that the difference between what he or she has and what he or she would like to have.
Marketers technique to let customers recognize problem (wants)
In marketing, advertisements or salespeople can activate a consumer’s decision process by showing the shortcomings of competing or currently owned products.
Information Search
= seeking value
A consumer begin to search for information about what product or service might satisfy the newly discovered need.
1. Internal search
2. External search
Internal search
scanning one’s memory for previous experiences with products or brands. Internal search is often sufficient for frequently purchased products.
External search
necessary when past experience or knowledge is insufficient, the risk of making a bad decision is high, and the cost of gathering information is low.
Primary source of external information about purchase decision;
1. Personal sources (relatives, friends)
2. public sources (consumer reports, government agencies)
3. marketer dominated sources (information from sellers, ads, websites, salespeople, displays at stores)
Alternative Evaluation
= assessing value
The information stage clarifies the problem for consumers by:
1. suggesting criteria
2. suggesting points to consider
3. developing consumer value perceptions
Evaluative criteria
= attributes
Both the objective attributes of a brand and the subjective ones you use to compare different products and brands
Evoked set (consideration set)
the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware
Word of mouth
The power of word of mouth influence is well known in marketing.
Focusing on customer satisfaction which leads to the power of word of mouth will result in
increase in sales along with decrease on Marketing Expense
Brand Loyalty can be
a shortcut to mind of customers in purchase-decision making process
New car buyers have fairly well-defined evaluative criteria.
1. warranty/gurantee
2. ease of maintainance
3. quality compared to other brands
Purchasing decisin (buying value)
In this stage, two remained choices are;
1. from whom to buy
2. when to buy

The Internet adds a technological dimension to the consumer decision process by allowing consumers to gather information, evaluate alternatives, and make buying decisions
Postpurchase behavior
after buying a product, the consumer compares it with his or her expectations and is either satisfied or dissaisfied.
What affects customer's perceives after purchasing a product?
A company's sensitivity to a customer's consumption experience.
Satisfied buyers tell 3 other people about their experience, while dissatisfied ones complain to...
9 people.
Satisfied buyers tend to...
Buy from the same seller each time a purchase decision arises, creating a huge financial impact.
Many firms focus attention on postpurchase behavior to maximize customer satisfaction and retention by offering...
Toll-free telephone numbers, liberalized return policies, and engaging in staff training to handle complaints.
Consumers, faced with two or more highly attractive alternatives and purchasing one of them, may ask the question, “Should I have purchased this?” This feeling of postpurchase psychological tension or anxiety is called
Cognitive Dissonance
After a purchase, consumers seek to ...
affirm their choice, often seeking information or approval from others or reading ads or reviews about the brand chosen.
Firms often use ads or follow-up calls from salespeople in the postpurchase stage to...
Try to comfort buyers that they made the right decision.
personal, social, and economic significance of a purchase to the consumer
Consumers might skip or minimize one or more steps of purchase-decision making process when...
the level of involvement is low.
High-involvement purchase typically...
- are expensive
- can have serious personal consequences
- could reflect on one's social image
When the purchase has a high level of involvement...
Consumer engage in extensive information search, consider many product attributes and brands, form attitudes, and partcipate more in word-of-mouth communication
For routine product, consumers tend to...
skip steps of purchase-decision process since the level of involvement is low.
Routine problem solving is typically the case for...
low-priced, frequently purchased products.
consumers typically seek some information or rely on a friend to help them evaluate alternatives when they use...
Limited problem solving
Consumers spend little time for research.
Situational influences include;
1. the purchase task
2. social surroundings
3. physical surroundings
4. temporal effects
5. antecedent states
Purchase task
the reason for engaging in the decision in the first place affect the purchase decision process
Social surroundings
Others present when making a purchase decision affect the purchase decision process.
Physical surroundings
Decor, music, and crowding in retail stores may alter how purchase decisions are made.
Temporal effects
such as time of day or the amount of time available will influence on purchase decision.
Antecendent states
the consumer's mood or the amount of cash on hand, can influence purchase behavior and choice
energizing force that stimulates behavior to satisfy a need. Markets try to arouse these needs
Hierarchy of needs
1. Physiological needs
2. Safety needs
3. Social needs
4. Personal needs
5. Self-actualization
The need which is basic to survival and must be satisfied first...
Phyichological needs
The need which involve self-preservation and physical well-being...
Safety needs
The need which is concened ith love and friendship
Social needs
The need for achievement, status, prestige, and self-respect...
Personal needs
needs for self-fulfillment...
self-actualization needs
Universal principles of persuation
1. Reciprocity
2. Scarcity
3. Authority
4. Consistency
5. Liking
6. Consensus
people feel obligated
Reciprocity Principle
feeling obligated to return what we have received.
Small gift up front better than promise of gift later. This is explained by...
Reciprocity principle
Tip a waiter gets went up when he start giving customers mints. This is explained by...
Reciprocity principle
Scarcity principle
Something that is scarce is more desirable than when it is ready supply.
Marketing technique to sell products in their "limited edition" is explained by...
Scarcity principle
Authority principle
Belief that If an expert says it, it must be true. The authority figure must be credible.
- Knowledgeable
- Trustworthy
or can be manipulated through Skillful communication
Packaging saying "FDA approved" or "Dr. recommend…" is using the principle of...
Consistency principle
Get people to take a first step and they will continue. Customers tend to be consistent in purchase-decision.
- Committment principle: loyalty is built along with the consistency of customers
Liking principle
Manipulating likable character by the uses of;
-Cooperative efforts
We have tendency to like people who like us.
The company holding parties for customers frequently uses the principle of...
Physical Attractiveness plays an important role in interviews according to the principle of...
someone's consistent behaviors or responses to recurring situations.
Typical key traits that describe personalities are...
Description of Social Norms – what others like us do.
“everyone has it” “everyone does it” so you do it. This is the example of...
The process by which someone selects, organizes, and interprets information to create a meaningful picture of the world.
Selective perception
The process of filtering the information so that only some of it is understood or remembered or even available to the conscious mind.
Selective Exposure
It occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent.
Selective exposure often occurs in the stage of...
Postpurchase, when the consumer read the ads for the brand he or she just bought.
Selective comprehension
interpreting information so that it is consistent with your attitudes and beliefs.
Naming a product that can be understood easily is important because of customers'...
selective comprehension effect
Selective retention
consumers do not remember all the information they see, read, or hear, even minutes after the exposure to it. This affects the internal and external research stage.
Furniture and automobile retailers often give consumers product brochures to take home after they leave the showroom because customers have...
Selective retention effect
Most of problems today are not technical, but they are..
relational - personalities clashes among employees, customers or partners.
Perceived risk
Anxiety felt when a consumer cannot anticipate possible negative outcomes of a purchase.
Companies offering free-trials are trying to overcome customers tendency called..
Perceived risk
Warranties and guarantees ease the customers'...
perceived risk
behaviors that result from repeated experience or reasoning
Behavioral learning
the process of developing automatic response to a type of situation built up through repeated exposure to it
Four variables in behavioral learning...
Cognitive Learning
making connections between two or more ideas or simply observing the outcomes of others' behaviors and adjusting your own accordingly.
Repetition in advertising, messages such as "Advil is a headache remedy" attempt to link a brand and the idea of headache remedy. This is the use of...
cognitive learning
Brand Loyalty
favorable attitude toward and consistent purchase of a single brand over time
tendency to respond to something in a consistently favorable or unfavorable way. Learned predisposition to respond to an object or class of objects in a consistent way.
consumer's perceptions of how a product or brand performs
Attitude Changing approach
1. Changing belifs about the extent to which a brand hascertain attributes
2. changing the perceived importance of attributes
3. adding new attributes to the product
Cologate included a new anti-bacterial ingreadient in it toothpaste and marketed the brand. The company was trying to...
adda new attribute to the product to change consumers' attitude towards the brand.
A way of living that is identified by
1. activities: how people spend their time and resources 2. interests: what they consider important in their environment
3. opinions: what they think of themselves and the world around them
The analysis of consumer lifestyles
Psychographics that identifies 8 interconnected categories of adult lifestyles
VALS psychographic segments
1. Thinkers
2. Experiencers
3. believers
4. makers
5. achievers
6. innovators
7. strivers
8. survivors
Opinion leaders
individuals who have social influence over others
people influencing each other by personal conversations
Use of actresses/ actors in ads is the use of...
opinion leaders
reference groups
people to whom an individual looks as a basis for self-appraisal or as a source of personal standards
Family Life Cycle
Family's progression from formation to retirement, each phase bringing with it distinct purchasing behaviors
subgroups within the larger, or national, culture with unique values, ideas, and attitudes
Consumer socializing
the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers
Children lean how to purchase by interacting with adults is the example of...
consumer socializing
Reference groups affect consumer purchases because
they influence the information, attitudes, and aspiration levels that help set a standard
Clayton Act
1914 federal consumer protection legislation that prohibits certain monopolistic practices and other impediments to free market competition, including price discrimination, mergers that may lessen competition, tying agreements and exclusive dealings.
Robinson-Patman Act
1936 federal amendment to the clayton act that prohibited specific forms of price discrimination not adequately addressed by the Clayton Act.
Sherman Antitrust Act
Federal legislation passed in 1890 prohibiting "monopolies or attempts to monopolize" and "contracts, combinations, or conspiracies in restraint of trade" in interstate and foreign commerce.
regulatory forces for Consumer protections
Nutritional Labeling
consumer product safety act
Exclusive Dealings refers to;
when a retailer or wholesaler is ‘tied’ to purchase from a supplier on the understanding that no other distributor will be appointed or receive supplies in a given area. When the sales outlets are owned by the supplier, exclusive dealing is because of vertical integration, where the outlets are independent exclusive dealing is illegal due to the Restrictive Trade Practices Act
Requirements Contracts
Requirements contracts are contracts in which one party agrees to supply as much of a good or service as is required by the other party. For example, a grocery store might enter into a contract with the farmer who grows oranges under which the farmer would supply the grocery store with as many oranges as the store could sell. The farmer could sue for breach of contract if the store were thereafter to purchase oranges for this purpose from any other party.
Tying arrangement;
An agreement in which a vendor conditions the sale of a particular product on a vendee's promise to purchase an additional, unrelated product.