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85 Cards in this Set
- Front
- Back
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Maslow's Five Hierarchy of Needs
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1. Physiological – things we need to survive (ie. food)
2. Safety- housing security. 3. Social needs- friendship, love 4. Esteem- self respect, status 5. Self-Actualization – artistic, enriching experiences |
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Difference between needs and wants
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Needs are general deprivations of drives.
Wants are specific satisfiers of those needs. |
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Consumers choose solutions based on what three perceptions?
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1. Value
2. Satisfaction 3. Quality |
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What is the goal of marketers in terms of a consumers' wants and needs?
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They need to understand and manage consumer expectations and product performances, making sure the performances are at least as good as the expections.
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What is the meaning of value to a consumer?
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The perception of quality in relation to price.
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Why do firms value long-term relationships with their customers?
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1. Gain information
2. Do a better job of satisfying the customer. 3. Switching costs increase for the consumer - making switching less likely 4. Lower cost to retain an existing customer vs. attracting new customer 5. For customer, staying generally exceeds that of a new provider. |
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What is the theory of competitive rationality?
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The idea that customers are always evolving and marketers need to come up with new solutions to adopt to evolving consumer tastes.
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Why do marketers focus on future needs of the market?
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Because other sellers are watching. As soon as they are successful, others start to copy. Sound strategy can be built to copying others.
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How do radical ideas and innovations gain a competitive advantage?
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They change the definition of the market and its competitors. (example: Apple iPod and iPhone)
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What is the goal of the marketing concept?
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Approach doing business to use satisfaction of the consumers wants and needs as the guide to all aspects of the firm.
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What is "marketing myopia"?
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The tendency of firms to focus narrowly on the nature of their products and the processes by which those products are made, ignoring the likelihood those products were not what people might want.
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How has the American Marketing Associations definition of marketing changed since 1985 to 2008?
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The recent definition is more general, more strategic, and more basic to definition and direction of the firm.
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What is Product orientation?
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-Firm defines quality
-Excellence in engineering research and development |
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What is Production Orientation?
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Focused on keeping costs low through efficiencies of production
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What is Selling orientation?
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Focused on persuading the consumer to buy the firm’s product
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What is society orientation?
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Focused on meeting the long term wants and needs of society in general. Marketers who focus on social and environmental causes.
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What is the job of marketing management?
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To increase the number or the value of the exchanges (sell more), but, not always. Sometimes they want to shift demand.
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What are the 4 P's?
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Product, Price, Promotion, and Place (distribution)
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What is strategic planning?
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Simply a way to get from where you are to where you want to be, given your knowledge of what lies between those two
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What characteristics should strategic objectives have?
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They should be specific; attainable, but not easily so; and measurable.
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What is the micro-environment?
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The key players in its market—customers (both resellers and ultimate consumers), suppliers, direct competitors, indirect competitors (producers of substitutes), and colleagues (banks, advertising agencies, insurers, etc.)
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What is the macro-environment?
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The macro-environment comprises the rest of the world, generally categorizing relevant trends or issues into technology, economy, regulatory, and social factors.
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What must good strategy take into account?
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The best strategy must take into consideration good estimates of what competitors, customers, suppliers, etc. are going to do, and the value of any relevant factors in the world at large.
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What does SWOT stand for?
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Strength and Weakness, Opportunity and Threats
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What variables are “key”? (Strategy)
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1. Must be important - have an important variable that the organization can define.
2. Plan to deal with uncertainty- have plans for different outcomes. |
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What are the four combinations that can be exploited for growth?
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1. Market penetration
2. Market development 3. Product Development 4. Diversification |
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Why are low growth markets likely to present better profit potential?
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Because low growth means less competition, which means lower levels of competitive marketing, which means less marketing cost. And, low growth markets are mature markets, which means the consumer and all the market players are fully informed, which means less investment in building and maintaining the market.
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Why is market share related to profit?
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Obviously, larger firms in a market make more profit than smaller firms; but, why do they have higher ROI? Economies of scale—larger firms get discounts on purchases and transportation.
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Michael Porter refers to two viable business strategies, what are they?
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1. Cost leadership (Wal Mart)
2. Basis of differentiation (Whole Foods) |
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What is the blue ocean strategy?
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Blue ocean strategy is an attempt to create market space by redefining the market, rather than outperforming the competition.
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What are the four GOALS of the Marketing Information System?
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(1) It must assist managers in assessing information needs. (2) It must develop and store information. (3) It must provide ways to evaluate and analyze information. (4) It must distribute or make available information to the people who need it.
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What are the four PARTS of the Marketing Information System?
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1. internal database
2. the analysis procedures 3. marketing intelligence 4. marketing research |
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What is the difference between primary and secondary data?
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Primary data are collected as part of the research design.
Secondary data represent information already gathered. |
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What is the purpose of a focus group?
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Get people into an artificial situation that increases their ability to think about an issue
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What is the economic model?
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Assumes that consumers are rational, utility-maximizers with little consideration of feelings.
Means that all the benefits of the product can be measured in dollars and considered relative to the price |
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What is the leaning theory model?
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Rejects internal (mental) constructs, such as utility or attitude or preference and limits itself to observable stimuli and behaviors.
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What is classical conditioning?
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Consumers “learn” to like brands because they see the brands paired with stimuli that they already like (just as Pavlov’s dogs learned to salivate at the sound of a bell, rung with the presentation of food)
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What is operant conditioning?
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The concept of reinforcement and punishment. Responses to stimuli that are reinforced are more likely to be repeated when next the stimuli are encountered
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How does vicarious learning occur?
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When people observe someone else’s behavior’s being reinforced or punished
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What is the psychoanalytic model?
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Consumer behavior is driven by unconscious and unknowable motives. Pillsbury's discovery that women bake out of the unconscious desire to give birth.
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What causes people to pay attention to stimuli?
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If the stimuli is relevant to one's needs.
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What is subliminal advertising?
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Subliminal means below the threshold of consciousness, exposure with insufficient strength or clarity to achieve attention.
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Why do consumers sometimes buy a brand they didn't intend to buy?
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1. new information
2. stock outs or sold out. |
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What is the means-end value chain?
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Links from product or brand choices to the attributes that characterize those products to the benefits that result from those attributes to the values that are supported by those benefits.
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How are strength and weaknesses compared on a BxI score?
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Strengths and weaknesses are comparisons on attributes across firms, not comparisons within a firm across attributes.
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What is the purpose of segmentation?
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To satisfy the wants and needs of the consumer by customizing the offering for each consumer segment
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Why engage in mass-market standardization?
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Lower costs, basic product for everyone, “average” satisfaction”
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What are the criteria of good segmentation?
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• Segments must be profitable – large enough, with sufficient demand
• Segments must react differently • Differences across segments must be actionable. • Groups of consumers may want different features on a product |
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What are the advantages of segmentation?
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• Guides marketing research by focusing on the appropriate consumers;
• Improves satisfaction; • Improves forecasting; • Identifies competition and market opportunities |
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What are the disadvantages to segmentation?
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• Increased marketing costs;
• Proliferation of products with decreasing marginal value; • Consumer backlash and confusion; • Reduction in popularity of the “basic” product, which limits cost benefits. |
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What is the purpose of VALS?
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Groups consumers into 8 roughly equal sized segments
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What is the foundation for PRIZM?
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• Based on sociological truism that people tend to be similar to their neighbors
• Capitalizes on the ready availability of rich data describing households at the neighborhood level • Can create an incredibly rich data set describing every zip code in the country Categorizes people and associates them with media and purchase |
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What is targeting?
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Selection of one or more segments as the groups that the firm intends to serve
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What is Positioning?
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The execution of the marketing plan appropriate to the target market
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Positioning - Undifferentiated Marketing
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A marketing plan that will meet the needs of the entire market
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Positioning - Concentrated Marketing
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Plan that is focused on satisfying the wants and needs of a more similar group
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What determines positioning?
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Positioning is determined by what consumers think, not by what engineers/accountants believe
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What is the objective of positioning?
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To create a sustainable advantage
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What are the three techniques for developing a perceptual map?
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1. Rely on manager expertise and judgement.
2. Survey consumers' perceptions 3. Consumer survey to rate similarity. |
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Why might a firm violate the expectations of an offering?
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• Firm deliberately violates the expectations of the set of offerings, eliminating some of the expected features, but supplementing with others that were not important or not considered at al
• i.e. Costco – no fitting rooms, wide assortment / low prices, changing assortment |
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What are the most important aspects of branding?
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physical product design, features, quality
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What is brand equity?
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i. Refers to the marginal value of the product that results from the brand
ii. Valuable – gives a firm power in marketplace, can be shared or expanded to new products, leads to brand loyalty/future sales iii. the price premium a consumer is willing to pay for a certain brand. |
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Why is branding important to consumers?
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i. Guide product decisions
ii. Contain information iii. Add value iv. Communicate to others |
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What is the Theory of Competitive Rationality?
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Firms must be in a constant process of developing new products—to react to changes in consumer demand, to imitate successful competitive products, or to innovate ahead of both consumer demand and the competition.
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How does the Prospect Theory evaluate gains and losses?
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We value losses more than gains of equal magnitude.
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What is the endowment effect?
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People value items in their possession more than (objectively equally valuable) items not in their possession.
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According to the Prospect Theory, how much better must a new product be?
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It must be better by a large enough margin to overcome the biases that consumers have in evaluating gains and losses.
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Characteristics of a innovator
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The innovators are more influenced by product-related information. To the extent that they are influenced by information about the users of the product, they want to be different. The majority, however, want to be similar to other people. They want information about the product; but, they also want to be assured that the product is popular and acceptable.
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Characteristics of a follower
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The laggards are most concerned about acceptability; they demand evidence that the product is widely used before they consider adoption, and that may be the only information about the product that they require.
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What is the theory of diffusion of innovations?
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Diffusion theory proposes that the adoption of new products depends on the innovativeness of consumers—their willingness to try something new. Innovativeness, like many individual characteristics is believed to be normally distributed in the population. Thus, there is the standard bell-shaped curve of willingness-to-buy any innovation—lots of people with some willingness, fewer and fewer as you move off in either direction, toward very high willingness or very low willingness.
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What is selling orientation?
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Heavy focus on selling vs. marketing.
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Approximately how much R&D money is required to start a Vodite R&D project?
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Approx. 10 million dollars
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What are the three segments of the Vodite market?
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Innovators - adventurous and willing to try new idea at some risk. High desire and interest; above average income.
Early adopters- will not accept as quickly as innovators, but will do so before a majority of people have accepted new technology. High influence on other consumers, and above avg income level. Followers- bulk of potential consumers; adopt product only after a large number of consumers have tried it; below average income. |
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Approximately how many of each distribution channels are there? (ie. how many specialty stores)
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30,000 - Specialty Stores
7,000 - Department Stores 10,000 - Mass Merchandisers |
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What are the margins for each of the distribution channels?
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40% - Specialty Stores
30% - Department Stores 30% - Mass Merchandisers |
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What is the transfer cost (Markstrat)?
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The price paid to production.
The transfer cost is reduced 15% each cumulative production is doubled. |
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How much do mass merchandisers take off the list price?
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10%
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How much of your ad budget should you allocate to advertising research - existing? New?
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Existing - 7%
New - 15 to 20% |
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How is your next period budget determined?
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40% of your net contribution from the previous period
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What is loss incurred when existing inventory is disposed?
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Usually between 20 to 50%
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What is the MDS scale range?
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-20 to +20
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What is the semantic scale range?
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1 to 7
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What does the feasibility study tell you?
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The minimum cost at which the product can realistically be manufactured and R&D budget required to guarantee completion.
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What are online queries?
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They are immediate versions of feasibility studies, but often overestimate results by 50%
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How is the base cost calculated?
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It is obtained by subtracting the average distributors' margin, plus the minimum margin that will make the future product economically attractive for you to market.
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