Marketing and Consumer Behavior Lecture Notes

Practice flashcards covering the fundamentals of marketing, consumer behavior, strategic planning, psychological theories of motivation and attitude, and decision-making processes.

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large (American Marketing Association).

Consumer Behavior

The study of the processes involved when individuals or groups select, purchase, use, or dispose of products, services, ideas, or experiences to satisfy needs and desires and to define and express their identities.

The 4 Ps

The core pillars of marketing actions: Product, Price, Place, and Promotion.

Maslow's Hierarchy of Needs

A framework for understanding human motivation ranging from physiological needs to safety, love and belonging, esteem, and self-actualization.

Strategy (Michael Porter, 1980)

A broad formula for how a business is going to compete, what its goals should be, and what policies will be needed to carry out those goals.

C-Level Executives

Individuals responsible for Corporate level strategic plans, making cyclical decisions on an annual or quarterly basis based on the company's mission and values.

Competitive Advantage

Comes from the value that firms create for their customers that exceeds the cost of producing that value, leading to superior financial performance relative to competitors.

STEEP/PESTLE Analysis

A framework used to analyze external environmental factors including Sociocultural, Technological, Economic, Ecological, and Political/Legal trends.

Porter's Five Forces

A tool used to determine industry attractiveness based on: Bargaining Power of Suppliers, Threat of New Entrants, Rivalry Among Existing Competitors, Bargaining Power of Buyers, and Threat of Substitutes.

NAICS Code

The North American Industry Classification System, which replaced the SIC code system; sectors like Transportation start with $48$ and Retail starts with either $44$ or $45$.

Emotional Intelligence (EQ)

A person’s abilities to perceive, identify, understand, and successfully manage emotions in self and others.

Social Exchange Theory

The idea that interpersonal relationships are a series of resource exchanges (reciprocal and complementary) involving a hierarchy of: Love, Status, Information, Money, Goods, and Services.

Segmentation

The process where companies group potential customers based on relevant, shared characteristics to better meet their needs and preferences.

S-T-P Framework

A central marketing model representing Step 1: Segmenting, Step 2: Targeting, and Step 3: Positioning.

Cost Leadership

A generic strategy focused on producing at a lower cost than competitors to maximize the difference between value created and production costs.

Differentiation

A strategy where a product or service is chosen over competitors because it is unique, better, or superior in some way based on tangible or intangible value drivers.

Red Ocean Strategy

Competing in the known market space where industry boundaries are defined and companies try to outperform rivals for existing market share.

Blue Ocean Strategy

The simultaneous pursuit of low cost and differentiation to open up new market space and create new demand, making the competition irrelevant.

The Four Actions Framework

A Blue Ocean tool used to Eliminate, Reduce, Raise, and Create factors to shift strategic pricing and value.

Strategic Group Mapping

A technique to identify clusters of firms in an industry with similar competitive approaches and positions, separated by mobility barriers.

Sensory Marketing

When companies consider the impact of sensations—vision, scent, sound, touch, and taste—on the product experience.

Subliminal Perception

An interpretational bias occurring when a stimulus is below the level of the consumer’s awareness.

Gestalt Principles

Interpretational biases where the 'whole' is perceived as greater than the sum of its parts, including the Closure, Similarity, and Figure-ground principles.

Branding

The process of creating a unique identity and image for a business, product, or service in the minds of the target audience.

Classical Conditioning

A behavioral learning process where a stimulus that elicits a response (Unconditioned Stimulus) is repeatedly paired with a neutral stimulus (Conditioned Stimulus) until the neutral stimulus elicits the response on its own.

The Halo Effect

When a company builds brand equity in one category and uses those positive associations to expand to other products (stimulus generalization).

Shopper Marketing

A strategy used to enhance the in-store and online shopping experience at the point-of-sale.

Planogram

A diagram or model that indicates the placement of fixtures and retail products on shelves to maximize sales.

Attitude

A lasting, general evaluation of people, objects, things, advertisements, or issues.

Functional Theory of Attitudes

A pragmatic approach by Daniel Katz identifying four functions attitudes serve: Utilitarian, Value-expressive, Ego-defensive, and Knowledge.

System 1 Thinking

Fast, unconscious, automatic, intuitive, and emotional processing (Type 1).

System 2 Thinking

Slow, conscious, effortful, deliberate, and analytical processing (Type 2) used for complex decisions.

Fishbein Model

A Multiattribute Attitude Model (MAAM) that assesses attitudes based on salient beliefs, object-attribute linkages, and evaluations.

Theory of Reasoned Action

An updated version of the Fishbein model that accounts for the Subjective Norm (SN), which includes the intensity of normative beliefs and the motivation to comply with others' expectations.

Motivation

The processes characterized by arousal and direction that lead people to behave as they do to satisfy an activated need.

Utilitarian Need

A need focusing on objective, tangible attributes and specific task accomplishment.

Hedonic Need

A need focusing on subjective, experiential, and pleasure-seeking aspects of consumption.

Elaboration Likelihood Model (ELM)

A dual-process theory of persuasion describing how attitudes change via the Central Route (high involvement, cognitive processing) or the Peripheral Route (low involvement, affective processing).

Balance Theory

A cognitive consistency model involving a triad of a person, an attitude object, and another person/object to maintain harmony in perceptions.

Evoked Set

The group of brands or solutions a consumer is already aware of when a problem is recognized.

Consideration Set

The specific options from the evoked set that a consumer actually evaluates for purchase.

Compensatory Rule

A decision-making rule where a product's strength on one attribute can make up for its shortcomings on another (e.g., Simple or Weighted additive rules).

Noncompensatory Rule

A decision rule where an option is rejected if it fails to meet a specific threshold or is not the best on the most important attribute (e.g., Lexicographic or Elimination-by-aspects).

Buyer's Remorse

Post-decision dissonance or regret that occurs when a decision can't be undone and the outcome is negative or requires significant change.