MGMT 2430 Exam 1

The three key elements of a market

Customers, sellers, and exchange.

The difference between ultimate customers and organizational customers

Ultimate customers buy for personal use; organizational customers buy for resale, production, or operations.

Seller

Any individual/organization with surplus value to offer in exchange (e.g., manufacturers, retailers, service providers).

Marketing

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings of value.

The four major eras of marketing evolution

Production, sales, marketing, relationships.

Marketing myopia

Defining business too narrowly.

Examples of marketing myopia failures

Kodak, Blockbuster, Sears, Railroads.

Examples of marketing myopia successes

Netflix, Amazon, Apple.

Key challenges in today’s marketing environment

Customer power, media fragmentation, huge product selection, psychographic segmentation, privacy/ethical concerns.

What motivates customers to buy

Needs (gap between actual and desired state) to Wants (specific preferences)

The key elements of the Marketing Management Process?

Market Opportunity Analysis → Segmentation → Targeting → Positioning → Marketing Mix (4Ps/4Cs).

the difference between markets and industries

Markets = buyers; Industries = sellers

The framework that helps evaluate business opportunities

The Seven Domains Framework’s purpose

macro vs. micro analysis

Macro = overall environment/industry conditions; Micro = specific customers, segments, or firm advantages.

The six macro environmental factors (PESTEL-like)

Demographic, sociocultural, economic, regulatory, technological, natural.

The tool that assesses industry attractiveness?

Porter’s Five Forces.

Porter’s Five Forces Listed

Rivalry among competitors, threat of new entrants, supplier power, buyer power, threat of substitutes.

What makes a market attractive at the micro level?

Clear need, identifiable target customers, unique benefits, growth potential, multiple viable segments.

What makes an industry attractive at the micro level?

Sustainable competitive advantage (e.g., patents, strong brand, hard-to-imitate resources).

The reason why team domains matter in opportunity assessment?

Because Even good opportunities fail without leadership alignment, right employees, strong relationships, and execution ability.

consumer behavior

The study of how individuals/groups select, buy, and use goods/services to satisfy needs.

Why consumer behavior is studied

To design offerings tailored to different segments (price, product, promotion, place differences).

the difference between high- and low-involvement purchases?

High = riskier, more thought, problem-solving steps; Low = routine, inertia, brand loyalty, impulse.

Steps in the high-involvement decision-making process?

Problem ID → Information search → Evaluation → Purchase → Post-purchase evaluation.

What factors influence information search?

Product factors (brand options, features), personal factors (income, age), and external sources.

What drives post-purchase evaluation?

Expectations vs. actual product performance.

What is inertia vs. brand loyalty?

Inertia = buying out of habit without commitment; Brand loyalty = repeat purchases due to true preference.

How does involvement level affect marketing mix?

High involvement → stress product benefits, detailed promotion, less extensive distribution.
Low involvement → emphasize price, repetition in ads, widespread distribution.

What are the key social influences on behavior?

Culture, subculture, social class, and reference groups (family, peers).

What does STP stand for?

Segmentation, Targeting, Positioning.

Why segment markets?

Markets are heterogeneous; segmentation allows more tailored offerings → happier customers and more profit.

Define market segmentation.

Dividing a market into distinct subsets with similar needs/characteristics who respond similarly to offerings.

Six criteria for useful segmentation?

Identifiable, substantial, accessible, stable, differentiable, actionable.

What are common segmentation bases?

Demographic, geographic, geo-demographic, behavioral, psychographic (lifestyle, values).

What framework measures effective targeting?

Five-step process: (1) Choose factors → (2) Weight them → (3) Rate segments → (4) Project future → (5) Choose & allocate resources.

What dimensions guide targeting choices?

Market attractiveness + competitive position.

What are the main targeting strategies?

Niche market(small but profitable segment); mass-market (single product for all OR multiple products for different segments OR growth-market (focus on fast-growing segments)

What does the Marketing Management Process include?

Company, Context, Competitors, Customers, Segmentation, Targeting, Positioning (STP); Product, Price, Place, Promotion (4Ps/4Cs).

Why is differentiation important?

Consumers face overwhelming choices (thousands of products in each category). Standing out ensures better performance and profitability.

What is brand positioning?

Establishing meaningful differences in consumers’ minds using product, price, place, and promotion.

the two types of positioning

Physical positioning (objective attributes) and Perceptual positioning (subjective consumer perceptions).

an example of physical positioning.

Watches compared by glass type, power reserve, water resistance, and precision.

What is the limitation of physical positioning?

It ignores psychological/social factors that influence consumer attitudes.

Why is perceptual positioning important?

Consumers may not know/understand physical attributes, so they rely on perceptions (brand image, feelings, social input).

What factors influence perceptual positioning?

Presentation, past experiences, opinions of others, and emotional response.

What are three types of brand attributes subject to perception?

Simple physical (e.g. horsepower), complex physical (e.g. roominess), and abstract (e.g. prestige, sexiness, quality)

Can price be subject to perception?

Yes — it can signal quality, exclusivity, or affordability.

What is the general template for a positioning statement?

“For [target market], Brand X is the only brand among all [competitive set] that [unique value claim] because [reasons to believe].”

What is a “competitive set”?

All products/services that fulfill the same basic need.

What are determinant attributes?

The key features customers use to differentiate among alternatives (e.g., luxury, reliability).

What methods are used to collect customer perception data?

Qualitative (focus groups, interviews) and Quantitative (surveys).

Perceptual maps

The tool that’s often used to visualize brand positions

What is a positioning statement?

A succinct internal statement describing target market, competitive set, and unique benefit offered, with reasons to believe.

What is a value proposition?

A list specifying target market, benefits offered/not offered, and price range relative to competitors.

Volvo’s positioning statement

“For upscale American families, Volvo is the automobile that offers the utmost in safety, and charges 20% in premium.”

Volvo’s value proposition

Target = upscale American families, Benefit = safety, Price = 20% premium over similar cars.

Why positioning statements/value propositions should focus on measurable end-user consequences

To ensure clarity of benefits and avoid marketing myopia (narrowly defining competition).