MGT 103 Midterm 1

Marketing (definition)

The discovery, creation, communication, and delivery of value for customers, clients, partners, and society. Not just sales, advertising, or social media.

Four requirements for exchange

2+ parties with unsatisfied needs; desire and ability to satisfy them; a way to communicate; something to exchange

4 Ps

Product, Price, Promotion, Place: controllable, internal marketing mix elements

Value proposition

The benefits an organization promises to the customer: what benefits, for whom, and why they should believe you can deliver

Selling concept vs. marketing concept

Selling: start with the product, profit through sales volume. Marketing: start with customer needs, profit through customer satisfaction

Evolution of marketing

Production > Sales > Marketing concept > Relationship > Sustainability

Triple bottom line

Profit + People + Planet

Corporate sustainability

Considers financial, social, and environmental consequences of decisions; long-term success balancing the triple bottom line

Core values

Fundamental, enduring principles that guide an organization; what it says it believes (trust, integrity, customer obsession)

Organizational culture

How people actually behave: attitudes, rituals, and norms shared among members of the organization

Mission statement

A clear statement of who the organization serves, what it does, and why it exists

Vision

The desired future state of the organization

SMART goals

Specific, Measurable, Achievable, Relevant, Time-bound

Corporate level (structure)

Sets overall direction and allocates resources; asks 'Which businesses should we be in?'

Strategic Business Unit (SBU)

A business within the organization with its own market and competitive strategy; asks 'How do we win in this market?'

Functional level (structure)

Specialists like marketing, finance, operations, HR; asks 'How do we execute effectively?'

BCG Matrix: Star

High market share, high growth; invest to maintain leadership

BCG Matrix: Cash cow

High market share, low growth; harvest cash to fund stars

BCG Matrix: Question mark

Low market share, high growth; invest selectively or divest

BCG Matrix: Dog

Low market share, low growth; divest or manage for cash

Market penetration strategy

Existing products, existing markets; sell more to current markets (safest)

Product development strategy

New products, existing markets

Market development strategy

Existing products, new markets

Diversification strategy

New products and new markets (riskiest)

SWOT analysis

Internal: Strengths and Weaknesses. External: Opportunities and Threats. Leverage strengths, correct weaknesses, capitalize on opportunities, respond to threats

Environmental scanning

Continually acquiring information on events outside the organization to identify and interpret trends that may affect the business

Five marketing environments

Social (sociocultural), competitive, technological, economic, regulatory (legal/political)

Gross income

Total money earned

Disposable income

Income left after taxes

Discretionary income

Income left after taxes and necessities

Business cycle

Expansion, peak, contraction (recession), trough, expansion

Recession

Significant, prolonged economic decline: decreases in real income, production, employment, and retail sales

Stagflation

Slow economic growth + high unemployment + high inflation

Pure competition

Many sellers with nearly the same products

Monopolistic competition

Many sellers offering similar but differentiated products; most consumer brands, so branding and perception matter

Oligopoly

Only a few dominant firms (e.g., wireless providers)

Monopoly

Only one supplier with almost no substitutes (e.g., local utilities)

Primacy

The first thing you encounter is what sticks in your mind

Recency

The last thing you see is what sticks in your mind

Consumer Bill of Rights (original 4)

Safety, Informed, Choice, Heard

Consumer Bill of Rights (later additions)

Redress, Education, Healthy environment

Ethical vs. legal

Ethics = personal moral principles; laws = society's enforceable standards. Can be unethical but legal, or ethical but illegal

Corporate Social Responsibility (CSR)

Businesses have ethical responsibilities to employees, customers, communities, society, and shareholders; broader than sustainability

Green marketing

Marketing efforts that promote the environmentally conscious production process of a product and the product itself

Greenwashing

Making an unsubstantiated or misleading claim about the environmental benefits of a product or service

Green attitude-behavior gap

Consumers say sustainability matters but don't always buy accordingly: price, convenience, habit, performance concerns, confusion, skepticism, perceived impact

Consumer behavior

Decisions about acquisition, consumption, and disposition of goods, services, ideas, and experiences over time

Five roles in a purchase

Information gatherer, influencer, decider, buyer, end user

Industrial firms (B2B buyers)

Reprocess a product or service they buy before selling it again

Resellers (B2B buyers)

Wholesalers and retailers that buy products and resell them without reprocessing

Straight rebuy

Buying the same thing from the same supplier without considering options

Modified rebuy

A reorder where the buyer compares alternatives or changes something

New task purchase

A first-time purchase the organization has never made before

Consumer decision process (5 steps)

Problem recognition > Information search > Evaluation of alternatives > Purchase > Postpurchase evaluation

Problem recognition

Consumer sees a significant gap between current state and desired state

Internal vs. external search

Internal: searching your own memory. External: everything outside yourself

Maximizer

Consumer who keeps searching for the best option; leads to dissatisfaction and anxiety

Satisficer

Consumer who finds an option they're satisfied with and stops searching

Evoked set

Brands you know about

Unawareness set

Brands you don't know about

Inept set

Brands you know about but reject because they don't work for you

Consideration set

Brands you would actually choose from; you like them, can afford them, and weigh pros and cons

Extended decision making

Rare, high-stakes decisions requiring lots of research (college, house, laptop)

Limited decision making

Moderate effort and comparison (choosing a restaurant for the first time)

Habitual decision making

Quick, automatic purchases made out of habit (toothpaste)

Price = quality heuristic

Assuming the more expensive product is higher quality

Brand loyalty vs. status quo bias

Loyalty = emotional connection and positive feelings. Status quo bias = repeating behavior because it's easy and avoids risk

Country of origin heuristic

Associating where a product is made with quality (Belgian chocolate, Japanese cars, Korean skincare)

Affect heuristic

Making decisions based on feelings without careful cognitive processing

Normative tactics

Decisions influenced by 'people say I should': social conformity, group expectations, moral standards

Sunk cost

Money, time, or effort already spent that can't be recovered; it should be ignored in decisions

Endowment effect

Once something feels like yours, you value it more and are less likely to return it (fitting room, test drive)

Compromise effect (extremeness aversion)

With 3+ options, people avoid the extremes and choose the middle (Starbucks tall/grande/venti)

Decoy effect (asymmetric dominance)

An inferior option is added to make another option look like a better deal (medium popcorn priced close to large)

Cognitive dissonance

Psychological discomfort caused by inconsistency between beliefs/attitudes and behavior; post-purchase regret is one type

Perception

The process of selecting, organizing, and interpreting information from the outside world: exposure > attention > perception

Motivation

Internal state that drives us to satisfy needs by activating goal-oriented behavior

Learning

A relatively permanent change in behavior caused by information or experience

Classical conditioning

Learning by pairing two stimuli (meat powder + bell makes the dog salivate at the bell alone)

Operant conditioning

Behavior shaped by rewards (Starbucks stars for repeat purchases)

Attitudes

Learned predispositions to respond favorably or unfavorably to stimuli based on relatively enduring evaluations; made up of affect, behavior, and cognition

Psychographics

Grouping consumers by psychological and attitudinal similarities: interests, activities, opinions, and social values

Scarcity

Limited product or time (flash sales, limited-time offers); drives desirability

Conspicuous consumption

Buying to display status

Parody display

High-status people adopting low-status looks, turning them into trends (Golden Goose dirty shoes, ripped jeans)

Compensatory consumption

Buying something to make yourself feel better when you feel down

Aspiration reference group

A group you don't belong to but want to be like

Associative reference group

A group you belong to (classmates, coworkers)

Dissociative reference group

A group you don't belong to and don't want to belong to

Opinion leaders

People who influence others' attitudes or behaviors; high product interest, keep up to date, often early buyers

Basic vs. applied research

Basic: builds general knowledge (academic). Applied: addresses a specific organizational problem

Primary data

Collected specifically for the current research question; tailored but costlier and slower

Secondary data

Already exists, collected for another purpose; cheaper and faster but may be outdated or not a perfect fit

Rule for collecting data

Collect secondary data first, then primary data

Qualitative research

Explores why/how; small samples; rich detail; hard to generalize

Quantitative research

Measures how much/how many; large samples; numerical data analyzed statistically

Depth interview

One-on-one, 30-60 minutes, exploratory, primarily qualitative

Focus group

6-10 participants discussing a problem together with a trained moderator and discussion guide

Observation research

Recording behavior objectively; shows what people do but not why

Experiment

Tests causal hypotheses by manipulating the independent variable and measuring effect on the dependent variable