Marketing Principles and Consumer Buying Behavior

Vocabulary flashcards covering core marketing principles, strategic planning models, market growth strategies, and consumer buying behavior concepts from the lecture notes.

Product (Marketing Mix)

The 4 P's component responsible for creating value through tangible goods, intangible services, and ideas.

Price (Marketing Mix)

The 4 P's component responsible for capturing value, representing anything a consumer gives up including money, time, energy, information, and hassle.

Place (Marketing Mix)

The 4 P's component responsible for delivering value by getting offerings to the consumer through the supply chain and place of purchase.

Promotion (Marketing Mix)

The 4 P's component responsible for communicating value by describing offerings to attract customers and learning from them.

Value Proposition

Also known as a 30-second elevator speech, it outlines the specific benefits of a product and its superiority over competing products.

Personal Value Equation

The mathematical relationship defining customer value, expressed as $\text{Value} = \frac{\text{Benefits}}{\text{Price}}$.

Customer vs. Consumer

A customer is the individual who buys the product, whereas a consumer is the individual who uses the product and drives the purchase decision.

Customer Relationship Management (CRM)

Data warehouses used to leverage customer data, enhance communications, ascertain needs, gather feedback through value co-creation, and manage loyalty programs.

Corporate-Level Strategy

The overarching strategic planning level developed and driven by top executives.

Business-Level Strategy

Strategic planning executed at the level of Strategic Business Units (SBUs).

Functional-Level Strategy

Strategic planning executed at the departmental level within an organization.

Mission Statement

A document establishing the current purpose of an organization, detailing what it does, whom it serves, its orientation, and its differentiation from competition.

VIRO Framework

A model assessing sustainable competitive advantage based on whether an asset provides Value, is difficult to Imitate, is Rare in the marketplace, and supported by the Organization.

Customer Excellence

A sustainable competitive advantage achieved through strong customer service and demonstrating genuine care for customers.

Product Excellence

A competitive advantage achieved when consumers purchase a product due to strong brand identity or positive experience with another product from the same brand.

SWOT Analysis

A situational analysis tool that evaluates internal Strengths and Weaknesses alongside external Opportunities and Threats.

5M Framework

An internal evaluation framework assessing Minds (staffing), Minutes (time), Machinery (equipment), Materials (production), and Money (finance).

Microenvironment

The immediate external environment affecting a business, including corporate partners (retailers, wholesalers, suppliers/vendors, customers) and direct or indirect competitors.

Macroenvironment

The broader external environment consisting of social factors (demographics, cultural trends), technological factors, economic factors, and political/legal factors.

Boston Consulting Group (BCG) Matrix

A business portfolio analysis tool used to allocate resources among SBUs based on market growth rate and relative market share.

Star (BCG Matrix)

An SBU with high relative market share in a high-growth market, serving as a priority for corporate investment.

Question Mark (BCG Matrix)

An SBU with low relative market share in a high-growth market, requiring analysis to determine whether to invest or divest.

Cash Cow (BCG Matrix)

An SBU with high relative market share in a low-growth or stagnant market, generating excess cash to keep other operations alive.

Dog (BCG Matrix)

An SBU with low relative market share in a low-growth market, often kept only as a complementary product or slated for divesting.

Success Sequence (BCG Matrix)

The portfolio strategy of harvesting money from a Cash Cow to invest into a Question Mark, turning it into a Star.

Market Penetration

A growth strategy focused on selling more of the same products to the same target customer group.

Market Development

A growth strategy focused on selling existing products to a new customer group.

Product Development

A growth strategy focused on selling new products to the same existing customer base.

Diversification

A growth strategy focused on offering new products to entirely new markets.

The Buyer's Black Box

A model showing how Marketing Stimuli (4 P's) and Environmental Stimuli enter a buyer's characteristics and decision-making process to produce Buyer Responses.

Habitual Decision Making

A form of low-involvement decision making where consumers repeatedly buy a familiar option without evaluating alternatives.

Internal Locus of Control

The perception that an individual has direct control over the outcomes and consequences of their own buying behavior.

External Locus of Control

The perception that purchasing outcomes and consequences are beyond personal control and depend on external factors.

Determinant Attributes

Specific product features or deal-breaker criteria that directly influence and determine a buyer's final choice.

Decision Heuristics

Mental shortcuts in consumption—such as brand, price, and packaging—that help consumers make quicker purchasing decisions.

Post-Purchase Cognitive Dissonance

Also known as buyer's remorse, the post-purchase state where a buyer feels that a product was not worth the purchase.

Selective Perception

The process by which consumers filter out information that is not important to them and pay attention only to relevant stimuli.

Aspirational Reference Group

A group that a consumer is not currently a member of, but desires to emulate and belong to in the future.

Dissociative Reference Group

A social group that an individual actively avoids being associated with or resembling.