marketing ch. 1-3
Marketing: the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
Need: something you must have to live or achieve a goal (basic biological motive)
Want: specific manifestation of a need determined by personal and cultural factors (one way to satisfy the need, influenced by society)
The Marketing Mix: The controllable set of decisions or activities that the firm uses to respond to the wants of its target markets
The Marketing Mix: Product, price, promotion, place
Product: goods, services, ideas
Customer Value Proposition – unique combination of benefits received by targeted buyers that will satisfy their Needs, (Product design., Pricing strategies, Service elements)
Price : everything a buyer gives up (money, time, energy) in exchange for the product or service, what they are willing to pay
Place: all the marketing processes necessary to get the product to the right customer when that customer wants it
Promotion: communication by a marketer that informs, persuades, and reminds potential buyers about a product or service to influence their buying decisions and elicit a response.
Market: potential consumers who have both the willingness and ability to buy a product
Target Market: the specific group or segment(s) of existing and potential customers to which marketers direct their marketing efforts
Value: reflects the relationship of benefits to costs: what you get for what you give
Value Cocreation: customers act as collaborators with a manufacturer or retailer to create the product or service
Relational Orientation: a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship
Customer Relationship Management (CRM): a business philosophy and set of strategies, problems, and systems that focus on identifying and building loyalty among the firm’s most valued customers.
Social Media: member-to-member interactions which allow self-expression
MArketing STrategy: identifies target market and is the basis on which a firm plans to build a sustainable competitive advantage
Customer excellence: retain loyal customers and offer excellent customer service
Operational Excellence: efficient operations, excellent supply chain management, strong relationships with suppliers
Product excellence: provide products with high perceived value and effective branding and positioning
SWOT: internal strengths and weaknesses, external opportunities and threats
Environmental scan: continually acquiring info on events outside the organization to identify external trends that are opportunities or threats
Demographics: the study of populations → gender, age, ethnicity, income, education and occupation
Socio-cultural forces: ideas, cultural values, and attitudes that are learned and shared among a group of people
Greenwashing: misleading use of environmental claims for marketing purposes
Economic forces: affects the way consumers buy products and services and spend money, in home country and abroad (inflation, interest, currency rates)
Technological Forces: new products and services, communication, retail channels
Privacy concerns: cookies- track where you start, go and end the interaction with a website
Competitive forces: know competitor’s strengths, weaknesses and reactions to your marketing activities (direct = pepsi and coke, indirect)
Monopoly: one firm controls the market
Oligopolistic competition: a handful of firms control the market
Monopolistic competition: many firms selling differentiated products at different prices
Pure competition: many firms selling commodities for the same prices
Regulatory Forces: restrictions placed don marketing practices by the government and industry associations
eg. competition bureau, do not call list, privacy act
Promotion and Value Communication: integrated marketing communications (IMC), advertising, sales promotion, public relations etc.
Metric: measuring system that quantifies a trend, dynamic or characteristic
Consumer Behavior: why people buy goods or services
Consumer Hyperchoice: being forced to make repeated decisions that may drain psychological energy and decrease our abilities to make smart choices
Decisions fatigue: the deteriorating quality of decisions made by an individual after making lots of decisions
Morning Morality Effect: people are more likely to cheat, lie, commit fraud in the afternoon
Problem REcognition: occurs when we experience a significant difference between our current state and our desired state
Actual STate: slip and phone breaks
Ideal state: a new phone comes out and makes yours look worse
Information Search: the process by which we survey the environment for appropriate data to make a reasonable decision
Prepurchase search: looking to buy
Ongoing search: niche interest, what’s going on, leads to opportunity recognition. More common in women
Inner Locus: I make things happen and determine my own future
Outer Locus: the world is predetermined and we cannot change our future
Types of Risk: performance, financial, social, psychological (how you perceive yourself and what the purchase would say about you), physiological
Universal Set: all possible choices
Evoked/retrieval set: alternatives a consumer knows about
Consideration set: alternatives a consumer seriously considers
Evaluative criteria: the dimensions we use to judge the merits of competing options
Determinant attributes: the features we actually use to differentiate among our choice
Eg. screen size, sound
Consumer decision rules: the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from several alternatives → depends on involvement
Central route to persuasion: quit smoking ad, emotional
Peripheral Route to persuasion: celebrities, look at other cues in the ad to determine how you feel about
The influence paradox: the less you care about a product, the more you’re influenced by cues manipulated by advertisers
Habitual decision making: the choices we make with little or no conscious effort
Inertia: it’s les effort to buy a familiar package
Brand loyalty: conscious decision to continue buying the same brand
Choice architecture: priming, nudge, framing, [prospect theory, heuristics, impulse buying
Priming: cues in the environment that make us much more likely to react in a certain way (can be unaware, wine example
Nudge: a deliberate change by an organization that intends to modify behavior
Default bias: much more likely to comply with requirement than to make the effort not to comply eg. organ donors
Framing: how we present things matters
Loss aversion: people dislike losing things more than they like gaining things
Prospect theory: the value of a decision depends on gains and losses
Sunk-cost fallacy: the more you invest in something, the harder it becomes to abandon it eg. movie ticket
Heuristics: mental shortcuts or rules of thumb that allow us to quickly arrive a satisficing solution
Bounded rationality: we are often content to a arrive at a satisficing solution (good enoch) than a maximizing solution, which takes more effort
Covariation: we assume associations between events that don’t necessarily influence each other eg. buying dirty vs clean car
Country of origin: we associate certain items with specific countries, and countries with traits
Other heuristics: familiar brand names, higher prices= higher quality,
Conversion rate: converting purchase intentions into purchases
Post-purchases cognitive dissonance: an internal conflict that arises from an inconsistency between believes or between beliefs and behavior
Customer loyalty: marketers attempt to solidify a loyal relationship → analytics software and CRM
Motives: a need or want that is strong enough to cause the person to seek satisfaction
Attitudes: lasting, general evaluation of people, objects etc.
Perception: the process by which we select, organize and interpret information to form a meaningful picture of the world
Cognitive learning: learning without direct experience through thinking, reasoning and problem solving
Lifestyle: the way consumers spend their time and money to live (actual and perceived)
Culture: the shared meanings, beliefs, morals, values and customs of a group of people
Purchase situation: only cooking because people are coming over
Sensory situation: auditory, visual, taste, tactile, olfactory
Temporal state: mood congruency: decisions are shaped by our moods
Eg. showing happy ads during happy shows