Economic approach

Question 1

What is the economic approach?

Answer 1

The idea that the right marketing mix will generate optimal sales

Question 2

What does it use in it’s theory?

Answer 2

Neoclassical economics, classic marketing theory, marketing mix

Question 3

Assumptions

Answer 3

1) Brand is controlled by the sender (company). If they get the marketing mix, the brand will be successful
2) Consumers are perceived as passive receivers of marketing mix, and they perceive and evaluate brands rationally

Question 4

Assumptions arise from…

Answer 4

The economic man:
1) Human behaviour is guided by rational parameters
2) Consumers have perfect information about alternatives
3) The exchange between both parties is seen as an isolated event
4) Consumers have limited income, thus they find ways to maximize the utility of their income

Question 5

Transaction cost theory

Answer 5

Not only is it important to supply the best deal, but it is equally important to minimize the transaction cost associated with the search, purchase, and consumption of the product.

Question 6

Brand-consumer exchange framework

Answer 6

Company –> Marketing mix –> Consumer

Question 7

Brand-consumer exchange

Answer 7

It is assumed that brand choice is based on a linear communication, where the marketer sends off brand messages in the shape of a product, price, a placement and promotions, and the consumer receives these messages and acts on them (make the purchase) if they are right.

Question 8

Transaction cost

Answer 8

Barriers to utility maximization

Question 9

Marketing mix

Answer 9

4 Ps

Question 10

Methods and data

Answer 10

Statistical tools between two variables (regression) from big data samples