Exam 1

Question 1

Who determines the value of a product?

Answer 1

The consumer

Question 2

If companies don’t determine value, then what do they do?

Answer 2

Companies offer value propositions

Question 3

What is customers perceived value?

Answer 3

Perceived benefits versus perceived costs (what you get relative to what you give)

Question 4

What is satisfaction?

Answer 4

A pleasurable fulfillment response to a consumption experience

Question 5

How is satisfaction determined?

Answer 5

Satisfaction is determined by disconfirmation

ie… McDonalds example: we go in with low expectations and you may or may not be satisfied, because your notion was to expect little satisfaction

Question 6

What is ACSI and why does it matter?

Answer 6

American Customer Satisfaction Index

Can be an indicator of economic standings in terms of consumer oriented companies/products

Question 7

What is a market?

Answer 7

A collection of buyers and sellers who are both interested in making exchanges

A market can also refer to a group of people, a place, or a product.

Question 8

What is the unique contribution of Marketing to a firm?

Answer 8

Marketing acquires resources from customers, while stimulating product demand & customer value

Question 9

What is Marketing?

Answer 9

Marketing is the idea of managing exchanges with customers

Question 10

What is Marketing not?

Answer 10

Marketing is not advertising and it is not common sense. Another common misconception is that marketing does not require the use of numbers/analytic processes.

Question 11

Counter to the idea of “Marketing is advertising and unnecessary”

Answer 11

You can’t force people to buy something that they don’t need, which is why being in touch and understanding consumers is crucial to marketing and company success

Question 12

What is the marketing concept?

Answer 12

Achieving the goals of an organization based on the knowledge of consumer wants along with targeting desired markets

Question 13

What are the other concepts that compete with the marketing concept?

Answer 13

Production concept, sales concept, and social concept

Question 14

What is required to implement the marketing concept?

Answer 14

1) Information has to be generated regarding the customer and target audience

2) Disseminate the information back to the organization

3) Incentivize the use of the information

Question 15

What is the role of Marketing Research?

Answer 15

Measuring the outcomes of marketing activities versus the goals of the organization. Failure is bound to happen, and has potential to help refine the allocation of $$ and resources towards strategies that show positive results.

Question 16

What is the shareholder concept?

Answer 16

The goal of a firm should be to maximize shareholder value

Question 17

What are some problems with focus on the shareholder concept?

Answer 17

Often times firms who focus on the shareholder concept are overly concerned with short term goals in hopes of satisfying shareholders periodically, instead of focusing on long term investments for the benefit of the firm.

Question 18

What are the consumer bill of rights?

Answer 18

The right to information, the right to be heard/acknowledged, and the right to not be harmed

Question 19

Why do consumers need protected rights as opposed to the “buyer beware” mentality?

Answer 19

Consumers don’t know every little thing about a product. They deserve to be made knowledgeable of anything potentially harmful. The business knows all but the consumer does not.

Question 20

What is the Milton Freidman view on businesses?

Answer 20

“The role of a business is to increase profits.” This is beneficial because it creates competition in the market and helps to drive prices down as companies try and gain advantages over one another.

Question 21

What are some arguments for businesses to seek other goals besides maximizing profit?

Answer 21

The issues we face globally are massive, and some consumers feel that businesses should do their part to help, as for profit businesses have a large majority of resources. For businesses, there are also self oriented reasons for them to engage in other activities. (they can become more likeable if they do it right)

Question 22

CSR

Answer 22

Corporate social responsibility

Question 23

What determines whether firms are “rewarded” for engaging in CSR?

Answer 23

Quality, stakeholders opinion, advertising spending is higher than others

Question 24

What is Cause Related Marketing (CRM)?

Answer 24

Charitable actions of a firm are directly tied to consumer revenue

Question 25

What is the annual amount spent on CRM?

Answer 25

$2.24 billion

Question 26

Is CRM related spending the same as marketing spending?

Answer 26

No, regular marketing spending is $250 billion, so CRM spending is small in comparison.

Question 27

Why is CRM so hard to get right?

Answer 27

The purpose of the firm needs to align with the cause of the charitable actions, and the quality of product can't be affected. ie... big tobacco shouldn't act charitably toward cancer research

Question 28

What is a mission statement? How do you evaluate it?

Answer 28

A definition of the firms business focus that helps provide direction for the company

Question 29

What is Marketing Myopia and why does it matter?

Answer 29

Defining a company to narrowly with not enough focus on the progression and evolution of consumer behavior. Companies that suffer from this often miss key trends in the market.

Question 30

What happens when a firm defines itself to broadly?

Answer 30

The firm will struggle to perfect a product or division of the market. Resources and spending will not be allocated well.

Question 31

What is a competitive advantage?

Answer 31

A firm has a competitive advantage when they offer greater customer value than a competitor.

Question 32

What is differentiation?

Answer 32

A marketing strategy that helps a firm stand out from competitors and encourages consumers to choose their product.

Question 33

What are the 5 P's of marketing.

Answer 33

Product- diet soda Place- live streaming service Promotion- sale on beer Participation- discord/reddit Price- matinee at movie theatre

Question 34

5 C's

Answer 34

Customer benefit cost convenience communication connection

Question 35

What does it mean to change the marketing mix?

Answer 35

Adjusting strategy to better influence customer decision making or to broaden/shrink the target audience for a product

Question 36

Market share and relative market share

Answer 36

Market Share = brand sales / category sales Relative Market Share = brand market share / key competitor %

Question 37

What is the benefit of market share?

Answer 37

As market share increases, companies are likely to have higher profit margins, declining purchase to sales ratios, decline in marketing costs, and higher product quality

Question 38

Link between market share and customer satisfaction

Answer 38

as market share increases, typically customer satisfaction decreases. ie... McDonalds controls the most market share in fast food, but has the worst satisfaction rating

Question 39

Does the drive for market share relate to the marketing concept?

Answer 39

Yes, as companies seek to grow their market share, they must implement the marketing mix to better understand and cater to the needs of their customer base.

Question 40

Are monopolies concerned with customer satisfaction?

Answer 40

Yes, because studies show a direct tie between customer satisfaction and operating costs. As customers become satisfied, operating costs go down.

Question 41

ROI

Answer 41

Return on investment = net profit / total investment

Question 42

CLV

Answer 42

Customer lifetime value is the expected value a company can expect to receive from a customer over the course of their relationship CLV = Customer value x average customer lifespan

Question 43

Customer equity

Answer 43

the total value of a company's customer relationships over their lifetime. Customer equity = # of customers x average value of each customer *typically calculated for a specific period

Question 44

Value appropriation & Value creation

Answer 44

Value appropriation is the value that a company receives for providing consumer value Value creation is the actions that innovate, produce, and deliver products to market.

Question 45

Who are the main appropriators

Answer 45

1) firm 2) competitors 3) Society/public

Question 46

Is marketing more related to value creation or appropriation?

Answer 46

Marketing is tied more closely with value creation, as it strives to understand customer needs and deliver products and services

Question 47

What do fidget spinners, Beanie Babies, Nike, and Legos tell us about marketing’s role in value creation and appropriation?

Answer 47

Beanie babies were produced conservatively, resulting in a fad that went on for a long time. Fidget spinners were overly produced which led to a short period of popularity. Nike, could profit off the secondary market, but they choose to appropriate value elsewhere

Question 48

Micro-environmental forces

Answer 48

things in the environment that are affected by marketing decisions. company, consumers, suppliers, resellers, primary/secondary and unexpected competitors

Question 49

Macro-environmental forces

Answer 49

general trends that companies do not influence social, political, economic, natural, technological

Question 50

What is a SWOT analysis?

Answer 50

a strategic planning tool that helps businesses identify their strengths, weaknesses, opportunities, and threats

Question 51

What is critical thinking?

Answer 51

evaluation of evidence regarding a claim, so a sound conclusion can be drawn.

Question 52

5 cognitive biases

Answer 52

gamblers fallacy: if the slot machine hasn't paid out yet it's bound to soon anchoring bias: i heard that company was bad 10 years ago so that's what i believe sunk-cost fallacy: if we've invested in something, we keep going no matter what the cost benefit ratio is confirmation bias: tendency to search, interpret, and favor information that supports what we already think survivorship bias: if i can do it than anyone can (0.1% success and 99.9% failure)

Question 53

How does critical thinking and biases relate to marketing?

Answer 53

Marketers have to assume people will be biased. They have to use critical thinking and the marketing mix to target and appeal to all types of consumers

Question 54

General model of customer experience

Answer 54

1) need recognition 2) information search 3) evaluation of alternatives 4) purchase/choice 5) post purchase

Question 55

what is an attitude

Answer 55

a consumer's opinion, feelings, and intentions about a product or service. Typically hard to change, as people become loyal to brands. To change an attitude, peoples opinions must be disconfirmed over time, whether good or bad.

Question 56

Contextual influences on buyer behavior

Answer 56

Contextual- motivation & problem solving Social Influences- reference groups Individual Influences- personality & perception

Question 57

Maslow's hierarchy in order

Answer 57

self actualization esteem love/belonging safety physiological

Question 58

What are the two ideas related to MH?

Answer 58

unknown

Question 59

Can Maslow's be used for any product?

Answer 59

Yes, any product can serve any need

Question 60

Examples of ads at each level of Maslow's

Answer 60

unknown

Question 61

Routine, limited, & extensive problem solving

Answer 61

routine: little thinking, little judgement, and insulated from arguments (brushing your teeth) limited: short cuts in thinking and can accept weak arguments (buying toothpaste) extensive: elaborate thinking, and evidence serves as judgement, rejects weak arguments (buying a car)

Question 62

What % of our behavior is habitual

Answer 62

40-50%

Question 63

How do the thinking types relate to celeb endorsers

Answer 63

Influencers have no impact on extensive problem solving, but they do with limited you might buy chips with katy perry on them

Question 64

What are the forms of selective perception? How do these relate to marketing phenomenon?

Answer 64

Selective attention: Humans don't direct a lot of attention to things that we don't support or care about. Selective interpretation: we often interpret things to confirm what we already think Selective retention: We choose to remember what supports our preconceived notions.

Question 65

What is the self-concept?

Answer 65

Self-concept is a consumer's perception of themselves. How they think, feel, and value themselves

Question 66

How does the self-concept relate to self-image?

Answer 66

How a person sees themselves, especially physically and mentally. Self-image can be based on how a person wants to appear to the world, and it doesn't always align with reality. Self-concept is a broader concept than self-image, but self-image is a component of self-concept

Question 67

Traits vs Roles

Answer 67

Traits are what makes someone unique... caring, generous, attentive Roles are what connects you to the rest of society. I am a consumer, I'm a brother, I'm a friend

Question 68

Actual & Ideal self concept

Answer 68

The actual self is who someone is, and the ideal is who someone strives to be. Planet fitness is an "actual" marketing style while LA fitness is an "ideal" marketing style. Which to choose is based on the product and the target audience Ideal could be used when a product is highly visible and consumers seek cognition

Question 69

Is consumer purchasing typically rational or irrational?

Answer 69

consumer purchasing is typically not entirely rational and often incorporates irrational elements behavioral economics highlights how psychological factors and cognitive biases can lead to seemingly irrational choices

Question 70

How is organizational buying different from consumer buying?

Answer 70

organizational buying involves a more complex decision-making process with multiple individuals within a company, focused on rational economic needs and specific product specifications. consumer buying is typically driven by personal wants and needs, often influenced by emotions and brand loyalty

Question 71

When does consumer buying start to look like business buying?

Answer 71

Biases have to be ignored, and rational decisions based on economic principles have to be made.

Question 72

What is the buying center?

Answer 72

The group that makes purchase decisions for a business

Question 73

Parts of the buying center.

Answer 73

deciders, influencers, buyers, initiators, gatekeepers, and users

Question 74

Is organizational buying purely rational?

Answer 74

No, not purely rational... Emotions are present throughout the organizational decision-making process. Marketers can use this to their advantage by managing emotions and fostering positive ones like trust, excitement, and interest.

Question 75

How does the General Model of Customer Experience look for businesses as compared to consumers?

Answer 75

for businesses, the model centers on the experience of their entire company interacting with a brand, encompassing multiple decision-makers. consumers focus on individual perception and emotional/personalized experiences

Question 76

how does marketing differ between business to consumer and business to business?

Answer 76

B2C: Focuses on individual consumers, with the goal of capturing their attention and driving sales. B2C marketing often uses emotional ads and straightforward language to speak to the customer B2B: Focuses on individuals or teams that make purchasing decisions for a larger organization, such as suppliers, distributors, and wholesalers. B2B marketing focuses on building long-term relationships and delivering value to business clients.

Question 77

What is market segmentation?

Answer 77

the process of categorizing groups of customers to divide a market into pieces based on customer differences.

Question 78

What does market segmentation stress? (2 things) And what should result? (2 things)

Answer 78

meaningful groups & customized marketing mix better value propositions and increased likelihood of customer response should result

Question 79

What are micromarketing, differentiated marketing, and niche marketing?

Answer 79

Micro: A targeted marketing approach that focuses on a small group of consumers with personalized messages and offers. Micromarketing campaigns are based on specific traits, such as age, gender, job title, or geographic location. Differentiated: A strategy that involves creating campaigns for two or more customer groups or market segments. The goal of differentiated marketing is to increase brand awareness, reach a wider audience, and increase sales. Niche: A technique that focuses on a smaller segment of the market with specific needs, preferences, or traits

Question 80

What does mass marketing attempt to do? Is there anyone who truly mass markets?

Answer 80

aims to reach as many potential customers as possible by using a single message to appeal to a broad audience nowadays every company is segmenting in one way or another

Question 81

What are two ideas of the long tail?

Answer 81

the long tail theory shows that the popular products control most of the market share, while the products with less market share extend further to reach a subset (niche market) as people learn about the long tail they tend to gravitate toward it

Question 82

What helps asses a market segmentation?

Answer 82

demographics (gender, age, marital status) geographics (region and size) behavioral patterns (usage rates, visits, spending patterns) psychographic (personality, wants vs needs, & value)

Question 83

What can help resolve a non-profitable segment

Answer 83

adjust strategy, stop certain products, retain high value customers, and convert occasional buyers to high value customers

Question 84

What segment variables are the easiest & hardest to collect?

Answer 84

Demographics... they're often readily accessible on the internet or third party surveys/data Psychographics... they are subjective and and lack observable data sometimes

Question 85

What's the issue with demographic variables? Does it remain true for geographic variables?

Answer 85

they are overly simplistic and might not capture behavioral needs within a group yes because relying solely on location can overlook individual variations within a region

Question 86

What is variability and how does this effect segmentation?

Answer 86

high variability indicates that a group of customers or data points within a segment exhibit diverse characteristics, making it difficult to effectively target them with a single marketing strategy

Question 87

What is a problem with psychographic variables?

Answer 87

they're subjective and hard to measure effectively

Question 88

f there is a problem with psychographic variables, can they be used? How?

Answer 88

by combining them with other data sources like demographics or behavioral data to provide a more comprehensive understanding of your target audience

Question 89

best predictor of future behavior

Answer 89

past behavior

Question 90

What is user status, usage rate, Pareto principle, and share of wallet? What kind of variables are these?

Answer 90

user status: current relationship with a product (active or inactive user) usage rate: how frequently customers interact with a product Pareto principle (80/20): small % of factors contribute to large % of results share of wallet: proportion of spending dedicated to a brand within a category (spending with brand/spending in category)x100

Question 91

If you want to create segments that will be inclined to purchase more, what must you segment on (i.e. what did the Miller Lite case study tell us?

Answer 91

Match marketing actions to target markets (make stronger arguments than Miller Lite did)

Question 92

How similar and/or different are the variables for business customers as compared to consumers

Answer 92

buying behavior might be more important with consumers, while demographics could be more important with B2B

Question 93

Steps of segmentation process

Answer 93

1) define market 2) pick relevant variables 3) create and profile the segments

Question 94

What is targeting and a target market?

Answer 94

Targeting: The process of prioritizing advertising relevance by defining a target market and segmenting it based on common traits. Target Market: A group of consumers that a business aims to reach with its products or services. Target markets are defined by commonalities such as age, income, interests, or geographic location

Question 95

Why is choosing a target market a high risk activity?

Answer 95

if you select the wrong market segment, it can lead to significant financial repercussions

Question 96

Why should companies initially focus on one segment?

Answer 96

few products have universal appeal, and financial resources can be easily wasted while expanding into new segments that may not be immediately successful

Question 97

What is positioning?

Answer 97

creating perception in the customers mind relative to other options

Question 98

key ideas of positioning

Answer 98

1) you can only own one position 2) a position can only be owned by one brand

Question 99

What are perceptual maps?

Answer 99

a visual tool that shows how consumers perceive different brands or products relative to each other