Session 1: what is a market ?

Question 1

What does “mercatus” means ?

Answer 1

Trade, market

Question 2

What does “mercor” means ?

Answer 2

I trade, I deal in, I buy

Question 3

What does “merx” means ?

Answer 3

wares, merchandise

Question 4

What is a market economy ?

Answer 4

Economic system where decisions regarding investments, production and distribution to consumers are guided by the price signals created by the forces of supply and demand

Question 5

What are the 4 types of markets ?

Answer 5

• Perfect competition
• Monopolistic competition
• Oligopoly
• Monopoly

Question 6

What is Perfect competition ?

Answer 6

Large numbers of sellers of small size, which produce homogeneous products

Question 7

What is Monopolistic competition ?

Answer 7

Large number of sellers which sell similar but slightly differentiated products

Question 8

What is an Oligopoly ?

Answer 8

Only a few firms in the market (say, 3-5). They might collaborate instead of competing, to keep prices high and increase profits

Question 9

What is a Monopoly ?

Answer 9

One firm controls the market, deciding quantities produced and prices. Consumers have no alternatives.

Question 10

What is product differenciation ?

Answer 10

Process through which firms distinguish their products from those of competitors, to make it particularly attractive to specific groups of customers.

Question 11

What is vertical differenciation ?

Answer 11

Differences can be measured objectively

Question 12

What is horizontal differenciation ?

Answer 12

Differences refer to individual subjective preferences

Question 13

What are Search goods ?

Answer 13

Clients can easily compare alternative products and obtain all relevant information (quality, price) before purchase. Examples: salt, sugar, generic medicines such as aspirin, fuel. Small differences in price can make a huge difference in sale.

Question 14

What are Experience goods ?

Answer 14

Product comparison is difficult. Clients can find some information, but they will have full information about quality only after purchase. Examples: having dinner in a new restaurant; buying a new wine

Question 15

What are Credence goods ?

Answer 15

Not even after purchase clients are capable of evaluate quality. Examples: Even with the best surgeon, sometimes a patient dies during the operation. This doesn’t mean that the patient hasn’t received the best care

Question 16

What are the 3 types of good ? (based on the difficulty to evaluate quality)

Answer 16

• Search goods
• Experience goods
• Credence goods

Question 17

What is the difference between economic’s and social scientists work ?

Answer 17

Economics overlooks social ties and culture, while social scientists highlight cultural differences in markets worldwide, aiding international business. They also show how some exchanges are culturally expected to avoid market logic.

Question 18

What type of products/services are culturally expected not to be dominated by a market logic ?

Answer 18

• Gift giving
• Family
• Health
• The body
• Religion

Question 19

How has the adoption of market logics reshaped public services like healthcare, education, or transportation?

Answer 19

In the late 20th century, free-market ideas became popular again, leading to privatization and less government funding. This means services like healthcare, education, and transportation, which used to be publicly supported, now rely more on competition and business strategies like advertising and market research.

Question 20

What is Marketing ?

Answer 20

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large

Question 21

What is the main difference between the goals of economists and marketers?

Answer 21

Economists focus on helping the state regulate markets to ensure fair competition and limit the power of firms. In contrast, marketers focus on helping firms increase their influence on customers to boost sales and profits

Question 22

What does Marketing involve ?

Answer 22

• Understanding what clients wants
• Designing products/services accordingly
• Promote, sell, and distribute those products in the most effective/efficient manner possible

Question 23

What roles does marketing play within companies, specialized service providers, and academia?

Answer 23

Marketing operates as a company function, the core business of specialized agencies, and an academic discipline taught in business schools worldwide

Question 24

What are the key differences between production, product, sales, and market-oriented companies?

Answer 24

Companies can have different orientations: production-oriented firms focus on efficiency and low costs; product-oriented firms prioritize quality and innovation; sales-oriented firms aim for immediate sales; and market-oriented firms prioritize understanding and meeting customer needs.

Question 25

What are the 4 Ps of marketing and how do they guide business decisions?

Answer 25

The 4 Ps (Product, Price, Place, Promotion) is a framework for making key marketing decisions. It involves designing products to meet customer needs, setting competitive prices, choosing distribution strategies, and creating effective promotional messages. Market research helps in each of these areas.

Question 26

How does market research support businesses in understanding consumer behavior?

Answer 26

Market research helps businesses identify the right market segments, improve decision-making, and reduce risks. It has a long history and includes methods like surveys, focus groups, and data analysis to better understand consumers.

Question 27

What role did quantitative questionnaires play in the development of market research?

Answer 27

In the early 20th century, market research began using quantitative methods, such as surveys, to measure advertising effectiveness and public opinion. The development of scientific polling helped predict general attitudes based on small samples.

Question 28

How did focus groups and motivational research change market research practices in the 1950s and 60s?

Answer 28

During this period, businesses expanded market research methods to include qualitative techniques like focus groups and motivational research, which explored unconscious consumer desires. These methods provided deeper insights into consumer behavior beyond just what they said.

Question 29

What concerns were raised about market research in Vance Packard’s "The Hidden Persuaders"?

Answer 29

In 1957, Vance Packard’s book "The Hidden Persuaders" raised concerns about the manipulation of consumers through market research and psychological techniques used in advertising, influencing public opinion and legislation.

Question 30

How did technological advancements in the 1970s and 80s improve market research?

Answer 30

In the 1970s and 80s, technological advancements allowed for larger consumer samples and more sophisticated statistical analysis. This helped in market segmentation, brand analysis, and understanding consumer attitudes towards products.

Question 31

How did the growth of the internet impact market research in the 1990s?

Answer 31

The rise of the internet led to the development of web analytics, which allowed marketers to track consumer behavior online and improve the effectiveness of digital campaigns.

Question 32

What role did ethnography play in the evolution of market research in the 1990s?

Answer 32

Ethnography, a method from cultural anthropology, became a key tool in market research during the 1990s. It involved observing consumers in real-life settings to understand their behavior beyond survey responses.

Question 33

What is neuromarketing, and how does it differ from traditional market research methods?

Answer 33

Neuromarketing emerged in the 2000s, applying neuroscience to understand consumer behavior through tools that measure physiological responses, such as heart rate and facial expressions, to marketing stimuli.

Question 34

How are AI and machine learning shaping the future of market research?

Answer 34

AI and machine learning are transforming market research by enabling machines to predict consumer behavior, assist in decision-making, and interact with consumers through bots, improving personalization and efficiency.