Principles of Marketing Study Guide Exam 1

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What is marketing (in terms of how I have defined it in class)?

Marketing is the science of exchange.

What are the components for exchange? (Conditions for exchange to occur)

1. At least 2 parties are involved
2. Each party must have something that is perceived as being valuable
3. Communicate the value to other parties
4. Either accept or reject any offer

What are the 4 P's? What are these called?

"Marketing Mix"
1. Product (type, look)
2. Place (access to consumer)
3. Price (what is given up in order to get product)
4. Promotion (information about product)

What are the barriers to exchange? Be able to give an example of each!

1. Geographic (bridges, UPS/FEDEX, internet)
2. Time (24 hr stores, internet)
3. Value
4. Information (what does it do, cost, etc.)
5. Quantity (amount needed by consumer)
6. Variety (product that fits best)
7. Ownership (responsible for breaks = warranty, guarantee)

What are the four (4) different marketing orientations or philosophies that have emerged during the past century?

1. Production Era (Late 1800s-Late 1920s): Demand > Supply = shortage "provider"; after the great depression people were much more conservative

2. Sales Era (1940s-1990s): Supply > Demand = Surplus "Persuader"

3. Marketing Era (1970s-1990s): uncover and satisfy customer needs (concept); 24hr help "problem solver"

4. Relationship Era (1990s-today): Information exchange "partner"

Be able to distinguish company orientations based on activities and know the role of the marketing department for each orientation.

1. Production = provide what people really NEED
2. Sales = persuade people they need/want different things and a lot of them
3. Marketing: find out customer needs and provide
4. Relationship: work with the customers to provide

What is the marketing concept?

Uncover and satisfy customer needs

Be familiar with the six (6) uncontrollable forces that influence marketing mix decisions.

1. Social (cultural) changes in the society or culture, habits, what is acceptable, etc. (women in workforce, health focus, environmental)

2. Political (legal): laws- punishments by fines, jails, capital punishment, etc., ethics- established by society

3. Technological:

4. Demographic (older, multicultural, etc.)

5. Competitive:
Type - direct or indirect
Number: Global Marketing (types of strategies, standard of mkt - global policy, customication - adaptation, licensing, contract manufacturing, joint ventures, direct investment)\

6. Economic

Know the three (3) important social changes that occurred over the past 50 years that influence marketing activities.

Women in the work place

"Health" craze

Environmental friendliness craze

What is the difference between direct and indirect competition?

Direct competitors product similar goods to that of your own. Indirect provide alternatives, i.e. muffins instead of bagels. Prostitutes instead of GF's. Etc :)

Be familiar with the three (3) laws discussed in class.

Wheeler-Lea Act: prohibits false or misleading advertisement
Robinson-Patman Act: prevention of price gouging
Sherman Act: anti-trust, anti-competiton

What are the primary differences between laws and ethics? (Hint: Who makes them, enforces them, and consequences of violating them?)

Ethics are to be considered law from above or feeling of the specific individual, whereas laws are man made and enforced as such.

What is a SST? How about HSS?

SST: Self Service Technology
HSS: Hyper Sonic Sound

What is global marketing?

Standardization of marketing policy. i.e. not adapted to special considerations such as cultural differences.

Know the difference between exporting, licensing, joint venture, and direct investment.

Licensing: Giving someone else, somewhere cheaper usually, the right to produce a product that is protected by copyrights and such.

Joint Venture: Two companies joining together for a common goal.

DI: A company investing in another

Be familiar with some of the "lost in translation" examples in class. For instance... what is "Calpis?"

Calpis: a Japanese soft drink. Americans would not want to drink this due to the name.

I didn't write the others down. There was a spanish one too. This is one of those back translation examples

What is "Snuss?"

A form of smokeless tobacco that is outlawed in a lot of Europe. Growing popularity in the US as an alternative to quit smoking.

What is consumer behavior? How does it relate to the marketing concept?

Consumer Behavior: process of consumer selecting, using, and disposing of products

The marketing concept and consumer behavior relate because by uncovering customers needs the selecting, using, and disposing of products needs to be found

What are the steps involved in the consumer decision making process?

1. Need Recognition
2. Information Search
3. Evaluate the Alternatives
4. Make Informed Decision
5. Post-Purchase Behavior

Why does need recognition occur? Where does the need stimulus originate?

Need recognition occurs when the persons actual state doesn't equal the desired state

The need stimulus originates...

Be familiar with the three (3) different conflict types discussed in class.

1. Approach-Approach: two equally strong options
2. Approach-Avoidance: want to do something but there are bad parts
3. Avoidance-Avoidance:

Be familiar with different forms of need recognition and information search.

Internal: personal experience
External: library, internet, etc.
---Market: paid for or sponsored
---Non-Market: not paid for (friends)

What is TOMA?

Top of Mind Awareness (deals with personal experience)

What are the different categories of external source information?

External: library, internet, etc.
---Market: paid for or sponsored
---Non-Market: not paid for (friends)

What is a consideration set?

all alternatives that we will actively consider

Be familiar with the four (4) different decision making tools used to evaluate alternatives discussed in class! (i.e., lexicographic)

NON-COMPENSATORY
1. Lexicographic: select the alternative that scores the highest on most important attribute
2. Conjunctive (elimination by aspects): anything under a rank of 4 gets eliminated

COMPENSATORY
1. Additive: add up scores of attributes
2. Multi-Attribute (weighted additive)

What is the difference between compensatory and non-compensatory?

Compensatory: bad in one area, make up in another
Non-Compensatory: can't make up one bad score in another area

What is the weighted additive model? How does it work and what are its key components?

a method of determining the most important of certain attributes. Contains "Attributes, Importance, Info Sets"

What is "buyers remorse"? What is the technical term for it?

Cognitive Dissonance: when a buyer feels remorse after purchasing an item and considers returning it

Be familiar with the different buying situations. What goods are associated with each situation?

Routine: Staples, every day items, convenience, emergency

Limited: Shopping around.

Extended: Specialty items

Unsought goods: New goods potentially also

What is the primary factor that determines the type of decision making situation a consumer is in?

Time

What two (2) variables affect the amount of time you spend in the CDM process?

1. Levels of perceived risk involved: financial, social, physical
2. Involvement (importance)

Be familiar with each situational variable that affects the consumer decision making process.

1. Time: time of day, time of year, limited time to make a decision
2. Environment (Physical): colors on walls, smells, lighting (florescent lights on meat)
3. Task Involved: making card vs. buying card
4. Mood (Antecedent State)

What is an "antecedent state"?

Mood

What psychological variables influence consumer decision making?

Perception
Motivation
Personality
Self-Concept

What is the difference between selective awareness, distortion, and retention?

Perceptual Awareness (Selective Attention): select what is payed attention to and ignore everything else

Selective Distortion: distort contradictory information so that it makes sense

Selective Retention: keep information that supports what we believe and forget other things

What is perceptual mapping/positioning? How is it different from a positioning strategy (also known as product positioning)?

Perceptual Position (Mapping): what a customer thinks of a product and where it is positioned relative to competition

Product Positioning: businesses change around the 4 P's to change the perception that customers have of their product

What is the difference between self-concept, self-esteem, self-image, and personality?

Self-Concept: overall evaluation of yourself

Self-Esteem: an opinion of one's self (positive or negative)

Self-Image: how one sees theirself (may be different than how they actually are)

Personality: characteristics of a person

What does priming refer to? How does it relate to need stimulus?

Priming: receive something for free and then take it away to make you want it again

Relates to need stimulus because once you have had something for a while and use it all the time and it is taken away you will suddenly perceive that you "need" whatever the stimulus was to function.

What is a reference group? What are the different types of reference groups?

Any individual or group of individuals that have a significant influence

Membership: know who the people are, interact, have relationship
---Primary: interact frequently
---Secondary: interact infrequently

Non-Membership: no interaction
---Aspirational: "role models" aspire to be like (athlete, etc)
---Dissociative: don't want to be anything like, stay away

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