Term
| Is gift-giving a marketing exchange? |
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Definition
| no, someone must give up something in exchange for something else, so no |
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Term
| What is marketing as defined by AMA? HINT: Know the key element, not verbatim definition. |
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Definition
Marketing is 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
No part of the definition talks about a product— marketing encompasses physical products AND services.
The important part is the requirement of value— value is not just money. Value is defined by the customer.
** committed to creating value for customers
** speaks to actions or activity |
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Term
| Is marketing an applied science? |
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Definition
YES. Based primarily on the economic theory of supply and demand. Consumer behavior is based on psychology and sociology.
*not a pure science. we use theories from sociology, consumer behavior from psychology |
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Term
| What are the conditions of an exchange? |
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Definition
More than two parties may participate in an exchange.
Typically the buyer has money and a seller has a good or service desired by the buyer
The seller must be able to communicate (some areas of Alaska have no internet) and deliver the product/service
There cannot be a forced exchange; either party participates under duress
Both the buyer and seller must find the exchange desirable |
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Term
| What is a need (must have to survive) product versus a want? |
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Definition
The theory of supply and demand according to the dictionary: “the amount of a commodity, product, or service available and the desire of buyers for it, considered as factors regulating its price."
Products that are necessary for survival will always have a high demand, no matter how large or small the supply is. Things like food, water, shelter and health care are needed for people to survive, therefore the demand will be omnipresent.
**needs= water, food, air, human contact wants = smart water designer water |
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Term
| What is the basic concept of the economic theory bounded rationality? |
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Definition
Bounded rationality is the idea that the cognitive, decision-making capacity of humans cannot be fully rational because of a number of limits that we face.
** you basically cannot know everything. consumers choose options that satisfy their needs and wants without putting in too much effort into making sure they are considering every angle. can't know it all. |
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Term
| what are the limits to the economic theory bounded reality |
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Definition
Information failure - there may not be enough information, it may be unreliable, or maybe not all possibilities or consequences have been considered
The amount of time that we have to make our decisions - we tend to be time-scarce so don’t spend as much time as is needed to make a fully-informed choice.
The limits of the human brain to process every piece of information and consider every possibility.
We usually end up making satisfying decisions, rather than optimal decisions— we use “rules of thumbs” or heuristics (practical but maybe not optimal).
Impact of bounded rationality is that contracts cannot be fully complete in order to cover all possibilities— markets rarely work perfectly.
Behavioral economists generally point out that bounded rationality is not the same as irrationality, because decision-makers are still attempting to make as rational a decision as they possibly can. |
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Term
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Definition
An economic system in which individuals own and operate the factors of production. Also known as free enterprise or capitalism. Examples: United States, Great Britain, Japan
- in reality there are no pure market economies. in America, Govt intervenes with taxes, social security etc
A market economy is a system where the laws of supply and demand direct the production of goods and services. Supply includes natural resources, capital, and labor. Demand includes purchases by consumers, businesses, and the government.
Businesses sell their wares at the highest price consumers will pay. At the same time, shoppers look for the lowest prices for the goods and services they want. Workers bid their services at the highest possible wages that their skills allow. Employers seek to get the best employees at the lowest possible price. |
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Term
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Definition
| An economic system in which the government owns and operates the factors of production, also known as socialism or communism. Examples: Cuba, China and Laos. |
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Term
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Definition
| An economic system based upon customs and tradition. Economy is based upon agriculture and hunting. Also known as Non-industrialized or Agrarian societies. Examples: Chad, Haiti, Rwanda. |
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Term
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Definition
An economic system that has features of both market and command economies. In reality there are no pure market or command economies. U.S. has elements of command economy (minimum wage
Capitalism requires a market economy to set prices and distribute goods and services. Socialism and communism need a command economy to create a central plan that guides economic decisions. Market economies evolve from traditional economies. Most societies in the modern world have elements of all three types of economies. That makes them mixed economies. |
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Term
| What are the characteristics of a production orientation? |
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Definition
Focuses on internal capabilities
Ignores consumers wants/needs
Effective strategy when:
Competition is weak
Demand exceeds Supply
** an example is Henry fords contribution of the assembly line. every car was black and he knew he could sell them all |
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Term
| What are consumers' opinion/attitudes about eco-friendly products? |
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Definition
What are consumers' opinion/attitudes about eco-friendly products?
While 83% of consumers worldwide believe that firms should have environmentally friendly products, only 22% would pay more for eco-friendly products. This suggests that at this time, the demand is low so companies don’t feel any pressure to respond, even though the margins could be higher— by charging more for “eco-friendly” or “socially responsible” products. |
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Term
| What are the elements of the triple bottom line? |
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Definition
John Elkington, it aims to measure the financial, social and environmental performance of a business over a period of time
Profit (traditional) (financial)
Familiar to managers
Identified from income statement
Audited = reliable figure
People (social)
Measures extent to which business is socially responsible
Hard to calculate and report reliably and consistently
Planet (environmental)
Measures impact of business on environment
More tangible - e.g., emissions, use of sustainable inputs |
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Term
| What are the characteristics of customer value? |
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Definition
Customer value is the relationship for a customer between benefits and sacrifice.
Achieving customer values:
**Offer products that perform
Earn trust
Avoid unrealistic pricing
Give buyers facts
Commitment to service and after-sales support
**Co-creation between buyer and seller
**cost benefit analysis
** ex. old people with cell phones who only want to make a call and don't care about facial recognition or anything like that |
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Term
| what is the difference between satisfaction and loyalty? |
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Definition
Satisfaction - measurement of customer attitudes regarding products, services and brands.
Evaluation - goods/services met needs and expectation
It’s all about money - drive down cost = poor service
Recovering from dissatisfaction:
Decentralized part-time customer service to full-time centralized teams
Address customer “pain points” - specific problems that prospective customers of your business are experiencing
Loyalty - likelihood of previous customers returning to buy good or services from a business
Loyalty behaviors are known as customer retention, or the act of consumers making repeat purchases of current brands rather than competitor brands
Encompasses loyalty attitudes which are opinions and feelings about products, services, brands or businesses that are associated with repeat purchases.
** you can be satisfied with a product and not be loyal
** tide detergent vs all detergent- Dr. Cano like tide detergent, but if all detergent is on sale she will change (satisfaction)
** coke vs. pepsi products-Dr. Cano will only go to restaurants that sell coke products because she likes diet coke so much and she is also willing to pay more for it. (Loyal) |
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Term
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Definition
measurement of customer attitudes regarding products, services and brands.
Evaluation - goods/services met needs and expectation
It’s all about money - drive down cost = poor service
Recovering from dissatisfaction:
Decentralized part-time customer service to full-time centralized teams
Address customer “pain points” - specific problems that prospective customers of your business are experiencing |
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Term
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Definition
likelihood of previous customers returning to buy good or services from a business
Loyalty behaviors are known as customer retention, or the act of consumers making repeat purchases of current brands rather than competitor brands
Encompasses loyalty attitudes which are opinions and feelings about products, services, brands or businesses that are associated with repeat purchases. |
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Term
| What is relationship marketing? |
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Definition
Relationship marketing is marketing with the conscious aim to develop and manage long term relationships with customers, distributors or other parties in the marketing environment
The focus is on keeping and improving relationship with current customers
Factors for success:
Organizational culture is customer-centric
Customer-oriented personal
Effective training programs
Employee empowerment
Teamwork |
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Term
| what are the factors of success for relationship marketing |
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Definition
Organizational culture is customer-centric
Customer-oriented personal
Effective training programs
Employee empowerment
Teamwork |
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Term
| What is the assumption of relationship marketing? |
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Definition
| The assumption of relationship marketing is that consumers prefer ongoing relationships |
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Term
| What size firm typically operate in oligopoly and monopoly economic systems? |
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Definition
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Term
| In which economic system is there no government intervention? |
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Definition
| there is no system without government intervention. an example being tariffs |
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Term
| What are some actual examples of ethical challenges with AI? |
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Definition
Gymnast search in Google’s search engine had only females as the top result.
Google image such for nurses also had mostly women as the top results.
Parents search turned up mostly heterosexual couples.
Gender-recognition AI software from IBM, Microsoft and Megvii identified a person’s gender from photographs correctly 99% of the time— if the photos were of white men.
A Palestinian man was arrested in Israel in 2017 because social media automated translations wrongly interpreted the caption of a photo he posted as “attack them” when he really said “good morning” |
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Term
| What are the key trends in the political environment? |
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Definition
Increased legislation
Changing enforcement
Greater concern for ethics
Nationalism (yikes) (not so much emphasis of 1st 3) |
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Term
| What are the major global social changes associated with? |
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Definition
Major causes of global social changes are tied to changes in technology and economics.
agricultural advances
industrialization
beuracratizaiton
conflict and competition
politcal and legal power
ideaology
diffusion
acculturation
modernization
urbanization |
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Term
| agricultural advances (GSC) |
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Definition
irrigation, plow, cotton gin, etc.
Surplus food, population growth, urbanization, working outside the farm |
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Term
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Definition
move from economy of food to goods, services and information
Technology driven work force
Change in value of gender, child care, labor force
Work centered around machines |
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Term
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Definition
Organizations use extreme rational and impersonal thinking
Extreme division of labor and record keeping
Can lead to inefficiencies |
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Term
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Definition
War (religion, ethnic tensions, competition for resources); women’s movement
Civil Rights; Class (unions)
Sexuality (LGBT )
Positive = solidarity; negative = inequality, violence |
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Term
| Political and legal power |
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Definition
Elected officials - redistribution of wealth
Unelected officials - corporate power |
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Term
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Definition
| Religious beliefs (lead to revolution, civil wars); religions legitimize gender-based inequality |
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Term
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Definition
| Celebrity drinking milk campaigns, birth control becoming available in less developed countries |
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Term
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Definition
| Preventing acculturation; China Cultural Revolution (removing capitalism) |
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Term
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Definition
Larger role of government
Specialization, bureaucracy
Social institution to regulate behavior
Mass production
Larger role of education
Improved quality of life
Ability to expect and adapt to continuous change |
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Term
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Definition
Result of economic opportunity
More diversity independence, secularization, crime, mass communication |
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Term
| Discuss outcomes of bureaucratization and global social change? |
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Definition
Bureaucratization can happen as an attempt to standardize policies and procedures, but can often times lead to inefficiencies. Using people like machines is a waste in workforce skills. Mass amounts of paperwork can lead to miscommunication and mistakes. It can easily make a transaction become inefficient by taking too much time and energy to complete.
**3 outcomes:
1. organizations use extreme rational and impersonal thinking
2. extreme division of labor and record keeping
3. all can lead to inefficiencies |
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Term
| What are measures of social change and modernization? |
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Definition
Larger role of government
Specialization, bureaucracy
Social institution to regulate behavior
Mass production
Larger role of education
Improved quality of life
Ability to expect and adapt to continuous change
**HIV: world =1.1% more developed countries= .3% less developed countries= 1.9%
life expectancy male, female: world= 65,69, more developed= 72,79, less developed= 61,64 |
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Term
| What are characteristics of industrialized societies? name 3 |
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Definition
Reduced Agriculture employment
Specialization
Increase in education
Increase in business
Interdependency between government and economy
Technological change
Geographical and occupational mobility
Population changes
It’s a move from economy of food to goods, services and information. The services sector is an important part of the U.S. economy. According to BEA, in 2009 services accounted for 79.6% of U.S. private-sector gross domestic product (GDP), or $9.81 trillion. Service jobs accounted for more than 80% of U.S. private-sector employment, of 89.7 million jobs. |
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Term
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Definition
1. a few seller control over 70% of the market
2. firms offer identical or differentiated products ( real or imaginary) advertising is important
3. product information must be easily available. they use informative advertising ( price, quality, and special features) to introduce new products
4. there are huge barriers of entry into the industry. the three major barriers are: technological knowledge, money, and brand name loyalty
- entry is difficult because many own patents or own essential raw materials. this makes it difficult for new firms to try to compete
examples include:
automobiles
cell phone |
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Term
| what are the three major barriers to entry into the industry in an oligopoly |
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Definition
1. technological knowledge
2. money
3. brand name loyalty |
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Term
| characteristics of monopolistic competition |
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Definition
1. large number of firms
2. free entry and exit
3. some control over price
4. heavy expenditure on advertisements and other selling costs
5.product variation
6. product differentiation
examples: pepsi and coca cola
starbucks and duncan donuts |
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Term
| major causes of global social change are tied to |
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Definition
| changes in technology and economics |
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Term
| summary of global social change |
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Definition
We are modern!
Rise of the machines!
Rise of the corporations!
Do what you do best!
Let’s duke it out!
Living the high life!
A rolling stone gathers no moss!
Bureaucracy is here to stay |
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Term
| What is the salad bowl theory? |
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Definition
As opposed to a melting pot, the salad bowl theory believes that while different cultures come together and compliment each other (like the different elements of a salad) they do not “melt” together and create a homogenized culture.
**diversity retains its identity and we all live in one society, but retain our uniqueness. melting pot theory doesn't work because cultures enjoy being unique
*culture is very difficult to change. it changes very slowly if at all
*people do not want to be like everyone else. they enjoy being unique |
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Term
| Typically, how is status evaluated in American society? |
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Definition
What you do, or your job.
Your house, your car, your appearance, the way you speak and present yourself
Status is earned in USA
Clinton – from poor family; worked hard, Rhodes Scholar, President |
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Term
| What are ethnic economics? |
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Definition
Ethnic economies are economies created by and for different ethnic or immigrant groups-- think Chinatown or Little Italy in NYC. They are successful within their ethnic community because they cater specifically to the needs of those ethnic groups.
**communities owned by minorities for example Miami, Fl: large population of cuban, they own their own businesses and are situated within communities that are highly populated by hispanics, they hire hispanics, customers are all hispanics. consequently they do not have to assimilate. they don't have to learn the english language. they can survive in these ethnic economies very well without assimilating. |
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Term
| What is the trend in Americans' value of religion (e.g., more important?)? |
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Definition
| increasingly less important |
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Term
| How did American values change after World War II? |
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Definition
After WWII there was a marked shift from being active, materialistic, hard-working, religious, abstinent and believing in postponed gratification to an emphasis on leisure, immediate gratification and sensual gratification.
Preference for part-time work (children)
America is a secular society; activists attempt to regular market activities (sin tax)
Strong material orientation; unwilling to delay pleasures (frugality fatigue)
Preference for sedentary activities (surfing the web, cooking)
*consumers become more materialistic and hardworking |
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Term
| characteristics of minority groups: african american |
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Definition
13% of population
Concentrated in the south and metropolitan areas outside the south
Younger, less educated and lower income than white minority (systemic racism)
41.1 trillion in buying power
81% online
second largest ethnic subculture |
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Term
| characteristics of minority groups: hispanics |
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Definition
Largest, fastest growth minority
Younger, less educated and lower income than white minority
$1.2 trillion in buying power
-*Highly brand loyal |
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Term
| characteristics of minority groups: asian american |
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Definition
Smaller than African-American and Hispanics but growing
Highest educated and highest income group |
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Term
| characteristics of minority groups: (GBLT) LGBT |
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Definition
Majority of Americans believe that gay relationships are
morally acceptable, support hate crime protection and serving openly in the military
Substantial in size and purchase power (spend ~$4k at retail stores)
82% purchase from gay-friendly companies
Gay-oriented print ads tripled since 1997
Social media use - men use for information; women use to find promotions |
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Term
| What is the traditional housewife? |
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Definition
Married, prefer to stay at home, ware of foregone income
** stay home and take care of the kids and love it. no desire to go out or anything like that. |
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Term
| What are the characteristics of the modern man? |
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Definition
Modern man focuses on fashion, shopping and cooking. He is price conscious and less time-sensitive, which allows him to become more discriminating. They do, however, tend to purchase when the need is immediate and do not plan ahead.
**purchase in advance, plan, like shopping, etc.. (ASK) |
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Term
| What is the connected spender? |
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Definition
Connected spenders are the next generation of online shoppers. They use the internet to research brands, follow trends and they tend to be more selective on where they spend their discretionary funds-- but when they do spend, it’s often above their income class level.
http://demandinstitute.org/connectedspenders/ |
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Term
| What are elements of the connected spender (e.g., access to the internet, etc.)? |
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Definition
Access to internet
Significant amount of discretionary income
Willing to spend a lot of their discretionary income
Prefer premium goods and services when they can afford them
Seek to be on the cutting edge of consumer trends (FYRE FEST!) |
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Term
| What are the characteristics of the connected spender? |
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Definition
Working age (>30% are 25-34)
Highly urban (80% live in cities, 90% in emerging markets)
Likely affluent (though not all affluent people are connected spenders)
Account for 19% of global populations (projected 37% by 2025)
$260 million in spending (46% of the world’s consumer spending, in USA will reach 50%) |
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Term
| What are the consumption behaviors of the connected spender? |
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Definition
Demand new products, latest technology, tangible benefits
Use internet to find best price
Receptive to advertising (both traditional and online) |
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Term
| Discuss one strategy for attracting and reaching the connected spender? |
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Definition
1.Cultivate mature markets; prepare for financial reality of up-and-comers
Seek imaginative, technology-drive twist to existing products to solve problems
Effective promotions
2.Prepare for emerging markets
Decrease barriers to online consumption
Safe and convenient access, education, easy e-commerce
Design products/shopping to align dominant Internet methods each market
Leapfrogging to smartphones (China and Nigeria)
Market-wide online payment infrastructure; logistics of last mile |
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Term
| What is the superior social association (e.g., age, race, physical appearance, etc.)? |
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Definition
definitely ethnicity. show 2 picture 1 white one hispanic
- we would not think of age first we would think of ethnicity |
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Term
| James Truslow Adams, The Epic of America |
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Definition
“…a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement…regardless of fortuitous circumstances of birth or position.”
Defined by home ownership
Driven by large middle class
Save to purchase |
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Term
| the modern american dream |
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Definition
Increasing extravagant and unrealistic
Purchase on credit
Divide middle-income and upper-income families increased sharply last 40 years |
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