Marketing Exam 1 Study Guide  

What is a market share?

Marketing Lecture 1  

Intro and Overview: Chapter 1 in text  

Needed for marketing to occur

1. 2 or more parties with unsatisfied needs  

2. desire and ability on their part to have their needs satisfied 3. a way for parties to communicate  

4. something to exchange  

shareholders -> ownership

customers -> relationships

suppliers -> partnerships  

other organizations -> alliances  

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

- Create customers and keep customers  

Customer value = (benefits)  

What is s.t.p marketing?

 ________

 costs

Synonyms for value: 

- Satisfaction

- Utility  

Time  

Place

Possession  

Form

Marketing creates customer value through the process of exchange:  exchange relationship

Marketing management facilitates the exchange of value  Marketing mix – marketing programs a plan that integrates the  marketing mix to provide a produce, service, or idea to prospective  customers

o Product

o Price

o Place

o Promotion  

Market Share  

- Ratio of firm’s sales revenue to total industry sales revenue (including  the firms)  

What is environmental scanning?

We also discuss several other topics like What is extinction?

- Sometimes measured in unit sales rather than sales revenue

- A key indicator of a successful marketing program

S.T.P Marketing – how to serve customer’s needs best

- Segmentation: assessing difference in needs of different customers  - Targeting: deciding with segmentation who to target

- Positioning: best product for chosen target  

Four Business Orientations  

1. Product orientation – practically sells itself  

2. Sales orientation – aggressively sell the product

3. Marketing orientation – learn what they want

4. Market orientation – sell what they want  If you want to learn more check out What is modern economic growth?

Marketing Lecture #2  

The Marketing Environment: chapter 3  

Environmental Scanning 

The process of continually acquiring information on events occurring  outside of the organization to identify and interpret potential trends  Marketing Environment  

- Constraining  

- Multi levels  

o Macro – least control

o Micro  

o Internal – most control

- Current / future  

Constraint  If you want to learn more check out What is the meaning of genetic variation?

- Control: adapt / modify  

how to change macro constraints?  

- Lobby / lead broad consumer change

Threat / opportunity  

Macro Sectors 

- Social  

- Regulatory  

- Economical  

- Natural  

- Technological  

- (competitive treated as micro sector)  

Social  

- cultural  

o core set of values and beliefs  

 materialistic

 individualism

 time orientation (future)

 youthfulness

o micro-cultures

 subset differing from mainstream

 share beliefs, values, behavior, and language / symbol  system

o diversity  

 demographic:  

∙ age distribution – shifting to an older population  

∙ geographic

Lecture #3

3 main ethnic subcultures:  

change over time  

- African American (13.2%)

- Asian American (5.6%)

- Latino American (17%)

Population moving away from rural locations  

Household composition changing  

Economic  

- Trend in GDP (gross domestic product)  Don't forget about the age old question of What is meant by reverse engineering?

o Upward trend  

o Generally constant upward rate

o Inflation devalues the dolar

o CPI – how much does a dollar buy us?

- Trend in consumer income

o nominal vs. real (real accounts for inflation)  

o increase in income inequality  

- Consumer willingness and ability to buy If you want to learn more check out What are the types of enzyme inhibition?

o Ability: consumer income

 Gross – before taxes  

 Disposable – after taxes  

 Discretionary – after taxes and necessary purchases  

- Willingness:  

o Consumer expectations  

o Index of consumer confidence (CCI)  

 To what % are consumers confident to buy

Technological: 3 screens of advertising  

- TV, computer, mobile, and possible 4th tablet (displaying ads)  

key issues in technological environment  

- Rate of change  

- Media fragmentation  

o Increase in TV channels

o Decrease in time spent on each channel

o Change in media (mostly digital)  

Social / Technological Change in Economy Don't forget about the age old question of How does a stratovolcano form?

Advent of sharing economy  

- Uber / air bnb

- Also called 1099 economy  

o 53 million Americans employed by 1099  

- major impact on specific industries  

o uber = impact car companies  

- creates significant social upheaval  

Regulatory  

Protect competition

- Sherman Anti-Trust Act (1890)

o Prevents development of monopolies  

- Robinson-Patman Act (1936)

o Prevents price discrimination among businesses

- Lanham Act (1946)

o Provides trademark protection  

Protecting Customers  

- Federal Trade Commission (1914)

o Prevents false / misleading advertisements

- Food and Drug Administration Act (1906)

o Regulates food and drug testing, ads  

- Consumer Product Safety Committee (1972)

o Regulates sale and manufacture of 15,00+ products not  covered by others  

Political Pressure  

- Consumerism  

o Protect interest of consumers (vs. businesses)

- Media  

o Motivated to disclose harmful practices  

Natural  

- Energy  

- Global warming / climate change

o Rising land temperatures, reduced ice cover, rising CO2  levels, increase in extreme weather

Environmental Marketing Opportunities

- Green marketing: marketing products, brands, and companies with  environmental sustainability in mind

o Products that directly benefit the environment  

o Sustainable processing, packaging

- Negative effects: greenwashing  

Micro Environment 

- Customers

- Competitors

- Stakeholders  

- Suppliers  

- Channels  

Internal Environment 

- Tip management  

- Personel

- Other departments  

Strategic Environmental Scanning 

Sectors  

- Macro  

- Micro  

- Internal

Actors  

- Stakeholders

- Competitors

- CEO

Source

- Industry publications  

- Outside information for competitive advantage  

Interpretation

- Interpreting environmental scanning information  

Chapter 3: Scanning the Marketing Environment  

Influential Environmental Forces:  

- Social

- Techonological

- Economic

- Competitive

- Legal and regulatory  

Change = opportunities / threats  

*Environmental scanning: organize and identify potential trends *

Social

Economical

Technologic al

Competitive

Regulatory

Demographic shifts

Cultural  

changes

Macro

economic  

conditions

Consumer  

income

Changing  

technology

Technological impact on  

customer  

value

Tech data  

analytics

Alternate  

forms of  

competition

Small  

businesses

Laws  

protecting  

competition  

Laws  

affecting  

marketing  

mix actions

Self-

regulatory

Value consciousness: obtaining the best quality, features, and  performance of a product or service for a given price

Baby boomers: 1946 – 1964

Gen X : 1965 – 1976 - baby bust -  

Gen Y : 1977 – 1994

 ^^^^^^^^^^^^^^^^^^^

 generational cohorts  

generally, the population is becoming: larger, older, and more diverse Marketing Lecture #4

Segment 3: Ethics and Social Responsibility – chapter 4 in text

Ethics: rmoral principles and values that govern actions and decisions Laws: Societal standards and values that are enforceable in a court of law

Classifying market decisions: illegal & ethical, illegal & unethical, legal &  ethical, legal & unethical

Reason for increased attention to ethics:

- Diverse societal value systems  

- Increase public scrutiny

- Expectations have increased

- Ethical conduct perceived to be dropping

Societal 

Culture and norms   

PERSONAL  

Business 

Culture and industry practices   

MORAL

Organizational  

Corporate culture and expectations   

PHILOSOPHY

Personal Moral Philosophy and Ethical Behavior  

Moral idealism – “golden rule” rules you will not break  

Utilitarianism – think about consequences, act considering outcomes, for  most benefit, to extract most utility  

Current topics in marketing ethics:

- Fake reviews: astroturfing and sockpupets

- Product placement

- “native” advertising

- permission-based marketing

- data privacy / sharing

Corporate Social Responsibility (CSI)

- profit responsibility : make profit for stakeholders - stakeholder responsibly : shareholders, customers, partners,  employees

- societal responsibility

o green marketing

 advertising products as environmentally friendly

 green washing: false claims of enviro friendliness

o cause marketing

 socially responsibility (but not eco-friendly): charitable  contributions, buy 1 give 1, social entrepreneurship  

(Newman’s Own giving away all profits)  

triple bottom line – profits, people, planet

Social Audit  

Tracking “am I really doing good / what I set out to do?” - recognize responsibility

- identify “mission”

- determine priorities

- specify resources

- evaluate results  

Segment 4: Consumer Behavior – chapter 5 in text

Consumer Decision Making (DM)  

Influences on comsumer

 marketing mix

∙ product  

∙ place  

∙ promotion  

∙ price

 psychological

∙ reference price

∙ memory of ads  

 situational

∙ time (hurry vs not)

 socio-cultural

∙ family influence

∙ cultural preferences  

DM is:

- goal directed  

o maximize utility

- bounded-rational

o bounded within constrains of being a human

- of varied involvement

- selective  

o choice to focus / not focus on something

- adaptive

Decision Making Unit (DMU)

Household:

- information gatherer  

- influencer

o anyone changing your views

- decision maker

- purchaser  

- user

Chapter 4: Ethical and Social Responsibility for sustainable  Marketing

Ethics – moral principles and values that govern the actions and decision of  an individual or group – serve as guidelines on how to act rightly and justly  when faced with moral dilemmas

Ethics = personal moral principles and values

Laws = societies values and standards that are enforceable in the courts  

- 17% of U.S adulrs rate ethical standards of business executives as  “high” or “very high” but mostly they are rated poorly

- advertising practitioners, insurance agents, and car sales people are  thought to be among the least ethical occupations

- 41% of business employees are aware of ethical misconduct within the  company  

there are at least four possible reasons for the state of perceived ethical  business conduct:  

1) increase in pressure on business people to make decisions in a society  characterized by diverse value systems

2) growing tendency for judgement by groups with different values and  interests

3) increased expectation of ethical business behavior from public 4) ethical business conduct may have declined  

4 Factors Affect Ethical Marketing Behavior  

Societal and Cultural Norms  

- culture is another socializing force that dictates what is mornally right  and just  

- moral standards are relative to societies  

- companies in the global marketplace recognizes this fact Business culture and Industry Practices

- ethics of exchange: exchange is central to marketing

- buyers and sellers should be better off after a transaction - Consumer Bill of Rights (1962 JFK) codified the ethics of exchange o Right to: 1) safety 2) be informed 3) choose 4) be heard

Marketing Lecture #5 & #6

Decision Making Process

5 stages:

- Problem recognition: recognizing problem

- Information source: internal and external information search - Evaluation of alternatives: extent to which alternatives might satisfy needs  

o Leads to selection  

- Purchase decision: when to buy / how to buy  

- Post-purchase behavior  

Alternative Evaluation  

- Multi-attribute model  

- Consideration set

- Attribution importance weight (overall attitude)

o Multiply importance x rating  

Involvement and Decision Making

- Low: routine problem solving (shampoo, milk, etc)

- Moderate: limited problem solving (majority of purchases)  - High: extended problem solving (car, university)  

Developing a Customer Profile

Individual differences (variables)  

- Demographic: sex, age, marital status, # of kids  

- Socio-economic: income, education, job, owning vs. renting, dual  earner household

- Psychographic: AIO’s (activities, interests, opinions), lifestyle,  product attributes (importance, ratings)  

Customer Satisfaction  

- Before purchase and use

o Expectations re: product performance

- After purchase and use

o Perception of actual performance  

*assess satisfaction by comparing expectations (E) and perceived  performance (P)  

P < E dissatisfaction

P = E satisfaction

P > E delight  

Net Promoter Score  

- “on a scale from 0-10, how likely is it that you would recommend us  to your friends or colleagues?”

detractors = 0 through 6

promoters = 9 or 10  

NPS (%) = %P - %D  

Managing consumer Satisfaction  

- measurement (of expectations)  

- service after sale (promotes satisfaction)  

- 800 # / website  

- chief customer officer  

“Symbolic Consumer Behavior”  

- we are what we wear

- we are what we drink

- we are what we drive  

- building, maintaining, and projecting a self-concept

- hedonic consumption (experiences)  

- product enthusiasts: hobbies, collecting

Ex. Understanding the active recreation consumer  

- macro lifestyle trends  

 athleisure  

 age / gender/ indoor / outdoor  

- leisure trends (micro)  

 aging boomers  

 hybrid sports

 cross participation

- time use: 4 Types of Time

o contracted (paid work)

o committed (household care)  

o personal (self-maintenance)  

o free (discretionary)

Working adults with children  

vs.

College students

- less time sleeping

- more sleep

- leisure and sports  

- more work

- more leisure and sports

- education work

- free time is not necessarily “re-creative”  

 lots of time spent doing non-beneficial activities such as watching TV

peak experiences: a high point in life, exciting, rich, fulfilling experiences  

“flow” – a sense of mastery, accomplishment, and novelty, at one with the  activity at hand  

Lecture #6  

Business to Business Marketing  

Types of organizational buyers 

1) Industrial  

: firms that are changing or reprocessing  

manufactures – industry buyers

2) Resellers  

: purchase the good, make no changes, resell  

more product from manufacturer  consumer  

retailers, wholesalers – resellers  

3) Government  

: any federal, state, local agency / organizational unit that  

is buying products to pass products and services to the  

consumer

North American Industry Classification System (NAICS_  

: systems for classifying organizations in Canada, Mexico, and the U.S.  on the basis of the major activity, good, or service provided  

lists all possible organizations that may be of interest to you  

Key Features of Organizational Buyers  

 “derived demand”

demand that organizational buyers see is dependent on their  customers

 Ex. I sell glass bottles to coca cola, how many bottled  

coke orders depends on how much coke customers want

Much more formal decision process

Deadlines, meetings, etc.

Larger decision-making unit

Group of employees: manufacturers, users, finance, etc.

There may be 1 purchaser  many opinions  

More specific criteria

Software, cost, delivery date, repair,  

Price is often last on the list of criteria (other criteria are more  important)  

Criteria:

Quality specifications, delivery schedule, technical capability, warranty  & claim policy, past performance, problem solving service, production  capability / growth capability

Recent: vendor diversity and sustainability  

The “Buying Center: Decision Making  Unit

- Users  

- Influencer

- Purchasing agent  

 Person who signs to make purchase, not necessarily the  only input in the decision

 Can be an individual or a group / department

- Deciders  

 Actually make the decisions

- Gatekeeper

 Control the flow of information

 Who can and can’t meet with the boss



The Decision Process: “Buyclasses” 

- Straight rebuy  

 Not changing previous order  

 Can be by individual or automated

- Modified rebuy  

 Consider alternatives, bit of change in amount / type of  product / vendor

- New buy  

 All uncharted territory  

 Prolonged decision process / more people involved

Value Analysis:  

- Understand how customer uses product

- Cost savings

 Not only sticker price – how organizations can save  

money long term

- These steps want to create value for the customer

Types of Costs: 

- Initial purchase  

 Ticket price

- Switching  

 Switching to different software: provide tools to reduce  switching cost

- Operation

 Less energy to run  reduced costs

- Life-cycle

 Ex. With a more efficient printer, one can save money  

on ink long term

Life-cycle printer example:  

First year costs:

 Assume you print 6500 color pages / year

 Espson ET – 2500 = $380 (comes with ink for 6500  

pages)

 Typical inkjet = $70 (comes with ink for 325 pages) +  

19($40/cartridge) = $830

Total lifetime costs

 Assume lifetime is 5 years

 Epson ET – 2500 = $380 = 4($52) = $588

 Typical inkjet = $830 = 4(20 x $40) = $4030

 Cost savings: $4030 - $588 = $3442 (85.4%)  

Vendor Analysis: “formal” multi-attribute model approach  - Rank vendors on product quality, delivery, reliability, and price, and  on importance of each

Chapter 5 – Understanding Consumer Behavior  

Consumer behavior: the actions a person takes in purchasing and using  products and services – mental and social processes before and after  purchasing  

Purchase decision process: stages a buyer passes through in making choices  about what to buy  

5 Stages:  

1) Problem recognition

Perceiving a need

2) Information search

Seeking value  

3) Alternative evaluation

Assessing value  

4) Purchase decision

Buying value

5) Post purchase behavior

Realizing value  

Problem Recognition:

Initial step in the purchase decision

Perceiving difference between persons idea and actual

Situations big enough to trigger need for a decision

Information Search:

Internal search: scan memory for previous experiences with products / brands

External search: personal sources, public sources, marketer dominated sources  

Alternative Evaluation:  

Clarifies information gathered by

 Suggesting criteria used for purchase

 Yielding brand names that might meet criteria

 Developing consumer value perceptions  

Evaluate criteria: objective attributes (quality) and subjective  attributes (prestige) used to compare brands  

Purchase Decision:

1) From whom you buy

2) When you buy

Post Purchase Behavior:

Compares reality with expectations  

Either satisfied or dissatisfied  

 If dissatisfied, marketers must determine if product was  deficient or if consumer expectations were too high  

(oversold features and benefits)  

Consumer Involvement Affects Problem Solving  

Level of involvement in the 5 steps of the purchase decision process  depends on personal, social, and economic significance  

- High involvement purchase:  

o Expensive

o Serious personal consequences

o Could reflect on social image

Extensive information searches, consider attributes and brands, form  attitudes, word f mouth communication  

3 Variations in Consumer Purchase Decision Process Based on Consumer  Involvement and Product Knowledge

Characteristics

Extended

Limited

Routine

# brands  

examined

Many

Several

One

# sellers  

considered

Many

Several

Few

# product  

attributes

Many

Moderate

One

# external info  

sources

Many

Few

None

Time spent  

searching

Considerable

Little

Minimal

Extended Problem Solving  

Each of the 5 stages is used and considerable time and effort are  devoted to search for external info and evaluation and identification of  alternatives  

- High involvement purchase (cars, audio systems)  

Marketing Lecture #7 & #8

Segment 6: Segmentation, Targeting, and Positioning (STP)  - Related to chapter 9 in the text

Market Segmentation: search for relatively homogeneous clusters in a  heterogeneous market  

Segment: group of customers, existing and potential, with common needs,  values, and responsiveness to marketing variables  

Segmentation Criteria 

- Measurability  

 Basic demographic variables  

 Assigning customers to segments  

4 categories of measures: used to target segments  1) Objective, general

a. Demographic, socio-economic (easiest to measure)  

2) Objective, specific  

a. Past purchases  

3) Subjective, general  

a. Activities, interests, opinions (AOI’s)

4) Subjective, specific  

a. Brand, ratings, and importance rates  

Demographic/ses: age, sex, ethnicity, income, region

Indexing: “how likely is a group good to target?” a single # in portion in  region divided by portion in country  

%DMA / % in USA x 100

want DMA > 100 not <  

*Demographics with region and lifestyle help ad companies

- Reachability

 Need to reach to the target  

 Selective targeting  

∙ Place ad for people in segment (otherwise, wasted  

coverage)

∙ Look at demographic profile for magazines  

 Self-selection: let the ad do the talking  

∙ Ex. Body wash  

1) Just used to clean the body

2) Differentiated by men and wome  

3) Various needs of women: hydrating, beautiful /  

smooth skin, feel, scent  

4) Men: shampoo, shower, shave = efficient “smell  

like a man”  

- Profitability  

 Not all consumers within a segment are profitable, but the  segment as a whole is  

- Differential response  

 People in segment respond to changes in marketing mix  different than other segments  

Differential response to various marketing variables: PRICE Price inelastic: price increases, and quantity doesn’t change Price elastic: price increases, and quantity changes  

Applies to all controllable marketing variables:  

- Price

- Product

 Segment by high, mid, low tier

- Promotion  

 This segment likes coupons, etc  

- Place

 Where consumers shop / online location

 Nordstrom vs. Nordstrom rack  

Typical AIO Study 

- AIO’s  

- Product usage  

 What products, how frequently

- Media usage  

 Use media to target ads

- Demo / ses  

Product usage: specific  

- Past purchases  

o Product class (heavy half) use of product

o Brand loyalty

Pivotal Point Customer (top 80%)  

As product gets more specific, more profits come from a smaller % of  people

Benefit Segmentation: subjective and product specific  

Collect with multi-attribute survey / segmentation on the basis of what  benefits are important  

Targeting: 4 Strategies  

- Mass marketing

- Concentration

- Multi-segment

- “mass customization”  

other considerations in target segments  

- expected size and growth of segment  

- competition

- cost

- compatibility

Majority Fallacy: blindly pursuing the largest segment

Product Positioning:  

The location a brand occupies in a consumer mind relative to  competitors  

- points of parity: features or benefits that are similar or identical to  competitors in the product category  

- points of difference: unique (desirable) brand features or benefits that differentiate it from other competition in the product category  trying to create sustainable competitive advantage  

Perceptual Maps:  

- can interpret competitors (closest) and how one is competing with  them

- conceptually simple and powerfully useful  

Approaches to Positioning 

- product features  

 coors light focuses on cold

- product benefits

 what’s my product designed to do  

 crest toothpaste => no cavities

- user category  

 associate brand with target people characteristics  

 Wheaties cereal w Olympians / champions

- against other brands  

 Samsung vs iphone

- against product category  

 7up against cola

- specific use

 am/pm medicine

competitive advantage: finding out things competitors don’t know about

lifestyle example: Subaru ads with dogs to attract outdoorsy dog people /  donates to dog charity

data ex.: target maternity ads  

usage based ex: laptop for travel vs. editing: shoes for running vs. basket  ball  

Targeting: 4 Strategies  

1) mass marketing

a. inefficient (some degree of targeting is far more efficient)  b. no established company would do this  

i. not even gasoline companies mass market

2) concentration marketing  

a. perfect for some segment out there

b. small, fewer resourced, company  

c. extreme of this is small niche marketing

d. problem: difficult to handle changes in economy  

3) portfolio strategy (multi-segment)  

a. covering move of market with variety in products  

b. problem: costs / marketing / approach of developing each  product  

4) “mass customization”  

a. segment of 1: everyone can get what they want custom to better suit needs  

b. easier because of the internet  

c. problem: most needs met by general products  

Marketing Lecture #9 & #10

Segment 7: Market Research

- Related to chapter 8 in the text

- Last segment on exam

Marketing Research:

Activities providing info for marketing decision-making

Uses:  

- Demand forecasting  

 Forecasting demand for a product

 Difficult to do with new / innovative products

 Ex. Tide pods delayed release because they couldn’t meet  expected demand yet  

- Segmentation  

 Research variables finding relations to customers’ needs

- Market tracking

 How well is it selling? Locations  

 Data is kept by retailers and sold to companies  

- New product testing

 To what degree is this product viable (going to make  

money)

- Ad pretesting  

 Which ad idea resonted with specific segment  

 Facebook (the #2) and Amazon are the top advertisers  Approach to Marketing Research:

1. Define Problem

2. Develop Research Plan

3. Collect Information

4. Review Data => develop findings and rec’s  

5. Take Action, Evaluate Results  

a. If results are good, take no further action

b. If not, go back to stage 1  

Marketing Information System (MIS)  

An integrated, ongoing decision support system

 Routinely evaluated

 A more modern-day approach  

MIS data classification

- Internal secondary: data already collected, and repurposed  - External, secondary: syndicated research: a company collects info  because they recognize the value and can sell reports to other  companies  

- Internal, primary: my company collecting for a specific need – info  collected because of a specific plan  

- External, primary: answers specific need – outsourced the study for  data (outsourcing reduced bias)  

Types of (external, primary) Marketing Resource 

- Exploratory – Descriptive – Causal  

Exploratory – get a sense of / define the problem

- Observation

 Observing consumers

- Focus group

 Group conversation, observers and note takers, moderator  Test ads, products, product ideas / concepts

 Can lead astray, recently falling out of favor

 Eye tracking with Campbell’s soup label – higher tech

- Depth interviews

 One on one  

 Researcher has basic script to cover

 Lattering: approach – asking why? Why? Why? To get  further information / track all the way back to basic needs

Descriptive - Unbiased / describe relationships  

- Observation

 Personal

 Electronic: mostly used now – purchases recorded  

∙ Phone generates a lot of information about you

- Surveys

 Set survey / script  

 Mail: no longer used / bias sample because of who  

responds / low response  

 Phone: no longer common

 Web  

 Personal: survey in real life / present concept or product  Mobile: more recent  

Key factors in descriptive research:

- Population

 Often, everyone in target market segment

 Could be anyone – more broad

- Sample

 Individuals who participate in research  

- Response rate

 Of all people approached, how many responded

- Representativeness  

 Want results to accurately represent population

 Ex. If population is 50% male and 50% female, sample  should be too

- Error (bias)  

 Any # of ways results may not generalize the population

Types of survey error:  

Sampling error

Interviewer error

Questionnaire design error  

Survey Research:  

Measures of consumer memory: how aware are consumers of my  brand?

Free recall

- “what brands did you see advertised during the Super Bowl?”  Cued Recall  

- “which pick-up truck brands did you see during the Super Bowl?” Recognition

- “did you see an ad for the Chevy Silverado during the Super Bowl?”  

Causal – what factors are causing particular changes in variable  Experiments  

- laboratory

 pro: can control variable

 con: removed from the real world  

- field (Test marketing)

 in real stores / theatres / whatever environment  

Internal Validity vs. External Validity  

Internal: Extent to which you can say with certainty that x => y  (Laboratory experiment)

External: generalizing results to the population / environment you care  about (field exp.)

*technology is making it easier to have high internal and external validity  

correlation does not = causation

why we do causal research

Manipulation and Control: the keys to causal research

- manipulate the experimental independent variable(s)  

ex. Experiment

o dependent variable measures:  

 overall satisfaction with purchase

 likelihood to buy another product

 likelihood to recommend product

 all use rating scales from 1-7

- control all extraneous variables  

- measure response on dependent variable  

Test Marketing: external validity in local scope  

o cost

o competition: can interfere

o timing: long / short term

o re-purchasing rate

o fine running  

costs a lot – mostly used by large companies – is cost worth marketing  revenue  

END OF EXAM 1 MATERIAL