IBM 301 Final Review
The exam will be largely based on the application of these concepts and principles.
Understand the three sources of competitive advantage (ch2)
Cost Competitive Advantage
: being the low-cost competitor in an industry while maintain
satisfactory profit margins.
A cost competitive advantage enables a firm to deliver superior customer value. (ex-Wal-
Product/service differentiation competitive advantage
: the provision of something that is
unique and valuable to buyers beyond simply offering a lower price than the competitions. (ex-
Nike, Lexus, Maytag appliances)
Niche competitive advantage
: the advantage achieved when a firm seeks to target and
effectively serve a small segment of the market. (ex—Rolex [high-quality watches], Nordstrom
[services], Southwest Airlines [low price])
Explain the components of a situation analysis (ch2)
: the firm should identify its internal strengths (S) and weakness (W) and also
examine external opportunities (O) and threats (T).
Internal [strength and weaknesses]
: production costs, marketing skills, financial
resources, image, and technology.
External [opportunities and threats]
: social, demographic, economic, technological,
political/legal, and competitive.
Describe the elements of the marketing mix (ch2)
: not only is physical unit important but the package, warranty, after-sale service,
brand name, company image, value, and many other factors.
: goal is to make sure products arrive in usable condition at designated places when
needed. Making products available when and where consumers are wanted.
: advertising, public relations, sales promotion, and personal selling. Informing,
education, persuading and reminding consumers.
: what a buyer must give up to obtain a product; it is often the most flexible o the
four marketing mix elements—the quickest element to change.
Analyze the components of the consumer decision making process and explain how each
component is useful to marketers (ch5)
: occurs when consumers are faced with an imbalance between actual
and desired states (internal stimuli: hunger, thirst, tired/ eternal stimuli: restaurant
recommendation, color of car, design of package). This creates a want in a product by