MGMT 4A Lecture Notes - Lecture 3: Decision-Making, Target Market, Pricing Strategies
Document Summary
Marketing: activities, institutions, and processes aimed at creating, communicating, and delivering and exchanging products or services that provide value for customers, clients, parters, and society at large. Opportunity cost: value of the best alternative foregone in a situation in which a choice is made between several mutually exclusive alternatives. Utility: property in any object to produce pleasure or happiness, or prevent pain or unhappiness. Cardinal utility: consumer satisfaction measured in actual numbers. Ordinal utility: ranks goods relative to one another. Marginal: change in one thing that occurs w/ a one-unit change in another thing. Marginal utility: additional utility derived from a one unit increase in consumption. Total utility increases w/ consumption but does so at a decreasing rate : decreasing marginal utility. The equimarginal principle: a consumer w/ fixed income facing market prices achieves max satisfaction when mu of last dollar spent on each good is exactly the same as the mu of last dollar spent on any other good.
