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Final

MKT100 Exam Notes


Department
Marketing
Course Code
MKT 100
Professor
Paul Finlayson
Study Guide
Final

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MKT100 Exam Notes:
Class 1:
-Schumpeter Wealth Creation Principle:
-The value that technological innovation (large or small) adds in
use
-Named after Joseph Schumpeter who called it “creative
destruction”
-The Smith Wealth Creation Principle:
-Two individuals, X and Y meet. X has 10 Units of A in his
possession and ownership and Y has 10 units of B in his
possession and ownership. They discuss whether they would like
to barter two units of A for two units of B.
-X agrees because he values two of B much more than two
of his 10 units of A. Y agrees because he values two of A much
more than two of his 10 units of B. They make the exchange.
-The Wealth Creation Feedback Effect
-A virtuous economic cycle/circle that drives economic growth,
prosperity, and capital creation
-Innovation <- Even Bigger Pot of Gold -> Exchanges
-Trade & trading empires grew from the production of agricultural
surpluses
-Surplus was traded, led to the diffusion of innovations
-6,000BC: cultivation of rice invented in China
-Rice farming expands across South East Asia
-Goats, sheep, cows, pigs and water-buffalo =
domesticated
-3,000BC: first great trading civilizations created along rivers

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-Moving cargo along rivers = 1/20th cost of using camels or
carts
-Trading boats -> Mediterranean & South China Seas
-Rome trading centre -> Carthage
-Europe dominated trading with Roman roads
-China dominates Asia
-Overland trade begins between super powers, cities
evolve
-Dark ages: raiding dominates trading
-Civilizations decline -> climate change, warrior tribes’
destruction
-Islamic “Enlightenment” restores trade in Europe & with Asia
-Mongols create Eurasian trading empire
-Merchant adventurers emerge -> Venice, Italy, Portugal, Spain,
Holland & England
-New sailing ships -> trade slaves, spices, plants, precious
metals, & crafts
-Baltic states, Russia, North America develop
-Steamship, container ship & air-cargo took over trade
-USA, China, Japan, Germany -> dominated
-Supply & Demand:
-Markets should always be getting more efficient
-Markets are about disequilibrium, not equilibrium
-About change, growth, transformation, decline and fall, not
stability
-Supply changes as product, production and trading processes evolve
-New tech creates new product life cycle
-Videos -> DVDs -> BluRay
-New innovation: variance in supply increases, demand may not
change much
-Depends on if you change their preferences/demands
-When demand greatly increases, supply must greatly increase
too
-“Imitators” enter the market
-Diffusion occurs through greatly expanded distribution
reach
-Ads make competitive comparisons
-Profits are greatest, good times for suppliers
-At product maturity:
-Little product design improvement, supply doesn’t change
much
-Market shares stabilize around brand loyalty
-Supply & Demand rate of change decreases

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-Price competition increases: suppliers innovate on
production process cost reduction
-New product, New Life-Cycle
-Typewriter -> Electric Type-writer -> Word-processor -> PC
-Trade depends on perception of value in products/services of grading
partner
-New innovation:
-Customer preferences change, standards of quality change,
demand changes
-Suppliers rush to serve demand
-Imbalances with supply & demand created, increase competition
w/old & new market
Class 2:
-Situation/Environmental Analysis:
-PEST
-Political
-Economic
-Socio-Cultural
-Technical
-Political:
-Government related businesses (suppliers), defense, services,
lobbyists, and laws
-Snow tires, car seats, safety regulation, overall government
control over industry, green legislations
-Wars, taxes, HST
-Economic:
-Tax rates, HST, recession, boom, bust (& fears & hopes that
surround them)
-Spending patterns (75% of economy consumer driven)
-Affects? Entertainment, great depression, changed patterns for
years
-Socio-Cultural:
-Demographics, education, family, urbanization, busy-ness,
religious, norms and values, drug use, pluralism, diversity,
intellectual property values, attitude towards wealth, mash up
(IP), risk, financial decisions
-Religion (voodoo, fatalism)
-Privacy concerns, individualistic vs. collectivist, stronger role of
social norms
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