5 theories in marketing

1. 1. Organizational Life cycle Theory
2. Elaboration likelihood theory
3. Commitment and consistency Theory
4. Theory of reasoned action
5. Open systems theory
5 Theories in management & Marketing

2. Organizational life cycle Theory
 The organizational life cycle theory that was developed by business consultant
and former professor Ichak Adizes, refers to the expected and distinct sequence
of advancements experienced by an organization, as opposed to a randomized
occurrence of events.
 The organizational life cycle is a theoretical model based on the changes
organizations experience as they grow and mature.

3. According to Adizes, generally, there are five stages to an organization's life cycle:

4. Organizational Life cycle Theory:
 Stage 1: Existence(Start-up): Commonly known as the birth stage, “existence”
signifies the start of an organization's expansion. The main importance is
centered around the acknowledgement of having an adequate number of
customers to keep the organization or business active.
 Stage 2: Survival(Growth): At this stage, organizations look to pursue
growth, establish a framework and develop their capabilities. There is a focus on
regularly setting targets for the organization, with the main aim being to
generate sufficient revenue for survival and expansion.

5. Organizational Life cycle Theory:
 Stage 3: Maturity : This stage signifies the organization entering a more
formal hierarchy of management (hierarchical organization).
 Stage 4: Renewal(Revival): Organizations experience a renewal in their
structure of management, from a hierarchical to a matrix style, which
encourages creativity and flexibility.
 Stage 5: Decline: This stage initiates the death of an organization. focusing on
political agenda and authority within an organization, whereby individuals
start to become involved with personal objectives, instead of focusing on the
objectives of the organization itself.

6. Elaboration likelihood theory:
 The Elaboration Likelihood theory (ELM) which was developed by Richard
E. Petty and John Cacioppo, proposes that each and every message is
undergoing the process of persuasion in two different ways.
 They are called Central route and peripheral route.
 Both of them are effective persuasion techniques, but each of them has its own
guiding techniques to make them more operative.

8. Elaboration likelihood theory:
 Central Route
 The process of persuasion through Central route is straight to the point and
complete.
 It is informational and structured, and focuses on a high level of
cognition where the individuals are heavily involved in the decision.
 It requires more involvement from the part of the addressee that should
carefully analyze the message in every possible angle.

9. Elaboration likelihood theory:
 Peripheral Route
 The peripheral route is the opposite, instead of the credibility of the source and
statistics, it values the attractiveness.
 Here the receiver of the message is not sure whether to agree with the message or
to disagree, so finally, he will be persuaded by the peripheral factors.
 This is where packing, marketing, advertising and other PR factors does their job.

11. Commitment and consistency Theory:
 The Commitment and Consistency principle is one of the six principles
established by Cialdini (1984) in his book Influence: The Psychology of
Persuasion.
 It describes the way in which people want their beliefs and behaviors to be
consistent with their values and self-image.
Cialdini's 6 Principles of Influence are reciprocity, commitment and consistency, consensus or social proof,
authority, liking and scarcity

12. Commitment and consistency Theory:
 As a psychological principle, commitment and consistency refer to the choices
people make to believe more strongly in the decisions we've already made in
order to avoid cognitive dissonance (a situation where you have conflicting
beliefs or behaviors).
 This theory refers to the use of a psychological technique in order to increase
marketing effectiveness.

13. Commitment and consistency Theory:
 It states that the best way to encourage people to pass on their loyalty is to get
them to commit to something consistently. That commitment could be a
standpoint, their identity, their leanings or even a statement.
 The theory suggests some effective ways marketers use the principles of
commitment and consistency to increase costumers’ loyalty.

14. 5 Ways to Use Commitment and Consistency to Drive Sales:
 Foot in the Door technique: In this principle, you start the marketing
process by offering customers small steps, then lead to bigger decisions.
 Cross-Selling technique: It is where you show people items that would go
well with their current purchase.
 Wishlist technique: It is a smart tactic in which customer receives fluttery
notifications that “now it is a good time to buy an item from the wish list” and
you are just a facilitator.

15. 5 Ways to Use Commitment and Consistency to Drive Sales:
 Committing in public:Once the public shows a commitment, the individual
feels that he is accountable for the actions and also feel compelled to complete
the commitment.
 User Generated Content Campaigns - Make them work for you :UGC, is
a marketers dream. You’re getting the customers to do the work for you by
sharing their work linked to a campaign that you’re doing.

16. Theory of reasoned action:
 The Theory of Reasoned Action was initiated by Ajzen and Fishbein(1975)
 It is a consumer behavior theory that focuses on the relationship between
marketing and the preexisting attitudes of consumers in their purchasing
decisions.
 It suggests consumers act on behaviors that they believe will create or
receive a particular outcome.

17. Theory of reasoned action:
 The consumers’ acts are determined by two independent variables, their attitudes
and subjective norms.
 Attitudes are feelings that are believed to be a positive or negative in
relation to the achievement of an objective.
 Subjective norms are person’s beliefs about how people around them judge
their behavior to be right or not.
This has led marketers to several insights such as associating a purchase with a
specific positive result.

19. Open systems theory:
 Based on theories, systems can be considered either open or closed.
 Almost all modern theories of organization utilize the open systems perspective.
 Open system theory (OST) looks at the relationships between the organizations
and the environment in which they are involved.
 This focus reflects on organizations' ability to adapt to changes in environmental
conditions.
 It is useful for businesses because it provides a framework for thinking about
processes such as change – a regular part of running a business.

20. Change in open systems is the process of adapting to shifting situation.