MRKT Unit 2 Key Terms and Concepts

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This contains the key terms and concepts in the notes for MRKT 341 Chapt 5-8

70 Terms

1

consumer buyer behavior

the buying behavior of final customers

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2

consumer market

all individuals and households that buy goods and services for personal consumption

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3

opinion leader

exerts social influence on people in the reference group because of special skills, knowledge, personality, etc.

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4

social networks

online social communities where people exchange information and opinions (ex. Instagram)

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5

perception

the process by which people select, organize and interpret information to form a meaningful picture of the world

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6

learning

changes in individuals behavior arising from experience

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7

need recognition

first stage of buyer decision process; customer recognizes a problem or need

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8

info search

second stage of the buyer decision process; customer is motivated to search for more information

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9

alternative evaluation

third stage of the buyer decision process; the customer uses information to compare brands in the choice set

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10

purchase decision

fourth stage of the buyer decision process; the customer purchases the product/service

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11

post purchase behavior

fifth stage of the buyer decision process; consumer take further action based on their satisfaction or dissatisfaction

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12

cognitive dissonance

buyer discomfort caused by post purchase conflict

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13

customer journey

sum of ongoing experiences consumers have with a brand that affect their buying behavior, engagement, and brand advocacy over time

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14

high involvement

takes more time to plan, more decisions need to be made, usually more expensive; ex) dream vacation

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15

low involvement

inexpensive, few attributes, and short purchase decision time; ex) can of beans

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16

prospect theory

losses loom larger than gains; ex) a product that is marketed to work 95% of the time will attract more buyers than a product that is marketed to fail 5% of the time

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anchoring

consumers use reference points when making judgements

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Why is consumer behavior important?

Allows marketers to understand, appreciate and predict/influence potential customers

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Factors that influence consumer purchase decisions/buying behavior

personal, situational, psychological, and social

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20

How do marketers use the levels of customer involvement to make business descions?

To determine how to sell the product to customers; For instance, it would take more convincing for a customer to buy their dream vacation compared to a can of beans. So more money would need to be put into ads for the dream vacation.

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21

Stages of the consumer buying process

  1. Need recognition

  2. Information search

  3. Evaluation of alternatives

  4. Purchase decision

  5. Post Purchase Behavior

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22

reciprocity theory

people feel obliged to give back to others; ex) if the server provides the table with a mint along with the bill, their tip will most likely increase

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23

scarcity theory

people feel the need to get their share before the product is all gone; ex) toilet paper at the beginning of COVID

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likeability theory

people prefer to say yes to people they like; ex) if the author of a book includes a personal message, you’ll be more likely to recommend the book and maybe buy more copies to give out to people

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consensus theory

people will look to the behavior of others to determine their own actions; ex) if you go into an empty drive thru, you’ll likely see cars enter in behind you

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Why do marketers use segmentation?

To determine who the market is and how to sell the product so it’s appealing to their target market

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segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes

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target market

a set of buyers who share common needs that a company decided to serve

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What are characteristics of a great target market?

size/growth, structural attraction, and skills/strength

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How do marketers segment a market?

  1. Understand the benefits the customers seek

  2. Partition the market and develop prototypical customer profiles based on those benefits

  3. Find observable variables that discriminate among the benefit segments

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Categories of the Segmentation Library

benefits sought, behavioral, demographic, geographic, psychographic, and business to business

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Benefits sought segments

dividing the market into segments according to different benefits that the customer seeks from the product

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geographic segments

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demographic segments

dividing the market into segments according to observable variables like age, gender, religion, etc.

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psychographic segments

divides the market into segments according to personality and lifestyle

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behavioral segments

divides the market according to usage, occasion, user status, usage rate or loyalty status

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postioning

arranging the market offering to occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers

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positioning statement

To (target segment and need) our (brand) is (concept) that (point of difference); summarizes company/brand positioning

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value proposition

the full positioning of a brand - the full mix of benefits on which it is positioned

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40

competitive advantage

gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices

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mass marketing

undifferentiated; whole market in one offer

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niche marketing

concentrated; large share of one or a few segments

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micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; local and individual marketing

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local marketing

form of micro-marketing that tailors to cities, neighborhoods and even specific stores

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What is a differentiated offering?

What a company does to make their product/service unique and better than competing offerings

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Why does great marketing need differentiation?

It gives the customer a reason to buy the offering over all other offerings

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product

anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need

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service

activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership if anything

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core value

basic benefits gained from buying the product/service

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actual product

the features the product/service offers

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augmented product

peripherals for the product; ex) warranty, delivery, manual, etc

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consumer product

bought by the final consumer for personal consumption

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convenience product

bought frequently, immediately, and with minimal comparison and buying effort

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shopping product

product that is usually compared on attributes like suitability, quality, price and style

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specialty product

unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort

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service intangibility

services cannot be seen, tasted, felt, heard, or smelled before they are bought

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service inconsistency

a.k.a. variability; ex) Shawn Mendes’ concerts vary from night to night

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service inventory

the services perish

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brand equity

differential effect that knowing the brand name has on customer response to the product or it’s marketing

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brand value

total financial value of a brand

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private label

a brand created and owned by the reseller of the product; ex) Cheerios

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co-branding

practice of using an established brand names of two different companies on the same product

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line extension

extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category

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64

category extension

applying an existing brand name to a new product in a different product category; a.k.a. brand extension

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65

new product development cycle

introduction → growth → maturity → decline

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introduction (PDC)

new product is first distributed and made available for purchase

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growth (PDC)

sales start climbing quickly

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maturity (PDC)

sales growth slows or levels off

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decline (PDC)

sales fade away

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70

7Ps

product, price, place, promotion, people, process, physical space and productivity

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