MRKT Unit 2 Key Terms and Concepts

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

consumer buyer behavior

the buying behavior of final customers

consumer market

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

opinion leader

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

social networks

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

perception

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

learning

changes in individuals behavior arising from experience

need recognition

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

info search

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

alternative evaluation

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

purchase decision

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

post purchase behavior

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

cognitive dissonance

buyer discomfort caused by post purchase conflict

customer journey

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

high involvement

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

low involvement

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

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

anchoring

consumers use reference points when making judgements

Why is consumer behavior important?

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

Factors that influence consumer purchase decisions/buying behavior

personal, situational, psychological, and social

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.

Stages of the consumer buying process

1. Need recognition

2. Information search

3. Evaluation of alternatives

4. Purchase decision

5. Post Purchase Behavior

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

scarcity theory

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

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

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

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

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

target market

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

What are characteristics of a great target market?

size/growth, structural attraction, and skills/strength

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

Categories of the Segmentation Library

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

Benefits sought segments

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

geographic segments

demographic segments

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

psychographic segments

divides the market into segments according to personality and lifestyle

behavioral segments

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

postioning

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

positioning statement

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

value proposition

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

competitive advantage

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

mass marketing

undifferentiated; whole market in one offer

niche marketing

concentrated; large share of one or a few segments

micromarketing

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

local marketing

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

What is a differentiated offering?

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

Why does great marketing need differentiation?

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

product

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

service

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

core value

basic benefits gained from buying the product/service

actual product

the features the product/service offers

augmented product

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

consumer product

bought by the final consumer for personal consumption

convenience product

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

shopping product

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

specialty product

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

service intangibility

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

service inconsistency

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

service inventory

the services perish

brand equity

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

brand value

total financial value of a brand

private label

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

co-branding

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

line extension

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

category extension

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

new product development cycle

introduction → growth → maturity → decline

introduction (PDC)

new product is first distributed and made available for purchase

growth (PDC)

sales start climbing quickly

maturity (PDC)

sales growth slows or levels off

decline (PDC)

sales fade away

7Ps

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