Principles of Marketing Exam 2 - Moore

Consumer buying behavior

Buying behavior of final consumers

Consumer market. What are the three words?

All the individuals and households that buy or acquire goods and services for personal consumption

ACQUIRE, USE, DISPOSE

Is this an S-R model? What does S-R mean?

Yes. S-R means stimulus-response

What is the BBB (what are the two parts)?

Buyer's Black Box

1. Buyer's characteristics

2. Buyer's decision process

What are the four characteristics that influence consumer purchases" See figure 5.2. Be able to list and define

Cultural, Social, Personal, Psychological

Define culture, subculture

Culture - •Set of basic values, perceptions, wants, and behaviors learned by an individual from family and other important institutions

Subculture - Group of people with shared value systems based on common life experiences and situations

What are the key elements of social factors.

- Membership groups

- Reference groups

- Word-of-mouth

- Opinion leaders

- Influencer marketing

- Online social networks

- Family

- Roles and status

Opinion leader

Person within a reference group that exerts influence due to special skills, knowledge, personality or other characteristics

Influencer marketing

Enlisting established influencers

Reference groups

direct or indirect point of comparison

-Aspirational groups: wish to belong

What do roles and status mean?

Is family important?

People usually choose products appropriate to their roles and status

Family is important

List the personal factors.

•Occupation

•Age and family life cycle

•Economic situation

•Environmental situation

•Lifestyle: involves AIO (activity, interest, opinions)

•Personality and self-concept

What does AIO stand for?

activities, interests, opinions

List the key psychological factors

•Motivation

•Perception

•Learning

•Beliefs and Attitudes

Know Maslow's Hierarchy of needs (figure 5.3)

Define perception

Selecting, organizing, and interpreting information to product meaning

Define subliminal advertising

advertising in which the consumer doesn't realize they are being affected by an ad

What is JND?

Just Noticeable Difference

Is stimulus generalization part of learning? What were our examples?

Yes, it is

Examples include Arm and Hammer, and Ritz

Attitude

An individual’s enduring evaluation of feelings about and behavioral tendencies toward an object or idea

Parts of attitude

Cognition

Beliefs, knowledge, information

Affect

feelings, emotions

Behavior

intentions

KNOW figure 5.4 (steps in buyer decision process)

Need recognition

Information search

Evaluation of alternatives

Purchase decision

Post purchase behavior

A need occurs when there is enough tension and distance between what and what (see slide)? How can a need be triggered?

Can be triggered through internal and external stimuli

Do we always engage in information search? What types are there? Which is the least biased?

Yes, we do. External is the least biased

What is universal, retrieval, consideration, choice set

What two things get in the way during purchase decision stage?

-Attitudes of others

-Unexpected situational factors

In post-purchase, why is cognitive dissonance a concern? Define it.

A buyer's doubts shortly after a purchase about whether the decision was the right one

Often occurs after expensive, high-involvement purchases

Define Customer Journey.

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

List the steps in the adoption process. Define adoption process.

Adoption process: A mental process through which an individual passes from first learning about an innovation to final adoption

Trial (The quickest route to adoption)

In this stage, the consumer tries the new product on a small scale to improve his or her estimate of its value

know the difference between trial and adoption.

Trial is small scale test of a product, adoption is full and regular use of the product

Know figure 5.5

Innovators and Lagging adopters.

Innovators: Try new ideas at some risk.

Lagging: adopt the innovation only when it has become something of a tradition itself

What are the five characteristics that impact the rate of adoption?

•Relative advantage

•Compatibility

•Complexity

•Trialability

•Observability

•Risk

Relative Advantage

The degree to which the innovation appears superior to existing products.

Compatibility

The degree to which the innovation fits the values and experiences of potential consumers

Complexity

Refers to the degree to which the innovation is difficult to understand or use

Trialability

The degree to which the innovation may be tried or sampled on a limited basis

Observability

The degree to which the use of the innovation and the potential outcomes of usage can be observed by or communicated to others

Risk

The degree to which the customer perceives risk in purchasing the product

Business buyer behavior

-Purchasing goods and services that are used in the production of other products and services

Business-to-business B2B

must understand business markets and business buyer behavior

Business buying process

•Determining which products and services to purchase

-Finding, evaluating, and choosing among alternative suppliers and brands

What are the three main differences between consumer and business markets?

Business markets are

huge and involve more money and items than consumer markets.

What is meant by derived demand?

Business demand that comes from the demand for consumer goods. It is inelastic

Are there more buyers in this (business) market than in the consumer market? Are they larger or smaller?

Fewer but larger buyers

Is this market more professional? Are there more decision makers? (see slide).

Couldn't find anything for this

Know figure 5.6. Is this like the consumer model?

Yes (S-R)

What is the difference between a straight rebuy, modified rebuy, new task?

Straight rebuy

•Buyer routinely reorders something without any modifications

Modified rebuy

•Buyer wants to modify product specifications, prices, terms, or suppliers

New task

•Buyer purchases a product or service for the first time

What are the different roles in the buying center?

Actual users of the product or service

People who make the buying decision

People and units influencing the buying decision

People who do the actual buying

Individuals and units controlling the buying information

What are the four broad influences on business buying behavior?

Environmental, Organizational, Interpersonal, Individual

How many stages are there in the business buyer decision process? (Is it more or less than the consumer buying process?)

There are 8

It is more

Define market segmentation

Divide the total market into smaller segments

Define market targeting

Select the segment or segments to enter

Define market differentiation

differentiating the market offering to create superior customer value

Define market positioning

position the market offering in the minds of target customers

Correct order of the market strategy

Market segmentation, targeting, differentiation, positioning

What are the four major segmentation variables and examples?

Geographic, Demographic, Psychographic, Behavioral

Geographic segmentation

dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods

Demographic segmentation

dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

Psychographic segmentation

dividing a market into different segments based on social class, lifestyle, or personality characteristics

Behavioral segmentation

dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

What are the key requirements for effective segmentation?

-Measurable, accessible, substantial, differentiable, and actionable

What are the four different targeting approaches? Define and provide examples. (figure 6.2)

Undifferentiated, Differentiated, Concentrated, Micromarketing

Undifferentiated marketing

a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

Differentiated

a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each

Concentrated

market-coverage strategy in which a firm goes after a large share of one or a few smaller segments or niches

Micromarketing

Practice of tailoring products and marketing programs to suit the tastes of specific individuals and locations

Define competitive advantage. What are some?

An advantage over competitors gained by offering greater customer value, either by

-Having lower prices, or

-Providing more benefits that justify higher prices

Which differences to promote?

•Important

•Distinctive

•Superior

•Communicable

•Preemptive

•Affordable

•Profitable

What is a perceptual map? Consider the example from class and the in-class activity.

•created by questioning a sample of consumers about their perception of products, brands, and organizations with respect to two or more dimensions

The full positioning of a brand is called the brand's v_________ p___________.

Value Proposition

Which are the 'winning' value propositions. What is ALDI's?

More for more

more for the same

more for less

The same for less

Less for much more (ALDI)

What is a positioning statement?

Summarizes company or brand positioning

Define product. Is it the same as a service?

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

It is the same as a service

What is a market offering?

It is both tangible goods and services

Know figure 7.1 What example did we use back in chapter 5 to discuss this?

Pool tables

List the four types of consumer products. Define/example.

Convenience, shopping specialty, unsought

Convenience def

are usually bought frequently, immediately, with low customer involvement, and with minimal comparison and buying effort. Examples include laundry detergent, soft drinks, and city subway or bus transport

Shopping def

Are less frequently purchased consumer products and services that customers gather information about and compare carefully on suitability. Examples include furniture, clothing, major appliances, and hotel services.

specialty def

products have unique characteristics or brand identifications for which buyers are willing to make a special purchase effort. Examples include high-end cars, high-priced photography equipment, designer clothes, and medical or legal services

unsought def

are those that a consumer either does not know about or knows about but does not normally consider buying.

What are the three product/service decisions?

individual, product line, product mix

List the 5 individual product decisions.

Define product quality, feature, design.

What is branding? Define brand, name, mark, trademark.

What does the package do? What does the label do?

Packaging protects and promotes,

Labeling identifies, describes, and promotes

List and define the 5 determinants of service quality.

Reliability

The ability to perform the service dependably and accurately

Responsiveness

The willingness to help customers and provide prompt service

Assurance

the knowledge of and courtesy by employees and their ability to convey trust and confidence

Empathy

The caring, individualized attention provided to customers

Tangibles

The appearance of physical facilities, equipment, personnel, and communication materials

What is the CREST method for?

-CALM the customer

-REPEAT the problem

-use EMPATHY statements

-SOLVE the problem

-make a TIMELY RESPONSE

What is a product line? What is stretching? Filling?

•closely related products that:

–Have similar functions and customer groups

–Are sold through similar outlets or fall within given price ranges

What is stretching

A company lengthens its product line beyond its current range

What is filling

Adding more items within the present range of the line

What (and define) are the 3 key product mix decisions (mix, length, width)?

What are the four service characteristics (figure 7.3)? Define and provide examples.

Service intangibility

Service intangibility means that services cannot be seen, tasted, felt, heard, or smelled before they are bought