MRKT 303 Exam 2 Michael Budden

What are the 5 steps of the consumer decision process?

1. Need recognition. What do I need?

2. Information search

3. Evaluate alternatives

4. Purchase

5. Post-purchase behavior

How can you prevent bad thoughts in customers after they purchase something?

offer warranties or refund policies

provide realistic expectations of your product up front

What are the 3 types of decision processes?

extensive decision making - takes the most time. Used for making big decisions

limited decision making - in between. Decisions you make sometimes

routine decision making - takes least time. regular purchases or decisions you make all the time

Describe the 5 levels of Maslow's hierarchy of needs

From the base of the pyramid up:

Physiological - our basic needs for life are met such as food, water, and shelter

Safety - We want to feel safe

Love and belonging - we want to feel like we belong and we matter

Self-esteem - feeling of accomplishment

Self-actualization - achieving one's full potential

Can you ever completely satisfy Maslow's hierarchy of needs?

No

How can marketers utilize Maslow's hierarchy of needs?

You must find out what need you want your product to fill

any product can target any level of the hierarchy

What is a want?

how you satisfy a need

ex. i need food but want a burger

What are 8 factors that influence customer decisions?

culture and values, such as language and subculture

social class. Heavily dependent on education and wealth plays a factor as well

Reference groups - groups that we relate to. Primary and secondary reference groups

aspirational groups - groups that you want to be a part of in the future. Acting like the group you want to be a part of

dissociative groups - acting in a way that lets people know you are not part of a certain group

opinion leaders - someone people go to when they need an opinion on something. Ex: Dr. Budden consulted his brother before buying a gun because he was a gun expert

Family, gender, age and family life cycle stage

personality and self concept

What is the difference between a primary and secondary reference group?

Primary - groups you don't have to pay to be a part of. informal groups such as family

Secondary - formal groups such as frats or churches

What are the 4 things that make up personality?

unique to an individual

a combination of traits/characteristics

relatively stable

behaviors can vary across time

What is self concept?

impacted by how people believe others see them

story: Stacy at SLU was attending for 6 years for a 4 year degree. Dr. Budden was told that he need to tell her that she needed to drop out, as she was wasting her money being at SLU because she wasn't progressing. Instead, Dr. Budden said he believed in her and after that meeting she graduated in 1 year

What is self esteem?

positivity of a person's self-concept. Acceptance by others

What are gender differences?

differences in preferences and behaviors between men and women

story: Dr. Budden was serving burgers on campus and noted that most women didn't what onions on their burgers while most men did

What is business marketing?

marketing goods/services to organizations for other than personal consumption

How much more do businesses spend on online purchases compared to individuals?

3 times as much

What are reverse auctions and who held them?

someone wanted to buy something and companies bid prices down so that person could buy it. Dr Wyld

True or false: business to business marketing faces the same challenges as all other marketers?

true

story: Dr. Budden worked for a lumber company and had to look through a book and find organizations that bought at least

What are the 3 traits of original e-business initiatives from the 90s

revenue generation

basic marketing communication

aggressive disintermediation initiatives

What are the 5 traits of current e-business initiatives?

reduce costs

customer focused technology

brand building and development

integrate online and traditional media

build partnerships and trust

What story does Dr. Budden tell about his friend who went to South Africa?

he knows someone who went to South Africa to a world cup. He came back and said he wanted to sell LSU themed mirror socks in the USA because of their growing popularity in SA

What are the 5 current tools marketers have access to online?

blogs. stories about efforts/products

Social networking sites such as LinkedIn/Facebook

Platforms like Twitter

Videos like on Youtube

mobile marketing

What is the equation for stickiness factor?

frequency X duration X site reach

What are 2 important things to note when trying to keep customers at your business?

people who shopped there before are more likely to do it again

big spenders are very important (80/20 rule)

What is a strategic alliance?

cooperative agreement between firms

What are 4 ways corporations utilize strategic alliance?

helps firms leverage what they have

licensing

joint ventures

R&D consortia

What is Keiretsu?

in Japan, a network of interlocking corporate affiliates

ex. Wal-Mart has offices from their supplier in their own office buildings

What are the 4 types of business customers?

Producers (OEM)

resellers

governments

institutions (ex. schools, churches, hospitals. Not profit driven entities)

Why are wholesalers dissapearing?

more people are buying directly from manufacturers

What is derived demand?

when demand of one product affects the demand of another

ex. demand for CPU chips is derived from demand for computers and cars

What is inelastic demand?

changes in prices don't affect demand

What is joint demand?

when 2 or more products are used in a final product

ex. hard drives and computers

What is fluctuating demand?

demand for business products fluctuates more than consumer products

What is major equipment and what is different about it?

capital goods

they depreciate over time for tax purposes

What is a buying center?

all individuals involved in the purchase decision

What are the 3 criteria for commercial products?

Quality - technical suitability

Service - will the company assist in servicing the product

Price -arguably the least important of the 3

Describe the 3 buying situations.

new buy - requires time and evaluation. when you have never bought a certain product before

modified re-buy - minor change in existing process or products

straight rebuy - automatic purchases

What are the 4 reasons market segmentation is important?

plays key role in marketing strategy

helps define customers wants and needs

helps define marketing objectives and allocate resources

provides for better performance assessments

What are the 4 criteria for successful segmentation?

sustainability

identifiability and measurability

accessability

responsiveness

What are some ways you can segment consumer markets?

geographic segmentation

Demographic segmentation such as:
age
gender
income
ethnicity
family life cycle

What is geodemographics?

clusters potential customers into neighborhood lifestyle categories

What is benefit segmentation?

when your product appeals to a certain use case

ex. toothpaste that whitens, fights bad breath, sensitivity, etc

What is usage rate segmentation?

80/20 rule

What are 2 strategies for selecting target markets?

concentrated targeting - firm selecting a market niche appealing to a single segment (starbucks going after gourmet coffee)

multisegment marketing - serving 2 or more defined markets (ex. hersheys)

What is positioning?

the place a brand, product, or group of products occupy in customer's minds relative to competing offerings

ex. we see the Toyota Camry as a safe, reliable sedan while we see the Cadillac as top of the line for upscale markets

What is perceptual mapping?

a means of displaying or graphing in 2 or more dimensions

the location of products/brands in customers minds

What is the equation to find the break even point

fixed costs/(price-average variable costs)

What story does Dr. Budden tell on the importance of knowing break even points?

he met a couple that started a business the day before he met them. Within the next 3 days they were out of business because they did a break-even analysis and realized they could not stay in business

What is a decision support system and why is it important?

computerized interactive database that gives information about customers

important because marketers need to know their customers

What story does Dr. Budden tell about the importance of database marketing?

he describes how Winn Dixie used to give customers coupons for products they actually bought. He was given coupons for cat litter and was confused as he did not own a cat. He realized that he had bought cat food for someone else and the store assumed he had a cat and gave him coupons for other cat related products

What is marketing research?

process of planning, collecting, and analyzing data relevant to marketing decisions

ex. SLU SOT surveys

What are the 3 roles of marketing research?

Descriptive - describes target market

diagnostic - understanding a problem

predicting - changing one of the 4 Ps and predicting what would happen

What are the 7 steps of the marketing research process?

problem identification

research design. How do we collect data. Primary vs secondary data

specify sampling procedure. Make sure you ask the right people the right questions

collect data

analyze the data

prepare and present the report

follow up

What is the difference between primary and secondary data?

primary - data you personally collect (ex. going from door to door and asking how many people live in each house)

secondary - using data someone else collected (ex. using the US census to find population data rather than going door to door and asking yourself)

When doing marketing research, should you start by using primary or secondary research?

Secondary, as if someone has already collected the data you want, you won't have to waste time collecting it yourself

What are the 3 major ways to collect data?

observation studies. observing people. more accurate than surveys

experiments - changing one of the 4 Ps to see what happens

surveys - asking people questions. not always accurate

What are the 3 characteristics of good surveys?

scales well

semantic differential - series of words used to describe something. Giving people 2 words and asking them to rank between them.

Likert scales - series of statements that ask if you agree or disagree

Describe reliability vs validity

reliability - getting the same answer every time you ask

validity - asking the right people the right questions

What are the 2 types of sampling?

probability sample - when the probability of being selected for the sample is known. simple random is when everyone has the same change of being selected. Stratified random is when you draw from different subsets of the population to ensure all different types of people are represented in the sample

Nonprobability samples - called convenient samples because they are convenient. ex is when someone walks up to you in the mall and asks you questions

What are the 7 characteristics of good questionairre design?

easy to read and understand

relevant and specific questions

do not bias

questions are long enough

put personal or open ended questions at the end

make it easy to encode for computer analysis

use scales when possible

What is utilitarian value?

a value derived from a product or service that helps the consumer solve problems and accomplish tasks

What is hedonic value

a value that acts as an end in itself rather than a means to an end. When the purchase itself gives us good feelings

What is showrooming?

the practice of examining merchandise in a physical retail location without purchasing it and then shopping online for a better deal of the same item

What is churning?

when a significant number of suctomers are switching brands

What is the multiplier effect?

when a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product

What is reciprocity?

a practice whereby business purchasers choose to buy from their own customers