Principles of Marketing Exam 2- Melissa Moore

What are the three words defining consumer buyer behavior and consumer market?

Acquire, Use, Dispose

Consumer buyer behavior

buying behavior of final consumers

Consumer Market

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

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

Buyer's Black Box

two parts: buyer's characteristics and buyer's decision process

What are the four characteristics that influence consumer purchases?

cultural, social, personal, and psychological

Cultural Factors

culture, subculture, social class

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

Social Class

relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors

Social Factors

groups, word-of-mouth influence and influencer market, opinion leader, inline social networks, family, and roles and status

Opinion leader

people within a reference group who, because of special skills, knowledge, personality, or other characteristics, exert social influence on others

Influencer marketing

involves enlisting established influencers or creating new influencers to spread the word about a company's brands

Is the family unit an important social factor?

yes it is the most important membership reference group

Personal Factors

age and life-cycle stage, occupation, economic situation, lifestyle, personality and self-concept

What does AIO stand for?

Activities, Interests, Opinions

What is VALS?

Value and Lifestyle Survey

-a proprietary psychometric method that measures these and other predictive attitudes—in conjunction with behaviors and demographics—for developing countrywide typologies

Psychological factors

motivation, perception, learning, beliefs and attitudes

Perception

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

From bottom to top, what is Maslow's Hierarchy of Needs?

Physiological, Safety, Social, Esteem, Self-Actualization

(Paul Sells Shells Each Saturday-Afternoon)

What is the JND?

Just Noticeable Difference

-The minimum change in stimulation required to detect the difference between two stimuli

Is stimulus generalization part of learning?

yes?

Belief

a descriptive thought that a person holds about something

Attitude

describes a person's relatively consistent evaluations, feeling, and tendencies toward an object or idea

What are the parts of attitude?

Cognition, affect, behvaior

**In order, what are the 5 steps in the buyer decision process?

1. need recognition

2. information search

3. evaluation of alternatives

4. purchase decision

5. post-purchase behavior

A need occurs where there is enough tension and distance between what and what?

desired state and actual condition

What types of information search are there? Which is least biased?

Internal and External search

-external search is least biased

What is internal information search?

buyers search their MEMORIES for information about products that might solve their problem

What is external information search?

when an internal search is insufficient, consumers seek additional information from OUTSIDE sources

From largest to smallest, what are the attribute sets used when evaluating alternatives?

Universal, retrieval, and evoked/ consideration

What is the consideration (evoked) set?

a group of brands within a particular product category that the buyer views as alternatives for possible purchase

In post-purchase, what is cognitive dissonance, and why is it a concern?

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

-concerning because it could cause consumer to not buy the product again

Adoption process

the mental process through which an individual passes from first learning about an innovation to final adoption

List the steps in the adoption process

1. Awareness 2. Interest 3. Evaluation 4. Trial 5. Adoption

From lowest to highest along the curve, list the five adopter groups relative to time of adoption

1. Innovators (venturesome risk)

2. Early Adopters (Respect Opinion leaders)

3. Early Mainstream (Deliberate Rarely leaders)

4. Late Mainstream (Skeptical)

5. Lagging adopters (Tradition bound suspicious)

What is the key difference between innovators and lagging adopters?

Innovators try new ideas when they are fresh and have high risk while lagging adopters wait until the idea has become something of a tradition itself

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

Relative advantage, compatibility, complexity, divisibility, communicability

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

Divisibility

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

Communicability

refers to the degree to which the results of using the innovation can be observed or described to others

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

1. market structure and demand

2. nature of the buying unit

3. types of decisions and the decision process

Straight Rebuy

buyer routinely reorders something without any modifications

Modified Rebuy

buyer wants to modify product specifications, prices, terms, or supplier

New Task

buyer purchases a product or service for the first time

How many stages are there in the business buyer decision process? List them.

8

1. Problem Recognition

2. General need description

3. Product specification

4. Supplier search

5. Proposal solicitation

6. Supplier selection

7. Order-routine specification

8. Performance review

Is there more or less stages in the business buyer decision process than there are in the consumer buying process?

yes

What are the four parts of creating value for targeted customers?

Segmentation, targeting, differentiation, and positioning

Segmentation

divide the total market into smaller segments

Targeting

select the segment or segments to enter

Differentiation

differentiate the market offering to create superior customer value

Positioning

position the market offering in the minds of target customers

When creating value for targeted customers, the customers are selected through __________ or _________, and the value proposition is chosen through _________ or _________

Segmentation and targeting

Differentiation and positioning

What are the major segmentation variables for consumer markets?

geographic, demographic, psychographic, and behavioral

Examples of the geographic segmentation

nations, regions, states, counties, cities, neighborhoods, population density, climate

Examples of demographic segmentation

age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, generation

Examples of psychographic segmentation

social class, lifestyle, personality

Examples of behavioral segmentation

occasions, benefits, user status, usage rate, loyalty status

Why use multiple segmentation bases?

help companies to identify smaller, better-defined target groups, identify and understand key customer segments, and reach customers more efficiently by tailoring market offerings and messages to customer's specific needs

What are the key requirements for effective segmentation?

measurable (size, purchasing power), accessible (reached and served), substantial (profitable enough), differentiable (distinguishable), and actionable (effective programs designed to attract)

What are the four different targeting approaches?

Undifferentiated (Mass) Marketing, Differentiated (Segmented) marketing, Concentrated (Niche) marketing, and Micromarketing (Local or Individual) marketing

Differentiated/ Segmented marketing

a firm decides to target several market segments and designs separate offers for each

EXAMPLE: MARRIOTT INTERNATIONAL

Undifferentiated/ Mass marketing

a firm decides to ignore market segment differences and go after the whole market with one offer

Concentrated/ Niche marketing

a firm goes after a large share of one or a few smaller segments or niches

Micromarketing

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

A perceptual map

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

In class, what example was used to display a perceptual map? What activity?

The example was a map separating medicines based on price and what it cures. Another example separated drinks based on strength of taste and whether it is healthy or just fun.

The activity separated different candy.

The full positioning of a brand is called the brand's _______ ________.

value proposition

In figure 6.4, how are the possible value propositions shown?

Top right corner cells (5) represent winning value propositions and the bottom left corner cells (3) represent losing value proposition. The center cell represents at best a marginal proposition

In the possible value propositions table, what are the 5 winning value propositions?

more for more, more for the same, more for less, the same for less and less for much less

According to the value propositions table, what is ALDI's value proposition?

Less for much more

More for more? example?

-provides the most upscale product or service

-Example: Louis Vuitton, Mercedes

More for the same? Example?

-High quality at lower prices

-Example: Upscale discounters, like Target

More for less?

Best winning proposition

Same for less? Example?

Gives a good deal

-Example: Discount stores, like Walmart

Less for much less? Example?

Meeting consumers' lower performance or quality requirements at a lower price

-Examples: ALDI or Dollar General

Product

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

-includes services, events, persons, places, organizations, and ideas

Service

an activity, benefit, or satisfaction offered for sale; it is intangible and does not result in ownership of anything

List the four types of consumer products

1. Convenience

2. Shopping

3. Specialty

4. Unsought

Convenience products

frequent purchase; little planning, little comparison or shopping effort; low customer involvement

-example: toothpaste, magazines, laundry detergent

Shopping products

less frequent purchase; much planning and shopping effort; comparison of brands on price, quality, and style

-example: major appliances, TV, furniture, clothing

Specialty products

strong brand preference and loyalty; special purchase effort; little comparison of brands' low price sensitivity

-example; luxury goods, such as Rolex watches or fine crystal

Unsought products

little product awareness or knowledge (or, if aware, little or even negative interest)

-example: life insurance and Red Cross blood donations

What are the three product/service decisions?

Individual product, Product line, Product mix

List the 5 individual product decisions

1. Product attributes

2. Branding

3. Packaging

4. Labeling

5. Product support services

What are the 5 determinants of service quality?

1. Reliability

2. Responsiveness

3. Assurance

4. Empathy

5. Tangibles

Product line

closely related products that have similar functions and customer groups and are sold through similar outlets or fall within given price ranges

Stretching

when a company lengthens its product line beyond its current range

Filling

involves adding more items within the present range of the line

What are the 3 key product mix decisions?

Width, length, depth

Width

number of different product lines the company carries

Length

total number of items a company carries within its product lines

Depth

number of versions offered for each product in the line

True or False: Internal marketing is different than external and interactive marketing

True

What are the three types of services marketing?

1. Internal marketing

2. External marketing

3. Interactive marketing

Internal marketing

the service firm must orient and motivate its customer-contact employees and supporting service employees to work as a team to provide customer satisfaction

Interactive marketing

service quality depends heavily on the quality of the buyer-seller interaction during the service encounter

What are the four service characteristics?

1. Intangibility

2. Heterogeneity

3. Simultaneous Production and Consumption

4. Perishability

Intangibility

services cannot be seen, tasted, felt, heard, or smelled before purchase