marketing exam 2

the model of consumer buyer behavior

environment —> buyer’s black box —> buyer response

consumer buyer behavior

• buying behavior of final consumers - individuals and households that buy goods and services for personal consumption

  • Combine to make up the consumer market - 331 million people

culture

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

• Comes about through family and friends, school, and places of worship

  • Cultural shifts → marketers looks for these to discover new products that might be wanted

subculture

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

• Total market strategy integrates ethnic themes and cross-cultural perspectives within a brand’s mainstreams marketing

• Includes regions of the country (like the South)

  • Nationalities, religions, racial groups, age cohorts, and geographic regions

social class

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

• Measured by occupation, income, education, wealth, and other variables

• Six categories, three broad ones

• Primarily determined by career, income, and education

• Low class, middle class, and upper class

  • Each is split into upper and lower

    • Fairly stable in a person’s life - born into lower class, they might move to upper middle class or lower upper class but will likely only move 1-2 classes in a lifetime

social

refers to interacting with other people

reference groups

•  direct (face-to-toface interactions) or indirect points of comparison or reference in forming a person’s attitudes or behavior 

  • Expose a person to new behaviors and lifestyles, influence the person’s attitudes and self-concept, and create pressures to conform that may affect the person’s product and brand choices

groups

• Team for class, sports team, intramural, high school sports team, club

  • We are affected and our consumer behavior is affected

word of mouth influence

• Powerful 

  • More powerful from a trust source than from any marketing or advertising

opinion leaders

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

• From different areas

• Influencers are opinion leaders (evolution)

  • Listen to, watch, read different influencers and they are opinion leaders in different areas

online social networks

• Strangers or acquaintances, close friends, family members 

• Online communities where people socialize or exchange information and opinions

  • Blogs, message boards, social media sites, communal shopping sites

family

• Carries a lot of weight with the large majority of people

• Matronly duties shifting to become a split effort between mom and dad - companies that previously only marketed towards moms need to shift their target audience 

  • 93% of parents today admit their children influence family and household purchases

roles and status

• Humans take on different roles in their life at the same time

• Son, daughter, sibling, cousin

• Work part time or full time

• Partner or significant other

  • Role - the activities people ar expected to perform according to the people around them

occupation

• Student

• Job, may change in the future 

  • Plays a big part in how you see the role and act as a consumer

age and family life cycle

• Being single as somebody finishes college

• Empty nesting - undivided attention of the travel industry

  • Dinks - dual income, no kids for the travel industry

economic situation

Employed, unemployed, recently employed

lifestyle

• Sports, entertainment/music, health & nutrition

  • A person’s pattern of living as expressed in his or her psychographics

environmental circumstances

• Staying in or eating out

  • Many changes will be permanent

personality and self-concept

• Individual personality

  • Personality refers to the unique psychological characteristics that distinguish a person or group

5 bucks called personality traits

Openness to new experiences, extraversion, conscientiousness, neuroticism, agreeableness

5 brand personality traits

sincerity, excitement, competence, sophistication, and ruggedness

motive

a need that is sufficiently pressing to direct a person to seek satisfaction

motivation

• Freud suggested that a person’s buying decisions are affected by subconscious motivates that even a buyer may not fully understand

• Many companies employ teams of psychologists, anthropologists, and other social scientists to carry out motivation research

  • What is it that creates need?

perception

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

  • Enacted reality - we all create our own understanding of reality in the world around us through perception

    • Subliminal messaging does NOT work, but can influence the behavior of smart devices without consumers knowing it

selective distortion

describe the tendency of people to interpret information in a way that will support what they already believe

selective retention

means that consumers are likely to remember good points made about a brand they favor and forget good points made about competing brands 

maslow’s hierarchy of needs

physiological —> safety —> social —> esteem —> self actualization

learning

• Describes changes in an individual’s behavior arising from experience

  • Most human behavior is learned

drive

•  strong internal stimulus that calls for action

  • Becomes a motive when it is directed toward a particular stimulus object

belief

•  a descriptive thought that a person holds about something

  • May be based on reak knowledge, opinion, or faith and may or may not carry an emotional charge

attitude

• describes a person’s relatively consistent evaluations, feelings, and tendencies toward an object or idea 

  • Difficult to change

the consumer buyer descion process

need reconigiton —> information search —> evaluation of alternatives —> purhcase decision —>postpurchase behavior

alternative evaluation

How consumers process information to choose among alternative brands

purchase decision

• Be to buy the most preferred brand but two factors come between the purchase intention and the purchase decision

  • Attitudes of others

    • Unexpected situational factors

postpurchase behavior

Consumer’s expectations vs product’s perceived performance

cognitive dissonance

• When we second guess ourself after we make a purchase

• When you buy shoes and then get them and they don’t fit you the way they expect you and you second guess it

  • Differs if they’re $200 or $20

    • Post purchase behavior

customer journey

• The sum of the ongoing experiences with consumers have with a brand

  • Will shape their continuing behavior and attitudes toward the brand

stages in the adoption process

awareness —> interest —> evaluation —> trial —> adoption

adoption process

• The mental process which an indivdual passes from first learning about an innovation to final adoption

  • Adoption is teh decision by an individual to become a regular user of the product

characteristics influencing an innovation’s rate of adoption

relative advantage, compatibility, complexity, divisibility, communicability rel

relative advantage

the degree to which the innovation apepars superior to existing products

compatibility

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

complexity

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

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

when a person adopts

Innovators, early adopters, early mainstream, late mainstream, lagging adopters

B2B business buyer behavior

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

• Or

• Purchasing supplies to support production (machine belts, printer paper, etc.)

• B to B marketers must understand business markets and business buyer behavior

  • We don;t have to understand everybody, just the industry that we are in

business buying process

• determining which products and services to purchase

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

business market structure and demand

Fewer but larger buyers

derived demand

business demand that comes from the demand for consumer goods

bull whip effect

when less consumers come in, so we need decrease in making products and each step up the supply chain the amount in decrease goes up 

elasticity

a change in price will change demand for that product

inelastic

demand doesn’t change with prices (most B2B is this)

nature of the business market buying unit

• More decision participants

  • More professional purchasing effort

supplier development

Systematically developing networks of supplier-partners to ensure a dependable supply of the products and materials that they use in making their own products or reselling to others

buyer activity consists of two major parts

• Buying center - consists of all the individuals and units that play a role in the business purchase decision-making process

  • Buying decision process

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

systems selling (or solutions selling)

• Buying a packaged solution to a problem from a single seller

  • Avoids the separate decisions involved in a  complex buying situation

major influences on business buyer behavior

environmental —> organizational —> interpersonal —> individual

buying center

• all the individuals and units that play a role in the purchase decision-making process

  • 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

stages of the business buyer decision process

problem recognition —> general need description —> product specification —> supplier research —> proposal solicitation —> supplier selection —> order routine specification —> performance review

product specification

Product value analysis: an approach to cost reduction in which components are studied carefully to determine if they can be redesigned, standardized, or made by less costly methods of production

e-procurement

• Online purchasing

• Grown rapidly in recent years 

• Reverse auctions - put their purchasing requests online and invite suppliers to bid for their business

• Online trading exchanges - companies work collectively to facilitate the trading process

• Company buying sites

• Extranet links with key suppliers 

• E-procurement reduces the time between order and delivery

  • Frees purchasing people from a lot of drudgery and paperwork

designing a customer value-driven marketin strategy

segementation, targeting, differentation, positioningm

marketing comes down to two questions

• Which customers will we serve

• How will we serve theme

• The tough part is finding good answers to these simple sounding yet difficult questions

  • The goal is to create more value for the customers we serve than the competitors do

segementation

• Market segmentation addresses the first simple-sounding marketing question: what customers will we serve

  • Cutting up the pie

positioning

• Take the pieces and put them on a plate for maximum value

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

differentiation

Involves actually differentiating the firm’s market offering to create superior customer value

geographic segmentation

• Dividing market into geographical units

• Nations, states, regions, counties, cities, neighborhoods, population density (urban, suburban, exburb (self sustaining areas outside of a major city), rural), climate 

  • Hyperlocal social marketing - location-based targeting to consumers in local communities or neighborhoods using digital and social media

demographic segmentation

• Age and lifecycle segmentation

  • Dividing a market into different age, generation, and life cycle groups

subculture segmentation

Dividing a market into a different segment based on racial +/& ethnic subcultures

gender segmentation

• Based on gender

• Clothing, cosmetics, toiletries, toys and magazines

• Men’s personal care industry increase

  • Gender-neutral products

income segmentation

Different income segments

psychographic segmentation

• Marketers segment their markets using variables such as 

  • Social class

  • Lifestyle

  • Personality characteristics

• The products people buy reflect their lifestyles

  • AIO (activities, interests, & opinions)

behavioral segmentation

Divides buyers into segments based on their knowledge, attitudes, uses, or responses to a product

occasion segmentation

• segments are divided according to occasions, related to the moment that the buyers

  • NyQuil & Dayquil

  • Starbucks & the PSL

  • Get the idea to buy

  • Make their purchase 

    • Use the purchased items

benefit segmentation

• segments divided according to the different benefits that consumers seek from the product

  • Reward

    • Health

user status segmentation

• Non-users, ex-users, potential users, first-time users, and regualr users of a product

  • Reinforce nad retain regular users, attract targeted nonusers, an reinvorgate relationships with ex-users

target market

set of buyers sharing common needs or characteristics that the company decides to serve

intermarket segmentation

 marketers form segments of consumers who have similar needs and buying behaviors even though they are located in different countries

factors to consider

• Company resources

• Product variability

• Product’s life-cycle stage

• Market variability

  • Competitors marketing strategies

requirements for effective segmentation

• Measurable

• Accessible

• Substantial 

• Differentiable

  • actionable

collins; factors to consider

• Customer

• Company

  • Competitors

market targeting strategies

undifferentiated (mass) marketing —> differentiated (segmented) marketing —? concentrated (niche) marketing —> micromarketing (local or individual marketing)

undifferentiated or mass marketing

• Ignores market segment differences and targets the whole market with one may offer

  • Focuses on what is common rather than what is different

differentiated marketing

• A firm targets several market segments and designs separate offers for each

• P&G segmented the laundry detergent market in the US by benefits sought:

  • Cleanest

  • Best smell

  • Best value

    • Best for babies

concentrated or niche marketing

• Firm goes after a larger share of one or a few smaller segments or niches

  • Achieves a strong market position because of its greater knowledge of consumer needs in the niche it serves and the special reputation it acquires

micromarketing

• Practice of tailoring products and marketing programs to suit the tastes of specific individuals and local customer segments 

  • Rather than seeing a customer in every individual, micro-marketers see the individual in every customer

local marketing

Tailoring brands and promotions to the needs and wants of local customers

individual marketing

Tailoring products and marketing programs to the needs and preferences of individual customers

competitive advantage

the extent that a company can differentiate and position itself as providing superior customer value

choosing the right competitive advantage

• Important

• Distinctive

• Superior

• Communicable

• Preemptive

• Affordable

  • Profitable

USP

unique selling proposition

One point of differentiation that means the most about our brand

number of differences to promote

• Developing a USP for each brand and sticking to it

• Or

  • Positioning on more than one differentiator (not recommended)

product posiition

• The way a product is define by consumers on important attributes

  • The place t

types of differentiation

Channel, service, product, people, or image

developing a positioning statement

• It summarizes company or brand positioning

  • Public goods is positioned as an online food and household goods retailer that makes healthy, sustainable, everyday essentials accessible at a fair price

value propistion

• The full mix of benefits on which a brand is differentiated and positioned 

  • Answer the customer’s question “why should I buy your brand?”