Marketing Slides- Exam 2

Consumer behavior

processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or service; also incudes factors that influence purchase decisions and product use

Consumer's product and service preferences are constantly ________________.

changing

Value

a personal assessment of the net worth one obtains from making a purchase, or the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct

Perceived value

the value a customer expects to obtain from a purchase

Utilitarian value

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

Hedonic value

a value that acts as an end in itself rather than as a means to an end

- the emotional and experiential enjoyment a consumer derives from a product or service, focusing on pleasure, fun, and sensory experience rather than mere functional utility

Customer value proposition

the way in which a product or service will meet the prospect's needs and how that is different from the offerings of competitors, especially the next-best-alternative

Consumer decision-making process

a 5 step process used by consumers when buying goods or services

5 steps in consumer decision making process

1. Problem/need recognition

2. information search

3. evaluation of alternatives

4. purchase decision

5. post-purchase behavior

Problem/need recognition

the result of imbalance between actual and desired states

Want

recognition of an unfulfilled need and a product that will satisfy it

What are the 4 types of wants?

1. economizing

2. sustaining

3. treating

4. rewarding

Stimulus

any unit of input affecting one or more of the five senses: sight, smell taste, touch, hearing

Want-got gap

the imbalance between actual and desired states

Internal information search

the process of recalling past information stored in the memory

External information search

the process of seeking information in the outside environment

- non-marketing controlled information source

- marketing controlled information source

Evoked set (considered set)

a group of brands resulting from an information search which a buyer can choose

Cognitive dissonance

Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions

How can a consumer reduce cognitive dissonance?

1. seeking information that reinforces the purchase decision

2. avoiding information that contradicts the purchase decision

3. revoking the original decision by returning the product

Involvement

the amount of time and effort a buyer invests in the search, evaluation, and decision process of consumer behavior

Routine response behavior

the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time

Limited decision making

the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category

Extensive decision making

the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information

What are the 3 categories of consumer decision making?

1. routine

2. limited

3. extensive

What are the 5 factors that determine what type of consumer decision making is exhibited?

1. level of consumer involvement

2. length of time to make a decision

3. cost of the good or service

4. degree of information search

5. number of alternatives considered

What factors determine a consumer's level of involvement in their purchase?

1. previous experience

2. interest

3. perceived risk of negative consequences

4. social visibility

5. product involvement

6. situational involvement

7. shopping involvement

7. enduring involvement

8. emotional involvement

High-involvement purchases

Require extensive and informative promotion to the target market

Low involvement purchase

require in-store promotion, eye-catching package design, good displays, coupons, and limited availability

Classic consumer decision journey

consumers engage in an extended consideration and evaluation phase either entering into the loyalty loop or proceeding into a new round of consideration and evaluation that may lead to the subsequent purchase of a different brand

New consumer decision journey

compresses the consider step and shortens or entirely eliminates the evaluation step, delivering customers directly into the loyalty loop and locking them within it

Social factors that affect the consumer decision journey

1. reference groups

2. opinion leaders

3. family

Individual factors that affect the consumer decision journey

1. gender

2. age and household

3. life cycle stage

4. personality

5. lifestyle

Cultural factors that affect the consumer decision journey

1. culture an values

2. subculture

3. social class

Psychological factors that affect the consumer decision journey

1. perception

2. motivation

3. learning

4. beliefs and attitudes

Opinion leader

an individual who influences the opinions of others

Marketers try to create _______________ ________________.

opinion leaders

Separated self-schema

a perspective whereby a consumer sees himself or herself as distinct and separate from others

Connected self-schema

a perspective whereby a consumer sees himself or herself as an integral part of a group

What results do physiological differences between man and women create?

many different market needs, such as health and beauty products

What other factors can have a significant impact on consumer behavior?

1. age

2. family life cycle stage

Personality

a way of organizing and grouping the consistencies of an individual's reactions to situations

Self-concept (self-perception)

how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations

Self-concept combines what two self-images?

1. ideal self-image

2. real self-image

Ideal self image

the way an individual would like to be perceived

Real self-image

the way an individual actually perceives themself

Perception

the process by which people select, organize, and interpret stimulus into a meaningful and coherent picture

Selective exposure

a process whereby a consumer notices certain stimuli and ignores others

Selective distortion

a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs

Selective retention

a process whereby a consumer remembers only the information that supports their personal beliefs

Motive

a driving force that clauses a person to take action to satisfy specific needs

Maslow's hierarchy of needs

a method of classifying human needs and motivations into five categories in ascending order of importance

Market

people or organizations with needs or wants and the ability and willingness to buy

Market segment

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar products needs, and you can expect to react similarly to a specific marketing mix

Market segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

Importance of the marketing mix

1. plays a key role in the marketing strategy of successful organizations

2. powerful marketing tool

3. helps marketers define customer needs and wants precisely

4. helps decision makers define objectives and allocate resources more accurately

What are the benefits of market segmentation?

1. leads to better customer understanding

2. leads to superior insights

3. leads to better pricing and optimization

4. leads to effective use of budgets

5. leads to increased profitability

What is the criteria for a market segment?

1. substantiality

2. identifiability

3. measurability

4. accessibility

5. responsiveness

Segmentation bases (variables)

characteristics of individuals, groups, or organizations

Geographic segmentation

segmenting markets by region of a country or the world, market size, market density, or climate

Demographic segmentation

segmenting markets by age, gender, income, ethnic background, and family life cycle

Psychological segmentation

segmenting markets on the basis of personality, motives, lifestyles, and geo-demographics

Benefit segmentation

the process of grouping customers into market segments according to the benefits the seek from the product

Usage-rate segmentation

dividing a market by the amount of product bought or consumed

Profile

includes segment size, expected growth, purchase frequency, current brand usage, brand loyalty, and long-term sales and profit potential

Buyer persona

a semi-fictional representation of your ideal customer based on market research and real data about your existing customers

Position

the place a product, brand, or group of products occupies in consumers' minds relative to competing offerings

Positioning

developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general

Positioning base: Price and quantity

this positioning base may stress high price as a signal of quality or emphasize low price as an indication of value

Positioning base: Attribute

a product is associated with an attribute, product feature, or customer benefit

Positioning base: Use or application

stressing uses or applications can be an effective means of positioning a product with buyers

Positioning base: Product user

this positioning base focuses on a personality or type of user

Positioning base: Product class

the objective here is to position the product as being associated with a particular category of products

Positioning base: Competitor

positioning against competitors is part of any positioning strategy

Positioning base: Emotion

positioning using emotion focuses on how the product makes customers feel

Perceptual mapping

a means of displaying or graphing the location of products, brands, or groups of products in customers' minds

Product differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

Repositioning

changing consumer's perceptions of a brand in relation to competing brands

What are the 7 positioning bases?

1. attribute

2. price and quality

3. use or application

4. product user

5. product class

6. competitor

7. emotion

Market Research

the process's of planning, collecting, and analyzing data relevant to a marketing decision

- links the consumer, customer, and public to the marketer through information

- provides data on the effectiveness of a marketing mix and insights for necessary changes

- it is the main data source for management information systems

What are the management uses of market research?

1. improves the quality of decision making

2. helps managers trace problems

3. helps managers understand detailed and complicated relationships

4. helps managers serve customers accurately and efficiently

What are the 3 roles of market research?

1. descriptive "what?"

2. diagnostic "why?"

3. predictive "what if?", "how?"

Management decision problem

a broad-based problem that uses marketing research in order for managers to take proper actions

Marketing research problem

determining what information is needed and how it can be obtained efficiently and effectively

Marketing research objective

the specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information

Examples of secondary information originating within the company includes:

1. the company's websites

2. annual reports

3. reports to stockholders

4. blogs

5. product testing results

6. youtube videos

7. social media posts

8. house periodicals composed by the company's personnel for

communication to employees, customers, or others

Examples of secondary information originating outside the company include:

1. government agencies

2. trade and industry associations

3. business periodicals

4. news media

Advantages of market research

1. save time and money

2. aid in formulating the problem statement

3. suggest research methods and data to solve problems

4. pinpoint the kinds of people to approach

5. serve as a basis of comparison for other data

Disadvantages of market research

1. may not give adequate detailed information

2. quality and accuracy of data may pose a problem

Research design

specifies which research questions must be answered, how and when to gather data, and how the data will be analyzed

Product budget is finalized after the _______________ ___________ is approved

research design

Universe

the population from which a sample will be drawn

Sample

a subset from a larger population

Probability sample

a sample in which every element in the population has a known statistical likelihood of being selected

Non probability sample

any sample in which little or no attempt is made to get a representative cross section of the population

Types of probability samples

1. simple random sample

2. stratified sample

3. cluster sample

4. systematic sample

Types of non probability sample

1. convenience sample

2. judgement sample

3. quota sample

4. snowball sample

Simple random sample

every member of the population has a known and equal chance of selection

Stratified sample

the population is divided into mutually exclusive groups (such as gender or age); then random samples are drawn from each group

Cluster sample

the population is divided into mutually exclusive groups (such as geographic areas); then a random samples of clusters is selected, the researcher then collects data from all the elements in the selected clusters and forms a probability sample of elements within each selected cluster

Systematic sample

A list of the population is obtained and a skip interval is obtained by dividing the sample size by the population size