Mktg test 2

Mktg 351 Barfield marketing Test 2, Chapters 6,7,8, and 9.

Consumer behavior

process consumers use to make purchase decisions as well as to use and dispose of purchased goods or services

• it’s the full pattern of how people choose, buy, use, and get rid of products, plus what affects those choices.

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

• it is what the customer thinks they get compared with what they give up

• (benefits - sacrifice = value)

perceived value

the value the customer expects to obtain from a purchase

• what the buyer thinks the purchase will be worth before actually using it

utilitarian value

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

• practical usefulness

hedonic value

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

• pleasure, enjoyment, feelings, and experience

  • ex: spa day or a steak dinner

consumer decision-making process

five-step process consumers use when buying goods and services

1. Need recognition.

2. information search

3. evaluation of alternatives

4. purchase

5. postpurchase behavior

need recognition

a result of an imbalance between actual and desired states

want

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

stimulus

any input affecting one or more of the five senses

want got gap

the diffirence between what you have and what you want

Internal information search

recalling information stored in memory

external information search

seeking information in the outside environment

non-marketing-controlled information source

an objective information source not associated with ads or promotion

marketing-controlled information source

a product information source that originates with marketers promoting the product

the extent of an external search depends on _____

• Perceived risk: Higher percived risk = more searching

• Knowledge: more prior knowledge/experience = less searching

• Prior experience

• levels of interest in the good or service: more interest = more searching, less confidence = more searching even if the person knows a lot

Evaluation of alternatives

consumers compare options using criteria they develop from memory and outside information.

Not always perfectly rational

Nudge

a small intervention that can change a person’s behavior

subtle push that influences choice without forcing it. Ex: shelf placement, checkout snacks, app prompts

Purchase

The consumer must decide:

• Whether to buy

• when to buy

• what to buy

• where to buy

• how to pay

Planned purchase

Lots of information gathered first

ex: buying a home or a car

Partially planned purchase

product category known but the specific brand/style is decided in the store.

ex: buying clothes or furniture

Impulse/unplanned purchase

little planning, often low price or sale item

often triggered by a nudge

psychological ownership

The consumer feels the product is “theirs“ before or during purchase, which makes them more willing to pay more and talk positively about it.

This phenomenon happens when the consumer controls it, invests themselves in it or know it intimately.

Jilting effect

anticipation of receiving a highly desirable option only to have it become inaccessible.

cognitive dissonance

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

“Did I make the right choice?” feeling after a purchase

Can be reduced with: Post-purchase communication, excellent post-purchase customer service, reassurance, guarantees/returns, testimonials/social proof

involvement

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

routine response behavior

frequently purchased, low-cost goods

little search and decision time

Limited decision-making

moderate time spent

often unfamiliar brands in a familiar category

Extensive decision-making

most complex;

unfamiliar, expensive or infrequently bought item

heavy information search required and multiple evaluative criteria

Five factors are used to describe involvement categories.

1. level of involvement

2. length of time to make decision

3. cost

4. degree of information search

5. number of alternatives considered

Factors affecting the level of involvement

• Previous experience

• interest

• perceived risk of negative consequences

• social visibility

showrooming

examining merchandise in a physical store but then buying it online for a better price

reconceptualized consumer journey

Digital tech has shifted power from marketers to consumers. Consumers can compare prices, read reviews, sort through recommendations, and get products delivered quickly.

The consumer decision journey (classic)

1. Consider

2. evaluate

3. buy

4. maybe enter loyalty loop or start over.

The consumer decision journey (New)

• the consider stage is compressed

• The evaluation stage is shortened or even eliminated.

• The customer is moved directly into the loyalty loop if the experience is strong enough.

Loyalty loop

• enjoy

• advocate

• bond

How marketers shorten the consumer decision journey

Firms need four capabilities:

1. automation

2. proactive personalization

3. contextual interaction

4. journey innovation

Two loyalty levels

• Satisfied: loyal largely from habit and dependable performance

• committed: Emotionally attached, more expressive, more likely to advocate for the brand

Churning

When a significant number of customers are switching brands.

Culture

the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts or products of that behavior as they are transmitted from one generation to the next

subculture

a homogeneous group of people who share elements of the overall culture as well as unique elements of their own group

social class

a group of people in society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms.

reference group

all ofthe formal and informal groups in society that influence an individual’s purchasing behavior the

Primary membership group

family, friends, coworkers

infromal and frequent interaction

secondary membership group

More formal and less frequent

clubs, professional groups, religious groups

aspirational reference group

a group someone wants to join

nonaspirational reference group

a group someone does not want to associate with

Norm

a value or attitude deemed acceptable by a group

opinion leader

an individual who influences the opinions of others

Socialization process

how cultural values and norms are passed down to children

Family roles to know

• Initiator

• influencer

• decision maker

• purchaser

• consumer/end user

separated self-schema

consumer sees self as distinct from others.

connected self-schema

The consumer sees themself as part of a group.

Important individual influences

• Gender

• age

• life-cycle stage

• personality

• self-concept

• lifestyle

personality

a way of organizing and grouping the consistencies of an individuals reactions to situations

Self-Concept

How consumers perceive themselves in terms of attitudes, perceptions, beliefs, and evaluations

Ideal self-image

how a person would like to be perceived

Real self-image

how a person actually perceives themselves

Perception

The process by which people select, organize, and interpret stimuli into a meaningful and coherent picture

Selective exposure

Noticing some stimuli and ignoring others

Selective distortion

changing or distorting information that conflicts with beliefs

Selective retention

remembering only the information that supports personal beliefs

Motive

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

Maslow's hierarchy of needs

1. physiological needs

2. safety needs

3. social needs

4. esteem needs

5. self-actualization needs

learning

a process that creates changes in behavior, immediate or expected, through experience and practice

Two types of learning:

• experiential learning

• Conceptual learning

Experiential learning

Learning by experiencing something

an experience changes your behavior

Conceptual learning

Learning based on reasoning

not acquired through direct experience

Stimulus generalization

extending one response to a similar stimulus.

ex: getting burned on a stove, you know that stoves can burn now

stimulus discrimination

Learned ability to differentiate among similar products

Business marketing (b2b)

marketing of goods and services to individuals and organizations for purposes other than personal consumption

business product

a product used to manufacture other goods or services, to facilitate an organizations operations, or to resell to other customers

Consumer product

a product bought to satisfy an individual’s personal wants or needs

Content marketing

a strategic marketing approach that focuses on creating and distributing content that is valuable, relevant, and consistent

Useful metrics for social media campaigns

• Awareness: Attention, followers, fans

• engagement: Comments, reposts, shares, Searches

• conversions: Desired responses, from downloads to purchases

Relationship marketing

a strategy that entails seeking and establishing ongoing partnerships with customers

Strategic alliances

a cooperative agreement between business firms

Built on:

• relationship commitment

• Trust

kiretsu

A network of interlocking corporate affiliates.

japanese relationship-based network concept

major categories of business customers

• Producers: use goods/services to make other products or support operations

• OEMs: Buy business goods and incorporate them into products they sell.

• Resellers: Retail and wholesale businesses that buy finished goods and resell for profit

• Governments

• Institutions: schools, hospitals, churches, nonprofits, etc.

Derived Demand

Business demand comes from the consumer demand.

Joint demand

Demand for items used together in the final product

Multiplier effect

Small consumer demand changes create much larger changes in business demand.

Reciprocity

A practice where business purchasers buy from their own customers

Purchase volume

Business customers tend to buy in large quantities

Number of customers

Business marketers usually have far fewer customers than consumer marketers

concentration of customers

business marketers are more geographically concentrated in large metropolitan areas areas.

Distribution structure

Shorter/ direct distribution chanels

Nature of buying

more formal, business buyers are typically professionally trained purchasing agents.

how business marketing negotiations are different than consumer

Much more negotiation than consumer buying

use of reciprocittyreciprocity

Reciprocity may matter if you are trying to maintain a good relationship

use of leasing

Leasing is very common in business marketing.

Primary promotional method

personal selling is the main promotional method for business marketing

seven categories of business products

• Major equipment

• accessory equipment

• raw materials

• Component parts: usually retain identity in final product

• Processed materials: usually do not retain identity.

• supplies: MRO-type consumables that do not become part of final product

• business services: Expensive items, not part of final product

Buying center

all the people in an organization who become involved in the purchase decision

Roles:

• Initiator

• Influencer/evaluators

• gatekeepers

• deciders

• purchasers

• users

successful selling strategies

• Identify who actually matters in the decision unit.

• determine each member’s relative influence

• tailor the sales presentation to the criteria most important to those members.

• Get involved early and stay visible to executives throughout the process.

Four characteristics executives want in sales reps

1. Ability to marshal resources

2. understanding of the buyers business goals

3. responsiveness to requests

4. willingness to be held accountable

Three evaluative criteria business buyers use

• Quality - technical suitability and the seller’s reputation

• Service - Prepurchase and postpurchase support

• Price - Pushing price too low can damage quality or supplier relationships.

Buying situations

New buy - First ime purchase

Modified rebuy - some change desired

straight rebuy - reorder the same good/service without new search

market

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

If any of those four is missing, it’s not a market.

market segment

subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Market segmentation

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

3 Important reasons for market segmentation

1. Identify customers with similar needs and behaviors

2. design marketing mixes that fit those segments

   1. support the marketing concept by satisfying wants and needs while meeting firm objectives