Chapter 11: Marketing Processes and Consumer Behavior (Part 4: Principles of Marketing: Building Relationships with Customers for Competitive Advantage)

Advertising

any form of paid nonpersonal communication used by an identified sponsor to persuade or inform potential buyers about a product

What is Value?

relative comparison of a product’s benefits versus its costs

-Benefits = function and emotional satisfaction from owning the product

-Costs = price and time

*When benefits are greater than costs, there is value

What is the Value Formula?

Value= Benefits/Costs

What are 2 ways to increase value?

1. Develop an entirely new product that performs better than existing products(better performance benefits)

2. Keep a store open longer hours during a busy season(time benefit of greater shopping convenience)

What are the 4 utilities?

• Form

• Time

• Place

• Possession

Consumer Goods

physical products purchased by consumers for personal use

Ex: cologne, cars, cold medicine

Industrial Goods

physical products purchased by companies to produce other products

Ex: raw materials (steel, coffee beans, plastic), bulldozers, surgical instruments

What is CRM and why is it important?

Organized methods that a firm uses to build better information connections with clients, so that stronger company-client relationships are developed

importance: Customer Relationship Management (CRM) is crucial because it helps businesses build stronger relationships with their clients. By organizing and analyzing customer data, companies can better understand customer preferences and predict future needs. This leads to increased customer satisfaction, loyalty, and retention.

What are the 5 external environments that are affecting marketing?

1.Political-Legal Environment: the relationship between business and government, usually in the form of government regulation of business

ex: environmental legislation, political push for alt. energy sources

2.Sociocultural Envionment: the customs, values, and demographic characteristics of the society in which an organization functions

ex: organic foods

3.Technological Environment: all the ways by which firms create value for their constituents by creating new goods and services

ex: products become obsolete, social media, apps

4. Economic Environment: relevant conditions that exist in the economic system in which a company operates

ex: inflation, interest rates, recessions

5.Competitive Environment: the competitive system in which businesses compete

What is a substitute product?

Substitute Product: product that is dissimilar from those of competitors, but that can fulfill the same need

ex: fitness program and drug regimen

What are the 2 main components of a marketing plan?

Marketing Objectives: the things marketing intends to accomplish in its marketing plan

Marketing Strategies: how marketers intend to accomplish their objectives

What is a Marketing Plan?

detailed strategy for focusing marketing efforts on consumers’ needs and wants

What is the Marketing Mix and what is also known as?

Marketing Mix also known as “The 4Ps”: combination of product, pricing, promotion, and place(distribution) strategies used to market products

What is “place” also known as?

place(distribution)

What are the geographic, demographic, psychographic, behaviorial segmentation?

Geographic Segmentation: geographic units, from countries to neighborhoods, that may be considered in identifying different market segments in a segmentation strategy

Demographic Segmentation: a segmentation strategy that uses demographic characteristics to identify different market segments

Psychographic Segmentation: a segmentation strategy that uses psychographic characteristics sucg as social class, culture, lifestyles, opinions, interests and attitudes to identify different market segments

Behavioral Segmentation: a segmentation strategy that uses behavioral variables to identify different market segments

What are the different promotional tools?

1. Advertising: any form of paid non-personal communication used by an identified sponsor to persuade or inform potential buyers about a product

2. Personal Selling: person-to-person sales via phone, meetings, door-to-door, retail locations

ex: real estate and insurance sales

3. Sales Promotion: direct inducements such as premiums (free gifts), coupons, contests/sweepstakes, and package inserts to tempt consumer to buy products

ex: buy $100 worth of gift cards and get an extra $20

4. Public Relations: communication efforts directed at building goodwill and favorable attitudes in the minds of the public toward the organization and its products

ex: Ronald McDonald House Charities

5. Direct or Interactive Marketing: Engaging directly with consumers through personalized communications.

Feature

a physical characteristics or quality of a good or service

Benefit

advantage or personal satisfaction a person will get from using the good or service

What are the 4 research methods?

1. Observation: research method that obtains data by watching and recording consumer behavior

2. Survey: research method of collecting consumer data using questionnaires, telephone calls, and face-to-face interviews to gather facts, attitudes or opinions

3. Focus Group: research method using a group of people from a larger population who are asked their attitudes, opinions, and beliefs about a product in an open discussion

4. Experimentation: research method using a sample of potential consumers to obtain reactions to test versions of new products or variations of existing products

ex: taste tests, test drives

What are the motives that affect the consumer buying process?

1. Psychological Influences:

   • These include an individual's motivations, perceptions, ability to learn, and attitudes. For example, a person's desire for status or comfort can drive their purchasing decisions.

2. Personal Influences:

   • Factors such as lifestyle, personality, and economic status play a role. A consumer's personal taste or financial capability might affect what they choose to buy.

3. Social Influences:

   • Family, opinion leaders, and reference groups like friends or coworkers can significantly impact buying behavior. Social acceptance or peer pressure often guides choices.

4. Cultural Influences:

   • Culture, subculture, and social class shape consumer preferences and behaviors. Cultural norms may dictate certain product preferences over others.

What is an evoked set also known as and what influences your evoked set?

group of products consumers will consider buying as a result of information search(also known as a consideration set)

Influences on Evoked Set:

1. Psychological Factors: These include motivations, perceptions, learning abilities, and attitudes.

2. Personal Factors: Lifestyle, personality traits, and economic status play a role.

3. Social Factors: Family influence, opinion leaders, and reference groups such as friends or coworkers impact decisions.

4. Cultural Factors: Culture, subculture, and social class can significantly affect consumer choices.

What 2 reasons have caused social media marketing to take off?

1. Shift in Information Sources: People now rely on online media for information that was traditionally obtained from newspapers, magazines, and television. This shift allows marketers to reach consumers more effectively through digital platforms.

2. Interactive Engagement: The interactive nature of social media enables users to participate actively by sharing and seeking information. This engagement helps spread marketing messages quickly and widely, enhancing consumer awareness at a lower cost than traditional methods.