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Perception
Process of selecting, organizing, and interpreting stimuli
Odd number Pricing
Prices ending in odd numbers affecting perception
Anchoring effect
Process of relying heavily on the first piece of information encountered
Retailers
Entities like Sam's Club and Costco offering high-quality products in bulk
Consumer loyalty motivation
Understanding the factors that drive consumers to stay and be loyal
Social norms
Expected patterns of behavior within a society
Engagement
Level of effort causing consumers to interact and take actions
Consumer behavior
Study of how consumers satisfy their needs and wants through product selection, purchase, use, and disposal
Interpretive approach
Approach to consumer behavior study focusing on understanding consumption meaning
Methods
Long interview
Focus groups
Cultural Anthropology
Study of shared meanings, rituals, norms, and traditions within a group
Long interview
In-depth method for collecting sensitive data through extended 1 on 1 interviews
Focus groups
Qualitative method offering insights into opinions and emotions that are hard to define
-have similar target audiences
Marketing science
Field using math modeling and simulation to predict consumer behavior
- importance of having independent variables
Marketing Planning
Process involving situation analysis, competition understanding, and 5 Forces Analysis
SWOT analysis
Assessment of internal strengths, weaknesses, and external opportunities, threats
Targetting
Selecting specific market segments to serve with tailored marketing strategies
Positioning
Placing a product in consumers' minds relative to competing products
Repositioning
Altering a product's positioning to adapt to market changes
-difficult to change consumer perceptions
ex: jcpenny alienated core market going from bargain to luxury
should do when sales decline, new trends
Segmentation
Dividing the market into groups of similar consumers based on various variables
Subculture
Distinct set of behaviors and beliefs within a larger culture
-set their own norms but there is a reliance on larger culture for direction
-can belong to many at once
Ex: ethnic subcultures
Social class
Groups sharing similar lifestyles stratified by social prestige and esteem
Status float
Trend where goods start in low class and spread upwards
Household lifecycle stages
Different stages in a family's lifecycle influencing consumption patterns
Reference group
Group used as a guide for behavior and point of reference
Diffusion of innovation
The spread of new ideas, practices, or products within a society
Selective exposure
Choosing what to acquire or avoid in terms of information
Absolute threshold
Minimum amount of stimulation needed to be detected
Odd Pricing
Anything that ends with an odd number (5,7,9)
- affects perception making it think its seems lower
Breaking social norms
Can result in negative reactions
Level of effort
causes consumers to interact and make actions towards something (engagement)
traditional approach
Core: psych and socio
Explains decision making behavior
Methods
Experiments and surveys
Survey
rating your experience on a scale (5, 7, 9) needs a neutral point
Experiment
testing one or more factors
Ex: packaging and colors
5cs Analysis
Climate
Competition
Customers
Companies
Collaborators
Climate
social, cultural, political
Competition
Direct
Selling the same product Ex: burgers Mcds and burger king
Vs Indirect
Being in the same industry Ex: taco bell and mcds
Potential segmentation variables
Location
Demographics
Psychographics
Demographics
Age
Gender
Life Cycle
Psychographics
Personality, opinions, and lifestyle elements, including activities and interests.
Target market
a market segment a company selects to focus on
-companies stay for a long time, not easy for established brands to change
Ex: porsche for sports cars vs retargeting to suvs
Repositioning example
Olay had an older audience and failed to capture younger women
rebranded with a new logo, packaging, and advertising
how to position
Should be relevant to consumers, credible, attainable, and unique
price
quality (overall)
features
benefts
usage
user
against competition
Positioning map
a map of how consumers perceive brands
-find gap in market and see if there is strong demand
-consider your companies reputation and brand image in comparison to others
Culture
the accumulation of shared meanings, rituals, norms, and traditions among members of an organization and society
Culture defines
general behavior and way of life of a group of people
Cultural analysis
the goal is to understand cultural meanings that are created and shared by people
Law
violations are punished with written sanctions
folkways (customs)
Norms in rituals, beliefs, traditions, and routine in culture
- Breaking feels uncomfortable (tipping)
- varies whats good in one culture may be bad in another (gestures)
Social Norms are
linked to social nature and community (warm and fuzzy)
Market norms
Norms with exchanges (wages and rent) clear and sharp edged
Family branding
motivates employees and increases loyalty
BUT mixing social and market norms cause problems when cutting wages and benefits
Changes in culture
occurs overtime and unevenly
-followed by changes in consumer behavior
can create issues or opportunities for marketers
Changes in culture example
new york times dropped heavily from the 80's-10's while internet ad spend increased exponentially
Cross cultural mktg strategies
Straight expansion
Product adaptation
Communication adaptation
dual adaptation
straight expansion
same product and promotions across countries
- only changes in language
-due to globalization people are more similar to eachother resulting in no need to localize
product adaptation
adapting a product to meet local conditions or wants in foreign markets
communication adaptation
fully adapting advertising messages to local markets
Dual adaptation
adapt product, adapt communications
Religion subculture
Christians, SC: mormons
only beers, no hard liquor, no caffeine, family oriented with large families
Regional subcultures
texas: bigger proportions, trucks are 10% higher than other states
ex: trucks vs prius
Age/cohorts subculture
how old you are vs when you were born(generations)
influences activities ex: seniors vs skateboarding
Special interest subculture
Gamers, bikers, vegans
social class influences
trickle down effect
status float
Trickle down effect
lower class copies upper class trends
ex: opera in 1800s and champagne
Status float
begins in lower class spreads upwards
ex: tattoos, jeans, hip hop
How social class is determined
Single measure items
multiple item measures
Single item measures
occupation, income, education
may not be as accurate
multiple item measures
occupation (prestige level), income, education, area of residence
sponsors
brands will become sponsors for events towards their target audience
ex: US grand open and highend products
Social structures
Upper middle class is obtainable through hardwork
middle class aspires to be upperclass
Upward pull strategy
Advertising is targeted at middle class
they use upperclass symbolism for middle class products
Ex: mercedes benz at an affordable price
Social classes change over time
Upward mobility: raising class level
downward mobility: losing ones social standing
Status panic
the state of disappointment and frustrations when kids can't meet parents status
conspicuous consumption
luxury for showing off wealth
ex: rolex watches aren't for telling time, but showing off wealth
conspicuous waste
visibly buying products to never use
fraudulent symbols
goods become common and lose prestige
ex: iphones
Single 1
hedonic consumption pattern and low responsibilites
purchase for interests and hobbies
young married
joint decisions and still hedonic, but focus on pursue romance
ex: purchasing furniture together and saving money
full nest 1
babies, less income more spending, no more past self purchases, now kid friendly
full nest 2
children growing bigger cars, food, and houses
Empty nest 1
children gone, spend money on nicer luxury items, vacations, homes, cars, and themselves
less restrictions on spending
HLC/occupational category matrix
The vertical axis is the particular stage in the HLC, which determines the problems the household will likely encounter; the horizontal axis is a set of occupational categories, which provide a range of acceptable solutions.
Limits of Household life cycle
- changes may occur
-doesn't consider non family households
married vs nonmarried: less joint choices and future planning
ex: married: high quality expensive furniture
nm: more careful and cheaper if they break up
boomerang age
coming back after empty nesting
-consumption changes when kids come back
Family decision making
how families interact and influence eachother when making purchase choices for household
roles in family decision making
initiators
influencers
info gatherers
users
deciders
buyers
Ex: beers- dads household items- moms
Conflict in decision making
when family members want different things
Ex: vacations:
disney=kids
Las vegas=parents
consumer socialization in family
children acquire knowledge about products and services and various consumption related skills
direct/indirect
instrumental training
directly told what to do/ not do by family members
modeling
picking up habits seen in other family members
Ex: coke over pepsi
Changing american family
changes in marriage and divorce, delayed marriage
-decrease in childbirth, increase in childless couples
More pets!
Reference group
group an individual uses as a guide for behavior (point of reference)
Attraction
the desire that membership has for an individual
Aspiration reference group
groups we want to be like
Ex: ceos
aspiration groups and marketers
sell an image to be like your aspiration
ex: endorsements
Negative (disassociation) reference groups
groups to which we dont want to belong
marketers: fear and deter people from decisions
Ex: antidrugs
Informative groups
pass on information (advice and recomendations)
ex: doctors
Asch Effect
a person is more likely to make a decision due to surrounding peoples pressure
normative reference group
Provide people with norms that they consider when evaluating a behavior or course of action
fitting in vs being left out
brand choice congruence
choosing a certain brand even if its not whats originally wanted
-marketing context for normative ref group
-Fitting in