Mktg 122 class notes exam 1

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