Marketing Exam #2

what is high involvement consumer behavior?

long decision process for high priced/value items on a consumer’s life

ex: house

what is low involvement consumer behavior?

quick/small decisions that have less risk and a smaller financial commitment

ex: toothpaste

how are cognitive decisions made?

based on logical reasoning, facts and comparisons

ex: buying a computer

how are emotional decisions made?

based on feeling and personal meaning

ex: buying flowers

what are optimizing decisions?

people making the best possible choice by comparing all other options

what are satisficing decisions?

not looking for the best choice but rather something that meets the bare minimum

what are some internal factors that influence consumer behavior?

The customer’s perception of the uncertainty or ambiguity associated with any purchase

1. monetary

2. physical

3. social

4. psychological

5. functional

6. temporal

list the consumer decision making process

1. need/problem recognition

2. information search

3. evaluation of alternatives (non-compensatory model (minimum requirements) v compensatory model)

4. purchase decisondecision

5. post-purchase evaluation

what is segmenting?

Dividing customers into groups with similar needs.

what are some variables for segmentating?

1. sociodemographic

2. geographic

3. psychographic

4. behavioral

5. volume/profitability

how are targets determined?

Selecting which segments to focus on

how is positioning effective?

define the value far target segments and dropping a plan to do so

what is geographic segmentation?

Dividing a market based on where they live

what is demographic segmentation?

Dividing a market based on observable characteristics (Income, age, race, gender)

what is Psychographic segmentation?

Dividing a market based on unobservable characteristics (personality, attitudes, lifestyle, social class)

what is behavioral segmentation?

Dividing a market based on product related behavior (product knowledge, attitudes, usage, loyalty)

A local coffee shop wants to target customers who are environmentally conscious and prefer to support businesses that engage in sustainable practices. Which type of segmentation should the coffee shop primarily use?

• Volume and profitability

• Behavioral segmentation

• Geographic segmentation 

• Sociodemographic segmentation

• Psychographic segmentation

 

Psychographic segmentation

The Pareto Principle, often observed in marketing contexts, suggests that:

80% of a company's sales come from 20% of its customers.

how do you make segmentation work and maximize it?

1. identifiable

2. substantial - increasing availability of data

3. accessible

4. stable

5. differentiable

6. actionable

A company has segmented its market based on very detailed behavioral and psychographic factors. However, it notices that despite high precision in targeting, the overall profit margins are not meeting expectations. What could be the reason for this outcome?

Too sophisticated segmentation can indeed undermine a firm’s profit.

who does mass marketing target?

for everyone

who does segment marketing target?

adapting to meet the various needs for different groups

who does niche marketing target?

single marketing for a very small and specific segment

ex: lush

how does personalized marketing work?

adapting the marketing mix to each individual customer 

ex: Spotify’s Weekly and Daily Mix 

what are some factors for targeting?

1. size

2. growth

3. accessibility

4. competitive situation

5. adaption cost

what is positioning?

How a brand is perceived in consumers' minds compared to competitors.

explain positioning for a new brand.

1. Targeting customers 

2. Positioning of existing brands 

3. Differentiation

explain positioning for a existing brand?

1. Targeting customers 

2. Positioning of existing brands and your brand  

3. Positioning (reinforcing + repositioning)

how does repositioning affect a brand?

attempt to change a well-established brand to target a new audience while retaining their current customers.

how does reinforcement affect a brand?

strengthens the brands current position

Points of Parity v Points of Difference?

POP - Features similar to competitors

POD - Unique advantages

what is a brand?

1. name

2. logo

3. symbol

4. design

5. combination

differentiates them from competitors’ products

how does brand equity posivitly affect a brand?

• adds value to their products

• brings awareness

• brand image

• favorability

• unqieuness

• brand loyalty

what are the purposes of brands?

1. Provides a sense of belonging

2. Help signal and portray desired identities

3. Provides a standard of quality

4. Convenience

what are the elements of brand equity?

1. brand awareness

2. brand association - favorability v unqiueness

3. brand loyalty

define umbrella brand.

one brand name for all products

ex :

Brand - Apple 

Sub-brand - Apple Music, Apple TV, Apple Airpods

define house of brand.

hard to know the parents brand

what is brand extensions?

1. line extension

2. brand extension

3. multi-brand approach

4. new brand creation

What are line extensions?

Same product category
Example: new flavor

what are brand extensions?

New product category

Example: brand makes headphones after phones

what is multi-brands?

Releasing products within a product category that you are already involved in but under a different brand name

what are new brands?

Releasing products within a product category that you are NOT already involved in and under a different brand name and/or logo

what is the purpose of a perceptual map?

ensure that a company stands ouNew product category
Example: brand makes headphones after phonesr from their competitors

what is A? what is B?

a - differentiation

b - repositioning

Which of the following is a potential disadvantage of using perceptual maps?

 

They cannot guarantee that identified gaps represent a demand.