Marketing review (chapter 4+8)

What is consumer behavior?

actions a person takes in purchasing and using products and services

What does consumer behavior include?

the mental and social processes that come before and after these actions

What are the steps in the consumer purchase decision process?

1. Problem recognition

2. Information search

3. Alternative evaluation

4. Purchase decision

5. Postpurchase behavior

Why is it important to understand the consumer purchase decision process?

• Arouse need in consumer in order to sell produce

• Steer consumers to their product and close the deal

• Helps marketers effectively communicate with consumers

What happens in stage 1 (problem recognition) of the consumer purchase decision process?

There is a decision to buy or use a product is triggered by need arousal

What are the 2 types of needs?

Functional and psychological

What is a functional need?

Performance of product

What is a psychological need?

Gratification associated with product

In stage 1 (problem recognition), consumers are then __________ to find a solution for their need

motivated

What are the 2 types of searches that happen in stage 2?

Internal and external

What is an internal search?

• Memory of past experiences

• Frequently purchased items

What is an external search?

• Personal, public, marketer-driven

• When risk of wrong decision is high and cost of gathering info is low

What are the risk types in stage 2?

Performance, financial, psychological, and physiological

What happens in stage 3 (alternative evaluation)?

Alternatives need to be evaluated before a final decision is made

What is evaluative criteria?

objective and subjective attributes of different products/brands

What are attributes?

qualities or features

What are tangible attributes?

search attributes help customers evaluate a product before purchase

What are intangible attributes?

experience attributes cannot be evaluated before purchase

What is universal set?

all possible choices for a product category

What is consideration set?

choices consumer deems acceptable out of all that is known (a smaller subset of the universal set)

Trade-offs are often involved when it comes to….?

Quality, price, and convenience

What is a purchase decision?

possible alternatives are compared and evaluated, whereby the best option is selected

What must you decide in a purchase decision?

• Which product you are going to buy

• From whom to buy

• When to buy

What are some considerations that happen in stage 5 (post-purchase behavior)?

• Customer expectations

• Product offering

• Product quality

• Overall value

• Service excellence

What is satisfaction?

attitude-like judgement

What is cognitive dissonance also known as?

buyer’s remorse

What is required for cognitive dissonance?

• Uncomfortable state of inconsistency between beliefs and behaviors

• Post-purchase psychological tension or anxiety

• Two or more highly attractive alternatives

• Companies avoid this by reinforcing decision

Negative word of mouth spreads ____

quickly

Social media allows for rapid _____ of word of mouth

dissemination

How do you build customer satisfaction?

1. Build realistic expectations

2. Demonstrate correct product use

3. Stand behind the product or service

4. Encourage customer feedback

5. Personally make contact with customers and thank them for their support

Define involvement

Level of personal, social, and economic significance of the purchase to the consumers

If its regularly purchased and inexpensive, is it low or high involvement?

Low involvement

If its expensive, can have serious personal consequences, and coudl reflect on one’s social image, is it low or high involvement?

High involvement

For low involvement products, if you are the category leader, you should:

Maintain products quality, avoid stock outs, use repetitive advertising

For low involvement products, if you are the category challenger, you should:

Encourage trials, free samples, coupons, rebates

For high involvement products, if you are the category leader, you should:

A lot of product information, personal selling, social media (experiences)

For high involvement products, if you are the category challenger, you should:

Comparative advertising, novel evaluation criteria, and internet searches

What are situational influences?

• Purchase task

• social surroundings

• physical surroundings

• temporal effects

• antecedent states

What is a purchase task

Reason for making decision

What are social surroundings

Who is with you at the time of purchase

What are physical surroundings

Store atmosphere, salespeople, promotions, crowds, etc.

What are temporal effects

Time of day, amount of time

What are antecedent states

Mood, money available

Define motive

An energizing force that stimulates behavior to satisfy a need

What can affect purchase decision process and help explain how/why consumers behave a certain way?

Motive

Maslow’s Hierarchy of Needs can be ____ or ______

Physiological; psychological

Define personality

consistent behaviors or responses to reoccurring situations

Define perception

the process by which an we select, organize, and interpret information to create a meaningful picture of the world

What does selective exposure mean

Pay attention to information consistent with our beliefs

What does selective comprehension mean

Interpreting info so it is consistent with our beliefs

What is selective retention

what we remember

What is perceived risk

anxiety felt because one can not anticipate outcome

What are some marketing strategies to reduce perceived risk

• Obtain seals of approval

• secure endorsements

• provide free trials/samples

• give extensive instructions

• provide warranties/guarantees

What is an attitude

A learned predisposition to respond to an object in a favorable or unfavorable way

How can marketers change attitudes?

• Change beliefs about brand’s attributes

• Change perceived importance of attributes

• Add new product attributes

Define lifestyle

mode of living that is identified by how people spend their time and resources

Define psychographic

combines consumer, psychology, lifestyle, and demographics to understand motivation for buying

What helps marketers segment and target market?

A psychographic

What are some influences on consumer behavior

• Marketing mix

• Psychological

• Situational

• Sociocultural

What are opinion leaders

Individuals who exert direct and indirect social influence over others

What is word of mouth?

People influencing each other during conversation

What is buzz marketing?

Messages are blasted to a massive audience all at once

What is viral marketing?

Messages reach people gradually, slowly building momentum

What are reference groups?

People to whom an individual looks as a basis for self-appraisal or personal standards

What is associative group?

Ones who actually belong to

What is an aspiration group?

Ones who wish to be a member of

What is a brand community?

Ones with a relationship with particular brand

What is a dissociative group?

Ones who wish to maintain distance

What is consumer socialization?

Process by which people acquire skills to function as a consumer

How does consumer socialization happen?

• Interacting with adult in purchase situation

• Through own purchase and usage experiences

What are subcultures?

Subgroups within larger culture with unique ideas, values, and attitudes

What does STP stand for?

Segmentation → targeting → positioning

What is the purpose of the STP process?

To respond more effectively to wants of potential buyer in order to increase sales and profit

What is market segmentation?

Aggregating prospective buyer into groups, or segments that:

• have common needs and

• will respond similarly to a marketing action

What are market segments?

Homogenous groups of similar buyers

Why should you segment markets?

• To respond more effectively to the wants of potential buyers, thereby increase sales and profits

• Provides links between various buyers needs and marketing program

• One size fits all no longer applies

What is the criteria to use in forming the segments?

• Simplicity and cost effectiveness

• Potential for increased profit

• Similarity of needs of potential buyers within a segment

• Difference of needs of buyers among segment

• Potential of a marketing action to reach a segment

• Simplicity and cost effectiveness

• Potential for increased profit

• Similarity of needs of potential buyers within a segment

• Difference of needs of buyers among segment

• Potential of a marketing action to reach a segment

This is the criteria to use in what?

Forming the segments

What are ways to segment consumer markets?

• Geographic

• Demographic

• Psychographic

• Benefit

• Behavioral

Market can be grouped by…?

• Country

• Region (Northeast, Southeast)

• Areas within region (State, city, neighborhoods, zip codes)

Grouping the market can be most useful for…?

Companies whose products satisfy needs that vary by region

Segmenting based on….?

Identifiable population characteristics

Segmenting based on identifiable population characteristics would be:

• Most Common

• Easy to identify

• Easy to reach

• Statistically analyzable

The following statements describe what…?

• Involves understanding consumer lifestyles, interests, and opinions

• Delves into how they describe themselves

• Based on characteristics of how they spend their time and money

Psychographic segmentation

What does benefit segmentation divide based on?

Need/want

Benefit segmentation segments on basis of…?

The benefits consumer is seeking from product

Behavioral segmentation is segmentation based on…?

Consumer relationship with the product or the firm

Occasion in terms of behavioral segmentation means what?

What is the reason for purchase

Loyalty in terms of behavioral segmentation means..?

Are they brand loyal?

What is the buying stage?

Consumer decision making process

What is usage rate?

Quantity consumer or patronage (store visits) during a specific period

A Market Can Be Segmented Based on ____ As Long As It Is Relevant to the Product and Market and Meets the Criteria for Having a Viable Target Market

Anything

What criteria should you use in selecting target markets?

• Market size

• Expected growth

• Competitive position

• Cost of reaching the segment

• Organizational compatibility

What is product differentiation?

Marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the product as being different and better than competing products

When a company uses____, they provide one product to multiple market segments

Undifferentiated/ Mass Marketing

When a company uses ______, they provide multiple products to multiple market segments

Differentiated Targeting

What is a build-to-order?

A manufacturing process where the production of an item begins only after a confirmed customer order is received

What is product positioning?

Defining marketing mix variables so target customers have a clear, distinctive understanding of what product does

Positioning is in the mind of the ______

Consumer

Product positioning is based on…?

Important attributes relative to competitive products