MKT 300 Hapke Exam 2

What is consumer buying behavior?

The study of individuals, groups, organizations, and all the activities associated with the purchase, use, and disposal of goods and services

What are the 5 stages of the consumer buying decision process?

1. Need Recognition 2. Info search 3. Alternative evaluation 4. Purchase and consumption 5. Post-purchase

What happens during need recognition (stage 1)?

Consumer recognizes they have an unsatisfied need and want to go from an actual, needy state to a different, desired state

What happens during info search (phase 2)?

Examine knowledge about product/service gathered through experience and seek info outside personal knowledge

What happens during alternative evaluation?

Sift through alternative choices and choose best option

What are functional needs?

Needs pertaining to product performance

What are psychological needs?

Needs pertaining to personal gratification consumers associate with a product or service

What is an internal & external search?

Examining info gathered through experience vs. seeking outside knowledge to make a decision.

What is the purchase stage- conversion rate?

The percentage of consumers who take the desired action in response to a marketing effort or call to action

What is the post purchase stage- cognitive dissonance?

Internal conflict from inconsistencies between beliefs

What is extended problem solving?

Purchase entails lots of risk and requires extra effort

What is limited problem solving?

Moderate amount of effort and time

What is habitual decision making?

This occurs when involvement is low and brand difference is small so consumers default towards the “familiar” product

What is the STP process- a firm's marketing strategy?

Using segmentation, targeting, and positioning to assess and pinpoint target audience

What are the steps in the STP process?

SEGMENTATION: derive a segment consistent with mission and objectives

TARGETING: Evaluate segment attractiveness and select target market

POSITIONING: correlate positions to hit target

What is psychographic segmentation?

Dives into how consumers describe themselves

What does it mean to evaluate a segment to see if it is substantial?

To measure the size of a market to determine if it is significant

What does it mean to evaluate a segment to see if it is profitable?

Focus assessments on potential profitability both current and future

What is the undifferentiated/mass marketing targeting strategy?

Targeting strategy focused on basic commodities, provides similar benefits to customers

What is the concentrated targeting strategy?

Targeting strategy focused on a single, primary target market selected with all focus/energy on providing a product to fit that market’s needs

What is the micro marketing targeting strategy?

Firm tailors a product/service to suit an individual customers wants and needs

What is marketing positioning?

Defining market mix variables so target customers have a clear, distinctive desirable understanding of what the product represents.

What is a value proposition?

Communicates customer benefits to be received from a product/service, provides reasons for wanting to purchase it.

What is the competition positioning method? 

Identify the competitions position in the market

What is perceptual mapping?

FOUR QUADRANT DISPLAY to Display in 2 or more dimensions, the positions of the brand in a consumer's mind

What is the marketing research process?

Made up of 5 steps to analyze marketing: defining objective/needs, designing research, collecting data, analyzing data and developing insights, developing and implementing action plan

What is primary data?

Data collected to address specific research needs 

What is syndicated data (Nielsen)?

Data collected available for a fee from commercial research firms such as Nielsen

What is survey research (Structured/unstructured response)?

using a survey to collect data, unstructured responses are open ended and structured responses have a set of options

What is experimental research?

systematically manipulates one or more variables to determine which variables have a causal effect (Blind taste tests are common in this type of research)

What are the disadvantages of primary and secondary research?

Advantages of primary research are they hit specific data needs and offer behavioral insight, disadvantages are they are costly, time-consuming, and require sophisticated training

Advantages of secondary research are they save time, readily available, and inexpensive, disadvantages are they are not always relevant, not timely, and not original

What is big data?

Data sets too large and complex to analyze with conventional software 

What are the 5 Vs of big data- veracity?

Volume, variety, velocity, veracity, and value 

What are marketing analytics?

Tech and models to analyze gathered data to improve decision making, optimize their returns and make appropriate customer related decisions 

What are the ethics of consumer information- privacy?

• As tech advances there are more threats to consumer personal info and companies must not abuse their access to data

• EPIC (Electronic Privacy Information Center) emerged as a watchdog over data mining to maintain consumer privacy 

What is the core customer value- figure?

• defines basic problem-solving benefits that customers are seeking 

What are consumer products- convenience examples?

Products used by people for their personal use that are classified by how they are used

What is in the product mix?

• a complete set of all products and services offered by a firm

What is depth?

• The number of products within a product line (indicates variety)

What is breadth/width?

A number of product lines offered by a firm

What is the brand purpose?

A company’s reason for existing and how they stand out amongst typical businesses 

What are the four elements of brand equity (including associations)?

Brand loyalty, brand awareness, brand associations, and perceived value

What is brand loyalty?

customer consistently buys the same brands products rather than buying from others in the same category

What is brand awareness?

how many consumers are familiar with a brand, and what it stands for (CREATED THROUGH EXPOSURE)

What is brand association?

reflect mental/emotional links customers make between brand and key attributes like color, logo, slogan

What is perceived value?

relationship between product/service benefits and costs & value compared to competitors 

What is manufacturer/national brand ownership?

brands owned by/managed by a manufacturer who developed products, ensures quality, and markets (EX: Coke)

What is retailer/store (Private Label) brand ownership?

Products developed by retailers that can connect with outside manufacturers to produce products

What is family brand ownership?

Use corporation name to brand all product lines

What is brand extension?

Use of same brand name in a different product line

What is primary packaging?

The package used by consumers

What is labeling?

Providing info the customer needs for decision making and consumption -> exemplify the brand

What are the 5 Cs of pricing?

Company objectives, customers, costs, competition, channel members

What are the 4 orientations?

Product orientation, marketing orientation, sales orientation, and manufacturing orientation 

What is sales orientation?

Business model focused on making the best product without considering the customer

What is the customer demand curve?

A visual representation of how many units of a good will be purchased at each possible price

What are the factors influencing price elasticity of demand?

Substitution effect, income effect, cross price elasticity

What is the income effect?

How and increased income can change the quantity of goods demanded by customers

What is the substitution effect?

Substituting a brand for another when there is a cheaper option

What is cross-price elasticity?

How sensitive the demand of a product is over a shift in a corresponding product’s price

What is the break-even analysis- FORMULA

FIXED COSTS divided by PRICE MINUS VARIABLE COSTS

What is a Monopoly?

When one firm controls a market

What is an Oligopolistic competition?

When a handful of firms control a market

What is a monopolistic competition?

When many firms sell differentiated products at different prices

What is Pure Competition?

Many firms sell commodities for the same price

What are the pricing strategies?

Everyday low pricing

What is everyday low pricing (EDLP)?

Pricing strategy promising consumers a low price without the need to wait for sale price or compare to alternatives

What is high/low pricing?

Pricing strategy when and item is priced highly but discounted when it becomes less desirable

What is market penetration pricing?

Pricing strategy hen a business starts a new product at a low price to undercut competitors

What is price skimming?

Pricing strategy where a firm charges a high intro price and lowers the price to attract price-sensitive customers if necessary

What is predatory pricing?

Pricing strategy in which products are priced so low that competitions cant compete and are forced to leave the market