Principles of Marketing - Exam 2 - Melissa Moore

Consumer Buyer Behavior

Buying behavior of final consumers for personal consumption.

Consumer Market

All individuals and households acquiring goods or services for personal use.

Three Consumer Actions

Acquire, use, and dispose.

Consumer S-R Model

S-R = stimulus-response. Marketing stimuli and environmental stimuli enter the buyer's black box and produce buying responses.

Buyer's Black Box (BBB)

The buyer's characteristics and decision process that turn stimuli into purchase responses.

Buyer Characteristics

Internal traits influencing how a consumer perceives and reacts to marketing stimuli (product, price, place, and promotion).

Buyer Decision Process

The mental steps a consumer goes through when making a purchase.

Four Factors Influencing Purchases

Cultural, social, personal, and psychological factors.

Culture

The set of basic values, perceptions, wants, and behaviors learned from family and society.

Subculture

A group of people with shared value systems based on common life experiences. Ex: Nationality, religion, ethnicity, age cohort, geographic region.

Membership Group

A group to which a person currently belongs and has direct influence.

Reference Group

A group serving as a direct or indirect point of comparison or reference.

Aspirational Group

A group to which an individual wishes or aspires to belong.

Dissociative Group

A group that an individual actively seeks to avoid being associated with.

Opinion Leader

A person within a reference group who exerts social influence due to skills or expertise.

Influencer Marketing

Enlisting established online influencers to talk about a brand to their followers.

Family (Consumer Influence)

The most important consumer buying organization in society.

Role vs. Status

A role consists of expected activities; status reflects the general esteem given to it.

AIO Statement

Activities, Interests, and Opinions used to measure and describe a consumer's lifestyle.

Four Psychological Factors

Motivation, perception, learning, and beliefs/attitudes.

Maslow's Hierarchy of Needs (Order)

Physiological, Safety, Social, Esteem, and Self-actualization.

Motive (Drive)

A need that is sufficiently pressing to direct a person to seek satisfaction.

Perception

The process by which people select, organize, and interpret information.

Subliminal Advertising

Marketing messages presented below the threshold of conscious awareness.

Just Noticeable Difference (JND)

The smallest difference between two stimuli that a consumer can detect.

Stimulus Generalization

Transferring a learned response from one familiar stimulus to a similar new stimulus.

Class Examples: Arm & Hammer across baking soda, laundry, cat litter, and oral care; Ritz Products.

Belief

A descriptive thought that a person holds about something.

Attitude

A person's consistently favorable or unfavorable evaluations, feelings, and tendencies.

Cognitive Component of Attitude

Beliefs and knowledge held about an object.

Affective Component of Attitude

Emotional feelings or evaluation regarding an object.

Behavioral Component of Attitude

An intention or action taken toward an object.

Five Consumer Decision Stages

1. Need recognition, 2. Information search, 3. Evaluation of alternatives, 4. Purchase decision, 5. Postpurchase behavior.

Routine Purchases may skip stages; toothpaste usually requires less search than a pool table.

Need Recognition

First decision stage, triggered when a consumer senses a gap between actual and desired state.

Internal vs. External Triggers

Internal triggers stem from normal needs (hunger); external triggers come from outside stimuli (ads).

Internal Information Search

Recalling information and experiences stored in memory.

External Information Search

Gathering information from personal, commercial, public, or experiential sources.

Universal Set

All existing product options available in a category.

Retrieval Set

Product choices in a category that a consumer can recall from memory.

Consideration (Evoked) Set

The group of brands a consumer seriously considers before purchasing.

Choice Set

The final shortlist of options evaluated immediately prior to a buying decision.

Factors Impeding Intended Purchase

Attitudes of others and unexpected situational factors.

Cognitive Dissonance

Postpurchase buyer discomfort caused by post-sale doubt or conflict. Can reduce satisfaction, repeat buying, and loyalty.

Customer Journey

The sum of all touchpoints and experiences a customer has with a brand.

Adoption Process

Mental process through which an individual passes from first learning of an innovation to final adoption.

Five Adoption Stages

1. Awareness, 2. Interest, 3. Evaluation, 4. Trial, 5. Adoption.

Trial vs. Adoption

Trial is initial limited testing; adoption is full, regular, and continued usage.

Innovators (2.5%)

Venturesome risk-takers who try new ideas first.

Early Adopters (13.5%)

Respected opinion leaders who adopt new ideas early but carefully.

Early Mainstream (34%)

Deliberate buyers who adopt innovations before the average person.

Late Mainstream (34%)

Skeptical buyers who adopt an innovation only after the majority has tried it.

Lagging Adopters (16%)

Tradition-bound buyers who are suspicious of change and adopt last.

Relative Advantage (Innovation)

Degree to which an innovation appears superior to existing solutions.

Compatibility (Innovation)

Degree to which an innovation fits past values and current needs.

Complexity (Innovation)

Degree to which an innovation is difficult to understand or use.

Trialability (Innovation)

Degree to which an innovation may be tried on a limited basis.

Observability (Innovation)

Degree to which the results of using an innovation are visible to others.

Business Buyer Behavior

Buying behavior of organizations purchasing goods for production, operations, or resale.

Key Distinguishing Feature of B2B

The intended use distinguishes business from consumer purchases. Business buyers identify needs, then find, evaluate, and select products/suppliers.

Derived Demand

Business demand that ultimately comes from the demand for consumer goods.

Business Demand Elasticity

Inelastic in the short run; price changes produce smaller proportional demand changes.

Straight Rebuy

A business buying situation where the buyer routinely reorders without modifications.

Modified Rebuy

A business buying situation where specifications, terms, prices, or suppliers are changed.

New Task Purchase

A business buying situation where the buyer purchases a product or service for the first time.

Buying Center

All individuals and units that participate in the business decision-making process.

User Role (Buying Center)

Members who will actually consume or use the product or service.

Influencer Role (Buying Center)

Members whose technical expertise or input helps define specifications.

Buyer Role (Buying Center)

Members with formal authority to select suppliers and arrange terms.

Decider Role (Buying Center)

Members with formal or informal power to select or approve final suppliers.

Gatekeeper Role (Buying Center)

Members who control the flow of information to other buying center members.

Influences on Business Buyers

Environmental, organizational, interpersonal, and individual factors.

Target Marketing Steps Order

Segmentation → Targeting → Differentiation → Positioning.

Market Segmentation

Dividing a market into distinct groups with distinct needs, traits, or behaviors.

Targeting

Evaluating each market segment's attractiveness and selecting one or more segments to enter.

Differentiation (Market)

Differentiating the market offering to create superior customer value.

Positioning

Arranging for a product to occupy a clear, distinctive, and desirable place relative to competitors.

Geographic Segmentation

Dividing a market into geographical units like nations, regions, states, or climates.

Demographic Segmentation

Dividing a market based on variables such as age, gender, income, occupation, and education.

Psychographic Segmentation

Dividing a market based on social class, lifestyle, or personality characteristics.

Behavioral Segmentation

Dividing a market based on consumer knowledge, attitudes, uses, or responses to a product.

Variables: occasions, benefits sought, user status, usage rate, loyalty, digital behavior.

Five Segmentation Criteria

Measurable, Accessible, Substantial, Differentiable, and Actionable.

Undifferentiated (Mass) Marketing

Targeting the entire market with a single, uniform market offering.

Ex: a broadly marketed basic commodity.

Differentiated Marketing

Targeting several market segments and designing separate offers for each.

Ex: Marriott's hotel brands.

Concentrated (Niche) Marketing

Targeting a large share of one or a few small, specialized submarkets.

Ex: serving tiny-house buyers.

Micromarketing

Tailoring products and marketing programs to suit the tastes of specific individuals or locations.

Ex: local mobile offers or customized products.

Competitive Advantage

An advantage over competitors gained by offering greater customer value.

Five Differentiation Dimensions

Product, Services, Channels, People, and Image.

Perceptual Map

A visual graph displaying consumer perceptions of brands versus competing brands along key dimensions.

Class Examples: pain relievers by price/headache versus body-ache focus; drinks by fun/healthy and strong/light taste.

Value Proposition

The full positioning mix of benefits upon which a brand is differentiated.

More for More Positioning

Providing upscale products with superior benefits at a higher price.

Class Ex: Louis Vuitton/Mercedes.

More for Less Positioning

Offering superior benefits at a lower price (hard to maintain long-term).

Class Ex: MSU

Same for Less Positioning

Offering comparable quality/benefits at a significantly lower price.

Class Ex: Walmart

Less for Much Less Positioning

Offering lower performance/fewer benefits at a much lower price.

Class Ex: ALDI

Positioning Statement Format

For [target] who [need], our [product] provides [benefit]; unlike [competitor], it [difference].

Product vs. Service

Products include all market offerings; services are intangible products that result in no ownership.

Market Offering

A combination of products, services, information, or experiences offered to satisfy a market need.

Core Customer Value

The basic problem-solving benefit or value that consumers seek when purchasing.

Ex: Entertainment and social time (pool-table example)

Actual Product

The tangible product built around core benefits, including quality, design, brand, and features.

Ex: The pool-table itself and its features.

Augmented Product

Additional non-physical services and benefits built around the core and actual product.

Ex: Delivery, setup, warranty, support (pool-table example)

Convenience Products

Consumer products bought frequently, immediately, and with minimal comparison effort.

Shopping Products

Consumer products evaluated carefully on suitability, quality, price, and style before purchase.