marketing exam 2

internal forces - consumer decision process

personal characteristics and psychological attributes are these type of factors that affects consumer choices

demographics

the characteristics of human populations, and population segments, especially when used to identify consumer markets.

personal characteristics

these attributes are frequently used to define an individual consisting of life cycle stage, family life cycle, education, occupation, income, lifestyle (gender roles)

psychological attributes

these forces drive the need, shape the content and format of information stored in memory, and have an effect on point of view about products and brands

psychological attributes

motivation, attitude, perception, learning, personality (affect consumer choices)

personal characteristics

life cycle stage (age), family life cycle, education, occupation, income, lifestyle, gender roles (affecting consumer choices)

cultural values

a psychological attribute that is a value based on national conscience

personal values

a psychological attribute that is a value held by an individual

multi-attribute model

this evaluates the object on several important attributes (psychological attributes)

Maslow’s hierarchy of needs

theory: Humans have wants and needs that influence their behavior. People advance to the next level only if the lower needs are met.

marketing implications: Individuals are not interested in luxuries until they have had basic needs (food, shelter) meterh

herzberg’s two factor theory

theory: Certain factors in the workplace result in job satisfaction.

marketing implications: Satisfying hygiene factors does not create a loyal employee or customer. For a company to really create satisfied employees it is important to focus on motivators

alderfer’s ERG theory

theory: Expansion on Maslow’s hierarchy, placing needs in three categories.

marketing implications: People need a sense of belonging and social interaction. Creating a relationship with the customers extends the customers’ satisfaction with the product.

mcclelland’s achievement motivation

theory: here are three categories of needs and people differ in the degree to which the various needs influence their behavior

marketing implications: Companies can be successful targeting one of three basic needs

perception

is a system to select, organize, and interpret information to create a useful, informed picture of the world.

perception

is shaped by three psychological tools: selective awareness, selective distortion, and selective retention

learning

is any change in the content or organization of long-term memory or behavior.

learning

this consists of two approaches: conditioning and cognitive learning

personality

is a set of unique personal qualities that produce distinctive responses across similar situations

external factors

have a direct and profound effect on the consumer decision process. Three external factors have the most significant impact on consumer choices: Cultural. Situational. Social.

cultural factors

culture, subculture, language, values, nonverbal communication

culture

assimilates shared artifacts such as values, morals, beliefs, art, law, and customs into an organized system that enables people to function as members of society.

subculture

is a group within the culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography.

nonverbal communication

communicating through facial expressions, eye behavior, gestures, posture, and any other body language

positive nonverbal communication

Eye contact, Smiling, Good posture, Pleasant tone of voice, Moving closer to the person

negative nonverbal communication

Swaying, Stuttering, Hands in pockets, Fidgeting, Looking at watch or clock.

situation factors

are time-sensitive and interact with both internal and external factors to affect change in the consumer. Physical Surroundings, Personal Circumstances, Time.

social factors

type of factors consist of family, household life cycle, social class, aspirational purchases, opinion leader, market mavens, reference group, desirability, degree of affiliation

family

is a group of two or more people living together and related by birth, marriage, or adoption.

social class

is a ranking of individuals into harmonized groups based on demographic characteristics, also aspirational purchases

reference group

is a group of individuals whose beliefs, attitudes, and behavior influence the beliefs, attitudes, and behavior of an individual

involvement

activated by: A person’s background and psychological profile, The aspirational focus, The environment at decision-making time.

high involvement learning

People spend more time in the decision-making process and report higher satisfaction.

low involvement learning

Automatic or habitual purchases with little time or energy involved

customer decision making process

problem recognition - search for information - evaluation of alternatives - product choice decision - post purchase decision

sources if external information

independent groups, personal associations, marketer information, experiential

set of alternatives

in the consumer decision making process, consists of the complete set, awareness set, and consideration set

evaluation of alternatives

in the consumer decision making process, consists of emotional choice, attitude based choice, and attribute based choice

product choice decision

in the consumer decision making process, consists of physical surroundings, social circumstances, time, and state of mind. Also what, where, how much, when, payment

post purchase assessment

in the consumer decision making process, consists of dissonance, use/non use, disposal, satisfaction / dissatisfaction

differences in marketing strategy

Relationship with customers, Number and size of customers, Geographic concentration, Complexity of the buying process, Complexity of the supply chain, Demand for products and services.

buying influencing factors

Nature of the purchase, Number of people involved in the decision, Understanding of the product being purchased, Time frame for the decision.

buying situations

straight rebuy, modified rebuy, new purchase

buying centers

A number of individuals with a stake in the purchase decision come together to form a center that manages the purchase decision process and ultimately makes the decision.

business market purchase decision

problem recognition, define the need and product specs, search for suppliers, seek sales, make purchase decision, post purchase evaluation

problem recognition

The business market purchase decision process is triggered when someone inside or outside the company identifies a need. Can be triggered by: Simple reorders, Need to consider new options, New technologies

purchase decision choices

financial criteria, value criteria, and service criteria are choices in this

personal factors

refers to the needs, desires, and objectives of those involved in the purchase decision

organizational factor

this is the key factor, known as risk tolerance

e-procurement methods

Industry purchasing sites, Business function sites, Extranet to major suppliers, Company buying sites

customer needs and wants

fulfilling these are achieved through Market segmentation,Target marketing, Positioning, Positioning strategy

market segmentation

dividing a market into meaningful smaller markets or submarkets based on common characteristics

target marketing

evaluating the market segments, then making decisions about which among them is most worthy of investment for development

positioning

communicating one or more sources of value to customers in ways that connect needs and wants to what the product has to offer. These strategies are executed through the development unique combination of the marketing mix variables

segmentation

seeks to find one or more factors about members of a heterogeneous market that allow for dividing of the market into smaller, more homogeneous subgroups

differentiation

means communicating and delivering value in different ways to different customer groups.

Not all customers are alike, Subgroups of customers can be identified on some basis of similarity, The subgroups will be smaller and more homogeneous than the overall market, Needs and wants of a subgroup are more efficiently and effectively addressed than would be possible within the heterogeneous full market.

effective segmentation criteria

Segment is of sufficient size to warrant investing in a unique value-creating strategy for that segment as a target market.

Segment is readily identifiable and can be measured.

Segment is clearly differentiated on one or more important dimensions when communicating the value of the product.

Segment can be reached (in terms of both communication and physical product) to deliver the value of the product, and subsequently can be effectively and efficiently managed.

geographic segmentation

divides consumer groups based on physical location but is an insufficient segmentation criterion in and of itself

geographic segmentation approaches

popular approaches are by region, by density of population, by size and growth of population, by climate

demographic segmentations

variables consist of: age, generational group, gender, family, race and ethnicity, income, occupation, education, social class, geodemographic

GI generational group

Financial security and conservative spending (shaped by hard times and the economic depression of the 19 30’s).

No such thing as problems—only challenges and opportunities.

Civic minded.

Duty to family, community, country.

Unified and team oriented.

silent generation

Strength in human relation skills.

Respectful of others’ opinions.

Trusting conformists.

Health, stability, and wisdom.

any boomer generationbCivic life and extended families.

baby boomer generation

Forever young.

Individualistic.

Conspicuous consumption—great acquirers of goods and services.

Idealistic: value- and cause-driven despite indulgences and hedonism.

energThe end justifies the means

generation X

Lack of trust in society.

Cynical and media-savvy.

Entrepreneurial.

Accept diversity.

Environmentally conscious.

Work to live, not live to work.

Generation Y or millennial generation

Pragmatic.

Optimistic.

Team players.

Savvy consumers.

Edgy.

Focused on urban style.

More idealistic than Gen X.

Technology comes naturally

generation Z or zoomer generation

Digital natives.

Highly educated.

Racially and ethnically diverse.

Internationally-minded.

Environmentally conscious.

Socially and politically progressive.

Marketing-resistant

demographic segmentation

A hybrid form of segmentation that considers both geographic and demographic factors is called

psychographic segmentation

is sometimes referred to as segmentation

by lifestyle or values.Relies on personality and A I O’s (activities, interests, and opinions). V A L S data based on level of resources and primary motivation.

behavioral segmentation

divides customers into groups based on benefits sought or usage patterns. Benefits sought: What are crucial value-adding properties of an offering? Key starting place for segmentation

business market segmentation variables

these consist of demographic, operating variables, purchasing approaches, situational factors, and personal characteristics

target marketing

3 steps in this type of marketing are to analyze market segments, develop profiles of each potential market, select marketing approach

analyze market segments

in target marketing one must do this by looking at - segment size and growth potential of market, find competitive forces related to the segment, and find the strategic fit of the segment

develop profiles

in target marketing one must develop these - primary target markets, secondary target markets, tertiary target markets, and target markets to abandon for future development

positioning

Firms must create, communicate, and deliver the value offering to the target markets by doing this with the product so that consumers understand its ability to fulfill their needs and wants.

These strategies are created using unique combinations of the marketing mix variables of product, supply chain, price, and promotion

sources of differentiation

sources are innovative leadership, product leadership, image leadership, price leadership, convenience leadership, service leadership, service leadership, personnel leadership

innovative leadership

source of differentiation, constantly developing the “next new thing.” Ex: apple

product leadership

source of differentiation, performance, features, durability, reliability, style, and so on. Ex: BMW

image leadership

source of differentiation, symbols, atmosphere, and creative media. Ex: harley davidson

price leadership

source of differentiation, Efficiencies in cost of labor, materials, supply chain, or other operational elements enabling the price leader to charge less. Ex: Walmart

convenience leadership

source of differentiation, making the product or service

significantly easier to obtain. Ex: amazon

service leadership

having an unusual and notable pcommitment to providing service to customers. Ex: ritz-carton

personnel leadership

source of differentiation, hiring employees who are competent, reliable, courteous, credible, responsive, and able to communicate clearly. Ex: chick fil a

positioning errors

under positioning, over positioning, confused positioning, and doubtful positioning

under positioning

type positioning error, when consumers have only a vague idea about the company and its products, and do not perceive any real differentiation. Ex: Audi and VW

over positioning

type of positioning error, when consumers have too narrow an understanding of the company, product, or brand. Ex: dell

confused positioning

type of positioning error, when frequent changes and contradictory messages confuse consumers regarding the positioning of the brand. Ex: McDonalds

doubtful positioning

when the claims made for the product or brand are not regarded as credible by consumers. Ex: Southwest Airlines