Marketing 3000 Exam 2 Mizzou

consumer behavior

describes how consumers (people who potentially may buy something) make purchase decisions

consumer buying process

influenced by different cultural, social, personal, and psychological factors.

Problem recognition, Information search, Evaluation of alternatives, Purchase decision, Postpurchase behavior

See Chart pg 40

Need/Problem Recognition

1st stage in the buying process

there is a need or want that requires satisfaction for primary needs or secondary needs

marketing mix elements and having a problem cause the stimuli to want to satisfy it

information search

2nd stage in the buying process

a consumer will engage in a search for information about alternatives that may satisfy that need

can occur internally or externally

internal - recalling information stored in memory(most relatable)

external - seeking information from the outside environment (trial most valuable)

alternative evaluation

3rd stage in the buying process

yields a set of the most preferred alternatives, called the evoked set or consideration set

consumer weighs the importance of attributes

purchase decision

4th stage in the buying process

consumer decides whether to buy as well as where and how to buy

post purchase behavior

5th stage in the buying process (most important)

performance - expectations = level of satisfaction

Innate needs vs. Acquired needs

I- food, water, shelter, sex "Primary needs"

A- Prestige, power, affection, "learned"

Trio of Needs

power, affiliation, achievement

P- need to control environment

Af- need of friendship

Ac- need of personal accomplishment

routine decision making

A type of customer decision making used when a person needs little information about a product he or she is buying. Gum, Milk

limited decision making

the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category. Blender

extensive decision making

the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information. Cars

cognitive dissonance

feeling of tension or anxiety after the purchase, can lead to either a returned purchase or to a negative evaluation of the brand

to combat use: personal selling or advertising communication

availability bias

is reflected in judgements regarding the predicted frequency of an event. consumers may use these types of predictions in forming judgements about alternatives or whether a product is needed

ex. how reliable is a ford focus (how frequently would this model need repairs)

ex. will I look stupid if I buy my gf a necklace from kay jewelers (how often do others buy gifts there)

usually comes from media

recency effect

the IRS convicts people for tax evasion in march to make it a memorable and recent event for people doing their taxes in april

vividness

a single vivid experience is highly memorable and available to the mind for what could be an indefinite amount of time also called flashbulb memories

anchoring and adjustment

ex. if a marketing manager was asked to predict next year's sales, she might take this year's forecasted sales as a starting point, or an anchor, and then make adjustments to this figure according to anticipated changes in conditions

nothing biased about this process, disadvantages in this strategy lie mainly in the way the original anchor is generated

representativeness heuristic

people tend to judge the probability of an event by finding a 'comparable known' event and assuming that the possibilities will be similar

also known as stereotyping

disadvantage is assuming that similarity in one aspect leads to similarity in other aspects

law of small numbers

is the assumption people make that a small sample is representative of a much larger population

international marketing

marketing of products outside one's domestic market

its booming!

global marketing

focuses its resources and competencies on global market opportunities and threats in a comprehensive manner

global market penetration

the extent to which a company has operations in major world markets

coordination of marketing activities

the degree to which global, marketing-mix activities are planned and executed interdependently

standardization vs. adaptation

the extent to which each marketing mix element can be standardized (used the same way) or must be adapted (used in different ways) in different country markets

concentration of marketing activities

the extent to which activities related to the marketing are performed in one or only a few country locations

integration of competitive moves

the extent to which a firm's competitive marketing tactics in different part of the world are interdependent

ethnocentric

a person who assumes that his/her country is superior to the rest of the world

associated with national arrogance

these companies that conduct business outside their home country are known as international companies

standardized or extension approach

the belief that products can be sold everywhere without adaptation

polycentric

the belief that each country in which you do business is unique

leads to localized or adaption view that assumes products MUST be adapted to succeed

regiocentric

the region becomes the relevant geographic unit

management's goal is to develop a regional integrated strategy

geocentric

views the entire world as a potential market and strives to develop integrated global strategies

known as global or transnational companies

serve global markets and utilize global supply chains

"think globally, act locally"

power distance index

this dimension expresses the degree to which the less powerful members of a society accept and expect that power is distributed unequally

how society handles inequalities among its people

people in societies exhibiting a large degree of power distance accept a hierarchical order in which everybody has a place and which needs no further justification

individualism

the high side of this dimension, can be defined as a preference for a loosely-knit social framework in which individuals are expected to take care of only themselves and their immediate families

collectivism

represents a preference for a tightly-knit framework in society in which individuals can expect their relatives or members of a particular in-group to look after them in exchange for unquestioning loyalty

masculinity

represents a preference in society for achievement, heroism, assertiveness, and material rewards for success

femininity

a preference for cooperation, modesty, caring for the weak and quality of life

also known as tough vs. tender cultures

uncertainty avoidance index (UAI)

dimension expresses the degree to which the members of a society feel uncomfortable with uncertainty and ambiguity

how a society deals with the fact that the future can never be known: should we try to control it or let it happen?

countries exhibiting strong _____ maintain rigid codes of belief and behavior, and are intolerant of unorthodox behavior and ideas

long term orientation vs. short term normative orientation

societies that score low on this dimension, prefer to maintain time-honored traditions and norms while viewing societal change with suspicion

those with a culture which scores high, take more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future

indulgence

stands for a society that allows relatively free gratification of basic and natural human drives related to enjoying life and having fun

restraint

stands for a society that suppresses gratification of needs and regulates it by means of strict social

Hofstede's cultural typology

social values suggesting that the cultures of different nations can be compared in terms of five dimensions

provides marketers insight that can guide them in a range of activities: product development, interacting with joint ventures partners, and conducting sales meetings

Japan, Brazil, mexico, and india

building a relationship with a potential business partner takes precedence over transacting the deal

Chinese Value Survey (CVS)

LTO asses the sense of immediacy within a culture, whether gratification should be immediate or deferred

market entry strategies

companies that wish to move beyond exporting can use a range of alternative

licensing

can generate revenue flow with little new investment; it can be a good choice for a company that possesses advanced technology, a strong brand image, or valuable intellectual property

advantages of licensing

enables companies to circumvent tariffs, quotas, or similar export barriers

disadvantages of licensing

-Offer limited market control

-Licensees can develop into strong competitors in the local market and eventually into industry leaders

joint venture

a type of strategic alliance in which partners share equity investment in an independent entity

offer two or more companies the opportunity to share risk and combine complementary strengths

advantages of joint ventures

can limit its financial risk as well as its exposure to political uncertainty

experience to learn about a new market environment

combine different value chain strengths

might be the only way to enter a country or region

disadvantage of joint ventures

must share rewards as well as risks

potential conflict between partners

foreign direct investment

a higher level of involvement outside the home country may involve

can also be used to establish company operations outside the home country through greenfield investment, acquisition, or taking ownership

greenfield investment

constructing new operational facilities in a foreign country

acquisition

a minority or majority equity stake in a foreign business

ownership

taking _______ of an existing business entity through merger or outright acquisition

competitive advantage of nations

according to Michael Porter the presence or absence of particular attributes in individual countries influences industry development

Michael Porter's attributes

1. factor conditions

2. demand conditions

3. related and supporting industries

4. firm strategy, structure, and rivalry

factor conditions

refers to a country's endowment with resources

5 categories:

1. human

2. physical

3. knowledge

4. capital

5. infrastructure

demand conditions

determines the rate and nature of improvement and innovation by the firms in the nation

contains 3 characteristics:

market size

demanding customers

market sophistication

market size

when the market for a particular product is larger locally than in foreign markets, the local firms devote more attention to that product than do foreign firms, leading to a competitive advantage when the local firms begin exporting the product

demanding customers

a more demanding local market leads to national advantage

market sophistication

a strong, trend-setting local market helps local firms anticipate global trends

product

of all the four Ps in the marketing mix, _________ decisions are usually the most critical in determining marketing success

new-product development

important today!

the ability of a firm to efficiently and effectively develop new products is often critical to survival

important from a societal perspective, reflects the world we live in but also can change our lives and determine the type of world we live in

Product Life Cycle (PLC)

products go through introduction, growth, maturity, and decline

used to understand and analyze product categories or industries

Introduction (PLC)

when a product innovation is introduced, marking the beginning of a new product category

first product is called the "pioneer", and its promotional efforts are for stimulating primary demand (demand for the category itself)

growth (PLC)

once sales and profits start to take off it is in the ___________ stage.

typical for competitors to enter the category

promotional efforts are now made to stimulate secondary demand (demand for the brand of product)

maturity (PLC)

sales and profit growth within a product category eventually slow. This marks the start of the ___________ stage, which often lasts a long time.

competition is at its highest

highest levels of promotional expenditures are made

decline (PLC)

competition outside the product class may grow due to better technology or changing tastes

early and late majority and Laggards

EM- 34.0% adopt new early on

LM- 34.0% adopt after average

L- 16% last to try it

branding

is a name or symbol that identifies a particular product and differentiates it from competing products

provides valuable service to consumers bc it gives us a means for associating a particular product with a specific level of quality

generic brands

a low-priced product identified only by its generic name

greatest success is in pharmaceuticals, often preferred by insurance bc of low prices

private brands

owned by a wholesaler or retailer

ex. Sam's choice and Equate are private brands sold at Wal-Mart stores

sales are growing and account for 20% of sales at U.S. mass merchandisers, drugstores, and supermarkets

Building Strong Brands 4 steps

1. Brand Identity- Who are you?

2. Brand meaning- What are you?

3. Brand imagery- What do I think about you?

4. Create loyalty between brand and customers- What about you and me?

manufacturer brand

types of brands we commonly think of when we think of branding, like Coca-Cola, Kodak, Ford, and Kraft.

they are owned by the producer of the particular product

brand equity

brands are more than just names and symbols, they represent consumers' perceptions and feeling about a product

the differential effect that knowing the brand name has on customer response to the product or service

extent to which customers are willing to pay more for the brand

desirable qualities for a brand name

1. it should suggest something about the product's benefit and qualities

2. it should be easy to pronounce, recognize, and remember. Short names help.

3. the brand name should be distinctive

4. it should be extendable

5. the name should translate easily into foreign languages

6. it should be capable of registration and legal protection

product management

involves making decisions regarding the product line

line extension

occur when a company introduces additional items in a given product category under the same brand name, such as new flavors, forms, colors, ingredients, or package sizes

brand extension

involves the use of a successful brand name to launch new or modified products in a new category

may confuse image of the main brand however it gives the new product instant recognition and faster acceptance

multi-branding

marketing of more than two competing and almost identical products, that belongs to a single organization and is filled under different and unrelated brands

ex. Unilever's personal care brands (Dove, Axe, Suave)

ex. P&Gs laundry detergent brands (Tide, Cheer, Era, Dreft)

offers a way to establish different features and appeal to different buying motives

Trading up vs. Trading down

(Chapter 11)

Trading up = adding value to product by adding features or higher-quality materials;

Trading down = reducing number of features, quality, or price

services

are intangible actions or processes performed for one entity/person by another entity/person

dominate 1st-world economies and are growing

80% of all US economic activity

intangibility

services cannot be inventoried like products, therefore fluctuations in demand are more difficult to manage.

services can't be readily displayed or communicated to customers, so their quality may be difficult for consumers to asses

heterogeneity

services most often involve the actions by humans which lead to heterogeneous (varying) outcomes.

ensuring consistent quality is a primary challenge

simultaneous production and consumption (inseparability)

most services are sold first and then produced and consumed at the same time.

perishability

since services cannot be stored, resold, or returned, a service opportunity is lost forever once the service expires.

means that a recovery strategy and flexible pricing are needed

people

all of the actors in the service process - the firms employees, the customer and other customers that influence service delivery

appearance, behavior, and attitudes will influence perception

physical evidence

the service environment in which the service is delivered including all tangible elements involved in the service delivery

(signage, equipment, brochures, and websites)

servicescape

the physical facility/grounds where the service is offered

process

the systems, procedure and methods by which activities are performed for service delivery

offerings

One may think of all ________ as having tangible and intangible components.

promotion

Which of the following is the most frequently used marketing stimulus used to trigger "problem/need recognition" with consumers?

People problems

Non-cooperational, Anger, being too loud, Obnoxious/annoying behavior, unjustified complaining, Insensitivity to others

Gaps.

Listening Gap

Service design and standards gap

performance gap

communication gap

performance and expectation gap

Which is most difficult to close?

which can be closed whenever?

LG-between consumer expectation and management perception

SDSG- between management perception and service-quality

PG- between service-quality and service delivery

CG- between service delivery and external communications

PEG- between perceived service and expected service

Difficult- Performance

Whenever- Communication

different reasons people buy things?

Social communication, hedonistic 'joy of the shop', construct identity

Who has the roles and responsibilities of a change toward more sustainable consumption?

Governments, individuals, media

How do the authors view image-base ads?

Negative, it promotes overconsumption

Idea of creating "Brand free Zones"?

Schools, polling place, church, hospitals

Factors that speed diffusion of an innovation

1. Large Relative advantage (smart phone)

2. High level of compatibility (music streaming)

3. Easily observed (wearables)

4. Less complex

5. Easy to try "triability"