MKTG 3000 - Exam 2

Chapter 4,5,6

Consumer Decision Making Process

1. Problem recognition

2. Information search

3. Alternative evaluation

4. Outlet selection and purchase

5. Post-purchase processes

Consumer Behavior

The study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy needs, and the impacts that these processes have on the consumer and society

Problem Recognition

Stage where the consumers recognize a gap between their current situation and a desired end-state (Step 1)

Information search

Stage where consumers identify alternative solutions and and appropriate criteria for evaluation those solutions (Step 2)

Alternative Evaluations

Stage where the consumer uses information to evaluate alternative brands in the evoked set (Step 3)

Outlet selection and purchase

The stage where the consumer selects a product from available alternatives, the outlet from which to purchase the product, and completes the exchange (Step 4)

Post-purchase processes

The final stage that takes into account consumer satisfaction, product disposal, alternative markets, cognitive dissonance (Step 5)

Business-to-consumer marketing (B2C)

Selling goods and services to end-user customers

Business-to-business markting (B2B)

Marketing to organizations that acquire goods and services in the production of other goods and services that are then sold or supplied to others.

System 1 Thinking

Thinking fast: Automatic & non-conscious way of thinking

System 2 Thinking

Thinking slow: Effortful, slow controlled way of thinking

Habitual Decision Making

Decision made out of "habit" without much deliberation or product comparison (ex: groceries, gas)

Limited Problem Solving

Refers to situations in which the consumer has established basic criteria for evaluating the product category, but is unfamiliar with supplier, product options, prices, and so on (ex: buying clothes from Target when you usually shop at Walmart)

Extended Problem Solving

Refers to consumer decisions requiring considerable cognitive activity, thought, and effort (ex: car, house)

Attribute based choices

(Heavily system 2) Based off the physical attributes of the product

Affective choices

(Heavily system 1, sometimes system 2) Based off feelings and emotions

Attitude based choices

(Heavily system 1) Based off of past experiences

Evoked Set

Set of products you are considering

Internal Information Search

Identifying options based off your own memory/opinions (often happens with smaller purchases, areas you know very well)

External Information Search

Going out beyond yourself (often happens with big purchases, consult someone who knows more)

Search Marketing

A form of Internet marketing that promotes websites by increasing their visibility in search-engine results pages

Payment Systems

The system used to provide and track supplier's invoices and payments for services and products (ex: apple wallet, credit card, cash)

Reference Groups

(3 kinds)

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

Opinion Leader

Person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others

Norms

Formal or informal societal rules

Unplanned purchases

Purchases made at a retail/ecommerce store that the customer did not plan on buying when entering the store

Reminder purchases

When the customer is reminded of something they need to buy upon seeing it

Impulse purchases

Sudden or immediate purchase of a product without any pre-shopping intention

Personality

The set of distinctive characteristics that lead an individual to respond a consistent way in certain situations (Big 5 model)

Big 5 Model

Openness, Conscientiousness, Extraversion, Agreeableness, Neuroticism (OCEAN)

Lifestyle

A person's typical way of life as expressed by their activities, interests, and opinions

Values

A consumer's belief that specific behaviors are socially or personally preferable to other behaviors

Perception

The psychological process by which people select, organize, and interpret sensory information to form a meaningful picture of the world

Sensory Marketing

Marketing that engages consumers' senses and affects their behaviors

Differences in national cultures

Individualism vs Collectivism

Consumption Subcultures

Distinct groups of people united by a common commitment to a particular set of consumption items or activities

Brand Communities

A place where people who have an emotional connection to your brand can connect with each other and with your brand

Consumer Tribes

Social groups that are formed by people sharing common interests, values, community, profession, needs, or aspirations

Maslow's Hierarchy

A theory that arranges the five basic needs of people in order of importance: (from the bottom up)

Self actualization

Esteem

Love and belonging

Safety

Physiological

Types of Attitudes

Cognitive (logic)

Affective (emotions)

Conative (actions driven)

Research relative to Product

NPD Research

Redesign/relaunch

Iterative development

Research relative to Price

Demand analysis

Change in price effects

Research relative to Place

Sales forecasts

Inventory forecasts

Salesperson demand

Research relative to Promotion

Advertising effectiveness studies

Messaging research

Marketing Research

An organizational activity that links the consumer, customer and public to the marketer through information (refines information to drive better decisions and lower risks)

Marketing Research Process

1. Define the problem

2. Develop a research plan

3. Collect data

4. Analyze the data

5. Present results and take action

Define the Problem (Step 1)

Specify the research objectives

Define the population of interest

Identify relevant environmental factors

Ways to Develop a Research Plan (Step 2)

Exploratory Research

Descriptive Research

Causal Research

Exploratory Research

Seeks to discover new insights that will help the firm better understand and define the research problem and suggest testable hypotheses

Descriptive Research

Seeks to describe consumer behavior by answering the questions who, what, when, where, and how

Causal Research

Used to test hypotheses to understand the cause-and-effect relationships among variables

Ways to Collect Data (Step 3)

Secondary Data (use first)

Primary Data

Primary Data

Information collected specifically for the research problem at hand

Secondary Data (examples of sources)

Information collected for alternative purposes prior to the study, typically by another entity or person (ex: government sources, trade associations, media sources, and commercial

sources)

Purpose of Analyzing the Data (Step 4)

To convert the data collected into information (Cross-tabulations)

Competitive Intelligence (Secondary)

The systematic gathering of data about strategies that direct and indirect competitors are pursuing in terms of new-product development and the marketing mix.

Environmental Scanning (Secondary)

The act of monitoring developments outside the firm's control with the goal of detecting and responding to threats and opportunities

Reliability (Primary)

The ability of a measurement instrument to produce almost identical results over repeated trials

Validity (Primary)

The extent to which a research instrument measures what it is intended to measure

Quantitative Research

Numbers based, can be inferred if the sample size is large enough, gets to the what, sometimes the how, often blind to the why

Qualitative Research

More exploratory, can get to the why, cannot be inferred over a population, results tend to be subjective (interpretations)

Kinds of Quantitative Research

Survey research (mobile-optimized surveys)

Observation research (mystery shoppers, behavioral targeting, blog mining)

Experiments (field experiment, A/B testing)

Kinds of Qualitative Research

Focus groups

Depth interview

Semi-structured interview

Ethnographic research

Product

Specific combination of goods, services, ideas, or experiences (for consumers)

Goods

Tangible products with physical traits, manufactured, stored, and transported to customers

Services

Intangible, cannot be touched, weighed, or measured

Ideas

Intangible, representative of thoughts and opinions