MKT 381 Exam 2 (Price) (Mississippi College)

Consumer Behavior

Examines how consumers make decisions and what factors influence purchase decisions and product use.

Why study consumer behavior?

If they can better understand how consumer thinks, they can develop marketing mixes that satisfies consumer needs.

Decision Making Process

Need recognition

Information search

Evaluation of alternatives

Purchase

Post purchase behavior

Need recognition

Result of an imbalance between actual and desired states.

2 Types of Information Search

Internal information search

External Information search

Internal information search

Recall information in memory

External Information search

Seek information in outside environment

-nonmarketing sources

-marketing sources

Need Less Information

Less risk

More knowledge

More product experience

low level of interest

Confidence in decision

Need More Information

More risk

Less knowledge

Less product experience

High level of interest

Lack of confidence

Evoked Set

Group of brands, resulting from an information search, from which a buyer can choose.

Evaluation of Alternatives

-Evoked Set Used

-Rate each brand in the Evoked Set

-Use consumer evaluative criteria

-Purchase brand that best meets the evaluative criteria

Post purchase behavior

How well these outcomes meet expectations determines customer satisfaction

Cognitive Dissonance

Inner tension that a consumer experiences when their words, thoughts or actions re inconsistent with their beliefs.

Consumer can reduce dissonance by?

Seeking information that reinforces positive ideas about the purchase

Avoiding information that contradicts the purchase decision

Revoking the original decision by returning the product

Marketing can minimize dissonance through:

effective communication with purchasers.

Types of Consumer Decision Making

Routine Response Behavior

Limited Decision Making

Extensive decision making

Extensive Decision Making

Consumer is putting a lot of effort in the decision process

Routine Response Behavior

Snap decision

Limited Decision Making

In between decision making process of routine and extensive

Types of Consumer Involvement?

High Involvement

Low Involvement

High Involvement

High stakes purchases personally relevant to consumer risks associated with making wrong purchase

Low Involvement

Low stakes purchases, not as personally relevant to consumer, low risks associated with making wrong purchases

Psychological Influences

Perception

Motivation

Learning

Beliefs and attitudes

Perception

The process in which a person picks up stimuli through their senses, organizations it and assigns it meaning.

Selective Exposure

The process whereby a consumer notices certain stimuli and ignores others

Selective Retention

Consumer remembers only that information that supports personal beliefs

Psychological Factors

Looks at the consumer as an individual

Motivation

The energizing force that cause a person to take action to satisfy a need

Maslow's Hierarchy

Self-Actualization Needs

Esteem Needs

Social Needs

Safety Needs

Physiological Needs

Types of Learning

Experiential

Conceptual

Experiential Learning

Occurs when an experience changes behavior

Conceptual Learning

Not learned through direct experience

Attitude

A learned predisposition to respond in a consistently favorable or unfavorable manner toward an object, person, or behavior

Attitudes are shaped by our ________

Beliefs

Attitudes ten to be ______

Enduring

Sociocultural Influences

Family Members

Reference Groups

Opinion Leaders

Culture and Subculture

How does family impact purchases

How much you buy

Likes and dislikes

Consumer Socialization

Process where you learn how to behave in market place based on what parents taught growing up

Family Life Cycle

Series of stages that family goes through as it formed, developed, and dissolves.

Reference Group

A group that you turn toward for personal standards

Direct Face-To-Face membership

Primary: Small informal group

Secondary: large, formal group

Indirect Nonmembership

Aspirational Group: Someone would like to join

Nonaspirational Group: Someone who wants to avoid being identifiied

Opinion Leaders

Refers to an individual who influences the options of others

Often the first to try a new product

May be challenging to locate

Culture

The set of values, norms, attitudes and other meaningful symbols that are learned and shared among the members of a group or society and passed on from one generation to the next.

Subculture

Subgroups within a larger culture that have unique values, norms, and attitudes

Racial/ethnic subcultures

Age subcultures

Regional subcultures

Why do marketers rarely try to appeal to all consumers with one product or service

To satisfy needs of different market sections

Market Segmentation Process

Select a Market for study

Choose bases for segmenting the market

Profile Segments

Market

A group or organizations with needs or wants and with the ability and willingness to acquire a product or service

Characteristics of a Market

Composed of people or organizations

Those people have wants or needs that can be satisfied by a product

Ability to buy the product

Willing to exchange resources for product

Market Segmentation

The process of dividing a market into meaningful, relatively similar, and identifiable segments

Bases for Segmentation

Geographics

Demographics

Psychographics

Benefits Sought

Usage Rate

Geographic Segmentation

Market is divided into different geographic units such as nations, states, counties, or even neighborhoods

Demographic Segmentation

Market is divided on the basis of easily quantifiable variables such as age, gender, income, ethnic background, education or occupation.

Psychographic Segmentation

Market is divided on the basis of psychological factors such as personality motives and lifestyle.

Benefit Segmentation

The process of grouping customers into market segments according to the benefits they seek from the product.

Usage Rate Segmentation

Dividing a market by the amount of product bought or consumed

80/20 principle

A principle holding that 20 percent of all customers generate 80 percent of the demand

VALS

values, attitudes, lifestyles

Profile Segments

Complete description of the characteristics and wants of people within a market segment

Targeting Process

1. Determine market coverage strategy

2. Determine which segments to target

Target Market

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group.

3 market Coverage Strategies

-Undifferentiated Strategy

-Concentrated Strategy

-Multisegmentated Strategy

Undifferentiated Targeting Strategy

A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix.

Concentrated Targeting Strategy

A strategy that involves focusing a firm's efforts on one segment of a market and developing a highly specialized marketing mix.

Multisegment Targeting Strategy

A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.

Cannibalization

Occurs when sales of a new product cut into sales of a firm's existing products

Factors to Determine which Segments to Target

-Size and sales potential of each segment

-Growth opportunities of each segment

-Cost

-Competition

-Compatibility

Positioning Process

1. Determine positioning strategy

2. Develop the marketing mix program

Positioning

Developing a specific marketing mix to influence how the target market perceives a brand, product line or organization in comparison to the competition

Perceptual Mapping

A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds.

Marketing Research

The process of planning, collecting, and analyzing data relevant to a marketing decision.

7 steps of Marketing Research Process

1. Define the research problem

2. Determine research objectives

3. Gather secondary data

4. Create the research design

5. Collect the primary data

6. Analyze the data

7. Prepare and present the report

Observation

Involves gathering data by directly or indirectly observing and recording behavior

Survey

Involves gathering data by asking people what they think and do

Experiment

Method of gathering data in which the researcher alters one or more variables while observing the effects of those alterations on another variable.

Sample

Subset of the population of interest from which we draw data.

Census

Collecting data from every single subject within the population of interest.

What Process is used to select the sample?

Define the population of interest

Select a the sampling frame

Choose a sampling method

Determine the required sample size

Probability Sample

A sample in which every element in the population has a known statistical likelihood of being selected.

Random Sample

A sample arranged so that every element of the population has an equal chance of being selected.

Non probability Sample

Any sample in which little or no attempt is made to get a representative cross-section of the population.

Convenience Sample

A form of non probability sample using respondents who are convenient or readily accessible to the researcher.

Open-Ended Question

A question that encourages an answer phrased the respondent's own words.

Closed-ended question

A question that asks the respondent to make a selection from a limited list of responses.

Scaled Response Question

A close-ended question designed to measure the intensity of a respondent's answer.

How should Data Collection be done by?

- The company's own research staff

- Outside firms who specialize in data collection

What are the Methods of Analysis

- Frequencies

- Measures of central tendency

- Cross tabulations

- Other More Sophisticated analytical techniques

What are some advantages of internet surveys

· Rapid development, Real time reporting

· Reduced Costs Personalized questions and data

· Improved respondent participation

· Contact with hard to reach

Sam was driving when someone ran a stop sign and totaled his car. His car cannot be repaired, so he realized he's going to have to get another one. What stage of the consumer decision-making process does this represent?

A. Need recognition

B. Purchase

C. Evaluation of alternatives

D. Postpurchase behavior

E. Information search

Need Recognition

Which of the following products would most likely require the purchaser to use only an internal information search?

A. A doctor for a recently detected illness

B. A new washer and dryer

C. A dance formal outfit

D. A favorite restaurant you love to patronize regularly

E. Choosing a movie to see at the theater

A favorite restaurant you love to patronize regularly

All of the following influence the extent to which an individual conducts an external search for information EXCEPT:

A. perceived risk

B. knowledge

C. prior experience

D. social class

E. level of interest

Social Class

A group of brands resulting from an information search, from which a buyer can choose is referred to as the buyer's:

A. evoked set

B. primary set

C. inert set

D. complete set

E. justifiable set

Evoked Set

The market for athletic shoes is best described as:

a. athletes.

b. teens who want to make a fashion statement with athletic shoes.

c. anyone who has the time, the money, and the desire to acquire athletic shoes

d. children on athletic teams.

e. adults who need running shoes.

Anyone who has the time, the money, and the desire to acquire athletic shoes

If a packaged-goods manufacturer divides a market on the basis of regional food preferences, it is using __________ segmentation.

Geographic

If a toy manufacturer divides its market into age categories such as toddlers, young children and tweens, it is using ________________ segmentation.

Demographic

A health club divided its market into three segments: light, medium, and heavy users. It is using _________________ segmentation.

Usage Rate

If a toothpaste manufacturer divides its market on the basis of the primary benefit each segment seeks, it is using _____________ segmentation

Benefit

If a car manufacturer divides its market on the basis of personality categories, it is using ____________________ segmentation

Psychographics

VALS is a well known ___________________ segmentation tool

Psychographic

While many economic indicators have been negative, the Wall Street Journal recently reported that U.S. retail sales were actually up. If Costco used this report as a factor in their expansion plans, they would be using data.

- internal secondary

- primary

- external secondary

- convenience

- observation

Secondary