Marketing Exam 2

• Key concepts to review include market segmentation, targeting strategies, and the marketing mix (4Ps).

• Be prepared to analyze case studies and apply theoretical frameworks to real-world scenarios.

• What is a Market?

  • Requirements of a Market

    • Must need or desire a particular product

    • Must have the ability to purchase the product

    • Must be willing to use their buying power to purchase the product

    • Must have the authority to buy the product

  Segmentation

  • Taking a heterogeneous market and breaking it down into smaller homogeneous markets

  Targeting Strategies

   

   

   

  Total Market Demand vs Segment Demand

  • LOOK AT SLIDES

  • You are able to look individually at the demand versus the whole demand of every product as one

  Value of Segmenting and Targeting

  • Better understand needs, desires and motives of consumers

  • Better understand why they buy or do not buy

  • Ability to assess competitive strengths and weaknesses

  • Ability to identify the promotional message to use

  • Specialization vs Generalization

    • Vodka made in America is all the same due to regulations

  Targeting

  • How much are you willing to pay for a good mattress?

    • $100 or $1000

  • Selecting a target market to serve

  • Differentiated Targeting Strategy

  Demographic Segmentation

  • Describe the observable characteristics of individuals living in the culture

  • Include: physical traits such as gender, age, race; Occupational-related traits such as education; and location related traits

  The Phoenix Suns

  • Segmentation Strategy

  • Geographic segmentation for ticket sales

  Geodemographic Segmentation

  • Clusters based on zip Code areas and even neighborhoods

  Psychographic, Behavioralistic & Benefit Segmentation

  • Psychographic => personality characteristics, motives, and lifestyle

  • Behavioralistic => heavy, moderate, light

  • Benefit Segmentation

  Prioritizing Target Segments

  • Capabilities of the Organization

  • Size and Growth Potential of the segment

  • Competitive field

  • Market niche

    

Consumer Behavior

• The complex process by which individuals acquire, use and dispose of products or services to satisfy their needs and desires

• Involvement

  • Personal Relevance

  • Buying candy vs buying a house

  • High Involvement

  • Low Involvement

Consumer Decision-Making Processes

• Central Route (High involvement processing)

  • Beliefs => Attitude => Behavior

  • Looking at high quality reasons

  • Research

• Peripheral Route (Low-involvement)

  • Beliefs => Behavior => Attitude

  • Shallow reasons

  • Not a lot of research

  • BEHAVIOR IS BUYING IT

Five Stage Process

• Problem (need) Recognition

• Search

• Alternative Evaluation

• Choice

• Post purchase Evaluation

Information Search

• Internal Information

  • What you already know

• External Information

  • Research

  • Talk to others

Evaluation of Alternatives

• Consideration set

  • All brands that you would consider buying

• Cost in time and money

  • What is it going to cost me to find/buy

• Information already available

  • Do you have that in your internal search

• Perceived risk

  • Number of risk

Functional vs Emotional Benefits

• Functional

  • Derive from objective performance characteristics

• Emotional

  • (Subjective) ex/ love, belonging, prestige, etc.

Purchase & Post purchase Behavior

• Satisfaction / Dissatisfaction

  • Satis - meaning enough

  • Meets expectations

  • Delight is higher

• WOM (Word of Mouth)

  • If its good you tell 3 people

  • If its bad you tell everyone

• Cognitive Dissonance

  • When you get home and wish you bought the other one

Situational Influences

• Result from circumstances, time, and location ….affect the consumer buying decision process

• Reactance Theory

  • Freedom

  • Taken Away

  • Want it more

Psychological Influences

• Perception

  • Exposure

  • Attention

  • Selective Attention

    • Act of focusing on a product while ignoring something else

  • Closure

    • We want closure

• Motives - Maslow's Hierarchy of Needs

  • Maslow believed that people seek to fulfill five categories of needs

• Behavioral Learning

  • Classical Conditioning

    • Response is learned as a result of the pairing of two stimuli

  • Operant Conditioning

    • Response is learned or strengthened because it has been associated with certain consequences

    • Do something and then you get rewarded or punished

  • Observational Learning

    • Learning from observing other behavior

    • Attitudes

      • An enduring disposition, favorable or unfavorable, toward an idea, person, thing or situation

      • The amount of affect or feeling for or against a stimulus. (Thurstone)

    • Three components of Attitudes

      • Cognitive (head)

      • Affective (heart)

        • Most powerful component

      • Behavioral (hand)

Multiattribute Model (Fishbein Model)

• A=BiEi

  • A= attitude toward object

  • B = Strength of belief

  • E = goodness or badness (importance)

Personality and Self Concept

• Internal Traits

  • Openness

    • Creative side

  • Conscientiousness

    • How thorough and precise you are

  • Extraversion

  • Agreeability

  • Neuroticism (Stability)

    • Degree of moodiness

  • Material needs

    • How materialistic you are

  • Arousal needs

  • Physical Needs

• Personality and Need for Affiliation

Marketing Personality

• Agreeability

  • Most agreeable of all categories

• Openness

  • Highest openness

• Materialistic

  • Highest on Materialism

Social Influences

• Roles

• Family Influences (identification with brand)

  • Reference Group

    • Membership

    • Aspirational

    • Dissociative

  • Social Class

  • Culture and Subculture

    

What is a Product?

• Good, Service or Idea

• Augmented

  • Don’t remember

• Psychological

  • Status

  • Feel good

• Social Affects

  • Sports Fans and attire

Classifying Consumer Goods

• Convenience

  • You don't do much research on

  • Toothpaste, soda, milk, gasoline

• Shopping

  • Lots of comparing

  • Appliances and shoes

• Specialty

  • No substitutes

  • Lots of research

  • Buying a Painting

• Unsought

  • Forced

  • Car breaks down

• Bought / Unused

  • Gym equipment

Product Line and Product Mix

• Product Line

  • Typically prices the same

  • Lawn equipment

  • John Deere

• Product Mix

  • The total group of products that an organization makes available to customers

  • Yamaha has odd product mix

• Width of Product Mix

  • The number of product lines a company offers

• Depth of Product Mix

  • The number of different products in each product line

Product Life Cycle

• The progression of a product through four stages: introduction, growth, maturity, and decline

• Introduction

  • The first people to buy a product are the innovators

  • You are going after these people

  • Willing to pay a premium

  • Pricing Strategies

    • Skimming

      • Start with high price and then slowly go down until you find equilibrium

    • Penetration Pricing

  • Profits at the end of intro

• Growth

  • Competition appears dramatically

  • Profits maximize at the end of this stage

• Maturity

  • Profits are declining

  • Specific Groups

• Decline

  • Kjkj

Product Adopter Categories

• Innovators 2.5%

  • Tech people

• Early Adopters 13.5%

• Early Majority 34%

• Late Majority 34%

• Laggards 16%

  • Skepitcal

Brand

• A name, term, design, symbol, or other feature that identifies a seller's products and differentiates them from competitor's products

• "The art of marketing is the art of brand building. If you are not a brand, you are a commodity," (Philip Kotler)

Branding

• Value of branding

  • Brand Loyalty

  • Brand recognition

    • Aware of the brand

  • Brand Preference

    • Stronger loyalty

    • You prefer…

  • Brand Insistence

    • Only want this brand

    • You insist…

Major Elements of Brand Equity

• Brand name awareness

• Brand loyalty

• Brand associations

• Perceived brand quality

• ALL GO INTO BRAND EQUITY

Brand Personality

• Sincerity

• Excitement

  • Apple

• Competence

• Sophistication

• Ruggedness

  • Tough, outdoorsy

Selecting a Brand Name

• The name should

  • Be easy to say, spell and recall

    • IMPORTANT

  • Indicate the product's major benefits

  • Suggest the products major uses

  • Be distinctive

    • IMPORTANT

  • Be compatible with all products in line

  • Designed for use and recognition in all types of media

Brand Extension

• Using an existing brand to create a new one

Co-Branding and Licensing

• Using two or more brands on one product to capitalize on the brand equity (customer confidence and trust) of multiple brands

• Agreement to use brand on other products for a fee

  • Harley Davidson F-150

Packaging / Labeling

• Color, design, shape, texture

  • MJ water bottle and UNC shorts

    

Key Marketing Concepts

Market Definition and Requirements

A market is defined by the need or desire for a particular product, the ability to purchase it, the willingness to utilize buying power for this purchase, and the authority to buy the product.

Segmentation and Targeting Strategies

Segmentation involves breaking down a heterogeneous market into smaller, homogeneous segments. Understanding Total Market Demand versus Segment Demand can reveal insights into demand for individual products compared to overall demand. The value of segmenting and targeting lies in better understanding consumer needs, desires, and motives, which aids in assessing competitive strengths and weaknesses. This enables the identification of effective promotional messages. Key strategies in targeting include differentiated targeting strategy, and demographic segmentation which describes observable characteristics of individuals, including gender, age, race, occupation, and location.

Specific Examples and Strategies

For instance, the Phoenix Suns employ geographic segmentation for ticket sales. Other segmentation strategies involve geodemographic clustering based on zip codes, psychographic characteristics related to personality and lifestyle, behavioral segmentation based on consumption levels, and benefit segmentation that prioritizes segments based on consumer needs.

Consumer Behavior

Consumer behavior pertains to the complex processes that individuals go through to acquire, utilize, and dispose of products to satisfy their needs and desires. It encompasses concepts like involvement which differentiates between high (e.g., purchasing a house) and low (e.g., buying candy) involvement decisions. The consumer decision-making process includes five stages: problem recognition, search, alternative evaluation, choice, and post-purchase evaluation.

Information Search and Evaluation of Alternatives

Information can be sourced internally from previous knowledge or externally through research and discussions with others. Evaluation of alternatives includes forming a consideration set of brands and considering costs in time and money. Perceived risk and benefits, both functional and emotional, influence these decisions.

Purchase and Post-Purchase Behavior

Post-purchase behavior can lead to satisfaction or dissatisfaction, which further influences word-of-mouth, or WOM. Cognitive dissonance may occur when consumers wish they had made a different choice. Situational influences, such as circumstances, time, and location, also affect purchasing decisions.

Psychological and Social Influences

Psychological influences include perception and motives that drive consumer decisions, such as Maslow's Hierarchy of Needs. Social influences come from family, reference groups, social class, culture, and subcultures that shape consumer attitudes toward brands and products.

Product Definition and Classification

A product can be a good, service, or idea and often carries psychological and social implications. The classification of consumer goods includes convenience goods for impulse buys, shopping goods requiring comparison, specialty goods with unique attributes, and unsought goods needed unexpectedly.

Product Life Cycle and Pricing Strategies

The product life cycle consists of four stages: introduction, growth, maturity, and decline. During the introduction phase, innovators are targeted, often at a premium price. Skimming and penetration pricing strategies are used to maximize profits as products move through the life cycle phases.

Branding

Branding is crucial in distinguishing a seller’s products from competitors and includes elements like brand name awareness, loyalty, associations, and perceived quality. Strong branding fosters brand loyalty categorized into recognition, preference, and insistence. Effective brand names should be easy to recall, indicate major benefits, be distinctive, and fit within the product line.

Brand Extension and Co-Branding

Brand extension leverages existing brands to create new products, while co-branding and licensing involve collaboration between brands to enhance credibility. Finally, product packaging and labeling can significantly affect consumer perception and purchasing behavior.