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Marketing 6 8 10 11
Chapters 6, 8, 10, 11
| Question | Answer |
|---|---|
| Understand Consumer Behavior | Consumer behavior=How consumers make purchase decisions and how consumers use and dispose of products |
| Consumer Decision-Making Process | 1. Need Recognition 2. Information Search 3. Evaluation of Alternatives 4. Purchase 5. Postpurchase behavior Cultural, social, individual, and psychological factors affect all steps. |
| Consumer Decision-Making Process (definition) | A five-step process used by consumers when buying goods or services. |
| Need Recognition | Result of an imbalance between actual and desired states. Wants and stimulus. |
| Stimulus | Any unit of input affecting one or more of the five sense. |
| Recognition of Unfulfilled Wants | When a current product isn't performing properly. When the consumer is running out of a product. When another product seems superior to the one currently used. |
| Internal Information Search | The process of recalling information in memory. This includes prior experience or prior knowledge about a product. |
| External Information Search | This process relies on information in the outside environment. This includes personal and public references, advertisements, and publicity. Found in non-marketing controlled sources- personal experiences, personal sources, and public sources. |
| Market-controlled Information Source | This is biased toward a specific product because it originates with marketers promoting that product. (Mass media ads, sales promotions, salespeople, product labels and packaging, and the Internet. |
| Envoked Set | Group of brands, resulting from an information search, from which a buyer can choose. |
| Evaluative Criteria | Analyze product attributes Use cutoff criteria Rank attributes by importance. |
| Information Search | Internal information search External information search. |
| Nonmarketing-controlled information source | A source not associated with marketers promoting a product. |
| Cognitive Dissonance | Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions. |
| Postpurchase Behavior (Consumers) | Consumers can reduce dissonance by: Seeking info that reinforces positive idea about the purchase. Avoiding info that contradicts the purchase decision. Revoking the original decision by returning the product. |
| Postpurchase Behavior (Marketing) | Effective Communication Follow-Up Guarantees Warranties |
| Routine Response Behavior | Frequently purchased, low-cost goods and services, with low involvement on search and decisions by consumers before making the purchase. Consumers buy first and evaluate later. |
| Limited Decision Making | Consumer has previous product experience but is unfamiliar with the current brands available. A moderate effort is spent searching for information or in considering alternatives. |
| Extensive Decision Making | Applies to unfamiliar, expensive products, or an infrequently bought item. The most complex type of consumer buying decisions, and is associated with high involvement on the part of the consumer. |
| Consumer Involvement | Routine Response Behavior Limited Decision Making Extensive Decision Making |
| Involvement | the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumers behavior. |
| Culture | the essential character of a society that distinguishes it from other cultural groups. |
| values | the enduring beliefs shared by a society that a specific mode of conduct is personally or socially preferable to another mode of conduct. Most defining element of cultural. |
| Factors Determining the Level of Consumer Involvement | Previous Experience Interest Perceived Risk of Negative Consequences Situation Social Visibility |
| What is the consumer decision-making process influenced by? | Cultural Social Individual Psychological |
| Components of Culture | Values Language Myths Customs Rituals Laws Material artifacts |
| Pervasive | Cultural values influence individual life, yet most are completely unaware of its presence. What people eat, how they dress, and what language they speak are all cultural dimensions. |
| Functional | By establishing expectations, culture gives order to society, such as laws. |
| Learned | Culture is not genetic. Instead, consumers must learn what is acceptable from family and friends. |
| Dynamic | It adapts to changing needs and an evolving environment. The rapid growth of technology has accelerated the rate of cultural change. |
| Subculture | a homogeneous group of people who share elements of the overall culture as well as unique elements of their own group. |
| Social Class | A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms. |
| Social Class Measurements | Occupation Income Education Wealth Other Variables |
| Impact of Social Class on Marketing | Indicates which medium for advertising. Helps determine the best distribution of products. |
| Social Influences | Reference groups opinion leaders family members |
| Reference Groups | direct or indirect. |
| direct reference groups | primary or secondary |
| primary membership groups | This includes all groups with which people interact regularly in an informal way, such as family, friends, and coworkers. |
| Secondary Membership Groups | This is less consistent and more formal. Includes clubs, professional groups, and religious groups. |
| Indirect Reference Groups | This includes aspirational reference groups, such as organizations that a person would like to join. A nonaspirational reference group is one that someone wants to avoid being identified with. |
| Influences of Reference Groups | They serve as info sources and influences perceptions. They affect an individual's aspiration levels. Their norms either constrain or stimulate consumer behavior. |
| Opinion Leaders | An individual who influences the opinion of others. Teenagers, movie stars, sports figures, celebrities. This is a casual, face-to-face phenomenon. Location=challenge. |
| Socialization Process | The passing down of cultural values and norms to children. |
| Purchase Process Roles in the Family | Initiators Influences Decision Makers Purchasers Consumers |
| Initiators | The ones who suggest or initiate the purchase process. |
| Influencers | those members whose opinions are valued |
| Decision Makers | The one that actually makes the decision to buy or not to buy. |
| Purchasers | The one who exchanges money for the product. |
| Consumers | The one who uses the product. |
| Individual Influences on Consumer Buying Decisions | A person's buying decisions are also influenced by personal characteristics that are unique to each individual, such as gender, age and life cycle stage, and personality, self-concept, and lifestyle. |
| Age and Family Life-Cycle Stages | Consumer tastes in clothes, food, cars, and recreation are often age related. An orderly series of stages through which consumers’ attitudes and behavior evolve through maturity, experience, and changing income and status. |
| Personality | a broad concept combining psychological makeup and environmental forces. |
| Psychologyical Influences | Perception Motivation Learning Beliefs and Attitudes |
| Perception | Selective Exposure Selective distortion Selective retention |
| Selective exposure | consumer notices certain stimuli and ignores others |
| Selective distortion | consumer changes or distorts info that conflicts with feelings or beliefs. |
| Selective retention | consumer remembers only that info that supports personal beliefs. |
| Marketing Implications of Perception | Important attributes Price Brand names Quality and reliability Threshold level of perception Product or repositioning changes Foreign consumer preception |
| Motivation | Maslow's Hierarchy of Needs By studying this, marketers can analyze the major forces influencing consumers’ purchase decisions. When a product is purchased a need is usually fulfilled. These needs become motives when aroused sufficiently. |
| Maslow's Hierarchy of Needs | Self-actualzation needs Esteem Needs Social needs Safety needs Psychological needs |
| Motives | The driving forces that cause a person to take action to satisfy those needs. |
| Self-actualization needs | self-development, self-relization |
| Esteem needs | self-esteem, recognition, status |
| Social needs | sense of belonging, love |
| safety needs | security, protection |
| physiological needs | hunger, thirst. |
| market segments | a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs. |
| Market segmentation | The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups. |
| Criteria for successful segmentation | Sustaintiality identifiability, measurability accessibility responsiveness |
| Segmentation bases (variables) | characteristics of individuals, groups, organizations. Geographic Segmentation Demographic Segmentation Psychographic Segmentation Benefit Segmentation Usage-Rate Segmentation |
| Geographic segmentation | based on the region, market size, market density (number of people within a unit of land), or climate. |
| Demographic segmentation | Age, gender, income, ethnic, family life-cycle segmentation |
| Psychographic segmentation | market segmentation on the basis of personality, motives, lifestyles, and geodemographics |
| Bases for psychographic segmentation | personality motives lifestyles geodemogaphics |
| Geodemographic segmentation | Segmenting potential customers into neighborhood lifestyle categories. Combines geographic, demographic, and lifestyle segmentation. |
| Lifestyle Segmentation | How time is spent Importance of things around them Beliefs Socioeconomic characteristics |
| Benefit segmentation | the process of grouping customers into market segments according to the benefits they seek from the product. |
| Benefit segmentation | usage-rate segmentation 80/20 principle |
| Usage-Rate segmentation | dividing a market by the amount of product brought or consumed. |
| 80/20 principle | a principle holding that 20% of all customers generate 80% of the demand |
| Five bases are commonly used for segmenting consumer markets: | Geographic segmentation is based on region, size, density, and climate characteristics. Demographic segmentation is based on age, gender, income level, ethnicity, and family life-cycle characteristics. |
| Five bases are commonly used for segmenting consumer markets: | “Benefits sought” is a type of segmentation that identifies customers according to the benefits they seek in a product. Usage segmentation divides a market by the amount of product purchased or consumed. |
| Psychographic segmentation | This includes personality, motives, & lifestyle characteristic |
| Undifferentiated Targeting Strategy | A marketing approach that views the market as one big market with no individual segments and thus requires a single marketing mix. |
| Concentrated Targeting Strategy | A strategy used to select one segment of a market for targeting marketing efforts. |
| Multisegment Target Strategy | A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each. |
| One-to-one marketing | This is individualized, information-intensive, long-term, personalized. |
| One-to-one marketing's goal | cost reduction, customer retention, increased revenue, customer loyalty |
| Trends of One-to-One Marketing | One-size-fits all marketing isn't effective Direct & personal marketing grow to meet needs of busy consumers. Consumers loyal to companies that earn/reinforced—their loyalty. Mass-media approaches decline as technology allows better customer tracki |
| Pros & Cons of Undifferentiated Target Strategy | Pro: Potential saving on production and marketing costs. Cons: Unimaginative product offerings; Company more susceptible to competition |
| Pros & Cons of Concentrated Target Strategy | Pro: Concentration of resources; Meets narrowly defined segment; Small firms can compete; Strong positioning Cons: Segments too small, or changing; Large competitors may market to niche segment |
| Pros and Cons of Multisegment Targeting Strategy | Pros: Greater financial success; Economies of scale Cons: High costs; Cannibalization |
| Cannibalization | A situation that occurs when sales of new product cut into sales of a firm's existing products. |
| Positioning | Developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general. |
| Positioning Bases | Attribute Price & Quality Use or application product user product class competitor emotion |
| Attribute: | Association of a product with a product feature, an attribute, or customer benefit. |
| Price and quality: | High price as a symbol of quality, or low price as an indicator of value may be used to position a product. |
| Use or application: | Stressing use or applications. |
| Product user: | Positioning base focuses on a personality or type of user. |
| Product class: | Product is positioned as associated with a particular category of products |
| Competitor: | Positioning against competitors is a part of any positioning strategy |
| Emotion: | Positioning using emotion focuses on how the product makes customers feel. |
| Product differentiation | a positioning strategy that some firms use to distinguish their products from those of competitors. Distinctions can be real or perceived. |
| Repositioning | Changing consumers' perceptions of a brand in relation to competing brands. |
| Perceptual mapping | a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customer's minds. |
| Product | Everything, both favorable and unfavorable, that a person receives in an exchange. Tangible good service idea |
| Types of Products | Business Products Consumer Products |
| Business Products | A product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other consumers. major equipment, raw materials. |
| Consumer product | A product bought to satisfy an individual's personal needs or wants. lightbulbs, pencils and paper, and computers. |
| Types of Consumer Products | Convenience Product Shopping Specialty Unsought |
| Convenience Product | A relatively inexpensive item that merits little shopping effort |
| Shopping product | A product that requires comparison shopping, because it is usually more expensive and found in fewer stores. |
| Speciality Product | A particular item for which consumers search extensively and are reluctant to accept substitutes. |
| Unsought product | a product unknown to the potential buyer or a known product that the buyer does not actively seek. |
| Product item | a specific version of a product that can be designated as a distinct offering among an organization's products. |
| Product line | a group of closely-related product items |
| Product mix | all products that an organization sells. |
| Benefits of Product lines | advertising economies Package uniformity standardized components efficient sales and distribution equivalent quality |
| Product mix width | the number of product lines an organization offers. |
| Product Line Depth | the number of product items in a product line |
| Product line extension | adding additional products to an existing product line in order to compete more broadly in the industry. |
| Product line contraction | a strategic way to deal with overextension. |
| Brand | a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitor's products. |
| Brand name | that part of a brand that can be spoken, including letters, words, and numbers. |
| brand equity | the value of company and brand names |
| brand loyalty | consistent preference for one brand over all others. |
| Branding strategies: | Manufacturer's Brand Private Brand Captive |
| Manufacturer's Brand | The brand name of a manufacture |
| Private brand | a brand name owned by a wholesaler or a retailer. Also known as a private label or store brand. |
| Captive | A brand manufactured by a third party for exclusive retailer, without evidence of that retailer's affiliation |
| Advantages of Manufactures' Brands | Heavy consumer ads by manufacturers Attract new customers Enhance dealer's prestige Rapid delivery, carry less inventory. If dealer carries poor quality brand, customer may simply switch brands and remain loyal to dealer. |
| Advantages of Private Brands | Earn high profits (own brand) Less pressure to mark down price Man. can become a direct competitor or drop a brand/reseller Ties customer to wholesaler or retailer Wholesalers & retailers have no control over the intensity of distribution of man's bra |
| Advantages of Captive Brands | No evidence of store's affiliation Sold exclusively at the chain Can ask price similar to manufacturer's brand. |
| Individual Brand | using different brand names for different products |
| Family brand | marketing several different products under the same brand name. |
| Cobranding | placing two or more brand names on a product or its package. |
| Types of Cobranding | Ingredient Branding Cooperative branding Complementary |
| Trademarks | the exclusive right to use a brand or part of a brand. |
| Trademark Facts | Many parts of a brand & associated symbols qualify for trademark protection. ® right comes from use rather than registration. The mark has to be continuously protected. Rights continue for as long as the mark is used. ® law applies to the online world |
| UPCs | A series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products. |
| Test Marketing | The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation. |
| Alternates to Test Marketing | Single-source research using supermarket scanner data. Simulated (laboratory) market testing Online test market |
| Diffusion | the process by which the adoption of an innovation spreads. |
| Categories of Adopters | Innovators (Venturesome) Early Adopters (Respect) Early majority (Deliberate) Late majority (Skepticism) Laggards (Traditional) |
| Product Characteristics and the Rate of Adoption | Complexity Compatibility Relative Advantage Observability Trialability |
| Adoption | A person who buys a new product never before tried a consumer who was happy enough with his/her product trial experience to use it again |
| Innovators | The first 2.5 percent who adopt the product. Many are obsessive about trying new ideas and products Not worry about risks. Not concerned about what people think More global-their influence would be with/on other innovators. |
| Product Life Cycle | A concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death.) |
| 4 stages of the product life cycle | introductory stage growth stage maturity stage decline stage |
| Introductory Stage | High failure rates little competition frequent product modification limited distribution high marketing & production costs Negative profits w/ slow sales increases Promotion focuses on awareness & info Com. challenge is to stimulate primary demand |
| declined stage | Long-run drop in sales Large inventories of unsold items Elimination of all nonessential marketing expenses “Organized abandonment” |
| Maturity Stage | Sales increase at a decreasing rate Saturated markets Annual models appear Lengthened product lines Service and repair assume important roles Heavy promotions to consumers and dealers Marginal competitors drop out Niche marketers emerge |
| Growth Stage | Increasing rate of sales Entrance of competitors Market consolidation Initial healthy profits Aggressive advertising of the differences between brands Wider distribution |
| Two types of communication aid the diffusion process: | Word-of-Mouth communication among consumers. Communication directly from the marketer to potential adopter |
| Word-of-Mouth Communication Among Consumers | Opinion leaders discuss new products. Some products, such as professional and health care services, rely almost solely on word-of-mouth communication for new business. |
| Communication directly from the marketer to potential adopter | Messages directed toward early adopters should use different appeals than messages directed toward the early & late majority, or the laggards. |
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acpearl
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