McGraw Hill Marketing 5

consumer behavior
the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after the purchase.
purchase decision process
the maximum of 5 stages a buyer passes through in making choices about which products and services to buy
the 5 stages of the purchase decision process
problem recognition, information research, alternative evaluation, purchase decision, post purchase behavior
problem recognition
first step in the purchase process. difference between a persons ideal and actual situation big enough to trigger a decision.
information research
second step of purchase process. search for information
internal search
a kind of information research. scanning your memory for previous experiences with products or brands
external search
when internal search is insufficient, the risk of making a wrong purchase decision is high, and the cost of gathering info is low
sources of external information
personal sources, public sources like consumer reports, and marketer-dominated sources like private information from sellers
consideration set
the group of brands that a consumer would consider acceptable from among all the brands he is aware of
cognitive dissonance
a post-purchase psychological tension, which results in convincing yourself that you made the right purchase decision
involvement
personal, social and economic significance of the purchase to the consumer, which affects the extent of purchase decision process
extended problem solving
each of the 5 steps of the consumer purchase decision process is used. (i.e. cars)
limited problem solving
consumers will seek some info or rely on a friend to help evaluate alternatives. (i.e. toaster)
routine problem solving
consumers recognize a problem and solve it with little effort. (i.e. table salt)
in low involvement products, companies place attention on:
quality, avoiding stockouts, repetitive advertising
situational influences
the purchase situation that affects the purchase decision process
what are the 5 situational influences?
the purchase task, social surroundings, physical surroundings, temporal effects and antecedent states
purchase task
the reason for engaging in the decision
social surroundings
the other people present when a purchase decision is made
physical surroundings
decor, music, crowding
temporal effects
time of day and time available
antecedent states
the consumers mood or amount of cash in hand
motivation
the energizing force that stimulates behavior to satisfy a need
motivation comes from
need
what are the 5 need classes (Mazlovs)
physiological needs, safety needs, social needs, personal needs, self-actualization needs
what are some key traits?
assertiveness, extroversion, compliance, dominance and aggression
self-concept
the way a person sees himself and the way he believes others see him
ideal vs. actual self-concept
the way people actually see themselves and the way they would like to see themselves
perception
the process by which an individual selects, organizes, and interprets information to create a meaningful picture in the world.
selective perception
when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent
selective exposure
when people see advertisements for the brand they just bought
selective comprehension
interpreting information so that its consistent with your attitudes and beliefs
selective retention
consumers don’t remember all the information they learn
subliminal perception
seeing or hearing messages without being aware of them
perceived risk
anxiety felt because the consumer cannot anticipate the outcome of a purchase, but believes there maybe negative consequences
how does perceived risk influence information search?
the greater the perceived risk the more extensive the external search stage will be
how do companies limit perceived risk?
obtaining seals of approvals, securing endorsements from influential people, providing free samples, giving extensive usage instructions, providing warranties and guarantees
learning
behaviors that result from repeated experience and resigning
behavioral learning
the process of developing automatic responses of a situation built up through repeated exposure to it
what are the 4 variables to behavioral learning?
drive, cure, response and reinforcement
drive
a need that moves an individual to action
cue
a symbol perceived by consumers
response
the action to satisfy the drive
reinforcement
reward for the response
cognitive learning
learning through thinking, reasoning and mental problem solving
brand loyalty
consistent purchase of a single brand over time that results from positive reinforcement of previous actions
attitude
shaped by our values and beliefs, the consistent way we respond to products
beliefs
based on experience and advertising, the subjective perception of how a product performs on different attributes
what are 3 ways marketers change attitudes toward products?
changing beliefs of the products, changing perceived importance of attributes, and adding new attributes to a product
lifestyle
a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them
psychographics
the practice of combining psychology, lifestyle and demographics to uncover consumer motivations, provides insights into customers; needs and wants
VALS
a prominent psychographic system. identifies 8 consumer segments based on their primary motivation for buying and product and their resources
consumers are inspired by three primary motivations:
ideals, achievement, self-expression
ideals-motivated group
guided by knowledge and principle. thinkers and believers
achievement-motivated groups
looks for produce that reflect success. achievers and strivers
self expression-motvated groups
desire social or physical activity, variety and risk. experiences and makers
sociocultural influence
a consumer’s forma and informal relationships with other people
what 2 aspects of personal influence are important to marketing?
opinion leadership and word-of-mouth activity
opinion leaders
individuals who direct direct or indirect influence over others
word of mouth
influencing other people during conversations
buzz
popularity created by consumer words of mouth
reference groups
people to whom people look as a basis of self-appraisal or as a source of personal standards
membership group
a group to which a person belongs
aspiration group
a group that a person wants to become a part of
dissociative group
a group that a person wants to maintain distance from because of opposing values
family influences on consumer behavior result from 3 sources:
consumer socialization, family life cycle, and decision making within the family
consumer socialization
the process by which a person a quires the skills and knowledge necessary to function as a consumer
family life cycle
the distinct phases that family goes through from formation to retirement
family decision-making
spouse dominant and joint decision-making
joint decision-making increases with:
education of the spouses
what are the 5 roles of individual family members?
information gatherer, influencer, decision maker, purchaser, user.
social class
divisions in a society into which people sharing similar values, interest and behavior can be grouped
what affects social class?
occupation, source of income, and education
subcultures
subgroups within the larger culture that share unique, values, ideas and attitudes
4 P’s
Price, Promotion, place, product.
Role of Marketing
the activity for creating and delivering offerings that benefit the organization, its stakeholders, and society. To see the need and meet it.
Personal selling
An important part of marketing that relies heavily on interpersonal interactions between buyers and sellers to initiate, develop, and enhance customer relationships
Benefits of Personal Selling
High customer attention, custom message, interactivity, persuasiveness, relationship development, adaptable, opportunity to close the sale
Disadvantages of Personal Selling
expensive, labor intensive, limited customers reached
Pros of word of mouth
cost effective, persuasive
Cons of word of mouth
negativity amplified, persuasive
Customer Value
The unique combination of benefits received by targeted buyers that include quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price.
Customer Value Proposition
A cluster of benefits that an organization promises customers to satisfy their needs.
Ultimate Consumers
The people who use the products and services purchased for a household. Also called consumers, buyers, or customers.
Marketing Concept
The idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.
Organizational Buyers
manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.
Societal Marketing Concept
The view that organizations should discover and satisfy the needs of consumers in a way that provides for society’s well-being.
Market Orientation
An organization that focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.
Utility
The benefits or customer value received by users of the product.
Relationship Marketing
Links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.
Marketing Program
A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
SWOT Analysis
Strengths, Weaknesses, Opportunities, and Threats of an organization
Marketing Tactics
Detailed day-to-day operational decisions essential to the overall success of marketing strategies.
Market Share
The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
Mission
A statement of the organization’s function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision.
Two types of differentiation
Product, cost
Points of Difference
Those characteristics of a product that make it superior to competitive substitutes.
Three appeals used in advertising
Fear, sex, humor
the three different types of innovations
Continuous Innovation, Dynamically Continuous Innovation, Discontinuous Innovation
Continuous Innovation
-modify existing product to set it apart
-no new learning or behavior modification needed (knockoff product & copies existing product with a few changes) Ex. Ipod
Dynamically Continuous Innovation
Pronounced modification to an existing product. Moderate learning or behavior modification needed. Convergence products (when teo technology come together to create more than sum of it’s part) ex. Blackberry cell phone
Discontinuous Innovation
New product that changes the way we live. Major learning or behavior modification needed. Ex: computer
Steps of product development
1. Idea generation
2. Product development
3. Develop Marketing Strategy
4. Business Analysis
5. Technical Development
6. Test Market the product in Limited Market
7. Commercialization
Gross Profit
Revenue-Cost of Goods (COGS)
Gross Margin
Gross Profit/sales price x 100
Price
COGS/(1-Gross Margin)
CPM
(Cost of ad/audience size) x 1000
International Firm
engages in trade and marketing in different countries as an extension of the marketing strategy in its home country
Multinational firm
views the world as consisting of unique parts and markets to each part differently.
transnational firm
views the world as one market and emphasizes cultural similarities across countries or universal needs and wants rather than differences
Global Brand
A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
The five steps in strategic marketing
identifying a mission; analyzing the situation; setting objectives; developing a marketing strategy; and planning for evaluation.