Consumer Behavior Exam 1

Customer Lifetime Value formula

*CLV= NPV (sales-costs) + NPV (equity)* CLV= Customer Lifetime Value NPV= Net Present Value

model of consumer decision making process

*INPUT:* two influencing factors are marketing efforts (marketing mix) and sociocultural influences ( family, friends, neighbors, etc.) *PROCESS:* focuses on how consumers make the decisions; the psych factors (motivation, perception, learning, personality, and attitudes) affects how the the customers are influenced to realize their need, pre-purchase info, and evaluation of alternatives *OUTPUT:* two post decision activities are purchase behavior and post purchase evaluation

Ethnography

- study of consumers that relies on interpretation of artifacts to draw conclusions about consumption - understanding you by being more personal by looking at what you have, how you interact with people, etc. instead of by asking questions

How do you learn about customer research?

-Customer Research -- Interpretive/ Qualitative Research (---Ethnography) -- Quantitative Research (---#)

2 questions for how consumers are treated

1. How competitive is the marketing environment? (if youre the only one then it doesn't matter how you treat your consumers) 2. How dependent is the marketer on repeat business? (If it is a tourist stop and they are one-time customers then it doesn't matter either)

List the FOUR types of environments marketers are influenced by

1. Internalenvironment 2. Externalenvironment 3. Controllable environment 4. Uncontrollable environment

List,in complete sentences,the FOUR criteria for a marketing exchange to occur

1. Marketing exchange involves a minimum of two separate parties. 2. Each party has to have something of value to the other. 3. Both the parties can act (or not) on a voluntary basis -in other words, there is no coercion from either side. 4. There is free and viable communication between the parties to facilitate the exchange

7 questions to be asked and answered for consumer analysis

1. Who buys- demographic 2. What is bought- core product 3. Why is the purchase made- hardest question/ motivation 4. How often is the purchase made- frequency and amount 5. Where is the purchase made- location/ convenience 6. When is the purchase made- time, season, occasion 7. How is the purchase made- decision making process

Name the five orientations in order and what do the 4th and 5th make up?

1. production, product, selling (sell what you make), marketing (make what you'll sell), and social responsibility 2. they make up the basis for relationship marketing

Which of the following advertising messages would be considered puffery?

Bubba Cola, the most refreshment you can get in a can.

Why care about consumers?

Consumption spending drives growth

______ consists of marketing messages and promotional materials that appear to come from independent parties although, in fact, they are sent by marketers

Covert marketing

Production concept/ orientation

Henry Ford; consumers mostly want it if its at low prices. Want the product more than they want special features; mass production and keeping price low

On a percentage basis, which of the following is the fastest-growing American minority?

Hispanic Americans

Jim has an ear infection and has to take the specific medication that his doctor has prescribed. His selection of medications constitutes a ________ decision.

Hobson's choice

4 tiers from bottom to top/ point

Lead, Iron, Gold, Platinum

Every consumer is sensitive to what?

Price. It may not be the same product that we are price sensitive to though.

5 P's

Product, Price, Place, Promotion, and Packaging

emotional bonds represent what?

a high level of personal commitment from the consumer and attachment to the company

When marketers plan to sell their products in foreign or multinational markets, they must go through a process of ________ in order to ensure that their products and marketing messages are suitable for the foreign culture

acculturation

Which of the following Americancore values serves as a social and moral justification for the acquisition of goods and services in a context such as "you worked for it," or "you deserve it?"

achievement and success

determinants of customer satisfaction with online websites and merchants (11)

adaption, interactivity, nurturing, commitment, network, assortment, transaction ease, engagement, loyalty, inertia, and trust

Generation Y, Generation X, baby boomers, and seniors are four subcultural segments based on ________.

age

examples of demographics

age, gender, family, size, occupation, income, education, religion, race, nationality, etc.

Pomona Fruits, a tropical fruit grower, wants to raise awareness of the health benefits of pineapples in order to spur sales of its produce. Pomona buys a full page in a women's health magazine and pays a nutritionist to write a complementary article highlighting tropical fruits, including pineapples. This is an example of ________.

an advertorial

When "The Ab Crusher," newpiece of work-out equipment, is advertised in a 30-minute TV slot that is produced to look like a documentary on health and fitness, this is an example of ________

an infomercial

transactional bonds

are mechanics and structure that facilitate exchanges between consumers and sellers

Cards, presents, cakes, and candles are ________ for birthday rituals.

artifacts

Brand Loyalty includes

behavior and attitude (breakfast at fast food places), frequency award programs are popular, customer relationships can be active or passive, can loyalty be bought? EX: retail customers seek functional v. affective values (grocery shopping experience at publix and whole foods v. walmart)

Maya is actively saving money so that she can afford a down paymenton the purchase of a house because she thinks that home ownership is the key to creating wealth. This personal conviction in the value of home ownership is one of Maya's

belief

selling concept/ orientation

caring about commission over helping the customer (because hard sell wont make them want to buy it again); making and pushing you to buy; hard sell; sell what you make

brand positioning

company creates a distinct image and identity for its products, services, and brand in its customers' minds; develop value proposition ;

Whereas the ________ focuses on fulfilling the needs of target consumer markets more effectively than competitors, the ________ requires marketers to do that in a way that preserves and enhances the well-being of consumers and society as a whole.

consumer marketing concept; societal marketing concept

Why segment the market? (4)

consumer needs differ, it is better to divide and conquer, differentiation helps brands compete, and segmentation helps identify media

product concept/ orientation

consumer will buy the product that offers them the highest quality, best performance, and most features

usage rate

consumption volume(heavy drinkersv. moderate drinkers); level of involvement

Track _________ and _________ of individual consumers __________________ them into tiers based on consumption behavior

costs, revenues, categorizes

lead

customers who cost the company money because they claim more attention than is merited by their spending; tie up company resources; spread negative word-of-mouth

iron

customers whose spending volume and profitability do not merit special treatment from the company

How to segment

demographics, geographic, psychographic, and behavior

Mayur wants a new digital camera and will accept, for consideration, any camera with greater than 5 megapixel resolution.Mayur is using a(n) ________.

disjunctive decision rule

market segmentation

dividing the market into subsets with similar characteristics; identify groups to market; netflix did this well

Consumer behavior as a field is related to many other fields such as...

econ., marketing, psych, anthropology, and social psych

Researchers often measure social class in terms of

education

Verve shampoo has come out with a new hair-care product that is a shampoo and conditioner in one, so consumers can wash and condition their hair in one easy step. This product appeals to Americans' value of

efficiency

Within the context of the model of consumer decision making, ________ is likely to occur when a consumer is faced with a "problem."

evaluation of alternatives

A husband and wife and one or more children, together with at least one grandparent living within the household, constitutes a (n)

extended family

A consumer is most likely to use ________ when buying an expensive, important, or technically complicated product or service for the first time.

extensive problem solving

social responsibility concept/ orientation

fulfill the needs of the target audience in ways that improve, preserve and enhance society's well-being while simultaneously meeting their business objectives

The fact that Skippy peanut butter is preferred on the coasts, and Jif is preferred in the South and Midwest, is an indication that marketers must research ________ subcultures

geographic

gold

heavy users but not as profitable because they are more price sensitive; ask for more discounts; are likely to buy from several providers

platinum

heavy users who are not price sensitive and are willing to try new offerings

marketing apostle

high satisfaction and high loyalty

criteria for effective segmentation/ targeting

identifiable(demographis), sizable(must have enough to be profitable), stable & growing(teenagers), accessible/reachable(communicate), and consistent with co. objectives and resource

Benefits sought represent consumer needs

important for positioning EX: what you want in a car

examples of psychographic

in your head, attitude, thought processes; lifestyles, social class, personal values, AIOs (activity, interests, opinion)

Helen enjoys Jack's Links beef jerky. By contrast, she is indifferent to Oberto beef jerky, and dislikes Pemmican beef jerky. Oberto beef jerky is part of Helen's ________.

independent set

When Wendy's advertising emphasizes that a combo meal can come with any of a number of sides, not just fries, and the company is appealing to American consumers' preference for

individualism

The ________ consists of brands the consumer excludes from the purchase consideration because they are felt to be unacceptable.

inept set

Carla learned how to go about shoppingfor a new car when her father specifically sat her down and told her what to look for at dealerships and how to negotiate the best price. This constitutes

informal learning

Gloria buys Crest toothpaste because her mother always bought Crest for her family when she was growing up. This is an example of

intergenerational brand transfer

List some of the changes/ trends affecting marketing/ consumer behavior

internationalization, demographics, cultural, economic, and technological changes

Consumers often develop shortcut decision rules called heuristics to facilitate the decision making process and to cope with ________.

lack of information

restaurants are all about what?

location ( if you are a competitor of mcdonalds, go where they go)

The societal marketing concept advocates a ________

long-term perspective

Marketing terrorist

low satisfaction and low loyalty

the traditional marketing concepts

make what you can sell; don't focus on product, focus on the need it satisfies; match needs better than competitors do;research consumer needs and characteristic; understand purchase behavior process and influences; each customer transaction is a discrete sale

Marketing concept/ orientation

make what you sell; asks what you want and makes that

Delivering satisfaction through... (3steps)

market segmentation, target marketing, and brand position (and differentiation)

___________ constitute the largest Hispanic subcultural group

mexicans

fast food trends (9)

mobile technology affects everything, DIY health/natural, local as an expectation, looking for gen Z, far east flavors dominate, heat rises, food service options everywhere, sustainability every which way, and beverages get the spotlight

Streamline Luggage Company markets its roll-aboard suitcases to international executives and businesspeople that travel regularly. This is an example of segmenting based on

occupation

Personality

people often don't identify these traits because they are guarded or not consciously recognized; consumer innovators (open minded, and perceive less risk in trying new things)

geodemographic segment variables for segmentation

people who live close to one another are similar, and birds of a feather flock together

Friends, neighbors, coworkers, and salespeople are considered ________ pre-purchase information sources.

personal

Maya wants a candy bar and tries to convince her father to purchase one for her by threatening to throw a fit in the crowded grocery store if he does not. This is an example of which of the following tactics used by children to influence their parents?

pressure tactic

35. The judges of American Idol always have a Coca-Cola within easy reach (and view). This is an example of ________.

product placement

psych: us _______ ::social psych: us ___________________

psych: us *alone (ex-motivation)* ::social psych: us *in a group*

Lifestyle

psychographics, includes AIO

Kosher seals on food items are placed to cater to a(n) ________ subculture

religious

Greg and his brothers always put ketchup on their scrambled eggs at breakfast. This is an example of a

ritual

usage-situation segmentation

segmenting on the basis of special occasions or situations. EX: with friends- I drink imports EX: gift for mom on mothers day is better

target marketing

selecting segments to use as customers; go after them with the P's

Because ofdivorce, separation, and out-of-wedlock births, there has been a rapid increase in the number of ________ households in the U.S.

single-parent family

Mayur is an analyst at an investment bank. He notices that many of the senior executives at his office wear Rolexwatches, so he decides to save up and buy a Rolex so that he will appear to more like those executives. This behavior is known as

status consumption

In most drugstores, less expensive brands of personal care products such as shampoo, dental floss, skin care lotions, andsoap come in packages that are extremely similar to instantly recognized and more expensive premium brands of these products, and are deliberately placed right next to them on the shelf. This is an attempt to encourage ______

stimulus generalization

Phenomenology

study of consumers that relies on interpretation of their lived experience associated with some aspect of consumption (relies on casual interviews with consumers by winning their confidences and trust)

Children perceive ________ to be a close and reliable source of information, whereas adolescents and teenagers are likely to look to ________ for models of acceptable consumption behavior.

their families; their friend

evolution of target marketing

undifferentiated marketing, differentiated marketing (segmented marketing), concentrated/niche marketing, custom marketing

examples of behavior

usage (ex: social drinkers v. over users); occasions, degree of loyalty, benefits sought, buyer readiness, user status

segmentation by consumption specific variables/ bases

usage rate, usage situation, benefits segmentation, perceived brand loyalty, and brand relationship

value- and retention- focused marketing

use technology that enables customers to customize what you make; focus on product's value and need it satisfies; know customers' needs to make more valuable than competitors; research level of profit associated with the needs; behavior in relation to co. product; make each transaction a relationship

product positioning

using product differentiation as the basis; marketers try to position their products as being "unique" in the minds of the consumers

VALS

values and lifestyles; most popular segmentation system combining lifestyles and values. Maslows needs hierarchy

marketing myopia

what product orientation often leads to; focus on the product rather than the needs it presumes to satisfy; focuses on the needs of the company instead of defining the company and its products in terms of the customers' needs and wants.

examples of geographic

zip code, continent, country, city, density, climate, population, subway station, city area

Consumer Behavior Definition

The behavior that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services that they expect will satisfy their needs.

Which of the following best describes Baby Boomers?

They are value oriented, weighing price-quality relationships.

Which of the following is true of gender roles and consumer behavior?

Women exhibit superior affect and purchase intention toward ads that are simple and attribute-oriented