Marketing Exam 2 (ch 6-9)

Roles in the Buying Center(ch 7)

Initiator Influencers/evaluators Gatekeepers Decider Purchaser Users

Trust: (ch 7)

the condition that exists when one party has confidence in an exchange partner's reliability and integrity

Positioning Bases (ch8)

-Attribute: A product is associated with an attribute, product feature, or customer benefit -Price and quality: This positioning base may stress high price as a signal of quality or emphasize low price as an indication of value -Use or application: Stressing uses or applications can be an effective means of positioning a product with buyers -Product user: This positioning base focuses on a personality or type of user -Product class: The objective here is to position the product as being associated with a particular category of products -Competitor: Positioning against competitors is part of any positioning strategy -Emotion: Positioning using emotion focuses on how the product makes customers feel

Management Uses of Marketing Research

-Improves the quality of decision making -Helps managers trace problems -Helps managers understand detailed and complicated relationships -Helps managers serve customers accurately and efficiently

Undifferentiated targeting strategy (ch8)

: a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix Essentially a mass-market philosophy—viewing the market as one big market and using one marketing mix The first firm in an industry sometimes uses this strategy. With no competition, the firm may not need to tailor marketing mixes to the preferences of market segments. Too often, it emerges by default rather than by design, reflecting a failure to consider the advantages of a segmented approach. The result is often sterile, unimaginative product offerings that have little appeal to anyone.

geographic segmentation( ch 8)

: segmenting markets by region of a country or the world, market size, market density, or climate Market density is the number of people within a unit of land Geographic segmentation is useful for companies needing to find ways to grow Ex. Target opening smaller stores in urban locations. Smaller, quick-tip shopping, and services tailored to customers living in large cities. Discussion/Team Activity Discuss the marketing of regional brands/products in various areas of the country.

Age and Family Life Cycle Stage

A consumer's age and family life cycle stage can have a significant impact on his or her behavior Family life cycle is an orderly series of stages through which consumers' attitudes and behavioral tendencies evolve through maturity, experience, and changing income and status Marketers often define their target markets in terms of family life cycle Nontraditional life cycles Marketers should also be aware of the many nontraditional life cycle paths that are common today and provide insights into the needs and wants of such consumers as divorced parents, lifelong singles, and childless couples. Single parents Careers often create a poverty of time for single parents. To cope with the dual demands of a career and raising children, single parents are always on the lookout for time saving products like quick preparation foods and no-iron clothing. Life events Life-changing events can occur at any time—death of a spouse, moving, birth or adoption of a child, retirement, job loss, divorce, and marriage. Typically, such events are quite stressful, and consumers will often take steps to minimize that stress.

Advantages and Disadvantages of Secondary Data

Advantages -Save time and money -Aid in formulating the problem statement -Suggest research methods and data to solve problems -Pinpoint the kinds of people to approach -Serve as a basis of comparison for other data Disadvantages -May not give adequate detailed information -Quality and accuracy of data may pose a problem

Advantages of Internet Surveys(ch9)

Advantages of Internet surveys include: Rapid development Reduced costs Personalized questions and data Improved respondent participation Contact with the hard-to-reach

Online Focus Groups(ch9)

Advantages of online focus groups: Better participation rates Cost-effectiveness Broad geographic scope Accessibility

Preparing and Presenting the Report and Follow Up(ch9)

After data analysis, researchers prepare the report and communicate conclusions and recommendations to management Contents of a report: Concise statement of the research objectives Brief explanation of research design Summary of major findings Conclusion with recommendations Follow up: Researcher should determine why management did or did not carry out the recommendations

Information Search

After recognizing a need or want, consumers search for information Internal information search: the process of recalling past information stored in the memory Largely stems from previous experience External information search: the process of seeking information in the outside environment Two types of external information sources: Nonmarketing-controlled information source: a product information source that is not associated with promotion Personal experiences, personal sources, and public sources (like Consumer Reports) Technology and the internet have changed the way consumers gather non-marketing controlled information Marketing-controlled information source: a product information source that originates with marketers promoting the product Social media communities can strengthen customer relationships with a company and brand An external search depends on the consumer's perceived risk, knowledge, prior experience, and level of interest in the good or service Evoked set (consideration set): a group of brands resulting from an information search from which a buyer can choose

Types of Consumer Buying Decisions and Consumer Involvement

All consumer buying decisions generally fall along a continuum of three broad categories: routine response behavior, limited decision making, and extensive decision making Goods and services in these three categories can best be described in terms of five factors: -Level of consumer involvement -Length of time to make a decision -Cost of the good or service -Degree of information search -Number of alternatives considered Consumers expect certain outcomes from the purchase, and how well these expectations are met determines the level of customer satisfaction. For a marketer, an important element of any postpurchase evaluation is reducing any lingering doubts that the decision was sound. Consumers try to reduce dissonance by justifying their decision. Marketing managers reduce dissonance through effective communication with purchasers. Marketing-oriented companies perceive a contact center as an opportunity to engage customers and reinforce the brand promise.

Psychological Influences

An individual's buying decisions are further influenced by psychological factors: perception, motivation, and learning Unlike the other three influences on consumer behavior, psychological influences can be affected by a person's environment because they are applied on specific occasions

Analyzing the Data

Analysis helps to interpret and draw conclusions from the mass of collected data Data are organized using techniques such as one-way frequency counts, cross-tabulations, and sophisticated statistical analysis One-way frequency tables record the responses to a question and provide a general picture of the study's results. Cross-tabulation: a method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions

Exhibit 6.5 U.S. Social Classes

As you can see from Exhibit 6.5, the upper and upper middle classes comprise the small segment of affluent and wealthy Americans. In terms of consumer buying patterns, the affluent are more likely to own their own home and purchase new cars and trucks and are less likely to smoke.

Observation Research

Behavioral targeting (BT): a form of observation marketing research that combines a consumer's online activity with psychographic and demographic profiles compiled in databases Social media monitoring: the use of automated tools to monitor online buzz, chatter, and conversations Ethnographic research: the study of human behavior in its natural context; involves observation of behavior and physical setting Comes to marketing from the field of anthropology Ethnographers directly observe the population they are studying to gain richer insights into the culture and behavior of people Virtual shopping: simulation of an actual retail store environment on a computer screen Experiment: a method of gathering primary data in which the researcher alters one or more variables while observing the effects of those alterations on another variable Holding all other factors in the external environment is monumental and costly, if not impossible

Customer Service(ch7)

Beneficial to have a formal system to monitor customer opinions and perceptions of the quality of customer service To ensure superior service, firms must: Divide customers into groups based on their value Create policies that govern how service will be allocated among groups

Evaluative Criteria(ch 7)

Business buyers evaluate products and suppliers against three important criteria: Quality: refers to technical suitability Service: includes prepurchase, postsale, and dependability of supply Price: business buyers want to buy at low prices Quality improvement should be part of every organization's marketing strategy. Service: includes prepurchase, postsale, and dependability of supply Services that help sell the finished products are especially appropriate when the seller's product is an identifiable part of the end product. Price: business buyers want to buy at low prices However, a buyer who pressures a supplier to cut prices to a point at which the supplier loses money on the sale almost forces shortcuts on quality. The buyer also may, in effect, force the supplier to quit selling to him or her. Then a new source of supply will have to be found.

Business Buying Behavior(ch7)

Business buying behavior has five important aspects: Buying centers Evaluative criteria Buying situations Business ethics Customer service

Customer Relationship Management(ch9)

CRM is described as a closed-looped system that builds relationships with customers The CRM cycle is initiated by identifying customer relationships within the organization Next, the company must understand the interaction each customer has with the company by building on the initial information collected and developing a useful database The company can then acquire and capture all relevant information about the customer Technology is used to store and integrate customer data The company must use data mining to determine its profitable and unprofitable customer segments Leverage customer information

Postpurchase Behavior

Cognitive dissonance: inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions Consumers reduce dissonance by: - Seeking information that reinforces the purchase decision - Avoiding information that contradicts the purchase decision - Revoking the original decision by returning the product

CRM as a Targeting Tool(ch8)

Companies that successfully implement CRM tend to customize the goods and services offered to their customers - Based on data generated through interactions between carefully defined groups of customers and the company Can allow marketers to target customers with extremely relevant offerings Trends leading to the continuing growth of CRM: Personalization: One-size-fits-all marketing is no longer relevant. Time savings: Direct and personal marketing efforts will continue to grow to meet the needs of consumers who no longer have the time to spend shopping and making purchase decisions. Loyalty: Consumers will be loyal only to those companies and brands that have earned their loyalty and reinforced it at every purchase occasion. Technology: Mass-media approaches will decline in importance as advances in market research and database technology allow marketers to collect detailed information on their customers.

Discussion PointBuying Situations(ch 7)

Connie reorders copy paper for the office in the same quantity she orders every month. The produce buyer for Wegmans orders blueberries in 1 pint packages instead of the smaller 6 ounce size. Desmond is tasked with purchasing the university's first 3D printer for the computer lab. Mercy Hospital reorders syringes with no changes to quantity or type. The owner of Franco's Pizzeria has requested that his accountant start providing payroll services for employees bi-weekly instead of monthly. Which type of buying situation is described in each example: a new buy, modified rebuy, or straight rebuy? Answers: Straight rebuy Modified rebuy New buy Straight rebuy Modified rebuy

Discussion Point Maslow's Hierarchy of Needs

Consider the following products: Home security system McDonald's hamburger Rolex watch Insurance policy Jewelry BMW American Express "black card" Which level in Maslow's hierarchy are these products meant to satisfy: physiological, safety, social, esteem, or self-actualization? Answers: 1 Safety 2 Physiological 3 Esteem 4 Safety 5 Social 6 Esteem 7 Self-actualization

Factors Affecting Consumer Decision Making

Consumer decision making does not occur in a vacuum -Cultural factors -Social factors -Individual factors -Psychological factors Social factors sum up the social interactions between a consumer and influential groups of people, such as reference groups, opinion leaders, and family members. Individual factors, which include gender, age, family life cycle stage, personality, self-concept, and lifestyle, are unique to each individual and play a major role in the type of products and services consumers want.

The Traditional Consumer Decision-Making Process

Consumer decision-making process: a five-step process used by consumers when buying goods or services The steps include: (1) need recognition, (2) information search, (3) evaluation of alternatives, (4) purchase, and (5) postpurchase behavior These five steps represent the traditional buying process, which can be used as a guide for studying how consumers make decisions Consumers' decisions do not always proceed in order through all of the steps A consumer may end the process at any time and may not make a purchase Technology is also changing how people make decisions

Evaluation of Alternatives and Purchase

Consumers evaluate and compare alternatives with the help of: - Environment - Internal information - External information Categorization - Brand extensions (One way to begin narrowing the number of choices in the evoked set is to pick a product attribute and then exclude all products in the set that do not have that attribute.) (Another way to narrow the number of choices is to use cutoffs or minimum or maximum levels of an attribute that an alternative must have.) (A final way to narrow the choices is to rank the attributes under consideration in order of importance and evaluate the products based on how well each performs on the most important attributes.) (Consumers may also choose to categorize May be general or specific Categories typically associated with some degree of liking or disliking Marketers must understand whether consumers are using categories that evoke the desired evaluations Brand extensions are one way companies employ categorization to their advantage) Consumers have to make the following decisions: - Whether to buy - When to buy - What to buy (product type and brand) - Where to buy (type of retailer, specific retailer, online or in store) - How to pay Planned versus impulse purchase - Partially planned purchase: Made by consumers when they know the product category they want to buy but wait until they get to the store or go online - Unplanned purchase: Made by consumers on an impulse Psychological ownership - Consumers sometimes develop feelings of ownership without even owning the good, service, or brand

The Importance of Understanding Consumer Behavior(ch9)

Consumers' product and service preferences are constantly changing Consumer behavior: processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use

Cultural Influences on Consumer Buying Decisions

Culture: the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next Culture is Pervasive Encompasses all the things consumers do without conscious choice because their culture's values, customs, and rituals are ingrained in their daily habits Functional Human interaction creates values and prescribes acceptable behavior for each culture Learned Learn what is acceptable from family and friends Dynamic Adapts to changing needs and evolving enviornment

When Should Marketing Research Be Conducted?(ch9)

Depends on managers' perceptions of its quality, price, and timing When the expected value of research information exceeds the cost of generating the information When managers have several possible solutions to a problem, they should not instinctively call for marketing research. The first decision to make is whether to conduct marketing research at all. Depends on managers' perceptions of its quality, price, and timing When the expected value of research information exceeds the cost of generating the information

Demand(ch7)

Derived demand: the demand for business products Inelastic demand: demand for product not significantly affected by change in price Joint demand: the demand for two or more items used together in a final product Fluctuating demand: demand for business products is more volatile than for consumer products Multiplier effect (accelerator principle): phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product Discussion/Team Activity Discuss examples of products that describe each of the demand differences in business markets

Competitive Intelligence(ch9)

Derived from military intelligence, competitive intelligence is an important tool for helping a firm overcome a competitor's advantage Competitive intelligence: an intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors It can help identify the advantage and play a major role in determining how it is achieved Sources of competitive intelligence include the Internet, company salespeople, industry experts, government agencies, suppliers, and industry trade shows

Exhibit 9.4 Observational Situations

Examples of various observational situations are shown in Exhibit 9.4

Exhibit 6.3 The Consumer Decision Journey

Exhibit 6.3 depicts the journey and explains how marketers are trying to regain control from consumers by streamlining the decision-making process

Exhibit 6.4 Factors That Affect the Consumer Decision Journey

Exhibit 6.4 summarizes the following influences. Social factors: sum up the social interactions between a consumer and influential groups of people, such as reference groups, opinion leaders, and family members. Individual factors: which include gender, age, family life cycle stage, personality, self-concept, and lifestyle, are unique to each individual and play a major role in the type of products and services consumers want. Psychological factors: determine how consumers perceive and interact with their environments and influence the ultimate decisions consumers make. Cultural factors: which include culture and values, subculture, and social class, exert a broad influence over consumer decision making

Perceptual Map and Positioning Strategy for Saks Department Stores (ch8)

Exhibit 8.3

Exhibit 9.1 The Marketing Research Process

Exhibit 9.1 traces the steps in the marketing research process. As changes occur in the firm's external environment, marketing managers must decide on changes to the existing marketing mix.

The Growing Importance of Social Media Data

Facebook owns and controls data collected from 2 billion daily users and 79 billion monthly active users In an effort to expand its information databases even further, Facebook now combines its social data with third-party information from data brokerages like Acxiom, Datalogix, and Alliance Data Systems New Facebook tool allows advertisers to calculate their return on investment Facebook has also begun using the like and share buttons embedded in non-Facebook websites to track peoples' browsing histories, so it can more accurately and narrowly target ads

Gender and Income Segmentation (ch8)

Gender segmentation Uses different strategies for men and women Many marketers are going after the less-traditional market Income segmentation Income level influences consumers' wants and determines their buying power Retailers can appeal to low-income or high-income categories, or both Women make 85 percent of consumer goods purchases annually. -Women tend to view money and wealth differently than men do. -They don't seek to accumulate money but see it as a way to care for their families, improve their lives, and find security. -Marketers of products such as clothing and cosmetics still segment markets by gender. -Many of these marketers are going after the less-traditional male market. -Income influences consumers' wants and determines their buying power

Company Characteristics (ch8)

Geographic location Type of company Company size Product use Volume of purchase (heavy, moderate, light) is a commonly used basis for business segmentation Geographic location is helpful because some buyers buy from local suppliers Segmenting by customer type allows business marketers to tailor their marketing mixes to the unique needs of particular types of organizations or industries. Volume of purchase (heavy, moderate, light) is a commonly used basis for business segmentation. The ways in which customers use a product may influence the amount they buy, their buying criteria, and their selection of vendors.

Marketing Implications of Involvement

High-involvement purchases: -Require extensive and informative promotion to the target market Marketing managers must have promotion to the target market that is extensive and informative a good ad gives consumers the information they need for making the purchase decision, as well as specifying the benefits and advantages of owning the product Low-involvement purchases: -Require in-store promotion, eye-catching package design, and good displays -Coupons and two-for-one offers promote low-involvement items -Limited availability consumers may not recognize their wants until they are in the store. In-store promotion and package design are important tools for catching the customer's attention. Good displays can help explain a product's purpose and create recognition of a want. Limited availability create a "get it now or never" mentality

Relationships in Other Cultures(ch7)

In Japan, exchange between firms is based on personal relationships developed through indulgent dependency Relationships between companies can develop into a keiretsu Keiretsu: a network of interlocking corporate affiliates Many firms have found the best way to compete in Asian countries is to form relationships with Asian firms

Exhibit 9.2 Characteristics of Traditional Forms of Survey Research

In a survey research, the researcher interacts with people to obtain facts, opinions, and attitudes. This table compares the characteristics of traditional forms of research

Learning

Learning: a process that creates changes in behavior, immediate or expected, through experience and practice Types: Experiential: occurs when an experience changes behavior Conceptual: not learned through direct experience but based upon reasoning Reinforcement and repetition boost learning Stimulus generalization: a form of learning that occurs when one response is extended to a second stimulus similar to the first Marketers use a well-known brand name for a family of products because it gives consumers familiarity with and knowledge about each product in the family Another form occurs when retailers design their packages to resemble well-known manufacturers' brands Stimulus discrimination: a learned ability to differentiate among similar products Marketers rely on promotion to point out brand differences that consumers would otherwise not recognize Product differentiation

Exhibit 6.7 Maslow's Hierarchy of Needs

Look at powerpoint

market segmentation: discussion point(ch 8)

Look at some of the Coca-Cola Company's product lines: Coca-Cola Coke Zero Sugar DaSani Powerade Gold Peak Tea Honest tea Sprite Smart water How do these product lines fit the needs of different market segments? Answers will vary.Consider similar product lines (DaSani/Smartwater, Coca-Cola/Coke Zero Sugar/Sprite, Honest tea/Gold Peak tea). How do the target markets differ for those similar product lines?

Types of Business Products (ch7)

Major equipment (installations): capital goods such as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings Depreciates over time and often custom-designed Personal selling is an important marketing strategy Accessory equipment: goods such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment Portable drills, power tools, microcomputers, and computer software Raw materials: unprocessed extractive or agricultural products, such as mineral ore, lumber, wheat, corn, fruits, vegetables, and fish Component parts: either finished items ready for assembly or products that need very little processing before becoming part of some other product There are two important markets: The OEM market and the replacement market Processed materials: products used directly in manufacturing other products Do not retain their identity in final products Supplies: consumable items that do not become part of the final product Fall into categories of maintenance, repair, or operating supplies (MRO) Business services: expense items that do not become part of the final product Includes janitorial, advertising, legal, management consulting, marketing research, maintenance, and other services

Social Influences

Many consumers seek out the opinions of others to reduce their search and evaluation effort or uncertainty, especially as the perceived risk of the decision increases Consumers may also seek out others' opinions for guidance on new products or services, products with image-related attributes, or products for which attribute information is lacking or uninformative -Reference Group -Optional Leaders -Family

Uses of the Internet by Marketing Researchers(ch9)

Market researches use the Internet to: Administer surveys Conduct focus groups Performa a variety of other types of marketing research

Target market: (ch8)

Market segmentation is the first step in determining whom to approach about buying a product. The next task is to choose one or more target markets. 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, resulting in mutually satisfying exchanges Strategies for selection: -Undifferentiated targeting -Concentrated targeting -Multi segment targeting Because most markets will include customers with different lifestyles, backgrounds, and income levels, it is unlikely that a single marketing mix will attract all segments of the market

market segmentation: successful criteria(ch 8)

Marketers segment markets for three reasons: To identify groups of customers with similar needs and analyze the characteristics and buying behavior of these groups Segmentation provides marketers with information to help them design marketing mixes specifically for one or more segments Segmentation is consistent with the marketing concept of satisfying customer wants and needs while meeting the organization's objectives A market segment must meet four criteria: Substantiality:Segment must be large enough to warrant developing and maintaining a special marketing mix. Identifiability and measurability:Segment must be identifiable and its size measurable Accessibility:Marketing mix must be reachable to members of targeted segments. Responsiveness:Segment need not be treated separately unless it respond differently to a marketing mix

Marketing Implications of Perception

Marketers use perception to identify important attributes: -Price -Brand names -Quality and reliability -Threshold level of perception Changes in product or repositioning of a product Awareness of foreign consumers' perception is required when expanding to global markets

Trends in B-to-B Internet Marketing (ch7)

Marketers use social media to increase awareness and build relationships and community Growth of platforms, such as mobile and streaming video, necessitate development of new ways to measure campaign effectiveness Metrics that are useful for increasing the success of a social media campaign -Awareness -Engagement -Conversion

Understanding the Ever-Changing Marketplace

Marketing research helps managers understand what is going on in the marketplace and take advantage of opportunities One of the hottest trends in technology today is the Internet of Things (IoT) - By 2019, 69 percent of consumers plan to have at least one IoT device, such as a thermostat or security system - Younger consumers are most likely to adopt connected technologies later on, while older consumers are slightly more likely to already own certain products

Types of Errors

Measurement error: an error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process Sampling error: an error that occurs when a sample does not represent the target population Nonresponse error: occurs when the sample actually interviewed differs from the sample drawn Frame error: an error that occurs when a sample drawn from a population differs from the target population Random error: an error that occurs when the selected sample is an imperfect representation of the overall population

The Growing Importance of Mobile Research(ch9)

Mobile surveys account for about half of interview responses It is designed to fit into brief cracks of time New and better apps make the survey experience easier and more intuitive

The Profound Impact of the Internet on Marketing Research(ch9)

Most American marketing research companies conduct some form of online research Online survey research has replaced computer-assisted telephone interviewing as the most popular mode of data collection

Business Ethics(ch 7)

Most companies: Follow ethical practices Offer ethics training to employees Many companies have codes of ethics that guide buyers and sellers

Need Recognition

Need recognition: the result of an imbalance between actual and desired states - First stage in the decision-making process Want: recognition of an unfulfilled need and a product that will satisfy it - Wants can be viewed in terms of four goals: economizing, sustaining, treating, and rewarding Stimulus: any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing - Internal vs. external stimuli Want-got gap: imbalance between actual and desired states

Buying Situations(ch 7)

New buy: a situation requiring the purchase of a product for the first time Modified rebuy: a situation in which the purchaser wants some change in the original good or service Straight rebuy: a situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers

Individual Differences in Susceptibility to Social Influences

Not all persons are equally influenced in their purchase decisions Consumers differ in their feelings of connectedness to other consumers -Separated self-schema: a perspective whereby a consumer sees himself or herself as distinct and separate from others -Connected self-schema: a perspective whereby a consumer sees himself or herself as an integral part of a group

Specifying the Sampling Procedures

Once researchers decide how they will collect primary data, their next step is to select the sampling procedures they will use Sample: a subset from a larger population Universe: the population from which a sample will be drawn The universe should include all the people whose opinions, behavior, preferences, attitudes, and son on, are of interest to the marketer If researchers determine that if the sample must be representative of the population Probability sample: a sample in which every element in the population has a known statistical likelihood of being selected Random sample: a sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample Nonprobability 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 nonprobability sample using respondents who are convenient or readily accessible to the researcher—for example, employees, friends, or relatives

Perception

Perception: the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture Selective exposure: a process whereby a consumer notices certain stimuli and ignores others Selective distortion: a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs Selective retention: a process whereby a consumer remembers only that information that supports his or her personal beliefs

Personality, Self-Concept, and Lifestyle

Personality: a way of organizing and grouping the consistencies of an individual's reactions to situations Self-concept: or self-perception, is how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations May change, but the change is gradual Self-concept combines: Ideal self-image: the way an individual would like to be perceived Real self-image the way an individual actually perceives himself or herself Consumers rarely buy products that jeopardize their self-image By influencing the degree to which consumers perceive a good or service to be self-relevant, marketers can affect consumers' motivation to learn about, shop for, and buy a certain brand

Gender

Physiological differences between men and women result in many different needs, such as with health and beauty products Just as important are the distinct cultural, social, and economic roles played by men and women and the effects that these have on their decision-making processes Key categories and predominant decision maker: Furniture and home accessories: women sole decision maker 53% of the time, men and women joint decision makers 27% of the time Small appliances: women sole decision maker 51% of the time, men and women joint decision makers 31% of the time Smartphones: women sole decision maker 38% of the time, men sole decision makers 35% of the time Power tools: men sole decision maker 68% of the time Auto tires and batteries: men sole decision maker 61% of the time

Market Segmentation: importance(ch 8)

Plays a key role in the marketing strategy of successful organizations Powerful marketing tool Helps marketers define customer needs and wants precisely Helps decision makers define objectives and allocate resources more accurately Discussion/Team Activity Name different fashion retailers and identify their market segmentation strategies.

Major Categories of Business Customers(ch7)

Producers Original equipment manufacturers (OEMs): Individuals and organizations that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers Resellers Governments Institutions

Questionnaire Design

Questionnaires ensure that all respondents will be asked the same series of questions Open-ended question: an interview question that encourages an answer phrased in the respondent's own words Closed-ended question: an interview question that asks the respondent to make a selection from a limited list of responses Scaled-response questions: a closed-ended question designed to measure the intensity of a respondent's answer

Exhibit 9.3 Types Of Questions Found on Questionnaires for National Market Research

Questionnaires include three basic types of questions: open-ended, closed-ended, and scaled-response.

Discussion Point The Marketing Research Process(ch9)

Read the following examples: Marketers at Lego observe thousands of children playing with Legos Gatorade determines they need to "Assess the hydration needs of endurance athletes before, during, and after athletic events." Marketers at Folgers examine recorded responses to the internet survey distributed to coffee drinkers Researchers at Nintendo look at previous quarterly reports to determine sales trends Marketers conducting a survey determine that every person in the population has a known statistical likelihood of being selected Determine which step of the marketing research process is described in each of the examples. Answers Step 4: Collect primary data Step 1: Identify and formulate the problem/opportunity Step 5: Analyze the data Step 2: Plan the research design and collect secondary data Step 3: Specify the sampling procedures

Ethnic Segmentation (ch8)

Some companies make products geared toward specific ethnic groups -To meet the needs and wants of expanding populations Largest ethnic groups in the United States: -Hispanic Americans -African Americans -Asian Americans In the past, ethnic groups in the United States were expected to conform to a homogenized, Anglo-centric ideal. Increasing numbers of ethnic minorities and increased buying power have changed this.

Reference Groups

Reference group: all of the formal and informal groups in society that influence the buying behavior of an individual Learn by watching how members of the reference group consume, and they use the same criteria to make their own consumer decisions Categorized very broadly as direct or indirect. Direct reference groups, touch people's lives directly and are either primary or secondary Primary membership group: a reference group with which people interact regularly in an informal, face-to-face manner, such as family, friends, and coworkers Today they also communicate by text, email, and through other social media Secondary membership group: a reference group with which people associate less consistently and more formally than a primary membership group, such as a club, professional group, or religious group Indirect reference groups are categorized as either aspirational or nonaspirational Aspirational reference group: a that someone would like to join To join an aspirational reference group, a person must at least conform to the norms of that group Norm: a value or attitude deemed acceptable by a group Nonaspirational reference group: a group with which an individual does not want to associate A consumer may avoid buying some products to avoid being associated with a particular group For marketers, reference groups have three important implications: They serve as information sources and influence perceptions They affect an individual's aspiration levels Their norms either constrain or stimulate consumer behavior

Opinion Leaders

Reference groups and social media groups frequently include individuals known as group leaders, or opinion leaders—persons who influence others. Opinion leader: an individual who influences the opinions of others Marketers try to create opinion leaders Movie stars, celebrities Marketers are looking to social media to find opinion leaders, but the sheer volume of posts and platforms makes determining true opinion leaders challenging

Exhibit 6.6 Types of Reference Groups

Reference groups are characterized as either direct or indirect

Relationship Marketing(ch7)

Relationship marketing has become an important business marketing strategy because: Customers have become more demanding Competition has become more intense Business suppliers use social networking sites to advertise themselves to businesses Steady dialogue between the supplier and the customer needs to be maintained to gain repeat business

Planning the Research Design and Gathering Primary Data

Research design: specifies which research questions must be answered, how and when to gather data, and how the data will be analyzed Project budget is finalized after the research design is approved Primary data: information collected for the first time; used for solving the particular problem under investigation Answers specific research questions Data are current, and source of data is known Secrecy can be maintained

Scanner-Based Research(ch9)

Scanner-based research: a system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy The two major scanner-based suppliers are SymphonyIRI Group Inc. and the Nielsen Company InfoScan: a scanner-based sales-tracking service for the consumer packaged-goods industry Neuromarketing: Studies the body's responses to marketing stimuli

Age Segmentation( ch 8)

Segments markets by age into the following cohorts: Generation Z Millennials Generation X Baby Boomers War generation Great Depression generation -Companies choose to segment by age because the needs of Baby Boomers are different from those of Generation Z

Survey Research

Survey research: the most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes In-home personal interviews: Although in-home personal interviews often provide high-quality information, they tend to be very expensive because of the interviewers' travel time and mileage costs Mall intercept interviews: a survey research method that involves interviewing people in the common areas of a shopping mall Computer-assisted personal interviewing: an interviewing method in which the interviewer reads questions to the respondent off a computer screen and enters the respondent's data directly into the computer Computer-assisted self-interviewing: an interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where each respondent reads questions off a computer screen and directly keys his or her answers into the computer Telephone interviews: Telephone interviews cost less than personal interviews, but cost is rapidly increasing due to respondent refusals to participate Central-location telephone (CLT) facility: a specially designed phone room used to conduct telephone interviewing Mail surveys: Mail surveys have several benefits: relatively low cost, elimination of interviewers and field supervisors, centralized control, and actual or promised anonymity for respondents Mail panels offer an alternative to the one-shot mail survey Executive interview: a type of survey that usually involves interviewing business people at their offices concerning industrial products or services Focus group: seven to ten people who participate in a group discussion led by a moderator

Bases for Segmenting Business Markets (ch8)

The business market consists of four broad segments: producers, resellers, government, and institutions. Further market segmentation offers just as many benefits to business marketers as it does to consumer product marketers.

Reconceptualizing the Consumer Decision-Making Process

The consumer decision journey explains how marketers are trying to regain control from consumers by streamlining the decision-making process In order to minimize (or eliminate) the "consider and evaluate" phases of the consumer journey, a company must have four distinct but interconnected capabilities: -Automation: Streamlines journey steps -Proactive personalization: Uses information—either based on past interactions or collected through external sources—to instantaneously customize the customer experience -Contextual interaction: Uses knowledge about where a customer is in the journey to deliver them to the next set of interactions -Journey innovation: Extends customer interactions to new sources of value, such as related products or partnered businesses Automated reordering can also keep customers in the loyalty loop Two loyalty levels among customers: Satisfied - Buy regularly, often out of habit, satisfied with brand's performance over a long period of time "one of my favorite brands' Committed - More intense and involved relationship with the brand -More likely to have an emotional attachment, receive self-expressive benefits, and to have a use experience that goes beyond functional - "I can't imagine living without"

Exhibit 6.1 The Consumer Decision-Making Process

The consumer decision-making process is a five-step process used by consumers when buying goods or services. It is used as a guide for studying how consumers make decisions.

Family

The family is the most important social institution for many consumers, strongly influencing values, attitudes, self-concept, and buying behavior Socialization process: how cultural values and norms are passed down to children Family members assume a variety of roles in the purchase process Initiators suggest, initiate, or plant the seed for the purchase process Influencers are members of the family whose opinions are valued Decision maker The one who actually makes the decision to buy or not to buy Purchaser (probably Dad or Mom) is the one who actually exchanges money for the product Consumer The actual user Marketers should consider family purchase situations along with the distribution of consumer and decision-maker roles among family members.

Consumer Involvement

The level of consumer involvement is perhaps the most significant determinant in classifying buying decisions Involvement: the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior Routine response behavior: the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time - Little time is spent on search and decision before purchasing - Buyers usually are familiar with several different brands in the product category, but stick with one brand - Consumers engaged in routine response behavior normally do not experience need recognition until they are exposed to advertising or see the product displayed on a store shelf Limited decision making: the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category typically occurs when a consumer has previous product experience but is unfamiliar with the current brands available. Low level of involvement because consumers expend only moderate effort in searching for information or in considering various alternatives Extensive decision making: the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information Consumers want to make the right decision, so they want to know as much as they can about the product category and available brands Consumers experience the most cognitive dissonance when buying high-involvement products

Factors Determining the Level of Consumer Involvement

The level of involvement in the purchase depends on the following factors: -Previous experience -Interest -Perceived risk of negative consequences -Social visibility Definitions: Previous experience When consumers have had previous experience with a product or repeated product trials, the level of involvement typically decreases and quick choices are made Interest Involvement is directly related to consumer interests, such as cars, motorcycles, or electronics Perceived risk of negative consequences As the risk increases, so does the consumer's level of involvement. Risks include financial risks, social risks, and psychological risks. Financial: exposure to loss of wealth or purchasing power Social: when consumers buy products that can affect people's social opinions of them Psychological: occur if consumers believe that making the wrong decision might cause some concern or anxiety Social visibility Involvement increases as the social visibility of a product increases High involvement can take a number of different forms: -Product involvement -Situational involvement -Shopping involvement Showrooming: the practice of examining merchandise in a physical retail location without purchasing it, and then shopping online for a better deal on the same item -Enduring involvement -Emotional involvement definitions: High involvement means that a consumer cares about a product category or a specific good or service High involvement can take a number of different forms: Product involvement means that a product category has high personal relevance. Situational involvement the circumstances of a purchase may temporarily transform a low-involvement decision into a high-involvement one Shopping involvement the personal relevance of the process of shopping Showrooming: the practice of examining merchandise in a physical retail location without purchasing it, and then shopping online for a better deal on the same item Enduring involvement an ongoing interest in some product, such as kitchen gadgets, or activity, such as fishing Emotional involvement how emotional a consumer gets during some specific consumption activity

Exhibit 7.1 How NAICS Works

The more digits in the NAICS code, the more homogenous the groups at that level.

Steps in Segmenting a market (ch8)

The purpose of market segmentation is to identify marketing opportunities -The purpose of market segmentation is to identify marketing opportunities -Select a market or product category for study -Define the overall market or product category to be studied -Choose a basis or bases for segmentation -Requires managerial insight, creativity, and market knowledge -Select segmentation descriptors Descriptors identify the specific segmentation variables to use -Profile and analyze segments Profile should include segment size, expected growth, purchase frequency, current brand usage, brand loyalty, and long-term sales and profit potential -Select markets A natural outcome of the segmentation process. Directly influences and determines the marketing mix Design, implement, and maintain appropriate marketing mixes Product, place (distribution), promotion, and pricing strategies

Ways in which B-to-B firms use the Internet: (ch7)

Use company websites to facilitate communication and orders Use digital marketing to increase brand awareness Use digital marketing—primarily in the form of content marketing—to position their businesses as thought leaders and therefore generate sales leads B-to-B companies are increasingly leveraging the Internet as an effective sales and promotion platform (much like B-to-C companies have done for decades).

Value(ch6)

Value: a personal assessment of the net worth one obtains from making a purchase, or the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct Perceived value: the value a consumer expects to obtain from a purchase Utilitarian value: a value derived from a product or service that helps the consumer solve problems and accomplish tasks Hedonic value: a value that acts as an end in itself rather than as a means to an end

Steps in a Marketing Research Project

Virtually all firms that have adopted the marketing concept engage in some marketing research because it offers decision makers many benefits. Some companies spend millions on marketing research; smaller firms conduct informal, limited-scale research studies. Marketing research problem: -determining what information is needed and how it can be obtained efficiently and effectively Marketing research objective: -the specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information The goal statement Management decision problem: --a broad-based problem that uses marketing research in order for managers to take proper actions -Action oriented

Online Research Communities(ch9)

Web communities Selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation Benefits Provide cost-effective, flexible research Helps companies create customer-focused organizations and achieves customer-derived innovations Establishes brand advocates Offers real-time results

Methods of Conducting Online Surveys(ch9)

Web survey systems -Designed for web questionnaire construction and delivery Google consumer surveys -Do-it-yourself web surveys Online panel providers -Pre-recruit people who agree to participate in online surveys

Individual Influences on Consumer Buying Decisions

While individuality impacts a person's susceptibility to social influences, factors such as gender, age, life cycle stage, personality, self-concept, and lifestyle also play important roles in consumer decision making Individual characteristics are generally sable over the course of one's life

Strategic alliance (strategic partnership): (ch7)

a cooperative agreement between business firms Types: Licensing or distribution agreements Joint ventures Research and development consortia Partnerships Formed to strengthen operations and better compet Relationship commitment,Trust

North American Industry Classification System (NAICS): (ch7)

a detailed numbering system developed by the United States, Canada, and Mexico to classify North American business firms by their main production processes Number, size, and geographic dispersion of firms can be identified Data can be converted to market potential and share estimates and sales forecasts Can identify firms that may be prospective users of a supplier's goods and services

Field service firms

a firm that specializes in interviewing respondents on a subcontracted basis A typical marketing research study involves data collection in several cities, which may require the marketer to work with a comparable number of field service firms Provide focus group facilities, mall intercept locations, test product stores, and kitchen facilities to prepare test food products

Relationship commitment: (Ch7)

a firm's belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it indefinitely

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 is typically measured as a combination of occupation, income, education, wealth, and other variables. Marketers are interested in social class for two main reasons: Indicates which medium to use for promotion Knowing what products appeal to which social classes can help marketers determine where to best distribute their products

Subculture:

a homogeneous group of people who share elements of the overall culture as well as cultural elements unique to their own group In the United States alone, countless subcultures can be identified, and many are concentrated geographically. The growing Hispanic population of United States has made South and Central American subcultures a prime focus for many companies with large marketing budgets.

Perceptual mapping (ch8)

a means of displaying or graphing the location of products, brands, or groups of products in customers' minds Where do you compare in the costumers mind to other companies. Do people think you have low quality or lack in aesthetic. You cannot lie about your qualities, you have to actually be better and be able to compare.

Product differentiation (ch8)

a positioning strategy that some firms use to distinguish their products from those of competitors What really makes your company different than other ones, and what makes yours better? You want people to want to be associated with your brand

80/20 principle:( ch8)

a principle holding that 20 percent of all customers generate 80 percent of the demand Frequency/loyalty programs aim to develop customers into heavy users

Consumer product: (ch7)

a product bought to satisfy an individual's personal wants or needs

Business product (industrial product): (ch7)

a product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers The key characteristic distinguishing business products from consumer products is intended use and not physical form

Family Life Cycle Segmentation (ch8)

a series of stages determined by a combination of age, marital status, and the presence or absence of children -Consumption patterns among people of the same age and gender differ because they are in different stages of the family life cycle -The horizontal flow shows the traditional FLC

Cannibalization: (ch8)

a situation that occurs when sales of a new product cut into sales of a firm's existing products

Content marketing: (ch7)

a strategic marketing approach that focuses on creating and distributing content that is valuable, relevant, and consistent This strategy has played an important role for B-to-B marketers.

Multisegment targeting strategy(ch 8)

a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each A firm that chooses to serve two or more well-defined market segments and develops a distinct marketing mix for each Example: P&G offers 18 different laundry detergents, each targeting a different segment of the market. A risk of multisegment targeting is cannibalization: a situation that occurs when sales of a new product cut into sales of a firm's existing products

Concentrated targeting strategy (ch8)

a strategy used to select one segment of a market for targeting marketing efforts A firm selects a niche for targeting its marketing efforts. Because the firm is appealing to a single segment, it can concentrate on understanding the needs, motives, and satisfactions of that segment's members and on developing and maintaining a highly specialized marketing mix

market segment(ch 8)

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Buying Centers(ch7)

all those people in an organization who become involved in the purchase decision Number of people involved varies with each purchase decision Do not appear on formal organization charts

Optimizers (ch8)

business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one 1/2 purchasing profiles.

Satisficers: (ch8)

business customers who place an order with the first familiar supplier to satisfy product and delivery requirements

Major equipment (installations): (ch7)

capital goods such as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and -Depreciates over time and often custom-designed =Personal selling is an important marketing strategy

Business versus Consumer Markets(ch 7)

ch7. slide 16

Repositioning (ch8)

changing consumers' perceptions of a brand in relation to competing brands Sometimes products or companies are repositioned in order to sustain growth in slow markets or to correct positioning mistakes

Consumer markets: Segmentation bases(variables)(ch 8)

characteristics of individuals, groups, or organizations An inappropriate segmentation strategy could lead to lost sales and missed profit opportunities Markets can be segmented using a single variable or several -Geography -Demographics -Psychographics -Benefits sought -Usage rate( how frequently someone buys a product,

Secondary data:

data previously collected for any purpose other than the one at hand Internal sources of secondary data include: the company's websites, annual reports, reports to stockholders, blogs, product testing results, YouTube videos, social media posts, and house periodicals composed by the company's personnel for communication to employees, costumers or others Sources of secondary data outside of the company include: government agencies, trade and industry associations, business periodicals, news media

Positioning: (ch8)

developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general

Usage-rate segmentation: (ch8)

dividing a market by the amount of product bought or consumed -Segmenting by usage rate enables marketers to focus efforts on heavy users or to develop multiple marketing mixes aimed at different segments.

Accessory equipment: (ch 7)

goods such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment -Portable drills, power tools, microcomputers, and computer software

Exhibit 6.2 Continuum of Consumer Buying Decisions

look at ch 6

Niche: (ch8)

one segment of a market

market(ch 8)

people or organizations with needs or wants and the ability and willingness to buy

Exhibit 9.5 Types of Samples

probability samples and nonprobability samples

Demographic segmentation:(ch 8)

segmenting markets by age, gender, income, ethic background, and family life cycle Demographic information is widely available and often related to consumers' buying and consuming behavior.

Psychographic Segmentation (ch8)

segmenting markets on the basis of personality, motives, lifestyles, and geodemographics Personality Motives Lifestyles Geodemographics -Example: People buy clothes that they feel represent their personalities and give others an idea of who they are. -Motives: Marketers might appeal to emotional, rational, or status-related motives, among others. -Example: Carmakers might appeal to customers with status-related motives, whereas makers of baby product might appeal to emotional motives. -Lifestyle segmentation divides people into groups according to the way they spend their time, the importance of the things around them, their beliefs, and socioeconomic characteristics such as income and education.

Geodemographic segmentation: (ch8)

segmenting potential customers into neighborhood lifestyle categories It helps marketers develop marketing programs tailored to prospective buyers who live in small geographic regions, such as neighborhoods, or who have very specific lifestyle and demographic characteristics. It combines geographic, demographic, and lifestyle segmentation.

Exhibit 7.2 Buying Center For Computer Purchases (ch 7)

slide 23 ch 7

Big data

the exponential growth in the volume, variety, and velocity of information and the development of complex, new tools to analyze and create meaning from such data Gathered both online and offline Data visualization uncovers subtle patterns from billions of pieces of data Enables managers to share and explain their findings

Business marketing (also called industrial, business-to-business, B-to-B, or B2B marketing): (ch7)

the marketing of goods and services to individuals and organizations for purposes other than personal consumption Example: Sale of a PC to a college or university

Position (ch8)

the place a product, brand, or group of products occupies in consumers' minds relative to competing offerings

market segmentation(ch 8)

the process of dividing a market into meaningful, relatively similar, and identifiable segments or subgroups

Benefit segmentation: (ch8)

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

Marketing Research

the process of planning, collecting, and analyzing data relevant to a marketing decision -Links the consumer, customer, and public to the marketer through information -Provides data on the effectiveness of a marketing mix and insights for necessary changes -It is the main data source for management information systems Marketing research has three roles: Descriptive Gathering and presenting factual statements What is the historic sales trend in the industry? What are consumers' attitudes toward a product? Diagnostic Explaining data What was the impact on sales after a change in the package design? Predictive Addressing "what if" questions "What if" questions, such as how can descriptive and diagnostic research be used to predict the results of a planned marketing decision?

Motivation

when consumers buy products, they do so to fulfill some kind of need Motive: a driving force that causes a person to take action to satisfy specific needs Maslow's hierarchy of needs: a method of classifying human needs and motivations into five categories in ascending order of importance: physiological, safety, social, self-esteem, and self-actualization