buyer behavior exam 3

Role of Marketing Communications

"Marketing communications represent the voice of the company and its brands; they are the means by which the firm can establish a dialogue and build relationships with consumers." -influence and respond

5 dimensions of marketing communication

1. customization (mass or individual)(like a website is often customized to your actions, or like tik tok changes fyp) 2. level of interaction (1 way or 2 way) (1 way like broadcast) (2 way like twitter communnication) 3. target of marketing communcation (customer also the channel) 4. perception of the source (direct or indirect) (sales or public relations) 5. control (your sales people or is it a retailer that your partnered with) (via commercials or product placement)

What is Advertising?

"Non-personal forms of communication, conducted through paid media under clear sponsorship." -1 way via the consumer -high control -people tend to not like as much so brands try to be entertaining

external search increases as

- Expected costs decrease- Expected benefits increase

how does number of argument effect low involvement (assigment)

- number of arguments presented as an important variable -The three strong arguments did not draw out significantly more agreements than the three weak arguments -when shown 6 arg with weak and strong strong created more agreement

Advertising Goals

-Create awareness -Convey information -Develop positive associations -Increase preferences -Build the brand

Social Marketing Goals

-Gain WOM (word of mouth) -Attract (positive) attention -Increase engagement -Build brand associations

pricing stratgey econ approach:

-Maximizes short-run profits subject to assumptions about demand and costs -Is determined after product design & quality are fixed -Assumes a "rational" consumer (elephant)

sludge

-The opposite of nudge -Creating friction to make it less likely to continue Grubhub: if you ever try to take advantage of offer they dont make it easy

seconf hand information

-adversting -word of mouth -reviews

B2B (jaime speaker)

-appeal to invidiual -purhcase from speicifc person -service is expected and assessed

B2C (jaime speaker)

-appeal to masses -purchase from retailer or entity -service and support rarley anticpated

Authority (social influence reading)

-desire to agree with an expert There is nothing wrong with such claims when they are real, because we usually want the opinions of true authorities. Their insights help us choose quickly and well.

Liking (social influence reading)

-desire to agree with people you like People prefer to say yes to those they like.

reciprocation (social influence reading)

-desire to give back in "kind" when you receive a gift when people feel obligated to repay in some form like for gifts or free things (charities use this)

Consistency (social influence reading)

-desire to maintain consistency in what you have done the desire to be, and to appear, consistent. modifies behavior

How do people (mis)believe?

-disrtaction -repitition (more fimilar is likely to be true) -delays: the sleeper effect ("False Tag" becomes dissociated from content)

cost plus pricing pros

-easy to communicate and justify -simple to implement -Can create cost leadership (e.g., Costco) if the company has competence in cost control

tthe value function (mental accounting reading)

-explained how someone makes economic decsions -representation of some central components of the human percived pleasure machine

direct channel strength

-high quality contact -dedicated to products -fast feeback loop

for public realtions to work

-info must be newswothry

B2B Buyer's underlying motivators (jaime speaker)

-keep thier job (get paid) -get promoted (get made) -be attractive to others (get hugs)

indirect channel strength

-larger coverage -reach new target -lower fixed costs

indirect channel weakeness

-less focused on your product -may limit customer info

B2B buyers mindset (jaime speaker)

-motivators -trust is criticle (buyer must have confidence)

first hand experince

-people have most exposure to this -interacting with brand -highly pursasive

disatvantages of advertising

-people try not to hear ads -consumers get annoyed

direct channel weakness

-smaller coverage -higher fixed costs

6 Steps for eCommerce Go-to-Market Strategy (rachel speaker)

0. Right brand, right product 1. Right value, right pricing: prepare to transfer value online 2. Fix your digital shelf experience 3. Make sure all analytics set up and in place 4. Create test-and-learn plan and begin piloting 5. Move marketing dollars to effective channels 6. Review successes and build virtual bundles in response

4 Basic Components of Believing:

1. Comprehension = Belief First you believe, only then can you unbelieve 2.Unbelieving is effortful 3."If it's there, it has to be true" 4. The more familiar, the more likely that it is true

misbeleiving lead people to make incorrect refrences

1. Literal vs. Figurative Meanings -Brand X may relieve your pain 2. Comparison Omission -Brand X relieves pain better -500 Doctors recommend brand X 3. Piecemeal Comparisons -Brand X works faster than Y and longer than Z

who has influence

1.connectors 2. mavens (experts) 3.sales people (celebrities)

Step 2: Fix your digital shelf experience (rachel speaker)

2. Make it appropriate for our category and shopping experience

Step 3: Set up KPI tracking and analytics (rachel speaker)

3. Make sure all analytics set up and in place Have a plan for what you will measure over time & why it's relevant Ensure you can measure and track KPIs (tablestakes)

Step 6: Assess supply chain and margin preservation ops (rachel speaker)

6. Review successes and build virtual bundles in response

Scarcity (social influence reading)

A great deal of evidence shows that items and opportunities become more desirable to us as they become less available.

What is Sales Promotion?

A short-term incentive designed to encourage earlier or stronger target behavioral response

What is "Promotion"?

All elements in an organization's marketing mix that facilitate exchanges by establishing shared meaning with the organization's customers. -shared meaning: more of a conversation then ad

Step 4: Develop test and learn plan, and pilot (rachel speaker)

Approach test-and-learn as a science as well as art; nobody knows for certain what will work, and anyone that claims to is either lying or selling something Before you scale marketing, first test-and-learn and pilot Once you figure out what's working, you can make decisions with confidence Move small audiences of traffic to the site and then make sure you're driving those audiences to the right areas

jaime speaker exercise

Assess the interests of a buyer, based on their role. 1) Plant Manager - Maintain manufacturing uptime- Reduce waste- Maximize production yields 2) Head of IT- Keep the network running- Maintain network security 3) Procurement- Get good deal compared to any similar or previous contracts- No drama or questions through the life of the contract

2C vs B2B (jaime speaker)

B2B buyer is an "exaggerated" buyer -B2B selling is far different from B2C -B2C buyers are rather detached from sellers

Attitudes (promotion)

Based on inherited or learned association between object and goals -Association / Spreading activation -Categorization (i.e., good vs. bad) -Influence perception

cost plus pricing

Cost of manufacturing that ads x amount to it to make profit Mark cuban Online drug store and everything is clearly priced to manufacture and what it sells at When you think about drugs its a necessity so you can price it high Cuban has a drug comapany with way lower pricing because it uses cost-plus

in social media and branding Communications management strategy must recognize diversity of consumer goals because

Customers value involvement but... Only some consumers want to get involved With only some of the brands they use And only some of the time

What are Events & Experiences?

Designing, developing, or sponsoring a themed activity, occasion, display, or exhibit to promote a product, cause, or organization.

Product is #1 but...

Distribution, price, and promotion matter

dynamic pricing

Ex: airline pricing changes based on days of the week -adjusts prices several times a day

Event Marketing Goals

Gain awareness Build relationship with target Create or reinforce particular associations Develop involvement Entertain

Goals of Public Relations

Generate attention Increase credibility Reach harder to find audiences Tell a story Build brand associations

price cloaking

Hiding the price Fuel surcharges• Shipping and handling• Mattress sales

how does price influence disposition

If you have a phone thats fine but the newer phone that just came out has a discount Clothes you bought and you dont wear it anymore but it sits in your closet because it was expensive

Sales Promotion Goals

Influence behavior: • Generate trial• Attract new users (switchers)• Increase usage• Maintain loyalty• Increase effort (e.g., door busters)

Group sales

Initiator -- person who brings up the need or idea (Problem recognition) Gatekeeper -- person who conduct info search, controls what info goes to group Influencer -- person who tries to influence outcome of the decision Decider - person or group of people who make final decision. Buyer -- person who makes the actual purchase order User-- person who uses the solution

beyond revenue what do we measure (rachel speaker)

LTV and CAC (customer aquestion costs)

pricing stratgey: physch approach

Maximizes long-run profits based on market evolution and the company's strategic advantages -Is part of evaluating alternative approaches to positioning -Recognizes consumers are boundedly rational

Social Media

Means for consumers to share text, images, audio, and video information with each other and with companies, and vice versa

Internal Search =

Memory Search • Retrieve satisfactory prior solution • Retrieve information to construct solution

Step 5: Shift marketing dollars to what's working (rachel speaker)

Once you know what channels and tactics are working, prioritize these and push funds to them to get the best results

Social Validation (social influence reading)

One fundamental way that we decide what to do in a situation is to look to what others are doing or have done there. If many individuals have decided in favor of a particular idea, we are more likely to follow, because we perceive the idea to be more correct, more valid.

price refernece points : extreme prices ex

Patreon account Sign up, support the podcast and receive bonus stuff They have different membership levels They created a absurd level of payment Did this to make the other prices seem reasonable

selective exposure

People have control over what they will be exposed to: -search (search for info) -avoid(Banner ads, Pop ups Zapping, Zipping) -brand try to find interesting way to avoid

skimming pricing

Premium price it and recognize that you can segment based on willingness to pay Start high and then drop the prices for the other consumers waiting to pay Recognize heterogeneity in the market place -apple

Step 1. Right value, right pricing: Prepare to move online (rachel speaker)

Prepare company to transfer value online by understanding where to play and how to win. Are there unique marketplace opportunities that arise by entering eCommerce? Unique challenges? Are consumers willing to buy your product online because they want a discount, or because it's difficult to find?

cons to cost plus pricing

Price is contingent on (changing) cost structures. - Based on a forecast (i.e., a guess) about sales. -Ignores customers' willingness to pay and competitors' prices

ecommerce conversion (rachel speaker)

Traffic x AOV x Conversion = Revenue AOV: Average Order Value. Changes here are mainly related to product offerings and typically require new products or features (expensive and requires MUCH longer lead time).

Reference points: joint vs separate evaluation ex

Survey: asked people to evaluate some offering of ice cream One case: shows people two different ice creams side by side Unless dieting or other reason: in general more is better than less Asked people what is your willingness to pay The bigger one has a higher willingness to pay This is joint evaluation Separate evaluation would be: The shorter one gets higher willingness to pay without seeing the bigger one Also dependant on presentation 8 oz doesnt seem that great Elephant mode 5 oz seems way more appealing when 8 oz isnt there

What is Public Relations?

The development and execution of any of a variety of programs designed to build awareness and the image of the company or product, generally through non-paid avenues

Web rules, but retail matters.

We see people adding brick and morter Amazon storefront There's a whole part of the market that likes to do things in person vs online Demand: if you need something today Additional services like the people that work there that give you advice on product

how does number of argument effect high involvement (assigment)

The study also showed that the number of arguments had less of an effect on high-involvement consumers. The number of arguments for high involvement consumers had less significance than did the quality of the arguments when it came to their agreement. This was shown through the fact that the six arguments presented to them did not produce more agreement than it did with the three strong arguments

how does quality of argument effect high involvement (assigment)

The study showed that argument strength was a significant variable in affecting high involvement consumers. When consumers were presented with high involvement conditions, three strong arguments showed more agreement than three weak arguments. The six argument message also did not produce more agreement than the three strong arguments did

Q: Why do some start-ups succeed and others flop?

The way the failures die is they run of money. So what could cause them to run out of money? They can either not make something people want or they can be bad at selling it." -marketing doesnt matter if there is not a good product

Nudge: shape the path

Things that you can do to make process easier Nudge: Passive interventions to help people make better decsions Ex: if you happen to use the urinal there is a problem where not everyone hit the mark (spillage) → there was a little fly painted on urinal and if you hit the fly then there is no spillage Passive becuase no one telling you to do it but its a nudge

refernce point joint vs seperate (drive to save 5 example)

Would you drive to save 5 when 115 to 110 No because its not worth 10 min to save 5 but Yes when 10 to 5 Shown on presentation as joint but people see it separately Both of the decisions are the same but the feelings are different The bottom one feels like a good deal Elephant says yes to one and no to the other The rider either says yes to both or no to both

misbeleiving and the elephant problem

Wrongfully Inferring Causality (e.g., affirmation of consequent) -Active people take brand X Unclear Definitions -Ocean Spray (food energy) Misleading Visuals

direct channel

a distribution channel in which producers sell directly to consumers -company owned, sales force, internet

Price influences information and search becaus

a lot of searches price is a factor Better solutions tend to get priced higher A lot of search tends to be finding a lower price

value to target market=

benefits to target market - cost to target market

how to appeal to high involvement central

detailed and information, strong argument

Pricing is the firm's attempt to

capture some of that value in the profits it earns.

what route of persuasion is relevant to high involvement

central route The quality of the arguments was more important to them than the number. We can see here that their central route was used here as they were evaluating the facts and information over their emotion. They were able to experience attitude change through issue-relevant thinking

Consumer behavior is critical to

channel design hen in doubt, ask: "Um, where are our customers?" - Your professor

"Product, promotion, and distribution...are a firm's attempt to

create value in the marketplace.

transaction utility (mental accounting reading)

difference between the amount paid and the reference price for the good (that is the regular price consumers expect to pay)

indirect channel

intermediaries are inserted between the producer and consumers and perform numerous channel functions

What is eCommerce? (rachel speaker)

eCommerce is the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions

peripharl route is the (rider or elepahnt)

elepahnt

how to appeal to low involvement peripharl

emotional

goal of promotion and exposure

find ways to cut through clutter -influence attention (goal relevance, suprise, salience (bein eye catching), position (ex: where you place print ads)

Sometimes the decision process occurs in sequence (the adaptive decsion maker)

first consideration set (elepahnt) -non compensatory methods reduced consideration set (rider) -compensatory method -choice

the value function is defined over (mental accounting reading)

gains and losses relative to some refernce point -People are highly tuned into the information at their disposal -Ex reference point: what do I normally pay for this item

sales tend to be which involvement

high

what is mental accounting (reading)

households that read and summarize financial transactions in books and analyzing and verifying results

low effort Peripheral Route Processing

occurs when someone evaluates a message, such as an advertisement, on the basis of physical attractiveness, background music, or other surface-level characteristics rather than the actual content of the message.

external search

outside sefl -Marketer-dominated• Friends, family, unbiased reports

what route of persuasion is relevant to low involvement

peripheral route The studies show that with low involvement in the change, consumers relied more on feelings and emotions. They were able to experience attitude change in the absence of issue-relevant thought

information search order

problem recognition, information search, internal search, external search

promotion and the decsion making process (problem, info search, consumption)

problem: a lot of communications talk about solving problem (educating about products that can solve problem) info search: letting people know where to find your product consumption: message people who own the product already, good reviews can promote product

channel of distribution

processes and partners that move a product from producer to consumer -answers where and how product will be obtained

way to avoid selective exposure

product pllacement -put in movie or tv

how does quality of message effect low involvemnet (assigment)

quality was not a significant variable in affecting the low involvement consumers attitudes. -they agreed more when six arguments were presented to them rather than either of the three.

Six basic tendencies of human behavior come into play in generating a positive response: (reading)

reciprocation, consistency, social validation, liking, authority and scarcity.

types of pricing

skim, dynamic, subscrptions, cloak

If effective product development, promotion, and distribution sow the seeds of business success, effective pricing is

the harvest."

high effort central route of pursauaion

the process by which attitudes are formed or changed as a result of carefully scrutinizing and thinking about the central merits of attitude-relevant information.