Marketing Study Guide Exam 2

What is the best predictor of future behavior?

past behavior

What is a positioning statement?

"A statement that summarizes company or brand positioning using this form: To (target segment and need) our (brand) is (concept) that (point of difference)."

Be aware of primary and secondary data sources. Which would companies typically use first?

"Primary data Information collected for the specific purpose at hand." - data you collect - Research approach - Contact method - Sampling plan - Research Instruments "Secondary data Information that already exists somewhere, having been collected for another purpose." - data other people collect - Relevance - Accurate - Current - Impartial

What is a product and what are the product "levels"

"Products are a key element in the overall market offering" Three levels - Customer value - what is the consumer buying - Actual product - core benefit of the product, (design, qaulity, features, packaging, brand name) - Augmented product - after sale service, warranty, product support, credit

What is a value proposition?

"The full positioning of a brand—the full mix of benefits on which it is differentiated and positioned."

What is a buying center?

"all the people involved in the buying decision, and the buying decision process. The model shows that the buying center and the buying decision process are influenced by internal organizational, interpersonal, and individual factors as well as external environmental factors." roles for example -Users -Deciders -Gatekeepers -Influencers -Buyers

What does marketing look like that tries to influence these stages? (if I were to give you an ad, could you pinpoint the stage that ad is targeting)

(Break down each stage)

Be aware of the research approaches and contact methods for primary data collection.

(EXPLORATORY) "Observational research Gathering primary data by observing relevant people, actions, and situations." "Ethnographic research A form of observational research that involves sending trained observers to watch and interact with consumers in their "natural environments." IT and Data Mining (DESCRIPTIVE) "Survey research Gathering primary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior." (CAUSAL) "Experimental research Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses." Contact methods - Mail - telephone - personal - online

"I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination."

- David Ogilvy

"The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself."

- Peter Drucker

What is the self-concept? What is the actual and ideal self-concept? Generally, which form of the self-concept should be used in marketing? Why? What could make it so that the ideal self-concept is used? What is brand personality and how does it relate to a consumer's self-concept?

1) Actual VS. Ideal "The idea is that people's possessions contribute to and reflect their identities—that is, "we are what we consume." (Actual VS. Ideal) 2) actual self concept is how someone sees himself now. Ideal self concept is how someone would like to see themselves 3) we should use our actual self concept, it is more likely to get favorable responses 4) Ideal works best on people with low self esteem 5) "A brand personality is the specific mix of human traits that may be attributed to a particular brand." 5 TYPES - Sincerity - Excitement - Competence - Sophistication - Ruggedness

1) What is an attitude? 2) How stable is it and how easy is it to change? 3) Once an attitude is stable, what causes it to change?

1) Attitude - "A person's relatively consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea." 2) "changing one attitude may require difficult adjustments in many others. Thus, a company should usually try to fit its products into existing attitude patterns rather than attempt to change attitudes." 3)

Understand how --- 1)cultural, 2)social, 3)personal, 4)psychological factors influence buyer behavior.

1) Culture - "The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions." EX. "For example, the cultural shift toward greater concern about health and fitness has created a huge industry for health-and-fitness services, exercise equipment and clothing, organic foods, and a variety of diets." 2) Social - "A consumer's behavior also is influenced by social factors, such as the consumer's small groups, social networks, family, and social roles and status." EX. "an aspirational group is one to which the individual wishes to belong, as when a young basketball player hopes to someday emulate basketball star LeBron James and play in the NBA." 3) "A buyer's decisions also are influenced by personal characteristics such as the buyer's occupation, age and life-cycle stage, economic situation, lifestyle, and personality and self-concept" EX. 4) Psychological - "A person's buying choices are further influenced by four major psychological factors: motivation, perception, learning, and beliefs and attitudes."

What is a product, product line, and product mix? (lecture and pg 213-214) How are product lines determined? (lecture) What is length, width, and depth in relation to a product mix? In what ways can a line be stretched? (lecture and pg 213) What is cannibalization? (lecture and pg 213)

1) Product line - A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges. Product Mix - The set of all product lines and items that a particular seller offers for sale. 2) 3) Product mix length - total number of items a company carries within its product lines Product mix depth - number of versions offered for each product in the line Product mix width - number of different product lines the company carries 4) reaching for extra profits, satisfying dealers, using excess capacity, being the leading full-line company, and plugging holes to keep out competitors 5) Cannibalization (over line stretching/filling - eating up sales of the company's own existing products

What are the three generic types of organizational purchases? How do these affect marketing?

1) Straight rebuy - A business buying situation in which the buyer routinely reorders something without any modifications. Modified rebuy - A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers. New Task -"A business buying situation in which the buyer purchases a product or service for the first time." 2) these affect marketing by simply giving feedback from other businesses on a product, we are able to predict what business expect of a product given their purchase decision. (just a guess)

What is the continuum between mass and micro marketing? What does mass marketing attempt to do? Is there anyone who truly mass markets?

1) Target (micro) - varying some element of the mix for a target market (rifle approach) Mass - Aiming at "everyone" with the same mix (shotgun approach) 2) Mass marketing trys to target everyone and get everyone to buy something 3) Coke and Alabama power try to reach everyone (but coke does do some segmentation)

1) How does word-of-mouth and opinion leaders influence people? 2) How would these play into the purchase decision process

1) WORD OF MOUTH ---"The personal words and recommendations of trusted friends, family, associates, and other consumers tend to be more credible than those coming from commercial sources, such as advertisements or salespeople." 1) Opinion LEADER - "A person within a reference group who, because of special skills, knowledge, personality, or other characteristics, exerts social influence on others." 2) These would play into the purchase process because if you hear someone you trust or someone who is knowledgeable about a product you are interested in it can reassure your purchase decision or help encourage a purchase choice geared toward a product.

Which is typically cheaper/faster? Which is typically realivent? Which typically provides more accurate data? Which is typically more time consuming?

1) secondary is cheaper 2) primary 3) Primary 4) Primary

What is, usage rate, Pareto principle, share of wallet, and loyalty matrix? What kind of variables are these? What is their purpose? How can you measure share of wallet?

1) usage rate - the quantity consumed or patronage during a specific period (light, medium, heavy users) 80% of your results come from 20% of your inputs. 80% of your revenue comes from 20% of your customers. Share of wallet is the percentage of a customers category and industry spending that they spend with a company Loyalty matrix is the pic 2) THESE ARE BEHAVIOR VARIABLES 3) These are used to help predict user behavior and maximize user revenue 4) You can measure share of wallet with surveys and third party data

What are the two "Key ideas" of Positioning

1. You can only own one position 2. A position can only be owned by one brand

What are the criteria in creating segments? Be able to name all of the criteria and understand why each criteria is used.

1.Measurable (Can you find them?) 2.Accessible (Can you get to where they are?) 3.Substantial (Is it worth it?) 4. Differentiable (Is the segment truly different?) 5.Actionable (Can you get a response?)

In relation to big data, what percentage may be seen as actionable?

99.999%

What is sampling and why is it used? What are two problems that can arise form sampling and what do we use to overcome these problems? Which of these two problems can still persist in big data?

A sample is a segment of the population selected to represent the population as a whole. Bias - random sampling Error - Sample Size We try to use these to counteract these problems. We use probability samples: We use non profitability samples: bias

What is sampling and why is it used? What are two problems that can arise form sampling and what do we use to overcome these problems? Which of these two problems can still persist in big data?

A sample is a segment of the population selected to represent the population as a whole. Bias - random sampling Error - Sample Size We try to use these to counteract these problems. We use probability samples: We use non profitability samples: random sampling

What kind of variable is big data likely to be based on?

Behavior (all things you are actually doing)

What is the long tail enabled by?

Breaking free of the constraints of physical space, finding ways to talk to market segments economically, and new distribution systems

What do you do if a segment is not profitable?

Broaden market definition to find opportunity- try to match the firm's resources and objective (the market should be bigger than the firm's present product market but not so big that it couldn't expand and become an important competitor) ----- quit customizing it, or walk away

Chapter 5

Buyer Behavior

SEGMENTATION

CHAPTER 6

What are the differences between Consumer, convenience, shopping, specialty, and unsought products? How do these types influence their marketing? ***

Consumer product - a product bought by final consumers for personal consumption Convenience product - a consumer product that customers usually buy frequently, immediately, and with minimal comparison, and buying effort Shopping product - A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style. Specialty product - A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort. Unsought Products - A consumer product that the consumer either does not know about or knows about but does not normally consider buying.

What is the difference between correlation and causation? What is the benefit of each? What is a downfall of correlation?

Correlation- things tend to happen together/at the same time. Causation- one thing causes another. Example of useful correlation- Big Data- weather can affect sales- Wal-Mart puts umbrellas at the front of the store when its raining. People also don't like to eat berries when it's really windy. They did things to direct people to buy berries on days when it's calm. Downfall- before you jump to the conclusion that one is causing the other- you need to consider a compound (a third variable) that could be causing both.

chapter 7 NOT ON TEST

DONT STUDY BEYOND HERE

What is the four-step approach to marketing research?

Define the problem Develop the plan Collect and analyze the data Interpret and report

What are the three types of marketing research?

Exploratory research -Marketing research to gather preliminary information that will help define problems and suggest hypotheses. Descriptive research -Marketing research to better describe marketing problems, situations, or markets, such as the market potential for a product or the demographics and attitudes of consumers. Causal research - Marketing research to test hypotheses about cause-and-effect relationships.

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What are two things that are stressed by segmentation?

Meaningful groups and customized marketing mix

If you want to create segments that will be inclined to purchase more, what must you segment on (i.e. what did the Miller Lite case study tell us?)

Miller Lite "Catfight" commercial- clearly targeting men with this commercial (women fighting with little clothing over beer. In 2004, sales of Miller Lite were up to 10.5% by volume, compared with just 0.9% for the rest of the industry and 3.7% for Bud Light). What they have shown- when you segment based on why people might like a commercial- it does not drive behavior. When companies go overly sexual without any info on the product. It does not drive behavior. WE NEED TO SEGMENT ON WHY PEOPLE PURCHASE NOT ON PSYCHO-GRAPHIC VARIABLES.

What is positioning and differentiation?

Positioning - Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers. Differentiation - making your product stand out differently from a competitor

What is the problem with demographic variables? Does this problem also hold for geographic variables?

Problems with demographics and geographic- you could think that you have a homogenous group but you could have a lot variability within the group

Chapter 4

Research

o What are the forms of selective perception? How do these relate to marketing phenomenon?

Selective Perception - The process by which a person filters information Selective attention --- How we pay attention Selective distortion --- How we interpret Selective retention --- How we remember Marketing Phenomena simply means things that happen in Marketing. Like a product launch, a sales increase. an advertising campaign, a price increase or reduction - these are events that involve marketing activities or have an impact on the marketing of a product COMPILED ANSWER --- These three forms of selective perception directly impact the awareness of a consumers ability to recognize a product given in the marketing phenomena. By knowing how an market acts in takes in information, the more equipped marketers are at being able to reach those audiences.

What is Segmentation?

Separating prospective customers into smaller groups based on common needs and/or response to marketing actions (must be reached economically)

How are services different from goods?

Services are intangible products - Intangibility - Services cannot be seen, tasted, felt, heard, or smelled before they are bought. - Inseparability - Services are produced and consumed at the same time and cannot be separated from their providers. - Variability - The quality of services may vary greatly depending on who provides them and when, where, and how they are provided. - Perishability - Services cannot be stored for later sale or use.

Which research approach is most common? Which is most suited for causal research?

Survey Research Experimental

What does the black box represent? Why do we need to understand the black box?

The black box represents the "why" in someones purchase decision. Represented by Buyer Characteristics and Buyers Decision Process It is important to understand the black box, because this is ultimately what effects a consumers choice to buy something.

What is Derived demand

The demand for industrial products and services is driven by demand for consumer products. based on final consumption

What is the long tail?

The niche products that are less popular but satisfy the needs/wants of a specific population

What is involvement? What Causes it? How does it relate to Celebrity Endorsers?

The personal, social, and/or economic significance of a purchase to a consumer. When the stakes or value of the product are significantly important to the consumer The image of the celebrities transfers over toward the brand. This helps build brand image.

How does segmentation dehumanize people?

The practice of denying, or charging more for, services such as banking, insurance, access to health care, or even supermarkets to residents in particular, often racially determined, areas.

How is organizational buying different from consumer buying?

consumer buying means the day to day purchases by individuals to satisfy their daily needs. "Business purchases often involve large sums of money, complex technical and economic considerations, and interactions among people at many levels of the buyer's organization. The business buying process also tends to be longer and more formalized."

If I were to give you a form of data collection (e.g. mystery shopper) as it relates to a certain marketing situation. Could you identify what kind of research is being undertaken?

hmmmm

If I were to give you a market, could you pick a product or marketing avenue that would best follow the idea of the long tail (i.e. which takes advantage of those technological factors that enable the long tail?)

hmmmmm think on this

What are common differences in marketing research of large firms and small businesses

large firms=systems allow managers to get info they need directly and quickly and tailor it to their own needs Small businesses= secondary data collection, observation, surveys and experiments

Where are the products with the majority of demand?

the head

Based on the theory of long tail, where does the majority of potential revenue fall,in the head or the tail?

the tail

What is the goal of most marketing research?

uncover unique (and actionable) customer (and market) insight.

Not on the test What did we learn from the Microsoft Vista case study in regards to marketing research? o In general, is there too little or too much data? o In regards to the Microsoft case study and the use of marketing data, what are the things we need to do and understand to ensure we are actually using true customer insights and not a misrepresentation or false information?

• For new insights, new methods are sometimes needed. Every method has its limitations. Even new methods and new data can still lead you into trouble so a balanced approach using multiple methods and data is needed. Microsoft's sample group said they were concerned with privacy but the pop up they created to ease this concern was a huge bust

What are geographic, demographic, behavioral, or psychographic variables? Which is generally hardest to collect? Which is generally the easiest? Which ones do companies typically utilize the most for segmentation? Which one do companies typically utilize the least?

•Geographic (region, city size, statistical area) --- EASIEST TO GET 88% (THIS ONE FOR LEAST SEGMENTATION) •Demographic (gender, age, marital status) 53% •Psychographic (personality, needs, values) --- HARDEST TO GET 43% •Behavioral (usage rate) 65% (THIS ONE FOR MOST SEGMENTATION) (COME BACK TO THIS ONE)

What are perceptual maps?

•Visual representation of consumer perceptions and preferences •Grid with attributes on two different axes •You "map" your brand along with competitor brands to get a sense of the market