MAR 301 Midterm

How easy it is to influence people's "neutral reference point" or "anchor"

It is very easy -People with a social security number would base their answers (with numbers) based on the SS#

Standard bases for market segmentation - examples

geographic (by place, market density, climate, language and more to customize to local preferences), demographic (age, gender (sports companies are now targeting women), family, income, ethnicity, occupation, etc.), geo-demographic (assuming that people that live near each other are similar in their purchasing), psychographic (personality such as introvert or extrovert) lifestyle, beliefs, and values), life cycle stage (new parent, teen (social media vs email and what not), etc.)

How does the idea of positioning and perceptual mapping relate to "Categorization theory

Categories are mental groupings of similar objects, events, and people. These are developed by finding what's most common in a group of stuff. But they have fuzzy boundaries and can be hard to figure out (what to save from a burning house) -Perceptual maps helps people group things together (in categories) and helps the customer and marketer come up with the correct dimensions of the map

What is the general 5-step model of consumer decision making

(not ALWAYS in sequence) 1. Need recognition: current product isn't performing properly, you want something better. Latent needs 2. Information search: internal (what do i know/remember/retrieve info) and external (this is influenced by attention, motivation, involvement, etc). You'll do more research if it's more expensive and important and with greater risk 3. Evaluation of alternatives (evoked set) 4. Purchase (little involvement, or low/oderate involvement, or high involvement) 5. Post-purchase behavior

Utilitarian, Low Involvement, Ego Intensive categories of consumer purchases

*Drawing -It shows how we shop differently based on the thing we're buying.

Draw and explain the typical product Life Cycle curve

*Drawing on Graphics Page. -Intro: the product is launched and promoted. -Growth: sales grow, brand is building -Maturity: sales grow but at a decreasing rate -Decline: other products may be introduced Why do some Marketers reject the shape of the Product Life Cycle model? Because you can implement additions or changes to a product to keep it's decline from happening. These would be life cycle extensions

What is an Experience Curve, also called a Learning Curve?

*Drawing on graphics page. It shows how when the volume of products produced increases, the cost to produce the products goes down. It relates to competitive analysis and strategy because companies should try to make their cost as low as possible to offer the lowest price.

What is Ansoff's Strategic Growth matrix? Draw it and explain.

*Drawing on graphics page. It shows the different ways you could grow a product based on the newness of the market vs the newness of the product

What is a Perceptual Map, also called Positioning Map?

*Drawing. -A perceptual map is a visual depiction for customer perceptions of competitive products, brands, or companies in a market. How do Marketing Managers use this tool to gain insight about their market? -Looking for gaps in the market to find an unowned market position that is unique and defensible. This will allow product differentiation -They can also see where they are positioned in the customers mind -And also how they compare to other companies in the market in terms of competition. They can see how competitors are perceived and identify their positions How does one define the dimensions, or Axes, of a Perceptual Map? -Analyze the market and define the customer segments -Through the category organization of the customer What three things might a gap in a perceptual map represent? -A trap -Not enough data -An opportunnity

Prospect Theory (Kahneman and Tversky)******

*Drawing. Domain of Gains and Domain of Losses - risk seeking and risk averse behavior -We mentally code all potential decision outcomes as gains or losses Prospect theory utility curve - shape and meaning: shows how people make choices -Losing money is scarier than the pleasure from equivalent gains. That's why the curve in the domain of losses is steeper than in the domain of gains. We will eliminate risky decisions because it'll be harder to deal with if a loss Diminishing pleasure and diminishing pain neutral reference point -The rate at which you gain is higher than the rate at which you get happier -Same with pain, that's why it starts to flatten out -The neutral reference point is a mental anchor that can be set as arbitrary Segregating gains and integrating losses -You want to get gains separately on different occasions, but you want to deal with all of your losses at once Cancellation effect: if the net result is gain. Something is not perfect in the product to you accentuate the big positive to cancel the negative. Paycheck Silver Lining effect: if the net result is loss. Separate the small gain from the large negative. Tax return! Application of prospect theory concepts in pricing strategy -decoy effect?****** Framing and bundling:

What are the 4 C's and 4 P's of Marketing and what do they mean?

-4 C's: Context, Company, Customer, Competition. These stand for the market environment. You have the Customer (you have to understand who you're selling to), the Competition, the Company (what your business does for the consumer), and the Context (what is the situation) -4 P's: Position, Product, Price, and Promotion. This is the marketing mix, it's all the different components of a marketing effort. Position (where it is in the consumers mind), the Product itself, Price (to make and sell, value), and Promotion (how you make it seem)

What is a "market segment"? What is a "target market"? Why are these so important in marketing?

-A market segment is a group taken from a larger population of a market that is supposed to be homogenous -Target market is the specific group of people or organization for which a firm designs, implements a certain marketing mix and product to benefit those in the group -This way, you can better understand your market and allocate resources more efficiently to make more people happy

Conjoint Analysis

-A play on the words "considered jointly" -It's used to figure out what is important in terms of a products features without asking point blank -It's used in new product development or re-design, and it used to remain unobtrusive, holistic, and natural -It's based on ratings or hypothetical profiles of possible choices. It used multi-attribute impact preferences estimates a relationship between multiple attributes and customers preferences to come up with a multi variable equation and find out which variable actually matters the most -Beta weight is how much a singular variable matters and weighs in importance to the consumer. The one that weighs the most is the most important. They represent relative importance -It's better than surveys and interviews because it's less obtrusive and gets the answer the consumer doesn't even know

AIDA model and Hierarchy of effects model of consumer behavior

-AIDA shows how customers decide to buy: Attention, Interest, Desire, Action -Lines up with Hierarchy or effects: Awareness and Beliefs (attention), Attitude to Intention (Interest and Desire), Behavior (action)

Methods of decision process simplification / decision heuristics

-Brand Restrictions -Method of purchase -Geography -Expert recommendation -Published rankings to save time and energy and to reduce risk

Cutoff criteria, attribute weighting, Elimination by Aspects model

-Cut off criteria is how you decide what products are just not going to happen so you can eliminate them by aspects and narrow down your decision -Each product has a weight attribute decided by it's importance and your attitude on it -Non-compensatory is when you stay rigid and make sure that the products must match criteria -Compensatory processing is when you see that the products can't conform to the criteria and you have to make trade offs

What do we mean by "positioning"?

-Definition: establishing a distinctive claim to fit a pre-determined place in the mind of the customer, relative to competitive offerings (differentiation) on the most important product dimensions for the target segment (segmentation) -approaches: feature (what is supplies you with), benefit (how it'll help you), values (why it's valuable and worth buying)

Three roles of Market Research - types of questions answered by each type

-Descriptive: gather facts about the present state or history of the market -Diagnostic: gather facts to explain why something happened in the market -Predictive: gather facts to predict what might happen

What is Marketing?

-It facilitates a transaction and a relationship with a customer. Satisfying customer needs How does it relate to Sales? -Sales sells the product, Marketing needs to understand the customer to Advertising? -Advertising is a subset of marketing To other Functions? What is the role of Marketing in a for-profit firm? - It is important for them to do what is best for the customer and give them a product that will benefit them. And get money in exchange for the product What misperceptions do people tend to have about Marketing? -all about advertising, all about plots and ploys, all about hype and sizzle, unethical and harmful, etc. Marketing's Main Objective -listen to the customers, identify their needs, and marshal the resources of the organization. If it's done correctly, it benefits society

How do the sales or marketing media used in consumer marketing differ from those used for B2B marketing? Why?

-It's a lot less electronic -They have trade magazines, which are ads and articles made for people in the industry -They have trade shows, which demonstrate and display the products up for sales -Direct marketing, so personalized emails and phone calls -Sales calls which are scheduled visits, drop-ins, demonstration site visits -It's slowly getting more electronic with online purchasing and auctions, online service and help, "big data" analysis, Internet of Things (IOT) which is a network of physical objects that are embedded with software to collect and exchange data

Consumer involvement in different types of purchases

-Little Involvement: it's frequently purchased, quick decision, may stick with one brand, POS displays. Toothpaste -Low/Moderate: evaluation of a few brands, short amount to moderate amount of time. Backpack -High: high cost, many brands, a lot of time, extensive info. Computer Factors: social visibility, innate interest, social situation, previous experience

Framing - definition and examples, impact on decision making

-Proves that rationality isn't true. Choices depends on the way that the choice is described. -For example, pro-life/pro-choice. The words LIFE and CHOICE are supposed to frame the way you think about the sides. -We mentally code all potential decision outcomes as gains or losses

Future technologies of Market Research

-Neuro-marketing -Eye movement tracking technology: goggles with camera to locate gaze. Test efficiency on labels, ads, websites -Virtual store environments and online purchasing: the environment is reproduced online

Heuristics and Biases in decision behavior - definition and examples

-Representativeness heuristic: our mind asses the evidence intuitively and try to compare it to mental model that we hold and make assumptions. Basically, stereotyping. -Availability heuristic: people judge the likelihood of something happening by how easily they can call other examples of the same thing to mind. Plane crash. This causes he "vividness effect" or imaginability, and people overestimate the possibility of something happening.

Cognitive dissonance and the role of marketing in reduction of cognitive dissonance

-There can be mental anxiety after making a decision and two thoughts might conflict with each other. Buyers remorse can occur after the decision -SO marketers offer free trials, warranties, return policies, money back guarantee, "congrats" on your purchase, etc

Scanner data-based market research:

-These are research methods in which the company continuously monitors the ads, promos, and pricing a subject group is exposed to and track what they buy over time -AC Neilsen measures market sand data, so viewership -IRI products do the same thing -It can relate a response bias because people know they are being monitored

Targeting a market segment: both financial/profitability reasons, and strategic reasons

-You want to target a market segment because firstly, it'll help you make more money because you're focusing on the correct group of people, and also it'll help build brand loyalty and value in the customer. -Fit with company mission, strategy, and capabilities in manufacturing, sales, and promotions -You want a target market that is economically attractive (potential growth profit), strategically attractive (create a defensible competitive stance or niche in the market), fits with the companies overall mission and strategy, and fit with the companies abilities

Types of research error - descriptions and examples of each

-measurement error: there is a difference between the info the researcher desires and the info actually provides by the measurement process. (demand effect) -sampling error: sample used does not well represent the target market (no-response, no-shows) -frame error: frame from which the sample is chosen does not reflect (using the phone book to randomly call respondents) -random error: how accurately the chosen samples true average reflects the overall populations true average (law of large number)

Survey Terminology

-universe or total population: the group of persons from which study participants come from -subject: a person in the sample -sample: a group of subjects taken from the universe -sample size: the number of people included in the same -probability sampling: every person in the population has a known statistical likelihood of being selected -random samples: every person has an equal change of being selected -stratified samples: population is divided into mutually exclusive groups with an ordinal structure, then a random sample is drawn from each group -cluster samples: population is divided into mutually exclusive groups that are non-ordinal (geographic or gender) then selected. There is heterogeneity within the group -systematic samples: every 10th person -non-probability sampling: NOT every person in the population has a known statistical likelihood of being selected -convenience samples: selected from easiest people to access. This can happen with voluntary response -quota samples: find a pre-set # of subjects in preset samples -judgment samples: decide who is part of your target market and then choose people -snowball samples: respondents selected on basis of referrals from previous respondents

What are the steps of the Corporate Strategic Planning Process?

1. Identify the business mission 2. Analyze the situation: market environment, set business objective 3. Identify opportunities: segmenting, targeting, positioning (these are all marketing concepts) 4. Implement the Marketing Mix (PPPP) 5. Evaluate performance using market metrics

Steps in the Market Research process

1. Identify the question and define the research objective 2. Plan the research design 3. Specify the sampling procedure 4. Collect the data ("field the study") 5. Analyze and interpret the data 6. Prepare and present the report 7. Follow up -Most of these steps (all but 1) are often done in collaboration with an outside market research vendor

Questionnaire Design

1. Precisely define what info is sought 2. Determine what type of questions are to be used 3. Write a draft, examine 4. Pre-test and edit 5. Specify procedures for use What is a good questionnaire from both the researcher and subject's perspectives -If it's short, logical, respectful and relevant, this will be good for the subject -If it's completed, screens for qualified subjects, supports needed analysis, and cannot be misinterpreted, this is good for the researcher How do you set up a questionnaire to get the best and most complete responses -3-5 screen questions, 8-12 core content, 1-3 difficult questions, 3-5 closers. -End with thank you, avoid private questions and unanswerable questions

What is the "multiplier effect" (or "accelerator effect") in B2B marketing? Explain.

A small increase or decrease in consumer demand can result in large change in demand for the facilities and equipment needed to make the consumer product. Result = "lumpy" orders

Maslow's Hierarchy of Needs model

A want is an unfulfilled need when there is an object that can satisfy it. Hierarchy of needs-what a human needs to survive (bottom to top) -Physiological (food) -Safety -Social -Esteem -Self-Actualization (self-expression)

What are the key differences between consumer marketing and B2B marketing?

B2B marketing is marketing of goods and services to individual and organizations for purposes other than personal consumption. The nature of it is that it is information intensive, and the customers are highly involved and focusing on the total value proposition (encompasses all the features of a product like lifecycle, the service, replacement?) so the marketing has to cover a lot more bases -The order size is bigger and the distribution is direct, and promotional is more personal selling than advertising

What are the types of roles in the Decision Making Unit? Give examples from consumer purchasing and B2B

Consumer (Bike) B2B (New Software) Initiator: Child Production Planner Influencer: Neighbor Engineer Decider: Parents Purchasing Manager Purchaser: Mother Purchaser (the buyer) User: Child End users in the firm Evaluator: Parents Sourcing Manager

Market Information Systems and Customer Relationship Management

Customer relationship management (CRM) is based on data that a company already has. It gives managers the ability to sift through large volumes of data and try to find trends to run their business more effectively and put the customer @ customer centricity (center of all they do)

What do we mean when we say demand in B2B markets is: Derived? Interdependent (joint)? Fluctuating? Inelastic with respect to price?

Derived: demand for the product results from demand for consumer products Inelastic: a change in price will not effect the demand for B2B products as it does for consumers Joint: multiple items are used together in final products so the demand for one product effects all Fluctuating: demand for business products is more volatile than for consumer products

What do we mean by the term "The Marketing Concept"?

Difference between a product-oriented firm, a customer-oriented firm and a sales-oriented firm? -Customer: Focus on the product and how to produce it efficiently -Sales: Focus on making money and persuasion -Customer: Focus on benefiting the customer -The primary task of the marketing function is to find effective and efficient ways of making the firm do what serves the interests of the customer -Sometimes a company suffers from marketing myopia and doesn't see how they need to change their product (blockbuster) -Marketing starts "outside in"--> listen to what's happening outside and bring it in to your company

What do we mean by "Portfolio Models"?

Draw the Boston Consulting Group (BCG)* Portfolio Model and explain. How does it relate to the Product Life Cycle? -It shows how to allocate resources to a company's portfolio of products in order to extend the life of a product or stop wasting money. Draw the GE portfolio model.* How does it differ from the BCG model? -It looks at a companies collection of businesses and organizes them into SBU (strategic business units) to create it's own mission, strategy, target market, etc. In what way(s) are product portfolios like an individual investor's portfolio of stocks? -Product portfolio is a company's collection and display of it's products and their purposes

Ethnographic research, what is it, why it is used, advantages and drawbacks

Ethnography research is going into the field of study and observing what is going on in a culture. It is often associated with anthropology. It's good because you can get specific and reliable information first hand. But it's difficult, because you can't exploit them or run into issues of ethics -You watch people unobtrusively and determine customer behavior in the real world. There can be no demand effect and representativeness is certain -Can be slow or tedious and you can only infer conclusions from behavior

Routine response behavior (habitual purchases) vs. limited and extensive decision

Habitual Response behavior is when you're buying something like toothpaste, which you have bought many times before. Limited and Extensive is when you are making an important purchase and need time and info to solve.

What do we mean by "differentiation"?

How and why do Marketers use differentiation as a competitive tool? -Differentiate themselves from their competitors, show the customers why they should buy their product and to make it more attractive to a particular target market

Central Route to Persuasion vs. Peripheral Route to Persuasion

How information is delivered to us Central: involves active cognitive processing of info, logic and reason, fact-based Peripheral: passive and pre-conscious processing, may not even be aware, impacted by tone or music or color or feeling etc.

What is a "positioning statement"?

How is the Positioning Statement used by a firm's Marketing function? -it's a document used by managers and advertisers to briefly explain the value of your product What are the 5 characteristics of a well-written Positioning Statement? (the CRUDE model) -Credible/believable, Relevant to the target market, Unique/different, Durable, Emotionally appealing/motivating "For (target market), (product name) is the (define competitive set) that provides the (single most important benefit) because (single most important substantiation)

Mental Accounting - definition and examples, impact on decision making

In our minds, we have folders of how much we can spend on certain categories. For example, you'll spend more on your kids education than their clothing. Because of this, sometimes we are unwilling to spend money because we feel it should be going elsewhere. For example, if you get money as a gift you won't use it for something you want. But if you get a gift card, you have no choice! -A type of implicit cognitive rule by people to categorize gains and losses. Ticket losing

Internal and External information search, factors mediating extent of search

Information search: internal (what do i know/remember/retrieve info) and external (this is influenced by attention, motivation, involvement, etc). You'll do more research if it's more expensive and important and with greater risk and you don't have confidence

What is an integrated marketing mix and why is it important

Integrated Marketing is an approach to creating a unified and seamless experience for consumers to interact with the brand/enterprise; it attempts to meld all aspects of marketing communication such as advertising, sales promotion, public relations, direct marketing, and social media, through their respective mix of tactics, methods, channels, media, and activities, so that all work together as a unified force.

Behavioral Decision Theory - what is it? What does it study?

It is a school of psychology that studies brain mechanisms and patterns caused by learning. Brain is a black box, and you can only watch behavior -Economics cannot explain decision making because the "rational man" is not realistic. Most consumers are impulsive and easily influenced. A consumers behavior is seldom straightforward

Asymmetrically dominated alternatives and the 'decoy' effect

It is mentally easier to compare and judge similar alternatives in a product category relative to each other, than to compare dissimilar alternatives. Example: Paris, Rome, Rome WITH coffee. They will choose Rome with coffee.

How has market segment targeting changed over the past 60 years?

It was originally a lot more mass segmentation oriented and working hard on extreme broadcast and ads. Now, it's much more focused on narrowing down to smaller segments and specifically target group, "One to One" marketing

More specialized bases for market segmentation

Life style, Life stage, Geo-demographic, usage rate (how quickly consumed), benefits sought (core benefit from desired product) so you group the people according to the benefits they seek from the product

Reasons for and uses of Market Research*** Begin again

Market research is the process by which info about the market is generated, analyzed, and interpreted for use in marketing decision making. Using the big ear, you have to listen to the public. It's goals are to understand customer needs, why+how+when customers buy, what media they pay attention to, the decision making process, who's involved in it, emerging market trends, and more.

The impact of regret (anticipation of regret) on choice behavior

More choices results in regret and stress because they don't want to make the wrong choice. A maximizer will search for the perfect choice, and a satisfier will choose the best one that comes along.

The "Law of Large Numbers"

More numbers/larger data set/opportunities, less variability. As the number of trials of any task increases, the more overall average will tend to represent the mean, or true underlying probability for the system

Mental anchors

Planting an idea in your head that you will later use as a filter. If you hear a certain price in a commercial, you will go into a store looking for a product by that price.

Primary research and primary data vs. Secondary research and secondary data

Primary: research you are gathering yourself to answer the question at hand. -examples: lab experiment, market experiment, observational research, survey, focus group, panel studies pros: you get it first hand so you know it's accurate, it's relevant to what you need -cons: it can be expensive and difficult to come up with and make happen Secondary: data gathered previously for another market study for research -government data on the market, trade association data, web-based or library searches, news groups, blogs, twitter, pinterest -pros: it's easy to get access to, you don't have to do the study for yourself and waste time -cons: it might not be relevant to your study, you might have to pay for it

Qualitative research vs. Quantitative research

Qualitative research: looking personal thoughts, feelings, and attitudes. Gained through interaction. Use it when wanting to uncover and understand customers thoughts and opinions -pros: small, easier to plan, open-ended questions, can tailor questions, less expensive, fast -cons: less diagnostic (too small a sample), may not be completely representative -ex: how do you feel about ice cream? one-2-one interview, mall intercepts, ethnography Quantitative research: systematic procedure to analyze. Uses mathematics modeling and statistics. Used to measure and predict customer behavior -pros: more diagnostic, better statistical reliability -cons: large, complex, no open-ended, longer, more expensive -ex: how many times a day do you floss. Survey studies, panel studies, experiments examples and characteristics of each, pros and cons

What is "re-positioning"? What are good examples of brands re-positioning themselves?

Re-positioning is when you change the place and character of your brand in the consumers mind. Mazda re-positioned themselves because they were boring, so they made the exciting Miata to change

What do we mean by "segmentation" and "targeting"?

Segmentation is the process of separation and grouping by taking seemingly heterogeneous population of people of potential customers and assigning them to homogenous categories. Targeting is when you aim to specifically please or benefit one of those segments -This way, you can better understand your market and allocate resources more efficiently Process 1. ID bases for segmenting the market 2. develop profiles for resulting segments 3. develop measures for segment attractivesness 4. select target segments 5. develop position for each target segment 6. develop marketing mix for each target segment

Cognitive distortion types and their impact on decision making

Selective attention: we notice certain stimuli and ignore others Selective distortion: we distort info that conflicts with our beliefs Selective retention: we remember info that supports out beliefs

Evoked set (consideration set)

The group of products you'll make your decision from

How do firms Segment markets and target customers in B2B marketing situations?

They separate in terms of -Company characteristics: manufacturer or retailer, what the size, what's the location -Buying processes: typical volume and frequency? do they pay on time? -Customer relationship: long term history? are they good partners and loyal?

What is an undifferentiated targeting strategy? A concentrated targeting strategy? A differentiated targeting strategy?

Undifferentiated: one big market -Pros: less money to spend -Cons: unimaginative, susceptible to comp -Ex: salt? it's hard Concentrated Targeting: one segment -Pros: focus resources, meet needs, strong -Cons: if it's too small can it change? and comp -Ex: Porsche Multi Segmented/Differentiated: multiple segments -Pros: potential for success -Cons: higher costs and cannibalization -Ex: Coca Cola Micromarketing: financial services

Cultural, Social, and individual psychological influences on purchase behavior

Values: Americans are hard-working Culture: language, myths, customs Social: reference groups (want to be like), opinion leaders (influence behavior), family members (usually the most influential) Decision making process (DMP) and Decision Unit (DMU)

Why are B2B purchasers less price sensitive than consumer purchasers?

What factors are more important than price in B2B purchase decisions? -A lot more stuff, like how is the service, are there people who can come in and fix it if there's a problem, when will it be replaced, do we like this partner -Most important is the product quality and reliability, then service terms, and then price What are the steps in the buying process for B2B products? -You have an initiator, then an influencer, than a decider and a buyer, then a user and evaluator

What is Lateral Marketing? How does it differ from Vertical marketing

What is "Push" marketing? How does it differ from "Pull" marketing? -Push: low volume unit margins, focused on media and small ad budges, to push the product onto you, motivate retailers to sell aggressively with incentive (Harley Davidson) -Pull: high volume, mass media and large ad spending, intensive distribution to the customer grabs for the product (Honda) When and in what types of product categories are these different approaches used? -Vertical marketing seeks to find new dimensions on which to compete for new segments. Looking for smaller and smaller segments in the market -Lateral marketing leverages a company's core competencies, technologies, and skill sets into other markets. Finding new markets to put their product in

Focus Group issues

When asking someone a question, you can often use a leading question in a way that commands a certain response. For example: How much do you like ice cream? This will cause a demand effect, in which the person will have to answer in a way that makes them think they have to like ice cream to answer the question. The demand artifact is the answer the surveyor will receive.

What are the criteria for a useful segmentation method?

substantial (meaningful); to offer profit and justify spending $ and growth identifiable and (measurable); must be able to gauge their needs accessible (marketable); must be reachable with products and advertising responsive (marketable); segments must react differently to the marketing mix