Flashcards
Marketing Principles Exam #2
Cards in this deck (102)
- 1consumer buyer behaviorthe decision process and purchasing activities of people who purchase a product for personal or household use -- the buying behavior of final consumers
- 2two major influences on buying behavior1. sociocultural
2. psychological - 3sociocultural (social) influencesinfluences on the consumer from the cultural and social environments--states of being--demographic factors
- 4psychological influences (5)thinking/behavior--states of mind and action
1. motivation
2. perception
3. learning
4. attitudes
5. personality, lifestyle, and self-image - 5motivationpsychological influence--a need that is sufficiently pressing to direct the person to seek satisfaction of the need
- 6perceptionpsychological influence--the process by which people select, organize, and interpret information to form a meaningful picture of the world
- 7learningpsychological influence--changes in an individual's behavior arising from experience
- 8attitudespsychological influence--a person's consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea
- 9types of buying decision behavior (4)1. complex buying behavior
2. dissonance-reducing buying behavior
3. habitual buying behavior
4. variety-seeking buying behavior - 10complex buying behaviorhigh consumer involvement and significant perceived differences among brands
- 11dissonance-reducing buying behaviorhigh involvement but few perceived difference among brands
- 12habitual buying behaviorlow consumer involvement and few significant perceived brand differences
- 13variety-seeking buying behaviorlow involvement but significant perceived brand differences
- 14The Consumer Decision Process1. problem recognition
2. information search
3. alternative evaluation
4. purchase decision
5. post purchase behavior - 15need recognitionwhen there is a significant gao between consumer's actual/current state and their desired/idea state--unsatisfied need/want
- 16information searchpre-purchase search for information--can be internal or external
- 17alternative evaluationcomparing the options on evaluative criteria in order to make a decision
- 18purchase decisionthe selection of a particular brand
- 19post purchase behaviorconsumers take further action after purchase based on satisfaction/dissatisfaction--post-purchase dissonance (buyer's regret)
- 20two factors influencing whether or not a five-stage decision process will be followed1. involvement level (high, moderate, low)--the riskier the purchase, the more involved the consumer
2. level of decision making--consumer's degree of prior info on and experience with the product category/brands - 213 Levels of Decision Making1. Routine
2. Limited
3. Extended - 22extended decision makingwhen buyers purchase in an unfamiliar, high involvement product category requiring much information search and evaluation
- 23limited decision makingwhen buyers are confronted with an unfamiliar brand in a familiar product category requiring some information search and evaluation
- 24routine decision makingwhen buyers purchase items with which they are familiar and can purchase with little to no thought/effort--two types:
1. brand loyalty
2. inertial/habitual buying - 25?Stages in the adoption process (for new products)--5?1. awareness
2. interest
3. evaluation
4. trial
5. adoption - 26business buyer behaviorthe buying behavior of the organizations that buy goods and services for use in production of other products and services that are sold, rented, or supplied to others
- 27decision-making units (DMUs)all of the individuals and units that participate in the business decision-making process--functions as buying centers
- 28functional roles in the buying center (6)1. initiator--recognizes the needs that begins the buying process
2. gatekeeper--controls the flow of information to others
3. influencer--helps define specifications and provides information for evaluating alternatives
4. decider--has formal or informal power to select and approve final suppliers
5. buyer--makes the purchase and might negotiate terms
6. user--uses the good/service - 29Types of buyclasses (b2b purchase situations)1. straight rebuy
2. modified rebuy
3. new task - 30straight rebuybusiness buying situation in which the buyer routinely reorders something without any modifications
- 31modified rebuybusiness buying situation in which the buyer wants to modify product specifcations, prices, terms, or supplies
- 32new taskbusiness buying situation in which the buyer purchases a product or service for the first time
- 33systems selling/solutions sellingbuying a packaged solution to a problem from a single seller, thus avoiding all the separate decisions involved in a complex buying situation
- 34The Business Buying Process (8 steps)problem recognition > general need description > product specification > supplier search > proposal solicitation > supplier selection > order-routine specifications > performance review
- 35Characteristics of B2B marketmore decision participants--more complex/more formalized decision process--buyer/seller relationships are closer--derived demand
- 36derived demanddemand for a business good occurs as a result of the demand for a consumer good
- 37product differentiationitems in a product line differ from each other and/or from rivals' offerings in 1/3 ways--better physically or tangibly (quality/style)--superior psychologically/intangibly (brand image)--product variety
- 38requirements for effective market segmentation (6)1. differentiable
2. identifiability and divisibility
3. measurability
4. substantiality/attractiveness
5. accessibility
6. actionability - 39steps in designing a customer-driven marketing strategymarket segmentation > market targeting > product/brand positioning
- 40market segmentationthe process of dividing a total market into group with relatively similar product and marketing needs and want to design a marketing mix to match one (or more) of those groups
- 41segmentation variables (bases)characteristics of individuals, groups, or organizations used to divide a market into segments--four general categories
- 42four general categories of market segmentation variables1. geographic
2. demographic
3. psycho-graphic
4. behavioristic - 43geographic segmentationdivides the market into different geographic units such as nations, regions, states, countries, cities, or zip codes/neighborhoods
- 44demographic segmentationdivides the market into groups based on personal/population characteristics such as age, sex, income, occupation, education, religion, race, nationality, etc.--most common segmentation basis
- 45psychographic segmentationdivides buyers into different groups based on lifestyle or personality traits--activities, interests, opinions
- 46behavioral segmentationdivides buyers into groups based on their consumer behavior/behavioral responses to a product--ex = hard core (sony ps) vs casual (Wii) videogamers--user status/rate
- 47market segment profilea description of the market segment emerging from the market segmentation process using particular segmentation variable--multiple variables may be combines
- 48target marketingthe act of evaluating, selecting, and concentrating on market segments that the company can serve more effectively and efficiently
- 49when evaluating market segments, a firm must look at 3 factors...1. segment size
2. segment structural attractiveness
3. company objectives and resources - 50four market coverage (target marketing) strategies1. undifferentiated/mass marketing
2. differentiated marketing
3. concentrated/niche marketing
4. individual marketing - 51undifferentiated/mass marketingno market segmentation--pursue the entire or largest part of the market with one product and one marketing program--one size fits all
- 52differentiated marketingdivide the total market into two or more market segments and pursue two or more of them with two or more marketing strategies
- 53concentrated/niche marketingdivide the market into groups and then focus exclusively on one and only one, often narrowly defined, small, and under-served segment with one product and one marketing mix
- 54individual marketingtailoring products and marketing programs to the needs and preferences of individual customers--customized products
- 55Product and brand positioningphysical and psychological differentiation of the product from the competition via a competitive marketing mix for each segment
- 56product positionthe way a product is defined by consumers on important attributes--the place the product occupies in consumers' minds relative to competing products
- 57two types of positioning1. physical positioning (distinguishing the market's product via tangible product attributes)
2. psychological positioning (creating "induced" brand differences in buyers' minds via advertising and promotion - 58positioning statementstatement that summarizes company or brand positioning--to (target segment and need), our (brand) is (concept) that (point of difference)
- 59productan offering that has value for customers--anything that can be offered to customers in a market exchange that might provide them value by satisfying a need or want, solving a problem, or providing a desired experience
- 60features vs. benefitsfeatures = physical characteristics in the product//benefits = customers satisfactions of needs and wants delivered by the product features
- 61levels of a productproduct class/category > product form > brand
(ex = deodorant > stick, roll on, spray > secret) - 62branda name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
- 63brand identity elements (5)brand name/slogan/brand mark(logo)/trade character (mascot)/package
- 64(consumer) brand equitythe differential effect that knowing the brand name has on customer response to the product or its marketing
- 65two ways to capitalize on brand equity1. brand extension (same brand name for new product categories)
2. product line extension (existing brand name in an existing product category via new forms, styles, and other varieties) - 66three elements of a product1. core generic product/core customer value (the core problem solving benefits that consumers seek)
2. actual product
3. augmented/extended product (extra add-ons, like warranty) - 67durability and tangibility (3 factors)1. nondurable goods
2. durable goods
3. services - 68nondurable goodsshort-lived, frequently purchased, low unit cost, low involvement, and low perceived risk (ex=detergent)
- 69durable goodslong-lived, infrequently purchases, high unit cost, high involvement and perceived risk (ex=washing machine)
- 70servicesintangible activities, processes, performances, or/or experiences that cannot be physically possessed (ex=laundromat)
- 71characteristics of services (4)1. intangibility
2. inseparability
3. variability
4. perishability - 72classification of consumer products (4)1. convenience goods
2. shopping goods
3. specialty goods
4. unsought goods - 73convenience goodsrelatively inexpensive, frequently purchased items which customers buy immediately and with minimum comparison and buying effort (usually nondurables)
- 74shopping goodsusually infrequently bought items that customers expend considerable effort in planning and buying--compare carefully on suitability, quality, prices, and other brand-differentiating attributes
- 75specialty goodsconsumer product with unique characteristics or brand identification for which a significant group of buyers is will to make a special purchase effort (specific car brands)
- 76unsought goodsinfrequently purchased items that the consumer doesn't know about/doesn't think about buying--latent or unknown want--life insurance/smoke detectors
- 77new product development processthe set of activities, actions, task, and evaluations done by individuals that move the new product project from the idea stage to the market launch
- 78steps in new product development process (8)idea generation > idea screening > concept development and testing > business analysis >product development and testing > marketing strategy development > market testing > commercialization
- 791. idea generationthe systematic search for new product ideas
- 802. idea screeningscreening new product ideas to spot good ideas and drop poor ones as soon as possible
- 813. concept development and testingproduct concept=detailed version of the idea states in meaningful customer terms and presented to customers for feedback//concept testing=testing new product concepts with groups of target consumers using a brief written description of the product
- 824. business analysisa review of the new product concept's sales, costs, and profit projections to find out whether they satisfy the company's objectives
- 835. product development and testingproduct development = the creation and testing of one or more physical versions by the research and development or design and engineering departments
- 846. marketing strategy developmentthe initial marketing strategy for introducing the product to the market
- 857. market testingthe product and some/all marketing program components are introduced into more realistic marketing settings for a limited time
- 868. commercialization/launchthe introduction of the new product to the marketplace--need post-launch control
- 87product life cycle (PLC)the course of a product's sales and profits over its lifetime (five stages)
- 88Product life cycle stages (5)product development > introduction > growth > maturity > decline
- 89product developmentsales are zero and investment costs mount
- 90introductionslow sales growth--no profits because of heavy advertising expenses
- 91growthrapid market acceptance and increasing profits
- 92maturityslowdown in sales growth and profits level off
- 93declinesales fall off and profits drop
- 945 considerations of pricing1. customers/demand
2. costs/supply
3. competition
4. channels of distribution
5. corporate goals and strategies - 95valuegetting much benefit (perceived quality and quantity) per dollar spent--money's worth--good deal
- 96value based pricingsetting price based on buyers' perceptions of value rather than on the seller's cost
- 97value added pricingattaching value-added features and services to differentiate a company's offers and charging higher prices
- 98cost-based pricingsetting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk
- 99pricing objectives (7)1. survival
2. profit
3. return on investment
4. market share
5. cash flow
6. status quo
7. product quality - 100NEW PRODUCT pricing strategiesmarket skimming and market penetration pricing
- 101market skimming pricingsetting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price--high profit per unit but low volume
- 102penetration pricingsetting a low initial price for a new product in order to penetrate a market quickly and deeply--to attract large number of buyers and large market share--low profit but high volume