Ch. 1 - Consumer Behavior and Technology Flashcards
Marketing
the activity, instructions, and processes for creating, communicating, and delivering products that have value for customers, clients, partners, and society
Uncovers consumer’s unmet desires to then create and promote superior offerings
Consumer behavior
The study of consumers actions while searching for, purchasing, using, evaluating, and disposing of products and services they expected would satisfy their needs
explains how and why people spend money, time, and effort on these goods and describes why people pick certain brands, prices, places, times, etc.
Explain the need type relationship
Everyone needs something, maybe for the same necessary reason. But our deeper needs touch on the type of product someone is more receptive towards in relation to advertising and purchase behaviors
Marketing Concept
That marketing is satisfying consumer’s needs, creating value, and retaining customers. To only produce goods already determined to satisfy consumer needs and can meeting the goals of the organization.
Marketing-oriented companies
Don’t persuade customers to buy what they have already produce. Make only products that satisfy customer’s needs, attempting to convert first-time buyers into long-term customers
The production concept
Conceived by Henry Ford
Makes products that are the most inexpensive, uniformly produced, for the lowest price possible
Ignores customer’s diverse needs
The product concept
Satisfying customers’ needs means marketing products offering the most features and ignoring customers wanting a simple, easy to use product
That consumers buy products offering the highest quality, best performance, most features.
Marketing myopia
centering on the products rather than the need it’s designed to fulfill
- short sided (myopic) approach
- ignores consumer needs
ex: Apple software only for Mac, not allowing to share pictures. Leads more people buying Microsoft systems that, although less efficient and harder to use, can share with others
Selling concept
before marketing focus on consumers. companies should sell what they had already made instead of making only those products they could sell
assumes consumers would only buy if pressured, leading to people becoming unsatisfied and not buying again
Biological needs
nourishment, air, water, shelter
share them with everyone else, identitcal
Psychological needs
shaped by upbringing, culture, social stratum, financial resources, and education
developed later
Market segmentation
divides a market into subsets of consumers with common needs or characteristics.
each subset identifies a group with shared needs different from other consumers, termed market segments
Targeting
selecting segments the company views as prospective customers and pursuing them with distinct offerings.
Positioning
when company creates a distinct image and identity for its products, services, and brand in consumers’ minds.
must differentiate the company’s offerings from the competition
does so by stressing the product’s unique benefits that fulfills their specific needs
essential, as most new products (different sizes, flavors, etc.) fail to capture markets because they are perceived as mee too products
Marketing mix (overview)
the four p’s (price, product, place, and promotion)
segmentation, targeting, and positioning implemented across these 4 components
Marketing mix (in depth)
Price: the list price, discounts, allowances, and payment methods
Product or service: features, designs, bands, and packaging; post-purchase benefits like warranties and return policies
Place: distribution through stores, online, or other outlets
Promotion: advertising, sales promotion, public relations, and sales efforts developing product awareness and demand
Traditional Marketing
paying large sums for large number of potential buys via mass media, only able to see effectiveness looking at sales and post-purchase studies
Electronic communications
two-way interactive exchange where consumers can instantly react to messages and marketers can gauge effectiveness instantaneously
click-to-call ad
google making money when you click an ad to call a nearby hotel, whether or not you book a room
Value exchange
technologies create this ability for marketers to provide value through efficient shopping, more information, customized products, and entertainment
the internet has enabled marketers to gather more precise data about consumers by _______ rather than relying on their _____.
observing shoppers
responses to post-purchase surveys
Cookies
invisible bits of code stored on webpages exchanged by data brokers and marketers that allows data aggregators to track who is interested in what
How can marketers optimize their resources?
By targeting individual consumers instead of large segment
Why are tailored ads more powerful?
They allow advertisers to zero in on users that have already shown interest in their products
Cross-screen marketing
tracking and targeting users across their computers, mobile phones, and tablets. “pushing” personal ads from one platform to the other.
essential to capturing the attention of consumers watching television while surfing the internet
Customer value
The ratio between customers’ perceived benefits (economic, functional, and psychological) and the resources they use to obtain those benefits (monetary, time, effort, psychological)
Customer satisfaction
customers’ perceptions of the performance of the product or service in relation to their expectations
Customer retention
turning individual consumer transactions into long-term customers
Why is it more expensive to win new customers?
- Loyal customers buy more products and are ready for new ones
- Loyal customers are less price sensitive
- Servicing existing customers is less expensive that training new ones
- Loyal customers spread positive word-of-mouth
- Marketing towards new customers is expensive, with low customer turnover being correlated with higher profits
- Increased retention makes employee jobs easier, and happy employees means happier customers
How does technology enhance customer relationships and retention?
By engaging consumers with brands
What are the two forms of customer engagnement?
Emotional bonds and transactional bonds
Emotional bonds
represents a customer’s high level of personal commitment and attachment to the company
Transactional bonds
the mechanics and structures that facilitate exchanges between consumers and sellers
Social media
means of interaction among people in which they create, share, and exchange information and ideas in virtual communities and networks.
Led to more organic-looking photos, street-style photographers, and ordinary people rather than models
Has transformed market research without focus groups but looking at social media chatter and interaction
What are the determinants of customer satisfaction with online websites and merchants?
Adaptation, interactivity, nurturing, commitment, network, assortment, transaction ease, engagement, loyalty, inertia, and trust
Adaptation
where merchant purchase recommendations match customer’s needs, making tailor-made products, personalized ads, and feel unique and valued
Interactivity
View merch offerings from different perspectives, searches to quickly locate products, easy comparison tools, useful info
Nurturing
receives reminders about making purchases, relevant info provided for purchases, appreciates your business, creates a relationship and makes efforts to increase business with them
Commitment
delivers goods on times, responds to problems, customer-friendly return policies, takes good care of customers
Network
Customers sharing experiences about their product purchases, networks to share experiences, benefits from the community
Assortment
provides “one-stop shopping” for most purchases, satisfies shopping needs, caries wide assortment and selection of products
Transaction ease
website navigated intuitively, easy for first-time buyers to do so without help, quick transactions
Engagement
attractive site design, enjoyable shopping, inviting site
Loyalty
Seldom considers switching, clicks on site whenever needing to make a purchase, favorite
Inertia
Unless very dissatisfied, changing is not worth the hassle, difficult to stop shopping there
Trust
Counts on the merchant, trusts the site’s performance, believes that they are reliable and honest
Fan relationship
High bonds and high purchase levels
Loyals relationship
Frequent purchasers, but without high bonds
Delighted relationship
High bonds but modest purchase levels
Transactional relationship
Low bonds and infrequent purchasers
The Loyalists
completely satisfied customers who keep purchasing
The apostles
the loyal customers who provided positive word-of-mouth about the company to others
The defectors
Feel neutral or merely satisfied with the company and are likely to switch to another company offering a lower price
The terrorists
have had negative experiences and spread negative word-of-mouth
The hostages
Unhappy customers staying with the company because of monopoly or low prices, frequently complaining about
The mercenaries
Very satisfied customers with no real loyalty and may defect somewhere on impulse. Should be studied for figure how to strengthen bonds
How do marketers selectively build relationships with customers according to profitability by consumer retention?
- Monitoring consumption volume and shopping patterns
- Creating tiers of customers according to their profitability levels
- Developing distinct strategies for each group of customers
Ex: the diamond, emerald, sapphires, elite, and select of an airline, the perks they get and why the airline separates them
What are the methods of consumer retention?
- Consumer valuation: valuing them, categorizing them according to financial and strategic worth, and then deciding where to invest in deeper relationships
- Retention rates: use the ratio to make comparisons between products, market segments, and over time
- Analyzing defections: look for root cause, not symptoms
Cross selling
Selling related products to current customers
Cross promotions
Giving discounts or other incentives to purchasers of related products
Termination costs
Penalties for leaving the relationship with a company
The Marketing concept
Fulfilling the needs of target audiences
shortsighted
The societal marketing concept
Requires marketers to fulfill target audience needs in ways that improve, preserve, and enhance society’s well-being, while also meeting their business objectives
companies are better of incorporating ethical behavior and social responsibility to maintain loyal consumer support long term
The four disciplines of consumer behavior
Psychology
Sociology
Anthropology
Communication
Psychology
the study of the human mind and the mental factors that affect behavior (needs, personality traits, perception, learned experiences, and attitudes)
Sociology
The study of the development, structure, functioning, and problems of human society
Anthropology
The comparative study of human societies’ cultures and developments
Communication
The process of imparting or exchanging information in the context of consumer behavior, it is the transmission of messages from senders (the sources) to receivers (the consumers) via the media (the channels of transmission)
What is consumer decision-making comprised of?
Input, process, and output
Input
- Segmenting and targeting: implemented through marketing mix (4 Ps) representing marketer’s initiatives to persuade consumers to buy their products
- Communications from marketers to consumers: Advertising, creating buzz, and social media
- Sociocultural dimensions: Shape consumers’ decisions (family, social standings, friends, peers, cultural values, ethnicity, and gender roles)
- Communications among consumers: word-of-mouth and social media
Process
Stems from psychological factors
The study of the human mind and the mental factors that affect behavior and the cognitions that drive people to take actions and determine how they act, such as motivation, personality traits, perceptions, learning, and attitudes
Need recognition, type of decisions, prepurchase information search, evaluation of purchase alternatives, learning (knowledge and experience)
Output
the purchase behavior, post purchase evaluation, the repurchase to trust and loyalty (leading to experience in future processes) or the no repurchase
Brand management
The process of maintaining, improving, and upholding a brand so that it is clearly differentiated from other offerings in the same product category.
Stems from the marketing concepts stating that marketing must satisfy consumer needs and retaining customers, through the 4 elements of the marketing mix
What does understanding perception do?
enables newly hired graduates to demonstrate they understand how marketers position prodcucts in highly competitve markets by forming an easily and favorably recongixable brand image in consumers’ minds
What does understanding stimulus generalization do?
Enables proficiency in designing and adding ite,s into successful product lines effectively because consumers would believe that a familiar name delivers satisfaction and quality
Why is the knowledge of learning crucial to designing promotions?
Tt explains how consumers retain information and how to ensure that they will remember it by constructing advertising schedules
What is the most important aspect in persuasion
Source credibility, as it stems from consumers’ perception of the source’s experitise, reliability, and reputation
Why is it important to understand the distinction between formal and informal sources, as well aas the difference between impersonal and interpersonal communications?
Crucial in transmitting advertising messages that will be recalled and remain impactful and influential
Consumer research
the process and tools used to study consumer behavior, a form of market research
Market research
A process that links the consumer, customer, and public to the marketer through information in order to identify marketing opportunities and problems, evaluating marketing actions, and judge the performance of marketing strategies
Market research
A process that links the consumer, customer, and public to the marketer through information in order to identify marketing opportunities and problems, evaluating marketing actions, and judge the performance of marketing strategies
Brand Image
The perception, in the minds of consumers, of products and brands stemming from images and symbolic values for consumer benefits that these products claim they provide.
