Chapter 6 - Understand Consumer and Business Markets Flashcards
Demographics
the characteristics of human populations and population segments, especially when used to identify consumer markets.
why it is helpful to understand the demographics of a target market?
- knowing the personal characteristics of a target market enables marketers to evaluate relevant statistics against competitors and the overall population using broad demographic studies like the US Censure Bureau reports.
- personal characteristics like age, income, and education play a critical role in consumer decision making, affecting information search, possible product choices, and the product decision itself.
family life cycle
A sequence of stages that families tend to progress through.
lifestyle
references an individuals perspective on life and manifests itself in that person’s activities, interests, and opinions.
- helps marketing managers develop a holistic view of the individual
- how people choose to live, and how a person lives dictates what she or he buys
gender roles
behaviors regarded as proper for men and women in a particular society
motivation
the stimulating power that induces and then directs behavior
Maslow’s hierarchy of needs theory
humans have wants and needs that influence their behavior. People advance to the next level only if the lower needs are met
- psychological
- safety
- love/social
- self esteem
- self actualization
Herzberg’s two factor theory
certain factors in the workplace result in job satisfaction
- motivators: challenging work, recognition, and responsibility
- hygiene factors: status, job security, salary, and benefits
Aldelfer’s ERG theory
expansion on Maslow’s hierarchy, placing needs in three categories.
- existence
- relatedness
- growth
McClelland’s Achievement Motivation Theory
there are three categories of needs and people differ in the degree to which the various needs influence their behavior
- need for achievement
- need for power
- need for affiliation
attitude
a learned predisposition to respond to an object or class of objects in a consistently variable or unfavorable way
two categories of values
- cultural values based on national conscience
2. personal values held by the individual
multiattirbute model
evaluates an object on several important attributes
perception
a system to select, organize, and interpret information to create a useful, informed picture of the world.
perception is shaped by three psychological tools
- selective awareness
- selective distortion
- selective retention
selective awareness
helps people focus on what is relevant and eliminate what is not
- the challenge for marketers is breaking through peoples decision rules, which are designed to reject the vast majority of stimuli they see every day
selective distortion
information can be misunderstood or made to fit existing beliefs
selective retention
the process of placing in one’s memory only those stimuli that support existing belief and attitudes about. product or brand.
memory
where people store all past learning events
two types of memory
- short term: what is being recalled at the present time and is sometimes referred to as working memory
- long term: enduring storage, which can remain with the individual for years and years
learning
any change in the content or organization of long term memory behaviour
two fundamental approaches to learning
- conditioning: involves creating an association between two stimuli
- cognitive: involves mental processes that acquire information to work through problems and manage life situations
two types of conditioning
- classical: seeks to have people learn by associating a stimulus and response
- operant: entails rewarding a desirable behaviour
personality
a set of unique personal qualities that product distinctive responses across similar situations
Marketers need to be aware of culture for two reasons
- learning a target market’s culture is essential to an effective marketing strategy
- failing to understand cultural norms has a significant negative effect on product acceptance
culture
assimilates shared artifacts such as values, moral, beliefs, art, law, and customs into an organizes system that enables people to function as members of society.
language
an essential cultural building block and the primary communication tool in society
cultural vlaues
principle shared by a society that assert positive ideals
nonverbal communication
the means of communicating through facial expressions, eye behavior, gestures, posture, and nay other body language
subculture
a group within the culture that shares similar cultural artifacts created by differences in ethnicity, religion, race, or geography
family
a group fo two or more people living together and related by birth, marriage, or adoption
household life cycle (HLC)
consists of a fairly structured set of activities that begins when single people get married (20s), start a family (30s), rain kids (40s to 50s), watch as the kids grow up and leave home (50s to 60s), and finally enter into retirement (60s and beyond).
social class
a ranking of individuals into harmonized groups based on demographic characteristics such as age, education, income, and occupation
aspirational purchases
products bought outside the individual’s social standing
opinion leaders
fulfill and important role by classifying, explaining, and then bestowing information, most often to family and friends by occasionally to a broader audience
reference group
a group of individuals whose beliefs, attitudes, and behavior influence the beliefs, attitudes, and behavior of an individual.
three characteristics used to categorize reference groups:
- association
- desirability
- degree of affiliation
desirability
the extent and direction of the emotional connection an individual wishes to have with a particular group
degree of affiliation
indicates the amount of interpersonal contact an individual has with the reference group
primary groups
marked by frequent contact
secondary groups
marked by less frequent or limited dealings
high-involvement learning
someone stimulated to acquire new information
low-involvement learning
happens when people are not prompted to value new information
consumer decision making process
- problem recognition
- search for information
- evaluation of alternatives
- product choice decision
- post purchase decision
internal information sources
information stored in memory and accessed by the individual
- the first place people consider for information
external information sources
include independent groups, personal associations, marketer-created information, and experiences.
awareness set
reduces the number of options
consideration (evoked) set
encompasses the strongest options
- it is from here that the product decision is made
4 purchase even characteristics
- physical surroundings
- social circumstances
- time
- state of mind
Business to business markets (B2B)
Relationship with customer: invest more in maintaining personal relationships
number and size of customers: fewer but larger customers
geographic concentration: suppliers located strategically by the buyers
complexity of buying process: complex process that can take a long time and involve more people
complexity of supply chain: direct from supplier to manufacturer
demand for products: derived from consumer demand, fluctuates with changes to consumer demand, and more inelastic
Business to consumer market (B2C)
relationship with customers: impersonal; exist through electronic communication
number and size of customers: more customers buy buy in smaller, less frequent quantities
geographic concentration: could be anywhere in the world
complexity of buying process: fewer people, often just one, directly involved in the purchase decision and the purchase decision is often based on personal and psychological benefits
complexity of supply chain: complex with products moving through the channel to reach the consumer
demand for products: consumer perceptions about their own needs mitigated by environmental factors and marketing stimuli
supply chain
the synchronized movement of goods through the channel
inelastic demand
changes in demand are not significantly affected by changes in price
business buying decisions vary widely based on…
- nature of the purchase
- number of people involved in the decision
- understanding of the product being purchased
- time frame for the decision
straight rebuy
companies use a wide range of products on a consistent basis and simply reorder when needed
- handled by one person in the purchasing department
modified rebuy
occurs when the customer is familiar with he product and supplier but is looking for additional information
new purchase
the purchase of a product or service by a customer for the first time
North American Industry Classification System (NAICS)
defined 20 major business sectors based on a six digit hierarchical code
- the first 5 digits are standardized across Mexico, Canada, and the US
- the 6th digit enables countries to adjust the code to fit the country’s own unique economic structure
original equipment manufacturers (OEMs)
Purchase goods to use in making their products
end user purchases
represent the equipment, supplies, and services needed to keep the business operational
capital equipment purchases
involve significant investments and include major technology decisions or critical equipment needed in the manufacturing process
materials, repairs, and operational purchases (MRO)
products used in everyday business operations and are typically not considered a significant expense
resellers
companies that buy products and then resell them to other business or consumers
request for proposal (RFP)
putting product specifications into a document for distribution
personal factors
refers to the needs, desires, and objectives of those involved in the purchase decision
Knowing the _____ _____ of a target market enables marketers to evaluate relevant statistics against competitors and the overall population using broad demographic studies.
personal characteristics
______ is an individual’s perspective on life and manifests itself in that person’s activities, interests, and opinions.
lifestyle
The behaviors regarded as proper for men and women in a particular society are called _____.
gender roles
An individual’s assessment of an object that evaluates the object on several important attributes is based on a(n):
multiattribute model
______ is a psychological tool that people use to focus on what is relevant and eliminate what is not.
selective awareness
______ learning involves mental processes that acquire information to work through problems and manage life situations.
cognitive
_______ is a set of unique personal qualities that produce distinctive responses across similar situations.
personality
Which of the following is the most important tool in developing and maintaining a strong customer relationship in business markets?
one-on-one personal communication
As B2B companies connect with customers, it becomes more difficult for one individual (the ____) to keep up with the complexity of the relationships.
salesperson
The _______ _______ requires a high level of coordination among the participants and facilitates the movement of goods through a channel to the ultimate consumer.
supply chain
Demand for B2B products originates from the demand for consumer products and is called _____ _____.
derived demand
A _______ occurs when companies use a product on a consistent basis and simply reorder when needed.
straight rebuy
straight rebuy
When the customer is familiar with the product and supplier but is looking for additional information, the purchase is called a ______.
modified rebuy
A(n) ____ ____ is the purchase of a product or service by a customer for the first time.
new purchase
An tool developed in the 1990s for defining and segmenting business markets is a classification system known as the ______.
NAICS
______ purchases are components used in the manufacturing process.
Original equipment manufacturer
Companies that buy products and then resell them to other businesses or consumers are called ______.
resellers
Organizations, such as the Small Business Administration, provide information on _____ contracts and contract personnel.
government
In B2B markets, _______ are defined as nonprofits, hospitals, and other non-government organizations .
institutions
Which of the following is not a stage in the business market purchase decision process?
evaluate the alternatives
Internally, ________ frequently activate the business market purchase decision process as part of their job.
employees
Which of the following are reasons why product specifications should be defined? Select all that apply.
- to help individuals inside the organization plan for the future
- to guide potential suppliers
- to give direction to the buying center
Which of the following are methods used to determine the least of vendors? Select all that apply.
- create a list of preferred or approved suppliers
2. search for and identify potential suppliers
Which of the following are reasons companies frequently solicit proposals from a number of vendors? Select all that apply.
- getting additional proposals helps in negotiating with the preferred vendor
- getting more information about all available options is a good idea.
Components used in the manufacturing process are called ______ _______ _______ purchases. (Spell out your answer; do not use an abbreviation).
original equipment manufacturer
True or false: product specifications are never written in such a way as to limit the number vendors.
false
Often the final purchase decision involves trade-offs between equally important evaluation criteria and equally qualified _____.
vendors
Which of the following is not a primary criterion used to evaluate the product choice?
promotional
The needs, desires, and objectives of those involved in the purchase decision are called _____.
personal factors
The primary organizational factor that affects product and supplier choices is ______ tolerance.
risk
Dealing with complains, resolving customer problems, and making sure the company is meeting customer expectations are critical to ensuring _____ _____.
customer satisfaction
_________ ________ _________ allows customer computers to communicate directly with supplier computers to reorder as needed. (Spell out your answer; do not use an abbreviation).
electronic data interchange
_______ is the process of business purchasing online.
E-procurement
Marketers realize that changes in life stage transform an individual’s buying habits and are referred to as the _____ ______ ______.
family life cycle
The stimulating power that induces and then directs behavior is called _______.
motivation
A(n) _______ is defined as a “learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.”
attitude
_________ is a system to select, organize, and interpret information to create a useful, informed picture of the world.
perception
__________ _________ is the process of placing in one’s memory only those stimuli that support existing beliefs and attitudes about a product or brand.
selective retention
Any change in the content or organization of long-term memory or behavior is called _____.
learning
Research suggest that consumers make product choices from which three perspectives? Select all that apply.
- attribute-based choice
- attitude-based choice
- emotional choice
Match the term to its market.
B2B Market:
- direct supply chain from supplier to manufacturer
- derived demand that fluctuates and is more inelastic (less price sensitive)
- complex buying process that can take a long time and involve more people
B2C Market:
- more customers but buy in smaller less frequent quantities
- could be located anywhere in the world
- impersonal relationships that exist through electronic communication
Place the stages of the consumer decision-making process in order, with he first stage at the top.
- problem recognition
- search for information
- evaluation of alternatives
- product choice design
- finally post-purchase evaluation
A _______ state is the desire that reflects how people would like to feel or live in the present time.
preferred
People live in the perceived reality of present time or ______ ______.
real state
