Part 2 Flashcards
1
Q
List and define the four growth strategies we discussed in class.
A
- Market Penetration Strategy: employs the existing marketing mix and focuses the firm’s efforts on existing customers
- Market Development Strategy: employs the existing marketing offering to reach new market segments
- Product Development Strategy: offering a new product or service to a firm’s current target market
- Diversification strategy: a firm introduces a new product or service to a market segment that it does not currently serve
2
Q
List, define, and provide an example of the 4 E’s of social media.
A
- Excite: offer must be relevant to its targeted customer; relevancy can be achieved by providing personalized offers (customers who bought this item also bought, frequently bought together)
- Educate: sells the product’s value proposition and offered benefits; explains why the customer should want to purchase/use the product, how it can offer more value than competing products. (Starbucks app highlights the importance of convenience – you don’t need to carry cash, you can earn rewards, and you can find new Starbucks locations)
- Experience: provide information about a firm’s goods and services; simulating real experiences; Mini Cooper allows you to design your car without entering the dealership by selecting details and then request financing and a test drive
- Engage: the previous 3 E’s go into engage; action, loyalty, and commitment; positively engaged consumers lead to more profitability (20-40% more purchases); engagement can also backfire
3
Q
Define culture and discuss how culture plays a role in marketing activities.
A
- Culture plays a role in the macro environment; the shared meanings, beliefs, morals, values, and customs of a group of people (passed down from generation to generation, family, school, town/city/state/region)
- Influences marketing activities: risk tolerances, sales, likes/dislikes, products unique to certain regions (skiing, sailing, golf, etc.)
- Country Culture: includes behavior, dress, symbols, physical settings, ceremonies, languages, food preferences, advertising
4
Q
What are some examples of regional culture?
A
• Skiing, snowmobiling, sailing, golf, soda vs. pop, pizza vs. pie
5
Q
Define and provide examples of demographics.
A
- The characteristics of human populations and segments, especially those used to identify consumer markets
- E.g.: age, gender, race, income, education, location, “You are where you live”
6
Q
List and discuss the four main generational cohorts we discussed in class. What are characteristics of each?
A
- Generational Cohort: a group of people of the same generation, have similar purchase behaviors because they have shared experiences and are in the same stages of life
- Gen Y: (1977-2000) 60 million Americans; also called “millennials”; tech savvy – internet, cell phones, social media; multitasking experts; expect easy access to virtually everything, prompting one observer to refer to them as the ‘entitled generation’; are incredibly proficient at tasks that overwhelm other generations; internet, cell phones, Facebook, IM, texting, tweeting, 9-11, internet bubble, housing bubble, the Great Recession, Google, Apple, YouTube, BRICs and the changing face of global competition
- Gen X: (1965-1976) 41 million Americans; they are unlikely to enjoy greater economic prosperity than their parents; population less than boomers and Gen Y, but possess spending power: delaying marriage, delaying purchase of first home; cynical, demand convenience; knowledgeable about products (less likely to trust salespeople or ad claims), more risk averse; MTV, Atari, Nintendo, Cable TV, Gulf War I, The Simpsons, Star Wars, Michael Jackson (“Thriller”), Challenger disaster
- Baby Boomers: (1946-1964) 78 million American’s born between 1946-1964 (post WW2); individualistic, self-reliant, obsession with maintaining their youth; entering their retirement years during one of the worst economic recessions in recent history; spending patterns shifting away from luxury items; lack of savings – working well beyond retirement age, reverse mortgages, becoming caregivers
- Seniors: (Before 1946) America’s fastest growing group, currently 39 million seniors in the US; tends to complain, needs special attention, and takes time browsing before purchasing, they have the time to shop and money to spend; tech averse, made in the USA, blue chip brand names, high quality, convenience, some internet use, fear of online security
- Gen Z: (2001-2014) digital natives, video games, affinity for brands (the book is rather sparse on this generation)
7
Q
Define need recognition, functional needs, and psychological needs. How can a product fulfill both functional and psychological needs?
A
- Need Recognition: the beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from a “needy” state to a desired state
- Functional Needs: pertain to the performance of a product or service
- Psychological Needs: pertain to the personal gratification consumers associate with a product or service
- If the functional need is good it can satisfy the psychological needs to if it gratifies them
8
Q
Describe the processes that a consumer goes through when conducting an internal search for information and an external search for information
A
- Internal Search for Information: the buyer examines their own memory and knowledge about the product or service, gathered through past experiences; past experiences (good and bad)
- External Search for Information: the buyer seeks information outside their personal knowledge base to help make the buying decisions; consumer reports, friends, and family
9
Q
Define universal set, retrieval set, and evoked set.
A
- Universal Set: include all possible choices for a product category
- Retrieval Set: those brands that can be readily brought forth from memory (a subset of the universal set)
- Evoked Set: compromises the alternative brands that the consumer states they would actually consider when making a purchase decision
10
Q
Define and provide an example of compensatory decision rules and non-compensatory decision rules
A
- Compensatory Decision Rules: the consumer trades off one characteristic against another – good characteristics compensate for bad characteristics
- Non-compensatory Decision Rules: selecting a product or service on the basis of one characteristic or one subset of characteristics, regardless of the values of other attributes; if a product/service lacks a certain characteristic, it is removed from the decision set
11
Q
Define and provide an example of decision heuristics.
A
• Mental shortcuts that help a consumer narrow down choices; price difference, brand, product presentation)
12
Q
What are three things that a company can do to deliver post-purchase customer satisfaction?
A
- Build realistic expectations
- Demonstrate correct product use
- Stand behind the products – money-back guarantees, warranties
- Encourage customer feedback, use to improve future products and experience
- Thank your customers
13
Q
Define cognitive dissonance. Provide an example of cognitive dissonance.
A
- An uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; aka buyer’s remorse
- E.g. product doesn’t work the same way its advertised so buyer feels mislead and doesn’t trust the brand anymore
14
Q
What are three things that a customer can do to relieve cognitive dissonance?
A
- Take back the item
- Only focus on the good qualities of the decision
- Seek positive feedback to justify your purchase
- Seek negative information about the products you did not select
15
Q
What are three things that a company can do to increase customer loyalty?
A
- Building a long-term relationship
- Discount/Loyalty cards
- Consistent employee contact
- Special hours/coupons for loyal customers
- Build positive word of mouth (WOM)
