Second exam Flashcards
Reference groups
- membership groups: direct influence and to which a person belongs
- aspirationals: groups an individual wishes to belong
- reference groups: groups that form a comparison or reference in forming attitudes or behavior
Perception
- selective attention: tendency to screen out most of the information to which they are exposed. People are more likely to notice stimuli that relate to a current need
- selective retention: remember good points made about a brand they favor
- selective distortion: interpret information in a way that will support what they already believe
Buyer decision process
- Need recognition
- Information search
- Evaluation of alternatives
- Purchase decision
- Post-purchase behavior
Buying decision behavior
- complex: highly involved and significant differences among brands
- dissonance reducing: highly involved but little difference among brands
- habitual: low-consumer involvement and little significant brand difference (market leader)
- variety seeking: low consumer involvement but significant brand difference (challenger firms)
Buyer decision process for new products
- innovators
- early adopters
- early mainstreamer
- late mainstreamer
- lagging adopters
Major types of buy situation
- straight rebuy
- modified rebuy
- new task
Participants in the business buying process
- users
- influencers
- deciders
- purchasers
- gatekeepers
Buyphases
- Problem recognition
- Need description
- product specification
- supplier search
- proposal solicitation
- supplier selection
- order routine specifications
- performance review
Marketing research
- proper defining the problem and research objectives
- developing a research plan for collecting information
- implementing research plan
- interpreting and reporting the findings
Types of research
- qualitative
- quantitative
- primary
- secondary (lower cost but data may not be relevant)
Sampling plan (probability)
- Simple random sample: equal chance of selection
- Stratified random: mutually exclusive groups and random samples are drawn from each group
- Cluster sample: mutually exclusive groups and the researcher draws a sample
Sampling plan (non probability sample)
- Convenience sample: easiest population members
- Judgement sample: the researcher select population members
STP strategy
Identifiying and engaging the right customer segments
Select customers to serve
Through segmentation and targeting
Value proposition
Through differentiation and positioning
Market segmentation
It requires dividing the market into smaller segments with distinct needs and characteristics. It can be geographic, demographic, psychographic, behavioral
Requirements for effective segmentation
- Measurable
- Accessible
- substantial
- differentialble
- actionable
Target market
Set of buyers who share common needs or characteristics that the company decides to serve
Marketing targeting strategies
- mass marketing: focuses on common needs rather than what’s different (eg apples)
- segmented marketing: targets several different market segments and designs separate offers for each (eg shampoo)
- niche marketing: target a large share of one smaller segment (eg clothes for pregnant women)
- micromarketing: tailoring products to suit the tastes of specific individuals
Positioning strategy
- Identifying competitive advantages: offering consumers greater value
- Selecting competitive advantages
- Effectively communicate chosen position
Positioning statement
To (target segment) our (brand) is (concept) that (point of difference)
Positioning map
It shows the consumer’s perceptions of marketers’ brands
Consumer product classification
- convenience: minimum comparison and buying effort
- shopping: customers carefully compares
- specialty: unique characteristics
- unsought: not something that consumers think about
Core product vs actual product
Core product: the product itself
Actual product: all the attributes that come with it
Brand positioning
- attributes
- benefits
- beliefs and values
Brand sponsorship
- manufacturer’s / national brand: eg cocacola
- store / private brand: found in specific stores, they don’t do promotions (eg hacendado)
- licensed brands: h&m using disney on their clothes
- co-brands: two brands of different companies are used on the same product
Brand development
- line extentions
- brand extentions
- multibrands
- new brands
Product life cycle
- Product development stage
- Introduction
- Growth
- Maturity
- Decline
Price
It can be:
cost based pricing:
- fixed costs: do not vary with production or sales level
- variable costs: vary with the level of production
value based pricing: the price is estimated following what the consumers are willing to pay for a product
Place (distribution)
- supply chain: includes firms’ raw materials, productive inputs, and factory capacity
- value chain: includes company, suppliers, distributors, consumers
Types of distribution
- Intensive distribution: penetrate every retail
- exclusive distribution: only available in some retailers
- selective distribution: companies select retailers that are more suitable to their consumers
Promotion
- advertising: pay form of nonpersonal presentation and promotion of products
- personal selling: personal interaction by the firm’s sales force
- sales promotion: short-term incentive to encourage the purchase
- public relations: creating good relationships with the company’s publics
- direct and digital marketing
New communications thinking
- owned: content we control and create
- shared: content created by consumers, NO control over it
- paid: we can partially control it
- earned: feedback we earn, NO control over it
Geographic segmentation
It divides the market into different geographical units such as:
nations
regions
states
countries
cities
neighborhoods
e.g. McDonald’s has different menus for each country
Demographic segmentation
Divides the market into segments based on variables such as
- age → age and life-cycle stage segmentation divide a market into different age and lifecycle groups (e.g. Amazon targeted a younger tablet market for using the Kindle Fire tablet, introducing FreeTime Unlimited, a multimedia subscription service targeted toward 3- to 8-year-olds)
- life-cycle stage
- gender → gender segmentation divides a market into different segments based on gender (e.g. L’Oréal Men’s Expert, P&G, Nivea, clothes)
- income → income segmentation divides a market into different income segments. E.g. Dollar Tree (low- and middle-income groups)
- occupation
- education
- religion
- ethnicity
- generation
Psychographic segmentation
Divides a market into different segments based on:
- social class
- lifestyle → e.g. W Hotels, iconic lifestyle brand inviting guests to step inside the worlds of design, music, and fashion
- personality → e.g. Coca-Cola Zero targets more mature, practical, good-humored personalities: “Real Coca-Cola taste and zero calories”
- characteristics
Behavioral segmentation
Divides a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product:
occasions → occasions refer to when consumers get the idea to buy (e.g. Knorr advertises its soups more heavily in the cold winter months)
Holiday occasions or nontraditional occasions.
benefits sought → e.g. Schwinn makes bikes for every benefit segment. For example, Schwinn’s urban bikes are “for riders who want a functional, durable, and stylish bike to commute or ride casually in urban areas.”
user status (nonusers, ex-users, potential users, first-time users, and regular users of a product) → Marketers want to reinforce and retain regular users and attract targeted nonusers. E.g. Potential users (those facing life-stage changes), upscale kitchen retailer works, and contacts couples through the bridal registry.
usage rate (light, medium, and heavy product users) → heavy users are often a small percentage of the market but account for a high percentage of total consumption (e.g. a recent study showed that heavy seafood consumers in the United States are a small but hungry bunch. Less than 5% of all shoppers buy nearly 64% of unbreaded seafood consumed in the United States.)
loyalty status → buyers can be divided into groups according to their degree of loyalty:
some consumers are completely loyal, somewhat loyal, or other buyers show no loyalty to any brand
