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155 Cards in this Set

  • Front
  • Back
• Buyer’s Black Box
o Buyer characteristics
o Buyer decision process
• Buyer responses
o Product choice
o Brand choice
o Dealer choice
o Purchase timing
o Purchase amount
Consumer buyer behavior
• The buying behavior of final consumers—individuals and households who buy goods and services for personal consumption
Consumer market
• All the individuals and households who buy or acquire goods and services for personal consumption
Buyer’s black box 2
• Where marketing and other stimuli are turned into observable buyer responses.
• First, the buyer’s characteristics influence how he perceives and reacts to the stimuli
• Second, the buyer’s decision process itself affects the buyer’s behavior
o Culture
 The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
o Subculture
 A group of people with shared value systems based on common life experiences and situations (nationalities, religions, racial groups, geographic regions) [Hispanic, African American, Asian American, Mature consumers]
o Social Class
 Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
 Measured by a combination of occupation, income, education, wealth, and other variables
 Upper Class, Middle Class, Working Class, Lower Class
 Membership Groups
groups that have a direct influence and to which a person belongs
o Group
Two or more people who interact to accomplish individual or mutual goals
 Reference Groups
serve as a direct or indirect point of comparison or reference in forming a person’s attitudes or behaviors
 Opinion Leader
person within a group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others
 Roles
activities that you are expected to perform
 Status
- reflects the general esteem given to the role by society
 Lifestyle
- a person’s pattern of living as expressed in his or her activities, interests, and opinions
 Personality
the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment
 Brand Personality
the specific mix of human traits that may be attributed to a particular brand
 Self-concept
the premise is that people’s possessions contribute to and reflect their identities
 Motive
a need that is sufficiently pressing to direct the person to seek satisfaction of the need
 Maslow’s hierarchy of needs
human needs are arranged in a hierarchy from the most pressing at the bottom to the least pressing at the top. As each important need is satisfied, the next important need will come into play.
• Self-actualization needs
• Esteem needs
• Social needs
• Safety needs
• Physiological needs
 Perception
 The process by which people select, organize, and interpret information to fro a meaningful picture of the world
 Selective Attention
- the tendency to screen out most of the information to which they are exposed; tuning out
 Selective Distortion
distorting it to support your existing belief
 Selective Retention
Of the information we pay attention to we only retain a certain amount
o Learning
 Changes in an individual’s behavior arising from experience
 Belief
a descriptive thought that a person holds about something
 Attitude
a person’s consistently favorable or unfavorable evaluations, feeling, and tendencies toward an object or idea
• Complex Buying Behavior
High Involvement, Significant Diff. Between Brands
o consumer will make significant time and effort, made infrequently, expensive, could be perceived as risky and very self reflective, will also involve several different parties (computer)
• Variety-Seeking Buying Behavior
- Low Involvement, Significant Difference Between Brands
o buys more frequently, consumer’s not that involved in the process (buying cookies) must make sure that your product is available
• Dissonance-Reducing Buying Behavior
High Involvement, Few Differences Between Brands
o purchase is not considered self reflective (buying carpeting) after purchase they have “post-consumer dissonance” expensive, infrequent, or risky
• Habitual Buying Behavior
Low Involvement, Few Differences Between Brands
o go for the most familiar brand (at the forefront) buying the laundry detergent that your parents use, not involving many other parties in the purchase (salt)
o Need recognition
the first stage of the buyer decision process, in which the consumer recognizes a problem or a need. you run out of food, a trigger, where is the trigger coming from? Can be triggered by internal or external stimuli
o Information search
the stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search.
 commercial sources (going straight to the company, most common) media sources (newspaper) personal sources (family friends, most influential) experiential sources (actually trying out the car)
o Evaluation of alternatives
the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set
o Purchase decision
the buyer’s decision about which brand to purchase
 can be affected by attitudes of others or unexpected situational factors
o Post-purchase Behavior
the stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction
 Cognitive dissonance
buyer discomfort caused by postpurchase conflict
Buyer Decision Process for New Products
• (a good, service, or idea that is perceived by some potential customers as new)
• Adoption Process
the mental process through which an individual passes from hearing about an innovation to final adoption
• 1) Awareness
the consumer becomes aware of the new product, but lacks information about it
• 2) Interest
: the consumer seeks information about the new product
• 3) Evaluation
the consumer considers whether trying the new product makes sense
• 4) Trial
the consumer tries the new product on a small scale to improve his or her estimate of its value
• 5) Adoption
the consumer decides to make full and regular use of the new product
Market Segmentation
- dividing a market into smaller groups of buyers distinct needs, characteristics, or behavior who might require separate products or marketing mixes
• Geographical segmentation
dividing a market into different geographical units such as nation, states, counties
• Demographic segmentation
dividing the market into groups based on demographic variables such as age, sex, family size, income, religion, race
o most popular segmentation; demographics are closely related to needs, wants and income
• Psychographic segmentation
dividing a market into different groups based on social class, lifestyle, or personality characteristics
• Behavioral segmentation
dividing a market into groups based on consumer knowledge, attitude, use, or response to a product
o Occasion segmentation
- dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
o Benefit segmentation
dividing the market into groups according to the different benefits that consumers seek from the product
• Intermarket segmenation
forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
Requirements for Effective Segmentation
• Measurable
• Accessible
• Substantial
• Differentiable
• Actionable
Target Marketing
• The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
• Target Market
a set of buyers sharing common needs or characteristics that the company decides to serve
o Undifferentiated Marketing
mass marketing, one product for every demographic; if all consumers in the market have the same taste, rarely the case
o Differentiated Marketing
where a firm decides to target several market segments and designs separate offers for each; segmented
o Concentrated Marketing
niche, dads for example; better for limited resources and as you grow you can think about other segments
o Micromarketing
local or individual marketing
 Local marketing
- tailoring brands and promotions to the needs and wants of specific individuals and local customer groups—cities neighborhoods, and even specific stores
 Individual Marketing
tailoring products and marketing programs to the needs and preferences of individual customers (customized t-shirts)
o Product position
the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products
Market Positioning
• arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
• Competitive Advantage
an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices
o Criteria for Meaningful Differences
 Is it important?
 Superior
 Preemptive
 Distinctive
 Communicable
 Affordable
 Profitable
• Unique Selling Proposition
each brand should pick an attribute and tout itself as “number one” for that attribute (ex. Wal-Mart, Crest, etc.)
• Positioning statement
a statement that summarizes company or brand positioning

To (target segment and need) our (brand) is (concept) that (point-of-difference)
Market Segmentation
• Identify bases for segmenting the market
• Develop segment profiles
Target Marketing
• Develop measure of segment attractiveness
• Select target segments
Market Positioning
• Develop positioning for target segments
• Develop a marketing mix for each segment
• Product
anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
• Service
any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything
o Core Benefit
what is the buyer really buying
o Actual Product
- (a Sony camcorder)
o Augmented product
offering additional consumer services and benefits
o offering additional consumer services and benefits
Consumer Products
product bought by final consumer for personal consumption
o Convenience
something that will be bought frequently and immediately (gum, candy) and with a minimum of comparison and buying effort
o Shopping
consumer good that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price, and style; sales people would need to be there to assist the consumer in purchasing (clothing, furniture, appliances) Stores are located within close proximity of one another
o Specialty
consumer makes a special effort to buy, strong brand identification or unique characteristics (consumer knows they want a Ferrari)
o Unsought
- goods the consumer doesn’t normally think about buying or isn’t aware of (life insurance) strong sales
• Industrial Product
product bought by individuals and organizations for further processing or for use in conducting a business
• Product quality
the ability of a product to perform its functions; it includes the product’s overall durability, reliability, precision, ease of operation and repair, and other valued attributes
• Product style and design
style describes the appearance of a product; design contributes to a product’s usefulness as well as to its looks
• Brand
name sign or symbol that identifies a product
• Packaging
- the activities of designing and producing the container or wrapper for a product
• Labeling
printed information appearing on or with the package, part of packaging
Product Line
a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
Product Length
you add up all of the products across all of the product lines
Product Depth
total number of versions of each product or brand
Product Line Stretching
- when a company lengthens its product line beyond its current range
Product Line Filling
adding more items within the present range of the line
Product mix
the set of all product lines and items that a particular seller offers for sale
• Width- the number of different product lines the company carries
• Length- the total number of items the company carries within its product lines
• Depth- the number of versions offered of each product in the line
• Consistency- how closely related the various product lines are
Brand Equity
the positive differential effect that knowing the brand name has on customer response to the product or service
o Manufacturer’s brand
created and owned by the producer
o Private brand
store brands owned by resellers of products or services (publix cereals)
o Licensed Brand
acquiring a name to put on your output or giving out your name (athletes giving out their name to put on a product)
o Co-branding
two companies come together to create one new brand (Reese’s peanut butter cup cereal)
• Line extensions
existing product category, existing brand name
o taking your brand and introducing different versions of it (iPod, flavors, varieties, sizes)
• Brand extension
o introducing the same brand name into a new product category (swiss army sung1asses)
new product category, existing brand name
• Multibrands
existing product category, new brand name
(Honda and Acura; Toyota and Lexus) in the higher end or lower end
• New Brands
new product category, new brand
o new brand name and new product category (Dasani)
• Megabrand Strategies
weeding out weaker brands and focusing their marketing dollars only on brands that can achieve the number one or number two market share positions in their categories
• Intangibility
services cannot be seen, tasted, felt, heard, or smelled before purchase
• Variability
quality of services depends on who provides them and when, where, and how (doctors office, haircut, etc
• Inseparability
they are produced and consumed at the same time and connot be separated from their providers (working on a car)
• Perishability
a major characteristic of services—they cannot be stored for later sale or use (charging someone if they miss a doctor’s appointment)
The service-profit
- the chain that links service firm profits with employee and customer satisfaction
• Internal Marketing
marketing by a service firm to train and effectively motivate its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction
• Interactive Marketing
marketing by a service firm that recognizes that perceived service quality depends heavily on the quality of buyer-seller interaction
Service Differentiation
• Have a good service recovery program and make your frontline employees experienced and train them well.
• Productivity should be improved but not to the point where it affects the quality of the service that is provided
New Product Development
• the development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts
• Idea Screening
o Screening new product ideas in order to spot good ideas and drop poor ones as soon as possible
• Product Concept
o a detailed version of the new product idea stated in meaningful consumer terms
• Concept Testing
o Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
Marketing Strategy Development
• Designing an initial marketing strategy for a new product based on the product concept
Business analysis
• A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.
Product Development
• Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product
Test Marketing
• The stage of new-product development in which the product and marketing program are tested in more realistic market settings
o Standard Test Markets
o Controlled Test Markets
o Simulated Test markets
• Introducing a new product into the market
• Sequential Product Development
a new product development approach in which one company department works to complete its stage of the process before passing the new product along to the next department and stage
• Simultaneous (team-based) Product Development
an approach to developing new products in which various company departments work closely together, overlapping the steps in the product-development process to save time and increase effectiveness.
Product Life-Cycle Strategies
• The course of a product’s sales and profits over its lifetime. It involves five distinct stages:
o Product Development
- when the company finds and develops a new product idea
o Introduction
a period of slow sales growth as the product is introduced in the market
o Growth
a period of rapid market acceptance and increasing profits
o Maturity
a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers
the period when sales fall off and profits drop
• The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service
• Fixed Price
setting one price for all buyers
• Dynamic Pricing
changing different prices depending on individual customers and situations (car dealerships)
o Current profit maximization
you set your price to achieve short term profit maximization
o Market share leadership
setting price as low as possible to get the largest market share
o Product quality leadership
set price to demonstrate a leading edge in product quality; technology area
o Survival
set price in order to keep business afloat
o Social Pricing
- basing on customer income, social position
o Target Costing
pricing that starts with an ideal selling price, then targets costs that will ensure that the price meets the buyers expectations
• Marketing Mix Strategy
o you build your marketing mix around the final price that the consumer is willing to pay for the product
o Fixed Costs
costs that do not vary with production or sales level whether you buy 10 or 1000
o Variable Costs
costs that vary directly with the level of production (raw materials) whether you buy 10 or 1000
o Total Costs
the sum of the fixed and variable costs for any given level of production
o Experience Curve (Learning Curve)
the drop in the average per-unit production cost that comes with accumulated experience (because you become more efficient)
o Pure Competition
the market consists of many buyers and sellers trading in a uniform commodity (wheat, copper, or financial securities)
o Monopolistic Competition
the market consists of many buyers and sellers who trade over a range of prices rather than a single market price
o Oligopolistic Competition
the market consists of a few sellers who are highly sensitive to each other’s pricing and marketing strategies (airline industry)
o Pure Monopoly
the market consists of one seller; in theory you can charge any price you want, but you don’t always do so
• Consumer perceptions of price and value
o Will determine the highest price you can charge for the product
o Demand Curve
a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged

 Shows price/quantity relationship
o Inelastic demand
means that if prices changes buyers will still buy because it is a necessity (gas, cigarettes); higher the price for more profit
o Elastic demand
buyers will not buy if the price goes up (coffee); lower the price for profit
o Cost-plus pricing
adding a standard markup to the cost of the product
o Break Even Pricing (target profit pricing)
setting price to break even on the cost of making and marketing a product; or setting price to make a target profit
• Value-Based Pricing
setting price based on buyers’ perceptions of value rather than on the seller’s cost
• Competition-Based Pricing
setting prices based on the prices that (you know or what you think) competitors charge for similar products
o Going-Rate Pricing
where a firm bases its price largely on competitors’ prices, with less attention paid to its own costs or to demand
o Sealed-Bid Pricing
a firm bases its price on how it thinks competitors will price rather than on its own costs or on the demand; you don’t know your competitors’ pricing because the bid is sealed