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124 Cards in this Set
- Front
- Back
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Marketing |
Process of identifying customer needs and wants and satisfying them by creating and exchanging valuable product offerings. |
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Needs |
Fundamental physiological and psychological requirements. |
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Wants |
Preferences for specific way in which needs are fulfilled. |
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Satisfaction |
Predictive of purchase, captures extent to which product offering fulfils targeted needs based on consumers' experience with the product. -negatively related with value
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Expectancy - disconformation |
Expectations negatively related to satisfaction. |
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Delighted customers |
More likely to repurchase and spread the word than any other group. |
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Outraged customers |
More likely to engage in negative word of mouth and other destructive ploys. |
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Expected approach goals |
-things that customer expects to have fulfilled -approach goals can be hedonic and utilitarian |
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Expected avoidance goals |
-assumed to not occur because a) marketer claims b) norms that dictate minimum acceptable standards c) social norms
-avoidance goals do not have to be associated with negative affect, but most exist because they are attempts to avoid painful outcomes |
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Unexpected approach goals |
-customers will appreciate being fulfilled; surprising and rewarding -delight can be achieved |
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Product offering |
1. Price 2. Promotion 3. Product 4. Place -overall package offered to customers chosen by marketers |
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Value |
Perceived benefits that a product offers over its competition. -assessed relative to other options at that time |
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Perceived value = |
perceived benefits (expectations) relative to perceived costs
-increasing perceived benefits will decrease satisfaction (expectations raised) |
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Satisfaction = |
experienced benefits relative to expectations (perceived benefits) |
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Opportunity costs |
-what money could buy outside of category -highlighting opportunity costs should affect choice (makes price differences salient and increases preference for lower priced options) |
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Informercial tactics |
1. Increase perceived benefits -highlight problems -illustrate how product solves them -segregate gains to increase total value of components 2. Increase perceptions of efficacy -make it easy to obtain 3. Decrease perceived costs -provide high within-category reference prices -split cost into multiple future payments -highlight favourable opportunity cost comparisons -anchoring and adjustment
-highlight benefits any product can achieve but people may not know about -limited time offers because feelings are fleeting
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Anchoring and adjustment effect |
When consumers fail to adjust reference price downwards even when they know reference price provided is excessively high. |
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Segmentation |
Dividing market into distinct groups according to their needs, or related characteristics and behaviour, for the purpose of developing separate marketing mixes designed to provide the highest value for each chosen segment. |
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Why segment? |
-only a subset of things likely to be satisfying to one customer -they'll only pay for things they value, and will pay more -products cannot satisfy all desires without impeding ability to satisfy some desires or incurring additional costs |
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Focus |
-can aid memory -create general halo effect surrounding product -adding features can reduce perceived ability of product to perform well |
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Market |
Group of potential customers with similar needs for which there is a class of products or potential products that can satisfy their needs. |
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Mass marketing |
Provides single market offering; no distinction is made across customers to appeal to as many people as possible. -use with cost of primary importance (EOS), homogeneous needs, little competition |
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Demographic segmentation |
divide groups based on observable characteristics of population -age, sex, family size, income, religion, etc |
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Geographic segmentation |
divide groups based on where people live, using geographical and political distinctions |
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Psychographic segmentation |
divide groups based on social class, lifestyle personality, culture |
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Behavioural segmentation |
divide groups based on consumers' product-related behaviour, in terms of usage and occasion -occasion used to think about how to expand market -usage divides light and heavy users |
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Descriptors |
1) Demographic 2) Geographic 3) Psychographic 4) Behavioural -can be useful as long as they are correlated with underlying needs -do not let descriptors define segment (group is not homogeneous) |
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Ways to identify segments |
-split up existing market based on closely related needs -identify needs for which no good solution currently exists -combine needs satisfied by products from different categories (combine features) |
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Segmentation strategies |
-performing key goals better (improve on certain elements) -divergent / convergent |
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Divergent segmentation strategies |
for specialist products designed to fulfill very particular needs -add features that satisfy same goal or need |
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Convergent segmentation strategies |
for generalist products designed to do many different things -some additional goal or need -risks negatively impacting abilities -at minimum should add convenience |
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Feature creep |
-marketers attempt to add features to fulfill additional goals and increase appeal, grow -costs but may not pay |
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Positioning |
arranging for product to occupy clear, distinctive and desirable place in consumers' minds relative to competition -essence of product (simplest thing) that aligns with needs of target market |
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Product position |
way product is defined or understood by consumers relative to competing products -strategies include more for more, more for same, more for less, same for less and less for less |
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Over-positioning |
being too specific or promising too much |
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Under-positioning |
not adopting clear position |
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Confused / contradictory positioning |
establishing associations that do not make sense to consumers or are not consistent |
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Repositioning |
attempt to change image consumers have -necessary when product's position is inconsistent with primary needs of segment -may need to change brand name |
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Steps to positioning |
1. State need and characterizing of segment 2. Name brand 3. State product category with which you wish to align 4. State key elements of positioning that distinguish it from competitors and appeal to segment |
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Adding features |
-must ensure that existing customers are still satisfied and their most important needs are being met -how will existing market react? what is ability to appeal to different segment? how does this affect ability to provide initial features? |
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Ads |
we use ad because we assume it causes some liking over and above simply presenting product -want to understand why ad caused liking -to what extent is ad gauging correct psychological reaction in order to elicit purchase behaviour -each feature of ad has different impact on how it is perceived -difficult to assess behavioural impact of ad and pinpoint what caused reaction |
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Consumer research questions |
-how satisfied are customers? -why are consumers not buying? -what do consumers want? -how will consumers respond to marketing variables?
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Descriptive research |
Purpose is to describe existing state of affairs -consumers attitude towards ad -consumer satisfaction -number of people who share particular goal -correlational evidence Primary goal to generalize some group -existing customers, entire market, or some group within market |
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Coke's taste change |
-Coke was losing market share to Pepsi, Pepsi preferred in taste tests -changed formula to New Coke -assumed that taste was driving consumers' purchase decisions, but they were driven by a number of factors -people were attached to Coke and some of current market preferred taste -Coke did not test right research question |
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Correlation-causality fallacy |
correlations don't mean causality
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Problems with correlations |
-correlation-causality fallacy -lack of correlation doesn't mean no causality -range restriction can hide relationships |
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Causal research |
1. Tests causal links 2. Tests underlying theory |
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Causality and intuition |
-intuitive beliefs about relationships can be compelling but disastrous for business -rarely question causal relationships, don't always recognize that we've assumed causality, and suffer from many biases |
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Confirmation bias |
More likely to notice information that is consistent with our beliefs. |
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Positive test strategies |
When individuals look to test hypothesized relationships, they tend to look for information that would confirm the case rather than refute. |
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Ease of retrieval |
Individuals tend to rely on ease with which they can retrieve instances from memory as basis for judgements. |
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Distinctive co-occurrences |
Obvious instances of particular co-ocurence tend to cause beliefs that there is relationship. -linked to formation of stereotypes -only need few instances of very distinct behaviour in easily identified group to start believing there is relationship between two |
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Sense-making |
Tend to be convinced by causal explanations to extent that we have story that makes sense; fits together based on pre-existing beliefs about way world works -when more difficult to construct story and piece together evidence, less likely to believe story -can be led astray by own stories when making accurate causal judgements -often convinced by arguments based on extent to which they rely on believable causal relationships |
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To infer relationship |
-if we want to know whether X has Y, need to know 1) How many X have Y 2) How many X do not have Y 3) How many non X have Y 4) How many non X do not have Y -avoid jumping to conclusions |
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Fundamental attribution error |
Individuals tend to attribute others' behaviour to their disposition or internal influences, while ignoring situational determinants of behaviour. -tend to do opposite when thinking about own behaviours; attribute them to situational or external influences -attribute good things to ourselves -can lead to pluralistic ignorance -can explain snowballing effects where individual's behaviour is often reaction to other person in interaction and observers attribute behaviour to disposition |
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Pluralistic ignorance |
Failure to realize that other people might share one's private reactions. -attribute others' outward behaviours to inner motives -we forget there are situational constraints that can affect behaviour |
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False consensus effect |
Tend to overestimate extent to which others will act and do as we do; we view own actions and choices as more common than they are. -tend to hang out with similar individuals -consult own behaviour to use as guide -marketing managers may make judgements about how consumers react based on own reactions |
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Self-persuasion |
if we can come up with reason we believe it more |
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Product |
Need-satisfying offering of firm. |
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Product quality |
Ability of product to satisfy needs of target market. -often major element of product positioning -quality may relate to set of generic needs -marketers consider what needs are valued by target market |
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Good product |
-satisfies unfulfilled needs -satisfies central needs better than competition -satisfies important needs -ignores irrelevant needs -should not dissatisfy non-central needs; consumers have minimum acceptable standards |
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Branding |
Firm perspective - Use of name, term, symbol and/or design to identify product or groups of products
Consumer perspective - Associations and categorization of product as identified by particular name and/or logo |
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Brands |
Key tool used to position product. -consider how and which info to attach -emphasize less, consistently -can be tied to one or more products, which changes distinctiveness of brand -ranges from mere familiarity to well-defined set of associations / image of brand -relies on consistency -not only affected by what marketers say, also affected by consumers perceptions of product and firms' actions |
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Brand Equity |
Extent to which consumers are willing to pay more for product because of brand.
Rejection -> Non-recognition -> Recognition -> Preference -> Insistence |
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Information storage |
Stored in long-term memory in associative networks known as schemas |
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Spreading activation |
Activated by cues present in environment or that emanate from individual consumer. -Mars landing and Mars Bars |
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Emphasize less, not more |
-stronger associations have higher probability of recall (Marlboro) -easier to create fewer associations -ease of retrieval affects confidence in belief -halo effect occurs when consumers use valence associated with one belief to infer others -more credible that product can do fewer things better than more |
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Changing associations |
cannot remove existing associations, can only attach new ones -stronger associations are called preferentially over weaker ones |
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Corporate brands |
often lack distinct image, especially with conglomerates -good for assurance of quality (Ford, GM, VW) |
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Family branding |
good for closely related products (Dove, Swiffer, Levi's) |
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Individual branding |
helps maintain distinct brand identity (Corvette, AXE, Smart car) -expensive to brand each product |
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Brand extensions |
-rely on principle that associations will carry over to extension -moderated by perceived fit between parent and new product -trade-off between boost for extension and effects of overall brand dilution -always consider brand dilution |
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High fit extensions |
Horizontal -> All-bran cereal and granola bars Vertical -> Campbell's classic soup and fancier soup (step-up and step-down extensions) |
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Brand dilution |
-extensions can also impact overall brand (brand dilution) -step-down vertical extensions and low fit extensions problematic -generic associations may be more robust to dilution |
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Line extensions |
-considered low-cost, low-risk segmentation -rarely increase overall demand -cost of producing multi-item line higher than single item -related to over-segmentation |
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Over-branding |
when only a small portion of the total brands make up most of the profit |
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Brand name |
names can have existing associations, convey meaning -relevant to product positioning |
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Choosing brand name |
choose from existing words or neologisms -bad names can work, but avoid in-jokes and personally meaningful things like names -consider ease of creating new associations (strength of existing associations) -concrete nouns easier to attach associations -short, easy to pronounce, and distinct |
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Trace strength |
Some concepts / activations are stronger and more likely to come to mind. |
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Promotion |
Marketing activities that communicate information -to consumers -about organization, products, activities -to directly or indirectly expedite exchange Communicating value of product offering to chosen target market. |
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Types of promotion |
1) Personal selling 2) Advertising 3) Public relations 4) Sales promotions
-promotion more than just advertising! |
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Communications mix |
Specific blend of promotion types used. |
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Direct marketing |
-either part of advertising or personal selling Involves direct-to-consumer solicitation -direct mail, telemarketing, leaflets, flyers, infomercials -easy to measure positive effects but not negative effects |
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Personal selling |
Face-to-face contact with consumers designed to inform and persuade consumers to buy. -persuasive but costly |
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Advertising |
Paid form of non-personal communication through various media channels by identified sponsor. -broad reach but limited content -ability to tailor messages depends on match bw channel and target market |
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Advertising channels |
include print, TV, radio, flyers, internet, outdoor, and guerilla |
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Public relations |
Any unpaid form of non-personal communication through various media outlets. -credible but uncontrollable -includes press conferences, news stories, features, annual reports, corporate website, product publicity, lobbying, public service |
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Sales promotion |
An activity or material that offers direct inducement to purchase -incentivizing but costly |
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Key questions about promotion |
1. Who to communicate with? (Audience) 2. What to say? (Message 3. Where to say it? (Promotion type and channels) |
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Audience for promotion |
-want to persuade our target market of value of offering -may wish to persuade intermediaries (customer vs. consumer) bc they can be effective promoters |
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Push strategy |
producer promotes to wholesaler, who promotes to retailer, who promotes to consumer -often used for convenience goods |
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Pull strategy |
producer promotes to consumer and skips wholesaler and retailer |
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Message of promotion |
must communicate value by persuading target market that product fulfills category and primary choice needs better than competition -focus on desired position, requires consistency across all promotion types and over time -may have other promotion objectives such as awareness/interest, persuading, and rewarding
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Promotion objectives |
1. Find right consumers (exposure) 2. Attract their attention 3. Communicate something that contributes to positive product attitude (processing) -many different types of information can affect attitudes -always think about how and why information you provide is creating desired response -positive attitudes do not require extensive processing |
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AIDA model of promotional messages |
good messages should 1. Attract Attention 2. Create Interest 3. Arouse Desire 4. Obtain Action -may focus on different aspects depending on specific promotional objectives |
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Psychological purpose of promotion |
Create positive attitude towards purchasing product. -often can't provide all information necessary to create strong purchase attitudes |
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Processes involved in purchase attitudes |
1. Exposure -marketers need to find consumers who do or will possess relevant goals 2. Perception 3. Attention -attention can occur above and below conscious awareness 4. Processing -processing depends on relevance to important goals 5. Attitudes -attitudes strongly influenced by direct experience with object
-for consumers who have already experienced product, primary goal would be to remind |
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Exposure process |
-choose media that can reach target market -consider extent of information processing (most unsought media seriously limited in extent to which info can and will be processed) -consider traditional media and other contexts where relevant consumers spend time |
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Perception and attention processes |
consumers must perceive and attend to information to which they are exposed to formulate attitude -stimuli perceived within context of background, grab or lose attention relative to background -expectancies form background in many cases -expectancies also shape perception |
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Attracting attention |
marketers spend great deal of effort attempting to attract attention, typically through use of surprising or unexpected stimuli (expectancy violation) -marketers often use stimuli relevant to consumer goal to attract attention (entertainment, humour, beautiful images, threatening info), not always related to product |
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Threatening information |
Designed to create goal conflict that takes you away from certain goals. -stimuli that grabs attention is also directly related to advocated position -eg, warning labels on cigarette boxes |
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Humour and entertainment in ads |
-when ad is humorous or entertaining, good for product awareness -but ads vary in humour arousal, can lower attitude or even offend -must consider nature of target market -attention-grabbing stimuli divert attention away from product, problematic when info requires more than minimal processing or consumers want more than minimal info -should not be focal point of advertisement, should be integral and relevant to message |
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Information for attitude formation |
-info needs to communicate goal-fulfillment better than competition, but descriptive arguments require extensive processing and credibility to impact attitudes -consumers attend and process other information in ways that require little motivation/capacity |
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Affective responses |
one type of response to stimuli that requires very little in way of cognitive processing -pictures babies, puppies, nice scenery all generate positive feelings |
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Conditioning attitudes |
-reactions to primary object can be transferred to secondary object -useful for ads which rely on goal-relevant stimuli anyway to attract attention -initial unconditioned stimulus naturally elicits unconditioned response, then transfer those feelings to another conditioned stimulus to elicit conditioned response (Pavlov) |
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Classical conditioning |
can work with any unconditioned stimulus / unconditioned response -unconditioned responses often involve emotional responses and/or ANS -whatever is conditioned is whatever immediately precedes stimulus |
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Likelihood of conditioning |
1) Frequency of repetitions -more repetitions increases conditioning, no repetition could lead to extinction 2) Strength of UCS -stronger reactions increase conditioning -habituation 3) Previous exposure to UCS and CS -pre-exposure -latent inhibition -blocking 4) Timing of CS and UCS -delayed conditioning, trace conditioning, concurrent conditioning, backward conditioning |
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Habituation |
repeated exposure to UCS decreases conditioning |
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Pre-exposure |
familiar UCS decreases conditioning |
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Latent inhibition |
familiar CS decreases conditioning |
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Blocking |
previously paired UCS decreases conditioning |
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Delayed conditioning |
presentation of CS right before presentation of UCS -most effective |
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Trace conditioning |
presentation of CS precedes presentation of UCS way in advance -2nd most effective -allows room for something else to become signal during delay |
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Concurrent conditioning |
presentation of CS and UCS at same time -3rd most effective |
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Backward conditioning |
presentation of UCS precedes presentation of CS -least effective |
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Marketing implications of conditioning |
-CS (product) should be presented before UCS -most effective for new products (no latent-inhibition) -choose novel (avoid pre-exposure effect) UCS that elicit strong, positive reactions (UCR) -music, attractive, sex appeal, humour, and colour can all be effective UCS -choose appropriate UCS / UCR for product |
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Key points of promotion |
Promotion must create positive purchase attitude. -consider promotional objectives in terms of conveying info about causes of purchase attitude (product attitude, value, acquisition info) -all attempts require exposure and attention -evaluative conditioning can create favourable attitudes when UCS emanates from product |
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Persuasion |
Changing / creating attitudes by providing information. -routes include heuristic processing and systematic processing |
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Heuristic processing |
if-then reasoning -rely on simple cues -occurs when either motivation or capacity are low |
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Attractiveness |
affects liking and credibility affected by similarity and familiarity |
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Heuristic cues |
-consensus information -source cues give credibility, liking, and / or attractiveness |
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Systematic processing |
-argument strength crucial -requires both motivation and capacity -tend to consider central information that directly speaks to or has implications for advocated position -characterized by effortful, elaborative and deliverative consideration of advocated position -involves counter-argumentation and self-persuasion |
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Strong arguments |
Defined as those hard to counter-argue -need to communicate that product fulfills goals of target market -must be believable and understandable -don't rely on what's persuasive to you -test multiple times |
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Boomerang effect |
weak arguments can lead to more negative attitudes -when consumers view negatively without processing |
