Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
130 Cards in this Set
- Front
- Back
|
Consumer Behaviour |
- value creation and consumer needs - consumer decision making process (DMP) - attitudes and perceptions (can be manipulated) |
|
|
Marketing Research |
- quantitative methods to evaluate markets and consumer behaviour, look for patterns - quantitative measures of attitudes and intensions to understand consumer behaviour and improve current strategies - starts with secondary data |
|
|
Diamond-Water Paradox |
- gives objects value - not necessarily actual physical use of object but emotional/social value (scarce items = valued) |
|
|
Labour Theory of Value |
- labour is the exchangeable value of all commodities (Adam Smith) |
|
|
Value |
- subjective - consumer value can have economic, experiential, social, and functional value
|
|
|
Economic Value |
- reduced cost of acquisition and/or consumption |
|
|
Experiential Value |
- intangible, psychological, emotional benefits - i.e. brand, design, service |
|
|
Social Value |
- value from interaction with other users - positive network externality - community |
|
|
Functional Value |
- enhanced tangible benefits - features --> leads to marketing myopia - choice depends on functional values and weights |
|
|
Primary Data |
- non-experimental data - info collected for current marketing decisions |
|
|
Secondary Data |
- non-experimental data - info initially collected for other purpose
|
|
|
Qualitative Data |
descriptive data |
|
|
Quantitative Data |
measurable/numerical data |
|
|
Determining What Consumers Value |
- primary and qualitative data: focus groups (8-10ppl + moderator), individual depth interview - small samples -results: qualitative data and no statistical analysis
|
|
|
Why Consumers Value Specific Features |
- primary and qualitative data (motivation research): explore hidden and subconscious motivation, individual depth interview, laddering technique (why, why, why) - small samples -results: qualitative data and no statistical analysis |
|
|
Laddering |
feature -->benefits -->needs |
|
|
Relative Importance of Each Value |
Quantitative measures of importance - question through survey - infer from actual/hypothetical choices - Need: large samples -Results: importance estimate |
|
|
Survey |
1. Question (Problem) 2. Information Required: - feature importance - brand perception - individual characteristics 3. Questionnaire Design - attitude measurement - sequence of questions 4. Sampling 5. Data analysis |
|
|
Measuring Feature Importance |
Scales with Data Limitation - nominal scale (important =1, not important =0) - interval rating scales (not important at all to very important 0,1,2,3,4,5) - constant-sum scaled (allocated 100 points from most important to least important feature) |
|
|
Reliability |
How likely would you get the same outcome in repeated measurement - not due to sampling error - People may not pay attention - People's hypothetical choices may differ from their actual choice behaviour |
|
|
Sequence of Question |
1. Warm-Up Questions (phone usage) 2. Difficult Questions (feature importance) 3. Sensitive/Personal Questions (demographics) |
|
|
Consumer Buying Process |
1. Pre-Purchase 2. Purchase 3. Post-Purchase |
|
|
Pre-Purchase |
From Consumer Buying Process 1. recognition of needs (trigger) 2. search for alternatives 3. collect information for alternatives |
|
|
Purchase |
From Consumer Buying Process - What (Brand)? - Where? - When ? - How much? - How was it paid for? |
|
|
Post-Purchase |
From Consumer Buying Process - inconsistencies - delivery and installation - maintenance - warranty - feedback |
|
|
Narrow Down |
Total Set --> Awareness Set --> Consideration Set --> Choice! |
|
|
Secondary Data - Big Data |
1. Volume : # of bytes 2. Velocity: speed of data accumulated over time 3. Variety : multiple types of data: behavioural and query (qualitative, quantitative). |
|
|
Experiment Research |
Primary, quantitative research - cause & effect Online Experiments & Design - "click here" "see details" |
|
|
Perception |
Process by which people select, organize, and interpret information - selective retention, selective distortion, selective attention, and basic perception |
|
|
Selective Retention |
Perception: People retain points to support certain attitudes |
|
|
Selective Distortion/Conjunction Fallacy |
Perception: People interpret to support certain beliefs |
|
|
Selective Attention |
Perception: Consumers screen out most information |
|
|
Basic Perception |
Perception: People retain points to support attitudes |
|
|
Observational Research |
Immerse into consumer's life for insight/creative ideas |
|
|
Market Segmentation |
Dividing market into groups of potential customers (market segments) with distinct characteristics, behaviours, or needs. - similar needs within each segment - i.e. Professionals, DIY, and beginners (painters) |
|
|
Segmentation - Based on Benefit/Need |
benefits sought by consumers (based on needs) - drugs: effectiveness vs gentleness (2) - Power tool market (power, vs ease of use, vs add'l features) - smartphone (brand, vs design, vs features) |
|
|
Segmentation - Based on Observable Characteristics |
based on observed characteristics: -demographics -psychographics -behaviour -lifestyle -geographic location i.e. power tool market (DIY, professionals)
|
|
|
What marketers require for segmentation |
1. Identify benefits that customers seek 2. Segment the market and develop prototypical customer profiles based the customer benefits 3. Find observable variables most likely to discriminate among benefit segments to identify specific segments |
|
|
Target Marketing |
Evaluating each market segment's attractiveness and selecting one or more of the market segments to enter, and how to enter them. - maximize profit - compatible with organization's goals and images - match the company's resources - try and enjoy a competitive advantage |
|
|
Target Market Selection |
1. Start Process: Collect Data for Each Firm 2. Synthesize data into competitor capability matrices |
|
|
Start Process |
Target Market Selection 1. ability to conceive and design 2. ability to produce (quality and quantity) 3. ability to market 4. ability to finance 5. ability to manage/execute |
|
|
Synthesize data into competitor capability matrices |
Target Market Selection 1. 1 matrix per segment : detailed items of evaluation listed in rows, relevant firms listed in columns, 10-point scaled rating 2. Allows to recognize patterns in competitive environment |
|
|
Positioning |
Marketer's effort to identify a unique selling position for the product - arranges for the product to occupy a clear, distinctive, and attractive position in relation to competing products in the mind of target consumers - graph: walmart (low P, low quality), canadian tire (ok P, ok quality), home depot (higher P, higher quality) |
|
|
Good Positioning Statements Include |
1. "Who are the customers?" 2. "What is the set of needs that the product fulfils?" 3. "Why is the product the best option to satisfy those needs?" Positioning in order to achieve a competitive advantage |
|
|
Position Statement Template |
Our __________(product/brand)_________ is ______(single most important claim)______ among all __________(competitive frame)__________ because _____(single most important support)___. |
|
|
Differentiation |
Creating tangible or intangible differences on one or more attributes between a focal offering and its main competitors Good positioning --> competitive differentiation 1. Vertical Differentiation 2. Horizontal Differentiation |
|
|
Vertical Differentiation |
- all buyers agree that product A is better than product B - if A and B are sold at same P, no one will buy B - take advantage of customers' WTP for quality - strategy: position products to customers with a specific WTP for quality that is not sufficiently served by competitor
|
|
|
Horizontal Differentiation |
- products A and B differ in ways independent of buyers' overall judgements about their quality levels - if A and B are sold at same P, some will buy A, and others will buy B - consumers differentiate in taste - strategy: identify group whose needs are no sufficiently served by competitor |
|
|
Brands |
Nouns that marketers have introduced into consumers' language to make differentiation concrete |
|
|
Fundamentals of Marketing |
people have different likes/dislikes - process through which a firm creates value for its customers by delivering (place) the good & service (product) that meet their needs and wants |
|
|
Branding |
Building awareness of and preference for the specific name of the product that is being branded |
|
|
Brand Positioning Statement |
Short written document that lays out how the marketer believes others should think, feel, and relate to the brand.
To __(target group/users)__, __(brand name)__, is the brand of __(competitive framework)__ that__ (point of differentiation benefit)__, because__ (reasons why)__. The brand character is ______. |
|
|
Target Users |
Brand Positioning Statement "user" : person who uses it, not always also person who buys it - gatekeeper? Define target user by: 1. Demo-psychographics and attitudes 2. Usage Habits 3. Needs
i.e. Gatorade (1) active athletes, all ages and performance levels, (2) rely heavily on liquid replenishment, (3) to stay at competitive best physically and mentally |
|
|
Brand Name |
Brand Positioning Statement The brand name of the product you are positioning |
|
|
Competitive Framework |
Brand Positioning Statement Identifies who else competes in the space - should answer what the brand substitutes for the consumer - should answer where the volume is coming from for the manufacturer - not always straight forward: Gatorade "performance thirst quencher/body replenisher" - can sometimes change the categories in favour of an activity by making the consumer see it in a different light (i.e. Jell-O Packaged dessert - Gelatin) |
|
|
Point of Differentiation |
Brand Positioning Statement Offer the product attributes that marketers want consumer to strongly associate with their brand - should be consistent with product's physical attributes and be what consumers find most desirable about the brand - should have benefits: functional/emotional, tangible/intangible i.e. Snickers, POD Benefit: satisfies hunger better, Product Physical Attributes: Packed with peanuts, caramel, nougat, and chocolate |
|
|
Reason Why |
Brand Positioning Statement Support/reason for POD claim - adds credibility - sell instead of tell and permission to believe Can relate to - Experience: include challenges or acid tests - Product: design, formula, ingredient, source, or process features - People: expert/person who endorses product - can be one or multiple, intrinsic/extrinsic reason |
|
|
Brand Character |
Brand Positioning Statement Product's personality - strategic element of positioning - develops the emotional parts of a brand and strengthens the personal meaning - can represent with a famous figure |
|
|
Marketing Mix |
Product Price Place Promotion |
|
|
Product |
Marketing Mix Anything that is offered to a market for consumption and that satisfies a need - tangible/intangible - usually bundles of benefits: core & augmented product |
|
|
Nature of customers' buying behaviour |
Product -convenience good (frequently purchased, not much deliberation, widely available) - shopping good (involve more planning and some comparison) - specialty good (relatively inelastic demand and little/no comparison, scarcely available) - unsought good: little awareness and knowledge , life insurance, aggressive advertising and personal selling) |
|
|
Level of Involvement in Purchase Process |
Product -low involvement, or high involvement (significant time and effort in purchasing process) |
|
|
Type of Benefits |
Product - Mostly functional benefits (logical, rational advantage) - some address emotional benefits (ego-expressed needs) - classifications subjective to customers |
|
|
Core Product |
what you're actually purchasing -direct, primary benefit |
|
|
Augmented Product |
offers add'l benefits -for some, the augmented product is more valued than the core product - i.e. customer service, installation, repair and delivery, warranties, and credit possibilitiesM |
|
|
Brand Equity |
Positive effect that the brand has on potential customer of a product - how much more consumers are WTP for a specific brand compared to a competing brand or a generic brand - source of competitive advantage (signal of quality level, promotional efficiency , helps launch new products, reduces price competition based on brand loyalty) |
|
|
Making Marketing Policies |
1. Recognize the core customer need they intend to satisfy 2. Verify if core product satisfies need 3. Understand how to best augment product for most satisfaction and shield company from competitors |
|
|
Product Mixes |
Encompasses all product lines - Can be define din terms of length and depth - Length: # of products in lines (Lime, Lemon, Raspberry..) - Width: # of product lines - Depth: # of versions of each product in line (Lemon, Diet Lemon).. - Product line: group of items that serve a similar need (iced tea, juice, water, lemonade) |
|
|
Product Line and Brand Extension |
New Products and Brands |
|
|
New Product Development |
Development of new products, from product modifications to truly original products General Stages: 1. Idea generation and screening (customer value, profitability) 2. Concept development and testing (market feedback) 3. Physical product development and testing (market responses) 4. Commercialization (tracking, modifying marketing plan) Ultimate objective: generate a product that delivers superior value to target customers |
|
|
Effective Process - New Product Development |
1. The voice of the customer is heard throughout the development process unless firm is trying to create a breakthrough product where they have to anticipate customer needs 2. Substantial work is done before physical production begins, across firms' different functional areas (marketing, engineering, and manufacturing) 3. Process has real go/no-go decision points: a proper process in which ideas are generated and in each development stage, some are rejected while others pass the test and continue on 4. Process recognizes the firm's distinctive competencies and assesses the product-market fit and product-company fit and market-company fit. Compare capabilities to competitors |
|
|
Product Life Cycle (PLC) |
Stages: 1. Development 2. Introduction (offer basic product) 3. Growth (add elements of augmented product and product extensions) 4. Maturity (extend and diversify the brand) 5. Decline (refine product) |
|
|
Development PLC |
In the period before the product is introduced, investments increase, while sales are not existent |
|
|
Introduction PLC |
- When the product is launched in the marketplace, initial sales growth is slow, marketing expenses increase and other costs - negative profit - customers are innovators, marketers want to create product awareness and trial |
|
|
Growth PLC |
- Sales rapidly rise - early consumers now join customer base (economies of scale) - increasing profit - focus on maximizing market share |
|
|
Maturity PLC |
- sales levels peak - sales growth declines as market saturates and competition further increases - less efficient to increase customer base - harder to market effectively - profits decrease - focus on maximizing profit - defend market share |
|
|
Decline PLC |
- sales fall - profitability virtually disappears - some competitors exit - focus on expenditures - milk the brand |
|
|
Managing Product & Brand Portfolios |
- develop a product template from which a family of products can be developed at low incremental cost - product line > single product, to better serve multiple market segments - avoid situations will little planning - discontinued lists might make customers feel abandoned or poorly served... - strong product line planning process: systematic investigation of deletion opportunities to ease customers' decision making and improve overall economics of the firm |
|
|
STP |
S- bases of segmentation T - Identify Target marketing strategy P - Positioning |
|
|
Purposes of Communication |
Influence consumers to engage in a value exchange with the firm - informs people of the existence and benefits of products, services and ideas. - 4 types of communication goals: 1. awareness 2. information 3. Attitude/image 4. Call-to-action
|
|
|
Awareness (Comm) |
captures one's attention to product |
|
|
Information (Comm) |
convey actual info about product |
|
|
Attitude/Image (Comm) |
persuade consumers to change their attitude toward a brand |
|
|
Call-to-action (Comm) |
persuade consumers to act through specific behaviour |
|
|
Decision Making Process (DMP) |
awareness (cognitive) --> consideration (cognitive) --> attitude (affective) --> trial (behavioural) --> repeat/loyalty (behavioural/affective) |
|
|
Awareness (DMP) |
- advertising must provide engaging content such as entertainment, humour, and pleasing aesthetics - balance between attraction, information, and persuasion to capture consumer's attention span |
|
|
Consideration (DMP) |
- fit needs and/or budget: varies by consumer, product category, context, and level of expertise - 2 to 8 brands involved in serious consideration |
|
|
Tools of Communication |
Advertising Sales Promotions Other Forms of Communication |
|
|
Advertising |
Paid Placement of non-personal messages by an identified sponsor intended to inform or persuade members of a particular target market about a brand, product, service or idea. A. Type of Message B. Medium |
|
|
Type of Message - Advertising |
1. Brand building: ads focused on advertiser (brand/firm) 2. Product Promotion: ads centered on advertised object (product, service, idea) |
|
|
Medium - Advertising |
1- Traditional Options: television, print, radio, billboards 2- Digital options: online and mobile 3- Social options: social networking sites, events, multiplayer video games
Directionality of the communication - undirectional: traditional - bidirectional : digital - bidirectional + : social |
|
|
Sales Promotions |
form of mass marketing production - most products sold by channels and independent retailers A. Consumer Promotion B. Trade Promotion
|
|
|
Consumer Promotion - Sales Promo |
Pull - designed to accomplish: product trial, repeat, purchase, brand switching, upselling, cross-selling, and neutralizing effect of competitors' ads/promos - Promotion directed at customers to induce them to buy the product - form: coupons, free samples, rebates, premium
|
|
|
Trade Promotion - Sales Promo |
Push - financial incentives to the channel to gain its support to carry an item, increase visibility, or decrease its price - promotion directed at intermediaries to induce them to carry the product and promote it to final consumers - form: discounts, slotting allowance fees for distribution of a new product/special display in store, cooperative advertising - directly increase retail margins or passed to consumers in form of temporary price discounts |
|
|
Other Forms of Communication |
Marketing, sponsorships and publicity, public relations, direct marketing (infomercials, catalogs, and telemarketing) |
|
|
Outbound Marketing |
- Consumer response to communication - firm initiated - using paid media - most influential for when consumers are considering their options
|
|
|
Inbound Marketing |
- Consumer response to communication - consumer initiated - can be unpaid media (google, recommendations...) - most influential for when consumers are carefully comparing a few alternatives |
|
|
Impact of Different Sources of Communication |
<-2Consumer Initiated comparison <-1Producer Initiated initial consideration <-3Channel Initiated final choice |
|
|
Matching Comm Tools to DMP |
|
|
|
Managing the Communication Process (6Ms) |
1. Mission 2. Market 3. Message 4. Media 5. Money 6. Measurement |
|
|
Mission and Market - Strategic (6Ms) |
- mission: objective of campaign - market: to whom is the comm. campaign addressed ? Have greatest impact on the overall success of the campaign 1. "Effectiveness first, efficiency second" - first inform or persuade (doing right things) - then search for efficiency (doing things right) 2. Adhering to consistency and alignement - maintain a period over time - maintain a cohesive pattern
|
|
|
Message and Media - Executional (6Ms) |
Appropriate understanding of the advantages and disadvantages of each type in relation to the objectives of the campaign is crucial |
|
|
Money and Measurement - Financial (6Ms) |
- how much money to budget and determine whether the spending will pay off 1. top-down approach: firm set comm. budget by defining money available then deciding what can be done with it 2. bottom-up approach: define comm. goals first, then cost it out |
|
|
Measuring Results of a Campaign |
A. Measuring what matters (DMP of consumers, find measures that tap into pre/post trial) B. Measuring relative to purpose (size of audience and depth of the impact) C. Measuring the full impact (diff media used for diff objectives, advertising elasticity: %change in sales that corresponds to a 1% change in advert spending) and potential increases in equity of brand should be factored in when assessing the longterm impact or ROI of marketing communication |
|
|
Effective Segmentation |
MASDA M - Measurable: size, purchasing power, and profile of segment A - Accessible: can be reached and served S - Substantial: large, profitable enough to serve, and sustainable over time D - Differentiable: mutually exclusive, similar needs within each segment A - Actionable: effective programs can be developed
|
|
|
Target Marketing Strategies
|
|
|
|
Tasks in Commission
|
- Use the market research study to better understand consumers
- Identify and define consumer segments within the bra market - Generate suggestions for marketing strategies |
|
|
Perceptual Map
|
- A graphical representation of competitive positioning in a category, as perceived by customers
- Maps are derived from data of customer perceptions of existing products/new concepts along various attributes - i.e. Beer Map (heavy, light, budget, and premium) |
|
|
Product Attributes --> Branding --> Packaging --> Labelling --> Product Support Services
|
Sequence of events
|
|
|
Product and Service Attributes
|
- Quality
- Features - Style and Design |
|
|
Product Packaging
|
- Primary, secondary, and shipping packages
- Functions of packaging: contain and protect, promote product, and differentiate product |
|
|
Product Labelling
|
- Identifies the product
- Describes the product - Promotes the product - Must be careful not to: mislead customers, fail to describe ingredients, or fail to include safety warning |
|
|
Product Support Services
|
- Survey customers regularly to assess current customer service
- companies use a mix of phone, email, fax, Internet, and interactive voice and data technologies |
|
|
Why do Many New Products Fail?
|
- No customer value
- Poor positioning - No systematic development process - People problems |
|
|
Gilette Guard
|
1. Product: single blade, long handle textured for each gripping, hole at handle to hang up, a small comb by blade for thick hair
2. Production: cut number of components from 24 to 4, reduce production cost to 1/3 of previous, Vector product. Priced at 15 rupees and 5 rupees for blade. 3. Introduced: 3 years ago, takes up approx 2/3 of market in India |
|
|
Product Line Length
|
- Line Stretching (vertical): adding products that are higher or lower priced than the existing line
- Line filling (horizontal): adding more items within the present price range |
|
|
Brand Positioning - Building Strong Brands
|
1. Product attributes (least effectives)
2. Benefits 3. Beliefs and Values (taps into emotions) |
|
|
Brand Name Selection - Building Strong Brands
|
Good Brand names:
- suggest something about the product or its benefits - easy to say, recognize, and remember - distinctive - extendable - translate well in other languages - domain (www) |
|
|
Brand Sponsorship - Building Strong Brands
|
- Manufacturer brands
- Private brands (costly to establish, higher profit margins) - Licensed brands (name and character licensing has grown) - Co-branding |
|
|
Brand Development - Building Strong Brands
|
- Line extensions
- Brand extensions - Multibrands - New brands |
|
|
Managing Brands
|
- Brands are known through advertising, personal experience, word of mouth, the Internet
- Everyone in the company represents the brand - Brands positioning need to be regularly communicated to the customers - Companies need to periodically run a brand audit |
|
|
Selecting Advertising Media
|
Choose media type and select specific media vehicles according to
- consumer media habits - nature of the product - type of messages - cost Measurement - level of reach - frequency - impact |
|
|
Traditional Vs. Digital Vs. Social Advertising
|
|
|
|
Distribution
|
Getting goods from the producer to the consumer
|
|
|
Channel
|
Agents that facilitate distribution
Direct channel: too many transactions Indirect Channel: reduces # of transactions |
|
|
Indirect Channels
|
Fewer contracts
- transactional efficiency leads to lower price Assortment - match product assortment demand with supply (1 stop shopping) Availability - no waiting, cost of time Access value - neighbourhood location Lot size - flexible order size After-sales service - credit, delivery, installation Information Service - generate demand, advice, feedback |
|
|
Channel Management
|
Channel conflict: occurs when channel members do not perform values as designed
- achieves coordination through ownership, contracts, or market power - different goals - disagree on roles, activities, or rewards Types of Conflict: - Horizontal conflict: between resellers at the same channel level - Vertical Conflict: between firms at different channel levels |
|
|
Franchise System
|
Franchise System manages channel relation through contractual arrangement
Type of Franchise: - Manufacturer-sponsored franchise (Ford dealers) - Business format franchise (Mcdonalds) |
|
|
Market Power
|
Ability to influence others in the channel through
- economic power (ability to find a substitute) - rewards (better margins) - expertise |
|
|
Market Exposure Decision
|
Desired level of market exposure in each geographic market
- Intensive distribution - Selective distribution - Exclusive distribution |
