Marketing 301 Exam 2 Study Guide Chapters 6 11 Chapter 6 7 2 Product Benefits 1 Customer Value incurred from acquiring using and disposing of a product The difference between the benefits a customer receives and the total cost a Functional Benefits From use of the product b Brand Benefits the emotional benefits that consumers gain from owning some brand c Service Benefit The added value that some manufacturers offer along with the purchase of 3 Product Costs Costs associated with acquisition product use maintenance disposal etc a product a Purchase Price b Usage Cost c Maintenance d Disposal 4 Value Map a The fair value zone FVZ is where the performance matches up to the selling price of the product b Products to the left of the FVZ are products that are perceived to underperform in relation to their price c To the right deliver higher perceived performance relative to their price 5 Customer Satisfaction meets or exceeds customer expectations the degree to which a product a Negative b Neutral c Positive i Dissatisfied defect i Satisfied switchable i Delighted Loyal d Measured through surveys and the ACSI i American Customer Satisfaction Index 6 The Value of a Customer a 80 20 Rule i 80 of a companys profits are generated by 20 of their customers ii 20 of profits are from 60 of customers iii No profits loss are from 20 of customers The present value of all profits expected to be earned in the future a Customer Lifetime Value Average Purchases per Year x Profit Margin Cost to service 7 Customer Lifetime Value from a customer the Customer 8 Customer Retention a It costs less to keep an existing customer than it does to recruit a new customer 9 Relationship Marketing mutually beneficial relationships with profitable or potentially profitable customers develop and maintain customer sales 10 Customer Relationship Management comprised of the activities that are used to establish the organizational commitment to developing and enhancing long term a External Processes Gather Information b c Internal Processes Use Information Involves the acquisition and use of information i Customize products ii Establish dialogue iii Identify customers iv Differentiate customers v Loyalty Programs vi Technology 11 Consumer Behavior environment in which human beings conduct the exchange aspects of their lives the dynamic interaction of affect and cognition behavior and the a Represents the psychology of marketing 12 Consumer Decision Making Process a Need Recognition Internal i ii External Information Search b c Evaluate Alternatives d Purchase Decision e Post purchase Evaluation 13 Consumer Decision Making Process a Personal Influences i Self Identity ii Personality iii Lifestyle and personal resources iv Age and Life Stage an individuals understanding that they are unique personal distinctiveness way of life that individuals express by choosing how to spend their time 1 Generation X 1965 1981 2 Generation Y 1982 1994 v Affluence b Psychological Influences i Perception ii Motivation actions and behavior a need or want iii Attitudes Beliefs iv Learning cognitive impression of incoming stimuli that influences the individuals the set of conditions that create a drive toward particular action to fulfill State of readiness Knowledge acquired through experience encourages action influences a particular action 1 Drive 2 Cue 3 Response 4 Reinforcement experience a consumers reaction to drive and cue a reduction in drive resulting from a positive response c Situational Influences i Purchase Environment ii Time iii Digital Environment iv Context d Social Influences i Culture ii Subculture iii Global iv Group 1 Norms define membership 2 Roles specific actions 3 Status position of one individual relative to others characteristics that distinguish certain members v Social Class vi Gender Roles vii Family 14 Consumer Problem Solving How someone comes to a conclusion about a situation When a consumer is prepared to exert a certain amount of effort a Limited Problem Solving to make a purchase decision i New product option arises b Significant Problem Solving make a purchase decision c Routine Problem Solving fulfilling a need or want When a consumer is prepared to commit considerable effort to When a consumer has a well developed process associated with Chapter 8 Customer Insight 1 Product Value Product Benefits Product Costs 2 Customer Insight a Perceived meanings of data collected from the study of consumer behavior b Taking the raw data gained from research and turning it into insight that will allow the company to attract and retain customers c Questions to ask yourself i What do customers think about my brand ii What do customers think about competitor s brands iii Why do customers buy my brand iv What are consumer expectations v What are the opportunities vi What are the threats 3 Market Research The acquisition and analysis of information used to identify and define marketing opportunities that connect consumers to marketers a The process of planning collecting and analyzing data relevant to a marketing decision 4 The Market Research Process a Define the Problem b Design the Research i Research Questions 1 Exploratory Understand why a consumer bought a brand a Why do consumers purchase brand X 2 Descriptive who what when where how a How often do consumers shop for groceries and where do they shop 3 Explanatory a What happens if we increase the price c Conduct the Research d Analyze the Data i Write report of findings ii Statistical analysis e Address the Problem 5 Types of Research Data a Secondary Data i ii The internet iii School Databases Information that has previously been collected for another purpose b Primary Data i Information that is collected to address a current research question 1 Qualitative a Focus b c Interviews Informational 2 Quantitative a Numbers b Surveys c Measurement characteristics are possessed in another variable the process of quantifying how much one variable s set of features or i Nominal Measurement in which numbers are assigned to characteristics of objects ii Ordinal Measurement in which numbers are assigned to characteristics of objects solely for identifying the objects to reflect the order of the objects 1 Allows rankings first second third iii Interval Measurement in which numbers assigned to characteristics of objects legitimately allow comparison of the size of the differences among and between objects an identifiable absolute zero Measurement in which numbers are assigned