MARK3001 1st Edition Lecture 8 Outline of Last Lecture I Extended High Involvement Decision Making Process A Need Recognition B Information Search a Internal Information Search b External Information Search c Evoked set C Evaluation of Alternatives D Purchase E Post Purchase Behavior a Cognitive Dissonance i Buyer reduces it by ii Seller reduces it by iii Example II Factors that Influence Consumer Behavior A Cultural a Definition of culture b Culture is c Definition of subculture i Example SEC football culture vs Big 10 football culture B Social a Social Class i Upper class middle class and lower class b Reference groups i Membership ii Aspirational iii Dissociative c Family i Consumer socialization process ii Varied roles C Individual a Demographics b Personality and Self concept i Definition of personality ii Definition of self concept D Psychological These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute a Perception i Definition of perception ii Selective perception 1 Selective Exposure Attention 2 Selective Distortion 3 Selective Retention b Motivation i Maslow s Hierarchy of Needs 1 Self Actualization 2 Esteem Needs 3 Social Needs 4 Safety Needs 5 Physiological Needs c Learning i Experiential Learning ii Conceptual Learning d Beliefs and Attitudes i Definition of beliefs and attitudes III Segmentation and Target Marketing A Segmentation a Definition b Process of segmentation i Step 1 ii Step 2 iii Step 3 1 Positioning B Segmentation Bases a Demographic i Divides consumers by b Psychographic i Divides consumers by c Geographic i Divides consumers based location 1 City vs Rural 2 North vs South 3 East Coast vs Midwest 4 Mountain vs Beach 5 And many others d Benefit Segmentation i Divides consumers by ii Example 1 Group 1 2 Group 2 e Usage Rate Segmentation i Dividing a market ii Example C Segmentation Profile a Definition b Example D Two questions to ask when dealing with segmentation a Question 1 b Question 2 c If no segments exist i Undifferentiated Targeting d If segments do exist i Multi segment Differentiated Targeting 1 Cannibalization 2 The marketing mix would look like this CCC CC CCC CC 1st time drivers Soccer moms Mix 1 ii iii CCC CC Male Successful Mix 2 Mix 3 Concentrated Niche Targeting 1 Definition 2 Example One to One Targeting 1 Definition CCC CC Old People Mix 4 2 Example Outline of Current Lecture I Ethics in Marketing A Definition of ethics i Why is it important B Definition of laws C What is ethical is not always legal and what is legal is not always ethical D Legal or ethical obligation i Real life situation example E Outcomes i Two models 1 Personal model 2 Business model F Framework for ethical decisions i Four sets of norms ii Societal Norms iii General Business Norms 1 Basic business values a Consumer rights b Caveat emptor 2 Industry standards a The American Marketing Association i Standards set by AMA iv Company Norms v Personal Value Norms 1 Personal moral philosophies a Moral Idealism b Utilitarianism G Level of Responsibility Model 1 Profit Investors Only 2 Stakeholder 3 Societal Current Lecture II Ethics in Marketing A Ethics moral principles and values that govern actions i Why is it important Studies show that the general society believes that business people have low morals and ethics B Laws society s values which are enforceable in court i Society agrees so strongly that something is wrong that a law is passed to enforce it C What is ethical is not always legal and what is legal is not always ethical D Legal or ethical obligation i Ford s 1990 s Lincoln Towncar Crown Victoria and Lincoln Limo all share the same chassis On this chassis the gas tank was directly in front of the trunk in the crumple zone According to Ford it didn t increase problems or increase chances of fires There were then a number of fatal fires in police cars when the cars were rear ended in that area Ford gave shields and retrofit kits to police departments for the cars but not for the civilian market because they said that consumers were not in the situation of being rear ended as often as police cars were police pulling people over on the interstate etc They didn t make any changes and didn t inform regular consumers Ford settled with every family who filed lawsuits against them The government had investigated the cars previously because of safety complaints and had found nothing wrong with them Therefore Ford had an ethical obligation to tell consumers but no legal obligation E Outcomes i Two models 1 Personal model personal individual framework for ethical decisions 2 Business model levels of corporate responsibility F Framework for ethical decisions i Your decision is based off of consideration of four sets of norms societal norms general business norms company norms and personal value norms ii Societal Norms 1 Basic set of values of the society 2 Ask yourself how would people react if everything about your situation was exposed in the newspaper iii General Business Norms 1 Asks what is the standard practice in business 2 Basic business values a Consumer right to safety be informed choose be heard b No longer caveat emptor which means buyer beware 3 Industry standards a The American Marketing Association sets the industry s standards i First do no harm ii Foster trust and consumer confidence in the market system iii Values of honesty responsibility fairness respect openness and citizenship iv Company Norms 1 What would those in your company say about this decision 2 Setting company norms comes from establishing codes of conduct company policies etc v Personal Value Norms 1 How do you feel about this decision 2 Personal moral philosophies a Moral Idealism if any bad comes out of a decision the action is unethical b Utilitarianism balance the good versus the bad to make the decision G Level of Responsibility Model i To whom is a company responsible ii Starting with the group closest to the company and moving out to the group farthest from the company a company is responsible to Investors Only then All Stakeholders and then Society In General 1 Profit Investors Only a Companies are responsible only to those who make them profit 2 Stakeholder a Companies are responsible to owners as well as customers employees and suppliers 3 Societal a Companies are responsible to owners stakeholders and society in general b They have to take into consideration cultural diversity