MARK3001 1st Edition Lecture 8 Outline of Last Lecture I. Extended High-Involvement Decision-Making ProcessA. Need RecognitionB. Information Searcha. Internal Information Searchb. External Information Searchc. Evoked setC. Evaluation of AlternativesD. PurchaseE. Post-Purchase Behaviora. Cognitive Dissonancei. Buyer reduces it by…ii. Seller reduces it by…iii. ExampleII. Factors that Influence Consumer BehaviorA.Culturala.Definition of cultureb.Culture is…c.Definition of subculturei.Example: SEC football culture vs. Big 10 football cultureB.Sociala.Social Classi.Upper class, middle class, and lower classb.Reference groups:i.Membership ii.Aspirational iii.Dissociativec.Family:i.Consumer socialization process ii.Varied roles C.Individuala.Demographics:b.Personality and Self-concepti.Definition of personalityii.Definition of self-concept D.PsychologicalThese 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.Perceptioni.Definition of perceptionii.Selective perception:1.Selective Exposure/Attention 2.Selective Distortion3.Selective Retentionb.Motivationi.Maslow’s Hierarchy of Needs1.Self-Actualization2.Esteem Needs 3.Social Needs 4.Safety Needs5.Physiological Needs c.Learningi.Experiential Learningii.Conceptual Learningd.Beliefs and Attitudesi.Definition of beliefs and attitudesIII. Segmentation and Target MarketingA. Segmentationa. Definitionb. Process of segmentation:i. Step 1ii. Step 2iii. Step 31. PositioningB. Segmentation Basesa. Demographici. Divides consumers by…b. Psychographici. Divides consumers by…c. Geographici. Divides consumers based location1. City vs. Rural2. North vs. South3. East Coast vs. Midwest4. Mountain vs. Beach5. And many others…d. Benefit Segmentationi. Divides consumers by…ii. Example1. Group 12. Group 2e. Usage Rate Segmentationi. Dividing a market ii. ExampleC. Segmentation Profilea. Definitionb. ExampleD. Two questions to ask when dealing with segmentationa. Question 1b. Question 2c. If no segments exist:i. Undifferentiated Targetingd. If segments do exist:i. Multi-segment/Differentiated Targeting: 1. Cannibalization2. The marketing mix would look like this…CCC CCC CCC CCCCC CC CC CC Mix 1 Mix 2 Mix 3 Mix 4ii. Concentrated/Niche Targeting: 1. Definition2. Exampleiii. One-to-One Targeting:1. Definition2. ExampleOutline of Current Lecture I. Ethics in MarketingA. Definition of ethicsi. Why is it important? B. Definition of lawsC. What is ethical is not always legal, and what is legal is not always ethicalD. Legal or ethical obligation?i. Real-life situation exampleE. OutcomesOld PeopleSoccer moms1st time drivers MaleSuccessfuli. Two models1. Personal model2. Business model F. Framework for ethical decisionsi. Four sets of normsii. Societal Normsiii. General Business Norms1. Basic business values: a. Consumer rightsb. Caveat emptor2. Industry standards:a. The American Marketing Association i. Standards set by AMAiv. Company Normsv. Personal Value Norms1. Personal moral philosophies:a. Moral Idealism b. Utilitarianism G. Level of Responsibility Model1. Profit (Investors Only)2. Stakeholder3. SocietalCurrent LectureII. Ethics in MarketingA. Ethics: moral principles and values that govern actionsi. Why is it important? Studies show that the general society believes thatbusiness people have low morals and ethicsB. Laws: society’s values which are enforceable in courti. Society agrees so strongly that something is wrong that a law is passed to enforce itC. What is ethical is not always legal, and what is legal is not always ethicalD. 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.). Theydidn’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. Outcomesi. Two models1. Personal model – personal, individual framework for ethical decisions2. Business model – levels of corporate responsibilityF. Framework for ethical decisionsi. Your decision is based off of consideration of four sets of norms: societal norms, general business norms, company norms, and personal value normsii. Societal Norms1. Basic set of values of the society2. Ask yourself, how would people react if everything about your situation was exposed in the newspaper?iii. General Business Norms1. Asks what is the standard practice in business?2. Basic business values: a. Consumer right to safety, be informed, choose, be heardb. No longer “caveat emptor” – which means “buyer beware”3. Industry standards:a. The American Marketing Association sets the industry’s standardsi. First do no harmii. Foster trust and consumer confidence in the market systemiii. Values of honesty, responsibility, fairness, respect, openness, and citizenshipiv. Company Norms1. 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 Norms1. 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 unethicalb. Utilitarianism – balance the good versus the bad to make the decisionG. Level of Responsibility Modeli. 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 General1. Profit (Investors Only)a. Companies are responsible only to those who make them profit2. Stakeholdera. Companies are responsible to owners as well as customers,employees, and suppliers3.