MARK 3001: Exam 1
97 Cards in this Set
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Marketing
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Anticipating(research) and determining the needs/wants of consumers(target market) and satisfying those needs through the use of the 4P's (Production, Promotion, Place, Price) to create long term exchanges of value
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Target Market
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Specific subset of consumers who share similar needs/wants
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4P's
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Product (physical good, service, idea)
Price (value to be exchanged)
Promotion (how communicated)
Place (where available)
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Exchange of Value
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Both parties must see value
Value = ratio of benefits to costs
Customers measure value based on Utility
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Types of Utilities (exchange)
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Form- how easy the product is to use
Time- the ability tot buy the product when you want it
Place- receiving the product when you need it
Assortment- buying a variety of items at once
Fires Take Place Anywhere
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4P's (S.A.V.E)
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Solutions- Product
Access- Place
Value- Price
Education- Promotion
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Marketing Concept or Marketing Orientation
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Purpose of the organization is to satisfy consumer needs/wants, while meeting organization objectives
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Production Orientation
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Focus is on internal capability and technology
Produce items that are efficient and high quality
What does the firm do best?
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Sales Orientation
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Focus is on aggressive sales techniques
Goal is to get rid of the extra production
How can we sell more of what we have?
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Marketing Concept
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Make what you can seek rather than selling what you can make
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Societal Marketing Orientation
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Focus is on enhancing benefits to society
How can I meet consumer needs and benefit society?
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Marketing Environment
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Uncontrollable elements outside of any organization that may affect its performance.
Ex: society, economy, population
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Environmental Scanning
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Systematic analysis of those elements in the environment
Scanning of customers or competitors
Puts the company in a position to move forward in sales
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External Environmental Factors
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Demographic- populations statistics
Social- values and beliefs
Economic- income and business
Technological- innovation
Political and Legal- laws
Competitive- what others are doing
Dad Said Every Team Poops Cookies
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Tweens
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12-Aug
20+ million
Attitudes
Access to Info
Cynical towards ads- rarely "click thru"
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Teens
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13-17
25 million
72hrs/wk electronic
93% internet, 74% cell phones
75% facebook
Shopping in social sport
Want convenience, engagement
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Gen Y
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18-32
75+ million
Largest Cohort
Milleniums
Wide range of life cycles
Inquisitive, diverse, time managers, multitaskers, identify with brands and continue loyalty
Most important in marketing: targeted most
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Gen X
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33-47
40 million
Focus on Children
"Helicopter parents"
Biggest spenders at mass merchandisers (target, walmart)
Value education
Convenience is important- busy lifestyle
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Baby Boomers
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48-66
75 million
Control 80% of personal wealth
More active than previous, "never age"
Postponing retirement
Involved in lives of adult children/grandchildren
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Values (social factors)
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Self-sufficiency, work ethic, upward mobility
Conformity- no one should expect special treatment
Individuality
Work to Live
Get what we actually need/want
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Economic Factors
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Overall economy
Consumers ability to purchase
Consumers' willingness to purchase (income; business cycles and perceptions)
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Savings rate
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how much of our income do we save vs. spend
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Depression
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Low income/employment/production
Focus on basic needs
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Recession
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Falling income/employment/production
Focus on value- buy now, save you money in other ways
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Recovery
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Rising income/employment/production
Focus on buy now for better times later
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Prosperity
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High income/employment/production
Focus on convenience/reward
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Misery Index
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Employment rate + Inflation
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Laws and Regulations Protect (2 things)
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Competition
More competition drives prices down and increases the quality of products
U.S. thinks more competition the bette
Consumers
protect consumers from unethical procedures
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Focus of Legislation
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Maintain a competitive environment
Sherman and Clayton Acts
Fair prices
Robinson Patman
Federal Trade Commission Act
Truthful Advertisement
Wheeler-Lea Act
Safe Products
Consumer Product Safety Commission
Food and Drug Administration
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Sherman and Clayton Acts
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No merging or monopolies
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Robinson Patman
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Price discrimination (sell same product but different price to different people) at consumer level, illegal in business to business aspect)
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Federal Trade Commission Act
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Price fixing(independent companies cannot get together and fix prices)
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Wheeler-Lea Act
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Companies cannot lie on products
Would a rational person be deceived?
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Consumer Product Safety Commission
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Test every product
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Food and Drug Administration
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Anything we eat
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Direct Competition
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Similar/same product
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Indirect Competition
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Substitutable items- perform same function
Ex: coke and milk
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Competition for Discretionary Spending
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Other possible uses for the Money
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Competitive Environment
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Direct Competition
Indirect Competition
Competition for Discretionary spending
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Marketing Research
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The Process of planning, collecting and analyzing data relevant to a marketing decision
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Marketing Research Process
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Identify Problem
Plan Design
Specify Sampling Procedure
Collect Data
Analyze Data
Prepare/Present Report
Follow Up
I Play Soccer, Cole Analyzes People's Feet
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Identify Problem (step 1)
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Identify key marketing decision
Identify target market/group and look at 4P's
Is the product good enough?- commercials, packaging, etc.
Translate into research problem
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Plan Research Design (step 2)
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Decide on:
Type of Data needed
Method of Collecting Primary Data
Observation Research
Experiments
Survey Research
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Primary Data
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New knowledge created for this research effort
How will we get this data? - interaction with samples of customers
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Secondary Data
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Already available
Ex: Form, article, or internet
Cheap, easy to get
Less reliable, might not give us exact info we need
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Observation Research
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Manual- person doing the recording
is the observation changing how people behave?
more expensive and obvious
Mechanical- technology watching consumer with much more accuracy
Ethnographic- someone observing over time in environment
Virtual shopping- observation in lab
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Experiments
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Changing a variable and analyzing results
Independent- controlled(4P's)
Dependent-results(sales)
Usually change one of 4P's and look at their sales or awareness
Field: real customers, real life: can't control what's happening
Lab: bring people in and tell them to do something; can co…
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Survey Research
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In-Home Interviews
Mall Intercept Interviews
Executive Interviews
Focus Groups
Telephone Interviews
Mail Surveys
Internet Surveys
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Mall Intercept Interviews
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(Survey)
Only successful if is addressing issues that are relevant to the people shopping
Brief
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Executive Interviews
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(Survey)
Collect a lot of good data by observing body language
Can be expensive and consumers are unwilling to participate
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Focus Groups
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(Survey)
Group similar in some ways, take a group and ask them questions and allow audience to drive discussion
Good for early research, initial concepts
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Telephone Interviews
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(Survey)
direct questions
have to be short and simple
a lot can be done quickly
allows clarification on particular questions
Most done at Central-location Telephone Facility (CLT)
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Mail Surveys
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(Survey)
More truthful
Take long time
Can ask complicated questions
Low response rates
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Internet Surveys
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(Survey)
Quick results but not representative of population
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In-Home Interviews
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(Survey)
High quality information
Expensive
Declining in U.S. but still popular around globe
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Issues with Surveys
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Interviewer Bias
Presence of interviewer may change responses
Consumer unwillingness to participate
suggin= lie and tell you its a survey when really trying to sell you something
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Questionnaire Issues
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Questions to avoid
Leading- lead you to answer in a certain way
Loaded- emotionally charged, almost always leading
Double barreled- ask you 2 different things
Jargon- inappropriate to target market
Ordering of questions
Sensitive, personal questions at end
More difficult questions …
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Sampling Issues (Step 3)
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Who is the population?
universe of interest
What will be used for the sampling frame?
Identification of universe- device/list of which potential respondents are selected
How do you know who is in the universe
What type of sample will be used?
Probability Sample
Non-probability Samp…
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Probability Sample
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(Sample)
Statistically valid- every element in population/universe has known probability of being selected
Can generalize the results
Random- every member of population has equal chance of being chosen
Stratified random- divide population into groups based on some characteristics than…
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Non-probability Sample
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(Sample)
Not statistically valid- no attempt to be representative
Researchers use their judgement and decide who will take part in the sample
Judgment, convenience
Cannot generalize- can't take it as a general public view
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Collect and Analyze the Data (Steps 4 & 5)
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Often outsource collection
Select appropriate statistical methods
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Report & Follow Up (Steps 6 & 7)
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Report
Concise statement of the research objectives and design
Summary of major findings and Recommendations
Knowledgeable in marketing but not statistics
Follow-up
Were recommendations Implemented? Did they work? Did sales increase?
High Involvement Purchases
Important to consumer…
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Common Types of Questions
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Likert Scale:
Strongly Agree Agree Uncertain Disagree Strongly Disagree
Semantic Differential:
Excelente_____________Awful
Old__________________Fresh
Healthy_______________Unhealthy
Projective Technique:
Indirect and underlying answers
If a Wendy's hamburger could talk…
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Consumer Behavior Concepts
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The process of buying
Why we make the purchase decisions that we do
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How we buy
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Determined by purchase involvement
How important is the purchase?
Reflects the degree of perceived risk of the purchase
Indicates the time, effort expended
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Low Involvement Purchases
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Characteristics of low involvement purchases
Low cost, standardized, not important, low risk
Type of buying process used:
Routine response behavior/habitual
How marketers try to influence
in store promotion
link to high involvement issue
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High Involvement Purchases
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Characteristics
Important to consumer
Risk is present
Consumers see substantial differences between alternatives
Process used is extensive
Extended (High Involvement) Decision-Making Process
1. Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchase
5.…
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Need Recognition
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Present state- where am I?
Preferred state- where I want to be
Internal Stimuli- one I already have; something wrong with it
External Stimuli- see something from other places
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Information Search
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Collecting data to help make a reasonable decision
Internal information search- personal experience; review cars i've owned
External information search- information from other sources
Results in Evoked Set- set we will consider; narrowed down set
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Evaluation of alternatives
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Narrowing down and rating possible choices
Evaluative criteria- factors we look at to make our choice
ex: safety, cost, performance
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Purchase
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Final Purchase
How to make final purchase?
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Post-purchase Behavior
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Comparing outcomes to expected results
"Was my choice wise?"Make sure in our mind if purchase was good ideaMost consumers think about other option after purchase
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Cognitive Dissonance
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Ways it is reduced by buyer
Way it is reduced by seller
Not 100% made the right choice
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Factors Influence Behavior
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Cultural
Social
Individual
Psychological (how our mind works)
Cookies Save It People
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Culture
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Set of values, norms, symbols that shape behavior and which are generally passed from one generation to the next
Leaned: parents, grandparents
Pervasive: without conscious choice
Functional: common expectations
Evolving/Dynamic: adapts to changing needs and evolving environment- techn…
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Subculture
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Small group whose members share elements of overall culture, as well as cultural elements unique to the group
Often based on demographics, geographic, religious beliefs, political beliefs
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Social Class
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Consumers who are relatively equal in status and behavior
Often defined by income, source of income, education, and occupation
In U.S.
Upper class(capitalist and upper middle) 15%
Middle class (middle and working) 65%
Lower class (working poor and underclass) 20%
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Social Factors
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Groups that influence decision making
Membership-group already belong to
Aspirational- group we don't belong to, but you want to
Dissociative- group don't want anything to do with
Opinion Leaders- people you may know, or someone with a blog
Family
Consumer socialization process- how…
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Individual Factors Influence Decision Making
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Demographics
Age, gender, family life cycle
Personality and Self-Concept
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Psychological Factors Influence Decision Making
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Perception
Motivation
Learning
Beliefs and Attitudes
Police Mullets Look Bad
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Perception
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Process by which people select, organize, and interpret stimuli into a meaning and coherent picture
Perceptual Screens
Selective exposure/attention- we notice things important to us
Selective distortion- change info that conflicts with beliefs
Selective retention- we remember things w…
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Motivation
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Why do we buy?
Maslow's Hierarchy of Needs (From Top to Bottom)
Self actualization needs: self development, self realization
Esteem needs: recognition, status (reward yourself)
Social needs: sense of belonging
Physiological needs: hunger, thirst (what we need to retain life)
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Learning (influence decision making)
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How do we gain information and process it?
Changes in consumer behavior over time
Experiential= an experience changes behavior
Conceptual= thinking or reasoning, not experience, changes behavior
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Beliefs and Attitudes (psychological factor)
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What a consumer holds as true
Consistent response based upon "truth"
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Segmentation
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Identifying and serving homogenous groups(segments) of consumers
Process
Recognize segments exist, based on segmentation variable/bases
Pick one or more groups to serve(target market)
Create marketing mix to serve needs(positioning)
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Demographic Segmentation
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Splitting market based on:
Age, gender, income
Ethnicity, family life cycle
Essentially "what we are"
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Psyhcographic Segmentation
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Expands demographic segmentation to include "how we think and act"
Personality
Lifestyle, motives
Often measured and grouped based upon AOI statements (ask you questions and based on answers give you products you may like)
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Geographic Segmentation
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Divides consumers based upon location
City v. rural
North v. South
ETC.
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Benefit Segmentation
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Segment customers based upon benefit they seek
Buy product based on your need of product
What is your specific need of buying a muffin?
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Usage Rate Segmentation
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Dividing a market by the amount of product bough or consumed
how much do consumers use the product
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Commercially
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...
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Multisegment/differentiated Targeting
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Recognizes different segments exist
Pick two and target product based on the specific segment
If one market goes down, you can still sell to the other
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Cannibalization
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Situation that occurs when sales of a new product cut into sales of a firm's existing products
Split your segments
Don't gain new customers
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No Segment Exist
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Consumers all the same
Undifferentiated targeting
Firm assumes all consumers are the same, relative to the product category
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Segments Exist (pick one)
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Concentrated/niche marketing
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One-to-One Marketing
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Treat each person as a segment
Advantage- increases loyalty
Each customer ends up with different product characteristic
Easy for information and services
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Positioning
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Create marketing mix to meet needs of segment
Making sure your product is perceived correctly in minds of consumers
Competitive postitions can be compared using a perceptual map
Price Dimension (vertical)
Style (horizantal)
Extreme at each end
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MARK 3001: Exam 1