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Exam 1 Study Guide

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by: Antonio Castillo

Exam 1 Study Guide MARK 3324

Antonio Castillo
GPA 3.8

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This study guide contains notes of all 5 chapters covered in class with expanded material from the Consumer Behavior textbook 13th Edition.
Consumer Behavior
Adwait Khare
Study Guide
Consumer Behavior, Marketing
50 ?




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"Same time next week teach? Can't wait for next weeks notes!"
Glenna Dibbert

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Popular in Marketing

This 12 page Study Guide was uploaded by Antonio Castillo on Thursday February 4, 2016. The Study Guide belongs to MARK 3324 at University of Texas at Arlington taught by Adwait Khare in Spring 2016. Since its upload, it has received 182 views. For similar materials see Consumer Behavior in Marketing at University of Texas at Arlington.


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Same time next week teach? Can't wait for next weeks notes!

-Glenna Dibbert


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Date Created: 02/04/16
MARK 3324 CH 1  Consumer behavior includes the study of individuals/groups or organizations and the processes used in electing and securing a product/services or ideas to satisfy needs and the impacts that they have on the consumer and society o Awareness creation o society changes, product must change o consumers have done something in the past then you can predict the future  Self concept and lifestyle- are decisions made as consumers is a function of our lifestyle o How we choose what we consume creates an environment around us  Businesses/people should study consumer behavior  Application areas of consumer behavior o Marketing Strategy  Marketing decisions made on consumer’s behavior theory, assumptions and research are better than hunches or intuitions  Determined by Place, Price, Promotion, Product o Regulatory Policy-  Exists to develop, interpret and/or implement policies designed to protect consumers  i.e FDA and NLEA  Works in regulating banks, restaurants etc.  Reduces harm to society o Social Marketing  Application of marketing strategies to alter behaviors that have a positive effect on individuals or society  i.e Vaccination promotions that brings social benefits o Informed individuals  Most economically developed societies are referred to as consumption societies  Individuals in these societies spend the most time consuming more than any other activities like sleep or work  In understanding consumption patterns we can establish a foundation of business ethics  Marketing strategy begins with asking important questions (make a SWOT analysis) o Starts with consumer analysis on market o Then, identifies groups of individuals, households or firms with similar needs  Firm then focuses on one of these segments as the target market o Next, Marketing strategy is formulated  Formulated in terms of marketing mix: Product, Price, Promotion, Distribution and Service—referred to as the Total Product  Total Product is presented to the target market which is constantly engaged in processing information and making buying decisions  Total product is based also on experience  Seeks to provide the customer with more value than the competition o Consumer decisions process leads to the processing of information o Outcomes are based on the execution of the marketing strategy for the firm, individual or society  Firms expect an established image  For individual some need satisfaction is met  For society, effects economic growth, pollution and social welfare  Marketing Analysis Components include o Consumer- predict what the consumers will want not just about understanding consumers o Company- firm must fully understand its capabilities to meet customer needs  Includes assessing the firm itself  i.e financial condition, general management etc. o Competitor- understanding of competition to better meet customer needs  convince consumers that our product is better o Condition- any economic condition, physical environment, government regulation and technological developments affect customer needs  Also government regulations  Some companies are smarter on how to strategize o Must understand external and Internal influences in buyer behavior  i.e information from sources like internet or friends CH 1 Continued 1/21/16  Market segmentation involves four steps o Identify product-related need sets  Organization must be capable of meeting  Need Set is used to reflect the fact that most products satisfy more than one need o Grouping customers with similar needs  Involved consumer research and analysis of current consumption patterns o Describing each group  i.e age, demographic, ethnicity, social class o Selecting the most profitable segment to serve  Select target market- the segment of the larger market on which we will focus marketing efforts  How does understanding consumer behavior affect regulatory policy o Regulate smoking, drinking etc. o Size of cups for sodas etc.  Outcomes when a consumer makes a choice o For the individual, outcomes include pleasure, satisfaction, regret o To counter dissatisfaction, you can return the product  results in increase of price to take into account some people taking advantage of it o For the firms, it can create loyalty because the customer perceives the product as better, increase sales as well o For the society, the disposing lifestyle, creates a lot of waste (i.e social cost)  Individuals develop self concept (view of themselves) and how they live base on internal and external influences  External influences include o Culture o Demographics and social stratification o Ethnic, religious o Families/households o Groups  Internal influence o Perception o Emotion  The meaning of consumption has become a little functional but now there are increasing reasons o Added human meaning to products o Draw meaning on the Status, Identity and group acceptance CH 2  Four major world citizens o Global citizen- concerned with higher quality and production method. Like to see more socially responsible behavior o Global dreamer- less socially responsible, for identity purposes. buys more western o Anti-global- resists any foreign influence  Marketing implication = products must be adapted to local customs o Global Agnostics- will buy global brand or local brand, depends on which is superior  Culture includes knowledge, belief, art, law, morals, customs and any other habits acquired by a specific group of people o sets boundaries o Sets norms, what is wrong vs what is right o Sets sanctions or social penalties  Other-oriented values describe how groups and individuals interact with each other o Have a major influence on marketing practice o Dimensions:  Individual/collective (affects reward system, quality), Youth/Age (affects what is bought and why), Extended/Limited Family, Masculine/Feminine, Competitive/Cooperative (to what extent does a society value competitiveness), Diversity/Uniformity (  Environment-oriented values describe how people interact with their environment o Would adapt for a society that stresses a problem solving approach rather than a fatalistic approach to their environment o Dimensions:  Cleanliness (developing nations vs developed), Performance/Status, Tradition/Change (degree of openness), Risk taking/security (life insurance etc.), problem solving/fatalistic (things are not going to change vs change so there’s less consumer activism), Nature  Self oriented values reflects the approaches to life that the individual members of society find desirable o Describes how a person sees themselves o Dimensions:  Religious/secular (degree of of religious identification), Sensual Gratification/ Abstinence, Active/passive (take things for granted and accept the way things are), sensual gratification/abstinence (fight off desires), Material/nonmaterial (buying to solve a problem vs buying just to own), hard work/leisure,  Cultural variations in nonverbal communication can cause problems o Certain words mean something else in another country o Time perspective  monochronic (strict time) i.e Americans  polychronic (flexible, usually late) i.e Latinos o Space  size of space is correspondent to status in western culture  i.e larger office space is allocated according to rank  personal space also plays a role  i.e Latin America distance in business conversations are much shorter than America o Symbols  colors (pink vs blue), animals, shapes, number and music o Relationships  Americans tend to form relationships quick and easily  Chinese are more complex and characterized by guanxi  Guanxi- translated as a personal connection on which an individual can draw to secure resources o Agreements  Americans have developed an extensive legal system to make sure obligations are honored  Other cultures rely more heavily on relationships and friendships o Thing  Such as gift giving  Leads to purchase patterns o Etiquette  shaking hands  eating meals (some cultures eat a single large meal and share their food)  Purchasing power parity PPP o Necessary to equate incomes to CH 3- 1/28/15  People waste nearly 50% of global food o Majority is unopened  Marketing strategy and values o Green Marketing- beneficial to the environment, starts with the production, how consumer use the products o People differ in environmental friendliness  Some will pay more for eco friendly  Some motivated by efficiency  Some very dismissive of environmental concerns o The FTC has updated Green Guides relation to environmental claims  Decides what qualifies o Cause-relation marketing is marketing that ties a company and its products to an issue or case with the goal of improving sales  There has to be a clear connection—one pair bought another pair will be donated to needy kids  Marketing to Gay and lesbian consumers o State and federal actions have expanded to protect the rights of gays o Lifestyle of gay consumers does NOT differ much from other consumers to require product modifications o There is a large number of gay-oriented print media in the united states  Since no product modification is necessary, marketers will place regular ads, just in gay-oriented media o Support of gay community events such as Gay Pride Week is another important avenue to market to gays  Gender-Based Marketing o Changes in gender roles for women have been dramatic  Marketers of products and services ranging from automobiles to sports wear, understand the importance of women as a market segment o Sex and Gender are used interchangeably o Gender Identity refers to traits of masculinity or femininity o Gender Roles are the behaviors considered appropriate for males and females  Market Segmentation—men’s nor women’s market is homogenous o Traditional Housewife—married and stays at home. Seeks satisfaction and meaning from household and family maintenance. o Trapped housewife—Married bt would prefer to work. stays at home, lack of outside opportunity, Does not enjoy household chores. o Trapped working woman—would prefer to stay at home but works from necessity. Resents missed opportunities for family, volunteer and social activities. o Career working woman—married or single and prefers to work. Experiences some conflict over her role if younger children are left at home. Feels pressed for time  Male market is likewise diverse o One classification distinguishes between modern and traditional  Modern men are more focused on fashion, shopping and cooking  New Product Strategy has lost their traditional gender typing o i.e Guns, motorcycles, computer games, golf equipment are now being designed with women in mind  Assaults against women are a major problem, Smith & Wesson launches “Lady Smith”, a line of guns specifically for women  Marketing Communications must be considered when marketing to men and women because… o They consume different media and use same media differently  Since women are such a diverse group marketers have to consider such factors as ethnicity, age. Life stage, etc.  Retail strategy is also different for each because of switching gender roles and the fact that they react differently to retail environments o Loyalty, brand switching, coupon usage and shopping styles is apparent in grocery stores as more men go shopping for groceries o Men also tend to focus more on problem resolution when there is a service failure CH 4- Demographics and social stratification  Demographics describes a population in terms of size, distribution, and structure o Marketers segment markets in terms of demographics and use it to choose appropriate media  Demographics often related to values, lifestyles and media patterns  Population size and distribution- US approximately 320 million and growing due to increase life expectancy  Occupation is widely applied and what we use to initially evaluate and define individuals o Provides status and income  Education influences what one can purchase by partially determining ones income and occupation o Strong influence on ones tastes and preferences  Households income and accumulated wealth determines its purchasing power o Income enables purchases but does NOT cause or explain them  How wealthy one feels is just as important as actual income o Subjective discretionary income (SDI) is the estimate by the consumer of how much money they have available to spend on nonessentials  Age positioning is critical for many products o Affects self concept and lifestyle o Carries cultural and behavioral norms  Distinction between chronological age and Cognitive age o Cognitive age is ones perceived age, a part of ones self concept  Generation/Age Cohort, is a group of persons who have experienced a common social, political, historical and economical environment o Cohort analysis is the process of describing the attitudes, values, and behaviors of an age group as well as predicting them o Pre depression generation  born before 1930, part of the broader mature market  Gerontographics- segmentation process that incorporates aging process and life events related to physical health and mental outlook of older consumers  Ailing outgoers- have health problems and limit physical activities  Healthy Hermits- are healthy but life events like the death of a spouse leave them recluse  Frail Recluses- have accepted their old age and adjusted their lifestyle for less activity o Depression Generation  Born between 1930 and 1945, invented rock and roll, asset management important o Bab Boom generation  Born towards the end of world war II and 1964  Empty nest is common and leads to discretionary income and time (save more, thus spend more) o Generation X  Born between 65 and 76, has a very broad view on family  First generation to confront the issues of reduced expectations because path to success has been less certain for these people  Empowerment of generation X women o Generation Y  Born between 1977 and 1994, rivals the size of the baby boom generation  Strong sense of independence and autonomy. Also assertive and emotionally expressive  Understand that ads are around to sell products. Factors that believe to make generation unique are: technology use, music and pop culture, tolerance, intelligence and clothes o Generation Z  Born between 1995 and 2009 also called Generation @ because of heavy tech use  Teens have a high spending power but asides from that they are also attractive to marketers because preferences and tastes developed in teen years affect the rest of their life choices  Honesty, diversity, humor and information appear to be important for teens  Social class/standing equates to societal rank o Societal rank is one’s position relative to others in one or more dimensions  Individuals with different social standings have different needs and consumption patterns  What exists is not a set of social classes but a series of status continua o Which reflects various factors that society values o Status crystallization  Social structure in the US o Upper upper class, are aristocratic families tat make up the social elite (i.e the Kennedy family  Live in excellent homes, drive luxury cars etc o Lower upper class, relatively new in upper class social status and are not yet accepted by the upper upper (i.e Bill gates)  Respond by engaging in “conspicuous consumption”, they purchase things to demonstrate their wealth  Star athletes who owns 10 Lamborghinis called the nouveaux riches o Upper middle class, occupation and education are key aspects for this social stratum (i.e doctors, lawyers)  Confident and forward looking o Middle class, composed of white collar workers and typically has some college education (i.e office workers, school teachers)  Concerned with quality of schools, crime, drugs, and weakening traditional family values o Working class, consists of skilled and semiskilled factory service and sale workers  Live in modest homes or apartments and greatly concerned with crime, gangs, drugs and neighborhood deterioration o Upper lower class, poorly educated, very low incomes  Lack of education is the defining characteristic  Marketing system not served this group effective because they have a hard time securing financial services o Lower lower class, very low incomes and minimal education  Marketing to this class is frequently controversial  Two basic approaches to measuring social status o Single item indexes, estimate social status on the basis of a single dimension like education, income etc o Multi-item indexes, take into account numerous variables  Index of social Position is a two item index that is well developed and widely used o Created to measure an individuals or family’s overall social position within a community  3 types of people would be considered middle class through ISP o someone with eighth grade education who owns a medium sized firm o a four year college graduate working as a salesperson o a graduate of junior college working in an administrative position in civil service  these measures HOWEVER were developed before the rapid expansion of women’s roles CH 5  subcultures are like segments of a larger segment o some may be more individualist or collectivistic than others  Ethnic subcultures in America o Asian, Hispanic, African American, Arab American  African Americans- buying power o Are younger than white and tend to have less education and lower household incomes o Target opportunities exist across a broad range of income. one third of black household incomes are less than 50k  Hispanic Americans- buying power o Household income is relatively low  Hispanics Consumer Groups which drive differences in language, national identity o Generational groups  First gen, second and third o Hispanic Teens are often bicultural  Asian Americans- buying power o Higher education level and higher income o It is the most diverse group  Native Americans- buying power o Have limited incomes, very regional  Asian Indian Americans consumer groups o Place a high value on education o Insurance and reliability important  Arab Americans- buying power o Small percentage of population o Majority are Christians and 24% muslim  Religious subcultures o Roman catholic o Protestant o Jewish o Muslim o Buddhist Exam will have 50 multiple choice questions Chapter 3


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