Marketing study guide for exam 2
Marketing study guide for exam 2 MARK 30653
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This 16 page Study Guide was uploaded by Carolyn Notetaker on Saturday March 19, 2016. The Study Guide belongs to MARK 30653 at Texas Christian University taught by Mrs. Shropshire in Spring 2016. Since its upload, it has received 18 views. For similar materials see Principles of Marking in Marketing at Texas Christian University.
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Date Created: 03/19/16
Marketing Review Exam 2 Ch. 6 Consumer Decision: A.) Consumer Behavior: process a consumer uses to make purchase decisions as well as to use and dispose of purchased goods, influential factors • consumer decision making process: ◦ need for recognition ◦ information search ◦ evaluation of alternatives ◦ establish purchasing guidelines • want: recognition of an unfulfilled need that a product can satisfy • Stimulus: any unit of input affecting one or more of the 5 senses • internal information search: process of recalling past information stored in memory • external information search: process of seeking information in the outside environment • nonmarketing controlled information source: a product information source that originates with marketers promoting the product • marketing controlled information source: product information source originates with marketers promoting the product • evoked set: group of brands resulting from an information search from which a buyer can choose • cognitive dissonance: inner tension that a consumer experiences after recognizing an inconsistency between behavior and values of opinions • High involvement purchases require extensive and informative promotion to target market • Low involvement purchases require in store promotion, eye catching package design and good displays coupons two for one B.) Factors that influence buying decisions: • culturalset of norms, values, attitudes that shape human behavior, transmitted from generation to generation • Social class group of people who are equal in status or community esteem, share behavioral norms and regularly socialize together • Reference Groups formal and informal groups in society that iinfluence an individual’s purchasing behavior • Opinion Leaders: influences the opinions of others • Family C.) Factors that influence individual buying decisions: • gender • age • family life cycle stage • personality : a way of organizing and grouping the consistencies of an individual’s reaction to situations • self concept: how consumers perceive themselves in terms of attitudes, perceptions, beliefs and self evaluation • lifestyle • Selective Exposure: the process whereby a consumer notices certain stimuli and ignores others • Selective distortion: process whereby a consumer challenges or distorts information that conflict with his or her beliefs • selective retention: only remembers the information that supports his or her beliefs D.) Maslow’s Hiercharchy of needs: 1. physiological needs 2. safety needs 3. social needs 4. Esteem needs 5. self actualization E.) 3 types of decision making: 1. Routine Response Behavior: consumers buy freequently, low cost goods and services requires little decision time and search 2. Limited decision making: requires moderate amount of time for gathering information 3. extensive decision making: most complex decision making used when buying something unfamiliar and expensive, infrequently bought EX: new car Showrooming: examining a product in store without purchasing, then look online for a better price Stimulus Generalization: form of learning that occurs when one response is extended to a second stimulus similar to the first Stimulus Discrimination: learned ability to differentiate among similar products Beliefs VS Attitudes Belief: organized pattern of knowledge that an individual holds as true about his or her world (hard to change) Attitude: a LEARNED tendency to respond consistencly toward a given object o Changing Beliefs: A marketer may want to.. Turn a neutral negative or incorrect belief about a product attribute into a positive one Change the relative importance of a belief Add a new belief Chapter 7: Business Marketing I. Business Marketing on the Internet a. B2B or B to B: the use of the internet to facilitate the exchange of goods, services and information between organizations b. Number 1 goal for social media marketing is branding and push out content c. Commonly used tools by BtoB marketers are blogs, video streaming sites, social networking sites, Twitter d. Listening tools: used to gauge what topics are trending and to estimate consumer sentiment on social media platforms e. Measuring Online Success I. 3 of the most important measurements of online success are 1. Recency: relates to the fact that customers who have made a purchase recently are more likely to purchase again in the near future 2. Frequency: data helps marketers identify with frequent purchasers who are most likely to repeat their purchasing behavior in the future a. Monetary value of sales is important because big spenders can be the most profitable customers for a business b. Conversion Task: the behavior the marketer wants the visitor to take EX: signing up for emails, or calling this number for more information c. Conversion Rate: defined as a ratio of the number of people who visited the site to the number of people who went on to complete the desire action. ii. Stickiness: a measure of a Web Site’s effectiveness; calculated by multiplying the frequency of a visit by the number of pages viewed during each visit (site reach) 1. Stickiness= Frequency x Duration x Site Reach f. Trends to BtoB Internet Marketing i. Social Media usage is biggest marketing trend ii. Marketers use social media to create awareness and build relationships and community iii. Social media must create compelling and useful info for customers iv. Less than half of all online ads reach their intended audience v. Success of social media 1. Awareness: attention that social media attracts 2. Engagement: interaction between the brand and the audience (comments, retweets, searches) 3. Conversions: occurs when an action is taken II. Relationship Marketing and Strategic Alliances a. Relationship Marketing: i. is a strategy that entails seeking and establishing ongoing partnerships with customers b. Focus has shifted from trying to gain new customers retaining their current customers i. Building long term relationships with customers gives companies a way to build competitive advantage c. Strategic Alliance: (strategic partnership) i. Cooperative agreement between business firms 1. Licensing 2. Distributing agreements 3. Joint ventures 4. Research and development consortia 5. Partnerships ii. Business marketers form strategic alliances to strengthen operations and better compete iii. Sometimes alliance partners can be fierce competitiors iv. Others alliances are formed between companies that operate in completely different industries v. Relationship Commitment: a firm’s belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it vi. Trust: the condition that exists when one party has confidence in an exchange partner’s reliability and integrity d. Relationships in other cultures i. Keirestu: a network of interlocking coporate affiliates, members of keirestu trade with each whenever possible and engage in joint product development, finance, and marketing activity III. Major Categories of Business Customers i. Producers 1. Producers often called Original Equipment Manufacturer (OEMs) a. All individuals and organizations that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers EX: General Motors buys steel, paint, tires and batteries ii. Resellers 1. Market includes retail and wholesale businesses that buy finished goods and resell them for a profit iii. Government 1. “HURRY UP AND WAIT” iv. Institutions 1. Schools, hospitals, colleges, churches, labor unions, IV. North American Industry Classification System (NAICS) a. (NAICS): detailed numbering system developed by the US, Canada, Mexico to classify the North American business establishments by their main productions processes b. Provides common industry classification system for NAFTA c. The more digits in the code the more homogenous the group d. Derived demand: the demand for business products Business Derived Demand: demand for business products Inelastic Demand: price does not affect the demand of the product Ex: paint chips $ goes up, this will not affect how many cars are sold Joint Demand: occurs when two or more items are used together in a final product Ex: demand for Apple operating Systems exist as long as there is demand for apple computers Fluctuating Demand: also known as Multiplier effect or accelerator principle, IS a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product Purchase Volume: business customers buy in bulk Fewer customer than consumer marketers (each customer is crucial) More concentrated than consumer markets Channels of distribution are shorter Business to Business online exchange: electronic trading floor that provides companies with an integrated links to their customers and supplies B toB: goal is to simplify purchasing power and to make it more efficient Involves more people than in a consumer purchase Negotiating is common in business marketing: delivery dates, product specification, payment terms, and other pricing matters Reciprocity: business purchasers choose to buy from their own customers Businesses often LEASE expensive equipment (computers, vehicles, construction equipment o Effects of leasing: decrease capital flow,get seller’s latest product, receive better services, gain tax advantage I. Types of Business Products a. Major equipment: (Installations) capital goods such as large expensive machine, mainframe computers, blast furnaces, generators, airplanes and buildings i. Depreciated over time, not charged as an expense in year it was purchased ii. Personal Selling is important distribution channels come directly from producer to the business user b. Accessory equipment: goods such as portable tools and office equipment, less expensive, shorter lived, more standardized and often bought by more customers c. Raw materials: unprocessed extractive or agricultural products (timber, wheat, fruits, corn) i. Market sets the price of raw materials, individual producers have little pricing flexibility d. Component parts: either finished items ready for assembly or products that need little processing before becoming part of some other product i. Tires are a component part to a car ii. Retain their identity after becoming apart of final product iii. 2 markets: OEM market and Replacement Market iv. Replacement Market: no negotiations, no reciprocity, no leasing e. Processed Materials: products used directly in manufacturing other products (EX: plastic, corn syrup, do not retain identity i. Marketed to OEMs ii. Price and service are important when choosing a vendor f. Supplies: consumable items that do not become apart of the final product i. Short lived & inexpensive ii. Maintaince, repair, or operating supplies category referred as MRO items g. Business services: expense items that do not become a part of the final product i. Outside providers to perform janitorial, advertising, legal, management, marketing researcher, maintence (cheaper to higher someone outside company) II. Business Buying Behavior: a. 5 important aspects i. Buying centers: all the people in an organization who become involved in the purchase decision, avg buying center has 14 people per purchase, do not appear on formal organization charts Role illustration initiator person who first suggests making a purchase influencer/ evaluator people who influence buying decision, help define specifications and provide info for evaluating options Gatekeeper Regulate the flow of info decider person who has the formal/informal power to choose or approve the selection of the supplier or brand purchaser person who actually negotiates the purchase users use the product b. Evaluating criteria i. Quality: technical suituability of product ii. Service: want satisfactory service 1. Dependeability of supply 2. Services that help final product sell iii. Price: LOW PRICES c. Buying situations: i. MAKE VS BUY 1. New buy: purchased product for the first time, no previous relationship, specifications are fluid, buyers are more open to new vendors 2. Modified Rebuy: less critical and less time consuming than new buy purchaser wants some change to original product 3. Straight Rebuy: Vendors prefer this a. Use purchasing contracts when products are bought often and in high volumes d. Business ethics e. Customer Service i. Some customers are more valuable than others ii. Greater value because they spend more iii. Some companies provide different levels of customer seervice depending on the level of importance that customer is to the company CHAPTER 8: Segmenting and Targeting Markets I. The importance of Market Segmentation a. Market Segment: subgroup of people or organizations sharing one or more characteristics that cause them to have a similar product need b. Market segmentation: the process of dividing a market into meaningful relatively similar and identifiable segments or groups i. Purpose: enables the marketer to tailor marketing mixes to meet needs of one or more specific segments ii. Helps define customers needs and wants more precisely iii. Helps decision makers to more accurately define marketing objectives and better allocate resources iv. As a result better performance can be evaluated II. Criteria for Segmentation: a. Substantiability: segment must be large enough to warrant developing and maintaining a special marketing mix b. Identifiability and Measurability: segments must be identifiable and their size measurable , data about the population within geographic boundary, number ofpeople in age groups, social and demographic characteristics help determine segment size c. Accessibility: firm must be able to reach members of targeted segments with customized marketing mixes d. Responsiveness: markets can be segmented using any criteria that seem logical III. Bases for segmenting Consumer Markets a. Marketers use segmentation bases or variables which are characteristics of individuals, groups, or organizations to divide a total market into segments b. Multiple Variable Segmentation (more precise) vs Single variable Segmentation c. Geographic Segmentation: i. Breaks apart based on market density, market size, by region, climate ii. 4 main reasons why take regional approach 1. Need new ways to generate sales bc of competition or low sales 2. Computerized checkout stations give retailers accurate depiction of which brands sell best in their region 3. Packaged goods manufacturers are introducing new regional brands to appeal to local preferences (Ex: ski pants in Colorado and a light jacket for Houston) d. Demographic Segmentation: i. Age 1. Tweens: spend more than $208.7 billion of their own money and their parents on purchases for themselves, have influence over big family purchases (wii, new tv) 2. Millenial: makes up 30% of adule population, most educated, most diverse, and tech savy, formidable purchase power, prefer to get references from friends rather than ads, considers social issues (substainability) 3. Gen X: only 16 % of total population, best educated, disloyal to brands and skeptical of big businesses, often stuck between supporting their aging parents and young children 4. Baby Boomers: 24.7% of population, outspend other generations by about $400 billion a year ii. Gender 1. Women make up 85% of purchases of consumer goods each year, purchase majority of household items 2. Marketers of clothing, jewelry, magazines personal care often market by gender but are trying to expand their market to appeal to more men too iii. Income 1. Income level influences consumers wants and determines their buying power iv. Ethnic background 1. Hispanics, African Americans and Asians are the 3 largest ethnic groups and markets have started to make products that appeal to those groups v. Family life cycle 1. Series of stages determined by combo of age, marital status, presense or absence of children vi. Psychographic Segmentation: 1. Based on personality, lifestyle, motives, 2. Geodemographics: segmenting potential customers into neighborhoods lifestyle categories (ghetto vs Suburbia) vii. Benefit Segmetnation: process of grouping customers into market segments according to the benefits they seek from the product viii. Usage rate segmentation: divides a market by the amount of product bought or consumed (former users, potential users, first time, regular users) ix. 80/ 20 principle: 20 % of all customers generate 80% of the demand IV. Bases for segmenting Business Markets a. 4 broad segments: i. Producers ii. Resellers iii. Government iv. Institutions b. Company Characterisitcs c. Buying Processes: i. Satisfiers: business customers who place an order within the familiar supplier to satisfy the product and delivery requirement ii. Optimizer: business customer who consider numerous suppliers (familiar and unfamiliar) and study all proposals carefully before selecting one V. Steps in Segmenting a Market 1. Select a market or product category 2. Chose basis or bases for segmenting market 3. Select segmentation descriptors 4. Profile and analyze segments 5. Select markets 6. Design, implement, maintain appropriate marketing mixes Vi. Strategies for selecting target markets Targeting Strategy Advantages Disadvantages Undifferentiated targeting Potential savings on Unimaginative product production/ marketing offerings costs Company is more susceptible to competition Concentrated targeting Concentration of resources,Segments too small or better needs of specific changing , large segment, allows small competitors may more firms to better compete effectively market to niche with big firms and strong segments positioning Multisegment Targeting Greater financial success, High costs cannibalization economies of scale in producing/ marketing a. Target market: group of people or organization for which an organization designs, implements, maintains a marketing mix intended to meet the needs of the that group resulting in mutually satisfying exchanges b. Unindifferent targeting strategy: marketing approach that views the market as one big market with no individual segments this uses a single marketing mix c. Concentrated targeting strategy: used to select one segment of a market for targeting marketing effors d. Niche: one segment of a market e. Multisegment targeting strategy: chooses two or more well defined marker segments and develops a distinct marketing mix for each f. Cannibalization: situation that occurs when sales of a new product cut into sales of an existing firm’s products g. Positioning: developing a specific marketing mix to influence potential customers overall perception of a brand, product line, or organization in general h. Position: place a product brand or group of products occupies in consumers minds relative to competing offerings I. Product differentiation: positioning strategy that some firms use to distinguish their products from those of competitors j. Perceptual mapping: means of displaying or graphing in two or more dimensions the location of products and brands or groups of products in customers minds k. Repositioning: changing consumers perceptions of abrand in relation to competing brands Ch. 9 Marketing Research I. Management Uses of Marketing Research: 1. improves the quality of decision making 2. helps managers to trace problems 3. Marketing research can help managers understand very detailed and complicated relationships 4. SOUND marketing research can help managers serve their customers accurately and efficiently 5. Helps gauge perceived value of their good and services, level of customer satisfaction II. Steps in a Marketing Research Project a) Marketing Research Process: scientific approach to decision making that maximizes the change of getting accurate and meaningful results 1. Identify problem/ opportunity 2. plan the research design and gather secondary data 3. Specify the sampling procedures 4. Collect primary data 5. analyze the data 6. prepare and present the reporting 7. Follow up b) Marketing Research Problem: Information oriented, what info Is needed and how to obtain it efficiently and effectively c) Marketing Research Objective: specific information needed to solve the marketing research problem, objective should be to provide insightful decision making information d) Management Decision Problem: broad based problem that uses marketing research in order for managers to properly take ACTION e) Secondary Data: data previously collected for any purpose other than the one at hand (annual reports, reports to stockholders, product • Advantages: ◦ can save time and money if they help solve researchers problems ◦ aid in formulating the problems ◦ suggest other research methods ◦ pinpoint the kinds of people to approach and their locations • Disadvantages: ◦ mismatch between the researcher’s unique problem and the purpose for which the secondary data was collected ◦ lack of detailed info that would enable a researcher to enable secondary data relevance and quality f.) Big Data: exponential growth in the volume, variety, velocity of information and the development of complex new tools to analyze and create meaning from data • data is constantly streaming in from social media and other sources • adding big data to simple online tracking data makes the behavioral targeting of online advertising much more effective • primary focus→ to uncover what patterns and relationships exist in this database g.) Planning the research Design and gathering the primary database • Research Design: which research questions must be answered, how and when the data will be gathered, how data will be analyzed • Primary Data: information that is collected for the first time, used for solving the particular problem under investigation ◦ current→ researchers know the source ◦ secrecy can be maintained ◦ can answer specific research questions that secondary cannot • Survey Research: most popular way for gathering primary data, researcher interacts with people to obtain facts, opinions and attitudes, posts a questionnaire h.) Traditional Forms of Survey Research: • Mall Intercept Interviews: a survey research method involves interviewing people in the common areas of shopping malls ◦ Pro: can ask a person to clarify or elaborate to get more detailed answers ◦ Con: hard to get representative of the population • Computer assisted Personal Interviewing: an interviewing method in which the interviewer reads information from a computer screen and enters the respondent’s data directly into the computer • computer assisted self interviewing: interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where each responds to questions directly from computer • Central Location Telephone (CLT) facility: specially designed phone room used to conduct telephone interviewing ◦ most offer computer assisted interviewing • Mail Surveys ◦ Benefits: low cost, elimination of interviewers and field supervisors, centralized control, actual anonymity → more accurate responses ◦ Con: low response rates ◦ not a good representation of surveyed population • Executive Interviews: a type of survey that involves interviewing business people at their offices concerning industrial products or services • Focus Groups: type of personal interviewing of 710 randomized people with certain desired characteristics led by a mediator, used to gauge customer response to products I.) Questionnaire Design: • All forms of survey research require a questionnaire • open ended Questions: an answer phrased in the respondents own words • close ended question: asks for the respondent to make a selection from a limited list of responses • Scaled Ended responses: is a close ended question designed to measure the intensity of a respondent’s answer • Close ended and Scale Ended are easier to use because answer is more direct and responses are fixed J.) Observation research: • a research method that relies on four types of observation • people watching • watching an activity • machines watching people • machines watching an activity • Mystery Shoppers: researchers pose as customers who gather observational data about a store (what is on the shelves) • Behavioral Targeting: form of observation marketing research that combines a consumer’s online activity with psychographic and demographic profiles that compile into databases • Social Media Monitoring: the use of automated tools to monitor online buzz, chatter and conversations • Ethnographic Research: study of human behavior in its natural context that involves observation of behavior and physical setting. • Virtual Shopping: stimulation of an actual retail store on a computer screen ◦ data collection is fast and error free ◦ low production costs ◦ high degree of flexibility • Experiments: a method of gathering primary dat in which researchers alter one or more variables while observing the effects of those alterations on another variable • sample: a subset from a larger population • universe: population from which sample will be drawn • probability sample: a sample in which every element in the population ha known statistical likelihood of being selected • Random Sample: every one has equal chance of being selected as part of sample Probability Samples NON Probability Samples Simple Random: every member has equal chance Convenience sample: easiest population to obtain info from Stratified: pop. Divided into 2 mutually exclusive Judgment: researchers criteria are based on groups (gender or age) samples drawn from each personal judgment that the people chosen are likely group to give accurate info Cluster: pop divided into mutually exclusive Quota: researchers find a perscribed number of groups (geographic areas), randome sample of people in several categories, EX owners of large clusters selected dogs vs Owners of small dogs Systematic: sample size/ population size= skip Snowball: additional respondents are selected interval, randomly choose a beginning number based on referrals from initial respondents, used within skip interval → Skip pattern when a type of respondent is difficult to find k.) Types of Errors: • Measurement Error: occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process • Sampling error: an error that occurs when a sample does not represent the target population • frame error: occurs when a sample drawn from a population differs from the target population • random error: occurs when selected sample is an imperfect representation of the overall population • field service firm: specializes in interviewing respondents on a subcontracted basis • cross tabulation: method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more questions ◦ EX: what is the association between gender and the brand of microwave popcorn bought most frequently l.) Preparing and Presenting the report: • marketing researchers must convince managers that results are credible • summary of major findings • conclusion of report present recommendations to management • measure the quality of marketing research report based on the research proposal III. The Profound Impact of the internet on Marketing Research a.) Advantages to internet surveys: • rapid development, real time reporting • REDUCED COSTS • personalized questions and data • increase in participation • able to contact the hard to reach ones b.) USES of Internet by Marketing Research • Web Survey Systems ◦ software systems specifically designed for web questionnaires ◦ Survey Monkey • Google Consumer Surveys: ◦ visitor can gain acess to premium content by answering a couple of questions rather than paying a fee ◦ fast and cheap • Online Panel Providers: ◦ prerecruit people who agree to participate in online market research surveys ◦ must answer an extensive profiling questionnaire to enable the panel provider to target research efforts to panel members who meet specific criteria • online focus groups: ◦ better participation rates ◦ cost effectiveness ◦ broad geographic scope ◦ accessibility • Web Community Research ◦ carefully selected group of consumers who agrees to participate in an on going dialogue with a particular corporation c.) Scanner Based Research: system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy • 2 major scanner based suppliers: SymphonyIRI Group Inc. (inventor) , Nielson Company • behavior Scan: tracks the purchases of 3,000 households through store scanners in each research market • Info Scan: scanner based sales tracking service for the consumer packaged good industry • Neuromarketing: study to better understand consumers responses to promotion and purchase motivations, study body’s responses to marketing stimuli d.) Customer Relationship Management (CRM) • CRM Cycle= key to managing relationships with customers 1. identify customer relationships 2. understand interaction with current customer base 3. capture customer data based on interactions 4. store and integrate customer data using information technology 5. identify best customers 6. leverage customer information • Cycle repeats e.) Competitive Intelligence: (CI) • an intelligence system that helps managers access their competition and vendors in order to become more efficient and effective competitors
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