MKTG 330 Exam #1 Study Guide
MKTG 330 Exam #1 Study Guide
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Date Created: 10/22/14
1 Understanding Consumers a quotConsumer Behavior Reflects the totality of consumers decisions with respect to the acquisition consumption and disposition of goods services time and ideas by decision making units b The study of human responses to products and services and the marketing of those products and services i Consumer Responses Affect feelings Behavior actions Cognitions thoughts 2 The Scientific Study of Behavior a The behavioral sciences versus the physical sciences Dynamic versus static Behavioral sciences there is more uncertainty Intuition versus Research 246 we are overconfident we like to have our beliefs and intuitions confirmed quotConfirmation bias we search for and interpret ambiguous information to cohere with our beliefspreferences i Coke Debacle Product Failures What did Coke forget to consider when it introduced the New Coke formulation the emotional attachment that consumers had to the original formula 1 80 of new products fail 2 Jury Out trend seems to be heading toward sweet and spicy right now Needs and wants tastes and preferences change over time How have your expectations changed with the economic volatility How have your consumption patterns changed Key is to anticipate the unarticulated needs and wants of consumers and provide them with products that satisfy Importance of trendwatching 1 All these trends affect the way marketers do business i 99 Lives idea that people are living fragmented lives and multiple life roles People are time starved bc they39re juggling too much breakfast to go drive thrus multiple car cup holders caffeine kicks ii Anchoring idea that people are seeking to get back tobasics getting back to spiritual centers to recenter amp refocus yoga religious programming self help books iii Atmosfear people being worried about our environment and what we39re doing for it reducing our carbon footprint refillable water bottles recycling programs energy star products hybrid cars reusable energy iv Being Alive awareness of good health yoga labeling has changed more nutritious food organic vitamins v Cashing Out idea of going back tobasics by removing a second person39s income and only have one person in the family working taking care of the kids house etc vi Canning idea of surrounding yourself with people you care about in a group and spending time together grange fair vii Cocooning idea of wanting to go home get a break and relaxingcocooning inside Wanting to not be bothered Netflix online shopping food delivery home gym viii Downaging similar to quotbeing alive baby boomers trying to look feel and act younger plastic surgery joint replacements hair transplants anti wrinke cream jeans for older folks ix Eveolution women are actively making financial decisions now dominantly in charge of finances the decisionmakers of the house men and women handle finances differently x Fantasy Adventure we need a breakescape from our everyday lives fantasysupernatural shows Sims video game vacations Disney world xi Future Tense people being stressed out about the future life insurance quotover 55quot communities xii Icon Toppling big companies being seen as unethical consumers want these companies to act ethically pushing against big companies amp big government BACKLASH new regulations to protect consumers honor codes mission statements buying local xiii xiv XV Save Our Society increased emphasis on ethics boycotts against companies who use child labor Small Indulgences consumers need a little treat they crave indulgences to reduce stress bite size chocolates shorter Disney trip plans Vigilante Consumer consumer who doesn t put up with a company39s BS pushing back against a company negative word of mouth online reviews protests reporting them lawsuits f ConsumerTrends2014 vii Guiltfree Status consumers increasingly aware of how overindulgence has damaged the planet and society jeans recycled into rugs firearm jewelry Crowd shaped people pooling their data more than ever this is changing consumer expectations checkin DJ IBM improving bus routes in Africa Made Greener ByFor China China becoming the epicenter for innovation for green products Beijing subway rewards commuters for recycling plastic bottles Philips intelligent street lighting Mychiatry rea time health checks mental and physical PIP stress sensing video games mico headphones that detect mood and play music accordingly No Data delivering brilliant service without excessive data collection will earn consumer trust Internet of Caring Things connected objects will center around people ford intelligent car monitors driver39s heartrate amp glucose sensor integrated shirt monitors medical data Global Brain consumers more global and more local in focus g Examples of Integration McDonald39s amp CocaCola BFF Timeout App Esurance cellphone camera damage assessment Fox Portugal donating blood in exchange for walking dead merchandise 3 Studying Behavior Primary Research a Methods to identify and understand trendsconsumers vi vii Observations cannot detect motivations only responses kids interacting with toys Focus Groups effectiveness of moderator expensive representative sample always follow with additional research Interviews social desirability bias over reporting engaging in socially desirable activities under reporting engaging in socially undesirable activities Projective Techniques metaphors storytelling associating a brand with a certain animal Diaries and Panels people are paid to keep track of their purchases by keeping a diary Nielsen ratings track viewership retrospective Nielsen ratings Survey question wording order effect Experiment most controlled establish direction of causality b Scientific Methods Scientific methods allows you to uncover the relationships between 2 or more variables 1 Surveys tell you what responses are correlated but not necessarily causal What people want and what people say they want may be very different social desirability bias 2 Experiments designed to control and rule out alternative explanations Correlation pos neg or O correlation what surveys can tell you 4 Causation x leads to y what experiments can tell you a x independent variable cause i Person variables internal to individual interests values beliefs may be unobservable ii Situation Variables external environmental 4Ps these usually involve quotdecisions the marketing manager has to make Product Place Price Promotion Positioning b y dependent variable effect 9 i The dependent variable is the behavior or consumer response you want to measure eg change in feelings change in attitude change in sales compliance etc ii find groups of consumers who respond similarly to changes in the independent variable Market Segments TARGET MARKET 5 Reduction of Uncertainty a Use multiple measurestriangulate b Use statistical procedures c Randomly assign individuals to conditions in experiments d Understand random variability noise 1 Promotional Efforts Competition for mindspace is fierce a Consumers are bombarded with marketing communications and there is much clutter i Consumers exposed to 5000 messages a day ii Advertisers are going to extremes to get their ads noticed more on this later iii Of the ads that are noticed and remembered a small number 120 about 30 remembered negatively 2 Consumers Filter the Communications So from the Brand Manager39s perspective have to make Marketing Decisions a Selective Exposure pick medium to send messages channels to sell the product through b Selective Attention getting the message noticed c Selective Perception have to make sure they understand the message d Selective Retention have to make sure the message makes it all the way to memory so the consumer can use that information when they need to retrieve it in making purchase decisions 3 Selective Exposure refers to where we tune in The prcess by which the consumer comes in physical contact with the stimulus a Who Controls Exposure Consumers select what media they consumewhat stores they go to Marketers control whenwhere consumers encounter their brand b Intentional Avoidance Junk Mail Fast forwarding through commercials during recorded programs Switching channels during commercial breaks Blocking senders c How can marketers ensure their target market is exposed to their marketing messages Select media that target market consumes Need to think beyond traditional places where consumers are used to seeing advertising i Branded entertainment making a product part of a TV show s storyline ii Creative techniques and advertising locations are getting more unusual as companies try to ensure consumers are exposed to their productsmessages d Mere Exposure The more we are exposed to a stimulus the more familiar it becomes the more we will like it even if we aren t paying attention e From Exposure to Attention Attention can be pos or neg depending on who you are and what you associate with a brand i Selective Attention the process by which an individual allocates part of his or her mental activity to a stimulus 4 Characteristics of Attention a Selective people have a tendency to pay attention to information from a particular source and exclude other information cocktail party effect b Can be divided multitasking attention can be split and people can pay attention to more than one stimulus However dividing attention brings down the quality of the attention paid c Limited Our attention has a limited span we cannot pay attention to every stimulus around us Two Types of Attention i Voluntary Attention personal relevance involvement message must contain information that is importantrelevant to you ii Involuntary Attention Occurs when a consumer is exposed to something surprising Marketers activate the orientation refex by creating stimuli that stand out from the surrounding context orkin commercial with cockroach surprise value How Good Are We at Paving Attention asking for directions inattentional blindness awareness test wmoonwalking bear change blindness What Breaks Through Our attention is drawn to stimuli through our senses What gets noticed and attended to is dependent on whether the stimulus breaks our sensory imits i As the sensory input decreases our ability to detect changes in input or intensity increases 2b weight 1b noticed change 100b weight 1b unnoticed change Sensory Systems What are our sensory limits i Absolute threshold is the minimum amount of stimulation required for a person to detect a stimulus It is the difference between something being perceived versus nothing being perceived at all ii Differential threshold JND is the smallest differencechange in a specified amount of sensory input that is detectable iii Weber39s Law the stronger the initial stimulus the greater the intensity needed for the second stimulus to be perceived as different why you don39t notice your headlights are on in the day 1 Weber39s law in pricing markdowns must be at least 20 before consumer recognize them 2 JND increases in size proportionate to k as the dollar value of a purchase increases iv JND Applications Sometimes we want consumers to notice differences other times we do not want them to notice changes 1 If you do not want consumers to notice a change fall below JND Threshold Downsizing Pricing Increase Change in Spokescharacter v Subliminal Messages cognition can occur without awareness 1 Subliminal Below the sensory threshold x We cannot articulate what we have seen because we are not consciously aware that we have seen it McDonads logo flashing during Iron chef 2 Supraliminal Not paying attention conscious that something is changing but ca n t put your finger on how or what or gin sex vi Arousal amp Attention Intensity 1 Too much arousal low attention intensity 2 Selective Attention Role of Arousal Marketers want to increase overall sensory arousal so consumers pay more WW V i rIw5i l attention Low Mmerate High a Have to be careful to not raise it to the point at which consumers can no longer process the message ie avoid sensory overload vii What Enhances Our Attention 1 Personally Relevant things we wantneedmatch our goals High Ptllien39tinn llnitensit5r viii 2 Pleasant Attractive models music humor 3 Surprising novelty Volvo truck commercial unexpectedness Ikea kid with vibrator texting PSA honey maid PUZZLES 4 Concreteness easy to picturethink about 5 Proximity timing and spatial for things that are together if one is attended to the other is also likely to be attended to eg ads in the SuperBow 6 Prominence Effect People attend mostly to the more prominent attributes Prominent stimuli stand out relative to the environment because of their intensity Attention MultiSensory 1 Sight picture versus text versus brand logo in print ads visual transitions that relax vs agitate size of picture screen colors y Sound speed of voice transitions signals of quality Smell baking aisle in grocery store signal of seasons Touch quotsturdy clothing racks cashmere silk implications for online shopping 5 Tastemouth feel comfort food temperature relax vs agitate Sensory Limits we can only pay attention to 7 2 pieces of information and get it into our memory 1 First items on a list best remembered bc we have rehearsed it the most primacy 2 Last items stored in shortterm memory bc there39s nothing distracting us from it recency 3 Present information in an organized structure How much information should a marketer provide in an ad How much arousal should the marketer induce From Attention To Perception Suppose the consumer has been exposed and paid attention to the message the marketing manager sent out You still have to worry about whether that consumer is correctly interpreting the information and comprehending that message 39gtS quot Selective Perception we select organize and interpret stimuli into a meaningful and coherent quotpicture of the world It is the lens in which we see the world a Perception is how we make sense out of the information provided b We will perceive things based on our beliefs about reality rather than actuality and we respond accordingly Placebos People will become drunk if they believe that the drink that they had contained alcohol even if it did not Perception involves a lot of interpretation Ic The specific meaning we attach to a concept depends in part on how the information is organized and the context in which the information is found The more ambiguity present the more personal factors will govern the interpretation of the information c Common Perceptual Biases Figure and Ground Proximity Similarity Closure Continuation Good Figure Grouping common fate d Consumers Also Rely On Irrelevant cues when perception is difficult consumers tend to rely on irrelevant information Physical appearance people make certain attributions about the qualities that are associated with the productperson based on appearance alone Source credibility respected sources carry additional weight even if this isn t their area of expertise john krasinski esurance Repetition as repetition increases more likely to believe what isn t true eg mere exposure increases familiarity and believability SchemasScripts pull up information from memory and using that to interpret new circumstances going to a new restaurant E g h vi Halo effect a generalized impression either favorable or unfavorable is extended to the interpretation of non reevant stimuli vii Limited hypothesis testing we don t think about all of the possibilities 246 Misleading Consumers Intentionally i Praqmatic inferences literally true but figuratively false brand x pills MAY relieve pain 9 interpreted as USUALLY ii Affirmation of the Consequent quotWomen who look younger use Oil of Oay flip it to quotWomen who use Oil of Olay look younger builds on people39s lack of understanding of conditional probabilities iii Demonstrations Campbell39s put marbles in soup to make the potatoes and meat rise to the top shamwow iv Piecemeal Data juxtaposition of imperatives quotBrand X has more headroom than a Mercedes more leg room than a Cadillac and more trunk space than a BMW v Comparison Omission leave off comparison point quotBrand X gasoline gives you greater gas mileage Feature Identification we tend to group things into categories based on common features i Categorization and Prototypicality When we don t know exactly how to interpret a new concept we look for common features that will help us identify the concept 1 Expectations of features and context can play a role in how prototypical a given concept is Fish prototype goldfish 2 We also categorize by functionality and not just features expectation of features may create dissatisfaction acne medicine Perception Challenges for Marketers Consumers have different experiences and expectations that influence the perception i Firsthand experience can be controlled by the marketer ii Secondhand experience can39t be controlled but can be very powerful if managed quotbuzz marketing Word ofmouth social media iii Perception is constructive people construct interpretations on the fly iv The meanings are constructed as needed and are based upon two major factors The quotactualquot stimulus or event Prior knowedge expectations Expectations What we see to a large extent is determined by what we expect to see which is determined by our prior expectationsprior knowledge i Consumers only perceive differences in stimuli that exceed the JND threshold From Perception to Retention Marketers need to build strong associations and knowledge structures in consumers memory so that the brand is activated when a related concept is activated i Our interpretation from these perception processes is what is retained and goes into memory long term 6 Retention Associative Networks Information is stored in memory in an organized network structure a b c d Nodes conceptswords Links associations between related concepts Repetition strengthens the link more likely to prime related conceptsprovides a context Lack of usestrength of association diminishesbecomes less accessible in memory
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