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Exam 2 Study Guide

by: Chelsea Gavranich

Exam 2 Study Guide MKTG 360

Chelsea Gavranich
GPA 3.1
Principles of Marketing
Dr. David Knuff

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Principles of Marketing
Dr. David Knuff
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This 17 page Reader was uploaded by Chelsea Gavranich on Wednesday February 4, 2015. The Reader belongs to MKTG 360 at Washington State University taught by Dr. David Knuff in Spring2014. Since its upload, it has received 108 views. For similar materials see Principles of Marketing in Marketing at Washington State University.

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Date Created: 02/04/15
Mktg 360 Exam 2 a Decision making process 0 Step 1 problem recognition Process that occurs whenever the consumer sees a signi cant difference between his current state of affairs and some desired state of affairs Step 2 information search Process where a consumer searches for appropriate info to make a reasonable decision Step 3 evaluation of alternatives Compare competing product alternatives Step 4 product choice make a decision desire to buy most preferred brand 0 Step 5 post purchase evaluation perceived performance Satis ed or not satis ed 0 Types of Problem Solving 0 Extended typically higher expenses and higher involvement carefully going through steps Ex Buying a house 0 Limited problem solving limited time spent average level of involvement work to make a decision but not a great deal Ex Buying clothes jeans 0 Habitual problem solving little time spent low involvement little or no conscious effort Ex Buying candy 0 Which type of problem solving is best DEPENDS Extended when your product is NOT being selected Habitual when your product S being selected a Dissonancereduction strategies 0 Cognitive dissonance the anxiety or regret a consumer may feel after choosing from among several similar attractive choices Strategies 0 Internal in uences lifestyle learning etc Perception The process by which people select organize and interpret information from the outside world Exposure stimulus must be within sensory receptors to be no ced Perceptual select0n consumers will pay attention to some stimuli and not to others 0 Interpretation consumer assign meaning to stimuli 0 Motivation An internal state that drives us to satisfy needs by activation goaloriented Once we activate a need a state of tension exists that drives the consumer and eliminates the need Consequently only unmet needs motivate 0 Learning 0 The process by which experience leads to changes in knowledge attitudes andor behavior two types Beha viorist approa chBeha viora Learning Theory observing responses to external stimuli indicate that learning has happened Not concerned with the process just the inputs and outputs Behavior based and includes conditioning Classical amp Operant Conditioning Cognitive approachCognitive Learning Theory learning as a result of thinking and problem solving stresses the importance of internal mental processes Processed based very linear process Attitude a lasting evaluation of a person object or issue 0 3 components Affect feelings focuses more on peripheral Positive attitudes give more likelihood that you ll consume a product overall emotional response a person has to a product Cognitive beliefs focuses more facts belief or knowledge a person has about a product and its important characteristics Behavior the doing component of attitudes involves a consumer s intention to do something purchase or use of a certain product Beliefs Feeling l Attitudes l Behavioral Intentions Behavior 0 Personality the set of unique psychological characteristics that consistently in uence the way a person responds to situations in the environment 0 Often serves as the moderatorquot EX Price consciousness Cheap 0 Lifestyle a pattern of living that determines how people choose to spend their time money energy and re ects their values tastes and preferences 0 Psychographics groups consumers according to psychological and behavioral similarities to construct market segments 0 AIDS describing people in terms of their activities interests and opinions and place consumers into dimensions 0 VALS values and lifestyles Divides the entire US population into 8 segments VALET Framemark 7 IHMDHATDHE H i g h Fleaam runes High Inwnwat n F39Fil l39lHr39ia39 Muirram Ideals itch Evenlent SelfExpression THIHPEEHE 7 AEHIEUEHS EEPEHIEHGEHE Law HEScm Law Innuvatiun 1 External In uences Situational a Physical Environment 0 Arousal Dull or exciting o Pleasure Pleasant or unpleasant 1 Time a Time available to make a decision may include sense of time poverty a Time Poverty consumers belief that they are more pressed from time than ever before External In uences Cultural Social family a Culture values beliefs customs and tastes a group of people value Rituals symbolic activity consisting of a series of steps that occur in a xed sequence and are repeated over time o Artifacts needed to perform the ritual or enhance the performance or ritual EX Candy on Halloween owers on valentines day etc Subculture Group within a society whose members share a distinctive set of beliefs characteristics or common experiences 0 Social Class The overall ranksocial standing of groupspeople within a society according to the value assigned to factors such as family background education occupation amp income Formal learning adults or siblings teach you how to behave o Informal learning imitating the behavior of others 0 Technical learning teachers instruct children through a formal education environment Opinion leader people who in uence others attitudes or behaviors Knowledgeable about product category Among rst to buy new products Likely to tell both positive and negative info about product performance Maslow s Hierarchy of Needs Approach that categorizes motives according to ve levels of importance the more basic needs being on the bottom of the hierarchy and the higher the needs at the top BO39ITOM Physiological Safety Belongingness l Ego needs l SelfActualization TOP murahitys Y creativity 1 Spruntneiiy pll39 lthEm solving I what FITE leJdiEia Selfactualiaation r E EEPEMEDHEHE seifses teem mildew rr 39 aghlie39aigrriemt respect of other5 Egteggm respect by others il39lE nd Ehlil family sexual lritlrr39ami Lwefljaellhgmg security of bi dyen1aployniana t resembles Safari 7 morality the farming health property I ljrrimaingr grail g filr 592 algae1 ifiill39i iji lf fli i Pinififll lli fi I Physiological Cialdini In uence o Clickwhirrrrrrr tape player automatic can t do anything to ght it 0 Authority we usually listen to authority gures 0 Reciprocity The Of ce You owe mequot if I do something for you then you need to something for me 0 Door in the Face you ask for something big up front expecting to be told no then back up and ask for something small 0 Social proof idea that we do what the group is doing 0 Pluralistic ignorance 0 Works under uncertainty 0 Seek similarity o Liking association principle dogRV on fridge 0 Commitment and consistency car salesmen 0 Foot in the door asking for something small that s not an inconvenience at all and expecting a response slowly building subsequenUy Scarcity 0 When things are scarce we want it more 0 Joy is in possession not consumption 0 Newly scarce items vs always scarce 0 Does censorship work 0 It doesn t work because it makes people want it more Involvement theory o Developed from hemispheral lateralization aka split brain theory 0 Right and left sides of brain specialize in the types of info they process 0 Left cognitive activities 0 Rational active realistic Ex Reading speaking info processing 0 Right nonverbal picture information nonverbal creative 0 Emotional impulsive intuitive 0 Ex artists Classical Conditioning The learning that occurs when a stimulus eliciting a response is paired with another stimulus that initially does not elicit a response on its own but will cause a similar response over time bc of its association with the rst stimulus Unconditioned stimulus elicits an automatic behavior Ex Meat paste makes dogs salivate o Conditioned stimulus elicits behavior EX Bell ringing makes dogs salivate o The two are combined together until the conditioned stimulus elicits the same response as the unconditioned stimulus Stimulus generalization existing stimulusresponse relationship generalizes to a new similar stimulus Me too products offering a product that is a copy or replication of a competitors product Substantivecosmetic variations Substantive change in the product 0 Cosmetic change in the appearancepackaging Operant Conditioning instrumental learning consequences of the behavior affect the frequency of performing the behavior learning that occurs as the result of rewards or punishments Reinforcement schedule must decide when to offer rewards products need to be high in quality every time Evoked set a group of relevant brands that a prospective consumer is favorably familiar with when they are thinking about making a purchase Elaboration Likelihood Model centralperipheral route to persuasion Central route to persuasion infofacts left brain 0 Peripheral route to persuasion sound music sights right brain Enculturation learning from your own culture Acculturation learning from other s cultures Social in uences reciprocity consistency scarcity etc 0 Culture values beliefs customs and tastes valued by a group of people Subculture group within a society whose members share distinctive sets or beliefs characteristics or experiences ex Religious groups 0 Reciprocity reciprocating a favor Door in the face when you ask somebody for something big they say no so you ask for something smaller intentional Foot in the door opposite of door in the face ask for something small then ask for something larger likely to say yes again 0 Scarcity opportunity to get something scare l the person will want it Memory resource allocation 0 The process of receiving information and generating an output or acUon Sensory meaning shapecolor associations 0 Semantic meaning symbolic associations 0 Types of memory Sensory memory temporary storage of things from our senses ex Cinnabon o Shortterm memory stores for limited period of time 0 Longterm memory information stored for lengthy periods 0 The more effort it takes to process the more likely it will go to LTM Associated networks of infospreading activation Semantic priming symbolic associations help you recall info Stroop effect idea that there is a bottleneck in information that we receive Only limited info gets to our short term 0 Cocktail party phenomenon hear your name and pay attention personal relevance The self SelfConcept an individual selfimage that is composed of a mixture of beliefs observations and feelings about personal attributes Motivation internal state that drives us to satisfy needs by activating goaloriented behavior 0 Goals amp Needs a Perception process by which people select organize and interpret info from the outside world Attitudes learned predisposition to respond favorablyunfavorany to stimuli on the basis of relatively enduring evaluations of people objects and issues 0 Looking glass self Look at how others respond to what we are doing 0 Multiple selves work self social self religious self A person will act differently when surrounded by different people a Branding 4 323 Marketing 0 Marketing of goods and services that businesses and other organizational customers need in order to produce other goods and services for resale or to support their operations 0 Characteristics of 323 Markets 0 Multiple buyers more than one person involved in the purchasing process multiple people in organizations making decisions Geographic Concentration somewhat true Small number of customers maybe sell to one company Large size of purchases quantity discounts Classifying BZB Markets Producers purchase products for use in production of other goodsservices Resellers buy nished goods for purpose of reselling renting or leasing to others at pro t 0 Do not manufacture products Organizations 0 Federal state county and local governments that buy goods services to carry out public objectives Require very formal structure Notfor profit Organizations 0 Buying Center group of people in an organization who participate in a purchasing decision OOOO o Roles in the Buying Center KK Initiator Buying In eencer I User lt Center flame GateKeeper Buyer 000000 0 Different people want different messages Initiator person who is going to actually use that product GateKeeper controls the ow of information In uencer In uences the decision making CEO CFO Decider person who actually makes the decision Buyen 0 NAICS 0 North American Industry Classi cation System Is numerical coding of industries used to compareutilize rms information depending on industry and region Used to access potential markets Also used to nd new customers Report includes 0 of rms 0 Total amount of sales 0 of employees 0 Industry growth rate 0 Nature of Buying 0 Newtask buy extended problem solving more involvement large new purchase high involvement decision Modi ed Rebuy limited problem solving bought before change in a slight way Straight Rebuy routinehabitual problem solving bought before order the same 0 Crowdsourcing O Obtaining needed ideas services or other needs such as input from a large group of people rather than employees or third party vendors rms outsource marketing activities such as selecting an ad to a community of users EX crowd source through online community Essentially is outsourcing to the public usually for free 0 Outsourcing o Contracting out of internal business operation to a third party business buying process of obtaining outside vendors to provide goods or services that otherwise might be supplied in house Typically outsourced globally 0 Demand Characteristics 0 Derived Demand demand for business or organizational products caused by demand for consumer goods or services 0 Inelastic Demand demand in which changes in price have little or no effect on the amount demanded o 323 Market Structure 0 Producers Purchase products for use in production of other goodsservices o Resellers buy nished goods for purpose of reselling renting or leasing to others as product don t manufacture products 0 OrganizationFederal local state county government that buy goodsservices to carry out public objectives require formal structure notfor pro t organization 0 Relationship Marketing a form of marketing developed from direct response marketing campaigns which emphasizes customer retention and satisfaction rather than a dominant focus on sales transactions 0 CRM customer relationship management 0 A business strategy to optimize pro tability revenue and customer satisfaction Ex Personal book 0 Segmentation process 0 As marketers we must determine which part of the market we are going to focus on 0 To do this marketers divide up the entire market into groups based on some shared characteristics 0 Dimensions of market segmentation 0 Segment pro le the typical person for that segment 0 Once a segment is created a marketer must determine which segment they intend to target 0 5 segments 0 Criteria for good segment 0 Homogeneous within heterogeneous between differentiable substantial meaningfully de ned measurable accessible 0 Meaningfully de ned geographic demographic age gender income etc psychographic lifestyles AIO attitudes interest opinion Toughest to measuremost valuable to have behavioristic usage rate bene ts sought brand loyalty usage occasions o Segmentation strategies 0 Undifferentiated one strategy for everyone mass marketing Advantage low costs for one market strategy as opposed to multiple economies of scale Disadvantage you can miss out on individuals by not individually targeting them 0 Differentiated different product offerings for each segment Advantage most times this is the best strategy Disadvantage expensive 0 Concentrated only focusing on one segment do what you do best Most companies start with this 0 Product positioning positioning is the place a product or brand occupies in the consumer s mind on important attributes relative to competitive offerings 0 These attributes help a consumer position a product relative to the attributes o Relaying value information 0 Perceptual positioning map 0 Visual representation of how a product is positioned relative to competition 0 Uses a consumer s important attributes to place companies on a map 0 Use to determine the best marketing mix strategy Find the hole in the mind of the consumer Fast Food Example Adults Subway Arby s Healthy Unhealthy 2 McDonald s Kids 0 0 Chapter 8 and 9 product and branding o What is a product 0 Anything tangibleintangible that through the exchange process satis es consumerbusiness customer needs 0 You want to create products that provide 0 Products can be Physical goods services ideas people or places You want to create products that provide bene ts sought by consumers Products are viewed by marketers as bundle of attributes that includes packaging brand name bene ts and features Core product bene ts product will provide customer car transportation Actual product physical good or delivered service the actual car Augmented product actual product supporting features warranty on car 3yr36000 0 Classi cation of consumer products 0 Non durable convenience shortterm bene ts Low involvement Ex newspapers food Peripheral route to persuasion o Durable longterm bene ts High involvement Ex Cars appliances Center route to persuasion 0 Types of consumer products 0 Convenience Products Non durable frequently purchase little efforts low prices convenient Ex staples impulse emergency 0 Shopping Timeeffort in selection Moderately brand loyal Limited problem solving Ex clothing appliances services 0 Specialty Signi cant purchase effort Brand loyalty Unique characteristics important to buyer Ex Luxury goods 0 Unsought Little awarenessinterest until need arises Requires much advertising and personal selling Did not realize you would need Ex retirement plan insurance Innovation perceived to be new and different existing products 0 Critical to success of company 0 If you don t innovate you ll be out of business 0 Types of innovations Discontinuous totally new product requires much learning airplane car rst smart phone Central route to persuasion Dynamically continuous signi cant changes to existing products requires some learning tapes CDs l DVD Continuous modi cation to existing product knock offs Diffusion of innovations process which the use of a product spreads through out the population iPhones Product adoption process by which a consumer begins to buy and use a good service or idea getting a new product out there 0 6 stages of adoption 1 Awareness Advertising 2 Interest create a buzz teasers 3 Evaluation provide information 4 Trial experience the product 5 Adoption choose the product 6 Con rmation determine costs v bene ts Category of adopters o Innovators people in line for a iPhone release 25 0 Early adopters purchase products in the rst few weeks 135 0 Early majority waits for kinks to be worked outsecond round of products 34 0 Late majority people who eventually buy a smart phone 34 o Laggard forced to adopt just got a cell phone 16 Product life cycle characteristics at each stage 0 1 Introduction stage No pro ts Use a lot of advertising to spread word about product quotQuestion Markquot 0 2 Growth stage Pro ts increase and peak quotStarquot o 3 Maturity stage Sales peak pro t margin narrows quotCash Cowquot o 4 Decline stage Market shrinks sales and pro ts fall quotDogquot 0 Test markets advDisadv 0 Market testing testing whether your product is going to be successful in a small geographical area that is similar to the largest market that the rm hopes to enter 0 Advantages it can help determine whether a national or larger launch is desirable o Disadvantages even with test marketing products can still fail The large market isn t comparable to the test market Representativeness of the test market the test market needs to represent the large market Cost you still have to develop the product May reveal plans to competitors Competitors actions during the test may in uence the results of making it dif cult to predict the true situation 0 Ex Pepsi coming out with big deals and discounts right when coke launches new product 0 Trademark the legal term for a brand name brand mark or trade character 0 Brand equity a brand success is measured by its brand equity 0 Ability to be different from other brands 0 Ex Top 100 brands 0 Consumer based brand equity the differential effect of brand knowledge on consumer response to the marketing of a brand 0 The more brand equity value a company has its easier to recognize and more people know what it is o Keller s model of brand knowledge 1993 0 Managers need to develop a brand that consumers feel familiar with and have favorable strong and unique memory associations what consumers know about a brand leads to success 0 Brand knowedge brand awareness brand recallbrand recognitionbrand image brand association 0 Brand recall you don t have to see a brand to remember it 0 Brand recognition if you see a brand you know it by name Branding strategies 0 Manufacture brand Multi product blanketfamily brand we use a brand name to associate a variety of products 0 Pro less expensive to introduce positive halo people know the brand 0 Con dilutes brand strengthimage of the brand target marketingsegmentation is more dif cult 0 Ex Colgate toothpaste vs Colgate frozen dinner Multi brand individual brand made by same company 0 EX Tide cheer and oxydol all made by PampG 0 Pro target marketingsegmentation easier brand can establish its own identity and not have potential negative effect on the company s other brands o ProCon cannot bene t or suffer from halo effect 0 Con more costly to introduce Generic plain label Black writing and white packaging seldom used Nam eon packing is just what you are buying 0 EX rice 0 Storedealerprivate label EX Safeway products Kenmore or craftsman from sears o Cobranding When two brands are used together for a product EX Mrs Smith 5 cinnabon pie lngredient branding 0 Ex Ben amp jerry s with reese s a License Allow someone to use your brand on product EX Disney gives the rights to put Donad duck on orange juice 0 EX Sports teams license their logo to beer companies 0 Logorama 0 Most Valuable Brands Kn uff s Kn uggets Cherchez le creneauquot nd the hole PERCEPTUAL POSITIONING 0 Size creneau 0 High price creneau 0 Good idea to be all things to all people 0 What if you can t nd a creneau Might have to reposition the composition 0 Different than comparative advantage 0 It shifts how it is viewed in consumer s mind Elaboration likelihood model Stimulus generalization ringing bell for dog 0 But if dog heard an alarm same reaction as with bell would occur 0 Halo Effect extreme bias of product because of favorable expedence Social proof do what the group is doing Pluralistic ignorance don t do what everyone else isn t doing 0 Ex Assuming when someone is in trouble that someone else will call 911 FOR SURE ON TEST Hobson s Choice when you have no choice at all 0 Ex Doctor s prescription of drug for you 0 Which takes the least amount of effort 0 Hobson s choice 0 What are 3 strategies for alleviating postpurchase dissonance 0 Supporting evidence discerning evidence other options VALS framework


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