Term
Chapter 6:
Final consumers and Their Buying Behavior |
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Definition
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Term
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Definition
| people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money |
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Definition
| concerned with making the best use of a consumer's time and money- as the consumer judges it |
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| 5 Examples of Economic Needs |
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Definition
1. Economy of purchase/use
2. Efficiency in operation/use
3. Dependability in use
4. Improvement in earnings/profit
5. Convenience |
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Term
| 4 Influences on the Consumer Decision Process |
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Definition
1. Economic Needs
2. Psychological variables
3. Social influences
4. Purchase situation |
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Term
| types of psychological influences |
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Definition
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Term
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Definition
the basic forces that motivate a person to do something
1.Physiological....food,drink, shelter
2.Safety...well-being
3.Social...friends, love
4. Personal...personal satisfaction |
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Definition
-"needs" learned during a person's life
-when not satified, it leads to drives |
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Definition
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Definition
| stong stimulus that encourages action to reduce a need; they are internal |
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| how we gather and interpret information from the world around us....allows us to meet our needs in varying ways |
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| 3 types of selective processes |
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Definition
1. Selective exposure-notice only info. that interests us
2. Selective perception- screen out things that conflict with out previously learned attitudes/beliefs
3. Selective retention-remember what we want to remember |
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Definition
change in person's thought processes caused by prior experience
-based on:
Direct experience
Indirect experience & associations |
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Definition
1.need
2. want
3.drive
4.cues
5. response
6. reinforcement...can lead to a habit |
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Definition
=person's point of view on something
-affects the selective processes,learning, and buying decisions
-ACTION implications |
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Definition
=person's opinion about something
-NOT action oriented |
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Definition
an outcome or event that a person anticipates or looks forward to
-likely to be DISsatisfied if expectations are not met |
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| Psycho-graphic/lifestyle analysis |
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Definition
AIO= activity, interests, opinions
ex.: GeoVALS shows where people live and why they behave a certain way |
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| Examples of major social influences |
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Definition
1. Family
2. Kids...have big say in family purchases
3.Similat social Class |
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Definition
the people to whom an inficidual looks when forming attitudes about a particular topic
-normally have several groups for different topics |
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| =person who influences others |
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Definition
| =whole set of beliefs, attitudes, and behaviors of a reasonably homogeneous set of people |
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| Purchase Situation influences |
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Definition
1. Purpose of the buy
2. Timing
3. urgency of the need
4. how long does it take ()?
5. actual surroundings |
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Term
| 3 Levels of problem-solving in the Consumer Decision Process |
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Definition
1. Extensive
2. Limited
3. Routinized response behavior |
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Definition
1. Information Search
2. Identify alternatives
3. Set criteria
4. Evaluate alternatives |
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Term
| extensive problem solving |
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Definition
when they put much effort into deciding how to satisfy a need
-new purchases or for important needs |
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Definition
used bu consumers when some effort is requird in deciding how to satisfy a need
-used with minimal previous experience but not quite sure |
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Term
| routinized response behavior |
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Definition
=when he/she regularly seldcts a particular way of satisfying a need when it occurs
-used when no new info is needed or with multiple previous buys
-LOW INVOLVEMENT PURCHASES |
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Term
| 6 Steps of Adoption process |
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Definition
1. Awareness=know about product but lacks details
2.Interest=if interested, consumer will gather info on product
3. Evaluation=mental trial
4. Trial=buys actual product and trys it out
5. Decision=decides on adoption or rejection
6.Confirmation=adopter looks for further reinforcement |
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| business/organizational customers |
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Definition
| any buyers who buy resale or to produce other goods/services |
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Definition
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| business/organizational customers |
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Definition
| any buyers who buy resale or to produce other goods/services |
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| 4 types of business/organizational consumers |
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Definition
1. Producers of goods/services
2. Intermediaries
3. Govt.
4. Non-profits |
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Term
| 5 Key differences between business and final consumers |
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Definition
1. Purchase criteria and specifications
2.Multiple buying influence
3. Problem-solving process
4. B2B e-commerce
5. Buyer-seller relationships |
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Term
| Purchase criteria and specifications |
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Definition
-business are less emotional and have more basic needs
-dependablilty is crucial in business
-Small differences are key to fine-tuning the MM
-more simple for expanding to international markets
-buy based on purchasing specifications
-customers generally expect some sore of quality certification (ex: ISO 9000) |
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Term
| purchasing specifications |
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Definition
| written description of what the firm wants to buy |
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Term
| Multiple buying influence & the 5 Parts of the "buying center" |
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Definition
=several people play a part in making a purchase decision
1. Users
-production line
2. Influencers
-engineering or R&D
3. Buyers
-purchasing managers
4. Deciders
-people with power to approve the supplier
5. Gatekeepers
-control flow of info. |
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Definition
=a formal rating of suppliers on ALL relevant aspects of performance
-goal is to lower the TOTAL costs associated with purchases |
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Definition
allows a sales rep to be able to sell to factories all over the country without having to pay all the travel expenses
.....requisitions needed |
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Definition
| requests to buy something...often done online |
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Definition
1. New-task buying
2. Straight rebuy
3. Modified rebuy |
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Definition
=when an organization has a new need a wants a great deal of information
-multiple buying influence is common |
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Definition
=a routine repurchase that may have been made many times before
-small, general buys
-no need for more info |
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Definition
| the in-between process where some review of the buying situation is done |
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Definition
the terms of sale offered by the supplier inn response to the purchase specifications posted by a buyer
....if meets the specs, then lowest bid wins |
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Term
| 5 major dimensions of buyer-seller relationships |
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Definition
1. Cooperation=joint responsiblity for problems with buyer and seller
2.Info-sharing=key in e-commerce
3. Operational linkages
4. Legal bonds
5. Relationship-specific adaptations |
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Definition
direct ties between the interanla opeations of the buyer abd seller firms
-generally involve ongoing coordination of activities between the firms
-reduce total inventory costs, maintain adequate inventory levels and keep production lines moving |
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Definition
| =reliability in getting products JUST before the customer needs them |
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Term
| Characteristics of Manufacturers |
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Definition
-in small plants, owner does the buying
-3% of all plants have 250+ workers but the employ 50% of all workers and produce 60% of the value added by manufacturers
-concentrated in areas of high economic development...and major metro. areas...and in certain industry-concentrated areas
-detailed info in generally availalbe (ex: NAICS code) |
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| Characteristics of Producers of Services |
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Definition
-4.6 million firms in US (13x manufact.)
-more personal selling and especially advertising
-generally small and local |
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Term
| Characteristics of Intermediaries |
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Definition
-retailers buy what they can sell to consumers, not what manufacturers are offering them
-COMMITTEE BUYING
-use of automated control system to track sales
-carry a large number of products....multiple rebuys by the committee
-must forecast sales,costs, expenses...so sometimes not "open to buy"
-use of RESIDENT BUYERS |
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Term
| Characteristics of Govt. Market |
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Definition
-30% of US GDP is spent by the govt
-use mandatory bidding system...must take lowest bid if meets specs.
-frequent and routine buys
-Negotiation is often key
-must get native countries permission to sell to a foreign govt. |
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Term
| Foreign Corrupt Practices Act |
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Definition
| in 1977, it prohibits US firms from paying bribes to all foreign officials |
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Term
| Chapter 8: Improving Decisions with Marketing Information |
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Definition
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Term
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Definition
| prceduers that develop and analyze new info about a market |
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| Marketing Information System (MIS) |
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Definition
| -organized way of continually gathering, accessing, and analyzing info that marketing managers need to make ongoing decisions |
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Definition
| =a system for linking computers within a company....works a lot like the internet cept just for employees |
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Definition
| =a place where databases are stored so that they are available when needed |
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Term
| decision support system (DSS) |
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Definition
| =computer program that makes is easy for managers to access the data warehouse info |
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Definition
statement of relationships among marketing variables
-allows you to pick the right MM for the target market |
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Term
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Definition
=a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them
-involves a HYPOTHESIS and an EXPERIMENT |
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| 5 parts of the Marketing Research Process |
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Definition
1. Defining the problem
2. Situation analysis=informal study of what info is already available in the problem aread; find SECONDARY DATA; create a research proposal
3. Getting Problem-Specific Data= questioning and observing
4.Interpreting the Data=use of STATISTICAL PACKAGING, cross-tabulation, and SAMPLE-studies with CONFIDENCE INTERVALS; VALIDITY is key
5. Solving the Problem=research must have action implications to accompany it |
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Definition
1. Quantitative
2. Qualitative |
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Definition
=seeks structured responses that can be summarized in numbers and statistics
-survey questionnaires online and by mail and by telephone(RESPONSE RATE problem) |
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Definition
=seeks in-depth, open-ended responses; real advantage is DEPTH
-FOCUS GROUPS |
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Definition
=method of colleting data that focuses on a well-defined problem and observing the subjects in their natural environment
-"secret shoppers"
-videotaped for behavior
-"people" meter for tv's
-website tracking for length and # of clicks
-use of CONSUMER PANELS (continuous info-giving)
-use of computerized SCANNERS |
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Definition
| =when researchers compare the response of 2 (or more) groups that are similar except on the characteristic actually being tested |
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Term
| Chapter 9: Elements of Product Planning for Goods/Services |
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Definition
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Term
| 5 Elements of Product Planning |
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Definition
1. Product Idea
2. Branding
3. Packaging
4. Warranty
5. Product classes |
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Term
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Definition
-companies are really selling the satisfaction,use, or benefit that the customer wants...not that the product provides
-product=the need-satisfying offering of a firm
-can be a good or service or BOTH
-QUALITY is key |
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Definition
a product's ability to satisfy a customer's needs or requirements
-focuses on the customer |
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Definition
good=tangible...mass-produced before purchase commitment...higher quality...easy to balance supply and demand because non-perishable
service=intangible...experienced, used, or consumed...usually in-person but after purchase commitment...quality can change day-to-day ...perishable |
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| Product Assorment---Product Line----Individual product |
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Definition
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Term
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Definition
| =use of name, term, symbol, design or any combo to help identify a product |
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Definition
| world, letter, or a group of words or letters |
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Definition
| only those words, symbols, or marks that are legally REGISTERED for use |
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| 6 Conditions for Favorable Branding |
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Definition
1. Product is EASY TO LABEL/IDENTIFY
2. QUALITY is easy to maintain
3. Dependable and widespread AVAILABILITY
4. DEMAND is strong
5. ECONOMIES OF SCALE
6. favorable SHELF LOCATIONS or display space |
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Term
| 5 levels of brand familiarity |
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Definition
1. Rejection=potential buyers won't buy unless the brand's image is changed
=major concern for service-oriented businesses
2. Non-recognition=final consumers do NOT recognize the brand at all
3. Recognition=customers remember the brand...helps with very basic items
4. Preference=target usually chooses the brand over other brand, due to habit or good past experiences
5. Insistence=customers INSIST on a firm's branded product and are willing to search for it |
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Definition
| the value of a brand's overall strength in the market |
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Definition
-spells out what kind of marks can be protected and HOW
-does NOT force recognition, although it could help |
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Definition
=the same brand name for several products
-ex: Sear's KENMORE appliances
-ex: LICENSED BRAND |
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Definition
seperate brand names for each product
-helps avoid confusion |
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Definition
1. Manufacturer...created by the producers
2. Dealer/private brands....created by the intermediaries |
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Definition
=involves promoting, protecting and enhancing the product
=UPC (universal product code) by govt |
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| Federal Fair Packaging and Labeling Act (of 1966) |
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Definition
| requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more info |
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Definition
=explains exactly what the seller promises in its product
-in recent years, coverage has greatly decreased (ex: ipods) |
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| Magnuson-Moss Act (of 1975) |
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Definition
| =producers must provide clearly written warranty if they they CHOOSE to offer any warranty at all |
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Term
| 5. Product classes (Consumer and Business) |
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Definition
consumer=based on "how consumers think about and shop for products"
Business=based on "how buyers think about products and how they'll be used" |
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| 4 types of Consumer Product Classes |
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Definition
1. Convenience
2. Shopping
3. Specialty
4. Unsought |
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| Convenience product types: |
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Definition
1.Staples=products that are bough often, toutinely and without much thought...everyday items
2. Impulse Product=items bought quickly due to a strong need
3. Emergency product=items purchased immediately when need is great |
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| 2. Shopping Product types |
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Definition
1. Homogenous...shop for best price
2. Heterogenous...shop for quality and style |
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Definition
-consumer really wants so makes a SPECIAL EFFORT to find
-WILLINGNESS TO SEARCH is key |
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| 4. Unsought Products types |
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Definition
1.New...potential customers don't know about yet
2. General...products that stay unsought but not un-bought forever....PERSONAL SELLING is crucial |
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Definition
| -demand for business products derives from the demand for final consumer products |
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Term
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Definition
| product whose total cost is treated as business expense in the year it's purchased |
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Definition
| long-lasting product that can be used and depreciated for many years |
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Term
| 6 Business Product Classes |
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Definition
1. Installations=important capital items
-require special negotiations, involve top management,and are BOOM-or-BUST
2. Accessories=short-lived capital items that are a bit more standarized and needed by more customers
3. Raw materials=unprocessed EXPENSE items
-NATURAL and FARM
-longterm contracts with guaranteed prices
4. Components=processed expense items that become part of a finished product
-parts and materials
5. Supplies=expense items that do NOT become part of the final product
-MRO (maintenance, repair, and operating supplies)
-ordered only when needed
6. Professional services=specialized services that support a firm's operations |
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Term
| Chapter 10: Product Management and New-Product Development |
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Definition
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| 4 Stages of the Product Life Cycle |
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Definition
1. Product Introduction
2. Market Growth
3. Market Maturity
4. Sales Decline |
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Definition
=sales are low as a new idea is 1st introdcuced to a market
-uses INFORMATIVE promotion
-most companies experience losses during the introduction stage |
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Definition
=industry sales grow fast but industry profits peak then fall (due to competition and increase in consumer price sensitivity)
-MONOPOLISTIC COMPETITION |
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Definition
=occurs when industry sales level off and competition gets tougher, meaning profits continue to fall
-Persuasive promotion |
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Definition
=new products replace the old
-price competition from dying products becomes more vigorous |
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Term
| 5 characteristics of quickly-moving new-product ideas |
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Definition
1.greater comparative advantage
2. Easy to use
3. Easy to communicate
4. Can be actually tried
5.Compatible with values and experiences of target customers |
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Definition
=the currently accepted/popular style
-fashion-related products have SHORT life cycles |
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Term
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Definition
an idea that is fashionable only to certain groups who an enthusiastic about it
....fad is even more SHORT-LIVED than a regular fashion |
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| Managing Maturing products |
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Definition
-need to capitalize on some advantage...be it lower production/marketing costs, or more successful promotion
-continuous improvements on the same product (ex: Tide and BMW)
-find new use for older products
-PHASE-OUT strategy |
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Definition
=a product that is new in ANY WAY for the company
-FTC places 6-month limit on this |
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Term
| 5 Stages in the New-Product Development Process |
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Definition
1. Idea Generation.... continuous flow of ideas....reverse-engineering
2. Screening=evaluating the new ideas with the SWOT analysis....should increase consumer welfare over time, not just at one moment
-Consumer Product Safety Act
-LIABLITY
-rough ROI Estimate
3. Idea evaluation=concept testing and market research
-estimate of cost,profits, and sales
-more precise in BUSINESS markets
4. Development=R&D, develop model....test models and product tests with actual consumers
5. Commercialization=placed on the actual market... expensive and requires unified cooperation...ROLLOUTS |
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Term
| Major Success Factors in New-Product development |
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Definition
-TOP LEVEL SUPPORT
-CULTURE of INNOVATION
-someone actually IN-CHARGE
-DON'T SKIP STEPS
-CLEAR UNDERSTANDING OF MARKET NEEDS in R&D |
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Definition
=manage specific products
-major responsibility =PROMOTION
-experience is key!
-unified promotion efforts for entire brand |
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Term
| TQM (total Quality Management) |
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Definition
=the philosophy that everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs
-Early time=focus on preventing defects...focus should be on sustained quality |
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Term
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Definition
=graph that show the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent
***SLAY the DRAGON 1st |
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Definition
| visual aid that helps organize cause-and-effect relationships for "things gone wrong" |
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| 2 keys to improving quality |
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Definition
1. Training
2. Empowerment= giving employees the authority to correct a problem without 1st checking with management |
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Definition
=picking a basis of comparison for evaluating how well a job is being done
-generally against some external standard (perhaps a competitor) |
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Term
| Consumer Product Safety Act |
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Definition
| encourages safety in product design and better quality control...set standards for certain products |
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Term
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Definition
| =the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products |
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