• processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also included factors that influence purchase decisions and product use
• Consumers’ product and service preferences are constantly changing

Consumer Decsion Making Process

(5 Steps)

1. Need Recognition
2. Information Search
3. Evaluation of Alternatives
4. Purchasing
5. Post Purchase Behavior

1. Want
2. Internal Stimuli
3. External Stimuli
4. Imbalance between what Consumer has & wants
5. Consumers recognize unfulfilled wants

• Create wants based on your experience
• Ex: hunger, thirst, emotion

• Influences from external sources
• Ex: recommendations, color, design, advertisements.

• Marketing managers objective to create want-got gap.
• Surveying customers and observing trends helps marketers determine what types of promotions to use and what types of products to create 
• Ex: IKEA creates modern, easy-to-clean furniture for generation Y

• Consumers recognize unfulfilled wants in many ways, notably by finding things wrong with current products 
• Ex: Europeans want simpler laundry, so Persil tablet detergent trumps Procter and Gamble powder

1. Internal Information Search
2. External Information Search
3. Non-marketing Controlled Information Source
4. Marketing Controlled Information Source
5. External Researches Relying On...
6. Evoked Set/Consideration Set

• Internal Information Search: process of recording past information from memory 
• Ex: memory of a hotel’s service, memory of a restaurant’s flavor

• Source of information not associated with promotions or advertising
• Ex: critic reviews, personal experience, web forums, blogs

• product information source originating from marketers 
• Ex: mass media advertising, salespeople, product label

the group of brands from which a consumer can choose after an information search

1. Environment, Int. & Ext. Knowledge, & Exposure
2. Reduction of Options
3. Other Criteria
4. Categories
5. Brnad Extensions

• The environment, internal knowledge, external knowledge, and exposure to certain cues can affect purchases 
• Ex: Mars candy bar sales increase when the NASA Mars Pathfinder landed

Reduction of Options

• Reduction of options based on criteria
• Ex: eliminating all places to live that are too far from campus, too expensive, or in too poor of a neighborhood

• Other criteria include other brands
• Ex: an 800 dollar apartment seems cheaper when compared to a 900 dollar apartment, but too expensive in comparison to a similar 750 dollar apartment

• Categories also influence choices
• Ex: soda won’t be bought at a breakfast restaurant

Brand extensions are

 like coke having: diet coke, cherry coke, coke zero

1. Deciding
2. Fully-planned Purchase
3. Partially-planned Purchase
4. Unplanned Purchase

• Purchases based on impulse
• Ex: 68% of major shopping trips, 54% of minor

• Consumer Expected Outcomes
• Cognitive Dissonance

• When buying products consumers expect certain outcomes from the purchase, which determines satisfaction
• Ex: A car stereo may seem satisfying when it is bought on eBay for a low price and low expectations
• Ex: An expensive car stereo may not be satisfying if it has high expectations

• An inner tension that a customer experiences when there is a distance between behavior and opinions
• Ex: A customer may wrestle with the benefits of a more expensive but healthier tanning system
• Marketers reduce dissonance with effective communication
• Ex: thank you notes, money back guarantees

1. Routine Expense Behavior
2. Limited Decision Making
3. Extensive Decision Making

1. Involvement
2. Time
3. Cost
4. Degree of Information 
5. Number of Alternatives Considered

• Goods and services that require low involvement
• Ex: toothpaste, cleaning products

• Type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar category

1. Previous Experience
2. Interest
3. Perceived Risk of Negative Consequences
4. Situation
5. Social Visibility

• High involvement products require extensive marketing to the target market
• Low involvement products need to be eye catching to prompt impulse buys, aesthetics
• Linking products to a higher cause like pink soda can for breast cancer

• The consumer buying decision is based on the social, individual, cultural, and other underlying factors
• Culture, values, social class may impact what you buy
• Self-concept and lifestyle

• Culture is the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior from one generation to the next
• Value is the most defining element of a culture

• Is learned, functional, and dynamic, determined by environment, useful, and adaptable
• Ex: food, dress, language

• As more companies expand globally, they also adapt to regional cultural needs
• Language must also be manipulated and used carefully
• Globalization is a concern for people who want to ensure that the world isn’t homogeneous

• A homogeneous group of people who share elements of their overall culture as well as unique elements of their own group
• Common in US: Hispanics, Mormons, Cajuns

• Capitalist class
• Upper class
• Middle Class
• Working Class
• Working poor
• Underclass

1. Reference Groups
2. Opinion Leaders
3. Blogs
4. Family

1. Primary Membership Groups (Direct)
2. Secondary Membership Groups (Direct)
3. Aspirational Reference Group (Indirect)
4. Non-aspirational Reference Group (Indirect)

• a group with which people interact regularly in a normal, face to face manner
• Ex: family, friends, classmates, coworkers

• a less consistent and more formal reference
• Ex: group, clubs, churches, professional groups

• a group that someone would like to join
• Ex: athletes, high class

• dissociative groups, groups that people would like to avoid
• Ex: you may avoid a house in a low class neighborhood, or avoid shopping at Goodwill

• Often the first to try a product, can be casual or face-to-face
• Can also be movie stars, celebrities, or a respected organization such as the American Cancer Society

• Thousands of blogs that represent opinions and trends are now monitored by marketers
• Very big impact on the teenage market

• the most important social institution for many consumers, influencing values, attitudes, self-concept
• responsible for the Socialization Process: the passing down of cultural values and norms

• Initiators: suggest the product to be purchased
• Influencers: are family members with valued opinions
• Decision Maker: the person who makes the decision to buy
• Purchaser: The person who actually exchanges money
• Teenagers have 80 billion dollars of income, and 110 billion will be spent on them by parents

young singles, young married, middle age married with children, as well as life 

events such as deaths or divorces

how a person perceives themselves in terms of attitudes, perceptions, beliefs, and self 

evaluations

• the process by which people select, organize and interpret stimuli into a meaningful and coherent picture
• Familiarity influences perception

• the process by which a consumer decides which stimuli to observe and which stimuli to ignore
• Ex: out of 2500 advertisements per day, we elect to only notice 11-20

• the process by which a consumer distorts information that conflicts with his or her feelings or beliefs
• Ex: if you own a zune, you will justify that it is just as good as the apple iPod

• remembering only the information that supports personal beliefs
• Ex: if you see an ad for a product you want, you will remember it whereas your friend might forget it 30 seconds later

1. Physiological Needs- hunger thirst
2. Safety Needs- security/ freedom of discomfort
3. Social Needs- love, sense of belonging
4. Esteem Needs- status, self-esteem
5. Self Actualization Needs- self-fulfillment

• a form of learning that occurs when one response is extended to a second stimulus similar to the first 
• Ex: Jello-pudding from Jello Gelatin

• recency- more recent is better
• frequency- more frequent is better
• monetary value- higher contribution margin is better
• stickiness- frequency of visits x duration of visits x # of pages per site visits

• 90% of buyers at some point use internet, 50% start buying process online
• companies transitioning to online

• the strategy that entails seeking and establishing relationships with customers
• building relationships is a way to competitive advantage

• cooperative relationship between business firms
• used to strengthen operations and better competitive advantage
• Sometimes, alliances are between fierce competitors or in different

• Amae: a Japanese feeling of nurturing concern and dependence upon another
• Keiretsu: a network of interlocking corporate affiliates, executives sit on each other’s board

• Producers- buy business goods and incorporate them into the products that they sell to other producers or companies, GM buys steel, paint, tires
• Resellers- wholesale and retail business buying finished products to sell
• Government- Fed Gov buys resources, federal services/ City Govs have less paperwork
• Institutions- seek to gain goals beyond profit, market share, and ROI like colleges 

• classifies North American business establishments by their main production processes, detailed numbers
• classification system for NAFTA
• tool for marketers engaged in analyzing, segmenting, and targeting markets

• Derived Demand- demand for business product derived from demand of market
• Inelastic demand- demand that doesnt fluctuate with price
• Joint Demand- demand for 2 or more products used in final product apple software, apple comps
• Fluctuating Demand- demand for business products are less stable than the demand for consumer products

• phenomenon in which a small change in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product 

• Purchase volume much greater for businesses than consumers

• much fewer business customers, getting bids for orders can make or break a company

Business vs Consumer: Location of Buyers

• Business consumers are far more concentrated in urban areas

• B2B is mainly online, with direct channels more common amongst business marketers
• Nature of Buying: businesses are more professional and formal
• Buying Influence: businesses are much more likely to accrue more info with expert influences
• Negotiations: business tend to negotiate price, consumers accept it
• Reciprocity: business purchasers choose to buy from their own customers
• Leasing: businesses tend to lease more often
• Primary Promotion Method: business revolves around personal selling

• major equipment (installation)- capital goods, expensive machines or buildings
• accessory equipment- short-lived, not expensive office equipment
• Raw materials- Unprocessed extractive or agricultural products like wheat or lumber
• Component Parts- finished items used towards building final product like tires, spark plugs
• Processed materials- products used to directly manufacture other products like chemicals or steel
• Supplies- consumable products not used in final product like lubricants or paper towels
• Business services- like janitors
  

• Buying Centers- all people involved: initiator, influencer, gatekeeper, decider, purchaser, user (vendors must influnce decider and influncer)
• Evaluate criteria- Quailty, service, price
• Buying Situations- new buy: buying for first time, modified rebuy: original product needs improvements, straight rebuy: repurchase of product made before, very familiar
• Business Ethics- many companies value it an offer ethics training to employees
• Customer Service- keeping new and old people attracted to company

• Market: people/orgs with wants or needs and willingness to buy
• Market Segment: a subgroup of people with similar characteristics that cause them to have similar product needs
• Market Segmentation: process of dividing market into segments

• to IDENTIFY CUSTOMERS WITH SIMILAR NEEDS, PROVIDES INFO FOR SALES MIX, and SATISFIES WANTS AND NEEDS WITHIN COMPANY

• Sustainability- large enough to warrant developing and maintain a special marketing mix
• Identifiability & measurability- segments must be identifiable and size measurable
• Accessability- the firm must be able to reach members of the target segments
• Responsiveness- Market segments must respond differently or well to the specific types of marketing postulated

• Segmentation Bases/Variable: characteristics of groups, individuals, or organizations
• Geographic segmentation: segmenting markets by region of a country or world, market size, market density
• Demographic Segmentations: segmentation based on age, gender, income, ethnic background, and family life cycle
• Psychographic Segmentation: segmentation based on Personality, Motives, Lifestyles & Geodemographics: segmentation that clusters potential customers into neighborhood lifestyle categories
• Benefit Segmentation: dividing markets into people seeking specific benefits like weight watchers
• Usage Rate Segmentation: divides a market by the amount consumed like 80/20 Principle: 20 percent of customers

1. select a market
2. choose basis for segmenting
3. select segment descriptors
4. profile and analyze segements
5. select target markets
6. Design, Implement, and Maintain Appropriate Marketing Mixes (appropriate 4 Ps)

• undifferentiated targeting: one big market with no segments, saves on marketing costs but leads to unimaginative products that are susceptible to competition
• concentrated (niche) targeting: strategy that selects one segment of the market for targeting market efforts, which allows strong positioning, small firms to compete with larger ones, negative- segments too small
• Multisegment Targeting: chooses two or more marketing segments, and develops a distinct marketing mix for each

• an individualized marketing method that utilizes customer information to build long term, personalized, and profitable relationships with each customer
• Personalization: customers want to be treated as individuals
• Time Savings: customers spend less time on purchase decisions, more time on more important things
• Loyalty: more personal attention leads to better loyalty
• Technology: as marketers get more detailing information

• Position: the place a product, brand, or group of products occupies in consumer’s minds relative to competing offerings
• Product Differentiation: a positioning strategy that some firms use to distinguish their products from those of competitors
• Perceptual Mapping: a means of displaying or graphing, in two or more dimensions, the locations of products, groups of products, or brands in customer’s minds
• postioning basis- attribute, price and quality, use or application, product user, product class, competitor, and emotion
• repositioning- changing customers’ perceptions of a brand in relation to competing brands

• a system used for gatheirng market information
• decision support systems: computerized information system that enables manager to obtain and manipulate information as they make decisions
• support system give immediate results, can sort/total/regroup data fast, probe for trends and answer what ifs, & easy to use
• database marketing: process of collecting, planning, and analyzing data relevant to a marketing decision

• Marketing Research: The process of planning, collecting, and analyzing data relevant to a marketing decision
• Descriptive Role: gathering and presenting factual results
• Diagnostic Role: includes explaining data, determining impact
• Predictive Role: answers “what-if” functions

• an intelligence system that helps managers compare to competition and get competitive advantage

• a system for gathering information from a single group of respondents by continuously monitoring the advertising they are exposed to and the things that they buy
• Behavior-scan: a scanner based program that tracks the purchases of 3000 household in each research market
• InfoScan: a scanner based sales tracking device for the consumer packaged goods industry

• Internet Surveys: reduces cost, can be easily disributed to demographic, respondents complete quickly
• Use of the Internet by Marketing Researchers: online surveys and focus groups, moderators can be used to communicate with respondent full time
• Online focus groups: Real-time (Chatrooms) & Time-extended (Message boards)
• Advantage of focus groups: better participation, honesty, cost effectiveness, broad geographic scope

• everything a person could recieve in an exchange
• tangible good, service, idea

1. product
2. promotion
3. place (distribution)
4. Price

• Intensive- everyone has it
• Exclusive- only a few people have it
• Selective- some people have it

• Business Product- product used to manufacture other goods or services, to facilitate an organizations, or to resell to other customers
• Consumer Product- product bought to satisfy individuals personal wants

• Convenience Products- products right near checkout like gum or magazine
• Shopping Products- more time spent to shop for like groceries
• Specialty Products- when consumers search extensively for particular item, and are reluctant to accept substitutes
• Unsought Products- really need to market hard to get a consumer, impulse purchase, new items in a market

Product Item- specific version of a product that can be designed as a distinct offering among and organizations products (nike- t-shirt)

Product Line- a group of closely related produt items (long sleeve, short sleeve, muscle tee)

Product Mix- all products that an organization sells (pants, mouth guard, shirts)

• Advertising Economies- campbells promotes entire line by saying soups are "mmm mmm good"
• Package Uniformity- all have common look but keep individual identities, different campbell soup cans
• Standardized components- reduces manufacturing costs and inventory costs, GM using same parts for different models of car 
• Efficient sales and distribution- Sales form range of products appealing, distrbution is easier with line than a bunch of indivdual products
• Equivalent quality- all products in line are at similar quality

Adjustments to Product Items, Lines, and Mixes

• Product modification: quality, functional, and style modifications
• Repositioning: changing demographics, changes in social environment, decling sales
• Product Line Extension: adding products to existing product line
• Product Line Contradiction: deals with overextension in product lines

• practice of modifying products so those that have already been sold become obsolete before they actually need replacement.

Brand Name- part of brand that can be spoken including letters, words, and numbers

Brand Mark- elements of a brand that cannot be spoken (Mercedes Benz symbol)

Brand Equity- value of company and brand names 

Global Brand- where at least 1/3 of earnings comes from outside home country (KFC, Taco Bell)

• Product identification: helps distinguish product among others
• Repeat Sales: results from satisfied customers
• New Product Sales: Value of brand name can help new product sell

• Manufacturer's Brand: brand name of a manufacturer
• Private Brand: brand name owed by a wholesaler, also known as store brand or private label
• Captive: brand manufcatured by a third party for exclusive retailer, without evidence of that retailers affiliation like Sears having craftsman tools

• Individual Brand: using different brand names for different products
• Family Brand: marketing several different products under the sam brand name

• Ingredient Branding: identifies the brand of a part that makes up the product like Mr. Clean DIsinfecting Wipes with Febreeze freshness
• Cooperative Branding: 2 brands receiving equal treatment borrowing from each other's brand equity 
• Complimentary Branding: products advertised together to suggest usage

• exclusive right to use a brand
• trademark right comes from use
• renew trademark comes from proof of use
• right continue for as long as the mark is used

Packaging: contain, protects, and promotes product

Greenwashing: portraying that company is eco-friendly

• can be both persuasive or informational
• greenwashing
• consumer information is on labels
• helps make selection
• promotes product

• seires of thick and thin vertical lines (bar codes), readable by computerized optical scanners
• represent numbers used to track products
• established 1970s

• One brand name everywhere- company only markets one product so no negative connotations to brand
• Adaptations & Modifications- when brand name cant be pronounced in local language, like Barf Detergent from Iran wouldnt do well here
• Different Brand Names in Different Markets- when marketer wants brand to be seen as local brand

• Labeling: properly translating ingredients, promotional, and instructional info
• Aesthetics: watching cultures when choosing visual elements of a brand such as color
• Climate Considerations: make sure packing is durable for all climates

Warranty: confirmation of the quality/performance of a good or service

Express warranty: written gurantee "complete satisfaction guranteed"

Implied Warranty: unwritten gurantee that the good or service is fit for the purpose for which it was sold