Chapter 5

Question 1

Consumer Markets

Answer 1

Individuals and households, personal consumption

Question 2

Consumer Behaviour

Answer 2

Not only their buying behaviour. How they search, select, buy, use, dispose. Their actions and motives.

Question 3

Consumer’s Perspective

Answer 3

• Pre-purchase issues: selecting the product and finding the right sources of information to learn about the product and alternative choices.
• Purchase: what is a stressful or satisfying experience?
• Post-purchase: does the product provide pleasure/meet expectations? How will it be disposed of once it degrades and what are the environment consequences?

Question 4

Marketer’s Perspective

Answer 4

• Pre-purchase: what information is used to measure our product to superiors? How do their attitudes towards our products form and change?
• Purchase: how do situational factors affect consumer’s purchase decision?
• What determines a consumer’s satisfaction or dissatisfaction? Does this person tell others about the experience? How does this affect their purchase decisions?

Question 5

Name the factors that influence consumer behaviour from external (societal) to internal (personal)

Answer 5

Cultural, social, personal, psychological

Question 6

Culture

Answer 6

basic values, wants, behaviours learned from society. most basic cause of wants and behaviours. influences one’s views

Question 7

Subculture

Answer 7

self-organized tradition of shared interests, lifestyles, beliefs, customs, norms, style, tastes. smaller groups with shared values within cultures.

Question 8

Total Marketing Strategy

Answer 8

integrating ethnic themes and cross-cultural perspective within a brand mainstream marketing, appealing to consumer similarities across sub-cultural segments rather than differences.

Question 9

Social Class

Answer 9

Group that have similar buying behaviours and share values and interests. Split in three sections: upper, lower and middle class. Some of these groups are well defined while some are not.

Question 10

Reference Groups

Answer 10

A group that serves as direct or indirect point of comparison or reference in forming a person’s attitudes or behaviour. Family = most important reference group.

Question 11

Word of Mouth (WOM) Influence

Answer 11

Recommendations coming from trusted friends, families, etc.

Question 12

Influencer Marketing

Answer 12

sponsorships and partnerships with influencers

Question 13

Online Social Networks

Answer 13

online communities (reddit)

Question 14

Role

Answer 14

activities people are expected to perform according to those around them

Question 15

Status

Answer 15

each role carries a status reflecting the general esteem given to it by society. status means youre formally recognized as such.

Question 16

Position in a group

Answer 16

role + status. products people choose are appropriate to their roles and status. e.g. consider roles of a working mother. In her company, she plays the role of brand manager; in her family, she plays the role of wife and mother; at sporting events, she plays the role of avid fan.

Question 17

Age and Life-Cycle

Answer 17

Changes of tastes, preferences and behaviours over time. Life-stage segmentation = precise target market

Question 18

Occupation

Answer 18

Needs of occupational group. E.g. banker vs mailman

Question 19

Economic Situation

Answer 19

E.g. different economic situations result in peoples’ decisions to buy a used or new car. Depends on income and savings.

Question 20

Lifestyle

Answer 20

Pattern of Living. AIO Dimensions (Activity;Interests;Opinions)

Question 21

Company Personality

Answer 21

(i) Ruggedness
(ii) Sincerity
(iii) Excitement
(iv) Sophistication
(v) Competence

Question 22

Motivation

Answer 22

Need becomes motive when it inspires customer to seek action.
- External: money, reward
- Internal: self-esteem, sense of accomplishment
- Maslow’s Hierarchy of Needs

Question 23

Perception

Answer 23

How people select, organize & interpret info
- Selective attention (tendency to screen out); eye-catching stimuli
- Selective distortion (tendency to selectively interpret); biased
- Selective retention (tendency to selectively remember); memory

Question 24

Learning

Answer 24

changes in behaviour caused by greater life experience

Question 25

Drives

Answer 25

strong internal stimuli that call for action

Question 26

Cues

Answer 26

minor stimuli about when, where and how people respond

Question 27

Buying Decision Process

Answer 27

1) Need recognition
2) Info search
3) Evaluation of Alternatives
4) Purchase Decision
5) Post purchase behaviour

Question 28

Need Recognition

Answer 28

can be triggered by internal (need, memory, thought) or external (idea for someone, advertisement) stimuli

Question 29

Purchase Decision

Answer 29

Purchase intention does not always lead to purchase decision. Depends on attitude of others around and unexpected situational factors

Question 30

Post-Purchase Behaviour

Answer 30

Expectations vs Performance: (dis)satisfied, delighted
Possible cognitive dissonance: discomfort caused by post purchase conflict
Post purchase conversations: encourage complaints

Question 31

How do consumers make buying decisions for NEW products?

Answer 31

Adoption Process and Strategies
- Awareness: discovery of new product (either brand new or simply new to you)
- Interest: Info is sought out
- Evaluation: Examine and compare it
- Trial: representative sample of product/service
- Adoption: Consumer becomes user

Question 32

What influences new product adoption rate?

Answer 32

1. Individual differences in Innovativeness
2. Product Characteristics

Question 33

Influence of Product Characteristics on Adoption Rate

Answer 33

• Relative advantage
• Compatibility (fit with value and experience of potential customers)
• Complexity
• Divisibility
• Communicability

Question 34

Business Buyer Behaviour

Answer 34

The behaviour of organizations who purchase resources from suppliers to produce goods and services.

Question 35

Business Buying Process

Answer 35

Process by which organizations determine which resources they will need to produce their goods and services. They must then evaluate suppliers.

Question 36

Which market is bigger? Business market or consumer market?

Answer 36

Business market is huge. There are many sets of business purchases, only one set of consumer purchases.

Question 37

Market Structure

Answer 37

far fewer, but larger buyers

Question 38

Supplier Development

Answer 38

developing a network of suppliers in order to ensure dependable supply of resources and materials for company usage

Question 39

What are the 3 Business Buying Situations?

Answer 39

1) Straight rebuy - buyers reorder something without modifications
2) Modified rebuy - buyers want to modify product specifications, prices, terms, or suppliers
3) New task - buyers purchase product or service for the first time

Question 40

Systems/Solutions Selling

Answer 40

Provide most complete system (all in one)

Question 41

Buying Centre

Answer 41

Consists of all the individuals and units that play a role in the purchase decision-making process. Includes actual users of product or service, those who make buying decision, those who influence the decision, those who do the actual buying and those who control buying info. Look at illustration in notebook.

Question 42

Major Influences on Business Buying

Answer 42

1) Environmental - economic, supply conditions, technology, politics, etc…
2) Organizational - objectives, strategies and procedures
3) Interpersonal - intergroup dynamics within buying centre: expertise, authority, dynamics
4) Individual - age, education, lifestyle, etc…

Question 43

Business Buying Process

Answer 43

1) Problem Recognition (identify Need)
2) General Need Description
3) Product Specification (checking if items may be redesigned to reduce costs)
4) Supplier Search
5) Proposal Solicitation (suppliers submit proposals)
6) Supplier Selection
7) Order-Routine Specification (final order with chosen supplier)
8) Performance Review