4 - Lecture Unit Flashcards
1
Q
What are the external influences?
A
- culture
- subculture
- demographics
- social status
- reference groups
- family
- marketing activities
2
Q
What do demographics describe?
A
A population’s in terms of its size, distribution, and structure.
3
Q
What are demographics often related to?
A
Demographics are often related to values, lifestyles and media patterns
4
Q
What information demographics include?
A
Demographics include information about population size and distribution, occupation, education, income and age.
5
Q
Which demographic variables are direct influencers of consumption behavior?
A
income, education and occupation
6
Q
Why are demographics important for marketers?
A
They help in market segmentation and understanding consumption behavior.
7
Q
What are key demographic variables?
A
Income, education, occupation, age.
8
Q
What is the ‘Class to Mass’ strategy?
A
Enabling less affluent consumers to afford luxury.
9
Q
What determines purchasing power?
A
- A household’s income level combined
- its accumulated wealth
10
Q
What is occupation strongly associated with?
A
Education and income
11
Q
How is occupation linked to consumption?
A
It influences status, income, values, and lifestyle.
12
Q
How does education affect consumer behavior?
A
It influences income, occupation, decision-making, and social relationships.
13
Q
What is a generation (or age cohort)?
A
A group that experienced similar historical, social, political and economic environment.
14
Q
What is cohort analysis?
A
Predicting, describing and explaining attitudes, values and behaviors of different generations.
15
Q
Age cohorts often function as unique _____.
A
market segments
16
Q
Who are Baby Boomers?
A
Born 1945-1964, high education/income, tech-savvy, time-constrained.
- empty nest - discretionary income and time
- major challenge: taking care of their parents
- Marketers should not use themes and models that are too young and not representative of boomers and their life stage!
17
Q
Who is Generation X?
A
Born 1965-1976, independent, highly educated, experienced economic difficulties.
- Mainly raised in dual-career households
- Divorces and single-parent households
- Reduced expectations
18
Q
Who is Generation Y (Millennials)?
A
Born 1977-1994, diverse, tech-savvy, values autonomy/independence.
- Assertive, self-reliant, emotionally and intellectually expressive, innovative and curious
- Prefer customizable products
19
Q
Who is Generation Z?
A
Born 1995-2009, educated, civic-minded, values diversity & responsbility.
- They value personal responsibility, civic engagement and diversity.
- Tend to avoid risk behaviors, act in a responsible manner and accept diversity
- Expected to be even more educated than all generations before
- High expectations lead to an erosion of childhood
20
Q
Social ____ and social ____ can be used interchangeably to mean societal rank.
This concept refers to someone’s position relative to others on one or more dimensions valued by society.
A
class, standing
21
Q
A social class system can be defined as a ____ of a society into relatively distinct and homogeneous groups with respect to attitudes, values, and lifestyles.
A
hierarchical division
22
Q
What is social stratification?
A
Ranking individuals in society based on socio-economic status.
23
Q
What defines social class?
A
Relative position in society based on income, education, occupation.
24
Q
What is the Coleman & Rainwater model?
A
A social class categorization system.
25
What are status continua?
Gradual distinctions in class rather than distinct categories.
26
2 basic approaches to measuring social status?
1) single-item indexes
2) multi-item indexes
27
What are single-item indexes?
Measure status using one dimension (e.g. income).
## Footnote
* single dimension such as education, income or occupation.
* less accurate
28
What are multi-item indexes?
Measure status using multiple variables (e.g. ISP Index).
## Footnote
* consider numerous variables simultaneously and weight these according to a scheme that reflects societal views (e.g. Hollingshead Index of Social Position (ISP)).
* Multi-item indexes were designed to measure or reflect and individual’s or family’s overall social position within a community.
29
A ____ is defined as two or more individuals who share a set of norms, values, or beliefs and have certain implicitly or explicitly defined relationships to one another.
group
30
What is a reference group?
Group whose values influence an individual’s behavior.
A reference group is a group whose presumed perspectives or values are being used by an individual as the basis for his or her current behavior.
31
What are the four group classification criteria?
Membership, social tie strength, contact type, attraction.
## Footnote
Groups may be classified according to four criteria:
* Membership
* Strength of social tie (primary vs. secondary groups)
* Type of contact
* Attraction
32
____ refers to the closeness and intimacy of group linkage.
* primary groups such as family and friends involves strong ties and frequent interaction.
* secondary groups such as professional and neighborhood association involve weaker ties and less frequent interaction.
Strength of social tie
33
____refers to whether the interaction is direct or indirect.
* direct contact involves face to face interaction while indirect contact does not.
* the internet increased the importance of indirect reference groups in the form of online communities which are discussed in more detail later.
Type of contract
34
____ refers to the desirability that membership in a given group has for the individual. this can range from negative to positive.
Attraction
35
groups with negative desirability are called ____.
dissociative reference groups
## Footnote
* they can influence behavior as just to those with positive desirability.
* teenagers tend to avoid clothing styles associated with the older customers.
36
What is a consumption subculture?
distinctive subgroup of society that self-selects on the basis of a shared commitment to a particular product class, brand, or consumption activity.
37
What are traits of consumption subcultures?
* Identifiable, hierarchical social structure
* Set of shared beliefs or values
* Unique jargon, rituals and modes of symbolic expression
38
What is a brand community?
A brand community is a nongeographically bound community, based on a structured set of social relationships among owners of a brand and the psychological relationship they have with the brand itself, the product in use, and the firm.
## Footnote
* Brand communities can add value to the ownership of the product but remaining in a brand community generally requires continuing to own and use the brand.
* This can create intense brand loyalty!
39
What is an online community?
Group interaction around shared interest on digital platforms.
## Footnote
Thus, interactions can take place on online message boards, discussion groups, blogs and on corporate/nonprofit websites.
40
What defines a social networking site?
Profile creation, connection listing, browsing others' networks.
## Footnote
Online social networking sites are web-based services that allow individuals to..
* construct a public or semipublic profile within a bounded system,
* articulate a list of other users with whom they share a connection, and
* view and traverse their list of connections and those made by others within a system
41
Why are social networks important for marketers?
High user engagement and WOM potential.
42
Reasons why online communities and social networks are attractive
- consumer use: high
- consumers: share info
- customer acquisition potential
- interaction with a brand online > recalling, connecting, sharing info, purchase the brand
43
Reference group influence can take three forms:
1. Informational influence
2. Normative influence
3. Identification influence
44
What is informational influence?
Using reference group members’ behaviors and opinions as a source of information.
45
What is normative influence?
fulfilling group expectations to gain reward or avoid sanctions.
46
What is identification influence?
Internalizing group norms and values.
47
Influence: Strong product and brand
Public luxuries
## Footnote
* Snowboard
* Health club
48
Influence: Strong product and weak brand
Private luxuries
## Footnote
* Hot tub
* Home theater system
49
Influence: Weak product and strong brand
Public necessities
## Footnote
* Shoes
* Automobiles
50
Influence: Weak product and brand
Private necessities
## Footnote
* Clothes washer
* Insurance
51
5 Consumption Situation Determinants of (High) Reference Group Influence
1. Visible usage
2. High relevance of product to group
3. Low individual purchase confidence
4. Strong individual commitment to group
5. Nonnecessary item
52
Asch phenomenon?
One almost always agrees with the (incorrect) judgment of others as a result of publicly announced judgments.
Pressure to conform.
53
What is WOM (word-of-mouth)?
sharing information with other individuals in a verbal form, including face-to-face, phone and the Internet.
54
Why is WOM influential?
It is trusted more than advertisements.
## Footnote
Consumers generally trust the opinions of people (family, friends, acquaintances) more than marketing communications.
55
What is negative WOM?
Emotionally charged complaints that can influence behavior.
## Footnote
* Negative experiences (highly emotional and memorable) motivate to talk.
* Negative WOM can strongly influence recipients’ attitudes and behaviors.
56
What is an opinion leader?
"go-to persons” for specific types of information because they actively filter, interpret, or provide product and brand-relevant information to their social network.
57
What is the two-step flow of communication?
Information flows from marketing activities to relevant market segments.
58
What is the multistep flow of communication?
Opinion leaders also interact with marketing activities and relevant market segment.
## Footnote
* These opinion leaders process this information and transmit their interpretations to some members of the groups.
* The figure also indicated that these non-opinion leaders supply feedback to the opinion leaders.
* Likewise, opinion leaders receive information from the followers as well as from other opinion leaders.
59
What drives the likelihood of seeking an opinion leader?
60
Exchange of advice and information between group members can occur in 2 ways:
1. directly: WOM when one individual seeks information from another or one individual volunteers information
2. indirectly: observation as a byproduct of normal group interaction
61
What drives the likelihood of seeking an opinion leader?
* Low product knowledge
* High product/purchase involvement
62
What are the characteristics of opinion leaders?
* enduring involvement
* found within all demographic segments of the population
* more gregarious (sociable) than others
* higher levels of exposure to relevant media than others
## Footnote
Opinion leaders are specialists, their knowledge and involvement tend to be **product or activity specific.**
63
What is a market maven?
Generalized market influencers who provide significant amounts of information about various products, services and store types
64
Marketers are increasingly relying on WOM and influential consumers. Driving factors are:
* fragmented markets
* greater consumer skepticism toward advertising
* realization that opinion leaders, online creators and critics can provide invaluable insights in the research and development process
65
Marketing strategies designed to generate WOM:
* Advertising
* Product sampling
* Retailing/personal selling
* Creating buzz
66
How can advertising stimulate WOM and opinion leadership?
* themes designed to encourage current owners to talk about the brand
* having an acknowledged opinion leader endorsing the brand
67
What is product sampling (seeding)?
Getting a sample of a product into the hands of a group of potential consumers
## Footnote
Potent WOM tool if it involves opinion leaders!
68
What are referral reward programs?
corporate efforts of encouraging current customers to pass along information to potential new customers in exchange for rewards such as discounts
69
Buzz can be defined as the ____.
exponential expansion of WOM
## Footnote
“Word spreads like wildfire with no mass media advertising supporting it.”
70
What is buzz marketing?
Rapid WOM spread using nontraditional marketing.
71
What is guerilla marketing?
Unconventional low-budget marketing to create buzz.
72
What is an innovation?
An innovation is an idea, practice, or product perceived to be new by the relevant individual or group
73
What are the types of innovation?
Continuous, dynamically continuous, discontinuous.
74
What is a continuous innovation?
require relatively minor changes in behavior or changes in behavior that are unimportant to the consumer
75
What is a dynamically continuous innovation?
require a moderate change in an important behavior or a major change in a behavior of low or moderate importance to the individual
76
What is a discontinuous innovation?
require major changes in behavior of significant importance to the individual or group
77
Examples to:
* Continuous innovation
* Dynamically continuous innovation
* Discontinuous innovation
Continuous innovation
– introduction of DVD players 25 years ago
Dynamically continuous innovation
– digital cameras or personal navigators
Discontinuous innovation
– becoming a vegetarian
78
high purchase involvement for discontinuous innovations > Individual consumers go through a series of **distinct steps**.
1. adoption process
2. steps in extended decision making
stages in adoption process?
**stages in the adoption process**:
1. awareness
2. interest
3. evaluation
4. trial
5. adoption
79
Steps in extended decision making?
1. Problem recognition
2. Information search
3. Alternative evaluation
4. Purchase
5. Postpurchase evaluation
80
What is the diffusion process?
The manner in which innovations spread throughout a market
81
Patterns of diffusion processes
Growth, maturity and then
decline
82
What does the diffusion curve look like?
Bell-shaped curve: slow, fast, then slow adoption.
## Footnote
The evolution of new products’ penetration rate in time is found to exhibit a curve that looks like a bell shape
83
5 Adopter Types?
1. Innovators
2. Early Adopters
3. Early Majority
4. Late Majority
5. Laggards
84
Who are innovators?
First 2.5%, risk-takers, young, educated, socially mobile.
85
Who are early adopters?
Next 13.5%, opinion leaders, successful, educated, cautious risk-takers.
86
Who are early majority?
Next 34%, cautious, socially active.
## Footnote
* cautious about innovations
* adopt sooner than most of their social group
* socially active, seldom leaders, somewhat older, less well educated and less socially mobile than early adopters
* rely on interpersonal sources of information
87
Who are late majority?
Next 34%, skeptical, influenced by peers, less social status.
## Footnote
* sceptical about innovations
* adopt in response to social pressures or a decreased availability of the previous product
* older, have less social status and mobility
88
Who are laggards?
Last 16%, locally oriented, limited social interaction, dogmatic.
89
Since earlier purchasers differ from later purchasers, firms should consider a "____” approach.
“moving target market” approach
90
After selecting a general target market, the firm should initially focus on those individuals within the target market most likely to be ____ and ____.
Innovators and early adopters
## Footnote
* emphasize newness, innovative characteristics and functional features of the new product
91
As the innovation gains acceptance, the focus of attention should shift to the ____ and ____.
Early and late majority
## Footnote
* different media
* emphasize the acceptance the product has gained and its proven performance record
92
What factors affect diffusion speed? (10 factors)
1. Type of Group
2. Type of Decision
3. Marketing Effort
4. Fulfillment of Felt Need
5. Compatibility
6. Relative Advantage
7. Complexity
8. Observability
9. Triability
10. Perceived Risk
93
Factors Affecting Diffusion Spread - Type of Group?
The target market is an important determinant of the rate of diffusion because some individuals are more accepting of change than others.
94
Factors Affecting Diffusion Spread - Type of Decision?
The fewer individuals are involved in the purchase decision, the more rapidly an innovation will spread.
95
Factors Affecting Diffusion Spread - Marketing Effort?
the extent of marketing effort involved
96
Factors Affecting Diffusion Spread - Fulfillment of Felt Need?
The more manifest or obvious the need that the innovation satisfies, the faster the diffusion.
97
Factors Affecting Diffusion Spread - Compatibility?
Fit with consumer values increases diffusion.
## Footnote
The more the purchase and use of the innovation are consistent with the individual’s and group’s values or beliefs, the more rapid the diffusion.
98
Factors Affecting Diffusion Spread - Relative advantage?
Perceived benefits over existing solutions.
## Footnote
The better the innovation is perceived to meet the relevant need compared with existing methods, the more rapid the diffusion.
99
Factors Affecting Diffusion Spread - Complexity?
More complex = slower diffusion.
## Footnote
The more difficult the innovation is to understand and use, the slower the diffusion.
100
Factors Affecting Diffusion Spread - Observability?
Visible benefits = faster adoption.
## Footnote
The more easily consumers can observe the positive effects of adopting an innovation, the more rapid the diffusion will be.
101
Factors Affecting Diffusion Spread - Trialability?
Ease of trying = faster diffusion.
## Footnote
The easier it is to have a low-cost or low-risk trial of the innovation, the more rapid is its diffusion.
102
Factors Affecting Diffusion Spread - Perceived risk?
Higher risk = slower diffusion.
## Footnote
The more risk associated with trying an innovation, the slower the diffusion.
Risk can be financial, physical or social.
103
Perceived risk is a function of the following factors:
* probability that the innovation will not perform as desired
* consequences of its not performing as desired
* ability (and cost) to reverse any negative consequences
