Podcast
Questions and Answers
Which stage of the consumer purchase process involves recognizing the need for a product?
Which stage of the consumer purchase process involves recognizing the need for a product?
Which of the following is a characteristic of exploratory research?
Which of the following is a characteristic of exploratory research?
Objective attributes are always more important to consumers than subjective attributes.
Objective attributes are always more important to consumers than subjective attributes.
False
What is the term for the group of products that a consumer considers when making a purchase decision?
What is the term for the group of products that a consumer considers when making a purchase decision?
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Focus groups are conducted without a moderator.
Focus groups are conducted without a moderator.
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What is one advantage of using depth interviews in research?
What is one advantage of using depth interviews in research?
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The ___________ stage of the consumer purchase process is when consumers gather information about a product's attributes.
The ___________ stage of the consumer purchase process is when consumers gather information about a product's attributes.
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Match the attribute types with their descriptions:
Match the attribute types with their descriptions:
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A _____ technique uses indirect forms of questioning to gather insights from consumers.
A _____ technique uses indirect forms of questioning to gather insights from consumers.
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Match the following exploratory research methods with their advantages:
Match the following exploratory research methods with their advantages:
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Which source of information would be considered 'personal'?
Which source of information would be considered 'personal'?
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Purchase intentions always lead to actual purchase behavior.
Purchase intentions always lead to actual purchase behavior.
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What is a primary disadvantage of focus groups?
What is a primary disadvantage of focus groups?
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What is the primary goal of a seller during the purchase stage?
What is the primary goal of a seller during the purchase stage?
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Observation methods can be conducted in both natural and artificial settings.
Observation methods can be conducted in both natural and artificial settings.
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Name one method used in projective techniques.
Name one method used in projective techniques.
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What is one effective strategy to reduce perceived risk for consumers?
What is one effective strategy to reduce perceived risk for consumers?
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Framing only refers to the pricing of a product.
Framing only refers to the pricing of a product.
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What are the three characteristics of a good market segment?
What are the three characteristics of a good market segment?
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Mass marketing has __________, as it doesn't satisfy all consumers' needs well.
Mass marketing has __________, as it doesn't satisfy all consumers' needs well.
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Match the following market segmentation strategies with their definitions:
Match the following market segmentation strategies with their definitions:
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Which of the following is NOT a goal of a segmentation strategy?
Which of the following is NOT a goal of a segmentation strategy?
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Segment potential is irrelevant when determining a target segment.
Segment potential is irrelevant when determining a target segment.
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Name one of the three most popular consumer segments.
Name one of the three most popular consumer segments.
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What does BEV[monetary market share] represent?
What does BEV[monetary market share] represent?
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Net Present Value (NPV) can only be determined if cash flows are received at the end of the given periods.
Net Present Value (NPV) can only be determined if cash flows are received at the end of the given periods.
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What are firms with marketing advantages likely to experience?
What are firms with marketing advantages likely to experience?
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The formula for NPV is: NPV = cash flow × (1/[1 + i])^{______}
The formula for NPV is: NPV = cash flow × (1/[1 + i])^{______}
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Match the following advantages with their definitions:
Match the following advantages with their definitions:
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Which of the following is NOT a way firms can lose their consumer or operating advantages?
Which of the following is NOT a way firms can lose their consumer or operating advantages?
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Ethical standards for firms remain constant regardless of the countries they operate in.
Ethical standards for firms remain constant regardless of the countries they operate in.
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What demographic change does Japan currently face?
What demographic change does Japan currently face?
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What does value-based pricing consider?
What does value-based pricing consider?
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A larger sample size always leads to higher accuracy in marketing research.
A larger sample size always leads to higher accuracy in marketing research.
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What type of experiment allows the manipulation of consumers' actual marketing environment?
What type of experiment allows the manipulation of consumers' actual marketing environment?
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In cost-plus pricing, the formula used is Price = cost + _____ on cost.
In cost-plus pricing, the formula used is Price = cost + _____ on cost.
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Match the following marketing research methods with their characteristics:
Match the following marketing research methods with their characteristics:
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Which of the following is a goal of causal marketing research?
Which of the following is a goal of causal marketing research?
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Cost-plus pricing is consumer-oriented.
Cost-plus pricing is consumer-oriented.
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What is a potential issue when determining production costs for cost-plus pricing?
What is a potential issue when determining production costs for cost-plus pricing?
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Which of the following factors is NOT a key component of customer value?
Which of the following factors is NOT a key component of customer value?
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A firm's ability to attract customers depends solely on its advertising budget.
A firm's ability to attract customers depends solely on its advertising budget.
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What should firms focus on to increase the value of existing customers?
What should firms focus on to increase the value of existing customers?
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The economic value of a customer to the firm is referred to as __________.
The economic value of a customer to the firm is referred to as __________.
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Match the type of marketing communication with its definition:
Match the type of marketing communication with its definition:
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Which strategy does NOT help increase customer value?
Which strategy does NOT help increase customer value?
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Forecasting customer value involves simply adding attraction and retention costs.
Forecasting customer value involves simply adding attraction and retention costs.
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What is one way to reduce attracting costs mentioned in the content?
What is one way to reduce attracting costs mentioned in the content?
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Study Notes
Consumer Decision Making
- Stages of Consumer Purchase Process & Experience
- Need Recognition
- No need = no purchase
- How to motivate consumers to recognize the need for a product
- How sellers can motivate consumers to recognize the importance of a product
- Avoiding the wrong stage of the purchase process - Consumers can feel rushed when salespeople assume they're ready to buy before they have recognized their needs.
- Gather Information
- Collect product attributes
- Different types of attributes for electric cars
- Objective attributes: charging time, range, interior space
- Subjective attributes: styling, comfort, handling, ease of use
- Information sources
- Personal (friends, word-of-mouth, family, neighbors)
- Commercial (advertising, salespeople, company websites)
- Public/Neutral (media, consumer ratings groups) - Be aware of potential bias in consumer-generated ratings
- Compare Alternatives
- Consumers have different preferences, even with similar perceptions of products.
- The importance of attributes varies among consumers.
- More than one brand may be acceptable to a consumer.
- Purchase
- A sale is not complete until the consumer purchases.
- Purchase intentions lead to purchase behavior.
- Consumers might be willing to purchase any acceptable option.
- Effective sales practices can influence consumers to purchase sooner rather than later.
- Post-Purchase Evaluation
- Consumers continue to evaluate a product after purchase.
- Post-purchase behavior
- Reducing cognitive dissonance (e.g., "Did I buy the right car?")
- Satisfaction perceptions: perceived performance vs. expectations
- Avoiding unrealistic expectations to prevent customer disappointment (e.g., Whole Foods price cuts)
- Satisfaction fosters customer loyalty, positive word-of-mouth, and high customer value
- Post-purchase service is important (e.g., Land Rover Experience).
- Need Recognition
Consumer Involvement
- Involvement increases with consumer need, product performance, personal stake, and personal security.
- Involvement isn't directly related to price; some products are more involved regardless of price.
- Involvement differs across products, people, and usage situations.
Basic Quantitative Language to Communicate
- Understanding monetary sales vs. unit sales (volume).
- When companies increase prices, the number of units sold typically decreases.
- Profit and loss statements show the basics of financial performance, which helps to understand profit and loss.
- Data is often presented in multiple ways; consistent terminology is important.
Formulas
- Sales in units and sales in monetary value (Sales = Quantity * Selling Price)
- Market share in units (Firm Sales/Market Sales) and market share in monetary value (Firm Sales Value/Market Sales Value)
- Profit Margin
- Gross Margin Ratio per Unit (selling price - cost of goods sold)
- Gross Margin Ratio (gross margin/cost of goods sold)
- Gross Margin Ratio on Selling Price (gross margin/selling price)
- Break-even Volume in units and in monetary sales (Fixed Costs/Net profit margin per unit)
Marketing Advantages, Consumer Advantages, Environmental Analysis
Marketing Ethics
- Government standards
- Examples, Well Fargo fined for mortgage practices or Amazon Issues
- consumer issues
- Industry concerns, investors, and ethical standards across regions.
S3 Marketing Math
- Environmental Analysis
- Relevant factors of environmental changes (demographic, consumer taste, economic issues).
S4 Consumer Behavior
Consumers' Concerns and Risks
- Consumers worry that products may not meet their expectations.
- Satisfaction issues are tied to perceived performance being less than the expectations.
- Consumers develop issues in early stages of purchase process
- This creates perceived risk in consumer.
- Performance risk: the product doesn't meet expectations. Reduced with guarantees, quality control, and demonstrations.
- Social risk: others don't approve of the purchase. Reduced with influencer promotions and endorsements.
- Psychological risk: the product is not appropriate.
- Financial risk: financial impact of the product. Reduced through return/refund policies.
- Firms should assess the risks consumers associate with their products or competing products; this knowledge can help reduce the risks to increase customer value.
Behavioral Decision Theory
- Framing: Consumer decisions are influenced by the presentation of information. This includes the general price level and price history of existing products.
S6 Customer Segmentation Strategy
- Goals of segmentation strategy
- Aim to identify target segments instead of mass marketing
- Create products to meet target segment needs
- Communicate effectively with target segments.
- Three characteristics of a good market segment.
- Differential response
- Differential accessibility
- High potential
S7 Positioning Strategy
Elements of Market Maps
- Dimensions: Position on a single attribute (easy to communicate).
- Position on multiple attributes (creates a distinctive position).
- Products: Consumer's perception of products on these attributes (measured by market research surveys).
- Consumers: Represent consumers' ideal products and how liking increases as products approach their ideal points.
- Positioning Strategy
- Identify potential segments to focus on the positioning, identify best positions for new products, and reposition products facing high competition.
S8 Market Research
-
Goals of market research
- Improve the quality of marketing decisions.
- Identify the marketing problem (decisions, actions, issues concerning strategy, marketing mix).
-
Essential elements for effective market research.
- Learning about consumers, competitors, and important environmental trends.
- Examine competitor prices and actions.
- Examine consumer reactions to current and potential new product positions.
- Identify and evaluate market segments.
-
Types of Market Research Data (Primary and Secondary Research)
-
Types of Primary Data Collection
- Exploratory
- First look: to establish direction
- Descriptive: surveys, to numerically describe data
- Causal: to understand cause and effect with experimental manipulations.
- Exploratory
-
Focus groups, Depth interviews, Projective techniques, and Observation
-
Sampling Consumers
- Define the target population
- Understanding existing customer satisfaction
- The larger a sample, better chances of accurate results.
S10 Pricing I
- Cost-plus pricing: calculating prices based on costs plus a markup.
- Value-based pricing: pricing based on consumer perceived value rather than costs. Consumer surplus (difference betweens price and the willingness to pay). Strategies include Qualitative Steps.
S11 Pricing II
- Segmented Pricing: Different prices for different consumer segments. Examples are coupon usage.
- Price Discrimination: charging different prices to different consumers.
- Conditions for successful price discrimination:
- Different segments with different price sensitivities.
- Identification of those segment's to prevent resale between segments.
S13 New Products
- Product Life Cycle (PLC): Stages of product sales (Introduction, Growth, Maturity, Decline).
- Characteristics of successful new products.
- Relative advantage (better, faster, or cheaper than existing products).
- Communicability (easy to explain benefits).
- Minimal behavior change (doesn't force major adjustments to customer's habits/beliefs).
- New product development process:
- Generates ideas.
- Evaluates ideas (screen).
- Tests concept (consumer reactions).
- Develops the product.
- Test in market (place into selected cities).
S18 Internal Marketing Partners
- Internal partners
- Sales, Salesforce, customer service. Essential selling skills include asking questions, active listening, emphasizing benefits, establishing interpersonal influence, and effective negotiation.
S20 Customer Value
- Customer Value: economic value a customer brings to the firm.
- Includes attracting and retaining costs, profits from sales
S21 Marketing Communications
- Types of marketing communications
- Unearned media (press coverage).
- Earned media (organic social media).
- Paid media (advertising).
Message Strategies
- Rational messages: stressing product attributes and benefits.
- Emotional messages: Creating brand perception.
- Comparative advertising: highlight differences between firm and competition.
Yield Management
- Change pricing based on (current or projected) demand.
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Description
Test your knowledge on the consumer purchase process and research methods. This quiz covers topics such as exploratory research, attribute types, and the stages involved in consumer decision-making. Assess your understanding and learn more about consumer behavior!
