Consumer Decision Making and Marketing Analysis

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Questions and Answers

What are the main types of market research?

  • Qualitative and Quantitative
  • Formal and Informal
  • Exploratory and Conclusive
  • Primary and Secondary (correct)

Market maps are used to visualize consumer perceptions of products.

True (A)

Why is market research necessary for firms?

To improve marketing decisions by understanding consumers, competitors, and environmental trends.

Firms utilize _____ attributes to position their products distinctly in the market.

<p>positioning</p> Signup and view all the answers

Which part of the consumer decision-making process involves gathering data about product attributes?

<p>Information Gathering (D)</p> Signup and view all the answers

Match the types of market research with their descriptions:

<p>Exploratory = Used for understanding problems and generating hypotheses Descriptive = Focused on providing a detailed picture of the market Causal = Analyzes cause-and-effect relationships Secondary Data = Information that has already been collected and analyzed</p> Signup and view all the answers

Cognitive dissonance occurs after the purchase when consumers feel satisfied with their decision.

<p>False (B)</p> Signup and view all the answers

What is a key benefit of post-purchase service for firms?

<p>Customer loyalty</p> Signup and view all the answers

In order to calculate __________, firms need to differentiate between unit sales and monetary sales.

<p>market share</p> Signup and view all the answers

Match the consumer risk types with their descriptions:

<p>Performance Risk = Concerns about how well the product will function Social Risk = Fear of negative social perception Psychological Risk = Impact on self-esteem or mental well-being Financial Risk = Concerns about the monetary cost of the purchase</p> Signup and view all the answers

Which type of segmentation focuses on consumers' motivations and benefits sought?

<p>Benefit Segmentation (C)</p> Signup and view all the answers

Reducing perceived risk is essential for creating consumer value.

<p>True (A)</p> Signup and view all the answers

Name one strategy that firms can use to reduce perceived risk.

<p>Guaranties, influencer promotions, free trials, or return/refund policies</p> Signup and view all the answers

What is the first step in the consumer decision-making process?

<p>Need Recognition (A)</p> Signup and view all the answers

Purchase decisions are solely based on consumer involvement.

<p>False (B)</p> Signup and view all the answers

What do firms use to reduce perceived risks for consumers?

<p>Guaranties, influencer promotions, free trials, and return/refund policies.</p> Signup and view all the answers

Consumers may experience __________ after a purchase if their expectations are not met.

<p>cognitive dissonance</p> Signup and view all the answers

Match the types of segmentation with their descriptions:

<p>Demographic = Based on attributes such as age, gender, income Psychographic = Based on lifestyle and personality traits Benefit = Based on the benefits sought by consumers</p> Signup and view all the answers

Which of the following is a characteristic of good market segments?

<p>Differential response (D)</p> Signup and view all the answers

Behavioral Decision Theory suggests that framing and context do not influence consumer decisions.

<p>False (B)</p> Signup and view all the answers

To determine their market share, firms need to compare both __________ and monetary sales.

<p>unit sales</p> Signup and view all the answers

What is the primary purpose of market maps?

<p>To visualize consumer perceptions of products (A)</p> Signup and view all the answers

Market research is only necessary for large firms.

<p>False (B)</p> Signup and view all the answers

What type of market research is used to gather original data directly from consumers?

<p>Primary research</p> Signup and view all the answers

Firms position their products based on _____ attributes to create a unique market presence.

<p>positioning</p> Signup and view all the answers

Match the types of market research with their purposes:

<p>Exploratory research = To understand underlying reasons and motivations Descriptive research = To describe market characteristics Causal research = To determine cause-and-effect relationships Secondary data = To use existing data for analysis</p> Signup and view all the answers

Flashcards

Positioning Attributes

Characteristics that make a product stand out from the competition.

Market Maps

Visual representations of how consumers perceive different products in a market.

Market Research

The process of gathering information to improve marketing decisions.

Primary Market Research

Market research conducted directly to gather specific data from consumers.

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Secondary Market Research

Market research that uses existing data like articles and reports.

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Need Recognition

The first stage in consumer decision-making where individuals recognize a need or want that requires a product or service.

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Information Gathering

The process where consumers gather information about products from various sources like personal experiences, advertising, or online reviews.

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Comparing Alternatives

Consumers compare different products and their attributes based on their individual preferences and priorities.

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Purchase Decision

The actual act of purchasing a product after weighing alternatives, influenced by factors like consumer involvement and marketing strategies.

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Post-Purchase Evaluation

The evaluation of a product after purchase, comparing expectations with actual performance and potentially leading to customer satisfaction or dissatisfaction.

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Perceived Risk

The risk consumers perceive when buying a product, encompassing areas like financial loss, social embarrassment, or performance issues.

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Segmentation Strategy

A strategy where companies target specific groups of consumers with similar characteristics and needs, aiming to create products and marketing messages that resonate with them.

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Characteristics of Good Market Segments

Characteristics that define ideal target segments for marketing, ensuring they respond differently to marketing efforts, are accessible, and have significant potential.

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What are Market Maps?

These maps visually showcase how customers perceive different products, helping companies identify ideal product positions and potential market segments to target.

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How do Positioning Attributes help businesses?

By understanding how consumers see their offerings compared to competitors, companies can make informed decisions about product features, pricing, and marketing.

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Why is Market Research valuable?

This research helps businesses gather information about their customers, competitors, and industry trends, ultimately improving their marketing strategies.

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What is Primary Market Research?

Collecting data directly from target audiences through surveys, interviews, or focus groups.

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What is Secondary Market Research?

Utilizing existing data sources such as industry reports, articles, and government statistics to gain insights.

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Market Segmentation

The process of dividing a market into groups of consumers with similar characteristics and needs.

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Consumer Involvement

The level of importance a consumer places on a product or service.

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Profit Margin

The calculated ratio of a company's profits to its sales.

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Break-Even Point

The point at which a company's revenue equals its expenses.

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Segmentation Goals

Identifying, creating, and communicating value to specific customer groups.

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Study Notes

Consumer Decision Making Process

  • Consumers identify a need (need recognition), gather information (information gathering), compare options (comparing alternatives), make a purchase (purchase), and evaluate their purchase (post-purchase evaluation).
  • Firms can motivate consumers to identify and recognize a need through various strategies.
  • Consumers collect information on product attributes (objective and subjective) from personal, commercial, public, and experiential sources.
  • Consumers rank preferences based on attribute importance, which can vary across individuals.
  • The actual buying decision (purchase) is influenced by consumer involvement and the firm's strategies to motivate purchase.
  • Consumers assess satisfaction (perceived performance vs. expectations) and may experience cognitive dissonance. Post-purchase service is crucial for customer loyalty.

Marketing Math and Environmental Analysis

  • Market share can be calculated in units or monetary value.
  • Profitability is assessed via profit margin ratios and break-even analysis.
  • Firms with strategic advantages (consumer and operational) are more likely to succeed and are more profitable.
  • Maintaining these advantages requires adapting to changing consumer preferences and environmental trends.
  • Sales and market share can be calculated in units or monetary value.
  • Profit margin ratios and break-even volumes are used to interpret profitability.
  • Firms with consumer and operational advantages are more profitable and secure.

Consumer Behavior and Perceived Risk

  • Consumers experience different types of risk (performance, social, psychological, financial).
  • Firms can alleviate risk through various methods (guarantees, influencer promotions, trials, return policies).
  • Behavioral decision theory highlights how framing and context influence decisions.
  • Reducing perceived risk is pivotal to enhancing consumer value.
  • Consumers experience performance, social, psychological, and financial risks when purchasing products.
  • Firms can mitigate risk by implementing guarantees, influencer promotions, product trials, and return policies.
  • Consumers' decisions are influenced by framing and context, as described by behavioral decision theory.
  • Reducing perceived risk enhances consumer value.

Segmentation Strategy

  • Segmenting the market helps identify target audiences, design products to match needs, and effectively communicate with those audiences.
  • Effective market segments are unique in their needs, accessible to reach, and potentially profitable.
  • Segmentation can be demographic, psychographic, or based on benefits.
  • In-depth market research is essential when selecting segments.
  • Segmentation goals include identifying target segments, designing products to fit their needs, and communicating effectively.
  • Good segments are unique in their needs, accessible, and have high potential.
  • Segmentation can be based on demographics, psychographics, or benefits.
  • Market research is essential for accurate segmentation decisions.

Positioning Strategy and Market Maps

  • Product positioning is determined by distinct product attributes.
  • Market maps visually represent consumers' perceptions of products.
  • Maps help identify optimal positioning and select target segments.
  • Product positions are determined by distinguishing attributes.
  • Market maps visually represent consumer perceptions of products.
  • Maps help choose optimal positions and target segments.

Market Research

  • Market research is crucial to address marketing issues, understand consumers, competitors, and environmental shifts.
  • Market research uses both primary (exploratory, descriptive, causal) and secondary data.
  • Research methods must be tailored to address specific marketing challenges and objectives.
  • Market research aids in resolving marketing issues, understanding consumers and competitors, and recognizing environmental nuances.
  • Primary and secondary data are used in various research types(exploratory, descriptive, causal).
  • Research methods are tailored to fit marketing challenges and objectives.

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