Marketing and Consumer Behavior

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Questions and Answers

What does psychological value refer to in the context of consumer products?

The satisfaction and pleasure that a product creates for the customer. (correct)

The competitive price of a product in the market.

The revenue generated by a product for the manufacturer.

The tangible monetary benefits that a product provides to the customer.

What did the manufacturer of uniforms initially think they had in terms of market share?

85 percent market share (correct)

15 percent market share

35 percent market share

50 percent market share

Why is it important to gather accurate price data when establishing a competitive reference price?

To ensure prices are stated in the same units as the product (correct)

To calculate the revenue generated by the product

To ensure prices are higher than competitors

To compare prices with competitors

What is an example of a monetary value driver in the context of a hybrid car?

Lower fuel costs Signup and view all the answers

What is the first step in quantifying monetary value?

Understanding how the product category affects the customer's costs and revenues Signup and view all the answers

What is an example of a product that creates more psychological than monetary value?

A Rolex watch Signup and view all the answers

Why did the manufacturer of uniforms conduct market research?

To understand the larger market landscape and identify potential sales opportunities Signup and view all the answers

What is the purpose of establishing a competitive reference price?

To compare prices with competitors Signup and view all the answers

What is the primary purpose of conjoint analysis?

To understand which product features customers prefer and value Signup and view all the answers

What is the goal of market segmentation?

To divide a market into subgroups with common buying behaviors Signup and view all the answers

What are value drivers in the context of market segmentation?

Purchase motivators that vary the most among segments Signup and view all the answers

What is the purpose of Toyota's online calculator?

To help consumers estimate the financial benefits of purchasing one of their cars Signup and view all the answers

What is the outcome of using conjoint analysis?

Estimating the value of different feature sets Signup and view all the answers

What is a characteristic of market segmentation?

Identifying market subgroups with common buying behaviors Signup and view all the answers

What is a basic demographic criterion used in consumer markets?

Age Signup and view all the answers

What is the purpose of determining basic segmentation criteria?

To identify obvious segments and differences among them Signup and view all the answers

Study Notes

Psychological Value

A product's psychological value is the innate satisfaction it creates for the customer
Example: A Rolex watch's prestige and beauty create deep psychological benefit for some customers, who ascribe economic worth to it
Consumer products often create more psychological than monetary value, focusing on satisfaction and pleasure

A manufacturer of uniforms thought they had an 85% market share, but market research revealed that customers considered competitive offerings from other clothing sellers, not just uniform manufacturers
The actual market share was 35%, revealing many missed sales opportunities

Establishing Competitive Reference Price

Gathering accurate price data and ensuring it's comparable to the product's pricing is crucial
Competitive prices must be measured in terms familiar to customers in the segment (e.g., price per pound, price per hour) and stated in the same units as the product

Estimating Monetary Value

Monetary value drivers are tied to the customer's financial outcomes via tangible cost reductions or revenue increases
Understanding how the product category affects the customer's costs and revenues is essential
Example: A hybrid car provides monetary benefits like lower fuel and maintenance costs, which can be quantified using readily available data

Conjoint Analysis

Conjoint Analysis is a technique to discern the hidden values customers place on product features
It decomposes a product into feature groups and provides customers with choices to understand which they prefer
Value estimates from conjoint studies can be used as input for pricing decisions

Value-Based Market Segmentation

Value-based segmentation facilitates pricing commensurate with actual value perceived and delivered to customers
The goal is to divide a market into subgroups with common criteria that differentiate their buying behaviors

Determining Basic Segmentation Criteria

Choosing segmentation criteria starts with a descriptive profile of the total market to identify obvious segments and differences
Basic segmentation criteria include:
- Demographics (age, gender, income) in consumer markets
- Firmographics (revenue, industry, number of employees) in enterprise markets

Identifying Discriminating Value Drivers

Value drivers are purchase motivators that vary the most among segments
Identifying value drivers that drive willingness-to-pay and purchase decisions is crucial for effective marketing and pricing

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Description

Learn about the psychological value of products and how it affects consumer behavior, as well as the importance of market research in understanding market share.