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MKT 325 - Test #1
N/A
18
Marketing
Undergraduate 4
02/14/2010

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Term
High Involvement Purchasing Process
Definition
1. Problem Recognition
2. Information Search
3. Alternative Evaluation
4. Purchase
5. Post Purchase
*High involvement decision making process not only has high risk for the consumer, but also for the marketer.
Term
Problem Recognition
Definition
Strategy Options
- Marketer can either make a concerted effort to trigger problem recognition (remind or point out the need for the product)
- Or marketers can be present when the problem recognition occurs.
* Marketers spend a lot of money on this phase of the process (i.e. advertising).
*If marketers can find a way to be present when problem recognition occurs that is much more efficient -- use of database strategies.
Term
Information Search
Definition
Consumer will first go through an internal information search. Think about past experiences and how you have solved the problem in the past (shows the circular importance of the post purchase phase).
*If internal information search is adequate (i.e. satisfied with who you used in the past) then you move right to purchase.
*If your internal information search is inadequate then the consumer moves to an external information search with outside sources (i.e. word of mouth), which can become a consequence for marketers.
Term
Alternative Evaluation
Definition
When evaluating all the options you have an ideal solution in mind that you are comparing the alternatives to.

The two major topics regarding Alternative Evaluation:
1.Decision Rules: rules for combining information and evaluating various options. Decision rules can either be compensatory (willing to compromise) or non-compensatory (non-negotiable).
2.Attitude Formation: brand attitude has to occur before purchase. A positive brand attitude will lead to purchase.
Term
Purchase
Definition
Brand vs. store
Term
Post Purchase
Definition
Involves the importance of word of mouth and determines whether or not the customer will be a repeat consumer.
Term
The 80/20 rule
Definition
20% of the consumers consume 80% of your product. And 80% of consumers consume 20% of the product.
Term
Segmentation Variable Matrix
Definition
- Demographics and Usage Rate are ‘objective’ and tells us ‘who’ the consumer is
- Lifestyle and Benefits Sought are ‘subjective’ and tells us ‘why’ they might consume
Usage Rate and Benefits Sought are Consumer’s Interaction with the Product

*The segmentation process moves from demographics to lifestyles to usage rate and finally to benefits sought
Demographics and Lifestyles are Consumer Only
Term
Usage Rate
Definition
- Frequent or Heavy User (20% of consumers participate in 80% of the consumption)
- the positive in this group is the high volume consumed
- the negative is this group is most likely price sensitive
** example of buying a 6 pack of nicer beer compared to cases of natty
- Infrequent or Light User
(80% of consumers participate in 20% of the consumption)
- the positive in this group is that they are less price sensitive
- the negative in this group is that they consume less
Term
User Status
Definition
o At any point in time each consumer is in one and only one category
1.“Our” – Used our brand
2.“Their” – Used a competitor
3.Non-User
Term
User Status Marketing Strategies
Definition
1.Keep “our” customers
2.Usually “their” is the next priority (comparative advertising is very effective to reach this group)
3.Then target the non-user groups
•Some advertising might not want to target the “their” group because that group could be very brand loyal and they need to compete with that brands advertising
•Advertisers also need to recognize the challenges for their product and address that (i.e. Campbell’s soup developing the “to go” option)
Term
Culture
Definition
Sum total of learned beliefs, values and customs that are shared and transmitted through a culture and that regulate behavior within that society. Culture is synonymous with Core Values.
Term
Characteristics of Culture
Definition
1.Culture/Core values are learned in
Two Ways
- Direct Training: through parents, siblings, educators, peers, religious leaders, media
-Observation/Vicariously: observing others rewarded or punished (conditioning). Application within marketing and consumer behavior.
2.Shared: Generally accepted across the society (freedom) U.S. is more focused on individual vs. collective
3.Prescriptive (Regulate Behavior): core values and culture establishes boundaries – defines what is acceptable and what is unacceptable
4.Seldom Aware: Previously learned and is an unconscious reaction to the behavior
5.Stable: No significant change in the short term – marketers can recognize and follow core values of a culture. Dynamic over a long period of time and marketers still need to be aware of those changes.
Term
Influences of Subcultures
Definition
-Difference in consumption resulting from ethnicity, national origin, and race
-A subculture is a group that shares a sense of identification that is different from the core culture as a whole.
Term
3 Main Subcultures
Definition
-Hispanic Americans ~ 15%
-African Americans ~ 14%
-Asian Americans ~ 6-8%
> 1/3 of the U.S. Population...this is where growth is happening
Term
3 Key Question Analysis for Separately Targeting a Subculture
Definition
1. Do we need to separately target the subculture to reach it?
- Degree of assimilation of the subculture into the core culture.
- If the answer is yes then the segment lacks assimilation if it is no then there is sufficient assimilation meaning the segment would not need to be separately targeted.
2. Do we want to separately target the subculture?
- Returns to our costs…is it profitable?
- “Returns” If the answer is yes then that means that by separately targeting the segment you will increase “returns.” If the answer is no then that means that you will not increase “returns” by separately targeting the segment.
3. Can we efficiently target the subculture?
- Geographic Concentration: if we want to target a group who prefers advertising in a different language, wants a different product, has a different purchasing power and shops differently – can we do this so we don’t waste money. And this is important across all four areas of the marketing mix (product, promotion, place and price)
- How is having employees who are bilingual a cost? Because they cost more to hire… if you don’t need them you don’t want to hire them.
Term
Another way to determine need for segmentation
Definition
LANGUAGE through advertising, personal selling, and comfort with another language.
CULTURE through extended vs. limited family in decision making, who the key decision maker is, where is the income coming in from and where is the family living (separation from males and females in the household effects the decision making),
Differences in decision making view: H/I model, but also L/I
P/R – motivations
I/S – ex. Information sources W.O.M: even more important than in core culture because community and trust within that community has a huge impact when members of the subculture advise other members of a subculture.
A/E – who is the decision maker
PUR – shopping habits (mom and pop grocery stores)
CONSUMPTION BEHAVIOR
Term
Another way to determine want for segmentation
Definition
SIZE of the subculture in terms of being national or local
GROWTH
PURCHASING POWER – aggregate meaning looking at the purchasing power from the point of view of how … for example… Hispanic Americans as a whole are purchasing – also distinguishing between the household and per capita (in some subcultures it can be more collectivist than individual)
BRAND LOYALTY tends to be higher among the subcultures
USAGE RATE
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