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MKT361 Midterm

Buyer Behavior

Marketing meeting the needs of consumers
Consumer behavior the set of value seeking activities that take place as people go about addressing realized needs (bang for buck) Consumer relationship management is #1 important value in a company
Consumption Process by which goods, services, or ideas are used and transformed into value Consumption process ends when the thing is no longer holds value (thrown away)
How are consumers treated? competitions drives competition. Ex) DMV vs fine dining restaurant
Consumer orientation customer is king
Market orientation all departments work to meet goal
Relationship marketing performance
touchpoints direct contact with company
Why study CB? informs business decisions. input business marketing strategy, force that shapes society, input to making responsible decisions as a consumer
Resource Advantage theory explains why companies fail/succeed. The company goes about obtaining resources from consumers in return for the value the company's resources create. The more info you have about consumers, the better decisions you can make
Myopic looking at a business as a product based company. myopic view defines the business in terms of products, not the value consumers receive. Ex) kodak "sells memories"
Undifferentiated marketing one product for all segments
Differentiated Marketing different products for different segments
Niche Marketing one product for only one segment
Consumer Value Framework (CVF) represents consumer behavior theory illustrating factors that shape consumption-related behaviors and ultimately determine the value associated with consumption
CVF 1. internal influence 2. external influence 3. consumption process * 4. types of value 5. Relationship quality (CRM) * - helps us understand how consumers value the products
Internal influences: Psychology Cognition- the way we think Affect- the way we feel
Internal Influence: Personality Character traits- need for uniqueness lifestyles- how you live Ex) city vs country
Cognition the thinking or mental process that go on as we process and store things that can become knowledge
Affect refers to the feelings experienced during consumption activities or associated with specific objects
Personality of the Consumer individual differences include things like personality and lifestyles
Interpersonal Influences: Social Environment family is #1 influence. friends are next
Interpersonal influences: Situational influences time- (ex. coffee in the morning) place- environment (ex. targets lighting)
The Value Equation Value = what you get - what you want. Price does not equal value
Quality meeting your needs of the consumer ex) Civic vs BMW, only needed for transportations, so civic is better quality
Utilitarian Value Functionality (companies want to master both functionality and hedonic)
Hedonic Value Emotional/Experimental
Business strategy: 1. Corporate Strategy customer orientation (customer is king)
Business strategy: 2. Marketing strategy how do we create value to consumers? `
Business strategy: 3. Tactics 4 P's of marketing
Total Value Concept practiced when companies operate with the understanding that products provide value in multiple ways. Every product's value is made up of basic benefits, and the augmented product and "feel" benefit ex) Starbucks sells coffee, food, merch, and atmosphere
Value co-creation the realization that s consumer is necessary and must pay a part in order to produce value. Consumer must contribute to maximize vale of the product. Company must educate and inform about their products
Market segmentation separation of a market into groups based on different demand curves associated with each group
market segmentations demographics, geographics (easiest) psychographics (II) behavorial (best way to market products, most important but most difficult
Product Differentiation a marketplace condition in which consumers do not view all competing products as identical to one another
Perceptual map companies work to position their products in the minds of the consumer (product positioning)
Authenticity fake products still hold value based on consumer beliefs
Learning a change in behavior resulting from the interaction between a person and a stimulus. Learning always begins with a need (intentional of unintentional) unintentional is through experience.
Perception a consumer's awareness and interpretation of reality. perception is difficult for marketers (they want similar perception)
Perception VS Reality the context changes our perception (ex. eating a full plate at restaurant vs at buffet). Perception is more important than reality, it leads to action
Perceptions 1. person to person 2. within (state of our condition) 3. context (environment)
Elements of Consumer Perception: Exposure to present something in front of you
Elements of Consumer Perception: Attention to just to get you to know the ad exists
Elements of Consumer Perception: Comprehension getting you to understand the ad
Sensing deals with 5 senses (see, smell, hear, taste, feel)
Organizing recognizing something, define what "it" is
Reaction from your organization
Placing placing it in memory
Retireve retrieve info from inside our head
Organization Reactions: Assimilation we can easily identify the product category
Organization Reactions: Accommodation putting effort into identifying product
Organization Reactions: Contrast when you can't identify what it is
Selective Perception: Selective exposure we expose ourselves with things that are congruent with our beliefs
Selective Perception: Selective attention focus on what you want to see
Selective Perception: Selective distortion misinterpret info to what we believe in
Just noticeable difference (JND) How much can you change without your consumers noticing.Represents how much stronger one stimulus has to be relative to another so that someone can notice that the two are not the same
JND Marketing implications Price- changing from 1.99 to 2.09 Quantity- 20 slices to 19 slices of bread Quality- different quality clothes Add-on purchases- buying $300 gps alone vs getting gps into $30,000 car
Just meaningful difference (JMD) How much change to make in order for consumers to notice it is an improvement. Represents the smallest amount of change in a stimulus that would influence consumer consumption and choice.
Implicit Memory unintentional learning. You don't try to learn, but you learn from experience pre attentive effects, mere exposure. Implicit is always stronger than explicit
Explicit memory intentional learning
Mere exposure effect learning through lots of exposure
Attention the purposeful allocation of cognitive capacity toward understanding some stimulus
involuntary attention beyond the conscious control of the consumer and occurs as the result of a surprising or novel stimuli
Orientation reflex a natural reflex that occurs as a response to threat
Ways to enhance attention Intensity (brighter colors,bolder), Movement (enhances attention), Size (increasing or decreasing size), Contrast (presenting something different from expected), Surprise (gaining attention), Involvement (get people involved)
Classical Conditioning A change in behavior that occurs simply through associating some stimulus (unconditional) with another stimulus (conditional) that naturally causes a reaction. All about associations (ex. get a hot car, get a hot girl)
Instrumental conditioning (IC) behavior is conditioned through positive or negative reinforcement. Discriminative stimuli- Rewarding system
IC positive: rewarding good behavior (discount for next purchase) negative: punishment for bad behavior (extra fees for not paying bill on time)
Comprehension Refers to interpretation or understanding that a consumer develops about some attended stimulus in order to assign meaning. understand what the person/message is saying
Comprehension Depends on 1. Message (physical characteristics, words, who) 2. Message receiver (Who (you), attention) 3. environment (various)
Physical Characteristics of the message Color- different colors mean different moods. Font- masculine vs feminine fonts Numbers- odd numbers associate with masculine;even with feminine Spacing- three 30sec ads VS one 90sec ads Exposure- big font, big sound attention- small font,small sound
Simplicity Ads for low involvement consumers
Complexity Ads for high involvement consumers 8always think about consumers before the company
Congruent messages Loreal in shampoo magazine. Increases exposure
Incongruent messages Loreal in People magazine. increases attention
The figure (ads) focal point of the ad. focus on figure
The ground (ads) background, compliment the figure
Message source factors Likeability, Attractiveness, Trustworthiness, Expertise (highly involved consumers like expertise & trustworthiness) (low involved consumers like attractiveness & like ability)
message Receiver characteristics intelligence/ability, prior knowledge, involvement, familiarity/habituation, expectation, physical limits, brain dominance
Environmental Characteristics Information intensity, framing, timing
Framing/ Prospect theroy "losses loom greater than gains" the negative connotation is greater than the positive connotation even if it is the same
Multiple store theory of memory Views the memory process as utilizing 3 different storage areas within the human brain
Multiple store theory of memory: Sensory sensory- preattentive (no focus) echoic-auditory. iconic- visuals. haptic- sense of touch
Multiple store theory of memory: Workbench (short term memory) focus required, limited capacity, limiting duration, coding takes place
Multiple store theory of memory: Long-term memory unlimited capacity, unlimited duration, semantic meaning, decoding
Workbench Memory Where bits of information are worked on to create knowledge. Mental tagging- bits of information from the past that help you remember
Mental Processes Assisting Learning: Dual Coding make associations on distinct features
Mental Processes Assisting Learning: Meaningful coding using pre-existing knowledge to remember
Mental Processes Assisting Learning: Chunking separating info to remember easier (phone numbers_
Mental Processes Assisting Learning: Repetition repeating over and over again to remember
Long-term memory a repository for all information that a person has encountered
Rumination how a consumer remembers a memory, positively or negatively
Exemplar a concept within a schema that is the single best representative of some category. comparing with #1 example of that product category
Prototype characteristics more associated with a concept. using attributes to identify something
Motivations The inner reasons behind human action as consumers are driven to address real needs. human motivations are oriented toward two key groups of behavior
Homeostasis the body naturally reacts in a way so as to remain a constant, normal blood stream. (being hungry, thirsty, cold)
Self-improvement changing one's current state to a level that is more ideal. going towards an ideal state
Utilitarian Motivations choosing convenient place to eat, going gift shopping out of sense of obligation to give a gift
Hedonic Motivations going to a new trendy restaurant, giving a gift to enjoy the joy the recipient experiences when opening the gift
Consumer Involvement Represents the degree of personal relevance a consumer finds in pursuing value from a given consumption act
Consumer Involvement Types product(I'm involved in product category), shopping(highly involved in shopping), situational(a product becomes very important suddenly), enduring(ongoing interest in product category), emotional(strong emotional attachment to a product)
Emotions Psychobiological reactions to appraisals
Psychobiological because they involve psychological processing and physical responses (ex. sad=cry, anger=fight, happy=smile) emotions are both psychological and biological
Visceral responses certain feeling states are tied to behavior in a very direct way
Cognitive Appraisal Theory describes how specific types of thoughts can serve as a basis for specific emotions
Cognitive appraisals: Anticipation fear, anxiety, hope
Cognitive appraisals: Agency (judgement) envy, happy, admire, love, pride
Cognitive appraisals Equity (fairness) anger, disappointment, frustration
Cognitive appraisals: Outcomes (evaluations of expectations) relief, regret, satisfaction
Affect how you feel right now (feeling great)
Emotion description of your affect (happy)
Mood positive,negative, or neutral
Mood definition a transient (temporary and changing) and general affective state
Affect represents the feelings a consumer has about a particular product or activity
Autonomic measures a neurological way to measure brain activity, non feasible
Self-report measures self assessing, filling a survey
Emotional involvement you have an emotional interest, how much you are involved. Flow- temporary,highly charged, emotional involvement
Emotional Expressiveness how much do i express?
Emotional intelligence how good are you at controlling your emotion
Emotional Intelligence: self-control ability to control ones emotion
Emotional Intelligence: emotional empathy ability to read and understand others' emotions
Emotional Intelligence: Upbeat ability to maintain a generally upbeat and optimistic outlook
Emotional Intelligence: Productive ability to turn emotions into value through better problem solving
Channeling people hide emotions and channel it into positive productivity
Schema-based Affect emotions become stored as a part of the meaning for a category. certain emotions are tied to certain product category. encourage positive and change the negative
Self conscious emotions specific emotions that result from some evaluation or reflection of one's own behavior including pride, shame guilt, and embarrassment. we feel most self-conscious emotions most on first date
Emotional Contagion represents the extent to which an emotional display by one person influences the emotional state of a bystander (laughing because someone around you laughs)
Emotional labor workers have to overtly manage their own emotional displays as part of the requirements of the job (ex. ER, service industry, clowns) people with high emotional jobs are usually more depressed.
Personality Totality of thoughts, emotions, intentions, and behaviors that a person exhibits consistently as he or she adapts to his or her environment.
Personality qualities your overall personality is a combination of man stable characteristics or traits. Unique to an individual.
Aggregation approach the measurement of specific behaviors occurs over time rather than relying on a single measure of behavior at one point in time
Psychoanalytic Approach: Id focuses on pleasure seeking principle
Psychoanalytic Approach: Superego motivates behavior that matches societal norms; against Id
Psychoanalytic Approach: Ego balances Id and superego. Reality principle- satisfy Id within constraint of society
Traits a distinguishable characteristic that describes one's tendency to act in a relatively consistent manner
Coupon deal proneness tendency to seek deals using coupons/discounts
need for uniqueness individuals want/need to be unique from others
value consciousness important concept on consumer behavior, it underlies tendencies to perform certain behaviors
materialism deals with importance of material things in a person's life (older people less materialistic
Possessiveness tendency to retain control of possessions
Nongenerosity unwillingness to share
Need for cognition the degree to which consumers engaging in information processing that is challenging
innovativeness how much consumer is open to new products and services
Hierarchical Approaches Begin with the assumption that personality traits exist at varying levels of abstraction
Specific traits tendencies to behave in very well defined situations. specific to the situation (ex bargaining proneness)
Broad traits behaviors that are performed across many different situations (ex. extroversion) we can be extroverted in certain situations, but not in others
Brand Personality Dimensions Sincerity, excitement, competence, sophisticated, ruggedness
Personality and Brand Relationships: Love and passion consumer has such strong feelings about a brand they "love" it
Personality and Brand Relationships: Commitment Harley Davidson owners are committed to their bikes
Personality and Brand Relationships: Intimacy we need intimacy and passion. can be directly tied to s specific brand (perfume)
Personality and Brand Relationships: Self connection correct match between a consumer's personality and a perceived brand leads
Personality and Brand Relationships: Interdependence customers being reminded, "like a good neighbor state farm is there"
Personality and Brand Relationships: Brand partner quality brands perceived to be high quality contribute to consumer brand relationships
Lifestyles refers to the ways of consumers live and spend their time and money. What we do, what we like, and what we think determines our lifestyle. where we live geographically has a big impact on our lifestyle
Self concept refers to the totality of thoughts and feelings that an individual has about him or herself. How a person defines or gives meaning to their own identity
Actual self how a consumer currently perceives him/herself
ideal self how individuals would like to perceive themselves
social self beliefs that a consumer has about how others see them
ideal social self ideal image of what others perceive of the consumer themselves
possible self presents an image of what the consumer could become
extended self represents various possessions that a consumer owns that help them form self perceptions
Self Esteem refers to the positivity of an individuals self-concept. Negativity is associated with low self-esteem. people do things to reshape self esteem (piercings, tattoos)
Self-Congruency Theory Proposes that much of consumer behavior can be explained by the congruence (match) between a consumer's self-concept and the image of typical users of a focal product
Self-Congruency Theory (2) marketers use congruency theory by segmenting markets into groups of consumers who perceive high self concept congruence with their product-user image ("Built Ford Tough", tough contraction workers need a tough truck
Created by: Thomas.Siu