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Consumer Behavior | Exam 1 Part 2
Terms in this set (25)
important techniques in marketing.
the process of grouping a market (i.e customers) into smaller subgroups.
what does market segmentation enable?
Relevant marketing to each different group
Targeting and prioritization of investment
Identification of sources of growth or decline
Measurement of performance in different markets
good segmentation rules
Similarity of observations within segments
Difference between observations in different segmentation
Stability over time
Each segment large enough to be relevant
Each segment must make sense and be actionable
Segmentation can be based on different data types:
demographic, attitudinal, and behavioral.
Efficient resource use
Avoid direct competition at most intense part of market
Specialized needs met
Reduced search costs
factors than influence segmentation:
Buyers vary and buyer preferences vary.
Greater variety (heterogeneity) → more potential profits from individual segments.
Fallacy: something is false
"Pursuing the majority of buyers will increase profits."
Focus on large avg segments, neglect smaller segments.
Why is this a fallacy?
Majority segment i where competition from other companies will be greatest. Frequently marketing that segment less profitable than smaller segments with less competition.
Sales-Cost Trade Off
Increased segmentation of a market creates more segments, and decreases buyer count in those segments. Costs increases of # of segments increases (more unique products and marketing messages)
Race, gender, income, vital population stats from uc census
Includes geographic (location, climate, pop density_
Includes geo-demographic (zip-code based segmentation - "bids of a feather flock together"
PRIZM (described in book) & personicx systems based on this.
Attitudinal (aka psyhographic) segmentation
Personal lifestyle base .measure activities, interests, opinions, likes/dislikes, priorities.
Ex: VALS System: complete 35 psych and 4 demo Qs
Assigned to 3 prime motivators and 2 resource levels, which become 8 unique segments.
Valuable but requires scale completion.
Loyalty card data used to
Quantify loyalty into levels
Group people by purchase trends
Companies like 84.51 must often work with behavioral data.
Loyalty segmentation: customers place into groups based on their visit frequency and value
Process of communicating with target market
Through the 4 p's (product, price, placements (distribution), promotion) to help customers differentiate from competition and understand how product satisfies their needs.
Product usage and product user:
Product Knowledge acquired firsthand
food/bev, perfume, cosmetic samples
Snacks, detergent, pain relievers
Free dry cleaning, trial lawn care, free carpet cleaning
Product demos ( for durables)
Test drive car, software demos, music/movie gizmos
Product knowledge acquired secondhand
Company provided info
Ads, commercials, brochures
Companies rep (sales, telemarketer, etc)
Point of purchase (POP) displays
Other info Sources
Professional and licensing orgs.
Government (chamber of commrc, bbb, fda, ftc)
Internet sites (ex: consumer.org)
Can be biased. Companies may pay the websites.
process of retrieving, selecting and interpreting environmental stimuli with the five senses.
the erroneous assumption that everyone perceives the world as we do.
The is 2nd important
This can lead to attention
Focusing on or more environmental stimuli while potentially ignoring others.
Once attention is grabbed, you then get comprehension.
Understanding new information by relating it to information already stored in memory.
The minimum level of stimuli needed to experience sensation.
Jnd and Weber
Just Noticeable Difference (J.N.D)
The incremental change required to detect a difference between two similar stimuli.
How a big price decrease is noticed?
The ability to sense change in a stimulus depends on the strength of the original stimulus.
Notice-ability of price decrease depends on size of original price.
Process of becoming desensitized to sensual stimuli
Limits of Attention
Miller - 1956
attention span = 7 (+/- 2) units of information in short term memory (stm) at one time.
Easy to overload customers.
Burden can be eased by presentation.
Ex: shelf labels. Which is better buy?
Attention intensity - true capacity varies
Expertise (more info in a "unit")
low = drowsy (early morning )
Moderate = majority of day
High = after caffine,
allocation of effort:
researched by kahneman.
what is allocation controlled by?
1. Enduring dispositions (gaining involuntary attention)
A. salience (context dependent)
It salience because it stands out from the context. The background or other options are more dull.
If all your competitors uses the same colors, try using different colors.
Complexity (in book)
Vividness (context independent)
Stands out on it's own, no matter how the background or other options are..
Emotional interest of info.
concreteness/imaginability of info (ads)
Sensory, spatial, and temporal proximity of info.
herr et all (1991)
2 messages about a personal computer
1 ancedote & 2 sets of facts
A. IV: Anecdote vividness: printed (less vivd) vs spoken.
B. pos anec: negtive fact vs negative anec - pos fact.
Dv: rate desireabilty of pc. (from 1-9, higher = better)
Vividness advantage greatest when people receive face to face verbal communication.
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