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Ch 5 6 7 8

Terms in this set (209)

Psychological factors in consumer behavior.

-Motivation -Perception -Learning -Attitudes -Information processing

Social factors in consumer behavior.

-Sub-culture -Social Class -Reference group -Family

CONSUMER BEHAVIOR

is "the Action and Decision Processes of Individuals and Organizations Involved in Discovery, Evaluation, Acquiring, Consuming, and Disposing of Products and Services."

Consumer behavior begins with (1)______________ and extends through (2)_______________ of goods and services. It deals with how individuals and organizations make (3)_________________ to accomplish actions.

DISCOVERY 2. DISPOSAL 3. DECISIONS

SPHERES OF INFLUENCE

Culture 2. Mini-Culture 3. Social Class 4. Reference Group 5. Family and Organizations 6. Individual

A large amount of the research in consumer behavior is about the (4)__________________. Culture, mini-culture, social class, reference group and families (are social processes) that influence the behavior of (5)________________.

INDIVIDUAL 5. INDIVIDUALS

CONSUMER INVOLVEMENT

Involvement and Decision Making 2. Involvement and Ego

Routine decisions have (6)___________ self-ego (ego involvement). In low-involvement situations purchase occurs (7)___________ brand evaluation. This is called (8)___________ decision making. In high involvement decisions purchase occurs (9)__________ brand evaluation. (10)______________ decisions have (11)___________ self-ego. This is called (12)_____________ decision making.

LOW 7. BEFORE 8. PASSIVE 9. AFTER 10. COMPLEX 11. HIGH

Passive decision making

leads to purchase which leads to brand evaluation

Active decision making leads to

leads to brand evaluation which leads to purchase

Motivation is an internal force that directs behavior toward the fulfillment of needs.

EARLY MOTIVATION RESEARCHERS!

Suspenders & Convertibles 2. Freud 3. Measurement Problems

(13)____________researchers began the interest in understanding consumer behavior.

Motivation is an internal force that directs behavior toward the fulfillment of (14)__________.

Most early studies by motivational researchers had a (15)_____________________ interpretation.

MURRAY'S LIST OF MOTIVES

DOMINANCE - TO CONTROEXHIBITION - TO EXCITEPLAY - TO HAVE FUNSEX - TO FORM RELATIONSHIPREJECTION - TO SNUB OTHERS UNDERSTANDING - TO SPECULATE PLUS OTHERS

STARCH'S LIST OF MOTIVES

LOVE OF OFFSPRINGHEALTHGREGARIOUSNESSCLEANLINESSCURIOSITYCOMPETITIONHUMORPLUS OTHERS

From time to time companies use (one of more motives on Murray's list) of (16)_________________ as ways to position. Starch's list has been used as a backdrop (environment) for the presentation of (17)______________. This occurs without saying anything specifically about the (18)________________ itself. One early example is Coca-Cola!

MOTIVES 17. BRANDS 18. PRODUCT

MASLOW'S HIERARCHY

Categories 2. Needs Vs. Wants

MASLOW'S HIERARCHY

Self Actualization, esteem, love and belonging, safety, psychological

Maslow's hierarchy indicates that as needs are satisfied people move up the hierarchy. Today we have a complex world where most (19)________ exist for people (20)_______ of the time.

Safety - we need security and protection! In an automobile we (21)___________ anti-lock breaks. Needs are always there! Wants are (22)_____________ often based on what marketers do.

WANT 22. LEARNED

MOTIVATIONAL CONFLICT

Approach - Approach 2. Avoidance - Avoidance 3. Approach -- Avoidance

Provide messages about both benefits with (23)____________- ____________ conflict.

APPROACHAPPROACH

Stress unpleasantness of one aspect with (24)___________ - _____________ conflict.

AVOIDANCEAVOIDANCE

Emphasize positive benefits with (25)______________ - ________________ conflict.

25. APPROACHAVOIDANCE

(26)____________________ is the process of recognizing, selecting, organizing and interpreting stimuli in order to make sense of the world.

The (27)__________________ reality is what is actually going on. The (28)______________________ reality is our perception of what's happening

OBJECTIVE 28. SUBJECTIVE

Sensory receptors include (29)___________, (30)____________, (31)____________, (32)______________, (33)______________.

SMELL 30. TASTE 31. TOUCH 32. SIGHT 33. HEARING

Cognitive anchors have been (34)_______________ and allow us to (35)__________________ and understand the world around us. Cognitive anchors help determine what we see, how we interpret, and what we (36)________________.

LEARNED 35. CATEGORIZE 36. RECALL

Much of what we recall is taking elements from our subjective reality and (37)_________________ it to give a "memory" of what previously happened

. RECONSTRUCTING

Selective Attention

Democrats See Democrats b. Marketing and Brand Strategy

People tend to screen in brands they have already (38)_________________.

Comparison ads work by drawing (39)______________ to brands in the ad.

Selective Comprehension

a. Assimilation b. Contrast c. Message and Program Positioning

We don't comprehend the world based on its objective reality. We comprehend it according to our (40)____________________ reality. This is called (41)__________________ comprehension. Selective (42)_____________________ is the tendency to interpret products and messages according to current beliefs.

SUBJECTIVE 41. SELECTIVE 42. COMPREHENSION

When a neutral statement is made about an issue, people for and people against the issue will (43)_____________ the statement. When a consumer contrasts a statement, he or she perceives is as being (44)_____________ from their point of view than was intended.

ASSIMILATE FURTHER

Selective Retention

Smoking Experiment and Fear Appeal

Regarding the smoking and cancer communication research, how did smokers and non-smokers react to information? (45)________________ tended to hear the message. (46)___________________ tended to screen out the message or believe it didn't pertain. (47)_________________ tended to recall the ad at a later time.

NON-SMOKERS 46. SMOKERS 47. NON-SMOKERS

Three Types of Learning

Cognitive, Classical Conditioning & Operant Conditioning

Change in consumer tendency caused by experience.

(48)__________________ is a change in consumer tendency (behavior) caused by experience. There are (49)___________________ (how many?) types of learning. With classical conditioning (50)______________ are presented together: generalization and (51)___________________ develop. Cognitive learning involves (52)________________ . Operant conditioning involves (53)________________ or punishment.

LEARNING 49. THREE 50. STIMULI 51. DISCRIMINATION 52. THINKING 53. REINFORCEMENT

COGNITIVE LEARNING Key Elements

Problem Recognition • Information Search - Knowledge • Alternative Evaluation - Insights and Attitude • Purchase • Purchase Evaluation

Very seldom does the consumer actually use (54)__________________ learning.

CLASSICAL CONDITIONING - CONTIGUITY LEARNING Key elements

• Unconditioned Stimulus - Meat • Unconditioned Response - Hunger • Conditioned Stimulus - Bell • Conditioned Response - Hunger

A couple on a sunny beach is the unconditioned stimulus. Fun is the unconditioned response. A brand is shown. The brand is the (55)______________ stimulus and the conditioned response to the brand is (56)_________.

CONDITIONED 56. FUN

REINFORCEMENT LEARNING

Operant conditioning

Operant Conditioning

See something 3. Want something 4. Do something 5. Get something Get reinforcement or punishment

Reinforcement gets the consumer to (57)______ _____ ____________. Punishment gets the consumer to (58)____________. See something = (59)______________. Want something = (60)_____________. Do something = (61)_______________. Get something = (62)_______________ or ____________________.

DO IT AGAIN 58. STOP 59. STIMULI 60. MOTIVES 61. BEHAVIORS 62. REINFORCEMENT OR PUNISHMENT

Attitudes KEY ELEMENTS

"Social psychology is the study of attitudes" 2. Sociology and psychology 3. Key to Survey Research • Theory • Measurement Operant Conditioning 53 • Statistics • Strategy - Attitude Change

Sociology is the study of (63)___________________ .

Psychology is the study of (64)___________________

DEFINITION OF ATTITUDE

1. Mental and neural state 2. Organized through experience 3. Exerts a directive influence upon individuals' responses 4. To all objects and situations

ATTITUDES AND BELIEFS

Belief seeking vs. fact seeking "Spartans Will Win This Weekend"

People really don't seek the (65)_____________ ; they seek (66)_____________.

FACTS 66. BELIEFS

COMPONENTS OF ATTITUDES

Affective 2. Cognitive 3. Behavioral

Thoughts (cognitive)

What you think, what you believe

feelings (affective)

how you feel, what you like

intentions (behavioral)

your preferred actions, what you want to do

What you think/believe is the (67)_______________ component of attitude.

How you feel (what you like) is the (68)______________ component of attitude.

Your preferred actions is the (69)_________________ component of attitude.

high involvement

attitude leads to behavior

low involvement

behavior leads to attitude

processing associated with a pre-existing attitude

Attitudes (70)_______________ behavior in high involvement situations.

Attitudes (71)_______________ behavior in low involvement situations

Changing Attitudes

Central Processing of Information 2 . Peripheral Processing of information

If a product is highly involving, (72)_____________ processing of information occurs; get people to think about the subject. If a product is low involving, (73)_________________ processing of information occurs; get people to associate the product with something/somebody they already have a favorable attitude regarding (for example: Snoop Dogg).

CENTRAL 73. PERIPHERAL

INFORMATION PROCESSING

LEFT AND RIGHT BRAIN PROCESSING

LEFT AND RIGHT BRAIN PROCESSING

1. It's a useful interpretation 2. Cup example and early research

slow, analytical/rules, gets tired, reasons

fast, visual, music, creative

According to theory, the (74)_______________ brain is analytical and uses heuristics (rules).

According to theory, the (75)_______________ brain is fast and episodic (like a moving picture).

The (76)_____________ brain and the (77)_____________ brain work together to give more complete understanding.

(78)__________________ processing is the process of converting information into knowledge.

I am the right brain. I am creativity. A free spirit. I am passion. Yearning. Sensuality. I am the sound of roaring laughter. I am taste. The feeling of sand beneath bare feet. I am movement. Vivid colors. I am the urge to paint on an empty canvas. I am boundless imagination. Art Poetry. I see. I feel. I am everything I want to be.

I am the left brain. I am a scientist. A mathematician. I love the familiar. I categorize. I am accurate. Linear. Analytical. Strategic. I am practical. Always in control. A master of words and language. Realistic. I calculate equations and play with numbers. I am order. I am logic. I know exactly who I am.

ENCODING MESSAGES

Imagery - Episodic Verbal - Semantic

(79)____________________ is the process of converting information into knowledge.

(80)________________ occurs when the consumer remembers an ad without anything to jog the memory.

(81)___________________ occurs when a consumer is prompted by something that reminds him or her

TYPES OF MEMORY

1. Sensory (1/1,000 Sec.) 2. Short Term (16 Sec.) 3. Long Term (infinite)

(82)______________ stores and recalls encoded information.

Information that is rehearsed in (83)_______ term memory and put in (84)______ - term memory basically remains forever.

The learned values, beliefs, language, symbols, and patterns of behavior shared by people in society- passed on by generation to generation!

SUB-CULTURE (MINI-CULTURE)

A culture within a culture 2. Norms and mores to be emulated and followed.

America has (85)______________ sub-cultures.

1. Upper 2. Upper middle 3. Middle 4. Working 5. Lower

Social class is often measured by (86)___________________, (87)______________________, and (88)_____________________. Members of a (89)____________ _____________ tend to have similar interests, values, behaviors and wealth.

86. OCCUPATION 87. EDUCATION 88. INCOME 89. SOCIAL CLASS

REFERENCE GROUPS

Types of reference groups a. Associative b. Dis-associative 2. Spokespersons as influencers

(90)_____________________ for brands are seen as being like the reference group members because of unique behaviors such as a strong "work" ethic and outstanding performance.

Decision making Roles, Family life cycles

Decision making Roles

a. Initiator b. Influencers c. Decision maker d. Purchaser e. User

Autonomous decisions are carried out by one family member with (91)_____________ influence from others. For joint decisions, each family member has a different purchasing (92)__________ .

91. LITTLE 92. ROLE

young and married without children

young children, adolescents, young and married with children, middle aged married with children,

working/retired, middle aged married with no dependent children, retired couples

Business to business marketing is the marketing of goods and services to other businesses, governments, and institutions. It includes everything except direct sales to consumers.

business to business markets

commercial, extractor, transportation, telecommunication, federal government, state and local, military, trade

B2B marketing includes everything except direct sales to (1)___________________ . Globally, B2B is the (2)___________________ market by far.

CONSUMERS 2. LARGEST

B. B2B is 5 to 7 times larger than the B2C market.

C. B2B customers range from small businesses to giant global firms.

D. MSU Marketing is Rated #1 (Globally) in B2B Marketing!

A. Derived Demand:

Sales for business-to-business products depends most on the demand for products by consumers.

The purchase or consumption of products causes a stream of activities where goods and services are sold multiple times. This is called (3)___________________ ___________________.

Fluctuating Demand—The Accelerator Principle:

A small fluctuation in consumer demand has a large effect on business demand.

If there is a small increase in consumer demand, there is a (4)___________________ increase on business demand.

Examples of B2B Marketers

Companies nearly all B2B - Deloitte, McKinsey, Intel, Salesforce, Dow, etc

Companies like Deloitte, Intel, and Dow market nearly all of their products or services to other (5)_____________________.

BUSINESSES (OR COMPANIES)

Companies with B2C & B2B (as primary core (money stream))

Google, Whirlpool, Shorts, Microsoft, Facebook

While Google does sell products and services directly to end consumers, Google (6)____ are sold to businesses.

Types of B2B Markets.

A. Commercial. B. Extractor. C. Trade Industries. D. Institutions. E. Utilities. F. Transportation/Telecom. G. Government.

General Motors is a company that buys and sells in the (7)_____________________ market.

Michigan State University is an (8)_____________________ that provides outstanding education services to consumers like you.

Utility organizations like Consumers Energy (9)______________________ gas, electricity, and water.

Upstream and Downstream Value Chain Elements

society, value added interface, users, value added interface, providers, value added interface, distributors, value added interface, OEMs , value added interface, suppliers, value added interface, extractors, value added interface, enviornment

VALUE CHAIN DEFINED

"The linkage of actions performed by suppliers, producers, and channel members to create and deliver value that satisfies customers."

Everything in between the environment and (10)____________________ are the aspects that connect the environment with society.

An important part of these elements is the (11)______________________ between each member of the value chain. This is called the (12)____________--_____________ _____________________.

INTERFACE 12. VALUE ADDED INTERFACE

extractor: mining company (steel from ores), second tier supplier: upstream supplier (fasteners), first tier supplier: direct supplier (radiators), original equipment manufacturer: ford, chrysler, toyota, gm, nissan, honda (autos)

trade industry members: auto dealerships, consumers: auto purchaser, rental agencies, traveler

OEM's (Original Equipment Manufacturer's) like General Motors have a value linkage that goes to their (13)____________________, like car dealerships

(14)_______ are the centerpiece of upstream and downstream actions.

Companies must decide whether to supply products or services (15)____--____________ or buy them from other businesses.

(16)_______________________ is the purchase of projects from other companies.

(17)____________________ ______________ is used by organizations that want to obtain the lowest price rather than establish long-term relationships with suppliers

COMPETITIVE BIDDING

Online auctions match (18)____________ and (19)_______________ around the world.

18. BUYERS 19. SELLERS

Steps in the organizational buying process.

1. Problem recognition. 2. Need description. 3. Product specifications. 4. Supplier search. 5. Proposal solicitation. 6. Order routines. 7. Purchase and use. 8. Performance reviews.

The organizational buying process begins with (20)__________________ _____________________.

PROBLEM RECOGNITION

Relationships between Buyers and Marketers/sellers.

A. Courtship phase, B. Relationship-building phase, C. Partnership phase. D. Ethical considerations and confidentiality.

When purchasers express their desires to sellers, it is called the (21)__________________ _____________________.

COURTSHIP PHASE

When buyers and sellers work together for the first time, strengthening the bond between them, it is called the (22)_______________________--_________________ phase.

RELATIONSHIP-BUILDING

The partnership phase begins after numerous purchases have been completed satisfactorily and (23)__________--___________ agreements are reached.

Functions Involved in Business Purchases.

A. Purchasing Agents, B. Functional Managers, C. Buying Centers & Roles: 1. Gatekeepers, information seekers, advocated, linking pins, decision makers, users

Influences on B2B buying behavior:

A. Background of Buying Center Members. B. Information Sources. C. Time and Risk Factors. D. Company Factors. E. Joint Decisions and Conflict Resolution

control flow of outside information by screening commercial contacts

information seekers

locate data about products, competitors, and suppliers

provides group leadership support (or not support) specific, solutions and suppliers

establishes communication with functional areas

decision makers

have authority to make purchases

use the product, initiate purchasing changes and provide feedback

(26)__________________ ________________ are often very highly placed in organizations and have the authority to make purchases.

DECISION MAKERS

Marketing & Sales Leadership in B2B.

A. Relationship Symmetry. B. Salesperson as central force in large accounts

What causes satisfaction?

1. McDonald's Hamburgers 2. How to Cause Dissatisfaction

Meeting (1)__________________ causes satisfaction.

Customer Satisfaction Levels

Customer Perception/Satisfaction Level: Better than expected: delighted, as expected: satisfied, less than expected: unhappy

The benefits of customer satisfaction are - customers buy (2) _________, (3) don't _________ __________, show lower (4)____________ _____________ , great (5) _______ ___ _________, and increased (6) ___________________.

MORE 3. SHOP AROUND 4. PRICE SENSITIVITY 5. WORD OF MOUTH 6. LOYALTY

Satisfied customers

are less likely to shop, will tolerate price increases, tell others

satisfied customers

who complain may do so out of commitment, if recovery occurs, will be more loyal, speed of recovery, equity of solution

But all satisfied customers are not loyal

and all loyal customers are not satisfied

When something goes wrong, the marketer should (7)____________ ______________ with an (8)______________ solution.

QUICKLY RECOVER 8. EQUITABLE

LOYALTY PRODUCES STRONG BUSINESS PERFORMANCE

1. Loyalty Produces Sales 2. Loyalty lowers costs 3. Loyalty produces profit

(9)________________ percent of sales come from repeat purchase

It costs (10)___________________________ more to acquire a new customer than keep an existing customer.

Typically, a 5% increase in loyalty will (11)_______ the profit

LIFETIME VALUE OF A CUSTOMER

Purchase a new car every four years and influence one new buyer annually = $1 million in revenues and $100,000 in profits. Cadillac - Lexus Example Starbucks example -

Lifetime customer value is the amount of (12)________________ an organization could obtain over the course of a customer relationship

WHY CUSTOMERS LEAVE

10% prefer alternate product of service, 10% reason unrelated to business, 15% dissatisfied with a particular product or service, 65% don't like the way they were treated

Most customers that leave do not like the way they were (13)______________ . The best way to increase the value of a business is to develop a lasting base of (14)_________ customers.

TREATED 14. LOYAL

Satisfied employees create quality solutions & (15)_______________ customers, which leads to (16)____________ customers. The path to high customer (17)___________ (value) starts with satisfied employees. (18)_________________ equity is the value (profit) from loyal customers.

SATISFIED 16. LOYAL 17. EQUITY 18. CUSTOMER

Unhappy employees provide poor (19)_________________ which leads to unhappy customers, which leads to (20)____________ customers. Churning customers cause (21)_____ customer equity.

SOLUTIONS 20. UNHAPPY 21. LOW

CUSTOMER ACQUISITION & LOYALTY

a. Exodus Condition: low to high b. Complacent: low to high, low growth c. Churn: low to high, high cost d. Market Leadership:low to high

Low customer loyalty and high new customer acquisition is (22)_____________ cost, because it costs 5 to 7 times more to get a new customer than to keep one. A complacent business has (23)__________ growth because it isn't getting any new (24)_____________ Drucker says "The business of business is (25)_____________ & (26)______________ customers."

HIGH 23. LOW 24. CUSTOMERS 25. GETTING 26. KEEPING

1. Types of Quality

a. Static - Perfection (Meeting Expectations), Dynamic - Force of Change (Exceeding Expectations)

(27)_______________ quality is the preservation of patterns - continuous small improvements aimed at perfection on what already exists! (28)__________________ quality results from a change that makes an existing standard obsolete. (29)_________________ quality is about management. (30)________________ quality is about leadership.

27. STATIC 28. DYNAMIC 29. STATIC 30. DYNAMIC

Dynamic Quality

: Force of Change Ø something surprising.

According to an important study completed by MSU researchers the relationship between TQM (total quality management) and business performance has come under (31)______________ in recent years

QUALITY IS LIKE CONDITIONING OF AN ATHLETE

1. Satisfaction correlates with business performance 2. Loyalty highly correlates with business performance 3. Quality correlates with business performance, to a lower degree

Quality is a (32)_________________ but insufficient condition. (33)___________________ quality is the degree to which a product consistently does what it is supposed to do. (34)__________________ quality means that the product does what the customer wants. The Deming Prize and the Malcolm Baldrige National Award are two important (35)______________ awards (primarily for objective quality).

. NECESSARY 33. OBJECTIVE 34. SUBJECTIVE 35. QUALITY

Value to the customer (thinking)

Quality Value in $ Terms, Easy to buy and use, apropriate value for price, I'm smart

Emotional Connection to the brand (feeling)

Be core to your buyers competitive strategy, brand positioned in use situations, customer empathy, I feel great

Non- Switching Programs (Intentions)

Integrate with Purchaser's Supply Chain, Switching Impediments, Loyalty Programs, After sale responsiveness: I have no reason to switch

The three dimensions described in the diagram are: 1. value to the customer - (36)______________; 2. emotional commitment to the brand - (37)________________, and 3. non-switching programs - (38)________________ . They match the three components of consumers' (39)______________________ .

36. THINKING 37. FEELING 38. INTENTION 39. ATTITUDES

a. IKEA Example b. Ritz Carlton Example c. Speedway Example

A company needs to be outstanding in at least (40)______________ of the three dimensions.

There is (1)____ mass market. The person who is described as the average person does (2)______ exist and does (3)______ represent any real consumer.

NO 2. NOT 3. NOT

Market segments occur by dividing (4)__________________________ customers into (5)_______________________ sub-sets (groups)

HETEROGENEOUS 5. HOMOGENEOUS

A (6)_________________ is when one concept defines another in the same way; like talking about (7)_______________ and market segments.

TAUTOLOGY 7. PRODUCTS

Gender and age are (8)__________________ because they vary across consumers. Two categories of gender, (9)________ and (10)___________ , don't vary.

VARIABLES 9. MALE 10. FEMALE

Three categories of age, 2 categories of gender and 3 categories of income would yield (11)____ target market segments.

Examples of market segmentation

1. Alloy wheels example. 2. Pizza sauce example. 3. Children's World example. 4 International Logistics Company (ILC) example.

Executives from Children's World used census data to determine which (12)____________ give a useful understanding of the market. Segmentation is an (13)______ and a (14)______________ Children's World executives selected demographic variables that have to do with (15)______ and (16)______ people buy day-care services. The following are the three marketing strategy steps in order 1. (17)____________________ 2. (18) ____________ _________________ and 3. (19)___________________

. VARIABLES 13. ART 14. SCIENCE 15. HOW 16. WHY 17. SEGMENTATION 18. TARGET MARK

WHY SEGMENT - BENEFITS OF SEGMENTATION

1. Better understand customer needs and wants. 2. Comprehend competition. 3. Identify the size and potential of the segment.

Competitors don't compete in total markets; they compete by (each) (20)____________ ______________.

20. MARKET SEGMENT

EFFECTIVE MARKET SEGMENTATION

Members should have: • Similar - needs, wants and preferences. • Information gathering and media usage. • Shopping and buying patterns. And... • The segment should be large enough. • Information must be available.

SEGMENTATION VARIABLES (Consumer Segmentation)

a.Geographic b.Demographic c.Diversity d.Psychographic and Lifestyle e.Behavioristic f. Benefits

The Pure Michigan campaign is an example of (21)___________________ segmentation because it targets people in Chicago. Gender, family life cycle, age and income are (22)____________________ variables. Usage rates, readiness, loyalty, and shopping habits are examples of (23)_______________________ variables.

21. GEOGRAPHIC 22. DEMOGRAPHIC 23. BEHAVIORISTIC

B to B SEGMENTATION VARIABLES

1. Company demographics. 2. Geographic scope. 3. Buying approach. 4. Product technology.

Industry size and ownership are company (24)_______________________. Local and regional are two (25)___________________ __________ variables. Preferred partnering arrangement is a (26)____________ ________________ segmentation variable

24. DEMOGRAPHICS 25. GEOGRAPHIC SCOPE 26. BUYING APPROACH

SELECTING TARGET MARKETS

1. Size and Growth. 2. Competitive Factors. 3. Cost and efficiency. 4. Segment leadership 5. Compatibility

The market segment profile compiles information about a market segment and the amount of (27)_____________________ it represents. The (28)____________ ________________ that we sell to are the people we hang out with. They have a lot do with who (29)____ are and what (30)____ represent.

OPPORTUNITY 28. MARKET SEGMENTS 29. WE 30. WE

FOCUSING RESOURCES

Undifferentiated - Shotgun • Differentiated -- Pistol • Concentrated - Rifle

There is the same amount of lead and power in one shotgun shell or 4 pistol shells or one high powered rifle shell, so we have the same (31)________________ base for each strategy but it's targeted (32)______________________ . The three target market strategies are (33)______________________________ (34)___________________________ and (35)______________________.

31. RESOURCE 32. DIFFERENTLY 33. UNDIFFERENTIATED 34. DIFFERENTIATED 35. CONCENTRATED

a niche is a very small market that most companies ignore because they do not perceive adequate opportunity

Mass customization

serves one or several markets while efficiently responding to the needs and desires of individual consumers

Mass customization starts by identifying a (36)____________ ____________ and developing a (37)____________ so at the last moment the product can be adjusted to the target market (to individual customers within the target).

36. TARGET MARKET 37. SYSTEM

The process of creating in the minds of consumers an image, reputation or perception of a company or its products relative to the competition!

HIGH VALUE POSITIONING

1. Value in Exchange 2. Value in Use

Value in use positioning depicts people (38)__________ the good or service. It increases the perceived (39)__________. What establishes value for the consumer? (40)__________ and (41)___________. Positioning is relative to the (42)_________________ !

38. USING 39. VALUE 40. BENEFITS 41. COSTS 42. COMPETITION

POSITIOING - THE WAY WE ARE PERCIEVED

Talk Show Project

UNDERSTANDING & DIAGRAMMING PERCEPTIONS

1. Object to Object 2. Object to Attribute 3. Object to Self

An (43)_____________ is generally a brand, a company name or whatever is being marketed. On a positioning diagram, (44)____________ to (45)________ indicates where consumers are placed relative to objects concerning their use preferences.

43. OBJECT 44. OBJECT 45. SELF

The (46)__________ ________ is represented by positioning that makes sense to customers in terms of price and value.

Value destructive strategies

a. High price - low value added. b. High value added - low price.

High price - low value-added asks customers to (47)__________________ the company - owners! High value-added - low price asks (48)_______________________ to subsidize customers. High value-added - low price is often called buying (49)_____________ __________ .

47. SUBSIDIZE 48. SHAREHOLDERS 49. MARKET SHARE

FUNDAMENTAL WAYS TO POSITION A PRODUCT

1. Attribute 2. Price / Quality 3. Time of Use or Application 4. Product User or Spokesperson 5. With Respect to Competitor 6. Product Class or Category 7. By Country of Origin

(50)______________________ is positioned by safety. (51)_____________ is positioned by price and quality. (52)______ ________ is positioned by time of use and extreme sports. (53)__________ ______________ is positioned by spokesperson. (54)________ is positioned relative to a competitor. (Remember all positioning is in relationship to the competition.)

50. BRIDGESTONE 51. WALMART 52. RED BULL 53. UNDER ARMOUR 54. AUDI

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