BUAD yr 307 Test 2 Study Guide Answers
1. Distinguish between marketing research and a marketing information system. Marketing research: systemic process for uncovering key knowledge needed for a specific marketing management decision. Provided based on a special request. Marketing information system: people and processes that provide needed information to marketing decision makers on an ongoing basis. Once designed, automatically provided. 2. Distinguish between primary and secondary data. Primary data: facts and figures newly collected for the project Secondary data: facts and figures that have already been recorded before the project at hand. 3. Distinguish among the different types of formal basic research. For which type of research purpose is each best suited? Direct observation: watching how people actually behave. To find out actual behavior, not just how they say they behave Experimentation: obtaining data by manipulating factors under tightly controlled conditions to test cause and effect (eg. of different marketing mix elements) Analysis of purchase data: Survey research Focus groups: to find out how consumers feel, why certain opinions are held, plan and design of further research and plan and design of marketing mix elements. Individual interviews: single researcher asking questions of one respondent. To get very direct input and to connect directly with the thoughts of consumers. 4. Distinguish between probability and non-probability samples. Probability samples: participants are randomly selected from a population Non-probability samples: participants are not randomly selected 5. Describe 2 basic ways for identifying consumer preferences (concept tests and conjoint analysis). You should be able to describe the method and how it can help marketers. Concept tests: presents product idea and then, through a survey or interview, gauges level of interest. Useful for judging how minor modifications can change consumer perceptions. Conjoint analysis: respondents are asked to provide preference judgments for different product attributes then mathematical analysis is used to "tease out" the individual's underlying value system. Can determine the importance of different product attributes, aide in the selection of target markets and estimate the relative value of a product in the marketplace
6. What is a focus group and how is it used? Focus group: informal session where small group of past, present or prospective consumers answer questions on their opinions of the firm's products, how they use these products and needs they have which the product doesn't address Used to gain insights on how consumers feel, why certain opinions are held, plan and design of further research and plan and design of marketing mix elements 7. Describe the market research process. Define the problem: set research objectives and identify possible marketing actions Develop the research plan: identify data needed for marketing actions and determine how to collect the data Collect relevant info: secondary and primary data Deliver the final report: analyze data, present findings and make recommendations 8. Describe the 4 broad influences (marketing mix influences, psychological influences, situational influences and socio-cultural influences) on consumer buying behavior. Situational influences: purchase task (reason for engaging in decision), social surroundings (other people present), physical surroundings (store dcor, music, crowding), temporal effects (time of day and amount of time available) and antecedent states (mood, amount of cash on hand). Marketing mix influences: price, product, place, promotion Psychological influences: motivation, personality, perception, learning, values, beliefs and attitudes, lifestyle Socio-cultural influences: personal influence (word of mouth and opinion leaders), reference groups, family influence (consumer socialization, family decision making and family life cycle) and culture and subculture 9. Name and describe the psychological influences on consumer behavior. Motivation: what stimulates you to buy the product Personality: whether the consumer is aggressive (tends to prefer something different) or submissive (tends more towards mass market brands) Perception: selective perception (only some of the information is processed), selective exposure (sensitivity towards certain products when there is a need for them), selective retention (only some of the information is remembered) and selective comprehension (seeing things in a way consistent with your attitudes and beliefs), perceived risk Learning: behavioral learning (learning through developing automatic responses) and cognitive learning (learning through association) Attitudes and beliefs: learned predisposition to respond in a consistently favorable or unfavorable way. Perception of how a product or brand performs on different attributes Lifestyle: makes a consumer more or less likely to buy something. Age, occupation, experiences, stage in life etc.
10. How can a brand overcome negative beliefs and attitudes? Change beliefs about the extent to which a brand has certain attributes Change the perceived importance of attributes Adding new attributes to the product 11. How does subliminal advertising impact buyers? Controlling people's buying habits through messages without them knowing about it 12. Describe 5 socio-cultural influences on consumer behavior. Personal influence: word-of-mouth and opinion leaders Reference groups: belonging to certain groups can influence purchase decisions Family: consumer socialization (preference towards certain brands from a young age etc.), family decision making (who makes what decisions) and family life cycle (which stage families are at, singles vs. couples etc.) Social class: where you live, brought-up, occupation, interests etc. Culture and subculture: values, ideas and attitudes that are learned and shared among the members of a group 13. Project how marketing strategies can be influenced by level of learning involvement. Low learning involvement: usually lower-value goods. Marketing strategies should help facilitate quick decision making. High learning involvement: usually higher-value goods or services consumers which take a longer time to make purchase decisions on. Marketing strategies should focus on making as much information available as possible. 14. What are the different steps of the consumer purchase decision process? How do the steps impact the development of a marketing strategy? Problem or opportunity recognition: companies can market their products as solutions to problems Information search: how companies can make themselves more accessible Evaluation of alternatives: companies can position information in certain ways to make their products seem more desirable Purchase decision and act: companies should make this as simple as possible Post-purchase evaluation: minimize consumers thinking back on their purchases and regretting, make them feel comfortable about their purchase 15. What is VALS and how is it used? Psychographic system used to identify consumer motivations for buying and using products and services. Divides consumers into groups based on motivation for buying and having goods and services and their resources available.
16. In what way is the business market different from the consumer market? Business market markets its products to companies and governments but not to profit organizations. 17. Describe an organizational buying centre and contrast that with a purchasing department. Organizational buying centre: several people who share common goals, risks and knowledge participate in the buying process. Includes users, influencers, buyers, deciders and gatekeepers. Purchasing department: subset of buying centre. Only includes people who have formal authority and responsibility to select the supplier and negotiate the terms of the contract. 18. Distinguish between the 3 types of buying situations (new task, straight rebuy, modified rebuy). New task: first-time buyer of product or service requiring considerable effort on the decision maker's part Straight rebuy: routine, low-involvement purchases requiring little consideration Modified rebuy: same product but new supplier or different product but same supplier. Usually requires enlarging buyer center to include people outside purchasing department. 19. Distinguish between derived demand and inelastic demand. Derived demand: demand for a business product relies on the demand for a consumer product Inelastic demand: price increase has minor impact on product's final cost. Product usually has no close substitutes. 20. What is a market chain? Series of value-adding activities, linked together to produce goods and services to fulfill client needs. 21. Compare and contrast four common bases for labeling a business market segment. *IGNORE. YAY!!!! 22. Describe three issues supporting the idea that dealing with business buyers is more complex than dealing with consumer buyers. Different buying processes exist that affect business purchases (different departments evaluate different aspects of the product, often the criteria are more stringent) Organizational buying in business buyers can be handled by committees, causing purchase delay. Multiple vendors can be used to protect customers from shortages. Reduces reliance on any one supplier.
23. Evaluate whether a market segment is viable given the five criteria covered in class. Market segments must be: differentiable, identifiable, accessible, responsive and significant. 24. Compare and contrast six common bases for labeling a consumer market segment (geographic, demographic, psychographic, behavioral, profitability and benefits sought). Benefits sought: based on attributes customers are seeking from a particular product class. Geographic: market is divided in geographic units based on physical proximity Demographic: divides market based on personal tangible variables such as race and age. Psychographic: based on how people think, feel and behave Behavioral: based on consumers' uses, knowledge and attitudes toward product Profitability: whether customers are highly profitable, moderately profitable, modestly unprofitable or make the company incur heavy losses. 25. What is the difference between a product benefit and a product feature? Product benefit: focuses on the consumer and are the satisfying capabilities of the product Product feature: focuses on the product and are product characteristics or properties 26. Describe the relationship between positioning, targeting and segmenting. Why or why not segment? Segment the market then choose a target segment then position the product in relation to competitors Segment so it can respond more effectively to the wants of groups of potential buyers and thus increase its sales and profits 27. Distinguish among differentiated, concentrated and undifferentiated targeting approaches. Undifferentiated approach: one-size-fits-all. Same strategy is used to market products to all segments Concentrated approach: a single segment is identified and targeted by marketers who then focus all their efforts on selling their product to this group of customers Differentiated approach: multiple segments are identified and marketers use different methods to market products (which may or may not be the same) to the different groups of consumers 28. Define positioning, how positioning is used by marketers, and who ultimately determines a product's position in the market. Positioning: how the marketing mix is used to present the product in relation to competitive products in the mind of the consumer.
Used to highlight the product's unique characteristics and how these will best serve the needs of the consumer Marketing department ultimately determines product's position: decide what they want to emphasize and use as the product's selling point
29. What is a positioning map and how is it used? Visually plot how various brands stand in relation to one another. Based on important product attributes or on overall similarity or dissimilarities between products Used to test where unmet customer needs potentially exist, identify where competitors might be vulnerable, and gain insights on how an under-performing product might be repositioned 30. What does competition based positioning emphasize? Emphasizes the customer's perception of a product in relation to its competitors