Marketing Management and Consumer Behavior
Chapter 1.1
Terms
Marketing: The identification and meeting of individual and social needs in a way that harmonizes with the goals of the organization.
Marketing Management: The art and science of choosing target markets and getting, retaining, and growing customers by delivering superior value.
Social Marketing: The role marketing plays in society (e.g., delivering a higher standard of living). It is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.
Chapter 3
Perception
Perception: The process of selecting, organizing, and interpreting information to create a meaningful picture of the world.
Selective Attention: The process of focusing on specific environmental stimuli while ignoring others (e.g., things they need, things they anticipate, large deviations).
Subliminal Perception: Messages that consumers are not consciously aware of but that affect their behavior.
Selective Distortion: The tendency to interpret information to fit our preconceptions.
Short-Term Memory: The capacity to keep a limited amount of information in mind for a short time.
Long-Term Memory: The capacity to store information indefinitely, or even permanently.
- Episodic Memory: Events
- Semantic Memory: Facts
- Procedural Memory: Performance
Brand Associations: All thoughts, feelings, perceptions, images, experiences, beliefs, and attitudes attributed to the brand.
Expectancy-Value Model: The process by which people evaluate products and services by combining their assessments according to the weighted importance of those assessments.
Elaboration Likelihood Model: A description of how consumers make evaluations in both low- and high-involvement circumstances.
Chapter 4: Business Markets
Business Markets: All organizations that acquire goods and services used in producing other products or services that are sold, rented, or supplied to others.
Product-Value Analysis: Assessing a product’s value by examining how components or processes can be modified to reduce costs without adversely affecting product performance.
Selling is not the most important part of marketing—only the tip of the iceberg.
Terms
Corporate Credibility: Belief in a firm’s ability to design and deliver satisfaction.
Corporate Expertise: A company’s ability to make and sell products/services.
Corporate Trustworthiness: A company seen as honest, dependable, and sensitive.
Corporate Likeability: A company seen as likeable, attractive, prestigious, and dynamic.
Institutional Market: Schools, hospitals, nursing homes, prisons, and other entities that provide goods and services to people in their care.
Chapter 5: Data Collection & Analysis
Secondary Data: Existing information collected for another purpose.
Primary Data: Information gathered for a specific purpose or project.
Observational Data: Data obtained by unobtrusively observing customers’ shopping or consumption habits.
Ethnographic Research: An observational research approach using concepts and tools from anthropology and other social sciences to provide a deep cultural understanding of how people live and work.
Focus Group: A small group of people selected based on specific demographic, psychographic, or other considerations, brought together to discuss various topics of interest.
Survey Research: Assesses people’s knowledge.
Questionnaire: A set of questions presented to respondents to collect primary data.
Word Association: Asking respondents what words come to mind when they hear the brand name.
Projective Techniques: Presenting consumers with an incomplete or ambiguous stimulus (e.g., word association or choice ordering) to understand their thought processes better.
Visualization: Gaining insight into people’s perceptions by asking them to create a collage or drawing.
Brand Personification: Determining consumers’ brand associations by asking them to equate the brand to a person, animal, or object.
Laddering: A series of increasingly specific questions that can reveal consumers’ motivations and deeper goals.
Sampling Unit: The respondents who should be surveyed to glean information about a specific market, product, or behavior.
Sample Size: The number of people surveyed to provide credible, extrapolatable results to the entire target population.
Sampling Procedure: How survey respondents are chosen to make the sample representative of the total target population.
Market Demand: The total volume of a product that a defined customer group would buy in a defined geographic area, time period, marketing environment, and under a defined marketing program.
Company Demand: The company’s estimated share of market demand in a given time period.
Market Forecast: The market demand projected for a future time period.
Additional Terms
Company Sales Forecast: The expected level of company sales based on market trends and company marketing efforts.
Market Potential: The maximum sales achievable in a specific market in a given time period.
Company Sales Potential: The upper limit of sales a company can achieve in a specific market in a given time period.
Marketing Dashboards: A structured way to disseminate insights from marketing metrics and marketing mix modeling.
Marketing Mix Models: Analyzing data from multiple sources to understand the effects of specific marketing activities.
Chapter 6: Market Segmentation & Targeting
Mass Marketing: Addressing the entire market with a single offering.
Mass Customization: Using mass production techniques to produce offerings customized to individual customer needs.
Strategic Targeting: Focusing on customers whose needs the company can fulfill better than the competition.
Target Compatibility: Reflects the company’s ability to fulfill target customer needs.
Core Competency: Expertise in an area that gives a company a competitive advantage.
Customer Revenue: Money received from customers for the right to own or use the company’s offering.
Target Attractiveness: A market segment’s ability to create value for the company.
Social Value: Reflects the influence of target customers on other potential buyers.
Scale Value: Denotes benefits derived from the scale of the company’s operations.
Information Value: The worth of information that customers provide.
Tactical Targeting: Identifying the means to reach strategically viable customers to communicate and deliver the company’s offering. Two main principles: effectiveness (reaching all strategically viable customers) and cost efficiency (targeting only those customers).
Customer Profile: Observable demographic, geographic, behavioral, and psychographic customer descriptors.
Personas: Detailed profiles of one or more target consumers depicting the typical consumer in the target market.
Product Specialization: A firm sells a certain product to several different market segments.
Market Specialization: A firm concentrates on many needs of a particular customer group.
Market Segmentation: Dividing a consumer group into subsets with similar needs and/or profile characteristics.
- Demographic Segmentation: Age, family size, social class, gender, income, occupation, race, religion, nationality.
- Geographic Segmentation: Dividing a consumer group into subsets based on location.
- Behavioral Segmentation: Dividing target customers into groups based on their actions.
- Psychographic Segmentation: Dividing target customers into groups based on psychological traits, lifestyles, or values.
Chapter 7: Customer Value & Positioning
Total Customer Benefit: The perceived functional, psychological, and monetary value customers derive from a market offering.
Total Customer Cost: The perceived functional, psychological, and monetary costs customers incur to evaluate, obtain, use, and dispose of an offering.
Customer Value Proposition: The value the company aims to create for its target customers.
Customer Value Analysis: Assessing how consumers view the company’s strengths and weaknesses relative to the competition.
Positioning: Designing a company’s offering and image to occupy a distinctive place in the target market’s minds.
Frame of Reference: A benchmark against which customers can evaluate the benefits of a company’s offering.
Points of Difference (PODs): Attributes or benefits that differentiate the company’s offering from the competition.
Points of Parity (POPs): Attributes or benefits that are not unique and are shared with other brands.
Straddle: Two frames of reference with some PODs and some POPs.
Perceptual Maps: A visual representation of consumer perceptions and preferences.
Competitive Advantage: A company’s ability to create market value in a way competitors cannot match.
Positioning Statement: A summary of a product or brand’s strategy that aims to guide the company’s actions.
Additional Concepts
Reference Groups: All groups that directly or indirectly affect an individual’s beliefs, decisions, and behavior.
Opinion Leader/Influencer: A person who offers informal advice or information on how best to use a specific product or product category.
Personality: Distinguishing human psychological traits that lead to relatively consistent responses to environmental stimuli, including buying behavior.
Purpose of Marketing:
- Big ‘M’ Marketing (Strategy): Value creation for a particular customer (e.g., price, convenience, service, specialization).
- Little ‘m’ marketing (Tactics): Brand marketing (awareness, consideration) and performance marketing (conversion).
Customer Lifetime Value (CLV/CLTV): Average value per customer multiplied by the length of the relationship.
CLV Formula: Margin x (Retention Rate / 1 + Discount Rate – Retention Rate) or Margin / 1
Consumer Characteristics: Cultural, social, and personal factors influence buying behavior.
- Cultural: Behaviors, beliefs, values, symbols (e.g., growing up in a different country).
- Social: Reference groups (influencers, opinion leaders, dissociative groups), family, social classes (A-B-C-D-E).
- Personal Factors: Demographics and psychographics (age, life stage, economic status, lifestyle), personality and self-concept (actual self, ideal self, others’ perceptions), values and lifestyle (pattern of living, activities, interests, opinions).
Marketing Tactics: Product, service, brand, price, incentives, communication, distribution.
Market Context: Economic, technological, legal, political, sociocultural, physical factors.
Consumer Psychology: Motivation, perception, emotions, memory.
Buying Decision Process: Problem recognition, information search, evaluation of alternatives, purchase decision (product choice, brand choice, store choice, purchase quantity, purchase timing, purchase method), post-purchase behavior (satisfaction, use and disposal, repurchase).
Squatty Potty Case Study
The Squatty Potty case highlights the success of a viral marketing campaign leveraging humor and education to promote a product’s health benefits. Key takeaways include the impact of viral videos on sales, the expansion of the target audience, and the importance of data analytics in assessing campaign performance. The case also demonstrates the effective application of marketing frameworks like the 4Ps and 5Cs.