marketing midterm

• Consumer behavior - describes how consumersmake purchase decisions and how they use anddispose of the purchased goods or services.
• Consumer Decision-Making Process

  Information search

  Evaluation of alternatives

  Purchase

  Postpurchase behavior.

  Need recognition
• need recognition - Result of an imbalance between actual and desired states.
• want -The way a consumer goes about addressing a need.
• stimulus -Any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing.
• Internal stimuli - are occurrences we experience, such as hunger, thirst
• External stimuli - are influences from an outside source.
• Information Search -After recognizing a need or want, consumers search for information about the variousalternatives available to satisfy it.
• • Personal experiences -trying or observing a new product
• Personal sources - family, friends, acquaintances, and coworkerswho may recommend a product or service
• Public sources - Consumer Reports, Underwriters Laboratories,and other rating organizations that comment onproducts and services
• Evaluation of Alternatives and Purchase -After getting information andconstructing an evoked set of alternativeproducts, the consumer is ready to make adecision.
• Research has found that up to 68% of the items bought duringmajor shopping trips are planned and 54% of the items during minorshopping trips are unplanned.
• All consumer buying decisions generallyfalls along this three broad categories:

  Extensive decision making

  Limited decision making

  Routine response behavior
• Goods and services in these three categories can best be described in terms of fivefactors:

  Number of alternatives considered.

  Degree of information search

  Cost of the good or service

  Length of time to make a decision

  Level of consumer involvement
• Involvement is the amount of time and effort a buyer invests inthe search, evaluation, and decision processes of consumerbehavior
• Types of Consumer Buying Decisions -

  Extensive decision making

  Limited decision making

  Routine response behavior
• Routine Response Behavior - The type of decision making thatconsumers use to purchase aproduct they purchase regularly.
• Limited decision - making typically occurswhen a consumer has previous productexperience but is unfamiliar with thecurrent brands available
• Extensive decision - making typicallyoccurs when buying an unfamiliar,expensive product or an infrequentlybought item
• The level of involvement in the purchase depends on thefollowing five factors:

  Social visibility

  Situation

  Perceived risk of negative consequences

  Interest

  Previous experience
• Sales promotion is marketingcommunication activities in which ashort-term incentive motivates consumersor members of the distribution channel topurchase a good or service immediately
• Advertising offers the consumer a reason to buy.
• Sales Promotion offers an incentive to buy
• Consumer Sales Promotion is targeted to the ultimate consumer market
• Trade Sales Promotion is directed to members of the marketing channel, suchas wholesalers and retailers
• Sales promotion usually has more effect on behavior than on attitudes. Immediate purchase is the goal of sales promotion, regardless of the form it takes.
• A coupon is a certificate that entitles consumers to an immediate price reduction when they buy the product.
• A premium is an extra item/service offered to the consumer, usually in exchange for some proof that the promoted product has beenpurchased
• A premium is an extra item/service offered to the consumer, usually in exchange for some proof that the promoted product has been purchased
• Loyalty marketing programs, or frequent buyer programs, reward loyal consumers for making multiple purchases.
• Contests are promotions in which participants use some skill or ability to compete for prizes. A consumer contest usually requires entrants to answer questions, complete sentences, or write a paragraph about the product and submit proof of purchase. Winning a sweepstakes, on the other hand, depends on chance or luck, andparticipation is usually free.
• Sampling enables customers to try a product risk-free. Sampling can increase retail sales by more than 40%
• Point-of-Purchase (P-O-P) Promotion includes any promotional display set up at the retailer’s location to build traffic, advertise the product, or induce impulse buying
• Whereas consumer promotions pull a product through the channel by creating demand, trade promotions push a product through the distribution channel.
• Trade allowances: A trade allowance is a price reduction offered by manufacturers to intermediaries such as wholesalers and retailers. The price reduction or rebate is given in exchange for doing something specific, such as allocating space for a new product or buying something during special periods
• Intermediaries receive push money as a bonus for pushing the manufacturer’s brand through the distribution channel. Often the push money is directed toward a retailer’s salespeople.
• Sometimes a manufacturer will train an intermediary’s personnel if the product is rather complex—as frequently occurs in the computer and telecommunication industries
• Often a manufacturer offers retailers free merchandise instead of quantity discounts.
• Manufacturers can also arrange with retailers to perform an in-store demonstration