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MKT400 Midterm Notes.docx

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Department
Marketing
Course
MKT 400
Professor
Melanie Dempsey
Semester
Fall

Description
MKT400 Midterm Notes 10/18/2012 8:38:00 AM Midterm Notes Chapter 1, 4, 6, 11, 14, 16 Week 2: Demographics and Lifestyles – Chapter 6, 14 Chapter 6 – Personality and Lifestyles Personality  Personality: refers to a person‟s unique psychological makeup and how it consistently influences the way he or she responds to the environment Consumer Behaviour on the Couch: Freudian Theory  Freud developed the idea that much of human behaviour stems from a fundamental conflict between a person‟s desire to gratify his or her physical needs and the necessity to function as a responsible member of society  Freudian Systems o Id: part of mind that is entirely oriented toward immediate gratification (“party animal” of the mind)  Id is selfish and illogical, directs psychic energy toward pleasurable acts without regards to consequence o Pleasure principle: behaviour is guided by the primary desire to maximize pleasure and avoid pain o Superego: counterweigh to the id, essentially a person‟s conscience  Internalizes society‟s rules and works to prevent the id from seeking selfish gratification o Ego: the system that mediates between the id and superego  Tries to fight opposing sides according to the reality principle Motivational Research  Motivational research: approach largely based on psychoanalytic interpretations, with a heavy emphasis on unconscious motives o Basic assumption is that socially unacceptable needs are channeled into acceptable outlets  Motivational research relies on in-depth interviews, using few consumers and probes deeply into each person‟s purchase motivations  Motivational research has great appeal to at least some marketers for several reasons, some of which are: o Cost efficiency: motivational research tends to be less expensive than large scale, quantitative surveys because interviewing and data-processing costs are minimal o Providing insights: knowledge derived from motivational research can possibly help to develop marketing communications that appeal to deep-seated needs and thus provide a more powerful hook to relate a product to consumers o Intuitive sense: some of the findings seem intuitively plausible after the fact Neo-Freudian Theories  Karen Horney: proposed that people can be described as moving toward others (compliant), away from others (detached), or against others (aggressive). Indicates that each type prefers different products  Carl Jung: developed psychology, which emphasized both the individual‟s development as a creative person (his/her future) and his or her individual/racial history in the formation of personality o Believed people shaped by cumulative experiences of past generations o Collective unconscious: a storehouse of memories inherited from our ancestral past o Archetypes: universally shared ideas and behaviour patterns Trait Theory  Traits: identifiable characteristics that define a person  Some traits include: o Innovativeness (degree which a person likes to try new things) o Materialism (the amount of emphasis placed on acquiring and owning products) o Self-consciousness (the degree to which a person deliberately monitors and controls the image of the self that is portrayed to others) o Need for cognition – (degree to which a person likes to think about things, and by extension, to expend the necessary effort to process brand information)  Idiocentrics – (having an individualist orientation)  Allocentrics – (having a group orientation)  Some differences between these two personalities include o Contentment o Health consciousness o Food preparation o Workaholics o Travel and entertainment  Problems with Trait Theory in Consumer Research o Marketing researchers simply have not been able to predict CB on the basis of measured behaviour o Some explanations have been offered:  Many of the scales are not sufficiently valid or reliable  Personality tests are often developed for specific populations  The tests often are not administered under the appropriate conditions  The researchers often make changes in the instruments to adapt them to their own situations, in the process deleting or adding items and renaming variables  Many traits scales are intended to measure gross, overall tendencies (such as emotional stability or introversion) Brand Personality  Brand personality: the set of traits people attribute to a product as if it were a person  Brand equity: refers to the extent to which a consumer‟s hold strong, favourable, and unique associations with a brand in memory – and the extent in which they are willing to pay more for a branded version over a non-branded (generic version)  Some personality dimensions that can be used to compare and contrast the perceived characteristics of brands in various product categories include the following: o Old fashioned, wholesome, traditional o Surprising, lively, “with it” o Serious, intelligent, efficient o Glamorous, romantic, sexy o Rugged, outdoorsy, tough, athletic  Animism: the practices found in many cultures whereby inanimate objects are given qualities to somehow make them alive  Two types of animism can be identified to describe the extent to which human qualities are attributed to a product: o Level 1: object is believed to be possessed by the soul of the being – brands my strongly associate with a loved one, alive or deceased o Level 2: objects are anthromorphized – given human characteristics  Pillsbury doughboy, Michelin Man Personality of Positioning Lifestyle and Psychographics Lifestyles: Who we are, What we Do  Traditional societies, consumption, options are largely dictated by class, caste, village or family  Modern society, people are more free to select the set of products, services, and activities that defines them and in turn to create a social identity that can be communicated to others  Lifestyles: refers to pattern of consumption reflecting of how he or she spends time/money  A lifestyle marketing perspective recognizes that people sort themselves into groups on the basis of the things they like to do, how they like to spend their leisure time, and how they spend to spend their disposable income  Lifestyle As Group Identities o Lifestyle is more than the allocation of discretionary income, it is a statement about who we are in society and who we are not o Self-definitions of members are derived from the common symbol system to which the group is dedicated o Such self-definitions have been described by a number of terms including: lifestyle, taste public, consumer group, symbolic community, and status culture  Important part of lifestyle marketing is to identify the SET of products and services that seems to be linked to consumers‟ minds to a specific lifestyle  Co-branding strategies  Product complementarity: when the symbolic meanings of different products are related to each other o These sets of products, termed “consumption constellations”, are used by consumers to define, communicate and perform social roles Psychographics  Psychographics: involves the “use of psychological, sociological, and anthropological factors to determine how the market is segmented by the propensity of groups with the market – and their reasons – to make a particular decision about a product, person, ideology, or otherwise hold an attitude or use a medium”  Roots of Psychographics o Developed to address shortcomings of motivational and quantitative survey research o Demographics allows us to describe WHO buys, but psychographics allows us to understand WHY they buy Conducting a Psychographic Analysis  Studies can take several forms o A lifestyle profiled that looks for items that differentiate between users and non-users of a product o A product-specific profile that identifies a target group and then profiles these consumers on product-relevant dimensions o A general lifestyle segmentation, where the respondents in a large sample are placed into homogenous groups based on similarities in their overall preferences o A product-specific segmentation, where questions used in a general approach are tailored to a product category AIOs  AIOs: three categories of variables – activities, interests, and opinions  20/80 rule: only 20% of products users account for 80% of volume sold Uses of Psychographic Segmentation  Psychographic segmentation can be applied in a variety of ways o To define a target market o To create a new view of the market o To position the product o To better communicate product attributes o To develop overall strategy o To market social and political issues VALS  Most well-known and widely used segmentation system is VALS (Values and Lifestyles)  Used by over 200 corporations and ad agencies  VALS divide people into 8 groups such as: income, education, energy levels, and eagerness to buy  Groups are arranged by vertically by resources and horizontally by self-orientation  Top group called INNOVATORS; successful consumers with many resources  Next three groups also have sufficient resources but differ in outlooks on life o “thinkers” are satisfied, reflective and comfortable, tend to be practical and value functionality o “achievers” are career-oriented and prefer predictability over risk of self-discovery o “experiencers” are impulsive and young and enjoy offbeat or risky experiences  Next Three groups have fewer resources o “Believers” have strong principles and favour proven brands o “Strivers” like achievers with fewer resources. Very concerned with approval of others o “Makers” are action-oriented and tend to focus their energies on self-sufficiency  Finally group with fewest resources o “Survivors” are at bottom of ladder. Most concerned with meeting the needs of the moment Geodemography  Geodemography: refers to analytical techniques that combine data on consumer expenditures and other socioeconomic factors with geographic info about the areas in which people live to identify consumers who share common consumption patterns Food Cultures  Foot culture: a pattern of food and beverage consumption that reflects the values of a social group Behaviourial Targeting  Behavioural targeting: where e-commerce marketers serve up customized ads on websites or cable television stations based on customer‟s prior activity Chapter 14: Age Subcultures Subcultures, Microcultures, and Consumer Identity  Subculture: a group whose members share beliefs and common experiences that set them apart from others  Subcultures influence our everyday experience and consumption preferences  Microcultures: based on aesthetic and lifestyle preference o i.e. Fiero enthusiasts, Star Trek, The Matrix, Star Wars etc. Age and Consumer Identity  Gen Y (younger than 25), young professionals/DINKs (double income, no kids; aged 25-34), families (aged 35-54), zoomers (older than 55)  Age cohort: group of consumers of the same or approximate age who have undergone similar experiences  Multigenerational marketing strategy: this means to use imagery that appeals to consumers from more than one generation The Youth Market  Generation Y – people born between 1980-1995  Global youth market is massive, represents $100 billion in spending power  Much money goes toward “feel-good” products: cosmetics, posters, fast food etc  Major reason for overwhelming size: because of high birthrates in many countries, a large proportion of the world‟s population is very young Teen Values, Conflicts, and Desires  Consumers in this age subculture have a number of needs, including experimentation, belonging, independence, responsibility, and approval from others  Product usage is significant medium that satisfies these needs  The Saatchi and Saatchi ad agency identified 4 basic conflicts common to all teens o Autonomy vs. belonging: teens need to acquire independence, so the try to break away form their families. But they need to attach themselves to a support structures, such as peers to avoid being alone o Rebellion vs. conformity: tends need to rebel against social standards of appearance and behaviour, yet still need to fit in a be accepted o Idealism vs. pragmatism: teens tend to view adults as hypocrites, while see themselves as sincere. They struggle to reconcile their view of how the world should be with the realities they perceive around them o Narcissism vs. intimacy: teens tend to obsess about appearance and needs. However, also feel the desire to connect with others on a meaningful level Generation Y  Make up 26.5 of Canadian population  Almost 20% belong to ethnic minorities Digital Natives  Digital natives: refers to Gen Y as first generation to grow up with computers at home and 500 channel universe. They are multitaskers who easily engage their cell phones, music downloads, and IM at the same time. o At home in “thumb culture” that communicate online and by cell phone  Spate of recent studies on how Gen Yers use technology confirms this profile o Texting: overall, cell phone subscribers use their mobiles more to send texts than to make calls, teens drive this change o Video: American internet users ages 12 and older average more than 6 hours per day watching video o Online brand WOM: about 1 in 3 Gen Yers say that within any given month they talk about a brand on a discussion forum o Consumer-generated content: about 2/3 of online teens say they participate in one or more content-creating activities on the internet  Connexity: members of Gen Y who place high value on being both footloose and connected to their “peeps” 24/7 Speak to Teens in their Language  Rule 1: Don‟t talk down  Rule 2: Don‟t try to be what you‟re not  Rule 3: Entertain them  Rule 4: Show that you know what they‟re going through Tweens  Tweens: describes 2 million children aged 10 to 14, between childhood and adolescence Generation X  Gen X – consists of 6.5 million Canadians  Suffered the pressures of the 1990 recession Baby Boomers  Baby boomers (Canadians born between 1947 and 1966) consists of 9.7 million or 37% of population  Study sponsored by AARP, divides baby boomers into segments based on how they handle the economic downturn o The “yesterday” group: their attitude is summed up by the statement, “Life was better in the „50s”. concerned about uncertain future o The “today‟s” group: this label applies to about 30% of boomers. The agree with the statement “we live in exciting times”. Confident, healthy and satisfied with their accomplishments o The “tomorrow” group: about 45% of boomers live by “tomorrow will be better than today”. Very optimistic despite recent financial or health setbacks Grey Market  Grey market: refers to people aged 65 + Perceived Age: You‟re only as old as you feel  Research confirms the popular wisdom that age is more a state of mind than a body  Chronological age: the actual number of years lived  Perceived age: how old a person feels How Should Marketers Talk to Mature Consumers?  For marketing strats to succeed, they should link to one of following factors o Autonomy: mature consumers want to lead active lives and be self-sufficient o Connectedness: mature consumers value the bonds they have with friends and family o Altruism: mature consumers want to give something back to the world How Can we Segment the Mature Market?  Social aging theorists: try to understand how society assigns people to different roles across the lifespan  Consumer identity renaissance: refers to the redefinition process people undergo when they retire Week 3: Researching Consumer Behaviour, Cultural and Social Influences – Chapter 11 and 16 Researching Consumer Behaviour – Guest Lecturer: Jia Li Case #1 Molson M  “Liquid Art” commercial  30 second clip doesn‟t really show/talk about the actual beer itself Case #2 Skoda Auto  Cake car commercial  “The all new Fabia. Full of lovely stuff.”  Eye-tracking tool  Commercial provides no important details about the actual car Pro & Cons of Qualitative vs. Quantitative Methods  Qualitative Pros  Explore topics in more in depth and detail (less expensive  Offers flexibility of location and timeline Cons  Various audience answer makes difficulty of creating solid stats  Findings can not be extended to wider populations Quantitative Pros  Offers flexibility of data collection, timeline, and fast speed analysis  A trusted set of stats can provide more confidence of future business plan  Anonymous respondents can help sensitive research topics Cons  Limited ability to probe answers  More expensive Chapter 11: Group Influence and Opinion Leadership Reference Groups  Reference groups: an actual or imaginary individual or group conceived of as having significant relevance upon an individual‟s evaluations, aspirations, or behaviour  Reference groups influence consumers in three ways o Informational, utilitarian, value-expressive Types of Reference Groups  Ref group can be any external influence that provides socal cues  Normative influence: reference group helps to set and enforce fundamental standards of conduct (i.e. parents)  Comparative influence: where decisions about specific brands or activities are affected (i.e. weight watchers) Formal vs. Informal Groups  Formal groups have structure, rules, regular meet times  Informal can be dorms, group of friends  Formal easier to influence b/c easily identifiable and accessible  Informal exert a more powerful influence on individual consumers Brand Communities  Brand community: set of consumers who share a set of social relationships based on usage or interest in a product  Organized events called brandfest bring together people who don‟t live near eachother, i.e. Jeep or Harley meets  Consumer tribe: refers to a group of people who share a lifestlye and who can identify with eachother because of a shared allegiance to an activity or product  Tribal marketing Membership vs. Aspirational Reference Grous  Aspirational reference groups: comprise idealized figures, such as a successful businesspeople, athletes, performers  The likelihood that people will become part of a consumer‟s identified reference group is affected by several factors: o Propinquity: physical nearness, as physical distance between people decreases, opportunities for interaction increases  Mere exposure: we come to like people or things simply as a result of seeing them more often  Group cohesiveness: the degree to which members of a group are attracted to each other and value their group membership Positive vs. Negative Reference Groups Antibrand Communities  Antibrand communities: the encouragement of avoidance of brands, celebrities, stores etc. When Reference Groups are Important  Ref group influences are not equally powerful for all types of products and consumption activities  2 dimensions that influence the degree to which reference groups are important are whether the purchase is to be consumed publicly or privately and whether it is a luxury or necessity  ref groups are more robust for (1) luxuries (i.e. sailboats) since products purchased with discretionary income are subject to individual tastes  (2) items that are socially conspicuous or visible to others (furniture, clothes), since consumers are not swayed as much by opinions of others if purchases wont be observed by others The Power of Reference Groups  Social power: refers to “the capacity to alter the actions of others”  Following classification of power bases can help us distinguish among the reasons a person can exert power over another, the degree to which the influence is allowed voluntarily, and whether this influence will continue to have an effect in the absence of power source  Referent Power o A person will try to imitate qualities of an individual/group they admire (i.e. cars, clothes, leisure)  Information Power o Person can have info power if she knows something others
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