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MKT 400 Final: MKT400 FINAL Exam Notes

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Department
Marketing
Course
MKT 400
Professor
Steven Chuang
Semester
Winter

Description
MKT400 Final Exam Notes Manochehry 1 - Consumer Culture: Commonly held societal beliefs that define what is socially gratifying – Gives meaning to objects and activities How is Culture Learned? - Socialization: Learning through observation and the active processing of information about lived, everyday experience - Enculturation: The most basic way a consumer learns their own native culture - Acculturation: Consumers learn about a culture other than their own o Factors associated with faster acculturation: ▪ Low ethnic identification, relatively young, low ethnocentrism ▪ Culture Identification: Consumers feel a sense of belonging to the culture of their ethnic origins • Makes consumers feel close minded about new things ▪ Consumer Ethnocentrism: A belief among consumers that their ethnic group is superior to others and that their products are inferior compared to the ones from their culture o Shaping: Behaviours slowly adapt through a series of rewards o Modeling: Process of imitating others’ behaviours Glocalization: Idea that marketing strategy may be global but the implementation of that strategy at the marketing tactics level should be local Micro-Culture: A group of people who share similar values and tastes that are subsumed within a larger culture. - Each has role expectations for its members o Role Conflict: A situation where a consumer experiences conflicting expectations based on cultural expectations o Divergence: A situation in which consumers choose membership in micro-cultures in order to stand out to define themselves o Habitus: Mental and cognitive structures through which individuals perceive the world based on their social class ▪ Social Class: A cultural group to which a consumer belongs based on resources like prestige, income, occupation, and education o Homogamy: Marriages in the same social class o Social Stratification: Division of society into classes o Stigmatization: The consumer is marked in a way that indicates their place in society Age-Based Micro-Culture: People of the same age tend to share similar values and consumer preferences - This is especially true of teens and seems to apply across nations leading to a world teen culture - Cohort: A group of people who have lived the same major experiences, which end up shaping their core values o Marketers pay close attention to generational effects in order to successfully promote products to each cohort Types of Groups MKT400 Final Exam Notes Manochehry 2 - Reference Group: Group of individuals who have significant relevance for a consumer and who has an impact on the consumer’s evaluations, aspirations, and behaviour - Group Influences: Ways in which group members attitudes, options, and behaviours of others within the group - Group members o Share common goals and interests o Communicate with, and influence one another o Share a set of expectations, rules, and roles o View themselves as members of a common social unit - Primary Group: A group that includes members who have frequent, direct contact with one another o Generally have the most influence on their members, and social ties for these groups are very strong - Secondary Group: Interaction within the group is much less frequent than in a primary group o The influence of these groups on members is not as strong as the influence of primary groups on their members and social ties are not as strong as they are in primary groups o Brand Communities: Groups of consumers who develop relationships based on shared interest or product usage - Formal Group: A group in which a consumer formally becomes a member o Usually have a set of stated rules, accepted values, and codes of conduct that members are expected to follow - Informal Group: A group that has no membership or application requirements, and codes of conduct may be nonexistent o May not have as much of an influence as formal groups but they still have an effect - Aspirational Group: A group in which a consumer desires to become a member of – Often appeals to the consumer’s ideal self - Dissociative Group: A group to which a consumer does not want to belong Generations - Baby Boomers (1945-1964) o Grew up in the post-war economic prosperity of the 50’s and 60’s o Have had a significant impact on popular and consumer culture in North America o Enormous buying power o Expected to continue to have a transformative impact on sectors of the economy such as health care, pensions, real estate, and tourism - Generation X (1965-1979) o Grew up in the turbulent economic climate of the 70’s and 80’s o Characterized by the Cold War and the collapse of the Soviet Union o Careers have been marked by recession and recovery o Described as independent and self-reliant, cynical, and skeptical - Generation Y (1980-2000) o Aka. Millennials MKT400 Final Exam Notes Manochehry 3 o Grown up in the midst of economic, cultural, and technological globalization o Known to have children later and stay in school longer o More ethnically and culturally diverse o Sophisticated consumers who are cynical of companies that try to persuade them through mass marketing – prefer to be treated as heterogeneous individuals rather than a homogeneous mass Peer Pressure: The extent to which group members feel pressure to behave in accordance with group expectations Different Kinds of Power - Referent Power: Being trusted, respected, admired - Legitimate Power: Having a position of power - Reward Power: Rewarding individuals for compliance - Expert Power: Experience, skills, knowledge - Coercive Power: Fear of negative consequences Word-of-Mouth (WOM): Information about products, services, and experiences that is transmitted from consumer to consumer - Organic WOM: Occurs naturally when consumers truly enjoy a product/service and want to share their experience with others - Amplified WOM: Occurs when marketers attempt to launch or accelerate WOM in existing customer circles - Positive WOM: When consumers spread info from one to another about positive consumer experiences with companies - Negative WOM: Takes place when consumers pass on negative info about one company to another Guerilla Marketing: Marketing a product using unconventional means - Buzz Marketing: Includes marketing efforts that focus on generating excitement that is spread from consumer to consumer - Viral Marketing: Uses online technologies to facilitate WOM by having consumers spread marketing messages through online conversations - Stealth Marketing: Deceiving consumers about the involvement of marketers in a communication - Shilling: Compensating consumers to talk about, or promote, products without disclosing they that are working for the company - Infiltrating: Using fake identities in online discussions to promote a product Diffusion Process: The way in which new products are adopted and spread throughout a marketplace - Different groups of consumers tend to adopt new products at different rates - Innovators and early adopter consumers tend to be influential when discussing products and services with members of other groups o They tend to be opinion leaders for specific product categories o Innovators are risk takers and are financially well off - Early adopter consumers are generally young and well educated - Late majority consumers, and laggards, tend to be more cautious about buying new products and wait significantly longer to buy the latest innovations MKT400 Final Exam Notes Manochehry 4 - Innovators – Early Adopters – Early Majority – Late Majority – Laggards Consumer Decision Making - Decision Making Process o Need Recognition o Search for Information o Evaluation of Alternatives o Choice o Post-Choice Evaluation - Decision Making Perspectives o Rational Decision Making Perspective: Assumes that humans are rational and carefully consider their options and can identify the expected value associated with a purchase ▪ Carefully comparing various brands and attributes of products o Experimental Decision Making Perspective: Assumes that consumers often reach decisions based on the affect/feeling attached to the product/behaviour ▪ Focuses on hedonic value, considering sheer enjoyment rather than cognitive effort o Behaviour Influence Decision Making Perspective: Assumes that behaviour is influenced by environmental forces rather than cognitive thinking ▪ Helps explain how consumers react to store layout/design - Risk in Decision Making o Decision making approaches depend on the amount of involvement a consumer has with a product category/purchase and the amount of risk involves with the decision o As involvement increases, consumers are more careful with their decision making o Financial Risk: Cost of the product o Social Risk: How other consumers will view the purchase o Performance Risk: Likelihood of a product performing as expected o Physical Risk: Safety of product, likelihood of physical harm being caused from the product o Time Risk: Time required to search for the product, time necessary for the product to be serviced/maintained Limited and Extended Decision Making - Extended Decision Making: Consumers search for the best information that will help them reach a decision – high involvement, high risk - Limited Decision Making: Consumers search very little for information and often reach decisions based on prior beliefs – low involvement, low risk - Habitual Decision Making: Consumers generally do not seek information at all, they recognize a product and pick it based on habit o Brand Loyalty: Deeply held commitment to rebuy a product or service regardless of situational influence that could lead to switching behaviour ▪ Reduces searching time drastically MKT400 Final Exam Notes Manochehry 5 ▪ Allows consumers to enjoy benefits that come with long-term relationships with co
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