BUS630 Study Guide

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Study Guide Structure

In this study guide, the sections in each unit (1a., 1b., etc.) are the learning outcomes of that unit. 

Beneath each learning outcome are:

• questions for you to answer independently;
• a brief summary of the learning outcome topic; and
• and resources related to the learning outcome. 

At the end of each unit, there is also a list of suggested vocabulary words.

 

How to Use this Study Guide

1. Review the entire course by reading the learning outcome summaries and suggested resources.
2. Test your understanding of the course information by answering questions related to each unit learning outcome and defining and memorizing the vocabulary words at the end of each unit.

By clicking on the gear button on the top right of the screen, you can print the study guide. Then you can make notes, highlight, and underline as you work.

Through reviewing and completing the study guide, you should gain a deeper understanding of each learning outcome in the course and be better prepared for the final exam!

Unit 1: Introduction to Consumer Behavior

1a. Explain how consumer behavior is a process

• What do we understand about the consumer who might purchase a product?
• Who is not the ideal consumer for a product?
• Why does a consumer buy one product and not another?
• Is there anything that might increase the likelihood of a consumer buying a product?

Consumer behavior includes the actions and decisions a consumer makes during the buying process. Consumer behavior includes many aspects that need to be understood to properly market to that population. For example, the more the market population is understood, the more tailored the marketing can be. Not only do you need to understand the target market, but also why someone might not want the product. This information will allow a better understanding of what should not be included in the marketing.

Buying behavior includes decision processes a buyer goes through during and after a purchase. It is also important to understand the consumer decision process and how they narrow down their decision to purchase a certain product. Issues to consider might be what might make a customer choose one product over another and what might increase the chances of the consumer choosing the product. It is also important to consider customer loyalty and keep the level of customer satisfaction high. 

Information processing is another aspect of consumer behavior and includes the information consumers gather during the buying process; this may include reading product reviews, watching videos about the product, or reading information on the brand website.

When it comes to marketing, understanding who the ideal consumer is not is almost as important as understanding who the ideal customer is. As a marketer, understanding both is important to fully understand who you are trying to sell to. It is important to understand that consumer behavior is not just one thing but several things that make up that process.

To review, see The Black Box of Consumer Behavior.

1b. Assess how consumers use products to help them define their identities in various settings

• How do consumers visualize themselves using a product during the purchase-gathering phase?
• How does a consumer think about how a product might enhance or change their life?
• Would a consumer buy a product for the life that they want vs. the life they have?
• Can anything be done to increase the likelihood of helping consumers better understand their lives after buying a product?

How consumers feel about themselves determines their needs, and then these desires reflect their purchasing decisions. Consumers believe buying certain products will help them better define themselves and make their lives easier. By using products to better develop their identity, consumers are attempting to determine who they want to be.

For example, many consumers decide they must have the latest cell phone model available and believe that sets them apart from their less tech-savvy friends. They may see themselves as ahead of others when it comes to technology and using new products. Marketing companies may target these early adopters because these are the individuals who may influence others to purchase the same product. It is this identity the consumer decides they want to emulate, and as a result, it may allow them to be very popular with friends and acquaintances. In some sense, a marketer must assist the consumer in understanding their identity, and we see this in commercials and advertising today. By completely understanding how the consumer might identify with a product, the marketing may be more focused.

A marketer will go through the marketing process when developing a marketing plan for the consumer and the buying process. The marketing process includes collecting data about the market, analysis, planning, and implementation. 

To review, see Consumer Behavior in the Marketing Process.

1c. Identify why marketers need to understand the wants, needs, and desires of different consumer segments

• How does understanding consumer wants and needs guide marketing?
• Why is it important to understand consumer desire when developing a marketing plan?
• Without understanding consumer wants and needs, how would you develop an understanding of purchasing?

Understanding self-concept (which may include self-image, self-complexity, and self-esteem) as they relate to consumerism may help marketers better determine how to market a product. Understanding how wants and needs are part of consumer identity may better guide a marketer to focus on using those wants, needs, and desires when developing marketing content. Consumer needs include the motivations that make someone want to buy a product.

Consumers may identify themselves with a product and do not understand themselves without it; that product is a part of who they are. A cell phone is a good example of this because many people keep it with them during the day, check it dozens of times throughout the day, and without it, feel lost and unconnected to the world around them. At this level, a cell phone has become part of a consumer's identity. 

By understanding wants, needs, and desires, a marketer can better connect with the consumer and target advertising directly to those people who have an association with the product. Good marketing may sometimes guide the consumer to understand what they need vs. what they want. Then, at that point, the consumer can decide if they purchase a product that is both a need and a desire.

To review, see Self and Identity.

1d. Explain why the design of a product is a key driver of its success or failure

• How might a good product design connect with a consumer?
• What is the difference between a good and bad product design?
• Can a product fail because of design? If so, how?
• Can you think of a product that was successful in product design? Why or why not?

To better understand the perception of the product or brand, a consumer will undergo the perceptual process, which includes research, organization, and interpreting information. These stages will help them to better understand the buying process to ensure the product matches their needs. 

The design of a product may attract a consumer to buy the product. Sometimes, the more unusual a product, the more likely a consumer may buy it. Color or style may also attract a buyer. Product design begins with the end user in mind. How they might use the product, what might attract the consumer, and what design might look best are all considerations for good product design.

Product design can also be unsuccessful, and as a result, consumers may avoid purchasing a product. One example of this might be Google Glass. In theory, the product seemed as though it would be useful, but too many variables kept consumers from buying the product. These variables included the high price tag, being banned in certain areas, and the somewhat unattractive style that kept consumers from purchasing the high-tech glasses.

We know good product design when we see it. We may like the product immediately and feel as though we need that product. Product design failures work the same way; we immediately know we do not connect with a product, and our faces may even reflect our feelings. This occurs when the product design fails. Understanding good and bad design is important as a key consumer driver because of its effect on customers and sales.

To review, see The Perceptual Process.

Unit 1 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• buying behavior
• consumer behavior
• consumer identity
• good product design
• information processing
• marketing process
• perceptual process
• product design failures
• self-concept

Unit 2: The Consumer Learning Process

2a. Identify why it is important for marketers to understand how consumers learn about products and services

• Why is it important to ascertain how a consumer learns about a product?
• Ideally, how would a consumer learn about a product?
• Why is understanding the consumer learning process important?

Consumers may discover information about a product in various ways, including friends, social media, TV, conversations at work, etc. Then, once a consumer is interested enough to conduct their own research, they may decide whether to purchase the product for themselves. This research may come from product reviews, watching videos about the product, or conducting an online search. As a marketer, you may be able to guide how a consumer learns about a product by creating videos, blogs, or even written instructions about the product or service being offered.

This information is important for a marketer to understand because it may be used to market the product or provide additional information to help consumers decide to buy it. The consumer learning process has two consumer involvement levels: high and low involvement. Consumer involvement may be high for more expensive products, while a less expensive product may take less time or involvement to understand how the product works.

For example, if you consider buying a new home, you may spend months or even years researching possible homes in the area, what they sell for, what types of financing are available, what you can afford, etc. This would be considered high involvement on the part of the consumer because they spend less time and effort understanding or researching the process.

On the other hand, if you are hungry and want to go to dinner, you will most likely decide where to go with little or no effort. This would be considered a low involvement on the part of the consumer because the cost is lower, and if you choose poorly, there is very little effort lost.

To review, see Involvement Levels.

 

2b. Explain that learned associations can generalize to other insights and why this is important to marketers

• Why is it important to understand what learned associations consumers might make about a product?
• What are learned associations as applied to marketing?
• How can you use learned association information in marketing products to consumers?

Learned associations in marketing are useful when advertising a product. For example, suppose a consumer watches a commercial of an attractive woman drinking a soda. In that case, the association is that they may also look that way if they drink that product. These associations help consumers see themselves using the product or relate to how that product might make them look or feel better.

By associating with a brand, a consumer may be more likely to return to that company to continue buying other products, resulting in brand loyalty. When a marketer develops great or creative advertising around a product or brand, the consumer may feel a positive association that makes them want to buy that product. The more likely others want to buy that product or associate with that brand, the more popular it becomes.

We may also have poor associations with a product, which could change our perception. Perhaps when we were young, we ate cereal for breakfast, lunch, and dinner most days and quickly grew tired of it. This may result in never wanting to eat cereal and have developed a negative association with cereal. Seeing commercials with cereal will not change that negative association.

Cognitive learning theory occurs when internal and external factors assist with the learning process. In marketing, this may occur when we use a product that works; later, we remember the product and buy it again. In essence, we have learned through the consumer behavior process.

To review, see Behavioral and Cognitive Learning Theories.

 

2c. Compare the differences between classical and instrumental conditioning

• Why is it important to understand the difference between instrumental and classical conditioning?
• What is an example of instrumental conditioning?
• What are the two types of learning theories?

Whether we like it or not, we have all been conditioned or shaped somehow. It may have been through our parents, friends, education, or popular advertising. We see or hear something, and it may have the ability to take us back to a specific memory, or we may immediately respond in the way we have been conditioned. Behavioral learning theory occurs when we learn through experience and associate a stimulus with a reward or punishment.

Classical conditioning may elicit a behavioral response. An example may be that we are not hungry but salivate when we smell something baking. Our bodies have been conditioned to respond in a certain way. For example, we may be more likely to enjoy watching a commercial with our favorite song playing in the background.

Instrumental conditioning may occur when, in the past, we received positive or negative feedback and our brain associates that situation with good or bad. For example, if we receive positive feedback or an award for a job well done, our brain may understand that the behavior is good, and in the future, we associate this with a good thing. While instrumental conditioning may occur because we have learned the response, classical conditioning may occur with an auto-response or because of our reaction to a past situation.

To review, see Behavioral and Cognitive Learning Theories and Memory and Retrieval.

2d. Explain why it's important for marketers to recognize that products can satisfy a range of consumer needs

• Can you think of an example of a product that satisfies more than one need?
• Once you understand consumer needs, how can you apply them to advertising?
• How does a product give satisfaction to consumers?

Remember that one toy you had as a child that you loved and never wanted to part with? It brought you the kind of satisfaction you have rarely experienced. That toy satisfied your needs that you didn't even know you had. And even now, you look back fondly on those days spent playing with that toy.

As an adult, you know your consumer needs but sometimes have difficulty articulating them until one day, when you see a product advertised on social media and connect with it in a way you may not understand. It may be a product that you can see yourself using in several ways. It becomes that product you need to buy, and when you get it, you happily use it every day and tell ten people about it because it makes you that happy. This is an end-user example of great advertising. The marketers connected with you in a way you still may not understand.

Many products will solve more than one problem, and when we find something that solves several of our needs, we may become very excited about that product. For example, a laptop computer may help us to work, play games, store photos and music, or create artwork. We become more excited about using a product that we can use with such diversity.

To review, see Motivational Theories and Models and Why Human Consumption Never Ceases.

 

2e. Evaluate how the way we assess and choose a product depends upon our degree of involvement with the product, the marketing message, and/or the purchase situation

• Why is it important to think about how a consumer chooses a product?
• Why does the degree of involvement matter when choosing a product?
• What is a marketing message, and how might that influence a buyer?

We have so many product choices today that it can be overwhelming. Choosing a product can take some time. We may analyze the product, ask others about what they use, read product reviews, or just choose one because we don't have the time to conduct a proper search. When it comes to marketing, we want to make the process easier on the consumer and provide a level of learning and understanding that makes their involvement easier to understand.

Consumer purchasing decisions may use one of two levels of involvement in choosing a product: high or low. If we plan to purchase a car or a more expensive product, the degree of involvement in researching or learning about the product may be high. In contrast, a less expensive product may take less time or involvement in the research about the product.

Another thing to consider is limiting the number of choices or purchasing decisions a consumer needs to make. Sometimes, the decision-making process can be overwhelming when a consumer wants to purchase a product. By giving too many options, studies have shown that consumers may decide not to make a purchase because they cannot easily decide. The marketing message occurs when a brand communicates the values of a product to the consumer. Limiting the options or decisions in the marketing message may increase the likelihood that the consumer will buy the product.

To review, see:

• Involvement Levels
• McGuire's Psychological Motives
• Buying Behavior Influences

 

Unit 2 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• behavioral learning theory
• classical conditioning
• cognitive learning theory
• consumer involvement
• consumer learning process
• consumer needs
• instrumental conditioning
• learned association
• marketing message
• purchasing decisions

Unit 3: Understanding the Consumer

3a. Identify how the self-concept strongly influences consumer behavior

• What is self-concept as it relates to the consumer?
• From a marketing perspective, why is it important to understand self-concept?
• What are the four types of self-concept?

Have you ever purchased a product for the person you want to be? This sounds a little strange, but maybe you bought clothes that don't fit you now, but one day you want that clothing to fit. Or maybe you want to be more active and decide to buy snowshoes, but you have never been snowshoeing. You purchased that product because that is who you want to be in the future, and this is an example of your self-concept.

Self-concept has four types, which include actual, ideal, private, and social. The four self-concept types include who you are now, who you would like to be, how you see yourself, and how others see you. Depending on the self-concept and purchasing decisions, you may buy a different product for each self-concept.

Your actual self is the person you are today. Perhaps you are a good employee, a good husband, have quite a bit of stuff to fix around the house but don't want to do it, are 20 pounds overweight, and watch a lot of TV. You may be less likely to enjoy commercials about home improvement.

Your ideal self is who you would like to be. Maybe you see yourself as 20 pounds lighter, more active, socializing more with friends, or becoming a better employee. Because you need to lose some weight, you may be more open to ideas or advertising that will make you more active or help you to lose weight.

Your private self is how you see yourself. You may still believe you are the version of yourself from twenty years ago and get shocked each time you look in the mirror. Or you may see yourself realistically and know that you need some improvements in your life.

Your social self is how others perceive you, which can differ from how you see yourself. Perhaps you believe you are very friendly and outgoing with people, but they see you as quiet and that you tend to keep to yourself. Sometimes, asking others how they perceive you can be shocking, but also may help you to better understand how you are being perceived. The idea of self-concept may interest the individual, but from a marketing perspective, it can be complicated.

To review, see Self Concept and The Relationship between Self-Concept and Brand Personality.

 

3b. Explain why products often play a pivotal role in defining the self-concept

• Can a product define who you are? Why or why not?
• How can understanding the idea of self-concept help in marketing today?
• Give an example of how a product might help to define an individual.

Do you have your favorite brands? Have you ever stopped to consider why they are your favorite brands? Do you like them because your parents or friends do? Is there something about the company you find interesting, or do you just like the products they produce? If your parents liked the brand and you are just now determining that, does that influence your decision or opinion about that brand in any way?

What products we like leads us back to our self-concept. When it comes to advertising, it is important to understand self-concept because we may be marketing to the person people want to become and not who they are now. Can a product change your life? Every day, we hear examples of people saying a product changed their lives and they are passionate about the idea. Perhaps it is a diet plan, a new car, a new job, or a new house in a better neighborhood. Marketers capitalize on this idea of a life-changing product, and if we buy that product, it comes down to our self-concept at the time of the sale.

It is also important to understand that demographics play a part in our favorite brands, and these will change over time. The stores we shop at in our twenties may not be the same when we reach our thirties. We will change over time, and our favorite brands will change with that.

To review, see Self Concept and The Relationship between Self-Concept and Brand Personality.

 

3c. Explain how consumers' lifestyles are key to developing marketing strategies

• What demographic areas are considered when we think about a lifestyle?
• Why should personality traits be considered when discussing lifestyles?
• How would you define lifestyle, and what might it include?

Everyone has a different lifestyle based on their values, beliefs, and tastes. You might hear one person say that a healthy lifestyle is important, another person wants a rich lifestyle, or perhaps another friend wants to cultivate friendships. That lifestyle is most important to them. Consumer behavior, lifestyle, and personal traits must also be considered. Social interactions may also play a part in our desired lifestyle. Maybe we have a friend or acquaintance who has a lifestyle we desire.

It is also fun to imagine different lifestyles. Numerous television shows will give us a peek into lifestyles very different from the lifestyles we experience today. These may be fun to watch or imagine how our own lives might change if we win the lottery, and sometimes marketing might appeal to us because of this feeling of change.

Some demographics to consider might be where the person (or target market) might be in their life stage, their personality, or what is most important to them at this age. Consumer lifestyles may change over time and may be influenced by things we have not considered. For example, perhaps in your thirties, you desired a big house and a nice car. But in your fifties, you want to scale back and downsize because that is the current trend for those in your life stage. Developing marketing strategies for people with a certain lifestyle requires research into that consumer lifestyle and the potential personality traits of the people who desire that lifestyle.

To review, see Personal Factors.

 

3d. Assess how psychographics augment demographics, enabling marketers to understand and reach different consumer segments

• What is psychographics, and how can it be used in marketing?
• How might psychographics relate to demographics?
• What is an example of psychographics?

Understanding psychographics is important to marketers because it allows a glimpse into a consumer's personality, lifestyle, traits, or values. This information may be important because it plays a larger role in consumer behavior and why the consumer might make specific choices when it comes to purchasing. Understanding psychographics and demographics will allow the marketer to narrow down the marketing. Using consumer segments to consider which group of people the marketer needs to reach will assist in narrowing down that search.

For example, a retired couple may have developed a consumer lifestyle more suitable to their needs at the time. They may buy an RV, travel around the country, and decide to spend their retirement money on travel-related costs. Because their needs have changed, marketing towards these consumers will also change. They no longer wish to see home improvement ads or how to clean out their gutters. Now, the psychographics in these couples' lives have changed, and the focus of their purchasing has changed along with it.

Psychographics may also be narrowed down to a consumer's passions, interests, values, and how they might obtain information. It covers how they live and how that might affect their buying choices. By narrowing down this understanding, a marketer can better understand and use this information to specifically target the population for their product(s). Psychographics and demographics (age, sex, race, etc.) can be used together to find consumers who may purchase certain products.

To review, see Lifestyle and Psychographics.

 

Unit 3 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• actual self
• consumer lifestyle
• consumer segments
• demographics
• ideal self
• private self
• psychographics
• social self

Unit 4: Influencing Consumer Attitudes

4a. Explain why it's important for consumer researchers to understand the nature and power of attitudes

• In marketing, why is it important to understand consumer attitudes?
• How might consumer attitudes affect marketing?
• How can information about attitudes be used in marketing?

Our attitudes can affect our buying decisions, how we feel about a product, or how much time we might spend investigating information about a product. Attitudes may also change over time, which can make the marketing aspect of understanding attitudes quite encompassing.

By researching consumer attitudes about a specific product, a marketing company may be able to better understand how to sell that product. This might be accomplished by focus groups, surveys, or interviewing the public to see how they feel about a product or industry.

If a consumer has a positive attitude about beach vacations because, as a child, they spent summer vacations at the beach with family, then their general attitude about beach vacations as an adult will be positive. This person may also be more open to commercials or promotions about beach vacations.

Marketers need to understand general attitudes about products or services to successfully promote those products. If most of the population has a generally poor attitude about a product, then the marketer may need to change tactics to properly market that product.

To review, see Understanding Attitudes and How Attitudes Influence Buyer Choices.

 

4b. Identify how we use attitude models to identify specific components for predicting a consumer's overall attitude toward a product or brand

• According to the ABC Model of Attitudes, what are the three parts of attitudes?
• In marketing, why is it important to understand consumer attitudes?
• How might consumer attitudes affect marketing?

According to the ABC Model of Attitudes, there are three parts: affective (feelings and emotions), behavioral (response tendencies based on past and future), and cognitive (thoughts and beliefs). When all three parts are aligned, the attitude is stronger. For example, most people love their country and feel patriotic and positive about their country, and their behavior may also support that belief.

The three parts of attitudes include:

1. Our feelings and emotions help us to show affective attitudes. For example, we may feel connected to products we used when we were younger. Although it may not apply to our real life today, we may still purchase those products because of those feelings.
2. How we act or what we would like to do is considered our behavioral attitude. For example, we may intend to attend a local art festival this weekend, or we may intend to celebrate July 4th weekend with family. We may intend to purchase a new car soon because we are having issues with the current car. These are our intentions.
3. Our thoughts and beliefs are our cognitive attitudes. These are the beliefs we have about a topic. Sometimes, we may adopt our beliefs because of someone else. Our parents or friends may have mentioned their beliefs, which sound like a good idea to us, so we adopt these views as our own.

To review, see Understanding Attitudes and How Attitudes Influence Buyer Choices.

 

4c. Identify how the structure of the message determines how persuasive it will be

• Thinking about past marketing, what are three examples of consumer persuasion?
• Is building trust with consumers important in marketing? Why or why not?
• How might marketing be used to convey authority?

Every day, we are bombarded with marketing and messages, and sorting through that information can take time and effort. What we focus on may help our understanding of certain topics. What information we believe and find trustworthy may influence our purchasing decisions. The more we trust the source of information, the more we might be persuaded. Fear and humor can also be used to appeal to consumers.

Three trust characteristics lead to trusting a source of information: perceived authority, honesty, and likability.

Perceived authority may include information we receive from people or sources that we believe are an authority on the subject. For example, you may trust your doctor when giving medical advice because they have a medical degree and experience.

Honesty is another characteristic that leads to trusting information from individuals. For example, the more honest an individual seems, the more we may believe what they say.

Likability is the final factor in a persuasion model. The more likable a person is, the more we may believe what they say. If we have genuine feelings about someone, their opinion matters more. For example, if you have an acquaintance you've always liked but maybe don't know a lot about, you may be more likely to believe and trust information from that person.

To review, see Changing Attitudes and Communication Appeals.

 

4d. Assess why audience characteristics help to determine whether the nature of the source or the message itself will be relatively more effective

• How can emotion influence a marketing message?
• Can an emotional message be an effective way to get a point across? Why or why not?
• If an individual is likable or attractive, how can they influence others?

Marketers may use emotional, cognitive, and physical attraction to influence a consumer's purchasing habits.

You can probably remember a commercial that was based on emotional marketing. Perhaps it was for a dog shelter that showed images of dogs who have been mistreated. During this commercial, dog lovers may have felt terrible and wished to donate to the cause to stop dog abuse. The marketer used emotion and feelings to persuade people to donate money.

In addition, a marketer can use physical appeal marketing to help influence you. For example, if you are trying to get into better shape, and the physical trainer at your gym is physically appealing or attractive, you may be more likely to accept advice or information from that person.

Another influence may be cognitive. Someone who uses information or presents a message about factual knowledge they are more influential than us when it comes to a specific subject. An example of this may be a college professor or a doctor. Because they are an authority in their chosen subject, we may be more likely to listen or be influenced by the information they give us.

To review, see Changing Attitudes and Communication Appeals.

 

Unit 4 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• ABC Model of Attitudes
• consumer attitudes
• emotional marketing
• physical appeal marketing
• trust characteristics

Unit 5: The Purchasing Process

5a. Identify the stages of the decision process that result in the selection of one product over competing options

• Why might consumers choose one product over another?
• What is the decision process for choosing a product?
• What is the ABC Model of Attitudes?

As a consumer, why would we choose one product over another? At times, many options are available to us, and choosing one can take a lot of time. After researching, a consumer may decide one product is better than another and purchase that product.

The consumer decision-making process is complex and may vary depending on the individual. The steps may include recognizing the need, conducting an information search, evaluating different alternative products, selecting and purchasing the product, any post-purchase behavior, which may include returning the product, and potentially any disposal options in the future.

Above, we mentioned the ABC Model of Attitudes, which includes affective, behavioral, and cognitive factors. These consumer attitude situations may help strengthen attitudes about a product or service.

To review, see Consumer Decision-Making Process and Understanding the Consumer Decision-Making Process.

 

5b. Explain how our access to online sources is changing the way we decide what to buy

• Does the internet help or hurt the consumer decision-making process? Why?
• Does the quality of online resources matter when a consumer decides to buy a product?
• How can online sources help the marketer to develop marketing for a product?

Changing attitudes, social media, social influence, and the internet have changed how we buy products. The internet allows for faster information about the product; the consumer can read product reviews, and we can check out competing products to see if one is better. We also have faster shipping than we did a decade ago. All of these considerations may play into the consumer buying decision.

The quality of online resources must also be questioned. If all the product information only comes from the manufacturer or seller, how accurate or reliable is that information? Product reviews must also be considered for honest feedback and information, especially when the person leaving the review may receive the product for free or at a discount. Their feedback and honest review may be questionable. Social influence is another aspect of marketing and the internet today, and social influencers give their own reviews that may be tainted because they receive the product for free. The quality of such reviews should also be questioned.

As a marketer, online sources can also help to promote the selling of a product. Many websites now include blogs from experts at that company and information about the products they sell. In a sense, the companies establish themselves as the experts in their products.

To review, see Consumer Decision-Making Process and Understanding the Consumer Decision-Making Process.

 

5c. Evaluate how consumers rely upon different decision rules when evaluating competing options

• What considerations might a consumer make before purchasing a product?
• Why might a consumer choose one product over another?
• Do consumers consciously go through a purchase decision process?

Before buying a product, a consumer may review several options before making a purchase. They may look at reviews, go to a consumer advocacy website for information, ask friends or family for their opinions, or just buy a product, knowing they can return it later if it doesn't meet their needs. Consumer purchase regret occurs after purchase and may result in a return or an unhappy customer.

The process of choosing one product over another can be complicated. If there's only one option, it makes the process easier. Most of the time, however, ten or more options may be available. Reviewing the different features may be one way to differentiate between two products. But what happens when the products have the same features? When this happens, it may come down to price or how fast a company can ship the item. As you can see, the whole process is complex and may depend on many different decisions.

To review, see Consumer Repurchase Behaviors of Smartphones and Determinants of Consumer Attitudes.

5d. Explain the importance of understanding consumer evaluations of a product both before and after purchase

• Why would it be important to consider how a consumer evaluates a product?
• Is it possible that a consumer is more excited about a product after they receive it?
• Is there a difference in attitude about a product before and after purchase?

Imagine this: a consumer hears about a new product and immediately gets excited. They go through the process of researching and speaking to friends about the purchase and then place their order. The product arrives, and they go through the steps of setting it up. As they begin to use the product, they get excited about its use, and consumer satisfaction may begin. When a customer has a good or bad purchasing situation, these may be determinants of consumer attitudes.

It's possible that they're more excited now than they were when they first heard about the product. Or their attitude toward the product may deflate after using the product. If the product lives up to their standards, and they enjoy it, they may tell a dozen people about their experience or leave a review.

These consumer evaluations of products may affect the entire consumer decision process when making a purchase. This is why marketing has changed quite a bit over the last few decades. It is more specific and targeted to the consumer interested in buying products.

To review, see Consumer Repurchase Behaviors of Smartphones and Determinants of Consumer Attitudes.

 

Unit 5 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• consumer evaluations
• consumer purchase regret
• consumer satisfaction
• determinants of consumer attitudes
• post-purchase
• product reviews
• social influence

Unit 6: Consumer Analysis and Marketing Strategy

6a. Identify the components of an effective customer management strategy

• What is a customer relationship management (CRM) system?
• Why is it necessary for a marketing company to manage consumers?
• How might a marketing company develop a strategy to manage consumers?

A customer relationship management (CRM) system helps organizations organize consumer information. This might include marketing, sales information, and any consumer account information. The system may also collect information about interactions with the consumer.

Companies need to collect all the data they have on a consumer and also run the business with that information. A CRM system can be very detailed and even contain data analysis so the marketing department can better understand what a customer wants.

A CRM system is vital to any company and its customer management strategy to sell products to consumers, and almost any department can use the system to gain insight into a consumer's behavior. A CRM system can also help to better develop a strategy for managing consumer information.

To review, see Customer Relationship Management Systems and Customer Relationship Management.

 

6b. Compare the different formulas for calculating customer value

• How can customer value be calculated?
• Do companies save specific sales information about each customer? Why or why not?
• Why would customer value be important for a marketing company to track?

Most sales companies collect information about consumers and what value they may add to the company. Some of this information can easily be calculated by creating formulas. This may be as simple as reviewing the average purchase amount for each sale as a way of calculating customer value. This information can help a company to focus marketing and marketing efforts.

For example, a customer who has an average purchase amount of $3000 may be more valuable to a company than a customer who, on average, spends $300 per purchase. Other factors should also be taken into consideration. If, for example, the customer with the higher average purchase amount takes up employees' time by asking for special arrangements (extra attention, special shipping, etc.), that value may decrease. Another possible formula to explore is how often the customer makes a purchase. This may create a customer lifetime value that can easily be calculated. Each company may use a different way to evaluate this information, but it is essentially the same.

To review, see Customer Relationship Management Systems and Customer Relationship Management.

 

6c. Identify the different dimensions for a customer segmentation

• How might customer information be segmented?
• What demographics would a marketing company use to segment customer information?
• What are the four segmentations that might be used to manage customer information?

A marketing company might use customer segmentation to organize potential consumers into groups based on demographic, psychographic, geographic, or behavioral information. For example, a marketer might want to know the average age of people who purchase a certain product. This demographic information can give the marketer an age range of people who may become the target market for that product.

Psychographic segmentation occurs when a company groups individuals based on interests, values, or beliefs. Geographic segmentation occurs when a company groups together customers by their physical location. Behavioral segmentation occurs when a company groups customers based on their habits (for example, spending or online browsing information).

By segmenting customer information, a company can more easily understand customers. Each segment can be used to gain specific information about a group of people. A marketing company may use segmentation to obtain specific information about its target market.

To review, see Customer Relationship Management Systems and IMC.

 

6d. Explain how to use information from the customer management cycle to acquire better customers

• What is the customer management cycle?
• How can marketers use the customer management cycle?
• How can the customer management cycle be used to find customers?

A customer management cycle or customer life cycle may include different aspects. These might include retention, conversion rate, information about how a customer was initially obtained, or customer loyalty. It is important to understand this information so that it may yield a better understanding of the target market when grouped. In turn, this information may help a marketing company to obtain additional or better customers.

A marketer may study the average age and conversion rate for a specific product, which may allow for a more specific target market in the future. For example, if senior citizens are more likely to purchase luxury vacations and take those trips once or twice a year (conversation rate), a luxury cruise line may want to target senior citizens to purchase their cruises. Compared to individuals in the 40–50-year-old range who might take a luxury vacation once every five years, the conversion rate is not as high as it might be with a senior citizen. This information may allow a marketing company to focus on a specific population.

To review, see Customer Relationship Management Systems and IMC and Other Areas Impacted by Customer Management.

 

6e. Evaluate the differences between the customer management approaches for mass marketing versus direct marketing

• What is the difference between mass marketing and direct marketing?
• How might a mass marketing company target customers?
• How might a direct marketing company target customers?

Mass marketing might include television commercials, radio ads, at-home mailers, or newspapers, while direct marketing specifically targets their most likely buyers. These are types of marketing but with different approaches.

With mass marketing, you are trying to reach a market by getting the word out to millions of people at once, and the result is that a few will buy the product or service. For example, a grocery store may market to people living in that immediate area, with no specific target market. A pizza parlor may be another good example of a company that might use mass marketing because the products they sell fit a larger population.

Direct marketing may include very specific information about who their target market is. A health food store may want to specifically target healthy or athletic individuals. They may be able to use a mass marketing technique to reach these people. However, it may not be cost-effective. By specifically targeting healthy individuals, they can focus their marketing efforts.

To review, see Customer Relationship Management Systems and IMC.

Unit 6 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• calculating customer value
• customer lifetime value
• customer management cycle
• customer management strategy
• customer relationship management (CRM)
• customer segmentation
• direct marketing
• mass marketing

Unit 7: The Effects of Consumer Groups

7a. Explain how we are motivated to buy or use products in order to be consistent with what other people do

• How might others influence the consumer buying process?
• Can our social circle influence buying decisions? If so, how?
• What factors might influence buying habits?

Most of us believe we have complete control over what we buy. But many times, other things influence our buying process. Sometimes, it might be family, friends, social media, or coworkers. Or we may feel the need to compete with other people, and many times, these feelings or thoughts may not be something we are consciously aware of.

Our social circle can influence our buying decisions, which might vary from small to large purchases. For example, if your neighbor Buys a new electric car, you may feel the need to also buy one. This might depend on your relationship with your neighbor or the feeling that you need to compete with your neighbor.

Your relationship with others may depend on values or beliefs and how similar they may be. Some social factors that influence your decision-making process may include family, culture, social class, or even groups you belong to. Someone in your family may buy a product that you like, and you may wish to also buy that product.

To review, see Social Factors and Social Influences.

 

7b. Explain how consumers' word of mouth (both positive and negative) is often more influential than advertising campaigns

• How does word of mouth work as it relates to marketing?
• Why are some people more influential than others when purchasing a product?
• What is the difference between a word-of-mouth and an advertising campaign?

Do you have a friend who gets excited when they find a product they like? They may tell you about it, send you videos, and explain how much they love that product. Most likely, that person will influence a dozen people to buy the same product. This is called word-of-mouth marketing. Although your friend is most likely not receiving monetary compensation for telling people about their favorite new product. Companies love word-of-mouth marketing because it is inexpensive and effective.

With social media today, these types of people can influence followers. Their word-of-mouth marketing reaches more people than they would connect with in a one-on-one conversation. These influencers can have quite a bit of power in that social circle. Sometimes, these people have a magnetic personality that naturally gets people excited about something.

An advertising campaign may reach quite a few people but may not be specifically promoted to the target market. However, an influencer can target a specific market and may cover numerous similar products. For example, a makeup influencer may try many different products and have people who follow them on social media to gain tips and tricks on applying makeup. In contrast, an advertisement in a magazine promotes to a general audience that may not include people interested in makeup.

To review, see Social Influences.

 

7c. Assess how online technologies are accelerating the impact of word-of-mouth communication

• How can word-of-mouth techniques be promoted online?
• Could a marketing company promote a word-of-mouth consumer campaign? Why or why not?
• How can social media be used to promote successful consumer product reviews?

One of the ways that word-of-mouth communication can reach quite a few people is through social media. A decade ago, people could post something on a social page about something they were excited about. But today, they may have hundreds of thousands of followers and can reach a larger audience. Many of these influencers have perfected the art of promoting products by editing videos and giving ideas about how the product might be used.

Marketing companies may support these social media influencers and create a similar word-of-mouth campaign by using their own influencers. For example, many companies now share blogs and video blogs describing uses for various products they sell. For example, a heating, ventilation, and air-conditioning (HVAC) company may ask a marketing company to write blogs and video blogs for their website. These videos may show products that they sell or give ideas to homeowners who have issues with their HVAC, and they offer an opportunity to connect with potential buyers while setting themselves up as the experts in that area.

To review, see Social Influences.

 

7d. Identify how social networking is changing the way companies and consumers interact

• How has social networking changed over the last two decades?
• How can a company use social media to their advantage when promoting products?
• What can a company do to encourage online consumer interaction?

Social media has changed quite a bit over the last couple of decades, and with marketing, it has become specifically targeted to consumers who need products or services.

Social circles, social networking, and online consumer interaction are other ways companies can interact with customers. By creating a business social media page, consumers can follow the companies and have their posts appear on their feeds. Customers can also ask questions by posting information about a problem and looking for a solution. This interaction helps companies to better connect with their customers daily.

Companies can also use direct advertising on social media to reach their target market. For example, do an online search about carpet cleaning because you need the service. You may see a carpet cleaning advertisement show up almost immediately on your social media. This is targeted advertising specifically to you, and if this same company has a social media page, you can connect directly with that company through social media and avoid having to make a phone call.

To review, see Social Influences.

7e. Identify the demographic factors that relate to family and household structure

• Can you name three demographics that marketers might use that relate to family?
• Can you name three demographics marketers might use that relate to household structure?
• Why is it important for marketers to use demographics?

Demographics are basic information about consumers that marketers can use to better understand consumer buying habits. Demographics might include age, sex, race, education level, homeowners, etc. Demographics are essential statistics that help to describe populations.

When it comes to family and household structure, the family demographics that might be used are the size of the family or the head of the household. For example, in the United States, we can investigate statistics that show which states have the largest families and what those averages are. Marketing companies can then use this information to target larger families with household advertising or family needs.

A few years ago, a teenage girl purchased a pregnancy kit at a store, and while checking out, she used her parent's phone number to take advantage of rewards. A few weeks later, that store sent promotional items and congratulations to the family about prenatal vitamins for the new baby. This is how the family found out their teenage daughter was pregnant. In this case, the marketing was very specific and targeted the correct market, but it missed the mark on the discrepancy.

To review, see Demographic Influences.

 

Unit 7 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• family demographics
• online consumer interaction
• social circles
• social media influencers
• social networking
• word-of-mouth marketing

Unit 8: The Influences of Class, Ethnicity, and Age

8a. Compare how both personal and social conditions influence how we spend our money

• Why is it important for a marketer to study how social conditions might influence buying decisions?
• Beyond necessities, why do people spend money?
• Why would a consumer buy something they do not need or want?

Many things influence how a consumer may spend their money. When the economy is strong, people will have more confidence in the economy. This stronger confidence may also lead to consumer confidence, and they may buy more during a strong economy.

Many different factors may influence a consumer to spend money. Social conditions and social status may influence buying decisions depending on the amount of money one has to spend. Social class is one factor that a marketer may consider as an influencing behavior. The higher the social class, the more money one might spend. Other factors might include cultural, personal, or psychological, and when marketing a product, a marketer needs to be aware of these factors that may influence a consumer's purchase.

Can you imagine buying something that you do not want or need? Most likely, you just answered no. However, perhaps you have purchased cookies or lemonade from a five-year-old. Or maybe you loved and bought an item in the store, only to discover you did not need or want that product. Or perhaps you bought a product only to get home and find out you already own the same product and never used it. These are all examples of how consumers might buy something they don't truly want or need.

To review, see Factors Influencing Behavior and Influences on Consumer Decisions.

8b. Identify how a person's desire to make a statement about their social class, or the class they hope to belong to, influences the products they like and dislike

• Can psychological influences determine what a consumer likes or does not like?
• Why is social status important to most people?
• How can people in a higher social class influence those in a lower class?

Imagine that you recently received a promotion that tripled your income and now find yourself in a different social class, and you have created a change in your choice of economic decisions. You can afford the car you've always wanted, or you may be able to afford to move to a bigger and better house. Suddenly, it is very important to you to prove to others that your social status has improved. Essentially, you are attempting to make a statement about who you are.

Psychological influences may also change when consumers move from one social class to another. People in a higher social class tend to influence those in a lower class, whether this is intentional or not. People in a lower class may subconsciously or consciously wish to be in a higher class. Sometimes, people in a lower class may wish to spend as though they are not in their social class.

We saw examples of this just before the 2008 real estate marketing crash, and people were in homes they could not realistically afford. During that time, there was a sense of an unrealistic social status that was important to most consumers. Consumers typically spend according to their social class but may dream of being in a higher social class.

To review, see Situational Factors and Psychological Factors.

8c. Identify how social classes are measured, how social class membership is determined, and the measurement problems that marketing managers must deal with

• What is social class?
• How is social class determined?
• How can marketers use information about social classes?

Social class is typically determined by income. In the United States, we have a lower class of people who are typically close to the poverty level, a middle class that includes the bulk of the population, and an upper class. Some measurements break out the classes into the top 10%, 5%, or 1% of earners.

Cultural diversity is another social factor for marketers to consider when analyzing consumers from diverse backgrounds and cultures.

Marketers can use this information to specifically target a social class, depending on their product or services. For example, if a marketing company is trying to promote investments, they may specifically target the upper class who are looking for a way to invest money. If the minimum investment amount is $500,000, then a marketer would not want to promote that investment to someone in the lower or middle class because they will most likely not have as much discretionary income as someone in a higher social class. Therefore, a marketer must understand who they are promoting to and what measurements they are using to determine that population.

To review, see:

• Situational Factors
• Psychological Factors
• Cultural Diversity

 

Unit 8 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• cultural diversity
• economic decisions
• psychological influences
• social class
• social conditions
• social status

Unit 9: Cultural Influences

9a. Explain the critical role that demographics play in influencing consumer behavior

• What are demographics?
• How can demographics be used in marketing?
• How do demographics help to understand consumer behavior?

The cultural influences that might affect marketing today include family, race, sex, generations, subcultures, and more. By understanding these differences and how to reach each of these markets, a marketing plan may be better defined.

For example, a marketer may wish to target homeowners in their 40s or 50s for a new type of storm drain. The marketer can use demographics such as age, homeowner status, and location to find these individuals and specifically create marketing for this population. A homeowner may be more likely than others to purchase products that are made for the home. By understanding demographics and how to use that information, a marketer can better understand consumer behavior for the products they are attempting to promote.

To review, see Culture Explained.

9b. Compare the nature of generations and develop an understanding of the generations in the United States

• What are the generations alive today?
• From a marketing standpoint, why is it important to understand the generations?
• Can you give an example of how generational information might be used in marketing?

For marketing purposes, the largest generations that are alive today include baby boomers, generation X, and millennials. By understanding the generations, a marketer may be better able to create promotions for these populations.

For example, most Baby Boomers are people in their 60s and 70s, and this generation is more likely to have disposable income than other generations. This generation may be more likely to take long vacations, buy a new house, retire, and take up a new hobby.

Generation X are in their 40s and 50s and are a much smaller generation than the Baby Boomers. This has resulted in quite a few open jobs as the Baby Boomers have reached retirement age, and the Generation X population does not have enough people to fill those open jobs. As a result, Generation X workers have had quite a bit of work available to them, and at higher salaries.

Millennials are in their 30s and early 40s. This is a large generation, and many have developed an attitude that quality of life is more important than working more hours. Millennials have less disposable income than the generations who came before them.

A marketer takes into consideration each of the generations and how their economic situation may influence their consumer behavior and spending. Each generation generally has its own characteristics, values, and beliefs about life and money. By understanding these different factors, a marketer can create more focused advertising and promote products or services specific to that generation.

To review, see Age and Generational Subcultures.

 

9c. Explain how our memberships in ethnic, racial, and religious subcultures often play a big role in guiding our consumption behaviors

• How do memberships or subcultures guide what purchases we make?
• What are memberships and subcultures in marketing?
• What is an example of making a purchase based on membership in a group?

Many consumers belong to ethnic, racial, and religious subcultures that may guide their purchasing decisions. When marketing for specific products or services, it is important to understand these different memberships or subcultures to better target advertising.

Someone who is religious and belongs to a specific religion may purchase products promoted by their church or religion. These items may include religious artifacts, texts, clothing, etc. By better understanding the subculture, a marketer can make specific promotions to that population. Gender and culture are other areas that should be considered when it comes to the consumption behaviors of consumers.

It may also be important to consider what products or services people of a specific subculture may not buy. This may be because it goes against their ethnic, racial, or religious beliefs. As a result, this type of marketing may need to be sensitive to the population.

To review, see Gender and Culture and The Seven Elements of Culture.

 

9d. Contrast the various ethnic and religious subcultures and the unique opportunities and challenges they present to marketers

• What is an example of an ethnic or religious subculture?
• Why might it be challenging for a marketer to advertise to people with an ethnic or religious subculture?
• What opportunities would a marketer have when advertising to people with an ethnic or religious subculture?

As mentioned in the previous unit, it is important to understand the various ethnic and religious subcultures to properly market to those populations. A subculture is a smaller section of a cultural society. There are numerous opportunities and challenges that a marketer will need to consider before developing an advertising campaign for an ethnic and religious subculture. By better understanding one of these memberships, a marketer may be able to develop a more focused marketing campaign.

One challenge might be understanding what products or services someone in that subculture may not want to buy based on their religion or ethnic culture. One opportunity is that someone in an ethnic or religious subculture may be the only population for certain products or services. With a better understanding of that subculture, a marketer can specifically target that market.

For example, in some religions, specific clothing must always be worn. People who belong to this religion may be the only consumers of those specific products, and promotion of those products may be conducted through religious services.

To review, see Gender and Culture and The Seven Elements of Culture.

 

Unit 9 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• Baby Boomers
• cultural influences
• ethnic, racial, and religious subcultures
• generations
• Generation X
• Millennials
• subculture

Unit 10: Informing Marketing Strategy

10a. Identify the various components that would be most effective in understanding and/or predicting a consumer's behavior

• What are four factors that might be considered in consumer buying behavior?
• From a marketing perspective, why is it important to understand consumer buying behavior?
• From a social perspective, what is one factor to consider about consumer buying behavior?

When predicting a consumer's behavior, it's important to consider four factors or characteristics. These include personal, psychological, social, and cultural. Each one of these characteristics may change a consumer's behavior. Another factor to consider is the aging process and how these characteristics might change over time. For example, the social aspect will be entirely different when the consumer is in their 20s compared to when they reach their 50s. Not only has their social status changed, but their consumer buying behavior has changed.

From a marketing perspective, it is important to understand consumer buying behavior so that the marketer can better target a specific population. The consumer decision-making process may change depending on various factors affecting the buyer. As mentioned in other units, it is important to consider the various factors or characteristics of the consumer's behavior because the marketing can then be targeted to that population.

To review, see Consumer Behavior Components Summary.

 

10b. Evaluate the dimension components that a marketer could use in a customer segmentation

• What is customer segmentation?
• Why is it important to study customer segmentation?
• How can marketing be applied to customer segmentation?

Customer segmentation may be analyzed through different segmentation approaches, and examples may include demographic, behavioral, or geographic. A marketer needs to be able to narrow down the target market for specific promotions. To properly do this, market segmentation is needed. Market segmentation allows marketers to focus on specific statistics that may favor that population.

For example, if a real estate company wanted to advertise to potential buyers in the Houston area, they may use demographics and geographics, such as age, family size, and location. The marketer can then use this information to promote properties specific to that buying population.

To review, see Segmentation Criteria and Approaches.

 

10c. Identify the actions a marketer could take to measure, monitor, and improve the customer experience

• What is an example of improving the customer experience?
• How can the customer experience be monitored?
• Why is it important to improve the customer experience?

Marketing companies may want to analyze and improve the customer experience, and they can do this by monitoring or measuring the experience to improve. One way the customer experience may be monitored or measured is by reviewing that product or service. Many companies encourage customers to leave reviews after purchasing a product or using a service. These reviews may also contain feedback about that product or service and may give examples of improvement.

All companies must attempt to improve the customer experience because happy customers leave good reviews, which will encourage new customers to buy products for their services. By monitoring feedback through reviews, social media, and the company website, a company can monitor customer experience.

Consumer decision-making trends change frequently and can affect consumer behavior. For example, sustainability has been a business trend that has become quite popular. By promoting a product or a brand's sustainability, you may be able to better connect with the consumer and what is important to them.

To review, see Consumer Decision-Making Trends.

 

10d. Explain the concept of emotional branding and its impact on customer acquisition

• What is emotional branding?
• What is an example of emotional branding as it relates to consumer behavior?
• Why is it important for a company to establish emotional branding with a customer?

Emotional branding occurs when a customer deeply connects with a brand, and their consumer behavior reacts to that emotional bond. For example, Bath and Body Works and The Body Shop have strong customer followings because of their use of scent. Both stores have connected with customers through scent, which may bring fond memories and an emotional attachment.

When emotional branding occurs between a brand and a customer, customer loyalty is built, and in some cases, this bond may be very difficult to break. Once that bond forms, the buyer may continue to purchase products from that company for more than a decade.

Many companies would like to establish emotional bonding with customers, but most bonding with a brand occurs naturally and cannot be forced. It may be possible to build an emotional bond between a brand and a customer over time. The consumer must first trust that the products are reliable and usable and then may become a loyal customer after some time has passed.

To review, see Emotional Branding Overview.

 

Unit 10 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• consumer buying behavior
• consumer decision-making trends
• emotional branding
• improve the customer experience
• segmentation approaches