MKTG620 Dr. Rader Spring 2006 1. Discuss the concept of social class.

Include in your discussion the five attributes of social classes, the three methods used to develop indices of social status and the subjective nature of objective measures of social class. Social class is a rank w/in a given society based on attitudes, values and lifestyles. 5 attributes of social class are: 1. They have status. Ranking is relative to the criteria important to that society. 2. They are hierarchical. There is a social ladder based on status criteria. 3. Serve as a frame of reference for individual norms, attitudes and behavior. 4. They are dynamic. You can move up and down the social class scale. 5. They discourage contact w/ members of other social classes. Three indices are used to develop social status: 1. Reputation where u rank the social positions of other people 2. Subjective index is where one rates himself 3. Objective index: one or more socioeconomic measures are used to determine social class. When using objective indices to measure social class, one must remember that the results are subjective based on 4 criteria: 1. What measures are used (ex: occupation, income) 2. The assignment of scores to the indices. 3. The weight of the indices 4. The breakdown of social class by total points. 2. Discuss the applications of social class to marketing. Include in your discussion the concepts of relative occupational class income and subjective discretionary income. Mkters grp people together based on their consumption patterns. Consumption patterns are determined by lifestyle. Lifestyle seems to have a very strong link to social class, so, in effect, mkters target according to social class. The relationship of a family's total income to the median income of other families in the same occupational class is the relative occupational class income. These people are in a class w/ others, but differ slightly in response to mkting due to income differences. The overpriviledged have significantly higher incomes than the median age and the underpriviledged have significantly lower incomes than the median income for the social class. Selective discretionary income is an estimate by the consumer of how much money they have avail to purchase nonessentials. The underpriviledged may be in the same social class, but will not respond to mktg b/c they feel they don't have the money to spend on the product. 3. Discuss the concept of lifestyle (psychographics, AIO) as it relates to marketing. Include in your discussion the relationship between lifestyle and purchasing plus how marketers can use this concept. Lifestyle is how a person lives. It is their unified patters of behavior that bother determine and are determined by consumption. The goal of most purchases are aimed at maintaining or enhancing lifestyle. Mkters want to know if their product achieves this goal. Mkters must differentiate 1. Heavy users vs light users 2. Product user vs product non-user 3. Brand user vs non-brand user 4. Media watched, read or listened to. AIO plus demographics

MKTG620 Dr. Rader Spring 2006 explains a consumers lifestyle. Activities - how do they spend their time, Interests- what is important in their immediate surroundings, Opinions- where they stand on important issues. (attitudes and values) 10. The consumer-goods classification scheme identifies four product categories (convenience goods, shopping goods, etc.). Identify them and the subcategories (staples, impulse, etc.) and indicate how to market each of the different types of goods. I. Convenience goods: goods that the cust usually purchases frequently, immediately, & w/min effort. Ex: soaps, tobacco products. A. Staples - goods consumers purchase on a regular basis. B. Impulse goods - purchased w/o any planning or search effort. Ex: candy bars. Usually placed next to check out counters C. Emergency goods - purchased weh a need is urgent Ex: umbrella during a rainstorm. Placed in many outlets to capture the sale when the customer needs them. II. Shopping goods: goods that the cust, in the process of selection and purhase, characteristically compares on such bases as suitability, quality, price and style. Ex: furniture, clothing. A. Homogeneous shopping goods- similar in quality but different enuf in price to justify shopping comparisons. B. Heterogeneous shopping goods - differ in product features and services that may be more important than price. Seller of herero shopping goods carries a wide assortment to satisfy individual tastes and must have well-trained salespeople to inform and advise cust. III. Specialty Goods: goods w/ unique characteristics or barnd ID for which a sufficient number of buyers is willing to make a special purchasing effort. Ex: cars. Involve no comparisons. Buyers invest time only to reach dealer carring the wanted products. Dealers do not need convenient locations. However, they must let prospective buyers know their locations. IV. Unsought goods: goods the consumer does not know about or does not normally think of buying. Ex; life insurance. Require advertising and personal-selling support. 12. Discuss the five categories of the service mix (pure tangible good, tangible good with accompanying services, etc.) and the four major characteristics (intangibility, inseparability, variability, and perishability) that distinguish services from physical products and greatly affect marketing programs for services. Describe these four major characteristics and offer strategies for marketing each. 5 categories: I. Pure tangible good: the offering consists primarily of a tangible good such as soap, salt. No services accompany the product. II. Tangible good w/accompanying service: the offering consists of a tangible good accompanied by one or more services. Ex: computer and tech support III. Hybrid: the offering consists of equal parts of g&s. Ex: eat at restaurants for

MKTG620 Dr. Rader Spring 2006 food and service. Major service w/ accompanying minor g&s: the offering consists of a major service along w/ add'l services or supporting goods. Ex: plane ticket for transportation, but get snack, service for comfort V. Pure service: the offering consists primarily of a service. Ex: massage. 4 characteristics: I. intangibility: services are intangible. They cannot be seen, touched, tasted. To reduce uncertainty, buyers will look for signs or evidence of the service quality. They will draw inferences about quality from the place, people, equipment, communicaiton material, symbols and price. Service provider must "manage the evidence" to depict the image they wish to portray to the customer. II. Inseparability: Services are typically produce and consumed imultaneously. When clients have stron provider preferences, price is raised to ration the preferred provider's limited time. To overcome this the service provider can learn to work w/larger grps, learn to work faster, or even train more service providers and build a confidence w/clients that the service provider trained will deliver an equal amt of satisfaction. III. Variability: Services depend on who provides them and when and where they are provided. Service providers can take steps toward quality control: invest in good hiring and training procedures, standardize the service-performance process throughout the organization, and monitor cust satisfaction thru suggestion and complaint systems. IV. Perisability: Services cannot be stored. Strategies for supply/ demand management: A. Demand: 1. Differential pricing shifts some demand from peak to off-peak pds. Ex: matinee pricing 2. Nonpeak demand can be cultivated. 3. Complementary services can be developed dureing peak time to manage waiting customers 4. Reservation systems help manage demand level also. B. Supply: 1. Part-time employees used during peak hrs only 2. Peak-time efficiency routines - only essential tasks during peak hrs. 3. Increasd consumer participation - where customer does some of the task Ex: bag ur own groceries 4. Shared services - team up w/someone else who also needs the product. 5. Facilities for future expansion - plan ahead for future expansion or development IV. 14. Discuss the five international product and promotional strategies. (straight extension, communication adaptation, etc.) in terms of using a standardized marketing mix worldwide vs. an adapted marketing mix. The five strategies are: Straight extension - introducing the product in the foreign mkt w/o any change. The company should first determine whether foirign consumers use that product. Tempting

MKTG620 Dr. Rader Spring 2006 b/c it involves no add'l R&D expense, manufacturing retooling, or promo modification. But it can be costly in the long run. Product Adaptation: involves altering the product to meet local condistion or preferences. There are several levels of adapation. A company can produce a regional version of its product, a country version, a city version, and even retailer's versions. Often products are adapted to local superstitions or beliefs (ex: feng shue. Product Invention: consists of creating something new. 2 forms: Backward invention the reintroducing of earlier products that are well-adapted to a foreign country's needs. Forward Invention - creating a new product to meet a need in another country. Product invention is a costly stragegy, but the payoffs can be great. Communication adapation: changing a promo campaign for each local mkt. Dual adaptation: adapting a product and the promo campaign. W/ communication adaptation and dual adaptation mkters can do the following: same message, translate into other language; same message, but adapt meaning for locals to understand; develop global pool of ads and have each country choose appropriate ones; Mkters must also be aware of regulations on advertising and special promotions in other countries, as well as what type of advertising is effective in other countries. Draw pic here-

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