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Kotler 11th edition, ch. 1-4
MKTG MGMT 551 Terms & Concepts
179
Marketing
Graduate
07/26/2012

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Term
MARKETING
Definition
The process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services that satisfy individual and organizational goals (AMA definition)
Term
Marketing management
Definition
the art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.
Term
Markets
Definition
a collection of buyers grouped by needs, products, demographics, geographies and activities
Term
Market Segments
Definition
are markets defined by more than one grouping qualifier
Term
Target Markets
Definition
are markets or segments chosen as the primary source of business for an enterprise
Term
Industries
Definition
are Collections of Sellers Grouped by Common Solutions
Term
NEEDS
Definition
Requirements for survival, development and growth. Primary (application) and Secondary (social, emotional, psychological)
Term
WANTS
Definition
felt or activated needs
Term
SELLING
Definition
motivating someone to satisfy a need by providing a stimulus to make the need felt. Process of converting needs to wants
Term
DEMAND
Definition
The quantifiable want and ability to pay within a specific market (groups of buyers
Term
SOLUTIONS TO NEEDS, WANTS, AND DEMANDS
Definition
BRANDING
Term
Products & Offerings Provide
Definition
Satisfaction through Value
Term
Branding Creates
Definition
a Perception of Value
Term
Value is defined as
Definition
Benefits (functional & personal) less Costs (monetary & personal social, emotional, psychological)
Term
Exchange
Definition
is the core concept of marketing, is the process of obtaining a desired product from someone by offering something in return.
Term
Marketer
Definition
someone who seeks a response (attention, a purchase, a vote, a donation) from another party, called the prospect.
Term
Eight states of demand
Definition
Negative, Non existent, Latent, Declining, Irregular, Full, Overfull, and Unwholesome
Term
Negative demand
Definition
Consumers dislike the product and may even pay a price to avoid it.
Term
Nonexistent demand
Definition
Consumers may be unaware or uninterested in the product.
Term
Latent demand
Definition
Consumers may share a strong need that cannot be satisfied by an existing product.
Term
Declining demand
Definition
Consumers begin to buy the product less frequently or not at all.
Term
Irregular demand
Definition
Consumer purchases vary on a seasonal, monthly, weekly, daily, or even hourly basis.
Term
Full demand
Definition
Consumers are adequately buying all products put into the marketplace.
Term
Overfull demand
Definition
More consumers would like to buy the product than can be satisfied.
Term
Unwholesome demand
Definition
Consumers may be attracted to products that have undesirable social consequences.
Term
Four components of holistic marketing
Definition
Relationship, Integrated, Internal, Social Responsibility Marketing
Term
Relationship marketing
Definition
the aim of building mutually satisfying long term relationships with key parties—customers, suppliers, distributors, and other marketing partners—in order to earn and retain their business. Relationship marketing builds strong economic, technical, and social ties among the parties.
Term
marketing network
Definition
consists of the company and its supporting stakeholders (customers, employees, suppliers, distributors, retailers, ad agencies, university scientists, and others) with whom it has built mutually profitable business relationships. Increasingly, competition is not between companies but between marketing networks, with the prize going to the company that has built the better network. The operating principle is simple Build an effective network of relationships with key stakeholders, and profits will follow.
Term
marketing mix
Definition
defined as the set of marketing tools the firm uses to pursue its marketing objectives. Marketing mix decisions must be made for influencing the trade channels as well as the final consumers. McCarthy classified these tools into four broad groups, which he called
Term
the four Ps of marketing
Definition
product, price, place, and promotion.
Term
The four Ps represent
Definition
the SELLER’s view of the marketing tools available for influencing buyers.  From a buyer's point of view, each marketing tool is designed to deliver a customer benefit.
Term
The marketer must try to understand the target market's
Definition
Needs, Wants, and Demands
Term
Needs
Definition
the basic human requirements. People need food, air, water, clothing, and shelter to survive. People also have strong needs for recreation, education, and entertainment.
Term
Needs become wants when
Definition
they are directed to specific objects that might satisfy the need.
Term
Demands
Definition
wants for specific products backed by an ability to pay.
Term
Marketers do not create needs
Definition
Needs preexist marketers. Marketers, along with other societal factors, influence wants.
Term
Value proposition
Definition
a set of benefits they offer to customers to satisfy their needs.
Term
The intangible value proposition is made physical by
Definition
an offering is made physical by the combination of products, services, information, and experiences. The intangible value proposition is made physical by
Term
A brand
Definition
is an offering from a known source.
Term
Strong brand strength
Definition
—that is, a strong, favorable, and unique brand image.
Term
Value
Definition
reflects the perceived tangible and intangible benefits and costs to customers. Value can be seen as primarily a combination of quality, service, and price (qsp), called the "customer value triad."
Term
Value increases with
Definition
quality and service
Term
Value decreases with
Definition
price, although other factors can also play an important role.
Term
Marketing can be seen as the
Definition
identification, creation, communication, delivery, and monitoring of customer value.
Term
Satisfaction reflects
Definition
a person's comparative judgments resulting from a product's perceived performance (or outcome) in relation to his or her expectations.
Term
The 3 MARKETING CHANNELS
Definition
Communication, Distribution, and Service
Term
Communication channels
Definition
deliver and receive messages from target buyers, and include newspapers, magazines, radio, television, mail, telephone, billboards, posters, fliers, CDs, audiotapes, and the Internet.
Term
Distribution channels
Definition
display, sell, or deliver the physical product or service(s) to the buyer or user. They include distributors, wholesalers, retailers, and agents.
Term
Service channels
Definition
to carry out transactions with potential buyers. Service channels include warehouses, transportation companies, banks, and insurance companies that facilitate transactions. Marketers clearly face a design problem in choosing the best mix of communication, distribution, and service channels for their offerings.
Term
SUPPLY CHAIN
Definition
describes a longer channel stretching from raw materials to components to final products that are carried to final buyers. The supply chain represents a value delivery system
Term
COMPETITION
Definition
includes all the actual and potential rival offerings and substitutes that a buyer might consider.
Term
ENVIRONMENT
Definition
Competition represents only one force in the environment in which the marketer operates. The marketing environment consists of the task environment and the broad environment.
Term
The task environment
Definition
includes the immediate actors involved in producing, distributing, and promoting the offering. The main actors are
Term
The supplier group are
Definition
material suppliers and service suppliers such as marketing research agencies, advertising agencies, banking and insurance companies, transportation companies, and telecommunications companies.
Term
Included with distributors and dealers
Definition
are agents, brokers, manufacturer representatives, and others who facilitate finding and selling to customers.
Term
The broad environment consists of six components
Definition
demographic environment, economic environment, physical environment, technological environment, political legal environment, and social cultural environment.
Term
The Marketing Planning Process
Definition
analyzing marketing opportunities; selecting target markets; designing marketing strategies; developing marketing programs; and managing the marketing effort.
Term
DEVELOPING MARKETING STRATEGIES AND PLANS
Definition
to identify its potential long run opportunities given its market experience and core competencies.
Term
CAPTURING MARKETING INSIGHTS
Definition
to understand what is happening inside and outside the company, it needs a reliable marketing information system to closely monitor its marketing environment.
Term
CONNECTING WITH CUSTOMERS
Definition
to best create value for its chosen target markets and develop strong, profitable, long term relationships with customers
Term
BUILDING STRONG BRANDS
Definition
it must understand the strengths and weaknesses of its brand with customers.
Term
SHAPING THE MARKET OFFERINGS
Definition
At the heart of the marketing program is the product—the firm's tangible offering to the market, which includes the product quality, design, features, and packaging
Term
DELIVERING VALUE
Definition
it must also determine how to properly deliver the value embodied by these products and services to the target market.
Term
COMMUNICATING VALUE
Definition
it must also adequately communicate the value embodied by its products and services to the target market.
Term
Marketing communications activities
Definition
are the means by which firms attempt to inform, persuade, and remind consumers—directly or indirectly—about the brands they sell.
Term
CREATING LONG TERM GROWTH
Definition
Companies must also take a long term view of its products and brands and how its profits should be grown. Based on its product positioning, it must initiate new product development, testing, and launching. The strategy also will have to take into account changing global opportunities and challenges.
Term
The Value Chain
Definition
a tool for identifying ways to create more customer value.
Term
According to the Porter model, every firm is
Definition
a synthesis of activities performed to design, produce, market, deliver, and support its product.
Term
The value chain identifies nine strategically relevant activities
Definition
(five primary activities and four support activities) that create value and cost in a specific business.
Term
Primary activities cover the sequence of
Definition
bringing materials into the business (inbound logistics), converting them into final products (operations), shipping out final products (outbound logistics), marketing them (marketing and sales), servicing them (service).
Term
Support activities
Definition
procurement, technology development, human resource management, and firm infrastructure—are handled in certain specialized departments, as well as elsewhere. Several departments, for example, may do procurement and hiring. The firm's infrastructure covers the costs of general management, planning, finance, accounting, legal, and government affairs.
Term
The firm's task is to
Definition
Examine its costs and performance in each value creating activity and to look for ways to improve it. Estimate its competitors' costs and performances as benchmarks against which to compare its own costs and performance and strive for "best of class" practices of the world's best companies. Success depends not only on how well each department performs its work, but also on how well the various departmental activities are coordinated to conduct core business processes, which include
Term
The market sensing process
Definition
All the activities involved in gathering market intelligence, disseminating it within the organization, and acting on the information.
Term
The new offering realization process
Definition
All the activities involved in researching, developing, and launching new high quality offerings quickly and within budget.
Term
The customer acquisition process.
Definition
All the activities involved in defining target markets and prospecting for new customers.
Term
The customer relationship management process.
Definition
All the activities involved in building deeper understanding, relationships, and offerings to individual customers.
Term
The fulfillment management process.
Definition
All the activities involved in receiving and approving orders, shipping the goods on time, and collecting payment.
Term
A core competency has three characteristics
Definition
(1) It is a source of competitive advantage in that it makes a significant contribution to perceived customer benefits (2) It has applications in a wide variety of markets (3) It is difficult for competitors to imitate
Term
Competitive advantage
Definition
also accrues to companies that possess distinctive capabilities. Whereas core competencies tend to refer to areas of special technical and production expertise, distinctive capabilities tend to describe excellence in broader business processes.
Term
The holistic marketing framework is designed to
Definition
address three key management questions
Term
VALUE EXPLORATION
Definition
requires an understanding of the relationships and interactions among three spaces
Term
(1) Customer’s cognitive space
Definition
reflects existing and latent needs and includes dimensions such as the need for participation, stability, freedom, and change.
Term
(2) Company’s competence space can be described in terms of
Definition
breadth—broad versus focused scope of business; and depth—physical versus knowledge based capabilities.
Term
(3) Collaborator’s resource space involves
Definition
horizontal partnerships, where companies choose partners based on their ability to exploit related market opportunities, and vertical partnerships, where companies choose partners based on their ability to serve their value creation.
Term
VALUE CREATION
Definition
How to craft new customer benefits, marketers must understand what the customer thinks about, wants, does, and worries about. Marketers must also observe who customers admire, who they interact with, and who influences them.
Term
To exploit a value opportunity, the company needs value creation skills to
Definition
Identify new customer benefits from the customer's view; Utilize core competencies from its business domain; Business realignment may be necessary to maximize core competencies.
Term
Value Creation involves three steps
Definition
(1) (re)defining the business concept (the "big idea"); (2) (re)shaping the business scope (the lines of business); (3) (re)positioning the company's brand identity (how customers should see the company).
Term
In order to deliver value the company must become proficient at
Definition
CRM, IRM, BPM
Term
Customer relationship management
Definition
allows the company to discover who its customers are, how they behave, and what they need or want. It also enables the company to respond appropriately, coherently, and quickly to different customer opportunities.
Term
Internal resource management
Definition
allows the company to respond effectively and integrate major business processes (e.g., order processing, general ledger, payroll, and production) within a single family of software modules.
Term
Business partnership management
Definition
allows the company to handle complex relationships with its trading partners to source, process, and deliver products.
Term
The marketing plan
Definition
the central instrument for directing and coordinating the marketing effort. The marketing plan operates at two levels strategic and tactical.
Term
The strategic marketing plan
Definition
lays out the target markets and the value proposition that will be offered, based on an analysis of the best market opportunities.
Term
The tactical marketing plan
Definition
specifies the marketing tactics, including product features, promotion, merchandising, pricing, sales channels, and service.
Term
A business must be viewed as
Definition
a customer satisfying process, not a goods producing process.
Term
The purpose of identifying the company's strategic business units (SBUs) is to
Definition
develop separate strategies and assign appropriate funding; it needs analytical tools to classify its businesses by profit potential.
Term
An SBU has three characteristics
Definition
1.) It is a single business or collection of related businesses that can be planned separately from the rest of the company. 2.) It has its own set of competitors. 3.) It has a manager who is responsible for strategic planning and profit performance and ?who controls most of the factors affecting profit. ?
Term
INTENSIVE GROWTH
Definition
The first option is to identify opportunities to achieve further growth within current businesses (intensive opportunities).
Term
Product market expansion grid
Definition
A useful framework for detecting new intensive growth opportunities
Term
INTERGRATIVE GROWTH
Definition
The second is to identify opportunities to build or acquire businesses that are related to current businesses (integrative opportunities).
Term
DIVERSIFICATION GROWTH
Definition
The third is to identify opportunities to add attractive businesses that are unrelated to current businesses (diversification opportunities).
Term
Contents of the Marketing Plan
Definition
Executive summary and table of contents. Situation analysis. Marketing strategy. Financial projections. Implementation controls.
Term
The General Electric Model CHARACTERISTICS
Definition
1. Assesses SBU opportunity based on current market share of quantifiable market sizes. 2. SBUs are rated in terms of business strengths relative to competitive position in markets of varying attractiveness. 3. Defines specific business strategies in accordance with SBUs’ competitive business strengths in markets of varying attractiveness
Term
A marketing information system (MIS) consists of
Definition
people, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.
Term
The Order to Payment Cycle
Definition
1. Sales representatives, dealers, and customers send orders to the firm. 2. The sales department prepares invoices and transmits copies to various departments. 3. Out of stock items are back ordered. 4.Shipped items are accompanied by shipping and billing documents that are sent to various departments.
Term
Sales Information Systems
Definition
1. Marketing managers need timely and accurate reports on current sales. 2. This enables it to transmit nightly orders to suppliers for new shipments of replacement stock. 3. Wal Mart shares its sales data with its larger suppliers such as P&G and expects P&G to re supply Wal Mart stores in a timely manner.
Term
Types of databases—
Definition
customer databases, product databases, salesperson databases.
Term
The internal records system
Definition
supplies results data, but the marketing intelligence system supplies happenings data.
Term
A marketing intelligence system is
Definition
a set of procedures and sources managers use to obtain everyday information about developments in the marketing environment.
Term
A trend is
Definition
a direction or sequence of events that has some momentum and durability. Trends are more predictable and durable than fads. A trend reveals the shape of the future and provides many opportunities.
Term
A fad is
Definition
unpredictable, short lived, and without social, economic, and political significance.
Term
Megatrends
Definition
described as "large social, economic, political and technological changes [that] are slow to form, and once in place, they influence us for some time— between seven and ten years, or longer."
Term
Demographic trends are
Definition
highly reliable for the short and intermediate run. There is little excuse for a company's being suddenly surprised by demographic developments.
Term
The main demographic force that marketers monitor is
Definition
population, because people make up markets.
Term
Marketers are keenly interested in
Definition
1. size and growth rate of population in cities, regions, and nations; 2. age distribution and ethnic mix; 3. educational levels; 4. household patterns; 5. regional characteristics and movements.
Term
The population in any society falls into five educational groups
Definition
illiterates, high school dropouts, high school diplomas, college degrees, and professional degrees.
Term
Consumerist movement—
Definition
an organized movement of citizens and government to strengthen the rights and powers of buyers in relation to sellers.
Term
Consumerists have advocated and won the right to know
Definition
the true interest cost of a loan, the true cost per standard unit of competing brands (unit pricing), the basic ingredients in a product, the nutritional quality of food, the freshness of products, and the true benefits of a product.
Term
The Marketing Research System
Definition
defined as the systematic design, collection, analysis, and reporting of data and findings relevant to a specific marketing situation facing the company.
Term
Marketing research firms fall into three categories
Definition
Syndicated service research firms, Custom marketing research firms, and Specialty line marketing research firms
Term
Syndicated service research firms
Definition
These firms gather consumer and trade information, which they sell for a fee. Examples Nielsen Media Research, SAMI/Burke.
Term
Custom marketing research firms
Definition
These firms are hired to carry out specific projects. They design the study and report the findings.
Term
Specialty line marketing research firms
Definition
These firms provide specialized research services. The best example is the field service firm, which sells field interviewing services to other firms.
Term
Secondary data
Definition
are data that were collected for another purpose and already exist somewhere.
Term
Primary data
Definition
are data freshly gathered for a specific purpose or for a specific research project.
Term
The 5 Research Approaches
Definition
Observational, Focus Group, Survey, Behavioral, and Experimental
Term
The 3 Research Instruments
Definition
Questionnaires, Qualitative Measures, and Mechanical devices
Term
Shadowing
Definition
—observing people using products, shopping, going to hospitals, taking the train, using their cell phones.
Term
Behavior mapping—
Definition
photographing people within a space, such as a hospital waiting room, over two or three days.
Term
Consumer journey—
Definition
keeping track of all the interactions a consumer has with a product, service, or space.
Term
Camera journals—
Definition
asking consumers to keep visual diaries of their activities and impressions relating to a product.
Term
Extreme user interviews—
Definition
talking to people who really know—or know nothing—about a product or service and evaluating their experience using it.
Term
Unfocus groups
Definition
—interviewing a diverse group of people To explore ideas about sandals, IDEO gathered an artist, a bodybuilder, a podiatrist, and a shoe fetishist.
Term
Mechanical devices
Definition
are occasionally used in marketing research. For example, galvanometers can measure the interest or emotions aroused by exposure to a specific ad or picture. In recent years technology has advanced to such a degree that now devices like skin sensors, brain wave scanners, and full body scanners are being used to get consumer responses.
Term
The SAMPLING PLAN calls for three decisions
Definition
Sampling unit, Sample size, and Sampling procedure
Term
Sampling unit Who is to be surveyed?
Definition
The marketing researcher must define the target population that will be sampled. Once the sampling unit is determined, a sampling frame must be developed so that everyone in the target population has an equal or known chance of being sampled.
Term
Sample size How many people should be surveyed?
Definition
Large samples give more reliable results than small samples. However, it is not necessary to sample the entire target population or even a substantial portion to achieve reliable results. Samples of less than 1 percent of a population can often provide good reliability, with a credible sampling procedure.
Term
Sampling procedure How should the respondents be chosen?
Definition
To obtain a representative sample, a probability sample of the population should be drawn. Probability sampling allows the calculation of confidence limits for sampling error.
Term
The 4 CONTACT METHODS
Definition
Mail Questionnaire, Telephone Interview, Personal Interview, and Online Interview
Term
Step 3 The data collection phase of marketing research is generally the
Definition
most expensive and the most prone to error.
Term
Customer performance scorecard
Definition
records how well the company is doing year after year on such customer based measures. Norms should be set for each measure, and management should take action when results get out of bounds.
Term
Stakeholder performance scorecard
Definition
tracks the satisfaction of various constituencies who have a critical interest in and impact on the company's performance employees, suppliers, banks, distributors, retailers, and stockholders. Again, norms should be set for each group and management should take action.
Term
Market share can be measured in three ways
Definition
Overall, Served, and Relative Market Share
Term
Overall market share
Definition
is the company's sales expressed as a percentage of total market sales.
Term
Served market share
Definition
is its sales expressed as a percentage of the total sales to its served market.
Term
Relative market share
Definition
over 100 percent indicates a market leader. A relative market share of exactly 100 percent means that the company is tied for the lead. A rise in relative market share means a company is gaining on its leading competitor.
Term
90 different types of demand estimates;
Definition
6 different product levels X 5 different space levels X 3 different time levels.
Term
The potential market
Definition
the set of consumers who profess a sufficient level of interest in a market offer.
Term
The available market
Definition
the set of consumers who have interest, income, and access to a particular offer. For some market offers, the company or government may restrict sales to certain groups.
Term
The qualified available market
Definition
the set of eligible consumers who have interest, income, access, and qualifications for the particular market offer.
Term
The target market
Definition
the part of the qualified available market the company decides to pursue. The company might decide to concentrate its marketing and distribution effort on the East Coast. The company will end up selling to a certain number of buyers in its target market.
Term
The penetrated market
Definition
the set of consumers who are buying the company's product.
Term
MARKET DEMAND for a product
Definition
is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.
Term
The overall marketing sensitivity of demand
Definition
The distance between the market minimum and the market potential
Term
An expansible market
Definition
such as the market for racquetball playing, is very much affected in its total size by the level of industry marketing expenditures..
Term
A nonexpansible market
Definition
—for example, the market for opera—is not much affected by the level of marketing expenditures; the distance between Ql and QZ is relatively small. Organizations selling in a nonexpansible market must accept the market's size (the level of primary demand for the product class) and direct their efforts to winning a larger market share for their product (the level of selective demand for the company's product).
Term
The market penetration index.
Definition
the current level of market demand to the potential demand level.
Term
A low market penetration index indicates
Definition
substantial growth potential for all the firms.
Term
A high market penetration index suggests that there will be
Definition
increased costs in attracting the few remaining prospects.
Term
In general, the price competition increases and margins fall when
Definition
the market penetration index is already high.
Term
The company's share penetration index
Definition
A company should also compare its current market share to its potential market share.
Term
A low share penetration index indicates that the company can
Definition
greatly expand its share.
Term
low share penetration index could be due to
Definition
low brand awareness, low brand availability, benefit deficiencies, too high a price.
Term
The market demand function
Definition
is not a picture of market demand over time. Rather, the curve shows alternative current forecasts of market demand associated with alternative possible levels of industry marketing effort in the current period.
Term
The company sales forecast
Definition
is the expected level of company sales based on a chosen marketing plan and an assumed marketing environment.
Term
The product penetration percentage
Definition
is the percentage of ownership or use of a product or service in a population.
Term
Company demand
Definition
is the company's estimated share of market demand at alternative levels of company marketing effort in a given time period.
Term
Sales quota
Definition
is the sales goal set for a product line, company division, or sales representative. It is primarily a managerial device for defining and stimulating sales effort.
Term
A sales budget
Definition
is a conservative estimate of the expected volume of sales and is used primarily for making current purchasing, production, and cash flow decisions.
Term
Company sales potential
Definition
is the sales limit approached by company demand as company marketing effort increases relative to that of competitors.
Term
Total Market Potential
Definition
is the maximum amount of sales that might be available to all the firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions.
Term
2 major methods of assessing area market potential are available
Definition
the market buildup method, which is used primarily by business marketers, and the multiple factor index method, which is used primarily by consumer marketers.
Term
Brand development index (BDI)
Definition
the index of brand sales to category sales.
Term
Group discussion method
Definition
Occasionally, companies will invite a group of experts to prepare a forecast. The experts exchange views and produce a group estimate {group discussion method);
Term
Pooling of individual estimates
Definition
experts supply their estimates individually, and an analyst combines them into a single estimate
Term
Time series analysis
Definition
consists of breaking down past time series into four components (trend, cycle, seasonal, and erratic) and projecting these components into the future.
Term
Exponential smoothing
Definition
consists of projecting the next period's sales by combining an average of past sales and the most recent sales, giving more weight to the latter.
Term
Statistical demand analysis
Definition
consists of measuring the impact level of each of a set of causal factors (e.g., income, marketing expenditures, price) on the sales level.
Term
econometric analysis
Definition
consists of building sets of equations that describe a system, and proceeding to fit the parameters statistically.
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