Term
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Definition
| the activity for creating, communicating, delivering, and exchanging offerings that benefit the organization, its stakeholders, and society at large |
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Term
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Definition
| the trade of things of value between buyer and seller so that each is better off after the trade |
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Term
| What does a market consist of? |
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Definition
| People with both the desire and the ability to buy a specific offering |
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Term
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Definition
| one or more specific groups of potential consumers toward which an organization directs its marketing program |
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Term
| What does the marketing mix consist of? |
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Definition
| the marketing manager's controllable factors- PRODUCT, PRICE, PROMOTION, & PLACE- that can be used to solve a marketing problem |
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Term
| What does environmental forces consist of? |
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Definition
| the uncontrollable forces in a marketing decision involving social, economic, technological, competitive, and regulatory forces |
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Term
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Definition
| the unique combination of benefits received by targeted buyers that includes quality, convenience, on-time delivery, and both before and after sale service at a specific price |
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Term
| What is a marketing program? |
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Definition
| A road map for the marketing activities (STP, 4Ps) for a specified future time period such as 1 or 5 years |
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Term
| What is the marketing concept? |
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Definition
| The idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization's goals |
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Term
| What is a mission statement? |
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Definition
| Organizations function in society that often identifies its customers, markets, products, and technologies. The term is often used interchangeably with vision |
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Term
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Definition
| the money left after a business firm's total expenses are subtracted from its total revenues and is the reward for risk it undertakes in marketing its offerings |
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Term
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Definition
| the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself |
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Term
| What is the marketing processes three phases? |
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Definition
Planning: use situation (SWOT) analysis>market-product focus and goal setting>marketing program
Implementation: marketing plan before implementation
Evaluation: results before the evaluation |
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Term
| Four alternative market product strategies using the growth matrix |
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Definition
Market penetration: current product in a current market
Product development: New product in a current market
Market development: current product in a new market
Diversification: new product in a new market |
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Term
| What is a Business Portfolio Analysis? |
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Definition
Stars: high market share and high growth rate
Cash cows: low market growth rate and high market share
Question marks: high growth rate and low market share
Dogs: low market growth rate and low market share |
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Term
| What are the environmental forces that affect the organization, its suppliers, and its customers? |
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Definition
Social: demographic shifts, cultural changes
Economic:macroeconomic conditions, consumer income
Technological: changing technology, technologies impact on customer value, electronic business technologies
Competitive: alternative forms of competition, small businesses
Regulatory: laws protecting competition and laws affecting marketing mix actions and self-regulation |
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Term
| Different types of competition |
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Definition
Pure competition: large number of sellers, similar products, place is important.
Monopolistic competition: large number of sellers, unique but substitutable, pricing is important
Oligopoly: a few large competitors, similar products, promotion is key to achieve perceived product differences
Monopoly: single producer, unique and substitutable, unimportant in the marketing mix |
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Term
| What is environmental scanning? |
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Definition
| the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends |
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Term
| Baby Boomers, Generation x & y, and millennials |
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Definition
Baby boomers: born 1946-1964, currently 50-68 years old
Generation X: born 1965-1976, currently 38-49 years old
Generation Y: 1977-1994, currently 20-37 years old
Millenials: 1995+ |
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Term
| What is disposible income? |
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Definition
| the money a consumer has left after paying taxes to use for necessities such as food, housing, clothing, and transportation |
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Term
| What is discretionary income? |
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Definition
| The money that remains after paying taxes and necessities |
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Term
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Definition
| the moral principles and values that govern the actions and decisions of an individual or group |
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Term
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Definition
| Society's values and standards that are enforceable in the courts |
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Term
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Definition
| Let the buyer beware; legal concept that was pervasive in the american business culture prior to the 1960s |
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Term
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Definition
| a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome |
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Term
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Definition
| Personal moral philosophy that focuses on the greatest good for the greatest number by assessing the costs and benefits of the consequences of ethical behavior |
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Term
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Definition
| Occurs when the charitable contributions (special olympics) of a firm are tied directly to the customer revenues produced through the promotion of one of its products |
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Term
| Influence on the consumer purchase decision process from both internal and external sources |
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Definition
Consumer purchase decision process: problem recognition> information search> alternative evaluation> purchase decision> post-purchase decision
Psychological influences: motivation, personality, perception, learning, values/beliefs/attitudes, lifestyle
Marketing mix influences: product, place, price, promotion
Sociocultural influences: personal influence, reference groups, family influence
Situational influences: purchase task, social surroundings, temporal effects, antecedent states |
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Term
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Definition
Self actualization: self-fulfillment
Personal: status, respect, prestige
Social: friendship, belonging, love
Safety: freedom from harm, financial security
Physiological: food, water, shelter, oxygen |
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Term
| Problem-solving variations |
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Definition
extended: high consumer involvement, many number of brands examined, many sellers considered, many number of product attributes evaluated, many number of external information sources used, considerable time spent searching.
Limited: in the middle of consumer involvement, several number of brands examined, several number of sellers considered, moderate number of product attributes evaluated, few number of external information sources used, little time spend searching
Routine: low consumer involvement, one number of brands examined and product attributes evaluated, few number of sellers considered, no external information sources used, minimal time spent searching |
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Term
| What is consumer behavior? |
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Definition
| the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions |
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Term
| What is evaluative criteria? |
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Definition
| The factors that represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands |
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Term
| What is cognitive dissonance? |
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Definition
| The feeling of post-purchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives |
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Term
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Definition
| A favorable attitude toward a brand and consistent purchase of a single brand over time |
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Term
| Five step marketing research approach leading to marketing actions |
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Definition
step 1 (define the problem): set research objectives, identify possible marketing actions
step 2 (develop research problem): specify constraints, identify data needed for marketing actions, determine how to collect data
Step 3 (collect relevant data): obtain secondary and primary data, use information technology and data mining
Step 4 (develop findings): analyze data and present findings
Step 5 (take marketing actions): make and implement action recommendations and evaluate results |
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Term
| Types of marketing information |
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Definition
Secondary: internal data- inputs (budgets, financial statements, sales call reports), outcomes (actual sales and customer communications) external data- U.S. census reports, trade association studies, magazines, business periodicals, and internet-based reports
Primary data: observational: mechanical methods, personal methods, neuromarketing methods. Questionnaire data- idea generation and idea evaluation methods. Other sources of data: social media, panels and experiments, information technology and data mining |
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Term
| What is marketing research? |
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Definition
| The process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions |
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Term
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Definition
| facts and figures that have already been recorded before the project at hand |
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Term
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Definition
| facts and figures that are newly collected for the project |
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Term
| What is observational data? |
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Definition
| facts and figures obtained by watching, either mechanically or in person, and how people actually behave |
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Term
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Definition
| the practice of shielding one or more industries within a countries economy from foreign competition through the use of tariffs and quotas |
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Term
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Definition
| Government taxes on goods and services entering a country that primarily serve to raise prices on imports. |
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Term
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Definition
| A restriction placed on the amount of a product allowed to enter (import quota) or leave a country (export quota) |
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Term
| What are strategic alliances? |
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Definition
| Agreements among two or more independent firms to cooperate for the purpose of achieving common goals |
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Term
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Definition
| A global market strategy in which a company produces goods in one country and sells them in another country |
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Term
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Definition
| A global market strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company |
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Term
| What is direct investment? |
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Definition
| Global market-entry strategy that entails a domestic firm to actually invest in and own a foreign subsidiary or division |
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Term
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Definition
| Occurs when a firm sells a product in a foreign country below its domestic price or below its actual cost |
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Term
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Definition
| A situation where products are sold through unauthorized channels of distribution; also called parallel importing |
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Term
| Market segmentation links market needs to an organization's marketing program through marketing mix actions |
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Definition
identify market needs: benefits in terms of product features, expense, quality, savings in time and convenience
Link needs to actions: take steps to segment and target markets
Execute marketing program actions: a marketing mix in terms of product, price, promotion, and place |
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Term
| Five key steps in segmenting and targeting markets that link market needs to a firm's marketing program |
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Definition
1. group potential buyers into segments
2. group products sold into categories
3. develop a market-product grid and estimate the size of markets
4. select target markets
5. take marketing actions to reach target markets |
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Term
| Segmentation of consumer markets |
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Definition
geographic: region, city size, statistical area, media-tv, density
demographic: gender, age, race/ethnicity, life stage, birth era, household size, marital status, income, education, and occupation
psychographic: personality values, lifestyle, needs
behavioral: retail store type, direct marketing, product features, usage rate, user status, awareness/intentions |
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Term
| Target market choice considerations |
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Definition
| market size (of segment), expected growth of segment, competitive position, cost of reaching the segment, compatibility with company objectives |
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Term
| What is product positioning? |
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Definition
| the place a product occupies in a consumers mind on important attributes relative to competitive products |
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Term
| What is product repositioning? |
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Definition
| Involves changing the place an offering occupies in a consumer's mind relative to competitive products |
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Term
| What is a perceptual map? |
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Definition
| It is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as the firm's own product or brand |
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Term
| How a consumer product is classified affects which products consumers buy and the marketing strategies used |
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Definition
convenience product: toothpaste, cake mix, hand soap, atm withdrawal; relatively inexpensive, widespread, many outlets; price, availability and awareness stressed in promotion; consumers are aware of brand but will accept substitutes; frequent purchases, little time and effort spent shopping.
shopping product: camera's, TVs, briefcases, airline tickets; fairly expensive; large number of selective outlets; differentiation from competitors stressed in promotion; consumers prefer specific brands but will accept substitutes; infrequent purchases, needs much comparison shopping time.
Specialty product: rolls-royce cars, rolex watches, heart surgery; usually very expensive; very limited; uniqueness of brand and status stressed in promotion; consumers are very brand loyal and will not accept substitutes; infrequent purchases, needs extensive search and decision time.
Unsought products: burial insurance, thesaurus; price varies; often limited in place (distribution); promotion awareness is essential; consumers will accept substitutes; very infrequent purchases, some comparison shopping. |
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Term
| Degree of newness affect the learning effort to use the product |
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Definition
continuous innovation: requires no new learning by consumers, gain consumer awareness and wide distribution (new improved shaver, detergent, and toothpaste)
dynamically continuous innovation: disrupts consumers normal routine but does not require totally new learning, advertise points of difference and benefits to consumers (electric toothbrush, compact disk player, automatic flash unit for cameras)
discontinuous innovation: requires new learning and consumption patterns by consumers, educate consumers through product trial and personal selling (wireless router, digital video recorder, and electric car). |
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Term
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Definition
| A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs as is received in exchange for money or something else of value |
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Term
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Definition
| A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range. |
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Term
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Definition
| Consists of all the product lines offered by an organization |
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Term
| What are the seven stages in the new-product process leading to success? |
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Definition
| new-product strategy development, idea generation, screening and evaluation, business analysis, development, market testing, commercialization. |
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Term
| What are the marketing reasons for new product failure? |
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Definition
| insignificant points of difference (most common reason for product failure), no economic access to buyers, not satisfying needs on critical factors, bad timing (market intro), poor product quality, too little market attractiveness, poor execution of the marketing mix. |
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Term
| Five categories and profiles of product adopters (diffusion of innovation) |
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Definition
innovators: venturesome, higher educated, use multiple information sources (2.5%)
early adopters: leaders in social setting, slightly above average education (13.5%)
early majority: deliberate, many informal social contacts (34%)
late majority: skeptical, below average social status (34%)
laggards: fear of debt, neighbors and friends are information sources (16%) |
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Term
| How stages of the product life cycle relate to a firm's marketing objectives and marketing mix actions |
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Definition
gain awareness: few competition; one product; skimming or penetration; promotion informs and educates; limited place (distribution)
stress differentiation: more competition; more versions of the product; gain market share, deal for price; stress points of difference in promotion; more outlets for place.
maintain brand loyalty: many competition; full product line; defend market share, profit; promotion is reminder oriented; uses maximum outlets
harvesting deletion: reduced competition; best seller products; stays profitable; minimal promotion; fewer outlets |
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Term
| Alternative branding strategies |
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Definition
| multiproduct branding, multibranding, private branding, and mixed branding |
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Term
| What is product modification? |
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Definition
| A strategy that alters one or more of a product's characteristic, such as its quality, performance, or appearance to increase the product's value to customers and increase sales |
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Term
| What is market modification? |
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Definition
| A strategy in which a company tries to find new customers, increase a product's use among existing customers, or create new use situations |
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Term
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Definition
| The added value a brand name gives to a product beyond the functional benefits provided |
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Term
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Definition
| A marketing decision in which an organization uses a name, symbol, phrase, design, or combination of these to identify its products and distinguish them from those of competitors. |
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Term
| What are the four I's of services |
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Definition
| Intangibility, inconsistency, inseparability, and inventory |
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Term
| Six steps in setting price |
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Definition
1. identify pricing objectives and constraints: objectives like profit, market share and survival. Constraints like demand for product class and brand, newness, costs, and competition
2. Estimate demand and revenue: demand estimation, sales revenue estimation, price elasticity estimation
3. Determine cost, profit, volume, and profit relationships: cost estimation, marginal analysis in relation to profit, break-even analysis in relation to profit.
4. Select an approximate price level: demand-oriented approaches, cost-oriented approaches, profit-oriented approaches, competition-oriented approaches.
5. Set list or quoted price: on price or flexible price, company/customer/competitive effects, incremental costs and revenue.
6. Make special adjustments to list or quoted price: discounts, allowances, geographical adjustments. |
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Term
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Definition
| The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service. |
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Term
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Definition
| The ratio of perceived benefits to price; or value= perceived benefits divided by price |
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Term
| What is break-even analysis? |
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Definition
A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.
How to calculate:
fixed costs/price- variable costs= breakeven point in units
ex: costs that are made up of lease, depreciation of its assets, executive salaries, and property taxes (fixed) =$60,000. product is widget and the costs that are associated with manufacturing that are raw material, factory labor, and sales commission (variable) which are $.80 per unit. The widget is priced at $2 each.
60,000/2-.80= 50,000 units. reducing salary by $10,000 would change fixed costs from $60,000 to $50,000.
reduce variable costs by cutting cost of goods sold to $.60 per unit |
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Term
| What are the four approaches for selecting an approximate price level? |
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Definition
Demand-oriented approaches: skimming, penetration, prestige, price lining, odd-even, target, bundle, yield management.
Cost-oriented: standard markup, cost-plus, experience curve.
Profit-oriented: target profit, target return on sales, target return on investment.
Competition-oriented: customary, above at or below market, loss leader |
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Term
| What are the special adjustments? |
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Definition
Discounts: quantity (non-cumulative, cumulative), seasonal, trade, cash
Allowances: trade-in, promotional, everyday low pricing.
Geographical: FOB origin pricing, uniform delivered pricing (single-zone, multiple-zone, FOB with freight-allowed, basing-point pricing) |
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Term
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Definition
| manufacturers suggested list price: $100 minus retail discount of 30%: $30. Retailer cost or wholesalers price: $70 minus wholesalers discount of 10%: $7. Wholesalers cost or jobber sales price: $63 minus jobber discount of 5%: $3.15. Jobber cost or manufacturers sales price=$59.85 |
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Term
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Definition
| Involves setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product. |
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Term
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Definition
| Involves setting a low initial price on a new product to appeal immediately to the mass market |
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Term
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Definition
| Revenue, gross profit (margin), contribution (margin), break-even, elasticity (price sensitive, not price sensitive), gross profit margins |
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Term
| Five elements of the promotional mix |
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Definition
advertising: mass, fees paid for space or time, efficient means for reaching large numbers of people, high absolute costs and difficult to receive good feedback.
Personal selling: customized, fees paid to salespeople as either salaries or commissions, immediate feedback, very persuasive, can select audience, can give complex information, extremely expensive per exposure, messages may differ between salespeople.
Public relations: mass, no direct payment to media, often most credible sources in the consumer's mind, difficult to get media cooperation.
Sales promotion: mass, wide range of fees paid depending on promotion selected, effective at changing behavior in short run, very flexible, easily abused, can lead to promotion wars, easily duplicated.
Direct marketing: customized cost of communication through mail, telephone, or computer, messages can be prepared quickly, facilitates relationship with customer, declining customer response, database management is expensive. |
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Term
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Definition
Push: mainly personal selling directed to intermediaries
Pull: mainly advertising directed to consumers |
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Term
| Different media alternatives |
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Definition
TV: reaches large audience and can target specific audiences. High cost. short exposure time, hard to convey complex information.
Radio: low cost, specific local audience, ads can be placed quickly, use of sound humor and intimacy effectively. No visual element, short exposure, difficult to convey complex information.
Magazines: target specific audience, can convey complex information, long life. Long time needed, relatively high cost, competes for attention.
Newspapers: excellent coverage of local markets, changed quickly, quick consumer response, low cost. Compete for attention, short lifespan, poor color.
Yellow pages: excellent coverage of geographical segments, long use period, available 24/365. Competitive directories, difficult to keep up-to-date.
Internet: video and audio capabilities, animation, interactive and link to advertiser. Require large files and time to load, effectiveness is still uncertain.
Outdoor: low cost, local market focus, high visibility, repeat exposure. Must be short and simple, low selectivity of audience, traffic hazard.
Direct mail: selectivity of audience, complex info, personalized messages, high-quality graphics. High cost per contact, poor image (junk mail) |
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Term
| Other promotional concepts |
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Definition
| aided and unaided recall, cooperative advertising, cost per thousand (CPM), IMC |
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Term
| What is cooperative advertising? |
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Definition
| Consists of advertising programs by which a manufacturer pays a percentage of the retailer's local advertising expense for advertising the manufacturer's products |
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Term
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Definition
| Tests conducted before an advertisement is placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisements |
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Term
| Marketing channel intermediaries perform three functions |
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Definition
Transactional: buying, selling, risk taking
Logistical: assorting, storing, sorting, transporting
Facilitating: financing, grading, marketing information and research |
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Term
| Three types of vertical marketing systems |
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Definition
Corporate: polo/ralph lauren
Contractual: most popular
Administered: proctor and gamble |
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Term
| Relating logistics management and supply chain management to supplier networks and marketing channels |
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Definition
| Suppliers inbound the flow of raw materials to the producer who outbounds the flow of finished products to consumers. This is logistics management. Between the supplier and producer is called the supplier network and between the producer and consumer is called the marketing channel; all of this is called supply chain management |
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Term
| What is multichannel marketing? |
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Definition
| It involves the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online. |
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Term
| What is dual distribution? |
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Definition
| Involves an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product |
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Term
| What are vertical marketing systems? |
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Definition
| Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact |
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Term
| What is intensive distribution? |
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Definition
| A level of distribution density whereby a firm tries to place its products and services in as many outlets as possible (fast food, candy, etc) |
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Term
| What is exclusive distribution? |
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Definition
| A level of distribution density whereby only one retailer in a specific geographical area carries the firm's products (clothing stores) |
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Term
| What is selective distribution? |
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Definition
| A level of distribution density whereby a firm selects a few retailers in a specific geographical area to carry its products. |
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Term
| What is channel conflict? |
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Definition
| Arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals. |
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Term
| What is disintermediation? |
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Definition
| Involves channel conflict that arises when a channel member bypasses another member and sells or buys products direct. |
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Term
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Definition
| Consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost. |
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Term
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Definition
| It consists of a sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users |
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Term
| Stages and objectives of the personal selling process |
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Definition
prospecting: search for and qualify prospects
preapproach: gather information and decide how to approach the prospect
approach: gain a prospect's attention, stimulate interest, and make transition to the presentation.
Presentation: begin converting a prospect into a customer by creating a desire for the product or service.
Close: obtain a purchase commitment from the prospect and create a customer
Follow-up: ensure that the customer is satisfied with the product or service. |
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Term
| The sales management process involves |
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Definition
sales plan formulation: setting objectives, organizing salesforce, developing account management policies
Sales plan implementation: salesforce recruitment and selection, salesforce training, salesforce motivation and compensation
salesforce evaluation: quantitative assessment, behavioral evaluation |
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