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mkt 320f-exam 2
chapter 6-10
119
Marketing
Undergraduate 3
10/13/2010

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Term
Chapter 6:
Final consumers and Their Buying Behavior
Definition
Term
economic buyers
Definition
people who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money
Term
economic needs
Definition
concerned with making the best use of a consumer's time and money- as the consumer judges it
Term
5 Examples of Economic Needs
Definition
1. Economy of purchase/use
2. Efficiency in operation/use
3. Dependability in use
4. Improvement in earnings/profit
5. Convenience
Term
4 Influences on the Consumer Decision Process
Definition
1. Economic Needs
2. Psychological variables
3. Social influences
4. Purchase situation
Term
types of psychological influences
Definition
needs
wants
drives
Term
Need & the 4 types
Definition
the basic forces that motivate a person to do something

1.Physiological....food,drink, shelter
2.Safety...well-being
3.Social...friends, love
4. Personal...personal satisfaction
Term
wants
Definition
-"needs" learned during a person's life
-when not satified, it leads to drives
Term
drives
Definition
Term
drives
Definition
stong stimulus that encourages action to reduce a need; they are internal
Term
Perception
Definition
how we gather and interpret information from the world around us....allows us to meet our needs in varying ways
Term
3 types of selective processes
Definition
1. Selective exposure-notice only info. that interests us
2. Selective perception- screen out things that conflict with out previously learned attitudes/beliefs
3. Selective retention-remember what we want to remember
Term
Learning
Definition
change in person's thought processes caused by prior experience
-based on:
Direct experience
Indirect experience & associations
Term
Learning process
Definition
1.need
2. want
3.drive
4.cues
5. response
6. reinforcement...can lead to a habit
Term
attitude
Definition
=person's point of view on something
-affects the selective processes,learning, and buying decisions
-ACTION implications
Term
belief
Definition
=person's opinion about something
-NOT action oriented
Term
expectation
Definition
an outcome or event that a person anticipates or looks forward to
-likely to be DISsatisfied if expectations are not met
Term
Psycho-graphic/lifestyle analysis
Definition
AIO= activity, interests, opinions
ex.: GeoVALS shows where people live and why they behave a certain way
Term
Examples of major social influences
Definition
1. Family
2. Kids...have big say in family purchases
3.Similat social Class
Term
reference group
Definition
the people to whom an inficidual looks when forming attitudes about a particular topic
-normally have several groups for different topics
Term
Opinion leader
Definition
=person who influences others
Term
culture
Definition
=whole set of beliefs, attitudes, and behaviors of a reasonably homogeneous set of people
Term
Purchase Situation influences
Definition
1. Purpose of the buy
2. Timing
3. urgency of the need
4. how long does it take ()?
5. actual surroundings
Term
3 Levels of problem-solving in the Consumer Decision Process
Definition
1. Extensive
2. Limited
3. Routinized response behavior
Term
4 Problem Solving Steps
Definition
1. Information Search
2. Identify alternatives
3. Set criteria
4. Evaluate alternatives
Term
extensive problem solving
Definition
when they put much effort into deciding how to satisfy a need
-new purchases or for important needs
Term
Limited problem solving
Definition
used bu consumers when some effort is requird in deciding how to satisfy a need
-used with minimal previous experience but not quite sure
Term
routinized response behavior
Definition
=when he/she regularly seldcts a particular way of satisfying a need when it occurs
-used when no new info is needed or with multiple previous buys
-LOW INVOLVEMENT PURCHASES
Term
6 Steps of Adoption process
Definition
1. Awareness=know about product but lacks details
2.Interest=if interested, consumer will gather info on product
3. Evaluation=mental trial
4. Trial=buys actual product and trys it out
5. Decision=decides on adoption or rejection
6.Confirmation=adopter looks for further reinforcement
Term
Chapter 7: B-2-B Sales
Definition
Term
business/organizational customers
Definition
any buyers who buy resale or to produce other goods/services
Term
4 types of business cujs
Definition
Term
business/organizational customers
Definition
any buyers who buy resale or to produce other goods/services
Term
4 types of business/organizational consumers
Definition
1. Producers of goods/services
2. Intermediaries
3. Govt.
4. Non-profits
Term
5 Key differences between business and final consumers
Definition
1. Purchase criteria and specifications
2.Multiple buying influence
3. Problem-solving process
4. B2B e-commerce
5. Buyer-seller relationships
Term
Purchase criteria and specifications
Definition
-business are less emotional and have more basic needs
-dependablilty is crucial in business
-Small differences are key to fine-tuning the MM
-more simple for expanding to international markets
-buy based on purchasing specifications
-customers generally expect some sore of quality certification (ex: ISO 9000)
Term
purchasing specifications
Definition
written description of what the firm wants to buy
Term
Multiple buying influence & the 5 Parts of the "buying center"
Definition
=several people play a part in making a purchase decision

1. Users
-production line
2. Influencers
-engineering or R&D
3. Buyers
-purchasing managers
4. Deciders
-people with power to approve the supplier
5. Gatekeepers
-control flow of info.
Term
vendor analysis
Definition
=a formal rating of suppliers on ALL relevant aspects of performance
-goal is to lower the TOTAL costs associated with purchases
Term
centralized buying
Definition
allows a sales rep to be able to sell to factories all over the country without having to pay all the travel expenses
.....requisitions needed
Term
requisitions
Definition
requests to buy something...often done online
Term
3 Buying Processes
Definition
1. New-task buying
2. Straight rebuy
3. Modified rebuy
Term
1. New-task buying
Definition
=when an organization has a new need a wants a great deal of information
-multiple buying influence is common
Term
2. Straight rebuy
Definition
=a routine repurchase that may have been made many times before
-small, general buys
-no need for more info
Term
Modified rebuys
Definition
the in-between process where some review of the buying situation is done
Term
Competitive bid
Definition
the terms of sale offered by the supplier inn response to the purchase specifications posted by a buyer
....if meets the specs, then lowest bid wins
Term
5 major dimensions of buyer-seller relationships
Definition
1. Cooperation=joint responsiblity for problems with buyer and seller
2.Info-sharing=key in e-commerce
3. Operational linkages
4. Legal bonds
5. Relationship-specific adaptations
Term
Operational linkages
Definition
direct ties between the interanla opeations of the buyer abd seller firms
-generally involve ongoing coordination of activities between the firms
-reduce total inventory costs, maintain adequate inventory levels and keep production lines moving
Term
just-in-time delivery
Definition
=reliability in getting products JUST before the customer needs them
Term
Characteristics of Manufacturers
Definition
-in small plants, owner does the buying
-3% of all plants have 250+ workers but the employ 50% of all workers and produce 60% of the value added by manufacturers
-concentrated in areas of high economic development...and major metro. areas...and in certain industry-concentrated areas
-detailed info in generally availalbe (ex: NAICS code)
Term
Characteristics of Producers of Services
Definition
-4.6 million firms in US (13x manufact.)
-more personal selling and especially advertising
-generally small and local
Term
Characteristics of Intermediaries
Definition
-retailers buy what they can sell to consumers, not what manufacturers are offering them
-COMMITTEE BUYING
-use of automated control system to track sales
-carry a large number of products....multiple rebuys by the committee
-must forecast sales,costs, expenses...so sometimes not "open to buy"
-use of RESIDENT BUYERS
Term
Characteristics of Govt. Market
Definition
-30% of US GDP is spent by the govt
-use mandatory bidding system...must take lowest bid if meets specs.
-frequent and routine buys
-Negotiation is often key
-must get native countries permission to sell to a foreign govt.
Term
Foreign Corrupt Practices Act
Definition
in 1977, it prohibits US firms from paying bribes to all foreign officials
Term
Chapter 8: Improving Decisions with Marketing Information
Definition
Term
marketing research
Definition
prceduers that develop and analyze new info about a market
Term
Marketing Information System (MIS)
Definition
-organized way of continually gathering, accessing, and analyzing info that marketing managers need to make ongoing decisions
Term
intranet
Definition
=a system for linking computers within a company....works a lot like the internet cept just for employees
Term
data warehouse
Definition
=a place where databases are stored so that they are available when needed
Term
decision support system (DSS)
Definition
=computer program that makes is easy for managers to access the data warehouse info
Term
Marketing model
Definition
statement of relationships among marketing variables
-allows you to pick the right MM for the target market
Term
scientific method
Definition
=a decision-making approach that focuses on being objective and orderly in testing ideas before accepting them
-involves a HYPOTHESIS and an EXPERIMENT
Term
5 parts of the Marketing Research Process
Definition
1. Defining the problem
2. Situation analysis=informal study of what info is already available in the problem aread; find SECONDARY DATA; create a research proposal
3. Getting Problem-Specific Data= questioning and observing
4.Interpreting the Data=use of STATISTICAL PACKAGING, cross-tabulation, and SAMPLE-studies with CONFIDENCE INTERVALS; VALIDITY is key
5. Solving the Problem=research must have action implications to accompany it
Term
2 Types of Questioning
Definition
1. Quantitative
2. Qualitative
Term
1. Quantitative
Definition
=seeks structured responses that can be summarized in numbers and statistics
-survey questionnaires online and by mail and by telephone(RESPONSE RATE problem)
Term
2. Qualitative
Definition
=seeks in-depth, open-ended responses; real advantage is DEPTH
-FOCUS GROUPS
Term
Observing
Definition
=method of colleting data that focuses on a well-defined problem and observing the subjects in their natural environment
-"secret shoppers"
-videotaped for behavior
-"people" meter for tv's
-website tracking for length and # of clicks
-use of CONSUMER PANELS (continuous info-giving)
-use of computerized SCANNERS
Term
Experimental method
Definition
=when researchers compare the response of 2 (or more) groups that are similar except on the characteristic actually being tested
Term
Chapter 9: Elements of Product Planning for Goods/Services
Definition
Term
5 Elements of Product Planning
Definition
1. Product Idea
2. Branding
3. Packaging
4. Warranty
5. Product classes
Term
1. Product Idea
Definition
-companies are really selling the satisfaction,use, or benefit that the customer wants...not that the product provides
-product=the need-satisfying offering of a firm
-can be a good or service or BOTH
-QUALITY is key
Term
quality
Definition
a product's ability to satisfy a customer's needs or requirements
-focuses on the customer
Term
Good vs. Services
Definition
good=tangible...mass-produced before purchase commitment...higher quality...easy to balance supply and demand because non-perishable
service=intangible...experienced, used, or consumed...usually in-person but after purchase commitment...quality can change day-to-day ...perishable
Term
Product Assorment---Product Line----Individual product
Definition
Term
2. Branding
Definition
=use of name, term, symbol, design or any combo to help identify a product
Term
brand name
Definition
world, letter, or a group of words or letters
Term
trademark/service-mark
Definition
only those words, symbols, or marks that are legally REGISTERED for use
Term
6 Conditions for Favorable Branding
Definition
1. Product is EASY TO LABEL/IDENTIFY
2. QUALITY is easy to maintain
3. Dependable and widespread AVAILABILITY
4. DEMAND is strong
5. ECONOMIES OF SCALE
6. favorable SHELF LOCATIONS or display space
Term
5 levels of brand familiarity
Definition
1. Rejection=potential buyers won't buy unless the brand's image is changed
=major concern for service-oriented businesses
2. Non-recognition=final consumers do NOT recognize the brand at all
3. Recognition=customers remember the brand...helps with very basic items
4. Preference=target usually chooses the brand over other brand, due to habit or good past experiences
5. Insistence=customers INSIST on a firm's branded product and are willing to search for it
Term
brand equity
Definition
the value of a brand's overall strength in the market
Term
Lanham Act (of 1946)
Definition
-spells out what kind of marks can be protected and HOW
-does NOT force recognition, although it could help
Term
Family Brand
Definition
=the same brand name for several products
-ex: Sear's KENMORE appliances
-ex: LICENSED BRAND
Term
Individual brands
Definition
seperate brand names for each product
-helps avoid confusion
Term
2 types of branders
Definition
1. Manufacturer...created by the producers
2. Dealer/private brands....created by the intermediaries
Term
3. Packaging
Definition
=involves promoting, protecting and enhancing the product
=UPC (universal product code) by govt
Term
Federal Fair Packaging and Labeling Act (of 1966)
Definition
requires that consumer goods be clearly labeled in easy-to-understand terms to give consumers more info
Term
4. Warranty
Definition
=explains exactly what the seller promises in its product
-in recent years, coverage has greatly decreased (ex: ipods)
Term
Magnuson-Moss Act (of 1975)
Definition
=producers must provide clearly written warranty if they they CHOOSE to offer any warranty at all
Term
5. Product classes (Consumer and Business)
Definition
consumer=based on "how consumers think about and shop for products"
Business=based on "how buyers think about products and how they'll be used"
Term
4 types of Consumer Product Classes
Definition
1. Convenience
2. Shopping
3. Specialty
4. Unsought
Term
Convenience product types:
Definition
1.Staples=products that are bough often, toutinely and without much thought...everyday items
2. Impulse Product=items bought quickly due to a strong need
3. Emergency product=items purchased immediately when need is great
Term
2. Shopping Product types
Definition
1. Homogenous...shop for best price
2. Heterogenous...shop for quality and style
Term
3. Specialty Products
Definition
-consumer really wants so makes a SPECIAL EFFORT to find
-WILLINGNESS TO SEARCH is key
Term
4. Unsought Products types
Definition
1.New...potential customers don't know about yet
2. General...products that stay unsought but not un-bought forever....PERSONAL SELLING is crucial
Term
derived demand
Definition
-demand for business products derives from the demand for final consumer products
Term
expense item
Definition
product whose total cost is treated as business expense in the year it's purchased
Term
Capital item
Definition
long-lasting product that can be used and depreciated for many years
Term
6 Business Product Classes
Definition
1. Installations=important capital items
-require special negotiations, involve top management,and are BOOM-or-BUST

2. Accessories=short-lived capital items that are a bit more standarized and needed by more customers

3. Raw materials=unprocessed EXPENSE items
-NATURAL and FARM
-longterm contracts with guaranteed prices

4. Components=processed expense items that become part of a finished product
-parts and materials

5. Supplies=expense items that do NOT become part of the final product
-MRO (maintenance, repair, and operating supplies)
-ordered only when needed

6. Professional services=specialized services that support a firm's operations
Term
Chapter 10: Product Management and New-Product Development
Definition
Term
4 Stages of the Product Life Cycle
Definition
1. Product Introduction
2. Market Growth
3. Market Maturity
4. Sales Decline
Term
1. Introduction
Definition
=sales are low as a new idea is 1st introdcuced to a market
-uses INFORMATIVE promotion
-most companies experience losses during the introduction stage
Term
2. Market Growth
Definition
=industry sales grow fast but industry profits peak then fall (due to competition and increase in consumer price sensitivity)
-MONOPOLISTIC COMPETITION
Term
3. Market maturity
Definition
=occurs when industry sales level off and competition gets tougher, meaning profits continue to fall
-Persuasive promotion
Term
4. Sales Decline
Definition
=new products replace the old
-price competition from dying products becomes more vigorous
Term
5 characteristics of quickly-moving new-product ideas
Definition
1.greater comparative advantage
2. Easy to use
3. Easy to communicate
4. Can be actually tried
5.Compatible with values and experiences of target customers
Term
Fashion
Definition
=the currently accepted/popular style
-fashion-related products have SHORT life cycles
Term
Fad
Definition
an idea that is fashionable only to certain groups who an enthusiastic about it
....fad is even more SHORT-LIVED than a regular fashion
Term
Managing Maturing products
Definition
-need to capitalize on some advantage...be it lower production/marketing costs, or more successful promotion
-continuous improvements on the same product (ex: Tide and BMW)
-find new use for older products
-PHASE-OUT strategy
Term
"New" product
Definition
=a product that is new in ANY WAY for the company
-FTC places 6-month limit on this
Term
5 Stages in the New-Product Development Process
Definition
1. Idea Generation.... continuous flow of ideas....reverse-engineering

2. Screening=evaluating the new ideas with the SWOT analysis....should increase consumer welfare over time, not just at one moment
-Consumer Product Safety Act
-LIABLITY
-rough ROI Estimate

3. Idea evaluation=concept testing and market research
-estimate of cost,profits, and sales
-more precise in BUSINESS markets

4. Development=R&D, develop model....test models and product tests with actual consumers

5. Commercialization=placed on the actual market... expensive and requires unified cooperation...ROLLOUTS
Term
Major Success Factors in New-Product development
Definition
-TOP LEVEL SUPPORT
-CULTURE of INNOVATION
-someone actually IN-CHARGE

-DON'T SKIP STEPS
-CLEAR UNDERSTANDING OF MARKET NEEDS in R&D
Term
product/brand managers
Definition
=manage specific products
-major responsibility =PROMOTION
-experience is key!
-unified promotion efforts for entire brand
Term
TQM (total Quality Management)
Definition
=the philosophy that everyone in the organization is concerned about quality, throughout all of the firm's activities, to better serve customer needs

-Early time=focus on preventing defects...focus should be on sustained quality
Term
Pareto chart
Definition
=graph that show the number of times a problem cause occurs, with problem causes ordered from most frequent to least frequent

***SLAY the DRAGON 1st
Term
fishbone diagram
Definition
visual aid that helps organize cause-and-effect relationships for "things gone wrong"
Term
2 keys to improving quality
Definition
1. Training
2. Empowerment= giving employees the authority to correct a problem without 1st checking with management
Term
Benchmarking
Definition
=picking a basis of comparison for evaluating how well a job is being done
-generally against some external standard (perhaps a competitor)
Term
Consumer Product Safety Act
Definition
encourages safety in product design and better quality control...set standards for certain products
Term
product liability
Definition
=the legal obligation of sellers to pay damages to individuals who are injured by defective or unsafe products
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