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Midterm #1 ch 1,2,3,9
Review
112
Marketing
Undergraduate 2
07/14/2010

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Term
Chapter 1
Definition
Term
*Exchange
Definition
trade of things of value between buyer and seller so that each is better off
Necessary elements for exchange
*Two or more parties with unsatisfied needs
*Desire and ability to satisfy those needs
*A way for the parties to communicate
*Something to exchange
Term
Requirements for Marketing to occur
Definition
•1. 2 or more parties with unsatisfied needs
•2. A desire and ability on their part to be satisfied
•3. A way for the parties to communicate
•4. Something to exchange
Term
Market
Definition
potential people/consumers with both the desire and the ability to buy a specific product
Term
*Target Market
Definition
one or more specific groups of potential consumers toward which an organization directs its marketing program
Term
The Four P's
Definition
*Product: a good, service, or idea to satisfy the consumer’s needs
*Price: what is exchanged for the product
*Promotion: a means of communication between the seller and buyer
*Place: a means of getting the product to the consumer
Term
*Marketing Mix
Definition
*Controllable factors
*marketing managers controllable factors that can be used to solve a marketing problem
Term
Environmental forces
Definition
Uncontrollable factors involving - social, economic, technological, competitive, and regulatory forces in a marketing decision
Term
*Customer Value
Definition
the unique combination of benefits received by targeted buyers that includes quality, convenience, on time delivery, and both before sale and after sale service at a specific price
Term
Relationship Marketing
Definition
Meaningful customer relationships are achieved by a firm identifying creative ways to connect closely to its customers through specific marketing mix actions implemented in its marketing program
*relationship marketing- linking the organization to its individual customers, employees, suppliers, and other partners for their mutual long term benefits
Term
Marketing Program
Definition
, a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers
Term
Evolution of the market orientation
Definition
Production Era
Sales Era
Marketing Concept Era
The Customer Relationship Era
Term
*Marketing Concept
Definition
the idea that an organization should strive to satisfy the needs of consumers while also trying to achieve the organization’s goals
Term
*Market Orientation
Definition
focuses its efforts on
*Continuously collecting info about consumers needs
*Sharing this info across departments
*Use it to create customer value, seek to continuously satisfy the expectations of customers and create customer value
Term
Customer Relationship Management
Definition
- identify prospective buyers, understand them intimately, develop favorable long term perceptions of the organization and its offerings so that buyer will choose them in the marketplace
Term
Customer Experience
Definition
- internal response that customers have to all aspects of an organization and its offerings, includes both direct and indirect contacts with the company
Term
Societal Marketing Concept
Definition
- view that organizations should satisfy the needs of consumers in a way that provides for society’s well-being
Term
Ultimate Consumers
Definition
people who use G and S for a household
Term
Organizational Buyers
Definition
manufacturers, wholesalers, retailers, and govnt agencies that buy G and S for their own use or for resale.
Term
Utility
Definition
the benefits or customer value received by users of a product
Term
*Value
Definition
It is delivered when customers wants and needs are satisfied
*Value is the set of benefits that we are getting, (reliability, customer service, better performance, mac vs pc)
*Common Value Strategies: Best service, best price, best product, best promotion,
Term
*Needs
Definition
Occurs when a person feels deprived of a certain necessity
Term
Wants
Definition
Manifestations of needs that are influenced by knowledge, culture and personality.
Term
Idea behind needs and wants
Definition
: Marketing doesn’t create needs, but instead marketing shapes wants.
Term
Chapter 2
Definition
Term
Profit
Definition
is the money left after a business firms total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings
Term
*Strategy
Definition
: An organization’s long-term course of action designed to deliver a unique customer experience while achieving its goals.
Term
Corporate Level
Definition
*Broad corporate image, Business Unit analysis, CMO role
*The corporate level is where top management directs overall strategy for the entire organization
Term
Board of Director or "Top Management"
Definition
*Applying the marketing concept to guide the business unit
*Individuals both inside and outside the organization with a variety of skills and experiences that are invaluable in establishing overall strategy
Term
Strategic Business Unit Level
Definition
Strategic business unit refers to a subsidiary, division, or unit of an organization that markets a set of related offerings to a clearly defined group of customers
Term
Functional Level
Definition
*Works with all other functional units in carrying out day-to-day activities
*where groups of specialists actually create value for the organization
Term
Cross-Functional Teams
Definition
used when developing marketing programs for new offerings or improving current ones
Term
Organizational Foundation (why)
Definition
Core Values
Mission
Organizational Culture
Term
Core Values
Definition
the fundamental passionate and enduring principles that guide its conduct over time
Term
Mission
Definition
statement of the organizations functions in society, often identifying its customers, markets, products, and technologies
Term
Organized Culture
Definition
set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization
Term
Business
Definition
- describes the clear, broad, underlying industry category or market sector of an organizations offering
Term
Goals or Objectives
Definition
statements of an accomplishment of a task to be achieved, often by a specific time, convert mission into performance targets
Term
Writing Goals
Definition
SMART
Term
SMART
Definition
Specific
Measurable
Attainable
Relevant
Time-Based
Term
Market Share
Definition
The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
*Sales or units sold can be used to express market share.
Term
Competencies
Definition
are an organizations special capabilities, including skills, technologies and resources that distinguish it from other organizations and that provide value to its customers
Term
Competitive Advantage
Definition
a unique strength relative to competitors, often based on quality, time, cost, or innovation
Term
Business Portfolio Analysis
Definition
used to quantify performance measures and growth targets to analyze SBUs as though they were a collection of separate investments
Term
Cash Cows
Definition
generate large amounts of cash, far more than they can invest profitably in themselves, they have dominant shares of slow growth markets and provide cash to cover the organizations overhead to invest elsewhere
Term
Stars
Definition
o Stars have a high share of high growth markets that may need extra cash to finance their own rapid future growth, when their growth slows, they are likely to become cash cows
Term
Question Marks
Definition
have a low share of high growth markets. They require large injections of cash just to maintain their market share much less increase it
Term
Dog
Definition
have low shares of slow growth markets. They may generate enough cash to sustain themselves; they do not hold the promise of every becoming real winners for the organization.
Term
Hedgehog Analyses
Definition
develops a simple, excellent offering that captures the imagination of its employees and its customers (the hedgehog knows one big thing)
Term
Blue Ocean Analysis
Definition
believes that an organization must swim out of the red ocean of bloody competition and into a blue ocean having less competition
Term
Red Ocean Analysis
Definition
Lots of competition in the market place
Term
Marketing Metric
Definition
measure of the quantitative value or trend of a marketing activity or result
Term
Marketing Plan
Definition
road map for the marketing activities of an organization for a specified future time period, such as 1 or 5 years
Term
Marketing Dashboard
Definition
the visual display on a single computer screen of the essential information related to achieving a marketing objective
Term
Strategic Marketing Process
Definition
organization allocates its marketing mix resources to reach its target markets, divided into 3 parts planning, implementation, and evaluation
Term
Planning Phase
Definition
Situational Analysis
SWOT: Strengths, Weaknesses, Opportunities, Threats
Term
Step 2
Definition
Market-Product focus and Goal setting
Set market and product goals
Select target markets
Find points of difference
Position the product
Term
Step 3
Definition
Marketing Program
Develop the programs marketing mix
Develop the budget by estimating revenues expenses and profits
Term
Implementation Phase
Definition
Four Components
Obtaining resources
Design marketing organization
Developing schedules
Execute marketing program
Term
Evaluation Phase
Definition
Compare results with plans to identify deviations
Act to correct negative deviations exploit positive ones
Planned vs actual
Term
Chapter 3
Definition
Term
Environmental Scanning
Definition
the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends
Term
Social forces
Definition
demographic shifts
cultural changes
Term
Social forces
Definition
demographic shifts
cultural changes
Term
Economic
Definition
Macroeconomic conditions
Consumer income
Term
Technological
Definition
Changing technology
Technology's impact on customer value
Electronic business technologies
Term
Competitive
Definition
Alternative forms of competition
Small businesses
Term
Regulatory
Definition
Laws protecting competition
Laws affecting marketing mix actions
self-regulation
Term
Social Forces
Definition
The social forces of the environment include the demographic characteristics of the population and its values
Term
Demographics
Definition
- the describing of a population according to selected characteristics such as age, gender, ethnicity, income, and occupation
Term
Culture
Definition
Values, ideas and attitudes that are learned and shared among members of a group
Term
Culture Trends
Definition
Blending of traditional gender roles
Consumers searching for value
Consumer power
The Green Movement
Use of Social Networks
Term
Economic Forces
Definition
economy pertains to the income, expenditures, and resources that affect the cost of running a business and household
Term
Consumer Income
Definition
trends in terms of consumer income also very important to marketers
Term
Gross Income
Definition
- the total amount of money made in one year by a person, household, or family unit
Term
Disposable Income
Definition
*the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation
*Has increased recently as goods are more efficient and use less energy
Term
Discretionary Income
Definition
the money that remains after paying for taxes and necessities
Term
Technology’s impact on customer value
Definition
Cost of technology is plummeting, causing the customer value assessment of technology based products to focus on other dimensions such as quality, service, and relationships
Term
Competitive Forces
Definition
- competition refers to the alternative firms that could provide a product to satisfy a specific market’s needs
Term
Pure competition
Definition
is competition in which every company has a similar product
Term
Monopolistic Competition
Definition
is competition in which the many sellers compete with their products on a substitutable basis
Term
Oligopoly
Definition
is a common industry structure, which occurs when a few companies control the majority of industry sales
Term
Pure Monopoly
Definition
occurs when only one firm sells the product
Term
Components of Competition
Definition
Term
Barriers of Entry
Definition
are business practices or conditions that make it difficult for new firms to enter the market
Term
Buyer and Supplier Power
Definition
o Powerful buyers exist when they are few in number, there are low switching costs, or the product represents a significant share of the buyer’s total costs which makes pressure for price competition
Term
Competitive Intensity
Definition
When the market is slow competition is high
High fixed costs also cause competition
Term
Small business as competitors
Definition
make up majority of competitive landscape for most businesses, generate 60-80% of new jobs and 50% of GDP, as economic growth increases new small business activity increases
Term
Protecting Competition
Definition
Major federal legislation has been passed to encourage competition, which is deemed desirable because it permits the consumer to determine which competitor will succeed and which will fail
Term
Company Protection
Definition
A company can protect its competitive position in new and novel products under the patent law, which gives inventors the right to exclude others from making, using, or selling products that infringe the patented invention
o Copyright law
Term
Consumer Protection
Definition
Consumerism a grassroots movement started in the 1960’s to increase the influence, power, and rights of consumers in dealing with institutions
Term
Chapter 9
Definition
Term
What is a market?
Definition
A collection of people or of organizations with both the desire and ability to buy a particular product.
Term
Market Segmentation
Definition
aggregating prospective buyers into marketing groups that have common needs and will respond similarly to a marketing action
Term
Product Differentiation
Definition
use different marketing mix activities (such as product features and advertising) to help consumers perceive the product as being different and better than competing products
Term
Market Segmentation
Definition
Identify Market Needs
Link needs to actions
Execute marketing program actions
Term
Identify Market Needs
Definition
 Benefits in terms of product features, expense, quality, savings in time and convenience
Term
Link needs to actions
Definition
Take steps to segment and target markets
Term
Execute marketing program actions
Definition
A marketing mix in terms of product, price, promotion, place
Term
Step 1: Segmentation
Definition
than forming groups of consumers from our market population.
*Consumers in any one group should have common needs and should respond to marketing stimuli in similar ways.
Term
One Product and Multiple Market Segments
Definition
 Produce single product or service and attempt to sell it to two or more market segments
 Often involve new promotional campaign or method of distribution
 EX- movies, magazines, books
Term
Multiple Products and Multiple Market Segments
Definition
 EX- Ford’s different lines of cars, SUVs, and pickups
 Many firms offer variations of same product (high and low end)
Term
Segments of one/Mass customization
Definition
 Tailor goods or services to the tastes of individual customers on a high volume scale
 Customer relationship management- recognizing individual needs and wants of customers
Term
Step one factors
Definition
Simplicity and cost-effectiveness of assigning potential buyers to segments
Potential for increased profit and ROI
Similarity of needs within segments
Differences in buyers between segments
Feasibility of reaching segments with marketing actions
Term
Ways to segment
Definition
 geographic: (region)- based on where prospective customers live or work
 Demographic: (household size)- objective physical (race), measurable (age, income) or other classification attribute
 Psychographic: (lifestyle)- subjective mental or emotional attributes (personality), attributions (lifestyle) or needs of prospective customers
 Behavioral- based on some observable actions or attitudes (examples are product features and usage rate- quantity consumed or number of store visits during a specific period)
 80/20 rule- 80% of a firm’s sales are obtained from 20% of its customers
Term
text Step 2 group products to be sold in categories
Definition
o Combine individual products that sell together, group into meaningful categories
 Wendy’s- selling combo of products to make a meal
Term
•text Step 3- Develop a Market-Product grid and estimate the size of markets
Definition
o Market-product grid- framework to relate market segments of potential buyers to products offered or potential marketing actions
 Identify markets (horizontal) and product groupings (vertical). Wendy’s- markets-student vs nonstudent, products- each type of meal/eating occasion
 Estimate size of each market-product combination, estimates help determine which target market segment to collect and which product groupings to offer
Term
Text step 4; select target market
Definition
o Divide the market into segments- 5 criteria

Size / Substantiality
Expected Growth
Competitive Position (Market Attractiveness)
Cost of Reaching the Segment
Compatibility with the Organization
Term
Step 3 Positioning; Text step 5 take marketing action
Definition
The place an offering occupies in consumers’ minds on important attributes
Term
Head to Head Positioning
Definition
competing directly with competitors on similar product attributes in the same target market
Term
Differentiation Positioning
Definition
seek less-competitive, smaller market niche in which to locate a brand
Term
Review
Definition
Segmentation
1. Place Consumers into Segments
2. Group Products in Similar Ways
3. Develop a Product-Market Grid and Estimate Market Size
Targeting
4. Select Target Markets

Positioning
5. Taking Marketing Actions to Reach Target Markets
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