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marketing

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an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders

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2 goals of marketing

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discovering the needs of prospective customers and satisfying them

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marketing mix

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controllable factors- product, price, promotion, place

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environmental forces

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not controllable-social, economic, technological, competitive and regulatory forces

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customer value

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the unique combination of benefits received by targeted buyers that usually includes quality, price, convenience, on-time delivery, and both before sale and after sale service 3 strategies of marketers: best price, product, or service

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organization

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a legal entity of people who share a common mission; 2 kinds: business firm and nonprofit

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business firm

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privately owned organization

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non-profit

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nongovernmental, serves its customers but does not have profit as a goal

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3 levels of organizational strategy

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an organization's long term course of action designed to deliver a unique customer experience while achieving its goals corporate level-where top management directs overall strategy for the entire organization strategic business unit level-managers set a more specific strategic direction for their businesses to set value creating opportunities functional level-groups of specialists actually create value for the organization

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core values

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the organization's fundamental, passionate, and enduring principles that guide its conduct over time

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mission

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organization's statement of its function in society, often identifying its customers, markets, products, and technologies

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organizational culture

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a set of values, ideas, attitudes, and norms of behavior that is learned and shared among the members of an organization

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business

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the clear, broad, underlying industry category or market sector of an organization's offering

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organization's goals/objectives

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statements of an accomplishment of a task to be achieved, often by a specific time maximize profit, sales, market share, quality, customer satisfaction,

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marketing dashboards

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used by marketing managers to visually display on one screen the essential info to make a decision to take an action or further analyze a problem

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marketing metric

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a measure of the quantitative value or trend of a marketing activity or result

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marketing plan

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road map for the marketing activities of an organization for a specified future time period

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business portfolio analysis

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used to assess a business' strategic business units (SBUs), product lines, or individual products as though they were a collection of separate investments (cash cows, stars, question marks, and dogs) to determine the amount of cash each should receive

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diversification analysis

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a tool that helps managers use one or a combination of four strategies to increase revenues: market penetration, market development, product development, and diversification

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market penetration

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selling more of an existing product to existing markets

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market development

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selling an existing product to new markets

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product development

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selling a new product to existing markets

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diversification

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selling new products to new markets

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strategic marketing process

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3 steps: planning-a SWOT analysis, market product focus through market segmentation and goal setting, marketing program that specifies the budget and activities for each marketing mix element

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SWOT analysis

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taking stock of where the firm or product has been recently, where it is now, and where it is headed (strengths, weaknesses=internal, opportunities, threats=external)

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market segmentation

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grouping buyers into segments with common needs and similar responses to marketing programs

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implementation phase of strategic marketing process

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4 key elements: obtaining resources; designing the marketing organization to perform product management, marketing research, sales, and advertising and promotion activities; developing schedules to identify the tasks that need to be done, the time that is allocated to each one, the people responsible for eat task, and the deadlines for each task's accomplishment; and executing the marketing strategies

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marketing strategies

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means by which marketing goals are to be achieved, and their associated marketing tactics

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marketing tactics

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detailed day-to-day operational decisions of a firm's marketing strategies

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cross functional teams

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small number of people from different departments who are mutually accountable to accomplish a task or a common set of performance goals

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strategic business unit (SBU)

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subsidiary, division, or unit of an organization that markets a set of related offerings to clearly defined groups of customers

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profit

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the money left after a business firm's total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offerings

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market share

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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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competitive advantage

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unique strength relative to competitors that provides superior returns, often based on quality, time, cost, or innovation competencies-special capabilities of a company that distinguish it from other organizations and provide customer value

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points of difference

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characteristics of a product that make it superior to competitive substitutes

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marketing concept

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the idea that an organization should strive to satisfy the needs of customers while also trying to achieve the organization's goals

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market orientation

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focuses on an organizations efforts on continuously collecting info about customers' needs, sharing this info across departments, and using it to create customer value

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environmental scanning

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the process of acquiring information about these changes to allow marketers to identify and interpret trends

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4 forms of competition in market

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pure competition, monopolistic competition, oligopoly, and monopoly key components of competition: likelihood of new competitors, power of buyers and suppliers, and the presence of competitors and possible substitutes

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ethics

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personal moral principles and values that govern the actions and decisions of an individual/group-guidlines how to act rightly and justly when faced with moral dilemmas

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laws

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society's values and standards that are enforceable in the courts

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4 factors that influence ethical marketing behavior

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1 societal culture and norms, 2 business culture and industry practices, 3 corporate culture and expectations, 4 an individual's personal and moral philosophy

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social responsibility

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an organization is part of the larger society and is accountable to that society for its actions

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profit responsibility

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companies have responsibility to maximize profits for their owners or stockholders

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stakeholder responsibility

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obligations an organization has to those who can affect achievement of its objectives stakeholders-employees, shareholders, board of directors, suppliers, distributors, creditors, unions, govt, local communities, and customers

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societal responsibility

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obligations that organizations have to the preservation of the ecological environment and general public

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5 stages of consumer purchase decision process

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problem recognition, information search, alternative evaluation, purchase decision, post purchase behavior

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problem recognition

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perceiving a difference between a person's ideal and actual situation bi enough to trigger a decision

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information search

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remembering previous purchase experiences (internal search) and external search behavior such as seeking info from other sources

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alternative evaluation

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clarifies the problem for the consumer by suggesting the evaluative criteria to use for the purchase, yielding brand names that might meet the criteria, and developing consumer value perceptions

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purchase decision

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choice of an alternative, including from whom to buy and when to buy

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postpurchase behavior

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the comparison of the chosen alternative with a consumer's expectations, which leads to satisfaction or dissatisfaction and subsequent purchase behavior

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low involvement purchases

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consumers engage in routine problem solving-recognize a problem, make a decision,and spend little effort seeking external info and evaluating alternatives

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high involvement purchases

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each of the 5 stages of the consumer purchase decision profess is used, including considerable time and effort on external info search and in identifying and evaluating alternatives

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limited problem solving

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consumers seek some information or rely on a friend to help them evaluate alternatives

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motivation

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the energizing force that stimulates behavior to satisfy a need

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personality

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a persons's consistent behaviors or responses to reoccuring stiuations

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perfecption

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the process by which an individual selects, organizes, and interprets info to create a meaningful picture of the world

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learned behavior

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results from repeated experience and reasoning-brand loyalty results from this, so do values, beliefs, and attitudes

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lifestyle (psychographics)

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combines psychology and demographics and focuses on how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them

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sociocultural influences

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evolve from a consumer's formal and informal relationships with other people, affect consumer behavior; include personal influence, reference groups, the family, social class, culture, and subculture

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reference groups

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people to whom and individual looks as a basis for self-approval or as a source of personal standards

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industrial firms

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reprocess a product or service they buy before selling it to the next buyer

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resellers

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wholesalers and retailers-buy physical products and resell them again without any reprocessing

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government agencies

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buy goods and services for the constituents they serve

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characteristics of organizational buying

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demand characteristics size of the order or purchase number of potential buyers buying objectives buying criteria buyer-seller relationships and supply partnerships multiple buying influences within organizations

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buying center

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a group of individuals who share common goals, risks, and knowledge important to a purchase decision

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5 roles a person may play in buying center

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users-people in the organization who actually use the product/service influencers-affect buying decision by helping define the specifications for what is bought buyers-have formal authority and responsibility to select the supplier and negotiate terms of contract deciders-have the formal/informal power to select/approve the supplier that receives the contract gatekeepers-control the flow of info into the buying center

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environmental forces that shape global marketing efforts

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cultural forces-values, customs, cultural symbols, and language economic forces-stage in economic development and economic infrastructure, consumer income and purchasing power, and currency exchange rates political-regulatory forces

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4 approaches for entering global market

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exporting, licensing, joint venture, direct investment

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exporting

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producing goods in one country and selling them in another

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licensing

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company offers the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee

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joint venture

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foreign company and local firm invest together to create a local business; 2 companies share ownership, control, and profits

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direct investment

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a domestic firm actually investing in and owning a foreign subsidiary or division

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standardization

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all elements of marketing program are the same across countries and cultures

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customization

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one or more elements of marketing program are adapted to meet the needs or preferences of consumers in a particular country or culture

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5 step marketing research approach

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1 define the problem-setting the research objectives and identifying possible marketing actions 2 develop the research plan-specifiying constraints, identifying data needed for marketing decisions, and determining how to collect the data 3 collect the relevant info-consider secondary data and primary data as well as using info technology and data mining 4 develop findings from the marketing research data collected-analyzing data and presenting findings of research 5 take marketing actions

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secondary data

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internal-orgiinate form organization, such as sales reports and customer comments external-created by other organizations or business and trade publications

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primary data

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collected specifically for the project and are obtained either by observing or questioning people

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neuromarketing

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using high-tech braining scanning to record responses of a consumer's brain to marketing stimuli

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information technology

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enables about of marketing data to be stored, accessed, and processed, results in databases for data mining to find statistical relationships useful for marketing decisions and actions

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3 approaches to developing a company's sales forecast

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1 judgements of decision maker 2 surveys of knowledgeable groups 3 statistical methods-linear trend extrapolation

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direct forecast

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estimating the value to be forecast without any intervening steps

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lost horse forecast

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starts with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making a final forecast

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market segmentation

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aggregating prospective buyers into groups that have common needs and will respond similarly to marketing action

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5 steps in market segmentation

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1 group potential buyers into segments, 2 putting related products to be sold in meaningful groups, 3 organizations develop a market product grid, 4 setting the target market segments on which the organization should focus, 5 taking marketing mix actions-marketing program

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bases used to segment consumer market

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geographic, demographic, psychographic, and behavioral

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product

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a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in echange for money or something else of value

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non-durable good

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consumed in one or a few uses

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durable good

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lasts over many uses

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services

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intangible activities or benefits that an organization provides to satisfy consumer needs in exchange for money or something else of value

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idea

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thought that leads to a product or action

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ways products and services can be classified

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type of user, effort involved in purchase decision process, marketing mix attributes used in purchase, frequency of purchase

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convenience products

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items that consumers purchase frequently and with a minimum of shopping effort

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shopping products

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items for which consumers compare several alternatives on selected criteria

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specialty product

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items that consumers make special efforts to seek out and buy

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unsought products

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items consumers do not know about or initially want

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business products

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prudcts that organizations buy that assist them in providing others for resale components-items that become part of the final product, or support products-items used to assist in producing other goods and services

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classification of services

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whether they are delivered by people or equipment, business firms or nonprofit organizations, or government agencies

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newness

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the degree of learning that a consumer must engage in to use a product

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continuous innovation

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no new behaviors must be learned

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dynamically continuous innovation

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only minor behavioral changes are needed

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discontinuous innovation

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consumers must learn entirely new consumption patterns

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factors contributing to a product/service success/failure

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insignificant points of difference, incomplete market and product protocol before product development starts, not satisfying customer needs on critical factors, bad timing, too little market attractiveness, poor product qua lit, poor execution of the marketing mix, no economical access to buyers

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new product process

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7 stages an organization goes through to identify business opportunities and convert them to a salable good or service 1 new product strategy development, 2 idea generation, 2 screening and evaluation, 4 business analysis, 5 development, 6 market testing, 7 commercialization

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new product strategy development

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defining the role for the new product within the firm's overall objectives

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idea generation

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developing a pool of concepts from consumers, employees, basic r&d, ad competitors to serve as candidates for new products

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screening and evaluation

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evaluating new product ideas to eliminate those that are not feasible from a technical or consumer perspective

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business analysis

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defining the features of the new product, developing the market strategy and marketing program to introduce it, and making a financial forecast

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development

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producing a prototype product and testing it in the lab and on consumers to see that it meets standards set for it

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market testing

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exposing actual products to perspective consumers under realistic purchasing conditions to see if they will buy the product

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commercialization

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positioning and launching a product in full-scale production and sales with a specific marketing program

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metropolitan statistical area

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has at least 1 urbanized area of 50,000 people and adjacent territory that has a high degree of social and economic integration

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micropolitan statistical area

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has at least 1 urban cluster of 10,000-50,000 people and adjacent territory has a high degree of social and economic integration

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multicultural marketing

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combinations of marketing mix that reflect unique attitudes, ancestry, communication preferences, and lifestyle of different races

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culture

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set of values, ideas, and attitudes that are learned and shared among members of a group

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value consciousness

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the concern for obtaining the best quality, features, and performance of a product for a given price

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disposable income

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the money a consumer has left after paying taxes to use for necessities such as food, housing, etc.

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discretionary income

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money that remains after paying for taxes and necessities used for luxury items

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electronic commerce

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any activity that uses electronic form in the inventory, exchange, advertisement, distribution, and payment of goods and services

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intranet

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internet based network used within the boundaries of an organization

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pure competition

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there are many sellers with a similar product

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monopolistic competition

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sellers compete with substitutable products within a price range

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oligopoly

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few companies control the majority of industry sales

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pure monopoly

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only 1 firm sells the product

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components to competition

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barriers to entry and power of buyers/suppliers

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regulation

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restrictions state and federal laws place on businesses with regard to conduct of activities-used to ensure competition

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exclusive dealing

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arrangement between manufacturer and reseller to handle only its products and no competition, can be illegal

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requirement contracts

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buyer has to purchase all or part of its needs for a product from 1 seller for a time period, can be illegal

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exclusive territorial distributorship

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manufacturer grants a distributor the sole rights to sell a product in a specific area

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tying arrangement

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a seller requires the purchaser of 1 product to buy another item in the line, can be illegal

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self regulation

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an industry attempts to police themselves; problems: noncompliance by members and enforcement

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Better Business Bureau

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best known self-regulation group of companies whose goal is to help maintain fair practices

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business model

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the strategies an organization develops to provide value to the customers it serves

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cash cows

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SBUs that generate large amounts of cash-more than they can invest profitably in themselves, have dominant shares of slow growth markets and provide cash to cover the organizations overhead and invest in other SBUs

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stars

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SBUs with a high share of high growth markets that may need extra cash to finance their own rapid future growth

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question marks

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SBUs with a low share of high growth markets, require large injections of cash to maintain market share

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dogs

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SBUs with low shares of slow growth markets, don't hold the promise of becoming real winners of the organization

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economic espionage

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the clandestine collection of trade secrets or proprietor info about a company's competitors-illegal and unethical

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code of ethics

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a formal statement of ethical principles and rules of conduct

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whistle blowers

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employees who report unethical/illegal actions of their employers

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moral idealism

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a personal moral philosophy that considers certain individual rights/duties as universal, regardless of outcome

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utilitarianism

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a personal moral philosophy that focuses on "the greatest good for the greatest number" but assessing the costs and benefits of the consequences of ethical behavior

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societal responsibility

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organizations are part of a larger society and are accountable to that society for their actions

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triple bottom line

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recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long term growth

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green marketing

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marketing efforts to produce, promote, and reclaim environmentally sensitive products

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cause marketing

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occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of its products

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social audit

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a systematic assessment of a firm's objectives, strategies, and performance in terms of social responsibility

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5 steps of social audit

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1 recognition of a firm's social expectations and the rationale for engaging in social responsibility endeavors, 2 identification of social responsibility causes or programs consistent with the company's mission, 3 determination of organizational objectives and priorities for programs and activities it will undertake, 4 specification of the type and amount of resources necessary to achieve social responsibility objectives, 5 evaluation of social responsibility programs and activities undertaken and assessment of the future

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sustainable development

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involves conducting business in a way that protects the natural environment while making economic progress

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greenwashing

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the practice of making an unsubstantiated misleading claim about environmental benefits of a product, service, tech, or company practice

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Services

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intangible activities or benefits (such as airline trips, financial advice, or automobile repair) that an organization provides to satisfy consumers' needs in exchange for money or something else of value. In the US 42% of the GDP comes from service and the value from which has increased 70%

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Four I's of Service

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Intangibility, Inconsistency, Inseparability, and Inventory

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Intangibility

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One of the four I's, can't be held, touched, or seen before the purchase decision. Because services tend to be a performance rather than an object, they are much more difficult for consumers to evaluate

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Inconsistency

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One of the four I's related to developing, pricing, promoting, and delivering services is chalenging because the quality of a service is often inconsistant. Because services depend on the the people that provide them, their quality varies with each person's capabilities and day-to-day job performance.

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Inseperability

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One of the four I's related the consumer's inability seperate the deliverer of the service from the service itself.

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Inventory

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the cost of paying a person used to provide a service along with any needed equipment.

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Idle Production Capacity

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when the service provider is available but there is no demand

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Service continuum

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what companies bring to the market ranges from the tangible to the intangible or good-dominant to service-dominant offerings

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Classifying Services

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1. they are delivered by people or equipment 2. they are profit or nonprofit 3. they are government sponsored

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Profit organizations

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excess in revenues over expenses are taxed and distributed to shareholders

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Nonprofit organizations

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excess in revenues over expenses are not taxes or distributed to shareholders. When excess revenue exists the money goes back into the organization's treasury to allow continuation of the service.

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Government Sponsored

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Although there is no direct ownership and they are non profit organizations, governments at the federal, state and local levels provide a broad range of services

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Search Properties

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properties such as color, size, and style which can be determined before purchase

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Experience Properties

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properties which can be discerned only after purchase or during consumption

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Credence Properties

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characteristics that the consumer may find impossible to evaluate even after purchase and consumption

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Gap Analysis

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a marketing research method that measures the difference between a customer's expectation of a service quality and what actually occurred based on reliability, tangibles, responsiveness, assurance, empathy

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Customer Contact Audit

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flowchart of the points of interaction between consumer and service provider

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5 Dimensions of service quality

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1. Reliability 2. Tangibles 3. Responsiveness 4. Assurance 5. Empathy

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Reliability

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Ability to perform the promised service dependably and accurately

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Tangibles

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Appearance of physical facilities, equipment, personnel, and communication materials

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Responsiveness

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Willingness to help customers and provide prompt service

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Assurance

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Knowledge and courtesy of employees and their ability to convey trust and confidence

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Empathy

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Caring, individualized attention provided to customers

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Relationship Marketing

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The contact between a service provider and a customer represents a service encounter that is likely to influence the customer's assessment of the purchase. Encounters represent opportunities to develop social bonds or relationships with customers.

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8 P's of service marketing

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1. Product (service) 2. Price 3. Place (distribution) 4. Promotion 5. People 6. Physical Enviornment 7. Process 8. Productivity

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Product

answer

A good , service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is recieved in exchange for money of something else of value. With regard to service branding strategies are particularly important

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Price

answer

in service, this is referred to by many different names such as, charges, fees, fares, rates, and tuition. Because of the intangible nature of services, this is often percieved by consumers as a possible indicator of the quality of the service.

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Off-peak Pricing

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charging different prices during different days of the week to reflect variations in demand for the service

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Place

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A major factor in developing a service marketing strategy because of the inseperability of services from the producer. Rarely are intermediaries involved in the distribution of service; the distribution site and the service deliverer are the tangible components of the service

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Promotion

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The value, especially in advertising, for many services is to show consumers the benefit of purchasing the service. It is valuable to stress availability, location, consistent quality, and efficient, courteous service, and to provide a physical representation of the service or a service encounter.

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People

answer

many services depend on this factor for the creation and delivery of the customer service experience. The nature of the interaction between employees and customers strongly influences the customer's perceptions of the service experience.

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Internal marketing

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Based on the notion that a service organization must focus on it's employees, or internal market, before successful programs can be directed at customers.

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Customer Experience Management

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(CEM) The process of managing the entire customer experience within the company. Experts suggest that the process should be intentional, planned, consistant so that every experience is similar, differentiated from other service offerings, and relevant and valuable to the target market.

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Physical Environment

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The appearance of the environment in which the service is delivered and where the firm and customer interact can influence the customer's perception of the service The physical evidence of the service includes all the tangibles surrounding the service: the buildings, landscaping, vehicles, furnishings, sinage, brochures, and equipment.

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Process

answer

Refers to the actual procedures, mechanisims, and flow of activities by which the service is created and delivered. The actual creation and delivery steps that the customer experiences provide customers with evidence on which to judge the service.

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Productivity

answer

Most services have a limited capacity due to the inseperability of the service from the service provider and the perishible nature of the service.

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Capacity Management

answer

the service component of the marketing mix must be integrated with efforts to influence consumer demand. Service organizations must manage the availibility of the offering so that 1. demand matches capacity over the duration of the demand cycle and 2. the organization's assets are used in ways that will maximize the return on investment.

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Product Life Cycle

answer

the stages a new product goes through in the marketplace; introduction, growth, maturity, and decline.

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Introduction Stage

answer

occurs when a product is introduced to its intended target market. during this period slaes grow slowly, and profit is minimal

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Trial

answer

the initial purchase of a product by a consumer

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Primary Demand

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the desire for the product class rather than for a specific brand, since there are few competitors with the same product.

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Selective demand

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the preference for a specific brand

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Skimming strategy

answer

setting a high initial cost to recover the costs of development as well as capitalize on the price insensitivity of early buyers.

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penetration pricing

answer

Pricing strategy in which the seller charges a low price on a new product to discourage competition and gain market share.

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Growth Stage

answer

part of the life cycle characterized by rapid increases in sales and appearance of competitors. Profits tend to peak during this stage and advertising shifts emphasis to stimulating selective demand.

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Repeat Purchasers

answer

those who tried the product, were satisfied and bought it again

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Maturity Stage

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part of the life cycle characterized by a slowing of total industry sales or product class revenue. Competitors begin to leave the market. sales increase at a decreasing rate and obtaining new customers becomes more costly. Market is focused on holding market share.

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Decline Stage

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part of the life cycle characterized by the dropping of sales, often caused by enviornmental or technological changes. results in one of two strategies, deletion or harvesting

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Deletion

answer

dropping the product from the company's product line, is the most drastic strategy

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Harvesting

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when a company retains a product but reduces marketing costs. The product continues to be offered but sales people do not allocate time in selling nor are advertising dollars spent.

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4 aspects of product life cycle

answer

1. their length 2. the shape of their sales curves 3. how they vary with different levels of products 4. the rate at which consumers adopt products

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length of cycle

answer

there is no set lenght that it takes a product to move through its life cycle. Mass communication informs consumers quickly and shortens life cycles

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Shape of cycle

answer

not all products have the same shape 4 most common are 1. high learning product 2. low learning product 3. Fashion product 4. Fad product

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High-learning product

answer

one for which significant customer education is required and there is extended introduction period

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Low-learning product

answer

begins immediately because little learning is required by the consumer, and the benefits of purchase are redily understood

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Fashion product

answer

is a style of the times-life cycles appear in women and men's apparel, introduced, decline then seem to return

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Fad

answer

experiences rapid sales on introduction and then an equally rapid decline , typically novelties and have a short life cycle

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Product Class

answer

refers to the entire product category or industry such as prerecorded music

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Product Form

answer

pertains to variations within the product class. For prerecorded music, this exists in the technology used to provide the music such as casset tapes, compact disks and digital music players

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Diffusion of Innovation

answer

The process whereby a new product, service, or idea spreads through a population

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Innovators

answer

Venturesome, higher educated, use multiple information sources

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Early Adapters

answer

Leaders in social setting, slightly above average education

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Early Majority

answer

Deliberate, many informal social contacts

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Late Majority

answer

Skeptical; below average social status

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Laggards

answer

fear of debit; neighbors and friends are informal sources

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Free Sample

answer

one of the most popular means to gain consumer trial. 71% of consumers consider this to be the best way to evaluate a new product

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product/Brand manager

answer

manages the marketing efforts for a close knit family of products or brands. Responsible for managing existing products through the life cycle. also called product manager

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Product Modification

answer

involves altering a product's characteristics such as its quality performance or appearance to increase the products value to customer and increase sales

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Product Bundling

answer

the sale of two or more seperate products in one package

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Market Modification

answer

strategies used by companies trying to find new customers, increase a product's use among existing customers, or create new use situations

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Product repositioning

answer

changes the place a product occupies in a consumer's mind relative to competitive products, generally through 4 factors 1. reacting to a competitor's position 2. reaching a new market 3. catching a rising trend 4. changing the value offered

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Trading up

answer

adding value to a product through additional features or higher quality materials

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Trading down

answer

reducing the number of features, quality or price

question

Branding

answer

an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors

question

Brand Name

answer

any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller's goods or services

question

Trade Name

answer

a commercial legal name under which a company does business

question

Trademark

answer

identifies that a firm has legally registered its brand name or trade name so the firm has exclusive use, thereby preventing others from using it

question

Product counterfeiting

answer

involves low-cost copies of popular brands not manufactured by the original producer

question

Brand Personality

answer

a set of human characteristics associated with a brand name. reserach shows that consumers often assign personality traits to products, traditional, rugged, sophisticated- and choose brands that are consistant with their own desired self image.

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Brand Equity

answer

The added value a brand name gives to a product beyond the functional benefits provided giving two distinct advantages, 1. provides competitive advantage 2. consumers are willing to pay a premium for these products

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Brand awareness

answer

the first step in creating Brand Equity consists of developing positive brand awareness and an association of the brand in consumers' minds with a product class or need to give the brand an identity

question

Brand imagery and performance

answer

the second step in creating Brand Equity consists of establishing a brand's meaning in the minds of consumers through two dimensions 1. a functional, performance-related dimension and 2. an abstract image-related dimension

question

Consumer judgements and feelings

answer

the third step in creating Brand Equity consists of eliciting the proper consumer responses to a brand's identity and meaning. Here attention is placed on how consumers think and feel about the brand. Thinking is focused on a brand's percieved quality, credibility, and superiority relative to other brands. Feeling relates to the consumer's emotional reaction to a brand

question

Consumer-Brand connection

answer

the fourth/final step in creating Brand Equity consists of creating an intense, active loyalty relationship between consumers and the brand. A deep psychological bond characterizes the connection and the personal identification consumers have with the brand.

question

Brand Equity

answer

the economic value of a brand name

question

Brand licensing

answer

is contractual agreement whereby one company (licensor) allows its brand name (s) or trademark (s) to be used with product or services offered by another company (licensee) for a royalty fee

question

Picking a Good Brand Name

answer

1. The name should suggest the product benefits 2. The name should be memorable, distinctive, and positive 3. The name should fit the company or product image 4. No legal or regulatory restrictions 5. Name should be simple.

question

Branding Strategies

answer

companies can employ several different strategies including multiproduct branding, multibranding, private branding, or mixed branding

question

Mulitproduct branding

answer

a company uses one name for all its products in a product class. sometimes called family branding or corporate branding. Advantages; transfer favorable image to other products, lower advertising and promotion cost. Disadvantages; other items in the product line may sacrifice exposure

question

Product Line Extension

answer

practice of using a current brand name to enter a new market segment in its product class

question

Subbranding

answer

combining a corporate or family brand with a new brand, to distinguish a part of its product from others

question

Brand extension

answer

the practice of using a current brand name to enter a different product class. Risks include having too many uses for one brand can dilute the meaning of the brand to consumers

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Co-branding

answer

the pairing of two brand names of two manufacturers on a single product.

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Multi-branding

answer

involves giving each product a distinct name, a useful strategy when when each brand is intended for a different market segment.

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Fighting Brands

answer

introducing new brands as a defensive move to counteract competition, their chief purpose is to confront competitor brands

question

Private Branding

answer

when a company manufactors products but sels them under the brand name of a wholesaler or retailer, also called private labeling or reseller branding. It is estimated that 1 in 5 items purchased at US supermarkets, drug store and mass merchandisers bears this branding

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Mixed Branding Strategy

answer

where a firm markets products under its own name and that of a reseller because the segment attracted to the reseller is different from its own market.

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Packaging

answer

refers to the container in which a product is offered for sale and on which label information is conveyed

question

Label

answer

an integral part of the package and typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients.

question

Packaging and Labeling Cost

answer

US companies spend more than $120 Billion annually and account for 15 cents of every dollar spent by consumers for products

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Communication Benefits

answer

a major benefit of packaging is the label information on it to conveyed to the customer, such as directions how, where and when to use the product, and the source and composition opf the product, which is needed to satisfy legal requirements of product disclosure.

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Functional Benefits

answer

a role such as storage, convenience, protection, or product quality

question

Perceptual benefits

answer

package shape, color, and graphics distinguish one brand from another, convey a brand's positioning, and brand equity, creating a perception in the consumer's mind

question

Packaging Challenges

answer

package and label designers face 4 challanges, 1. the continuing need to connect with customers 2. enviornmental concerns 3. health, safety, and security issues 4. cost reduction

question

Connecting with customers

answer

packaging must be continually updated, creating a challenge in creating aesthetic and functional design features that attract customer attention and deliver customer value for their use

question

Enviornmental concerns

answer

because of widespread worldwide concern about the growth of solid waste and the shortage of viable landfill sites, the amount, composition and disposal of packaging material continues to recieve attention.

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Health, Safety, and Security issues

answer

due to growing health, safety and security concerns, most US and European consumers believe companies should make sure products and their packages are safe and secure, regardless of the cost

question

Cost reduction

answer

about 80% of packaging material used in the world consists of paper, plastics, and glass. as the cost of these materials rise, companies are constantly challenged to find innovative ways to cut packaging costs while delivering value to their customers

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Warranty

answer

a statement indicating the liability of the manufacturer for product deficiencies

question

express warranties

answer

written statements of liabilities

question

limited-coverage warranty

answer

specifically states the bounds of , areas of noncoverage

question

full warranty

answer

no limits to coverage

question

implied warranties

answer

assign responsibility for product deficiencies to the manufacturer

question

80/20 rule

answer

A concept that suggests 80% of a firm's sales are obtained from 20% of its customers. The percentages in the concept are not really fixed but suggets that a small fraction of customers provides a large fraction of a firm's sales.

question

marketing-product grid

answer

A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization

question

market segmentation

answer

Involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.

question

market segments

answer

The relatively homogeneous groups of prospective buyers that result from the market segmentation process.

question

perceptual map

answer

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 its own product or brand to develop marketing actions to move its product or brand into an ideal position.

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product differentation

answer

a marketing strategy that involves a firm's using different marketing mix activities to help consumers perceive the product as being different and better than competing products.

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Usage Rate

answer

The quantity consumed or patronage (store visits) during a specific period. Also called frequency marketing

question

Key of Marketing segmentation

answer

1. forms meaningful groupings 2. develops specific marketing mix actions

question

One Product and Multiple market segments

answer

when an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the exra costs of developing and producing additional versions of the product

question

Multiple Markets and Multiple Market Segments

answer

many firms now offer different variations of the same basic offering to high-end and low-end segments

question

Segments of One: Mass Customization

answer

tailoring goods or services to the tastes of individual customers on a high-volume scale made possible by today's internet ordering, flexible marketing and flexible manufacturing.

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Built-to-order (BTO)

answer

manufacturing a product only when there is an order from a customer.

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Organizational Synergy

answer

The increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently

question

Cannibalization

answer

a situation that occurs when sales of a new product cut into sales of a firm's existing products

question

5 step market segmentation process

answer

1. Group potential buyers into segments 2. group products to be sold into categories 3. develop a market-product grid and estimate size of markets 4. select target markets 5. take marketing actions to reach target markets

question

Criteria for forming segments

answer

1. simplicity and cost-effectiveness of assigning potential buyers to segments 2. potential for increased profit 3. similarity of needs of potential buyers within a segment 4. difference of needs of buyers among segments 5. potential of a marketing action to reach a segment

question

Geographic segmentation

answer

Dividing a market based on different geographical units such as nations, states, regions, counties, cities, or neighborhoods

question

Demographic segmentation

answer

Dividing a market based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) or perspective customers

question

Psychographical segmentation

answer

Dividing a market based on some subjective mental or emotional attribute (personality), aspirations (lifestyle), or needs of perspective customers.

question

Behavorial segmentation

answer

Dividing a market based on some observable actions or attributes by prospective customers, such as where they buy, what benefits they seek, how frequently they buy and why they buy.

question

Ways to Segment Consumer Markets

answer

Geographical - region Demographic - household size Psychographic - lifestyle Behavioral - product features and usage rate

question

Frequency Marketing

answer

strategy that focuses on the usage rate of consumers

question

Ways to Segment Organizational Markets

answer

Geographic - statistical areas Demographic - North American Industry Classification System codes Demographic - Number of employees Behavioral - Usage rate

question

Select Target Markets

answer

A firm must take care to choose its target market segments carefully. If it picks too narrow a set of segments, it may fail to reach the volume of sales and profits it needs

question

Target Market Criteria

answer

Market Size, Experienced growth, Competitive Position, Cost of reaching the segment, and Compatibility with the Organization's objectives and resources

question

Market Size

answer

The estimated size of the market in the segment is an important factor in deciding whether it's worth going after.

question

Expected Growth

answer

although the size of the market in the segment may be small now, perhaps it is growing significantly or is expected to grow in the future.

question

Competitive position

answer

is there a lot of competition in the segment now or is there likely to be in the future? The less competition, the more attractive the segment is.

question

Cost of reaching the segment

answer

a segment that is inaccessible to a firm's marketing actions should not be pursued. For example, if few people in the marketing area are reachable by newspaper or print ads, don't waste advertising money.

question

Compatibility with objectives and resources

answer

judging the cost of pursuing and obtaining a particular market in contrast with the current goals and regulations/resources of the company

question

This chapter

answer

is crap and won't shut up about Wendy's

question

Take Marketing Action

answer

Step 5 in the segment and targeting process. The purpose of developing a market-product grid is to trigger marketing actions to increase sales and profits. This means that someone must develop and execute an action plan in the form of a marketing program.

question

Immediate Strategy

answer

Using the current or past information to formulate a current approach to advertising and marketing.

question

Future Strategy

answer

Changing customer tastes and competition mean you must alter your strategies when necessary. This involves 1. Looking at company headquarters 2. What competitors are doing and 3. What might be changing in your area.

question

Marketing Synergies

answer

Running horizontally across the grid, each row represents an opportunity for efficiency in terms of a market segment. Often these come at the expense of product synergies because a single customer segment will likely require a variety of products, each of which will have to be designed and manufactured. The company saves money on marketing but spends more on production.

question

Product Synergies

answer

Running vertically down the market-product grid, each column represents and opportunity for efficiency in research and development and production.

question

Product positioning

answer

the place a product occupies in consumers' minds on important features relative to competitive products

question

product repositioning

answer

changing the place a product occupies in a consumer's mind relative to competitive products

question

Head-to-head positioning

answer

competing directly with competitors on similar products attributes in the same target market

question

Differentiation positioning

answer

Seeking a less competitive smaller market niche in which to locate a brand. Companies also follow this strategy among brands within their own product line to minimize the cannibalization of a brand's sales or market share

question

Positioning Statement

answer

A succinct written statement describing the ideas for the product or the brand that is not only used internally within the marketing department, but also for those in areas such as research and development and advertising

question

Customer positioning steps

answer

1. identify the important attributes for a productor brand class 2. Discover how target customers rate competing products or brands with respect to these attributes 3. Discover where the company's product or brand is on these attributes in the minds of potential customers 4. Reposition the company's product or brand in the minds of potential customers

question

Simplicity and Cost-effectiveness

answer

a marketing manager must be able to put a marketing segmentation plan into effect. This means identifying the characteristics of potential buyers in a market and then Cost-effectively assigning them to a segment

question

Potential for increased Profit

answer

The best segmentation approach is one that maximizes the opportunity for future profit and return on investment (ROI). If this potential is maximized without segmentation, don't segment! For non-profit organizations, the criterion is the potential for serving clients more effectively.

question

Similarity of needs

answer

Potential buyers within a segment should be similar in terms of common needs that, in turn, leads to a common marketing action, such as product features sought or advertising media used.

question

Difference of needs

answer

If the needs of the various segments aren't very different, combine them into fewer segments. A different segment usually requires a different marketing action that, in turn, means greater costs. If increased sales don't offset extra costs, combine segments and reduce the number of marketing actions.

question

Reaching a segment

answer

Reaching a segment requires a simple but effective marketing action. If no such action exists, don't segment.

question

PRIZM

answer

Designed by Nielsen Claritas, this lifestyle segmentation system classifies every household in the US into one of 66 unique market segments based on the concept that, "birds of a feather flock together."

question

Usage Index

answer

This emphasizes the importance of the Heavy-user segment. For example, giving light users an index of 100 and the heavy users an index of 640 means that for every $1 spent by light users, heavy users are spending $6.40. This is why business owners focus on the heavy-user segment.

question

Grouping

answer

Combining the products a firm sells into meaningful categories is as important as grouping customers into segments. When a firm has dozens or hundreds of products, they must be grouped in some way so buyers can relate to them.

question

Constraints

answer

in a decision the restrictions placed on potential solutions to a problem

question

data

answer

the facts and figures to a problem that are divided into two main parts: secondary data and primary data.

question

data mining

answer

the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions.

question

decision

answer

a conscious choice from among two or more alternatives

question

information technology

answer

involves operating computer networks that can store and process data

question

marketing research

answer

the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions

question

measures of success

answer

criteria or standards used in evaluating proposed solutions to a problem

question

observational data

answer

facts and figures obtained by watching, either mechanically or in person, how people behave

question

primary data

answer

facts and figures that are newly collected for the project

question

questionnaire data

answer

facts or figures obtained by asking people about their attitudes, awareness, intentions, and behaviors

question

sales forecast

answer

the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing effort. Also called company forecast

question

secondary data

answer

facts and figures that have already been recorded before the project at hand

question

Ethnographic Research

answer

specialized observational approach in which trained observers seek to discover subtle behavioral/emotional reactions as consumers encounter products in their nature use environment

question

5 steps of Marketing Research

answer

1. define problem 2.determine research plan 3. collect relevant information through secondary and primary data 4. develop finding 5. take marketing actions

question

Define the problem

answer

Set research Objectives; Identify possible marketing actions

question

Develop the research plan

answer

Specify constraints; identify data needed for marketing actions; determine how to collect data

question

Collect Relevant Information

answer

Obtain secondary data; Obtain Primary Data; Use Information technology and data mining

question

Develop Findings

answer

Analyze the data; present the findings

question

Take Marketing Actions

answer

Make action recommendatons; implement action recommendations; evaluate the results

question

Exploratory research

answer

provides ideas about a relatively vague problem

question

Descriptive research

answer

generally involves trying to find the frequency that something occurs or the extent of a relationship between two factors

question

Causual research

answer

the most sophisticated, tries to determine the extent to which the change in one factor changes another

question

Causation

answer

A cause and effect relationship in which one variable controls the changes in another variable.

question

Correlation

answer

a reciprocal relation between two or more things, ex. swamp and malaria (really caused by mosquitos)

question

Between Subjects Experiment

answer

an experimental design in which the independent variable is made to vary across >two or more groups < of subjects.

question

Within Subjects Experiment

answer

Experiment in which each subject of a >single group< receives all the variables/stimuli.

question

Key Elements to collect data

answer

1. Concepts 2. Methods

question

Concepts

answer

ideas about products or services.

question

Methods

answer

approaches that can be used to collect data to solve all or part of the problem

question

Sampling

answer

a technique to select a group of distributors, customers, or prospects and treating the information they provide as typical of all those in whom they are interested.

question

Statistical Inference

answer

generalizes the results from the sample to much larger groups of distributors, customers, or prospects to help decide on marketing actions

question

Secondary Data: Internal

answer

Examples include detailed sales breakdowns by product line, by region, by customer, and by sales representative, as well as customer inquiries and complaints. Often a starting point for research

question

Secondary Data: External

answer

Published data from outside the organization. Examples include, US Census, Trade Association studies, business periodicals

question

Census Bureau

answer

Population poll every 10 years; Economic Census every 5 years

question

NAICS

answer

North American Industry Classification System-provides common industry definitions for Canada, Mexico, and US which makes it easier to measure economic activity in the 3 member countries

question

Advantages of Secondary Data

answer

1. Tremendous time savings because the data have already been collected andpublished 2. the low cost such as free or inexpensive census reports

question

Disadvantages of Secondary Data

answer

1. Out of date data (census every 5-10 years) 2. Definitions or categories might not be quite right 3. Data may not be specific enough

question

Primary Data: Watching People

answer

Observing people and asking them questions are the two principal ways to collect new or primary data for a marketing study. 3 main methods, Mechanical (including electronic), Personal, and Neuromarketing methods.

question

Mechanical Methods

answer

Ratings system for TV, Anytime Anywhere Media Measurement (A2/M2) Initiative

question

Personal Methods

answer

Personal shoppers, watching consumers in person or videotaping, Ethnographic research

question

Neuromarketing Methods

answer

use of brain scanning to analyze buying processes, mixing the study of the brain with marketing

question

Primary Data: Asking people

answer

Asking consumers to gather data. Divided into 1. Idea Generation methods and 2. Idea Evaluation Methods

question

Idea Generation Methods

answer

Individual interview, Depth Interviews, Focus Groups

question

Idea Evaluation Method

answer

the process by which the marketing researcher tries to test the ideas discovered earlier to help marketing manager recommend marketing actions.

question

CATI

answer

Computer Assisted Telephone Interviewing

question

open-ended question

answer

allows respondent to express opinions, ideas and behaviors

question

Closed-end or fixed alternative Question

answer

require respondent to select one or more predetermined choices

question

Dichotomous question

answer

simple form of a fixed alternative question that allows only a yes or no answer

question

semantic differential scale

answer

five point scale using 1-2 word adjectives with opposite meanings

question

Likert Scale

answer

respondant expresses the extent to which they agree or disagree with a statement

question

Wording Problems

answer

Leading questions, Ambiguous question, unanswerable question, 2 questions in one, non-mutually exclusive answers

question

Panel

answer

A sample of consumers or stores from which researchers take a series of measurements

question

Experiment

answer

Obtaining data by manipulating factors under tightly controlled conditions to test cause and effect, an example of causal research

question

Marketing Drivers

answer

independent, variables of interest, often one or more of the marketing mix elements such as price, product features, or promotion

question

Data Warehouse

answer

Databases at the core where the ocean of info is collected and stored.

question

Sensitivity Analysis

answer

querying the database with "what if" questions to determine how a hypothetical change in driver such as advertising can affect sales.

question

Actions

answer

Delivering results in a clear picture and if possible, a single page

question

Sales Forecasting Techniques

answer

1. Judgments of the decision maker (99%0 2. surveys of knowladgeable groups 3. Statistical methods

question

Direct Forecast

answer

estimating the value to be forecast without any intervening steps ex.. "How many quarts of milk should i buy?"

question

Lost-horse Forecast

answer

involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast

question

Survey of Buyers Intentions Forecast

answer

asking prospective customers if they are likely to buy the product during some future time period

question

Salesforce Survey Forecast

answer

involves asking the salespeople to estimate sales during a coming period

question

Trend Extrapolation

answer

involves extending a pattern observed in past data into the future

question

back translation

answer

The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.

question

balance of trade

answer

the difference between the monetary value of a nation's exports and imports

question

bottom of the pyramid

answer

the largest, but poorest socioeconomic group of people in the world

question

consumer ethnocentrism

answer

the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products

question

countertrade

answer

the practice of using barter rather than money for marketing global sales

question

cross-cultural analysis

answer

the study of similarities and differences among consumers in two or more nations or societies

question

cultural symbols

answer

things that represent ideas and concepts

question

currency exchange rate

answer

The price of one country's currency expressed in terms of another country's currency.

question

customs

answer

what is considered normal and expected about the way people do things in a specific country

question

direct investment

answer

a global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division

question

dumping

answer

when a firm sells a product in a foreign country below its domestic price or below its actual cost

question

Economic Espionage Act (1996)

answer

A law that makes the theft of trade secrets by foreign entities a federal crime in the United States. the act perscribes prison sentances up to 15 years and $500,000 fines for individuals. Agents of foreign governments can face 25 years and up to $10 million

question

exporting

answer

A global market-entry strategy in which a company produces goods in one country and sells them in another country.

question

Foreign Corrupt Practices Act (1977)

answer

a law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country

question

global brand

answer

a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs

question

global competition

answer

Exists when firms originate, produce, and market their products and services worldwide.

question

global consumers

answer

consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services

question

global market strategy

answer

the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ

question

gray market

answer

a situation where products are sold through unauthorized channels of distribution. Also called parallel importing.

question

gross domestic product (GDP)

answer

the monetary value of all goods and services produced in a country during one year

question

joint venture

answer

a global market-entry 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

question

microfinance

answer

the practice of offering small, collateral- free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generation activities

question

multidomestic marketing strategy

answer

multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business

question

protectionism

answer

the practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas

question

quota

answer

A restriction placed on the amount of a product allowed to enter or leave a country.

question

semiotics

answer

a field of study that examines the correspondence between symbols and their role in the assignment of meaning for people

question

strategic alliances

answer

a practice whereby one firm's marketing channel is used to sell another firm's products

question

tariffs

answer

government tax on goods or services entering a country, primarily serve to raise prices on imports

question

values

answer

a society's personally or socially preferable modes of conduct or states of existence that tend to persist over time

question

World Trade Organization

answer

formed in 1995, a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions. Includes 153 member countries which account for 90% of world trade. The WTO reviews over 200 disputes annually

question

Dynamics of World Trade

answer

The dollar value of worl trade has more than doubled in the past decade and will exceed 20 trillion in 2012. Manufactured goods account for 75% and service industry accounts 25%

question

Countries accounting more than 2/3 of world trade

answer

US, Europe, Canada, China, and Japan

question

Trade Feedback effect

answer

imports affect exports and vice versa

question

US role in Marketplace

answer

percentage of US exports over the past 30 years has shifted downward whereas its percentage of imports has increased causing its role as world supplier to diminish

question

Surplus

answer

when a country's exports exceed its imports

question

Deficit

answer

when a country's imports exceed it's imports

question

4 largest importers of US goods and services

answer

Canada, China, Mexico and Japan. These countries purchase approximately 67% of US exports. They are also the the 4 largest exporters TO the United States

question

Factor Conditions

answer

these reflect a nation's ability to turn its natural resources, education, and infrastructure into a competitive advantage

question

Demand Conditions

answer

these include both the number and sophistication of domestic customers for an industry's product

question

Related and Supporting Industries

answer

firms and industries seeking leadership in global markets need cluster of world class suppliers that accelerate innovation

question

Company strategy, structure, and rivalry

answer

these factors include the conditions governing the way a nations businesses are organized and managed, along with the intensity of domestic competition

question

Economic Espionage

answer

the clandestine collection of trade secrets or proprietary information about a company's competitors. Common among high-technology industries such as electronics, specialy chemicals, industrial equip, aerospace, ect.. estimated to cost firms $250 BILLION a year

question

Global Economic Trend 1

answer

Gradual decline of economic protectionism by individual countries

question

Global Economic Trend 2

answer

Formal economic integration and free trade of nations

question

Global Economic Trend 3

answer

Global competition among global companies for global customers

question

Global Economic Trend 4

answer

Emergence of networked global marketplace

question

General Agreement on Tariffs and Trade (GATT)

answer

International treaty intended to limit trade barriers and promote world trade through the reduction of tariffs, which it did. However, GATT did not address nontariff trade barriers, such as quotas and world trade in services, which often sparked heated trade disputes between nations

question

Transnational Trade Groups

answer

Countries with similar trade goals forming unions or signing trade agreements for the purpose of promoting free trade among member nations and enhancing their individual economies. Examples; European Union (EU), NAFTA, and the Asian Free Trade Areas

question

European Union (EU)

answer

consists of 27 member nations, houses more than 500 million consumers with a combined GDP larger than that of the US. 16 countries have adopted common currency called the EURO.

question

Little Dragons

answer

refers to four countries in the Asian Free Trade Market; Hong Kong, Singapore, South Korea and Taiwan

question

Types of Companies in Global Marketplace

answer

1. International Firms 2. Multinational Firms 3. Transnational firms; All 3 employ people in different countries and many have administrative marketing and manufacturing operations (divisions or subsidaries) around the world

question

International Firm

answer

engages in trade and marketing in different countries as an extension of the marketing strategy in its home country. uses same marketing strategy to market products internationally and domestically. AVON

question

Multinatinal Firm

answer

views the world as consisting of unique parts and markets to each part differently. Use a multidomestic marketing strategy... Lever/Unilever, Proctor and Gamble MR Clean/Mastro Limpio

question

Transnational Firm

answer

views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences. Employ a Global Marketing Strategy. Nike, McDonalds

question

Networked Global Marketplace

answer

enables the exchange of goods, services, and information from sellers Anywhere to buyers Anywhere at Any time and at a lower cost.

question

Schuld

answer

German word for debt, also the german word for guilt!

question

Cultural Ethnocentrism

answer

The belief that one's own culture is superior to that of another

question

Global Market Scan

answer

Should include 1. a comparative analysis of the economic development in different countries, 2. an assessment of the economic development in different countries, 3. measurement of consumer income in different countries, and 4. recognition of a country's currency exchange rates.

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Developed Countries

answer

have somewhat mixed economies. Private enterprise dominates, although they have substancial public sectors as well. US Canada Japan and most Western Europe

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Developing Countries

answer

in the process of moving from agricultural to an industrail economy. Includes 2 subgroups, 1. those who have already made the move (Brazil, Poland, India, China) and 2. those that remained locked in a preindustrial economy (Afghanistan, Ethopia, Tanzania) As a whole 86% of the world's population (6.9 bil) reside in this group and comprise 1/5 of total world income.

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Economic Infrastructure

answer

a country's communications, transportation, financial and distribution systems

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Political Stability

answer

Billions of dollars have been lost in the Middle East and Africa as a result of internal political strife, terrorism, and war. Losses such as these encourage careful selection of countries and regions for world trade

question

PRS Group

answer

an agency that monitors, tracks and rates the political stability and assigns risk ratings to countries

question

Means of Market Entry

answer

4 general options exist 1. Exporting 2. Licensing 3. Joint Venture 4. Direct investment. the amount of financial commitment, risk, marketing control, and profit potential increases as the firm moves from exporting to direct investment.

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Indirect Exporting

answer

When a firm sells its domestically produced goods in a foreign country through an intermediary

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Direct Exporting

answer

when a firm sells its domestically produced goods in a foreign country without intermediaries. Boeing is the world's largets aerospace company and the largest US exporter

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Licensing

answer

a company offers the right to a trademark, patent, trade secret, or other similarly valued items of intellectual property in return for a royalty or fee. Benefits include low-cost and capital-free entry into a foreign country. Disadvantages include loss of control of products reducing potential profits gained.

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Contract Manufacturing

answer

a US company may contract with a foreign firm to manufacture products according to stated specification

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Contract Assembly

answer

the US company may contract with a foreign firm to assemble (not manufacture) parts and components that have been shipped to that country.

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Franchising

answer

one of the fastest growing market-entry strategies. A contractual agreement that specifies the methods by which a dealer can prooduce and market a supplier's good or service

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Product Promotion Strategies

answer

1. Product extension strategy 2. Product adaptation strategy 3. Product Invention 4. Dual Adaptation Strategy 5. Product invention strategy

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Product Extension

answer

Selling virtually the same product in other countries. Works best when the consumer market target for the product is alike across countries and cultures

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Product Adaptation

answer

changing a product in some way to make it more appropriate for a country's climate or consumer preferences.

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Production Invention

answer

companies can invent totally new products designed to satisfy common needs across countries

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Product adaptation strategy

answer

Adapting a product to meet local conditions or wants in foreign markets

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Dual Adaptation Strategy

answer

Adapting both a product and the promotion message to meet local conditions or wants in foreign markets

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Distribution Steps

answer

Seller > Seller's international marketing headquarters > Channels between Nations > Channels within foreign nations > Final Consumer

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bidder's list

answer

a list of firms believed to be qualified to supply a given item

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business marketing

answer

the marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others

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buy classes

answer

consists of three types of organizational buying situations: straight rebuy-buyer/purchasing manager reorders an existing product/service from the list of acceptable suppliers, probably without even checking with users new buy-the organization is a first time byre of the product or service modified rebuy-users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier

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buying center

answer

the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

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derived demand

answer

the demand for business products and services is driven by, or derived from, demand for consumer products and services

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e-marketplaces

answer

online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products and services. Also, called B2B exchanges or e-hubs

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ISO 9000 standards

answer

standard for registration and certification of manufacturer's quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization (ISO)

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make-buy decisions

answer

an evaluation of whether components and assemblies will be purchase from outside suppliers or built by the company itself

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North American Industry Classification System (NAICS)

answer

a detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes

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Organizational buyers

answer

those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale 3 types: industrial markets, reseller markets, government markets

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Organizational buying behavior

answer

the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers.

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Organizational buying criteria

answer

the objective attributes of the supplier's products and services and the capabilities of the supplier itself serve the same purpose as evaluation criteria

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reciprocity

answer

an industrial buying practice in which two organizations agree to purchase each other's products and services

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reverse auction

answer

in an e-marketplace, it is an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other

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supplier development

answer

the deliberate efforts by organizational buyers to build relationships that shape suppliers' products, services and capabilities to fit the buyer's needs and those of its customers

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supply partnership

answer

buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer., a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer

question

traditional auction

answer

in an e-marketplace, it is an online auction in which a seller puts an item up for sell and would-be buyers are invited to bid in competition with each other

question

value analysis

answer

a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs

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Industrial Market

answer

reprocess a product or service before selling it to next buyer; Physical goods make up 25% of market and Services make up 75%

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Reseller Market

answer

wholesalers and resellers that buy physical products and resell them again without reprocessing. in the US there are about 2 million resellers and 430,000 wholesalers

question

Government Market

answer

federal, state, and local government agencies that buy goods and services for the constituents they serve. about 89,500 in the US

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Global Market

answer

Largest exporting organizations focus on organizational buyers. Capital equipment and industrial supplies account for 46% of US product exports

question

NAICS

answer

North American Industry Classification System provides common industry definitions for Canada, Mexico and the US which makes it easier to measure economic activity in the members of NAFTA

question

NAFTA

answer

North American Free Trade Agreement, Trade agreement , North American Free Trade Agreement; allows open trade with US, Mexico, and Canada

question

NAICS coding system

answer

six-digit system; first 2 digits represent sector, 3rd digit represents subsector, 4th represents industry group, 5th designates a specific industry and is the most detailed level at which comparable data is available for Canada, Mexico and the US, 6th digit designates the individual country. p.142 figure 6-1

question

NAPCS

answer

North American Product Classification System, provides a classification system for for products and services across North America

question

Key Characteristics of Organization Buying

answer

Market Characteristics, Product or Service Characteristics, Buying Process Characteristics, Marketing Mix Characteristics

question

Marketing Characteristics

answer

Demand for industrial products and services is derived, Few customers typically exist and their purchase orders are large

question

Product or service Characteristics

answer

Products or services are technical in nature and purchased on the basis of specifications; many goods purchased are raw and semi-finished; Heavy emphasis is placed on delivery time, technical asistance, and postsale service

question

Buying Process Characteristics

answer

Technically qualified and professional buyers follow established purchasing policies and procedures; Buying objectives and criteria are typically spelled out, as are procedures for evaluating sellers and their products; There are multiple buying influences and mulitple parties participate in purchase decisions; There are reciprocal arrangements, and negotiation between buyers and sellers is commonplace; online buying is widespread

question

Marketing Mix Characteristics

answer

Direct Selling to organizational buyers is the rule and distribution is very important; Advertising and other forms of promotion are technical in nature; Price is often negotiated, evaluated as part of broader seller and product or service qualities, and frequently affected by quality discounts.

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Attitude

answer

learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way

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Beliefs

answer

A consumer's subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.

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Brand Loyalty

answer

a favorable attitude toward and consistent purchase of a single brand over time

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Cognitive dissonance

answer

The feeling of postpurchase psychological, 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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consideration set

answer

The group of brands that a consumer would consider acceptable from among all the brands of which he or she is aware in the product class

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consumer behavior

answer

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

question

consumer socialization

answer

the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers. Children learn how to purchase 1. by interacting with adults in purchase situations and 2. through their own purchasing and product usage experiences

question

evaluative criteria

answer

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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family life cycle

answer

the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors.

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involvment

answer

the personal, social, and economic significance of the purchase to the consumer

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learning

answer

Those behaviors that result from (1) repeated experience and (2) reasoning

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lifestyle

answer

a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them.

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motivation

answer

the energizing force that stimulates behavior to satisfy a need

question

opinion leader

answer

Individuals who exert direct or indirect social influence over others. about 10% of US adults are opinion leaders. study by popular mechanics showed 18 million opinion leaders responsible for influencing the purchases of some 85 million consumers.

question

perceived risk

answer

the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.

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perception

answer

The process by which an individual selects, organizes, and interprets information to create an meaningful picture of the world

question

personality

answer

a person's consistant behaviors or responses to recurring situations

question

purchase decision process

answer

the five stages a buyer passes through in making choices about which products and servicesto buy: (1) problem recognition,(2) information search, (3) alternative evaluation, (4) purchase decision,and (5) postpurchase behavior.

question

reference groups

answer

people to whom an individual looks as a basis for self-appraisal or as a source of personal standards

question

self-concept

answer

the way people see themselves and the way they believe others see them

question

situational influences

answer

the five aspects of the purchase situation that impacts the consumer's purchase decision; (1) the purchase task, (2) social surroundings, (3) physical surroundings, (4) temporal effects, and (5) antecedent states

question

social class

answer

the relatively permanent, homogenous divisions in a society into which people sharing similar values, interests and behavior can be grouped

question

subcultures

answer

subgroups within the larger or national culture that have unique values, ideas, and attitudes. 3 largest US subcultures are Hispanics, African-Americans, and Asian-Americans. They account for 1 in 4 of US consumers and are expected to spend about 3.4 TRILLION in 2013.

question

subliminal perception

answer

seeing or hearing messages without being aware of them

question

word of mouth

answer

the influencing of people during conversations. Most powerful and authentic information source for consumers, typically involves friends viewed as trustworthy. 67% of US sales are based directly on word-of-mouth among friends, family and collegues

question

Problem Recognition

answer

the initial step in the purchase decisionis perceiving a difference between a person's ideal and actual situations big enough to trigger a decision

question

Information Search

answer

after recognizing a problem, a consumer begins to search for information to clarify by 1. suggesting criteria for purchase 2. yielding brand names to meet criteria 3. developing consumer value perceptions

question

Internal Search

answer

scanning your memory for previous experiences with products or brands

question

External Search

answer

when personal knowledge is insufficient, consumers look to external sources for information including 1. personal sources; friends and relatives 2. public sources; rating organizations, consumer reports 3. marketer-dominated sources; info from sellers including, advertising, company web-sites ect..

question

Alternative Evaluation

answer

assessing value, The stage of the buyer decision-making process in which the consumer uses information to evaluate alternative brands in the choice set

question

Purchase Decision

answer

the decision of whether or not to buy and which competing product to buy, which is made after carefully weighing the alternatives. 1. From whom to buy 2. When to buy

question

Postpurchase behavior

answer

The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction

question

3 to 1 ratio

answer

Satisfied buyers tell 3 other people about their experience. Dissatisfied buyers complain to 9 people.

question

High-involvement purchase

answer

usually have at least one of these characteristics 1) expensive 2) can have serious personal consequences 3) could reflect on ones social image. For these consumers usually engage in extensive info search, consider many attributes and brands, form attitudes and participate in word-of-mouth communication

question

Low-involvement purchases

answer

purchases that have little importance or relevance for the customer

question

Extended problem solving

answer

each of the five stages of the consumer purchase decision process is used, including considerable time and effort on external information search and in identifying and evaluating alternatives. Used in high-involvement purchases and decisions involving risk

question

Limited problem solving

answer

consumers typically seek some information or rely on a friend to help them evaluate alternatives

question

Routine problem solving

answer

for products such as table salt and milk, consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives.

question

Low Involvement Marketing Strategy

answer

companies who are market leaders place attention on 1. maintaining quality 2. avoiding stockout situations so buyers don't substitute competing brands 3. repetitive advertising messages that reinforce a consumer's knowledge or assures buyers they made the right choice

question

High Involvement Marketing Strategy

answer

marketers know their consumers constantly seek and process information about objective and subjective brand attributes, form evaluative criteria, rate product attributes in various brands and combine these for overall brand evaluation. Market leaders ply consumers with product info through advertising and personal selling and create chat rooms and communities on company or brand websites

question

Psychological influences

answer

Motivation and personality, perception, learning, values, beliefs and attitudes, lifestyle

question

Sociocultural influences

answer

Personal Influence, Reference Groups, Social Class, Culture and Subculture.

question

Situational influences

answer

Purchase task, social surroundings, physical surroundings, temporal effects, antecedent states

question

Marketing mix influences

answer

product, price, promotion, place

question

Physiological needs

answer

the most basic human needs to be satisfied- water, food, shelter, and clothing

question

Safety Needs

answer

freedom from harm, financial security

question

Social Needs

answer

friendship, belonging, love

question

Personal needs

answer

status, respect, prestige

question

Self-actualization needs

answer

self-fulfillment

question

Key Traits

answer

enduring characteristics witin a person or in his or her relationship with others. Assertiveness, extroversion, compliance, dominance, and aggression

question

Ideal Self

answer

describes how people would like to see themselves

question

Selective perception

answer

the brain's attempt to organize and interpret information. a filtering exposure, comprehensionand retention

question

Selective exposure

answer

occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent

question

Selective Comprehension

answer

interpreting information so that it is consistent with your attitudes and beliefs.

question

Selective Retention

answer

consumers do not remember all the information they see, read, or hear, event minutes after exposure to it.

question

Strategies to reduce consumer's risk

answer

Obbtaining seal of approval, Securing Endorsements from influential people, providing free trials of the product, giving extensive usage instructions, Providing warranties and Gaurantees

question

Behavioral Learning

answer

the process of developing automatic responses to a situation built up through repeated exposure to it

question

Learning Variables

answer

Drive, Cue, Response, Reinforcement

question

Drive

answer

a need that moves an individual to action. Examples such as hunger might represent motives

question

Cue

answer

a stimulus or or symbol percieved by customers

question

Response

answer

the action taken by the consumer to satisfy the drive

question

Reinforcement

answer

the reward recieved by a consumer as a result of a successful response

question

Stimulus Generalization

answer

occurs when a response elicited by one stimulus (cue) is generalized to another stimulus

question

Stimulus Discrimination

answer

refers to a person's ability to percieve differences in stimuli

question

Cognative learning

answer

involves making connections betewwn two more ideas or simply observing the outcomes of others' behavior and adjusting one's own accordingly

question

Attitude Change

answer

marketers use 3 approaches to change consumer attitude toward products. 1. Changing beliefs about the extent to which a brand has certain attributes 2. Changing the percieved importance of attributes 3. Adding new attributes to the product

question

Psychographics

answer

an analysis of consumer lifestyle, combining psychology, lifestyle and demographics, that provides insight into consumer needs and wants. Used to uncover consumer motivations for buying and using products and services

question

VALS

answer

prominent Psychographic system, developed by SRI Consulting, that identifies eight consumer segemnts based on 1. primary motivation for buying and having certain products and services 2. their resources

question

VALS Primary motivations

answer

Ideals, Achievment, Self-expression

question

Ideals-motivated Groups

answer

consumers guided by knowledge and principle.

question

Thinkers

answer

High-resource group, mature, reflective, and well-educated people who value order, knowledge, and responsibility. Deliberate information-seekers who value durability and functionality in products over styling and newness

question

Believers

answer

low-resource group, conservative, conventional people with concrete beliefs based on traditional, established codes, family, religion, community. They choose familiar products and brands, favor american products, generall loyal costomers

question

Achievement-motivated Groups

answer

Consumers look for products and services that demonstrate sauccess to their peers or to a peer group they aspire to.

question

Achievers

answer

High-resource group, Busy, goal directed lifestyle and a deep commitment to career and family. Image is important to them. They favor established, prestige products and services and are interested and time-saving devices given their hectic schedules

question

Strivers

answer

low-resource group, Trendy, fun-loving, and less self-confident than Achievers. They also have lower levels of education and household income. Money defines success for them. They favor stylish products and are as impulsive as their financial circumstances permit.

question

Self-expression-motivated Groups

answer

consumers that desire social or physical activity, variety and risk

question

Experiencers

answer

high-resource group, young, enthusiastic, and impulsive consumers that become excited about new possibilities but are equally quick to cool. They savor the new, the offbeat, and the risky, enjoy exercise, sports outdoor recreation and social activities. spend income on fashion items, entertainment, and socializing

question

Makers

answer

low-resource group of those who are motivated by self-expression. They are practical people who value self-sufficiency. They are focused on the familiar-family, work, and physical recreation-and have little interest in the broader world. As consumers, they appreciate practical and functional products.

question

High- and Low-resource groups

answer

The seperation of the VALS groups based on and seperated by a group's resources

question

Innovators

answer

Successful, sophisticated, take-charge people with high self-esteem and abundant resources of all kinds. Image is important to the, not as evidence of power or status, but as an expression of cultivated tastes, independence, and character. They are receptive to new ideas and technologies

question

Survivors

answer

Least resources of any segment. They focus on meeting basic needs (safety and security) rather than fulfilling desires. They represent a modest market for most products and services and are loyal to favorite brands, especially if they can be purchased at a discount.

question

Teaser advertising

answer

run in advance advance of new-product introductions to stimulate conversation

question

Buzz

answer

Popularity created by consumer word-of-mouth. BzzAgent, a company of 600,000 people who go out and channel their chatter toward products they deem authentically worth talking about

question

Membership group

answer

a group to which a person actually belongs, including fraternities, and soroities, social clubs, and family

question

Aspiration group

answer

a group that a person wishes to be a member of or wishes to identify with, such as a professional society

question

Dissociative group

answer

a group that a person wishes to maintain a distance from because a difference in values or behaviors

question

Traditional Family

answer

a married couple with children younger than 18 years constitutes just 22% of all US households. 78% of US households include single parents, unmarried couples, divorced, never married or widowed individuals and older couples whose children no longer live at home

question

Spouse-dominant descision making

answer

those descisions for which the husband or wife is more responsible. Wives tend to have more say in groceries, children's toys, clothing, and medicines. Husbands tend to be more influential in home and car maintenance purchases

question

Joint descsion making

answer

common decision process for cars, vacations, houses, home appliances and electronics, and medical care.

question

Family descision making Roles

answer

1. information gatherer 2. influencer 3. descision maker 4. purchaser 5. user. 89% of wives make descisions or purchases of men's clothing. More than 40% of all food-shopping dollars are spent by males. Increasingly Teens and preteens are information gatherers, descision makers and purchasers given the prevelance of working parents and single-parent homes.

question

Hispanic buying patterns

answer

quailty and brand concious, willing to pay a premium price for premium quality and are often brand loyal. Prefer buying American-made products, buying preferences strongly influenced by family and peers, consider advertising a credible product info source, convience is not an important product attribute with respect to food preparation or consumption

question

African American buying patterns

answer

1. Spend more on boy's clothing, rental goods, audio equipment 2. Twice as likely to own a pager and spend twice as much for online services 3. African American women 3x more on health and beauty products 4. Typical family is 5 years younger 5. Strongly motivated by quality and choice 6. Respond more to products such as apparel and cosmetics 7. Respond more to advertising that appeal to African American pride and heritage

question

Asian American buying patterns

answer

difficult to make generalizations due to diverse subculture. Divided into two groups 1. Assimilated, conversant in english, highly educated, good jobs and exibit buying patterns typical of the American consumer 2. Nonassimilated, those who prefer their native tongue and customs

question

difference between marketing and business plan

answer

business contains detail on research and development (R and D), marketing within the business

question

currency exchange rates

answer

the price of 1 country's currency, such as the US $ expressed in another country's

question

market-product grid

answer

a framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization

question

mystery shopper

answer

paid by company to check quality and pricing of products and the integrity of and customer service by employees

question

consumer products

answer

products purchased by the ultimate consumer

question

product item

answer

a specific product that has a unique brand, size or price

question

stock keeping unit (SKU)

answer

a unique identification number that defines an item for ordering or inventory purposes

question

product line

answer

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

question

product mix

answer

consists of all the product lines offered by an organization

question

protocol

answer

a statement that before product development begins, identifies: a well defined target market, specific consumers' needs, ants and preferences, and what the product will be and do

question

organizational problems in new product failure

answer

1 not really listening to the voice of the consumer, 2 skipping stages in new product process, 3 pushing a poorly conceived product into the market to generate quick revenue, 4 encountering group thing, 5 not learning critical takeaway lessons from past failures

question

open innovation

answer

an organization finds and executes creative new product ideas by developing strategic relationships with outside individuals and organizations

question

test marketing

answer

offering a product for sale on a limited basis in a defined area-done to determine whether consumers will actually buy a product and try different ways to market

question

simulated test markets (STM)

answer

technique that simulates a full-scale test market but in a limited fashion

question

slotting fee

answer

payment manufacturer makes to get space on grocery shelf

question

failure fee

answer

penalty payment a manufacturer makes to compensate a retailer for sales and valuable shelf space failed to make

question

time to market

answer

Ttm-vital in introducing new product

question

parallel development

answer

cross functional team members who conduct simultaneous development of both product and production process stay with the product from conception to production

question

fast prototyping

answer

do it, try it, fix it

question

services in the future

answer

expanding scope of global economy and new technology

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