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Business marketing

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is the marketing of goods and services to individuals and organizations for purposes other than personal consumption.

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three primary marketing goals of U.S. business marketers

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are customer acquisition (62 percent), creating brand awareness (19 percent), and customer retention (12 percent).1

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business-to-business electronic commerce

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The use of the Internet to facilitate the exchange of goods, services, and information between organizations.

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Recency

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relates to the fact that customers who have made a purchase recently are more likely to purchase again in the near future than customers who haven't purchased for a while.

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Frequency

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data help marketers identify frequent purchasers who are definitely more likely to repeat their purchasing behavior in the future.

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The monetary value

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of sales is important because big spenders can be the most profitable customers for a business.

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stickiness

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A measure of a Web site's effectiveness; calculated by multiplying the frequency of visits times the duration of a visit times the number of pages viewed during each visit (site reach). Stickiness = Frequency × Duration × Site Reach

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disintermediation

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eliminating intermediaries such as wholesalers or distributors from a marketing channel. A prime example of disintermediation is Dell, Inc., which sells directly to business buyers and consumers. Large retailers such as Wal-Mart use a disintermediation strategy to help reduce costs and prices.14

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reintermediation

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the reintroduction of an intermediary between producers and users. They realized that providing direct online purchasing only was similar to having only one store in a city selling a popular brand.

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relationship marketing

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relationship marketing is a strategy that entails seeking and establishing ongoing partnerships with customers.

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strategic alliance

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A strategic alliance, sometimes called a strategic partnership, is a cooperative agreement between business firms. Strategic alliances can take the form of licensing or distribution agreements, joint ventures, research and development consortia, and partnerships.

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relationship commitment

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A firm's belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it indefinitely.

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trust

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trust The condition that exists when one party has confidence in an exchange partner's reliability and integrity.

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keiretsu

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A network of interlocking corporate affiliates.

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Amae

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is the feeling of nurturing concern for, and dependence on, another

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keiretsu

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keiretsu—a network of interlocking corporate affiliates. Within a keiretsu, executives may sit on the boards of their customers or their suppliers.

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business marketing four major categories

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producers, resellers, governments, and institutions.

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original equipment manufacturers (OEMs)

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Individuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers.

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reciprocity

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The practice of business purchasers choosing to buy from their own customers

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buying center

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All those persons in an organization who become involved in the purchase decision.

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a market

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is (1) people or organizations with (2) needs or wants and with (3) the ability and (4) the willingness to buy. A group of people or an organization that lacks any one of these characteristics is not a market.

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market segment

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is a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs.

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market segmentation

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The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups.

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Multiple-variable segmentation is clearly more precise than single-variable segmentation.

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it is

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psychographic segmentation

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Market segmentation on the basis of personality, motives, lifestyles, and geodemographics.

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geodemographic segmentation

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Segmenting potential customers into neighborhood lifestyle categories.

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benefit segmentation

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The process of grouping customers into market segments according to the benefits they seek from the product.

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satisficers

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Business customers who place an order with the first familiar supplier to satisfy product and delivery requirements.

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optimizers

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Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one.

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target market

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A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges.

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undifferentiated targeting strategy

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A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix.

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concentrated targeting strategy

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A strategy used to select one segment of a market for targeting marketing efforts.

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niche

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One segment of a market.

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cannibalization

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

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one-to-one marketing

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An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer.

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positioning

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Developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general.

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position

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The place a product, brand, or group of products occupies in consumers' minds relative to competing offerings.

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perceptual mapping

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A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds

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Attribute

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A product is associated with an attribute, product feature, or customer benefit. Kleenex has designed a tissue that contains substances to kill germs in an effort to differentiate its product from competing tissues

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product differentiation

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A positioning strategy that some firms use to distinguish their products from those of competitors.

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repositioning

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Changing consumers' perceptions of a brand in relation to competing brands.

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Successful market segmentation depends on four basic criteria

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: (1) a market segment must be substantial and have enough potential customers to be viable; (2) a market segment must be identifiable and measurable; (3) members of a market segment must be accessible to marketing efforts; and (4) a market segment must respond to particular marketing efforts in a way that distinguishes it from other segments.

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Six steps are involved when segmenting markets:

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(1) selecting a market or product category for study; (2) choosing a basis or bases for segmenting the market; (3) selecting segmentation descriptors; (4) profiling and evaluating segments; (5) selecting target markets; and (6) designing, implementing, and maintaining appropriate marketing mixes.

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Marketers select target markets using three different strategies:

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undifferentiated targeting, concentrated targeting, and multisegment targeting. An undifferentiated targeting strategy assumes that all members of a market have similar needs that can be met with a single marketing mix. A concentrated targeting strategy focuses all marketing efforts on a single market segment. Multisegment targeting is a strategy that uses two or more marketing mixes to target two or more market segments.

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database marketing

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The creation of a large computerized file of customers' and potential customers' profiles and purchase patterns.

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marketing research

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The process of planning, collecting, and analyzing data relevant to a marketing decision

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marketing research problem

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Determining what information is needed and how that information can be obtained efficiently and effectively.

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marketing research objective

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The specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information.

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management decision problem

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A broad-based problem that uses marketing research in order for managers to take proper actions.

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secondary data

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Data previously collected for any purpose other than the one at hand.

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research aggregator

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A company that acquires, catalogs, reformats, segments, and resells reports already published by marketing research firms.

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research design

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Specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed.

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primary data

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Information that is collected for the first time; used for solving the particular problem under investigation.

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survey research

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The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes.

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universe

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The population from which a sample will be drawn.

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probability sample

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A sample in which every element in the population has a known statistical likelihood of being selected.

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random sample

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A sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample.

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nonprobability sample

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Any sample in which little or no attempt is made to get a representative cross section of the population.

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convenience sample

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A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher—for example, employees, friends, or relatives.

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measurement error

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An error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process.

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sampling error

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An error that occurs when a sample somehow does not represent the target population.

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frame error

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An error that occurs when a sample drawn from a population differs from the target population.

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random error

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An error that occurs when the selected sample is an imperfect representation of the overall population.

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field service firm

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A firm that specializes in interviewing respondents on a subcontracted basis.

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cross-tabulation

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A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions.

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Web community

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A carefully selected group of consumers who agree to participate in an ongoing dialogue with a particular corporation.

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consumer generated media (CGM)

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Media which consumers generate and share among themselves.

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behavioral targeting

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A form of observation marketing research that uses data mining coupled with identifying Web surfers by their IP addresses.

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scanner-based research

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A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.

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BehaviorScan

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A scanner-based research program that tracks the purchases of 3,000 households through store scanners in each research market.

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InfoScan

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A scanner-based sales-tracking service for the consumer packaged goods industry.

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competitive intelligence (CI)

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An intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors.

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product

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Everything, both favorable and unfavorable, that a person receives in an exchange.

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business product (industrial product)

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A product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers.

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consumer product

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A product bought to satisfy an individual's personal wants.

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convenience product

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A relatively inexpensive item that merits little shopping effort.

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shopping product

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A product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores.

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specialty product

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A particular item for which consumers search extensively and are very reluctant to accept substitutes.

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unsought product

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A product unknown to the potential buyer, or a known product that the buyer does not actively seek.

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product item

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A specific version of a product that can be designated as a distinct offering among an organization's products.`

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product line

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A group of closely related product items.

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product mix

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All products that an organization sells.

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product mix width

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The number of product lines an organization offers.

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product line depth

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The number of product items in a product line.

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product modification

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Changing one or more of a product's characteristics.

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brand

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A name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products. be spoken.

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brand name

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That part of a brand that can be spoken, including letters, words, and numbers

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brand mark

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The elements of a brand that cannot

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Branding has three main purposes:

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product identification, repeat sales, and new-product sales.

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brand equity

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The value of company and brand names.

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global brand

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A brand where at least one-third of the product is sold outside its home country or region.

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brand loyalty

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A consistent preference for one brand over all others.

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manufacturer's brand

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The brand name of a manufacturer.

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private brand

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A brand name owned by a wholesaler or a retailer.

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captive brand

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A brand that carries no evidence of a retailer's affiliation, is manufactured by a third party, and is sold exclusively at the retailer.

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individual branding

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Using different brand names for different products.

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trademark

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The exclusive right to use a brand or part of a brand.

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service mark

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A trademark for a service.

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persuasive labeling

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A type of package labeling that focuses on a promotional theme or logo with consumer information being secondary.

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informational labeling

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A type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase.

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warranty

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A confirmation of the quality or performance of a good or service.

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express warranty

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A written guarantee.

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implied warranty

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An unwritten guarantee that the good or service is fit for the purpose

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new product

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A product new to the world, the market, the producer, the seller, or some combination of these.

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new-product strategy

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A plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.

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product development

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A marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products.

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brainstorming

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The process of getting a group to think of unlimited ways to vary a product or solve a problem.

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screening

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The first filter in the product development process, which eliminates ideas that are inconsistent with the organization's newproduct strategy or are obviously inappropriate for some other reason.

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concept test

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A test to evaluate a new-product idea, usually before any prototype has been created.

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business analysis

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The second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated.

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development

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The stage in the product development process in which a prototype is developed and a marketing strategy is outlined.

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simultaneous product development

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A team-oriented approach to new-product development.

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test marketing

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The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.

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simulated (laboratory) market testing

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The presentation of advertising and other promotion materials for several products, including a test product, to members of the product's target market.

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adopter

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A consumer who was happy enough with his or her trial experience with a product to use it again.

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innovation

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A product perceived as new by a potential adopter.

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diffusion

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The process by which the adoption of an innovation spreads.

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product life cycle (PLC)

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A biological metaphor that traces the stages of a product's acceptance, from its introduction (birth) to its decline (death).

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PLC longer for product or brand?

answer

The PLC for a product form is usually longer than the PLC for any one brand. The exception would be a brand that was the first and last competitor in a product form market.

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product category

answer

All brands that satisfy a particular type of need.

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introductory stage

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The first stage of the product life cycle in which the full-scale launch of a new product into the marketplace occurs.

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growth stage

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The second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start acquiring small pioneering firms, and profits are healthy. a decreasing rate.

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maturity stage

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The third stage of the product life cycle during which sales increase at a decreasing rate.

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decline stage

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The fourth stage of the product life cycle, characterized by a long-run drop in sales

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Explain why some products succeed and others fail.

answer

The most important factor in determining the success of a new product is the extent to which the product matches the needs of the market. Good matches are frequently successful. Poor matches are not.

Three Primary Goals of US Business Marketing: Customer Acquisition, Brand Awareness, and Retention

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