Combo with Essentials of Marketing Chapters 1-5

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production
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actually making goods or performing services
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customer satisfaction
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the extent to which a firm fulfills a customer’s needs, desires, and expectations
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innovation
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the development and spread of new ideas, goods, and services
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marketing
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the performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client
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pure subsistence economy
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when each family unit produces everything it consumes – there is no need to exchange goods and services and no marketing is involved
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macro-marketing
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social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society
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economies of scale
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when a company produces larger numbers of a particular product, the cost of each unit goes down
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universal functions marketing
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buying, selling, transporting, storing, standardization, grading, financing, risk taking, and market information
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buying function
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looking for and evaluating goods and services
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selling function
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involves promoting the product
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transporting function
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movement of goods from one place to another
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storing function
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holding goods until customers need them
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standardization and grading
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sorting products according to size and quality
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financing
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provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products
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risk taking
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bearing the uncertainties that are part of the marketing process
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market information function
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collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities, whether in the firm’s own neighborhood or in a market overseas
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intermediaries
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People that specialize in trade rather than production
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collaborators
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firms that facilitate or provide one or more of the marketing functions other than buying or selling
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E-commerce
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refers to exchanges between individuals or organizations and activities that facilitate these exchanges based on applications of information technology
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economic system
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the way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society
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command economy
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government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why
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market-directed economy
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the individual decisions of the many producers and consumers make the macro-level decisions for the whole economy
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simple trade era
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a time when families traded or sold their “surplus” output to local distributors
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production era
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a time when a company focuses on production of a few specific products perhaps because few of these products are available in the market
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sales era
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a time when a company emphasizes selling because of increased competition
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marketing department era
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a time when all marketing activities are brought under the control of one department to improve short-run policy planning and to try to integrate the firm’s activities
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marketing company era
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a time when, in addition to short-run marketing planning, marketing people develop long-range plans – sometimes five or more years ahead – and the whole company effort is guided by the marketing concept
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marketing concept
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means that an organization aims all its efforts at satisfying its customers at a profit
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production orientation
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making whatever products are easy to produce and then trying to sell them
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marketing orientation
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means trying to carry out the marketing concept by offering customers what they need
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customer value
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the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits
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micro-macro dilemma
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what is good for some firms and consumers may not be good for society as a whole
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social responsibility
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a firm’s obligation to improve its positive effects on society and reduce its negative effects
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marketing ethics
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the moral standards that guide marketing decisions and actions
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marketing management process
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the process of 1) planning marketing activities 2) directing implementation of the plans and 3) controlling those plans. planning, implementation, and control
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strategic management planning
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the managerial process of developing and maintaining a match between an organization’s resources and its market opportunities
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marketing strategy
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specifies a target market and related marketing mix
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target market
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a fairly homogenous group of customers to whom a company wishes to appeal
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marketing mix
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the controllable variables the company puts together to satisfy this target group
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target marketing
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says that a marketing mix is tailored to fit some specific target customers
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mass marketing
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the typical production-oriented approach – aims at everyone with the same marketing mix
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channel of distribution
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any series of or firms or individuals that participate in the flow of products from producer to final users or consumers
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personal selling
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direct spoken communication between sellers and potential customers
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customer service
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personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase and is often the key to building repeat business
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mass selling
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communication with large numbers of customers at the same time
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marketing plan
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written statement of a marketing strategy and the time related details for carrying out the strategy
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implementation
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putting marketing plans into operation
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operational decisions
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short-run decisions to help implement strategies
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marketing program
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blends all of the firm’s marketing plans in to one big plan
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customer equity
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the expected earnings stream (profitability) of a firm’s current and prospective customers over some period of time
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breakthrough opportunities
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opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time
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competitive advantage
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means that a firm has a marketing mix that the target market sees as better than a competitor’s mix
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SWOT analysis
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identifies and lists the firm’s strengths, weaknesses, opportunities, and threats
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differentiation
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means that a marketing mix is distinct from and better than what is available from a competitor
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market penetration
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trying to increase sales of a firm’s present products in its present markets probably through a more aggressive marketing mix
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market development
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trying to increase sales by selling present products in new markets
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product development
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means offering new or improved products for present markets
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diversification
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means moving into totally different lines of business perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system
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mission statement
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sets out the organization’s basic purpose for being
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competitive environment
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affects the number and types of competitors the marketing manager must face and how they may behave
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competitor analysis
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an organized approach for evaluating the strengths and weaknesses of current or potential competitor’s marketing strategies
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competitive barriers
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the conditions that may make it difficult, or even impossible for a firm to compete in a market
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competitive rivals
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firms that will be the closest competitors
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economic environment
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refers to macro-economic factors including national income, economic growth, and inflation that affect patterns of consumer and business spending
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technology
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the application of science to convert an economy’s resources to output
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nationalism
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an emphasis on a country’s interests before anything else affect how macro-marketing systems work
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North American Free Trade Agreement (NAFTA)
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lays out a plan to reshape the rules of trade among the United States, Canada, and Mexico
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cultural and social environment
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affects how and why people live and behave as they do which affects customer buying behavior and eventually the economic, political, and legal environments
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gross domestic product (GDP)
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the total market value of all goods and services provided in a country’s economy in a year by both residents and non-residents of that country
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senior citizens
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people over the age of 65
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baby boomers
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those born between 1946 and 1964 are now creating new opportunities in industries such as tourism, health care, and financial services
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generation x
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the generation born immediately following the baby boom from 1965 to 1977
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generation y
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also known as the Millenials, refers to those born from 1978 to 1994
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sustainability
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that idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs
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strategic business unit (SBU)
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an organization unit (within a larger company) that focuses on some product-markets and is treated as a separate profit center
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Generic market
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market with broadly similar needs and sellers offering often diverse ways of satisfying those needs
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Product-market
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market with very similar needs and sellers offering various close substitute ways of satisfying those needs
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What is the 2 step process of market segmentation?
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1) Naming broad product-markets 2) Segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes
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List the types of potential segmenting dimensions
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1) Behavioral – needs, benefits sought, thoughts, rate of use, purchase relationship 2) Geographic – Region of world, region of country, size of city 3) Demographic – Income, sex, age, family size, occupation, education, ethnicity, social class
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Market segment
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homogeneous group of customers who will respond to a marketing mix in a similar way
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Criteria for segmenting a broad product-market
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1) Homogeneous (similar) within 2) Heterogeneous (different) between 3) Substantial 4) Operational
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Three ways to develop market-oriented strategies
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1) Single target market approach 2) Multiple target market approach 3) Combined target market approach
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economic buyers
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people who know all the facts and logically compare choices to the get the greatest satisfaction from spending their time and money
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economic needs
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needs concerned with making the best use of a consumer’s time and money–as the consumer judges it
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discretionary income
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what is left of income after paying taxes and paying for necessities
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needs
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the basic forces that motivate a person to do something
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wants
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“needs” that are learned during a person’s life
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drive
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a strong stimulus that encourages action to reduce a need
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physiological needs
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needs that are concerned with biological needs–food, liquid, rest, and sex
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safety needs
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needs that are concerned with protection and physical well-being (perhaps involving health, financial security, medicine, and exercise)
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social needs
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needs that are concerned with love, friendship, status, and esteem–things that involve a person’s interaction with others
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personal needs
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an individual’s need for personal satisfaction unrelated to what others think or do
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perception
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how we gather and interpret information from the world around us
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selective exposure
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our eyes and minds seek out and notice only information that interests us
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selective perception
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we screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs
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selective retention
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we remember only what we want to remember
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learning
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a change in a person’s thought processes caused by prior experience
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cues
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products, signs, ads, and other stimuli in the environment
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response
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an effort to satisfy a drive
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reinforcement
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occurs in the learning process when the consumer’s response is followed by satisfaction–that is, reduction in the drive
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attitude
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a person’s point of view towards something
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belief
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a person’s opinion about something
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trust
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confidence a person has in the promises or actions of another person, brand, or company
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empty nesters
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people whose children are grown and who are now able to spend their money in other ways
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social class
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group of people who have approximately equal social position as viewed by others in the society
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reference group
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the people to whom an individual looks when forming attitudes about a particular topic
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opinion leader
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a person who influences others
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culture
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whole set of beliefs, attitudes, and ways of doing things of a reasonably homogeneous set of people
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extensive problem solving
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the type of problem solving consumers use for a completely new or important need–when they put much effort into deciding how to satisfy it
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limited problem solving
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when a consumer is willing to put some effort in deciding the best way to satisfy a need
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routinized response behavior
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when the consumer regularly selects a particular way of satisfying a need when it occurs
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low-involvement purchases
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purchases that have little importance or relevance for the customer
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dissonance
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a feeling of uncertainty about whether the correct decision was made
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adoption process
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the steps individuals go through on the way to accepting or rejecting a new idea

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