MAR3023 Exam 1

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Marketing
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the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
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Customer Value
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the unique combination of benefits received by targeted buyers that include quality, price, convenience, on-time delivery, and both before-sale and after-sale service. perceived benefits/ cost
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Types of utility
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Ways to distinguish your product vs. the competition: time place form prosession
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Exchange
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the trade of things of value between a buyer and a seller so that each is better off after the exchange.
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The Marketing Mix
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the set of controllable factors of Product, Price, Place & Promotion used by marketing managers
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Marketing Program
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a plan that integrates the marketing mix to provide a product, service, or idea to prospective customers
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Marketing Share
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the ratio of the firm’s sales revenue to total industry sales revenue, including the firm.. the key indicator of a successful marketing program
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MS(Brand)=
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Sale$/Total$= Share(%)
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“STP” Marketing
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Segmentation Targeting Positioning
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Environmental Scanning
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the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
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Core Values
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the fundamental, passionate, and enduring principles that guide its conduct over time
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Demographics
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Describing a population according to selected characteristics such as age, gender, ethnicity, income, and occupation
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Generation X
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includes the 50 million people born between 1965 and 1976. This period is also known as the baby bust, because during this time the number of children born each year was declining. This is a generation of consumers who are self-reliant, supportive of racial and ethnic diversity, and better educated than any previous generation. They are not prone to extravagance and are likely to pursue lifestyles that are a blend of caution, pragmatism, and traditionalism.
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Generation Y
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Includes the 72 million Americans born between 1977 and 1994. Increasing births, which resulted from baby boomers having children, and it is often referred to as the echo-boom or baby boomlet. They exert influences on music, sports, computers, video games, and all forms of communication and networking. Interested in distinctive, memorable, and personal experiences and are very adept at managing their lives to create a work-life balance. They are strong-willed, passionate about the environment, and optimistic. This is also a group that is attracted to purposeful work where they have control. The Making Responsible Decisions box describes how millennials’ interest in sustainability is influencing colleges, graduate schools, and employers.
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Metropolitan Statistical Area
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has at least one urbanized area of 50,000 or more 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 one urban cluster of at least 10,000 but less than 50,000 people and adjacent territory that has a high degree of social and economic integration.
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Value Consciousness
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The concern for obtaining the best quality, features, and performance of a product or service for a given price that drives consumption behavior for many products at all price levels.
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What are some of the most dramatic technological changes occurring now?
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Connectivity will grow to include all customers, homes, vehicles, appliances, and mobile devices to create the “Internet of Things.” Computers will develop all five senses to create intelligent data collection and personalized predictive capabilities. Green technologies such as smart grid electricity services, online energy management, and consumer-generated energy (e.g., home solar systems) will gain widespread acceptance among American consumers. 3D technologies will move from movie theaters and televisions to many new and useful applications.
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Marketspace
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an information- and communication-based electronic exchange environment occupied by sophisticated computer and telecommunication technologies and digital offerings
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Electronic Commerce
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the activities that use electronic communication in the inventory, promotion, distribution, purchase, and exchange of products and services.
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Intranet
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a way to communicate within the organization, and extranets
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Extranet
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a way to communicate with suppliers, distributors, and other partners such as advertising agencies.
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What are the four different types of competition?
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pure competition monopolistic competition oligopoly pure monopoly
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Pure Competition
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there are many sellers and they each have a similar product. Companies that deal in commodities common to agribusiness (for example, wheat, rice, and grain) often are in a pure competition position in which distribution (in the sense of shipping products) is important but other elements of marketing have little impact.
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Monopolistic Competition
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many sellers compete with substitutable products within a price range. For example, if the price of coffee rises too much, consumers may switch to tea. Coupons or sales are frequently used marketing tactics.
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Oligopoly
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a common industry structure, occurs when a few companies control the majority of industry sales. The wireless telephone industry, for example, is dominated by four carriers that serve more than 95 percent of the U.S. market. Verizon, AT&T, Sprint, and T-Mobile have 131, 120, 55, and 55 million subscribers, respectively.
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Pure Monopoly
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The final point on the continuum occurs when only one firm sells the product. They are common for producers of products and services considered essential to a community: water, electricity, and cable service. Typically, marketing plays a small role because it is regulated by the state or federal government.
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Regulation
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consists of restrictions state and federal laws place on business with regard to the conduct of its activities
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Sherman Antitrust Act (1890)
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This act forbids (1) contracts, combinations, or conspiracies in restraint of trade and (2) actual monopolies or attempts to monopolize any part of trade or commerce.
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Clayton Act (1914)
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This act forbids certain actions that are likely to lessen competition, although no actual harm has yet occurred.
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Robinson-Patman Act (1936)
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This act makes it unlawful to discriminate in prices charged to different purchasers of the same product, where the effect may substantially lessen competition or help to create a monopoly.
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Digital Millennium Copyright Act (1998)
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This act was created to improve protection of copyrighted digital products.
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Consumerism
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a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions
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Lanham Act (1946)
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This act provides for registration of a company’s trademarks.
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Better Business Bureau (BBB)
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uses moral suasion to get members to comply with its standards.
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Federal Trade Commission (FTC)
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monitors advertising. If it deems an ad to be false or misleading, it can issue a cease-and desist order.
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Food and Drug Administration (FDA)
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supervises the safety of food, tobacco, and other drugs.
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Consumer Confidence Index
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tracks consumers expectations based on responses to specific questions
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Greenwashing
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occurs when companies overstate their green claims in an attempt to appeal to customers who respond well to such things.
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Marketing Research
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is a set of activities that provides information for marketing decision making.
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Demand Forecasting
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gives a firm an idea of how much of a product it will sell.
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What do Demand levels determine?
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production scheduling the firm’s approach to the marketplace
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Segmentation
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the use of research to divide the market into smaller subgroups of consumers that are each more homogeneous than the overall market.
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How can marketers be segmented?
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age ethnic group location income
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Market Tracking
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follows sales over time to see how a product is selling and to determine if adjustments are needed.
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Nielson
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one of the largest market research firms in the world
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What are some services that help companies with Ad Pretesting
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Ipsos ASI Google AdWords Facebook’s AdExpresso
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What is the formal five-step approach to marketing research?
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1. Define the problem 2. Develop a research plan 3. Collect relevant information by specifying 4. Develop findings and recommendations 5. Take marketing actions and evaluate results
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Marketing Information System (MIS)
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an integrated, ongoing decision support system that organizes data used in decision making.
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Cross Tabulation
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is a method of presenting and analyzing data involving two or more variables to discover relationships in the data
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Sales Forecasting
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refers to 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 efforts
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lost-horse forecast
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nvolves 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.
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Syndicated
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firms that gather information and produce reports for sale to other organizations
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Four kinds of data found in marketing information systems:
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look at matrix: Internal/ External & Primary/ Secondary
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Secondary Data
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those that are pre-existing; they were originally gathered for a purpose other than the one at hand.
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Primary Data
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gathered specifically for the task at hand.
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Internal Data
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gathered from within the organization. For example, information coming from the firm’s sales or billing records.
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External Data
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gathered from outside the firm. For example, conducting surveys with consumers.
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Internal, Secondary Data
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Data produced within the firm for some reason other than marketing.
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What is an example of internal, secondary data?
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Amazon customers’ purchase histories. It is internal because they exist within the firm. It is secondary because they were developed for reasons other than marketing (such as keeping records for refunds).
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Internal, Primary Data
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Data gathered for a specific purpose within the firm.
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What is an example of internal, primary data?
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Asking employees for new product ideas. i.e. Kraft requesting employee input to name a new Jell-O product, generating over 100 ideas within the first 24 hrs.
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External, Secondary Data
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Data gathered by an external organization for some reason other than a specific firm’s marketing efforts.
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What is an example of external, secondary data?
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Trade publications, in which companies are allowed access to data collected by industry trade groups.
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External, Primary Data
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comes from the “classic” marketing research that firms use to gather information about customers.
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What is an example of external, primary data?
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Snapple contracting with an outside research firm that does marketing research in a different way in order to better understand declining sales.
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What are three basic types of external, primary data?
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exploratory descriptive casual research
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What happens to the research as you move from exploratory to casual?
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it becomes more sophisticated and expensive
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Exploratory Research
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used during the first stage of an investigation, in which markets are trying to define a problem. marketers observe what’s going on in the marking through observation, depth interviews, or focus groups. Data tends to be qualitative used to formulate marketing questions rather than answer them
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Firms use this to capture consumers “in their native habit” -in the real world
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exploratory research observation
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Consumer ethnography
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an approach to observation that involves immersing oneself in the consumer’s world by going to where he or she lives or shops
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probably the most widely used form of exploratory research
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focus groups
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This is led by a moderator who is trained but does not have to be a clinical psychologist
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focus groups
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Depth interview
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A one-on-one approach to exploratory research in which a trained researcher sits down with an individual consumer and has a conversation with him or her about a particular product category or advertisement.
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What is a common technique used in in depth interviews?
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Laddering
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Give an example of laddering
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A researcher asked a customer why he enjoys Haagen-dazas and the customer says he enjoys the “excellent flavor”. The researcher then continues to ask questions on why this is a desirable attribute and finds that it feels like an “affordable luxury”. The researcher continues to ask why and found that excellent flavor represents this customer’s sense of accomplishment. Laddering helps make connections between basic product attributes to the symbolic meaning of the product to the customer.
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Descriptive Research
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this involves taking a “snapshot” of the marketplace by developing an accurate description of consumers and the market.
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This involves a larger number of people and a more systematic, precise, quantitative recording of their responses.
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descriptive research observation
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Personal Observation
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involves a large number of people, whose behavior is recorded much more systematically.
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What is an example of personal observation in descriptive research?
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cameras watching how customers behave while they navigate through a mall department store
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Examples of Electronic Observation in descriptive research:
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Smartphone apps that connect to Bluetooth “beacons,” which are tiny wireless sensors that identify customers and track their personal location while in the store. Data can be scaled and analyzed more easily this way.
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What are the four basic kinds of surveys in descriptive research?
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mail surveys phone surveys personal interviews web surveys
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Mail Surveys
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a questionnaire that is mailed out to a sample of people and asks them to each fill it out and return it and sometimes they include a small incentive so people will fill them out.
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What is a problem associated with mail surveys?
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many people don’t take the time to fill them out and mail them back in which causes the response rates to be very low.
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Phone Surveys
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These surveys used to be the “backbone” of the marketing research industry and received high response rates. However, today, they are much less effective.
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What is a problem associated with phone surveys?
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they are very biased because many people scan their calls and won’t pick up from an unfamiliar number and the people who do respond may not a representative sample of the target population
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Personal Interviews
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these surveys involve a live, one-on-one interaction with a consumer.
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What is an example of a personal interview?
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A mall intercept survey
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What are mall intercept surveys?
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surveys performed by interviewers who intercept shoppers while they are walking from store to store in the mall. They are useful in the sense that they allow consumers to physically interact with new products.
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What is a problem associated with mall intercept surveys?
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they don’t usually involve a representative sample of the overall population.
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Web Surveys
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These surveys are rapidly growing and allow for much more representative samples than they did before. They can produce huge samples at a relatively low cost and allow marketers to see results instantaneously. They can use geo-targeting to find respondents on the basis of their location to result in more relevant samples.
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What are some of the key factors in descriptive research?
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population sample response rate representativeness error (bias) questionnaire design error
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Population
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the group of interest to the firm or organization. It is often broader than the market segment a firm is trying to target, and can be difficult to define.
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Sample
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A subset of the population. It is usually impossible and expensive to survey the entire population, so we survey a representative group to draw conclusions about the population as a whole. Must be random and response rate must be high
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Response Rate
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The percentage of people who actually agree to participate in the research.
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Representativeness
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measures how accurately the sample actually reflects the population. The firm needs to have a sample that is random and large in order to have this.
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Error (bias)
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low response rates or poor samples that are not representative of the population can cause this. It is inaccuracy in predicting consumer response.
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Sample Error
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results from selecting a sample that is either biased or too small.
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What is an example of sampling error?
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If survey respondents have disproportionately higher income than the population of interest.
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Interviewer Error
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Interviews can inadvertently impact survey responses through their body language and voice inflection leading to responses that might be different based on whether the interviewers gender and/or physical features.
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Questionnaire Design Error
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The questions themselves might either intentionally or unintentionally make the respondent more likely to answer in a particular way. Push pools are an example of this.
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What would a free recall question be for how memorable a Super Bowl commercial was?
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“What commercials do you remember seeing during the Super Bowl?”
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What would a cued recall question be for how memorable a Super Bowl commercial was?
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“Do you remember seeing any commercials about pickup trucks during the Super Bowl?”
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What would a recognition question be for how memorable a Super Bowl commercial was?
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Showing the commercial to participants and asking them, “Do you remember seeing a commercial for the Chevy Silverado during the Super Bowl?”
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Causal Research
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addresses why something happens in the marketplace. Firms conducting this research are looking for explanations of various phenomena. This research tries to determine what influences consumer behavior through experiments. Most expensive but also more powerful
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What is the goal of causal research?
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to manipulate the experimental independent variable while controlling for all extraneous independent variables, and then measure the response of the dependent variable.
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What are two essential elements of causal research?
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Manipulation and control
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Manipulation
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Marketers should change only one experimental independent variable to see what impact it has on the ultimate response.
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Control
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All extraneous variables should be controlled, or help constant, wile single independent variable of importance is being manipulated.
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What are two major kinds of experiments that are used in causal research?
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laboratory experiments test marketing (field experiments)
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Laboratory Experiments
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These experiments use data from people who are brought into a lab environment and asked to answer questions about a product. These experiments manipulate one variable and control all others so that marketers can try to establish a cause for changes in the dependent variable. These experiments are good at controlling internal validity. These experiments are bad at controlling external validity.
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Test Marketing (Field Experiments)
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conducted in the field, where marketers see whether a product will sell in a “real world” environment.
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What are some issues that marketers must consider when conducting field experiments (or test marketing)?
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cost competition timing repurchase rate fine-tuning
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Cost
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test marketing is extremely expensive so they are usually only used when marketers face a big decision
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Competition
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competitors may interfere with a test market by lowering their prices or offering incentives in the test market which makes it difficult to attribute the results of the test market to the firm’s intended independent variable.
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Timing
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The period of time during which a company does a test market may not be representative of how the product will perform in the future.
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Repurchase Rate
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a critical variable in measuring a new product’s success.
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Fine- Tuning
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Test marketing can be used to adjust aspects of a firm’s marketing program, including product formulations, advertising campaigns, pricing points, and packing.
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AB Testing
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When firms are increasingly testing two or more alternative marketing programs. Testing in separate regions with different income levels, etc.
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Scanner Panel
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This looks at household data across time. The same people answer a survey periodically so that a firm can understand more about how a person or household is trying new products, if they are repeating purchases, the frequency of their purchases, and how much they purchase.
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Elastic Demand
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exists when a 1 percent decrease in price produces more than a 1 percent increase in quantity demanded, thereby actually increasing total revenue
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Inelastic
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Products and services considered to be necessities
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Cognitive Dissonance
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post purchase anxiety
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Word- of- mouth
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the most powerful and authentic information source for consumers because it typically involves friends viewed as trustworthy.
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Consumer Socialization
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The process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers
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What are the three largest racial/ethnic subcultures in the United States?
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Hispanics African Americans Asian Americans
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What are the four main types of Utility?
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Time Place Form Possession
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Time
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wanting a product as close to when it will be used as possible
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Place
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wanting a product as close to where it will be used as possible
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Form
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multiple uses for a product
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Possession
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getting a product without fully paying upfront for it
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Customer Relationship Management (CRM)
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the overall process of building and maintaining profitable relationships through delivering superior value and superior satisfaction.
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Value Proposition
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the set of benefits it promises to deliver to the customers. For example, BMW promises an “ultimate driving machine” which keeps a company focused and different from its competitors.
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Marketing Orientation
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the focus is on satisfying consumer wants and needs
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Market Orientation
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all departments in a firm are worried about providing customer value
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What is the difference between marketing orientation and market orientation?
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the main difference is that the focus of all departments in a firm with providing customer value but in a firm with a marketing orientation, only the marketing department is focused on providing customer value.
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Macro Trends
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have a broad influence on all of the firms in an economy. i.e.: demographic, cultural, economic, technological, regulatory, and natural trends
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Micro Trends
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narrower and have a more specific impact on one particular firm. i.e.: industry-specific, regional, customer, competitor, stakeholder, supplier, channel, and internal trends.
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Stakeholder
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an individual or group that is affected by the firm in any way.
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Supplier
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the organizations that provide the firm with the inputs it needs to operate. i.e.: groups of employees, who provide valuable labor services
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Channel
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include distributors, wholesalers, and retailers who are involved in getting the product from the manufacturer to the customer.
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Internal
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refer to the trends within the firm itself.
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What does the marketing environment do?
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it sets boundaries for what a firm can or cannot do.
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Multigenerational Households
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households with members of more than one generation
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Psychographics
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includes the activities, interests, and opinions of consumers. They give marketers insight into customers’ perceptions of brands and the importance of various product attributes.
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Ethics
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the moral principles and values that govern the actions and decisions of an individual or group. They serve as guidelines on how to act rightly and justly when faced with moral dilemmas
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What does the right to be informed mean?
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marketers have an obligation to give consumers complete and accurate information about products and services.
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Laws
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Society’s values and standards that are enforceable in the courts.
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caveat emptor
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The legal concept of “let the buyer beware” that was pervasive in the American business culture prior to the 1960s.
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What are the two most common types of unethical behavior?
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economic espionage and bribery
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Where is economic espionage most prevalent?
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in high-technology industries, such as electronics, specialty chemicals, industrial equipment, aerospace, and pharmaceuticals, where technical know-how and trade secrets separate industry leaders from followers
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Economic Espionage
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the clandestine collection of trade secrets or proprietary information about a company’s competitors
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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 or illegal actions of their employers
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What are the two prominent personal moral philosophies that have direct bearing on marketing practice?
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moral idealism and utilitarianism
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Moral Idealism
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is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome
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Social 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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Utilitarianism
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a personal moral philosophy that focuses on “the greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior
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What are three concepts of social responsibility?
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profit responsibility, stakeholder responsibility, and societal responsibility
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Profit responsibility
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holds that companies have a simple duty: to maximize profits for their owners or stockholders
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Stakeholder responsibility
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focuses on the obligations an organization has to those who can affect achievement of its objectives. These constituencies include consumers, employees, suppliers, and distributors
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Societal responsibility
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refers to obligations that organizations have to the preservation of the ecological environment and to the general public. Emphasis is placed on the triple-bottom line—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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The societal marketing concept
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is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being
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Green marketing
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marketing efforts to produce, promote, and reclaim environmentally sensitive products—takes many forms
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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 one of its products
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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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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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What are the five steps that a social audit consists of?
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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 future involvement.
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What are the five situational influences have an impact on the purchase decision process?
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the purchase task, social surroundings, physical surroundings, temporal effects, and antecedent states
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What are the sociocultural influences?
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personal influence, reference groups, family, social class, culture and subculture
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What are the psychological influences?
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motivation and personality, perception, learning, values, beliefs, and attitudes, and lifestyle
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Motivation
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the energizing force that stimulates behavior to satisfy a need
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Physiological needs
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are basic to survival and must be satisfied first.
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Safety needs
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involve self-preservation as well as physical and financial well-being
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Social needs
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are concerned with love and friendship
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Personal needs
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include the need for achievement, status, prestige, and self-respect.
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Self-actualization
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needs involve personal fulfillment
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Perception
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the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world
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Perceived Risk
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represents the anxiety felt because the consumer cannot anticipate the outcomes of a purchase but believes there may be negative consequences
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Word of mouth
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The influencing of people during conversations
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cognitive learning
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involves making connections between two or more ideas or simply observing the outcomes of others’ behaviors and adjusting your own accordingly
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Opinion leaders
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are considered to be knowledgeable about or users of particular products and services, so their opinions influence others’ choices
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What is the most powerful and authentic information source for consumers because it typically involves friends viewed as trustworthy?
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word of mouth
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Brand Community
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is a specialized group of consumers with a structured set of relationships involving a particular brand, fellow customers of that brand, and the product in use
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Business to business marketing
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is the marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of products and services that they can produce and market to others
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Organizational Buyers
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are those manufacturers, wholesalers, retailers, service companies, not-for-profit organizations, and government agencies that buy products and services for their own use or for resale.
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industrial firms
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in some way reprocess a product or service they buy before selling it again to the next buyer
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Resellers
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Wholesalers and retailers that buy physical products and resell them again without any reprocessing
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Government units
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are the federal, state, and local agencies that buy goods and services for the constituents they serve.
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North American Industry Classification System (NAICS)
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provides common industry definitions for Canada, Mexico, and the United States, which makes it easier to measure economic activity in the three member countries of the North American Free Trade Agreement (NAFTA)
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Explain the parts of the six digit coding system that the NAICS uses.
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The first two digits designate a sector of the economy The third digit designates a subsector The fourth digit represents an industry group. The fifth digit designates a specific industry and is the most detailed level at which comparable data are available for Canada, Mexico, and the United States. The sixth digit designates individual country-level national industries.
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Derived demand
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means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services
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What are the most commonly used criteria?
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price ability to meet the quality specifications required for the item ability to meet required delivery schedules technical capability warranties and claim policies in the event of poor performance past performance on previous contracts production facilities and capacity
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Organizational Buying Criteria
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the objective attributes of the supplier’s products and services and the capabilities of the supplier itself.
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Organizational buying behavior
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is 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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Reciprocity
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is an industrial buying practice in which two organizations agree to purchase each other’s products and services
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Traditional Auction
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a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other. As more would-be buyers become involved, there is an upward pressure on bid prices
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Reverse Auction
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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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Mass Marketing
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“one-size fits all”
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organizational synergy
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the increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently.
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Head-to-head positioning
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involves competing directly with competitors on similar product attributes in the same target market
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cannibalization
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When the increased customer value involves adding new products or a new chain of stores, the product differentiation-market segmentation trade-off raises a critical issue
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Product Positioning
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refers to the place a product occupies in consumers’ minds based on important attributes relative to competitive products
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Product Repositioning
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changing the place a product occupies in a consumer’s mind relative to competitive products.
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Differentiation positioning
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involves seeking a less-competitive, smaller market niche in which to locate a brand
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Hedonic consumption
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is defined as the multisensory, fantasy, and emotional aspects of consumers’ interactions with products.
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Bounded Rationality
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We are what we wear, We are what we drink, We are what we drive, self concept, Hedonic Consumption

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