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Marketing Mix

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four p's essential to the success of a marketing plan for either a product or a service

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Product

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Refers to the benefits of buying a product

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Quality, Features, Design, Packaging

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Product

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Price

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establishing the price of their service/product

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Markup Price

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How much profit do you want to make on every product/customer

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Competition, Penetration, Bundle, Psychological

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Price

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Place

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refers to how & where you are going to sell the product to the consumer

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Direct Distribution

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selling your product directly to the consumer

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Indirect Distribution

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sold through a 3rd party

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Promotion

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communicating benefits of a product or service to a target market

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Public Relations, Advertising, Sales, Buzz

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Promotion

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MIM

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Marketing Information Management · Provide info in a useful format for business decisions (Ex: customer survey)

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PSM

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Product/Service Management · Making products/services available to meet wants/needs of customers

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Pricing

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· Purpose: to make profits

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Distribution

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· Availability, Transportation, Inventory Methods

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Promotion

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* Communicate info about products/services to potential customers

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Selling

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* Finalizing the exchange process with the customer by selling products/services & developing loyal, repeat customers

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Financing

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* Manage cash needs on daily basis/future

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Mission Statement

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Guiding principle for all decision/planning.

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Goal

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Objective you plan to fulfill.

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Strategy

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Plan of action for achieving goal.

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Tactics

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Specific actions used to carry out strategies.

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Market

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group of all potential customers who have similar needs and wants and have the ability to buy the product.

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Market Share

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percentage of the total sales revenue acquired by a business within a market.

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Mass Marketing

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single marketing plan used to reach all consumers

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Niche Marketing

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Narrowing markets, by identifying very specific characteristics, into a more specific group of people

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Direct Distribution

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is when a product/service goes from the manufacturer (wholesaler) directly to the consumer.

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Indirect distribution

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is when a product/service goes through an intermediary or middlemen.

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Agents

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do not take ownership but instead represent a business and assist in the sales transaction. Real Estate Agents, Travel Agents, Sports Agents

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Market Segmentation

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Dividing the entire market into smaller groups who share similar characteristics

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Demographic

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Dividing the market based on personal characteristics such as age, gender, marital status, income, ethnic background, education, and occupation

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Psychographic

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Dividing the market based on values (ethics, morals, standards), attitudes (personality), and lifestyles (how people spend their time, hobbies, interests)

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Behavioral

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Dividing the market into groups based on what they are looking for in a product and why they buy the product

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Geographic

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Dividing a market based on where a person lives (local, regional, state, national, or global markets).

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Marketing Research

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Reports from research firms, surveys, observations, test markets, and simulations

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Selling

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Responding to consumer needs and wants through planned, personalized communication.

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Tangible

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are those items that can be touched, smelled, tasted, seen or heard.

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Intangible

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are productive activities that we pay someone else to perform

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Customer service

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a process rather than a function or a department.

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Personal Selling

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Determine what is of value to the customer and what they need help with.

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Suggesting selling

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Suggesting additional products/services that will enhance his/her primary purchase

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Cross selling

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Related merchandise * Buying sneakers, suggest socks

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Upselling

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larger quantities at lower prices * Buying a Big Mac only, suggest a Value Meal * Special sales opportunities - inform about any sales * Buying pants, mention sale on shoes.

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Special sales opportunities

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inform about any sales * Buying pants, mention sale on shoes.

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32. Post-Sale Customer Service

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* It is the salespersons responsibility to ensure customer's orders are processed correctly

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Shipping and delivery

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* Can be a major source of frustration for customers * Items arriving too early or too late, get lost/damaged

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Installation

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Salespeople need to stay involved to reduce frustration and minimize problems

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Warranty issues

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Successful salespeople take responsibility to make sure customers understand exactly what their warranties cover.

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Maintenance and repair

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Certain products need routine service and may also need specialized repairs over time May be offered as part of overall sales package Successful salespeople make sure their customers understand

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Credit/Financing

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Problems with obtaining credit and financing are a main cause of customer-service complaints for sales organizations.

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Customer Training

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Some products require customer training, even classes

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Customer Service Mindset

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o A clear focus on the customer o Makes customer feel special o Satisfies customer

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Business policy

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predetermined course of action which is established to provide a guide toward accepted business strategies and objectives.

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Trading Down

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Adding lower priced items to a product line of prestige products

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Trading Up

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Adding higher priced items to a product line

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Express Warranty

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Defined as promises expressed in a specific statement concerning the quality of the product

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Implied Warranty

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Defined as an unwritten, unstated warranty understood by the consumer and the seller that a product will perform as expected

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Full Warranty

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Cover entire product

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Limited Warranty

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do not contain the provisions of full warranties, may cover only certain repairs or specific parts

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Guarantee

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a promise made by the seller to the consumer that the seller will refund the consumer's purchase price if the product doesn't perform as expected.

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Product Liability

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is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause.

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Product Recall

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is a request to return to the maker a batch or an entire production run of a product, usually due to the discovery of safety issues. The recall is an effort to limit liability (which can cause costly legal penalties and damage in reputation)

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A Corporate image

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is the perception that the general public holds about a particular business.

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Touch Points

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are all the opportunities that businesses have to connect with customers and reinforce brand value

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Product Knowledge

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Must have adequate knowledge of the products features & benefits to be able to explain how they will fulfill the customer's wants and needs.

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Feature

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is a physical characteristic or quality of a product.

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Benefit

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is the personal satisfaction or advantage that a customer wants from a product.

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Merchandise approach

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- Approach customer while they are looking at a product

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Service approach

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Approach customer and ask them questions about what they are looking for.

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Purchase Discount

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set amount of money that a business saves on a specific order if the payment is made within a certain period of time.

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Bulk Discounts

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purchasing a large quantity and getting a discount on the price

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Product Life Cycle

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Represents the stages that a product goes through during its life.

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Planned Obsolescence

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Making products that are known to not last long, or change, so that people will need to replace them

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Competitive advantage

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Unique features of a company and its products that are observed by the target market as significant and superior to the competition.

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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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Attribute

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Product Feature

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Price and Quality

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May stress high price as a sign of quality, or emphasize low price as an indication of value.

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Use or application

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Stressing unique uses or applications.

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Product User

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Associating a personality or type of user with the product.

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Product Classification

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Associate the product with a particular category of products.

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Competitor

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Demonstrate how they are positioned against the competitors that hold a strong market position.

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Recognition

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* When consumers become aware of a brand and know a bit about it

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Preference

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* When consumers prefer to purchase a certain product brand based on their positive experience with the brand.

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Insistence

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* When the consumer insists on "their" brand and will not accept substitutes.

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Generic

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* Unbranded products that are plainly packaged, have lower or standard quality, are sold at lower prices than branded products, and receive little or no promotion.

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National Manufacture

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The manufacturer has assumed all responsibility of branding (logo, slogan, name, etc.)

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Private Distributer

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* A brand owned by an intermediary or store. * Examples -- Radio Shack batteries & Great Value Macaroni & Cheese.

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Brand Positioning

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The way consumers see the brand, as compared to a competitive brand.

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Brand Extensions

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* When a brand name is used for a new or improved product line.

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Brand Licensing

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* Allows one company to use another's brand name, logo, or character for a fee.

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Co-Branding

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Companies join forces to increase recognition, customer loyalty, and sales of both brands.

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Family Branding

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Involves using the same brand for related products in a product line.

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Individual Branding

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* Involves using different brands for products owned by one company.

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Brand Identity

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elements that are instantly recognized as belonging to a certain company or product

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Band cues

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elements that remind customers of brands and their values

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Brand Personality

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the behavior of your brand -- creates and maintains an emotional connection with customers (people buy what they relate to) * Excitement, Sincerity, Ruggedness, Competence, Sophistication)

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Brand Promise

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agreement that a company or product will consistently meet expectations and deliver on characteristics and value

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Corporate Brand

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represents the entire company or organization

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Distributer Brand

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private or store brands

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Anti-Dumping Laws

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punish foreign producers for offering their products to domestic consumers at low prices.

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Bait and Switch

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First, customers are "baited" by advertising for a product or service at a low price; second, the customers discover that the advertised good is not available or the sales person disparages the advertised item and customers are "switched" to a costlier product.

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Loss Leader

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- a product sold at a low price (at cost or below cost) to stimulate other profitable sales.

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Deceptive Pricing

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False/Deceptive Advertising

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Predatory Pricing

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is the practice of selling a product/service at a very low price, intending to drive competitors out of the market

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Price Fixing

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is an agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services are sold, price fixing is illegal.

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Channels

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A path through which goods and services flow in one direction (from vendor to the consumer), and the payments generated by them that flow in the opposite direction (from consumer to the vendor).

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Channel Length

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is the total number of channel members in a channel of distribution

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Channel Members

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are business or individuals who assist in moving goods and services from the producer to the consumer

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Exclusive

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a producer sells a product through just one middle man (intermediary) in a geographic area

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Selective

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- a producer sells a product through a limited number of middlemen in a geographic area

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Intensive

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- a producer sells a product through every available wholesaler and retailer in a geographic area

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Chargebacks

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financial penalties assessed for a variety of problems

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Horizontal Conflict

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occurs between channel members at the same level

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Vertical conflict

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occurs between channel members at different levels within the same channel

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Perfect competition

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-Many buyers and many sellers all dealing in an identical product. Neither producer nor user has any market power and both must accept the prevailing market price.

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Monopoly

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-One seller who dominates many buyers.

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Monopolistic competition

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-A large number of suppliers offer similar, but not identical products.

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Oligopoly

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Where relatively few competitive companies dominate the market while each large firm has the ability to influence market prices the unpredictable reaction from the other giants makes the final industry price in determinate.

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Price Fixing

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is collaborating with other companies (competitors) to set prices for a company's products, price fixing is illegal.

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Predatory Pricing

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is the practice of selling a product or service at a very low price, intending to drive competitors out of the market

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Institutional Promotion

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used to create a favorable image for itself. Does not directly sell a certain product.

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Advertising

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any paid form of non-personal presentation and promotion by an identified sponsor.

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Publicity

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placing newsworthy information about a company, product, or person in the media to build an image.

Marketing Mix- FOUR P’S – Flashcards

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