McGraw Hill Marketing 5

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consumer behavior
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the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after the purchase.
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purchase decision process
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the maximum of 5 stages a buyer passes through in making choices about which products and services to buy
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the 5 stages of the purchase decision process
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problem recognition, information research, alternative evaluation, purchase decision, post purchase behavior
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problem recognition
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first step in the purchase process. difference between a persons ideal and actual situation big enough to trigger a decision.
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information research
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second step of purchase process. search for information
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internal search
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a kind of information research. scanning your memory for previous experiences with products or brands
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external search
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when internal search is insufficient, the risk of making a wrong purchase decision is high, and the cost of gathering info is low
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sources of external information
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personal sources, public sources like consumer reports, and marketer-dominated sources like private information from sellers
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consideration set
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the group of brands that a consumer would consider acceptable from among all the brands he is aware of
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cognitive dissonance
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a post-purchase psychological tension, which results in convincing yourself that you made the right purchase decision
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involvement
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personal, social and economic significance of the purchase to the consumer, which affects the extent of purchase decision process
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extended problem solving
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each of the 5 steps of the consumer purchase decision process is used. (i.e. cars)
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limited problem solving
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consumers will seek some info or rely on a friend to help evaluate alternatives. (i.e. toaster)
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routine problem solving
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consumers recognize a problem and solve it with little effort. (i.e. table salt)
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in low involvement products, companies place attention on:
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quality, avoiding stockouts, repetitive advertising
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situational influences
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the purchase situation that affects the purchase decision process
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what are the 5 situational influences?
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the purchase task, social surroundings, physical surroundings, temporal effects and antecedent states
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purchase task
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the reason for engaging in the decision
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social surroundings
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the other people present when a purchase decision is made
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physical surroundings
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decor, music, crowding
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temporal effects
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time of day and time available
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antecedent states
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the consumers mood or amount of cash in hand
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motivation
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the energizing force that stimulates behavior to satisfy a need
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motivation comes from
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need
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what are the 5 need classes (Mazlovs)
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physiological needs, safety needs, social needs, personal needs, self-actualization needs
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what are some key traits?
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assertiveness, extroversion, compliance, dominance and aggression
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self-concept
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the way a person sees himself and the way he believes others see him
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ideal vs. actual self-concept
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the way people actually see themselves and the way they would like to see themselves
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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 in the world.
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selective perception
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when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent
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selective exposure
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when people see advertisements for the brand they just bought
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selective comprehension
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interpreting information so that its consistent with your attitudes and beliefs
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selective retention
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consumers don’t remember all the information they learn
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subliminal perception
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seeing or hearing messages without being aware of them
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perceived risk
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anxiety felt because the consumer cannot anticipate the outcome of a purchase, but believes there maybe negative consequences
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how does perceived risk influence information search?
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the greater the perceived risk the more extensive the external search stage will be
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how do companies limit perceived risk?
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obtaining seals of approvals, securing endorsements from influential people, providing free samples, giving extensive usage instructions, providing warranties and guarantees
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learning
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behaviors that result from repeated experience and resigning
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behavioral learning
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the process of developing automatic responses of a situation built up through repeated exposure to it
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what are the 4 variables to behavioral learning?
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drive, cure, response and reinforcement
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drive
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a need that moves an individual to action
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cue
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a symbol perceived by consumers
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response
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the action to satisfy the drive
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reinforcement
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reward for the response
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cognitive learning
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learning through thinking, reasoning and mental problem solving
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brand loyalty
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consistent purchase of a single brand over time that results from positive reinforcement of previous actions
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attitude
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shaped by our values and beliefs, the consistent way we respond to products
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beliefs
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based on experience and advertising, the subjective perception of how a product performs on different attributes
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what are 3 ways marketers change attitudes toward products?
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changing beliefs of the products, changing perceived importance of attributes, and adding new attributes to a product
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lifestyle
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a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them
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psychographics
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the practice of combining psychology, lifestyle and demographics to uncover consumer motivations, provides insights into customers; needs and wants
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VALS
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a prominent psychographic system. identifies 8 consumer segments based on their primary motivation for buying and product and their resources
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consumers are inspired by three primary motivations:
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ideals, achievement, self-expression
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ideals-motivated group
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guided by knowledge and principle. thinkers and believers
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achievement-motivated groups
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looks for produce that reflect success. achievers and strivers
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self expression-motvated groups
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desire social or physical activity, variety and risk. experiences and makers
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sociocultural influence
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a consumer’s forma and informal relationships with other people
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what 2 aspects of personal influence are important to marketing?
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opinion leadership and word-of-mouth activity
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opinion leaders
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individuals who direct direct or indirect influence over others
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word of mouth
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influencing other people during conversations
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buzz
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popularity created by consumer words of mouth
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reference groups
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people to whom people look as a basis of self-appraisal or as a source of personal standards
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membership group
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a group to which a person belongs
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aspiration group
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a group that a person wants to become a part of
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dissociative group
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a group that a person wants to maintain distance from because of opposing values
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family influences on consumer behavior result from 3 sources:
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consumer socialization, family life cycle, and decision making within the family
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consumer socialization
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the process by which a person a quires the skills and knowledge necessary to function as a consumer
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family life cycle
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the distinct phases that family goes through from formation to retirement
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family decision-making
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spouse dominant and joint decision-making
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joint decision-making increases with:
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education of the spouses
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what are the 5 roles of individual family members?
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information gatherer, influencer, decision maker, purchaser, user.
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social class
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divisions in a society into which people sharing similar values, interest and behavior can be grouped
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what affects social class?
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occupation, source of income, and education
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subcultures
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subgroups within the larger culture that share unique, values, ideas and attitudes
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4 P’s
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Price, Promotion, place, product.
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Role of Marketing
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the activity for creating and delivering offerings that benefit the organization, its stakeholders, and society. To see the need and meet it.
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Personal selling
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An important part of marketing that relies heavily on interpersonal interactions between buyers and sellers to initiate, develop, and enhance customer relationships
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Benefits of Personal Selling
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High customer attention, custom message, interactivity, persuasiveness, relationship development, adaptable, opportunity to close the sale
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Disadvantages of Personal Selling
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expensive, labor intensive, limited customers reached
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Pros of word of mouth
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cost effective, persuasive
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Cons of word of mouth
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negativity amplified, persuasive
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Customer Value
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The unique combination of benefits received by targeted buyers that include quality, convenience, on-time delivery, and both before-sale and after-sale service at a specific price.
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Customer Value Proposition
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A cluster of benefits that an organization promises customers to satisfy their needs.
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Ultimate Consumers
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The people who use the products and services purchased for a household. Also called consumers, buyers, or customers.
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Marketing Concept
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The idea that an organization should (1) strive to satisfy the needs of consumers (2) while also trying to achieve the organization’s goals.
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Organizational Buyers
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manufacturers, wholesalers, retailers, and government agencies that buy products and services for their own use or for resale.
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Societal Marketing Concept
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The view that organizations should discover and satisfy the needs of consumers in a way that provides for society’s well-being.
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Market Orientation
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An organization that focuses its efforts on (1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and (3) using it to create customer value.
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Utility
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The benefits or customer value received by users of the product.
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Relationship Marketing
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Links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefit.
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Marketing Program
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A plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
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SWOT Analysis
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Strengths, Weaknesses, Opportunities, and Threats of an organization
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Marketing Tactics
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Detailed day-to-day operational decisions essential to the overall success of marketing strategies.
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Market Share
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The ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
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Mission
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A statement of the organization’s function in society that often identifies its customers, markets, products, and technologies. Often used interchangeably with vision.
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Two types of differentiation
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Product, cost
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Points of Difference
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Those characteristics of a product that make it superior to competitive substitutes.
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Three appeals used in advertising
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Fear, sex, humor
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the three different types of innovations
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Continuous Innovation, Dynamically Continuous Innovation, Discontinuous Innovation
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Continuous Innovation
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-modify existing product to set it apart -no new learning or behavior modification needed (knockoff product & copies existing product with a few changes) Ex. Ipod
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Dynamically Continuous Innovation
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Pronounced modification to an existing product. Moderate learning or behavior modification needed. Convergence products (when teo technology come together to create more than sum of it’s part) ex. Blackberry cell phone
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Discontinuous Innovation
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New product that changes the way we live. Major learning or behavior modification needed. Ex: computer
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Steps of product development
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1. Idea generation 2. Product development 3. Develop Marketing Strategy 4. Business Analysis 5. Technical Development 6. Test Market the product in Limited Market 7. Commercialization
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Gross Profit
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Revenue-Cost of Goods (COGS)
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Gross Margin
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Gross Profit/sales price x 100
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Price
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COGS/(1-Gross Margin)
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CPM
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(Cost of ad/audience size) x 1000
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International Firm
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engages in trade and marketing in different countries as an extension of the marketing strategy in its home country
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Multinational firm
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views the world as consisting of unique parts and markets to each part differently.
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transnational firm
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views the world as one market and emphasizes cultural similarities across countries or universal needs and wants rather than differences
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Global Brand
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A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs
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The five steps in strategic marketing
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identifying a mission; analyzing the situation; setting objectives; developing a marketing strategy; and planning for evaluation.

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