Principles of Marketing Exam 2 Nethery

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domestic marketing
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marketing within one nation with no cross-border business activity (home country)
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global marketing
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targets markets throughout the world; a standardized marketing strategy across the globe ex: Apple
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international marketing
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marketing strategy of opening a subsidiary to serve local markets. Pays attention to local customers, distribution channels, etc. ex: Nike
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multinational corporations
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heavily engaged in international trade beyond exporting and importing; move resources, goods/services, skills across national boundaries, may have several worldwide headquarters, less than 1% of US companies (taking it to the next level)
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global marketing standardization
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production of uniform products that can be sold the same way all over the world ex: Apple, Coca-Cola
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multidomestic strategy
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subsidiaries of multinational firms are allowed to compete independently in domestic markets (think SBU’s but for multinational companies)
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5 external environment facing global markets
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culture economic development natural resources political structure demographic makeup
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culture
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the common set of values shared by its citizens that determine what is socially acceptable
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economic development
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developed country- complex, sophisticated industries less developed country- basic industries China and India are two of the highest growth rates in the world, largest populations but among the highest levels of income disparity ex: China and India
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global economy
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economies around the world closely interwoven
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natural resources
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differences in natural resources create international dependencies, shifts in wealth, inflation and recession, export opportunities if resources are abundant, and stimulus for military intervention
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political structure
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no private ownership minimal individual freedom or little central government maximum personal freedom
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tariff
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a tax levied on goods entering a country
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quota
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limit on the amount of a product entering a country
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boycott
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exclusion of products from a country or company
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trade agreement
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an agreement to stimulate international trade
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market grouping
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common trade alliance- countries work together to form a common trade area
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demographic makeup
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marketing considerations: population density alone not useful
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international opportunities
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95% of the world’s population outside the US 75% of the world’s purchasing power is outside the US
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export
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sell domestically produced products to buyers in other countries
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licensing and franchising
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licensor allows another firm to use its manufacturing process, trademarks, patents etc. Licenses pays royalty or fee.
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contract manufacturing
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private-label manufacturing by a foreign country
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joint venture
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domestic firm buys a part of foreign company or joins with a foreign company to create a new entity
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direct investment
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active ownership of a foreign company or overseas manufacturing or marketing facility
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global marketing mix
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adhere to same principles as marketing mix, basis for 4 P’s of global marketing= RESEARCH
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one product one message
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same product same message ex: head & shoulders shampoo
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product adaptation
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change product same message ex: Oreos in Japan
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promotion adaptation
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change message same product ex: Coca-Cola light in Europe
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product invention
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change product change message ex: Pringles in Spain and UK flavors vary
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exchange rate
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reflect the price of one’s currency in terms of another country’s currency ex: Toyota car in US vs. Japan
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floating exchange rate
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the system that currency markets operate under, prices of different currencies move up and down based on the demand for and the supply of each currency
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dumping
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sale of exported product at price lower than charged for the same product in “home” market of exporter, can harm importing nation’s competing industries (steel)
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countertrade
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all or part of payment for goods/services is in the form of other goods/services no cash involved
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straight barter
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pepsi for vodka and ocean freighters with Russia
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compensation agreement
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technology/equipment to foreign plant, payment taken in goods produced (give equip get goods) general tire gives equipment to Romanian truck tire plant in return GT receives tires they sell in US
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consumer behavior
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how consumers make purchase decisions and how consumers use and dispose of product
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consumer decision-making process
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a 5 step process used by consumers when buying goods or services: need recognition information search evaluation of alternatives purchase post purchase behavior
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need recognition
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result of an imbalance between actual and desired states ex: i am really hungry
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want
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recognition of an unfulfilled need and a product that will satisfy it ex: I want a Dutch’s burger
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stimulus
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any unit of input affecting one or more of the five senses
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internal stimulus
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hunger, thirst, hear your stomach growl and realize hungry
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external stimulus
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recommendations from people, ad on TV/radio ex: friend told you to try Woodshed
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job statement
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goal the consumer is trying to achieve or problem trying to solve (what you want to get out of this product)
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outcome statement
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what consumers are seeking from the job of the product
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internal information search
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recall information in memory- prior experiences, knowledge of product
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external information search
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seek information in outside environment
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need less information
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less risk, more knowledge, more product experience, low level of interest, confidence in decision
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need more information
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more risk, less knowledge, less product experience, high level of interest, lack of confidence
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evoked set
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group of brands from which a buyer can choose
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evaluation of alternatives
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analyze product attributes, use cutoff criteria, rank attributes by importance (narrows your search)
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purchase
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to buy or not to buy
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postpurchase behavior
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how well expectations are met determine consumer satisfaction or dissatisfaction with the purchase
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cognitive dissonance
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inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions
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routine response behavior
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little involvement in selection process, frequently purchased, low cost goods, may stick with one brand, buy first/evaluate later, quick decision, familiar with several brands but stick with one brand
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limited decision making
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consumer has product experience but unfamiliar with brands available, low levels of involvement, low to moderate cost goods, evaluation of a few alternative brands, short to moderate time to decide
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extensive decision making
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high levels of involvement, high cost goods, evaluation of many brands, long time to decide, buying unfamiliar, expensive, product or item infrequently bought
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involvement
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the amount of time and effort a buyer invests in the search, evaluation and decision processes of consumer behavior
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culture is…
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pervasive- everywhere, but most are unaware of presence functional- give order to society learned- not genetic, learn what is acceptable dynamic- adapts to changing needs/environment
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value
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an enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct ex: breakfast/energy bars- all eat on the go
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subculture
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a homogenous group (similar kind) of people who share elements of the overall culture as well as cultural elements unique to their own group
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social class
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group of people in a society who are considered nearly equal in status or community esteem, regularly socialize among themselves both formally and informally, share behavioral norms
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social class measurements
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occupation, income, education (#1determinant), wealth, and spending habits
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reference groups
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friends, family, clubs, professional groups, religious groups (who you talk to about getting product)
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opinion leaders
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group leader who influences others, first to try new products and services out of curiosity
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age life cycle
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taste in food, clothes, cars, recreation often age related marketers define target markets according to life style
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personality self-concept lifestyle
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combines psychological makeup and environmental forces (how you think of yourself)
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perception
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process by which people select, organize and interpret stimulus into a meaningful and coherent picture
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experiential learning
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an experience changes behavior
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conceptual learning
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not learned through direct experience
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belief
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an organized pattern of knowledge that an individual holds as true about his or her world
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attitude
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a learned tendency to respond consistently toward a given object
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business marketing
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marketing of goods and services to individuals and organizations for purposes other than personal consumption
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business products
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used to manufacture other products, become a part of another product, aid in the normal operations of an organization, the KEY is INTENDED USE of the product
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business market
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companies that market exclusively to business consumers
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business-to-business electronic commerce
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the use of the internet to facilitate the exchange of goods, services, and information between organizations
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relationship marketing
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strategy that entails seeking and establishing ongoing partnerships with customers
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strategic alliances
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cooperative agreement between business firms ex: Starbucks in Target and Barnes & Noble
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keiretsu
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network of interlocking corporate affiliates (strong strategic alliance)
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4 categories of business customers
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producers- buy goods/incorporate into products for sale to others; profit-oriented resellers- wholesalers, retailers, buy finished goods for profit governments- federal, state, local, largest single market for goods/services in the world institutions- schools, churches, hospitals, colleges etc. d not have the standard business goals or profit, market share, ROI
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7 types of business products
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major equipment accessory equipment raw materials component parts processed materials supplies business services
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major equipment
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capital goods- machines, airplanes, buildings often custom designed, personal selling important marketing strategy
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accessory equipment
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less expensive/shorter lived- computers, power tools, standardized, purchased by more customers
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raw materials
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unprocessed products- minerals, timber, wheat, corn, fish, become part of the finished product
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component parts
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finished item ready for assembly or needs very little processing
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processed materials
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used directly in manufacturing other products- sheet metal, chemicals, lumber; do not retain their identity in final product
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supplies
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consumable items that do not become part of the final product; short lived inexpensive; categories of maintenance, repair or operating supplies
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business services
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expense items not a part of the final product- janitorial, advertising, legal, marketing research, maintenance services
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buying centers
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all the people in an organization who become involved in the purchase decision
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initiator
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suggest the purchase
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influencers
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define specifications/provide info for evaluating options
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gatekeepers
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regulate flow of information, often purchasing agent
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decider
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person with power to choose or approve selection
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purchaser
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negotiates the purchase
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users
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members of organization who actually use the product
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new buy
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a situation requiring the purchase of a product for the first time
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modified rebuy
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a situation where the purchaser wants some change in the original good or service
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straight rebuy
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a situation in which the purchaser reorder the same goods or services without looking for new information or investigating other suppliers
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market
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people or organizations with needs or wants and the ability and willingness to buy
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market segment
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a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
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market segmentation
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the process of dividing a market into meaningful, relatively similar, identifiable segments or groups
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4 criteria for successful segmentation
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substantiality- segment must be large enough to warrant a special marketing mix identifiability & measurability- segments must be identifiable and their size measurable accessibility- members of targeted segments must be reachable with marketing mix responsiveness- unless segment responds to a marketing mix differently, no separate treatment is needed
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geographic segmentation
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region of the country or world, market size, market density, climate
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demographic segmentation
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age, gender, income, ethnic background, family life and family life cycle
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age segmentation
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marketers can segment markets by age using cohorts
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gender segmentation
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marketers of products such as clothing and cosmetics still segment markets by gender
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income segmentation
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income level- influences consumers wants determines buying power, retailers can appeal to low-income, high-income or both
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ethnic segmentation
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to meet needs and wants of ethnic populations some companies create products geared to specific groups
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family life cycle
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series of stages determined by combination of age, marital status, and the presence or absence of children
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psychographic segmentation
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market segmentation on the basis of personality, motives, lifestyles, and geodemographics
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personality segmentation
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reflects a person’s traits, attitudes and habits
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motive segmentation
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marketers appeal to emotional, rational, or status motives
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lifestyle segmentation
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divides people into groups according to how time is spent, importance of things around them, beliefs, income and education
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geodemographic segmentation
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segmenting potential customers into neighborhood-lifestyle categories; combines geographic, demographic, and segmentation
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benefit segmentation
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group customers into market segments based on benefits they seek from the product (needs and wants NOT customer characteristics)
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usage rate segmentation
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dividing market by amount of product bought or consumed
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satisficers
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business customers who place an order with the first familiar supplier to satisfy product and delivery requirements
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optimizers
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business customers who consider numerous suppliers both familiar and unfamiliar solicit brands and study all proposals carefully before selecting one
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undifferentiated targeting strategy
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mass-marketing philosophy, market is one big market with no individual segments, uses a single marketing mix
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concentrated targeting strategy
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select one segment of a market for targeted marketing efforts
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multisegment targeting strategy
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chooses two or more well-defined market segments and develops a distinct marketing mix for each
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positioning
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determine marketing mix choose target market(s) develop product’s positioning
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product differentiation
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positioning strategy to distinguish company’s products from those of competition, distinctions between products can be real or perceived
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perceptual mapping
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graph how customers view things in their minds: products, brands, and group of products
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7 positioning bases
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attribute price and quality use or application product class competitor emotion product user
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repositioning
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changing consumers’ perceptions of a brand in relation to competing brands

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