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TMC – Marketing Exam 2

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Business marketing
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The marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others.
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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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Three markets making up organizational buyers
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The industrial market, reseller market, and government market.
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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.
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Organizational buying criteria (by use)
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Performance, technical support, ease of use, ease of setup, complete solution, ruggedness, customization ability, price, etc.
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Supplier development
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The deliberate effort by organizational buyers to build relationships that shape suppliers’ products, services, and capabilities to fit a buyer’s needs and those of its customers.
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Reciprocity
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An industrial buying practice in which two organizations agree to purchase each other’s products and services. (Disapproved by US Justice Department)
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Supply partnership
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Exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer.
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Sustainable procurement
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Aims to integrate environmental considerations into all stages of an organization’s buying process with the goal of reducing the negative impact on human health and the environment.
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Organizational buying behavior
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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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Five stages in the buying decision process
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Problem recognition, information search, alternative evaluation, purchase decision, and post-purchase behavior.
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Buying center
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The group of people in an organization that participate in the buying process.
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Five specific roles of individuals in the buying center
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Users, influencers, buyers, deciders, and gatekeepers.
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Buy classes
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Three types of organizational buying situations: straight rebuy, new buy, and modified rebuy.
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E-marketplaces
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Online trading communities that bring together buyers and supplier organizations.
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Traditional auction
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Occurs when a seller puts up an item for sale and would-be buyers bid in competition with each other.
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Reverse auction
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Occurs when a buyer communicates a need for something and would-be suppliers bid in competition with each other.
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Protectionism
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The practice of shielding one or more industries within a country’s economy from foreign competition, usually through the use of tariffs or quotas.
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Tariff
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A government tax on goods or services entering a country, primarily serving to raise prices on imports.
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Quota
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A restriction placed on the amount of a product allowed to enter or leaver a country.
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World Trade Organization (WTO)
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Institution that sets rules governing trade between its members through a panel of trade exports. Its 153 member countries account for more than 97% of world trade.
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European Union
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Consists of 27 member countries that have eliminated most barriers to the free flow of goods, services, capital, and labor across their borders.
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North American Free Trade Agreement (NAFTA)
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Lifted many trade barriers between Canada, Mexico, and the United States.
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Global competition
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Exists when firms originate, produce, and market their products and services worldwide.
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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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Multidomestic marketing strategy
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A multinational firm’s strategy of offering as many different product variations, brand names, and advertising programs as countries in which it does business.
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Transnational firm
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Views the world as one market and emphasizes cultural similarities across countries or universal consumer needs and wants more than differences.
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Global marketing strategy
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Used by transnational marketers, the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
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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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Global consumers
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Consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services.
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Three kinds of uncontrollable market variables
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Cultural, economic, and political-regulatory variables.
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Cross-cultural analysis
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The study of similarites and differences among consumers in two or more nations or societies.
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Values
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A society’s personally or socially preferable models of conduct or states of existence that tend to persist over time.
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Customs
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The normal and expected ways of doing things in a specific country.
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Foreign Corrupt Practices Act (1977)
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A law that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
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Cultural symbols
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Things that represent ideas and concepts in a specific culture.
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Back translation
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Retranslating a word or phrase back into the original language using a different interpreter to catch errors.
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Economic infrastructure
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A country’s communications, transportation, financial, and distribution systems.
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Microfinance
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The practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities.
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Currency exchange rate
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The price of one country’s currency expressed in terms of another country’s currency.
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Exporting
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Producing goods in one country and selling them in another country.
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Licensing
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A company offers the right to a trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee.
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Joint venture
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When a foreign company and a local firm invest together to create a local business, sharing ownership, control, and the profits of the new company.
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Direct investment
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When a domestic firm invests in and owns a foreign subsidiary or division.
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Product extension strategy
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Selling virtually the same product in other countries.
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Product adaptation strategy
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Changing a product in some way to make it more appropriate for a country’s climate or consumer preferences.
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Product invention strategy
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Investing in totally new products designed to satisfy common needs across countries.
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Communication adaptation strategy
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Adapting the promotional message for the same product.
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Dual adaptation strategy
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Modifying both the product and promotion messages.
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Dumping
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When a firm sells a product in a foreign country below its domestic price or below its actual cost.
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Gray market
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A situation where products are sold through unauthorized channels of distribution.
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Marketing research
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The process of defining a marketing problem and opportunity, systemativally collecting and analyzing information, and recommending actions.
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Five steps in marketing research
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Define the problem, develop the research plan, collect relevant information, develop findings, and take marketing actions (includes: evaluate results).
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Step 1: Define the problem
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Set research objectives and identify possible marketing actions.
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Step 2: Develop the research plan
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Specify constraints, identify data needed for marketing actions, and determine how to collect data.
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Step 3: Collect relevant information
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Obtain secondary data and obtain primary data.
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Step 4: Develop findings
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Analyze the data and present the findings.
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Step 5: Take marketing actions.
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Make action recommendations, implement action recommendations, and evaluate results.
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Measures of success
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Criteria or standards used in evaluating proposed solutions to a problem.
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Constraints
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Restrictions placed on potential solutions to a problem.
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Secondary data
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Facts and figures that have already been recorded prior to the project at hand.
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Primary data
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Facts and figures that are newly collected for the project.
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Other methods of collecting primary data
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Social media, panels and experiments, information technology, and data mining.
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Panel
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A sample of consumers or stores from which researches take a series of measurements.
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Data mining
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The extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions.
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Sales forecast
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The total sales of a product that a firm expects to sell during a specified time period under specified conditions.
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Market segmentation
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Involves aggregating prospective buyers into groups that have common needs and will respond similarly to a marketing action.
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Market segments
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The relatively homogeneous groups of prospective buyers that result from the market segmentation process.
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Product differentiation
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The strategy of using different marketing mix activities to help consumers perceive the product as being different and better than competing products.
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Market-product grid
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A framework to relate the market segments of potential buyers to products offered or potential marketing actions.
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Three specific segmentation strategies
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One product and multiple market segments, multiple products and multiple market segments, and segments of one, or mass custimization
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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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Cannabilization
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When the new products or new chain simply steals customers and sales from the older, existing ones.
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Five-step process used to segment a market
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Group potential buyers into segments, group products to be sold into categories, develop a market-product grid and estimate the size of markets, select target markets, and take marketing actions to reach target markets.
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Criteria to segment a given market
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Simplicity and cost-effectiveness of assigning potential buyers to segments, potential for increased profit, similarity of needs of potential buyers within a segment, difference of needs of buyers among segments, and potential of a marketing action to reach a segment.
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Four general bases of market segmentation
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Geographic segmentation, demographic segmentation, psychographic segmentation, and behavioral segmentation.
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Usage rate
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The quantity consumed or the number of store visits during a specified period.
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80/20 rule
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The idea that 80 percent of a firm’s sales are obtained from 20 percent of its customers.
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Criteria to use in selecting target segments
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Market size, expected growth, competitive position, cost of reaching the segment, and compatibility with the organization’s objectives and resources.
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Marketing synergies
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An opportunity for efficiency in terms of the market segment.
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Product synergies
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An opportunity for efficiency research and development and production.
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Product positioning
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The place a product occupies in consumer’s 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 consumers mind relative to competitive products.
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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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Differentiation positioning
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Involves seeking a less-competitive, smaller market niche in which to locate a brand.
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Perceptual map
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A means of displaying in two dimensions the location of products or brands in the minds of consumers.
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Four steps to discover the perceptions in the minds of potential customers
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Identify the important attributes for a product or brand class, discover how target customers rate competing products or brands with respect to these attributes, discover where the company’s product or brand is on these attributes in the minds of potential customers, and reposition the company’s product or brand in the minds of potential customers.