marketing
the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
relationship marketing
establishing long-term, mutually satisfying buyer-seller relationships
customer relationship management (CRM)
using information about customers to create marketing strategies that develop and sustain desirable customer relationships
customer lifetime value
a combination of purchase frequency, average value of purchases, and brand-switching patterns over the entire span of a customer's relationship with a company
exchange function, physical distribution, facilitating functions
Three major marketing functions
exchange functions
all companies (manufacturers, wholesalers + retailers) buy + sell to market their merchandise
physical distribution
involve flow of goods from producers to customers. Transportation and storage provide time utility + place utility + require careful management of inventory
facilitating functions
functions that help other functions take place
utility
the ability of a good or service to satisfy a human need
form utility
created by converting production inputs into finished products
place utility
created by marketing a product available at a location where customers wish to purchase it
time utility
created by making a product available when customers wish to purchase it
possession utlity
created by transferring title (OR ownership) of a product to a buyer
the marketing concept
a business philosophy that a firm should provide goods and services that satisfy customers' needs through a coordinated set of activities that allows the firm to achieve its objectives
communicate with potential customers to assess needs, develop a good or service to satisfy those needs, continue to seek ways to provide customer satisfaction
The marketing concept... and to achieve success, a business must:
production orientation
emphasis placed on increased output and production efficiency
sales orientation
sell goods rather than just produce. Characterized by increased advertising, enlarged sales forces, and (occassionally) high pressure selling techinques
market
a group of individuals or organizations, or both, that need products in a given category and that have the ability, willingness, and authority to purchase such products
market
willing buyers who can pay for + have the authority and ability to do so
consumer markets
purchasers and/or households members who intend to consume or benefit from the purchased products and who do not buy products to make a profit
business to business (industrial) markets
producer, reseller, governmental, and institutional customers that purchase specific kinds of products for use in making other products for resale or for day to day operations
producer markets
individuals and business organizations that buy products to use in the manufacture of other products
reseller markets
intermediaries such as wholesalers and retailers that buy finished products and sell them for a profit
governmental markets
buy goods and services to maintain (internal) operations and provide citizens with products such as highways, education, utilities (water+energy), defense, and police+fire
institutional markets
churches, not-for-profit private schools and hospitals, civic clubs, charitable organizations, foundations, fraternities + sororities
marketing strategy
a plan that will enable an organization to make the best use of its resources and advantages to meet its objectives.
marketing strategy
consists of: 1 - selection and analysis of a target market; 2 - the creation and maintenance of an appropriate marketing mix
marketing mix
combination of product, price, distribution, and promotion developed to satisfy a particular target market
target market
a group of individuals, organizations, or both, for which a firm develops and maintains a marketing mix suitable for the specific needs and preferences of that group
market segment
a group of individuals or organizations within a market that share one or more common characteristics
market segmentation
the process of dividing a market into segments and directing a marketing mix at a particular segment or segments rather than at the total market
concentrated market segmentation
a single marketing mix is directed at a single market segment
differentiated market segmentation
multiple marketing mixes are focused on multiple market segments
basis
common characteristic
marketing plan
a written document that specifies an organization's resources, objectives, strategy, and implementation and control efforts to be used in marketing of a specific product or product group
sales forecast
an estimate of the amount of a product that an organization expects to sell during a certain period of time based on a specified level of marketing effort
marketing information system
a system for managing marketing information that is gathered continually from internal and external sources
internal data sources
sales figures, product and marketing costs, inventory, sales force activities
external data sources
suppliers, intermediaries, customers, competitors, economic conditions
marketing research
process of systematically gathering, recording + analyzing data concerning a particular marketing prob. Used in specific situations to obtain info. not otherwise available to decision makers
intranets
internal web pages that allow employ. to access internal data + facilitate comm. among departments
database
collection of information arranged for easy access + retrieval
single source data
info. provided by a single firm on household demog., purchases, television viewing behavior, + responses to promotions such as coupons and free samples
buying behavior
the decisions and actions of people involved in buying and using products
consumer buying behavior
the purchasing of products for personal or household use, not for business purposes
business buying behavior
the purchasing of products by producers, resellers, governmental units, and institutions
personal income
the income an individual receives from all sources less the Social Security taxes the individual must pay
Disposable income
personal income less all additional personal taxes (income, estate, gift + property; by local, state, fed. gov't)
discretionary income
disposable income less savings and expenditures on food, clothing, and housing
product
everything one receives in an exchange, including all tangible and intangible attributes and expected benefits; it may be a good, service, or an idea
consumer product
product purchased to satisfy personal and family needs
business product
product bought for resale, for making other products, or for use in a firm's operations
convenience product
relatively inexpensive, frequently purchased item for which buyers want to exert only minimal effort
shopping product
item for which buyers are willing to expend considerable effort on planning and making the purchase
specialty product
item that possesses one or more unique characteristics for which a significant group of buyers is willing to expend considerable purchasing effort
raw material
basic material that actually becomes part of a physical product; usually comes from mines, forests, oceans, or recycled solid wastes
major equipment
large tools and machines used for production purposes
accessory equipment
standardized equipment used in a firm's production or office activities
component part
item that becomes part of a physical product and is either a finished item ready for assembly or a product that needs little processing before assembly
process material
material that is used directly in the production of another product but is not readily identifiable in the finished product
supply
item that facilitates production and operations but does not become part of a finished product
business service
intangible product that an organization uses in its operations
product life-cycle
series of stages in which a product's sales revenue and profit increase, reach a peak, and then decline
product line
group of similar products that differ only in relatively minor characteristics
product mix
all the products a firm offers for sale
product modification
process of changing one or more of a product's characteristics
line extension
development of a new product that is closely related to one or more products in the existing product line but designed specifically to meet somewhat different customer needs
product deletion
elimination of one or more products from a product line
brand
name, term, symbol, design, or any combination of these that identifies a seller's products as distinct from those of other sellers
brand name
part of a brand that can be spoken
brand mark
part of a brand that is a symbol or distinctive design
trademark
brand name or brand mark that is registered with the U.S. Patent and Trademark Office and thus is legally protected from use by anyone except its owner
trade name
complete and legal name of an organization
manufacturer brand
brand that is owned by a manufacturer
store brand
brand that is owned by an individual wholesaler or retailer
generic product
product with no brand at all
brand loyalty
extent to which a customer is favorable toward buying a specific brand
brand equity
marketing and financial value associated with a brand's strength in a market
individual branding
strategy in which a firm uses a different brand for each of its products
family branding
strategy in which a firm uses the same brand for all or most of its products
brand extension
using an existing brand to brand a new product in a different product category
packaging
all the activities involved in developing and providing a container with graphics for a product
labeling
presentation of information on a product or its package
express warranty
written explanation of the producer's responsibilities in the event that a product is found to be defective or otherwise unsatisfactory
price
amount of money a seller is willing to accept in exchange for a product at a given time and under given circumstances
supply (&demand)
quantity of a product that producers are willing to sell at each of various prices
demand
quantity of a product that buyers are willing to purchase at each of various prices
price competition
emphasis on setting a price equal to or lower than competitors' prices to gain sales or market share
non-price competition
competition based on factors other than price
product differentiation
process of developing and promoting differences between one's product and all similar products
markup
amount a seller adds to the cost of a product to determine its basic selling price
breakeven quantity
number of units that must be sold for the total revenue (from all units sold) to equal the total cost (of all units sold)
total revenue
total amount received from sales of a product
fixed cost
cost incurred no matter how many units of a product are produced or sold
variable cost
cost that depends on the number of units produced
total cost
sum of the fixed costs and the variable costs attributed to a product
price skimming
strategy of charging the highest possible price for a product during the introduction stage of its life-cycle
penetration pricing
strategy of setting a low price for a new product
negotiated pricing
establishing a final price through bargaining
secondary-market pricing
setting one price for the primary target market and a different price for another market
periodic discounting
temporary reduction of prices on a patterned or systematic basis
random discounting
temporary reduction of prices on an unsystematic basis
odd-number pricing
strategy of setting prices using odd numbers that are slightly below whole-dollar amounts
multiple-unit pricing
strategy of setting a single price for two or more units
reference pricing
pricing a product at a moderate level and positioning it next to a more expensive model or brand
bundle pricing
packaging together two or more complementary products and selling them for a single price
everyday low prices
setting a low price for products on a consistent basis
customary pricing
pricing on the basis of tradition
captive pricing
pricing the basic product in a product line low, but pricing related items at a higher level
premium pricing
pricing the highest-quality or most-versatile products higher than other models in the product line
price lining
strategy of selling goods only at certain predetermined prices that reflect definite price breaks
price leaders
products priced below the usual markup, near cost, or below cost
special-event pricing
advertised sales or price cutting linked to a holiday, season, or event
comparison discounting
setting a price at a specific level and comparing it with a higher price
transfer pricing
prices charged in sales between an organization's units
discount
deduction from the price of an item
channel of distribution
sequence of marketing organizations that directs a product from the producer to the ultimate user
middleman
marketing organization that links a producer and user within a marketing channel
merchant middleman
middleman that actually takes title to products by buying them
functional middleman
middleman that helps in the transfer of ownership of products but does not take title to the products
retailer
middleman that buys from producers or other middlemen and sells to consumers
wholesaler
middleman that sells products to other firms
intensive distribution
use of all available outlets for a product
selective distribution
use of only a portion of the available outlets for a product in each geographic area
exclusive distribution
use of only a single retail outlet for a product in a large geographic area
supply-chain management
long-term partnership among channel members working together to create a distribution system that reduces inefficiencies, costs, and redundancies while creating a competitive advantage and satisfying customers
vertical channel integration
combining of two or more stages of a distribution channel under a single firm's management
vertical marketing system
centrally managed distribution channel resulting from vertical channel integration
merchant wholesaler
middleman that purchases goods in large quantities and then sells them to other wholesalers or retailers and to institutional, farm, government, professional, or industrial users
full-service wholesaler
middleman that performs the entire range of wholesaler functions
general-merchandise wholesaler
middleman that deals in a wide variety of products
limited-line wholesaler
middleman that stocks only a few product lines but carries numerous product items within each line
specialty-line wholesaler
middleman that carries a select group of products within a single line
limited-service wholesaler
middleman that assumes responsibility for a few wholesale services only
commission merchant
middleman that carries merchandise and negotiates sales for manufacturers
agent
middleman that expedites exchanges, represents a buyer or seller, and often is hired permanently on a commission basis
broker
middleman that specializes in a particular commodity, represents either a buyer or a seller, and is likely to be hired on a temporary basis
manufacturer's sales branch
essentially a merchant wholesaler that is owned by a manufacturer
manufacturer's sales office
essentially a sales agent owned by a manufacturer
independent retailer
firm that operates only one retail outlet
chain retailer
company that operates more than one retail outlet
department store
retail store that 1.) employs 25 or more persons and 2.) sells at least home furnishings, appliances, family apparel, and household linens and dry goods, each in a different part of the store
discount store
self-service general-merchandise outlet that sells products at lower-than-usual prices
catalog showroom
retail outlet that displays well-known brands and sells them at discount prices through catalogs within the store
warehouse showroom
retail facility in a large, low-cost building with a large on-premises inventory and minimal service
convenience store
small food store that sells a limited variety of products but remains open well beyond normal business hours
supermarket
large self-service store that sells primarily food and household products
superstore
large retail store that carries not only food and nonfood products ordinarily found in supermarkets but also additional product lines
warehouse club
large-scale members-only establishment that combines features of cash-and-carry wholesaling with discount retailing
traditional specialty store
store that carries a narrow product mix with deep product lines
off-price retailer
store that buys manufacturers' seconds, overruns, returns, and off-season merchandise for resale to consumers at deep discounts
category killer
very large specialty store that concentrates on a single product line and competes on the basis of low prices and product availability
nonstore retailing
type of retailing whereby consumers purchase products without visiting a store
direct selling
marketing of products to customers through face-to-face sales presentations at home or in the workplace
direct marketing
use of the telephone, Internet, and nonpersonal media to introduce products to customers, who can then purchase them via mail, telephone, or the Internet
catalog marketing
type of marketing in which an organization provides a catalog from which customers make selections and place orders by mail, telephone, or the Internet
direct-response marketing
type of marketing in which a seller advertises a product and makes it available, usually for a short time period, through mail, telephone, or online orders
telemarketing
performance of marketing-related activities by telephone
television home shopping
form of selling in which products are presented to television viewers, who can buy them by calling a toll-free number and paying with a credit card
online retailing
retailing that makes products available to buyers through computer connections
automatic vending
use of machines to dispense products
lifestyle shopping center
open-air environment shopping center with upscale chain specialty stores
neighborhood shopping center
planned shopping center consisting of several small convenience and specialty stores
community shopping center
planned shopping center that includes one or two department stores and some specialty stores, along with convenience stores
regional shopping center
planned shopping center containing large department stores, numerous specialty stores, restaurants, movie theaters, and sometimes even hotels
physical distribution
all the activities concerned with the efficient movement of products from the producer to the ultimate user
inventory management
process of managing inventories in such a way as to minimize inventory costs, including both holding costs and potential stock-out costs
order processing
activities involved in receiving and filling customers' purchase orders
warehousing
set of activities involved in receiving and storing goods and preparing them for reshipment
materials handling
actual physical handling of goods, in warehouses as well as during transportation
transportation
shipment of products to customers
carrier
firm that offers transportation services
promotion
communication about an organization and its products that is intended to inform, persuade, or remind target-market members
promotion mix
particular combination of promotion methods a firm uses to reach a target market
integrated marketing communications
coordination of promotion efforts to ensure their maximal informational and persuasive impact on customers
advertising
paid nonpersonal message communicated to a select audience through a mass medium
personal selling
personal communication aimed at informing customers and persuading them to buy a firm's products
sales promotion
use of activities or materials as direct inducements to customers or salespersons
public relations
communication activities used to create and maintain favorable relations between an organization and various public groups, both internal and external
primary-demand advertising
advertising aimed at increasing the demand for all brands of a product within a specific industry
selective-demand advertising
advertising that is used to sell a particular brand of product
institutional advertising
advertising designed to enhance a firm's image or reputation
advertising media
various forms of communication through which advertising reaches its audience
direct-mail advertising
promotional material mailed directly to individuals
Yellow Pages advertising
simple listings or display advertisements presented under specific product categories appearing in print and online telephone directories
out-of-home advertising
short promotional messages on billboards, posters, signs, and transportation vehicles
infomercial
program-length televised commercial message resembling an entertainment or consumer affairs program
advertising agency
independent firm that plans, produces, and places advertising for its clients
order-getter
salesperson who is responsible for selling a firm's products to new customers and increasing sales to present customers
creative selling
selling products to new customers and increasing sales to present customers
order-taker
salesperson who handles repeat sales in ways that maintain positive relationships with customers
sales support personnel
employees who aid in selling but are more involved in locating prospects, educating customers, building goodwill for the firm, and providing follow-up service
missionary salesperson
salesperson-generally employed by a manufacturer-who visits retailers to persuade them to buy the manufacturer's products
trade salesperson
salesperson-generally employed by a food producer or processor-who assists customers in promoting products, especially in retail stores
technical salesperson
salesperson who assists a company's current customers in technical matters
consumer sales promotion method
sales promotion method designed to attract consumers to particular retail stores and to motivate them to purchase certain new or established products
trade sales promotion method
sales promotion method designed to encourage wholesalers and retailers to stock and actively promote a manufacturer's product
rebate
return of part of the product's purchase price
coupon
offer that reduces the retail price of a particular item by a stated amount at the time of purchase
sample
free product given to customers to encourage trial and purchase
premium
gift that a producer offers a customer in return for buying its product
frequent-user incentive
program developed to reward customers who engage in repeat (frequent) purchases
point-of-purchase display
promotional material placed within a retail store
trade show
industry-wide exhibit at which many sellers display their products
buying allowance
temporary price reduction to resellers for purchasing specified quantities of a product
cooperative advertising
arrangement whereby a manufacturer agrees to pay a certain amount of a retailer's media cost for advertising the manufacturer's product
publicity
communication in news-story form about an organization, its products, or both
news release
typed page of about 300 words provided by an organization to the media as a form of publicity
feature article
piece (of up to 3,000 words) prepared by an organization for inclusion in a particular publication
captioned photograph
picture accompanied by a brief explanation
press conference
meeting at which invited media personnel hear important news announcements and receive supplementary textual materials and photographs
promotional campaign
plan for combining and using the four promotional methods-advertising, personal selling, sales promotion, and publicity-in a particular promotion mix to achieve marketing goals
positioning
development of a product image in buyers' minds relative to the images they have of competing products