utility
want-satisfying power of a good or service
marketing
organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
exchange process
activity in which 2 or more parties give something of value to each other to satisy perceived needs
consumer orientation
business philosophy incorporating the marketing concept that emphasizes first determining unmet consumer needs and then designing a system for satisfying them
marketing concept
company wide consumer orientation with the objective of achieving long-run success--all facets from top to bottom of the organization contribute to satisfying customer needs and wants
relationship marketing
development and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit
marketing myopia
management's failure to recognize the scope of it's business-- product-oriented rather than consumer-oriented endangers future growth
bottom line
the most obvious distiniction between not-for-profit organizations and for-profit commercial firms-- business jargon that refers to the overall profitability of an organization
person marketing
marketing efforts designed to cultivate the attention, interest, and preferences of a target market toward a person (perhaps political candidate or celebrity)
place marketing
marketing efforts to attract people and organization to a particular geographic area-- tourist attractions lure vacation travelers
cause marketing
identification and marketing of a social issue, cause, or idea to selected target markets
event marketing
marketing of sporting, cultural, and charitable activities to selected target markets
organization marketing
marketing by mutual benefit organizations, service organizations, and government organizations intended to influence others to accept their goals, receive thier services, or contribute to them in some way (BSU, political parties, UPS)
strategic alliance
partnerships in which 2 or more companies combine resources and capital to create competitive advantages in a new market
Eight Universal Marketing functions
Buying and Selling (Exchange functions)
Transporting and Storing (Physical distribution functions)
Standardizing and Grading, Financing, Risk Taking, and Securing marketing information (Facilitating functions)
planning
process of anticipating future events and conditions and of determining the best way to acheive organizational objectives
strategic planning
process of determining an organization's primary objectives and adopting courses of action that will achieve these objectives
tactical planning
planning that guides the implementation of activities specified in the strategic plan
mission
essential purpose that differentitates one company from others-- specifies the overall goals and operational scope and provides general guidelines for future management actions
Porter's Five Forces
model developed by strategy expert Michael Porter that identifies 5 competitive forces that influence planning strategies;
1. the threat of new entrants
2. the bargaining power of buyers
3. the bargaining power of suppliers
4. the threat of substitute products
5. rivalry among competitors
first mover strategy
theory advocating that the company that is first to offer product in a marketplace will be the long-term market winner
second mover strategy
theory that advocates observing closely the innovations of first movers and then improving on them to gain advantage in the marketplace
SWOT analysis
analysis that help planners compare internal organizational strengths and weaknesses with external oppertunities and threats
strategic window
limited periods in during which the key requirements of a market and the particular competencies of a firm best fit together
marketing mix
blending of the 4 strategy elements- product, distribution, promotion, and pricing- to fit the needs and preferences of a specific target market
strategic business units (SBU's)
key business units within diversified firms-- each SBU has its own managers, resources, objectives, and competitors. A division, a product line, or single product may define the boundaries of an SBU, each persues its own mission and often develops its own plans independently of other units in the organization.
The BCG Matrix
way to evaluate each of an organization's SBUs, like a portfolio performance framework. The market share/ market growth matrix places SBU's in a 4 quadrant chart that plots market share against market growth potential and then places them in one of 4 quadrants--stars, cash cows, question marks, and dogs.
marketing plan
detailed description of the resources and actions needed to achieve stated marketing objectives
strategic plan
process of anticipating events and market conditions and deciding how a firm can best achieve its organizational objectives
business plan
formal document that outlines a companies objectives, how they will be met, how the business will obtain financing, and how much money the company expects to earn.
spreadsheet analysis
grid that organizes numerical information in a standardized, easily understood format
environmental scanning
process of collecting information about the external environment to identify and interpret potential trends
environmental management
attainment of organizational objectives by predicting and influencing the competitive, political-legal, economic, technological, and social-cultural environments
competitive environment
interactive process that occurs in the marketplace among marketers of directly competitive products, marketers of products that can be substituted for one another, and marketers competing for the consumer's purchasing power
political-legal environment
component of the marketing environment consisting of laws and thier interpretations that require firms to operate under competitive conditions and to protect consumer rights
economic environment
factors that influence consumer buying power and marketing strategies, including stage of the business cycle, inflation and deflation, unemployment, income, and resource availibility
demarketing
process of reducing consumer demand for a good or service to a level that the firm can supply
technological environment
application to marketing of knowledge based on discoveries in science, inventions, and innovations
social-cultural environment
component of the marketing environment consisting of the relationship between the marketer, society, and culture
consumerism
social force within the environment that aids and protects the consumer by exerting legal, moral, and economic pressures on business and government
consumer rights
list of legitimate consumer expectations suggested by President Kennedy
-the right to chose freely
-the right to be informed
-the right to be heard
-the right to be safe
marketing ethics
marketers' standards of conduct and moral values
social responsibility
marketing philosophies, policies, procedures, and actions that have the enhancement of society's welfare as a primary objective
green marketing
production, promotion, and reclamation of environmentally sensitive products
e-business
firm that targets customers by collecting and analyzing business information, conducting customer transactions, and maintaining online relationships with customers
e-marketing
strategic process of creating, distributing, promoting, and pricing goods and services to a target market over the internet or through digital tools-- downloading itunes music, booking a flight
interactive marketing
buyer-seller communications in which the customer controls the amount and type of information received from a marketer through such channels as the internetand virtual reality kiosks
corporate website
site designed to increase a firm's visibility, promote its offerings, and provide information to interested parties
marketing web site
site whose main purpose is to increase purchases by visitors
b2b e-marketing (business to business)
use of the internet for business transactions between organizations
b2c e-marketing (business to consumer)
selling directly to consumers over the internet
electronic storefront
company website that sells products to customers
phishing
high tech scam that uses authentic looking email or pop-up messages to get unsuspecting victims to reveal personal information
spam
popular name for junk email
blog
short for web log-- an online journal for an individual or organization
search marketing
paying search engines, such as google, a fee to make sure that the company's listing appears toward the top of the search results
click through rate
percentage of people presented with a banner ad who click on it
conversion rate
percentage of visitors to a website who make a purchase
consumer behavior
process through which buyers make purchasing decisions
culture
values, beliefs, preferences, and tastes handed down from one generation to the next
reference groups
people or institutions whose opinions are valued and to whom a person looks for guidance in his or her own behavior, values, and conduct, such as family, friends, or celebrities.
opinion leaders
trendsetters who purchase new products before others in a group and then influence others in thier purchases
need
imbalance between a consumer's actual and desired states
motive
inner state that directs a person toward the goal of satisfying a need
Maslow's hierarchy of needs
physiological, safety, social/belongingness, esteem needs, self-actualization
perception
meaning that a person attributes to incoming stimuli gathered through the 5 senses
attitudes
person's enduring favorable or unfavorable evaluations, emotions, or action tendencies toward some object or idea
learning
knowledge or skill that is acquired as a result of experience, which changes consumer behavior
self concept
person's multifaceted picture of himself or herself
evoked set
number of alternatives that a consumer actually considers in making a purchase decision
evaluative criteria
features that a consumer considers in chosing among alternatives
cognitive dissonance
imbalance among knowledge, beliefs, and attitudes that occurs after an action or decision, such as a purchase
b2b marketing
organizational sales and purchases of goods and services to support production of other products, to facilitate daily company operations, or for resale
commercial market
individuals and firms that acquire products to support, directly or indirectly, production of other goods and services-- HP buys chips from Intel, Sara Lee buys wheat to mill into flour for an ingredient in its breads, lightbulbs for a factory--largest segment of business market
trade industries
retailers or wholesalers that purchase products for resale to others-- usually finished goods are bought and resold to consumers; clothing, auto parts, meat.
reseller
marketing intermediaries that operate in the trade sector
computer-based segmentation
dividing a business-to-business market into homogeneous groups based on buyers' product specifications
North American Industry Classification System, NAICS
Classification used by NAFTA countries to categorize the business marketplace into detailed market segments
end-use application segmentation
segmenting a business-to-business market based on how industrial purchasers will use the product
global sourcing
purchasing goods and services from suppliers worldwide
offshoring
movement of high-wage jobs from one country to lower-cost overseas locations
nearshoring
moving jobs to vendors in countries close to the businesses home country
outsourcing
using outside vendors to provide goods and services formerly produced in-house
buying center
participants in an organizational buying action A
exporting
marketing domestically produced goods and services in foreign countries
importing
purchasing foreign goods and services
exchange rate
price of one nation's currency in terms of another country's currency
tariff
tax levied against imported goods
import quotas
trade restrictions that limit the number of units of certain goods that can enter a country for resale
General Agreement on Tariffs and Trade (GATT)
international trade accord that has helped reduce world tariffs
World Trade Organization (WTO)
organization that replaces GATT agreements, making binding decisions in mediating disputes (GATT were not binding agreements), and reducing trade barriers-- 151members, must undergo extreme negotiations to enter WTO, China is one of the newest members.
North American Free Trade Agreement (NAFTA)
Accord removing trade barriers between Canada, Mexico, and the US
European Union (EU)
customs union that is moving in the direction of an economic union by adopting a common currency, removing trade restrictions, and permitting free flow of goods and workers throughout the member nations-- 27countries--huge common market
franchise
contractual agreement in which a wholesaler or retailer (the franchisee) agrees to meet the operating requirements of a manufacturer or other franchiser-- reduces risk by offering a proven concept
foreign licensing
agreement that grants foreign marketers the right to distribute a firm's merchandise or to use its trademark, patent, or process in a specified geographic area
countertrade
form of exporting whereby goods and services are bartered rather than sold for cash
marketing research
process of collecting and using information for marketing decision making
exploratory research
process of discussing a marketing problem with informed sources both within and outside the firm and examining information from secondary sources
secondary data
previously published information
primary data
information collected specifically for the investigation at hand
sampling
process of selecting survey respondents or research participants
probability sample
sample that gives every member of the population a chance of being selected
nonprobability sampling
sample that involves personal judgement somehwere in the selection process
interpretative research
observational research method developed by social anthropologists in which customers are observed in thier natural setting and thier behavior is interpreted based on an understanding of social and cultural characteristics; also known as ethnography or "going native
focus group
simultaneous personal interview of a small group of individuals, which relies on group discussion about a certain topic
marketing decision support system (MDSS)
marketing information system component that links a decision marketer with relevant databases and analysis tools
sales forecast
estimate of a firm's revenue for a specified future period
consumer products
products bought by ultimate consumers for personal use
business products
goods and services purchased for use either directly or indirectly in the production of other goods or services for resale
market segmentation
division of the total market into smaller, relatively homogenous groups
geographic segmentation
division of an overall market into homogenous groups based on thier location
demographic segmentation
division of an overall market into homogenous groups based on variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in the family life cycle; also called socioeconomic segmentation
psychographic segmentation
division of a population into groups that have similar psychological characteristics, values, and lifestyles.
product-related segmentation
division of a population into homogenous groups based on thier relationships to the product
undifferentiated marketing
strategy that focuses on producing a single product and marketing it to all customers, also called mass marketing
differentiated marketing
strategy that focuses on producing several products and pricing, promoting, and distributing them with different marketing mixes designed to satisfy smaller segments.
micromarketing
targeting potential customers at very narrow, basic levels, such as by zip cod, specific occupation, or lifestyle--possibly even individuals themselves
positioning
placing a product at a certain point or location within a marketin the minds of prospective buyers
transaction based marketing
buyer and seller exchanges characterized by limited communications and little or no ongoing relationship between the parties.
relationship marketing
development, growth, and maintenance of long-term, cost-effective relationships with individual customers, suppliers, employees, and other partners for mutual benefit.
frequency marketing
frequent-buyer or user marketing programs that reward customers with cash, rebates, merchandise, or other premiums.
affinity marketing
marketing effort sponsored by an organization that solicits responses from individuals who share common interests and activities
database marketing
use of software to analyze marketing information, identifying and targeting messages toward specific groups of potential customers
customer relationship management (CRM)
combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers.
partnership
affiliation of 2 or more companies that help each other achieve common goals
cobranding
cooperative arrangement in which 2 or more businesses team up to closely link thier names on a single product
comarketing
cooperative agreement in which two businesses jointly market each other's product
electronic data interchange (EDI)
computer-to-computer exchanges of invoices, orders, and other business documents
vendor-managed inventory (VMI)
inventory management system in which the seller--based on an existing agreement with a buyer--determines how much of a product is needed.
supply chain
sequence of suppliers that contribute to the creation and delivery of a good or service
lifetime value of a customer
revenues and intangible benefits such as referrals and customer feedback that a customer brings to the seller over the average lifetime, less the amount the company must spend to acquire, market to, and service the customer
brand recognition
consumer awareness and identification of a brand
brand preference
consumer reliance on previous experiences with a product to choose that product again
brand insistence
consumer refusal of alternatives and extensive search for desired merchandise
brand
name, term, sign, symbol, design, or some combination that identifies the products of one firm while differentiating them from the competition's
generic products
products characterized by plain labels, no advertising, and the absence of brand names
manufacturer's brand
brand name owned by a manufacturer or other producer
family brand
single brand name that identifies several related products
brand equity
added value that a respected, well-known brand name gives to a product in the marketplace
category management
product management system in which a category manager--with profit and loss responsibility-- oversees a product line
brand name
part of a brand consisting of words or letters that form a name that identifies and distinguishes a firm's offerings from those of its competitors
trademark
brand for which the owner claims exclusive legal protection
brand extension
strategy of attaching a popular brand name to a new product in an unrelated product category
adoption process
stages that consumers go through in learning about a new product, trying it, and deciding whether to purchase it again
consumer innovator
people who purchase new products almost as soon as the products reach the market
diffusion process
process by which new goods or services are accepted in the marketplace
marketing mix
blending of the four strategy elements, product, distribution, promotion, and price, to fit the needs and preferences of a specific target market
product
bundle of physical, service, and symbolic attributes designed to satisfy a customer's wants and needs
services
intangible tasks that satisfy the needs of consumer and business users
goods
tangible products that customers can see, hear, smell, taste, or touch
homeshoring
hiring workers to do jobs from their homes
consumer product (B2C)
product destined for use by ultimate consumers
business to business product
product that contributes directly or indirectly to the output of other products for resale; also called industrial or organizational product
convenience products
goods and services that consumers want to purchase frequently, immediately, and with minimal effort
shopping products
products that consumers purchase after comparing competing offerings
business services
intangible products that firms buy to facilitate their production and operating processes
total quality management
continuous effort to improve products and work processes with the goal of achieving customer satisfaction and world class performance
product line
series of related products offered by one company
product life cycle
progression of a product through introduction, growth, maturity, and decline stages
distribution
movement of goods and services from producers to customers
marketing (distribution) channel
system of marketing institutions that enhances the physical flow of goods and services, along with ownership title, from producer to consumer or business user
logistics
process of coordinating the flow of information, goods, and services among members of the distribution channel
supply-chain management
control of the activities of purchasing, processing, and delivery through which raw materials are transformed into products and made available to final consumers
physical distribution
broad range of activities aimed at efficient movement of finished good from the end of the production line to the consumer
intensive distribution
Distribution of a product through all available channels
exclusive distribution
distribution of a product through a single wholesaler or retailer in a specific geographic region
selective distribution
distribution of a product through a limited number of channels
channel captain
dominant and controlling member of a marketing channel
vertical marketing system (VMS)
planned channel system designed to improve distribution and cost effectiveness by integrating various functions throughout the distribution chain
supply chain
complete sequence of suppliers and activities that contribute to the creation and delivery of merchandise
radio frequency identification (RFID)
technology that uses a tiny chip with identification information that can be read by a scanner using radio waves from a distance
intermodal operations
combination of transport modes such as rail and highway carriers (piggyback), air and highway carriers (birdyback), and water and air carriers (fishyback) to improve customer service and achieve cost advantages
retailing
activities involved in selling merchandise to ultimate consumers
wheel of retailing
hypothesis that each new type of retailer gains a competitive foothold by offering lower prices than current suppliers charge; the result of reducing or eliminating services
stock-keeping unit
offering within a product line such as a specific size of liquid detergent
markup
amount that a retailer adds to the cost of a product to determine its selling price
markdown
amount by which a retailer reduces the original selling price of a product
planned shopping center
group of retail stores planned, coordinated, and marketed as a unit
atmospherics
combination of physical chacterisitics and amenities that contribute to a store's image
retail convergence
situation in which a similar merchandise is available from multiple retail outlets, resulting in the blurring of distinctions between type of retailer and merchandise offered
scrambled merchandising
retailing practice of combining dissimilar product lines to boost sales volume
wholesaler
channel intermediary that takes title to goods it handles and then distributes these goods to retailers, other distributors, or B2B customers
wholesing intermediary
comprehensive term that describes wholesalers as well as agents and brokers
broker
agent wholesaling intermediary that does not take title to or possesion of goods in the course of its primary function, which is to bring together buyers and sellers
manufacturers' representative
agent wholesaling intermediary that represents manufacterers of related but noncompeting products and receives a commision on each sale
direct marketing
direct communications, other than personal sales contacts, between buyer and seller, designed to generate sales, information requests, or store or website visits
promotion
communication link between buyers and sellers; the function of informing, persuading, and influencing a consumer's purchase decision.
marketing communications
messages that deal with buyer-seller relationships
intergrated marketing communications
coordination of all promotional activities to produce a unified, customer-focused promotional message
AIDA concept
steps through which an individual reaches a purchase decision: attention, interest, desire, and action
promotional mix
subset of the marketing mix in which marketers attempt to achieve the optimal blending of the elements of personal and nonpersonal selling to achieve promotional objectives
sales promotion
marketing activities other than personal selling, advertising, guerrila marketing, and public relations that stimulate consumer purchasing and dealer effectiveness
direct marketing
direct communications, other than personal sales contacts, between buyer and seller, designed to generate sales, information requests, or store or website visits
public relations
firm's communications and relationships with its various publics
guerrilla marketing
unconventional, innovative, and low-cost marketing techniques designed to get consumers' attention in unusual ways
sponsorship
relationship in which an organization provides funds or in-kind resources to an event or activity in exchange for a direct association with that event or activity
pulling strategy
promotional effort by the seller to stimulate final-user demand, which then exerts pressure on the distribution channel
pushing strategy
promotional effort by the seller directed to members of the marketing channel rather than final users
advertising
paid, nonpersonal communication through various media about a business firm, not-for-profit organization, product, or idea by a sponsor identified in a message that is intended to inform or persuade members of a particular audience
product advertising
nonpersonal selling of a particular good or service
institutional advertising
promotion of a concept, an idea, a philosophy, or the goodwill of an industry, company, organization, person, geopgraphic location, or gov't agency
informative advertising
promotion that seeks to develop initial demand for a good, service, organization, person, place, idea, or cause
persuasive advertising
promotion that attempts to increase demand for an existing good, service, organization, person, place, idea, or cause.
reminder advertising
advertising that reinforces previous promotional activity by keeping the name of a good, service, organization, person, place, idea, or cause before the public
comparitive advertising
advertising strategy that emphasizes messages with direct or indirect promotional comparisons between competing brands
cooperative advertising
strategy in which a retailer shares advertising costs with a manufacturer or wholesaler
advertising campaign
series of different but related ads that use a single theme and appear in different media within a specified time period
advertising agency
firm whose marketing specialists help advertisers plan and prepare advertisements
publicity
nonpersonal stimulation of demand for a good, service, place, idea, person, or organization by unpaid placement of significant news regarding the product in a print or broadcast medium
cross-promotion
promotional technique in which marketing partners share the cost of a promotional campaign that meets their mutual needs
personal selling
Interpersonal influence process involving a seller's promotional presentation conducted on a person to person basis with the buyer
over-the-counter selling
personal selling conducted in retail and some wholesale locations in which customers come to the seller's place of business
field selling
sales presentations made at prospective customer's' locations on a face-to- face basis
inside selling
selling by phone, mail, and electronic commerce
relationship selling
regular contacts between sales representatives and customers over an extended period to establish a sustained buyer-seller relationship
consultative selling
meeting customer needs by listening to them, understanding their problems, paying attention to details, and following through after the sale
team selling
selling situation in which several sales associates or other members of the organization are recruited to help the lead sales representative reach all those who influence the purchase decision
order processing
selling mostly at the wholesale and retail levels, that involves identifying customer needs, pointing them out to customers, and completing orders
creative selling
personal selling that involves situations in which a considerable degree of analytical decision making on the buyer's part results in the need for skillful proposals of solutions for the customer's needs
missionary selling
indirect type of selling in which specialized salespeople promote the firms goodwill among indirect customers, often by helping customers use products
sales promotion
marketing activities other than personal selling, advertising, and publicity that enhance consumer purchasing and dealer effectiveness
price
exchange value of a good or service
Robinson-Patman Act
Federal legislation prohibiting price discrimination that is not based on a cost differential; also prohibits selling at an unreasonably low price to eliminate competition
unfair-trade laws
state laws requiring sellers to maintain minimum prices for comparable merchandise
fair-trade laws
statutes enacted in most states that once permitted manufacturers to stipulate a minimum retail price for their products
product maximization
point at which the additional revenue gained by increasing the price of a product equals the increase in total costs
target-return objective
short-run or long-run pricing objectives of achieving a specified return on either sales or investment
Profit Impact of Market Strategies (PIMS) project
research that discovered a strong positive relationship between a firm's market share and product quality and its return on investment
value pricing
pricing strategy emphasizing benefits derived from a product in comparison to the price and quality levels of competing offerings
customary prices
traditional prices that customers expect to pay for certain goods and services
elasticity
measure of responsiveness of purchasers and suppliers to a change in price
breakeven analysis
pricing technique used to determine the number of products that must be sold at a specified price to generate enough revenue to cover total cost
modified breakeven analysis
pricing technique used to evaluate consumer demand by comparing the number of products that must be sold at a variety of prices to cover total cost with estimates of expected sales at the various prices
yield management
pricing strategy that allows marketers to vary prices based on such factors as demand, even though the cost of providing those goods or services remains the same
skimming pricing strategies
pricing strategy involving the use of a high price relative to competitive offerings
penetration pricing strategy
pricing strategy involving the use of a relatively low entry price compared with competitive offerings, based on the theory that this initial low price will help secure market acceptance
competitive pricing strategy
pricing strategy designed to deemphasize price as a competitive variable by pricing a good or service at the general level of comparable offerings
list price
established price normally quoted to potential buyers
market price
price that a consumer or marketing intermediary actually pays for a product after subtracting any discounts, allowances, or rebates from the list price
allowance
specified deduction from a list price, including a trade-in or promotional allowance
psychological pricing
pricing policy based on the belief that certain prices or price ranges make a good or service more appealing than others to buyers
product-line pricing
practice of setting a limited number of prices for a selection of merchandise and marketing different product lines at each of these price levels
promotional pricing
pricing policy in which a lower than normal price is used as a temporary ingredient in a firm's marketing strategy
loss leader
product offered to consumers at less than cost to attract them to stores in the hope that they will buy other merchandise at regular prices
leader pricing
variant of loss leader pricing in which marketers offer prices slightly above cost to avoid violating minimum-markup regulations and earn a minimal return on promotional sales
cannibalization
loss of sales of an existing product due to competition from a new product in the same line
bundle pricing
offering two or more complementary products and selling them for a single price