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Final Exam Ch. 11-20
Principles of Marketing Chapters 11-20
| Term | Definition |
|---|---|
| Value delivery network | The network made up of the company, suppliers, distributors, and ultimately customers who “partner” with each other to improve the performance of the entire system. |
| Value delivery network | Palm manages a whole community of suppliers, assemblers, resellers, and complementors who must work effectively together to make life easier from Palm’s customers |
| Marketing channel (or distributing channel) | A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user |
| Marketing channel (or distributing channel) | FedEx works interdependently with other companies to make their product or service available for use or consumption by the consumer or business user |
| Channel level | A layer of intermediaries that performs some work bringing the product and its ownership closer to the final buyer |
| Direct marketing channel | A marketing channel that has no intermediary levels |
| Indirect marketing channel | A marketing channel that contains one or more intermediary levels |
| Direct marketing channel | An online class delivers the product (class) directly to the student with no intermediary levels |
| Indirect marketing channel | On campus classes requires people to maintain buildings and coordinate room and teaching schedules. These intermediaries perform work to bring the product (class) to the student |
| Channel conflict | Disagreement among marketing channel members on goals and roles—who should do what and for what rewards |
| Channel conflict | Tupperware in-home consultants and Target are conflicting intermediaries who work to bring the Tupperware product to its consumers |
| Conventional distribution channel | A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole |
| Vertical marketing system (VMS) | A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them or has so much power that they all cooperate. |
| Corporate VMS | A vertical marketing system that combines successive stages of production and distribution under single ownership—channel leadership is established through common ownership |
| Corporate VMS | Kroger the factories that produce and the stores that sell many of its products |
| Contractual VMS | A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone. |
| Franchise organization | A contractual vertical marketing system in which a channel member, called a franchiser, links several stages in the production-distribution process |
| Franchise organization | Ford has a network of dealers. Coca Cola licenses bottlers. Individual managers run McDonald restaurants. |
| Administered VMS | A vertical marketing system that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties |
| Administrative VMS | Some manufactures, like Proctor & Gamble, are large enough and powerful enough to influence their resellers. Retailers, like Barnes & Noble, are large enough and powerful enough to influence their manufacturers. |
| Horizontal marketing system | A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity |
| Horizontal marketing system | When McDonald’s set up “express” restaurants in Wal-Mart stores, two companies joined together at one level to make new marketing opportunities. |
| Multichannel distribution system (or hybrid marketing channel) | A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments |
| Multichannel distribution system (or hybrid marketing channel) | Fidelity Investments uses telephones, the internet, and branch offices as different marketing channels to reach one or more customer segments |
| Disintermediation | The displacement of traditional resellers from a marketing channel by radical new types of intermediaries |
| Disintermediation | People used to buy flowers from stores or street vendors. However, radical new types of intermediaries, such as 1-800 numbers and internet sites, have displaced many of the traditional resellers. |
| Intensive distribution | Stocking the product in as many outlets as possible |
| Intensive distribution | Coca-Cola sells its products in a wide variety of outlets, such as grocery stores, convenience stores, gas stations, hardware stores, office supply stores, restaurants and vending machines. |
| Exclusive distribution | Giving a limited number of dealers the exclusive right to distribute the company’s products in their territories |
| Exclusive distribution | Luxury car markets, such as Bentley, sell exclusively through a limited number of retailers. |
| Selective distribution | The use of more than one, but fewer than all, of the intermediaries who are willing to carry the company’s product |
| Selective distribution | KitchenAid, Maytag, Whirlpool, and General Electric will not sell their products through every retailer who is willing to carry their product. Instead, they use dealer networks and a few large retailers. |
| Marketing logistics (physical distribution) | The tasks involved in planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit |
| Supply chain management | Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers |
| Distribution center | A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible |
| Distribution center | A Wal-Mart storage center receives goods from various plants and suppliers. Then, it uses laser scanners, conveyer belts, and thousands of workers to fill orders for and deliver goods to Wal-Mart retailers so that the customers can get the goods quickly |
| Intermodal transportation | Combining two or more modes of transportation |
| Intermodal transportation | piggyback shipping, using both rails and trucks to ship products, is cheaper than straight trucking, but more flexible than just using trains. |
| Integrated logistics management | The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations, to maximize the performance of the entire distribution system |
| Third-party logistics (3PL) provider | An independent logistics provider that performs any or all of the functions required to get its client’s product to market |
| Third-party logistics (3PL) provider | For Jockey International, UPS manages a warehouse, fills internet orders, boxes them, provides truck drivers to ship goods, and phone representatives to handle problems. UPS provides many of the functions required to get its client’s product to market |
| Retailing | All activities involved in selling goods or services directly to final consumers for their personal, non-business use |
| Retailer | A business whose sales come primarily from retailing |
| Specialty stores | carry a narrow product line with a deep assortment |
| Specialty stores | apparel stores, sporting-goods stores, furniture stores, florists, and bookstores |
| Department stores | carry several product lines—typically clothing, home furnishings, and household goods—with each line operated as a separate department managed by specialist buyers or merchandisers |
| Department stores | Sears, Macy’s, Marshall Field’s |
| Supermarkets | A relatively large, low-cost, low margin, high volume, self-service operation designed to serve the consumer’s total need for food and household products |
| Supermarkets | Kroger, Vons, A&P, Food Lion |
| Convenience stores | Relatively small stores located near residential areas, open long hours seven days a week, and carrying a limited number of high turnover convenience products at slightly higher prices |
| Convenience stores | 7-Eleven, Stop-N-Go, Circle K |
| Off-price retailers | Sell merchandise bought at less-than-regular wholesale prices and sold at less than retail: often leftover goods, overruns, and irregulars obtained at reduced prices from manufacturers or other retailers |
| Off-price retailers | discount stores, factory outlets, warehouse clubs, Mikasa, TJ Maxx, Costco, Sam’s, BJ’s Wholesale Club |
| Superstores | Very large stores traditionally aimed at meeting consumers’ total needs for routinely purchased food and nonfood items—include category killers, supercenters, and hypermarkets |
| Category killer | a superstore that carries a deep assortment in a particular category and has a knowledgeable staff, like Circuit City, Petsmart, Staples, Barnes and Noble |
| Supercenter | a combined supermarket and discount store—Wal-Mart Supercenters, SuperTarget, Super Kmart Center |
| Hypermarket | an extremely large store that combines supermarket, discount, and warehouse retailing—Carrefour in France, Pyrca in Spain |
| Chain stores | two or more outlets that are owned and controlled in common, have central buying and merchandising, and sell similar lines of merchandise |
| Franchise organizations | Contractual association between a franchiser (manufacturer, wholesaler, or service organization) and franchisees (independent business people who buy the right to own and operate one or more units in the franchise system) |
| Shopping center | A group of retail businesses planned, developed, owned, and managed as a unit |
| Wheel-of-retailing concept | a concept of retailing that states that new types of retailers usually begin as low-margin, low-price, low-status operations but later evolve into higher-priced, higher-service operations, eventually becoming like the conventional retailers they replaced |
| Wholesaling | All activities involved in selling goods and services to those buying for resale or business use |
| Wholesaler | A firm engaged primarily in wholesaling activity |
| Merchant wholesaler | Independently owned business that takes title to the merchandise it handles |
| Broker | A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together |
| Agent | A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods |
| Manufacturers’ sales branches and offices | Wholesaling by sellers or buyers themselves rather than through independent wholesalers |
| Marketing communications mix (promotion mix) | The specific mix of advertising, personal selling, sales promotion, and public relations a company uses |
| Advertising | Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor |
| Sales promotion | Short-term incentives to encourage the purchase or sale of a product or service |
| Public relations | Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image,” and handling or heading off unfavorable rumors, stories, and events |
| Personal selling | Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships |
| Direct marketing | Direct communications with carefully targeted individual consumers—the use of telephone, mail, fax, email, the internet, and other tools to communicate directly with specific consumers |
| Integrated marketing communications (IMC) | The concept under which a company carefully integrates and coordinates its many communications channels to deliver a clear, consistent, and compelling message about the organization and its products |
| Buyer-readiness stages | The stages consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase |
| Personal communication channels | Channels through which two or more people communicate directly with each other, including face to face, person to audience, over the telephone, or through the mail |
| Word-of-mouth communication | Personal communication about a product between target buyers and neighbors, friends, family members, and associates |
| Buzz marketing | Cultivating opinion leaders and getting them to spread information about a product or service to others in their communities |
| Nonpersonal communication channels | Media that carry messages without personal contact or feedback, including major media, atmospheres, and events |
| Affordable method | Setting the promotion budget at the level management thinks the company can afford |
| Percentage-of-sales method | Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price |
| Competitive-parity method | Setting the promotion budget to match competitors’ outlays |
| Objective-and-task method | Developing the promotion budget by 1) defining specific objectives, 2) determining the tasks that must be performed to achieve these objectives, and 3) estimating the costs of performing these tasks |
| Push strategy | A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to wholesalers, the wholesalers promote to retailers, and the retailers promote to consumers |
| Pull strategy | A promotion strategy that spends a lot on advertising and promotion to build up consumer demand. If successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers. |
| Advertising | Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor |
| Advertising objective | A specific communication task to be accomplished with a specific target audience during a specific period of time |
| Advertising agency | A marketing services firm that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs |
| Sales promotion | Short-term incentives to encourage the purchase or sale of a product or service |
| Sample | A small amount of a product offered to customers for trial |
| Coupon | Certificate that gives buyers a saving when they purchase a specified product |
| Cash refund offer (rebate) | Offer to refund part of the purchase price of a product to consumers who send a “proof of purchase” to the manufacturer |
| Price pack (cents-off deal) | Reduced price that is marked by the producer directly on the label of package |
| Premium | Good offered either free or at low cost as an incentive to buy a product |
| Advertising specialty | Useful article imprinted with an advertiser’s name, given as a gift to consumers |
| Patronage reward | cash or other award for the regular use of a certain company’s products or services |
| Point-of-purchase (POP) promotion | Display and demonstration that takes place at the point of purchase or sale |
| Contests, sweepstakes, games | Promotional events that give consumers the chance to win something—such as cash, trips, or goods—by luck or through extra effort |
| Discount | A straight reduction in price on purchases during a stated period of time |
| Allowance | Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way |
| Public relations | Building good relations with the company’s various publics by obtaining favorable publicity, building up a good “corporate image,” and handling or heading off unfavorable rumors, stories, and events |
| Salesperson | An individual acting for a company by performing one or more of the following activities: prospecting, communicating, servicing, and information gathering |
| Sales force management | The analysis, planning, implementation of sales force activities, setting and designing sales force strategy, and recruiting, selecting, training, supervising, compensating, and evaluating the firm’s salespeople |
| Territorial sales force structure | A sales force organization that assigns each salesperson to an exclusive geographic territory in which that salesperson sells the company’s full line |
| Product sales force structure | A sales force organization under which salespeople specialize in selling only a portion of the company’s products or lines |
| Customer sales force structure | A sales force organization under which salespeople specialize in selling only to certain customers or industries |
| Outside sales force (or field sales force) | Outside salespeople who travel to call on customers |
| Inside sales force | Inside salespeople who conduct business from their offices via telephone or visits from prospective buyers |
| Team selling | Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large complex accounts |
| Sales quota | A standard that states the amount a salesperson should sell and how sales should be divided among the company’s products |
| Selling process | The steps that the salesperson follows when selling, which include prospecting and qualifying, preapproach, approach, presentation and demonstration, handling objections, closing and follow-up |
| Prospecting | The step in the selling process in which the salesperson identifies qualified potential customers |
| Preapproach | The step in the selling process in which the salesperson learns as much as possible about a prospective customer before making a sales call |
| Approach | The step in the selling process in which the salesperson meets the customer for the first time |
| Presentation | The step in the selling process in which the salesperson tells the “product story” to the buyer, highlighting customer benefits |
| Handling objections | The steps in the selling process in which the salesperson seeks out, clarifies, and overcomes customer objections to buying |
| Closing | The step in the selling process in which the salesperson asks the customer for an order |
| Follow-up | The last step in the selling process in which the salesperson follows up after the sale to ensure customer satisfaction and repeat business |
| Direct marketing | Direct communications with carefully targeted individual consumers—the use of telephone, mail, fax, email, the internet, and other tools to communicate directly with specific consumers |
| Customer database | An organized collection of comprehensive data about individual customers or prospects, including geographic, demographic, psychographic, and behavioral data |
| Telephone marketing | Using the telephone to sell directly to customers |
| Direct-mail marketing | Sending an offer, announcement, reminder, or other item to a person at a particular address |
| Catalog marketing | Direct marketing through print, video, or electronic catalogs that are mailed to select customers, made available in stores, or presented online |
| Direct-response television marketing | Direct marketing via television, including direct-response television advertising or infomercials and home shopping channels |
| Integrated direct marketing | Direct-marketing campaigns that use multiple vehicles and multiple stages to improve response rates and profits |
| Competitive advantage | An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices |
| Competitor analysis | The process of 1) identifying key competitors, 2) assessing their objectives, strategies, strengths and weaknesses, and reaction patterns, and 3) selecting which competitors to attack or avoid |
| Competitive marketing strategies | Strategies that strongly position the company against competitors and that give the company the strongest possible strategic advantage |
| Strategic group | A group of firms in an industry following the same or a similar strategy |
| Benchmarking | The process of comparing the company’s products to those of competitors or leading firms in other industries to find ways to improve quality and performance |
| Customer value analysis | Analysis conducted to determine what benefits target customers value and how they rate the relative value of various competitors’ offers |
| Market leader | The firm in an industry with the largest market share |
| Market challenger | A runner-up firm that is fighting hard to increase its market share in an industry |
| Market follower | A runner-up firm that wants to hold its share in an industry without rocking the boat |
| Market nicher | A firm that serves small segments that the other firms in an industry overlook or ignore |
| Competitor-centered company | A company whose moves are mainly based on competitors’ actions and reactions |
| Customer-centered company | A company that focuses on customer developments in designing its marketing strategies and on delivering superior value to its target customers |
| Market-centered company | A company that pays balanced attention to both customers and competitors in designing its marketing strategies |
| Global firm | A firm that, by operating in more than one country, gains R&D, production, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors |
| Tariff | A tax levied by a government against certain imported products, designed to raise revenue or to protect domestic firms |
| Quota | A limit on the amount of goods that an importing country will accept in certain product categories |
| Embargo | A ban on the import of a certain product |
| Exchange controls | Government limits on the amount of foreign exchange with other countries and on the exchange rate against other currencies |
| Nontariff trade barriers | Nonmonetary barriers to foreign products, such as biases against a foreign company’s bids, or product standards that go against a foreign company’s product features |
| Economic community | A group of nations organized to work toward common goals in the regulation of international trade |
| Countertrade | International trade involving the direct or indirect exchange of goods for other goods instead of cash |
| Exporting | Entering a foreign market by selling gods produced in the company’s home country, often with little modification |
| Joint venturing | Entering foreign markets by joining with foreign companies to produce or market a product or service |
| Licensing | A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty |
| Contract manufacturing | A joint venture in which a company contracts with manufacturers in a foreign market to produce the product or provide its service |
| Management contracting | A joint venture in which the domestic firm supplies the management know-how to a foreign company that supplies the capital—the domestic firm exports management services rather than products |
| Joint ownership | A joint venture in which a company joins investors in a foreign market to create a local business in which the company shares joint ownership and control |
| Direct investment | Entering a foreign market by developing foreign-based assembly or manufacturing facilities |
| Standardized manufacturing mix | An international marketing strategy for using basically the same product, advertising, distribution channels, and other elements of the marketing mix in all the company’s international markets |
| Adapted marketing mix | An international marketing strategy for adjusting the marketing mix elements to each international target market, bearing more costs but hoping for a larger market share and return |
| Straight product extension | Marketing a product in a foreign market without any change |
| Product adaptation | Adapting a product to meet local conditions or wants in foreign markets |
| Product invention | Creating new products or services for foreign markets |
| Communication adaptation | A global communication strategy of fully adapting advertising messages to local markets |
| Whole channel view | Designing international channels that take into account all the necessary links in distributing the seller’s products to final buyers, including the seller’s headquarters organization, channels among nations, and channels within nations |
| Consumerism | An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers |
| Environmentalism | An organized movement of concerned citizens and government agencies to protect and improve people’s living environment |
| Environmental sustainability | A management approach that involves developing strategies that both sustain the environment and produce profits for the company |
| Enlightened marketing | A marketing philosophy holding that a company’s marketing should support the best long-run performance of the marketing |
| Consumer-oriented marketing | The philosophy of enlightened marketing that holds that the company should view and organize its marketing activities from the consumer’s point of view |
| Innovative marketing | A principle of enlightened marketing that requires that a company seek real product and marketing improvements |
| Customer-value marketing | A principle of enlightened marketing that holds that a company should put most of its resources into customer value-building marketing investments |
| Sense-of-mission marketing | A principle of enlightened marketing that holds that a company should define its mission in broad social terms |
| Societal marketing | A principle of enlightened marketing that holds that a company should make good marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long run interests |
| Deficient products | Products that have neither immediate appeal nor long-run benefits |
| Pleasing products | Products that give high immediate satisfaction, but may hurt consumers in the long run |
| Salutary products | products that have low appeal, but may benefit consumers in the long run |
| Desirable products | Products that give both high immediate satisfaction and high long run benefits |
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