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MK 498 Exam 2
| Term | Definition |
|---|---|
| need | Occurs when the consumer’s existing level of satisfaction and desired level of satisfaction are not the same, Based on internal or external stimuli |
| want | Consumer’s desire for a specific product that will satisfy the need |
| demand | Occurs when a consumer’s ability and willingness to purchase a specific product backs up the want for that product |
| information search | Marketing activities can stimulate a desire for information |
| passive and active information search | two types of information search |
| internal source | sources of information involving personal experiences and memories |
| external source | sources of information involving advertising, websites, packaging, display, and salespeople |
| Degree of risk involved in the purchase, Amount of expertise with the product category, Actual cost of the search (time and money) | amount of time, effort, and expense dedicated to information search depends on: |
| evoked set | Narrowing down potential product choices to a few products that can meet consumer needs, Represents the outcome of information search |
| evaluation of alternatives | Consumers evaluate products as bundles of attributes |
| Purchase decision | Unforeseen circumstances can interfere with consumer’s decision to buy a product |
| postpurchase evaluation | Connection between buying process and developing long-term customer relationships |
| delight, satisfaction, dissatisfaction, cognitive dissonance (post-purchase doubt) | four possible outcomes of postpurchase evaluation |
| decision-making complexity | Primary reason for variations in the buying process |
| individual influences | Demographics, perceptions, motives, interests, attitudes, opinions, or lifestyles |
| social influences | Culture, subculture, social class, reference groups, and opinion leaders |
| situational influences | Affect amount of time and effort devoted to the purchase task |
| physical and spatial influences | Example - Retail atmospherics, retail crowding, store layout and design |
| social and interpersonal influences | Example - Salespeople, shopping in groups, other customers |
| temporal (time) influences | Example - Lack of time, emergencies, convenience |
| Purchase task or product usage influences | Example - Special occasions, buying for others, buying a gift |
| Consumer dispositional influences | Example - Stress, anxiety, fear, fatigue, emotional involvement, good/bad mood |
| Commercial markets, Reseller markets, Government markets, Institutional markets | four types of business markets |
| Buying center, Hard and soft costs, Reciprocity, Mutual dependence | unique characteristics of business markets |
| environmental conditions, organizational factors, individual factors | factors influencing the buying process |
| environmental conditions | increase uncertainty, risk, and complexity associated with purchase |
| organizational factors | include internal and external environmental conditions |
| individual factors | importance depends on specific buying situations and the importance of the firm's goals and objectives |
| market segmentation | Process of dividing total market for a particular product into homogeneous segments or groups, Should create groups where members are similar to each other but dissimilar to other groups |
| mass marketing | Involves no segmentation, Adopts an undifferentiated approach, Works best when the needs of an entire market are similar, Results in efficient production and lower marketing costs, Risky since it makes firm’s vulnerable to competitors |
| differentiated marketing | Dividing the total market into groups of customers having relatively common or homogenous needs |
| multi-segment approach | Attracting buyers in more than one segment by offering a variety of products that appeal to different needs |
| market concentration | focusing on a single market segment |
| niche marketing | Efforts are focused on one small, well-defined market segment, Customers will pay high prices for products that match specialized needs, Firms should understand and meet the needs of target customers in order to earn a big share of the market segment |
| one-to-one marketing | Creating an entirely unique product offering for each customer |
| mass customization | Extension of one-to-one marketing, Provides unique solutions to individual customers on a mass scale |
| permission marketing | Customers choose to become part of firm’s target market, Key advantage - Customers are already interested in the product offering |
| Identifiable and measurable, Substantial, Accessible, Responsive, Viable and sustainable | segmentation approach must be: |
| behavioral segmentation | variables include benefits sought, product usage, and occasions or situations |
| demographic segmentation | variables include gender, occupation, and education |
| psychographic segmentation | variables include personality, lifestyle, and motives |
| geographic segmentation | variables include city/county size and population density |
| marketing program | Strategic combination of four marketing mix elements |
| commoditization | Core product is incapable of differentiating the offering from that of the competition, Most organizations try to enhance the service and symbolic elements of their offerings by changing price, distribution, or promotion |
| product strategy | most critical strategic decision in a marketing plan, involves design, development, branding, and positioning decisions |
| real value of offerings | ability to deliver benefits that enhance customer's situation or solves a customer's problems |
| consumer products | for personal use and enjoyment |
| business products | for resale, use in making other products, or use in firm's operations |
| convenience products | inexpensive, routinely purchased products that consumers spend little time and effort acquiring, example - soft drinks |
| shopping products | products that consumers will spend time and effort to obtain, example - appliances |
| specialty products | unique, one-of-a-kind products that consumers will spend considerable time, effort, and money to acquire, example - antiques |
| unsought products | products that consumers are unaware of or a product that consumers do not consider purchasing until a need arises, example - emergency medicine |
| product line | Group of closely related product items |
| product mix or portfolio | total group of products offered by the firm |
| critical strategic decisions | width or variety of product mix, which refers to the number of product lines offered, assortment or depth of each product line |
| Economies of scale, Package uniformity, Standardization, Sales and distribution efficiency, Equivalent quality beliefs | potential benefits of offering a large product portfolio |
| intangibility | it is difficult for customers to evaluate quality, especially before purchase and consumption, it is difficult to convey service characteristics and benefits in promotion |
| simultaneous production and consumption | customers or their possessions must be present during service delivery, other customers can affect service outcomes including service quality and customer satisfaction |
| perishability | services cannot be inventoried for later use. therefore, unused service capacity is lost forever, service demand is very time-and-place sensitive |
| heterogeneity | service quality varies across people, time, and place, making it very difficult to deliver good service consistently, there are limited opportunities to standardize service delivery |
| client-based relationships | most services live or die by maintaining a satisfied clientele over the long term |
| idea generation, screening and evaluation, development, test marketing, commercialization | new product development process |
| revenue = price x quantity sold | relation to revenue equation |
| value | Customer’s subjective evaluation of benefits relative to costs, Helps determine worth of a firm’s product-offering relative to other product offerings |
| customer benefits | Everything customers obtain from an offering |
| customer costs | everything the customer must give up |
| profit-oriented | designed to maximize price relative to competitors' prices, the product's perceived value, the firm's cost structure, and production efficiency |
| volume-oriented | sets prices in order to maximize dollar or unit sales volume. this objective sacrifices profit margin in favor of high product turnover |
| market demand | sets prices in accordance with customer expectations and specific buying situations. this objective is often known as "charging what the market will bear" |
| market share | designed to increase or maintain market share regardless of fluctuations in industry sales. market share objectives are often used in the maturity stage of the product life cycle |
| cash flow | designed to maximize the recovery of cash as quickly as possible. this objective is useful when a firm has a cash emergency or when the product life cycle is expected to be quite short |
| competitive matching | designed to match or beat competitors' prices. the goal is to maintain the perception of good value relative to the competition |
| prestige pricing | sets high prices that are consistent with a high status product. prices are set with little regard for the firm's cost structure or the competition |
| status quo | maintains current prices in an effort to sustain a position relative to the competition |
| elasticity | Customers’ sensitivity to changes in price |
| service pricing | Helps balance supply and demand during peak and off-peak demand times |
| yield management | allows firms to simultaneously control capacity and demand |
| marketing channels | Organized system of marketing institutions, Facilitate flow of products, resources, information, funds, or product ownership from point of production to final user |
| physical distribution | Coordinating flow of information and products among members of the channel, Helps ensure that products are available in right places, in right quantities, at right times, and in a cost-efficient manner |
| supply chain | connection and integration of all members of the marketing channel |
| connectivity | Informational and technological linkages among firms |
| community | compatible goals and objectives among firms |
| collaboration | recognition of mutual independence among firms |
| exclusive distribution | Giving one merchant or outlet sole right to sell a product within a defined geographic region |
| selective distribution | giving several merchants or outlets the right to sell a product within a defined geographic region |
| intensive distribution | Making a product available to maximum number of merchants or outlets, Helps gain exposure and enhance sales opportunities |
| Legitimate power, Reward power, Coercive power, Information power, Referent power | sources of power in a supply chain |
| integrated marketing communications (IMC) | Used to create one consistent message across multiple channels, Ensures maximum persuasive impact on firm’s current and potential customers |
| Attention Interest Desire Action | what does AIDA stand for? |
| pull strategy | Focus promotional efforts toward stimulating consumer demand |
| push strategy | focus promotional efforts toward supply chain |
| advertising | One of the most visible elements of IMC program, Paid and non-personal communication transmitted via media |
| public relations | Promote the firm, its people, ideas , and image, Create an internal shared understanding among employees, Improve general brand awareness |
| personal selling | Paid personal communication, Informs customers about offerings and persuades them to buy, Most precise form of communication, but has very high cost per contact |
| sales promotion | Activities that create buyer incentives to purchase a product |
| branding strategy | Selecting the right combination of name, symbol, term, or design that identifies a product |
| brand name, brand mark | parts of a brand |
| brand name | words, letters, and numbers that can be spoken |
| brand mark | symbols, figures or a design |
| corporate branding | Considered as important as product-related branding, Aimed at a variety of stakeholders, Designed to build and enhance firm’s reputation, Rebuilds firm’s reputation when unfavorable events occur |
| manufacturer brand | example - NIKE |
| private-label brand | owned by the merchants that sell them, example - GAP, Sam's Choice |
| cobranding | the use of two or more brands on one product |
| brand licensing | Contractual agreement where a firm permits another to use its brand on non-competing products |
| individual branding | when a firm gives each of its product offerings a different brand name |
| family branding | occurs when a firm uses the same name or part of the brand name on every product |
| brand loyalty | positive attitude toward a brand that causes customers to have a consistent preference for that brand over all other competing brands in a product category |
| brand equity | value of a brand to the firm |
| brand recognition | exists when a customer knows about the brand and is considering it as one of several alternatives in the evoked set |
| brand preference | a stronger degree of brand loyalty where a customer prefers one brand to competitive brands and will usually purchase this brand if it is available |
| brand insistence | the strongest degree of brand loyalty, occurs when customers will go out of their way to find the brand and will accept no substitute |
| Reduced costs, Built-in loyalty, Enhanced image, Lower inventory, Less risk | advantages of selling manufacturer (name) brands |
| Increased profit, Less competition, Total control, Merchant loyalty | advantages of selling private-label (store) brands |
| differentiation | Creating differences in firm’s product offering that set it apart from competing offerings |
| positioning | Creating a mental image of product offering and its differentiating features in the minds of the target market |
| brand | most important tool of differentiation |
| repositioning | Often requires a fundamental change in one or more marketing program elements |
| product life cycle | Tool that addresses brand and product strategy over time |
| development stage | no sales revenue during this stage |
| introduction stage | begins when development is complete and ends when customers widely accept the product |
| growth stage | profits rapidly increase and decline toward the end of this stage |
| pricing | firms must balance need for cash flow and need to be competitive |
| maturity stage | longest stage in the cycle in which no more firms will enter the market |
| decline stage | attempt to postpone or accept the inevitability |
| harvesting | gradual reduction in marketing expenses and usage of a less resource-intensive marketing mix |
| divesting | withdrawing all marketing support from the product |
| inelasticity | Customers are not sensitive to changes in price |
| perceptual map, strategy canvas | two tools used to assess brand's positioning |
| need recognition, information search, evaluation of alternatives, purchase decision, postpurchase evaluation | five stages of the consumer buying process |
| hard costs | include monetary price and associated purchase costs such as shipping and installation |
| soft costs | downtime, opportunity costs, and human resource costs associated with the compatibility of systems, in the buying decision |
| reciprocity | two-way street, with each firm marketing products that the other firm buys |
| problem recognition, develop product specifications, vendor identification and qualification, solicitation of proposals or bids, vendor selection, order processing, vendor performance review | business buying process |
| price skimming | intentionally sets a high price relative to the competition |
| price penetration | designed to maximize sales, gain widespread market acceptance, and capture a large market share quickly by setting a relatively low initial price |
| value-based pricing (EDLP) | set reasonably low prices, but still offer high-quality products and adequate customer services |
| non-price strategies | builds the marketing program around factors other than price |
| discounting | involves temporary price reductions to stimulate sales or store traffic |
| reference pricing | firms compare the actual selling price to an internal or external reference price |
| price lining | the price of a competing product is the reference price, takes advantage of the simple truth that some customers will always choose the lowest-priced or highest-priced product |
| odd pricing | prices are rarely set at whole, round numbers |
| price bundling | solution-based pricing or all-inclusive pricing, brings together two or more complementary products for a single price |
| direct selling | marketing of products to consumers through face-to-face sales presentations at home or in the workplace |
| personal selling | paid personal communication that attempts to inform customers about products and persuade them to purchase those products |
| public relations | goal is to track public attitude, identify issues that may elicit public concern, and develop programs to create and maintain positive relationships between a firm and its stakeholders |
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