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Murrdock MKT 3343
Exam 2
| Question | Answer |
|---|---|
| Industrial/Buisness Markets | reprocess a product or service before selling it again to the next buyer. |
| Reseller Markets | Wholsalers and retailers that buy physical products and resell them again without any reprocessing. |
| Government Markets | federal, state, and local agencies that buy goods & services for the constituents they serve |
| Ultimate consumer | are people who use the goods and services purchased for the household |
| NAICS | North American Industry Classification System, provides common industry definitions for Canada, Mexico, & the US, which makes the measurment of economic activity, in the 3 member countries of NAFTA, easier. Replaces SIC system. Each given a "zipcode" |
| NAPCS | North American Product Classification System: classification system for products & services, UN-Central Product Classification System |
| Derived Demand | means the demand for industrial products/services is derived from, demand for consumer products/services. Example: milk & all it's compnents are now in demand when purchased. Based on future expectations of consumer demand. |
| Derived Demand v. Organizational Market | demand is always much lower for derived demand |
| Organizational Buying Criteria | the objective attributes of the supplier’s products & services & the capabilities of the supplier itself. |
| 7 most common Organizational Buying Criteria | 1. price, 2. ability to meet required delivery schedules, 3. ability to meet the quality specifications, 4. technical capabilites, 5. warranties & claim polocies 6. past performance, 6. production facilities/capabilities |
| ISO 9000 | International Standards Org: meet exact standards to set standards for quality/ consists of standards for registration & certification of a manufacturer’s quality management & assurance system based on an on-site audit of practices & procedures |
| Supplier development | the deliberate efforts by a company to build relationships with suppliers to improve their efficency, quality, & costs for an ultimate result for consumer & company |
| JIT Inventory System | Just In Time… |
| Reciprocity | an industrial buying practice in which two organizations agree to purchase each other’s products & services. The government frowns on reciprocity because it inhibits market competition. “I buy your stuff, if you agree to buy mine.” |
| Supply Partnership | exists when a buyer & its supplier adopt mutually beneficial objectives, policies & procedures for the purpose of lowering the costs/increasing the value of products & services delivered to the ultimate consumer. |
| Buying Center | group of people in an org. who participate in the buying process & share common goals, risks & knowledge important to a purchase decision. AKA Buying Comitee |
| Roles in the Buying Center | 1.Users (use product), 2. Influences(define specifications), 3. Buyers(negotiate terms of contact), 4. Deciders(selects supplier), 5. Gatekeepers(control flow of info) |
| Buy Classes | consists of three types of buying situations: straight rebuy; modified rebuy; and new buy. |
| Organizational Buying Behavior | the decision-marking process that organizations use to establish the need for products & services & identify, evaluate & choose among alternative brands & suppliers. (5 steps) |
| Stage 1 in Organizational Buying Process | Problem Recognition./ (Make-Buy Decision: do we make it or do we buy it?) |
| Stage 2 in Organizational Buying Process | Information Search./ (Value analysis: a systematic appraisal of the design, quality & performance of a product to reduce purchasing costs.) |
| Stage 3 in Organizational Buying Process | Alternitave Evaluation./ (Bidder’s List: a list of firms believed to be qualified to supply a given item.) |
| Stage 4 in Organizational Buying Process | Purchase Decision |
| Stage 5 in Organizational Buying Process | Postpurchase Behavior |
| Prominence of Online Buying in OM's | 1.timely supplie information, 2. reduces buyer order prcessing costs, 3. can reduce marketing costs |
| E-Marketplaces | online trading communities that bring together buyers & supplier organizations to make possible the real time exchange of information, money, products & services. AKA: B2B exchanges, e-hubs |
| Independent E-marketplace | p.158 |
| Traditional Auctions | a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other |
| Reverse Auctions | a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other |
| Countertrade | practice of using barter rather than money for making global sales |
| Trade Feedback Effect | export creates demand for import, vice versa |
| GDP | gross domestic product: monetary value of all goods/services produced in a country during one year. US always has the highest GDP, but Unions of countries now create competition. |
| Blanace of Trade | difference between the monetary value of a nation’s exports & imports. Import>export=deficit, Export>import=surplus. |
| U.S. Balance of trade | U.S. in deficit& overall volume has decreased. Importers-Canada, China, Mexico, Japan/Exporters-China, Japan, South Korea, Taiwan, Phillipines |
| Porter's Diamond | explain a nation's competitive advantage. 1. Factor Conditions-natural resources, 2. Demand Conditions- |
| Economic Espionage Act (1996) | a law that makes the theft of trade secrets by foreign entities a federal crime in the US. |
| Protectionism | the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quota. What countries engage in to protect their country includes tariffs, quotas, etc. The use of protectionism is declinin |
| Tariffs | a government tax on goods or services entering a country, primarily serving to raise prices on imports. Screws the customer! |
| Quota | a restriction placed on amount of a product allowed to enter or to leave a country. |
| GATT | General Agreement on Tariffs & Trade: to limit trade barriers & promote world trade through the reduction of tariffs. Did not explicitly adress non-tariff trade barriers(e.g.quotas) |
| World Trade Organization | (WTO) a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members & issue binding decision. Ultimate goal of the WTO is to eliminate tariffs & quotas. WTO is an o |
| European Union | 27 countries with a common currency (Euro), no protectionism within their borders. |
| North American Free Trade Agreement | NAFTA: lifted many tade barriers between Canada, Mexico, & US. Extended many advantages with CAFTA-DR |
| Asian Free Trade Agreement | have reduced tariffs among countries & promoted trade. To liberate East Asia from Japan & "The Four Little Dragons" |
| Global Competition | exists when firms originate, produce & market their products & services worldwide. |
| Strategic Alliances | agreements among 2+ independent firms to cooperate for the purpose of achieving common goals. |
| Types of Global Companies | International, Multinational, Transnational |
| International Firm | same product, marketing program, etc. everywhere, selling the same idea (ex. Coke) |
| Multinational Firm | changes whats needed for other countries markets (ex: breathe right) |
| Transnational Firm | change mkt strategy where needed keep same where can. |
| Multidomestic Marketing Strategy | used by multinational firms that have as many different product variations, brand names & advertising programs as countries in which they do business. |
| Global Marketing Strategy | used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similitarties & adapting them when cultures differ. |
| Global brand | brand marketed under the same name in multiple countries with similar & culturally coordinated marketing programs. |
| Global consumers | consists of customer groups living in many different countries or regions of the world who have similar needs or seek similar features & benefits from products/services. People around the world have a lot in common |
| Cross-cultural analysis | involves the study of similiarities & differences among consumers in 2+ nations or societies. For effective marketing programs |
| Values | a society’s personally or socially preferable modes of conducts/states of existence that tend to persist over time. |
| Customs | what is considered normal & expected about the way people do things in a specific country. |
| Foreign Corrupt Practices Act (1977) | a law, amended by the International Anti-Dumping & Fair Competition Act (1998), that makes it a crime for US corporations to bribe an official of a foreign government or political part to obtain/retain business in a foreign country. |
| Cultural symbols | things that represent ideas or concepts. |
| Semiotics | a field of study that examines the correspondence between symbols & their role in the assignment of meaning for people. Semiotics are the study of symbols. Example is that |
| Back translation | when a translated word/phrase is retranslated into the original language by a different interpreter to catch errors |
| Customer ethnocentrism | the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign made products. |
| Bottom of the Pyramid | largest, but poorest socioeconomic group in the world, mostly landlocked countries, it's to our advantage to help these coutries (Trade) |
| Economic Infrastructure | a country's communication, transportation, financial, & distribution systems. Critical for determining weather to enter a country's market. |
| Microfinance | practice of offering small, collateral-free loans to individuals who otherwise would not hav access to the capital necessary to participat in an income generating activity |
| Currency exchange rule | the price of one country’s currency expressed in terms of another country’s currency. |
| Exporting | producing goods in one country & selling them in another country. |
| Indirect Exporting | sell to a country through an intermediary |
| Direct Exporting | sell directly from us to them |
| Liscencing | A company offer the right for items of intellectual property for a royalty fee, in other countries however they lose all control of it's product, may lose profit, or create competition with their company. |
| Contact Assembley | contacts for a foreign company to ASSEMBLE parts for the prodcut. |
| Contact Manufacturing | US may contract with a foreign form for them to manufacture product to specifications |
| Joint venture | when a foreign country & a local firm invest together to create a local business |
| Direct investment | entails a domestic firm actually investing in & owning a foreign subsidiary or division |
| Dumping | when a firm sells a product in a foreign country below its domestic price or below its actual cost. |
| Gray market | a situation where products are sold through unauthorized channels of distribution. Also called parallel importing |
| Marketing research | the process of defining a marketing problem & opportunity, collecting data to try & fix the problem. |
| Difficulties of Marketing Research | Consumers do not know about new products, lying, purchase behavior could be different. |
| Decision | a conscious choice from among 2+ alternatives |
| 5 Step Marketing Research Approach | 1.Define the Problem: set research objectives & possible solutions, 2.Develop the Research Plan: constraints, data, 3.Collect Relevent Data, 4.Develop Findings: analyze data, 5. Take Mkt Action: implement |
| Exploratory research | gives ideas about a vague problem, used for many new products |
| Descriptive research | frequency or relationship of 2 factors |
| Casual Research | how much one thing occuring effects another thing occuring. |
| Measures of success | criteria or standards used in evaluating proposed solutions to a problem, how we know if our research tells us anything |
| Constraints | in a decision are the restrictions placed on potential solutions to a problem. Boundaries/limits on types of things trying to figure out, so not too broad. |
| Methods of Collecting Data | Sampling, Probability Sampling, Nonprobability Sampling, Statistical Inference |
| Sampling | involves selecting representative elements from a population. Involves making judgments about whole by what you know about a few. |
| Probability sampling | random sample |
| Nonprobability sampling | involves using arbitrary judgments to select the sample so that the chance of selecting a particular elements by an unknown or 0. A random sample w/ consraints, can't get statistical inference |
| Statistical inference | involves drawing conclusions about a population from a sample taken from that population. Drawing conclusions from information gotten from research. |
| Data | the facts & figures related to the problem, & are divided into 2 main parts: secondary data & primary data. |
| Secondary data | facts & figures that have already been recorded before the project at hand. The advantage is that it is inexpensive & fast. The disadvantages are that it’s not specific to your problem. (Internal & external) |
| Primary data | facts & figures that are newly collected for the project. The advantages are that it is specific to the problem. The disadvantage is that it’s time consuming & expensive. (Observation, Questionarre) |
| Observational data | the facts & figures obtained by watching, either mechanically or in person, how people actually behave. More truthful. |
| Questionnaire data | the facts & figures obtained by asking peple about their attitudes, intentions & behaviors. |
| "Fuzzy Front End" | try to id trends before typical consumers have recognized them themselves. |
| Question Formats | 1.Open ended, 2. fixed alt., 3.Dichotomous(Y/N), 4. Semantic Differential(Y/N scale), 5.Likert(agrrement scale) |
| Data mining | the extraction of hidden predictive information from large databases. |
| Information technology | involves a computer & communication system to satisfy an organization’s needs for data storage, processing & access. There is lots of statistical information available. |
| Market Segmentation | putting prospective buyers into groups that 1. have common needs, 2. will respond simarlarly to the market action |
| Market segments | the relatively homogeneous groups of prospective buyers that result from the market segementation process. |
| Product differentation | a strategy that involves a firm’s using different marketing mix activities to help consumers perceive the product as being different & better than competing products. |
| Market-product grid | a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm. |
| Synergy | the increased customer value achieved through performing organizational functions more efficicently. Customers are the reason companies do things more efficicently & that benefit goes back to the customer through customer value. |
| Usage rate | the quantity consumed or patronage (store visits) during a specific period of time. An example is frequent flier miles. |
| 80/20 Rule | concept that suggests 80% of a firm’s sales are obtained from 20% of its customers. And 20% of business from 80% of customers |
| Product positioning | refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive products. |
| Product repositioning | involves changing the place an offering occupies in a consumer’s mind relative to competitive’s products |
| Perceptual map | a means of displaying or graphing in 2 dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers to enable a manager to see how consumers perceive competing products or brands relative to its own & th |
| Market/Industry potential | the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions & marketing efforts of the firm. Also called industry potential |
| Sales/Company forecast | refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions & its own marketing efforts. Also called company forecast. |
| Direct forecast | involves estimating the value to be forecast without any intervening steps. The best guess of a person who’s selling based on what they think. |
| Lost horse forecast | making a forecast using the last known value & modifying it according to positive or negative factors expected in the future. When bring products back when they’ve phased it out for a while. Go from where product last was & go from there (the closest know |
| Survey of Buyers’ Intention Forecast | asking prospective customers if they are likely to buy the product during a coming period. |
| Trend Extrapolation | extending a pattern observed in past data into the future |
| Linear Trend Extrapolation | using a straight line to extend a pattern observed in past data into the future |
| Product | a good, service, or idea consisting of a bundle of tangible & intangible attributes that satisfies consumers & is received in exchange for money or some other unit or value |
| Product line | group of products that are closely related b/c they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or falls within a given price range. |
| Product mix | the number of product lines offered by a company |
| Consumer goods | products purchased by the ultimate consumer |
| Business goods | products that assist directly or indirectly in providing products for resale. Also called as B2B goods, industrial goods or organizational goods. |
| Convenience goods | items that the consumer purchases frequently, conveniently & with a minimum of shopping effort. |
| Shopping goods | items for which the consumer compares several alternatives on criteria, such as price, quality or style. |
| Specialty goods | items that a consumer makes a special effort to search out & buy. |
| Unsought goods | items that the consumer either does not know about or knows about but does not initially want |
| Production goods | items used in the manufacturing process that become part of the final product |
| Support goods | items used to assist in producing other goods & services |
| Protocol | a statement that, before product development begins, identifies: 1) a well-defined target market 2) specific customers’ needs, wants & preferences 3) what the product will be & do |
| New-product Strategy Development | the stage of the new product process that defines the role for a new product in terms of the firm’s overall corporate objectives. |
| Six sigma | means to “delight the customer” by achieving quality through a highly disciplined process to focus on developing & delivering near-perfect products & services. |
| Idea generation | the stage of the new-product process that involves developing a pool of concepts as candidates for new products |
| Screening & evaluation | the stage of the new-product process that involves internal & external evaluations of the new-product ideas to eliminate those that warrant no further effort |
| Business analysis | the stage of the new-product process that involves specifying the product features & marketing strategy & making necessary financial projections needed to commercialize a product. |
| Development | stage of the new-product process that involves turning the idea on paper into a prototype. |
| Market testing | stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy |
| Commercialization | stage of the new-product process that involves positioning & launching a new product in full-scale production & sales |
| Slotting fee | payment a manufacturer makes to place a new item on a retailer’s shelf. |
| Failure fee | penalty payment a manufacturer makes to compensate a retailer for sales its valuable shelf space failed to make. |
| product life cycle | describes the stages a new product goes through in the marketplace: introduction, growth, maturity & decline |
| Product class | the entire product category or industry. Example: string trimmers, like a weed eater |
| Product form | pertains to variations of a product within the product class. Example: weed eater: gas, electric, fat string, skinny string, etc. |
| Product modification | altering a product’s characteristic, such as its quality, performance or appearance, to try to increase the product’s sales |
| Market modification | a strategy in which a company tries to find new customers, increase a product’s use among existing customers or create new use situations. |
| Trading up | involves adding value to a product (or line) through additional features or higher-quality materials |
| "Trading down | reducing the number of features, quality or price. |
| Downsizing | reducing the content of packages without changing package size & maintaining or increasing the package price. |
| Branding | a basic decision in marketing products in which an organization uses a name, phrase, design or symbols, or combination of these to identify its products & distinguish them from those of competitors |
| Brand name | in any word, device (design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services |
| Trade name | a commercial, legal name under which a company does business |
| Trademark | identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it. |
| Brand personality | a set of human characteristics associated with a brand name. |
| Brand equity | the added value of a given brand name gives to a product beyond the functional benefits provided |
| Brand licensing | contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another (license) for a royalty or fee |
| Multi-product Branding | a branding strategy in which a company uses one name for all its product in a product class |
| Co-branding | a branding strategy that involves the practice of the pairing of 2 brand names of 2 manufacturers on a single product |
| Multi branding | branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment |
| Private branding | branding strategy used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. Also called private labeling or reseller branding |
| Mixed branding | a branding strategy where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market |
| Packaging | component of a product that refers to any container in which it is offered for sale & on which label information is conveyed. |
| Label | integral part of the package that typically identifies the product or brand, who made it, where & when it was made, how it is to be used, & package contents & ingredients |
| Warranty | statement indicating the liability of the manufacturer for product deficiencies. |
| Business marketing | is the marketing of goods and services to companies, government, or non-profit organizations for the use in the creation of goods and services that they can produce and market to others |
| Organizational buyers | are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. There are 3 different markets. |
| 3 markets of organizational buyers | 1. Industrial/Buisness Markets, 2. Reseller Markets, 3.Gevernment Markets |
| Primary Demand | A demand for a class of products |
| Selective Demand | A brand of a class of products |
| Skimming Strategy | Enter market at highest price for as long as possible |
| Penetration Pricing | Enter Market at low price to reach as many people as possible & create a brand loyalty |
| Introduction of a Product | trying to increase primary demand, use pricing strategies |
| Growth of a Product | rapid sales, repeat purchasers, new features, broader distribution and gain competitors |
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