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MKTG 250 Exam 2
| Question | Answer |
|---|---|
| Business-to-Business Marketing | Involves the marketing of products and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others |
| Organizational Buyers | Manufacturers, wholesalers, retailers, service companies, nonprofit organizations, and government agencies that buy goods and services for their own use or for resale |
| Types of Organizational Markets | Industrial, Reseller, Government |
| Reseller Markets | Retailers buy a product with the intent of reselling the product |
| Industrial Markets | Where businesses sell products or services to other businesses, primarily for use in production or operational processes |
| Government Markets | Primary buyers are federal, state, or local government agencies that purchase goods |
| Characteristics of Business Buying | Market, Product or service, Buying process, Marketing Mix |
| Market Characteristics | Few customers exist and their purchase orders are large Demand for industrial products and services is derived |
| Product or service characteristics | Often, goods are raw and semifinished Products or services are technical in nature and purchased on the basis of specifications Emphasis placed on delivery time, technical assistance, and postsale service |
| Marketing Mix characteristics | Direct selling to organizational buyers is the rule, and distribution is very important Advertising and other forms of promotion are technical in nature Price is often negotiated |
| Derived Demand | The demand for industrial products and services that is driven by, or derived from, the demand for consumer products and services (Ex: Fidget Spinners) |
| Reciprocity | When two organizations agree to buy from each other |
| Supply Partnership | When buyer and supplier adopt mutually beneficial objectives |
| Stages of Organizational Buying Process | Problem recognition Information Search Alternative Evaluation Purchase Decision Post-Purchase Decision |
| Buying Center | Consists of the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision (who is involved in the purchase process) |
| Straight Buy | The buyer reorders an existing product or service from the list of acceptable suppliers without checking with users or influencers |
| Organizational Buying Behaviors | Decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers |
| Buying Center | Consists of the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision (who is involved in the purchase process) |
| Straight Buy | The buyer reorders an existing product or service from the list of acceptable suppliers without checking with users or influencers |
| New Buy | A first-time buyer of the product or service. Involves great potential risks in the purchase, so they include all those who have stake in this buy |
| Modified Buy | Users or deciders want to change the product specifications, price, delivery or supplier. |
| E-Marketplace | Online trading communities that bring together buyers and supplier organizations to make possible real-time exchange information, money, products and services (B2B exchanges) |
| Traditional Auction | In a e-marketplace, is an online auction in which a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other |
| Reverse Auction | In an e-marketplace, is an online auction in which a buyer communicates a need for a product or service, and would-be suppliers are invited to a bid in competition with each other |
| Countertrade | The practice of using barter rather than money for making global sales |
| Globalization | The focus on creating economic, cultural, political, and technological interdependence among individual national institutions and economies |
| Protectionism | The practice of shielding one or more industries within a country's economy from foreign competition through the use of tariffs or quotas |
| Quota | A restriction placed on the amount of a product allowed to enter or leave the country (Sugar imports) |
| Tariffs | Government taxes on products and services entering a country that primarily serve to raise prices on imports |
| International Firms | Markets in other countries same as home countries (doesn't change) |
| Multinational Firms | Markets differently to each country |
| Transnational Firms | Emphasize universal consumer needs |
| Multidomestic Marketing Strategy | Used by multinational firms that have as many different product variations, brand names, and 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 similarities and adapting them when cultures differ |
| Global Brand | A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs |
| Economic Espionage | The clandestine collection of trade secrets or proprietary information about a company's competitors |
| Cross-Cultural Analysis | Study of similarities and differences among consumers in two or more nations or societies |
| Values | Personally, or socially preferable modes of conduct that persist over time (Appear in personal values) |
| Customs | What is considered normal and expected about the way people do things in a specific country (gift giving, greetings) |
| Language | 100+ official languages in the world (24 official languages) |
| Consumer Ethnocentrism | The tendency to believe that it is inappropriate, indeed immortal, to purchase foreign-made product |
| Economic Considerations | 1. Economic Infrastructure 2. Consumer income and purchasing power 3. Currency Exchange rates |
| Economic Infrastructure | A country's communications, transportation, financial, and distribution systems |
| Consumer Income and Purchasing Power | Consider the average per capita income in a country |
| Currency Exchange Rates | The price of one country's currency expressed in terms of another country's currency |
| Global Market-Entry Strategies | Exporting Licensing Joint Venture Direct Investment |
| Exporting | Global market-entry strategy in which a company produces products in one country and sells them in another country (Indirect: through foreign intermediary and Direct: Without intermediaries |
| Licensing | Right to a trademark, patent, or trade secret |
| Joint Venture | A foreign company and a local firm invest together to create a local business in order to share the ownership, control, and profits of the new company (Share ownership, control, and profits) |
| Direct Investment | Own a foreign subsidiary (Big commitment) |
| Cultural Ethnocentricity | Believing your country is superior to other countries |
| Product Extension | Same product sold in different countries |
| Product Adaptation | Change the product for different countries |
| Product Invention | New product for different countries |
| Dumping | Selling below cost |
| Gray Market | Where products are sold through unauthorized channels |
| Market Research | The process of defining a market problem and opportunity, systematically collecting and analyzing information, and recommending actions |
| Steps of Market Research | 1. Define the Problem 2. Develop the research plan 3. Collect relevant information 4. Develop Findings 5. Take Marketing Actions |
| Step 1: Define the problem | Set the research objectives, specific and measurable goals |
| Step 2: Develop the research plan | Constraints and identify data needed for marketing actions |
| Step 3: Collect relevant information | Obtain secondary data, obtain primary data |
| Step 4: Develop Findings | Analyze the data, present the findings |
| Step 5: Take marketing actions | Make action recommendations, implement action recommendations, Evaluate Results |
| Why does JCPenney's buy paper | For direct mail pieces and paper inserts |
| Last step in Buying behaviors: | Is more formal and different on the business side than consumer side |
| Example of Business Buyer | Construction company buying cement and tools (A strategic buyer) |
| When will a contract be voided? | During the purchase decision process |
| Global Competition | When firms originate, produce, and market their products and services worldwide |
| Gross Domestic Product | Total value of all final goods and services produced within a country during a specific period. (US is among the world's leaders in exports but the amount has decreased) |
| What do you look at before you do business with a company outside of the US? | Look at the economy! |
| Pepsi Challenge Question | Which flavor do you prefer? |
| Measures of Success | Criteria or standards used in evaluating proposed solutions to the problem (Ex: Legos: Their measure of success is play time (How long did the kids play with them)) |
| Constraints | The restrictions placed on potential solutions to a problem during a decision |
| Data | Facts and figures related to the project that are divided into two main parts |
| Primary Data | Facts and figures that are newly collected for the project (Advantages: More flexible, Specific to study Disadvantages: Costly and time consuming) |
| Secondary Data | Facts and figures that have already been recorded before the project at hand (Advantages: Time saving, Inexpensive Disadvantages: Out of data, Definitions/categories not right, not specific enough) |
| Observational Data | The facts and figures obtained by watching how people behave, using mechanical, personal, or neuromarketing data collection methods |
| What is another type of observational data? | Mystery shopping (Usually business do this to see how people interact with their products) |
| Ethnographic Research | Research within your home or natural environments |
| Neuromarketing | Technologies used to study the brain |
| Questionnaire Data | The facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors |
| Test Markets | Used in small geographies to evaluate marketing actions |
| Information Technology | All of the computing resources that collect, store, and analyze data |
| Data Mining | The practice of examining large databases to find statistical relationships between consumer purchasing patterns and marketing actions |
| Sales Forecast | The total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts |
| Focus Groups | Informal session of customers who are asked for opinions |
| Market Segmentation | Involves aggregating prospective buyers into groups, or segments, that 1. have common needs and 2. will respond similarly to a marketing action |
| Product Differentiation | A marketing strategy that involves a firm using different marketing mix actions to help consumers perceive the products as being different and better than competing products |
| What does segmentation lead to? | An increase in sales and profitability, if it does not then you should not do it |
| What does market segmentation link? | - It links a market need to an organization's marketing program - The link between a buyer's needs and the marketing program |
| Market-Product Grid | A framework to relate the market segments of buyers to products offered or potential marketing actions |
| Segmentation Strategies | 1. One product and multiple market segments (books and magazines) 2. Multiple products and multiple market segments (automobiles) 3. Segments of one "mass customization" (build-to-order) |
| Geographic segmentation | Dividing a market based off of where customers live or work |
| Demographic Segmentation | Dividing a market based off of age, income, gender, occupation, and family status |
| Mass Customization | When there is only one order |
| Cannibalization | Stealing Sales from yourself |
| Tiffany Co Segment Strategy | Sell and target high-end, luxury buyers |
| Walmart Segment Strategy | Sell and target low-end, price-sensitive value buyers |
| Personas | Character descriptions of a brand's typical customers. Personas bring target market data alive by creating fictional character narratives |
| Product Positioning | The place a product occupies in consumers' minds based on important attributes relative to competitive products |
| Product Repositioning | Involves changing the place a product occupies in a consumer's mind relative to competitive products |
| Perceptual Map | Displaying in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firm's own product or brands |
| List of reasons to segment | 1. Increased protfit potential 2. More effective use of marketing mix 3. Ability to reach customers more efficiently 4. Avoids Cannibalization 5. Supports Product differentiation |
| Steps to Segmentation | 1. Group potential buyers into segments 2. Group products to be sold into categories 3. Develop a market-product grid and estimate the market size 4. Select target markets 5. Take marketing actions |
| Product | A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is recieved in exchange for money or something else of value |
| Services | The intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value (Ex: Hotel Stay, Uber ride, Airline flight) |
| Durable | A good that is meant to last (Ex: Car, truck, oven) |
| Consumer Products | Products purchased by the ultimate consumer (Food products, Clothing, Electronics) |
| Convenience Products | Items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort (Toothpaste, Cake Mix) |
| Shopping Products | Items for which the consumer compares several alternatives on criteria such as price, quality, or style (Electronics, Airline Tickets) |
| Specialty Products | Items that a consumer makes a special effort to search out and buy (Rolex Watch, Heart Surgery) |
| Unsought Products | Items that the consumer either does not know about or know about but does not initially want (Funeral Expenses/Burial Insurance) |
| Product Item | A specific product that has a unique brand, size, or price (SKU barcode) |
| Product Line | A group of product or service items that are relatively close because they satisfy a class of needs that are used together, sold to the same customer group, distributed through the same outlets, or fall within a given price range Ex: Nike: Basketball Line |
| Product Mix | Consists of all of the product lines offered by an organization |
| Innovation | Consists of the practices and processes that encourage the use of external and internal ideas as well as internal and external collaboration when conceiving, producing, and marketing new products and services |
| Protocol | A statement that, before product development begins, identifies 1. a well-defined target market; 2. specific customers' needs, wants, and preferences; and 3. what the product will be and do to satisfy customers |
| Business Products | Products businesses buy that assist in providing other products for resale (B2B products or industrial products) (Ex: Buildings, Equipment, Office Equipment, Stationary, Paper clips, Maintenance, or legal services) |
| What does SKU stand for? | Stock Keeping Unit |
| Reasons for new product failures | Insignificant point of difference, Incomplete market and product protocol, Failure to satisfy customer needs on critical factors, Bad timing, No economical access to buyers, Poor execution of the marketing mix, Too little market attractiveness, Poor prod |
| New Product Development Process | Consist of seven stages an organization goes through to identify opportunities and convert them to salable product or services |
| New Product Development Steps | 1. New-product strategy development 2. Idea Generation 3. Screening and evaluation 4. Business Analysis 5. Development 6. Market testing 7. Commercialization |
| New Product Strategy Development | The stage of the new-product process that define the role for a new product in terms of the firm's overall objectives |
| Idea Generation Step | The stage of the new-product process that develops a pool of concepts to serve as candidates for new products, building upon the previous stage's results (Industrial Design) |
| Screening and Evaluation Step | The stage that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort |
| Business Analysis Step | The step that specifics the features of the product and the marketing strategy needed to bring it to market and make financial projections |
| Development Step | The stage that turns the idea on paper into a prototype |
| Market Testing Step | The stage that exposes actual products to prospective buyers |
| Commercialization | The stage that positions and launches a new product in full-scale production and sales |
| When is a product new? | When it is functionally different from existing products |
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