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MKTG 250 - Unit 2
| Term | Definition |
|---|---|
| JCPenny Media | what company buys 100,000+ tons of paper per year for newspaper inserts and direct mail? |
| Business-to-Business Marketing | the marketingof products and services to companies, governments, or nonprofit organizations for use in the creation of products and services that they can produce and market to others |
| Organizational Buyers | those manufacturers, wholesalers, retailers, service companies, nonprofit organizations, and government agencies that buy products and services for their own use or for resale |
| Ultimate Consumer | the people who use the products and services purchased for a household |
| Industrial Market | reprocesses a product or service they buy before selling it again to the next buyer |
| Reseller Market | wholesalers and retailers that buy physical products and resell them again without any reprocessing |
| Government Market | the federal, state, and local agencies that buy goods and services for the constituents they serve |
| Derived Demand | the demand for industrial products and services that is driven by, or derived from, the demand for consumer products and services; fidget spinner example purchases are bigger, potential buyers are smaller |
| Organizational Buying Criteria | the objective attributes of the supplier's products and services and the capabilities of the supplier itself; Most commonly used: price, ability to meet the quality specifications/required delivery schedule, technical capabilities, warranties, etc. |
| Supplier Development | the deliberate effort by organizational buyers to build relationships that shape suppliers' products, services, and capabilities to fit a buyer's needs and those of its customers |
| Reciprocity | an industrial buying practice in which two organizations agree to purchase each other's products and services; negotiation is commonplace when it's a big purchase |
| Supply Partnership | when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer |
| Organization Buying Behavior | the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers |
| The Buying Function in Organizations | responsible for the formal solicitation of bids from suppliers (vendors), the awarding of purchasing contracts, gathering and screening information about vendors, and selection and purchase of goods |
| Sustainable Procurement | integrating environmental considerations in getting products to customers |
| Stages in the Consumer and Organizational Purchase Decision Process | 1. Problem Recognition 2. Information Search 3. Alternative Evaluation 4. Purchase Decision 5. Postpurchase Behavior |
| Differences between Consumer and Organizational Purchase Decision Processes | Business side is more thought out than consumer side; in the Alternative Evaluation stage (3rd), facilities, capacity, quality control, and financial status especially |
| Purchase Decision | we negotiate and award a contract once we figure out who we want to buy from |
| Postpurchase Behavior | most different between the consumer and business side in the purchase decision process because on the business side, the process is very rigid Checklist: did they deliver? If there was a problem, how was it handled? Use a formal vendor rating system |
| Buying Center | the groups of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision; the people here change based on what you're buying |
| Buy Classes | three types of organizational buying situations: straight rebuy, new rebuy and modified rebuy |
| New Buy | organization is a first-time buyer and there are greater potential risks in the purchase |
| Straight Rebuy | buyer or purchasing manager reorder an existing product or service from the list of acceptable suppliers |
| Modified Rebuy | the users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier |
| E-Marketplace | online trading communities that bring together buyers and supplier organizations to make possible the real-time exchange of information, money, products, and services |
| Traditional Auction | in an e-marketplace, an online auction in which a seller puts up an item for sale and would-be buyers are invited to bid in competition with each other |
| Reverse Auction | in an e-marketplace, an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other |
| Countertrade | the practice of using barter rather than money from making global sales Donestically: bartering Around the world: this concept |
| US, China, and Germany | Top 3 importing/exporting countries |
| Balance of Trade | the difference between the monetary value of a nation's exports and imports |
| Globalization | the focus on creating economic, cultural, political, and technological INTERDEPENDENCE among individual national institutions and economies |
| Developments influencing Globalization | - economic protectionism by individual countries - economic integration among countries - global competition among global companies for global consumers - the presence of a networked global marketspace - the growing prevalence of economic espionage |
| Protectionism | the practice of shielding one or more industries within a country's economy from foreign competition through use of tariffs or quotas |
| Tariffs | government TAXES on products or services entering a country that primarily serve to raise prices on imports |
| Quota | a restriction placed on the AMOUNT OF A PRODUCT allowed to enter or leave a country |
| Global Competition | exists when firms originate, produce, and market their products and services worldwide |
| 3 Different Types of Global Firms | International Firms Multinational Firms Transnational Firms |
| International Firms | marketing in other countries the same as you would in your HOME country |
| Multinational Firms | marketing differently to each country you market to; uses the multidomestic marketing strategy |
| Multidomestic Marketing Strategy | a strategy used by multinational firms that have AS MANY DIFFERENT PRODUCT VARIATIONS, BRAND NAMES, AND ADVERTISING PROGRAMS AS COUNTRIES in which they do business Ex: Snuggle Fabric softener |
| Transnational Firms | marking with an emphasis on universal consumer needs; uses the global marketing strategy (key word GLOBAL) |
| Global Marketing Strategy | a strategy used by transnational firms that employ the practice of standardizing markteing 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; common in high-tech industries |
| Cross-Cultural Analysis | the study of similarities and differences among consumers in two or more nations or societies; has to do with understanding of an appreciation for the values, customs, symbols, and language of other countries |
| Customs | what is considered normal and expected about the way people do things in a specific country Ex: women giving men chocolate in Japan |
| Cultural Symbols | things that represent ideas and concepts in a specific culture |
| Semiotics | field of study emerged that examines the correspondence between symbols and their role in teh assignment of meaning for people |
| Back Translation | the practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors |
| Cultural Ethnocentrism | belief that one's cultures are superior to another's |
| Consumer Ethnocentrism | the tendency to believe that it is inappropriate, indeed immoral, to purchase foreugn-made products |
| Currency Exchange Rate | the price of one country's currency expressed in terms of another country's currency |
| Exporting, Licensing, Joint Venture, and Direct Investment (in that order) | the four market entry strategies; gets riskier but higher profit potential as you go through the list |
| Exporting | A market-entry strategy; producing products in one country and selling them in another indirect: selling through an intermediary direct: selling without intermediaries |
| Licensing | A market-entry strategy; a company offers the right to trademark, patent, trade secret, or other similarly valued item of intellectual property in return for a royalty or a fee Ex: General Mills giving someone in another country the formula to produce |
| Joint Venture | A market-entry strategy; a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company; cultural diffierences can lead to difficulties when people try to work together |
| Direct Investment | A market-entry strategy; biggest commitment a company can make when entering the global market a domestic firm actually invests in and owns a foreign subsidiary or division |
| Product Extension, Adaptation, and Invention | Three product and promotion strategies in a global market |
| Product Extension | selling virtually the same product in other countries; works best when consumers share the same desires, needs, and uses for the product Ex: Coca-Cola, Nike, Apple |
| Product Adaptation | changing a product in some way to make it more appropriate for consumer preferences or a country's climate Ex: Frito-Lay chips (different flavors), Maybelline makeup |
| Product Invention | companies invent totally new products designed to satisfy common needs across countries Ex: Black and Decker flashlight |
| Dumping | when a firm sells a product in a foreign country below its domestic price or below its actual cost often done to build a company's share of the market by pricing at a competitive level |
| Gray Market (Parallel Importing) | a situation where products are sold through unauthorized channels of distribution |
| Distribution Strategy | Seller > Seller's international marketing headquarters > channels between nations > channels within foreign nations > final consumer |
| "Which flavor do you prefer?" | Pepsi challenge question |
| Marketing Research | the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions |
| Define the Problem, Develop the Research Plan, Collect Relevant Information, Develop Findings, and Take Marketing Actions | Five steps to the Marketing Research Approach |
| Step 1: Define the Problem Stage | Stage in the Marketing Research Approach; setting specific, measurable goals and identifying possible marketing actions |
| Measure of Success | criteria or standards used in evaluating proposed solutions to the problem Ex: Lego's was how long the playtime was |
| Step 2: Develop the Research Plan | Stage in the Marketing Research Approach; specifying constraints, identifying necessary data, determining how to collect data |
| Constraints | in a decision, the restrictions placed on potential solutions to a problem Ex: limitations on the time and money available to solve the problem |
| Step 3: Collect Relevant Information | Stage in the Marketing Research Approach; gathering data (secondary and primary), and knowing the variety of techniques that could be used Also, using data mining and predictive modeling |
| Data | the facts and figures related to the project that are divided into two main parts: secondary and primary |
| Secondary Data | facts and figures that have already been recorded prior to the project at hand Advantages: time savings and inexpensive Disadvantages: out of date, categories not right, not specific enough |
| Primary Data | facts and figures that are newly collected for the project Advantages: more flexible, specific to the problem Disadvantages: far more costly, more time consuming |
| Observational Data | facts and figures obtained by watching how people actually behave, using mechanical, personal, and neuromarketing data collection methods |
| Personal Methods of Data Collection | mystery shopper (someone pretends to be a shopper), observation, ethnographic research (watching someone use a product in their home-use environment) |
| Neuromarketing Methods of Data Collection | technologies used to study the brain |
| Questionnaire Data | facts and figures obtained by asking people about their attitudes, awareness, intention, and behaviors |
| Alternative Methods of Date Collection | - focus groups (informal sessions of 6-10 people in which a discussion leader asks for opinions) - fuzzy front end - trend hunting (identifying shifts in social behavior) - mail surveys, telephone interviews, email surveys |
| Test Market | tying your product in a small geographic community to evaluate marketing actions |
| Information Technology | includes all of the computing resources that collect, store, and analyze data |
| Data Mining | the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions |
| Predictive Modeling | based on statistical models that use data mining and probability analysis to foretell outcomes |
| Step 4: Develop Findings | Stage in the Marketing Research Approach; analyzing data, presenting the findings |
| Step 5: Take Marketing Action | Stage in the Marketing Research Approach; making action recommendations, implementing them, and evaluating the results |
| Sales Forecast | the total sales of a product that a firm expects to sell during a specified time piod under specified environmental conditions and its own marketing efforts Ex: Betty Crocker might expect people to buy 4 million cakes in 2027 |
| Market Segmentation | aggregating prospective buyers into groups, or segments, that have common needs and will respond similarly to a marketing action; the link between marketing needs and what we give consumers LEAD TO increased sales/profitability; don't do it if not |
| Product Differentiation | a marketing strategy that involves a firm using different marketing mix actions to help consumers perceive a product as being different and better than competing products |
| Market-Product Grid | a framework to relate the market segments of potential buyers to products offered or potential marketing actions |
| One Product, Multiple Market Segments Multiple Products and Multiple Market Segments Segments of One - "Mass Customization" | Ways to segment markets |
| One Product and Multiple Market Segments | Form of Segmentation; Example: Harry Potter book series Adolescents are the target audience, but they are not the only ones who read the books |
| Multiple Products and Multiple Market Segments | Form of Segmentation; automobiles, soccer mom drives a minivan but so do other groups of people |
| Segments of One - "Mass Customization" | Form of Segmentation; Build-to-order only when there is an order; customized as people want it, like at a fast food place |
| Organizational Synergy | better functioning organization; the increased customer value achieved through performing organizational functions such as marketing or manufacturing efficiently |
| Cannibalization | stealing sales from yourself Ex: Loft store that is part of Ann Taylor |
| Tiffany/Walmart Strategy | selling to both high-end and low-end segments; getting both segments Ex: Winnie the Pooh cup/plate silverware set |
| 1. Segment our buyers 2. Group products to be sold into categories 3. Develop a market-product grid 4. Select target markets 5. Take marketing action | 5 step process for market segmentation |
| Segment our buyers | First step in the segmentation process; Criteria: - simplicity and cost-effectiveness of assigning potential buyers - potential for increased profit - difference of needs of buyers - similarity of needs of buyers - potential of marketing action |
| Geographic, demographic, psychographic, and behavioral | the different ways to segment |
| Geographic Segmentation | based on where prospective customers live or work (region, city size) Ex: Campbell Soup Co. |
| Demographic Segmentation | based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) of prospective customers Ex: Campbell Soup Co. |
| Personas | character descriptions of a typical customer in the form of fictional character narratives, complete with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with a brand |
| Group products to be sold into categories | Second step in the segmentation process |
| Develop a Market-Product Grid | Third step in the segmentation process; estimating market sizes and helps us figure out potential groups we want to target with our marketing |
| Selecting Target Markets | Fourth step in the segmentation process; criteria: - market size - expected growth - competitive position - cost of reaching the segment - compatibility with organization objectives and resources |
| Take marketing action | Fifth step in the segmentation process |
| Product Positioning | the place a product occupies in consumers' minds based on important attributes relative to competitive products |
| Product Repositioning | changing the place a product occupies in a consumers' mind relative to competitive products |
| Perceptual Map | a means of 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 brand |
| Product | a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers' needs and is received in exchange for money or something else of value |
| Nondurable Good | an item consumed in one or a few uses |
| Durable Good | an item that usually lasts over many uses |
| Service | intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value |
| Consumer Products | products purchased by the ultimate consumer |
| Convenience Products | items that the consumer purchases frequently, conveniently, and with a minimum effort; - regular basis - inexpensive - can find in a lot of places - awareness stressed |
| Shopping Products | items for which the consumer compares several alternatives in criteria such as price, quality, or style; - things you buy sometimes - shoes, coats, luggage; things between Louis Vuitton and toothpaste - almost always STRESSING DIFFERENTIATION |
| Specialty Products | items that the consumer makes a special effort to search out and buy - higher end, higher dollar products - Harley Davison Motorcycle - stress STATUS |
| Unsought Products | items that the consumer does not know about or knows about but does not initially want - insurance, funeral - things you don't think about until oyu need them - AWARENESS IS ESSENTIAL |
| Product Item | a specific produc that has a unique brand, size, or price Ex: Downy softener for clothes comes in different forms; each of the different product items represents a SKU, a unique identification number that defines an item for ordering or inventory purpose |
| Product Line | a gorup of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same to the same customer groups, are distributed through the same outlets, or fall within a given price range Ex: Nike |
| Product Mix | consists of all product lines offered by an organization literally everything the company provides |
| Functionally different from existing products and for 6 months after the product is introduced | Newness as compared with existing products |
| Continuous Innovation, Dynamically Continuous Innovation, and Discontinuous Innovation | Degrees of New Consumer Learning (Innovations) |
| Continuous Innovation | consumers don't need to learn new behaviors effective marketing mainly depends on generating awareness, not re-educating customers |
| Dynamically Continuous Innovation | only minor changes in behavior are required; the marketing strategy here is to educate prospective buyers on the product's benefits, advantages, and proper use |
| Discontinuous Innovation | making the consumer learn entirely new consumption patterns to use a new product marketing efforts involve not only gaining initial consumer awareness but also educating consumers on both the benefits andproper use of the innovative product |
| Product Extension | incremental improvement of an existing product line the company already sells |
| Brand Extension | putting an established brand name on a new product in an unfamiliar market |
| Radical Invention | truly revolutionary new product that creates value for the consumer |
| Protocol | a statement that, before product development begins, identifies a well-defined target market, specific customers' needs, wants and preferences, and what the product will be and do to satisfy customers |
| Insignificant point of difference, incomplete market/product protocol, failure to satisfy customer needs on critical factors, bad timing, no economical access to buyers, poor marketing mix execution, little market attractiveness, and poor product quality | Reasons for new-product failures |
| The New-Product Development Process | the seven stages an organization goes through to identify opportunities and convert them into salable products or services |
| New-product strategy development | Step 1: The New-Product Development Process |
| Idea generation | Step 2: The New-Product Development Process; universities are part of the list |
| Screening and evaluation | Step 3: The New-Product Development Process; this is where we start testing it out |
| Business Analysis | Step 4: The New-Product Development Process; the stage that specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections; first full-scale model |
| Development | Step 5: The New-Product Development Process; more testing |
| Market testing | Step 6: The New-Product Development Process; important to test the product in a smaller market before you bring it to the full market |
| Commercialization | Step 7: The New-Product Development Process; the stage that positions and launches the new product in full-scale production and sales; most expensive stage |
| Business Products | products organizations buy that assist in providing other products for resale anything that is bought for use at business |
| Market Characteristics, Product or Service Characteristics, Buying Process Characteristics, and Marketing Mix Characteristics | Characteristics of Organizational Buying Behavior |
| GDP | the total value of goods produced and services provided in a country during one year |
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