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Marketing Exam 2
| Term | Definition |
|---|---|
| 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 | are those manufacturers, wholesalers, retailers, service companies, nonprofit organizations, and government agencies that buy goods and services for their own use or for resale. Ex. toilet paper -> kstate buys a lot more than you would for your home. |
| Industrial markets | car manufacturers buy parts ie windshield, metal to make cars and sell them |
| Reseller market | Not making a product. Whole sellers buy food then sell it to Safeway in small quantities. Retailers sell to consumer |
| Government markets | satellites have to come from somewhere |
| Jc Penny | Jc Penny purchased paper for newspaper inserts and direct mail |
| What was the question we asked during the Pepsi/Coke Experiement | Which flavor do you prefer? |
| Derived demand | is the demand for industrial products and services that is driven by, or derived from, the demand for consumer products and services. Example: fidget spinner |
| Key characteristics of organizational buying behavior | Demand is derived, fewer customers buying more (Ex. Kstate buying toilet paper), negotiation is commonplace, reciprocity is normal, marketing mix - *direct selling is the rule* (Figure 6-1) |
| Reciprocity | when two organizations agree to buy from each other. |
| Supply partnership | when buyer and supplier adopt mutually beneficial objectives. |
| Organization buying criteria | 1. Price 2. Ability to meet quality specifications 3. Ability to meet delivery schedules 4. Technical capability 5. Warranties and claim policies 6. Past performance 7. Production facilities and capacity |
| Organizational buying behavior/process | is the decision-making process that organizations use to establish the need for product and services and identify, evaluate, and choose among alternative brands and suppliers. |
| Figure 6-3 Comparing differences between stages in the consumer vs organizational purchase decision process | Business side is bigger and more drawn out. Alternative evaluation is physically going into the store, purchase decision is where the contract will be worded. Post purchase behavior is the most different between the business side and consumer side |
| 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. |
| Buy classes | Consist of three types of organizational buying situations: straight rebuy, new buy, and modified rebuy. |
| New buy | An organizations first time buying a product or service. Higher risk means larger buying center is involved and the decisions time is long. |
| Straight rebuy | An organization reorders an existing product or service from the list of acceptable suppliers. One person involved, short decision time. Ex. office supplies |
| Modified rebuy | Users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier, two to three people involved, moderate decision time. |
| E-marketplaces | are online trading communities that bring together buyers and supplier organizations to make possible the real-time exchange of information, money, products, and services. Also called B2B exchanges or e‑hubs. |
| Traditional Auction | in an 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 bid in competition with each other. |
| Countertrade | is the practice of using barter rather than money for making global sales. (barter to barter) United states, china, and germany leading countries in global merchandise trade |
| Gross domestic product (GDP) | Measures the total value of all goods and services produced in a country. U.S. is among the world's leaders in exports, but the amount has decreased. |
| Globalization | is the focus on creating economic, cultural, political, and technological interdependence among individual national institutions and economies. |
| Protectionism | is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas. |
| Tariffs | are government taxes on products or services entering a country that primarily serve to raise prices on imports. |
| Quota | is 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. |
| International firms | Extension of home marketing strategy. An organization markets in other countries the same as it does in the home country -> home strategy = doesn't adapt or change based on the country |
| Multinational firm | An organization markets differently to each country. Changes per country and the products are NOT recognizable. Ex. snuggles fabric softener/detergent (MULTIDOMESTIC) |
| Transnational firm | Standardizes marketing activities when cultures are similar. Different activities when cultures differ. Slight tweaks in marketing but the brand is still recognizable. Ex. Mcdonalds, coke, (GLOBAL is in the question the answer is transnational) |
| Economic Espionage | is the clandestine collection of trade secrets or proprietary information about a company’s competitors. |
| Cross-cultural analysis | is the study of similarities and differences among consumers in two or more nations or societies. (values, customs, language) |
| Customs | are what is considered normal and expected about the way people do things in a specific country |
| Cultural ethnocentrism | Belief that one's culture is superior to another |
| Consumer ethnocentrism | Believe it is wrong to purchase foreign-made products |
| Economic considerations | Economic infrastructure, a country's communications, transportation, financial and distribution systems. Consumer income and purchasing power, and currency exchange rate. Know the economy of a country before you do business |
| Currency exchange rate | price of one country's currency in terms of another country's currency |
| Options for entering a new country market (global market-entry strategies) | Exporting, licensing, joint venture, and direct investment |
| Exporting | company produces products in one country and sells them in another country. Indirect and direct |
| Licensing | Right to trademark, patent, or trade secret, low risk, capital-free entry, but licensor loses control of product, can "waterdown" the brand due to loss of control of brand/recipe |
| 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. |
| Direct investment | Own a foreign subsidiary, requires a very big commitment and acceptance of risk |
| Product extension | Product and promotion strategy, same product sold in different countries Ex nike, apple |
| Product adaption | Product and promotion strategy, change a product for a different countries Ex Frito-lay potato chips |
| Product invention | Product and promotion strategy, new product for different countries Ex. Black and decker flexible flashlight |
| Dumping | An organization sells their product below cost in another country due to a surplus of the product |
| Grey Market | Also called parallel importing, where products are sold through unauthorized channels |
| Marketing Research | Marketing research is challenging, used to obtain information to determine consumer demand |
| Define the problem | Step 1 in marketing research process. Set research objectives, identify possible marketing actions |
| Develop the research plan | Step 2 in marketing research process. Specify constraints, identify data needed for marketing actions, determine how to collect data. Ex. tally marks for pepsi vs coke |
| Collect relevant information | Step 3 in marketing research process. Obtain secondary data, Obtain primary data. Collect information to make rational, informed marketing decisions |
| Develop findings | Step 4 in marketing research process. Analyze the data, Present the findings |
| Take marketing actions | Step 5 in marketing research process. Make action recommendations, implement action recommendations, and evaluate results |
| Measures of success | criteria or standards used in evaluating proposed solutions to the problem. Example: Legos, how long did kids play? PLAYTIME |
| Constraints | are, in a decision, the restrictions placed on potential solutions to a problem. |
| Primary data | are the facts and figures that are newly collected for the project. adv: more flexible and specific to the problem under study. disadv: costly and time consuming |
| secondary data | are the facts and figures that have already been recorded prior to the project at hand. Adv. time savings, inexpensive disadv. out of date, definitions/categories not correct, not specific enough |
| Observational data | are the facts and figures obtained by watching how people actually behave, using mechanical, personal, or neuromarketing data collection methods. |
| mystery shopper | a person hired to go on a shopping trip and report back to a company |
| Ethnographic | observational approach seek to discover subtle behavior and emotional reactions as consumers discover products in their "natural use environment" such as in their home or car. |
| Neuromarketing | Technologies used to study the brain, truly unbiased |
| Questionnarie data | are the facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors. Through interviews, trend hunting |
| Focus group | a data capture method where an informal session of customers are asked for opinions |
| Data mining | is the practice of examining large databases to find statistical relationships between consumer purchasing patterns and marketing actions. social media can provide ideas for new products and services, can reveal personal information, collected via cookies |
| Test markets | used in small geographies to evaluate marketing actions |
| Information technology | includes all of the computing resources that collect, store, and analyze data. challenge is to transform data into useful information |
| Sales forecast | consists of 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. |
| Market Segments | involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action. |
| Segmentation | is the link between buyer's needs and marketing program, should lead to increased in sales and profitability, if it doesn't you shouldn't do it. We want synergies (go with our objectives) |
| Product differentiation | is a marketing strategy that involves a firm using different marketing mix actions (4P's) to help consumers perceive the product as being different and better than competing products. Ex, different ingredients, different color |
| Market-product grid | is a framework to relate the market segments of potential buyers to products offered or potential marketing actions. |
| Mass customization | Build-to-order only when there is an order, (everyone gets what they want) Ex. Chipotle |
| One product, multiple markets | Books, magazines, Ex harry potter |
| Multiple products multiple markets | automobiles Ex soccer moms |
| Cannibalization | stealing sales from yourself Ex Nordstrom rack is an inexpensive version of Nordstrom (loft and Ann Taylor) |
| Tiffany/Walmart | Selling to high-end and low-end segments Ex. Gap and Old Navy, Tostios and Santitos, Winnie the pooh prociline = Tiffany plastic = Walmart |
| Ways to segment markets | Geographic - where customers live and demographic - objective classification |
| Personas | are character descriptions of a brand’s typical customers. Personas bring target market data alive by creating fictional character narratives. |
| Reasons to segment (criteria) | Market size, expected growth, competitive position, cost of reaching the segment, compatibility with the organization's o objectives and resources |
| Product positioning | is 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 | is 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. |
| Durable good | made to last |
| nondurable | made to be consumed, thrown away, recycled |
| Services | are 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, flight, uber, train, anything medical, pet grooming etc |
| Convenience products | are items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort. |
| Shopping product | are items for which the consumer compares several alternatives on criteria such as price, quality, or style. |
| Specialty product | are items that a consumer makes a special effort to search out and buy. |
| Unsought product | are items that the consumer either does not know about or knows about but does not initially want. |
| Business products | are products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products. |
| Product item | is a specific product that has a unique brand, size, or price. Anything with a barcode/SKU - stock keeping unit |
| product line | is a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range. |
| Product mix | consists of all of the product lines offered by a company |
| Continuous innovation | consumers do not need to learn new behavior, an improved version that is already out there Ex apple releases new iphone |
| Dynamic continous innovation | minor behavior changes are needed, minor update on gaming system |
| Discontinuous innovation | consumer learns new consumption patterns in order to use the product Ex horse and buggy to motorized car |
| How long can you call your product new? | Legally 6 months |
| protocol | DETERMINES PRODUCT SUCCEED OR FAILS is 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 consumers. |
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