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MKT 361: Exam 2

Quiz yourself by thinking what should be in each of the black spaces below before clicking on it to display the answer.
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Question
Answer
Global Marketing   Marketing that targets markets throughout the world.  
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Global Vision   Recognizing and reacting to international marketing opportunities, being aware of threats from foreign competitors in all markets, and effectively using international distribution networks.  
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The Negatives of Global Trade (4)   Mills. of Americans have lost jobs due to imports, production shifts abroad, or from outsourcing of tech jobs; Mills. of others fear losing jobs; Employers often threaten to outsource jobs if workers do not accept pay cuts; Service and white-collar vulner  
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Benefits of Globalization (3)   Expands economic freedom, spurs competition, and raises productivity and living standards of people in countries that open themselves to the global marketplace  
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Benefits of Globalization For Less Developed Countries (4)   Offers access to foreign capital, global export makers, and advanced technology while breaking the monopoly of inefficient and protected domestic producers; acts as a check on government power.  
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Multinational Corporation   A company that is heavily engaged in international trade, beyond exporting and importing  
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Multinational Development Stages (4)   (1) Companies operate in one country and sell into others (2) Set up foreign subsidiaries to handle sales in one country (3) Operate an entire line of business in another country (4) Primarily due to the Internet and involves mostly high-tech companies  
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Capital-Intensive   Using more capital than labor in the production process  
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Tedd Levitt's Global Marketing Standardization   Production of uniform products that can be sold the same way all over the world; inexpensive.  
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External Factors of Global Marketing (5)   Culture, economic and technological development, political structure and actions, demographic makeup, and natural resources  
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Tariff   A tax levied on the goods entering a country  
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Quota   A limit on the amount of a specific product that can enter a country  
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Boycott   The exclusion of all products from certain countries or companies  
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Exchange control   A law compelling a company earning foreign exchange from its exports to sell it to a control agency, usually a central bank  
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Market Grouping AKA Common Trade Alliance   Occurs when several countries agree to work together to form a common trade area that enhances trade opportunities  
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Trade Agreement   An agreement to stimulate international trade  
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Mercosur   The largest Latin American trade agreement, which includes Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay  
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Uruguay Round   An agrement to dramatically lower trade barriers worldwide; created the World Trade Organization  
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World Trade Organization (WTO)   A trade organization that replaced the old General Agreement on Tariffs and Trade (GATT)  
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General Agreements on Tariffs and Trade (GATT)   A trade agreement that contained loopholes that enabled countries to avoid trade-barrier reduction agreements  
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The Uruguay Round made several major changes in world trading practices (5)   Entertainment, pharmaceuticals, integrated circuits, and software; Financial, legal, and accounting services; Agriculture; Textiles and apparel; A new trade organization (WTO)  
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North American Free Trade Agreement (NAFTA)   An agreement between Canada, the United States, and Mexico that created the world's largest free trade zone  
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Free Trade Area of the Americas (FTAA)   A regional trade agreement that, when signed, will create a regional trading zone encompassing 34 countries in North and South America  
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European Union   A free trade zone that encompasses 25 European countries. It aspires to create a unified European market.  
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World Bank   An international bank that offers low-interest loans, advice, and information to developing nations  
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International Monetary Fund (IMF)   An international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation.  
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Demographic Dividend   Falling labor costs, a healthier and more educated population, and the entry of millions of women into the workforce. The demographic dividend is a gift of falling birthrates, and it causes a temporary bulge in the # of working age people.  
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Reasons For Going Global (6)   Additonal profits; unique product or technological advantage, exclusive market info about foreign customers, marketplaces, or market situations; saturated domestic markets; excess capacity; potential for economies of scale  
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Exporting   Selling domestically produced products to buyers in another country  
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Buyer For Export   An intermediary in the global market who assumes all ownership risks and sells globally for its own account  
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Export Broker   An intermediary who plays the traditional broker's role by bringing buyer and seller together  
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Export Agent   An intermediary who acts like a manufacturer's agent for the exporter. The export agent lives in the foreign market.  
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Licensing   The legal process whereby a licensor agrees to let another firm use its manufacturing process, trademarks, patents, trade secrets, or other proprieary knowledge  
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Contract Manufacturing   Private-label manufacturing by a foreign company  
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Joint Venture   When a domestic firm buys part of a foreign company or joins with a foreign company to create a new entity  
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Direct Foreign Investment   Active ownership of a foreign company overseas manufacturing or marketing facilities  
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Product Invention   Can be taken to mean either creating a new product for a market or drastically changing an existing product  
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Product Adaptation   Slightly altering a basic product to meet local conditions  
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Message Adaptation   Maintaining the same basic product but altering the promotional strategy  
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Exchange Rate   The price of one country's currency in terms of another country's currency. If a country's currency appreciates, less of that country's currency is needed to buy another country's currency. If it depreciates, more of that currency will be needed to buy  
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Floating Exchange Rates   Prices of different currencies move up and down based on the demand for and the supply of each currency  
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Purchasing Power   Measured by comparing the relative cost of a standard set of goods and services in different geographic locations  
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Dumping   The sale of an exported product at a price lower than that charged for the same or a like product in the "home" market of the exporter  
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Countertrade   A form of trade in which all or part of the payment for goods or services is in the form of other goods or services  
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Forms of Countertrade (2)   Straight Barter: Swapping goods for goods; Compensation Agreement: A company provides technology and equipment for a plant in a developing nation and agrees to take full or partial payment in goods produced by that plant  
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Demographic Makeup (4)   Population density, urban or rural, personal income, age  
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Natural Resources Major Categories (4)   Petroleum, foodstuffs, precious metals, timber and logs  
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Natural Resources Create... (5)   International dependencies; shifts of wealth; inflation and recession; export opportunites if resouces are abundant; stimulus for military intervention  
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Economies of Scale   Average per-unit production costs fall as output is increased  
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Alternative Entry Strategies in Order of Least Risk (5)   Export, Licensing, Contract Manufacturing, Joint Venture, Direct Investment  
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Consumer Behavior   Processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use  
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Consumer Decision-Making Process (5)   A five-step process used by consumers when buying goods or services. (1) need recognition; (2) information search; (3) evaluation of alternatives; (4) purchase; (5) postpurchase behavior  
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Need Recognition   Result of an imbalance between actual and desired states  
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Stimulus   Any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing  
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Internal Stimuli   Occurrences you experience, such as hunger or thirst  
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External Stimuli   Influences from an outside source such as someone's recommendation of a new restaurant, the color of an automobile, the design of a package, a brand name mentioned by a friend, or an advertisement on television or radio  
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Want   Recognition of an unfulfilled need and a product that will satisfy it  
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Internal Information Search   The process of recalling past information stored in the memory  
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External Information Search   The process of seeking information in the outside environment  
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Nonmarketing-Controlled Information Source   A product information source that is not associated with advertising or promotion  
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Marketing-Controlled Information Source   A product information source that originates with marketers promoting the product  
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Evoked Set (Consideration Set)   A group of brands, resulting from an information search, from which a buyer can choose  
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Cognitive Dissonance   Inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions  
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To Reduce Dissonance a Consumer Can (4)   Justify decision; seek new information; avoid contradictory information; return product  
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To Reduce Dissonance a Marketer Can (3)   Send postpurchase thank you or letter; display product superiority in ads; offer guarantees  
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Involvement   The amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior  
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Routine Response Behavior   The type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little serach and decision time  
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Limited Decision Making   The type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category  
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Extensive Decision Making   The most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information  
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The level of involvement in the purchase depends on the following factors (5)   Previous experience, interest, perceived risk of negative consequences, situation, and social visibility.  
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Factors Influencing Consumer Buying Decisions (4)   Cultural, social, individual, and psychological factors  
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Culture   The set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next  
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Values   The enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct  
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Subculture   A homogeneous group of people who share elements of the overall culture as well as unique elements of their own group  
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Social Class   A group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms  
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Marketers are interested in social class for 2 reasons   Social class often indicates which medium to use for advertising and knowing what products appeal to which social classes can help marketers determine where to best distribute their products  
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Reference Group   A group in society that influences an individual's purchasing behavior  
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Primary Membership Group   A reference group with which people interact regulary in an informal, face-to-face manner, such as family, friends, or fellow employees  
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Secondary Membership Group   A reference group with which people associate less consistently and more formally than a primary membership group, such as a club, professional group, or religious group  
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Aspirational Reference Group   A group that someone would like to join  
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Norm   A value or attitude deemed acceptable by a group  
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Nonaspirational Reference Group   A group with which an individual does not want to associate  
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Reference Groups have 3 important implications for marketers   (1) they serve as information sources and influence perceptions; (2) they affect an individual's aspiration levles; (3) their norms either constrain or stimulate consumer behavior  
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Opinion Leaders   An individual who influences the opinions of others. First to try new products and services out of pure curiosity. People you know or celebrities.  
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Socialization Process   How cultural values and norms are passed down to children  
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Initiators   Ones who suggest, initiate, or plant the seed for the purchase process  
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Influencers   Those members of the famliy whose opinions are valued  
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Decision Maker   The member of the family who actually makes the decision to buy or to not buy  
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Purchaser   The one who actually exchanges money for the product  
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Consumer   The actual user  
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Individual Influences on Consumer Buying Decisions (3)   Gender; age and life-cycle stage; personality, self-concept, and lifestyle  
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Family Life Cycle   An orderly series of stages through which consumers' attitudes and behavioral tendencies evolve through maturity, experience, and changing income and status  
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Personality   A way of organizing and grouping the consistencies of an individual's reactions to situations  
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Self-Concept   How consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations  
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Ideal Self-Image   The way an individual would like to be  
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Real Self-Image   The way an individual actually perceives himself or herself  
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Body Image   The perception of the attractiveness of one's own physical features  
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Lifestyle   A mode of living as identified by a person's activities, interests, and opinions  
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Psychographics   The analytical technique used to examine consumer lifestyles and to categorize consumers  
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Psychological Influences on Consumer Buying Decisions (4)   Perception, motivation, learning, and beliefs and attitudes  
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Perception   The process by which people select, organize, and interpret stimuli into a meaningful and coherent picture  
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Selective Exposure   The process whereby a consumer notices certain stimuli and ignores others  
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Selective Distortion   A process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs  
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Selective Retention   A process whereby a consumer remembers only that information that supports his or her personal beliefs  
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Threshold Level of Participation   The minimum difference in a stimulus that the consumer will notice  
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Subliminal Perception   Sending advertising messages subconciously to consumers  
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Motive   A driving force that causes a person to take action to satisfy specific needs  
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Maslow's Hierarchy of Needs   A method of classifying human needs and motivations into five categories in ascending order of importance: physiological, safety, social, esteem, and self-actualization  
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Learning   A process that creates changes in behavior, immediate or expected, through experience and practice  
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Stimulus Generalization   A form of learning that occurs when one response is extended to a second stimulus similiar to the first  
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Experiential Learning   Occurs when an experience changes your behavior  
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Conceptual Learning   Not acquired through direct experience  
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Stimulus Discrimination   A learned ability to differentiate among similar products  
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Belief   An organized pattern of knowledge that an individual holds as true about his or her world. Our opinion about an object; based on experience, advertising, and discussion with other people; do not necessarily involve liking or disliking  
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Attitude   A learned tendency to respond consistently toward a given object. Are either favorable or unfavorable; has actions implications; shaped by beliefs.  
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Product Differentation   Marketers rely on promotion to point out brand differences that consumers would not otherwise recognize  
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Brand Image   A set of beliefs about a particular brand  
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Strategies for Narrowing Choice Between Alternatives (3)   Pick an attribute and exclude alternatives that do not have it; use cutoffs; rank attribute by importance  
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Core American Values (6)   Success, materialism, freedom, progress, youth, capitalism  
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Underlying Elements of Culture (7)   Values, language, myths, customs, rituals, laws, and material artifacts  
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Social Class is typically measured as a combination of (5)   Occupation, income, education, wealth and other variables  
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People tend to notice stimuli that (3)   Relate to a current need, they anticipate, have a bigger deviation from the normal  
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Business Marketing   The marketing of goods and services to individuals and organizations for purposes other than personal consumption  
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Business Internet Uses From the Past (2)   Revenue generation and basic marketing communication  
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Business Internet Uses of Today (3)   Reduce costs, build parternships and alliances, build and support branding  
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Strategic Alliance (Strategic Partnership)   A cooperative agreement between business firms  
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Forms of Strategic Alliances (4)   Licensing or distribution agreements, joint ventures, research and development consortia, and partnerships  
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Amae   Japanese term for indulgent dependecy  
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Keiretsu   Japanese term for a network of interlocking corporate affiliates  
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Major Categories of Customers in the Business Market   Producers, resellers, governments, and institutions  
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Original Equipment Manufacturers (OEMs)   Individuals and organizations that buy business goods and incorporate them into the products that they produce for eventual sale to other producers or to consumers  
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Producer Segment   Includes profit-oriented individuals and organizations that use purchased goods and services to produce other products, to incorporate into other products, or to facilitate the daily operations of the organization  
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Reseller Segment   Includes retail and wholesale businesses that buy finished goods and resell them for a profit  
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Government Segment   Include thousands of federal, state, and local buying units; they make up what may be the largest single market for goods and services in the world  
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Institution Segment   Seek to achieve goals other than the standard business goals of profit, market share, and return on investment; includes schools, hospitals, colleges and universities, churhces, labor unions, fraternal organizations, civic clubs, foundations, and others  
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North American Industry Classification System (NAICS)   A detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes  
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NAICS Code First 2 Digits   Designate a major economic sector such as agriculture or manufacturing  
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NAICS Code 3rd Digit   Designates an economic subsector such as crop production or apparel manufacturing  
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NAICS Code 4th Digit   Designates an industry group, such as grain and oil seed farming or fiber, yarn, and thread mills  
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NAICS Code 5th Digit   Designates the NAICS industry, such as wheat farming or broad-woven fabric mills  
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NAICS Code 6th Digit   Identifies subdivisions of NAICS industries that accommodate user needs in individual countries  
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Derived Demand   The demand for business products  
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Inelastic Demand   An increase or decrease in the price of the product will not significantly affect demand for the product  
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Joint Demand   The demand for two or more items used together in a final product  
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Multiplier Effect (Accelerator Principle)   Phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product  
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Reciprocity   A practice where business purchasers choose to buy from their own customers  
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Major Equipment (Installations)   Capital goods such as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings  
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Business Product Categories (7)   Major equipment, accessory equipment, raw materials, component parts, processed materials, supplies, and business services  
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Accesory Equipment   Goods, such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment  
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Raw Materials   Unprocessed extractive or agricultural products, such as mineral ore, lumber, wheat, corn, fruits, vegetables, and fish  
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Component Parts   Either finished items ready for assembly or products that need very little processing before becoming part of some other product  
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Processed Materials   Products used directly in manufacturing other products  
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Business Services   Expense items that do not become part of a final product  
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Supplies   Consumable items that do not become part of the final product  
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Buying Center   All those persons in an organization who become involved in the purchase decision  
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Initiator   The person who first suggests making a purchase  
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Influencers/Evaluators   People who influence the buying decision  
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Gatekeepers   Group members who regulate the flow of information  
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Decider   The person who has the formal or informal power to choose or approve the selection of the supplier or brand  
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Purchaser   The person who actually negotiates the purchase  
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Users   Members of the organization who will actually use the product  
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Business buyers evaluate products and suppliers against 3 important criteria   Quality, service, price  
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New Buy   A situation requiring the purchase of a product for the first time  
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Modified Rebuy   A situation where the purchaser wants some change in the original good or service  
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Straight Rebuy   A situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers  
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NAICS data can be used to determine (4)   Number, size, and geographic dispersion of firms; market potential/market share estimates; sales forecasts; sales prospects  
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Strategic Alliance Benefits (4)   Access to market or technology; economies of scale; facilitate faster entry of new products to market; sharing risks  
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Market   People or organizations with needs or wants and the ability and willingness to buy  
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Market Segment   A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs  
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Market Segmentation   The process of dividing a market into meaningful, relatively similar, and identifiable segments or groups  
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To be successful, a segmentation scheme must produce segments that meet 4 basic criteria   Substaintiality; identifiability and measurability; accessibility; responsiveness  
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Substantiality   A segment must be large enough to warrant developing and maintaining a special marketing mix  
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Identifiability and Measurability   Segments must be identifiable and their size measurable  
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Accessibilty   The firm must be able to reach members of targeted segments with customized marketing mixes  
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Responsiveness   Markets can be segmented using any criteria that seem logical. Unless one market segment responds to a marketing mix differently from other segments, however, that segment need not be treated seperately.  
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Segmentation Bases (Variables)   Characteristics of individuals, groups, or organizations  
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Geographic Segmentation   Segmenting markets by region of a country or the world, market size, market density, or climate  
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Demographic Segmentation   Segmenting markets by age, gender, income, ethnic background, and family life cycle  
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Demographic Segmentation Areas (5)   Age, Gender, Income, Ethnic, and Family Life-Cycle  
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Family Life Cycle (FLC)   A series of stages determined by a combination of age, marital status, and the presence or absence of children  
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Psychographic Segmentation   Market segmentation on the basis of personality, motives, lifestyles, and geodemographics  
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Geodemographic Segmentation   Segmenting potential customers into neighborhood lifestyle categories  
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Psychographic Segmentation Variables (4)   Personality, Motives, Lifestyles, and Geodemographics  
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Explorers   Comfortable with themselves and are not obsessed with physical appearance; they also express strong or old-fashioned values such as admiring classical art, literature, and history  
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Achievers   Care about balance in their lives as much as they do about achieving their goals; they care much more about their own individual view of what success means than about society's expectations  
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Builders   Struggle between their need for material possessions to support their lives and the desire for simplicity and balance; they also take more time for themselves, even with families to care for  
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Masters   Are living simplified lives but are not internally settled; they have an active interest in health and beauty, but don't want to be told how they can stay young; they want support in being beautiful and living life to the fullest  
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Benefit Segmentation   The process of grouping customers into market segments according to the benefits they seek from the product  
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Usage-Rate Segmentation   Dividing a market by the amount of product bought or consumed  
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80/20 Principle   A principle holding that 20% of all customers generate 80% of the demand  
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Usage-Rate Segmentation Categories (6)   Former, Potential, 1st time, Light or Irregular, Medium, Heavy  
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Satisficers   Business customers who place an order with the first familiar supplier to satisfy product and delivery requirements  
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Optimizers   Business customers who consider numerous suppliers, both familiar and unfamiliar, solicit bids, and study all proposals carefully before selecting one  
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Steps in Segmenting a Market (6)   Select a market or product category for study; Choose a basis or bases for segmenting the market; Select segmentation descriptors; Profile and analyze segments; Select target markets; Design, implement, and maintain appropriate marketing mixes  
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Target Market   A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges  
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Undifferentiated Targeting Strategy   A marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix  
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Concentrated Targeting Strategy   A strategy used to select one segment of a market for targeting marketing efforts  
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Niche   One segment of a market  
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Multisegment Targeting Strategy   A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each  
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Cannibalization   A situation that occurs when sales of a new product cut into sales of a firm's existing products  
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One-to-One Marketing   An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer  
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Forces that have influenced the emergence of one-to-one marketing (5)   Demand for accountability, Diversity, Poverty of time, New media alternatives, Decreasing brand loyalty  
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Positioning   Developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general  
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Position   The place a product, brand, or group of products occupies in consumers' minds relative to competing offerings  
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Product Differentiation   A positioning strategy that some firms use to distinguish their products from those of competitors  
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Perceptual Mapping   A means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds  
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Bases for Positioning (7)   attribute; price and quality; use or application; product user; product class; competitor; emotion  
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Repositioning   Changing consumers' perceptions of a brand in relation to competing brands  
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STP   Segmentation, targeting, and positioning  
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Importance of Segmentation (4)   More precise definition of customers' needs and wants; more accurate marketing objectives; improved resource allocation; better marketing results  
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Bases of Segmentation   Geography, Demographics, Psychographics, Product Benefits (the most frequent used base), Usage Rate  
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Segmentation Bases of Business Markets (3)   Company characteristics; buying processes; customer relationship  
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Factors Influencing Segment Attractiveness (2)   Segment size and growth (current dollar sales, growth rate, profit margins); Segment structural attractiveness (competitors, substitute products, power of buyers and suppliers)  
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Declining Brand Loyalty Reasons (4)   Excessive couponing, trade deals, deep price promotions, proliferation of brands  
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Components of a perceptual map (2)   Dimensions of attributes; perceived locations of products in consumers' minds  
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