Bus 346 Principles of Marketing (EXAM 1)

4 Ps
Product, Price, Place, Promotion
goods
can be physically touched
services
intangible customer benefits
B2C
business to consumer
B2B
business to business
C2C
consumer to consumer
value
reflects the relationship of benefits to cost- what you get for what you give
value cocreation
customers can act as collaborators to create the product or service
relational orientation
method of building a relationship with customers based on the philosophy that buyers and sellers should have a long term relationship
market strategy
a firm’s target market, marketing mix, and method of obtaining a sustainable competitive advantage
sustainable competitive advantage
advantage over competition, not easily copied, maintained for a long time
customer excellence
focuses on retaining loyal customers and excellent customer service
operational excellence
efficient operations and excellent supply chain and human resource management
product excellence
having products with high perceived value and effective branding
locational excellence
having a good physical location and internet presence
marketing plan
1. planning phase
2. implementation phase (segmenting, targeting, positioning)
3. evaluate situation
4. use 4 Ps
5. control phase
mission statement
what type of business are we? what do we need to do to accomplish our goals and objectives?
situation analysis
SWOT- strengths, weaknesses, opportunities, threats
CDSTEP factors
cultural, demographic, social, technological, economic, political forces
market positioning
process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents
metric
measuring system that quantifies a trend, dynamic, or characteristic
relative market share
a measure of the product’s strength in a particular market, defined as the sales of the focal product divided by sales achieved by largest firm in the industry
market penetration strategy
growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers
market segmentation
process of dividing the market into groups of customers with different needs, wants, or characteristics
marketing development strategy
employs the existing marketing offering to reach new market segments, whether domestic or international
product development strategy
offers a new product or service to a firm’s current target market
diversification strategy
growth strategy whereby a firm introduces a new product or service to a market not currently served
related diversification
strategy whereby the current target market and/or marketing mix shares something in common with new opportunity
unrelated diversification
strategy whereby a new business lacks any common elements with present business
social media
content distributed through online and mobile technologies to facilitate interpersonal interactions
4 E framework
excitement, education, experience, engagement
creators
hip, cool contributors who are on the cutting edge and plan to stay there. social media give them new ways to post and share their clever ideas
bonders
social butterflies who use social media to enhance and expand their relationships
professionals
people who are constantly on the go, busy, and want to appear efficient, , so they use social media to show how smart they are
sharers
use social media sites and want to help by being constantly well informed, so they can provide genuine insights to others
professional blogs
written by people who review and give recommendations on products and services
microblog
short sentences, short videos, individual images
gamification
process of building customer loyalty through the offering of free apps
sentiment analysis
technique that allows marketers to analyze data from social media sites to collect consumer comments about companies and their products
hits
total requests per page
page views
number of times a page is visited
bounce rate
percentage of times a visitor leaves a site almost immediately
conversion rates
percentage of visitors or potential customers who act as the marketer hopes, whether by clicking, buying, or donating
social reach
how many people a person influences (like friends on FB)
business ethics
moral or ethical dilemmas that might arise in a business setting
marketing ethics
examines ethical problems that are specific to the domain of marketing
ethical climate
set of values within a marketing firm, or in the marketing division of any firm, that guide decision making and behavior
corporate social responsibility
voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders
decision making process (ethics)
1. identify issues
2. gather information and identify stakeholders
3. brainstorm alternatives
4. choose a course of action
locational privacy
person’s ability to move normally in public spaces with the expectation that his or her location will not be recorded for subsequent use
macroenvironmental factors
aspects of the external environment that affect a company’s business, such as the culture, demographics, social issues, technological advances, economic situation, and political environment
culture
shared meanings, beliefs, morals, values, customs of a group
country culture
entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences
demographics
characteristics of human populations and segments, especially those used to identify consumer markets
generational cohort
a group of people in the same generation who typically have similar purchase behaviors because they have shared experiences and are in the same stage of life
Gen Z
the digital natives. born into a world that was already full of electronic gadgets and digital technologies such as the internet and social networks. born between 2001-2014
Gen Y
millenials. born between 1977-2000. strong work/life balance.
Gen X
born between 1965-1976. get married later than other generations.
baby boomers
born between 1946-1964 after WWII. individualistic.
green marketing
strategic effort by firms to supply customers with environmentally friendly merchandise
greenwashing
exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goa of gaining public approval and sales
interest rates
cost to borrow money
political/regulatory environment
compromises political parties, government organizations, and legislation and laws
need recognition
beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state
wants
goods or services that are not necessarily needed but are desired
functional needs
pertain to the performance of a product or service
psychological needs
pertain to the personal gratification consumers associate with a product or service
internal search for information
buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences
external search for information
buyer seeks information outside his or her personal knowledge base to help make the buying decision
internal locus of control
refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities
external locus of control
consumers believe that fate ot other external factors control all outcomes
performance risk
involves the perceived danger inherent in a poorly performing product or service
financial risk
risk associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service
social risk
fears that consumers suffer when they worry others might not regard their purchases positively
physiological risk
fear of an actual harm should the product not perform properly
psychological risk
associated with the way people will feel if the product or service does not convey the right image
universal sets
includes all possible choices for a product-category
retrieval sets
brands or stores that can be readily brought forth from memory
evoked set
comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision
evaluative criteria
consist of a set of salient, or important, attributes, about a particular product
determinant attributes
product or service features that are important to the buyer and on which competing brands or stores are perceived to differ
consumer decision rule
the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives
multi-attribute model
a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes. Model uses a weighted average score based on the importance of various attributes and performance on those ideas
noncompensatory decision rule
at work when consumers choose a product or service on the basis of a subset of its characteristics, regardless of the values of its other attributes
conversion rate
percentage of consumers who buy a product after viewing it
postpurchase cognitive dissonance
an internal conflict that arises from an inconsistency between two beliefs or between beliefs and behavior
negative word of mouth
occurs when consumers spread negative information about a product, service, or store
motive
a need or want that is strong enough to cause the person to seek satisfaction
maslow’s hierarchy of needs
when basic needs are fulfilled, people turn to satisfying their higher-lever human needs (social and personal)
physiological needs
basic necessities: food, water, rest, shelter
safety needs
pertain to protection and physical well being
love needs
needs expressed though interactions with others
esteem needs
allow people to satisfy their inner desires
self actualization
when a person is completely satisfied with his or her life
attitude
a person’s enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea. 3 components
cognitive component of attitude
reflects what a person believes to be true
affective component of attitude
reflects what a person feels about the issue at hand (like or dislike of something)
behavioral component of attitude
comprises the actions a person takes with regard to the issue at hand
perception
the process by which we select, organize, and interpret information to form a meaningful picture of the world
learning
refers to a change in a person’s thought process or behavior that arises from experience and takes place throughout the consumer decision process
lifestyle
refers to the way consumers spend their time and mony to live
reference group
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors
involvement
consumer’s interest in a product or service
extended problem solving
when customer perceives that the purchase decision entails a lot of risk
limited problem solving
when a purchase decision calls for, at most, a moderate amount of effort and time
impulse buying
buying decision made on the spot
habitual decision making
purchase decision process in which consumers engage in little conscious effort
business to business marketing
the process of buying and selling goods or services to be used in the production of other goods and services, for consumption by the buying organization, or for the resale by wholesalers and retailers
derived demand
linkage between consumers’ demand for a company’s output and its purchase of necessary inputs to manufacture or assemble that particular output
resellers
marketing intermediaries that resell manufactured products without significantly altering their form
wholesalers
those firms engaged in buying, taking title to, often storing, and physically handling goods in large quantities, then reselling the goods to retailers or industrial or business users
distributors
a type of reseller or marketing intermediary that resells manufactured products without significantly altering their form
request for proposals (RFP)
process through which organizations invite alternative vendors or suppliers to bid on supplying their required components or specifications
web portal
internet site whose purpose is to be a major starting point for users when they connect to the web
buying center
group of people typically responsible for the buying decisions in large organizations
initiator
person who first suggests buying the particular product or service
influencer
person whose views influence other members of the buying center in making the final decision
decider
person who ultimately determines any part of or the entire buying decision- whether to buy, what to buy, how to buy, or where to buy
buyer
person who handles the paperwork of the actual purchase
user
person who consumes or uses product or service
gatekeeper
person who controls information or access, or both, to decision makers and influencers
organizational culture
reflects the set values, traditions, and customs that guide a firm’s employees’ behavior
autocratic buying center
buying center in which one person makes the decision alone, though there may be multiple participants
democratic buying center
buying center in which the majority rules
consensus buying center
buying center in which all members of the team must reach a collective agreement that they can support a particular purchase
consultative buying center
buying center in which one person makes the decision but he or she solicits input from others before doing so
new buy
in a b2b setting, a purchase of a good or service fro the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have experience with the item
modified rebuy
refers to when the buyer has purchased a similar product in the past but has decided to change some specifications, such as the desired price, quality level, customer service level, options, or so forth
straight rebuys
when the buyer or buying organization simply buys additional units of products that had previously been purchased
globalization
refers to the process by which goods, services, capital, people, information, and ideas flow across national borders
trade deficit
a country imports more than it exports
trade surplus
occurs when a country has a higher level of exports than imports
gross domestic product (GDP)
defined as the market value of the goods and services produced by a country in a year; most widely used standardized measure of output
gross national income
consists of GDP plus the net income earned from the investments abroad (minus any payments made to nonresidents who contribute to the domestic economy)
purchasing power parity
a theory that states that if the exchange rates of two countries are in equilibrium, a product purchased in one will cost the same in the other, if expressed in the same currecny
infrastructure
the basic facilities, services, and installations needed for a community or society to function, such as transportation and communications systems, water and power lines, and public institutions like schools, post offices, and prisons
tariff (duty)
a tax levied on a good imported into a country
quota
designates the maximum quantity of a product that may be brought into a country during a specified time period
exchange control
refers to the regulation of a country’s currency exchange rate
exchange rate
the measure of how much one currency is worth in relation to another
trade agreements
intergovernmental agreements designed to manage and promote trade activities for specific regions (ex: EU)
trading bloc
consists of those countries that have signed a particular trade agreement
power distance
willingness to accept social inequality as natural
uncertainty avoidance
extent to which the society relies on orderliness, consistency, structure, and formalized procedures to address situations that arise in daily life
individualism
perceived obligation to and dependence on groups
masculinity
extent to which dominant values are male oriented
time orientation
short vs. long term orientation
exporting
producing goods in one country and selling them in another
franchising
a contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a business using a name and format developed and supported by the franchisor
strategic alliances
a collaborative relationship between independent firms, though the partnering firms do not create an equity partnership; that is, they do not invest in one another
joint venture
formed when a firm entering a market pools its resources with those of a local firm ownership, control, and profits are shared
direct investment
when a firm maintains 100% ownership of its plants, operation facilities, and offices in a foreign country, often through the formation of wholly owned subsidiaries
glocalization
process of firms standardizing their products globally, but using different promotional campaigns to sell them
reverse innovation
when companies initially develop products for niche or underdeveloped markets, and then expand them into their original or home markets
geographic segmentation
organizes customers into groups on the basis of where they live
demographic segmentation
groups consumers according to easily measured, objective characteristics such as age, gender, income, and education
psychographics
used in segmentation; delves into how consumers describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices
self-values
goals for life, not just the goals one wants to accomplish in a day; a component of psychographics that refers to overriding desires that drive how a person lives his or her life
self-concept
the image a person has of him/herself
lifestyles
refers to the way a person lives his or her life to achieve goals
Value and Lifestyle Survey, VALS
a psychographic tool developed by SRI Consulting Business Intelligence; classifies consumers into eight segments: innovators, thinkers, believers, achievers, strivers, experiences, makers, or survivors
benefit segmentation
groups consumers on the basis of the benefits they derive from products or services
behavioral segmentation
divides customers into groups on the basis of how they use the product or service
occasional segmentation
based on when a product or service is purchased or consumed
loyalty segmentation
strategy of investing in loyalty initiatives to retain the firm’s most profitable customers
geodemographic segmentation
the grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics
segment profitability
(segment size x segment adoption % x purchase behavior x profit margin %) – fixed costs
undifferentiated targeting strategy (mass marketing)
a marketing strategy a firm can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups
differentiated targeting strategy
a strategy through which a firm targets several market segments with a different offering for each
concentrated targeting strategy
a marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market’s needs
micromarketing (one-to-one marketing)
an extreme form of segmentation that tailors a product or service to suit an individual customer’s wants or needs
cookies
small text files a website to stores in a visitor’s browser to get identifying information
value proposition
unique value that a product or service provides to its customers and how it is better than and different from those of competitiors
perpetual map
displays, in two or more dimensions, the position of products or brands in the consumer’s mind
ideal points
the position at which a particular market segment’s ideal product would lie on a perpetual map
marketing research
a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas
secondary data
pieces of information that have been collected prior to the start of the focal research project
primary data
collected to address specific research needs
data
raw numbers or other factual information that, on their own, have limited value to marketers
information
organized, analyzed, interpreted data that offer value to marketers
syndicated data
data available for a fee from commercial research firms such as Information Resources Inc., National Purchase Diary Panel, and ACNielsen
scanner data
type of syndicated external secondary data used in quantitative research that is obtained from scanner readings of UPC codes at check-out counters
panel data
information collected from a group of consumers, organized into panels, over time
data mining
the use of a variety of statistical analysis tools to uncover previously unknown patterns in the data stored in the databases or relationships among variables
churn
the number of consumers who stop using a product or service divided by the average number of consumers of that product or service
qualitative research
informal research methods, including observation, following social media sites, in-depth interviews, focus groups, and projective techniques
quantitative research
structured responses that can be structurally tested to confirm insights and hypotheses generated via qualitative research or secondary data
observation
an exploratory research method that entails examining purchase and consumption behaviors through personal or video camera scrutiny
sentiment mining
data gathered by evaluating customer comments posted through social media sites such as Twitter and Facebook
in-depth interview
an exploratory research technique in which trained researchers ask questions, listen to and record the answers, and then pose additional questions to clarify or expand on a particular issue
focus group interview
a research technique in which a small group of persons (usually 8-12) comes together for an intensive discussion about a particular topic, with the conversations guided by a trained moderator using an unconstructed method of inquiry
survey
a systematic means of collecting information from people that generally uses a questionnaire
questionnaire
a form that features a set of questions designed to gather information from respondents and thereby accomplish the researchers’ objectives; questions can be either unstructured or structured
unstructured questions
open-ended questions that allow respondents to answer in their own words
structured questions
close-ended questions for which a discrete set of responses alternatives, or specific answers, is provided for respondents to evaluate
biometric data
digital scanning of the physiological or behavioral characteristics of individuals as a means of identification