Marketing 301: EXAM 1 VOCAB

Marketing
the activity, set of institutions, and processes for creating, capturing, communicating, delivering, and exchanging offerings that have value for customers, clients partners and society at large
Marketing plan
a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements
Exchange
the trade of things of value between the buyer and the seller so that each is better off as a result
Marketing Mix (four Ps)
product, price, place, and promotion- the controllable set of activities that a firm uses to respond to the wants of its target markets
Goods
items that can be physically touched
Service
any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer
Ideas
intellectual concepts- thoughts, opinions, and philosophies
B2C (Business-to-consumers marketing)
the process in which businesses sell to consumers
B2B (business-to-business marketing)
the process of selling merchandise or services from one business to another
C2C marketing
the process in which consumers sell to other consumers
Employment marketing
marketing programs to attract applicants to the hiring firm
Value
reflects the relationship of benefits to costs, or what the consumer gets for what he/she gives
Value cocreation
customers act as collaborators with a manufacturer or retailer to create the product or service
Transactional orientation
regards the buyer-seller relationship as a series of individual transactions, so anything that happened before or after the transaction is of little importance
Relational orientation
a method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship
Customer relationship management (CRM)
a business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm’s most valued customers
Supply chain
the group of firms that make and deliver a given set of goods and services
Entrepreneurs
a person who organizes, operates, and assumes the risk of a new business venture
Marketing strategy
a firm’s target market, marketing mix, and method of obtaining a sustainable competitive advantage
Sustainable competitive advantage
something the firm can persistently do better than its competitors
Customer excellence
involves a focus on retaining loyal customers and excellent customer service
Operational excellence
involves a firm’s focus on efficient operations and excellent supply chain management
Product excellence
involves a focus on achieving high-quality products; effective branding and positioning is key
Locational excellence
a method of achieving excellence by having a strong physical location and/or Internet presence
Marketing plan
a written document composed of an analysis of the current marketing situation, opportunities and threats for the firm, marketing objectives and strategy specified in terms of the four Ps, action programs, and projected or pro forma income (and other financial) statements
Planning phase
the part of the strategic marketing planning process when marketing executives, in conjunction with other top managers, 1) define the mission or vision of the business and 2) evaluate the situation by assessing how various players, both in and outside the organization, affect the firm’s potential for success
Implementation phase
the part of the strategic marketing planning process when marketing managers 1) identify and evaluate different opportunities by engaging in segmentation, targeting, and positioning and 2) implement the marketing mix using the four Ps
Control phase
the part of the strategic marketing planning process when managers evaluate the performance of the marketing strategy and take nay necessary corrective actions
Mission statement
a broad description of a firm’s objectives and the scope of activities it plans to undertake; attempts to answer two main questions: What type of business is it? What does it need to do to accomplish its goals and objectives?
Situation analysis
second step in a marketing plan; uses a SWOT analysis that assesses both the internal environment with regard to its Strengths and Weaknesses and the external environment in terms of its Opportunities and Threats
STP
the processes of segmentation, targeting, and positioning that firms use to identify and evaluate opportunities for increasing sales and profits
Market segment
a group of consumers who respond similarly to a firm’s marketing efforts
Market segmentation
the process of dividing the market into groups of customers with different needs, wants, or characteristics- who therefore might appreciate products or services geared especially for them
Target marketing
the process of evaluating the attractiveness of various segments and then deciding which to pursue as a market
Market positioning
involves the process of defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products
Products
anything that is of value to a consumer and can be offered through a voluntary marketing exchange
Metric
a measuring system that quantifies a trend, dynamic, or characteristic
Strategic business unit (SBU)
a division of the firm itself that can be managed and operated somewhat independently from other divisions and may have a different mission or objectives
Product line
groups of associated items, such as those that consumers use together or think of as part of a group of similar products
Market share
percentage of a market accounted for by a specific entity
Relative market share
a measure of the product’s strengths in a particular market, defined as the sales of the focal product divided by the sales achieved by the largest firm in the industry
Market growth rate
the annual rate of growth of the specific market in which the product competes
Market penetration strategy
a growth strategy that employs the existing marketing mix and focuses the firm’s efforts on existing customers
Market development strategy
a growth strategy that employs the existing marketing offering to reach new market segments, whether domestic or international
Product development strategy
a growth strategy that offers a new product or service to a firm’s current target market
Diversification strategy
a growth strategy whereby a firm introduces a new product or service to a market segment that it does not currently serve
Related diversification
a growth strategy whereby the current target market and/or marketing mix shares something in common with the new opportunity
Unrelated diversification
a growth strategy whereby a new business lacks any common elements with the present business
Macroenvironmental factors
aspects of the external environment that affect a company’s business, such as the culture, demographic, social issues, technological advantages, economic situation, and political/regulatory environment
Culture
the set of values, guiding beliefs, understandings, and ways of doing things shared by members of a society; exists on two levels: visible artifacts (behavior, dress, symbols, physical settings, ceremonies) and underlying values (thought processes, beliefs, and assumptions)
Country culture
entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and more subtle aspects, which are trickier to identify
Demographics
information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education
Generational cohort
a group of people of the same generation- typically have similar purchase behaviors because they have shared experiences and are in the same stage of life
Seniors
America’s fastest-growing generational cohort; people aged 55-64 years
Baby Boomers
generational cohort of people born after World War II, between 1946 and 1964
Generation X (Gen X)
generational cohort of people born between 1965 and 1976
Generation Y (Gen Y)
generational cohort of people born between 1977 and 1995; biggest cohort since the original postwar baby boom
Millennial
consumers born between 1977 and 2000 and the children of the Baby Boomers
Green marketing
involves a strategic effort by firms to supply customers with environmentally friendly merchandise
Technological advances
macroenvironmental factor that has greatly contributed to the improvement of the value of both products and services in the past few decades
Economic situation
macroeconomic factor that affects the way consumers buy merchandise and spend money, both in a marketer’s home country and abroad
Inflation
refers to the persistent increase in the prices of goods and services
Foreign currency fluctuations
changes in the value of a country’s currency relative to the currency of another country; can influence spending
Interest Rates
these represent the cost of borrowing money
Political/regulatory environment
comprises political parties, government organizations, and legislation and laws
Need recognition
the 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
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
occurs when the buyer examines his/her own memory and knowledge about the product or service, gathered through past experiences
External search for information
occurs when the buyer seeks information outside his/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
refers to when consumers believe that fate or 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
the fears that consumers suffer when they worry others might not regard their purchases positively
Physiological risk
the fear of an actual harm should a product not perform properly
Psychological risks
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
includes those brands or stores that the consumer can readily bring forth from memory
Evoked set
comprises the alternative brands or stores that the consumer states he/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 rules
the set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives
Compensatory decision rule
at work when the consumer is evaluating alternatives and trades off one characteristic against another, such that good characteristics compensate for bad ones
Multi-attribute model
a compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics. The model uses a weighted average score based on the importance of various attributes and performance on those issues
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
Decision heuristics
mental shortcuts that help consumers narrow down choices; ex: price, brand, and product presentation
Conversion rate
percentage of consumers who buy a product after viewing it
Postpurchase cognitive dissonance
the psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyer’s remorse
Negative word of mouth
occurs when consumers spread negative information about a product, service, or store to others
Motive
a need or want that is strong enough to cause the person to seek satisfaction
Maslow’s Hierarchy of Needs
a paradigm for classifying people’s motives. It argues that when lower-level, more basic needs (physiological and safety) are fulfilled, people turn to satisfying their higher-level human needs (social and personal)
Physiological needs
those relating to the basic biological necessities of life: food, drink, rest, and shelter
Safety needs
one of the needs in the PSSP hierarchy of needs; pertain to protection and physical well-being
Love needs
needs expressed through interactions with others
Esteem needs
needs that enable people to fulfill inner desires
Self-actualization
when a person is completely satisfied with his/her life
Attitude
a person’s enduring evaluation of his/her feelings about and behavior tendencies toward an object or idea; consists of three components: cognitive, affective, and behavioral
Cognitive component
a component of attitude that reflects what a person believes to be true
Affective component
a component of attitude that reflects what a person feels about the issue at hand- his/her like or dislike of something
Behavioral component
a component of attitude that comprises the actions a person takes with regard to the issue at hand
Perception
the process by which people 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
a component of psychographics; refers to the way a person lives his/her life to achieve goals
Reference group
one or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors
Culture
the set of values, guiding beliefs, understandings, and ways of doing things shared by members of a society; exists on two levels: visible artifacts (behavior, dress, symbols, physical settings, ceremonies) and underlying values (thought processes, beliefs, and assumptions)
Situational factors
factor affecting the consumer decision process; those that are specific to the situation that may override, or at least influence, psychological and social issues
Involvement
consumer’s interest in a product or service
Extended problem solving
a purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk
Limited problem solving
occurs during a purchase decision that calls for, at most, a moderate amount of effort and time
Impulse buying
a buying decision made by customers on the spot when they see the merchandise
Habitual decision making
a purchase decision process in which consumers engage with little conscious effort
B2B (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 resale by wholesalers and retailers
Derived demand
the 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 (usually in smaller quantities) to retailers or industrial or business users
Distributors
a type of reseller or marketing intermediary that resells manufactured products without significantly altering their form, often buy from manufacturers and sell to other businesses like retailers in a B2B transaction
Request for proposals (RFP)
a process through which buying organizations invite alternative suppliers to bid on supplying their required components
Web portal
an Internet site whose purpose is to be a major starting point for users when they connect to the web
Buying center
the group of people typically responsible for the buying decisions in large organizations
Initiator
the buying center participant who first suggests buying the particular product or service
Influencer
the buying center participant whose views influence other members of the buying center in making the final decision
Decider
the buying center participant 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
the buying center participant who handles the paperwork of the actual purchase
User
the person who consumes or sues the product or service purchased by the buying center
Gatekeeper
the buying center participant who controls information or access to decision makers and influencers
Organizational culture
reflects the set of values, traditions, and customs that guide a firm’s employees’ behaviors
Autocratic buying center
a buying center in which one person makes the decision alone, though there may be multiple participants
Democratic buying center
a buying center in which the majority rules in making decisions
Consultative buying centers
a buying center in which one person makes the decision but he/she solicits input from others before doing so
Consensus buying center
a buying center in which all members of the team must reach a collective agreement that they can support a particular purchase
New buy
in a B2B setting, a purchase of a good or service for the first time; the buying decision is likely to be quite involved because the buyer or the buying organization does not have any 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
refers to when the buyer or buying organization simply buys additional units of products that have previously been purchased
Globalization
refers to the processes by which goods, services, capital, people, information, and ideas flow across national borders
Globalization of production/Offshoring
refers to manufactures” procurement of goods and services from around the globe to take advantage of national differences in the cost and quality of various factors of production (labor, energy, land, capital)
General Agreement on Tariffs and Trade (GATT)
organization established to lower trade barriers, such as high tariffs on imported goods and restrictions on the number and types of imported products that inhibited the free flow of goods across borders
World Trade Organization (WTO)
replaced the GATT in 1994; differs from the GATT in that it is an established institution based in Geneva, Switzerland, instead of simply an agreement; represents the only international organization that deals with the global rules of trade among nations
International Monetary Fund
established with the original General Agreement on Tariffs and Trade (GATT); primary purpose is to promote international monetary cooperation and facilitate the expansion and growth of international trade
World Bank Group
a development bank that provides loans, policy advice, technical assistance, and knowledge-sharing services to low- and middle-income countries in an attempt to reduce poverty in the developing world
Trade deficit
results when a country imports more goods 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; the most widely used standardized measure of output
Gross national income (GNI)
consists of GDP plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy)
Purchasing power parity (PPP)
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, expressed in the same currency
Human development index (HDI)
a composite measure of three indicators of the quality of life in different countries: life expectancy at birth, educational attainment, and whether the average incomes are sufficient to meet the basic needs of life in that country
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
Dumping
the practice of selling a good in a foreign market at a price that is lower than its domestic price or below its cost
Quota
designates the maximum quantity of a product that may be brought into a country during a specified time period
Boycott
a group’s refusal to deal commercially with some organization to protest against its policies
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
Trading bloc
consists of those countries that have signed a particular trade agreement
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 new market pools its resources with those of a local firm to form a new company in which 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