Marketing Chapter 8-13

Market
People or organizations with needs or wants and the ability and willingness to buy
Market Segment
A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
Market Segmentation
The process of dividing a market into meaningful, relatively similar, and indentifiable segments or groups.
1) Substaniality
2) Identifiable/Measurable
3) Accessbility
4) Responsiveness
Segmentation Bases (Variables)
Characteristics of people, groups, or organizations.
Geographic Segmentation
Segmenting markets by region of a country or world, market size, market density, or climate. Ex:
Demographic Segmentation
Segmenting markets by age, gender, income, ethnic background, and family life cycle.
Family Life Cycle
A series of staged determined by age, martial status, and the presence or absence of children.
Psychographic Segmentation
Market Segmentation based on the basis of personality, lifestyle, and geodemographics.
Geodemographic Segmentation
Segmenting potential customers into neighborhood lifestyle categories.
Benefit Segmentation
The process of grouping customers into market segments according to the benefits they seek from the product.
Usage-rate Segmentation
Dividing a market by the amount of product bought or consumed.
80/20 Principle
A principle holding that 20 percent of all customers generate 80 percent of the demand.
Satisficers
Business customers who place an order with the first familiar supplier to satisfy product and delivery requirements.
Optimizers
Business customers who consider numerous suppliers, (familiar and unfamiliar) solicit bids, and study all proposals carefully before selecting one.
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.
Undifferentiated Targeting Strategy
A marketing approach that views the market as one big market with no indivdual segments, and thus uses a single marketing mix.
Concentrated Targeting Strategy
A strategy used to select one segment of a market (niche) for targeting marketing effots.
Niche
One segment of a market
Multisegment Targeting Strategy
A strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each.
Cannibalization
A situation that occurs when sales from a new product cut into sales of a firm’s existing products.
One-to-One Marketing
An individualized marketing method that utilizes customer information to build long-term, personalized, and profitable, relationships wilth each customer.
Positioning
Developing a specific marketing mix to influence potential customers’ overall perception of a brand, product line, or organization in general.
Position
The place a product, brand, or group of products occupies in consumers’ minds relative to competing offerings.
Product Differentiation
A positioning strategy that some firms use to distinguish their products from those of competitors.
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
Repositioning
Changing consumers’ perceptions of a brand in relation to competing brands.
Marketing Information
Everyday information about development in the marketing environment that managers use to prepare and adjust marketing plans.
Decision Support System
An interactive, flexible, computerized information system that enables managers to obtain and manipulate information as they are making decisions.
Datebase Marketing
The creation of a large computerized file of customers’ and potential customers’ profiles and purchase patterns.
Marketing Research
The process of planning, collecting, and analyzing data relevant to a marketing decision.
Marketing Research Problem
Determining what information is needed and how that information can be obtained efficiently and effectively.
Marketing Research Objective
The specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information.
Management Decision Problem
A broad-based problem that uses marketing research in order for managers to take proper actions.
Secondary Data
Data previously collected for any purpose other than the one at hand.
Marketing Research Aggregator
A company that acquires, catalogs, reformats, segments, and resells reports already published by marketing research firms.
Research Design
Specifies which research questions must be answered, how and when the date will be gathered, and how the data will be analyzed.
Primary Data
Information that is collected for the first time; used for solving the particular problem under investigation.
Survey Research
The most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes.
Mall Intercept Interview
A survey research method that involves interviewing people when in the common areas of shopping malls.
Computer-Assisted Personal Interviewing
An interviewing method in which the interviewer reads questions from a computer screen and enters the respondent’s data directly into the computer.
Computer-Assisted Self-Interviewing
An interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where each respondent read questions off a computer screen and directly keys his or her answers into a computer.
Central-Location Telephone Facility
A specially designed phone room used to conduct telephone interviewing.
Executive Interview
A type of survey that involves interviewing business people at their offices concerning industrial products or services.
Focus Group
Seven to ten people who participate in a group discussion led by a moderator.
Open-ended Question
an interview question that ecourages an answer phrased in the respondent’s own words.
Close-ended Question
an interview question that asks the respondent to make a selection from limited list of responses.
Scaled-response Question
A close-ended question designed to measure the intensity of a respondent’s answer.
Observation Research
A research method that relies on four types of observation: people watching people, people watching an activity, machines watching people, and machines watching an activity.
Mystery Shoppers
Researchers posing as customers who gather observational data about a store.
Behavioral Targeting
A form of observation marketing research that uses data mining couple with identifying Web surfers by their IP addresses
Ethnographic Research
The study of human behavior in its natural context; involves observation of behavior and physical setting
Experiment
A method a researcher uses to gather primary data.
Sample
A subset from a larger population.
Universe
The population from which a sample will be drawn.
Probability Sample
A sample in which every element in the population has a known statistical likelihood of being selected.
Random Sample
A sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample.
Nonprobability Sample
Any sample in which little or no attempt is made to get a representative cross section of the population.
Convenience Sample
A form of nonprobability sample using respondents who are convenient or readily accessible to the researcher–employees, friends, or relatives.
Measurement Error
An error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process.
Sampling Error
An error that occurs when a sample somehow does not represent the target population.
Frame Error
An error that occurs when a sample drawn from a population differs from the target population.
Random Error
An error that occurs when the selected sample is an imperfect representation of the overall population.
Field Service Form
A firm that specializes in interviewing respondents on a subcontracted basis.
Cross-tabulation
A method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more questions.
Consumer-generated Media
Media that consumers generate and share among themselves.
Scanner-based Research
A system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy.
BehaviorScan
A scanner-based research program that tracks the purchases of 3,000 households through store scanners in each research market.
InfoScan
A scanner-based sales-tracking service for the consumer packaged-goods industry.
Neuromarketing
A field of marketing that studies the body’s responses to markerting stimuli.
Competitive Intelligence
An intelligence system that helps managers asses their competition and vendors in order to become more efficient and effective competitors.
Product
Everything, both favorable and unfavorable, that a person receives in an exchange.
Business Product
A product used to manufacture other goods or services, to facilitate an organization’s operations, or to resell to other customers.
Consumer Product
A product bought to satisfy an individual’s personal wants.
Convenience Product
A relatively inexpensive item that merits little shopping effort.
Shopping Product
A product that requires comparison shopping because it is usually more expensive thatn a convenience product and is found in fewer stores.
Specialty Product
A particular item that consumers seach extensively for and are very reluctant to accept substitutes.
Unsough Product
A product unknown to the potential buyer or a known product that the buyer does not actively seek.
Product Item
A specific version of a product that can be designated as a distinct offering among an organization’s products.
Product Line
A group of closely related product items.
Product Mix
All products that an organization sells.
Product Mix Width
The number of product lines an organization offers.
Product Line Depth
The number of product items in a product line.
Product Modification
Changing one or more of a product’s characteristics.
Planned Obsolescence
The practice of modifying products so those that have already been sold become obsolete before they actually need replacement.
Product Line Extension
Adding additional products to an existing product line in order to compete more broadly in the industry.
Brand
A name, term, symbol, design, or combination thereof that identifies a seller’s products and differentiates them from competitors’ products.
Brand Name
That part of a brand that can be spoken, including letters, words, and numbers.
Brand Mark
The elements of a brand that cannot be spoken.
Brand Equity
The value of company and brand names
Global Brand
A brand that obtains at least a third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data.
Brand Loyalty
Consistent preference for one brand over all others.
Manufacturer’s Brand
The brand name of a manufacturer.
Private Brand
A brand name owned by a wholesaler or a retailer.
Captive Brand
A brand manufactured by a third party for an exclusive retailer, without evidence of that retailer’s affiliation.
Individual Branding
Using different brand names for different products.
Family Branding
Marketing several different product under the same brand name.
Co-Branding
Placing two or more brand names on a product or its package.
Trademark
The exclusive right to use a brand or part of a brand.
Service Mark
A trademark for a service.
Generic Product Name
Identifies a product by class or type and cannot be trademarked.
Persuasive Labeling
A type of package labeling that focuses on a promotional theme or logo, and consumer information is secondary.
Informational Labeling
A type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase.
Universal Product Codes
A series of thick and think vertical lines, readable by computerized optical scanners, that represent numbers used to track products.
Warranty
A confirmation of the quality or performance of a good or service.
Express Warranty
A written guarantee.
Implied Warranty
An unwritten guarantee that the good or service is fit for the purpose for which it was sold.
New Product
A product new to the world, the market, the producer, the seller, or some combination of these.
New-Product Strategy
A plan that links the new-product development process with the objectives of the marketing department, the business unit, and the corporation.
Product Development
A marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products.
Brainstorming
The process of getting a group to think of unlimited ways to vary a product or solve a problem.
Concept Test
A test to evaluate a new-product idea, usually before any prototype has been created.
Business Analysis
The second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated.
Development
The stage in the product development process in which a prototype is developed and a marketing strategy is outlined.
Simultaneous Product Development
A team-oriented approach to new-product development.
Test Marketing
The limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation.
Simulated Market Testing
The presentation of advertising and other promotional materials for several products, including a test product, to members of the product’s target market.
Commercialization
The decision to market a product.
Innovation
A product that perceived to be new by a potential adopter.
Diffusion
The process by which the adoption of an innovation spreads.
Product Life Cycle
A concept that provides a way to trace the stages of a product’s acceptance, from its introduction (birth) to its decline (death).
Product Category
All brands that satisfy a particular type of need. Ex: shaving products, soft drinks.
Introductory Stage
The full-scale launch of a new product into the marketplace.
Growth Stage
The second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy.
Maturity Stage
A period during which sales increase at a decreasing rate.
Decline Stage
A long-run drop in sales.
Service
The result of applying human or mechanical efforts to people or objects.
Intangibility
The inability of services to be touched, seen, tasted, heard, or felt in the same manner that goods can be sensed.
Search Quality
A characteristic that can be easily accessed before purchase. Ex: color
Experience Quality
A characteristic that can be assessed only after use. Ex: quality of a meal in a resturant.
Credence Quality
A characteristic that consumers may have difficulty assessing even after purchase because they do not have the necessary knowledge or experience. Ex: medical services.
Inseparability
The inability of the production and consumption of a service to be separated; consumers must be present during production. Ex: haircut.
Heterogeneity
The variability of the inputs and outputs of services, which causes services to tend to be less standardized and uniform than goods. Ex: Physicians differ from each other through their technical and interpersonal skills
Perishability
The inability of services to be stored, warehoused, or inventoried. Ex: empty hotel room = revenue lost
Reliability
The ability to perform a service dependably, accurately, and consistently. Getting it right the first time.
Responsiveness
The ability to provide prompt service.
Assurance
The knowledge and courtesy of employees and their ability to convey trust.
Empathy
Caring, individualized attention to customers.
Tangibles
The physical evidence of a service, including the physical facilities, tools, and equipment used to provide the service.
Gap Model
A model identifying five gaps that can cause problems in service delivery and influence customer evaluations of service quality.
Gap 1
The gap between what customers want and what management thinks customers want. A result of misunderstanding customers’ needs/wants.
Gap 2
The gap between what management thinks customers want and the quality specifications that mangement develops to provide the service. A result of management’s inability to translate customers’ needs into delivery systems.
Gap 3
The gap between the service quality specifications and the service that is actually provided. A result of management and employees’ inability to do what should be done.
Gap 4
The gap between what the company provides and what the customer is told it provides. A result of a misscommunication, misleading or deceptive advertising.
Gap 5
The gap between the service cutomers receive and the service they want. Can be positive or negative.
Core Service
The most basic benefit the consumer is buying.
Ex: overnight rental of a bedroom at a hotel
Supplementary Services
A group of services that support or enhance the core service. Ex: Room service at a hotel.
People Processing
The service is directed at a customer. Ex: health care
Possesion Processing
The service is directed at customer’s physical possesions. Ex: dry-cleaning
Mental Stimulus Processing
Services directed at people’s minds. Ex: education
Information Processing
Services that use technology or brainpower directed at a customer’s assets. Ex: insurance or consulting
Mass Customization
A strategy that uses technology to deliver customized services on a mass basis.
Place Strategy
Distribution strategies for service organizations must focus on: convenience, number of outlets, direct/indirect distribution, location, and scheduling.
Promotion Strategy
Service organizations that focus on: stressing tangible cues, using personal information sources, creating a strong organizational image, engaging in post purchase communication.
Revenue-Oriented Pricing
A pricing strategy that aims to maximize the surplus of income over costs.
Operations-Oriented Pricing
A pricing strategy that focuses on matching supply and demand by varying prices. Ex: hotels raising price at peak times
Patronage-Oriented Pricing
A pricing strategy aimed at maximizing the number of customers using the service.
Internal Marketing
Treating employees as customers and developing systems and benefits to satisfy their needs. Ex: flextime, on-site day care, concierge services.
Nonprofit Organization
An organization that exists to achieve some goal other than the usual business goals of profit, market share, or return on investment.
Nonprofit Organization Marketing
The effort to bring about mutually satisfying exchanges with target markets.
Public Service Advertisement
An announcement that promotoes a program of a federal, state, or local government or of a nonprofit organization.
Marketing Channel
A set of interdependent organizations that eases the transfer of ownership as products move from producers to business user or consumer.
Channel Members
All parties in the marketing channel who negotiate with one another, buy and sell products, and facillitate the change of ownerhsip between buyer and seller in the course of moving the product from the manufactuere into the hands of the final consumer. Ex: Intermediaries, resellers, middlemen
Discrepancy of Quantity
The difference between the amount of product produced and the amount an end user wants to buy
Discrepancy of Assortment
the lack of all the items a customer needs to receive full satisfaction from a product or products
Temporal Discrepancy
A situation that occurs when a product is produced but a customer is not ready to buy it
Spatial Discrepancy
The difference between the location of a producer and the location of widely scattered markets
Retailer
A channel intermediary that sells mainly to consumers
Merchant Wholesaler
An institution that buys goods from manufacturers and resells them to businesses, government agencies, and other wholesalers or retailers and that receives and takes title to goods, stores them in its own warehouses, and later ships them
Agents and Brokers
Wholesaling intermediaries who do not take title to a product but facilitate its sale from producer to end user by representing retailers, wholesalers, or manufacturers
Logistics
The efficient and cost-effective forward and reverse flow and storage of goods, services, and related info into, through, and out of channel member companies
Direct Channel
A distribution channel in which producers sell directly to consumers
Dual Distribution
The use of two or more channels to distribute the same product to target markets
Private Exchange
A company creates a network so it can connect its business with that of its suppliers
Strategic Channel Alliance
A cooperative agreement between business firms to use the other’s already established distribution channel
Intensive Distribution
A form of distribution aimed at having a product available in every outlet where target customers might want to buy it
Selective Distribution
A form of distribution achieved by screening dealers to eliminate all but a few in any single area
Exclusive Distribution
A form of distribution that establishes one or a few dealers within a given area
Arm’s-Length Relationship
A relationship between companies that is loose, characterized by low relational investment and trust, and usually taking the form of a series of discrete transactions with no or low expectation of future interaction or service
Cooperative Relationship
A relationship between companies that takes the form of informal partnership with moderate levels of trust and info sharing as needed to further each company’s goals
Integrated Relationship
A relationship between companies that is tightly connected, with linked processes across and between firm boundaries and high levels of trust and interfirm commitment
Channel Power
The capactiy of a particular marketing channel member to control or influenece the behavior of other channel members
Channel Control
A situation that occurs when one marketing channel member intentionally affects another member’s behavior
Channel Leader (Captain)
A member of a marketing channel that exercises authority and power over the activities of other channel members
Channel Conflict
A clash of goals and methods and methods between distribution channel members
Horizontal Conflict
A channel conflict that occurs among channel members on the same level
Vertical Conflict
A channel conflict that occurs between different levels in a marketing channel, most typically between the manufacturer and wholesaler or between the manufacturer and retailers
Channel Partnering (Cooperation)
The joint effort of all channel members to create a channel that serves customers and creates a competitive advantage
Revenue Oriented Pricing
Maximizing the surplus of income over costs
Operations Oriented Pricing
Match supply and demand by varying prices
Patronage Oriented Pricing
Maximize the number of customers using the service