Marketing Chapters 1-5

Marketing
An organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders
Stakeholders
All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address.
Consumer
A person who purchases goods and services for personal use
Marketing Concept
A business philosophy that makes customer satisfaction – now and in the future – the central focus of the entire organization
Need
The recognition of any difference between a consumer’s actual state and some ideal or desired state
Want
The desire to satisfy needs in specific ways that are culturally and socially influenced
Benefit
The outcome sought by a customer that motivates buying behavior that satisfies a need or want
Demand
Customer’s desire for products coupled with the resources needed to obtain them
Market
All the customers and potential customers who share a common need that can be satisfied by a specific product who have the purchasing power to exchange for it
Marketplace
Any location or medium used to conduct an exchange
Virtual goods
Digital products consumers buy for use in online contexts
Utility
The usefulness or benefit consumers receive from a product
Exchange
The process by which some transfer of value occurs between a buyer and a seller
Product
A tangible good, service, idea, or combination of these that satisfies consumer or business needs through the exchange process
Production orientation
Most efficient way to produce and distribute products (demand>supply)
Selling orientation
A managerial view of marketing as a sales function, or a way to move products out of warehouses to reduce inventory
Consumer orientation
A business approach that prioritizes the satisfaction of customers’ needs and wants
Total Quality Management
A management philosophy that focuses on satisfying customers through empowering employees to be an active part of continuous quality improvement
instapreneur
A businessperson who only produces a product when it is ordered
Triple bottom line orientation
a business orientation that looks at financial profits, the community in which the organization operates, and creating sustainable business practices
Customer relationship management
Using information about customers to create marketing strategies that develop and sustain desirable customer relationships
Attention economy
A company’s success is measured by its share of mind rather than share of market, where companies make money when they attract eyeballs rather than just dollars
Social marketing concept
Marketers must satisfy customers’ needs in way that also benefit society and also deliver profit to the firm
Sustainability
Being able to meet the needs of the present without compromising the ability of future generations to meet their own needs.
Green marketing
A marketing strategy that supports environmental stewardship, thus creating a differential benefit in the minds of the consumers
Return on investment
The direct financial impact of a firm’s expenditure of a resource such as time or money
Popular culture
The music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market
Consumer goods
The goods individual consumers purchase for personal or family use
Services
Intangible products that are exchanged directly between producer and consumer
Business-to-business marketing
The marketing of goods and services from one organization to another
Industrial goods
Goods individuals or organizations buy for further processing or for their own use when they do business
e-commerce
The buying or selling of goods on the internet
Shrinkage
Losses experienced by retailers due to shoplifting, employee theft, and damage to merchandise
Anticonsumption
The deliberate defacement of products
Value proposition
A marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased
Brandfests
Events companies host to thank customers for their loyalty
Lifetime value
The potential profit a single customer’s purchase of a firm’s products generates over the customer’s lifetime
Distinctive competency
A superior capability of a firm in comparison to its direct competitors
Differential benefit
Properties of products that set them apart from competitor’s products by providing unique customer benefits
Value chain
A series of activities involved in designing, producing, marketing, delivering, and supporting any product. Each link in the chain has the potential to either add or remove value from the product the customer eventually buys.
Inbound logistics
Bringing in materials to make the product
Operations
Converting materials into final product
Outbound logistics
Shipping the final product
Marketing scorecards
Feedback vehicles that report how the company or brand is actually doing in achieving various goals
Metrics
Measurements or scorecards marketers use to identify the effectiveness of different strategies or tactics
Amafessionals
Consumers who contribute ideas to online forums for the fun and challenge rather than to receive a paycheck, so their motivation is psychic income versus financial income
Consumer-generated content
Everyday people functioning in marketing roles, such as participating in creating advertisements, providing input to new product development, or serving as wholesalers or retailers
Web 2.0
The new generation of the web that incorporates social networking and user interactivity
Folksonomy
A classification system that relies on users rather than preestablished systems to sort contents (ie Pandora radio stations)
Wisdom of crowds
Under the right circumstances, groups are smarter than the smartest people in them, meaning that large numbers of consumers can predict successful products
Open source model
Companies share their software codes with one another to assist int he development of a better product
Marketing plan
A document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out the strategy
Mass market
All possible customers in a market, regardless of the differences in their specific wants and needs
Market segment
A distinct group of customers within a larger market who are similar to one another in some way and whose needs differ from other customers in the larger market
Market position
The way in which the target market perceives the product in comparison to competitors’ brands
Marketing mix
Product, Price, Place, Promotion
Strategic planning
A managerial decision process that matches an organization’s resources and capabilities to its market opportunities for long-term growth and survival
Strategic business units (SBUs)
Individual units within the firm that operate like separate businesses, each having its own mission, business objectives, resources, managers, and competitors
Functional planning
A decision process that concentrates on developing detailed plans for strategies and tactics for the short term, supporting an organization’s long-term strategic plan
Operational planning
Focuses on developing detailed plans for day-to-day activities that carry out an organization’s functional plans
Steps to strategic planning
Defining the mission, SWOT analysis, setting objectives, establishing a business portfolio, developing growth strategies
Business portfolio
The group of different products or brands owned by an organization and characterized by different income-generating and growth capabilities
BCG growth-market share matrix
A portfolio analysis model developed by BCG that assesses the potential of successful products to generate cash that a firm can then use to invest in new products
Stars
SBUs with products that have high market share in high growth markets
Cash Cows
SBUs with a high market share in low growth markets
Question Marks
SBUs with low market shares in fast growth markets
Dogs
SBUS with low market shares in low growing market
Market penetration strategies
Growth strategies designed to increase sales of existing products to current customers, nonusers, and users of competitive brands in served markets (existing markets and existing products)
Product development strategies
Growth strategies that focus on selling new products in existing markets (existing markets and new products)
Market development strategies
Growth strategies that introduce existing products to new markets (new markets and existing products)
Diversification strategies
Growth strategies that emphasize both new products and new markets
Control
A process that entails measuring actual performance, comparing this performance to the established marketing objectives, and then making adjustments to the strategies or objectives
Return on marketing investment
Quantifying just how an investment in marketing has an impact on the firm’s success
Action plans (marketing programs)
Individual support plans included in a marketing plan that provide guidance for implementation and control of the various marketing strategies within the plan
Marketing environment
The actors and forces outside marketing that affect marketing management’s ability to build and maintain successful relationships with target customers
Microenvironment
The actors close to the company that affect its ability to serve its customers- that company, suppliers, marketing intermediaries, customer markets, competitors, and publics
Macroenvironment
The larger societal forces that affect the microenvironment- demographic, economic, natural, technological, political, and cultural forces
Marketing intermediaries
Firms that help the company to promote, sell, and distribute its goods to final buyers
Public
Any group that has an actual or potential interest or impact on an organization’s ability to achieve its objectives
Demography
Scientific study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics
Baby Boomers
78 million people born during the baby boom following World War II and lasting until 1964; most influential; wealthiest generation
Generation X
49 million people born between 1965-1976; “latch-key” generation; less materialistic, more focused on family values; most educated generation to date
Millenials
The 83 million children of the baby boomers, born between 1977 and 2000. Also called echo-boomers. Fluency in technology
Lifestyle
A person’s pattern of living as expressed in his or her activities, interests, and opinions
Economic environment
Economic factors that affect consumer purchasing power and spending patterns
Natural environment
Natural resources that are needed as inputs by marketers or that are affected by marketing activities
Technological environment
Forces that create new technologies, creating new product and market opportunities
Political environment
Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society
Cause-related marketing
Marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.
Cultural environment
Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors
Customer insights
Fresh understandings of customers and the marketplace derived from marketing information that becomes the basis for creating customer value and relationships
Marketing information systems (MIS)
People and procedures dedicated to assessing information needs, developing the needed information, and helping decision makers to use the information to generate and validate actionable customer and market insights
Internal databases
Collections of consumer and market information obtained form data sources within the company network
Competitive marketing intelligence
The systematic collection and analysis of publicly available information about consumers, competitors, and developments in the marketing environment
Marketing research
The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization
Exploratory research
Marketing research used to gather preliminary information that will help define problems and suggest hypotheses
Descriptive research
Marketing research used to better describe marketing problems, situations, or markets
Causal research
Marketing research used to test hypotheses about cause-and-effect relationships
Secondary data
Information that already exists somewhere, having been collected for another purpose
Primary data
Information collected for the specific purpose at hand
Ethnographic research
A form of observational research that involves sending trained observers to watch and interact with customers in their natural environments
Survey research
Gathering preliminary data by asking people questions about their knowledge, attitudes, preferences, and buying behavior
Experimental research
Gathering primary data by selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Focus group interviewing
Personal interviewing that involves inviting six to ten people to gather for a few hours with a trained interviewer to talk about a product, service, or organization. The interviewer “focuses” the group discussion on important issues
Sample
A segment of the population selected for marketing research to represent the population as a whole
Simple random sample
Probability sample; every member of the population has a known and equal chance of selection
Stratified random sample
Probability sample; the population is divided into mutually exclusive groups (such as gender), and samples are drawn from each group
Cluster (area) sample
Probability sample; The population is divided into mutually exclusive groups (such as blocks) and the researcher draws a random sample of the groups to interview
Convenience sample
Non-probability sample; The researcher selects the easiest population members from which to obtain information
Judgment sample
Non-probability sample; the researcher uses his or her best judgment to select population members
Quota sample
Non-probability sample; the researcher finds and interviews a prescribed number of people in each of several categories
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
Consumer decision-making process
Problem recognition; information search; evaluation of alternatives; product choice; postpurchase evaluation
Involvement
The relative importance of perceived consequences of the purchase to a consumer
Perceived risk
The belief that choice of a product has potentially negative consequences, whether financial, physical, and/or social
Problem recognition
Consumer sees a difference between current state of affairs and desired or ideal state
Search marketing
Marketing strategies that involve the use of internet search engines, including (S)earch (E)ngine (O)ptimization and ads
Behavioral targeting
Marketers deliver advertisements for products which a consumer is looking for by watching what a consumer does online
Evaluative criteria
The dimensions consumers use to compare competing product alternatives
Heuristics
“Rule-of-thumb” that leads to a speedy decision by simplifying the process
Cognitive dissonance
The anxiety or regret a consumer may feel after choosing from among several similar attractive choices
Hierarchy of Needs
Physiological>Safety>Belongingness>Ego>Self-Actualization
Classical conditioning
A type of learning in which one learns to link two or more stimuli and anticipate events
Operant conditioning
Learning that occurs as the result of rewards or punishment
Attitude
A predisposition to respond favorably or unfavorable to stimuli on the basis of affects, cognition, and behavior
Affect
The feeling component of attitude
Cognition
Knowing component of attitude
Behavior
Doing component of attitude
Personality
The set of unique psychological characteristics that consistently influences the way a person behaves
Self-Concept
Composed of a mixture of beliefs, observations, and feelings about personal attributes
Family Life Cycle
Characterizing consumers within a family structure on the basis of different stages through which people pass as they grow older
Psychographics
The use of psychological, sociological, and anthropological factors to construct market segments
AIOS
Activities, Interests, Opinions
Sensory marketing
Marketing techniques that link distinct sensory experiences such as a unique fragrance with a product or service
Time poverty
Consumers’ belief that they are more pressed for time than ever before
Culture
The values, beliefs, customs, and tastes a group of people values
Subculture
A group within society whose members share a distinctive set of beliefs, characteristics, or common experiences
Microcultures
Groups of consumers who identify with a specific activity or art form
Consumerism
A social movement that attempts to protect consumers from harmful business practices
Environmentalism
A social movement dedicated to protecting the earth’s life support systems for us and other species.
Kyoto Protocol
controlling global warming by setting greenhouse gas emissions targets for developed countries
Environmental stewardship
a position taken by an organization to protect or enhance the natural environment as it conducts its business activities.
Social class
A category of people who have a similar standing or rank in a society based on wealth, education, power, prestige, and other valued resources.
Status symbols
Visible markers that provide a way for people to flaunt their membership in higher social classes
Mass-class
The hundreds of millions of global consumers who now enjoy a level of purchasing power that’s sufficient to let them afford high-quality products.
Reference group
An actual or imaginary individual or group that influences an individual’s evaluations, aspirations, or behaviors
Opinion leader
A person who is frequently able to influence others’ attitudes or behaviors by virtue of his or her active interest and expertise in one or more product categories
Gender roles
Expectations about what is appropriate behavior for each sex.
Time Utility
Adding value to products by making them available when they’re needed.
Place Utility
Adding value to products by having them where people want them.
Possession Utility
Value consumers put on purchasing a product and having the freedom to use the product as it was intended or finding a new use for the product
Form Utility
The value producers add to materials in the creation of finished goods and services.
Customer Equity
The total combined customer lifetime values of all of the company’s customers
Syndicated Research
Research by firms that collect data on a regular basis and sell the reports to multiple firms
Data Mining
Technique used to search and analyze data to reveal patterns and trends that can be used to predict future behavior
Cross-Sectional Design
A research design in which investigators compare groups of subjects of differing age who are observed at a single point in time.
Longitudinal Design
A research design in which investigators observe one group of subjects repeatedly over a period of time.
Greenwashing
The unfortunate practice of overstating a company’s commitment to sustainability