MARKETING KERIN, HARTLEY, RUDELIUS CH’S 1-10 (10TH & 11TH EDITION)

Marketing
activity for creating, communicating, delivering, and exchanging offerings that befire the organization, stakeholders, and society
exchange
trade of things between buyer/seller
4 THINGS needed for marketing to occur
1-unsatisfied needs
2-desire and ability to be satisfied
3-a way for parties to communicate
4- exchange
target market
specific group of potential consumers toward which an organization directs its marketing program
marketing mix
marketing mgr’s controllable factors product, price, promotion, place, that can be used to solve a mot’ing problem.
environmental forces
social, economic, regulatory, technological, competitive
customer value proposition
cluster of benefits that an org. promises cust’s to satisfy their needs
relationship marketing
liking organizations to individual customers or employees for long term benefits
marketing program
plan that integrates marketing mix to provide good, service`
marketing concept
organization should satisfy needs while also trying to achieve orgs goals
market orientation
collect info about customers needs
share info across departments
create value
customer experience
internal response customers have to organization
societal marketing
view that organizations should satisfty needs of consumer in that provide for societys well being
ultimate consumers
people who purchase goods for household use
organizational buyers
manufactures, reatilers
utility
benefits or customer value received by users of the product
form utility
production of goods or services
place utility
having the offering available where consumers need it
time utility
available when needed
possession utility
value of marking an item easy to purchase, credit cards
organization
is a legal entity that consist of people who share a common mission
business firm
is a privately owned organization such as target, nike, or hyundai that serves its customers to ear a profit so that it can survive
profit
the money left after a business firm total expenses are subtracted from its total revenues and is the reward for the risk it undertakes in marketing its offering
nonprofit organization
is a non-governmental organization that serves its customers but does not have profit as an organizational goal
strategy
an organization long term course of action that delivers a unique customer experience while achieving its goal, may very both by level and by offering.
corporate level
is where top management directs overall strategy for the entire organization “top management” usually means the board of directors and senior management officers w/ variety of skills and experiences
strategic business unit (SBU)
which is subsidiary, division, or unit of an organization that markets a set of related offering to s clearly defined groups of customers.
strategic business unit level
managers set a more specific strategic direction for their businesses to exploit value creating opportunities,
functional level
where groups of specialist actually create value for the organization
department
generally refer to these specialized function such as marketing and finance
cross functional team
consists of a small number of people from different department who are mutually accountable to accomplish a task or a common set of performance goals.
core value
are the fundamental, passionate, and enduring principles that guide its conduct over time. inspire and motivate employees to take production action
mission
a statement of the organization function in society that often identifies its customers, market, products, and technology.
mission statement/vision
should be clear, concise, meaningful, inspirational, and long term
organizational culture
the set of values, ideas, attitudes, and behavioral norm that is learned and shared among the members of organization
business
describes the clear, broad, underlying industry or market sector of an organization offering
business model
the strategies an organization develops to provide value to the customer it serves
goals/objective
target of perfomance to be achieved, often by a specific time (statement of an accomplishment of a task to be achieved)
market share
is the rato of sales revenue of the firm to the total sale revenue of all firms in the industry, including the firm itself
marketing dashboard
visual computer display of the essential information related to achieving marketing objective/info.
marketing metric
a measure of the value or trend of a marketing activity or result
data visualization
which present info about an organization marketing metric graphically so marketers can quickly…
1. spot deviation from plans
2. take corrective action
marketing plan
road map for the marketing activities of an organization for a specified future time period, such as 1 yr to 5yr
competencies
which are its special capabilities.. the skills, techonologies, and resources that distinguish it from other organization and provide customer value
competitive advantage
a unique strength relative to competitor that provides superior return, often based on quality, time, cost, or innovation
business portfolio analysis
technique that managers use to quantify performance measures and growth targets of their firm’s strategic business units, determine if they should withdraw resources and phase out products, requires calculations of growth rate and market share,
is applied by classifying a fir’s products or services into a four-quadrant matrix.
market growth rate
vertical axis – annual rate of growth of the SBU industry
relative market share
horizontal axis – defind as the sales of the SBU divided by the sales of the largest firm n the industry
cash cows
are SBU that generate large amounts of cash, far more than they can use .
-they have dominant shares of slow growth market and provide cash to cover the organization overhead and to invest in other SBU
stars
are SBU with a high share of high growth markets that my need extra cash to finance their own rapid futher growth
-when their growth slows, they are likely to become cash cows
question marks
are SBU with a low share of high growth markets. they reqire large injections of cash just to maintain their market share, much less increase it
dogs
are SBU with low shares of slow growth market. although they may generate enough cash to sustain themselves, they do not hold the promise of ever becoming real winners for the organization
diversification analysis
a technique that helps a firm search for growth opportunities from among current and new markets as weel as current and new products, includes market penetration, market development, product development and diversification.
market penetration
is a marketing strategy to increase sales of current products in curren markets
market development
is a marketing strategy to sell current products to new markets
product development
is a marketing strategy of selling new products to current markets
diversification
is a marketing strategy of developing new product and selling them in new markets
strategic marketing process
an approach whereby an organization allocates its marketing mix resources to reach its target market
3phases – planning, implementation and evaluation
situation annalysis
is taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization marketing plan and the external forces and trends affecting it
SWOT annalysis
an acronym describing an organization appraisal of its internal strength and weaknesses and its external opportunities and threats
market segmentation
the sorting of potential buyers into groups that have common needs and will respond similarly to a marketing action
points of difference
those characteristic of a product that make it superior to competitive substitutes
marketing strategy
is a means by which a marketing goal is to be achieved, usually characterized by a specified target market and a marketing program to reach it
marketing tactics
detailed day to day operational decisions essential to the overall success of marketing strategies
Strategic Business Unit Levels
1. Corporate, where top management directs overall strategy

2. Functional, where groups of specialist actually create value for the organization.

Organizational Culture
the set of values, ideas, attitudes, and norms of behavior that is learned an shared among the members of an organization.
What are 2 elements that define an organization’s direction?
Specific goals, and “The business it’s in”
Industry
Organizations that develop similar offerings, when grouped together.
Implementation (Strategic Marketing Process)
Obtaining resources and developing planning schedules.
What are two elements that define an organization’s direction?
The business it’s in and its goals.
Where do we want to go?
is answered by identifying on’e competencies, customers, and competitors.
What is the difference between a marketing strategy and marketing tactics?
A marketing strategy is the means by which a marketing goal is to be achieved, whereas marketing tactics are the day to day operational decisions.
Why is international expansion (diversification) risky?
Language differences, governmental regulations, cultural traditions.
These allow an organization to determine where are we now?
Customers, Competitors, Competencies
Pathway for a SBU through the four quadrants of the BCG
Question mark star cash cow, dog. counterclockwise
Market penetration
current current
cross-functional team
different departments
product development
strategy offers a new product or service to a firm’s existing market.
Market segmentation is most essential for what part of the planning phase of the strategic marketing process?
Market-product focus.
What are the three levels of strategy
corporate level, strategic level, functional level
Where are we now?
reevaluate its competencies, assess its present and prospective customers, analyze its current and potential competitors.
Where do we want to go?
Set a direction and allocate resources. Business portfolio and diversification analyses do this.
Three steps of the planning phase of the strategic marketing process
Planning… A swot analysis, a market-product focus through market segmentation (grouping buyers into segments with things in common) and a marketing program that specifies the budget and activities (strategies and tactics)
Implementation
Evaluation
Implementation phase of the marketing process
Obtain resources, design the marketing organization to perform product management, marketing research, sales and advertising and promotion activities, develop schedules to identify the tasks that need to be done
Evaluatin phase of the marketing process
identify deviation or planning gaps, and take corrective actions to exploit positive deviation or correct negative ones
baby boomers
The generation of children born between 1946 and 1964. Wealthiest generation in U>S> history. 50% of all consumer spending. Fitness, retirement, fiscal planning
barriers to entry
Business practices or conditions that make it difficult for new firms to enter the market. Capital requirements, advertizing expenditures, product identity, distribution access, or the cost to customers of switching suppliers.
blended family
A family formed by merging two previously separated units into a single household
competition
alternative firms that could provide a product to satisfy a specific market’s needs.
consumerism
A grassroots movement started in the 1960’s to increase the influence, power, and rights of consumers in dealing with institutions.
culture
A social force that incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
demographics
Describing a population according to selected characteristics such as age, gender, ethnicity, income and occupation.
discretionary income
The money that remains after paying for taxes and necessities.
disposable income
The money a consumer has left after paying taxes to use for necessities such as food, housing, clothing and transportation
economy
The income, expenditures, and resources that affect the cost of running a business and a household
e-commerce
Any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services is often called electronic commerce.
environmental scanning
The process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
Generation X
Includes the 15% of the population born between 1965 and 1976. Self-reliant, supportive of racial and ethnic diversity, and better educated than any previous generation. Not extravagant. They are cautious, pragmatic and traditional.
Generation Y
Includes the 72 million Americans born between 1977 and 1994. Increasing births. Music sports computers video games communication and networking. eco-boom or baby boomlet.
gross income
The total amount of money made before taxes
marketspace
an information and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings.
multicultural marketing
Combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races.
regulation
restrictions state and federal laws place on business with regard to the conduct of its activities.
self-regulation
An alternative to government control is self-regulation, where an industry attempts to police itself. tv networks, better business bureau
social forces
to the environment include the demographic characteristics of the population and its values. Changes in these forces can have a dramatic impact on marketing strategy.
technology
inventions or innovations from applied science or engineering research.
value consciousness
the concern for obtaining the best quality, features, and performance of a product or service for a given price.
pure competition
many sellers similar product like commodities
Monopolistic competition
Many sellers compete with substitutable products within a price range. Ex if coffee goes up too much they may switch to tea.
Oligopoly
When a few companies control the majority of industry sales. Verizon, att, sprint
Pure Monopoly
Only one firm sells the product
consumer behavior
ththe action a person takes in purchasing and using products and services, including the mental and social processes that come before and after these action
purchase decision process
the stages a buyer passes through in making choices about which products and services to buy
5stages-
1. problem recognition
2. information search
3. alternative evaluation
4. purchase decision
5. postpurchase behavior
problem recognition
the initial step in the purchase decision, is perceiving a difference between a person ideal and acutla situation big enough to trigger a decision.
evaluative criteria
which represent both the objective attributes of a brand (display) and the subjective one (prestige) you use to compare different products and brands
involvement
the personal, social, and economic significance of a purchase to the consumer.
consideration set
the group of brand that you would consider from among all the brands of which you are aware in the product class
motivation
the energizing force that stimulates behavior to satify a need
physiological needs
basic to survival and must be satisfied first
safety needs
involce self preservation as well as physical and financial well being
social needs
are concerned with love and friendship
personal needs
include the need for achievement, status, prestige, and self respect
self actualizattion needs
involce personal fulfillment
personality
a person’s consistent behaviors or responses to recurring situations
self concept
which is the way people see themselves and the way they believe others see them.
perception
the process by which an individual selects, organizes, interprets info. to create a meaningful picture of the world.
selective perception
filtering of exposure, comprehension, and retention
selective exposure
occurs when people pay attention to messages that are consistence with their attitudes and beliefs and ignore messages that are inconsistent.
selective comprehension
involves interpreting information so that it is consistent with your attitudes and beliefs.
selective retention
means that consumers do not remember all the info. they see, read, or hear, even minutes after exposure to it.
subliminal perception
means that you see or hear messages without being aware of them
perceived risk
represents the anxiety felt because the consumer connot anticipate the outcomes of a purchase but believes there may be negative consequences
learning
behaviors that result from repeated experience and reasoning
behavioral learning
is the process of developing automatic responses to a situation built up through repeated exposure to it.
drive
is a need that moves an individual to action
cue
stimulus or symbol perceived by consumers
response
is the action taken by a consumer to satisfy the drive
reinforement
is the reward
stimulus generalization
occurs when a response elicited by one stimulus is generalized to another stimulus
stimulus discrimnation
refers to a person ability to perceive difference in stimuli
cognitive learning
consumers also learn through thinking, reasoning, and mental problem solving without direct experience
brand loyalty
a favorable attitude toward and consistent purchase of a single brand over time
attitude
is a “learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way”
beliefs
are a consumer subjective perception of how a product or brand performs on different attributes
lifestyle
is a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them
psychographics
provides insights into consumer needs and wants
thinkers
are mature, reflective, and well educated people who value order, knowledge, responsibility
achiever
have a busy, goal
Attitude
learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way
Beliefs
A consumer’s subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.
Brand Loyalty
a favorable attitude toward and consistent purchase of a single brand over time
Cognitive dissonance
The feeling of postpurchase psychological, the feeling of post-purchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives
consideration set
The group of brands that a consumer would consider acceptable from among all the brands of which he or she is aware in the product class
consumer behavior
The actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions
consumer socialization
the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers. Children learn how to purchase 1. by interacting with adults in purchase situations and 2. through their own purchasing and product usage experiences
evaluative criteria
factors that represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands
family life cycle
the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors.
involvment
the personal, social, and economic significance of the purchase to the consumer
learning
Those behaviors that result from (1) repeated experience and (2) reasoning
lifestyle
a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them.
motivation
the energizing force that stimulates behavior to satisfy a need
opinion leader
Individuals who exert direct or indirect social influence over others. about 10% of US adults are opinion leaders. study by popular mechanics showed 18 million opinion leaders responsible for influencing the purchases of some 85 million consumers.
perceived risk
the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.
perception
The process by which an individual selects, organizes, and interprets information to create an meaningful picture of the world
personality
a person’s consistant behaviors or responses to recurring situations
purchase decision process
the five stages a buyer passes through in making choices about which products and services to buy: (1) problem recognition, (2) information search, (3) alternative evaluation, (4) purchase decision, and (5) postpurchase behavior.
reference groups
people to whom an individual looks as a basis for self-appraisal or as a source of personal standards
self-concept
the way people see themselves and the way they believe others see them
situational influences
the five aspects of the purchase situation that impacts the consumer’s purchase decision; (1) the purchase task, (2) social surroundings, (3) physical surroundings, (4) temporal effects, and (5) antecedent states
social class
the relatively permanent, homogenous divisions in a society into which people sharing similar values, interests and behavior can be grouped
subcultures
subgroups within the larger or national culture that have unique values, ideas, and attitudes. 3 largest US subcultures are Hispanics, African-Americans, and Asian-Americans. They account for 1 in 4 of US consumers and are expected to spend about 3.4 TRILLION in 2013.
subliminal perception
seeing or hearing messages without being aware of them
word of mouth
the influencing of people during conversations. Most powerful and authentic information source for consumers, typically involves friends viewed as trustworthy. 67% of US sales are based directly on word-of-mouth among friends, family and collegues
Problem Recognition
the initial step in the purchase decisionis perceiving a difference between a person’s ideal and actual situations big enough to trigger a decision
Information Search
after recognizing a problem, a consumer begins to search for information to clarify by 1. suggesting criteria for purchase 2. yielding brand names to meet criteria 3. developing consumer value perceptions
Internal Search
scanning your memory for previous experiences with products or brands
External Search
when personal knowledge is insufficient, consumers look to external sources for information including 1. personal sources; friends and relatives 2. public sources; rating organizations, consumer reports 3. marketer-dominated sources; info from sellers including, advertising, company web-sites ect..
Alternative Evaluation
assessing value, The stage of the buyer decision-making process in which the consumer uses information to evaluate alternative brands in the choice set
Purchase Decision
the decision of whether or not to buy and which competing product to buy, which is made after carefully weighing the alternatives. 1. From whom to buy 2. When to buy
Postpurchase behavior
The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction
3 to 1 ratio
Satisfied buyers tell 3 other people about their experience. Dissatisfied buyers complain to 9 people.
High-involvement purchase
usually have at least one of these characteristics 1) expensive 2) can have serious personal consequences 3) could reflect on ones social image. For these consumers usually engage in extensive info search, consider many attributes and brands, form attitudes and participate in word-of-mouth communication
Low-involvement purchases
purchases that have little importance or relevance for the customer
Extended problem solving
each of the five stages of the consumer purchase decision process is used, including considerable time and effort on external information search and in identifying and evaluating alternatives. Used in high-involvement purchases and decisions involving risk
Limited problem solving
consumers typically seek some information or rely on a friend to help them evaluate alternatives
Routine problem solving
for products such as table salt and milk, consumers recognize a problem, make a decision, and spend little effort seeking external information and evaluating alternatives.
Low Involvement Marketing Strategy
companies who are market leaders place attention on 1. maintaining quality 2. avoiding stockout situations so buyers don’t substitute competing brands 3. repetitive advertising messages that reinforce a consumer’s knowledge or assures buyers they made the right choice
High Involvement Marketing Strategy
marketers know their consumers constantly seek and process information about objective and subjective brand attributes, form evaluative criteria, rate product attributes in various brands and combine these for overall brand evaluation. Market leaders ply consumers with product info through advertising and personal selling and create chat rooms and communities on company or brand websites
Psychological influences
Motivation and personality, perception, learning, values, beliefs and attitudes, lifestyle
Sociocultural influences
Personal Influence, Reference Groups, Social Class, Culture and Subculture.
Situational influences
Purchase task, social surroundings, physical surroundings, temporal effects, antecedent states
Marketing mix influences
product, price, promotion, place
Physiological needs
the most basic human needs to be satisfied- water, food, shelter, and clothing
Safety Needs
freedom from harm, financial security
Societal Marketing Concept
concept view that org.’s should satisfy the needs of consumers in way provides for society’s well being
Personal needs
status, respect, prestige
Self-actualization needs
self-fulfillment
Key Traits
enduring characteristics witin a person or in his or her relationship with others. Assertiveness, extroversion, compliance, dominance, and aggression
Ideal Self
describes how people would like to see themselves
Selective perception
the brain’s attempt to organize and interpret information. a filtering exposure, comprehensionand retention
Selective exposure
occurs when people pay attention to messages that are consistent with their attitudes and beliefs and ignore messages that are inconsistent
Selective Comprehension
interpreting information so that it is consistent with your attitudes and beliefs.
Selective Retention
consumers do not remember all the information they see, read, or hear, event minutes after exposure to it.
Strategies to reduce consumer’s risk
Obbtaining seal of approval, Securing Endorsements from influential people, providing free trials of the product, giving extensive usage instructions, Providing warranties and Gaurantees
Behavioral Learning
the process of developing automatic responses to a situation built up through repeated exposure to it
Learning Variables
Drive, Cue, Response, Reinforcement
Drive
a need that moves an individual to action. Examples such as hunger might represent motives
Cue
a stimulus or or symbol percieved by customers
Response
the action taken by the consumer to satisfy the drive
Reinforcement
the reward recieved by a consumer as a result of a successful response
Stimulus Generalization
occurs when a response elicited by one stimulus (cue) is generalized to another stimulus
Stimulus Discrimination
refers to a person’s ability to percieve differences in stimuli
Cognative learning
involves making connections betewwn two more ideas or simply observing the outcomes of others’ behavior and adjusting one’s own accordingly
Attitude Change
marketers use 3 approaches to change consumer attitude toward products. 1. Changing beliefs about the extent to which a brand has certain attributes 2. Changing the percieved importance of attributes 3. Adding new attributes to the product
Psychographics
an analysis of consumer lifestyle, combining psychology, lifestyle and demographics, that provides insight into consumer needs and wants. Used to uncover consumer motivations for buying and using products and services
VALS
prominent Psychographic system, developed by SRI Consulting, that identifies eight consumer segemnts based on 1. primary motivation for buying and having certain products and services 2. their resources
VALS Primary motivations
Ideals, Achievment, Self-expression
Ideals-motivated Groups
consumers guided by knowledge and principle.
Thinkers
High-resource group, mature, reflective, and well-educated people who value order, knowledge, and responsibility. Deliberate information-seekers who value durability and functionality in products over styling and newness
Believers
low-resource group, conservative, conventional people with concrete beliefs based on traditional, established codes, family, religion, community. They choose familiar products and brands, favor american products, generall loyal costomers
Achievement-motivated Groups
Consumers look for products and services that demonstrate sauccess to their peers or to a peer group they aspire to.
Achievers
High-resource group, Busy, goal directed lifestyle and a deep commitment to career and family. Image is important to them. They favor established, prestige products and services and are interested and time-saving devices given their hectic schedules
Strivers
low-resource group, Trendy, fun-loving, and less self-confident than Achievers. They also have lower levels of education and household income. Money defines success for them. They favor stylish products and are as impulsive as their financial circumstances permit.
Self-expression-motivated Groups
consumers that desire social or physical activity, variety and risk
Experiencers
high-resource group, young, enthusiastic, and impulsive consumers that become excited about new possibilities but are equally quick to cool. They savor the new, the offbeat, and the risky, enjoy exercise, sports outdoor recreation and social activities. spend income on fashion items, entertainment, and socializing
Makers
low-resource group of those who are motivated by self-expression. They are practical people who value self-sufficiency. They are focused on the familiar-family, work, and physical recreation-and have little interest in the broader world. As consumers, they appreciate practical and functional products.
High- and Low-resource groups
The seperation of the VALS groups based on and seperated by a group’s resources
Innovators
Successful, sophisticated, take-charge people with high self-esteem and abundant resources of all kinds. Image is important to the, not as evidence of power or status, but as an expression of cultivated tastes, independence, and character. They are receptive to new ideas and technologies
Survivors
Least resources of any segment. They focus on meeting basic needs (safety and security) rather than fulfilling desires. They represent a modest market for most products and services and are loyal to favorite brands, especially if they can be purchased at a discount.
Teaser advertising
run in advance advance of new-product introductions to stimulate conversation
Buzz
Popularity created by consumer word-of-mouth. BzzAgent, a company of 600,000 people who go out and channel their chatter toward products they deem authentically worth talking about
Membership group
a group to which a person actually belongs, including fraternities, and soroities, social clubs, and family
Aspiration group
a group that a person wishes to be a member of or wishes to identify with, such as a professional society
Dissociative group
a group that a person wishes to maintain a distance from because a difference in values or behaviors
Traditional Family
a married couple with children younger than 18 years constitutes just 22% of all US households. 78% of US households include single parents, unmarried couples, divorced, never married or widowed individuals and older couples whose children no longer live at home
Spouse-dominant descision making
those descisions for which the husband or wife is more responsible. Wives tend to have more say in groceries, children’s toys, clothing, and medicines. Husbands tend to be more influential in home and car maintenance purchases
Joint descsion making
common decision process for cars, vacations, houses, home appliances and electronics, and medical care.
Family descision making Roles
1. information gatherer 2. influencer 3. descision maker 4. purchaser 5. user. 89% of wives make descisions or purchases of men’s clothing. More than 40% of all food-shopping dollars are spent by males. Increasingly Teens and preteens are information gatherers, descision makers and purchasers given the prevelance of working parents and single-parent homes.
Hispanic buying patterns
quailty and brand concious, willing to pay a premium price for premium quality and are often brand loyal. Prefer buying American-made products, buying preferences strongly influenced by family and peers, consider advertising a credible product info source, convience is not an important product attribute with respect to food preparation or consumption
African American buying patterns
1. Spend more on boy’s clothing, rental goods, audio equipment 2. Twice as likely to own a pager and spend twice as much for online services 3. African American women 3x more on health and beauty products 4. Typical family is 5 years younger 5. Strongly motivated by quality and choice 6. Respond more to products such as apparel and cosmetics 7. Respond more to advertising that appeal to African American pride and heritage
Asian American buying patterns
difficult to make generalizations due to diverse subculture. Divided into two groups 1. Assimilated, conversant in english, highly educated, good jobs and exibit buying patterns typical of the American consumer 2. Nonassimilated, those who prefer their native tongue and customs
bidder’s list
a list of firms believed to be qualified to supply a given item
business marketing
the marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others
buy classes
consists of three types of organizational buying situations: straight rebuy, new buy, and modified rebuy
buying center
the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.
derived demand
the demand for industrial products and services is driven by, or derived from, demand for consumer products and services
e-marketplaces
online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products and services. Also, called B2B exchanges or e-hubs
ISO 9000
standard for registration and certification of manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards Organization (ISO)
make-buy decisions
an evaluation of whether components and assemblies will be purchase from outside suppliers or built by the company itself
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
Organizational buyers
those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale
Organizational buying behavior
the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers.
Organizational buying criteria
the objective attributes of the supplier’s products and services and the capabilities of the supplier itself
reciprocity
an industrial buying practice in which two organizations agree to purchase each other’s products and services
reverse auction
in an e-marketplace, it is an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other
supplier development
the deliberate efforts by organizations buyer to build relationships that shape suppliers’ products, services and capabilities to fit the buyer’s needs and those of its customers
supply partnership
buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer., a relationship that exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer
traditional auction
in an e-marketplace, it is an online auction in which a seller puts an item up for sell and would-be buyers are invited to bid in competition with each other
value analysis
a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs
Organizational Buyer Markets
1. Industrial Market 2. Reseller 3. Government
Industrial Market
7.2 million firms in industrial or business market; often reprocess a product or service before selling it; Physical goods make up 25% of market and Services make up 75%
Reseller Market
wholesalers and resellers that buy physical products and resell them again without reprocessing. in the US there are about 2 million resellers and 430,000 wholesalers
Government Market
federal, state, and local government agencies that buy goods and services for the constituents they serve. about 89,500 in the US
Global Market
Largest exporting organizations focus on organizational buyers. Capital equipment and industrial supplies account for 46% of US product exports
NAICS
North American Industry Classification System provides common industry definitions for Canada, Mexico and the US which makes it easier to measure economic activity in the members of NAFTA
NAFTA
North American Free Trade Agreement, Trade agreement , North American Free Trade Agreement; allows open trade with US, Mexico, and Canada
NAICS coding system
six-digit system; first 2 digits represent sector, 3rd digit represents subsector, 4th represents industry group, 5th designates a specific industry and is the most detailed level at which comparable data is available for Canada, Mexico and the US, 6th digit designates the individual country. p.142 figure 6-1
NAPCS
North American Product Classification System, provides a classification system for for products and services across North America
Key Characteristics of Organization Buying
Market Characteristics, Product or Service Characteristics, Buying Process Characteristics, Marketing Mix Characteristics
Marketing Characteristics
Demand for industrial products and services is derived, Few customers typically exist and their purchase orders are large
Product or service Characteristics
Products or services are technical in nature and purchased on the basis of specifications; many goods purchased are raw and semi-finished; Heavy emphasis is placed on delivery time, technical asistance, and postsale service
Buying Process Characteristics
Technically qualified and professional buyers follow established purchasing policies and procedures; Buying objectives and criteria are typically spelled out, as are procedures for evaluating sellers and their products; There are multiple buying influences and mulitple parties participate in purchase decisions; There are reciprocal arrangements, and negotiation between buyers and sellers is commonplace; online buying is widespread
Marketing Mix Characteristics
Direct Selling to organizational buyers is the rule and distribution is very important; Advertising and other forms of promotion are technical in nature; Price is often negotiated, evaluated as part of broader seller and product or service qualities, and frequently affected by quality discounts.
Product
a good, service or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is recieved in exchange for money or something else of value
Good
has tangible attributes that a consumer’s five senses can percieve.
Non-durable Good
an item that is consumed in one or a few uses, such as food and fuel. Rely heavily on adveritising
Durable Good
an item that lasts over many uses, such as appliances, cars and mobile phones. Generally emphasize personal selling.
Services
intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value. Significant part of US economy accounting for more that 40% of GDP.
Idea
a thought that leads to an action such as a concept for a new invention, or getting people out to vote.
Consumer Products
products purchased by the ultimate consumer
Business Products
products that organizations buy that assist in providing other products for resale. Also known as B2B products or industrial products
3 variables of Consumer Products
1. effort the consumer spends on the decision. 2. attributes used in making the purchase descision and 3. frequency of purchase.
Convenience Products
items that the consumer purchases frequently, conviently, and with a minimum of shopping effort.
Shopping Products
items for which the consumer compares several alternatives on criteria such as price, quality or style.
Speciality Products
items the consumer makes a special effort to search out an buy.
Unsought Products
items that the consumer does not know about or knows about but does not initially want
Derived Demand
sales of business products frequently result (or are derived) from the sale of consumer products.
Components
items that become part of the final product, including raw materials such as grain or lumber, as well as assemblies or parts, such as a car engine or door hinges
Support Products
items used to assist in producing other goods and services. such as…
Installations: buildings and fixed equipment
Accessory Equipment: tools, office equipment
Supplies: stationary, paper clips, and brroms
Industrial Services: maintenence, repair, and legal services
Product Item
a specific product that has a unique brand, size, or price. For example, fabric softener that comes in different sizes
Stock Keeping Unit (SKU)
unique identification number that defines an item for ordering purposes
Product Line
a group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets or fall within a given price range. Each group has it’s own marketing strategy. Nike examples include shoes, clothing and sports equipment.
Product Mix
consists of all product lines offered by an organization.
Marketing Dashboard
tool used to narrow focus of the performance of a product in a specific category such as growth rate or annual % sales change
Existing Product Comparison
newness described as a product that is functionally different from existing products.
Feature Bloat
a proliferation of extra features causing consumers to be overwhelmed
Legal Term Definition
the US Federal Trade Comission (FTC) advises that the term new be limited to use with a product up to six months after it enters regular distribution
Organizational Perspective
Newness viewed at 3 levels 1. lowest level is a product line extension or incremental improvement of existing products (low risk) 2. a significant jump in the innovation or technology such as land line to cellular service phones 3. true innovation, a truly revolutionary product such as the first Apple computer in 1976
Consumer perspective
newness defination based on the degree of learning required in terms of low to high
Continuous Innovation
consumers don’t need to learn new behaviors. Effective marketing based on generating awareness and not reeducation consumers. (toothpaste)
Dynamically Continuous Innovation
only minor changes in behavior are required. Marketing focus on educating prospective buyers on product benefits, advantages, and proper use. (heinz ez-squirt ketchup)
Discontinuous Innovation
making the consumer learn entirely new consumption patterns to use the product. Marketing involves not only gaining customer awareness but educating customer on the benefits and proper use of the innovative product
Protocol
a statement that, before product development begins, identifies 1. a well-defined target market 2. specific consumers’ needs, wants, and preferences 3. what the product will be and do.
Insignificant Point of Difference
having superior characteristics that deliver unique benefits to the user; a distinct point of difference is the single most important factor for a new product to defeat competitive ones
Incomplete market and product protocol
firms trying to design vague product for a phantom market.
Not satisfying customer needs on critical factors
this factor stresses that problems on one or more critical factors can kill the product, even though the general quality is high.
Bad timing
results when product is introduced too soon, too late, or when consumer tastes are shifting dramatically
Too little market attractiveness
often target market is too small or competitive to warrant the huge expenses necessary to reach it. (ideal: large target market with high growth & real buyer need)
Poor product quality
results when a product is not thoroughly tested; the costs to an organization for this can be staggering and include the labor, materials, & other expenses necessary to fix the problem (not to mention the lost sales, profits, and market share that usually result)
Poor execution of the marketing mix
somewhere in the marketing mix there can be a showstopper that kills the product
No economical access to buyers
supermarkets carry more than 30 thousand different SKUs, cost to gain access to retailer shelf space is huge (space is judged in terms of sales per square foot; ex:thirsty dog failed to generate enough sales to meet requirements); must displace an existing product on supermarket shelves (difficult task with the high sales per square foot demands of stores)
Not listening to the voice of the consumer
product managers thinking they “know better” than their customers or feel they “can’t afford” the valuable marketing research that could uncover problems
Skipping stages in the new product process
skipping one of the seven stages, this is why many firms have a “gate” to ensure that all steps are completed satisfactorily before going on to the next step
Seeking quick revenue
pressure from top managers cause marketing managers to push products into the marketplace to generate sales, often leads to overlooking the network of services needed to support the physical product.
Groupthink
the mode of thinking that occurs when the desire for harmony in a decision-making group overrides a realistic appraisal of alternatives
Not learning from past failures
easiest lessons are from “intelligent failures”- ones that happen early in the new-product process. at this point these failures are less expensive and immediately give better understanding of customers’ wants and needs.
Engineers in Silicon Valley
Chinese, Russian, Indian and other immigrants represent more than half of the total number
New-product process
seven stages an organization goes throughto identify business opportunities and convert them to a salable good or service.
New-product strategy development
the 1st stage of the new-product process that defines the role for a new product in terms of the firm’s overall corporate objectives. During this stage a firm uses bot SWOT analysis and enviornmental scanning to asses strenghts and weaknesses relative to the trends it identifies as opportunities or threats. Often difficult with services because they’re intangible and performance-oriented
Idea generation
the 2nd stage of the new-product process that develops a pool of concepts as candidates for new products, building upon the previous stage’s results
open innovation
an organization finds and executes creative new-product ideas by developing strategic relationships with outside individuals and organizations
Auto Sales
women buy two-thirds and influence 85% of all of these sales
Industrial design
an applied art that improves the aesthetics and usefulness of mass-produced products for users
Screening and evaluation
the 3rd stage of the new-product process that involves internal and external evaluations of the new-product ideas to eliminate those that warrant no further effort
Customer Experience Management (CEM)
the process of managing the entire customer experience within the firm
Concept Tests
external evaluations with consumers that consist of preliminary testing of a new-product idea rather than an actual product
Business analysis
the 4th stage of the new-product process that specifies the features of the product and the marketing strategy needed to bring it to market and make financial projections
Prototype
a full-scale operating model of a product
Capacity management
Integrating the service component of the marketing mix with efforts to influence consumer demand
Off-peak pricing
Charging different prices during different times of the day or days of the week to reflect variations in demand for the service
Development
the 5th stage of the new-product process that turns the idea on paper into a protype
Market testing
the 6th stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy
Test Marketing
involves offering a product for sale on a limited basis in a defined area. This test is done to determine whether consumers will actually buy the product and to try different ways of marketing it.
Simulated Test Markets (STM)
A technique that simulates a full scale test market but in a limited fashion. This technique can be used to save time cost and confidentiality not offered by regular test markets.
Commercialization
the 7th stage of the new-product process that positions and launches a new product in full-scale production and sales. Companies proceed carefully to this stage because it is the most expensive stage.
Regional rollouts
introducing the product sequentially into geographical areas of the United States, to allow production levels and marketing activities to build up gradually to minimize the risk of new-product failure
Slotting Fee
a payment a manufacturer makes to place a new item on a retailer’s shelf
Failure Fee
a penalty payment a manufacturer makes to compensate a retailer for sales its valuable shelf space failed to make
Time to Market (TtM)
the speed of marketing or introducing new products into the marketplace
Parallel Development
cross-functional team members who conduct the simultaneous development of both the product and the production process stay with the product from conception to production
Fast Prototyping
uses a “do it, try it, fix it” approach, encouraging continuing improvement even after the initial design
Constraints
in a decision the restrictions placed on potential solutions to a problem
data
the facts and figures to a problem that are divided into two main parts: secondary data and primary data.
data mining
the extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions.
decision
a conscious choice from among two or more alternatives
information technology
involves operating computer networks that can store and process data
marketing research
the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions
measures of success
criteria or standards used in evaluating proposed solutions to a problem
observational data
facts and figures obtained by watching, either mechanically or in person, how people behave
primary data
facts and figures that are newly collected for the project
questionnaire data
facts or figures obtained by asking people about their attitudes, awareness, intentions, and behaviors
sales forecast
the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing effort. Also called company forecast
secondary data
facts and figures that have already been recorded before the project at hand
Ethnographic Research
specialized observational approach in which trained observers seek to discover subtle behavioral/emotional reactions as consumers encounter products in their nature use environment
5 steps of Marketing Research
1. define problem 2.determine research plan 3. collect relevant information through secondary and primary data 4. develop finding 5. take marketing actions
Define the problem
Set research Objectives; Identify possible marketing actions
Develop the research plan
Specify constraints; identify data needed for marketing actions; determine how to collect data
Collect Relevant Information
Obtain secondary data; Obtain Primary Data; Use Information technology and data mining
Develop Findings
Analyze the data; present the findings
Take Marketing Actions
Make action recommendatons; implement action recommendations; evaluate the results
Exploratory research
provides ideas about a relatively vague problem
Descriptive research
generally involves trying to find the frequency that something occurs or the extent of a relationship between two factors
Causual research
the most sophisticated, tries to determine the extent to which the change in one factor changes another
Causation
A cause and effect relationship in which one variable controls the changes in another variable.
Correlation
a reciprocal relation between two or more things, ex. swamp and malaria (really caused by mosquitos)
Between Subjects Experiment
an experimental design in which the independent variable is made to vary across >two or more groups < of subjects.
Within Subjects Experiment
Experiment in which each subject of a >single group< receives all the variables/stimuli.
Key Elements to collect data
1. Concepts 2. Methods
Concepts
ideas about products or services.
Methods
approaches that can be used to collect data to solve all or part of the problem
Sampling
a technique to select a group of distributors, customers, or prospects and treating the information they provide as typical of all those in whom they are interested.
Statistical Inference
generalizes the results from the sample to much larger groups of distributors, customers, or prospects to help decide on marketing actions
Secondary Data: Internal
Examples include detailed sales breakdowns by product line, by region, by customer, and by sales representative, as well as customer inquiries and complaints. Often a starting point for research
Secondary Data: External
Published data from outside the organization. Examples include, US Census, Trade Association studies, business periodicals
Census Bureau
Population poll every 10 years; Economic Census every 5 years
NAICS
North American Industry Classification System
Advantages of Secondary Data
1. Tremendous time savings because the data have already been collected andpublished 2. the low cost such as free or inexpensive census reports
Disadvantages of Secondary Data
1. Out of date data (census every 5-10 years) 2. Definitions or categories might not be quite right 3. Data may not be specific enough
Primary Data: Watching People
Observing people and asking them questions are the two principal ways to collect new or primary data for a marketing study. 3 main methods, Mechanical (including electronic), Personal, and Neuromarketing methods.
Mechanical Methods
Ratings system for TV, Anytime Anywhere Media Measurement (A2/M2) Initiative
Personal Methods
Personal shoppers, watching consumers in person or videotaping, Ethnographic research
Neuromarketing Methods
use of brain scanning to analyze buying processes, mixing the study of the brain with marketing
Primary Data: Asking people
Asking consumers to gather data. Divided into 1. Idea Generation methods and 2. Idea Evaluation Methods
Idea Generation Methods
Individual interview, Depth Interviews, Focus Groups
Idea Evaluation Method
the process by which the marketing researcher tries to test the ideas discovered earlier to help marketing manager recommend marketing actions.
CATI
Computer Assisted Telephone Interviewing
open-ended question
allows respondent to express opinions, ideas and behaviors
Closed-end or fixed alternative Question
require respondent to select one or more predetermined choices
Dichotomous question
simple form of a fixed alternative question that allows only a yes or no answer
semantic differential scale
five point scale using 1-2 word adjectives with opposite meanings
Likert Scale
respondant expresses the ec=xtent to which they agree or disagree
Wording Problems
Leading questions, Ambiguous question, unanswerable question, 2 questions in one, non-mutually exclusive answers
Panel
A sample of consumers or stores from which researchers take a series of measurements
Experiment
Obtaining data by manipulating factors under tightly controlled conditions to test cause and effect, an example of causal research
Marketing Drivers
independent, variables of interest, often one or more of the marketing mix elements such as price, product features, or promotion
Data Warehouse
Databases at the core where the ocean of info is collected and stored.
Sensitivity Analysis
querying the database with “what if” questions to determine how a hypothetical change in driver such as advertising can affect sales.
Actions
Delivering results in a clear picture and if possible, a single page
Sales Forecasting Techniques
1. Judgments of the decision maker (99%0 2. surveys of knowladgeable groups 3. Statistical methods
Direct Forecast
estimating the value to be forecast without any intervening steps ex.. “How many quarts of milk should i buy?”
Lost-horse Forecast
involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast
Survey of Buyers Intentions Forecast
asking prospective customers if they are likely to buy the product during some future time period
Salesforce Survey Forecast
involves asking the salespeople to estimate sales during a coming period
Trend Extrapolation
involves extending a pattern observed in past data into the future
80/20 rule
A concept that suggests 80% of a firm’s sales are obtained from 20% of its customers. The percentages in the concept are not really fixed but suggets that a small fraction of customers provides a large fraction of a firm’s sales.
marketing-product grid
A framework to relate the market segments of potential buyers to products offered or potential marketing actions by an organization
market segmentation
Involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.
market segments
The relatively homogeneous groups of prospective buyers that result from the market segmentation process.
perceptual map
a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands, as well as its own product or brand to develop marketing actions to move its product or brand into an ideal position.
product differentation
a marketing strategy that involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products.
Usage Rate
The quantity consumed or patronage (store visits) during a specific period. Also called frequency marketing
Key of Marketing segmentation
1. forms meaningful groupings 2. develops specific marketing mix actions
One Product and Multiple market segments
when an organization produces only a single product or service and attempts to sell it to two or more market segments, it avoids the exra costs of developing and producing additional versions of the product
Multiple Markets and Multiple Market Segments
many firms now offer different variations of the same basic offering to high-end and low-end segments
Segments of One: Mass Customization
tailoring goods or services to the tastes of individual customers on a high-volume scale made possible by today’s internet ordering, flexible marketing and flexible manufacturing.
Built-to-order (BTO)
manufacturing a product only when there is an order from a customer.
Organizational Synergy
The increased customer value achieved through performing organizational functions such as marketing or manufacturing more efficiently
Cannibalization
a situation that occurs when sales of a new product cut into sales of a firm’s existing products
5 step market segmentation process
1. Group potential buyers into segments 2. group products to be sold into categories 3. develop a market-product grid and estimate size of markets 4. select target markets 5. take marketing actions to reach target markets
Criteria for forming segments
1. simplicity and cost-effectiveness of assigning potential buyers to segments 2. potential for increased profit 3. similarity of needs of potential buyers within a segment 4. difference of needs of buyers among segments 5. potential of a marketing action to reach a segment
Geographic segmentation
Dividing a market based on different geographical units such as nations, states, regions, counties, cities, or neighborhoods
Demographic segmentation
Dividing a market based on some objective physical (gender, race), measurable (age, income), or other classification attribute (birth era, occupation) or perspective customers
Psychographical segmentation
Dividing a market based on some subjective mental or emotional attribute (personality), aspirations (lifestyle), or needs of perspective customers.
Behavorial segmentation
Dividing a market based on some observable actions or attributes by prospective customers, such as where they buy, what benefits they seek, how frequently they buy and why they buy.
Ways to Segment Consumer Markets
Geographical – region
Demographic – household size
Psychographic – lifestyle
Behavioral – product features and usage rate
Frequency Marketing
strategy that focuses on the usage rate of consumers
Segment Usage
Geographical – 88%
Behavioral – 65%
Demographic – 53%
Psychographic – 43%
Ways to Segment Organizational Markets
Geographic – statistical areas
Demographic – North American Industry Classification System codes
Demographic – Number of employees
Behavioral – Usage rate
Select Target Markets
A firm must take care to choose its target market segments carefully. If it picks too narrow a set of segments, it may fail to reach the volume of sales and profits it needs
Target Market Criteria
Market Size, Experienced growth, Competitive Position, Cost of reaching the segment, and Compatibility with the Organization’s objectives and resources
Market Size
The estimated size of the market in the segment is an important factor in deciding whether it’s worth going after.
Expected Growth
although the size of the market in the segment may be small now, perhaps it is growing significantly or is expected to grow in the future.
Competitive position
is there a lot of competition in the segment now or is there likely to be in the future? The less competition, the more attractive the segment is.
Cost of reaching the segment
a segment that is inaccessible to a firm’s marketing actions should not be pursued. For example, if few people in the marketing area are reachable by newspaper or print ads, don’t waste advertising money.
Compatibility with objectives and resources
judging the cost of pursuing and obtaining a particular market in contrast with the current goals and regulations/resources of the company
This chapter
is crap and won’t shut up about Wendy’s
Take Marketing Action
Step 5 in the segment and targeting process. The purpose of developing a market-product grid is to trigger marketing actions to increase sales and profits. This means that someone must develop and execute an action plan in the form of a marketing program.
Immediate Strategy
Using the current or past information to formulate a current approach to advertising and marketing.
Future Strategy
Changing customer tastes and competition mean you must alter your strategies when necessary. This involves 1. Looking at company headquarters 2. What competitors are doing and 3. What might be changing in your area.
Marketing Synergies
Running horizontally across the grid, each row represents an opportunity for efficiency in terms of a market segment. Often these come at the expense of product synergies because a single customer segment will likely require a variety of products, each of which will have to be designed and manufactured. The company saves money on marketing but spends more on production.
Product Synergies
Running vertically down the market-product grid, each column represents and opportunity for efficiency in research and development and production.
Product positioning
the place a product occupies in consumers’ minds on important features relative to competitive products
product repositioning
changing the place a product occupies in a consumer’s mind relative to competitive products
Head-to-head positioning
competing directly with competitors on similar products attributes in the same target market
Differentiation positioning
Seeking a less competitive smaller market niche in which to locate a brand. Companies also follow this strategy among brands within their own product line to minimize the cannibalization of a brand’s sales or market share
Positioning Statement
A succinct written statement describing the ideas for the product or the brand that is not only used internally within the marketing department, but also for those in areas such as research and development and advertising
Customer positioning steps
1. identify the important attributes for a productor brand class 2. Discover how target customers rate competing products or brands with respect to these attributes 3. Discover where the company’s product or brand is on these attributes in the minds of potential customers 4. Reposition the company’s product or brand in the minds of potential customers
Simplicity and Cost-effectiveness
a marketing manager must be able to put a marketing segmentation plan into effect. This means identifying the characteristics of potential buyers in a market and then Cost-effectively assigning them to a segment
Potential for increased Profit
The best segmentation approach is one that maximizes the opportunity for future profit and return on investment (ROI). If this potential is maximized without segmentation, don’t segment! For non-profit organizations, the criterion is the potential for serving clients more effectively.
Similarity of needs
Potential buyers within a segment should be similar in terms of common needs that, in turn, leads to a common marketing action, such as product features sought or advertising media used.
Difference of needs
If the needs of the various segments aren’t very different, combine them into fewer segments. A different segment usually requires a different marketing action that, in turn, means greater costs. If increased sales don’t offset extra costs, combine segments and reduce the number of marketing actions.
Reaching a segment
Reaching a segment requires a simple but effective marketing action. If no such action exists, don’t segment.
PRIZM
Designed by Nielsen Claritas, this lifestyle segmentation system classifies every household in the US into one of 66 unique market segments based on the concept that, “birds of a feather flock together.”
Usage Index
This emphasizes the importance of the Heavy-user segment. For example, giving light users an index of 100 and the heavy users an index of 640 means that for every $1 spent by light users, heavy users are spending $6.40. This is why business owners focus on the heavy-user segment.
Grouping
Combining the products a firm sells into meaningful categories is as important as grouping customers into segments. When a firm has dozens or hundreds of products, they must be grouped in some way so buyers can relate to them.
Back Translation
The practice where a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
Balance of Trade
The difference between the monetary value of a nation’s exports and imports.
Bottom of the Pyramid
The largest but poorest socioeconomic group of people in the world.
Consumer Ethnocentrism
The tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products
Countertrade
The practice of using barter rather than money for making global sales.
Cross-Cultural Analysis
The study of similarities and differences among consumers in two or more nations or societies.
Cultural Symbols
Things that represent ideas and concepts.
Currency Exchange Rate
The price of one country’s currency expressed in terms of another country’s currency.
Customer Value
Unique combo of benefits received by targeted buyers that includes quality, convenience, on time delivery & both b4/after sale svc. @ a specific price.
Direct Investment
A global market-entry strategy that entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Dumping
When a firm sells a product in a foreign country below its domestic price or below its actual cost.
Economic Espionage Act (1996)
A law that makes the theft of trade secrets by foreign entities a federal crime in the United States.
Exporting
A global market-entry strategy in which a company produces goods in one country and sells them in another country.
Foreign Corrupt Practices Act (1977)
A law, amended by the International Anti-Dumping and Fair Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
Global Brand
A brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
Global Competition
Exists when firms originate, produce, and mar-ket their products and services worldwide.
Global Consumers
Consumer groups living in many countries or regions of the world who have similar needs or seek similar features and benefits from products or services.
Global Marketing Strategy
A strategy used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
Gray Market
A situation where products are sold through unau-thorized channels of distribution. Also called parallel importing.
Gross Domestic Product
The monetary value of all goods and services produced in a country during one year.
Joint Venture
A global market-entry strategy in which a foreign company and a local firm invest together to create a local business in order to share ownership, control, and profits of the new company.
Microfinance
The practice of offering small, collateral-free loans to individuals who otherwise would not have access to the capital necessary to begin small businesses or other income-generating activities.
Multidomestic Marketing Strategy
A strategy used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business
Protectionism
The practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.
Quota
A restriction placed on the amount of a product allowed to enter or leave a country.
Semiotics
A field of study that examines the correspondence between symbols and their role in the assignment of meaning for people.
Strategic Alliances
Agreements among two or more independent firms to cooperate for the purpose of achieving common goals.
Tariffs
Government taxes on goods or services entering a country that primarily serve to raise prices on imports.
Values
A society’s personally or socially preferable modes of con-duct or states of existence that tend to persist over time.

NOT to be confused with VALUE–The ratio of perceived benefits to price; or Value = (Perceived benefits รท Price).

World Trade Organization
A permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
Social Forces Order
1) Baby Boomers
2) Gen X
3) Gen Y
Ethics
moral principles and values that govern the actions and decisions of an individual or group.
Laws
Laws are society’s values and standards that are enforceable in the courts.
Caveat Emptor
Caveat emptor is the legal concept of “let the buyer beware” that was pervasive in the American business culture prior to the 1960s.
Consumer Bill of Rights (1962)
The Consumer Bill of Rights (1962) is a law that codified the ethics of exchange between buyers and sellers, including the rights to safety, to be informed, to choose, and to be heard.
Code of Ethics
A code of ethics is a formal statement of ethical principles and rules of conduct.
Whistle-Blowers
Whistle-blowers are employees who report unethical or illegal actions of their employers.
Moral Idealism
Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
Utilitarianism
Utilitarianism is a personal moral philosophy that focuses on the “greatest good for the greatest number” by assessing the costs and benefits of the consequences of ethical behavior.
Social Responsibility
Social responsibility is the idea that organizations are part of a larger society and are accountable to that society for their actions.
Triple-Bottom Line
The triple-bottom line is the recognition of the need for organizations to improve the state of people, the planet, and profit simultaneously if they are to achieve sustainable, long-term growth.
Green Marketing
Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.
Cause Marketing
Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.
Social Audit
A social audit consists of a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility.
Sustainable Development
Sustainable development consists of conducting business in a way that protects the natural environment while making economic progress.