Marketing Strategy Exam 1

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
Marketing Management
The art and science of choosing target markets and building profitable relationships with them
Production Concept
The idea that consumers will favor products that are available and highly affordable; therefore, the organization should focus on improving production and distribution efficiency.
Selling Concept
The idea that consumers will not buy enough of the firm’s products unless it undertakes a large-scale selling and promotion effort
Marketing Concept
A managerial philosophy that an organization should try to satisfy customers’ needs through a coordinated set of activities that also allows the organization to achieve its goals
Holistic Marketing
A marketing strategy developed by thinking of the business as a whole, its place in the broader economy and society
Relationship Marketing
A strategy that focuses on keeping and improving relationships with current customers
Marketing Network
The company and its supporting stakeholders, with whom it has built mutually profitable business relationships
Internal Marketing
The notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers.
Performance Marketing
Understanding the financial and nonfinancial returns to business and society from marketing activities and programs
Core Competency
A skill set that is difficult for competitors to imitate, can be leveraged in different businesses, and contributes to the benefits enjoyed by customers within each business
Value Delivery Network
The network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the performance of the entire system.
Supply Chain
Consists of all parties involved, directly or indirectly, in obtaining raw materials or a product
Mission Statement
A statement of the firm’s business based on a careful analysis of benefits sought by present and potential customers and an analysis of existing and anticipated environmental conditions
Strategic Business Units (SBUs)
Corporate Culture
The attitudes or beliefs that are shared by a particular organization
Scenario Analysis
An approach for assessing risk that uses several possible alternative outcomes (scenarios) to obtain a sense of the variability among returns.
Marketing Opportunity
A potentially favorable condition in which a business can capitalize on a changing trend or an increasing demand for a product by a demographic group that has yet to be recognized by its competitors.
Marketing Opportunity Analysis (MOA)
An area of buyer need and interest in which there is a high probability that a company can profitably satisfy that need.
Strategic Group
The set of companies that pursue a similar strategy within a specific industry
Partner Relationship Management (PRM)
Working closely with partners in other company departments and outside the company to jointly bring greater value to customers
Marketing Information System (MIS)
System for gathering and organizing marketing information used in decision-making
Marketing Intelligence System
The systematic collection and analysis of publicly available information about competitors and developments in the marketing environment
Cohorts
Group of people who share some common quality
Subcultures
A group of people within a culture that distinguish themselves from the primary culture to which they belong.
Consumerist Movement
An organized movement of citizens and government to strengthen the rights and powers of buyers in relation to sellers.
Market Demand
The demand by all the consumers of a given good or service
Market Share
An organization’s portion of the total industry (sector) sales in a specific market
Market Penetration Index
A comparison of the current level of market demand to the potential demand level.
Market Forecast
The market demand corresponding to the level of industry marketing expenditure
Market Potential
The total revenue that can be obtained from the market segment
Product-penetration Percentage
The percentage of ownership or use of a product or service in a population.
Company Demand
The company’s estimated share of market demand at alternative levels of company marketing effort in a given time period
Total Market Potential
The maximum sales available to all firms in an industry during a given period, under a given level of industry marketing effort and environmental conditions.
Market-buildup Method
Identifying all the potential buyers in each market and estimating their potential purchases.
Brand Development Index (BDI)
The percentage of a brand’s total sales in an area divided by the total population in the area; it indicates the sales potential of a particular brand in a specific market area.
Purchase Probability Scale
A scale to measure the probability of a buyer making a particular purchase.
Marketing Insights
Diagnostic information about how and why we observe certain effects in the marketplace, and what that means to marketers.
Marketing Decision Support System (MDSS)
Customized computer software that aids marketing managers in decision making
Brand Knowledge
The set of associations that consumers hold in memory regarding the brand’s features, benefits, users, perceived quality, and overall attitude as a result of prior brand marketing activities.
Brand Promise
Expressed in terms of what it is that the brand promises the customer
Internal branding
To make sure employees and marketing partners are inspired about the brand
Brand Community
A specialized group of consumers with a structured set of relationships involving a particular brand, fellow customers of that brand, and the product in use
Brand Value Chain
A structured approach to assessing the sources and outcomes of brand equity and the manner in which marketing activities create brand value.
Brand Audit
Analyzes history, success, everything dealing with the brand.
Brand-tracking Studies
Collect quantitative data from consumers over time to provide consistent, baseline information about how brands and marketing program are performing.
Branded Variants
Specific brand lines supplied to specific retailers or distribution channels
Brand Dilution
Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.
Customer-perceived Value (CPV)
The difference between the prospective customer’s evaluation of all the benefits and all the costs of an offering and the perceived alternatives
Total customer benefit
The perceived monetary value of the bundle of economic, functional, and psychological benefits customers expect from a given market offering because of the product, service, people, and image
Total customer cost
The bundle of costs customers expect to incur in evaluating, obtaining, using, and disposing of the given market offering, including monetary, time, energy, and psychic costs
Value proposition
The whole cluster of benefits the company promises to delivery
Value delivery system
All the expectancies the customer will have on the way to obtaining and using the offering
Quality
The totality of features and characteristics of a product or service that bear on its ability to satisfy stated or implied needs
Profitable customer
A person, household, or company that over time yields a revenue stream that exceeds by an acceptable amount the company’s cost stream of attracting, selling, and servicing that customer
Customer profitability analysis (CPA)
A means of assessing and ranking customer profitability through accounting techniques such as activity-based costing
Activity-based costing (ABC)
Accounting procedures that can quantify the true profitability of different activities by identifying their actual costs
Customer relationship management (CRM)
The process of carefully managing detailed information about individual customers and all customer “touch points” to maximize loyalty
Customer churn
High customer defection
Frequency programs
Designed to provide rewards to customers who buy frequently and in substantial amounts
Club membership programs
Programs open to everyone who purchases a product or service, or limited to an affinity group of those willing to pay a small fee
Customer database
An organized collection of comprehensive information about individual customers or prospects that is current, accessible, and actionable for marketing purposes
Database marketing
The process of building, maintaining, and using customer databases and other databased for the purpose of contacting, transacting, and building customer relationships
Business database
Complete information about business customers’ past purchases; past volumes, prices, and profits
Data warehouse
A collection of current data captured, organized, and stored in a company’s contact center
Data mining
The extracting of useful information about individuals, trends, and segments from the mass of data
Reference prices
Pricing information a consumer retains in memory that is used to interpret and evaluate a new price
Market-skimming pricing
Pricing strategy where prices start high and are slowly lowered over time to maximize profits from less price-sensitive customers
Fixed costs (overhead)
Costs that do not vary with production or sales revenue
Variable costs
Costs that vary directly with the level of production
Average cost
The cost per unit at a given level of production; it is equal to total costs divided by production
Experience (learning) curve
A decline in the average cost with accumulated production experience
Target costing
Deducting the desired profit margin from the price at which a product will sell, given its appeal and competitors’ prices
Markup
Pricing an item by adding a standard increase to the product’s cost
Target-return pricing
Determining the price that would yield the firm’s target rate of return on investment
Everyday low pricing (EDLP)
In retailing, a constant low price with few or no price promotions and special sales
High-low pricing
Charging higher prices on an everyday basis but then running frequent promotions and special sales
Going-rate pricing
Price based largely on competitors’ prices
Countertrade
Offering other items in payment for purchases
Net price analysis
Analysis that encompasses company list price, average discount, promotional spending, and co-op advertising to arrive at net price
Price discrimination
A company sells a product or service at two or more prices that do not reflect a proportional difference in costs
Yield pricing
Situation in which companies offer discounted but limited early purchases, high-priced late purchases, and the lowest rate on unsold inventory just before it expires
Marketing communications
The means by which firms attempt to inform, persuade, and remind consumers – directly or indirectly – about products and brand that they sell
Informational appeals
Elaborates on product or service attributes or benefits
Transformational appeal
Elaborate on a nonproduct-related benefit or image
Principle of congruity
Psychological mechanism that states that consumers like to see seemingly related objects as being as similar as possible in their favorability
Personal communications channels
Two or more persons communicating directly face-to-face, person-to-audience, over the telephone or through email
Integrated marketing communications (IMC)
A concept of marketing communications planning that recognizes the added value of a comprehensive plan