Principles of Marketing Exam 2 Study Guide

How do business markets differ from consumer markets
business market is significantly larger
Business Market
personal selling, customer relations complex, competitive bidding for price
Consumer Market
advertising, infrequent/short relations, list prices
Largest segment of the business market
commercial market
Demographic Segmentation
defines consumer groups according to demographic variables such as gender, age, income, occupation, education, sexual orientation, household size, and stage in family lifecycle
Customer Relationship Management (CRM)
combination of strategies and tools that drives relationship programs, reorienting the entire organization to a concentrated focus on satisfying customers
Derived Demand
linkage between demand for a company’s output and its purchases of resources (demand for a resource that results from demand for the goods and services produced by that resource)
Inelastic Demand
demand that, throughout an industry, will not change significantly due to a price change
Offshoring (what it involves)
movement of high-cost jobs from one country to lower-cost overseas locations, relocation of business processes to a lower-cost location can involve production or services offshoring
Related Party Trade
trade by US companies with their subsidiaries overseas as well as trade by US subsidiaries of foreign-owned firms with their parent companies
What factors are most likely included in the political environment
international law, US law, and legal requirements of host nations–> political risk assessment (PRA), friendship commerce and navigation (FCN) treaties, and international organization for standardization (ISO)
Embargo
complete ban on the import of specified products
Foreign Licensing
contractual agreement that grants foreign marketers the right to distribute a firm’s merchandise or to use its trademark, patent, or process in a specified geographic area
Business Products
goods and services purchased for use either directly or indirectly in the production of other goods and services for resale
Examples of business products
rubber, raw cotton, tires when purchased by a company (ex: Ford Motor Company)
Market Segmentation
division of the total market into smaller, relatively homogeneous groups –> attempts to isolate the traits that distinguish a certain group of consumers from the overall market
The most common method of market segmentation
geographic, demographic, psychographic, and product-related
Which change in family lifecycle behavior has been noted by researchers in the past decade
an increase in the number of grown children or “boomerangs” who return home to live with their parents
What is a logical starting point in identifying a marketing problem
evaluate the firm’s target market and marketing mix elements
Primary Data
information collected for a specific investigation for the first time, ex: statistics collected from a survey
Secondary Data
previously published information or complied sources, ex: US Census data
The best data collection method for obtaining detailed information about consumers
personal interviews
The least used method for collecting primary data
experimental method
Characteristics of transaction-based marketing
-buyer-seller exchanges are sporadic
-communication is limited
-relationships are rare or nonexistent
-the goal is simple and quick (sell something now)
-conflicts between buyer and seller often disrupt the exchange
-some marketing exchanges still remain largely transaction-based
The first step in measuring customer satisfaction
understanding customer needs
Why do customers prefer to have continuing relationships with businesses or suppliers
-reduce choices
-simplify information gathering and the entire buying process
-reduce the risk of dissatisfaction
-find comfort and perceived positive value, save money
Affinity Marketing
marketing effort sponsored by an organization that solicits responses from individuals who share common interests and activities
Why have mobile apps become a multi-billion dollar industry
access to users’ personal data, credit card information, and current location –> companies will spend more than $18 billion annually on mobile advertising
Viral Marketing
efforts that allow satisfied customers to spread the word about products to other customers
Examples of Viral Marketing
forwarding email or video clips, social media campaigns, partnerships with brands
Buzz Marketing
marketing that gathers volunteers to try products and then relies on them to talk about their experiences with their friends an colleagues –> influencers (early adopters of products) are ideal carriers of buzz because their credibility makes choices seem valuable and they are recruited online through chat rooms, blogs, and IM (word of mouth marketing association)
What does CRM attempt to do
manage customer relationships and integrate all stakeholders into a company’s product design and development, manufacturing, marketing, sales, and customer service processes –> use of technology
True statements about services
-intangible
-inseparable from service providers
-perishable
-companies cannot easily standardize services
-buyers often play important roles in the creation and distribution of services
-service standards show wide variations
Unsought Products
products marketed to consumers who may not yet recognize a need for them
Shopping Products
products consumers purchase after comparing competing offerings on characteristics such as price, quality, style, and color
Benchmarking
method of measuring quality by comparing performance against industry leader
The first main activity involved in benchmarking
identifying manufacturing or business processes that need improvement