Business Chapter 11-13

Marketing

An organizational and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships.

Utility

The ability of goods and services to satisfy consumer wants.

Marketing concept

A business philosophy that makes customer satisfaction the central focus of the entire organization.

Customer relationship management (CRM)

The ongoing process of acquiring, maintaining, and growing profitable customer relationships.

Value

A customer’s perception that a product has a better relationship than its competitors between the cost and the benefits.

Customer satisfaction

When customers perceive that a good or service delivers value above and beyond their expectations.

Customer loyalty

When customers buy a product from the same supplier again and again.

Marketing plan

A formal document that defines marketing objectives and the specific strategies for achieving those objectives.

Marketing segmentation

Dividing potential customers into groups of similar people or segments.

Target market

The group of people who are most likely to buy a particular product.

Consumer marketers (B2C)

Marketers who direct their efforts toward people who are buying products for personal consumption.

Business marketers (B2B)

Marketers who direct their efforts toward people buying products to produce other products.

Demographic segmentation

Dividing the market into groups based on measurable characteristics like age and gender.

Geographic segmentation

Dividing the market based on where consumers live, e.g., countries or cities.

Psychographic segmentation

Dividing the market into groups based on consumer attitudes and lifestyles.

Behavior segmentation

Dividing the market based on how people behave toward various products.

Marketing mix

The blend of marketing strategies for product, price, distribution, and promotion.

Environmental scanning

The process of continually collecting information from the external marketing environment.

Marketing share

The percentage of a market controlled by a given marketer.

Consumer behavior

Description of how people act when buying, using, and discarding goods.

Cognitive dissonance

Consumer discomfort with a purchase decision for a higher priced item.

Business buyer behavior

Describes how people act when buying products for production purposes.

Marketing research

The process of gathering and applying information to uncover marketing opportunities.

Secondary data

Existing data that marketers gather or purchase for research.

Primary data

New data that marketers compile for a specific research project.

Observation research

Marketing research that does not require the researcher to interact with subjects.

Survey research

Marketing research that involves interacting with subjects.

Green marketing

Developing and promoting environmentally sound products.

Mass customization

The creation of products tailored for individual consumers on a mass basis.

Product

Anything that an organization offers to satisfy customers' needs and wants.

Pure goods

Products that do not include any services.

Pure services

Products that do not include any goods.

Consumer products

Products purchased for personal use or consumption.

Business products

Products purchased to produce other products.

Products differentiation

Attributes that make a good or service different from competitors.

Quality level

How well a product performs its core functions.

Product consistency

How reliably a product delivers its promised level of quality.

Product features

Specific characteristics of a product.

Customer benefit

The advantage a customer gains from a specific product feature.

Product line

A group of closely related products.

Product mix

The total number of product lines and items sold by a firm.

Cannibalization

When a new product takes sales away from existing products.

Brand

A product's identity including name, symbol, design, reputation, and image.

Brand equity

The overall value of a brand to an organization.

Line extensions

Similar products offered under the same brand name.

Brand extension

A new product in a different category under an existing brand name.

Licensing

Purchasing the right to use another company's brand name or symbol.

Cobranding

When established brands from different companies join forces.

National brands

Brands that the producer owns and markets.

Store brands

Brands that the retailer produces and distributes (private label brands).

Product life cycle

A pattern of sales and profits that changes over time.

Promotion

Marketing communication designed to influence consumer purchase decisions.

Integrating marketing communications

The coordination of marketing messages through all promotional vehicles.

Positioning statement

A brief statement that articulates how the marketer wants the target market to envision a product.

Promotional channels

Marketing communication vehicles including advertising and personal selling.

Product placement

The paid integration of branded products into movies and media.

Advergaming

Video games created as a marketing tool, usually for brand awareness.

Buzz marketing

The simulation of word of mouth through unconventional tactics.

Sponsorship

A deep association between a marketer and a partner involving promotion.

Advertising

Paid, nonpersonal communication designed to influence a target audience.

Sales promotion

Marketing activities designed to stimulate immediate sales activity.

Consumer promotion

Marketing activities designed to generate immediate consumer sales.

Trade promotion

Marketing activities aimed at stimulating wholesalers and retailers.

Public relations (PR)

Efforts to create positive relationships with various publics.

Publicity

Unpaid stories in the media that influence perceptions.

Personal selling

The person-to-person presentation of products to potential buyers.

Push strategy

A marketing approach that motivates distributors to promote a product heavily.

Pull strategy

A marketing approach that creates consumer demand to pull products through distribution.

Distribution strategy

A plan for delivering the right product to the right person at the right time.

Channel of distribution

The network linking producers to consumers.

Physical distribution

The actual movement of products along the distribution pathway.

Direct channel

A distribution process linking producer and consumer without intermediaries.

Channel intermediaries

Distribution organizations that facilitate product movement.

Retailers

Distributors selling products directly to consumers in small quantities.

Wholesalers

Distributors who buy products from producers to sell them to others.

Independent wholesaling business

Independent distributors buying from various businesses to sell to different customers.

Merchant wholesalers

Distributors who take legal possession of the goods they distribute.

Agents/brokers

Independent distributors who do not take title of the goods.

Multichannel retailing

Providing multiple distribution channels for consumers.

Wheel of retailing

A theory suggesting retail firms become more upscale over their life cycle.

Multilevel marketing

Involves hiring contractors to sell products and recruit new salespeople.

Supply chain

All organizations and processes involved in the flow of goods to consumers.

Supply chain management (SCM)

Planning and coordinating the movement of products along the supply chain.

Logistics

A subset of supply chain management focusing on moving products.

Modes of transportation

Various options for moving products through the supply chain.

Penetration pricing

A pricing strategy to capture market share through low prices.

Everyday low pricing (EDLP)

Long-term discount pricing aiming for profitability through high sales volume.

High/low pricing

A strategy that drives traffic with special sales on some products.

Loss-leader pricing

Pricing items below cost to drive traffic.

Skimming pricing

A strategy that maximizes profitability by offering new products at premium prices.

Breakeven analysis

Determining the number of units a firm must sell to cover all costs.

Profit margin

The gap between the cost and the price of an item.

Odd pricing

Ending prices in numbers below whole amounts to create a perception of greater value.