Marketing Final

Market segmentation

dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate marketing strategies or mixes

Market targeting (targeting)

evaluating each market segment's attractiveness and selecting one or more segments to serve

Differentiation

actually differentiating the market offering (product/service) to create superior customer value

Positioning

arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers

Geographic segmentation

dividing a market into different geographical units, such as nations, states, regions, counties, cities, or even neighborhoods

Demographic segmentation

dividing the market into segments based on variables such as age, life-cycle stage, gender, income, occupation, education, religion, ethnicity, and generation

Age and life-cycle segmentation

dividing a market into different age and life-cycle groups

Gender segmentation

dividing a market into different segments based on gender

Income segmentation

dividing a market into different income segments

Psychographic segmentation

dividing a market into different segments based on lifestyle or personality characteristics

Behavioral segmentation

dividing a market into segments based on consumer knowledge, attitudes, uses of a product, or responses to a product

Occasion segmentation

dividing the market into segments according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item

Benefit segmentation

dividing the market into segments according to the different benefits that consumers seek from the product

Intermarket (cross-market) segmentation

forming segments of consumers who have similar needs and buying behaviors even though they are located in different countries

Target market

a set of buyers who share common needs or characteristics that a company decides to serve

Undifferentiated (mass) marketing

a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer

Differentiated (segmented) marketing

a market-coverage strategy in which a firm targets several market segments and designs separate offers for each

Concentrated (niche) marketing

a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches

Micromarketing

tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments; it includes local marketing and individual marketing

Local marketing

tailoring brands and marketing to the needs and wants of local customer segments-- cities, neighborhoods, and even specific stores

Individual marketing

tailoring products and marketing programs to the needs and preferences of individual customers

Product position

the way a product is defined by consumers on important attributes-- the place it occupies in consumers' minds relative to competing products

Competitive advantage

an advantage over competitors gained by offering greater customer value either by having lower prices or providing more benefits that justify higher prices

Value proposition

the full positioning of a brand-- the full mix of benefits on which it is positioned

Positioning statement

a statement that summarizes company or brand positioning using this form: to (target segment and need) our (brand) is (concept) that (point of difference)

Value delivery network

a network composed of the company, suppliers, distributors, and, ultimately, customers who partner with each other to improve the performance of the entire system in delivering customer value

Marketing channel (distribution channel)

a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user

Channel level

each layer of marketing intermediaries that performs some work in bringing the product and its ownership closer to the final buyer

Direct marketing channel

the company sells directly to consumers (it has no intermediary levels)

Indirect marketing channel

contains one or more intermediaries

Channel conflict

disagreements over goals, roles, and rewards

horizontal conflict

occurs among firms at the same level of the channel

vertical conflict

conflict between different levels of the same channel

Conventional distribution channel

consists of one or more independent producers, wholesalers, and retailers
- Each is a separate business seeking to maximize its own profits, perhaps at the expense of the system as a whole

Vertical marketing system (VMS)

consists of producers, wholesalers, and retailers acting as a unified system
- One channel member owns the others, has contracts with them, or wields so much power that they all must cooperate

Corporate VMS

integrates successive stages of production and distribution under single ownership
- Coordination and conflict management are attained through regular organized channels

Ex: Kroger owns and operates 38 food product plants– 17 dairies, seven bakery plants, five grocery plants, one deli plant, two frozen dough plants, two beverage plants, two cheese plants, and two meat plants

Contractual VMS

consists of independent firms at different levels of production and distribution that join together through contracts to obtain more economies or sales impact than each could achieve alone
- Through contractual agreements

Franchise organization

a channel member called the franchisor links several stages in the production-distribution process
- most common contractual relationship

three types of franchises

- manufacturer-sponsored retailer franchise system
- manufacturer-sponsored wholesaler franchise system
- service-firm-sponsored retailer franchise system

Administered VMS

assumed not through common ownership or contractual ties but through the size and power of one or a few dominant channel members
- Imbalance of power
- Companies with more of a market share will have more control over the decisions that are made
- Not contractual, but if you want to do business with these companies, you need to follow their rules

Rule example: agree to package the products so that its more efficient to move the products from the warehouse to the store

Horizontal marketing system

two or more companies at one level join together to follow a new marketing opportunity
- By working together, companies can combine their financial production, or marketing resources to accomplish more than any one company could alone

Multichannel distribution system

when a single firm sets up two or more marketing channels to reach one or more customer segments

Disintermediation

occurs when product or service producers cut out intermediaries and go directly to final buyers or when radically new types of channel intermediaries displace traditional ones

Marketing channel design

calls for analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating the alternatives

Intensive distribution

a strategy in which they stock their products in as many outlets as possible

Exclusive distribution

the producer gives only a limited number of dealers the exclusive right to distribute its products in their territories

Selective distribution

the use or more than one but fewer than all of the intermediaries who are willing to carry a company’s products

Marketing channel management

calls for selecting, managing, and motivating individual channel members and evaluating their performance overtime

Marketing logistics (physical distribution)

involved planning, implementing, and controlling the physical flow of goods, services, and related information from points of origin to points of consumption to meet customer requirements at a profit

Supply chain management

managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers

Distribution center

Large and highly automated warehouses designed to receive goods from various plant and suppliers, take order, fill them efficiently, and deliver goods to customers as quickly as possible
- designed to move goods rather than just store them

Multimodal transportation

combining two or more modes of transportation
- piggyback = rail and trucks
- fishyback = water and trucks
- trainship = water and rail
- airtruck = air and trucks

Integrated logistics management

recognizes that providing better customer service and trimming distribution costs require teamwork, both inside the company and among all the marketing channel organizations
- inside: the company's various departments must work closely to maximize its own logistics performance
- outside: the company must integrate its logistics system with those of its suppliers and customers to maximize the performance of the entire distribution network

Third-party logistics (3PL) provider

when firms outsource some or all of their logistics

Retailing

all the activities involved in selling goods or services directly to final consumers for their personal, non business use

Retailer

a business whose sales come primarily from retailing

Shopper marketing

focusing the entire marketing process on turning shoppers into buyers as they more along toward the point of sale, whether during in-store, online, or mobile shopping

Omni-channel retailing

creating a seamless cross-channel buying experience that integrates in-store, online, and mobile shopping

Specialty store

a retail store that carries a narrow product line with a deep assortment within that line

Department store

a retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers
ex: Nordstrom, Saks, Neiman Marcus, Sears, JC Penny, Macy's, Dillard's

Supermarket

a large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of grocery and household products
ex: Whole Foods, Trader Joe's, ALDI, Sprouts, Lidl

Convenience store

a small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods

Superstore

a store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services

Category killer

a giant specialty store that carries a very deep assortment of a particular line

Service retailer

a retailer whose product line is actually a service; examples include hotels, airlines, banks, colleges, and many others

Discount store

a retail operation that sells standard merchandise at lower prices by accepting lower margins and selling a higher volume
- ex: Target, Kohl's, Walmart

Off-price retailer

a retailer that buys at less-than-regular wholesale prices and sells at less than retail

Independent off-price retailer

an off-price retailer that is independently owned and operated or a division of a larger retail corporation
ex: TJ Maxx, Marshalls, HomeGoods (all owned by TJX), and online sellers such as Overstock.com

Factory outlet

an off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods
ex: J.Crew, Gap, Levi Strauss, factory outlet malls

Warehouse club

an off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees
ex: Costco, Sam's Club, BJ's

Corporate chains

two or more outlets that are commonly owned and controlled

Franchise

a contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system

Shopping center

a group of retail businesses built on a site that is planned, developed, owned, and managed as a unit

Wholesaling

all the activities involved in selling goods and services to those buying for resale or business use

Wholesaler

a firm engaged primarily in wholesaling activities

Wholesaling activities: selling and promoting

wholesalers' sales forces help manufacturers reach many small customers at a low cost. the wholesaler has more contacts and is often more trusted by the buyer than the distant manufacturer

Wholesaling activities: buying and assortment building

wholesalers can select items and build assortments needed by their customers, thereby saving much work

Wholesaling activities: bulk breaking

wholesalers save their customers money by buying in carload lots and breaking bulk (breaking large lots into small quantities)

Wholesaling activities: warehousing

wholesalers hold inventories, thereby reducing inventory costs and risking suppliers and customers

Wholesaling activities: transportation

wholesalers can provide quicker delivery to buyers because they are closer to buyers than are producers

Wholesaling activities: financing

wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time

Wholesaling activities: risk bearing

wholesalers absorb risk by taking title and bearing the cost of theft, damage, spoilage, and obsolescence

Wholesaling activities: market information

wholesalers give information to suppliers and customers about competitors, new products, and price developments

Wholesaling activities: management services and advice

wholesalers often help retailers train their salesclerks, improve store layouts and displays, and set up accounting and inventory control systems

Merchant wholesaler

an independently owned wholesale business that takes title to the merchandise it handles

Broker

a wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation

Agent

a wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods

Manufacturers' and retailers' branches and offices

wholesaling by sellers or buyers themselves rather through independent wholesalers

Promotion mix (marketing communications mix)

the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships

Advertising

any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identifies sponsor

Sales promotion

short-term incentives to encourage the purchase or sale of a product or service

Personal selling

personal customer interactions by the firm's sales force to engage customers, make sakes, and build customer relationships

Public relations (PR)

building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

Direct and digital marketing

engaging directly with carefully targeted individual consumers and customer communities to both obtain an immediate response and build lasting customer relationships

Content marketing

creating, inspiring, and sharing brand messages and conversations with and among consumers across a fluid mix of paid, owned, earned, and shared channels

Integrated marketing communications (IMC)

carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

Push strategy

a promotion strategy that calls for using the sales force and trade promotion to push the product through channels. the producer promotes the product to channel members who in turn promote it to final consumers

Pull strategy

a promotion strategy that calls for spending a lot on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel

Advertising objective

a specific communication task to be accomplished with a specific target audience during a specific period of time

Advertising budget

the dollars and other resources allocated to a product or a company advertising program