Chp 1-6 Mkt 337

Eight Marketing Functions

buying, selling, transporting, storing, standardization and grading, financing, risk taking, and market information

Production

Actually making goods or performing services.

Customer Satisfaction

The extent to which a firm fulfills a consumer’s needs, desires, and expectations.

Innovation

The development and spread of new ideas, goods, and services.

Marketing

The performance of activities that seek to accomplish an organization’s objectives by anticipating customer or client needs and directing a flow of need-satisfying goods and services from producer to customer or client.

Pure Subsistence Economy

Each family unit produces everything it consumes.

Macro Marketing

A social process that directs an economy’s flow of goods and services from producers to consumers in a way that effectively matches supply and demand and accomplishes the objectives of society.

Buying Function

Looking for and evaluating goods and services.

selling function

promoting the product

Intermediary

Someone who specializes in trade rather than production

collaborators

Firms that provide one or more of the marketing functions other than buying.

Economic System

The way an economy organizes to use scarce resources to produce goods and services and distribute them for consumption by various people and groups in the society.

Command Economy

Government officials decide what and how much is to be produced and distributed by whom, when, to whom, and why.

Marketing Concept

The idea that an organization should aim all of its efforts at satisfying its customers—at a profit.

Triple Bottom Line

A measure of long-term success that includes an organization’s economic, social, and environmental outcomes

Purpose Orientation

An organization’s reason for being that extends beyond profit and creates value for stakeholders, including customers, employees, suppliers, investors, and communitie

Customer Value

The difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.

Micro-macro dilema

What is good for some producers and consumers may not be good for society as a whole

Social Responsibility

A firm’s obligation to improve its positive effects on society and reduce its negative effects

Marketing Ethics

The moral standards that guide marketing decisions and actions.

Marketing Managment Process

The process of (1) planning marketing activities, (2) directing the implementation of the plans, and (3) controlling the plans.

Strategic (management) Planning

The managerial process of developing and maintaining a match between an organization’s resources and its market opportunities.

Marketing Strategy

Specifies a target market and a related marketing mix.

Target Market

A fairly homogeneous (similar) group of customers to whom a company wishes to appeal.

Marketing Mix

The controllable variables that the company puts together to satisfy a target group.

Target Marketing

A marketing mix is tailored to fit some specific target customers.

Mass Marketing

The typical production-oriented approach that vaguely aims at everyone with the same marketing mix.

Channel of Distribution

Any series of firms or individuals who participate in the flow of products from producer to final user or consumer.

Personal Selling

Direct spoken communication between sellers and potential customers, usually in person but sometimes over the telephone or even via an online conference.

Customer Service

A personal communication between a seller and a customer who wants the seller to resolve a problem with a purchase; often the key to building repeat business.

Mass selling

Communicating with large numbers of potential customers at the same time

Advertising

Any paid form of nonpersonal presentation of ideas, goods, or services by an identified sponsor.

Publicity

Any unpaid form of nonpersonal presentation of ideas, goods, or services.

Sales Promotion

Those promotion activities—other than advertising, publicity, and personal selling—that stimulate interest, trial, or purchase by final customers or others in the channel.

Marketing Plan

A written statement of a marketing strategy and the time-related details for carrying out the strategy.

Implementation

Putting marketing plans into operation.

Operational Decisions

Short-run decisions to help implement strategies.

Marketing Analytics

the practice of measuring, managing, and analyzing marketing performance to maximize its efficiency and effectiveness.

Marketing Program

Blends all of the firm’s marketing plans into one big plan.

Customer lifetime value (CLV)

Total profits a single customer contributes to a firm over the length of the relationship.

Retention rate

The percentage of customers retained as compared to the total number of customers.

Acquisition Cost

The expense required to acquire a new customer.

Customer Equity

The expected earnings stream (profitability) of a firm’s current and prospective customers over some period of time.

Breakthrough opportunities

Opportunities that help innovators develop hard-to-copy marketing strategies that will be very profitable for a long time.

Competitive Advantage

A firm has a marketing mix that the target market sees as better than a competitor’s mix.

S.W.O.T Analysis

Identifies and lists the firm’s strengths and weaknesses and its opportunities and threats.

Differentiation

The marketing mix is distinct from and better than what’s available from a competitor.

Market Penetration

Trying to increase sales of a firm’s present products in its present markets—probably through a more aggressive marketing mix.

Market Development

Trying to increase sales by selling present products in new markets.

Product Development

Offering new or improved products for present markets.

Diversification

Moving into totally different lines of business—perhaps entirely unfamiliar products, markets, or even levels in the production-marketing system.

Mission Statement

A statement that sets out the organization’s basic purpose for being

Purpose statement

an aspirational reason for being, inspiring action, and which benefits customers, employees, investors, and society at large

Economies of Scale

As a company produces larger numbers of a particular product, the cost of each unit of the product goes down.

competitive enviroment

The number and types of competitors the marketing manager must face and how they may behave.

sustainable competitive advantage

A marketing mix that customers see as better than a competitor’s mix and cannot be quickly or easily copied.

competitor analysis

An organized approach for evaluating the strengths and weaknesses of current or potential competitors’ marketing strategies.

Market Share

The portion of total sales in a product category accounted for by a particular brand.

Economic Enviroment

Macroeconomic factors, including national income, economic growth, and inflation, that affect patterns of consumer and business spending.

Intelligent Agent

A device that observes an environment and acts to achieve a goal.

Cultural and Social Environment

Affects how and why people live and behave as they do.

Sustainability

The idea that it’s important to meet present needs without compromising the ability of future generations to meet their own needs.

Black Swan events

events which are highly improbable and have severe consequences

generic market

A market with broadly similar needs and sellers offering various, often diverse, ways of satisfying those needs.

Product Market

A market with very similar needs and sellers offering various close substitute ways of satisfying those needs.

Market Segmentation

A two-step process of (1) naming broad product-markets and (2) segmenting these broad product-markets in order to select target markets and develop suitable marketing mixes.

Segmenting

An aggregating process that clusters people with similar needs into a market segment.

Market Segment

A relatively homogeneous group of customers who will respond to a marketing mix in a similar way.

Single Target Market Approach

Segmenting the market and picking one of the homogeneous segments as the firm’s target market.

Multiple target market approach

Segmenting the market and choosing two or more segments, then treating each as a separate target market needing a different marketing mix.

Combined target market approach

Combining two or more submarkets into one larger target market as a basis for one strategy.

Combiners

Firms that try to increase the size of their target markets by combining two or more segments

segmenters

Aim at one or more homogeneous segments and try to develop a different marketing mix for each segment.

Clustering Techniques

Approaches used to try to find similar patterns within sets of data.

Customer Relationship Management

An approach where the seller fine-tunes the marketing effort with information from a detailed customer database.

Dynamic behavioral segmentation

The use of real-time data to continuously update a customer’s placement in a market segment.

Positioning

Refers to how customers think about proposed or present brands in a market.

positioning statement

Statement that concisely identifies the firm’s desired target market, product type, primary benefit or point of differentiation, and the main reasons a buyer should believe the firm’s claims.

Transporting Function

The movement of goods from one place to another.

Storing Function

Holding goods until customers need them.

Standardization and Grading

Sorting products according to size and quality.

Financing

Provides the necessary cash and credit to produce, transport, store, promote, sell, and buy products.

Risk Taking

Bearing the uncertainties that are part of the marketing process.

Market Information Function

The collection, analysis, and distribution of all the information needed to plan, carry out, and control marketing activities.

Economic Buyers

People who know all the facts and logically compare choices to get the greatest satisfaction from spending their time and money.

Economic needs

Needs concerned with making the best use of a consumer’s time and money—as the consumer judges it.

Discretionary Income

What is left of disposable income after paying for necessities.

Needs

The basic forces that motivate a person to do something.

wants

Needs that are learned during a person’s life.

Drive

A strong stimulus that encourages action to reduce a need.

Physiological needs

Biological needs such as the need for food, drink, rest, and sex.

Safety Needs

Needs concerned with protection and physical well-being.

Social Needs 

Needs concerned with love, friendship, status, and esteem—things that involve a person’s interaction with others

Personal Needs

An individual’s need for personal satisfaction unrelated to what others think or do.

Societal Needs

an individual’s desire to see the needs of others or the natural world fulfilled.

Perception

How we gather and interpret information from the world around us.

Selective Exposure

Our eyes and minds seek out and notice only information that interests us.

Selective Perception

People screen out or modify ideas, messages, and information that conflict with previously learned attitudes and beliefs.

Selective Retention

People remember only what they want to remember.