Key Concepts in Business Marketing and Promotion

Business and organizational customers

Any buyers who buy for resale or to produce other goods and services.

Purchasing managers

Buying specialists for their employers.

Multiple buying influence

Several people share in making a purchase decision—perhaps even top management.

Buying center

All the people who participate in or influence a purchase.

Requisition

A request to buy something.

Purchasing specifications

A written (or electronic) description of what the firm wants to buy.

New-task buying

When an organization has a new need and the buyer wants a great deal of information.

Straight rebuy

A routine repurchase that may have been made many times before.

Modified rebuy

The in-between process where some review of the buying situation is done—though not as much as in new-task buying or as little as in straight rebuys.

White paper

An authoritative report or guide that addresses important issues in an industry and offers solutions.

Competitive bids

Terms of sale offered by different suppliers in response to the buyer's purchase specifications.

Vendor analysis

Formal rating of suppliers on all relevant areas of performance.

Just-in-time delivery (JIT)

Reliably getting products there just before the customer needs them.

Negotiated contract buying

Agreeing to a contract that allows for changes in the purchase arrangements.

Outsource

When the buying organization chooses to contract with an outside firm to produce goods or services rather than producing them internally.

North American Industry Classification System (NAICS) codes

Codes used to identify groups of firms in similar lines of business.

Foreign Corrupt Practices Act

A law passed by the U.S. Congress in 1977 that prohibits U.S. firms from paying bribes to foreign officials.

Place

Making goods and services available in the right quantities and locations—when customers want them.

Channel of distribution

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

Direct marketing

Direct communication between a seller and an individual customer using a promotion method other than face-to-face personal selling.

Discrepancy of quantity

The difference between the quantity of products it is economical for a producer to make and the quantity final users or consumers normally want.

Discrepancy of assortment

The difference between the lines a typical producer makes and the assortment final consumers or users want.

Regrouping activities

Adjusting the quantities or assortments of products handled at each level in a channel of distribution.

Accumulating

Collecting products from many small producers.

Bulk-breaking

Dividing larger quantities into smaller quantities as products get closer to the final market.

Sorting

Separating products into grades and qualities desired by different target markets.

Assorting

Putting together a variety of products to give a target market what it wants.

Traditional channel systems

A channel in which the various channel members make little or no effort to cooperate with one another.

Vertical channel conflict

Conflict that occurs between firms at different levels in the channel of distribution.

Horizontal channel conflict

Conflict that occurs between firms at the same level in a distribution channel.

Channel captain

A manager who helps direct the activities of a whole channel and tries to avoid, or solve, channel conflicts.

Vertical marketing systems

Channel systems in which the whole channel focuses on the same target market at the end of the channel.

Corporate channel systems

Corporate ownership all along the channel.

Vertical integration

Acquiring firms at different levels of channel activity.

Administered channel systems

Various channel members informally agree to cooperate with one another.

Contractual channel systems

Various channel members agree by contract to cooperate with one another.

Ideal market exposure

When a product is available widely enough to satisfy target customers' needs but not exceed them.

Intensive distribution

Selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product.

Selective distribution

Selling through only those intermediaries who will give the product special attention.

Exclusive distribution

Selling through only one intermediary in a particular geographic area.

Multichannel distribution

When a producer uses several competing channels to reach the same target market—perhaps using several intermediaries in addition to selling directly.

Multichannel shoppers

Shoppers who use different channels as they move through the purchase process.

Omnichannel

A multichannel selling approach where a single retailer provides a seamless customer shopping experience from desktop computer, mobile device, telephone, or brick-and-mortar store.

Reverse channels

Channels used to retrieve products that customers no longer want.

Waste Electrical and Electronic Equipment (WEEE) Directive

The European Community's law that requires producers to take back waste electrical and electronic equipment.

Exporting

Selling some of what the firm produces to foreign markets.

Licensing

Selling the right to use some process, trademark, patent, or other right for a fee or royalty.

Management contracting

The seller provides only management skills—others own the production and distribution facilities.

Joint venture

In international marketing, a domestic firm entering into a partnership with a foreign firm.

Direct investment

A parent firm has a division (or owns a separate subsidiary firm) in a foreign market.

Promotion

Communicating information between the seller and potential buyer or others in the channel to influence attitudes and behavior.

Personal selling

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

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.

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.

Publicity

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

Sales managers

Managers concerned with managing personal selling.

Advertising managers

Managers of their company's mass-selling effort in television, newspapers, magazines, online, and advertising on social media sites.

Sales promotion managers

Managers of their company's sales promotion effort.

Public relations

Communication with noncustomers—including the press, labor, public interest groups, stockholders, and the government.

Integrated marketing communications

The intentional coordination of every communication from a firm to a target customer to convey a consistent and complete message.

AIDA model

Framework for promoting Attention, Interest, Desire, Action.

Communication process

Source conveys a message to a receiver.

Source

Sender of a message in communication.

Receiver

Target of a message, usually a customer.

Noise

Distraction reducing communication effectiveness.

Encoding

Translating a message into words or symbols.

Decoding

Receiver translating the encoded message.

Message channel

Carrier through which the message travels.

Direct response promotion

Direct communication prompting immediate customer action.

Pushing

Promotion effort to sell the entire marketing mix.

Pulling

Promotion encouraging consumers to request products.

Adoption curve

Model showing when groups accept new ideas.

Innovators

First group to adopt new products.

Early adopters

Respected individuals who adopt products early.

Early majority

Group waiting for early adopters' approval.

Late majority

Cautious group adopting ideas later.

Laggards

Individuals resistant to new ideas, preferring tradition.

Primary demand

Demand for a general product idea.

Selective demand

Demand for a specific company's brand.

Task method

Budgeting based on specific job requirements.

Advertising agencies

Specialists in planning mass-selling advertising.

Advertising allowances

Price reductions to encourage local advertising.

Cooperative advertising

Cost-sharing ads between producers and retailers.

Product advertising

Ads aimed at selling a specific product.

Institutional advertising

Ads promoting an organization's image or ideas.

Pioneering advertising

Ads developing primary demand for a category.

Competitive advertising

Ads creating selective demand for a brand.

Direct competitive advertising

Ads aiming for immediate buying action.

Indirect competitive advertising

Ads highlighting product advantages for future decisions.

Comparative advertising

Ads comparing specific brands using names.

Reminder advertising

Ads keeping a product's name visible.

Advertising media

Means for communicating messages to target markets.

Pay-per-click

Advertiser pays when a customer clicks ad.

Retargeting

Ads shown based on previous online behavior.

Click-through rate

Clicks divided by ad impressions, expressed as a percentage.

Influencers

Trusted figures swaying purchase decisions.

Copy thrust

Core message communicated by ad content.

Corrective advertising

Ads correcting previous deceptive advertising.

Trade promotion

Sales promotion aimed at intermediaries.