Marketing Unit 2

Vocabulary flashcards covering key terms and concepts in organizational buying and business-to-business marketing from Chapter 6.

Business-to-Business (B2B) Marketing

The marketing of products and services to companies, governments, or nonprofit organizations for use in the creation of products and services that they can produce and market to others.

Organizational Buyers

Manufacturers, wholesalers, retailers, service companies, nonprofits, and government agencies that buy products and services for their own use or for resale. Long-term contracts prelevant.

Industrial Markets

Organizational markets consisting of entities (such as manufacturers) that buy products and services to reprocess them before selling them to others. (uses the product in business operations or production)

Reseller Markets

Organizational markets consisting of wholesalers and retailers that buy physical products and resell them again without any reprocessing. (sells produt again)

Government Markets

Organizational markets consisting of federal, state, and local agencies that buy goods and services for the constituents they serve. (purposes for public purposes)

North American Industry Classification System (NAICS)

A system that provides common industry definitions for Canada, Mexico, and the U.S. to make it easier to measure economic activity in the three member countries.

Derived Demand

Demand for industrial products and services that is driven by, or derived from, the demand for consumer products and services. (demand for final consumer product) Ex: Fidget spinner

Organizational Buying Behavior

The decision-making process that organizations use to establish the need for products and services and to identify, evaluate, and choose among alternative brands and suppliers.

Buying Center

A group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.

Reciprocity

An industrial buying practice in which two organizations agree to buy products and services from each other. (two businesses agree to buy from each other)

Supply Partnership

A relationship that exists when a buyer and its supplier adopt mutually beneficial goals, policies, and procedures. (relationship to improve quality, cost, delivery, or efficiency)

Buy Classes

Three types of organizational buying situations: new buy, straight rebuy, and modified rebuy.

E-Marketplaces

Online trading communities that bring together buyer and supplier organizations to make possible the real-time exchange of information, money, products, and services.

Traditional Auction

An online auction where a seller puts up an item for sale and would-be buyers are invited to bid in competition.

Reverse Auction

An online auction where a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition.

Organizational Buying Characteristic: Market

The organizational buying market characteristic where demand for products and services is derived.

Organizational Buying Characteristic: Product or Service

The organizational buying product or service characteristic where many goods purchased are raw or semifinished.

Organizational Buying Characteristic: Buying Process

The organizational buying process characteristic involving multiple influences, negotiations, and purchasing on the internet.

Organizational Buying Characteristic: Marketing Mix

The organizational buying characteristic where direct selling to organizational buyers is the rule.

Countertrade

Using barter rather than money for making global sales.

Globalization

Creating economic, cultural, political, and technological interdependence among individual national institutions and economies.

Protectionism

Shielding country’s industry from competition through tarrifs or quotas.

Tarrifs

Taxes on products or services entering a country (tax and dollars).

Quota

Restriction on amount allowed to enter/leave a country-quanity

International Firms

Markets in other countries same as home country.

Multinational Firms

Multi-domestic, every country gets own strategy. (Company adapts products and marketing to each country’s local market)

Transnational Firm

Emphasizes universal consumer needs.

Global Competition

Exists when firms originate, produce, and market their products and services worldwide.

Multi-Domestic Marketing Strategy

Many different product variations, brand names, and advertising programs as countries in which they do business.

Global Market Strategy

Used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting when cultures differ.

Economic Espionage

The clandestine collection of trade secrets or proprietary information about a company’s competitors.

Exporting

Global market entry strategy where you market in one country, then sell in another.

Licensing

Right to trademark, patent, or trade secret.

Joint Venture

Foreign and local companies invest together.

Cross-Cultural Analysis

Study of similarities and differences among consumers in two or more nations, or societies. (Studies values, customs, language, and ethnocentrism)

Cultural Ethnocentricity

Belief one’s country is superior to others.

Consumer Ethnocentrism

Believing that it’s inappropriate to purchase foreign-made products.

Currency Exchange Rates

Price of country’s currency expressed in terms of another country’s currency.

Gray Market

Products sold through unauthorized channels.

Dumping

Sell below cost.

Marketing Research

Process of defining a marketing problem and opportunity, systematically collecting and analyzing info, and recommending actions.

Step 1

Define the probelm

Measures of Success

Criteria or standards used in evaluating proposed situations to the problem.

How did lego measure success?

The assembly time.

Step 2

Develop the research plan.

Constraints

In a decision, the restrictions placed on potential solutions to a problem.

Step 3

Collect relevant information

Data

Facts and figured related to the project that are divided into 2 main parts.

Primary Data

Facts and figures newly collected for the project. Ex: Observational data, experiments, and panels (no government).

Secondary Data

Facts and figures that have already been recorded prior to the project at hand.

Input Data

Efforts expanded to make sales.

Output Data

Results of marketing effort.

Step 5

Collect relevant data

Marketing Input Data

Effort expended to make sales (budgets, financial statements, sales call reports)

Marketing Output Data

Results of marketing efforts (actual sales and customer communications)

External Data

U.S. census reports, trade association studies, internet-based reports.

Observational Data

Facts and figured obtained by watching how people actually behave, using mechanical, personal. or neuromarketing data collection.

Ethnographic Research

Watching someone in their household.

Neuromarketing

Measuring brainwaves.

Questionable Data

Facts and figures obtained by asking people about their attitudes, awareness, interactions, and behaviors.

Test Market

Used in small geographies to evaluate marketing actions.

Big Data

Large amounts of data collected from a variety of sources. Ex: websites watching, cookies

Information Technology

All computing resources that collect, store, and analyze data and big data.

Data Mining

Extraction of hidden predictive information from large databases to find statistical links between consumer purchasing patterns and marketing actions. Ex: Customers who purchase coffee beans often buy filters

Predictive Modeling

Based on statistical models that use data mining and probability analysis to foretell outcomes.

Sales Forecast

The total sales of a product firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts.

Market Segmentation

Involves aggregating prospective buyers into groups, or segments that (1) have common needs and (2) will respond similarly to a marketing action. Ex: Nike has lines for sports

Product Differentation

A marketing strategy that involves a firm using different marketing mix actions to help consumers perceive a product as being different and better than competing products. (makes offering stand out)

Segmentation

Linking needs to actions, link between needs of customers and actions. (Divides customers into groups)

Market-Product Grids

A framework to relate the market segments of potential buyers to products offered or potential marketing actions. (Which products serve which segment and where growth exists)

Organizational Synergy

Better functioning organization.

Cannibalization

Stealing sales from yourself.

“Tiffany/Walmart” Strategy

Selling to high-end and low-end segments.

Personas

Character descriptions of a typical customer in the form of fictional character, narratives, complete with images that capture the personalities, values, attitudes, beliefs, demographics, and expected interactions with a brand.

Product Positioning

The place a product occupies in consumers’ minds based on important attributes relative to competitive products.

Product Repositioning

Changing the place a product occupies in a consumer’s mind relative to competitive products.

Perceptual Map

Displaying in 2 dimensions the locations of products or brands in the minds of consumers to enable a manager to see how they perceive competing products or brands, as well as the firms own product/brand.

Products

A good, service, or idea consisting of a bundle of tangible/intangible attributes that satisfies consumers’ needs and is in exchange for money/something of value.

Services

Intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value.

Consumer Products

Products purchased by the ultimate consumer.

Convenience Products

Items that the consumer purchases frequently, conveniently, and with minimum shopping effort. Price, avalibility, awareness stressed.

Shopping Products

Items for which the consumer compares several alternatives on criteria such as price, quality, or style.

Specialty Products

Items that the consumer makes a special effort to search out and buy.

Unsought Products

Items the consumer doesn’t know or knows about but doesn’t initially want.

Business Products

Sales are the result of derived demand (B2B buying).

Product Item

Specific product that has a unique brand, size, or price. Ex: Stock-Keeping Unit (SKU).

Product Line

A group of product or service items that are closely related based on class of needs, are used together, and sold to same consumers.

Product Mix

All product lines offered by an organization.

Protocol

Identifies (1) a well-defined target market (2) specific consumers’ needs, wants, and preferences, and (3) what the product will be and do to satisfy consumers.

8 New Product Failure Reasons

(1) Insignificant point of difference (2 & 3) incomplete market and product protocol (4) failure to satisfy customer needs on factors (5) no access to buyers (6) poor marketing mix (7) too little market attractiveness (8) poor quality.

Continuous Innovation

Requires no new learning.

Dynamic Innovation

Minor behavior changes.

Discontinuous Innovation

Requires new learning and consumption patterns by consumers.

New-Product Development Process

7 Stages an organization goes through to identify opportunities and convert them into salable products or services.

Business Analysis

Specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections.

Commercialization

Positions and launches a new product in full-scale production and sales-most expensive stage.