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Marketing

An organizational function and set of process for creating, capturing, communicating, and delivering value to customers, and for managing customer relationships in ways that benefit the organization and its stakeholders

Marketing Plan

A written document composed of an analysis of the current marketing situation, opportunities, and threats for the firm, marketing objectives and strategy specified in terms of four P's, action programs, and projected or pro forma income (and other financial) statements

Exchange

The trade of things of value between the buyer and the seller so that each is better off as a result

Marketing Mix

Product, price, place, and promotion-the controllable set of activities that a firm uses to respond to the wants of its target markets

Goods

Items that can be physically touched

Services

Any intangible offering that involves a deed, performance, or effect that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer

Ideas

Intellectual concepts-thoughts, opinions, and philosophies

B2C (Business-to-consumers)

The process in which businesses sell to consumers

B2B (Business-to-business)

The process of selling merchandise, or services from one business to another

C2C (consumer-to-consumer)

The process in which consumers sell to other consumers

Production Oriented Era

Turn of the 20th century when most firms were production oriented and believed a good product would sell itself

Sales Oriented Era

Between 1920-1950, With overproduction they depended on heavy doses of personal selling and advertising

Market Oriented Era

After WWII(1945), buyers market

Value-Based Era

Most successful firms are this today. Discover and give the customer what they want.

Value

Reflects the relationship of benefits to costs, or what the consumer gets for what he or she gives

Value Cocreation

Customers act as collaborators with a manufacturer or retailer to create the product or service

Relation Orientation

A method of building a relationship with customers based on the philosophy that buyers and sellers should develop a long-term relationship

Customer Relationship Management (CRM)

A business philosophy and set of strategies, programs, and systems that focus on identifying and building loyalty among the firm's most valued customers

Supply Chain

The group of firms that make and deliver a given set of goods and services

Marketing Channel

The set of institutions that transfer the ownership of and move goods from the point of production to the point of consumption: consists of all the institutions and marketing activities in the marketing process

Entrepreneurs

A person who organizes, operates, and assumes the risk of a new business venture

Business Ethics

Refers to a branch of ethical study that examines ethical rules and principles within a commercial context, the various moral or ethical problems that might arise in a business setting, and any special duties or obligations that apply to persons engaged in commerce

Marketing Ethics

Refers to those ethical problems that are specific to the domain of marketing

Ethical Climate

The set of values within a marketing firm, or in the marketing division of any firm, that guide decision making and behavior.

Corporate Social Responsibility

Refers to the voluntary actions taken by a company to address the ethical, social, and environmental impacts of its business operations and the concerns of its stakeholders

Ethical Decision Making Framework

Identify Issues ⇒Gather info & identify Stakeholders ⇒Brainstorm & evaluate alternatives ⇒Choose a course of action

Locational Privacy

A person's ability to move normally in public spaces with the expectation that his or her location will not be recorded for subsequent use

Macro-Environmental Factors

Aspects of the external environment that affect a company's business, such as the culture, demographics, social issues, technological advances, economic situation, and political/regulatory environment

Culture

The set of values, guiding beliefs, understandings, and ways of doing things shared by members of society; exists on two levels: visible artifacts (i.e. behavior, dress, symbols, physical settings, ceremonies) and underlying values (thought processes, beliefs, and assumptions)

Country Culture

Entails easy-to-spot visible nuances that are particular to a country, such as dress, symbols, ceremonies, language, colors, and food preferences, and more subtle aspects, which are trickier to identify

Regional Culture

the influence of the area within a country in which people live

Demographic

Information about the characteristics of human populations and segments, especially those used to identify consumer markets such as by age, gender, income, and education

Generational Cohort

A group of people of the same generation—typically have similar purchase behaviors because they have shared experiences and are in the same stage of life

Generation Z

Also known as the Digital Natives, because people in this group were born into a world that already was full of electronic gadgets and digital technologies, such as the internet and social networks

Digital Native

Also known as Generation Z, people in this group were born into a world that already was full of electronic gadgets and digital technologies, such as the internet and social networks

Generation Y

People born between 1977-1995: biggest cohort since the original postwar baby boom

Millennials

Consumers born between 1977 and 2000 and the children of the Baby Boomers

Generation X

People born between 1965-1976

Baby Boomers

People born after WWII, between 1946-1964

Green Marketing

Involves a strategic effort by firms to supply customers with environmentally friendly merchandise

Greenwashing

Exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales

Inflation

Persistent increase in the prices of goods and services

Foreign Currency Fluctuations

Changes in the value of a country's currency relative to the currency of another country; can influence consumer spending

Interest Rates

These represent the cost of borrowing money

Political/regulatory Environment

Competitive political parties, government organizations, and legislation and laws

Need Recognition

The beginning of the consumer decision process; occurs when consumers recognize they have an unsatisfied need and want to go from their actual, needy state to a different, desired state

Functional Needs

Pertain to the performance of a product or service

Psychological Needs

Pertain to the personal gratification consumers associate with a product or service

Internal Search for Information

Occurs when the buyer examines his or her own memory and knowledge about the product or service, gathered through past experiences

External Search for Information

Occurs when the buyer seeks information outside his or her personal knowledge base to help make the buying decision

Internal Locus of Control

Refers to when consumers believe they have some control over the outcomes of their actions, in which case they generally engage in more search activities

External Locus of Control

Refers to when consumers believe that fate or other external factors control all outcomes

Performance Risk

Involves the perceived danger inherent in a poorly performing product or service

Financial Risk

Risk associated with a monetary outlay; includes the initial cost of the purchase, as well as the costs of using the item or service

Social Risk

The fears that consumers suffer when they worry others might not regard their purchases positively

Retrieval Sets

Includes those brands or stores that the consumer can readily bring forth from memory

Evoked Set

Comprises the alternative brands or stores that the consumer states he or she would consider when making a purchase decision

Evaluate Criteria

Consist of a set of salient, or important, attributes about a particular product

Physiological Risk

The fear of an actual harm should a product not perform properly

Safety Risk

Same as Psychological Risk

Psychological Risk

Associated with the way people will feel if the product or service does not convey the right image

Universal Sets

Includes all possible choices for a product category

Determinant Attributes

Product or service features that are important to the buyer and on which competing brands or stores are perceived to differ

Consumer Decision Rules

The set of criteria that consumers use consciously or subconsciously to quickly and efficiently select from among several alternatives

Compensatory Decision Rule

good characteristics compensate for bad ones; Decision made on multiple criteria

Multi-Attribute Model

A compensatory model of customer decision making based on the notion that customers see a product as a collection of attributes or characteristics. The model uses a weighted average score based on the importance of various attributes and performance on those issues

Noncompensatory Decision Rule

Base decision on only one criteria

Conversion Rate

Percentage of consumers who buy a product after viewing it

Postpurchase Cognitive Dissonance

The psychologically uncomfortable state produced by an inconsistency between beliefs and behaviors that in turn evokes a motivation to reduce the dissonance; buyer's remorse

Negative Word of Mouth

Occurs when consumers spread negative information about a product, service, or store to others

Motive

A need or want that is strong enough to cause the person to seek satisfaction

Maslow's Hierarchy of Needs

A paradigm for classifying people's motives. It argues that when lower-level, more basic needs (physiological and safety) are fulfilled, people turn to satisfying their higher-level human needs (social and personal)

Attitude

A person's enduring evaluation of his or her feelings about and behavioral tendencies toward an object or idea: consists of three components: cognitive, affective, and behavioral

Cognitive Component

A comment of attitude that reflects what a person believes to be true

Affective Component

A component of attitude that reflects what a person feels about the issue at hand-his or her like or dislike of something

Behavioral Component

A component of attitude that comprises the actions a person takes with regard to the issue at hand

Lifestyle

A component of psychographics; refers to the way a person lives his or her life to achieve goals

Reference Group

One or more persons whom an individual uses as a basis for comparison regarding beliefs, feelings, and behaviors

Situational Factors

Factors affecting the consumer decision process; those that are specific to the situation that may override, or at least influence, psychological and social issues

Involvement

Consumer's interest in a product or service

Extended Problem Solving

A purchase decision process during which the consumer devotes considerable time and effort to analyzing alternatives; often occurs when the consumer perceives that the purchase decision entails a lot of risk

Limited Problem Solving

Occurs during a purchase decision that calls for, at most, a moderate amount of effort and time

Impulse Buying

A buying decision made by customers on the spot when they see the merchandise

Habitual Decision Making

A purchase decision process in which consumers engage with little conscious effort

The Segmentation, Targeting, and Positioning Process

Establish overall strategy or objectives ⇒Segmentation methods ⇒Evaluate segment attractiveness ⇒Select Target Market ⇒Identify and develop positioning strategy

Geographic Segmentation

The grouping of consumers on the basis of where they live

Demographic Segmentation

The grouping of consumers according to easily measured, objective characteristics such as age, gender, income, and education

Psychographics

Used in segmentation; delves into how consumers describe themselves; allows people to describe themselves using those characteristics that help them choose how they occupy their time (behavior) and what underlying psychological reasons determine those choices

Self-Values

Goals for life, not just the goals one wants to accomplish in a day; a component of psychographics that refers to overriding desires that drive how a person lives his or her life

Self-Concept

The image a person has of him or herself; a component of psychographics

Value and Lifestyle Survey(VALS)

A psychographic tool developed by SRI consulting business intelligence classifies consumers into eight segments, innovators, thinkers, believer, achievers, strives, experiencers, makers or survivors

Benefit Segmentation

The grouping of consumers on the basis of the benefits they derive from products or services

Behavioral Segmentation

A segmentation method that divides customers into groups based on how they use the product or service. Some common behavioral measures include occasion and loyalty

Occasion Segmentation

A type of behavioral segmentation based on when a product or service is purchased or consumed

Loyalty Segmentation

Strategy of investing in loyalty initiatives to retain the firm's most profitable customers

Geodemographic Segmentation

The grouping of consumers on the basis of a combination of geographic, demographic, and lifestyle characteristics

Undifferentiated Targeting Strategy

A marketing strategy a firm can use if the product or service is perceived to provide the same benefits to everyone, with no need to develop separate strategies for different groups

Differentiated Targeting Strategy

A strategy through which a firm targets several market segments with a different offering for each

Concentrated Targeting Strategy

A marketing strategy of selecting a single, primary target market and focusing all energies on providing a product to fit that market's needs

Micromarketing(one-to-one)

An extreme form of segmentation that tailors a product or service to suit an individual customer's wants or needs; also called one to one marketing