MKTG 360 Test 2
Terms
undefined, object
copy deck
- 80/20 rule
- A marketing heuristic that claims that 20% of purchasers account for 80% of a product’s sales.
- Baby boomers
- The segment of people born between 1946 and 1976.
- Behavioral segmentation
- A technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service.
- Brand personality
- A distinctive image that captures a good’s or service’s character and benefits.
- Concentration targeting strategy
- Focusing a firm’s efforts on offering one ore more products to a single segment.
- Custom marketing strategy
- An approach that tailors specific products and the messages about them to individual customers.
-
Customer relationship management
(CRM) -
A philosophy that sees marketing as a process of building long-term relationships with customers to keep them satisfied and to keep them coming back. Involves systematically tracking consumers’ preferences and behaviors over time in order to tailor the value of proposition as closely as possible to each individual’s unique wants and needs.
Said another way, the purpose of CRM is to increase revenues, profits, and customer service by understanding customer preferences and catering to them in such a way that they choose to spend additional dollars with your firm. Its the use of information to change behaviors that makes the difference. If you understand customer preferences than you can segment them and use different promotions to talk to them. - Demographics
- Statistics that measure observably aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure.
- Generational marketing
- Marketing to members of a generation, who tend to share the same outlook and priorities. Ex: baby boomers, Gen X, Y.
- Geocoding
- Customizing advertising (Web, print ads, Radio ads, TV ads, etc.) so that people who live or log on in different places will be exposed to advertising for local businesses.
- Geodemography
- A segmentation technique that combines geography with demographics. You map demographic consumer segments to neighborhoods/regions.
- Lifetime value of a customer
- an estimation of the potential profit that one consumer may provide over their lifetime.
- Market fragmentation
- The creation of many consumer groups (segments) due to a diversity of distinct needs and wants in modern society
- Mass customization
- An approach that modifies a basic good or service to meet the needs of an individual.
- Perceptual map
- A vivid way to construct a picture of where products or brands are “located†in consumer’s minds.
- Positioning
- Developing a marketing strategy aimed at influencing how a particular market segment (persuading consumers) perceives a good or service in comparison to the competition.
- Psychographics
- The use of psychology, sociological, and anthropological factors to construct market segments. Segments are formed based on attitudes, interests and opinions.
- Segment profile
- A description of the “typical†customer in a segment.
- Segmentation
- The process of dividing a larger market into smaller pieces based on one or more meaningful shared characteristics.
- Segmentation variables-
- Dimensions that divide the total market into fairly homogenous groups , each with different needs and preferences
- Share of customer
- The percentage of an individual customer’s purchase of a product that is a single brand.
- Target market
- The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts.
- Target market strategy
- Dividing the total market into different segments on the basis of consumer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments.
- Targeting
- A strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers.
- Undifferentiated targeting strategy
- Appealing to a broad spectrum of people.
- Usage occasions
- An indicator used in one type of market segmentation based on when consumers use a product most.
- Actual product
- The physical good or the delivered service that supplies the desired benefit.
- Augmented product
- The actual product plus other supported features such as warranty, credit, delivery, installation, bundled services, and repair service after the sale.
- Business analysis
- The step in the product development process in which marketers assess a product’s commercial viability.
- Commercialization
- The final step in the product development process in which a new product is launched into the market.
- Complexity
- The degree to which consumers find a new innovation or its use difficult to understand, learn and use. Complexity is the opposite of ease of use.
- Continuous innovation
- A change in an existing product that requires a moderate amount of learning or behavior change (ie., ipod’s change from using hard-drives to flash memory).
- Convenience product
- A consumer good or service that is usually low-priced, widely available, or purchased frequently with a minimum of comparison or effort.
- Convergence
- The coming together of two or more technologies or industries to create a new system with greater benefits than its parts. Ex: iPhone or G3 phone which can download songs, make/play videos, do email, and Internet browsing.
- Core product
- All the benefits the product will provide for consumers or business customers. Ex: what are all the benefits a person received from a hair cut (style).
- Diffusion
- The process by which the use of a product spreads throughout a population.
- Discontinuous (Disruptive) innovation
- A totally new product that creates major changes in the way we live. Some examples are PC’s, refrigerators, and email.
- Durable goods
- Consumer products that provide benefits over a long period of time (usually many years) such as cars, furniture, and appliances.
- Gap analysis
- is a measurement tool that gauges the difference between a customer’s expectations of product or service quality and that level which actually occurred
- Good
- A tangible product that we can see, touch, smell, hear, or taste.
- Idea generation
- The first step of product development in which marketers brainstorm for products that provide customer benefits and are compatible with the company mission.
- Innovation
- A product that consumers perceive to be new and different from existing products.
- Product concept development and screening
- The second step of product development in which marketers test product ideas for technical and commercial success.
- Prototypes
- Test versions of a proposed product.
- Relative advantage
- The degree to which a consumer perceives that a new product provides superior benefits than existing products.
- Staples
- Basic or necessary items that are available almost everywhere.
- Shopping product
- A good or service for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase. Consumers have enduring involvement for shopping products (ex: coffee beans).
- Slotting allowance
- the fee that retail vendors charge to a manufacturer, or wholesaler to ensure a good product placement. For example the products are placed near the front of the store, at the end of each aisle, or at eye-level on the shelves.
- Technical development
- The step in the product development process in which a new product is refined and perfected by company engineers.
- Test marketing
- Testing the complete marketing plan in a small geographic area that is similar to the large market the firm hopes to enter.
- Trialability
- The ease of sampling a new product and its benefits. For example test driving a car.
- Unsought products
- Goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to his or her attention.
- Brand
- A name, a term, a symbol, or any other unique element of a product that identifies one firm’s product(s) and sets it apart from the competition. Brands also attempt to bond and elicit an emotional reaction from the consumer. Strong brands make it possible to charge triple for essentially a commodity. (ex: string cheese, fishy cheese crackers, bunny batteries).
- Brand equity
- Based on sales projections, brand equity is the financial value of a brand to an organization. The value of a product line is greatly increased when the product line is branded (ask Pillsbury).
- Co-branding
- An agreement between two brands to work together in marketing a new product. (Ex: Eddie Bauer Ford, Morgan Pepsi).
- Decline stage
- The final stage in a product life cycle, during which sales decrease as customer needs change, and consumers lose interest. The product may be pulled or sold-off to a specialty vendor.
- Generic branding
- No brand = product is a commodity (see large bins at Winco). A strategy in which products are not branded and are sold at the lowest possible price.
- Growth stage
- The second stage in the product life cycle, during which the product is accepted and sales rapidly increase.
- Introduction stage
- The first stage in the product life cycle = the introduction of a new product in the market place. Equivalent to commercialization phase of the product innovation cycle.
- Licensing
- An agreement in which one firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time. (Ex: licensed toys). There is approval of usage of brand name but there is no working together (co-design). Think generic manufacturing company licensing Spiderman logo to create new set of toys.
- Market manager
- Organizational employee who is responsible for developing and implementing the marketing plans for products sold to a particular customer group (as in typical in business-to-business where customers are large OR where the customers form a target market ex: adrenaline hungry college students).
- Maturity stage
- The third and longest stage in the product life cycle, during which sales peak and profit margins narrow as competition gets stiffer.
- Package
- The covering or container for a product that provides product protection, facilitates product use and storage, and supplies important marketing communication (such as usages, benefits, instructions for usage, etc.)
- Product life cycle
- A concept that explains how products go through four distinct stages from birth to death: introduction, growth, maturity, and decline. (Not all products die though, they can be continually reinvented).
- Product line
- A firm’s total product offering designed to satisfy a single need or desire of target customers (ex: all the different types of Starbucks Roasted Whole Bean Coffee)
- Product mix
- the total set of all product lines a firm offers for sale. The product mix can be one product line or many (referred to as narrow or wide).
- Product category managers
-
individuals who are responsible for developing and implementing the marketing plan for all the branded products within one product line
(Ex: all Tide detergents for P&G, all trousers for Dockers) - Total Quality Management (TQM)
- A management philosophy that incorporates the ideals of continuous improvement and a myriad of performance measures. TQM measures indiacate whether in fact business performance is improving, stagnant, or declining.
- Retro brand
- This is a brand that has been on the market for a long time, such as Converse Chuck Taylor sneakers or SPAM. The marketing strategy is to rejuvinate (reposition) the brand to resonate with the current generation (ex: this is not your fathers shaving cream)
- Trademark
- The legal term for a brand name, brand mark, or trade character; trademarks need to be legally registered by a government to obtain protection for exclusive use in that country or territory.
- Venture teams
- groups of people within an organization who work together focus exclusively on the development of a new product.
- Business-to-business (B2B) e-commerce
- Commerce conducted using Internet-based exchanges. Businesses or organizations locate each other’s goods and services via e-commerce forums.
- B2B marketing
-
The marketing of goods and services to business customers that need them to enable their production of goods and services. A business my purchase goods and services that are:
1) part of the products/services they make and sale (i.e., BMW buying auto engines), or raw materials such as shoe leather
2) resold such as when Ford purchases Nissan cars and puts their name plate on them.
Value-added resellers take a product and modify it for a customer (i.e., IT consultants buy software then modify it for resale, such as Protiviti buying SAP software and customizing it for resale
3) in support of their operations (i.e., consumables such as copy paper and hand soap) - B2B markets
- The group of customers that include manufacturers, wholesalers, retailers, and other organizations. In comparison to B2C, are characterized as a relatively small # of players, yet a huge $$ amount.
- Buy class
- Business purchases are classified as being one of three types. The three classifications are based on the degree of time and effort required to make a decision. The three categories are straight re-buy, modified re-buy, new task buy).
- Derived demand
- Demand for business or organizational products (tires) caused by demand for consumer goods of services (autos).
- Buying center
- The group of people in an organization who participate in a purchase decision. Can include purchasers, legal, engineering, and other advisors. These can be full-time purchasing dept. employees or called in as needed.
- Inter-Organizational system (IOS)
- A private, corporate computer network that links company departments, employees, and databases to suppliers, customers, and others outside the organization. An example is the Wal-mart extranet that suppliers have to use to communicate order info or a system built on SAP’s Enterprise Resource Planning (ERP system).
- Government markets
- The federal, state, county, and local governments that buy goods and services to carry out public objectives and to support their operations.
- Modified re-buy
- One of the three buying situation classifications used buy business buyers. A previously made purchase that involves some change and that requires limited decision making to deal with the changes is called a modified re-buy. For example instead of buying a fleet of rental cars, Avis buys a fleet of hybrid vehicles.
- Multiple sourcing
- The business practice of buying a particular product from several different suppliers. Doing this can keep the price down as companies compete for your business.
- New-task buy
- A new business-to-business purchase that is complex or risky and that requires extensive decision making. This occurs when you have no experience buying the product or service. For ex: a small business buying a we-hosting service.
- Private exchanges
- E-commerce systems that link an invited group of suppliers and partners over the web. These are industry groups organized around the production of, for example, meat, steel, ceramics, etc.
-
Product specifications
(specs) - A written description of the quality, size, weight, and so forth required of a product purchase. When creating an RFP, a business defines the specs they need the requested products/services to meet. The more detailed the specs, the higher the product/service quality will be.
- Request for Proposal (RFP)
- a company asks suppliers to place bids (proposals) on a job (such as to build a building or provide component parts or services). Proposals are needed as the job specs are unique (ex: construction job).
- Request for Quote (RFQ)
- a company asks suppliers to provide quotes (prices) for off-the-shelf needed products
- Single sourcing
- The business practices of buying a particular product from only one supplier. This is pretty risky. Many technology companies (computers, software, or equipment like cat scan machines) try to lock a customer in by using proprietary technologies.
- Straight re-buy
- A buying situation in which business buyers make routine purchases that require minimal decision making. re-buy the same product from a pre-approved vendor. The choice of vendor, delivery specs, and price may change though, but not the product.