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much more than selling and advertising; "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 producers to customers or client"
the process b which companies create value for customers and build strong customer relationships in order to capture value from customers in return |
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| the marketing process (5 steps): |
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1) understand the marketplace and customer needs and wants
2) design a customer-driven marketing strategy
3) construct an integrated marketing program that delivers superior value
4)build profitable relationships and create customer delight
5) capture value from customer to create profits and customer equity |
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| most basic concept of marketing. They are states of felt deprivation. They include: physical, individual and social |
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| the form that human needs take as they are shaped by culture and individual personality. An american needs food but wants a big mac. wants are shaped by one's society and are descrived in terms of objects that will satisfy needs |
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| human wants that are backed by buying power. |
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| some combination of products, services, information, or experiences offered to a market to satisfy a need or want. they include physical products, services, persons, places, organization, information, and ideas |
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the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these same products.
example: a manufacturer of quart-inch drill bits may thing that the customer needs a drill bit. But what the customer really needs is a quarter-inch hole. |
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| the act of obtaining a desired object from someone by offering something in return. Marketing occurs when people decide to satisfy needs and wants through exchange relationships. |
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| the set of all actual and potential buyers of a product or service. the concept of exchange and relationships lead to the concept of market |
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| the art and science of choosing target markets and building profitable relationships with them. |
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| the idea that consumers will favor products that are available and highly affordable and that the organization should therefore focus on improving production and distribution efficiency |
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| the idea that consumers will fabo products that offer the most quality, performance, and features and that the organization should therefore devote its energy t making continuous product improvement. |
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| the idea that consumers will not buy enough of the firm's products unless it undertakes a large-scale selling and promotion effort |
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| the marketing management philosophy that holds that achieving organizational goals depends on knowing the needs and wants of target markets and delivering the desired satisfactions better than competitors do. |
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| the idea that a company's marketing decisions should consider consumers' wants, the company's requirements, consumers' long-run interests and society's long run interests. |
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| customer relationship management |
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| the overall process of building and maintaining profitable customer relationshps by delivering superior customer value and satisfaction. it is perhaps the most important concept of modern marketing. |
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| the customer's evaluation of the difference between all the benefits and all the costs of a marketing offer relative to those of competing offers. |
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| the extent to which a products perceived performance matches a buyer's expectations. |
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| consumer-generated marketing |
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| marketing messages, ads, and other brand exchanges created by consumers themselves-both invited and uninvited. |
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| partner relationship management |
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| working closely with partners in other company departments and outside the company to jointly bring greater value to customers |
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| the value of the entire stream o purchases that the customer would make over a lifetime of patronage. |
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| the portion of the customer's purchasing that a company gets in its product categories. |
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| the total combined customer lifetime values of all the company's customers |
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| the process of developing and maintaining a strategic fit between the organization's goals and capabilities and its changing marketing opportunities |
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| the collection of businesses and products that make up a company |
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| the process by which managements evaluates the products and businesses that make up the company |
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| a portfolio-planning method that evaluates a company's strategic business units in terms of its market growth rate and relative market share. SBUs are classified as starts, cash cows, question marks or dogs |
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| product/market expansion grid |
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| a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification |
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a strategy for company grwoth by increasing sales of current products to current market segments without changing the product.
example: Crocs now offers a rainbow of colors and styles to match any personality or outfit |
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a strategy for company growth by identifying and developing new market segments for current company products.
example: crocs might review their demographic market and decide to target senior consumers or they could review their geographical markets and expand to international markets |
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a strategy for company growth by offering modified or new porducts to current market segments
example: croc has created different kinds of shoes such as boot, faux fur lined shoes and |
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a strategy for company growth through starting up or acquiring businesses outside the company's current products and markets
example: crocks purchased jibbitz LLC which makes accessories that can be snapped into exisint air holds in crocs shoes. it also purchased Ocean Minded which makes sandals for the beach, adventure and action sport markets taking cros into the surf and skate footwear category |
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| reducing the business portfolio by eliminating products of business units that are not profitable or that no longer fit the company's overall strategy. there are many reasons that a firm might want to abandon prducts or markets: (1) The market environment might change (2) the firm way have grown too fast or entered areas where it lacks experience (3) some products or business units simply age and die |
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| the series of departments that carry out value-creating actives to design, produce, market, deliver, and support a firm's products. |
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| the network made up of the company suppliers, distributors and ultimately, customers who "partner" with each other to improve the performance of the entire system. |
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| the marketing logic by which he business unit hopes to create customer value and achieve profitable customer relationships |
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| dividing the market into distinct groups of buyers who have different needs, characteristics, or behaviors and who might require separate products or marketing programs |
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| a group of consumers who respond in a similar way to a given set of marketing efforts |
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| the process of evaluating each market segment's attractiveness and selecting one or more segments to enter. |
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Product: the goods-and-services combination the company offers to the target market (variety, quality design, features, brand name, packaging, services)
Price: the amount of moeny customers must pay to obtain the product (list price, discounts allowances, payment periods, credit terms)
Place: includes company activities that make the product available to target consumers (channels, coverage, assortments, locations, inventory, transportation, logistics)
Promotion: activities that communicate the merits of the product and persuade target customers to buy it.(advertising, personal selling, sales promotion, public relations |
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| arranging for a product to occupy a clean, distinctive, and desirable place relative to competing products in the minds of target consumers. |
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| actually differentiating the market ofering to create superior customer value |
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| the set of controllable tactical marketing tools-products, price, place and promotion-the the firm blends to produce the response it wants in the target market |
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| an overall evaluation of the company's strengths, weaknesses, opportunities, and threats |
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| that process that turns marketing strategies and plans into marketing actions in order to accomplish strategic marketing objectives. (who, what, where, how) |
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| the process of measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that objectives are achieved. |
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| return on marketing investment (or marketing ROI) |
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| the net return from a marketing investment divided by the costs of the marketing investment |
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| the buying behavior of final consumers-indiiduals and households that buy goods and services for personal consumption |
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| all the individuals and households who buy or acquire goods and services for personal consumption |
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| the most basic cause of a person's wants and behaviors. The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions. |
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| a group of people with shared value systems based on common life experiences and situations. they include nationalities, religions, racial groups, and geographic areas |
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relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
consists of:
(1) upper class:
(a) upper uppers: the social elite who live on inherited wealth. They give large sums to charity, own more than one home, and send their children to the finest schools
(b) lower uppers: americans who have earned high income or wealth through exceptional ability. They are active in social and civic affairs and buy expensive homes, educations, and cars
(2) middle class
(a) upper middles: professionals, independent businesspersons, and corporate managers who possess neither family status nor unusual wealth. They believe in education, are joiners and highly civic minded, and want the better things in life
(b) Middle class: average-pay white- and blue-collar workers who live on "the better side of town" they buy poular products to keep up with trends. Better living means owning a nice hom ein a nice neighborood with good schools
(3) Working Class: those who lead a "working-class lifestyle" whatever their income, school background or job They depend heavily on relatives for economic and emotional suport, for advice on purchases and for assistance in times of trouble
(4)Lower Class
(a) upper lowers: the working poor. Althought their living standard is just above poverty, they strive toward a higher class. However, they often lack education and are poorly paid for unskilled work.
(b) lower lowers: visibly poor, often poorly educated unskilled laboreres. They are often out of work and some depend on pubic assistance. They tend to live a day-to-day existance. |
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| two or more people who interact to accomplish individual or mutual goals. |
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| Person within a reference group who, because of special skills knowledge, personality or other characteristics, exerts social influence on others |
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| online social communities-blogs, social networking web sites, or even virtual worlds-where people socialize or exchange information and opinions |
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| the unique psychological characteristics that lead to relatively consistent and lasting responses to one's own environment |
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| the specific mix of human traits that may be attributed to a particular brand |
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| a need that is sufficiently pressing to direct the person to seek satisfaction of the need. |
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| the process by which perople select, organize, and interpret information to form a meaningful picture of the world |
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| changes in an individual's behavior arising from experience |
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| a descriptive thought that a person holds about something |
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| a person's consistently favorable or unfavorable evaluations, feelins, and tendencies toward an object or idea |
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| consumer buying behavior in situations characterized by high consumer involvement in a purchase and significant perceived differences among brands. a consumer may be highly involved with a product is expensive, risky, purchased infrequently and high self expressive. |
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| dissonance-reducing buying behavior |
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Definition
| consumer buying behaior in situations characterized by high involvement buy few perceived differences among brands. occurs when consumers are highly involved with an expensive, infrequent, or risky purchase, but see little difference among brands. |
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Definition
consumer buying behavior in situations characterized by low-consumer involvement and few significantly perceived brand differences.
example: salt. Consumers simply go to a store and reach for a brand. it is out of habit rather than srong brand loyalty.
consumers appear to have low involvement with most low-cost, frequently purchased products. |
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| variety seeking buying behavior |
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Definition
| consumer buying behavior in situations characterized by low consumer involvement but significant perceived brand difference. In such cases, consumers often do a lot of brand switching |
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| buyer decision process (5 steps): |
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Definition
(1) need recognition: the first stage of the buyer decisions process, in which the consumer recognizes a problem or need.
(2) information search: the stage of the buyer decisions process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention may go into an active information search.
(3) Alternative evaluation: the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set.
(4) purchase decision: the buyer's decision about which brand to purchase
(5) Post purchase behavior: The stage of the buyer decision process in which the consumers take further action after purchase, based on their satisfaction or dissatisfaction. |
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| buyer discomfort cause by post purchase conflict |
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| a good, service, or idea that is perceived by some potential customers as new. |
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| the buyer decision process for new products: |
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Definition
(1) awareness: the consumer becomes aware of the new product, but lack information about it.
(2) interest: the consumer seeks info about the new product
(3) evaluation: the consumer considers whether trying the new product makes sense
(4) trial the consumer tries the new product on a small scale to improve his or her estimate of its value
(5) adoption: the consumer decides to make full and regular use of the new product. |
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| adopter categorization on the basis of relative time of adoption of innovations |
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Definition
(1) innovators: venturesome, they try new ideas at some risk
(2) early adopters: guided by respect, they are opinion leaders in their communities and adop new ideas early but carefully.
(3) early majority: deliverate althought they rarely are leaders, they adopt new ideas before the average person
(4) late majority: are skeptical, they adopt an innovation only after a majority of people have tried it
(6) laggards: tradition bound, they are suspicious of changes and adopt the innovation only when it has become something of a tradition itself. |
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| influence of product characteristics on rate of adoption |
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Definition
(1) relative advantage: the degree to wich the innovation appears superior to existing products
(2) compatibility: the degree to which the innovation fits the values and experience of potential consumers
(3) complexity: the degree to whicht he innovation is difficult to understand or use
(4) divisibility: the degree to which the innovation may be trid on a limited basis
(5) communicability: the degree to which the results of using the innovation can be observed or descried to others |
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| The buying behavior of the organizations that buy goods and services for use in the production of other products and services or to resell or rent them to others at a profit. |
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Definition
| the decision process by which business buyers determine which products and services their organizations need to purchase, and then find, evaluate, and choose among alternative suppliers to brands. |
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| Business-to-business (B-to-B) marketers |
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Definition
| must do their best to understand business markets and business buyer behavior |
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business demand that ultimately comes from (derives from) the demand for goods.
- Dell buys intel microprocessor chips because consumers buy personal computers.
i.e.- Intel advertises heavily to personal computer buyers, selling them on the virtues of Intel microprocessors. "multiply your mobility" it tells consumers. The increased demand for Intel chips boosts demand for the PCs containing them, and both Intel and its business partners win |
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Definition
Systematic development of networks of supplier-partners to ensure an appropriate and dependable supply of products and material for use in making products or reselling them to others
i.e.- Caterpillar no longer calls its buyers "purchasing agents" - they are managers of "purchasing and supplier development." Wal-Mart doesn't have a "Purchase department" it has a "supplier Development Department" |
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| 3 major types of buying situations: at one extreme is the straight rebuy, and the other extreme is the new task |
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Definition
1) Straight rebuy: A business buying situation in which the buyer routinely reorders something without any modifications
-"in" suppliers try to maintain product and service quality. "Out" suppliers try to find new ways to add value or exploit dissatisfaction so that the buyer will consider them
2) Modified rebuy: A business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers
- "in" suppliers may become nervous and feel pressured to put their best foot forward to protect an account. "Out" suppliers may see the modified rebuy situation as an opportunity to make a better offer and gain new business
3) New task: A business situation in which the buyer purchases a product or service for the first time. |
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| Systems selling (or solutions selling) |
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Definition
| Buying a packaged solution too a problem a single seller, thus avoind al the separate decisions involved in a complex buying situation. |
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Definition
| All the individuals and units that play a role in the purchase decision-making process. |
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| 5 Roles in the purchase decision process |
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Definition
1) users: are members of the organization who will use the product of service. In many cases, users initiate the buying proposal and help define product specifications.
2)Influencers: often help define specifications and also provide information for evaluating alternatives. Technical personnel are particularly important influencers
3) Buyers: have formal authority to select the supplier and arrange terms of purchase. buyers may help shape product specifications, but their major role is in selecting vendors and negotiating. In more complex purchases, buyers might inclued high-level officers participating in the negotiations.
4)Deciders:have formal or informal power to select or approve the final suppliers. In routine buying, the buyers are often the deciders, or at least the approvers.
5) Gatekeepers: control the flow of information to others. For example, purchasing agents often have authority to prevent salespersons from seeing users or deciders. Other gatekeepers include technical personnel and even personal secretaries. |
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| 8 stages of the business buying process |
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Definition
1) Problem Recognition: The first stage of the business buying process in whcih someone in the company recognizes a problem or need that can be met by acquiring a good or a service.
2)General need description: The stage in the buying process in which the company describes the general characteristics and quantity of a needed item.
3) Product specification: The stage of the buying process in which the buying organization decides on and specifies the best technical product characteristics for a needed item.
4) Supplier search: The stage of the business buying process in which the buyer tries to find the best vendors.
5) Proposal Solicitation: The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
6) Supplier selection: The stage of the business buying process in which the buyer reviews proposals and selects a supplier or suppliers
7)Order-routine specification: The stage of the business buying process in which the buyer writes the final order with the chosen supplier, listing the technical specifications, quantity needed, expected time of delivery, return policies, and warranties.
- many large buyers now practice vendor-managed inventory, in which they turn over ordering and inventory responsibilities to their suppliers.
8) the stage of the business buying process in which the buyer assesses the performance of the supplier and decides to continue, modify, or drop the arrangement |
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Purchasing through electronic connections between buyers and sellers - usually online.
- reduces the time between order and delivery |
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Definition
| Schools, hospitals, nursing homes, prisons, and other institutions that provide goods and services to people in care. |
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Definition
Governmental units - federal, state, and local - that purchase or rent goods and services for carrying out the main functions of government.
- The U.S government is the world's largest buyer of products and services - and its checks don't bounce. |
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Definition
| Dividing a market into smaller groups with distinct needs, characteristics, or behavior that might require separate marketing strategies or mixes. |
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Definition
| identifying market segments, selecting one or more of them, and developing products and marketing programs tailored to each |
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| Market targeting (targeting) |
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Definition
| The process of evaluating each market segment's attractiveness and selecting one or more segments to enter |
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Definition
| Actually differentiating the market offering to create superior customer value. |
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Definition
| Arranging for a market offering to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers |
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Definition
| Dividing the market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods |
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Definition
| Dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality |
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| Age and life-cycle segmentation |
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Definition
Dividing the market into different age and life-cycle groups
i.e- for kids, Oscar Mayer offers lunchables, full of fun, kid-appealing finger food. for older generations, it markets Deli Creations, everything they need to create a "hot and melty fresh-baked sandwich in a microwave minute" |
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Definition
Dividing the market into different groups based on gender
i.e- procter & gamble was among the first with Secret, a brand specially formulated for a woman's chemistry, packaged and advertised to reinforce the female image |
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Definition
Dividing the market into different income groups
i.e- for example, for a price, luxury hotels provide amenities to attract specific groups of affluent travelers, such as families, expectant moms, and even pet owners. |
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| psychographic segmentation |
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Definition
Dividing the market into different groups based on social class, lifestyle, or personality characteristics
i.e.- Rockport advertises that its shoes "are meant for a special occasion. It's called life. Live in Rockport." |
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Definition
| Dividing the market into groups based on consumer knowledge, attitudes, uses, or responses to a product |
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Definition
Dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
i.e - most consumers of orange juice drink it in the morning but orange growers have promoted drinking orange juice as a cool, healthful refresher at other times of the day |
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Dividing the market into groups according to the different benefits that consumers seek from the product
i.e- "Serious Sports Competitors" exercise heavily and live in and love their active wear - they seek performance and function |
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Definition
Forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
i.e- lexus targets the world's well-to-do - the "global elite" segment - regardless of their country |
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Definition
| A set of buyers sharing common needs or characteristics that they company decides to serve |
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Term
| undifferentiated (mass) marketing |
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Definition
| A market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer |
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| Differentiated (segmented) marketing |
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Definition
A market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
i.e.- General Motors tries to produce a car for every "purse, purpose, and personality." |
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| Concentrated (niche) marketing |
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Definition
A market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
i.e - Whole Foods Market has only about 275 stores and $6.5 billion in sales, compared with goliaths such as Kroger (more than 3,000 stores and sales of $66 billion) and Wal-Mart (7,300 stores and sales of $379 billion). |
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| The practice of tailoring products and marketing programs to the needs and wants of speciic individuals and local customer groups - includes local marketing and individual marketing |
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Definition
The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups - includes local marketing and individual marketing
i.e - Wal-mart customizes its merchandise store by store to meet the needs of local shoppers. |
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Definition
| Tailoring products and marketing programs to the needs and preferences of individual customers - also labeled "one-to-one marketing," "customized marketing," and "markets-of-one marketing." |
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Term
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Definition
| Tailoring products and marketing programs to the needs and preferences of individual customers - also labeled "one-to-one marketing," "customized marketing," and "markets-of-one marketing." |
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Definition
| the process through which firms interact one-to-one with masses of customers to design products and services tailor-made to individual needs. |
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Definition
| The way the product is defined by consumers on important attributes - the place the product occupies in consumers' minds relative to competing products |
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Definition
| An advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices |
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Definition
The full positioning of a brand - the full mix of benefits upon which it is positioned
- it is the answer to the question "Why should I buy your brand?"
i.e - Volvo's value proposition hinges on safety but also includes reliability, roominess, and styling, all for a price that is higher than average but seems fair for this mix of benefits.
There are five winning value propositions upon which companies can position their products:
1) More for More - involves providing the most upscale product or service and charging a higher price to cover the higher costs.
i.e- Ritz Carlton hotels and Mercedes automobiles
2) More for the same - Companies can attack a competitor's more-for-more positioning by inroducing a brand offering comparable quality but at a lower price.
i.e- Toyota introduced its Lexus "more-for-the-same" value proposition versus Mercedes and BMW
3) The same for Less- Offering "the same for less" can be a powerful value proposition because everyone like a good deal.
i.e - discount stores such as Wal-Mart and Best Buy
4) Less for Much less- A market almost always exists for products that offer less and therefore cost less
i.e - travelers seeking lodgings prefer not to pay for what they consider unnecessary extras, such as pool, attached restaurant, or mints on the pillow.
5) More for less - I.e - Home Depot had arguably the best product selection, the best service, and the lowest prices compared to local hardware stores and other home improvement chains |
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Term
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Definition
A statement that summarizes company or brand positioning - it takes this form: to (target segment and need) our (brand) is (concept) that (point-of-difference)
i.e.- To busy, mobile professionals who need to always be in the loop, Blackberry is a wireless conncetivity solution that gives you an easier, more reliable way to stay connected to data, people, and resources while on the go" |
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