Marketing Exam #2
Terms in this set (166)
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
an activity, benefit, or satisfaction offered for sale that is essentially intangible and does not result in the ownership of anything
A product bought by final consumers for personal consumption
A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort
A consumer product that the customer in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style
A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
A consumer product that the consumer either does not know about or knows about but does not normally consider buying
A product bought by individuals and organisations for further processing or for use in conducting a business
Materials and parts
Industrial products that include raw materials as well as manufactured materials and parts
Industrial products that aid in the buyer's production or operations, including installations and accessory equipment
Supplies and services
Include operating supplies, repair and maintenance items and include repair and maintenance services, and business advisory services
Activities undertaken to create, maintain, or change the attitudes and behaviour of target consumers toward an organization
Corporate Image Marketing
public relations campaigns that companies use to market themselves and polish their images
Activities undertaken to create, maintain, or change attitudes of behaviour toward particular people
Activities undertaken to create, maintain, or change attitudes or behaviour toward particular places
The use of commercial marketing concepts and tools in programs designed to influence individuals' behaviour to improve their well-being and that of society
The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs. Has two dimensions: quality level and quality consistency
Total Quality Management
an approach in which all of the company's people are involved in constantly improving the quality of products, services, and business processes
viewing quality as an investment and holding quality efforts accountable for bottom-line results
the product's quality to perform its functions
freedom from defects and consistency in delivering a targeted level of performance
A name, term, sign, symbol, or design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
The activities of designing and producing the container or wrapper for a product
Identifies the product or brand, describe several things about the product, and promote the brand, support its positioning, and connect with customers
A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
Product Line Stretching
a company lengthens its product line beyond its current range
Product Line Filling
adding more items within the present range of the line
Product mix (or product portfolio)
The set of all product lines and items that a particular seller offers for sale
Means that services cannot be seen, tasted, felt, heard, or smelled before they are bought
Services are produced and consumed at the same time and cannot be separated from their providers
Quality of services may vary greatly depending on who provides them and when, where, and how they are provided
services cannot be stored for later sale or use
Service profit chain
The chain that links service firm profits with employee and customer satisfaction; consists of internal service quality, satisfied and productive service employees, greater service value, satisfied and loyal customers, and healthy service profits and growth
Orienting and motivating customer-contact employees and supporting service employees to work as a team to provide customer satisfaction; it must precede external marketing
Training service employees in the fine are of interacting with customers to satisfy their needs
The differential effect that knowing the brand name has on customer response to the product or its marketing; a powerful brand has a high one and is a very valuable asset
The process of estimating the total financial value of a brand
Store brand (or private band)
A brand created and owned by a reseller of a product or service
The practice of using the established brand names of two different companies on the same product
Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
Extending an existing brand name to new product categories
A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives.
The development of original products, product improvements, product modifications, and new brands through the firm's own product-development efforts.
Diffusion of innovation
A social sciences theory that divides members of a social group into segments according to how likely they are to adopt a new idea.
Technology Adoption Life Cycle
A marketing theory that proposes that when marketing a technology product, marketers must cross a chasm, or significant gap, between members of the early adopters segments and members of the early majority segment, before a new product will become successful.
The systematic search for new-product ideas.
Inviting broad communities of people such as customers, employees, independent scientist and researchers, and even the public at large, into the new product innovation proccess.
Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible.
A detailed version of the new-product idea stated in meaningful consumer terms.
Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
Marketing strategy development
Designing an initial marketing strategy for a new product based on the product concept.
developing the product concept into a physical product to ensure that the product idea can be turned into a workable market offering
The stage of new-product development in which the product and marketing program are tested in more realistic market settings.
The full-scale introduction of the new product into the market.
Customer-Centered New Product Development
New product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences
Team-Based New Product Development
New product development in which carious company departments work closely together, overlapping the steps in the product development process to save time and increases effectiveness
Product life cycle
The course of a product's sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline.
The product life-cycle stage in which the new product is first distributed and made available for purchase. It is a period of slow sales growth and non-existent profit as the product is introduced into the market.
The product life-cycle stage in which a product's sales start climbing quickly. It is a period of rapid market acceptance and increasing profits.
The stage in the product life cycle in which sales growth slows or levels off. It is a period of a slowdown in sales growth because the product has achieved acceptance by most potential buyers.
The stage in the product life cycle in which sales growth slows or levels off.
A basic and distinctive mode of expression.
A currently accepted or popular style in a given field
A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity.
Packaging that meets the requirements of the product while minimizing the environmental, economic, and social impacts of the product and its package.
The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service
Customer value-based pricing
Setting price based on buyers' perceptions of value rather than on the seller's cost; one of the three major pricing strategies
Offering just the right combination of quality and good service at a fair price; one of the two types of value-based pricing
Attaching value-added features and services to differentiate a company's offers and charging higher prices; one of the two types of value-based pricing
Setting prices based on the costs of producing, distributing, and selling the product plus a fair rate of return for effort and risk; one of the three major pricing strategies
Fixed costs (overhead)
Costs that do not vary with production or sales level
Costs that vary directly with the level of production
The sum of the fixed and variable costs for any given level of production
Cost-plus pricing (markup pricing)
Adding a standard markup to the cost of the product; simplest pricing method; cost-oriented method
Break-even pricing (target return pricing)
Setting price to break even on the costs of making and marketing a product, or setting price to make a target return; cost-oriented pricing
Setting prices based on competitors' strategies, prices, costs, and market offerings; one of the three major pricing strategies
Pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
A curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
A measure of the sensitivity of demand to changes in price; elastic and inelastic
Market-skimming pricing (price skimming)
Setting a high price for a new product to skim maximum revenues layer by layer from the segments wiling to pay the high price; the company makes fewer but more profitable sales; one of the two new product pricing strategies
Setting a low price for a new product in order to attract a large number of buyers and a large market share; one of the two new product pricing strategies
Product line pricing
Setting the price steps between various products in a product line based on cost differences between the products, customer evaluation of different features, and competitors' prices; one of the five product mix pricing strategies
The pricing of optional or accessory products along with a main product; one of the five product mix pricing strategies
Setting a price for products that must be used along with a main product, such as blades for a razor and games for a video-game console; one of the five product mix pricing strategies
Setting a price for by-productsin order to make the main product's price more competitive; one of the five product mix pricing strategies
Product bundle pricing
Combining several products and offering the bundle at a reduced price; one of the five product mix pricing strategies
A straight reduction in price on purchases during a stated period of time or in larger quantities
Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer's products in some way
Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs
Pricing that considers the psychology of prices and not simply the economics; the price is used to say something about the product
Prices that buyers carry in their minds and refer to when they look at a given product
Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
value delivery network
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 in delivering customer value
marketing channel (distribution channel)
A set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
functions of marketing channel members
(1) INFORMATION (gathering & distributing marketing research and intelligence info;
(2) PROMOTION (developing & spreading persuasive communications about an offer);
(3) CONTACTS (finding and communicating with prospective buyers);
(4) MATCHING (shaping and fitting the offer to the buyer's needs, including activities such as manufacturing, grading, assembling and packaging);
(5) NEGOTIATION (reaching an agreement on price and other terms of the offer, so ownership or possession can be transferred);
(6) PHYSICAL DISTRIBUTION (transporting and storing goods);
(7) FINANCING (acquiring and using funds to cover the costs of the channel work;
(8) RISK-TAKING (assuming the risks of carrying out the channel work)
A layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
direct marketing channel
A marketing channel that has no intermediary levels
indirect marketing channel
A channel containing one or more intermediary levels
Disagreement among marketing channel members on goals and roles (who should do what, and for what rewards); can be horizontal (at same level of channel) or vertical (at different levels of channel)1
conventional distribution channel
A channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits, even at the expense of profits for the system as a whole
vertical marketing system (VMS)
A distribution channel structure in which producers, wholesalers, and retailers act as a unified system. One channel member owns the others, has contracts with them, or has so much power that they all cooperate
A vertical marketing system that combines successive stages of production and distribution under single ownership - channel leadership is established through common ownership
A vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone
The most common type of contractual VMS. A channel member (called a franchiser) links several stages in the production-distribution process
A vertical marketing system that coordinates successive stages of production and distribution, NOT through common ownership or contractual ties, but through the size and power of one (OR a few) dominant channel members. Manufacturers of a top brand can obtain strong cooperation and support from resellers. Large retailers can exert strong influence on the manufacturers that supply the products they sell.
horizontal marketing system
A channel arrangement in which two or more companies at one level join together to follow a new marketing opportunity. (For example, McDonalds now has "express" versions of its restaurants in Wal-Mart stores, with McDonalds benefiting from heavy foot traffic and Wal-Mart benefiting by keeping shoppers in the store.)
multichannel distribution system
A distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
The cutting out of marketing channel intermediaries by product or service producers, OR the displacement of traditional resellers by radical new types of intermediaries (e.g. selling only over the Internet, and no longer selling through stores)
marketing channel design
designing effective marketing channels by
(1) ANALYZING CONSUMER NEEDS (finding out what target customers want from the channel);
(2) SETTING CHANNEL OBJECTIVES (targeted levels of customer service);
(3) IDENTIFYING MAJOR CHANNEL ALTERNATIVES (types of intermediaries, number of intermediaries at each level, and responsibilities of each channel member), and
(4) EVALUATING ALTERNATIVES (using economic criteria, control issues, and adaptive criteria (flexibility of channel)
Stocking the product in as many outlets as possible
Giving a limited number of dealers the exclusive right to distribute the company's products in their territories
The use of more than one, but fewer than all of the possible intermediaries who are willing to carry the company's products
marketing channel management
Selecting, managing, and motivating individual channel members, and evaluating their performance over time
marketing logistics (physical distribution)
Planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit
supply chain management
Managing upstream and downstream value-added flows of materials, final goods, and related information among suppliers, the company, resellers, and final consumers.
A large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible.
goals of the logistics system
To provide a targeted level of customer service at the least cost
major logistics functions
(1) WAREHOUSING (storing goods until they can be used or sold); (2) INVENTORY MANAGEMENT (balance between too much inventory and too little; each has costs); (3) TRANSPORTATION (airlines, trucks, railroads, water carriers, Internet, or intermodal transportation); (4) LOGISTICS INFORMATION MANAGEMENT (sharing information with channel partners to make better joint logistics decisions via electronic data interchange (EDI))
Combining two or more modes of transportation (piggyback: rail/truck, fishyback: water/truck, mainship: water/rail, airtruck: air/truck)
integrated logistics management
The logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations. The goal is to maximize the performance of the entire distribution system.
third-party logistics (3PL) provider
An independent logistics provider that performs any or all of the functions required to get its client's product to market. Some companies are UPS Supply Chain Solutions, Penske Logistics, BAX Global, DHL Logistics, Ryder System, FedEx Logistics, Roadway Logistics Services. 3PL's can be especially helpful for companies attempting to expand GLOBAL market coverage.
All the activities involved in selling goods or services directly to final consumers for their personal, nonbusiness use.
A business whose sales come primarily from retailing
Using in-store promotions and advertising to extend brand equity to "the last mile" and encourage favorable point-of-purchase decisions
A retail store that carries a narrow product line with a deep assortment within that line. Examples REI, Radioshack
A retail store that carries a wide variety of product lines, each operated as a separate department managed by specialist buyers or merchandisers. Examples Macy's, Sears
A large, low cost, low margin, high-volume, self-service store that carries a wide variety of grocery and household products. Examples QFC, Safeway
A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods. Examples 7-Eleven
A store much larger than a regular supermarket that offers a large assortment of routinely purchased food products, nonfood items, and services. Examples Walmart Superstore, Staples
A giant specialty store that carries a very deep assortment of a particular line
A retailer whose product line is actually a service: examples include hotels, airlines, banks, colleges, and many others
A retail operation that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume. Examples Target, Walmart
A retailer that buys at less-than-regular wholesale prices and sells at less than retail. Examples Costco, Sam's Club
Independent off-price retailer
An off-price retailer that is either independently owned and run or is a division of a larger retail corporation
An off-price retailing operation that is owned and operated by a manufacturer and normally carries the manufacturer's surplus, discontinued, or irregular goods.
An off-price retailer that sells a limited selection of brand name grocery items, appliances, clothing, and other goods at deep discounts to members who pay annual membership fees.
Two or more outlets that are commonly owned and controlled
A contractual association between a manufacturer, wholesaler, or service organization (a franchisor) and independent businesspeople (franchises) who buy the right to own and operate one or more units in the franchise systems
A group of retail businesses built on a site that is planned, developed, owned, and managed as a unit
Regional Shopping Center
Has from 50-100 stores including two or more full-line department stores.
Community Shopping Center
Contains between 15 and 50 retail stores, normally contains branch department store, supermarket, specialty store, and sometimes a bank.
Neighborhood Shopping Center
Generally contain between 5 and 15 stores and are close and convenient for customers and contains service stores.
Huge unenclosed shopping centers consisting of a long strip of retail stores, including large, free standing anchors such as Walmart.
Smaller, open-air malls with upscale stores, convenient locations, and nonretail activities such as a playground.
The shopping practice of coming into a retail store showrooms to check out merchandise and prices but instead buying from an online-only rival, sometimes while in the store.
All the activities involved in selling goods and services to those buying for resale or business use.
A firm engaged primarily in wholesaling activities.
An independently owned wholesale business that takes title to the merchandise it handles
A wholesaler who does not take title to goods and whose function is to bring buyers and sellers together and assist in negotiation
A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title goods.
Manufacturers' and retailers' branches and offices
Wholesaling by sellers or buyers themselves rather than through independent wholesalers.
Selling and Promoting
Wholesalers' sales forces help manufacturers reach many small customers at a low cost.
Buying and Assortment Building
Wholesalers can select items and build assortments needed by their customers, thereby saving much work
Wholesalers save their customers money by buying in carload lots and breaking bulk
Wholesalers hold inventories, thereby reducing the inventory costs and risks of suppliers and customers
Wholesalers can provide quicker delivery to buyers because they are closer to buyer than are producers
Wholesalers finance their customers by giving credit, and they finance their suppliers by ordering early and paying bills on time.
Wholesalers absorb risk
Wholesalers give information to suppliers and customers about competitors, new products, and price developments
Management services and advice
Wholesalers often help retailers train their salesclerks, improve store layouts and displays, and set up accounting and inventory control systems.
Serve customers who are willing to perform their own locate-compare-select process to save time or money. Is the basis of all discount operations and is typically used by retailers selling convenience goods (supermarkets).
Provide more sales assistance because they carry more shopping goods about which customers need information. Examples Sears, JCPenney.
High end specialty stores that assist customers in every phase of the shopping process. Examples Nordstrom, Tiffany.
Wholesaler sponsored group of independent retailers engaged in group buying and merchandising.
Example True Value
Group of independent retailers who jointly establish a central buying organization and conduct joint promotion efforts. Example ACE Hardware