IBM Exam 1, IBM Exam 3, IBM Exam 2

Value; its role in marketing, along with an understanding, and the ability to identify, what the mutual benefits are for a given transaction.
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Terms in this set (189)
marketing conceptA marketing strategy that reflects the idea that a firm's long-term success must include a company-wide effort to satisfy customer needs.relationship marketingA marketing strategy that focuses on attracting, maintaining, and enhancing customer relationships.Strategic planThe process of thoughtfully defining a firm's objectives and developing a method for achieving those objectives.SWOT analysisstrengths, weaknesses, opportunities, threatsTarget marketingThe group of customers toward which an organization has decided to direct its marketing efforts.PositioningThe activities a firm undertakes to create a certain perception of its product in the eyes of the target market.Market penetrationA marketing strategy that emphasizes selling more of existing goods and services to existing customers.Product developmentA marketing strategy that involves creating new goods and services for existing markets.Market developmentA marketing strategy that focuses on selling existing goods and services to new customers.DiversificationA marketing strategy that seeks to attract new customers by offering new products that are unrelated to the existing products produced by the organization.5 methods of market entryexporting Licensing franchising joint venture direct ownershipExportingSelling domestically produced products to foreign markets.Licensingis a legal process in which one firm pays to use or distribute another firm's resources, including products, trade- marks, patents, intellectual property, or other proprietary knowledge.FranchisingA contractual arrangement in which the franchisor provides a franchisee the right to use its name and marketing and operational support in exchange for a fee and, typically, a share of the profits.joint ventureAn arrangement in which a domestic firm partners with a foreign company to create a new entity, thus allowing the domestic firm to enter the foreign company's market.Direct ownershipA method of entering an international market in which a domestic firm actively manages a foreign company or overseas facilities.Direct competitionA situation in which products that perform the same function compete against one another other.Indirect competitionA process in which products provide alternative solutions to the same market.The External Marketing Environment - • Economic o GDP, income distribution, inflation, consumer confidenceEconomic factors influence almost every market- ing decision a firm makes. Economic conditions impact consumers' willingness and ability to buy products. Consequently, firms must create, com- municate, and deliver value in a way that's appro- priate for the current economic climate. To break it down further, four economic elements influence marketers: gross domestic product (GDP), income distribution, inflation, and consumer confidence.The External Marketing Environment - DemographicDemographics are the characteristics of human populations that can be used to identify consumer markets. They include things such as age, gender, ethnicity, and education level, all of which influence the products consumers buy. Access to demographic information is essential to identifying and characterizing a firm's target markets.The External Marketing Environment - • PoliticalThe political climate in the United States can change the direction of govern- ment policy quickly and impact how marketers position their products. For example, video game marketers were very concerned about legislation that was passed in California in 2005 banning the sale or rental of violent video games to anyone under the age of 18.35 Since many of the consumers of these popular games are teenagers, such a ban would have forced marketers to reconsider their target market and positioning strategies as they sought to make up sales in other demographic segments.The External Marketing Environment - technologicalTechnology influences how consumers satisfy their needs and wants, the basic concept underlying all marketing activities. For exam- ple, if you had been at college in the early 1990s and heard a song on the radio you wanted to buy, you had a couple of options. You could buy the song as a single on compact disc (CD) for $3 to $5 or buy the artist's entire album on CD for $15 to $20, even though the album was filled with nine other songs you could care less about. Apple's iPod and iTunes Store changed the market by allowing consumers to purchase only the specific songs they liked for a mere $0.99. This technological advancement changed the way consumers purchased music forever.The External Marketing Environment - LegalThe legal system represents another component of the external environment that affects how firms market their products. The legal environment within the U.S. continues to change, forcing marketing professionals to refine their strategies.The External Marketing Environment - Socioculturalrefers to the combination of social and cultural factors that affect individual development.The new reality of busier families has created oppor- tunities for firms to offer new kinds of value. Banks, for example, have expanded their offerings to include later evening hours and more services through ATM machines.NAFTAAn international agreement that established a free trade zone among the United States, Canada, and Mexico.European unionAn economic, political, and monetary union among 27 European nations that created a single European market by reducing barriers to the free trade of goods, services, and finances.World trade organizationAn international organization that regulates trade among participating countries and helps importers and exporters conduct their business.If the USD rises against the euro dollar Exports from the US to EuropeThe price of the exported goods rise Result: This hurts US firms that export to europe. it raises the cost of the good to the EU buyer, which make the US firm less competitiveIf the USD rises against the euro dollar Imports to the US from europeThe price of imported goods fall Result: This helps US importers that buy from europe. It lowers their cost, or the price they pay for buying the goods. they now pay less for the same imports.If the USD falls against the euro dollar Exports from the US to europeThe price of the exported goods fall. Result: This helps US firms that export to EU. It lowers the cost of the good to the european buyer, which makes the US firm more competitiveIf the USD falls against the euro dollar Imports to the US from europeThe price of imported goods fall. Result:This hurst the US importers that buy from europe. It raises the cost to the US buyer. they now pay more for the same imports.Consumer decision making process--Problem recognition What need do I have to satisfy? --Information search What products are available to satisfy my need? --Evaluating alternatives Which product will best satisfy my need? --Making the purchase Where should I purchase from?How much should I pay? --Post-purchase evaluation Am I satisfied with my purchase?Ritual consumptionPatterns of consumption that are repeated with regularity.Sensory marketingthe techniques that are used to reach your customer's senses and influence their behavior based on how your brand and tactics make them feel. As we know, the five senses are sight, hearing, taste, touch and smell. This type of marketing is simply the process of winning a customer's trust and attention by appealing to each of these five senses.• The effect of social factors on consumer behavior. o Family life cycle o The different reference groups and their effects o Values and country of origin effects.membership reference group The group to which a consumer actually belongs. aspirational reference group The individuals a consumer would like to emulate. dissociative reference groups The people that the individual would not like to be like. Values reflect a consumer's belief that a specific behavior is socially or personally preferable to another behavior. Personal values, which include everything from a consumer's religious beliefs to a belief in self-responsibility, can impact the decision-making process. For example, a consumer who values self-responsibility might have been attracted to Ford's 2009 marketing message emphasizing that Ford was the only major U.S. auto- maker that didn't need a taxpayer-funded bailout. Country-of- origin effects are the beliefs and associations people have about a country. They can reflect an overall positive or negative feeling about that country or be specific to certain products. Germany, for example, has a reputation for manufacturing high-quality cars. The more favorable the country-of-origin image, the more mar- keters should emphasize the country in their advertisements. Marketers at Ger- man-owned BMW have focused on the German precision of their automobiles to appeal to consumers in other countries.Maslow's Hierarchy of Needsself-actualization- Creativity, spontaneity, problem solving, lack of prejudice. esteem- Self-esteem, confidence, achievement, respect of others, respect by others. love/belonging- Friendship, family, sexual intimacy. safety- Security of body, employment, resources, family, health, property. physiological- breathing, food water sleepself-actualization- Creativity, spontaneity, problem solving, lack of prejudice.esteem- Self-esteem, confidence, achievement, respect of others, respect by Friendship, family, sexual Security of body, employment, resources, family, health, property.physiological- breathing, food water sleepLow involvement vs high involvement purchaseslow-involvement products Inexpensive products that can be purchased without much forethought and that are purchased with some frequency. high-involvement products Significant purchases that carry a greater risk to consumers if they fail.B2B marketing -How it differs from consumer marketingMarketing to organizations that acquire goods and services in the production of other goods and services that are then sold or supplied to others.Derived DemandBusiness demand that ultimately comes from (derives from) the demand for consumer goods.Exploratory researchA type of research that seeks to discover new insights that will help the firm better understand the problem or consumer thoughts, needs, and behavior.Descriptive researchtype of research that seeks to understand consumer behavior by answering the questions who, what, when, where, and how.Causal researchA type of research used to understand the cause-and- effect relationships among variables.Primary datacollected specifically for the research prob-lem at hand. In the case of Fuze's product, such data might include how many people in the target market have been exposed to a particular advertisement, or how they've reacted to the advertisement.Secondary dataare collected for purposes other than answering the firm's research questions. Often the company itself has collected this data from its day-to-day operations and can access it directly. Other times, it must go to another source. For example, if Fuze wanted to know the size of its target market, it could go to the United States Census Bureau's website ( to find out how many people belong to a particular demographic group, or how many people from a demo- graphic group live in a certain geographic area.Sampling methodsRandom Non-random Snowball QuotaRandom sampling methodA type of sampling in which everyone in the target population has an equal chance of being selected.Non-random sampling methodA type of sampling that does not attempt to ensure that every member of the target population has a chance of being selected.Snowball sampling methodA type of sampling in which a set of participants is selected based on the referral of other participants who know they have some knowledge of the subject in question.Quota sampling methodA type of sampling in which a certain number of participants is picked based on selection criteria such as demographics.Analyzing quantitative data advantagesAdvantages: -Results may be generalizable to a larger population -Some methods can be conducted quickly and inexpensively. -analysis of data can be faster than in qualitative research -Can conduct casal studies that indicate why behaviors occur -Cost effective and convenient.Analyzing quantitative data disadvantagesDisadvantages: -May be limited by research questions -Response rates low -Difficult to determine nonresponse bias -participant resistance to giving sensitive infoAnalyzing qualitative data advantagesAdvantages: -Uncovers details concerning the motivations behind behaviors -Is not limited to predetermind set of responses -Can be a good way to start research into a marketing problem -Flexible approach -Used to generate ideasAnalyzing qualitative data disadvantagesDisadvantages: -Results ma be difficult to measure objectively -Research can take longer than quantitative methods -Individual participants may not represent general target market -Small sample size.Big dataextremely large data sets that may be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions.price skimming strategyA pricing strategy that involves setting a relatively high price for a period of time after the product penetration strategyA marketing strategy that emphasizes selling more of existing goods and services to existing customers.odd pricingA pricing tactic in which a firm prices products a few cents below the next dollar season strategyPrice reductions given to customers purchasing goods or services out of seasonPrestige PricingA pricing strategy that involves pricing a product higher than competitors to signal that it is of higher quality.Price Bundling StrategyA strategy in which two or more products are packaged together and sold at a single price.Dynamic pricing strategyA pricing strategy that involves constantly updating prices to reflect changes in supply, demand, or market conditions.Fixed costsCosts that remain constant and do not vary based on the number of units produced or sold.Variable costsCosts that vary depending on the number of units produced or sold.elasticity of demand formulaThe ________ is the percentage change in the quantity demanded of a good or service divided by the percentage change in the price.inelastic demandA situation in which a specific change in price causes only a small change in the amount purchased.Elastic demandA scenario in which demand changes significantly due to a small change in price.Reference priceThe prices that consumers consider reasonable and fair for a product.price discriminationThe practice of charging different customers different prices for the same product.CannibalizationWhen new products take sales away from the firm's existing products rather than generating additional revenues or profits through new sales.break-even pointTo calculate the ________ we divide total fixed costs by the unit contribution margin, which is determined by subtracting the variable cost per unit from the selling price per unit.Strong brand imageCustomer recognition, competitive edge in market, Easy introduction for new products, customer loyalty and shared values, enhanced credibility and ease of purchase.high brand equityIncreased margins, customer loyalty, expansion opportunities, negotiating power.Brand equityThe value the firm derives from consumers' positive perception of its products.Private labelProducts developed by a retailer and sold only by that specific retailer.manufacturer's brandBrands that are managed and owned by the manufacturer rather than a reseller.Brand extensionsThe process of broadening the use of an organi- zation's current brand to include new products.Brand revitalization(rebranding) A strategy to recapture lost sources of brand equity and identify and establish new sources of brand equity.Building blocks of service quality1. Reliability 2. Responsiveness 3. Assurance 4. Empathy 5. TangiblesCo-brandingA strategy in which two or more companies issue a single product in an effort to capitalize on the equity of each company's brand.EmpowermentGiving employees permission to make decisions and take action on their own to help customers.Zone of tolerancethe difference between desired service and the level of service considered adequateThe voice of the customerGather consumers perceptions of service quality at the time of sale; simple questionnaire; consumers cannot effectively evaluate the service until days or weeks later; Make use of customer complaint behavior.Role of technologyBenefits given are: access to a wider variety of services, a greater degree of control by the customer over the services, and the ability to obtain information. Can also improve the service provider's efficiency and reduces servicing costs.Service recoveryrefers to the 'actions taken by an organisation in response to a service failure'. Failures occur for all kinds of reasons — the service may be unavailable when promised, it may be delivered late or too slowly, the outcome may be incorrect or poorly executed, or employees may be rude or uncaring. All of these types of failures bring about negative feelings and responses from customers.Category killeris a retail chain store that is dominant in its product category. While it could be a single store, this is not common. This type of store generally offers an extensive selection of merchandise at prices so low that smaller stores cannot compete. These stores are larger in physical space and try to "own" the category of merchandise they sell.Omnichannel strategya multi-channel sales approach that provides the customer with an integrated customer experience. The customer can be shopping online from a desktop or mobile device, or by telephone, or in a bricks and mortar store and the experience would be seamless.Slotting allowanceSum paid by a vendor or manufacturer to a retail chain or establishment for making room for a product on its store shelves, making room for the product in its warehouse, entering the product data in its inventory system, and programming its computers to recognize the product's bar code. In the US, it can often run up to $50,000 or more per product per store, on an annual basis.Paid mediarefers to external marketing efforts that involve a paid placement. includes PPC advertising, branded content, and display ads.Owned mediacomprises digital marketing channels that a company exercises complete control over, such as their branded website and social media.Brand ambassadoris a person who is hired by an organization or company to represent a brand in a positive light and by doing so help to increase brand awareness and sales.GeofencingA technique that uses GPS to build a virtual fence around a location, such as a store, and send individually targeted advertisements to a customer while he or she is in the location.Role of delight vs. just meeting customer expectationsIt costs six to seven times more to acquire new customers than to retain an existing one. Not to mention, 55 percent of consumers would pay more to guarantee better services. -happens when you surprise a customer (or client) by exceeding expectations. When expecations are met, you have customer satisfaction. When expecations are exceeded, you acheive customer ___________Cognitive dissonanceThe mental conflict that people undergo when they acquire new information that contradicts their beliefs or assumptions.Touch pointsAny point at which a customer and the company come into contact.4 methods of CRM-Customer Segmentation analysis -Recency-frequency-monetary analysis -Lifetime value analysis -Predictive modelingCustomer segmentation analysisA method of analyzing data that creates customer profiles and categorizes them.Recency frequency monetary analysisA method of analyzing data that categorizes customers by their buying patterns.Lifetime value analysisA comparison of the costs of retain- ing customers and the costs of acquiring new customers with the goal of determining how much money each type of customer requires.Predictive modelingAnalysis that uses sophisticated algorithms based on patterns of previous buying behavior to try to deter- mine the future actions of miningA process that involves the computerized search for meaningful trends in a large amount of data.Customer relationship management exampleThe process by which companies get new customers, keep the customers they already have, and grow the business by increasing their share of customers' purchases. - Wells Fargo eX: They do this by taking advantage of CRM social media connectivity, so that they can always remain in touch and accessible to those who need them. They also use CRM to ensure that those who come to them with concerns are quickly connected with someone who can provide a solution. In the words of Steve Ellis, head of the Wells Fargo Wholesale Service Group, "We see the cloud as a way to help people connect around customers, to connect around building products, and to connect around risk management practices."Corporate philanthropyThe act of organizations voluntarily donating some of their profits or resources to charitable causes.Corporate volunteerismThe policy or practice of employees volunteering their time or talents for charitable, educational, or other worthwhile activities, especially in the community.Corporate Social ResponsibilityAn organization's obligation to maximize its positive impact and minimize its negative impact on society.4 differences between services and productsServices are intangible, inseparable, heterogeneous, and perishable.Intangibilitythey cannot be touched, tasted, or seen like a pure product can. Marketers must creatively employ symbols and images to promote and sell services, EX: Physicians provide appropriate images of personnel doing their jobs in white coats surrounded by high-tech equipment.InseparabilityServices are produced and consumed at the same time, such as getting a haircut. Customer has to participate with the barber therefore, barber providing positive experience makes the outcome better. Marketers understand purchase risk in these scenarios are high, firms sometimes provide extended warranties and 100% satisfaction guarantees.VariabilityThe more humans are needed to provide a service, the more likely there is ________ in the service's quality. EX: A hair stylist may give bad haircuts in the morning because they went out the night before. However that stylist may offer better service then the undertrained stylist working next to them. Marketers can use this to their advantage for ex: Tech superpowers store specializes in helping new apple customers setup their new toys and enjoy all the functions- basic services that the geniuses in apple stores may ignore.PerishabilityServices are ______ in that they cannot be stored for use in the future. EX: you cant stockpile your membership at golds gym like you could a six pack of beer. This causes a critical task for marketers of matching demand and supply. EX: A ski area can be open as long as there is snow, even at night, but demand peaks on weekends and holidays, so ski areas often offer less expensive tickets during off-peak periods to stimulate demand.ReliabilityThe ability to perform the service dependably and accurately.Responsivenesswillingness to help customers and provide prompt serviceAssurancethe knowledge and courtesy of employees and their ability to convey trust and confidence.empathyThe caring, individualized attention provided to customers. EX: To demonstrate _______ is personalizing communications. Employees are instructed to always address a guest by name if known. Trained to look for subtle cues such as name tags, caller id, luggage ID tags.Tangiblesthe appearance of physical facilities, equipment, personnel, and communication materials EX: University improved dorms built in the 20th century to meet the standards of 21st century visitors. Spent millions in improvements on rooms, outdoor pool, complex.intermodal transportationtwo or more transportation modes used in combinationJust-in-time (JIT)An inventory-management approach in which supplies arrive just when needed for production or resalepush-pull strategyA supply chain strategy in which the initial stages of the supply chain operate on a push system, but completion of the product is based on a pull system.pull strategyA supply chain strategy in which customer orders drive manufacturing and distribution operations.push strategyA supply chain strategy in which a company builds goods based on a sales forecast, puts those goods into storage, and waits for a customer to order the product.inventory carrying costsThe costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods.product assortmentMixing goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good.product allocationpicking available goods to fill customer ordersproduct sortationgathering goods with similar characteristics in one area of the distribution center to facilitate proper inventory controls and effectively provide customer serviceProduct accumulationReceiving goods from various suppliers, storing the goods until they're ordered by a customer or other company-owned facility, and consolidating orders to achieve transportation economies of scale.distribution centerA type of warehouse used specifically to store and ship finished goods to customers.objective and task methoda firm defines specific objectives, determines the tasks required to achieve those objectives, and then estimates how much each task will costpercentage of sales methodallocate a specific percentage of a period's total sales to the promotional budget for that periodaffordable methodA promotion mix budgeting strategy in which firms set their promotion budget based on what they believe they can afford.personal sellingThe two-way flow of communication between a buyer and a seller that is designed to influence the buyer's purchase decision.publicityUnpaid media attention, whether negative or positive, about a business and its products, services, or eventsPublic RelationsNonpersonal communication focused on promoting positive relations between a firm and its stakeholders.sales promotionA set of nonpersonal communication tools designed to stimulate quicker and more frequent purchases of a product.reminder advertisingseeks to keep the product before the public in an effort to reinforce previous promotional activity. Most common in the maturity and decline stages of the PLC.persuasive advertisingAttempts to increase demand for an existing good, service, organization, person, place, idea, or cause. Common during the growth stage of the PLC, as firms compete directly and attempt to take market share from one another.informative advertisingattempts to develop initial demand for a product, important in the introductory stage of the PLCadvertising campaigna collection of coordinated advertisements that share a single theme; inform, persuade, and to remind.Advertising AdvantagesGood for building awareness, effective at reaching a wide audience, repetition of main brand, and product positioning helps build customer trust. A or DAdvertising DisadvantagesImpersonal, cannot answer all a customer's questions. Not good at getting customers to make final purchasing decision. A or DSales promotions advantagesCan stimulate quick increases in sales by targeting promotional incentives on particular products. A or DSales promotions disadvantagesIf used over the long-term, customers may get used to the effect. Too much promotion may damage the brand image. A or DPersonal Selling AdvantagesHighly interactive, lots of communication between the buyer and seller. Excellent for communicating complex/ detailed product information and features. Relationships can be built - Important if closing the sale may take a long time. A or DPersonal selling disadvantagesCostly, employing a sales force has many hidden costs in addition to wages, not suitable if there are thousands of important buyers. A or DPublic relation advantagesOften seen as more credible, since the message seem to be coming from a third party, magazine or newspaper. A or DPublic relations disadvantagesRisk of losing control, cannot always control what other people write or say about your product. A or DAdvertisingnonpersonal promotional communication about goods, services, or ideas that is paid for by the firm.promotionall the activities that communicate the value of a product and persuade customers to buy itRepositioningThe act of reestablishing a product's position to respond to changes in the marketplace; digital age where marketers have to change and adapt their strategies if they want to continue to reach their target market.PositioningThe activities a firm undertakes to create a certain perception of its product in the eyes of the target market.Niche MarketingA targeting strategy that involves pursuing a large share of a small market segment.differentiated targeting strategyA targeting strategy that simultaneously pursues several different market segments, usually with a diff strategy for each.undifferentiated targeting strategya marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mixTarget MarketingMarketing directed toward those groups (market segments) an organization decides it can serve profitably.Criteria for Effective Market Segmentationsubstantial, measurable, differentiable, accessible, actionable.4 bases of segmentationgeographic, demographic, psychographic, behavioralDemographicAge, gender, income, family size, marital status.Geographicnations, regions, states, neighborhoodsPsychographicsPsychological traits, motivation, consumer attitudes.BehavioralLoyalty, price sensitivity, Occasions, usage rateTargetingThe act of evaluating each market segment to determine which segment or segments present the most attractive opportunity to maximize sales.Why do firms take part in market segmentation?Firms define needs and wants of customers interested in buying the product; Firms design specific marketing strategies for the characteristics of specific segments; Firms decided how to allocate marketing resources to maximize profits.Market SegmentationThe process of dividing a larger market into smaller groups, or market segments, based on meaningfully shared characteristics.The product life cycleintroduction, growth, maturity, declineIntroduction stagethe PLC stage in which a new product is first distributed and made available for purchaseGrowth stagethe second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthymaturity stagestage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning themDecline stagestage of the product life cycle when sales decline and the product eventually exits the marketProduct Adoption ProcessThe five-stage process of buyer acceptance of a product: awareness, interest, evaluation, trial, and adoptionSequential new-product developmentNew-product development that utilizes a progressive sequence in which functional areas consecutively complete their development tasks.Concurrent new-product developmentNew-product development that uses cross-functional teams made up of representatives from various departments to develop goods and services.Stage 2 of new product development processIdea generation- external sources, customer feedback, competitors' products, existing services from other companies, outsourcing.Revamped productsA product that has new packaging, different features, and updated designs and functions.product line extensionproducts that extend and supplement a company's established product linenew category entriesproducts that are new to a company but not new to the marketplaceNew-to-the-market productsinventions that have never been seen before and create a new market