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313 Cards in this Set
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Marketing
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the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large
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Exchange
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people giving up something to receive something they would rather have
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Production Orientation
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a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the market place
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Sales Orientation
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the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits
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Marketing Concept
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the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives
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Market Orientation
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a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product. It is synonymous with the marketing concept
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Societal Marketing Orientation
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the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests
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Customer Value
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the relationship between benefits and the sacrifice necessary to obtain those benefits
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Customer Satisfaction
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customer's evaluation of a good or service in terms of whether it has met their needs and expectations
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Relationship Marketing
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a strategy that focuses on keeping and improving relationships with current customers
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Empowerment
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delegation of authority to solve customers' problems quickly- usually by the first person that the customer notifies regarding a problem
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Teamwork
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collaborative efforts of people to accomplish common objectives
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Corporate Social Responsibility
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business's concern for society's welfare
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Sustainability
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the idea that socially responsible companies will outperform their peers by focusing on the world' social problems and viewing them as opportunities to build profits and help the world at the same time
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Pyramid of Corporate Social Responsibility
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a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure
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Ethics
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the moral principles or values that generally govern the conduct of an individual or a group
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Morals
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the rules people develop as a result of cultural values and norms
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Code of Ethics
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a guideline to help marketing managers and other employees make better decisions
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Target Market
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a defined group most likely to buy a firm's product
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Environmental Management
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when a company implements strategies that attempt to shape the external environment within which it operates
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Component Lifestyles
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the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle
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Demography
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the study of people's vital statistics, such as their age, race and ethnicity, and location
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Generation Y
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people born between 1979 and 1994
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Generation X
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people born between 1965 and 1978
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Baby Boomers
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people born between 1946 and 1964
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Multiculturalism
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when all major ethnic groups in an area- such as a city, county, or census tract- are roughly equally represented
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Purchasing Power
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a comparison of income versus the relative cost of a set standard of good and services in different geographic areas
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Inflation
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a measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year
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Recession
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a period of economic activity characterized by negative growth, which reduces demand for good and services
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Basic Research
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pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon
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Applied Research
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an attempt to develop new or improved products
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Food and Drug Administration (FDA)
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a federal agency charged with enforcing regulations against selling and distribution adulterated, misbranded, or hazardous food and drug products
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Consumer Product Safety Commission (CPSC)
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a federal agency established to protect the health and safety of consumers in and around their homes
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Federal Trade Commission (FTC)
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a federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce
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Consumer Behavior
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processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use
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Consumer Decision-Making Process
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a five-step process used by consumers when buying goods or services
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Need Recognition
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result of an imbalance between actual and desired states
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Stimulus
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any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing
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Want
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recognition of an unfulfilled need and a product that will satisfy it
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Internal Information Search
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the process of seeking information in the outside environment
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External Information Search
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the process of seeking information in the outside environment
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Nonmarketing-Controlled Information Source
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a product information source that is not associated with advertising or promotion
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Marketing-Controlled Information Source
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a product information source that originates with marketers promoting the product
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Evoked Set (Consideration Set)
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a group of brands, resulting from an information search, from which a buyer can choose from
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Cognitive Dissonance
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inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions
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Involvement
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the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior
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Routine Response Behavior
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the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time
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Limited Decision Making
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the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category
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Extensive Decision Making
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the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information
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Culture
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the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next
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Value
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the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct
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Subculture
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a homogeneous group of people who share elements of the overall culture as well as unique elements of their own group
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Social Class
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a group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms
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Reference Group
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a group in society that influences an individual's purchasing behavior
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Opinion Leader
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an individual who influences the opinions of others
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Socialization Process
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how cultural values and norms are passed down to children
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Personality
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a way of organizing and grouping the consistencies of an individual's reactions to situations
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Self-Concept
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how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations
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Ideal Self-Image
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the way an individual would like to be
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Real Self-Image
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the way an individual actually perceives himself or herself
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Lifestyle
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a mode of living as identified by a person's activities, interests, and opinions
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Perception
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the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture
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Selective Exposure
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the process whereby a consumer notices certain stimuli and ignores others
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Selective Distortion
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a process whereby a consumer changes or distorts information that conflicts with his or her feelings of beliefs
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Selective Retention
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a process whereby a consumer remembers only that information that supports his or her personal beliefs
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Motive
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a driving force that causes a person to take action to satisfy specific needs
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Maslow's Hierarchy of Needs
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a method of classifying human needs and motivations into five categories in ascending order of importance: physiological, safety, social, esteem, and self-actualization
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Learning
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a process that creates changes in behavior, immediate or expected, through experience and practice
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Belief
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an organized pattern of knowledge that an individual holds as true about his or her world
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Attitude
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a learned tendency to respond consistently toward a given object
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Market
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people or organizations with needs or wants and the ability and willingness to buy
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Market Segment
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a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
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Market Segmentation
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the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups
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Segmentation Bases (Variables)
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characteristics of individuals, groups, or organizations
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Geographic Segmentation
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segmenting markets by region of a country or the world, market size, market density, or climate
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Demographic Segmentation
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segmenting markets by age, gender, income, ethnic background, and family life cycle
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Family Life Cycle (FLC)
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a series of stages determined by a combination of age, marital status, and the presence or absence of children
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Psychographic Segmentation
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market segmentation on the basis of personality, motives, lifestyles, and geodemographics
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Benefit Segmentation
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the process of grouping customers into market segments according to the benefits they seek from the product
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Usage-Rate Segmentation
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dividing a market by the amount of product bought or consumed
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80/20 Principle
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a principle holding that 20% of all customers generate 80% of the demand
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Target Market
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a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges
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Undifferentiated Targeting Strategy
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a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix
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Concentrated Targeting Strategy
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a strategy used to select one segment of a market for targeting marketing efforts
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Niche
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one segment of a market
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Multisegment Targeting Strategy
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a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each
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Cannibalization
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a situation that occurs when sales of a new product cut into sales of a firm's existing products
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One-to-One Marketing
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an individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer
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Positioning
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developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general
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Position
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the place a product, brand, or group of products occupies in consumers' minds relative to competing offerings
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Product Differentiation
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a positioning strategy that many firms use to distinguish their products from those of competitors
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Perceptual Mapping
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a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds
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Repositioning
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changing consumers' perceptions of a brand in relation to competing brands
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Marketing Information
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everyday information about developments in the marketing environment that managers use to prepare and adjust marketing plans
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Decision Support System (DSS)
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an interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions
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Database Marketing
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the creation of a large computerized file of customers' and potential customers' profiles and purchase patterns
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Marketing Research
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the process of planning, collecting, and analyzing data relevant to a marketing decision
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Marketing Research Problem
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determining what information is needed and how that information can be obtained efficiently and effectively
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Marketing Research Objective
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the specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information
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Management Decision Problem
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a broad-based problem that uses marketing research in order for managers to take proper actions
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Secondary Data
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data previously collected for any purpose other than the one at hand
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Marketing Research Aggregator
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a company that acquires, catalogs, reformats, segments, and resells reports already published by marketing research firms
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Research Design
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specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed
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Primary Data
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information that is collected for the first time; are used for solving the particular problem under investigation
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Survey Research
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the most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes
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Mall Intercept Interview
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a survey research method that involves interviewing people in the common areas of shopping malls
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Computer-Assisted Personal Interviewing
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an interviewing method in which the interviewer reads the questions from a computer screen and enters the respondent's data directly into the computer
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Computer-Assisted Self-Interviewing
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an interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where the respondent reads questions off a computer screen and directly keys his or her answers into a computer
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Central-Location Telephone Facility (CLT)
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a specially designed phone room used to conduct telephone interviewing
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Executive Interview
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a type of survey that involves interviewing businesspeople at their offices concerning industrial products or services
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Focus Groups
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seven to ten people who participate in a group discussion led by a moderator
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Open-Ended Question
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an interview question that encourages an answer phrased in the respondent's own words
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Closed-Ended Question
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an interview question that asks the respondent to make a selection from a limited list of responses
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Scaled-Response Question
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a closed-ended question designed to measure the intensity of a respondent's answer
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Observation Research
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a research method that relies on four types of observation: people watching people, people watching an activity, machines watching people, and machines watching an activity
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Mystery Shoppers
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researchers posing as customers who gather observational data about a store
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Ethnographic Research
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the study of human behavior in its natural context; involves observation of behavior and physical setting
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Experiment
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a method a researcher uses to gather primary data
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Sample
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a subset from a larger population
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Universe
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the population from which a sample will be drawn
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Probability Sample
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a sample in which every element in the population has a known statistical likelihood of being selected
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Random Sample
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a sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample
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Nonprobability Sample
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any sample in which little or no attempt is made to get a representative cross section of the population
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Convenience Sample
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a form of nonprobability sample using respondents who are convenient or readily accessible to the researcher- for example, employees, friends, or relatives
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Measurement Error
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an error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process
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Sampling Error
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an error that occurs when when a sample somehow does not represent the target population
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Frame Error
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an error that occurs when a sample drawn from a population differs from the target population
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Random Error
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an error that occurs when the selected sample is an imperfect representation of the overall population
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Field Service Firm
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a firm that specializes in interviewing respondents on a subcontracted basis
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Cross-Tabulation
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a method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions
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Unrestricted Internet Sample
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a survey in which anyone with a computer and internet access can fill out the questionnaire
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Screened Internet Sample
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an internet sample with quotas based on desired sample characteristics
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Recruited Internet Sample
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a sample in which respondents are prerecruited and must qualify to participate. They are then e-mailed a questionnaire or directed to a secure web site
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Scanner-Based Research
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a system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy
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BehaviorScan
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a scanner-based research program that tracks the purchases of 3000 households through store scanners in each research market
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InfoScan
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a scanner-based sales-tracking service for the consumer packaged-goods industry
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Competitive Intelligence (CI)
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an intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors
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Product
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everything, both favorable and unfavorable, that a person receives in an exchange
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Business Product (Industrial Product)
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a product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers
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Consumer Product
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a product bought to satisfy an individual's personal wants
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Convenience Product
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a relatively inexpensive item that merits little shopping effort
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Shopping Product
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a product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores
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Speciality Product
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a particular item that consumers search extensively for and are very reluctant to accept substitutes
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Unsought Product
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a product unknown to the potential buyer or a known product that the buyer does not actively seek
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Product Item
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a specific version of a product that can be designated as a distinct offering among an organization's products
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Product Line
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a group of closely related product items
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Product Mix
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all products that an organization sells
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Product Mix Width
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the number of product lines an organization offers
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Product Line Depth
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the number of product items in a product line
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Product Modification
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changing one or more of a product's characteristic
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Planned Obsolescence
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the practice of modifying products so those that have already been sold become obsolete before they actually need replacement
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Product Line Extension
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adding additional products to an existing product line in order to compete more broadly in the industry
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Brand
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a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products
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Brand Name
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the part of a brand that can be spoken, including letters, worlds, and numbers
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Brand Mark
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the elements of a brand that cannot be spoken
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Brand Equity
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the value of company and brand names
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Global Brand
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a brand where at least 20 percent of the product is sold outside its home country or region
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Brand Loyalty
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a consistent preference for one brand over all others
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Generic Product
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a no-frills, no-brand-name, low-cost product that is simply identified by its product category
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Manufacturer's Brand
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the brand name of a manufacturer
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Private Brand
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a brand name owned by a wholesaler or a retailer
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Individual Branding
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using different brand names for different products
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Family Brand
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marketing several different products under the same brand name
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Cobranding
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placing two or more brand names on a product or its package
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Trademark
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the exclusive right to use a brand or part of a brand
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Service Mark
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a trademark for a service
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Generic Product Name
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identifies a product by class or type and cannot be trademarked
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Persuasive Labeling
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a type of package labeling that focuses on a promotional theme or logo and consumer information is secondary
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Informational Labeling
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a type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase
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Universal Product Codes (UPCs)
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a series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products
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Warranty
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a confirmation of the quality or performance of a good or service
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Express Warranty
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a written guarantee
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Implied Warranty
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an unwritten guarantee that the good or service is fit for the purpose for which it was sold
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New Product
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a product new to the world, the market, the producer, the seller, or some combination of these
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New-Product Strategy
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a plan that links that new-product development process with the objectives of the marketing department, the business unit, and the corporation
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Product Development
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a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products
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Brainstorming
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the process of getting a group to think of unlimited ways to vary a product or solve a problem
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Screening
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the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new product strategy or are obviously inappropriate for some other reason
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Concept Test
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a test to evaluate a new-product idea, usually before any prototype has been created
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Business Analysis
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the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated
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Development
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the stage in the product development process in which a prototype is developed and a marketing strategy it outlined
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Simultaneous Product Development
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a team-oriented approach to new-product development
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Test Marketing
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the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation
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Simulated (Laboratory) Market Testing
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the presentation of advertising and other promotion materials for several products, including a test product, to members of the product's target market
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Commercialization
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the decision to market a product
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Adopter
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a consumer who was happy enough with his or her trial experience with a product to use it again
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Innovation
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a product perceived as new by a potential adopter
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Diffusion
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the process by which the adoption of an innovation spreads
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Product Life Cycle (PLC)
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a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death)
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Product Category
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all brands that satisfy a particular type of need
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Introductory Stage
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the full-scale launch of a new product into the marketplace
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Growth Stage
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the 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 healthy
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Maturity Stage
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a period during which sales increase at a decreasing rate
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Decline Stage
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a long-run drop in sales
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Marketing Channel (Channel of Distribution)
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a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer
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Channel Members
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all parties in the marketing channel that negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer
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Supply Chain
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the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function
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Discrepancy of Quantity
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the difference between the amount of product produced and the amount an end user wants to buy
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Discrepancy of Assortment
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the lack of all the items a customer needs to receive full satisfaction from a product or products
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Temporal Discrepancy
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a situation that occurs when a product is produced but a customer is not ready to buy it
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Spatial Discrepancy
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the difference between the location of a producer and the location of widely scattered markets
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Retailer
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a channel intermediary that sells mainly to consumers
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Direct Channel
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a distribution channel in which producers sell directly to consumers
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Dual Distribution (Multiple Distribution)
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the use of two or more channels to distribute the same product to target markets
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Strategic Channel Alliance
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a cooperative agreement between business firms to use the other's already established distribution channel
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Supply Chain Management
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a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhance customer and economic value
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Intensive Distribution
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a form of distribution aimed at having a product available in every outlet where target customers might want to buy it
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Selective Distribution
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a form of distribution achieved by screening dealers to eliminate all but a few in any single area
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Exclusive Distribution
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a form of distribution that establishes one or a few dealers within a given area
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Logistics
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the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption
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Logistics Information System
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the link that connects all of the logistics functions of the supply chain
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Supply Chain Team
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an entire group of individuals who orchestrate the movement of goods, services, and information from the source to the consumer
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Mass Customization (Build-to-Order)
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a production method whereby products are not made until an order is placed by the customer; products are made according to customer specifications
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Just-in-Time Production (JIT)
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a process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line
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Order Processing System
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a system whereby orders are entered into the supply chain and filled
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Electronic Data Interchange (EDI)
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information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increase the speed and accuracy of information transmission
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Inventory Control System
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a method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand
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Materials Requirement Planning (MRP) (Materials Management)
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an inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer
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Distribution Resource Planning (DRP)
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an inventory control system that manages the replenishment of goods from the manufacturer to the final consumer
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Materials-Handling System
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a method of moving inventory into, within, and out of the warehouse
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Outsourcing (Contract Logistics)
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a manufacturer's or supplier's use of an independent third part to manage an entire function of the logistics system, such as transportation, warehousing, or order processing
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Electronic Distribution
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a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals
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Promotion
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communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response
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Promotional Strategy
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a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, and sales promotion
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Competitive Advantage
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one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors
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Promotional Mix
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the combination of promotional tools (the 4 P's) used to reach the target market and fulfill the organization's overall goals
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Advertising
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impersonal, one-way mass communication about a product or organization that is paid for by a marketer
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Public Relations
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the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance
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Publicity
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public information about a company, product, service, or issue appearing in the mass media as a news item
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Sales Promotion
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marketing activities- other than personal selling, advertising, and public relations- that stimulate consumer buying and dealer effectiveness
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Personal Selling
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a purchase situation involving a personal paid-for communication between two people in an attempt to influence each other
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AIDA Concept
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a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action
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Push Strategy
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a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise
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Pull Strategy
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a marketing strategy that stimulates consumer demand to obtain product distribution
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Integrated Marketing Communications (IMC)
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the careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where a company meets the consumer
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Advertising Response Function
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a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level buy then produces diminishing returns
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Institutional Advertising
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a form of advertising designed to enhance a company's image rather than promote a particular product
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Product Advertising
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a form of advertising that touts the benefits of a specific good or service
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Advocacy Advertising
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a form of advertising in which an organization expresses its views on controversial issues or responds to media attacks
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Pioneering Advertising
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a form of advertising designed to stimulate primary demand for a new product or product category
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Competitive Advertising
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a form of advertising designed to influence demand for a specific brand
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Comparative Advertising
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a form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes
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Advertising Campaign
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a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals
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Advertising Objective
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a specific communication task that a campaign should accomplish for a specified target audience during a specified period
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Advertising Appeal
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a reason for a person to buy a product
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Unique Selling Proposition
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a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
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Medium
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the channel used to convey a message to a target market
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Media Planning
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the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience
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Cooperative Advertising
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an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer's brand
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Infomercial
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a 30-minute or longer advertisement that looks more like a TV talk show than a sales pitch
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Advergaming
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placing advertising messages in web-based or video games to advertise or promote a product, service, organization, or issue
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Media Mix
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the combination of media to be used for a promotional campaign
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Cost per Contact
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the cost of reaching one member of the target market
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Reach
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the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
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Frequency
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the number of times an individual is exposed to a given message during a specific period
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Audience Selectivity
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the ability of an advertising medium to reach a precisely defined market
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Media Schedule
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designation of the media, the specific publications or programs, and the insertion dates of advertising
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Continuous Media Schedule
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a media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the latter stages of the product life cycle
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Flighted Media Schedule
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a media scheduling strategy in which ads are run heavily every other month or every two weeks, to achieve a greater impact with an increased frequency and reach at those times
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Pulsing Media Schedule
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a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods
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Seasonal Media Schedule
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a media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used
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Product Placement
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a public relations strategy that involves getting a product, service, or company name to appear in a move, tv show, radio program, magazine, newspaper, video game, book, or commercial for another product; on the internet; or at special events
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Sponsorship
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a public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image
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Cause-Related Marketing
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a type of sponsorship involving the association of a for-profit company and a nonprofit organization; through the sponsorship, the company's product or service is promoted, and money is raised for the nonprofit
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Crisis Management
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a coordinated effort to handle all the effects of unfavorable publicity or of another unexpected unfavorable event
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Consumer Sales Promotion
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sales promotion activities targeting the ultimate consumer
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Trade Sales Promotion
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sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer
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Coupon
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a certificate that entitles consumers to an immediate price reduction when they buy the product
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Rebate
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a cash refund given for the purchase of a product during a specific period
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Premium
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an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product
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Loyalty Marketing Program
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a promotional program designed to build long-term, mutually beneficial relationships between a company and its key customers
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Frequent Buyer Program
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a loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service
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Sampling
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a promotional program that allows the consumer the opportunity to try a product or service for free
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Point-of-Purchase Display
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a promotional display set up at the retailer's location to build traffic, advertise the product, or induce impulse buying
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Trade Allowance
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a price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers
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Push Money
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money offered to channel intermediaries to encourage them to "push" products- that is, to encourage other members of the channel to sell the products
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Relationship Selling (Consultative Selling)
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a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships
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Sales Process (Sales Cycle)
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the set of steps a salesperson goes through in a particular organization to sell a particular product or service
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Lead Generation (Prospecting)
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identification of those firms and people most likely to buy the seller's offerings
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Referral
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a recommendation to a salesperson from a customer or business associate
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Networking
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a process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations
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Cold Calling
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a form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects' needs or financial status
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Lead Qualification
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determination of a sales prospect's 1. recognized needs, 2. buying power, and 3. receptivity and accessibility
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Preapproach
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a process that describes the "homework" that must be done by a salesperson before he or she contacts a prospect
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Needs Assessment
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a determination of the customer's specific needs and wants and the range of options the customer has for satisfying them
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Sales Proposal
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a formal written document or professional presentation that outlines how the salesperson's product or service will meet or exceed the prospect's needs
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Sales Presentation
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a formal meeting in which the salesperson presents a sales proposal to a prospective buyer
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Negotiation
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the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement
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Follow-Up
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the final step of the selling process, in which the salesperson ensures that delivery schedules are met, that the goods or services perform as promised, and that the buyers' employees are properly trained to use the products
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Price
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that which is given up in an exchange to acquire a good or service
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Revenue
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the price charged to customers multiplied by the number of units sold
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Profit
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revenue minus expenses
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Return on Investment (ROI)
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net profit after taxes divided by total assets
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Yield Management Systems (YMS)
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a technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity
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Variable Cost
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a cost that varies with changes in the level of output
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Fixed Cost
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a cost that does not change as output is increased or decreased
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Average Variable Cost (AVC)
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total variable costs divided by quantity of output
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Average Total Cost (ATC)
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total costs divided by quantity of output
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Marginal Cost (MC)
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the change in total costs associated with a one-unit change in output
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Markup Pricing
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the cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for
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Keystoning
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the practice of marking up prices by 100 percent, or doubling the cost
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Profit Maximization
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a method of setting prices that occurs when marginal revenue equals marginal cost
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Marginal Revenue (MR)
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the extra revenue associated with selling an extra unit of output or the change in total revue with a one-unit change in output
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Break-Even Analysis
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a method of determining what sales volume must be reached before total revenue equals total costs
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Selling Against the Brand
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stocking well-known branded items at high prices in order to sell store brands at discounted prices
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Extranet
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a private electronic network that links a company with its suppliers and customers
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Prestige Pricing
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charging a high price to help promote a high-quality image
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Price Strategy
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a basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle
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Price Skimming
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a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion
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Penetration Pricing
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a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market
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Unfair Trade Practice Acts
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laws that prohibit wholesalers and retailers from selling below cost
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Price Fixing
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an agreement between two or more firms on the price they will charge for a product
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Predatory Pricing
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the practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market
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