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155 Cards in this Set
- Front
- Back
• Buyer’s Black Box
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o Buyer characteristics
o Buyer decision process |
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• Buyer responses
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o Product choice
o Brand choice o Dealer choice o Purchase timing o Purchase amount |
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Consumer buyer behavior
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• The buying behavior of final consumers—individuals and households who buy goods and services for personal consumption
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Consumer market
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• All the individuals and households who buy or acquire goods and services for personal consumption
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Buyer’s black box 2
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• Where marketing and other stimuli are turned into observable buyer responses.
• First, the buyer’s characteristics influence how he perceives and reacts to the stimuli • Second, the buyer’s decision process itself affects the buyer’s behavior |
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o Culture
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The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions
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o Subculture
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A group of people with shared value systems based on common life experiences and situations (nationalities, religions, racial groups, geographic regions) [Hispanic, African American, Asian American, Mature consumers]
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o Social Class
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Relatively permanent and ordered divisions in a society whose members share similar values, interests, and behaviors
Measured by a combination of occupation, income, education, wealth, and other variables Upper Class, Middle Class, Working Class, Lower Class |
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Membership Groups
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groups that have a direct influence and to which a person belongs
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o Group
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Two or more people who interact to accomplish individual or mutual goals
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Reference Groups
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serve as a direct or indirect point of comparison or reference in forming a person’s attitudes or behaviors
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Opinion Leader
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person within a group who, because of special skills, knowledge, personality, or other characteristics, exerts influence on others
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Roles
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activities that you are expected to perform
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Status
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- reflects the general esteem given to the role by society
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Lifestyle
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- a person’s pattern of living as expressed in his or her activities, interests, and opinions
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Personality
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the unique psychological characteristics that lead to relatively consistent and lasting responses to one’s own environment
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Brand Personality
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the specific mix of human traits that may be attributed to a particular brand
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Self-concept
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the premise is that people’s possessions contribute to and reflect their identities
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Motive
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a need that is sufficiently pressing to direct the person to seek satisfaction of the need
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Maslow’s hierarchy of needs
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human needs are arranged in a hierarchy from the most pressing at the bottom to the least pressing at the top. As each important need is satisfied, the next important need will come into play.
• Self-actualization needs • Esteem needs • Social needs • Safety needs • Physiological needs |
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Perception
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The process by which people select, organize, and interpret information to fro a meaningful picture of the world
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Selective Attention
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- the tendency to screen out most of the information to which they are exposed; tuning out
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Selective Distortion
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distorting it to support your existing belief
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Selective Retention
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Of the information we pay attention to we only retain a certain amount
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o Learning
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Changes in an individual’s behavior arising from experience
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Belief
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a descriptive thought that a person holds about something
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Attitude
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a person’s consistently favorable or unfavorable evaluations, feeling, and tendencies toward an object or idea
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• Complex Buying Behavior
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High Involvement, Significant Diff. Between Brands
o consumer will make significant time and effort, made infrequently, expensive, could be perceived as risky and very self reflective, will also involve several different parties (computer) |
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• Variety-Seeking Buying Behavior
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- Low Involvement, Significant Difference Between Brands
o buys more frequently, consumer’s not that involved in the process (buying cookies) must make sure that your product is available |
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• Dissonance-Reducing Buying Behavior
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High Involvement, Few Differences Between Brands
o purchase is not considered self reflective (buying carpeting) after purchase they have “post-consumer dissonance” expensive, infrequent, or risky |
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• Habitual Buying Behavior
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Low Involvement, Few Differences Between Brands
o go for the most familiar brand (at the forefront) buying the laundry detergent that your parents use, not involving many other parties in the purchase (salt) |
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o Need recognition
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the first stage of the buyer decision process, in which the consumer recognizes a problem or a need. you run out of food, a trigger, where is the trigger coming from? Can be triggered by internal or external stimuli
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o Information search
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the stage of the buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search.
commercial sources (going straight to the company, most common) media sources (newspaper) personal sources (family friends, most influential) experiential sources (actually trying out the car) |
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o Evaluation of alternatives
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the stage of the buyer decision process in which the consumer uses information to evaluate alternative brands in the choice set
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o Purchase decision
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the buyer’s decision about which brand to purchase
can be affected by attitudes of others or unexpected situational factors |
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o Post-purchase Behavior
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the stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction
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Cognitive dissonance
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buyer discomfort caused by postpurchase conflict
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Buyer Decision Process for New Products
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• (a good, service, or idea that is perceived by some potential customers as new)
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• Adoption Process
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the mental process through which an individual passes from hearing about an innovation to final adoption
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• 1) Awareness
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the consumer becomes aware of the new product, but lacks information about it
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• 2) Interest
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: the consumer seeks information about the new product
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• 3) Evaluation
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the consumer considers whether trying the new product makes sense
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• 4) Trial
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the consumer tries the new product on a small scale to improve his or her estimate of its value
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• 5) Adoption
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the consumer decides to make full and regular use of the new product
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Market Segmentation
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- dividing a market into smaller groups of buyers distinct needs, characteristics, or behavior who might require separate products or marketing mixes
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• Geographical segmentation
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dividing a market into different geographical units such as nation, states, counties
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• Demographic segmentation
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dividing the market into groups based on demographic variables such as age, sex, family size, income, religion, race
o most popular segmentation; demographics are closely related to needs, wants and income |
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• Psychographic segmentation
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dividing a market into different groups based on social class, lifestyle, or personality characteristics
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• Behavioral segmentation
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dividing a market into groups based on consumer knowledge, attitude, use, or response to a product
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o Occasion segmentation
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- dividing the market into groups according to occasions when buyers get the idea to buy, actually make their purchase, or use the purchased item
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o Benefit segmentation
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dividing the market into groups according to the different benefits that consumers seek from the product
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• Intermarket segmenation
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forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
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Requirements for Effective Segmentation
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• Measurable
• Accessible • Substantial • Differentiable • Actionable |
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Target Marketing
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• The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter
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• Target Market
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a set of buyers sharing common needs or characteristics that the company decides to serve
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o Undifferentiated Marketing
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mass marketing, one product for every demographic; if all consumers in the market have the same taste, rarely the case
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o Differentiated Marketing
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where a firm decides to target several market segments and designs separate offers for each; segmented
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o Concentrated Marketing
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niche, dads for example; better for limited resources and as you grow you can think about other segments
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o Micromarketing
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local or individual marketing
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Local marketing
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- tailoring brands and promotions to the needs and wants of specific individuals and local customer groups—cities neighborhoods, and even specific stores
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Individual Marketing
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tailoring products and marketing programs to the needs and preferences of individual customers (customized t-shirts)
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o Product position
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the way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products
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Market Positioning
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• arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers
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• Competitive Advantage
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an advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices
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o Criteria for Meaningful Differences
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Is it important?
Superior Preemptive Distinctive Communicable Affordable Profitable |
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• Unique Selling Proposition
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each brand should pick an attribute and tout itself as “number one” for that attribute (ex. Wal-Mart, Crest, etc.)
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• Positioning statement
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a statement that summarizes company or brand positioning
To (target segment and need) our (brand) is (concept) that (point-of-difference) |
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Market Segmentation
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• Identify bases for segmenting the market
• Develop segment profiles |
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Target Marketing
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• Develop measure of segment attractiveness
• Select target segments |
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Market Positioning
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• Develop positioning for target segments
• Develop a marketing mix for each segment |
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• Product
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anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need
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• Service
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any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything
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o Core Benefit
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what is the buyer really buying
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o Actual Product
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- (a Sony camcorder)
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o Augmented product
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offering additional consumer services and benefits
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o offering additional consumer services and benefits
Consumer Products |
product bought by final consumer for personal consumption
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o Convenience
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something that will be bought frequently and immediately (gum, candy) and with a minimum of comparison and buying effort
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o Shopping
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consumer good that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price, and style; sales people would need to be there to assist the consumer in purchasing (clothing, furniture, appliances) Stores are located within close proximity of one another
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o Specialty
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consumer makes a special effort to buy, strong brand identification or unique characteristics (consumer knows they want a Ferrari)
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o Unsought
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- goods the consumer doesn’t normally think about buying or isn’t aware of (life insurance) strong sales
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• Industrial Product
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product bought by individuals and organizations for further processing or for use in conducting a business
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• Product quality
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the ability of a product to perform its functions; it includes the product’s overall durability, reliability, precision, ease of operation and repair, and other valued attributes
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• Product style and design
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style describes the appearance of a product; design contributes to a product’s usefulness as well as to its looks
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• Brand
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name sign or symbol that identifies a product
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• Packaging
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- the activities of designing and producing the container or wrapper for a product
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• Labeling
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printed information appearing on or with the package, part of packaging
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Product Line
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a group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
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Product Length
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you add up all of the products across all of the product lines
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Product Depth
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total number of versions of each product or brand
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Product Line Stretching
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- when a company lengthens its product line beyond its current range
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Product Line Filling
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adding more items within the present range of the line
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Product mix
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the set of all product lines and items that a particular seller offers for sale
• Width- the number of different product lines the company carries • Length- the total number of items the company carries within its product lines • Depth- the number of versions offered of each product in the line • Consistency- how closely related the various product lines are |
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Brand Equity
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the positive differential effect that knowing the brand name has on customer response to the product or service
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o Manufacturer’s brand
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created and owned by the producer
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o Private brand
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store brands owned by resellers of products or services (publix cereals)
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o Licensed Brand
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acquiring a name to put on your output or giving out your name (athletes giving out their name to put on a product)
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o Co-branding
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two companies come together to create one new brand (Reese’s peanut butter cup cereal)
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• Line extensions
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existing product category, existing brand name
o taking your brand and introducing different versions of it (iPod, flavors, varieties, sizes) |
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• Brand extension
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o introducing the same brand name into a new product category (swiss army sung1asses)
new product category, existing brand name |
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• Multibrands
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existing product category, new brand name
(Honda and Acura; Toyota and Lexus) in the higher end or lower end |
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• New Brands
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new product category, new brand
o new brand name and new product category (Dasani) |
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• Megabrand Strategies
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weeding out weaker brands and focusing their marketing dollars only on brands that can achieve the number one or number two market share positions in their categories
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• Intangibility
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services cannot be seen, tasted, felt, heard, or smelled before purchase
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• Variability
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quality of services depends on who provides them and when, where, and how (doctors office, haircut, etc
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• Inseparability
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they are produced and consumed at the same time and connot be separated from their providers (working on a car)
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• Perishability
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a major characteristic of services—they cannot be stored for later sale or use (charging someone if they miss a doctor’s appointment)
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The service-profit
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- the chain that links service firm profits with employee and customer satisfaction
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• Internal Marketing
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marketing by a service firm to train and effectively motivate its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction
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• Interactive Marketing
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marketing by a service firm that recognizes that perceived service quality depends heavily on the quality of buyer-seller interaction
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Service Differentiation
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• Have a good service recovery program and make your frontline employees experienced and train them well.
• Productivity should be improved but not to the point where it affects the quality of the service that is provided |
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New Product Development
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• the development of original products, product improvements, product modifications, and new brands through the firm’s own R & D efforts
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• Idea Screening
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o Screening new product ideas in order to spot good ideas and drop poor ones as soon as possible
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• Product Concept
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o a detailed version of the new product idea stated in meaningful consumer terms
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• Concept Testing
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o Testing new product concepts with a group of target consumers to find out if the concepts have strong consumer appeal
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Marketing Strategy Development
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• Designing an initial marketing strategy for a new product based on the product concept
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Business analysis
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• A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company’s objectives.
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Product Development
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• Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product
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Test Marketing
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• The stage of new-product development in which the product and marketing program are tested in more realistic market settings
o Standard Test Markets o Controlled Test Markets o Simulated Test markets |
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Commercialization
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• Introducing a new product into the market
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• Sequential Product Development
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a new product development approach in which one company department works to complete its stage of the process before passing the new product along to the next department and stage
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• Simultaneous (team-based) Product Development
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an approach to developing new products in which various company departments work closely together, overlapping the steps in the product-development process to save time and increase effectiveness.
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Product Life-Cycle Strategies
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• The course of a product’s sales and profits over its lifetime. It involves five distinct stages:
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o Product Development
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- when the company finds and develops a new product idea
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o Introduction
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a period of slow sales growth as the product is introduced in the market
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o Growth
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a period of rapid market acceptance and increasing profits
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o Maturity
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a period of slowdown in sales growth because the product has achieved acceptance by most potential buyers
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Decline
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the period when sales fall off and profits drop
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Price
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• The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service
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• Fixed Price
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setting one price for all buyers
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• Dynamic Pricing
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changing different prices depending on individual customers and situations (car dealerships)
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o Current profit maximization
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you set your price to achieve short term profit maximization
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o Market share leadership
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setting price as low as possible to get the largest market share
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o Product quality leadership
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set price to demonstrate a leading edge in product quality; technology area
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o Survival
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set price in order to keep business afloat
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o Social Pricing
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- basing on customer income, social position
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o Target Costing
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pricing that starts with an ideal selling price, then targets costs that will ensure that the price meets the buyers expectations
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• Marketing Mix Strategy
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o you build your marketing mix around the final price that the consumer is willing to pay for the product
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o Fixed Costs
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costs that do not vary with production or sales level whether you buy 10 or 1000
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o Variable Costs
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costs that vary directly with the level of production (raw materials) whether you buy 10 or 1000
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o Total Costs
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the sum of the fixed and variable costs for any given level of production
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o Experience Curve (Learning Curve)
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the drop in the average per-unit production cost that comes with accumulated experience (because you become more efficient)
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o Pure Competition
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the market consists of many buyers and sellers trading in a uniform commodity (wheat, copper, or financial securities)
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o Monopolistic Competition
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the market consists of many buyers and sellers who trade over a range of prices rather than a single market price
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o Oligopolistic Competition
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the market consists of a few sellers who are highly sensitive to each other’s pricing and marketing strategies (airline industry)
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o Pure Monopoly
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the market consists of one seller; in theory you can charge any price you want, but you don’t always do so
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• Consumer perceptions of price and value
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o Will determine the highest price you can charge for the product
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o Demand Curve
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a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
Shows price/quantity relationship |
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o Inelastic demand
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means that if prices changes buyers will still buy because it is a necessity (gas, cigarettes); higher the price for more profit
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o Elastic demand
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buyers will not buy if the price goes up (coffee); lower the price for profit
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o Cost-plus pricing
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adding a standard markup to the cost of the product
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o Break Even Pricing (target profit pricing)
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setting price to break even on the cost of making and marketing a product; or setting price to make a target profit
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• Value-Based Pricing
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setting price based on buyers’ perceptions of value rather than on the seller’s cost
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• Competition-Based Pricing
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setting prices based on the prices that (you know or what you think) competitors charge for similar products
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o Going-Rate Pricing
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where a firm bases its price largely on competitors’ prices, with less attention paid to its own costs or to demand
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o Sealed-Bid Pricing
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a firm bases its price on how it thinks competitors will price rather than on its own costs or on the demand; you don’t know your competitors’ pricing because the bid is sealed
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