Marketing 101 Final Terms Fall 2012

Front 1

Joint Decision Making

Back 1

The buying process is not one person, multiple roles have to satisfy each of these constituents
User, Decider, Influencer, Purchasing Equal
Example: Buying a car

Front 2

Perceived Risk

Back 2

The subjective judgement that people make about the characteristics and severity of a risk.
Example: nuclear power- effect on environment or health
I have to feel it to have an impact on me, financial risk-could i have bought it for less? I have to return this and I won't get it all back. Does it work?
The greater the perceived risk the greater the information search
Resolve risk based on the research
Example:a smoker will say everyone dies, while a non-smoker will say smoking causes cancer and shortens your lifespan

Front 3

Cognitive Dissonance

Back 3

Doubt that a correct decision has been made. A person may regret a purchase or wish another choice had been made
To overcome dissonance, a firm must realize the process does not end with a purchase
Examples to overcome dissonance: Follow-up calls, extended warranties, and ads aimed at buyers can reassure people

Front 4

Derived Demand

Back 4

The demand for an organizational good is typically derived. Based on the final consumer.
Example: Military aircraft, can't make a guess because we don't know who is going to be the president or where we will be in war at this point. What will happen to airline passenger miles? Increase x% in the next few years, how many new aircraft will I need for that?

Front 5

Systems Selling

Back 5

A combination of goods and services is provided to a buyer by one vendor. This gives a buyer one firm with which to negotiate and consistency among various parts and components. OFFERS SINGLE-SOURCE COMPONENTS.
Example: Fluid Management
The worldwide leading maker of mixing and tinting equipment for the paint, coatings and ink industries.
Also markets specialized equipment and engineered systems to other industries, such as food, chemicals, and cosmetics
The firm’s products increase the accuracy and efficiency of tinting and mixing paints, inks, and other fluids

Front 6

Differentiated Marketing (multiple segmentation)

Back 6

Exists when a company targets two or more well-defined market segments with a marketing strategy tailored to each segment
Example: Chrysler's Dodge division differentiates its marketing between final consumers and governmental organizations. It offers one version of the Dodge Charger for final consumers and another for police departments.

Front 7

Heavy-usage Segment

Back 7

Example: Someone who is drinking 3 glasses of wine a day is more important than someone who drinks a glass or two a week.
Does the heavy user read different media, watch different media, have different taste perceptions?

Front 8

Product (Brand) Manager System

Back 8

Middle managers are responsible for planning, coordinating, and monitoring a single product or a small group of products

Front 9

Private (Dealer) Brands

Back 9

A brand designation that a retailer or wholesaler has, designation owned by a wholesaler or retailer
Example: Trader Joe's
Private Brand Issue Example: Sears and Craftsman Drill-lifetime warranty

Front 10

Brand Extension

Back 10

Take a brand name with a given positive image and put it on a different product, which may or may not be related. Taking a brand name and applying it mroe broadly than it was originally intended.
Example: Coach sells more than just handbags, they sell watches even though they know nothing about the inner workings of a watch
Example: Campbell's soup and Lady Godiva

Front 11

Perishability of Services

Back 11

Means that many services cannot be stored for future sale
Example: To deal with the effects of perishability, the Yankees charge different prices based on various factors (such as who the team is playing and seat location) to sell as many tickets as possible

Front 12

Service Blueprint

Back 12

You map out what needs to be done by whom in what sequence in what time period
Example: twenty minute oil change-what you do to get that twenty minutes to get that oil changed, minute 7, minute 9, minute 11

Front 13

Product Life Cycle

Back 13

A concept that seeks to describe a product's sales, competitors, profits, customers, and marketing emphasis from its beginning until it is removed from the market. It is divided into introduction, growth, maturity, and decline stages.
Example: Wibro (mobile WiMax) is a new service - in the introduction stage - which allows high-speed internet connections anytime and anywhere, both in stationary and mobile mode. Wireless connections in stationary mode are in the growth stage as more customers understand the service and use it. Regular DSL or cable connections via desktop computers are in maturity as they are the most popular services today. Dial-up connections are in decline as many homes ahve switched to other connection services. Wibro was conceived in South Korea.

Front 14

Test Marketing

Back 14

Involves placing a fully developed new product into one or more selected areas to observe its actual performance under a proposed marketing plan. Purpose is to evaluate the product and planned marketing efforts in a real setting prior ro a full-scale introduction. Rather than just study intentions, test marketing lets a firm monitor its actual consumer behavior, competitor reactions, and reseller interest. Occurs in selected areas and observes real performance
Example: Anheuser-Busch, Home Depot, McDonald's, and Proctor & Gamble

Front 15

Direct Channel of Distribution

Back 15

Involves the movement of goods and services from producer to consumers without the use of independent intermediaries. Separate transactions for each customer
Example: Manufacturer or service provider sells to consumers at company-owned outlets, Shell-owned gas stations, this is a direct channel

Front 16

Pulling Strategy

Back 16

Occurs when a firm first stimulates consumer demand and then gains dealer support.
Example: In a pull strategy, a new firm generally needs to heavily advertise to consumers, who in turn will ask retailers about the brand and encourage the retailers to stock it

Front 17

Rack Jobbers

Back 17

Set up displays of their own products on the racks, selling them on consignment basis, get paid after goods are sold. Unsold items are taken back. Set up displays, refill shelves, price-mark goods, maintain inventory records, and compute the amount due from their customers
Examples: Magazines, health and beauty ads, cosmetics, drugs, hand tools, toys, housewares, and stationary

Front 18

Drop Shippers (desk jobbers)

Back 18

Buy goods, but do not take possession. Buy goods from manufacturers or suppliers and arrange for their shipment to retailers or industrial users, they take ownership but do not physically possess products and have no storage facilities
Example: Coal and building materials, because these goods have high freight cost relative to their value, direct shipping from suppliers is needed

Front 19

Category Killer

Back 19

An especially large specialty store, features an enormous selection in its product category and relatively low prices, shoppers are drawn from wide geographic areas
Examples: Auto Zone, Bed Bath & Beyond, Foot Locker, and Sports Authority

Front 20

Planned Shopping Center

Back 20

Has centrally owned or managed facilities; it is planned and operated as an entity, ringed by parking, and based on balanced tenancy
Account for 40% of total U.S. store sales

Front 21

Integrated Marketing Communications (IMC)

Back 21

Recognizes the value of a comprehensive plan that evaluates the strategic roles of a variety of communication disciplines - advertising, public relations, personal selling, and sales promotion - and combines them to provide clarity, consistency, and maximum communication impact.
Example: IMC is often used when movies with large family audiences come out. These movies are advertised in newspapers and on TV. Related toys are marketed (such as Toy Story 3 dolls) Promotions are coordinated with fast-food firms. DVD sales are promoted after the theatrical run.

Front 22

Objective-and-Task Method

Back 22

A firm sets promotion goals, determines the activities needed to satisfy them, and then establishes the proper budget, the best method.
Advantages: goals are clearly stated, spending is related to goal-oriented tasks, adaptability is offered, and it is rather easy to evaluate performance.
Weakness: Complexity of setting goals and specific tasks, especially for small firms
Most large companies use some form of objective-and-task technique

Front 23

Reach

Back 23

Refers to the number of viewers, readers, or listeners in a medium's audience.
TV & Radio: It is the total number of people who watch or listen to an ad
Print Media: Circulation and passalong rate
Example: each copy of Newsweek is read by several people, the passalong rate is much higher than that of daily papers.

Front 24

Waste

Back 24

Part of a medium's audience not in a firm's target market
Magazine example cited in media costs

Front 25

Order Taker

Back 25

Processes routine orders and reorders. Does more clerical tasks than creative selling, typically for pre-sold goods or services. Arranges displays, restocks items, answers simple questions, writes up orders and completes transactions
Example: Retail clerk in a store

Front 26

Prospecting

Back 26

A procedure required by outside selling to generate a list of customer leads
Uses phone directories, the internet, and other general listings to find potential customers

Front 27

Closing the Sale

Back 27

Getting a person to agree to a purchase
Salesperson must make sure no key questions remain before trying to close a sale, and the salesperson must not argue with a customer.

Front 28

Nonprice-based Approach

Back 28

Sellers downplay price as a factor in consumer demand by creating a distinctive good or service via promotion, packaging, deliver, customer service, availability, and other marketing factors. Emphasizes factors other than price.

Front 29

Predatory Pricing

Back 29

Large firms cut prices on products to below their cost in selected geographic areas as to eliminate small, local competitors
At the federal level, predatory pricing is banned by the Sherman and Clayton Acts - manufacturers, wholesalers, and retailers are all subject to these acts

Front 30

Bait-and-Switch Advertising

Back 30

An illegal practice whereby customers are lured to a seller that advertises items at very low prices and then told the items are out of stock or of poor quality, salespeople try to switch shoppers to more expensive substitutes, and there is no intent to see the advertised items.
Example: Salesperson in most stores

Front 31

Skimming pricing

Back 31

Uses high prices to attract the market segment more concerned with product quality, uniqueness, or status than price.
Firms use price skimming when a product is perceived by the target market as being unique.
Example: Radius Corp. produces oval-headed toothbrushes made of black neoprence that look like a scuba-diving accessory. Radius prices its toothbrushes at $7.50 and up, compared to $2 or less for competitors regular toothbrushes.

Front 32

One-Price Policy

Back 32

Lets a firm charge the same price to all customers seeking to purchase a good or service under similar conditions.
All consumers are given the opportunity to pay the same price for the same combinations of goods and services.
Build consumer confidence, is easy to administer, eliminates bargaining, and permits self-service and catalog sites
The rule for most retailers in the United States today

Front 33

Price-Quality Association

Back 33

Consumers may believe high prices represent high quality and low prices represent low quality.
Tends to be the most valid when quality is difficult to judge on bases other than price, buyers perceive large differences in quality among brands, buyers have little experience or confidence in assessing quality (as with a new product), high prices exclude the mass market, brand names are unknown, or brand names require certain price levels to sustain their images