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B2B Marketing
The marketing of goods and services to business customers that need them to produce other goods/services.
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B2B Markets
The group of customers that include manufacturers, wholesalers, retailers, and other organizations. In comparison to B2C, B2B is small # of players yet a huge $$ amount.
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Buy Class
Composed of three classifications based on the degree of time and effort required to make a decision. (straight re-buy, modified re-buy, and new task buy)
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Buying Center
Group of people in an organization who participate in a purchase decision.
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Derived Demand
Demand for business (tires) caused by a demand for consumer goods of services (autos).
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Inter-Organizational System
- A private, corporate computer network that links company departments, employees, and databases to suppliers, customers, and other outside organizations.
- EX: Wal-mart extranet
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Government Markets
The federal, state, county, and local governments that buy goods and services to carry out public objectives
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Inelastic Demand
Demand in which changes in price has little or no effect on the amount demanded.
Ex: a coffee shop's demand for coffee beans in inelastic (unaffected by price)
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Modified re-buy
- One of the three buy classes.
- A previously made purchase that involves some change and requires limited decision making to deal with the changes.
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Multiple Sourcing
The business practice of buying a particular product from several different suppliers.
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New Task Buy
- One of three buy classes.
- A new B2B purchase that is complex or risky and that requires extensive decision making.
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Outsourcing
The business buying process of obtaining outside vendors to provide goods of services that otherwise might be supplied in-house.
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Private Exchanges
E-commerce systems that link an invited group of suppliers and partners over the web.
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Product Specifications (specs)
A written description of quality, size, weight, and so forth required of a product purchase.
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Reciprocity
A trading partnership in which two firms agree to buy from one another
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Request for Proposal (RFP)
A company asks suppliers to place bids (proposals) on a job.
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Request for Quote (RFQ)
A company asks suppliers to provide quotes (prices) for off-the-shelf needed products.
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Resellers
Individuals or organizations that buy finished goods for the purpose of reselling, renting, or leasing to others to make a profit and to maintain their business operations.
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Single Sourcing
The business practice of buying a particular product from only one supplier. pretty risky.
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Straight re-buy
- one of the buy classes
- A buying situation in which business buyers make routine purchases that require minimal decision making.
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80/20 Rule
A marketing heuristic that claims that 20% of purchasers account for 80% of a product's sales.
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Behavioral Segmentation
A technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service.
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Brand Personality
A distinctive image that captures a good's or service's character and benefit.
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Concentration Targeting Strategy
Focusing a firm's efforts on offering one or more products to a single segment.
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Custom Marketing Strategy
An approach that tailors specific products and the messages about them to individual customers.
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Customer Relationship Management (CRM)
- A philosophy that sees marketing as a process of building long-term relationships with customers to keep them satisfied and coming back.
- The purpose of CRM is to increase revenues, profits, and customer service.
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Demographics
Stats that measure observably aspects of a population, including size, age, gender, ethnic group, income, etc
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Differentiated Targeting Strategy
Developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace.
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Generational Marketing
Marketing to members of a generation, tend to share the same outlook and priorities.
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Geocoding
Customizing advertising (web, TV ads, Radio ads) so people who live or log on in different places will be exposed to advertising for local businesses.
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Geodemography
A segmentation technique that combines geography with demographics
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Lifetime Value of a customer
An estimation of the potential profit one customer may provide over their lifetime
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Market Fragmentation
The creation of many consumer groups (segments) due to a diversity of distinct needs and wants.
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Mass Customization
An approach that modifies a basic good or service to meet the needs of an individual.
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Perceptual Map
A vivid way to construct a picture of where products or brands are "located" in concumer's minds
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Target Market Process Steps
- 1 - Segmentation
- 2 - Targeting
- 3 - Positioning
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Positioning
3rd step in Target Market Process
Developing a unique marketing strategy to persuade consumers over the competition.
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Psychographics
The use of psychology, sociological, and anthropological factors to construct market segments.
segments are formed based on attitudes, interests, and opinions.
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Repositioning
Updating a product's position to respond to new marketplace changes.
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Segment profile
Description of the "typical" customer in a segment
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Segmentation
1st step in target market process
The process of dividing a larger market into smaller, meaningful segments based on one or more shared characteristics
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Segmentation Variables
Dimensions that divide the total market into fairly homogenous groups, each with different needs and preferences.
- Segment should be..
- Sustainable, Identifiable, Accessible, Responsive
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Share of Costumer
Percentage of an individual customer's purchase of a product that is a single brand.
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Target Market
The market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts.
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Target Market Strategy
Dividing the total market into different segments based on consumer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments.
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Targeting
2nd step in target market process
A strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources
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Undifferentiated Targeting Strategy
Appealing to a broad spectrum of people
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Usage Occasions
An indicator used in one type of market segmentation based on when consumers use a product most
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Actual Product
The physical good or service that supplies the desired benefit (name)
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Augmented Product
The actual product plus other supported features such as warranty, delivery, installation
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Business Analysis
The step in the Product Development Process in which marketers assess a product;s commercial viability
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Commercialization
Final step in the product development process which a new product is launched into the market
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Product Development Steps
- 1 - Idea generation
- 2 - Product development/screening
- 3 - Develop marketing strategy
- 4 - Business analysis
- 5 - Technical development
- 6 - Test market the product in limited market
- 7 - Commercialization
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Compatibility
extent to which a new innovation is consistent with the target market's existing cultural values, customs, and practices.
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Complexity
Degree to which consumers find a new innovation or its use difficult to understand, learn and use.
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Continuous Innovation
A change in an existing product that requires a moderate amount of learning or behavior change
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Convenience Product
A consumer good that is usually low-priced, widely available, or purchased frequently with minimum comparison or effort
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Convergence
Coming together of two or more technologies or industries to create a new system w/ greater benefits than its parts
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Core Product
all the benefits a product will provide for consumers or business customers.
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Diffusion
The process by which the use of a product spreads throughout a population
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Discontinuous (disruptive) Innovation
A totally new product that changes in the way we live.
Ex: PC's, refrigerators, email
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Durable Goods
Consumer products that provide benefits over a long period of time.
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Gap Analysis
A measurement tool that gauges the difference between a customer's expectations or product or service quality and that level which actually occured
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Good
A tangible product that we can see, touch, smell, hear, or taste
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Idea Generation
First step of product development which marketers brainstorm for products that provide customer benefits.
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Innovation
A product that consumers perceive to be new and different from existing products.
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Nondurable Goods
Consumer products that provide benefit for a short time
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Product Concept Development/ Screening
second step of product development which marketers test product ideas for technical and commercial success.
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Product Adoption
Process by which a consumer or business customer begins to buy and use a new good, service, or idea.
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Prototypes
Test versions of a proposed product.
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Relative Advantage
degree to which a consumer perceives that a new product provides superior benefits than existing products.
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Staples
Basic or necessary items that are available almost everywhere
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Shopping Product
A good which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase.
Ex: coffee beans
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Slotting Allowance
The fee that retail vendors charge to a manufacturer, or wholesaler to ensure a good product placement
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Specialty Product
A type of good that has unique characteristics which often makes the consumer brand loyal.
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Technical Development
Step in the product development process in which a new product is refined and perfected by company engineers
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Test Marketing
Testing the complete marketing plan in a small geographic area similar to the large market the firm hopes to enter.
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Trialability
The ease of sampling a new product and it's benefits
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Unsought Products
Goods which a consumer has little awareness or interest until the product or a need for the product is brought to his or her attention
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Product Life Cycle Stages
- 1 - Introduction stage
- 2 - Growth stage
- 3 - Maturity stage
- 4 - Decline stage
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Brand
A name, symbol, or other unique element of a product that identifies one firm's product and sets it apart from the competition.
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Brand Equity
The financial value of a brand to an organization. based on sales projections
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Brand Extensions
A new branded product of service sold under the same brand name. can be an extension to the product line or an entirely new product line.
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Cannibalization
When a company's product sells a lot and 'eats' the sales of the current product line.
Ex: sales of coke classic dropped when coke zero was introduced
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Co-branding
Agreement between two brands to work together in marketing a new product (Ex: Eddie Bauer Ford)
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Decline Stage
Final stage in product life cycle, which sales decrease as customer needs change, and consumers lose interest.
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Family Brand
A brand that a group of individual products or individual brands share. Ex: all microsoft products
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Generic Branding
A strategy in which products are not branded and are sold at the lowest possible price.
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Growth Stage
Second stage in product life cycle, which the product is accepted and sales rapidly increase
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Ingredient Branding
One company buys a license to incorporate the other brand in it's recipe or design.
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Introduction Stage
First stage in product life cycle = the introduction of a new product in the market place. Equivalent to commercialization
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Licensing
An agreement in which one firm sells another firm the right to use a brand name for a specific purpose and for a specific period of time
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Market Manager
Organizational employee who is responsible for developing and implementing the marketing plans for products sold to a particular customer group.
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Maturity Stage
third and longest stage in the product life cycle, which sales peak and profit margins narrow as competition gets stiffer.
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National or Manufacturer Brands
Brands that are owned by the manufacturer of the product. this is the normal case, Ex: ben n jerrys, ford
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Private-Label Brands
Brands that are owned and sold by a certain retailer of distributer. Ex: safeway selects
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Product Category Managers
Individuals responsible for developing and implementing the marketing plan for all the branded products within one product line.
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Product Life Cycle
A concept that explains how products go through 4 distinct stages from birth to death. (not all die, they can be continually reinvented)
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Product Line
A firm's total product offering designed to satisfy a single need or desire of target customers
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Product Mix
Total set of all product lines a firm offers for sale.
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Retro Brand
A brand that has been on the market for a long time, such as Converse.
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Total Quality Management (TQM)
A management philosophy that incorporates the ideals of continuous improvement and myriad of performance measures
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Trademark
The legal term for a brand name, brand mark, or trade character
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Venture Teams
groups of people within an organization who work together and focus exclusively on the development of a new product.
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