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market segmentation
dividing a market into smaller groups with distinct needs, characteristics, or behaviors that might require separate marketing strategies or mixes
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market targeting
the process of evaluating each market segment's attractiveness and selecting one or more segments to enter
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differentiation
actually differentiating the market offering to create superior customer value
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positioning
arranging for a market offering to occupy a clear, distinctive, and desirable place relatvie to competing products in the minds of target consumers
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demographic segmentation
dividing the market into groups based on variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, generation, and nationality
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gender segmentation
dividing a market into different groups based on gender
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income segmentation
dividing a market into different income groups
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psychographic segmentation
dividing a market into groups based on social class, lifestyle, or personality characteristics
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behavioral segmentation
dividing a market into groups based on consumer knowledge, attitudes, uses, or responses to a product
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occasion segmentation
dividing a 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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benefit segmentation
dividing the market into groups according to the different benefits that consumers seek from the product
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intermarket segmentation
forming segments of consumers who have similar needs and buying behavior even though they are located in different countries
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target market
a set of buyers sharing common needs or characteristics that the company decides to serve
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undifferentiated (mass) marketing
a market-coverage strategy in which a firm decides to ignore market segment differences and go after the whole market with one offer
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differentiated (segmented) marketing
a market-coverage strategy in which a firm decides to target several market segments and designs separate offers for each
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concentrated (niche) marketing
a market-coverage strategy in which a firm goes after a large share of one or a few segments or niches
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micromarketing
the practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups - includes local marketing and individual marketing
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local marketing
tailoring brands and promotions to the needs and wants of local customer groups -- cities, neighborhoods, and even specific stores
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individual marketing
tailoring products and marketing programs to the needs and preferences of individual customers -- also labeled "customized marketing"
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product position
the way a product is defined by consumers on important attributes -- the place the product occupies in consumers' minds relative to competing products
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competative advantage
an advantage over competitors gained by offering greater customer value, either through lower prices or by providing more benefits that justify higher prices
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value proposition
the full positioning of a brand -- the full mix of benefits upon which it is positioned
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positioning statement
a statement that summarizes company or brand positioning -- it takes this form: To (target segment and need) our (brand) is (concept) that (point of difference).
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service
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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consumer product
product bought by final consumer for personal consumption
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convenience product
consumer product that customers usually buy frequently, immediately, and with a minimum of comparison and buying effort
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shopping product
consumer good that the customers, in the process of selection and purchase, characteristically compare on such bases as suitability, quality, price, and style
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specialty product
consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
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unsought product
consumer product that the consumer either does not know about or knows about but does not normally think of buying
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industrial product
product bought by individuals and organizations for further processing or for use in conducting a business
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product quality
the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
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brand
a name, term, symbol, or design or a combination of these that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors
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packaging
the activities of designing and producing the container or wrapper for a product
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product line
a group of products that are closely related because they function in a similar manner, are sold to the same customer groupes, are marketed through the same types of outlets, or fall within given price ranges
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product mix (product portfolio)
the set of all product lines and itemsa that a particular seller offers for sale
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brand equity
the positive differential effect that knowing the brand name has on customer response to the product or service
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store brand (private brand)
a brand created and owned by a reseller of a product or service
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line extension
extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
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brand extension
extending an existing brand name to new product categories
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service intangibility
a major characteristic of services -- they cannot be seen, tasted, felt, heard, or smelled before they are bought
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service inseparability
a major characteristic of swervices -- they are produced and consumed at the same time and cannot be separated from their providers
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service variability
a major characteristic of services -- their quality may vary greatly, depending on who procides them and when, where, and how
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service perishability
a major characteristic of services -- they cannot be stored for later sale or use
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service-profit chain
the chain that links service firm profits with employee and customer satisfaction
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internal marketing
orienting and motivating customer-contact employees and the supporting service people at work as a team to provide customer satisfaction
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interactive marketing
training service employees in the fine art of interacting with customers to satisfy their needs
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new-product development
the development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts
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idea generation
the systematic search for new-product ideas
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internal idea sources
formal research and development, employee ideas, etc that contribute to new product ideas
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external idea sources
distributors, suppliers, competitors, consumers, etc that contribute to new product ideas
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idea screening
screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible
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product concept
a detailed version of the new-product idea stated in meaningful consumer terms
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concept testing
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
designing an initial marketing strategy for a new product based on the product concept
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business analysis
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
developing the product concept into a physical product in order to ensure that the pruduct idea can be turned into a workable market offering
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test marketing
the stage of new-product development in which the product and marketing program are tested in realistic market settings
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commercialization
introducing a new product into the market
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customer-centered new product development
new product development that focuses on finding new ways to solve customer problems and create customer-satisfying experiences
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product life cycle
- the course of a product's sales and profit over its lifetime
- includes:
- 1. product development
- 2. introduction
- 3. growth
- 4. maturity
- 5. decline
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price
the amount of money charged for a product or service
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value-based pricing
setting price based on a buyer's perceptions of value rather than on the seller's cost
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good-value pricing
- offering just the right combination of quality and good service at a fair price
- i.e. mcdonalds' $1 menu
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cost-based pricing
setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for its effort and risk
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fixed costs
costs that do not vary with production or sales level
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variable costs
costs that bary directly with the level of production
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target costing
pricing that starts with an ideal selling price, then targets costs that will ensure that the price is met
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demand curve
a curve that shows the number of units the market will buy in a given time period, at different prices that might be charged
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price elasticity
a measure of the sensitivity of demand to changes in price
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market penetration pricing
setting a low price for a new product in order to attract a large number of buyers and a large market share
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product line pricing
setting the price steps between products in a product line based on cost differences and customer perceptions of the value
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optional product pricing
the pricing of optional or accessory products along with a main product
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captive product pricing
setting a price for products that must be used along with a main product
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by-product pricing
setting a price for by-products in order to make the main product's price more competitive
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discount
a straight reduction in price on purchases under stated conditions or during a stated period of time
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allowances
promotional money paid by manufacturers to retailers in return for an agreement to reature the manufacturers products in some way
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product bundle pricing
combining several products and offering the bundle at a reduced price
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segmented pricing
selling a product or service at two or more prices, where the difference in prices is not based on differences in cost
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psychological pricing
a pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something aobut the product
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reference prices
prices that buyers carry in their minds and refer to when they look at a given product
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promotional pricing
temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales
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geographical pricing
setting price based on the buyer's geographic location
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dynamic pricing
adjusting prices continually to meet the characteristics and needs of individual customers and situations
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value delivery network
the netowrk made up of the company, suppliers, distributors, and ultimately customers who "partner" with each other to improce the performance of the entire system in delivering customer value
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marketing channel
a set of interdependent organizations that help make a product or service available for use or consumption by the consumer or business user
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channel level
a layer of intermediaries that performs some work in bringing the product and its ownership closer to the final buyer
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direct marketing channel
a marketing channel that has no intermediary levels
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indirect marketing channel
a channel containing one or more intermediary levels
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channel conflict
disagreement among marketing channel members on goals and roles -- who should do what and for what rewards
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conventional distribution channel
a channel consisting of one or more independent producers, wholesalers, and retailers, each a separate business seeking to maximize its own profits even at the expense of profits for the system as a whole
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vertical marketing system
- a distribution channel structure in which producers, wholesalers, and retailers act as a unified system.
- One channel member owns the others, has contracts with them, or has so much power that they all cooperate.
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corporate VMS
a vertical marketing system that combines successive stages of production and distribution under single ownership -- channel leadership is established through common ownership
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contractual VMS
a vertical marketing system in which independent firms at different levels of production and distribution join together through contracts to obtain more economies or sales impact than they could achieve alone
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franchise organization
a contractual vms in which a channel member, called a franchiser, links several stages in the production-distribution process
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Administered VMS
a vms that coordinates successive stages of production and distribution, not through common ownership or contractual ties, but through the size and power of one of the parties
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horizontal marketing system
a channel arangement in which two or more companies at one level join together to follow a new marketing opportunity
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multichannel distribution system
a distribution system in which a single firm sets up two or more marketing channels to reach one or more customer segments
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marketing channel design
designing effective marketing channels by analyzing consumer needs, setting channel objectives, identifying major channel alternatives, and evaluating them
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intensive distribution
stocking the product in as many outlets as possible
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exclusive distribution
giving a limited number of dealers the exclusive right to distribute the company's products in their territories
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selective distribution
the use of more than one, but fewer than all, of the intermediaries who are willing to carry the company's products
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marketing channel management
selecting, managing, and motivating individual channel members and evaluating their performance over time
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distribution center
a large, highly automated warehouse designed to receive goods from various plants and suppliers, take orders, fill them efficiently, and deliver goods to customers as quickly as possible
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intermodal transportation
combining two or more modes of transportation
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integrated logistics management
the logistics concept that emphasizes teamwork, both inside the company and among all the marketing channel organizations to maximize the performance of the entire distribution system
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third party logistics provider
an independent logistics provider that performs any or all of the functions required to get its client's product to market
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