Key Concepts in Marketing Strategy and Consumer Behavior

joint venture

A business arrangement where two or more parties agree to pool their resources for a specific task.

market information system

A continuing process of identifying, collecting, analyzing, accumulating, and dispensing critical data to marketing decision makers.

decision tree

A diagram that shows the possible outcomes of a series of related choices.

organizational bylaws document

A document that outlines the rules and regulations governing the internal management of an organization.

mission statement

A formal summary of the aims and values of a company, organization, or individual.

expectation of behavior

A guideline that seeks to operationalize the company's value by defining appropriate behaviors and decisions.

value network perspective

A macro-level strategic approach adopted by firms to cut costs and maximize process efficiencies every step of the way to market.

push strategy

A marketing strategy that involves pushing products through the distribution channel to the consumer.

co-branding

A marketing strategy that involves two brands collaborating to create a product.

observational research

A method of data collection where researchers observe subjects in their natural environment.

triple bottom line (TBL)

A metric that considers the impact of business on people, planet, and profit.

contingency plan

A plan devised for an outcome other than the usual or expected plan.

target return on investment pricing

A pricing strategy aimed at achieving a specific return on investment.

psychological pricing

A pricing strategy that considers the psychological impact on consumers.

everyday low pricing

A pricing strategy that offers consistently low prices rather than relying on sales or discounts.

average-cost pricing

A pricing strategy where the price is based on the average cost of production.

employee orientation

A process for introducing new employees to the organization and its culture.

open-ended question

A question that allows for a free-form response.

closed-ended question

A question that provides respondents with specific options to choose from.

Perishability of a service

A service cannot be stored or saved up for future use.

code of conduct

A set of rules outlining the responsibilities of or proper practices for an individual or organization.

SWOT analysis

A strategic planning technique used to identify strengths, weaknesses, opportunities, and threats related to competition or project planning.

diversification strategy

A strategy to increase profitability by expanding into new markets or products.

Predatory pricing

A strategy to intentionally sell below cost to push a competitor out of a market, then raise prices to new highs.

BCG matrix

A tool used to evaluate the strategic position of a business brand portfolio based on market growth and market share.

Channel of distribution for artisan

An artisan creates handmade soaps and sells them at her local farmers market, using a direct channel.

internal service quality

An organization's focus on providing quality service to its employees.

internal strengths

Attributes of the organization that are helpful to achieving its objectives.

Customer brand role

Brands convey information about a product.

Zone of affection

Caesars Entertainment has found that customers who fall into the zone of affection spend considerably more money and provide a substantially greater return on customer investment than others.

Price war

Can occur when a company purposefully makes pricing decisions to undercut one or more competitors and gain sales and net market share.

Matrix Structure

Combines product lines and geographic regions.

Package objective for theft reduction

Companies include antitheft methodology, such as bar coding or magnetic stripes, in the package design that discourages shoplifting, exemplifying protection.

Information Power Shift

Control of information moves to customers.

Local Distribution Networks

Cost-effective for global marketers in foreign markets.

macroeconomic data

Data that reflects the overall economic performance of a country or region.

Macro-level Environmental Trend

Digital shift affects marketing communication strategies.

channel conflict

Disagreements among channel members that can lead to inefficiencies and impact end-user consumers.

4Ps of Marketing Mix

Elements: Product, Price, Place, Promotion.

Purpose-driven Marketing

Engages consumers meaningfully around social issues.

Customer Relationship Management (CRM)

Enhances customer satisfaction and loyalty.

Sustainability Practices

Environmental responsibility in business operations.

customer delight

Exceeding customer expectations, which correlates positively with a high return on investment.

Customer-centric firms

Exhibit a high degree of customer orientation, which means that they instill an organization-wide focus on understanding customers' requirements.

external opportunities

Factors outside the organization that can help it achieve its objectives.

Pricing strategy for positioning

Firms that have an objective of utilizing pricing to communicate positioning use a value pricing strategy.

Relationship-oriented Firms

Focus on retaining and satisfying current customers.

Virtual Organization

Focuses on value-added activities, outsourcing others.

Brand Role

Function of a brand in customer decision-making.

Core Marketing Concepts

Fundamental ideas like value and exchange.

Gap Model of Service Quality

Gap 3: actual service quality specifications versus actual service delivery asks whether a service is provided in the manner intended.

Captive pricing

HP sells an inexpensive printer for an entry-level user, but the printer cartridges that need continual replacement are fairly expensive.

Channel Strategy Efficiency

Improves local distribution by reducing middlemen.

Competitive advantage in pricing

In markets where customers typically witness rapidly changing prices, stability pricing can provide a source of competitive advantage.

Global Market Research

Includes economic data on consumer spending.

primary data

Information collected for the specific purpose at hand.

agent intermediaries

Intermediaries that perform various functions to facilitate exchanges without taking title to the product.

service-related jobs

Jobs in the United States that are more than 80 percent of all jobs.

Price skimming objective

Lends status to a product or brand by virtue of a price relatively higher than the competition.

Strategic Marketing

Long-term commitment to marketing investments.

Brand management

Management has found that it is helpful to use brands to keep track of products in each type.

Licensing Strategy

Market entry with limited financial risk.

Marketing Visibility

Marketing often operates behind the scenes.

Channel Partner Alignment

Matching ethics with distribution partners.

Product Adaptation

Modifying products to suit local preferences.

qualitative data

Non-numerical information that is used to understand concepts, thoughts, or experiences.

Tying contract

Occurs if a seller requires an intermediary to purchase a supplementary product to qualify to purchase the primary product.

licensing

Offering other manufacturers the right to use a brand in exchange for a fee or percentage of sales.

Supply Chain Management

Part of the 'Place' in marketing mix.

Global Learning Continuum

Process of gaining international marketing experience.

Value pricing strategy

Proposed when the marketing manager usually is convinced that a strong price-quality relationship exists for the product.

Customer Value

Ratio of benefits received to costs incurred.

Intangibility of services

Refers to the fact that a service cannot be seen, heard, tasted, or felt by a customer.

Supply chain

Represents all organizations involved in providing a firm, the members of its channels of distribution, and its end-user consumers and business users.

causal research

Research that seeks to identify cause-and-effect relationships.

Dumping

Selling products below cost in foreign markets.

credence attributes

Service attributes that customers cannot evaluate even after use due to lack of expertise.

characteristics of services

Services are inseparable, perishable, intangible, and variable.

Marketing (Big M)

Strategic, overarching marketing approach.

partner relationship management (PRM) strategies

Strategies aimed at sharing resources, especially knowledge-based resources, to create profitable relationships between channel members.

Legal requirements of labeling

The Food and Drug Administration requires all processed-food companies to provide detailed nutritional information clearly identifying calories, fats, carbohydrates, and other information.

perishability

The characteristic of services that they cannot be stored for later use.

merger

The combination of two companies into a single entity.

perceived quality

The customer's perception of the overall quality or superiority of a product or service.

breaking bulk

The distribution function of dividing large quantities into smaller, more manageable amounts.

brand role

The function of a brand in educating customers, reassuring them, and providing benchmarks.

packaging role

The function of packaging in protecting, communicating, and promoting products.

service sector

The part of the economy that provides services rather than goods.

value

The perceived worth of a product or service to a customer.

marketing intelligence

The process of gathering and analyzing information about a market, including information about the target market and competitors.

distribution function

The process of moving products from producers to consumers.

utility

The satisfaction or benefit derived from a product or service.

research problem

The specific issue or question that a research project aims to address.

brand loyalty

The tendency of consumers to continue buying the same brand.

brand equity

The value added to a product by having a well-known brand name.

packaging purposes

The various roles packaging plays, including communication, protection, and entertainment.

Value network

Thought of as an overarching system of formal and informal relationships within which the firm participates to procure, transform and enhance, and ultimately supply its offerings in final form within a market space.

Core cost advantages

Translate directly to an edge over its competitors based on much more flexibility in its pricing strategies as well as its ability to translate some of the cost savings to the bottom line.

Market share pricing strategy

When a firm's objective is to gain as much market share as possible, a likely pricing strategy is penetration pricing.

Gross Domestic Product (GDP)

Widely used measure of economic growth.