Marketing Exam 1

reference groups

all of the formal and informal groups in society that influence an individual's purchasing behavior SUBCATEGORIES • primary • secondary • aspirational • non-aspirational

General Agreement on Tariffs and Trade (GATT)

a 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions

Made in China 2025 Plan

a Chinese government policy designed to bolster China's strength as an industrial leader; explicitly requires foreign companies to transfer intellectual property in return for access to the Chinese market

Global Trade Alert

a Swiss-based trade-monitoring group that counted 642 government actions in one year around the globe which hurt trade with other countries.

buying center

all the individuals and units that play a role in the purchase decision-making process • initiator • influencers / evaluators • gatekeepers: one who regulates and selects flow of information and advisor • decider • purchaser • users

Product portfolio

all the products a company has available for customers at any one time

joint venture

an agreement between two or more companies to share a business project, creating a new entity

Boston Consulting Group Matrix (portfolio matrix)

an analysis method of a firm's product portfolio regarding its market share and market growth • a tool for allocating resources among products or strategic business units on the basis of relative market share and market growth rate • classifies each SBU by its present or forecast growth and market share

European Union (EU) (Common Market)

an economic association established in 1957 by many Western European countries to promote free trade among its members • 2nd largest economy, behind the U.S. • Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom

business-to-business online exchange

an electronic trading floor that provides companies with integrated links to their customers and suppliers • simplify business purchasing

Mercosur

an eminent trade agreement among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area • largest Latin American trade agreement • Associate members are French Guiana, Suriname, Guyana, Chile, Colombia, Ecuador, Peru, and Bolivia

appreciation

an increase in the value of a currency

buyer for export (export merchant)

an intermediary in the global market that assumes all ownership risks and sells globally for its own account

export broker

an intermediary who plays the traditional broker's role by bringing buyer and seller together

International Monetary Fund (IMF)

an international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation

Utilitarian value

a value derived from a product or service that helps the consumer solve problems and accomplish tasks • functional • EX: coffee machine, washer

hedonic value

a value that in of itself is the reward rather than a means to an end • purchase tends to induce good feelings, happiness, and satisfaction • EX: ski trip, vacation, coffee

marketing plan

a written document that acts as a guidebook of marketing activities for the marketing manager • product lines, distribution channels, marketing communications, and pricing

cash cows

according to the portfolio matrix, SBUs with a dominant market share but a low growth potential market • a business unit that generates more cash than it needs to maintain its market share

dogs

according to the portfolio matrix, a business unit that has low growth potential and a small market share

stars

according to the portfolio matrix, a fast-growing market leader, as defined by high market growth rates and high relative market shares

BRICS

acronym that stands for Brazil, Russia, India, China, South Africa; the major emerging countries • maybe Korea too

globalization

actions or processes that involve the union of the entire world • internet • innovation • technology

countervailing duty

additional tariff placed on an imported product that a nation believes is receiving an unfair subsidy; meant to counteract dumping Local businesses are assisted to combat dumping by receiving • low-rate loans • tax exemptions • cash payments

postaudit tasks

after the audit has been completed, three tasks remain. 1. the audit should profile existing weaknesses and inhibiting factors as well as the firm's strengths and the new opportunities available to it 2. ensure that the role of audit has been clearly communicated 3. make someone accountable for implementing recommendations

proxy

agent, substitute, person authorized to act on behalf of another PROXIES that influence consumers • brands • price • origin

trade agreement

agreement by a group of countries to promote trade among them • stimulates international trade

environmental scanning

collection and interpretation of information about the external environment that may affect the future of organizations and their marketing plans

Adjacent Innovation

component of the Innovation Matrix about the decisions designed to take company strengths into new markets

Transformational Innovation

component of the Innovation Matrix about the invention of breakthrough products or services that don't exist yet and that are aimed at creating brand new markets and customers

Core Innovation

component of the Innovation Matrix that describes the optimizing of products or services for existing customers

Place (Distribution) Strategies

concerned with making products available when and where customers want them

brand loyalty

consistent preference for one brand over all others • Studies suggest that 13% of U.S. consumers are fully brand loyal. • highest loyalty: insurance, mobile carriers, investments • lowest loyalty: shoes, cosmetics, bath accessories, women's clothing

supplies

consumable items that do not become part of the final product • maintenance, repair or operating • pencils, paperclips, paper

Experiential Learning

consumers learning about a product from experiences

conceptual learning

consumers not learning about a product through direct experience • word of mouth • communication

Need recognition

consumers that feel an imbalance between their actual state and their desired state • induces purchase • wants • internal/external stimulus • Usually the 1st step of the consumer decision-making process

partially planned purchase

consumers when they know the product category they want to buy but wait until they get to the store or go online

codes of conduct

formalized rules and standards that describe the behavior a company expects of its employees

North American Free Trade Agreement (NAFTA)

former agreement that created a free-trade area among the United States, Canada, and Mexico • dissolved when Donald Trump threatened tariffs

reengineering

fundamental rethinking and radical redesign of business processes in an effort to achieve dramatic improvements in critical measures of performance • such as cost, quality, service, and speed

evaluation

gauging the extent to which the marketing objectives have been achieved during the specified time period

empowerment

giving employees more authority to solve customer problems • delegation of authority • independence begets better work ethic

World Customs Organization (WCO)

global organization to coordinate and improve Customs activities among member Countries; a trade organization that replaced the old General Agreement on Tariffs and Trade (GATT) • created the HTS code • very successful in lowering barriers to trade

accessory equipment

goods, such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment

Securities and Exchange Commission

government entity that monitors the stock market and enforces laws regulating the sale of stocks and bonds

Patient Protection and Affordable Care Act (ObamaCare)

health care reform law passed in 2010 that includes incentives and penalties for employers providing health insurance as a benefit

Self-concept

how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations • personalize products • insecurities • Ideal self image vs. Real self image • People are more likely to believe what they want to believe is true. • Offer a romanticized, tantalizing offer taking advantage of their ideal self image.

David Packard

"Marketing is too important to be left only to the marketing department." • cofounder of Hewlett-Packard

What is the order of ethnic groups in America from largest to smallest?

1) White 2) Hispanics 3) African Americans 4) Asian Americans 5) Other

Why write a marketing plan?

1) provides a basis for comparison of actual and expected performance 2) provides clearly stated activities to work toward common goals 3) provides an examination of the marketing environment 4) serves as a reference for the success of future activities 5) allows entry into the marketplace with awareness

Asian Americans

31% of Asian Americans are immigrants • $1 T buying power • adheres to traditional Asian culture • 7% of U.S. population • California and Hawaii have the most Asians • $110,523 annual income. exceeds average U.S. income by ~$48,000 • 52% of Asian Americans have a bachelor's degree, compared to 35% general population • healthiest diet

Donald Trump

45th president of United States; trade war with Xi Jinping

What percent of American Citizens are Christian?

65% of Americans are Christian. • African Americans: 77% • White: 70 percent • Hispanic Americans: 77%

What percent of people reported that posts made by companies influenced their buying decisions?

78% of people in a survey reported that posts made by companies influenced their buying decisions.

What percent of people responded in a survey that social media posts made by family and friends directly impacted their purchase decisions?

81% of respondents to a recent survey reported that social media posts made by family and friends directly impacted their purchase decisions.

Should Cash Cows be invested in growth?

A Cash Cow is typically preserved rather than invested in further growth. • preserve market share • Harvesting

Children's Online Privacy Protection Act (COPPA)

A U.S. federal act that requires operators of online services or Web sites directed at children under the age of 13 to obtain parental consent prior to the collection, use, disclosure, or display of a child's personal information

Small Business Administration (SBA)

A U.S. government agency that advises and assists small businesses by providing management training, financial advice, and loans.

Why would a business choose to lease?

A business might choose to lease in order to: • reduce capital outflow • acquire a seller's latest products • receive better services • gain tax advantages

A company should consider entering the global marketplace only after its management has a solid grasp of the ______ environment.

A company should consider entering the global marketplace only after its management has a solid grasp of the global environment.

Consumer Privacy

A consumer's right to be protected from the unwanted collection and use of information about that individual for use in marketing.

Is a country that exports more than it imports said to have an favorable balance of trade?

A country that exports more goods or services than it imports is said to have a favorable balance of trade. • When imports exceed exports, more money flows out of the country than flows into it.

Is a country that imports more than it exports said to have an favorable balance of trade?

A country that imports more than it exports is said to have an unfavorable balance of trade. • When imports exceed exports, more money flows out of the country than flows into it.

recession

A decline in a nations economy; a slowing nation's economy • slowing rate • negative growth

CAN-SPAM Act (2003)

A federal law that placed guidelines on mass commercial (SPAM) emails

Should a global marketer or a firm considering global marketing must consider the external environment?

A global marketer or a firm considering global marketing must consider the external environment. • culture • economic development • global economy • political structure • demographic makeup • natural resources.

Does a high household income generally translate to high purchasing power?

A high average household income does not necessarily translate into high household purchasing power. • California has one of the highest household incomes but the high cost of living erodes buying power, moving it to the midrange of all the states.

quota

A limit placed on the quantities of a product that can be imported

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country

Gross Domestic Product (GDP)

A measurement of the total goods and services produced within a country; the total market value of all final goods and services produced in a country for a given time period

B-Lab

A nonprofit organization that serves a global movement of people using business as a force for good. • certifies B Corporations • Its vision is that one day all companies compete not only to be the best in the world, but the best for the world and as a result society will enjoy a more shared and durable prosperity.

Should Problem Childs be invested in growth?

A problem child should be invested in if it's likely that it will become a star. • build Problem Childs up rather than holding

Inelastic demand

A situation in which an increase or a decrease in price will not significantly affect demand for the product • EX: If the price of automobile paint or spark plugs rises significantly, say, 200 percent in one year, do you think the number of new automobiles sold that year will be affected? Probably not.

recession

A slowdown in a nation's economy

World Bank

A specialized international bank of the United Nations that makes loans to countries for economic development, trade promotion, and debt consolidation • low-interest loans • advice • information to developing nations

Country of Origin Rule

A stipulation of the United States-Mexico-Canada Agreement • Cars and trucks must have 75 percent of their components manufactured in Mexico, United States, or Canada to qualify for zero tariffs. • The goal is to boost auto-parts manufacturing in North America.

tariff

A tax on imported goods • encourages domestic firms, discourages foreign firms

free market

An economic system in which prices and wages are determined by unrestricted competition between businesses, without government regulation or fear of monopolies

Trans-Pacific Partnership (TPP)

A trade agreement among 12 Pacific Rim countries • Australia, Brunei, Darussalam, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, and Vietnam, and formerly the United States

hyperinflation

A very rapid rise in the price level; an extremely high rate of inflation

Research suggests that ____% of consumers tell others when they perceive a brand as ethical.

According to research, 34% of consumers tell others when they perceive a brand to be making ethical actions or actions that are honest, fair, and responsible, and another 29% take to social media to share their support for ethical companies.

consumer decision journey

Ads or similar stimulus causes customer to research and contemplate wants and needs. (Begins Classic Journey) - asks others - competitors - research - ads, persuasion Consumer decides whether to purchase a product. - If so, loyalty may result, causing less customer involvement. (New Journey) - If not, they might enter another journey with a different product (begins another Classic Journey) • Classic Journey • New Journey • Loyalty Loop

Age and Family Life-Cycle Stages

Age and Family Life-Cycle Stages marketers should consider: • couples • age • single parents • nontraditional • major life events

Export-Import Bank

Agency of the US government whose mission is to provide aid in financing and facilitate exports and imports.

Which states have the greatest household purchasing power?

Alaska, Maryland, New Hampshire, North Dakota, Virginia, and Wyoming have the greatest household purchasing power.

Is America projected to have more or less ethnic diversity in the future?

America is projected to become more ethnically diverse. • Projected that in 2045 white people will comprise 49.7% of the population

America's largest trade deficit is with which country?

America's largest trade deficit is with China. • America exports around $130 B to China annually while China exports $506 B to the United States.

virtue ethics

An ethical philosophy claiming that morality's primary function is to develop virtuous character • training • teaching • Aristotle and Plato • virtues

trade deficit

An excess of imports over exports • A valuable dollar (not inflated) makes U.S. goods more expensive overseas and imports less expensive in the United States, widening the trade deficit.

Consumer Financial Protection Bureau (CFPB)

An independent bureau within the Federal Reserve that helps consumers make financial decisions.

Information Technology (IT)

Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization • used to stimulate innovation

J.P. Morgan

Banker who bought Carnegie Steel and renames it to U.S. Steel. • a philanthropist in a way; he gave all the money needed for WWI and was payed back. Was one of the "Robber barons"

Business customers tend to buy in ________ quantities.

Business customers tend to buy in large quantities.

Business marketers usually have far ________ customers than consumer marketers.

Business marketers usually have far fewer customers than consumer marketers. • customer satisfaction of each customer is more valuable • more personal relationship • sometimes the government is one of the only customers

What seven categories do business products generally fall into?

Business products generally fall into one of the following seven categories, depending on their use: • major equipment, accessory equipment • raw materials • component parts • processed materials • supplies • business services.

promotion

Communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response

trust

Companies should establish trust with the consumers to maintain and grow business. • customer loyalty

How does competition between vendors of the same industry generally affect sales and profit?

Competition generally results in declining profits and sales for competing vendors, unless they conspire together to artificially raise prices.

Milton Friedman

Conservative American economist famous for his advocacy of monetarism in works like A Monetary History of the United States. • strongly associated with the ideals of laissez-faire government policy. • 1912-2006 • free market

Consumers whose customer service questions and complaints are resolved during the first point of contact are nearly _____ as likely to remain loyal to the product or company and are _____ times more likely to spread positive word of mouth.

Consumers whose customer service questions and complaints are resolved during the first point of contact are nearly twice as likely to remain loyal to the product or company and are four times more likely to spread positive word of mouth.

How often are consumers' product and service preferences changing?

Consumers' product and service preferences are constantly changing. • well defined market • ideal marketing mix

Pricing Strategies

Cost based, competitor based, value based • competitive weapon

________ underlies the family, the educational system, religion, and the social class system.

Culture underlies the family, the educational system, language, religion, and the social class system. • vital factor of global marketers

Customers prefer ____________ over automated responses when dealing with customer services.

Customers prefer personalization rather than automated responses when dealing with customer services.

satisfied loyalty

Customers that are satisfied with a product, finding it to be reliable, easy, and comfortable; they purchase them often • "This product is one of my favorite brands."

Dissatisfied customers are _____ likely to rely on word of mouth and share to others that they are displeased with a product.

Dissatisfied customers are more likely to share to others that they are displeased with a product.

laws

Enforceable rules of conduct in a society

Federal Trade Commission Act (1914)

Established the Federal Trade Commission to monitor business practices, false advertising, and dishonest labeling

Are customers who have been churned and lost loyalty dead opportunities to a company?

Firms have begun to realize that lost customers may not be dead opportunities.

Managers have (little / some / complete) control over the environment.

Generally, managers have little control over the environment they choose to sell merchandise from; they instead rely on modifying the marketing mix or relocating

How does a multinational corporation generally go about growing?

Generally, multinational companies follow this pattern in the following order: 1) The multination companies begin by operating in one country and sell into others. 2) They set up foreign subsidiaries to handle sales in one country. 3) Then they operate an entire line of business in another country. 4) They utilize the internet as a basis for control and management because their CEOs and executives are often in different countries.

Is social change difficult for marketers to forecast and influence?

Generally, social change is perhaps the most difficult external variable for marketing managers to forecast, influence, or integrate into marketing plans. • values • lifestyle • trends

What factors affect the value of a country's currency?

Global currency traders create the supply of and demand for a particular country's currency based on that country's investment, trade potential, and economic strength.

Globalization and technology- especially online- contributes to the dramatic shift of power from the marketer to the ________.

Globalization and technology- especially online- has contributed to the dramatic shift of power from the marketer to the consumer.

How does globalization help reduce poverty?

Globalization causes competition to drive down prices and increase product and service quality, thus propagating innovation, union, and technology. This in turn leads to convenience. • discourages Monopolies • encourages democracy • encourages labor/environmental standards

Good previous experiences typically result in _____ customer involvement in subsequent future purchases from the same company.

Good previous experiences typically result in less customer involvement in subsequent future purchases from the same company.

Good product offer both _______ value and __________ value.

Good products can provide both Utilitarian and hedonic value simultaneously. • Utilitarian and hedonic values are not mutually exclusive. • The whole is greater than the sum of the parts; Hedonic and Utilitarian value together can create a new, distinct atmosphere that surpasses both values experienced separately. • EX: Starbucks offers not only coffee, but also a special atmosphere that is meant to be experienced together.

Contract Manufacturing (Outsourcing)

Hiring a foreign manufacturer to make your products according to your specifications.

In some instances, people deliberately seek contrary information in order to refute a potential product and reduce ____________ ____________.

In some instances, people deliberately seek contrary information in order to refute a potential product and reduce cognitive dissonance.

Why do some countries try to hinder globalization?

In theory, if a country can boost exports and limit imports, then more jobs are created and there is less competition for local businesses. TRENDS • More local relative power • Less absolute power • Analogy: Being the richest person but relative to a group of homeless people. "Best of the worst" rather than "Worst of the Best".

social visibility

Involvement increases as the social visibility of a product increases. These products that make a statement about the user may include cars, jewelry, furniture, and clothing. • status • expression

A customer's interest is directly related to their _________.

Involvement is directly related to consumer interests.

Are consumers more value oriented or status oriented when making a purchase?

It depends. Marketers can influence how consumers feel. SURVEY Researchers have found that when consumers see a product cue first (pretty shirt) without seeing the price initially, evaluation is strongly related to the product's attractiveness or desirability. When the price cue is presented first (they walk into a store seeing a big sign with prices), evaluation is related more to the product's value.

Amae

Japanese word for very close, physical, indulgent relationship between the mother and her young child

Do most large United States multinationals earn the majority of their revenue locally or abroad?

Many U.S.-based multinationals earn a large percentage of their total revenue abroad. • EX: Caterpillar, the construction-equipment company, receives 67% of its revenue from overseas markets. • Other large American multinationals include Walmart, Exxon Mobile, Apple, General Motors, Ford, and Chevron.

Many consumers seek out the ________ of others to reduce their search and evaluation effort or uncertainty, especially as the perceived risk of the decision increases.

Many consumers seek out the opinions of others to reduce their search and evaluation effort or uncertainty, especially as the perceived risk of the decision increases.

How do marketers generally manage the prices of their products during times of inflation?

Many marketers try to hold prices level for as long as is practical, because increasing prices generally has an immediate negative effect on demand, even if the price change is justified.

Marketers take advantage of psychological factors to convince the consumer that they have what the consumer wants.

Marketers take advantage of psychological factors to convince the consumer that they have what the consumer wants. • deception • persuasion • nonverbal cues • packaging • pricing STORY A business person sold very high end apartments. Their competitor, who sold very similar quality apartments, was losing money, so they lowered their prices in an attempt to garner more consumers. In response, the first business person raised their prices, despite not improving the quality of their apartments. They first business man paradoxically gains more sales because they took into account the psychological factor that people who occupy very high end apartments want the most expensive place.

How does a marketer exploit the want-got gap?

Marketers try to take advantage of the want-got gap by doing things like inducing the consumer into not being satisfied with their current state, offering romanticized prospects of what their life could be like, satisfying a need, or targeting an insecurity.

If marketers work in an ethical environment, is it more or less likely that marketers will take a strong stand against questionable practices?

More likely, according to the text.

What are some tactics most companies use to pull customers to their websites?

Most companies use email marketing, search engine optimization, paid search, and display advertising to pull customers to their websites.

Are metropolitan areas good for business?

Most large metropolitan areas host most of all business customers. • California, New York, Ohio, Illinois, Michigan, Texas, Pennsylvania, and New Jersey

What percent of United States companies are multinationals?

Multinationals comprise far less than 1% of U.S. companies. But they account for about 20% of all private jobs and 25% of all private wages.

Factors that Affect the Consumer Decision Journey

Of all the factors that affect consumer decision making, cultural factors exert the broadest and deepest influence. • values • subcultures • buying patterns • social class

Do periods of economic growth or decline stimulate inflation?

Often, periods of economic growth stimulate inflation.

Prime Minister Theresa

On January 15, 2019, Prime Minister Theresa May placed a motion before Parliament asking them to approve her withdrawal agreement with the European Union. The bill was rejected by 432 votes to 202. The 230-vote defeat was the largest in UK political history.

What is an example of a purchase that could initially involve extensive decision making yet later become routine response behavior?

One example is when a family gets a new puppy, they might spend a lot of time and energy trying out different toys to determine which one the dog prefers. Once the new owners learn that the dog prefers a bone to a ball, however, the purchase no longer requires extensive evaluation and will become routine.

consumer decision-making process

PROCESS that consumers generally abide by when purchasing: 1) need recognition 2) information search 3) evaluation of alternatives 4) purchase 5) post purchase behavior

What are characteristics of effective ads?

One study of videos promoting brands suggested that 60% of the viewers were primarily interested in informative content, 55% enjoyed entertaining content, and 46% liked funny content. • entertaining • informative • thought-provoking • inspiring • appeal to emotions

How do marketers influence a consumer to purchase a product they don't really want?

Persuasion using: • charisma • flattery • value • sense of a limited opportunity • nudges • Having the consumer come to a conclusion by themselves, but secretly influencing the decision without the consumer realizing it. • deception • reputation • sense of credibility

Xi Jinping

President of China • trade wars with Donald Trump

Child Protection and Toy Safety Act of 1969

Prevents marketing of products so dangerous that adequate safety warnings cannot be given

Which of the four P's are most subject to change?

Pricing is the most subject to change of the 4 P's because it's a competitive weapon and intangible- it's often essential to adapt the the dynamic marketing climate.

Narendra Modi

Prime Minister of India, is "opening India up to private investment like never before" • major emerging country INDIA • socialism • monopoly capitalism • competitive capitalism in its political ideology

4 P's of Marketing

Product, Price, Place (distribution), Promotion • meant to produce mutually satisfying exchanges with a target market

Federal Food and Drug Act

Prohibits adulteration and misbranding of foods and drugs involved in interstate commerce; strengthened by the Food, Drug, and Cosmetic Act (1938) and the Kefauver-Harris Drug Amendment (1962)

General Data Protection Regulation (GDPR)

Proposed set of regulations adopted by the European Union to protect Internet users from clandestine tracking and unauthorized personal data usage.

___________ and __________ boost learning.

Reinforcement and repetition boost learning. Reinforcement • positive • negative

____________ Marketing is a strategy that entails seeking and establishing ongoing partnerships with customers.

Relationship marketing is a strategy that entails seeking and establishing ongoing partnerships with customers.

Consumer Credit Protection Act (1968)

Requires that lenders fully disclose true interest rates and all other charges to credit customers for loans and installment purchases

Kefauver-Harris Drug Amendment (1962)

Requires that manufacturers conduct tests to prove drug effectiveness and safety.

Federal Hazardous Substances Act (1960)

Requires warning labels on hazardous household chemicals.

Research suggests that _____ % of U.S. consumers stop buying from companies they believe are unethical.

Research suggests that: • 56% consumers stop buying from companies they believe are unethical • 35% of consumers stop buying from brands they perceive as unethical even if there is no substitute available • 27% stop purchasing even if they think the competitor offers lower quality Also, according to research •

Risk ________ customer involvement.

Risk increases customer involvement. RISKS • financial • social • psychological

latch-key children

School age children who come home from school to an empty house and may remain unsupervised until parents return from work

Boris Johnson

Secretary of State for Foreign and Commonwealth Affairs

business services

Services that primarily meet the needs of other businesses, including professional, financial, and transportation services • janitorial, advertising, legal, management consulting, marketing research, maintenance, and other services • contracting

Some analysts believe that a business should focus on making a profit and leave social and environmental problems to nonprofit organizations and the government. Who is disadvantaged when companies use their money to maintain social responsibilities?

Shareholders, who might not have a say in what the Board of Directors does with their money.

Certified Purchasing Manager (CPM)

Some professional purchasers earn the designation of Certified Purchasing Manager (CPM) after participating in a rigorous certification program.

sales promotions

Special incentives or anticipating programs that encourage the purchase of a product or service • such as coupons, rebates, contests, free samples, and point-of-purchase displays, premiums

reciprocity

practice whereby business purchasers choose to buy from their own customers; mutual exchange

Generally speaking, are the market shares and profitability of a company strongly or weakly linked?

Strongly linked.

The United States had a favorable balance of payments until about which year(s)?

The United States had a favorable balance of payments from about 1900 until 1971. Since then, the country's overall payments have exceeded its receipts due largely to the U.S. military presence abroad.

Is innovation important to succeed in creating and marketing technology?

Technological success is based on innovation, and innovation requires imagination and risk taking. • competitive, huge field • highly technical

Justice Department

The DEA is located within this branch of the US Government

Together, the United States and the European Union account for ~_____% of the world's global economic outputs.

The United States and the EU together account for nearly half of global economic output.

Which country is the global leader in Research and Development efforts?

The United States became a global leader in research and development (R&D) spending in the 20th century, funding as much as 69% of annual global R&D after World War II.

Doha Round of Negotiations

The WTO launched a new round of negotiations in Doha, Qatar, in late 2001. The renewed negotiations were designed to lower trade barriers further and to help poor nations in particular, but it was a failed endeavor

sustainability

The ability to keep in existence or maintain; theory that socially responsible companies will outperform their peers by focusing on the world's social, economic, and environmental problems

Should the basic philosophy and practice of marketing be changed based on whether the customer is a business organization or a consumer?

The basic philosophy and practice of marketing are the same whether the customer is a business organization or a consumer.

What are the business market consists of four major categories of customers?

The business market consists of four major categories of customers: • producers • resellers • governments • institutions

What are competitive factors that a firm must face?

The competitive factors that a firm must face include the relative size of the competitors, and the degree of interdependence within the industry. Management has little control over the competitive environment confronting a firm.

Is it effective to personalize marketing to each gender specifically?

The difference in gender are extremely impactful to the market. TRENDS • Furniture/home accessories: Women dominant market • small appliances: women • smartphones: men • power tools: men • Auto Tires/batteries: men

Forex Markets (Foreign Exchange Market) (control agency)

The market in which international buyers and sellers exchange foreign currencies for one another to buy and sell goods, services, and assets from various countries. • used to control a currency's exchange rate relative to other currencies

interlocking directorates

The illegal practice of having executives or directors from one company serve on the Board of Directors of another company. • J. P. Morgan introduced this practice to eliminate banking competition in the 1890s.

Data Breaches

The intentional or unintentional release of secure or confidential information to those who aren't entitled to it. • online modern issue • customers lose loyalty • Customers are less forgiving if a breach occurs to a retailer they visit infrequently.

How does the internet influence consumers?

The internet greatly promotes need recognition among modern consumers by being a eminent external stimulus.

mergers

The joining together of two or more companies or organizations to form one, new larger one

Previous experience

The knowledge and skill that is gained through time spent doing a job or activity • Good previous experiences typically result in less customer involvement in subsequent future purchases from the same company.

exchange rate

The measure of how much one currency is worth in relation to another

market growth

The percentage change in the total size of a market (volume or value) over a period of time

Brexit

The possibility of Britain (United Kingdom) resigning from the European Union

What are successful guidelines for naming a product?

The power of naming products alone can garner significant attention. GUIDELINES • positive connotation • relevant • shorter • memorable • unique • flattery • EX: Nike - Nike : means "victory" • EX: Coca-Cola - catchy, unique alliteration • Mars Bars - rhyme - When NASA landed on Mars, they experienced a huge and dramatic increase in sales.

What are major reasons for a country losing industrial jobs?

The primary reasons for job losses in industries can be the losing country's lack of competitive technology and lower labor costs elsewhere • competitive advantage • low labor costs • trade balance

Piggybacking

The process of connecting to a wireless network without the permission of the owner of the network • stealing or unethically sharing information

Reverse Engineering

The process of taking something apart and analyzing its workings in detail • method used to improve product design and encourage a cost competitive advantage

Which states have the lowest household purchasing power?

The states at the lower end of average household purchasing power are Mississippi, New York, New Mexico, Florida, and West Virginia. • Some states, such as Mississippi, have a relatively low cost of living, but a low average household income still places them toward the bottom of the list.

What are economic concerns marketers focus on?

The three economic areas of greatest concern to most marketers are: • consumers' incomes • inflation • recession

Gross National Product (GNP)

The total value of goods and services, including income received from abroad, produced by the residents of a country within a specific time period, usually one year

automation

The use of technology to ease human labor or to extend the mental or physical capabilities of human • technology accelerates the consumer decision journey

Moral relativism

The view that there is no absolute or universal moral law or truth, resulting in a morality determined by cultural factors or preferences • no absolute rules • morality is like a continuum • circumstances

Does Effective strategic planning requires continual attention, creativity, and management commitment?

Yes

To succeed, firms seeking to enter into foreign trade must still adhere to the principles of the _________ mix.

To succeed, firms seeking to enter into foreign trade must still adhere to the principles of the marketing mix. • product • place (distribution) • promotion • price

What position is generally in control of the behavior of marketing professionals?

Top Management ETHICAL CULTURE • encouraging ethical behavior • discouraging unethical behavior • Social consensus

How does a strong U.S. dollar affect imports and exports?

Traditionally, a strong dollar has been a badge of honor for America. However, a strong dollar swells the trade deficit, making imports less expensive and exports more expensive for foreign buyers.

teamwork

collaborative efforts of people to accomplish common objectives

Consumers' Incomes

Unemployment rates are dropping and the average income of the general population is rising. • education highly emphasized • technology

Which is more fluid and changing, business demand or consumer demand?

Unlike consumer demand, business demand is derived, inelastic, joint, and fluctuating. Demand for consumer products is quite different from demand in the business market.

American values

VALUES • self-sufficiency • upward mobility: success to those who are educated, hard-working, and ethical • work ethic • equality • achievement orientation: creating goals, organization, results • selfless • Environment concerned INFLUENCERS • politicians • celebrities • marketers • family • religion • teachers • self

What are features of merchandise that a consumer typically considers?

Vale of merchandise • net worth = benefits - cost BENEFITS • durability • convenience • prestige/status • ease of use • function • novelty • unique/normal • affection, happiness, a sense of belonging • relief • flattery, charisma influence COST • price • time • image • effort • work • convenience • opportunity

Hispanics

With a population of more than 58 M, they make up the largest U.S. minority. • 60% are Mexican • 41% English dominant • 40% claim to be bilingual • spend the most time watching videos • family, music, food SPENDING • consumer packaged goods • likely to share the same product brands

straight rebuy

a business buying situation in which the buyer routinely reorders something without any modifications

modified rebuy

a business buying situation in which the buyer wants to modify product specifications, prices, terms, or suppliers • subsequent purchases, as the two parties are familiar with each other and credibility has been established

multinational corporation (MNC) (transnational corporation)

a business that's heavily engaged in international trade, beyond exporting and importing • headquarters in one country and production facilities in one or more other countries DEVELOPMENT STAGES 1) companies operate in one country and sell into others 2) sets up foreign subsidiaries to handle sales in one country 3) operate an entire line of business in another country 4) internet based control and management

Corporate social responsibility (CSR)

a business's concern for society's welfare

virtue

a character trait valued as being good • self-discipline, friendliness, caring, courage, compassion, trust, responsibility, honesty, determination, enthusiasm, and humility • Galatians 5:22-23

Ansoff's Strategic Opportunity Matrix

a collection of the following marketing models arranged as a matrix: • market penetration • market development • product development • diversification

marketing mix

a combination of factors that can be controlled by a company to influence consumers to purchase its products 4 P's 1) Product 2) Price 3) Place (distribution) 4) Promotion

market share

a company's product sales as a percentage of total sales for that industry

Customer Relationship Management (CRM)

a company-wide business strategy designed to optimize profitability, revenue, and customer satisfaction by focusing on highly defined and precise customer groups

purchasing power

a comparison of income versus the relative cost of living

sustainable competitive advantage

a competitive advantage that cannot be successfully copied or stolen by the competition • prolonged benefits • maintained

strategic alliance (strategic partnership)

a cooperative agreement between business firms • licensing or distribution agreements • joint ventures • research and development • consortia • partnerships

trade war

a cycle of increasing trade restrictions Historically, when one country raises tariffs to protect domestic industries, other countries retaliate, which causes the initial country to raise other tariffs—and escalation continues.

outsourcing

a decision by a corporation to depend on independent suppliers, usually abroad from the United States • cost-saving • hurts United States industry

North American Industry Classification System (NAICS)

a detailed numbering system developed by the United States, Canada, and Mexico to classify North American business establishments by their main production processes • number, size, and geographic dispersion of firms • market potential estimates, market share estimates, and sales forecasts • identifying potential new customers • pronounced nakes

Food and Drug Administration (FDA)

a federal agency charged with enforcing regulations against selling and distributing adulterated, misbranded, or hazardous food and drug products

Federal Trade Commission (FTC)

a federal agency established in 1914 to investigate and stop unfair business practices

Relationship commitment

a firm's belief that an ongoing relationship with another firm is so important that the relationship warrants maximum efforts at maintaining it indefinitely

B Corporation

a for-profit business that explicitly seeks to blend its social objectives with its financial goals • certified by B Labs

countertrade

a form of trade in which all or part of the payment for goods or services is in the form of other goods or services

Group of Twenty (G-20)

a forum for international economic development that promotes discussion between industrial and emerging-market countries on key issues related to global economic stability

Dominican Republic Central America Free Trade Agreement (CAFTA-DR)

a free-trade agreement instituted in 2005 that includes Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the United States

Consumer Product Safety Commission

a governmental agency responsible for setting and monitoring safety standards for all consumer products

evoked set (consideration set)

a group of brands resulting from an information search from which a buyer can choose • the consumers then narrows the choices down using preferences (price, favorites, availability, etc.) • EX: John want chocolate. EVOKED SETS - Snickers - Reece's - Milky Way John can only afford Milky Way and Snickers. He prefers Milky Way over Snickers. Therefore he chooses Milky Way.

social class

a group of people with similar backgrounds, incomes, and ways of living

aspirational reference group

a group that someone would like to join • non-aspirational: a group that someone would not like to join; takes actions to avoid

code of ethics

a guideline to help marketing managers and other employees make better decisions • improves internal controls • avoids confusion • standardized • consensus

Foreign Corrupt Practices Act (FCPA)

a law that prohibits U.S. corporations from making illegal payments to public officials of foreign governments to obtain business rights or to enhance their business dealings in those countries

stimulus discrimination

a learned ability to differentiate among similar products

Product development

a marketing strategy focusing on the creation of new products for established customers rather than new customers

Market development

a marketing strategy meant to attract new customers to already existing products

Market penetration

a marketing strategy meant to increase market share among already-established customers rather than new customers • EX: JCPenny partnered with InStyle (a fashion magazine) to offer their [JCPenny's] customers revamped Salons.

Diversification

a marketing strategy of increasing sales by introducing new products to new customers

tweens

a marketing term used to describe children aged 8 to 14 • 20 M population • high purchasing power ($200 B/ year) • accesses great amounts of information • 41% own a mobile device

Cost of Living Index

a measure of the change in the amount of money that people need to spend to achieve a given standard of living • groceries • transportation • utilities • health care • expenses

Inflation

a measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year • inflation rate

General Electric Model

a model for measuring the market attractiveness and company strength of a company • Market attractiveness: How versatile, useful, and desirable is the market to the population? • Company strength (business position): How strong is a company compared to its other competitors within the same market?

pyramid of corporate social responsibility

a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure RESPONSIBILITIES HEICHARCHY • Top level: Philanthropic • 2nd: Ethical • 3rd: Legal • Bottom: Economic

keiretsu

a network of interlocking corporate affiliates • Japanese term

Brand extensions

a new product sold with the same brand name as a strong existing brand

connected self-schema

a perspective whereby a consumer sees himself or herself as an integral part of a group • "I am buying this for others and possibly myself." • advertisements that appeal to connected self-schema are more often successful.

separated self-schema

a perspective whereby a consumer sees himself or herself as distinct and separate from others • "I am buying this for myself." • advertisements that appeal to connected self-schema are more often successful.

market orientation

a philosophy that focuses on the customer's decision to purchase a product • customer orientated • customer satisfaction • synonymous with the marketing concept • assumes that a sale does not depend on an aggressive sales force • targeted towards specific groups

Product Orientation (Field of Dreams Orientation)

a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the marketplace • focus on producing inventory/services

product differentiation

a positioning strategy of distinguishing products from those of competitors • "doctors recommend this brand the most"

Selective distortion

a process whereby a consumer changes or distorts information that conflicts with his or her feelings or beliefs • cognitive bias

selective exposure

a process whereby a consumer notices certain stimuli and ignores others • attention grabbing • relevant • triggers

Selective retention

a process whereby a consumer remembers only that information that supports his or her personal beliefs

consumer product

a product bought by consumers for personal consumption

non-marketing-controlled information source

a product information source that is not associated with advertising or promotion • word of mouth • reputation • testing (product experience) • reviews • social media

marketing-controlled information source

a product information source that originates with marketers promoting the product • advertising • social media • promotion • news/TV/magazines • radio • sales promotions (contests, displays, premiums)

business product (industrial product)

a product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers

shopping bots

a program that searches the Web for the best price for a particular item • mega bots • no emotional component • 5Gifts4Her, Waylo, PenneyCat, Magic, Kayak, Snaptravel, Hipmunk, and PricingCentral

Personal selling

a purchase situation involving a personal, paid-for communication between two people in an attempt to influence each other

secondary membership group

a reference group with which people associate less consistently and more formally than a primary membership group, such as a club, professional group, or religious group

primary membership group

a reference group with which people interact regularly in an informal, face-to-face manner, such as family, friends, and coworkers

raw material

a resource that can be used to make a product

Tying Contract

a seller of one good requires a buyer to purchase other goods as part of the deal

churning

a significant mass of customers switching brands • destroys loyalty

new buy

a situation requiring the purchase of a product for the first time

nudge

a small intervention that can change a person's behavior • Putting fruit at eye level in a restaurant.

mission statement

a statement of the organization's purpose

Mission Statement

a statement of the organization's purpose - what it wants to accomplish in the larger environment

Marketing Objective

a statement of what is to be accomplished through marketing activities CRITERIA They must be: • realistic • measurable • time specific • compared to a bench mark • EX: "to increase sales of Purina brand cat food between January 1, 2020, and December 31, 2020, by 15 percent, compared to 2019 sales of $300 million."

relationship marketing

a strategy that focuses on keeping and improving relationships with current customers • loyalty • nostalgia

strategic business units (SBU)

a subgroup of a single business or collection of related businesses within the larger organization with distinct missions and a specific market • return rates on investments • independent control and resources

floating exchange rates

a system in which prices of different currencies fluctuate based on the demand for each currency

target market

a targeted demographic of which a business designs and directs marketing mixes towards • needs of targets • mutually valuable exchanges

marketing audit

a thorough, systematic, periodic evaluation of the objectives, strategies, structure, and performance of the marketing organization Comprehensive: The marketing audit covers all the major marketing issues facing an organization—not just trouble spots. Systematic: The marketing audit takes place in an orderly sequence and covers the organization's marketing environment, internal marketing system, and specific marketing activities. The diagnosis is followed by an action plan with both short-run and long-run proposals for improving overall marketing effectiveness. Independent: The marketing audit is normally conducted by an inside or outside party that is independent enough to have top management's confidence and has the ability to be objective. Periodic: The marketing audit should be carried out on a regular schedule instead of only in a crisis. Whether it seems successful or is in deep trouble, any organization can benefit greatly from such an audit.

United States-Mexico-Canada Agreement (USMCA)

a trade agreement among the United States, Canada, and Mexico that replaced NAFTA REVISIONS • Country of Origin Rule • better Labor Provisions • U.S. Farmers Gain More Access to the Canadian Dairy Market • Intellectual Property Protections and Digital Trade Provisions • a Special Dispute Mechanism

Uruguay Round of Negotiations

a trade agreement to dramatically lower trade barriers worldwide; created the World Trade Organization

Act Utilitarianism

a utilitarian theory asserting that the moral action is the one that directly produces the best balance of morality over immorality • disregards the law • fairness

Rule Utilitarianism

a utilitarian theory asserting that the morally correct action is the one described by preset rules or principles • justice • principle

jilting effect

anticipation of receiving a highly desirable option only to have it become inaccessible

sales orientation

based on the belief that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits • lack of understanding of the needs and wants of the marketplace • targeted towards all consumers rather than a specific group; large volume of sales • making sales in this perspective is more valuable than the relationships with customers - promotion - product - pricing - distribution/location

principle of comparative advantage

belief that each country should specialize in the products or services that it can produce most readily and cheaply and trade those products or services for goods and services that foreign countries can produce most readily and cheaply

Traditional economic theory

belief that globalization causes competition to drive down prices and increase product and service quality

motive

cause for action

Harmonized Tariff Schedule (HTS) (HS)

classification scheme consisting of labeling a product with a 7 to 10 digit code used to classify and define internationally traded goods required by many nations to determine tariffs on imported goods

content marketing (branded content)

creating or providing useful information and product use solutions to potential customers • valuable, relevant, and consistent • videos, podcasts, webinars, blogs, etc.

harvest time

critical time generally spanning from August to September for farmers to optimally harvest crops

Depreciation

currency lessening in value

customer loyalty

customers purchasing from the same merchant • trust • ethics • loyalty even when competition seems to offer better products

committed loyalty

customers with an intense and involved relationship with the brand, even if they are dissatisfied with the product itself • emotional • more than just the function of product is considered "I can't imagine living without this."

customer satisfaction

customers' evaluation of a good or service in terms of whether it has met their needs and expectations

Robinson-Patman Act (1936)

declares it unlawful to discriminate in prices charged to different purchasers of the same product, where the effect may substantially lessen competition or help to create a monopoly

Sherman Act of 1890

declares monopolizing a market, cartels, and other collusive arrangements illegal

on-demand marketing

delivering relevant experiences, integrated across both physical and virtual environments, throughout the consumer's decision and buying process • convenient • quick • technology • specific, personalized • easy

research and development (R&D)

department of companies intended to be an investment for the sake of basic and applied research • essential for competition and innvoation

Marketing planning

designing activities relating to marketing objectives and the changing marketing environment

Green Marketing

development and marketing of products designed to improve or minimize negative effects on the environment • recycling

Innovation Matrix

diagram conveying that as a company moves away from its core capabilities, it traverses a range of change and innovation rather than choosing one of the four sectors in Ansoff's matrix • Continuum rather than a distinct option • conflicts with Ansoff's matrix COMPONENTS • Core Innovation • Adjacent Innovation • Transformational Innovation

experience curves

diagram that describes a general rule that the more items are manufactured, the cheaper that item's price will be • rarity

Conversions

digital actions that an online consumer takes to facilitate business with a company • downloading • purchasing • Each of these metrics affects the return on investment.

Engagement

digital interactions between a brand and the audience

per capita

dividing a value by the number of people in a population • Per Capita GDP = GDP of country / # of people

protectionism

economic policy of shielding an economy from imports • tariffs • quotas

utilitarian ethical theory

ethical theory about predicting consequences of actions; the choice that yields the greatest benefit to the most people is the choice that is ethically correct TYPES • Act • Rule

casuist ethical theory

ethical theory in which one compares a current ethical dilemma with examples of similar ethical dilemmas and their outcomes • innovation • growth • experience

Stakeholder Theory

ethical theory stating that social responsibility is paying attention to the interest of every affected stakeholder in every aspect of a firm's operation • society • consumers • business

deontological theory

ethical theory that states that people should adhere to obligations and duties when analyzing an ethical dilemma • always keep promises • follows the law • consistent decisions

control

evaluating marketing results in light of the plan's objectives and for correcting actions that do not help the organization reach those objectives within budget guidelines

global competition

exists when firms originate, produce, and market their products and services worldwide • In the past, global competition for U.S. brands was only a threat when the prices were very low, but not quality foreign products are emphasized.

greenwashing

exploiting a consumer by disingenuously marketing products or services as environmentally friendly, with the goal of gaining public approval and sales • technically meeting the requirements for being considered green

Journey innovation

extends customer interactions to new sources of value • related products, partnered businesses • mining data

Federal Legislation

federal laws that regulate competitive environment, pricing practices, and control false advertising

balance of payments

figure that conveys the difference between a country's total payments to other countries and its total receipts from other countries INCLUDES • balance of imports and exports (balance of trade) • long-term investments of overseas plants and equipment • government loans • gifts/foreign aid • military expenditures • deposits/withdrawals from foreign banks

component parts

finished items ready for assembly or products that need very little processing before becoming part of some other product

problem child (question mark)

in the portfolio matrix, a business unit that shows rapid growth yet poor market shares

point-of-purchase displays

in-store displays and signs

Product Strategies

includes not only the physical unit but also its package, warranty, after-sale service, brand name, company image, value, and many other factors

opinion leaders

individuals who exert direct or indirect social influence over others

Demand-Pull Inflation

inflation caused by an excess of demand for a product at an existing price level

Cost-Push Inflation

inflation caused by prices rise due to an increase in the cost of production

free trade

international trade that's free of government interference • no restrictions

Foreign Direct Investment (FDI)

investment made by a foreign company in the economy of another country • establishing business operations in a foreign country • acquiring business assets in a foreign country

contextual interaction

knowledge about where a customer is in the consumer decision journey is used to deliver them to the next set of interactions

major equipment (installations)

large tools and machines used for production purposes • large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings

Exchange control

law forcing companies earning foreign exchange to sell it to a control agency (exchange market) in order to have the foreign proceeds converted to a usable, native form; the regulation of a country's currency exchange rate

quotas

laws that place maximum limits on the number of people or items that can immigrate to a country each year

environmental scanning

learning the information about the external environment that may affect the future of an organization or the implementation of a marketing plan

enduring involvement

long-term interest in an offering, activity, or decision • maintaining lifestyle purchases • long term

strategic planning

maintaining the organization's objectives and resources and the evolving market opportunities • long-term • implementation

Resellers

marketing intermediaries that resell manufactured products without significantly altering their form • Coca-Cola sells their product to Kroger, who resells it again.

no-frills

merchandise that doesn't possess nicer, extra, fancy features or services; only the basics that satisfy the intended function

ethics

moral principles or values that govern an individual or a group • situation specific and time oriented

Post-purchase letters

notes sent by manufacturers featuring cognitive dissonance-reducing statements in instruction booklets intended to help customers feel at ease with their purchase • Notes are also slipped with the package itself congratulating the buyer on their decision.

market grouping (common trade alliance)

occurs when several countries agree to work together to form a common trade area that enhances trade opportunities

decision maker

one who makes the final decision on whether to buy a product

purchaser

one who spends their money to purchase a product

initiators

one who suggest, initiate, or plant the seed for the purchase process

influencers

one whose opinions concerning a potential purchase are valued • children

limited edition

only a small number of a type of products are made, after which the plate is destroyed • designed to encourage a "get it now or never" mentality

Baby Boomers

people born between 1946 and 1964 • 75 M people • 77.4 years life expectancy • retired SPENDING • 77% prescription drug sales • 80% vacation traveling • 41% of new car purchases • 1/3 of all movie ticket sales • pets • full service restaurants preferred over quick-service restaurants INFLUENCED BY • word of mouth • sales representatives • traditional ads • Facebook • hate the terms "senior", "elderly", and "aged"

Generation X

people born between 1965 and 1978 (65 M people) • 1/2 are divorced or separated • were latch-key children • independent • resilient • adaptable • optimistic SPENDING • greatest average income • frugal, value seeking • seeks financial independence • wants to own homes and upgrade estate • likely to keep working after retirement ($35,000 retirement average) • higher levels of credit card debt • education and knowledge focused • quick-service restaurants preferred over full-service restaurants

Generation Z (Gen Z) (Digital Natives)

people born between 1995 and 2010 • 67 M consumers INTERNET • 95% own a smartphone • 45% are online frequently • poorer Gen Z's (households earning less than $30,00/year) prefer Facebook • 24% of income spent on food • spends money on beauty products and videogames • heavily influenced by online CULTURE • liberal • multicultural • law-abiding • money-making • competitive • less interested in owning a business

unplanned purchase

people buying on impulse without specific planning ENCOURAGED BY • sale • promotion • coupons • pampering

thought leaders

people or firms whom an industry or a consumer group recognize for contributing a new way of thinking and original perspectives to their field

shopping involvement

personal relevance of shopping activities • people who enjoy shopping as an activity in of itself • social activity • atmosphere

multiplier effect (accelerator principle)

phenomenon in which a small increase or decrease in consumer demand can produce a much larger change in demand for the facilities and equipment needed to make the consumer product

socialization process

process of how cultural values and norms are passed down to children • marketers target generation - especially youth

implementation

process of turning a marketing plan into action assignments designed to accomplish said purposes

learning

process that creates changes in behavior, immediate or expected, through experience and practice • Experiential learning • Conceptual learning

Consumer behavior

processes a consumer uses to make purchasing decisions and use and disposal of purchased goods or services • internal/external influences • function

global marketing standardization

production of uniform products that can be sold uniformly and globally

processed materials

products used directly in manufacturing other products • akin to raw materials, except artificial

Herbert George (H.G.) Wells

prolific English writer of many genres, writing dozens of novels, short stories, and works of social commentary, history, satire, biography and autobiography • 1866-1946 "Adapt or Perish, now as ever, is nature's inexorable imperative."

advertisement (ad) (advert)

promotion of a product in the form of a public medium • target market • personalized • comprehensive • informative • persuasive • benefits / advantages

basic research

pure science that aims to increase the scientific knowledge base without specifically being meant to solve any specific problems • applied research: such knowledge is utilized to solve problems

relative market share

ratio of a company's market shares by its greatest competitor's market shares • EX: If a firm has a 50% shares and the competitor has 5%, the ratio is 10:1.

showrooming

the practice of examining merchandise in a physical retail location without purchasing it, and then shopping online for a better deal on the same item

Clayton Act of 1914

reinforcement of the Sherman Act, outlawing certain anticompetitive practices not prohibited by the Sherman Act, including price discrimination, tying contracts, exclusive dealing, interlocking directorates, and buying the corporate stock of a competitor

Interdependence

relationships between competitors within an industry in which they rely on one another for resources, goods, or services

Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPATPP)

renaming of the Trans-Pacific Partnership (TPP) after Trump resigned from the organization • Australia, Brunei, Darussalam, Canada, Chile, Japan, Mexico, Malaysia, New Zealand, Peru, Singapore, and Vietnam. • the Alliance already accounts for half of all South American exports

societal marketing orientation

satisfaction of both customer wants and needs and to meet organizational objectives and society's long-term best interests

applied research

scientific study that aims to solve practical problems, application of knowledge procured from basic research • new or improved products

external information search

seeking information in the outside environment about a potential purchase, including the product itself and competitors • more extensive as price, time, significance, rarity, interest, or energy consumption increases • non-marketing controlled • marketing-controlled

Exporting

selling domestically produced products to other countries • China: largest exporter

royalty

share of earnings given as payment, typically as payment for licensing

The (longer/shorter) the length of time between the action and the onset of negative consequences, the more likely that marketers will perceive a problem as unethical.

shorter

behavioral norms

standards of proper or acceptable behavior

Cost Competative Advantage

state of being the low-cost competitor in an industry while maintaining satisfactory profit margins • experience curves • efficient labor • No-frills goods and services • Government subsidies • Product design • reengineering • product innovations • new service delivery methods

multidomestic strategy

strategy of multinational firms enabling individual subsidiaries to compete independently in domestic markets • A conglomerate's retailers of various locations make tailored products for a specific culture of customers at a specific geographical area

marketing strategy

strategy(s) of ideally creating customer value and achieve profitable customer relationships • one or more target markets • use of marketing mix

value

subjective assessment of benefits relative to costs • net worth • tangible, measurable qualities as well as intangible

automated reordering

system available to consumers that automatically repurchases a product, service, or subscription • Firms implement to keep customers in the loyalty loop • can cause customer loss

Situation (SWOT) Analysis

taking stock of where the firm or product has been recently, where it is now, and where it is headed in terms of the organization's marketing plans and the external forces and trends affecting it ACRONYM S) internal strengths W) internal weaknesses O) external opportunities T) threats • adaptability • environment • competition

tariffs

taxes on imports or exports; meant to discourage free trade or to artificially generate income

contact centers

telephone operations that consumers can consult to troubleshoot product problems • meant to reduce cognitive dissonance and improve customer loyalty • can be very impactful • critical medium of communication between the marketer and the consumer

situational involvement

temporary interest in some imminent purchase situation • EX: Employee might routinely buy low-priced brands of liquor and wine. When the boss visits, however, the consumer might make a high-involvement decision and buy more prestigious brands.

comparative advantage

the ability to produce a good at a lower opportunity cost than another producer

absolute advantage

the ability to produce a good using fewer inputs than other producers • lowest-costing goods

awareness (exposure)

the amount of attention that social media attracts

involvement

the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior

product quality

the characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs • functional • reliable • durable • easy-maintenance • user-friendly • ease of use • Brands • price • social/environmental effects

marketing mix

the combination of product, place,a promotion, and price strategies to yield the greatest sales Product, Price, Place (distribution), Promotion

niche competitive advantage

the competitive advantage achieved when a firm seeks to target and effectively serve a small segment of the market

cause-related marketing

the cooperative marketing efforts between a for-profit firm and a nonprofit organization

cost of living

the cost of purchasing goods and services essential for survival, influenced by geography

social networking

the creation and maintenance of personal and business relationships especially online

derived demand

the demand for business products that's ultimately derived from the demand for consumer goods

Joint demand

the demand for two or more items used together in a final product • EX: Apple operating systems exists as long as there is a demand for Apple computers. Sales of the two products are directly linked.

market opportunity analysis (MOA)

the description and estimation of the size and sales potential of market segments that are of interest to the firm and the assessment of key competitors in these market segments STRATEGIES • appealing to the entire market with one marketing mix • concentrating on one segment • appealing to multiple market segments using multiple marketing mixes

want-got gap

the difference (gap) between a consumer's actual, current state and their desired states • needs recognition • exploited by marketers

balance of trade

the difference between the value of a country's exports and the value of its imports over a given period

big data

the discovery, interpretation, and communication of meaningful patterns in data

boycott

the exclusion of all products from certain countries or companies

supply-chain efficiency

the extent to which a company's supply chain is focusing on minimizing procurement, production, and transportation costs • sometimes by reducing customer service

Laissez-faire

the ideal that government should play as small a role as possible in economic affairs • free market

aquisitions

the incorporation of one firm into another through purchase, one firm consumes another

Licensing

the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge • royalties

social control

the maintaining of behavioral norms and regulation of conflict

global vision

the managing and development of international marketing opportunities • global marketing strategies • dealing with threats • foreign competitors

business (industrial) (business-to-business) (B-to-B) (B2B) marketing

the marketing of goods and services for purposes other than personal consumption

threshold level of perception

the minimum difference in a stimulus that the consumer will notice

marketing myopia

the mistake of paying more attention to the specific products a company offers than to the benefits and experiences produced by these products • narrow, short-term thinking

extensive decision making

the most complex type of consumer decision making in which the consumer buys an unfamiliar, expensive product or an infrequently bought item; requires much time for seeking information • high customer involvement • greatest cognitive dissonance

inflation rate

the percentage increase in the price level from one year to the next • EX: an inflation rate of 5% means you will need 5% more money than you would have needed last year to buy the same product • NOTE: If pay raises are matching the rate of inflation, then employees will be no worse off in terms of the immediate purchasing power of their salaries.

market shares

the percentages of the total sales volume generated a company by all companies that compete in a given market in a given time • EX: If a company sold $100 M in tractors last year domestically, and the total amount of tractors sold in the U.S. was $200 M, the company's U.S. market share for tractors would be 50%.

product involvement

the personal relevance of a particular product category

component lifestyles

the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle

Harvesting

the process of a company going about retaining products while simultaneously reduces marketing costs • increasing short-term cash returns • not as concerned about the long-term • not often applied to stars • Often used with Cash Cows, since there is high profit but low prospects of future growth

planning

the process of anticipating future events and determining strategies to achieve organizational objectives in the future

perception

the process of organizing and interpreting sensory information, enabling us to recognize meaningful objects and events • subject to manipulation

marketing

the processes for creating, communicating, delivering, and exchanging offers that have value for customers, clients, partners, and society

internal information search

the recalling of information stored in memory about a potential purchase • past experiences of product, reminders, conversations

customer value

the relationship between benefits and the sacrifice necessary to obtain those benefits COMPONENTS • function • emotional • Life-changing • Social/societal Impact

morals

the rules people develop as a result of cultural values and norms • good vs. evil

dumping

the sale of an exported product at a price lower than that charged for the same or similar product in the native market of the exporter usually in an effort to gain market share of other nations • considered to be unfair and detrimental to other countries PURPOSES (1) attempt to increase an overseas market share (2) temporarily distributing products in overseas markets to offset slack demand in the home market (3) lowering unit costs by exploiting large-scale production (4) attempting to maintain stable prices during periods of exchange-rate fluctuations

demography

the scientific study of population characteristics • such as age, race and ethnicity, and location • Vital to Marketing

Divest

the stripping or remove a title or position of authority • Get rid of Dogs since they have low growth potential and low profit-making potential • Example: Starbucks divested its failing SBU Teavana.

training

the teaching of employees training in customer service and relationship building • public image is crucial

stimulus generalization

the tendency to respond to a stimulus that is only similar to the original conditioned stimulus with the conditioned response

promotional periods

the time in which a limited-event product is available for purchase

C-level executives

the top bosses • (CEO, CFO etc.) chief marketers that are highly entrusted with purchasing decisions and can be held accountable FEATURES • The ability to marshal resources • An understanding of the buyer's business goals • Responsiveness to requests • Willingness to be held accountable

exchange

the trade for obtaining a desired object from someone by offering something else in return CONDITIONS 1) at least two parties 2) Each party has something that might be of value to the other party. 3) Each party is capable of communication and delivery. 4) Each party is free to accept or reject the exchange offer. 5) Each party believes it is appropriate or desirable to deal with the other party • Marketing can still occur when setting up an exchange even when the exchange doesn't take place.

routine response behavior

the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time • nudge required to change their shopping habits • low customer involvement • lowest cognitive dissonance

limited decision making

the type of decision making that requires a moderate amount of time gathering information and deliberating about an unfamiliar brand in a familiar product category • evaluation of competition

competitive advantage

the unique features of a company and its products that are perceived by the target market as significant and superior to other competition TYPES • cost • product/service differentiation • niche

consumer

the user of a product; doesn't have to be the purchaser

perceived value

the value a consumer expects to obtain from a purchase

Millennials (Generation Y)

the ~81 M U.S. people born between 1981 and 1996 • family oriented • significant income spent on baby products • 59% single and not married • delaying marriages • $1.4 T spending • 62% are "very happy" • 65% feel like their life is meaningful • more social and nicer • less technology oriented and more personal • quick-service restaurants preferred over full-service restaurants

original equipment manufacturers (OEMs)

those that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers

inshoring

trend of returning production jobs to the United States CAUSES • shipping costs • restoration of U.S. industry • proximity

emotional involvement

type of deep personal interest that evokes strongly felt feelings simply from the thoughts or behavior associated with some object or activity • sports

product/service differentiation competitive advantage

unique features of a product being sold that offer a competitive advantage for the seller • dealer networks • Brand Names • product reliability • exclusive services

Export agents

unite buyers and sellers and collect a commission for arranging sales; an intermediary who acts like a manufacturer's agent for the exporter • the export agent lives in the foreign market • helps with international financing, shipping, etc.

global marketing

universal marketing that targets the world as a whole • internet • foreign companies • global vision

cognitive dissonance

unpleasant mental experience of tension resulting from two conflicting thoughts or beliefs • Consumers seek justification of their purchases to reduce cognitive dissonance.

Proactive personalization

use of information to customize the customer experience

digital marketing

uses digital media to develop communications and exchanges with customers

capital intensive

using more capital than labor in the production process • reliance on technology on innovation rather than physical labor • lack of jobs but more convenience and higher standard of living

Gross National Income (GNI)

value of the output of goods and services produced in a country in a year, including money that leaves and enters the country GNI = GDP + income received from other countries (generally interest and dividends)

Psychological Ownership

when individuals feel that they have some control and perceived rights in the organization, they are more likely to be committed to the organization • consumers feel a sense of ownership of a product

What percent of the population of U.S. adults are thought to be single?

~45% of U.S. adults are thought to be single. Single • $52,900 • 58% own a home • spends more money on average than a married person Married • $61,000 • 90% own a home • saves more money than the average single person

African Americans

• 13 percent of the U.S. population • pop culture and music oriented • Median income is $20,000 less than all other families in America • religious (77% Christian)

What are three important criteria business buyers use to evaluate products and suppliers?

• Quality • Service • Price

What influences a customer's decision to buy something?

• convenience • value: key to larger profits and greater market share • features • status • personalization • social relativism • concerns • ethics, morals, virtues

factors influencing buying

• final decision • value • timing • product/brand • place (retailer, specific retailer, online, in-store) • method of payment

What kind of ads are the most valuable for low involvement products?

• in store promotions • targeted mobile ads • signs / in-store displays • package design • eye-catching, attention-getter • coupons • deals (2-FOR-1 COST!) (daily specials) • limited-event items

Psychological Influences on Consumer Buying Decisions

• perception • motivation • learning

Marketing Management Philosophies

• production orientation • sales orientation • market orientation • societal marketing orientation

Trust

• reliability and integrity • A perceived breakdown in commitment by one of the parties often leads to a breakdown in the relationship.

Methods of customer service

• telephone channels • e-mail • live chat • social media • mobile • self-service Consumers are less pleased when they have to use multiple mediums and spend a lot of time. The company also loses money sustaining a redundant and confusing system.

What are causes of inflation?

• when prices rise due to increases in production costs, such as raw materials and wages • a surge in demand for products and services, since consumers are willing to pay more for the product • periods of economic growth • Some companies reap the rewards of inflation if they can charge more for their products as a result of the high demand for their goods.