Marketing Final
E-Marketplaces
E-marketplaces are online trading communities that bring together buyers and supplier organizations to make possible the realtime exchange of information, money, products, and services.
Dumping
When a firm sells a product in a foreign country below its domestic price or below its actual cost
Joint Venture
When a foreign company and a local firm invest together to create a local business sharing ownership, control, and the profits of the new company.
primary data
facts and figures that are newly collected for a project
Secondary and primary data
facts and figures that have already been recorded before the project at hand
Loss leader pricing
for a special promotion retail store deliberately sell a product below its customary price to attract attention to it. the purpose of this is not to increase sales but to attract customers in hopes they will buy other products as well.
Marketing reasons for New Product Failures
insignificant point difference. no economical access to buyers. incomplete market and product protocol before product development starts. not satisfying customer needs on critical factors. bad timing. Poor product quality. Too little market attractiveness. Poor execution of the marketing mix: brand name, package, price Promotion distribution
Market segmentation
involves aggregating prospective buyers into groups that 1. have common needs and 2. will respond similarly to a marketing action
Product Modification
involves altering a product's characteristic, such as its quality performance or appearance to increase the products value to customers and increase sales.
Test Marketing
involves offering a product for sale on a limited basis in a defined area. this test is done to determine whether consumers will actually buy the product and to try different ways of marketing it.
Nondurable goods
is an item consumed in one or a few uses such as food products and fuel
psycho graphic segmentation
is based on some subjective mental or emotion attributes, aspirations, or needs of prospective customers
Elastic demand
is one in which a slight decrease in price results in a relatively large increase in demand or units sold
Fixed Cost
is the assume of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold. examples are rent executive salaries and insurance.
market share
is the ration of the fim's sales revenue or unit sals to those of the industry
Evaluating the decision process used
what the marketing research and analysis used to develop the recommendations effective? was it flawed? could ti be improved for similar situations in the future?
survival
when profit, sales and market shares aren't the most important
Eight P's of services marketing
Product, productivity, price, place promotion, people, physical environment, Process
General Pricing approach
1. Demand- oriented 2. Cost Oriented 3. Profit oriented 4. Competition oriented
criteria for selecting segments
1. market size 2. expected growth 3. competitive position 4. cost of reaching the segment 5. compatibly with the organization's objectives and resources
Benefits of brand equity
1. provides a competitive advantage 2. consumers are often willing to pay a higher price for a product with brand equity
Descriptive the steps taken in setting a final price
1. select an approximate price level as a starting point 2. set the list or quoted price, choosing between a one price policy or a flexible price policy 3. modify the list or quoted price by considering discounts, allowances and geographical adjustments
criteria for forming segments
1. simplicity and cost effectiveness of assigning potential buyers to segments. 2. potential for increased profit 3. Similarity of needs of potential buyers within a segment 4. Difference of needs of buyers among segments 5. Potential of a marketing action to reach a segment
Recognize the importance of branding and alternative branding strategies.
A basic decision in marketing products is branding, in which an organization uses a name, phrase, design, symbols, or a combination of these to identify its products and distinguish them from those of its competitors. Product managers recognize that brands offer more than product identification and a means to distinguish their products from competitors. Successful and established brands take on a brand personality and acquire brand equity—the added value a given brand name gives to a product beyond the functional benefits provided—that is crafted and nurtured by marketing programs that forge strong, favorable, and unique consumer associations with a brand. A good brand name should suggest the product benefits, be memorable, fit the company or product image, be free of legal restrictions, and be simple and emotional. Companies can and do employ several different branding strategies. With multiproduct branding, a company uses one name for all its products in a product class. A multibranding strategy involves giving each product a distinct name. A company uses private branding when it manufactures products but sells them under the brand name of a wholesaler or retailer. Finally, a company can employ mixed branding, where it markets products under its own name(s) and that of a reseller.
Explain what a demand curve is and the role of revenues in pricing decisions.
A demand curve is a graph relating the quantity sold and price, which shows the maximum number of units that will be sold at a given price. Three demand factors affect price: (a) consumer tastes, (b) price and availability of substitute products, and (c) consumer income. These demand factors determine consumers' willingness and ability to pay for goods and services. Assuming these demand factors remain unchanged, if the price of a product is lowered or raised, then the quantity demanded for it will increase or decrease, respectively. Three important forms of revenues impact a firm's pricing decisions: (a) total revenue, which is the total money received from the sale of a product; (b) average revenue, which is the average amount of money received for selling one unit of a product (which is simply the price of the unit); and (c) marginal revenue, which is the change in total revenue that results from producing and marketing one additional unit.
Describe the factors contributing to a new product's or service's success or failure.
A new product or service often fails for these marketing reasons: (a) insignificant points of difference, (b) incomplete market and product protocol before product development starts, (c) not satisfying customer needs on critical factors, (d) bad timing, (e) too little market attractiveness, (f) poor product quality, (g) poor execution of the marketing mix, and (h) no economical access to buyers.
Recognize the various terms that pertain to products and services.
A product is a good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers and is received in exchange for money or something else of value. A good has tangible attributes that a consumer's five senses can perceive and intangible ones such as warranties; a laptop computer is an example. Goods can also be divided into nondurable goods, which are consumed in one or a few uses, and durable goods, which usually last over many uses. Services are intangible activities or benefits that an organization provides to satisfy consumer needs in exchange for money or something else of value, such as an airline trip. An idea is a thought that leads to a product or action, such as eating healthier foods.
Gray market
A situation in which products are sold through unauthorized channels of distribution
examples or cultural symbols
Are superstitious about the number 13, and Japanese feel the same way about the number 4. Shi, the Japanese word for four is also the word for death. Thumbs-up is a positive sign in the united States. However, in Russia and Poland,this gesture has an offensive meaning when the palm of the hand is shown
Recognize the bases used to segment consumer and organizational markets.
Bases used to segment consumer markets include geographic, demographic, psychographic, and behavioral ones. Organizational markets use the same bases except for psychographic ones.a
Trends In World Trade
Both tariffs and quotas discourage world trade . as a result the major industrializes nations of the world formed the World trade organization. which is an institution that sets rules governing trade between its members through a panel of trade experts
Describe how various combinations of price, fixed cost, and unit variable cost affect a firm's break-even point.
Break-even analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output. The break-even point is the quantity at which total revenue and total cost are equal. Assuming no change in price, if the costs of a firm's product increase due to higher fixed costs (manufacturing or advertising) or variable costs (direct labor or materials), then its break-even point will be higher. And if total cost is unchanged, an increase in price will reduce the break-even point.
Explain how buying centers and buying situations influence organizational purchasing.
Buying centers and buying situations have an important influence on organizational purchasing. A buying center consists of a group of individuals who share common goals, risks, and knowledge important to a purchase decision. A buyer or purchasing manager is almost always a member of a buying center. However, other individuals may affect organizational purchasing due to their unique roles in a purchase decision. Five specific roles that a person may play in a buying center include users, influencers, buyers, deciders, and gatekeepers. The specific buying situation will influence the number of people and the different roles played in a buying center. For a routine reorder of an item—a straight rebuy situation—a purchasing manager or buyer will typically act alone in making a purchasing decision. When an organization is a first-time purchaser of a product or service—a new buy situation—a buying center is enlarged and all five roles in a buying center often emerge. A modified rebuy buying situation lies between these two extremes.
Identify the ways in which consumer and business products and services can be classified.
By type of user, the major distinctions are consumer products, which are products purchased by the ultimate consumer, and business products, which are products that assist in providing other products for resale. Consumer products can be broken down based on the effort involved in the purchase decision process, marketing mix attributes used in the purchase, and the frequency of purchase: (a) convenience products are items that consumers purchase frequently and with a minimum of shopping effort; (b) shopping products are items for which consumers compare several alternatives on selected criteria; (c) specialty products are items that consumers make special efforts to seek out and buy; and (d) unsought products are items that consumers do not either know about or initially want. Business products can be broken down into (a) components, which are items that become part of the final product, such as raw materials or parts, and (b) support products, which are items used to assist in producing other goods and services and include installations, accessory equipment, supplies, and industrial services. Services can be classified in terms of whether they are delivered by (a) people or equipment, (b) business firms or nonprofit organizations, or (c) government agencies. Firms can offer a range of products, which involve decisions regarding the product item, product line, and product mix.
Explain the distinction between standardization and customization when companies craft worldwide marketing programs.
Companies distinguish between standardization and customization when crafting worldwide marketing programs. Standardization means that all elements of the marketing program are the same across countries and cultures. Customization means that one or more elements of the marketing program are adapted to meet the needs or preferences of consumers in a particular country or culture. Global marketers apply a simple rule when crafting worldwide marketing programs: Standardize marketing programs whenever possible and customize them wherever necessary.
Name and describe the alternative approaches companies use to enter global markets.
Companies have four alternative approaches for entering global markets. These are exporting, licensing, joint venture, and direct investment. Exporting involves producing goods in one country and selling them in another country. Under licensing, a company offers the right to a trademark, patent, trade secret, or similarly valued items of intellectual property in return for a royalty or fee. In a joint venture, a foreign company and a local firm invest together to create a local business. Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.
Five-step marketing research approach
Define the problem Develope the research plan Collect relevant information Develope findings Take Marketing actions
Characteristics of Organizational Buying
Demand Characteristics Size Of the order of Purchase Number of potential buyers Organizational Buying objectives
Skimming Pricing
During inroduction, pricing can be either high or low, A high initial price may be used as part of a skimming strategy to help the company recover the cost of development as well as capitalize on the price insensitivity of early buyers
Number of Potential Buyers
Firms selling consumer products or services often try to reach thousands or millions of individuals or households. Firms selling to organizations are often restricted to far fewer buyers.
Explain the role of costs in pricing decisions.
Five important costs impact a firm's pricing decisions: (a) total cost, or total expenses, the sum of fixed cost and variable cost incurred by a firm in producing and marketing a product;(b) fixed cost, the sum of expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold; (c) variable cost, the sum of expenses of the firm that vary directly with the quantity of a product that is produced and sold; (d) unit variable cost, variable cost expressed on a per unit basis; and (e) marginal cost, the change in total cost that results from producing and marketing one additional unit of the product.
Identify the environmental forces that shape global marketing efforts
Four major trends have influenced the landscape of global marketing in the past decade. First, there has been a gradual decline of economic protectionism by individual countries, leading to a reduction in tariffs and quotas. Second, there is growing economic integration and free trade among nations, reflected in the creation of the European Union and the North American Free Trade Agreement. Third, there exists global competition among global companies for global consumers, resulting in firms adopting global marketing strategies and promoting global brands. And finally, a networked global marketspace has emerged using Internet technology as a tool for exchanging goods, services, and information on a global scale.
Explain the significance of "newness" in new products and services as it relates to the degree of consumer learning involved.
From the important perspective of the consumer, "newness" is often seen as the degree of learning that a consumer must engage in to use the product. With a continuous innovation, no new behaviors must be learned. With a dynamically continuous innovation, only minor behavioral changes are needed. With a discontinuous innovation, consumers must learn entirely new consumption patterns.
Four I's of services
Intangibility inconsistency inseparability inventory (idle production capacity - no demand)
Head-to-head positioning
Involves competing directly with competitors on similar product attributes in the same target market
Marketing research
Is the process of collecting and analyzing information in order to recommend actions
Identify ways that marketing executives manage a product's life cycle.
Marketing executives manage a product's life cycle three ways. First, they can modify the product itself by altering its characteristics, such as product quality, performance, or appearance. Second, they can modify the market by finding new customers for the product, increasing a product's use among existing customers, or creating new use situations for the product. Finally, they can reposition the product using any one or a combination of marketing mix elements. Four factors trigger a repositioning action. They include reacting to a competitor's position, reaching a new market, catching a rising trend, and changing the value offered to consumers.
Explain how marketing managers position products in the marketplace.
Marketing managers often locate competing products on two-dimensional perceptual maps to visualize the products in the minds of consumers. They then try to position new products or reposition existing products in this space to attain the maximum sales and profits.
Describe the five-step marketing research approach that leads to marketing actions.
Marketing researchers engage in a five-step decision-making process to collect information that will improve marketing decisions. The first step is to define the problem, which requires setting the research objectives and identifying possible marketing actions. The second step is to develop the research plan, which involves specifying the constraints, identifying data needed for marketing decisions, and determining how to collect the data. The third step is to collect the relevant information, which includes considering pertinent secondary data (both internal and external) and primary data (by observing and questioning consumers) as well as using information technology and data mining to trigger marketing actions. The fourth step is to develop findings from the marketing research data collected. This involves analyzing the data and presenting the findings of the research. The fifth and last step is to take marketing actions, which involves making and implementing the action recommendations.
Discuss the uses of observations, questionnaires, panels, experiments, and newer data collection methods.
Marketing researchers observe people in various ways, such as electronically using Nielsen people meters to measure TV viewing behavior or personally using mystery shoppers or ethnographic techniques. A recent electronic innovation is neuromarketing—using high-tech brain scanning to record the responses of a consumer's brain to marketing stimuli like packages or TV ads. Questionnaires involve asking people questions (a) in person using interviews or focus groups or (b) via a questionnaire using a telephone, fax, print, e-mail, or Internet survey. Panels involve a sample of consumers or stores that are repeatedly measured through time to see if their behaviors change. Experiments, such as test markets, involve measuring the effect of marketing variables such as price or advertising on sales. Collecting data from social networks like Facebook or Twitter is increasingly important because users can share their opinions about products and services with countless "friends" around the globe.
Describe three approaches to developing a company's sales forecast.
One approach uses the subjective judgments of the decision maker, such as direct or lost-horse forecasts. A direct forecast involves estimating the value to be forecast without any intervening steps. A lost-horse forecast starts with the last known value of the item being forecast, and then lists the factors that could affect the forecast, assesses whether they have a positive or negative impact, and makes the final forecast. Surveys of knowledgeable groups, a second method, involve obtaining information such as the intentions of potential buyers or estimates provided by the salesforce. Statistical methods involving extending a pattern observed in past data into the future are a third approach. The best-known statistical method is linear trend extrapolation.
Organizational buying objectives
Organizations buy products and services for one main reason: to help them achieve their objectives. For business firms the buying objective is usually to increase profits through reducing costs or increasing revenues.
Recognize the importance and nature of online buying in industrial, reseller, and government organizational markets.
Organizations dwarf consumers in terms of online transactions made and purchase volume. Online buying in organizational markets is popular for three reasons. First, organizational buyers depend on timely supplier information that describes product availability, technical specifications, application uses, price, and delivery schedules. This information can be conveyed quickly via Internet technology. Second, this technology substantially reduces buyer order processing costs. Third, business marketers have found that Internet technology can reduce marketing costs, particularly sales and advertising expense, and broaden their customer base. Two developments in online buying have been the creation of e-marketplaces and online auctions. E- marketplaces provide a technology trading platform and a centralized market for buyer-seller transactions and make possible the real-time exchange of information, money, products, and services. These e-marketplaces can be independent trading communities, such as PlasticsNet, or private exchanges, such as the Global Healthcare Exchange. Online traditional and reverse auctions represent a second major development. With traditional auctions, the highest-priced bidder "wins." Conversely, the lowest-priced bidder "wins" with reverse auctions.
Develop a market product grid to identify a target market and recommend resulting actions.
Organizations use five key criteria to segment markets, whose groupings appear in the rows of the market-product grid. Groups of related products appear in the columns. After estimating the size of market in each cell in the grid, they select the target market segments on which to focus. They then identify marketing mix actions—often in a marketing program—to reach the target market most efficiently.
Packaging
Packaging component of a product refers to any container in which it is offered for sale and on which label information is conveyed.
Describe the role of packaging, labeling, and warranties in the marketing of a product.
Packaging, labeling, and warranties play numerous roles in the marketing of a product. The packaging component of a product refers to any container in which it is offered for sale and on which label information is conveyed. Manufacturers, retailers, and consumers acknowledge that packaging and labeling provide communication, functional, and perceptual benefits. Contemporary packaging and labeling challenges include (a) the continuing need to connect with customers, (b) environmental concerns, (c) health, safety, and security issues, and (d) cost reduction. Warranties indicate the liability of the manufacturer for product deficiencies and are an important element of product and brand management.
Describe what price elasticity of demand means to a manager facing a pricing decision.
Price elasticity of demand measures the responsiveness of units of a product sold to a change in price, which is expressed as the percentage change in the quantity of a product demanded divided by the percentage change in price. Price elasticity is important to marketing managers because a change in price usually has an important effect on the number of units of the product sold and on total revenue.
Identify the elements that make up a price.
Price is the money or other considerations (such as barter)exchanged for the ownership or use of a good or service. Although price typically involves money, the amount exchanged is often different from the list or quoted price because of incentives (rebates, discounts, etc.), allowances (trade), and extra fees(finance charges, surcharges, etc.).
Recognize the objectives a firm has in setting prices and the constraints that restrict the range of prices a firm can charge.
Pricing objectives specify the role of price in a firm's marketing strategy and may include profit, sales revenue, market share, unit volume, survival, or some socially responsible price level. Pricing constraints that restrict a firm's pricing flexibility include demand, product newness, other products sold by the firm, production and marketing costs, cost of price changes, type of competitive market, and the prices of competitive substitutes.
Pricing Strategy
Pricing too low or too high can have dire consequences. Global companies also face many challenges in determining a pricing strategy as part of their world wide marketing effort. individual countries, even those with free trade agreements, may impose considerable competitive, political, and legal constrains on the pricing latitude of global companies.
Explain how marketing uses secondary and primary data.
Secondary data have already been recorded before the start of the project and consist of two parts: (a) internal secondary data, which originate from within the organization, such as sales reports and customer comments, and (b) external secondary data, which are created by other organizations, such as the U.S. Census Bureau (which provides data on the country's population, manufacturers, retailers, and so on) or business and trade publications (which provide data on industry trends, market size, etc.). Primary data are collected specifically for the project and are obtained by either observing or questioning people.
Product Extension
Selling virtually the same product in other countries is a product extension strategy. As a general rule, product extension seems to work best when the consumer market target for the product is alike across countries and cultures - that is , consumers share the same desires, needs, and uses for the product.
Products and services
Services are intangible activities or benefits that an organization provides to satisfy consumers' needs in exchange for money or something else of value. A product is a physical good and service
Describe the key characteristics of organizational buying that make it different from consumer buying.
Seven major characteristics of organizational buying make it different from consumer buying. These include demand characteristics, the size of the order or purchase, the number of potential buyers, buying objectives, buying criteria, buyer-seller relationships and supply partnerships, and multiple buying influences within organizations. The organizational buying process itself is more formalized, more individuals are involved, supplier capability is more important, and the postpurchase evaluation behavior often includes performance of the supplier and the item purchased.
Identify the five steps involved in segmenting and targeting markets.
Step 1 is to group potential buyers into segments. Buyers within a segment should have similar characteristics to each other and respond similarly to marketing actions like a new product or a lower price. Step 2 involves putting related products to be sold into meaningful groups. In step 3, organizations develop a market-product grid with estimated sizes of markets in each of the market-product cells of the resulting table. Step 4 involves selecting the target market segments on which the organization should focus. Step 5 involves taking marketing mix actions —often in the form of a marketing program—to reach the target market segments.
Pros and cons of joint venture
The advantages of this option are two fold. first one company may not have the necessary financial physical, or managerial resources to enter a foreign market alone the disadvantages arise when the two companies disagree about policies or courses of action for their joint venture or when government bureaucracy bogs down the effort
Brand name and Logo
The name should suggest the product benefits, the name should be memorable, distinctive and positve. the name should fit the company or product image, the name should have no legal or regulatory restrictions, the name should be simple
Explain the purposes of each step of the new-product process.
The new-product process consists of seven stages a firm uses to develop a salable good or service: (a) New-product strategy development involves defining the role for the new product within the firm's overall objectives. (b) Idea generation involves developing a pool of concepts from consumers, employees, basic R&D, and competitors to serve as candidates for new products. (c) Screening and evaluation involves evaluating new product ideas to eliminate those that are not feasible from a technical or consumer perspective. (d) Business analysis involves defining the features of the new product, developing the marketing strategy and marketing program to introduce it, and making a financial forecast. (e) Development involves not only producing a prototype product but also testing it in the lab and on consumers to see that it meets the standards set for it. (f) Market testing involves exposing actual products to prospective consumers under realistic purchasing conditions to see if they will buy the product. (g) Commercialization involves positioning and launching a product in full-scale production and sales with a specific marketing program.
Explain the product life-cycle concept.
The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline. Product sales growth and profitability differ at each stage, and marketing managers have marketing objectives and marketing mix strategies unique to each stage based on consumer behavior and competitive factors. In the introductory stage, the need is to establish primary demand, whereas the growth stage requires selective demand strategies. In the maturity stage, the need is to maintain market share; the decline stage necessitates a deletion or harvesting strategy. Some important aspects of product life cycles are (a) their length, (b) the shape of the sales curve, (c) how they vary by product classes and forms, and (d) the rate at which consumers adopt products.
Size of the order of purchase
The size of the purchase involved in organizational buying is typically much larger than that in consumer buying. The dollar value of a single purchase made by an organization often runs into thousands or millions of dollars.
Distinguish among industrial, reseller, and government organizational markets.
There are three different organizational markets: industrial, reseller, and government. Industrial firms in some way reprocess a product or service they buy before selling it to the next buyer. Resellers—wholesalers and retailers—buy physical products and resell them again without any reprocessing. Government agencies, at the federal, state, and local levels, buy goods and services for the constituents they serve. The North American Industry Classification System (NAICS) provides common industry definitions for Canada, Mexico, and the
Identify the reason for conducting marketing research.
To be successful, products must meet the wants and needs of potential customers. So marketing research reduces risk by providing the vital information to help marketing managers understand those wants and needs and translate them into marketing actions.
Explain how information technology and data mining lead to marketing actions.
Today's marketing managers are often overloaded with data—from internal sales and customer data to external data on TV viewing habits or grocery purchases from the scanner data at checkout counters. Information technology enables this massive amount of marketing data to be stored, accessed, and processed. The resulting databases can be queried using data mining to find statistical relationships useful for marketing decisions and actions.
Multiproduct branding
a company uses one name for all its products in a product class
80/20
a concept that suggests 80 percent of a firm's sales are obtained from 20 percent of its customers.
social responsibility
a firm may forgo higher profit on sales and follow a pricing objective that recognizes is obligations to customers and society in general.
Tariff
a government tax on goods or services entering a country, primarily serving to raise prices on imports
quota
a restriction placed on the amount of a product allowed to enter or leave a country
Focus groups
are informal sessions of 6 to 10 past, present, or prospective customers in which a discussion leader, or moderator, asks their opinions about the firm's and its competitors' products, how they use these products and special needs they have that these products don't address
Specialty
are items that the consumer makes a special effort to search out and buy
Discounts
are reductions fro list price that a seller gives a buyer as a reward for some activity of the buyer that is favorable to the seller. 1. quantity 2. seasonal 3. trade 4. cash
Intangibility
being intangible services can't be touched or seen before the purchase decision. instead services tend to be a performance rather than an object, which makes them more difficult for consumers to evaluate
Global Consumers
consumer groups living around the world who have similar needs or seek similar benefits from products or services
four types of consumer products
convenience shopping specialty unsought
Judgements of the decision maker
direct forecast - involves estimating the value to be frocast without any intervening steps last-horse forecast - involves starting with the last known value of the item being forecast, listing the factors that could affect the forecast, assessing whether they have a positive or negative impact, and making the final forecast.
Identify the major trends that have influenced world trade and global marketing
four major trends have influenced the landscape of global marketing in the past decade. First, there has been a gradual decline of economic protectionism by individual countries, leading to a reduction in tariffs and quotas. Second, there is growing economic integration and free trade among nations, reflected in the creation of the European union and the North American free trade agreement. third, there exists global competition among global companies for global consumer, resulting in firms adopting global marketing strategies and promoting global brands. And finally a networked global market space has emerged using internet technology as a tool for exchanging goods, services, and information on a global scale.
Sales
given that a firms profit is high enough for it to remain in business and objective may be to increase sales revenue, which will in turn lead to increases in market share and profit
Newness: Existing products
if a product is functionally different from existing products, it can be defined as new
Industrial Markets
in some way reprocess a product or service they buy before they selling it again to the next buyer
Organizational Buyers
industrial firms; resellers; government units those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale. For example, these organizations buy computers and telephone services for their own use. However, manufacturers buy raw materials and parts that they reprocess into the finished goods they sell. Wholesalers and retailers resell the goods they buy without reprocessing them. Organizational buyers include all buyers in a nation except ultimate consumers.
Profit
managing for long run profit , maximizing current profit, target return
Explain what market segmentation is and when to use it.
market segmentation involves aggregating prospective buyers into groups that a. have common needs b. will respond similarly to a marketing action organizations go to the expense of segmenting their markets when it increases their sales, profits, and ability to serve customers better.
Derived demand
means that the demand for industrial products and services is driven by, or derived from, demand for consumer products and services. Derived demand is based on expectations of future consumer demand
benefits of multiproduct branding
play off brand equity and you extension of product line
predatory pricing
predatory pricing is the practice of charging a very low price for a product with the intent of driving competitors out of business
Back Translation
re-translating a word or phrase back into the original language using a different interpreter to catch errors.
Mass customization
segments of one. each customer has unique needs and wants and desired special tender loving care
New Product Process
strategy Development, idea generation, screening and evaluation, business analysis, Development, market testing, commercialization
Buying center
several people in the organization participate in the buying process. The individuals in this group, called a buying center, share common goals, risks, and knowledge important to a purchase decision. For most large multistore chain resellers, such as Sears, 7-Eleven convenience stores, Target, or Safeway, the buying center is highly formalized and is called a buying committee. However, most industrial firms or government units use informal groups of people or call meetings to arrive at buying decisions. The importance of the buying center requires that a firm marketing to many industrial firms and government units understand the structure, the technical and business functions represented, and the behavior of these groups. 1 9 Four questions provide guidance in understanding the buying center in these organizations: (1) Which individuals are in the buying center for the product or service? (2) What is the
Price objectives
specify the role of price in an organizations marketing and strategic plans. Profit, sales, market shares, unit volume, survival, social responsibility
Surveys of knowledgeable groups
survey of buyers' intentions forecast- involves asking prospective customers if they are likely to buy the product during some future time period. sales-force survey forecasts- involves asking the firm's salespeople to estimate sales during the coming period
Brand equity
the added value a brand name gives to a product beyond the functional benefits provided
Organizational Buy Criteria
the objective attributes of the supplier's products and services and the capabilities of the supplier itself. These criteria serve the same purpose as the evaluative criteria used by consumers. The most commonly used criteria are (1) price, (2) ability to meet the quality specifications required for the item, (3) ability to meet required delivery schedules, (4) technical capability, (5) warranties and claim policies in the event of poor performance, (6) past performance on previous contracts, and (7) production facilities and capacity. Suppliers that meet or exceed these criteria create customer value.
Unit volume
the quantity productd or sold
Sales forecasting techniques
the total sales of a product that a firms expects to sell during a specified time period under specified conditions 1. judgements of the decision maker 2. surveys of knowledgeable groups 3. statistical methods
evaluate the results
there are two aspects of this evaluation process evaluating the decision itself evaluating the decision precess used
Cultural symbols
things that represent ideas or concepts in a specific culture
evaluating the decision itself
this involves monitoring the market place to determine if action is necessary in the future
Buying Classes
three types of buying situations. These buy classes vary from the routine reorder, or straight rebuy, to the completely new purchase, termed new buy. In between these extremes is the modified rebuy. New buy. Here the organization is a first-time buyer of the product or service. This involves greater potential risks in the purchase, so the buying center is enlarged to include all those who have a stake in the new buy. Straight rebuy. Here the buyer or purchasing manager reorders an existing product or service from the list of acceptable suppliers, probably without even checking with users or influencers from the engineering, production, or quality control departments. Office supplies and maintenance services are usually obtained as straight rebuys. Modified rebuy. In this buying situation the users, influencers, or deciders in the buying center want to change the product specifications, price, delivery schedule, or supplier. Although the item purchased is largely the same as with the straight rebuy, the changes usually necessitate enlarging the buying center to include people outside the purchasing department.
Statistical methods
trend extrapolation - which involves extending a pattern observed in past data into the future. linear trend extrapolation - when the pattern is described with a straight line
Off Peak Pricing
which consists of charging different prices during different times of the day or days of the week to reflect variations in demand for the service