Marketing Test 3

Nature of Buying

Unlike consumers, business buyers usually approach purchasing rather formally. Professionally trained purchasing agents/buyers.

product differentiation

a positioning strategy that some firms use to distinguish their products from those of competitors

Reciprocity

a practice whereby business purchasers choose to buy from their own customers .

80/20 principle

a principle holding that 20 percent of all customers generate 80 percent of the demand

customer product

a product bought to satisfy an individual's personal wants or needs

shopping product

a product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores

unsought products

a product unknown to the potential buyer or a known product that the buyer does not actively seek

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

convenience product

a relatively inexpensive item that merits little shopping effort

observation research

a research method that relies on four types of research: people watching people, people watching an activity, machines watching people, and machines watching avtivity

random sample

a sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample

probability sample

a sample in which every element in the population has a known statistical likelihood of being selected

nonprobability sample

a sample in which personal judgment is used to select respondents

infoscan

a scanner-based sales-tracking service for the consumer packaged-goods industry

family life cycle (FLC)

a series of stages determined by a combination of age, marital status, and the presence or absence of children

Universal Product Code (UPC)

a series of thick and thin vertical lines (bar codes) readable by computerized optical scanners that represent numbers used to track products

straight rebuy

a situation in which the purchaser reorders the same goods or services without looking for new information or investigating other suppliers. Usually routine.

modified rebuy

a situation in which the purchaser wants some change in the original good or service. Usually less critical and time consuming than new buy.

new buy

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

Cannibalization

a situation that occurs when sales of a new product cut into sales of a firm's existing products

central-location telephone (CLT) facility

a specially designed phone room used to conduct telephone interviewing

product item

a specific version of a product that can be designated as a distinct offering among an organization's products

content marketing

a strategic marketing approach that focuses on creating and distributing content that is valuable, relevant and consistent

multisegment targeting strategy

a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each

relationship marketing

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

concentrated targeting strategy

a strategy used to select one segment of a market for targeting marketing efforts

market segment

a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

sample

a subset from a larger population

mail intercept interview

a survey research method that involves interviewing people in the common areas of shopping malls

scanner-based research

a system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy

service mark

a trademark for a service

information labeling

a type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase

persuasive labeling

a type of package labeling that focuses on a promotional theme or logo, and consumer information is secondary

executive interview

a type of survey that involves interviewing business people at their offices concerning industrial products or services

express warranty

a written guarantee

target market

A group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges

North American Industry Classification System (NAICS)

An industry classification system introduced in 1997 to replace the standard industrial classification system (SIC). The system, developed jointly by the United States, Canada, and Mexico, provides a common industry classification system for the North American Free Trade Agreement (NAFTA) partners.

customer serivce

Business Marketers are increasingly recognizing the benefits of developing a formal to monitor customer opinions and perception of the quality of customer service.

number of customers

Business marketers have fewer customers than consumer marketers. An advantage is that it is easier to identify buyers, monitor customer needs, and build personal relationships. A disadvantage is that each customer becomes crucial, especially for those manufacturers who have only one customer.

Use of Leasing

Businesses commonly lease expensive equipment to reduce capital outflow, keep state of the art products, and gain tax advantages.

specialty product

a particular item for which consumers search extensively and are very reluctant to accept substitutes

Fluctuating Demand

Demand for business products tend to be less stable than demand for customer products.

Trust

Exists when one party has confidence in an exchange partner's reliability and integrity.

Governments

Government organizations include thousands of federal, state, and local buying units. Collectively, these government units account for the greatest volume of purchases of any customer category in the United States.

major equipment (installations)

Includes capital goods such as large or expensive machines, mainframe computers, blast furnaces, generators, airplanes, and buildings. Depreciated over time.

Roles in the Buying Center

Initiator Influencers/evaluators Gatekeepers Decider Purchaser Users

Amae

Japanese word for very close, physical, indulgent relationship between the mother and her young child. Amae is the feeling of nurturing concern for, and dependence on, another.

Concentration of customers

Manufacturing operations in the US tend to be more geographically concentrated than consumer markets

Producers

The producer segment of the business market includes profit-oriented individuals and organizations that use purchased goods and services to produce other products, to incorporate into other products, or to facilitate the daily operations of the organization. Examples of producers include construction, manufacturing, transportation, finance, real estate, and food service firms.

Resellers

The reseller market includes retail and wholesale businesses that buy finished goods and resell them for a profit. A retailer sells mainly to final consumers; wholesalers sell mostly to retailers and other organizational customers.

Nature of buying influence

Typically, more people are involved in a single business purchase decision than in a consumer purchase.

captive brand

a brand manufactured by a third party for an exclusive retailer, without evidence of that retailer's affiliation

private brand

a brand name owned by a wholesaler or a retailer

global brand

a brand that obtains at least a one-third of its earnings from outside its home country, is recognizable outside its home base of customers, and has publicly available marketing and financial data

management decision problem

a broad-based problem that uses marketing research in order for managers to take proper actions

scaled-response question

a closed-ended question designed to measure the intensity of a respondent's answer

warrenty

a confirmation of the quality or performance of a good or service

strategic alliance (strategic partnership)

a cooperative agreement between business firms. Strategic alliances can take the form of licensing or distribution agreements, joint ventures, research and development consortia, and partnerships. They may be between manufacturers, manufacturers and customers, manufacturers and suppliers, and manufacturers and channel intermediaries.

neuromarketing

a field of marketing that studies the body's responses to marketing stimuli

relationship commitment

a firm believes an ongoing relationship with some other firm is so important that it warrants maximum efforts at maintaining it indefinitely

field service firm

a firm that specializes in interviewing respondents on a subcontracted basis

convenience sample

a form of nonprobability sample using respondents who are convenient or readily accessible to the researcher—for example, employees, friends, or relatives

behavioral targeting (BT)

a form of observational marketing research that combines a consumer's online activity with psychographic and demographic profiles compiled in database

product line

a group of closely related product items

undifferentiated targeting strategy

a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix

perceptual mapping

a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds

cross-tabulation

a method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions

experiment

a method of gathering primary data in which the researcher alters one or more variables while observing the effects of those alterations on another variable

brand

a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products

keiretsu

a network of interlocking corporate affiliates. Members of a keiretsu trade with each other whenever possible and often engage in joint product development, finance, and marketing activity.

product line extension

adding additional products to an existing product line in order to compete more broadly in the industry

product mix

all products that an organization sells

buying center

all those people in an organization who become involved in the purchase decision.

service

almost as much as they want satisfactory products, business buyers want satisfactory service. Pre-pruchase service, post purchase, post sale, dependability of supply.

frame error

an error that occurs when a sample drawn from a population differs from the target population

sampling error

an error that occurs when a sample somehow does not represent the target population

random error

an error that occurs when the selected sample is an imperfect representation of the overall population

measurement error

an error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process

inelastic demand

an increase or decrease in the price of the product will not significantly affect demand for the product.

competitive intelligence

an intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors

closed-ended questions

an interview question that asks the respondent to make a selection from a limited list of responses

open-ended questions

an interview question that encourages an answer phrased in the respondent's own words

computer-assisted self-interviewing

an interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where each respondent reads questions off a computer screen and directly keys his or her answers into the computer

computer-assisted personal interviewing

an interviewing method in which the interviewer reads questions from a computer screen and enters the respondent's data directly into the computer

implied warrenty

an unwritten guarantee that the good or service is fit for the purpose for which it was sold

evaluative criteria

business buyers evaluate products and suppliers against three important criteria: quality, service, and price.

Purchase Volume

business customers buy in much larger quantities than consumers.

optimizers

business customers who consider numerous suppliers (both familiar and unfamiliar), solicit bids, and study all proposals carefully before selecting one

satisficers

business customers who place an order with the first familiar supplier to satisfy product and delivery requirements

Primary Promotional Method

business marketers tend to emphasize personal selling in their promotion, especially for expensive items, custom-designed products, large volume purchases, and situation requiring negotiations.

Repositioning

changing consumers' perceptions of a brand in relation to competing brands

product modification

changing one or more of a product's characteristics

segmentation bases (variables)

characteristics of individuals, groups, or organizations

brand loyalty

consistent preference for one brand over all others

supplies

consumable items that do not become part of the final product examples include lubricants, detergents, paper towels, pencils and paper

secondary data

data previously collected for any purpose other than the one at hand

marketing research problem

determining what information is needed and how that information can be obtained efficiently and effectively

usage-rate segmentation

dividing a market by the amount of product bought or consumed

component parts

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

Business-to-business online exchange

electronic trading floor that provides companies with integrated links to their customers and suppliers. Goal is to simplify business purchasing and to make it more efficient.

product

everything, both favorable and unfavorable, that a person receives in an exchange

Business Services

expense items that do not become part of a final product.

accessory equipment

goods, such as portable tools and office equipment, that are less expensive and shorter-lived than major equipment. usually charged as an expense the year it was bought.

Deciders (Buying Center)

have formal or informal power to select and approve final suppliers or brand

generic product name

identifies a product by class or type and cannot be trademarked

original equipment manufacturers (OEMs)

individuals and organizations that buy business goods and incorporate them into the products they produce for eventual sale to other producers or to consumers. (PRODUCERS)

primary data

information that is collected for the first time; used for solving the particular problem under investigation

family branding

marketing several different products under the same brand name

Users

members of the buying organization who will actually use the purchased product or service

joint demand

occurs when two or more items are used together in a final product. For example, a decline in the availability of memory chips will slow production of microcomputers, which will in turn reduce the demand for disk drives. Likewise, the demand for Apple operating systems exists as long as there is demand for Apple computers. Sales of the two products are directly linked.

niche

one segment of a market

derived demand

organizations buy products to be used in producing their customers' products. For instance, the demand for timber is derived from, or based on, the demand for new construction houses.

Gatekeepers

people in an organization's buying center who control the flow of information to others

market

people or organizations with needs or wants and the ability and willingness to buy

influencers/evaluators

people who influence the buying decision. They often help define specifications and provide information for evaluating options. Technical personnel are especially important as influencers.

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.

co-branding

placing two or more brand names on a product or its package

Major Categories of Business Customers

producers, resellers, governments, institutions

processed materials

products used directly in manufacturing other products

Business Ethics

refers to moral principles or values that generally govern the conduct of an individual or group. Standard of behavior by which conduct is judged.

quality

refers to technical suitability.

mystery shoppers

researchers posing as customers who gather observational data about a store

Institutions

seek to achieve goals other than the standard business goals of profit, market share, and return on investment. This segment includes schools, hospitals, colleges and universities, churches, labor unions, fraternal organizations, civic clubs, foundations, and other so-called nonbusiness organizations.

demographic segmentation

segmenting markets by age, gender, income, ethnic background, and family life cycle

geographic segmentation

segmenting markets by region of a country or the world, market size, market density, or climate

psychographic segmentation

segmenting markets on the basis of personality, motives, lifestyles, and geodemographics

geodemographic segmentation

segmenting potential customers into neighborhood lifestyle categories

focus group

seven to ten people who participate in a group discussion led by a moderator

research design

specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed

brand name

that part of a brand that can be spoken, including letters, words, and numbers

manufacturer's brand

the brand name of a manufacturer

Initiator

the buying center participant who first suggests buying the particular product or service

brand mark

the elements of a brand that cannot be spoken

Trademark

the exclusive right to use a brand or part of a brand

big data

the exponential growth in the volume, variety, and velocity of information and the development of complex, new tools to analyze and create meaning from such data

Business Marketing (industrial business, B-To-B, Business to Business, B2B Marketing)

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

survey research

the most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes

product line depth

the number of product items in a product line

product mix width

the number of product lines an organization offers

purchaser

the person who actually negotiates the purchase

positioning

the place a product, brand, or group of products occupies in consumers' minds relative to competing offerings

universe

the population from which a sample will be drawn

planned obsolescence

the practice of modifying products so those that have already been sold become obsolete before they actually need replacement

Market Segmentation

the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups

benefit segmentation

the process of grouping customers into market segments according to the benefits they seek from the product

marketing research

the process of planning, collecting, and analyzing data relevant to a marketing decision

marketing research objective

the specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information

ethnographic research

the study of human behavior in its natural context; involves observation of behavior and physical setting

social media monitoring

the use of automated tools to monitor online buzz, chatter, and conversations

brand equity

the value of company and brand names

raw materials

unprocessed extractive or agricultural products, such as mineral ore, lumber, wheat, corn, fruits, vegetables, and fish. Become part of finished products

individual branding

using different brand names for different products