Marketing

 103:  Chapters  1-­4  

Chapter  1  

Marketing-­‐Deals  with  customers  

             -­‐Is  managing  profitable  customer  relationships.  
             -­‐Two  fold  Goals-­‐-­‐-­‐To  attract  new  customers  by  promising  superior  value  AND  to  keep  
and  grow  current  customers  by  delivering  satisfaction.  
             -­‐Today’s  Marketersto  help  you  live  their  brand  
           -­‐Before:Telling  and  Selling…Today:  Satisfying  Customer  Needs.  
           -­‐The  aim  of  marketing  is  to  make  selling  unnecessary,  selling  and  advertising  is  only  
part  of  a  larger  marketing  mix.  (Peter  Drucker)  
         -­‐Broadly  Defined  Marketing  is  a  social  and  managerial  process  by  which  individuals  
and  organization  obtain  what  they  need  and  want  through  creating  and  exchanging  value  with  
others.    
         -­‐Marketing  involves  building  profitable,  value  laden  exchange  relationships  with  
customers  
                                   -­‐as  the  process  by  which  companies  create  value  for  customers  and  build  strong  
customer  relationships  in  order  to  capture  value  from  customers  in  return.  
 
Marketing  Process  

1. Understand  the  marketplace  and  customer  needs  and  wants  

2. Design  a  customer  driven  marketing  strategy  
3. Construct  an  integrated  marketing  program  that  delivers  superior  value  
4. Build  profitable  relationships  and  create  customer  delight  

Understanding  the  Market  place  

1. Needs-­‐States  of  felt  deprivation  

2. Wants-­‐The  form  human  needs  take  as  shaped  by  culture  and  individual  personality  
3. Demands-­‐Human  wants  that  are  backed  by  buying  power.  
• Marketing  Offering-­Consumer  needs  and  wants  are  fulfilled  through  this.  
         -­‐Some  combination  of  products,  services,  information  or  experiences  
offered  to  a  market  to  satisfy  a  need  or  want.  

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.  
Customer  Value  &  Satisfaction-­‐Marketers  must  be  careful  to  set  the  right  level  of  expectations.  
Building  blocks  for  developing  and  managing  customer  relationships.  
Exchange-­‐is  the  act  obtaining  a  desired  object  from  someone  by  offering  something  in  return.  
In  the  broader  sense,  the  marketer  tries  to  bring  about  a  response  to  some  market  offering.  
Marketing  consists  actions  taken  to  build  and  maintain  desirable  exchange  relationships  with  
target  audiences  involving  a  product,  service,  idea,  or  other  object.  The  goal  is  to  retain  
customers  and  grow  their  business  with  the  company.  
Market-­‐The  set  of  actual  and  potential  buyers  of  a  product  or  service.  These  buyers  share  a  
particular  need  or  want  that  can  be  satisfied  through  exchange  relationships.  
 
SuppliersCompanyMarketing  IntermediariesConsumers  
SuppliersCompetitorsMarketing  IntermediariesConsumers  
Marketing  Management-­‐  the  art  and  science  of  choosing  target  markets  and  building  
profitable  relationships  with  them.  (What  customers  will  we  serve,  whats  our  target  market?  
How  can  we  serve  these  customers  best,  what’s  our  value  proposition?)  
-­‐The  company  must  first  decide  whom  it  will  serve.  It  does  this  by  dividing  the  market  into  
segments  of  customers  (Market  Segmentation)  and  selecting  which  segments  it  will  go  after  
(target  marketing).  Demarketing-­‐reducing  customers,  or  shift  demand.  Also  known  is  customer  
management  and  demand  management.  
Value  Proposition-­  set  of  benefits  or  values  it  promises  to  deliver  to  consumers  to  satisfy  their  
needs.    (why  should  I  buy  your  brand  rather  than  a  competitors’?)  companies  must  design  
strong  value  propositions  that  give  them  the  greatest    advantage  in  their  target  markets.  
Marketing  Strategies  

1. Production  
2. Product  
3. Selling  
4. Marketing  
5. Social  marketing  concepts  

Production  Concept-­holds  the  consumers  will  favor  products  that  are  available  and  highly  
affordable  and  that  the  organization  should  therefore  focus  on  improving  production  and  
distribution  efficiency.  Can  also  lead  to  Marketing  Myopia-­‐-­‐-­‐might  lose  satisfying  customer  
needs  and  building  customer  relationships.  

Product  Concept-­The  idea  that  consumers  will  favor  products  that  offer  the  most  quality,  
performance,  and  features  and  that  the  organization  should  therefore  devote  its  energy  to  
making  continuous  product  improvements.  Can  also  lead  to  Marketing  Myopia.  

Selling  Concept-­the  idea  that  that  consumers  will  not  buy  enough  of  the  firm’s  products  unless  
it  undertakes  a  large-­‐scale  selling  and  promotion  effort.  Normally  practiced  with  unsought  
goods,  can  carry  high  risks.  It  focuses  on  creating  sales  transactions  rather  than  on  building  long  
term,  profitable  customers  relationships.    

Marketing  Concept-­The  marketing  management  philosophy  that  holds  that  achieving  

organizational  goals  depends  on  knowing  the  needs  and  wants  of  target  markets  and  delivering  
the  desired  satisfactions  better  than  competitors  do.  Customer  focus  and  value  are  the  paths  to  
sales  and  profits.  Customer  centered  ‘sense  and  respond’  philosophy,  the  job  is  to  find  the  right  
products  for  your  customers.    

Selling  concept-­‐inside-­‐out  perspective  ,  starts  with  the  factory,  focuses  on  the  company’s  
existing  products,  and  calls  for  heavy  selling  and  promotion  to  obtain  profitable  sales.  Getting  
short-­‐term  sales.  Marketing  concept  takes  outside-­‐in  perspective,  starts  with  a  well  defined  
market,  focuses  on  customer  needs,  and  integrates  all  the  marketing  activities  that  affect  
customers.    Yields  profits  by  creating  lasting  relationships  with  the  right  customers  based  on  
customer  value  and  satisfaction.    

Selling  ConceptFactoryExisting  ProductsSelling  and  PromotingProfits  through  Sales  

Volume  

Marketing  ConceptMarketCustomer  NeedsIntegrated  MarketingProfits  through  

customer  satisfaction  

Societal  Marketing  Concepts-­‐The  idea  that  a  company’s  marketing  decisions  should  consider  
consumers’,  wants,  the  company’s  requirements,  consumer’s  long  run  interests  and  society’s  
long  run  interests.    

SocietyConsumersCompany=Societal  Marketing  Concepts.  

Marketing  program  builds  customer  relationships  by  transforming  the  marketing  strategy  into  
action.  Contains  the  firm’s  marketing  mix,  set  of  marketing  tools  the  firm  uses  to  implement  its  
marketing  strategy.  
Marketing  Mix  tools-­‐four  P’s  (Product,  Price,  Place,  Promotion)  
Product-­‐Firm  must  first  create  a  need-­‐satisfying  market  offering  
Price-­‐Decide  how  much  it  will  charge  for  the  offering  
Place-­‐it  must  decide  on  how  to  make  the  offering  available  to  target  consumers    
Promotion-­‐it  must  communicate  with  target  customers  about  the  offering  and  persuade  them  of  
its  merits.    
*Comprehensive  integrated  marketing  program  

Marketing  Process  

Understanding  the  marketplace  and  customer  needs,  designing  a  customer-­‐driven  marketing  

strategy,  and  constructing  marketing  programsBuilding  profitable  customers  relationships.  

Customer  Relationships  Management  

The  overall  process  of  building  and  maintaining  profitable  customer  relationships  by  delivering  
superior  customer  value  and  satisfaction.  

Customer  perceived  Value-­‐  the  customer’s  evaluation  of  the  difference  between  all  the  
benefits  and  all  the  costs  of  a  marketing  offer  relative  to  those  competing  offers.    

Customer  Satisfaction-­the  extent  to  which  a  product’s  perceived  performance  matches  a  

buyer’s  expectations.  Customer  Evangelists-­‐those  who  spread  the  word  about  their  good  
experience.  

Customer  Relationship  Level  and  Tools  

• Basic  Relationships-­‐low  margin  customers  

• Full  Partnerships-­‐few  customers  and  high  margins  
• Frequency  Marketing  Programs-­‐reward  customers  who  buy  frequently  or  in  large  amounts  
(VIP)  
• Club  Marketing  Programs-­‐Offers  members  special  benefits  and  create  member  
communities.  

 
Changing  Nature  

• Relating  with  more  carefully  selected  customers  

• Selective  Relationship  Management-­‐target  few  customers,  but  more  profitable  

Relating  more  deeply  and  interactivity  

• Cannot  solely  rely  on  intrusion,  but  this  time  by  attraction-­‐-­‐-­‐creating  market  offerings  
and  message  that  involve  consumers  rather  than  interrupt  them.  

Consumer  Generated  Marketing  

• Marketing  messages,  ads,  and  other  brand  exchanges,  created  by  consumers  
themselves-­‐-­‐-­‐both  invited  and  uninvited  

Partnership  Relationship  Management  

• Working  closely  with  partners  in  other  company  departments  and  outside  the  company  
to  jointly  bring  greater  value  to  customers.  

Partners  inside  the  Company  

 • Departments  are  linked  in  the  cause  of  creating  customer  value.  

Partners  outside  the  Company  

• Suppliers,  channel  partners,  and  even  competitors,  relying  heavily  on  partnerships  with  
other  firms.  
• Supply  Chain-­‐from  raw  materials  to  components  to  final  products  that  are  carried  to  
final  buyers.  Through  Supply  Chain  management-­‐-­‐-­‐many  companies  today  are  
strengthening  their  connections  with  partners  all  along  the  supply  chain.    

Capturing  Value  from  Customers  

Superior  Customer  Value-­‐the  firm  creates  highly  satisfied  customers  who  stay  loyal  and  buy  
more.  Means  greater  long  run  returns  for  the  firm.  The  outcomes  of  creating  values:  highly  
satisfied  customers  who  stay  loyal  and  buy  more.  

Creating  Customer  Loyalty  and  Retention  

• Delighted  customers  remain  loyal  and  talk  favorably  to  others  about  the  company  and  
its  products.  Customer  Lifetime  Value-­‐the  value  of  the  entire  stream  of  purchases  would  
make  over  a  lifetime  of  patronage.  

Growing  share  of  customer  

• The  portion  of  the  customer’s  purchasing  that  a  company  gets  in  its  product  categories.  

Building  Customer  Equity  

• The  total  combined  customer  lifetime  values  of  all  of  the  company’s  customers.  The  
more  loyal  the  firm’s  profitable  customers  the  higher  the  firm’s  customer  equity.  Build  
the  right  relationships  with  right  customers.  Customers  are  classified  customers  
according  to  their  potential  profitability  and  manage  its  relationships  with  them  
accordingly.    
1. Strangers-­‐Show  low  potential  profitability  and  little  projected  loyalty.  
2. Butterflies-­‐are  potentially  profitable  but  not  loyal  
3. True  Friends-­‐both  profitable  and  loyal  
4. Barnacles-­‐are  highly  loyal  but  not  very  profitable  

The  Changing  Marketing  Landscape  

Digital  Age  

Internet-­a  vast  public  web  of  computer  networks  that  connects  users  all  types  all  around  the  
world  to  each  other  and  to  an  amazingly  large  information  repository.  
Globalization  
More  Ethics  and  Social  Responsibility  
 
Chapter  2  
Strategic  planning  
The  process  of  developing  and  maintaining  a  strategic  fit  between  the  organization’s  goals  and  
capabilities  and  its  changing  marketing  opportunities.  Sets  the  stage  for  the  rest  of  the  planning  
in  the  firm.  
 
Mission  statement  
A  Statement  of  the  organization’s  purpose-­‐what  is  wants  to  accomplish  in  the  larger  
environment.  The  company  needs  to  turn  its  mission  into  detailed  supporting  objectives  for  
each  level  of  management.  Each  manager  should  have  objectives  and  be  responsible  for  
reaching  them.  
Business  Portfolio  
The  collection  of  businesses  and  products  that  make  up  the  company  
Portfolio  Analysis  
The  process  by  which  management  evaluates  the  products  and  businesses  that  make  up  the  
company  
Growth  Share  Matrix  
A  portfolio  planning  method  that  evaluates  a  company’s  strategic  business  units  in  terms  of  its  
market  growth  rate  and  relative  market  share.  SBU’s  are  classified  as  stars,  cash  cows,  question  
marks,  or  dogs.  
Production  Market  Expansion  Grid  
A  portfolio-­‐planning  tool  for  identifying  company  growth  opportunities  through  market  
penetration,  market  development,  product  development  or  diversification.    
Market  Penetration  
A  strategy  for  company  growth  by  increasing  sales  of  current  products  to  current  market  
segments  without  changing  the  product.    
Market  Development  
A  strategy  for  company  growth  by  identifying  and  developing  new  market  segments  for  current  
company  products.  
Product  Development  
A  strategy  for  company  growth  by  offering  modified  or  new  products  to  current  market  
segments.  
Diversification  
A  Strategy  for  company  growth  through  starting  up  or  acquiring  business  outside  the  
company’s  current  products  and  markets.  
 
Downsizing  
Reducing  the  business  portfolio  by  eliminating  products  of  business  units  that  are  not  profitable  
or  that  no  longer  fir  the  company’s  overall  strategy.  
Value  Chain  
The  series  of  departments  that  carry  out  value-­‐creating  activities  to  design,  produce,  market,  
deliver,  and  support  a  firm’s  products.  
Value  Delivery  Network  
The  network  made  up  of  the  company,  suppliers,  distributors,  and  ultimately  customers  who  
‘partner’  with  each  other  to  improve  the  performance  of  the  entire  system.  
Marketing  Strategy  
The  marketing  logic  by  which  the  business  unit  hopes  to  create  customer  value  and  achieve  
profitable  customer  relationship.  
Market  Segmentation  
Dividing  a  market  into  distinct  groups  of  buyers  who  have  different  needs,  buyers  who  have  
different  needs,  characteristics  or  behaviors,  and  who  might  require  separate  products  or  
marketing  programs.  
Market  Segment  
A  group  of  consumers  who  respond  in  a  similar  way  to  a  given  set  of  marketing  efforts.  
Marketing  Targeting  
The  process  of  evaluating  each  market  segment’s  attractiveness  and  selecting  one  or  more  
segments  to  enter.  
Positioning  
Arranging  for  a  product  to  occupy  a  clear,  distinctive,  and  desirable  place  relative  to  competing  
products  in  the  minds  of  target  consumers.  
Differentiation  
Actually  differentiating  the  market  offering  to  create  superior  customer  value.  
Marketing  Mix  
The  set  of  controllable  tactical  marketing  tools-­‐-­‐-­‐product,  price,  place,  and  promotion-­‐-­‐-­‐that  the  
firm  blends  to  produce  the  response  it  wants  in  the  target  market.  
SWOT  analysis  
An  overall  evaluation  of  the  company’s  strengths,  weaknesses,  opportunities,  threats.    
Marketing  Control  
The  process  of  measuring  and  evaluating  the  results  of  marketing  strategies  and  plans  and  
talking  corrective  action  to  ensure  that  objective  are  achieved.    
Return  on  Marketing  Investment  
The  net  return  from  a  marketing  investment  divided  by  the  costs  of  the  marketing  investment.    
Chapter  3  
Marketing  Environment  
The  actors  and  forces  outside  marketing  that  affect  marketing  management’s  ability  to  build  
and  maintain  successful  relationships  with  target  customers.  
Microenvironment  
The  actors  close  to  the  company  that  affect  its  ability  to  serve  its  customers-­‐-­‐-­‐the  company,  the  
suppliers,  marketing  intermediaries,  customer  markets,  competitors  and  publics.  
Macro  environment  
The  larger  societal  forces  that  affect  the  microenvironment-­‐-­‐-­‐demographics,  economic,  natural,  
technological,  political,  and  cultural  forces.    
 
Marketing  Intermediaries    
Firms  that  help  the  company  to  promote,  sell,  and  distribute  its  goods  to  final  buyers.  
Public    
Any  group  that  has  as  actual  or  potential  interest  in  or  impact  on  an  organizations  ability  to  
achieve  its  objectives  
Demography  
The  study  of  human  populations  in  terms  of  size,  density,  location,  age,  gender,  race,  occupation,  
and  other  statistics.  
Baby  Boomers  
The  78  million  people  born  during  the  baby  boom  following  the  world  war  II  and  lasting  until  
1964  
Generation  X  
The  45  million  people  born  between  1965  and  1976  in  the  ‘birth  death’  following  baby  booms.  
Millecusnnials  (Generation  Y)  
The  83  million  children  of  the  baby  boomers,  born  between  1977  and  2000  
Economic  Environment  
Factors  that  affect  consumer  buying  power  and  spending  patterns.  Industrial  economies  (rich  
market  for  many  different  goods),  subsistence  economies  (they  consume  most  of  their  own  
agricultural  and  industrial  output  and  offer  few  market  opportunities.),  Developing  economies  
(can  offer  outstanding  marketing  opportunities  for  the  right  kinds  of  produtcs.)  
Engel’s  Laws  
Differences  noted  over  a  century  ago  by  in  how  people  shift  their  spending  across  food,  housing,  
transportation,  health  care,  and  other  goods  and  services  categories  as  family  income  rises.  
Natural  Environment  
Natural  resources  that  are  needed  as  inputs  by  marketers  or  that  are  affected  by  marketing  
activities.  
Environmental  Sustainability  
Developing  strategies  and  practices  that  create  a  world  economy  that  the  planet  can  support  
indefinitely.    
Technological  Environment  
Forces  that  create  new  technologies,  creating  new  product  and  market  opportunities.    
Political  Environment  
Laws,  government  agencies,  and  pressure  groups  that  influence  and  limit  various  organizations  
and  individuals  in  a  given  society.  
Cultural  Environment  
Institutions  and  other  forces  that  affect  society’s  basic  values,  perceptions,  preferences,  and  
behaviors.  
 Chapter  4  
Customer  insights  
Fresh  understandings  of  customers  and  the  marketplace  derived  from  marketing  information  
that  become  the  basis  for  creating  customer  value  and  relationships  
Marketing  Information  System  
People  and  procedures  for  assessing  information  needs,  developing  the  needed  information,  
and  helping  decision  makers  to  use  the  information  to  generate  and  validate  actionable  
customer  and  market  insights.    
 
Internal  Databases  
Electronic  collections  of  consumer  and  market  information  obtained  from  data  sources  within  
the  company  network  
Marketing  Intelligence  
The  systematic  collection  and  analysis  of  publicly  available  information  about  consumers,  
competitors,  and  developments  in  the  marketing  environment.  
Market  Research  
The  systematic  design,  collection,  analysis,  and  reporting  of  data  relevant  to  a  specific  marketing  
situation  facing  an  organization.  
Exploratory  Research  
Marketing  research  to  gather  preliminary  information  that  will  help  define  problems  and  
suggest  hypotheses  
Descriptive  Research  
Marketing  research  to  better  describe  marketing  problems,  situations,  or  markets,  such  as  
market  potential  for  a  product  or  the  demographics  and  attitudes  of  consumers.  
Casual  Research  
Marketing  research  to  test  hypotheses  about  cause  and  effect  relationships.  
Secondary  Data  
Information  that  already  exists  somewhere,  having  been  collected  for  another  purpose.  
Primary  Data  
Information  collected  for  the  specific  purpose  at  hand  
Commercial  online  databases  
Computerized  collections  of  information  available  from  online  commercial  sources  or  via  the  
internet  
Ethnographic  Research  
A  form  of  observational  research  that  involves  sending  trained  observers  to  watch  and  interact  
with  consumers  in  their  natural  habitat.  
Survey  Research  
Gathering  primary  data  by  asking  people  questions  about  their  knowledge  attitudes  preferences  
and  buying  behavior.  
Experimental  Research  
Gathering  primary  data  by  selecting  matched  groups  of  subjects,  giving  them  different  
treatments,  controlling  related  factors,  and  checking  for  differences  in  group  response.    
Focus  Group  interviewing  
Personal  interviewing  that  involves  inviting  six  to  ten  people  to  gather  for  a  few  hours  with  a  
trained  interviewer  to  talk  about  a  product,  service,  or  organization.  The  interviewer  focuses  
the  group  discussion  on  important  issues.  
Online  Market  Research  
Collecting  primary  data  online  through  internet  surveys,  online  focus  groups,  web  based  
experiments  or  tracking  consumers’  online  behavior.  
Online  Focus  Groups  
Gathering  a  small  group  of  people  online  with  a  trained  moderator  to  chat  about  a  product,  
service,  or  organization  and  gain  qualitative  insights  about  consumer  attitudes  and  behavior.  
Sample  
A  segment  of  the  population  selected  for  marketing  research  to  represent  the  population  as  a  
whole.  
 
 
Customer  Relationship  Management  
Managing  detailed  information  about  individual  customers  and  carefully  managing  customer  
‘touch  points’  in  order  to  maximize  customer  loyalty  
 
Marketing  Chapters  5-­7  
 
Chapter  5:  Models  of  Consumer  Behavior  
Culture  
The  set  of  basic  values,  perceptions,  wants  and  behaviors  learned  by  a  member  of  society  from  
family  and  other  important  instructions  
Subculture  
A  group  of  people  with  shared  values  systems  based  on  common  life  experiences  and  solutions  
Social  Class  
Relatively  permanent  and  ordered  divisions  in  a  society  whose  members  share  similar  values,  
interests  and  behaviors  
Group  
Two  or  more  people  who  interact  to  accomplish  individual  or  mutual  goods.  
Opinion  Leader/Influentials/Leading  adopters  
Person  within  a  reference  group  who,  because  of  special  skills,  knowledge,  personality,  or  other  
characteristics,  exerts  social  influence  on  others.  
Online  Social  Networks  
Online  social  communities-­‐-­‐-­‐blogs,  social  networking  web  sites,  or  even  virtual  worlds-­‐-­‐-­‐where  
people  socialize  or  exchange  information  and  opinions.    
Lifestyle  
A  person’s  pattern  of  living  as  expressed  in  his  or  her  activities,  interests,  and  opinions.    
Personality  
The  unique  psychological  characteristics  that  lead  to  relatively  consistent  and  lasting  responses  
to  one’s  own  environment.  
Brand  Personality  
The  specific  mix  of  human  traits  that  may  be  attributed  to  a  particular  brand  
Motive  (Drive)  
A  need  that  is  sufficiently  pressing  to  direct  the  person  to  seek  sacrifice  of  the  need.  
Perception  
The  process  by  which  people  select,  organize,  and  interpret  information  to  form  a  meaningful  
picture  of  the  world.  
Learning    
Changes  in  an  individual’s  behavior  arising  from  experiences  
Belief  
A  descriptive  thought  that  a  person  holds  about  something  
Attitude  
A  person’s  consistency  favorable  or  unfavorable  evaluations,  feelings,  and  tendencies  toward  an  
object  or  idea.    
Complex  Buying  Behavior  
Consumer  buying  behavior  in  situations  characterized  by  high  consumer  involvement  in  a  
purchase  and  significant  perceived  differences  among  brands  
 
 
Dissonance  Reducing  buying  behavior  
Consumer  buying  behavior  in  situations  characterized  by  high  involvement  but  few  perceived  
differences  among  brands.  
Habitual  Buying  Behavior  
Consumer  buying  behavior  situations  characterized  by  low  consumer  involvement  and  few  
significantly  perceived  brand  differences.  
Variety-­Seeking  Buying  Behavior  
Consumer  buying  behavior  in  situations  characterized  by  low  consumer  involvement  but  
significant  perceived  brand  differences.  
Buyer  Decision  Process  
Need  Recognition  
The  first  stage  of  the  buyer  decision  process,  in  which  the  consumer  recognizes  a  problem  or  
need.  
Information  search  
The  stage  of  the  buyer  decision  process  in  which  the  consumer  is  aroused  to  search  for  more  
information,  the  consumer  may  simply  have  heightened  attention  or  may  go  into  an  active  
information  search.    
Alternative  Evaluation  
The  stage  of  the  buyer  decision  process  in  which  the  consumer  uses  information  to  evaluate  
alternative  brands  in  the  choice  set  
Purchase  Decision  
The  buyer’s  decision  about  which  brand  to  purchase  
Postpurchase  Behavior  
The  stage  of  the  buyer  decision  process  in  which  the  consumers  take  further  action  after  
purchase,  based  on  their  satisfactions  or  dissatisfaction.    
Cognitive  Dissonance  
Buyer  discomfort  caused  by  postpurchase  conflict.  
New  Product  
A  good,  service,  or  idea,  that  is  perceived  by  some  potential  customers  as  new  
Adoption  Process  
The  mental  process  through  which  an  individual  passes  form  first  hearing  about  an  innovation  
to  final  adoption  
Stages  of  adoption  Process  
Awareness:the  consumer  becomes  aware  of  the  new  product  but  lacks  information  about  it.  
Interest:  the  consumer  seeks  information  about  the  new  product  
Evaluation:  the  consumer  considers  whether  trying  the  new  product  makes  sense  
Trial:  The  consumer  tries  the  new  product  on  a  small  scale  to  improve  his  or  her  estimate  of  its  
value  
Adoption:  The  consumer  decides  to  make  full  or  regular  use  of  the  new  product.    
Chapter  6  
Business  Buyer  Behavior    
The  buying  behavior  of  the  organizations  that  buy  goods  and  services  for  use  in  the  production  
of  other  products  and  services  or  to  resell  or  rent  them  to  others  at  a  profit  
Business  Buying  process  
The  decision  process  by  which  business  buyers  determine  which  products  and  services  their  
organization  need  to  purchase,  and  then  find,  evaluate,  and  choose  among  alternative  suppliers,  
and  brands.  
Derived  Demand  
Business  demand  that  ultimately  comes  from  (derives  from)  the  demand  for  consumer  goods.    
Supplier  Development  
Systematic  development  of  networks  of  supplier-­‐partners  to  ensure  an  appropriate  and  
dependable  supply  of  products  and  materials  for  use  in  making  products  or  reselling  them  to  
others.    
 
  
Straight  Rebuy  
 A  business  buying  situation  in  which  the  buyer  routinely  reorders  something  without  any  
modifications.  
Modified  Rebuy  
A  business  buying  situations  in  which  the  buyer  wants  to  modify  product  specifications  prices,  
terms,  or  suppliers.  
New  Task  
A  business  buying  situation    in  which  the  buyer  purchases  a  product  or  service  for  the  first  time  
Systems  Selling  (solutions  selling  )  
Buying  a  packaged  solution  to  a  problem  from  a  single  seller,  thus  avoiding  all  the  separate  
decisions  involved  in  a  complex  buying  situation.    
Buying  Center  
All  the  individuals  and  units  that  pay  a  role  in  the  purchase  decision  making  process  
Users  
Members  of  the  buying  organizations  who  will  actually  use  the  purchased  product  or  service.  
Influencers  
People  in  an  organization’s  buying  center  who  affect  the  buying  decisions;  they  often  help  
define  specifications  and  also  provide  information  for  evaluating  alternatives  
Buyer  
The  people  in  the  organization’s  buying  center  who  make  an  actual  purchase  
Deciders  
People  in  the  organization’s  buying  center  who  have  formal  or  informal  power  to  select  or  
approve  the  final  suppliers.  
Gatekeepers  
People  in  the  organization’s  buying  center  who  control  the  flow  of  information  to  others.    
Problem  Recognition  
The  first  stage  of  the  business  buying  process  in  which  someone  in  the  company  recognizes  a  
problem  or  need  that  can  be  met  by  acquiring  a  good  or  a  service.  
General  Need  description  
The  stage  in  the  business  buying  process  in  which  the  company  describes  the  general  
characteristics  and  quantity  of  a  needed  item  
Product  Specification    
The  stage  of  the  business  buying  process  in  which  the  buying  organization  decides  on  and  
specifies  the  best  technical  product  characteristics  for  a  needed  item.  
Supplier  Search  
The  stage  of  the  business  buying  process  in  which  the  buyer  tries  to  find  the  best  vendor    
Proposal  Solicitation  
The  stage  of  the  business  buying  process  in  which  the  buyer  qualified  suppliers  to  submit  
proposals  
Supplier  selection  
The  stage  of  the  business  buying  process  in  which  the  buyer  reviews  proposals  and  selects  a  
supplier  or  suppliers    
Order-­Routine  specification  
The  stage  of  the  business  buying  process  in  which  the  buyer  writes  the  final  order  with  the  
chosen  suppliers  listing  the  technical  specifications,  quantity  needed,  expected  time  of  delivery,  
return  policies  and  warranties.  
Performance  Review  
The  stage  of  the  business  buying  process  in  which  the  buyer  assess  the  performance  of  the  
supplier  and  decides  to  continue,  modify  or  drop  the  arrangement.  
E-­Procurement  
Purchasing  through  electronic  connections  between  buyers  and  sellers-­‐-­‐-­‐usually  online  
 
 
Institutional  Market  
Schools,  hospitals,  nursing  homes,  prisons,  and  other  institutions  that  provide  goods,  and  
services  to  people  in  their  care.    
Government  Market  
Governmental  units—national,  regional  and  local-­‐-­‐-­‐that  purchase  or  rent  goods  and  services  for  
carrying  out  the  main  functions  of  government.  
 
Chapter  7  
Market  Segementation  
Dividing  the  market  into  smaller  groups  with  distinct  needs,  characteristics,  or  behavior  that  
might  require  separate  marketing  strategies  or  mixes.  
Market  Targetting  
The  process  of  evaluating  each  market  segment’s  attractiveness  and  selecting  one  or  more  
segments  to  enter  
Diffrentiation  
Actualy  differentiating  the  market  offering  to  create  superior  customer  value.  
Positioning  
Arranging  for  market  offering  to  occupy  a  clear,  distinctive,  and  desirable  place  relative  to  
competing  products  in  the  minds  of  target  consumers.  
Gerographic  Segmentation  
Dividing  the  market  into  different  geographical  units  such  as  nations,  provinces,  regions,  
parishes,  cities  or  neighborhoods.    
Demographic  Segementation  
Dividing  the  market  into  groups  based  on  variables  such  as  age,  gender,  family  size  family  life  
cycle,  income,  occupation,  education,  religion,  race,  generation,  and  nationality.  
Age  and  life  cycle  segmentation  
Dividing  market  into  different  age  and  life  cycle  groups  
Psychographic  Segmentation  
Dividing  the  market  into  different  groups  based  on  social  class,  lifestyle,  or  personality  
characteristics  
Behavioral  Segmentation  
Dividing  the  market  into  groups  based  on  consumer  knowledge,  attitudes,  uses  or  responses  to  
a  product  
Occasion  Segementation  
Dividing  the  market  into  groups  according  to  occasions  when  buyers  get  the  idea  to  buy,  
actually  make  their  purchase,  or  use  the  purchased  item  
Benefit  Segmentation  
Dividing  the  market  into  groups  according  to  the  different  benefits  that  consumers  seek  from  
the  product  
Intermarket  Segmentation  
Forming  segments  of  consumers  who  have  similar  needs  and  buying  behavior  even  though  they  
are  located  in  different  countries.  
Target  Market  
A  set  of  buyers  sharing  common  needs  or  characteristics  that  the  company  decides  to  serve  
Undifferentiated  Marketing  
A  market  coverage  strategy  in  which  the  firm  decides  to  ignore  market  segment  differences  and  
go  after  the  whole  market  with  one  offer.  
Differentiated  Marketing  
A  market  coverage  strategy  in  which  a  firm  decides  to  target  several  market  segments  and  
designs  separate  offers  for  each.  
Concentrated  (niche)  marketing  
A  market  coverage  strategy  in  which  a  firm  goes  after  a  large  share  of  one  or  a  few  segments  or  
niches  
 
Micromarketing  
The  practice  of  tailoring  products  and  marketing  programs  to  the  needs  and  wants  of  specific  
individuals  and  local  customer  groups-­‐-­‐-­‐includes  local  marketing  and  individual  marketing  
Local  Marketing  
Tailoring  brands  and  promotions  to  the  needs  and  wants  of  local  customer  groups-­‐-­‐-­‐cities,  
neighborhoods,  and  even  specific  stores  
Individual  Marketing  
Tailoring  products  and  marketing  programs  to  the  needs  and  preferences  of  individual  
customers-­‐-­‐-­‐also  labeled  “one-­‐to-­‐one  marketing”  “customize  marketing”  and  “markets-­‐of-­‐one-­‐
marketing”  
 
Product  Position  
The  way  the  product  is  defined  by  consumers  on  important  attributes-­‐-­‐-­‐the  place  the  product  
occupies  in  consumers’  minds  relative  to  competing  products.  
Competitive  advantage  
An  advantage  over  competitors  gained  by  offering  grater  customer  value,  either  through  lower  
prices  or  by  providing  more  benefits  that  justify  higher  prices.    
Value  Proposition  
The  full  positioning  of  a  brand-­‐-­‐-­‐the  full  mix  of  benefits  upon  which  it  is  positioned  
Positioning  Statement  
A  statement  that  summarizes  company  or  brand  positioning-­‐-­‐-­‐it  takes  this  form  to  (target  
segment  and  need)  our  (brand)  is  (concept)  the  (point  of  difference).  
Marketing  Chapter  8-­12  and  18  
Chapter  8  Products  Services  and  Brands  
Product  
Anything  that  can  be  offered  to  a  market  for  attention,  acquisition,  use  or  consumption  that  
might  satisfy  a  want  or  need  
Service  
Any  activity  or  benefit  that  one  party  can  offer  to  another  that  is  essentially  intangible  and  does  
not  result  in  the  ownership  of  anything  
Consumer  Product  
A  product  bought  by  final  consumer  for  personal  consumption  
Convenience  Product  
A  consumer  product  that  customers  usually  buy  frequently,  immediately,  and  with  a  minimum  
of  comparison  of  buying  effort.    
Shopping  Product  
A  consumer  product  that  the  customer,  in  the  process  of  selection  and  purchase  ,  usually  
compares  on  such  a  bases  as  suitability,  quality,  price  and  style.  
Specialty  Product  
A  consumer  product  with  unique  characteristics  or  brand  identification  for  which  a  significant  
group  of  buyers  is  willing  to  make  a  special  purchase  effort.  
Unsought  Product  
A  consumer  product  that  the  consumer  either  does  now  knot  about  or  knows  about  but  does  
not  normally  think  of  buying  
Industirlal  Product  
A  product  bought  by  individuals  and  organizations  for  further  processing  or  for  use  in  
conducting  business  
Social  Marketing  
The  use  of  commercial  marketing  concepts  and  tools  in  programs  designed  to  influence  
individuals;  behavior  to  improve  their  well-­‐being  and  that  of  society  
Product  Quality  
The  characteristics  of  a  product  or  service  that  bear  on  its  ability  to  satisfy  stated  or  implied  
customer  needs  
Brand  
A  name,  term,  sign,  symbol,  design  or  a  combination  of  these  that  identifies  the  products  ir  
services  of  one  seller  or  a  group  of  sellers  and  differentiates  them  from  those  of  competitors  
Packaging  
The  activities  of  designing  and  producing  the  container  or  wrapper  for  a  product  
Product  Line  
A  group  of  products  that  are  closely  related  because  they  function  in  a  similar  manner,  are  sold  
to  the  same  customer  groups,  and  marketed  through  the  same  types  of  outlets,  or  fall  within  a  
given  price  ranges.  
Product  mix  (product  portfolio)  
The  set  of  all  product  lines  and  items  that  a  particular  seller  offers  for  sale  
Brand  Equity  
The  differential  effect  that  knowing  the  brand  name  has  on  customer  response  to  the  product  or  
its  marketing  
Store  Brand  
A  brand  created  and  owned  by  a  reseller  of  a  product  or  service  
Co-­branding  
The  practice  of  using  the  established  brands  names  of  two  different  companies  on  the  same  
product  
Line  extension  
Extending  an  existing  brand  name  to  new  forms,  colors,  sizes,  ingredients  or  flavors  of  an  
existing  product  category.  
Brand  Extension  
Extending  an  existing  brand  name  to  new  product  categories  
Service  Intangibility  
A  major  characteristic  of  services-­‐-­‐-­‐they  cannot  be  seen,  tasted,  felt,  heard,  or  smelled  before  
they  are  bought  
Service  Inseparability  
A  major  characteristic  of  services-­‐-­‐-­‐they  are  produced  and  consumed  at  the  same  time  and  
cannot  be  separated  from  their  providers.  
Service  Variability  
A  major  characteristic  of  services-­‐-­‐-­‐their  quality  may  vary  greatly,  depending  on  who  provides  
them  and  when,  where  and  how    
Service  Perishability  
A  major  characteristic  of  services-­‐-­‐-­‐they  cannot  be  stored  for  later  sale  or  use  
Service-­profit  Chain  
The  chain  that  links  service  firm  profits  with  employee  and  customer  satisfaction  
Internal  Marketing  
Orienting  and  motivating  customer-­‐contact  employees  and  supporting  service  people  to  work  
as  a  team  to  provide  customer  satisfaction  
Interactive  Marketing  
Training  service  employees  in  the  fine  art  of  interacting  with  customers  to  satisfy  their  needs  
Chapter  9:New  product  Development  and  Product  Life  Cycle  Strategies  
New  Product  Development  
The  development  of  original  products,  product  improvements,  product  modifications,  and  new  
brands  through  the  firm’s  own  product  –development  efforts  
Idea  Generation  
The  systematic  search  for  new  product  ideas.  
Idea  Screening  
Screening  new-­‐product  ideas  in  order  to  spot  good  ideas  and  drop  poor  ones  as  soon  as  possible  
Product  Concept  
A  detailed  version  of  the  new-­‐product  idea  stated  in  meaningful  consumer  items  
Concept  Testing  
Testing  ne  product  concepts  with  a  group  of  target  consumers  to  find  out  if  the  concept  have  
strong  consumer  appeal  
Marketing  Strategy  Development  
Designing  an  initial  marketing  strategy  for  a  new  product  brand  on  the  product  concept  
Business  Analysis    
A  review  of  the  sales,  costs,  and  profit  projections  for  a  new  product  to  find  out  whether  these  
factors  satisfy  the  company’s  objectives  
Product  Development  
Developing  the  product  concept  into  a  physical  product  in  order  to  ensure  that  the  product  idea  
can  be  turned  into  a  workable  market  offering  
Test  Marketing  
The  stage  of  the  new-­‐product  development  in  which  the  product  and  marketing  programs  are  
tested  in  realistic  market  settings.  
Commercialization  
Introducing  a  new  product  into  the  market  
Customer-­centered  new  product  development  
New  product  development  that  focuses  on  finding  new  ways  to  solve  customer  problems  and  
create  more  customer  satisfying  experiences  
Team  Based  New  Product  Development  
An  approach  to  development  new  products  in  which  various  company  departments  work  
closely  together,  overlapping  the  steps  in  product  development  process  to  save  time  and  
increase  effectiveness  
Product  Life  Cycle  
The  course  of  a  product’s  sales  and  profits  over  its  lifetime,  it  involves  five  distinct  stages:  
product  development,  introduction,  growth,  maturity  and  decline  
Style  
A  basic  and  distinctive  mode  of  expression  
Fashion  
A  currently  accepted  or  popular  style  in  a  given  filed  
Fad  
A  temporary  period  of  unusually  high  sales  driven  by  consumer  enthusiasm  and  immediate  
product  or  brand  popularity  
Introduction  Stage  
The  product  life  cycle  stage  in  which  the  new  product  is  first  distributed  and  made  available  for  
purchase  
Growth  Stage  
The  product  life  cycle  stage  in  which  product’s  sales  start  climbing  up  quickly  
Maturity  Stage  
The  product  life  cycle  stage  in  which  sales  growth  slows  or  levels  off  
Decline  Stage  
The  product  life  cycle  stage  in  which  a  product’s  sales  decline  
Chapter  10:Pricing  understanding  and  capturing  customer  value  
Price    
The  amount  of  money  charged  for  a  product  or  service,  or  the  sum  of  the  values  the  customer  
exchanges  for  the  benefits  of  having  or  using  the  product  or  service  
Value  Based  Pricing  
Setting  the  price  based  on  buyers’  perceptionof  value  rather  than  on  the  seller’s  cost  
Good  Value  Pricing  
Offering  just  in  the  right  combination  of  quality  and  good  service  at  a  fiar  price  
Value-­‐added  Pricing  
Attaching  value-­‐added  features  and  services  to  differentiate  a  company’s  offers  and  charging  
higher  prices  
Cost  Based  Pricing  
Selling  prices  based  on  the  costs  for  producing,  distributing,  and  selling  the  product  plus  fair  
rate  of  return  for  effort  and  risk  
Fixed  Costs  (Overhead)  
Costs  that  do  not  vary  with  production  or  sales  level.  
Variable  Costs  
Costs  that  vary  directly  with  the  level  of  production  
Total  Costs  
The  sum  of  fixed  and  variable  costs  for  any  given  level  of  production  
Experience  curve  (learning  curve)  
The  drop  in  average  per-­‐unit  production  cost  that  comes  with  accumulated  production  
experience  
Cost  Plus  Pricing  
Adding  a  standard  markup  the  the  cost  of  the  product  
Break  Even  Pricing  (Target  Profit  Pricing)  
Setting  the  price  to  break  even  on  the  costs  of  making  and  marketing  a  product,  or  setting  price  
to  make  a  target  profit  
Target  Costing  
Pricing  that  starts  with  an  ideal  selling  price,  then  target  costs  that  will  ensure  that  the  price  is  
met  
Demand  Curve  
A  curve  that  shows  the  number  of  units  the  market  will  buy  in  a  given  time  period,  at  different  
prices  that  might  be  charged  
Price  Elasticity  
A  measure  of  the  sensitivity  of  demand  to  changes  in  prices  
Chapter  11:Prodcut  Pricing  Strategies  
Market-­skimming  pricing  
Setting  a  high  price  for  a  new  product  to  skim  maximum  revenues  layer  by  layer  from  the  
segments  willing  to  pay  the  high  price;  the  company  make  fewer  but  more  profitable  sales  
Market-­penetration  pricing  
Setting  a  low  price  for  a  new  in  order  to  attract  a  large  number  of  buyers  and  a  large  market  
share  
Product  line  pricing  
Setting  the  price  steps  between  various  productin  in  a  product  line  based  on  cost,  differences  
between  the  products,  customer  evaluations  of  different  features,  and  competitors’  prices  
Optional-­product  pricing  
The  pricing  of  optional  or  accessory  products  along  with  a  main  product  
Captive-­product  pricing  
Setting  a  price  for  products  that  must  be  used  along  with  the  main  product,  such  as  blades  for  a  
razor  and  film  for    camera  
By-­product  pricing  
Setting  a  price  for  by  products  in  order  to  make  the  main  product’s  price  more  competitive  
Product  Bundle  pricing  
Combining  several  products  and  offering  the  bundle  at  a  reduced  price  
Discount  
A  straight  reduction  on  price  on  purchases  during  a  stated  period  of  time  
Allowance  
Promoitonal  money  paid  by  manufacturers  to  retailers  in  return  for  an  angreement  to  feature  
the  manufacturer’s  product  in  some  way  
Segemented  pricing  
Selling  a  product  or  service  at  to  or  more  prices,  where  the  difference  in  prices  in  not  based  on  
differences  in  costs  
Psychological  Pricing  
A  pricing  approach  that  considers  the  psychology  of  prices  and  not  simply  the  economics,  the  
price  is  used  to  say  something  about  the  product  
Reference  Pricing  
Prices  that  buyers  carry  in  their  minds  and  refer  to  when  they  look  at  a  given  product  
 
Promotional  Pricing  
Temporarily  pricing  products  below  the  list  price,  and  sometimes  even  below  costs  ti  increase  
short  run  sales  
Geographic  Pricing  
Setting  price  for  customers  located  in  different  parts  of  the  country  or  world  
FOB-­origin  Pricing  
A  geographical  pricing  strategy  in  which  goods  are  placed  free  on  board  a  carrier;  the  customer  
pays  for  the  fright  from  the  factory  to  the  destination  
Uniform  Delivered  Pricing  
A  geographical  pricing  strategy  in  which  the  company  charges  the  same  price  plus  freight  oto  all  
customers,  regardless  of  their  location  
Zone  Pricing  
A  geographical  pricing  strategy  in  which  the  company  sets  up  two  or  more  zones.  All  customers  
pay  within  the  zone  pay  the  same  total  price;  the  more  distant  the  zone  the  higher  the  price  
Basing-­point  pricing  
A  geographical  pricing  strategy  in  which  the  seller  designates  some  city  as  a  basing  point  and  
charges  all  customers  the  freight  cost  from  that  city  to  the  customer  
Freight-­absorption  Pricing  
A  geographical  pricing  strategy  in  which  the  seller  absorbs  all  of  part  of  the  freight  charges  in  
order  to  get  the  desired  business  
Dynamic  Pricing  
Adjusting  prices  continually  to  meet  the  characteristics  and  needs  of  individual  customers  and  
situations  
Chapter  12:Markeitng  Channels  Delivering  Customer  Values  
Value  Delivery  Network  
The  network  made  up  of  the  company  suppliers,  distributors,  and  ultimately  customers  who  
“partner”  with  each  other  to  improve  the  performance  of  the  entire  system  in  delivering  
customer  value  
Marketing  Channel  (distritution  Channel)  
A  set  of  interdependent  organizations  that  help  make  a  product  or  service  available  for  use  or  
consumption  by  the  consumer  or  business  user.  
Channel  level  
A  layer  of  intermediaries  that  performs  some  work  in  bringing  the  product  and  its  ownership  
closer  to  the  final  buyer  
Direct  Marketing  Channel  
A  marketing  channel  that  has  no  intermediary  level  
Indirect  Marketing  Channel  
Channel  containing  one  or  more  intermediary  levels  
Channel  Conflict  
Disagreements  among  marketing  channel  members  on  goals  and  roles-­‐-­‐-­‐who  should  do  and  for  
what  rewards  
Conventional  Distribution  Channels  
A  channel  consisting  of  one  or  more  independent  producers,  wholesalers,  and  retailers,  each  a  
separate  business  seeking  to  maximize  its  own  profits,  even  at  the  expense  of  profits  for  the  
system  as  a  whole  
Vertical  Marketing  System  (VMS)  
A  distribution  channel  structure  in  which  producers,  wholesalers,  and  retailers  act  as  a  unified  
system.  One  channel  member  owns  the  others,  has  contracts  with  them  or  has  so  much  power  
that  they  will  cooperate  
Corporate  VMS  
A  vertical  marketing  system  that  combines  successive  stages  of  production  and  distribution  
under  single  ownership-­‐channel  leadership  is  established  through  common  ownership  
Contractual  VMS  
A  vertical  marketing  system  in  which  independent  firms  at  different  levels  of  production  and  
distribution  join  together  through  contracts  to  obtain  more  economies  or  sales  impact  than  they  
could  achieve  alone  
Franchise  Organization  
A  contractual  vertical  marketing  system  in  which  a  channel  member,  called  a  franchisor,  links  
several  stages  in  the  production-­‐distribution  process.    
Administered  VMS  
A  vertical  marketing  system  that  coordinates  successive  stages  of  production  and  distribution,  
not  through  common  ownership  or  contractual  ties,  but  through  the  size  and  power  of  one  of  
the  parties  
Horizontal  Marketing  System  
A  Channel  arrangement  in  which  two  or  more  companies  at  one  level  join  together  to  follow  a  
new  marketing  opportunity  
Multichannel  Distribution  system  
A  distribution  system  in  which  a  single  firm  sets  up  two  or  more  marketing  channels  to  reach  or  
more  customer  segments  
Disintermediation  
The  cutting  out  of  marketing  channel  intermediaries  by  product  or  service  producers  or  the  
displacement  of  traditional  resellers  by  radical  new  types  of  intermediaries    
Marketing  Channel  Design  
Designing  effective  marketing  channels  by  analyzing  consumer  needs,  setting    channel  
objectives,  identifying  major  channel  alternatives  and  evaluating  them.    
Intensive  Distribution  
Stockin  the  product  in  as  many  outlets  as  possible  
Exclusive  Distribution  
Giving  a  limited  number  of  dealers  the  exclusive  right  to  distribute  the  company’s  products  in  
their  territories  
Selective  Distribution  
The  use  of  more  than  one,  but  fewer  than  al,  of  the  intermediaries  who  are  willing  to  carry  the  
company’s  products  
Marketing  Channel  Management  
Selecting,  managing,  and  motivating  individual  channel  members  and  evaluating  their  
performance  over  time  
Marketing  Logistics  (Physical  Distribution)  
Planning,  implementing  and  controlling  the  physical  flow  of  materials,  final  goods,  and  related  
information  form  points  of  origin  to  points  of  consumption  to  meet  customer  requirements  at  a  
profit  
Supply  Chain  Management  
Managing  upstream  and  downstream  value-­‐added  flow  of  materials,  final  goods,  and  related  
information  among  suppliers,  the  company,  resellers  and  finals  consumers  
Distribution  Center  
A  large,  highly  automated  warehouse  designed  to  receive  good  from  various  plants  and  
suppliers,  take  orders,  fill  them  efficiently  and  deliver  goods  to  customer  as  quickly  as  possible.    
Intermodal  Transportation  
Combining  two  or  more  modes  of  transportation  
Integrated  Logistics  Management  
The  logistics  concept  that  emphasizes  teamwork,  both  inside  the  company  and  among  all  the  
marketing  channel  organizations  to  maximize  the  performance  of  the  entire  distribution  
system.  
Third  Party  logistics  provider(  3PL)  
an  independent  logistics  provider  that  performs  any  or  all  of  the  functions  required  to  get  its  
clients  product  to  market.    
 
 
Chapter  18  
Competitive  Advantage  
An  advantage  over  competitors  gained  by  offering  consumers  greater  value  than  competitors  do  
Competitive  Analysis  
The  process  of  identifying  key  competitors;  assessing  their  objectives,  strategies,  strengths  and  
weaknesses  and  reaction  patterns  and  selecting  which  competitors  to  attack  or  avoid  
Competitive  Marketing  Strategies  
Strategies  that  strongly  position  the  company  against  competitors  and  that  give  the  company  
the  strongest  possible  strategic  advantage  
Strategic  Group  
A  group  of  firms  in  an  industry  following  the  same  or  similar  strategy  
Benchmarking  
The  process  of  comparing  the  company’s  products  and  processe  to  those  of  competitros  or  
leading  firms  in  other  industries  to  identify  ‘best  practices’  and  find  ways  to  improve  quality  
and  performance  
Customer  Value  Analysis  
Analysis  conducted  to  determine  what  benefits  target  customers  value  and  how  they  rate  the  
relative  value  of  various  competitors’  offers  
Market  Leader  
The  firm  in  the  industry  with  the  largest  market  share  
Market  Challenger  
A  runner  up  that  is  fighting  hard  to  increase  its  market  share  in  an  industry  
Market  Follower  
A  runner  up  firm  that  wants  to  hold  its  share  in  an  industry  without  rocking  the  boat  
Market  Nicher  
A  firm  that  serves  small  segment  that  the  other  firms  in  an  industry  overlook  or  ignore  
Competitor-­Centered  Company  
A  company  whose  moves  are  mainly  based  on  competitors’  actions  and  reactions  
Customer-­Centered  Company  
A  company  that  focuses  on  customer  development  in  designing  its  marketing  strategies  and  on  
delivering  superior  value  to  its  target  customers  
Market-­Centered  Company  
A  company  that  pays  balanced  attention  to  both  customers  and  competitors  in  designing  its  
marketing  strategies