Marketing Concepts
Joseph Lewis Aguirre

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Slide 12-19

Marketing
AMA Definition of Marketing
Marketing is an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.
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Exchange
Exchange is the trade of things of value between buyer and seller so that each is better off after the trade.
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Market
A market consists of people with both the desire and ability to buy a specific product.
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Target Market
The target market consists of one or more specific groups of potential customers toward which an organization directs its marketing program.
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Marketing Mix
The marketing mix consists of the marketing manager’s controllable factors—product, price, promotion, and place (the 4Ps)—that can be used to solve a marketing problem.
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Environmental Factors
Environmental factors are the uncontrollable factors involving social, economic, technological, competitive, and regulatory forces.
76

Customer Value
Customer value is the unique combination of benefits received by targeted buyers that includes quality, price, convenience, on-time delivery, and both before-sale and after-sale service.
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Relationship Marketing
Relationship marketing links the organization to its individual customers, employees, suppliers, and other partners for their mutual long-term benefits.
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Marketing Program
A marketing program is a plan that integrates the marketing mix to provide a good, service, or idea to prospective buyers.
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Marketing Concept
The marketing concept is the idea that an organization should (1) strive to satisfy the perceived needs of consumers (2) while also trying to achieve the organization’s goals.
NOTE: As perceived by the customer
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Market Orientation
An organization that has a market orientation focuses its efforts on
(1) continuously collecting information about customers’ needs, (2) sharing this information across departments, and
(3) using it to create customer value.
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Customer Relationship
Management (CRM)
Customer relationship management
(CRM) is the process of identifying prospective buyers, understanding them intimately, and developing favorable long-term perceptions of the organization and its offerings so that buyers will choose them in the marketplace.
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Societal Capital Marketing
The societal marketing concept is the view that an organization should satisfy the needs of consumers in a way that provides for society’s well-being.
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Macromarketing
Macromarketing is the study of the aggregate flow of a nation’s goods and services to benefit society.
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Micromarketing
Micromarketing is how an individual organization directs its marketing activities and allocates its resources to benefit its customers.
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Ultimate (End Users) Consumers
Ultimate consumers are the people who use the goods and services purchased for a household.
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Organizational Buyers
Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.
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Utility
Utility is the benefits or customer value received by users of the product.
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Profit
Profit is the reward to a business firm for the risk it undertakes in offering a product for sale. It is also the money left over after a firm’s total expenses are subtracted from its total revenues.
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Corporate Level
The corporate level is the level in an organization where top management directs overall strategy for the entire organization.
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Business Unit
A business unit is an organization that markets a set of related products to a clearly defined group of customers.
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Business Unit Level
The business unit level is the level in an organization where business unit managers set the direction for their products and markets to exploit valuecreating opportunities.
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Functional Level
The functional level is the level in an organization where groups of specialists actually create value for the organization.
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Cross-functional Teams
Cross-functional teams are a small number of people from different departments in an organization who are mutually accountable to a common set of performance goals.
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Mission
Mission is a statement of the organization’s scope, often identifying its customers, markets, products, technology, and values.
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Stakeholders
Stakeholders are the people who are affected by what the company does and how well it performs.
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Organizational Culture
Organizational culture is a set of values, ideas, and attitudes that is learned and shared among the members of an organization.
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Goals or Objectives
Goals or objectives convert the mission into targeted levels of performance to be achieved, often by a specific time.
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Market Share
Market share is the ratio of sales revenue of the firm to the total sales revenue of all firms in the industry, including the firm itself.
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Competencies
Competencies are an organization’s special capabilities, including skills, technologies, and resources that distinguish it from other organizations.
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Competitive Advantage
Competitive advantage is a unique strength relative to competitors, often based on quality, time, cost, or innovation.
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Quality
Quality consists of those features and characteristics of a product that influence its ability to satisfy customer needs.
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Benchmarking
Benchmarking involves discovering how others do something better than your own firm so you can imitate or leapfrog competition.
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Strategic Marketing Process
The strategic marketing process is the approach whereby an organization allocates its marketing mix resources to reach its target markets.
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Marketing Plan
A marketing plan is a road map for the marketing activities of an organization for a specified future period of time, such as one year or five years.
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Situation Analysis
Situation analysis involves taking stock of where a firm or product has been recently, where it is now, and where it is headed in terms of the organization’s plans and the external factors and trends affecting it.
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SWOT Analysis
SWOT analysis is an acronym describing an organization’s appraisal of its internal
S trengths and W eaknesses and its external O pportunities and T hreats.
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Market Segmentation
Market segmentation involves aggregating prospective buyers into groups, or segments, that (1) have common needs and (2) will respond similarly to a marketing action.
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Points of Difference
Points of difference are those characteristics of a product that make it superior to competitive substitutes.
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Marketing Strategy
A marketing strategy is the means by which a marketing goal is to be achieved, usually characterized by a specific target market and a marketing program to reach it.
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Marketing Tactics
Marketing tactics are detailed day-to-day operational decisions essential to the overall success of marketing strategies.
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Environmental Scanning
Environmental scanning is the process of continually acquiring information on events occurring outside the organization to identify and interpret potential trends.
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Social Forces
The social forces of the environment include the demographic characteristics of the population and its values.
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Demographics
Demographics describes a population according to selected characteristics such as age, gender, ethnicity, income, and occupation.
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Baby Boomers
Baby boomers is the generation of children born between 1946 and 1964.
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Generation X
Generation X includes the 15% of the
U.S. population born between 1965 and
1976.
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Generation Y
Generation Y includes the 72 million
Americans born between 1977 and 1994.
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Blended Family
A blended family is a family formed by the merging into a single household of two previously separated units.
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Multicultural Marketing
Multicultural marketing consists of combinations of the marketing mix that reflect the unique attitudes, ancestry, communication preferences, and lifestyles of different races.
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Culture
Culture incorporates the set of values, ideas, and attitudes that are learned and shared among the members of a group.
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Value Consciousness
Value consciousness is the concern for obtaining the best quality, features, and performance of a product or service for a given price.
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Economy
The economy pertains to the income, expenditures, and resources that affect the cost of running a business and household.
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Gross Income
Gross income is the total amount of money made in one year by a person, household, or family unit.
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Disposable Income
Disposable income is the money a consumer has left after paying taxes to use for food, shelter, clothing, and transportation.
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Discretionary Income
Discretionary income is the money that remains after paying for taxes and necessities.
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Technology
Technology refers to inventions or innovations from applied science or engineering research.
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Marketspace
Marketspace is an information- and communication-based electronic exchange environment mostly occupied by sophisticated computer and telecommunication technologies and digitized offerings.
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Electronic Commerce
Electronic commerce is any activity that uses some form of electronic communication in the inventory, exchange, advertisement, distribution, and payment of goods and services.
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Intranet
An Intranet is an Internet-based network used within the boundaries of an organization.
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Extranets
Extranets use Internet-based technologies to permit communication between a company and its suppliers, distributors, and other partners.
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Competition
Competition refers to the alternative firms that could provide a product to satisfy a specific market’s need.
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Barriers to Entry
Barriers to entry are business practices or conditions that make it difficult for new firms to enter the market.
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Regulation
Regulation consists of restrictions state and federal laws place on business with regard to the conduct of its activities.
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Consumerism
Consumerism is a grassroots movement started in the 1960s to increase the influence, power, and rights of consumers in dealing with institutions.
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Self-Regulation
Self-regulation is an alternative to government control where where an industry attempts to police itself.
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Ethics
Ethics are the moral principles and values that govern the actions and decisions of an individual or group.
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Laws
Laws are society’s values and standards that are enforceable in the courts.
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Caveat Emptor
Caveat emptor is the legal concept of
“let the buyer beware” that was pervasive in American business culture prior to the
1960s.
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Consumer Bill of Rights (1962)
The Consumer Bill of Rights (1962) is a law that codified the ethics of exchange between buyers and sellers, including the rights (1) to safety,
(2) to be informed, (3) to choose, and
(4) to be heard.
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Economic Espionage
Economic espionage is the clandestine collection of trade secrets or proprietary information about a company’s competitors.
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Code of Ethics
A code of ethics is a formal statement of ethical principles and rules of conduct.
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Whistle-blowers
Whistle-blowers are employees who report unethical or illegal actions of their employers.
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Moral Idealism
Moral idealism is a personal moral philosophy that considers certain individual rights or duties as universal, regardless of the outcome.
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Utilitarianism
Utilitarianism is a personal moral philosophy that focuses on “the greatest good for the greatest number,” by assessing the costs and benefits of the consequences of ethical behavior.
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Social Responsibility
Social responsibility means that organizations are a part of a larger society and are accountable to that society for their actions.
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Green Marketing
Green marketing consists of marketing efforts to produce, promote, and reclaim environmentally sensitive products.
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ISO 14000
ISO 14000 consists of worldwide standards for environmental quality and green marketing practices developed by the International Standards Organization
(ISO).
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Cause Marketing
Cause marketing occurs when the charitable contributions of a firm are tied directly to the customer revenues produced through the promotion of one of its products.
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Social Audit
A social audit is a systematic assessment of a firm’s objectives, strategies, and performance in terms of social responsibility.
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Sustainable Development
Sustainable development involves conducting business in a way that protects the natural environment while making economic progress.
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Consumer Behavior
Consumer behavior consists of the actions a person takes in purchasing and using products and services, including the mental and social processes that come before and after these actions.
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Purchase Decision Process
The purchase decision process is the stages a buyer passes through in making choices about which products and services to buy.
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Evaluative Criteria
Evaluative criteria are the factors which represent both the objective attributes of a brand and the subjective ones a consumer uses to compare different products and brands.
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Consideration Set
A consideration set is the group of brands that a consumer would consider acceptable from among all the brands in the product class of which he or she is aware.
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Cognitive Dissonance
Cognitive dissonance is the feeling of postpurchase psychological tension or anxiety consumers may experience when faced with two or more highly attractive alternatives.
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Involvement
Involvement consists of the personal, social, and economic significance of the purchase to the consumer.
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Situational Influences
Situational influences consist of the five aspects of the purchase situation that impacts the consumer’s purchase decision process: (1) the purchase task, (2) social surroundings, (3) physical surroundings,
(4) temporal effects, and (5) antecedent states.
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Motivation
Motivation is the energizing force that stimulates behavior to satisfy a need.
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Personality
Personality refers to a person’s consistent behaviors or responses to recurring situations.
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Self-Concept
Self-concept is the way people see themselves and the way they believe others see them .
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Perception
Perception is the process by which an individual selects, organizes, and interprets information to create a meaningful picture of the world.
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Subliminal Perception
Subliminal perception is seeing or hearing messages without being aware of them.
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Perceived Risk
Perceived risk represents the anxieties felt because the consumer cannot anticipate the outcomes of a purchase but believes that there may be negative consequences.
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Learning
Learning refers to those behaviors that result from (1) repeated experience and
(2) reasoning.
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Brand Loyalty
Brand loyalty is a favorable attitude toward and consistent purchase of a single brand over time.
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Attitude
An attitude is a “learned predisposition to respond to an object or class of objects in a consistently favorable or unfavorable way.”
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Beliefs
Beliefs are a consumer’s subjective perception of how a product or brand performs on different attributes based on personal experience, advertising, and discussions with other people.
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Lifestyle
Lifestyle is a mode of living that is identified by how people spend their time and resources, what they consider important in their environment, and what they think of themselves and the world around them.
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Opinion Leaders
Opinion leaders are individuals who exert direct or indirect social influence over others.
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Word of Mouth
Word of mouth is the influencing of people during conversations.
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Reference Groups
Reference groups are people to whom an individual looks as a basis for self-appraisal or as a source of personal standards.
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Consumer Socialization
Consumer socialization is the process by which people acquire the skills, knowledge, and attitudes necessary to function as consumers.
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Family Life Cycle
The family life cycle describes the distinct phases that a family progresses through from formation to retirement, each phase bringing with it identifiable purchasing behaviors.
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Social Class
Social class is the relatively permanent, homogeneous divisions in a society into which people sharing similar values, interests, and behavior can be grouped.
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Subcultures
Subcultures are subgroups within the larger, or national, culture with unique values, ideas, and attitudes.
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Business Marketing
Business marketing is the marketing of goods and services to companies, governments, or not-for-profit organizations for use in the creation of goods and services that they can produce and market to others.
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Organizational Buyers
Organizational buyers are those manufacturers, wholesalers, retailers, and government agencies that buy goods and services for their own use or for resale.
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Industrial Firms
Industrial firms are organizational buyers that in some way reprocesses a product or service they buy before selling it again to the next buyer.
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Resellers
Resellers are wholesalers and retailers that buy physical products and resell them again without any processing.
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Government Units
Government units are the federal, state, and local agencies that buy goods and services for the constituents they serve.
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North American Industry
Classification System (NAICS)
The NAICS provides common industry definitions for Canada, Mexico, and the
United States, which makes easier the measurement of economic activity in the three member countries of the North
American Free Trade Agreement
(NAFTA).
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Derived Demand
Derived demand means the demand for industrial products and services is driven by, or derived from, demand for consumer products and services.
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Organizational Buying Criteria
Organizational buying criteria are the objective attributes of the supplier’s products and services and the capabilities of the supplier itself.
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ISO 9000
ISO 9000 consists of standards for registration and certification of a manufacturer’s quality management and assurance system based on an on-site audit of practices and procedures developed by the International Standards
Organization (ISO).
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Reverse Marketing
Reverse marketing involves the deliberate effort by organizational buyers to build relationships that shape suppliers’ products, services, and capabilities to fit a buyer’s needs and those of its customers.
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Reciprocity
Reciprocity is an industrial buying practice in which two organizations agree to purchase each other’s products and services.
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Supply Partnership
A supply partnership exists when a buyer and its supplier adopt mutually beneficial objectives, policies, and procedures for the purpose of lowering the cost or increasing the value of products and services delivered to the ultimate consumer.
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Buying Center
A buying center is the group of people in an organization who participate in the buying process and share common goals, risks, and knowledge important to a purchase decision.
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Buy Classes
Buy classes consist of three types of buying situations: straight rebuy; modified rebuy; and new buy.
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Organizational Buying Behavior
Organizational buying behavior is the decision-making process that organizations use to establish the need for products and services and identify, evaluate, and choose among alternative brands and suppliers.
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Make-Buy Decision
A make-buy decision is an evaluation of whether components and assemblies will be purchased from outside suppliers or built by the company itself.
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Value Analysis
Value analysis is a systematic appraisal of the design, quality, and performance of a product to reduce purchasing costs.
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Bidder’s List
A bidder’s list is a list of firms believed to be qualified to supply a given item.
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E-Marketplaces
E-marketplaces are online trading communities that bring together buyers and supplier organizations to make possible the real time exchange of information, money, products, and services.
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Traditional Auction
A traditional auction is an online auction in which a seller puts an item up for sale and would-be buyers are invited to bid in competition with each other.
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Reverse Auction
A reverse auction is an online auction in which a buyer communicates a need for a product or service and would-be suppliers are invited to bid in competition with each other.
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Countertrade
Countertrade is the practice of using barter rather than money for making global sales.
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Gross Domestic Product
Gross domestic product is the monetary value of all goods and services produced in a country during one year.
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Balance of Trade
Balance of trade is the difference between the monetary value of a nation’s exports and imports.
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Economic Espionage Act (1996)
The Economic Espionage Act (1996) is a law that makes the theft of trade secrets by foreign entities a federal crime in the
United States.
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Protectionism
Protectionism is the practice of shielding one or more industries within a country’s economy from foreign competition through the use of tariffs or quotas.
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Tariffs
Tariffs are a government tax on goods or services entering a country, primarily serving to raise prices on imports.
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Quota
A quota is a restriction placed on the amount of of a product allowed to enter or leave a country.
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World Trade Organization
The World Trade Organization (WTO) is a permanent institution that sets rules governing trade between its members through panels of trade experts who decide on trade disputes between members and issue binding decisions.
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Global Competition
Global competition exists when firms originate, produce, and market their products and services worldwide.
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Strategic Alliances
Strategic alliances are agreements among two or more independent firms to cooperate for the purpose of achieving common goals.
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Multidomestic Marketing
Strategy
A multidomestic marketing strategy is used by multinational firms that have as many different product variations, brand names, and advertising programs as countries in which they do business.
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Global Marketing Strategy
A global marketing strategy is used by transnational firms that employ the practice of standardizing marketing activities when there are cultural similarities and adapting them when cultures differ.
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Global Brand
A global brand is a brand marketed under the same name in multiple countries with similar and centrally coordinated marketing programs.
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Global Consumers
Global consumers consist of customer groups living in many different countries or regions of the world who have similar needs or seek similar features and benefits from products or services.
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Cross-Cultural Analysis
Cross-cultural analysis involves the study of similarities and differences among consumers in two or more nations or societies.
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Values
Values is a society’s personally or socially preferable modes of conduct or states of existence that tend to persist over time.
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Customs
Customs are what is considered normal and expected about the way people do things in a specific country.
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Foreign Corrupt Practices
Act (1977)
The Foreign Corrupt Practices Act
(1977) is a law, amended by the
International Anti-Dumping and Fair
Competition Act (1998), that makes it a crime for U.S. corporations to bribe an official of a foreign government or political party to obtain or retain business in a foreign country.
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Cultural Symbols
Cultural symbols are things that represent ideas or concepts.
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Semiotics
Semiotics are a field of study that examines the correspondence between symbols and their role in the assignment of meaning for people.
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Back Translation
Back translation is when a translated word or phrase is retranslated into the original language by a different interpreter to catch errors.
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Consumer Ethnocentrism
Consumer ethnocentrism is the tendency to believe that it is inappropriate, indeed immoral, to purchase foreign-made products.
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Currency Exchange Rate
A currency exchange rate is the price of one country’s currency expressed in terms of another country’s currency.
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Exporting
Exporting is producing goods in one country and selling them in another country.
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Joint Venture
A joint venture is when a foreign country and a local firm invest together to create a local business.
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Direct Investment
Direct investment entails a domestic firm actually investing in and owning a foreign subsidiary or division.
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Dumping
Dumping is when a firm sells a product in a foreign country below its domestic price or below its actual cost.
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Gray Market
A gray market is a situation where products are sold through unauthorized channels of distribution. Also called parallel importing .
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Marketing Research
Marketing research is the process of defining a marketing problem and opportunity, systematically collecting and analyzing information, and recommending actions.
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Decision
A decision is a conscious choice from among two or more alternatives.
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Measures of Success
Measures of success are criteria or standards used in evaluating proposed solutions to a problem.
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Constraints
Constraints in a decision are the restrictions placed on potential solutions to a problem.
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Sampling
Sampling involves selecting representative elements from a population.
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Probability Sampling
Probability sampling involves using precise rules to select the sample such that each element of the population has a specific known chance of being selected.
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Nonprobability Sampling
Nonprobability sampling involves using arbitrary judgments to select the sample so that the chance of selecting a particular element may be unknown or 0.
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Statistical Inference
Statistical inference involves drawing conclusions about a population from a sample taken from that population.
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Data
Data are the facts and figures related to the problem, and are divided into two main parts: secondary data and primary data.
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Secondary Data
Secondary data are facts and figures that have already been recorded before the project at hand.
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Primary Data
Primary data are facts and figures that are newly collected for the project.
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Observational Data
Observational data are the facts and figures obtained by watching, either mechanically or in person, how people actually behave.
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Questionnaire Data
Questionnaire data are the facts and figures obtained by asking people about their attitudes, awareness, intentions, and behaviors.
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Information Technology
Information technology involves a computer and communication system to satisfy an organization’s needs for data storage, processing, and access.
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Data Mining
Data mining is the extraction of hidden predictive information from large databases.
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Market Segments
Market segments are the relatively homogeneous groups of prospective buyers that result from the market segmentation process.
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Product Differentiation
Product differentiation is a strategy that involves a firm’s using different marketing mix activities to help consumers perceive the product as being different and better than competing products.
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Market-Product Grid
A market-product grid is a framework to relate the market segments of potential buyers to products offered or potential marketing actions by the firm.
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Synergy
Synergy is the increased customer value achieved through performing organizational functions more efficiently.
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Usage Rate
Usage rate is the quantity consumed or patronage (store visits) during a specific period of time.
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80/20 Rule
The 80/20 rule is a concept that suggests
80 percent of a firm’s sales are obtained from 20 percent of its customers.
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Product Positioning
Product positioning refers to the place an offering occupies in consumers’ minds on important attributes relative to competitive products.
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Product Repositioning
Product repositioning involves changing the place an offering occupies in a consumer’s mind relative to competitive products.
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Perceptual Map
A perceptual map is a means of displaying or graphing in two dimensions the location of products or brands in the minds of consumers to enable a manager to see how consumers perceive competing products or brands relative to its own and then take marketing actions.
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Market Potential
Market potential is the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firm. Also called industry potential .
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Industry Potential
Industry potential is the maximum total sales of a product by all firms to a segment during a specified time period under specified environmental conditions and marketing efforts of the firm. Also called market potential .
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Sales Forecast
A sales forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Also called company forecast .
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Company Forecast
A company forecast refers to the total sales of a product that a firm expects to sell during a specified time period under specified environmental conditions and its own marketing efforts. Also called sales forecast .
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Direct Forecast
A direct forecast involves estimating the value to be forecast without any intervening steps.
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Lost-Horse Forecast
A lost-horse forecast involves making a forecast using the last known value and modifying it according to positive or negative factors expected in the future.
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Survey of
Buyers’ Intentions Forecast
A survey of buyers’ intentions forecast involves asking prospective customers if they are likely to buy the product during some future time period.
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Salesforce Survey Forecast
A salesforce survey forecast involves asking the firm’s salespeople to estimate sales during a coming period.
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Trend Extrapolation
Trend extrapolation involves extending a pattern observed in past data into the future.
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Linear Trend Extrapolation
Linear trend extrapolation involves using a straight line to extend a pattern observed in past data into the future.
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Product
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 some other unit of value.
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Product Line
A product line is a group of products that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same type of outlets, or fall within a given price range.
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Product Mix
The product mix is the number of product lines offered by a company.
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Consumer Goods
Consumer goods are products purchased by the ultimate consumer.
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Business Goods
Business goods are products that assist directly or indirectly in providing products for resale. Also called as B2B goods , industrial goods , or organizational goods .
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Convenience Goods
Convenience goods are items that the consumer purchases frequently, conveniently, and with a minimum of shopping effort.
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Shopping Goods
Shopping goods are items for which the consumer compares several alternatives on criteria, such as price, quality, or style.
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Specialty Goods
Specialty goods are items that a consumer makes a special effort to search out and buy.
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Unsought Goods
Unsought goods are items that the consumer either does not know about or knows about but does not initially want.
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Production Goods
Production goods are items used in the manufacturing process that become part of the final product.
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Support Goods
Support goods are items used to assist in producing other goods and services.
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Protocol
A protocol is a statement that, before product development begins, identifies:
(1) a well-defined target market;
(2) specific customers’ needs, wants, and preferences; and (3) what the product will be and do.
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New-Product Process
The new-product process consists of seven stages a firm goes through to identify business opportunities and convert them to a salable good or service.
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New-Product Strategy
Development
New-product strategy development is the stage of the new-product process that defines the role for a new product in terms of the firm’s overall corporate objectives.
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Six Sigma
Six Sigma is a means to “delight the customer” by achieving quality through a highly disciplined process to focus on developing and delivering near-perfect products and services.
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Idea Generation
Idea generation is the stage of the newproduct process that involves developing a pool of concepts as candidates for new products.
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Screening and Evaluation
Screening and evaluation is the stage of the new-product process that involves internal and external evaluations of the new-product ideas to eliminate those that warrant no further effort.
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Business Analysis
Business analysis is the stage of the new-product process that involves specifying the product features and marketing strategy and making necessary financial projections needed to commercialize a product.
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Development
Development is the stage of the newproduct process that involves turning the idea on paper into a prototype.
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Market Testing
Market testing is the stage of the new-product process that involves exposing actual products to prospective consumers under realistic purchase conditions to see if they will buy.
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Commercialization
Commercialization is the stage of the new-product process that involves positioning and launching a new product in full-scale production and sales.
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Slotting Fee
A slotting fee is a payment a manufacturer makes to place a new item on a retailer’s shelf.
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Failure Fee
A failure fee is a penalty payment a manufacturer makes to compensate a retailer for sales its valuable shelf space failed to make.
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Product Life Cycle
The product life cycle describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline.
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Product Class
A product class is the entire product category or industry.
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Product Form
The product form pertains to variations of a product within the product class.
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Product Modification
Product modification involves altering a product’s characteristic, such as its quality, performance, or appearance, to try to increase the product’s sales.
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Market Modification
Market modification is a strategy in which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations.
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Trading Up
Trading up involves adding value to a product (or line) through additional features or higher-quality materials.
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Trading Down
Trading down involves reducing the number of features, quality, or price.
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Downsizing
Downsizing involves reducing the content of packages without changing package size and maintaining or increasing the package price.
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Branding
Branding is a basic decision in marketing products in which an organization uses a name, phrase, design, or symbols, or combination of these to identify its products and distinguish them from those of competitors.
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Brand Name
A brand name is any word, device
(design, shape, sound, or color), or combination of these used to distinguish a seller’s goods or services.
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Trade Name
A trade name is a commercial, legal name under which a company does business.
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Trademark
A trademark identifies that a firm has legally registered its brand name or trade name so the firm has its exclusive use, thereby preventing others from using it.
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Brand Personality
A brand personality is a set of human characteristics associated with a brand name.
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Brand Equity
Brand equity is the added value a given brand name gives to a product beyond the functional benefits provided.
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Brand Licensing
Brand licensing is a contractual agreement whereby one company
(licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company
(licensee) for a royalty or fee.
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Multiproduct Branding
Multiproduct branding is a branding strategy in which a company uses one name for all its products in a product class.
86

Co-Branding
Co-branding is a branding strategy that involves the practice of the pairing of two brand names of two manufacturers on a single product.
87

Multibranding
Multibranding is a branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment.
88

Private Branding
Private branding is a branding strategy used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. Also called private labeling or reseller branding .
89

Mixed Branding
Mixed branding is a branding strategy where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market.
90

Packaging
Packaging is a component of a product that refers to any container in which it is offered for sale and on which label information is conveyed.
91

Label
A label is an integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients.
92

Warranty
A warranty is a statement indicating the liability of the manufacturer for product deficiencies.
93

Services
Services are intangible activities or benefits that an organization provides to consumers in exchange money or something else of value.
61

Four I’s of Service
The four I’s of service are the four unique elements to services: intangibility, inconsistency, inseparability, and inventory.
62

Idle Production Capacity
Idle production capacity occurs when the service provider is available but there is no demand.
63

Service Continuum
The service continuum is a range from the tangible to the intangible or gooddominant to service-dominant offerings available in the marketplace.
64

Gap Analysis
Gap analysis is a type of analysis that identifies the differences between a consumer’s expectations about and experiences with a service based on dimensions of service quality.
65

Customer Contact Audit
A customer contact audit is a flowchart of the points of interaction between a consumer and a service provider.
66

Internal Marketing
Internal marketing is the notion that a service organization must focus on its employees, or internal market, before successful programs can be directed at customers.
67

Capacity Management
Capacity management involves integrating the service component of the marketing mix with efforts to influence consumer demand.
68

Off-Peak Pricing
Off-peak pricing consists of charging different prices during different times of the day or days of the week to reflect variations in demand for the service.
69

Price (P)
Price (P) is the money or other considerations (including other goods and services) exchanged for the ownership or use of a good or service.
66

Barter
Barter is the practice of exchanging goods and services for other goods and services rather than for money.
67

Value
Value is the ratio of perceived benefits to price; or Value = (Perceived benefits divided by Price).
68

Value-Pricing
Value-pricing is the practice of simultaneously increasing product and service benefits while maintaining or decreasing price.
69

Profit Equation
A firm’s profit equation is as follows:
Profit = Total revenue − Total cost; or
Profit = (Unit price × Quantity sold)
− Total cost.
70

Pricing Objectives
Pricing objectives involve specifying the role of price in an organization’s marketing and strategic plans.
71

Pricing Constraints
Pricing constraints involve factors that limit the range of prices a firm may set.
72

Demand Curve
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.
73

Demand Factors
Demand factors are factors that determine consumers’ willingness and ability to pay for goods and services.
74

Total Revenue (TR)
Total revenue (TR) is the total money received from the sale of a product.
Total revenue (TR) = unit price (P)
× the quantity sold (Q) or TR = P × Q.
75

Average Revenue (AR)
Average revenue (AR) is the average amount of money received for selling one unit of a product, or simply the price of that unit.
76

Marginal Revenue (MR)
Marginal revenue (MR) is the change in total revenue that results from producing and marketing one additional unit.
77

Price Elasticity of Demand
Price elasticity of demand is the percentage change in quantity demanded relative to a percentage change in price.
78

Total Cost (TC)
Total cost (TC) is the total expense incurred by a firm in producing and marketing a product. Total cost (TC) equals the sum of fixed cost (FC) and variable cost (VC) or TC = FC + VC.
79

Fixed Cost (FC)
Fixed cost (FC) is the sum of the expenses of the firm that are stable and do not change with the quantity of a product that is produced and sold.
80

Variable Cost (VC)
Variable cost (VC) is the sum of the expenses of the firm that vary directly with the quantity of a product that is produced and sold.
81

Unit Variable Cost (UVC)
Unit variable cost (UVC) is variable cost expressed on a per unit basis.
82

Marginal Cost (MC)
Marginal cost (MC) is the change in total cost that results from producing and marketing one additional unit of a product.
83

Marginal Analysis
Marginal analysis is a continuing, concise trade-off of incremental costs against incremental revenues.
84

Break-Even Analysis
Break-even analysis is a technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output.
85

Break-Even Point (BEP)
Break-even point (BEP) is the quantity at which total revenue and total cost are equal or BEP = (FC ÷ (P−UVC)).
86

Break-Even Chart
Break-even chart is a graphic presentation of the break-even analysis that shows when total revenue and total cost intersect to identify profit or loss for a given quantity sold.
87

Skimming Pricing
Skimming pricing involves setting the highest initial price that customers really desiring the product are willing to pay.
67

Penetration Pricing
Penetration pricing involves setting a low initial price on a new product to appeal immediately to the mass market.
68

Prestige Pricing
Prestige pricing involves setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it.
69

Price Lining
Price lining involves setting a the price of a line of products at a number of different specific pricing points.
70

Odd-Even Pricing
Odd-even pricing involves setting prices a few dollars or cents under an even number .
71

Target Pricing
Target pricing involves estimating the price that the ultimate consumer would be willing to pay for a product, working backward through markups taken by retailers and wholesalers to determine what price is charged to wholesalers, and then deliberately adjusting the composition and features of a product to achieve the target price to consumers.
72

Bundle Pricing
Bundle pricing involves the marketing of two or more products in a single package price.
73

Yield Management Pricing
Yield management pricing involves the charging of different prices to maximize revenue for a set amount of capacity at any given time.
74

Standard Markup Pricing
Standard markup pricing involves adding a fixed percentage to the cost of all items in a specific product class.
75

Cost-Plus Pricing
Cost-plus pricing involves summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price.
76

Experience Curve Pricing
Experience curve pricing is a method of pricing based on the learning effect, which holds that the unit cost of many products and services declines by 10 percent to 30 percent each time a firm’s experience at producing and selling them doubles.
77

Target Profit Pricing
Target profit pricing involves setting an annual target of a specific dollar volume of profit.
78

Target Return-On-Sales Pricing
Target return-on-sales pricing involves setting a price to achieve a profit that is a specified percentage of the sales volume.
79

Target Return-On-Investment
Pricing
Target return-on-investment pricing involves setting a price to achieve an annual target return-on-investment (ROI).
80

Customary Pricing
Customary pricing involves setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors.
81

Above-, At-, or Below-Market
Pricing
Above-, at-, or below-market pricing involves setting a market price for a product or product class based on a subjective feel for the competitors’ price or market price as the benchmark .
82

Loss-Leader Pricing
Loss-leader pricing involves deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention in hopes that they will buy other products as well.
83

One-Price Policy
A one-price policy involves setting one price for all buyers of a product or service. Also called fixed pricing .
84

Flexible-Price Policy
A flexible-price policy involves setting different prices for products and services depending on individual buyers and purchase situations. Also called dynamic pricing .
85

Product Line Pricing
Product line pricing involves setting the price of a line of products at a number of different specific pricing points.
86

Price War
A price war involves successive price cutting by competitors to increase or maintain their unit sales or market share.
87

Quantity Discounts
Quantity discounts are reductions in unit costs for a larger order.
88

Promotional Allowances
Promotional allowances are cash payments or extra amount of “free goods” awarded sellers in the channel of distribution for undertaking certain advertising or selling activities to promote a product.
89

Everyday Low Pricing
Everyday low pricing is the practice of replacing promotional allowances with lower manufacturer list prices.
90

FOB Origin Pricing
FOB origin pricing is the price the seller quotes that includes the cost of loading the product onto the vehicle. The seller names the location (factory or warehouse) where the loading is to occur. The buyer becomes responsible for picking the specific mode of transportation and paying for all transportation and handling costs.
91

Uniform Delivered Pricing
Uniform delivered pricing is the price the seller quotes includes all transportation costs.
92

Basing-Point Pricing
Basing-point pricing involves selecting one or more geographical locations
(basing point) from which the list price for products plus freight expenses are charged to the buyer.
93

Price Fixing
Price fixing involves a conspiracy among firms to set prices for a product.
94

Price Discrimination
Price discrimination is the practice of charging different prices to different buyers for goods of like grade and quality.
95

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.
96

Marketing Channel
A marketing channel consists of individuals and firms involved in the process of making a product or service available for use or consumption by consumers or industrial users.
69

Direct Channel
A direct channel is a marketing channel where a producer and ultimate consumers deal directly with each other.
70

Indirect Channels
Indirect channels are marketing channels where intermediaries are inserted between the producer and consumers and perform numerous channel functions.
71

Industrial Distributor
An industrial distributor is an intermediary that performs a variety of marketing channel functions, including selling, stocking, delivering a full product assortment, and financing.
72

Electronic Marketing Channels
Electronic marketing channels employ the Internet to make goods and services available for consumption or use by consumers or business buyers.
73

Direct Marketing Channels
Direct marketing channels allow consumers to buy products by interacting with various advertising media without a face-to-face meeting with a salesperson.
74

Dual Distribution
Dual distribution is an arrangement whereby a firm reaches different buyers by employing two or more different types of channels for the same basic product.
75

Strategic Channel Alliances
Strategic channel alliances is a practice whereby one firm’s marketing channel is used to sell another firm’s products.
76

Merchant Wholesalers
Merchant wholesalers are independently owned firms that take title to the merchandise they handle.
77

Manufacturer’s Agents
Manufacturer’s agents are agents who work for several producers and carry noncompetitive, complementary merchandise in an exclusive territory.
Also called manufacturer’s representatives .
78

Selling Agents
Selling agents are agents who represent a single producer and are responsible for the entire marketing function of that producer.
79

Brokers
Brokers are independent firms or individuals whose principal function is to bring buyers and sellers together to make sales.
80

Vertical Marketing Systems
Vertical marketing systems are professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact.
81

Franchising
Franchising is a contractual arrangement between a parent company (a franchisor) and an individual or firm (a franchisee) that allows the franchisee to operate a certain type of business under an established name and according to specific rules.
82

Channel Partnership
A channel partnership consists of agreements and procedures among channel members for ordering and physically distributing a producer’s products through the channel to the ultimate consumer.
83

Intensive Distribution
Intensive distribution is a level of distribution density whereby a firm tries to place its products and services in as many outlets as possible.
84

Exclusive Distribution
Exclusive distribution is a level of distribution density whereby only one retail outlet in a specific geographical area carries the firm’s products.
85

Selective Distribution
Selective distribution is a level of distribution density whereby a firm selects a few retail outlets in a specific geographical area to carry its products.
86

Channel Conflict
Channel conflict arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals.
87

Disintermediation
Disintermediation is channel conflict that arises when a channel member bypasses another member and sells or buys products direct.
88

Channel Captain
A channel captain is a channel member
(producer, wholesaler, or retailer) that coordinates, directs, and supports other channel members.
89

Logistics
Logistics consists of those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost.
60

Logistics Management
Logistics management is the practice of organizing the cost-effective flow of raw materials, in-process inventory, finished goods, and related information from point of origin to point of consumption to satisfy customer requirements.
61

Supply Chain
A supply chain is a sequence of firms that perform activities required to create and deliver a good or service to consumers or industrial users.
62

Supply Chain Management
Supply chain management is the integration and organization of information and logistic activities across firms in a supply chain for the purpose of creating and delivering goods and services that provide value to consumers.
63

Electronic Data Interchanges
Electronic data interchanges (EDIs) combine proprietary computer and telecommunication technologies to exchange electronic invoices, payments, and information among suppliers, manufacturers, and retailers.
64

Total Logistics Cost
Total logistics cost consists of expenses associated with transportation, materials handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return goods handling.
65

Customer Service
Customer service is the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.
66

Lead Time
Lead time is the lag from ordering an item until it is received and ready for use or sale. Also called order cycle time or replenishment time .
67

Quick Response
Quick response consists of reducing the retailer’s lead time so that inventory levels of customers may be minimized and to make the process of reordering and receiving products as simple as possible.
Also called efficient consumer response .
68

Efficient Consumer Response
Efficient consumer response consists of reducing the retailer’s lead time so that inventory levels of customers may be minimized and to make the process of reordering and receiving products as simple as possible. Also called quick response .
69

Third-Party Logistics Providers
Third-party logistics providers are firms that perform most or all of the logistics functions that manufacturers, suppliers, and distributors would normally perform themselves.
70

Just-In-Time (JIT) Concept
The just-in-time (JIT) concept is an inventory supply system that operates with very low inventories and requires fast, on-time delivery.
71

Vendor-Managed Inventory
Vendor-managed inventory (VMI) is an inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items.
72

Reverse Logistics
Reverse logistics is a process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal.
73

Retailing
Retailing includes all activities involved in selling, renting, and providing goods and services to ultimate consumers for personal, family, or household use.
75

Form of Ownership
Form of ownership distinguishes retail outlets based on whether individuals, corporate chains, or contractual systems own the outlet.
76

Level of Service
Level of service is the degree of service provided to the customer and include self-, limited-, and full-service retailers.
77

Merchandise Line
A merchandise line describes how many different types of products a store carries and in what assortment.
78

Depth of Product Line
Depth of product line means that the store carries a large assortment of each item.
79

Breadth of Product Line
Breadth of product line refers to the variety of different items a store carries.
80

Scrambled Merchandising
Scrambled merchandising involves offering several unrelated product lines in a single store.
81

Hypermarket
A hypermarket is a large store (more than 200,000 square feet) that offers consumers everything in a single outlet, eliminating the need to shop at more than one location.
82

Intertype Competition
Intertype competition means there is competition between very dissimilar types of retail outlets.
83

Telemarketing
Telemarketing involves using the telephone to interact with and sell directly to consumers.
84

Retail Positioning Matrix
The retail positioning matrix is a matrix that positions retail outlets on two dimensions: breadth of product line and value added.
85

Retailing Mix
The retailing mix includes the activities related to managing the store and the merchandise in the store, which includes retail pricing, store location, retail communication, and merchandise.
86

Shrinkage
Shrinkage is the breakage and theft of merchandise by customers and employees.
87

Off-Price Retailing
Off-price retailing involves selling brand-name merchandise at lower than regular prices.
88

Central Business District
The central business district is the oldest retail setting, usually located in the community’s downtown area.
89

Regional Shopping Centers
Regional shopping centers consists of 50 to 150 stores that typically attract customers who live or work within a
5- to 10-mile range, often containing two or three anchor stores.
90

Community Shopping Center
A community shopping center consists of a retail location that typically has one primary store (usually a department store branch) and often 20 to 40 smaller outlets, serving a population of consumers who are within a 10- to 20-minute drive.
91

Strip Location
A strip location consists of a cluster of stores to serve people who are within a
5- to 10-minute drive.
92

Power Center
A power center consists of a huge shopping strip with multiple anchor
(or national) stores.
93

Category Management
Category management is an approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category.
94

Wheel of Retailing
The wheel of retailing is a concept that describes how new forms of retail outlets enter the market.
95

Retail Life Cycle
The retail life cycle is the process of growth and decline that retail outlets, like products, experience, which consists of the early growth, accelerated development, maturity, and decline stages.
96

Multichannel Retailers
Multichannel retailers utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television, and online retailing.
97

Promotional Mix
The promotional mix consists of the combination of one or more of the communication tools used to: (1) inform prospective buyers about the benefits of the product, (2) persuade them to try it, and (3) remind them later about the benefits they enjoyed by using the product.
79

Integrated Marketing
Communications (IMC)
Integrated marketing communications
(IMC) is the concept of designing marketing communications programs that coordinate all promotional activities— advertising, personal selling, sales promotion, public relations, and direct marketing—to provide a consistent message across all audiences.
80

Communication
Communication is the process of conveying a message to others and requires six elements: a source, a message, a channel of communication, a receiver, and the processes of encoding and decoding.
81

Source
A source is a company or person who has information to convey.
82

Message
A message is the information sent by a source to a receiver in the communication process.
83

Channel of Communication
A channel of communication is the means
(e.g., a salesperson, advertising media, or public relations tools) of conveying a message to a receiver .
84

Receivers
Receivers are consumers who read, hear, or see the message sent by a source in the communication process.
85

Encoding
Encoding is the process of having the sender transform an idea into a set of symbols.
86

Decoding
Decoding is the process of having the receiver take a set of symbols, the message, and transform them back to an idea.
87

Field of Experience
A field of experience is a mutually shared understanding and knowledge that the a sender and receiver apply to a message so that it can be communicated effectively.
88

Response
A response is the impact the message had on the receiver’s knowledge, attitudes, or behaviors in the feedback loop.
89

Feedback
Feedback is the sender’s interpretation of the response and indicates whether a message was decoded and understood as intended.
90

Noise
Noise includes extraneous factors that can work against effective communication by distorting a message or the feedback received.
91

Advertising
Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.
92

Personal Selling
Personal selling is the two-way flow of communication between a buyer and seller, designed to influence a person’s or group’s purchase decision, usually in face-to-face communication between the sender and receiver.
93

Public Relations
Public relations is a form of communication management that seeks to influence the feelings, opinions, or beliefs held by customers, prospective customers, stockholders, suppliers, employees, and other publics about a company and its products or services.
94

Publicity
Publicity is a nonpersonal, indirectly paid presentation of an organization, good, or service.
95

Sales Promotion
Sales promotion is a short-term inducement of value offered to arouse interest in buying a good or service.
96

Direct Marketing
Direct marketing uses direct communication with consumers to generate a response in the form of an order, a request for further information, or a visit to a retail outlet.
97

Push Strategy
A push strategy consists of directing the promotional mix to channel members to gain their cooperation in ordering and stocking the product.
98

Pull Strategy
A pull strategy consists of directing the promotional mix at ultimate consumers to encourage them to ask the retailer for a product.
99

Hierarchy of Effects
The hierarchy of effects is the sequence of stages a prospective buyer goes through from initial awareness of a product to eventual action (either trial or adoption of the product). The stages include awareness, interest, evaluation, trial, and adoption.
100

Percentage of Sales Budgeting
Percentage of sales budgeting consists of allocating funds to promotion as a percentage of past or anticipated sales, in terms of either dollars or units sold.
101

Competitive Parity Budgeting
Competitive parity budgeting consists of allocating funds to promotion by matching the competitor’s absolute level of spending or the proportion per point of market share. Also called matching competitors or share of market .
102

All-You-Can-Afford Budgeting
All-you-can-afford budgeting consists of allocating funds to promotion only after all other budget items are covered.
103

Objective and Task Budgeting
Objective and task budgeting consists of allocating Allocating funds to promotion whereby the company
(1) determines its promotion objectives,
(2) outlines the tasks to accomplish these objectives, and (3) determines the promotion cost of performing these tasks.
104

Direct Orders
Direct orders are the result of direct marketing offers that contain all the information necessary for a prospective buyer to make a decision to purchase and complete the transaction.
105

Lead Generation
Lead generation is the result of a direct marketing offer designed to generate interest in a product or a service and a request for additional information.
106

Traffic Generation
Traffic generation is the outcome of a direct marketing offer designed to motivate people to visit a business.
107

Advertising
Advertising is any paid form of nonpersonal communication about an organization, good, service, or idea by an identified sponsor.
115

Product Advertisements
Product advertisements are advertisements that focus on selling a good or service and which take three forms: (1) pioneering (or informational),
(2) competitive (or persuasive), and
(3) reminder.
116

Institutional Advertisements
Institutional advertisements are advertisements designed to build goodwill or an image for an organization rather than promote a specific good or service.
117

Reach
Reach is the number of different people or households exposed to an advertisement.
118

Rating
A rating is the percentage of households in a market that are tuned to a particular
TV show or radio station.
119

Frequency
Frequency is the average number of times a person in the target audience is exposed to a message or an advertisement.
120

Gross Rating Points
Gross rating points (GRPs) is a reference number used by advertisers that is obtained by multiplying reach
(expressed as a percentage of the total market) by frequency.
121

Cost per Thousand
Cost per thousand (CPM) is the cost of reaching 1,000 individuals or households with the advertising message in a given medium (M is the Roman numeral for
1,000).
122

Infomercials
Infomercials are program-length
(30-minute) advertisements that take an educational approach to communication with potential customers.
123

Pretests
Pretests are tests conducted before the advertisements are placed in any medium to determine whether it communicates the intended message or to select among alternative versions of the advertisement.
124

Full-Service Agency
A full-service agency is an advertising agency that provides the most complete range of services, including market research, media selection, copy development, artwork, and production.
125

Limited-Service Agencies
Limited-service agencies are advertising agencies that specialize in one aspect of the advertising process such as providing creative services to develop the advertising copy or buying previously unpurchased media space.
126

In-House Agencies
In-house agencies consists of the company’s own advertising staff, which may provide full services or a limited range of services.
127

Posttests
Posttests are tests conducted after an advertisement has been shown to the target audience to determine whether it accomplished its intended purpose.
128

Consumer-Oriented
Sales Promotions
Consumer-oriented sales promotions are sales tools used to support a company’s advertising and personal selling directed to ultimate consumers.
129

Product Placement
Product placement is a sales promotion tool that uses a brand-name product in a movie, television show, video, or a commercial for another product.
130

Trade-Oriented
Sales Promotions
Trade-oriented sales promotions are a
Sales tools used to support a company’s advertising and personal selling directed to wholesalers, distributors, or retailers.
Also called trade promotions .
131

Cooperative Advertising
Cooperative advertising consists of advertising programs by which a manufacturer pays a percentage of the retailer’s local advertising expense for advertising the manufacturer’s products.
132

Publicity Tools
Publicity tools consist of methods of obtaining nonpersonal presentation of an organization, good, or service without direct cost. Examples include news releases, news conferences, and public service announcements.
133

Personal Selling
Personal selling involves the two-way flow of communication between a buyer and seller, designed to influence a person’s or group’s purchase decision, usually in face-to-face communication between the sender and receiver.
82

Sales Management
Sales management involves planning the selling program and implementing and controlling the personal selling effort of the firm.
83

Relationship Selling
Relationship selling is the practice of building ties to customers based on a salesperson’s attention and commitment to customer needs over time.
84

Partnership Selling
Partnership selling is the practice whereby buyers and sellers combine their expertise and resources to create customized solutions, commit to joint planning, and share customer, competitive, and company information for their mutual benefit, and ultimately the customer. Also called enterprise selling .
85

Order Taker
An order taker processes routine orders or reorders for products that were already sold by the company.
86

Order Getter
An order getter sells in a conventional sense and identifies prospective customers, provides customers with information, persuades customers to buy, closes sales, and follows up on customers’ use of a product or service.
87

Missionary Salespeople
Missionary salespeople are sales support personnel who do not directly solicit orders but rather concentrate on performing promotional activities and introducing new products.
88

Sales Engineer
A sales engineer is a salesperson who specializes in identifying, analyzing, and solving customer problems and brings know-how and technical expertise to the selling situation but often does not actually sell products and services.
89

Team Selling
Team selling is the practice of using an entire team of professionals in selling to and servicing major customers.
90

Personal Selling Process
The personal selling process consists of sales activities occurring before and after the sale itself, consisting of six stages:
(1) prospecting, (2) preapproach,
(3) approach, (4) presentation, (5) close, and (6) follow-up.
91

Stimulus-Response Presentation
Stimulus-response presentation is a presentation format which assumes that given the appropriate stimulus by a salesperson, the prospect will buy.
92

Formula Selling Presentation
Formula selling presentation is a presentation format that consists of information that must be provided in an accurate, thorough, and step-by-step manner to inform the prospect.
93

Need-Satisfaction Presentation
Need-satisfaction presentation is a presentation format that emphasizes probing and listening by the salesperson to identify needs and interests of prospective buyers.
94

Adaptive Selling
Adaptive selling is a need-satisfaction presentation format that involves adjusting the presentation to fit the selling situation, such as knowing when to offer solutions and when to ask for more information.
95

Consultative Selling
Consultative selling is a needsatisfaction presentation format that focuses on problem identification, where the salesperson serves as an expert on problem recognition and resolution.
96

Sales Plan
A sales plan is a statement describing what is to be achieved and where and how the selling effort of salespeople is to be deployed.
97

Major Account Management
Major account management is the practice of using team selling to focus on important customers so as to build mutually beneficial, long-term, cooperative relationships. Also called key account management .
98

Workload Method
The workload method is a formula-based method for determining the size of a salesforce that integrates the number of customers served, call frequency, call length, and available selling time to arrive at a figure for the salesforce size.
99

Account Management Polices
Account management policies specify whom salespeople should contact, what kinds of selling and customer service activities should be engaged in, and how these activities should be carried out.
100

Emotional Intelligence
Emotional intelligence is the ability to understand one’s own emotions and the emotions of people with whom one interacts on a daily basis.
101

Sales Quota
A sales quota contains specific goals assigned to a salesperson, sales team, branch sales office, or sales district for a stated time period.
102

Salesforce Automation
Salesforce automation (SFA) is the use of computer, information, communication, and Internet technologies to make the sales function more effective and efficient.
103

Interactive Marketing
Interactive marketing involves two-way buyer-seller electronic communication in a computer-mediated environment in which the buyer controls the kind and amount of information received from the seller.
61

Choiceboard
A choiceboard is an interactive,
Internet-enabled system that allows individual customers to design their own products and services by answering a few questions and choosing from a menu of product or service attributes
(or components), prices, and delivery options.
62

Collaborative Filtering
Collaborative filtering is a process that automatically groups people with similar buying intentions, preferences, and behaviors and predicts future purchases.
63

Personalization
Personalization is the consumer-initiated practice of generating content on a marketer’s website that is custom tailored to an individual’s specific needs and preferences.
64

Permission Marketing
Permission marketing is the solicitation of a consumer’s consent (called “opt-in”) to receive e-mail and advertising based on personal data supplied by the consumer.
65

Customer Experience
Customer experience is the sum total of the interactions that a customer has with a company’s website, from the initial look at a home page through the entire purchase decision process.
66

Online Consumers
Online consumers are the subsegment of all Internet users who employ this technology to research products and services and make purchases.
67

Bots
Bots are electronic shopping agents or robots that comb websites to compare prices and product or service features.
68

Eight-Second Rule
The eight-second rule a view that customers will abandon their efforts to enter and navigate a website if download time exceeds eight seconds.
69

Customerization
Customerization is the growing practice of not only customizing a product or service but also personalizing the marketing and overall shopping and buying interaction for each customer.
70

Web Communities
Web communities are websites that allow people to congregate online and exchange views on topics of common interest.
71

Blog
A blog is a webpage that serves as a publicly accessible personal journal for an individual.
72

Spam
Spam is communications that take the form of electronic junk mail or unsolicited e-mail.
73

Viral Marketing
Viral marketing is an Internet-enabled promotional strategy that encourages individuals to forward marketer-initiated messages to others via e-mail.
74

Dynamic Pricing
Dynamic pricing is the practice of changing prices for products and services in real time in response to supply and demand conditions.
75

Portals
Portals are electronic gateways to the
Internet that supply a broad array of news and entertainment, information resources, and shopping services.
76

Cookies
Cookies are computer files that a marketer can download onto the computer of an online shopper who visits the marketer’s website.
77

Multichannel Marketing
Multichannel marketing consists of the blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in the traditional marketplace and marketspace.
78

Sales Response Function
A sales response function relates the expense of marketing effort to the marketing results obtained.
93

Share Points
Share points is an analysis that uses percentage points of market share as the common basis of comparison to allocate marketing resources effectively for different product lines within the same firm.
94

Generic Business Strategy
A generic business strategy is a strategy that can be adopted by any firm, regardless of the product or industry involved, to achieve a competitive advantage.
95

Cost Leadership Strategy
A cost leadership strategy is one of
Porter’s generic business strategies that focuses on reducing expenses and, in turn, lowers product prices while targeting a broad array of market segments.
96

Differentiation Strategy
A differentiation strategy is one of
Porter’s generic business strategies that requires products to have significant points of difference in product offerings, brand image, higher quality, advanced technology, or superior service to charge a higher price while targeting a broad array of market segments.
97

Cost Focus Strategy
A cost focus strategy is one of Porter’s generic business strategies that involves controlling expenses and, in turn, lowering product prices targeted at a narrow range of market segments.
98

Differentiation Focus Strategy
A differentiation focus strategy is one of
Porter’s generic business strategies that requires products to have significant points of difference to target one or only a few market segments.
99

Product or Program Champion
A product or program champion is a person who is able and willing to cut red tape and move the program forward.
100

Action Item List
An action item list is an aid to implementing a marketing plan, consisting of three columns: (1) the task,
(2) the person responsible for completing that task, and (3) the date to finish the task.
101

Line Positions
Line positions are managers who have the authority and responsibility to issue orders to the people who report to them.
102

Staff Positions
Staff positions are people who have the authority and responsibility to advise people in the line positions but cannot issue direct orders to them.
103

Product Line Groupings
Product line groupings are organizational groupings in which a unit is responsible for specific product offerings.
104

Functional Groupings
Functional groupings are organizational groupings that represent the different departments or business activities within a firm.
105

Geographical Groupings
Geographical groupings are organization groupings in which sales territories are subdivided according to geographical location.
106

Market-Based Groupings
Market-based groupings are organizational groupings which utilize specific customer segments.
107

Sales Analysis
Sales analysis is a tool for controlling marketing programs using the firm’s sales records to compare actual sales with sales goals to identify areas of strength and weakness.
108

Sales Component Analysis
Sales component analysis is a tool for controlling marketing programs which traces sales revenues to their sources, such as specific products, sales territories, or customers. Also called microsales analysis .
109

Profitability Analysis
Profitability analysis is a tool for controlling marketing programs using the profit attributable to the firm’s products, customer groups, sales territories, channels of distribution, and promotions to expand, maintain, or eliminate specific products customer groups, channels, or promotions.
110

ROI Marketing
ROI marketing is a tool for controlling marketing programs using the application of modern measurement technologies and contemporary organizational design to understand, quantify, and optimize marketing spending.
111