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Chapter 1Marketing- process of planning and executing the conception, pricing,promotion, and distribution of ideas, goods, and services to create exchangesthat satisfy individual and organizational objectives

Consumer- the ultimate user of a good or service1. Marketing concept- a management orientation that focuses onidentifying and satisfying consumer needs to ensure the organization'slong-term protability

1. Need- recognition of any dierence bet!een a consumer's actual stateand some ideal or desired state

1. Want- the desire to satisfy needs in specic !ays that are culturally andsocially in"uenced

1. Beneft- the outcome sought by a customer that motivates buyingbehavior--that satises a need or !ant

1. Market- all of the customers and potential customers !ho share a

common need that can be satised by a specic product, !ho have theresources to exchange for it, !ho are !illing to ma#e the exchange, and!ho have the authority to ma#e the exchange

1. Valueproposition- a mar#etplace oering that fairly and accuratelysums up the value that !ill be realized if the product or service ispurchased

1. Business-to-business marketing- mar#eting of those goods andservices that business and organizational customers need to produceother goods and services, for resale or to support their operations

1. Industrial goods- goods bought by individuals or organizations forfurther processing or for use in doing business

1. Marketing mix- a combination of the product itself, the price of theproduct, the place !here it is made available, and the activities thtintroduce it to consumers that creates a desired response among a set ofpredened consumers

a. $our %'s-- product, price, promotion, place1. Promotion- the coordination of a mar#eter's mar#eting communications

eorts to in"uence attitudes or behavior& the coordination of eorts by amar#eter to inform or persuade consumers of organizations about goods,services, or ideas

1. Place- the availability of the product to the customer at the desired timeand location

1. Customer relationship management (CM- a philosophy that seesmar#eting as a process of building long-term relationships !ithcustomers to #eep them satised and to #eep them coming bac#

1. Marketing plan- a document that describes the mar#eting environment,outlines the mar#eting objectives and strategy, and identies !ho !ill beresponsible for carrying out each part of the mar#eting strategy

1. Mass market- all possible customers in a mar#et, regardless of thedierences in their specic needs and !ants

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1. Market segment- a distinct group of customers !ithin a larger mar#et!ho are similar to one another in some !ay and !hose needs dier fromother customers in the larger mar#et

1. !arget market- the mar#et segments on !hich an organization focusesits mar#eting plan and to!ard !hich it directs its mar#eting eorts

Market position- the !ay in !hich the target mar#et perceives the product incomparison to competitors' brandsProduct orientation- management philosophy that emphasizes the mosteicient !ays to produce and distribute products"elling orientation- a managerial vie! of mar#eting as a sales function, or a!ay to move products out of !arehouses to reduce inventoryConsumer orientation- a management philosophy that focuses on !ays tosatisfy customers' needs and !antsNe# $ra orientation- a management philosophy in !hich mar#eting means adevotion to excellence in designing and producing products that benet thecustomer plus the rm's employees, shareholders, and communities

%tilit&- the usefulness or benet consumers receive from a product$orm utility- benet mar#eting provides by transforming ra! materials intonished products%lace utility- benet mar#eting provides by ma#ing products available !herecustomers !ant them(ime utility- storing products until they are needed%ossession utility- allo!ing consumer to o!n, use ,and enjoy the product

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Chapter )Business plan- a plan that includes the decisions that guide the entireorganizationMarketing plan- a document that describes the mar#eting environment,

outlines the mar#eting objectives and strategy, and identies !ho !ill beresponsible for carrying out each part of the mar#eting stretegy"trategic planning- a managerial decision process that matches anorganization's resources and capabilities to its mar#et opportunities for long-term gro!th and survival"trategic business units*+s- individual units !ithin the rm thatoperates li#e separate businesses, !ith each having its o!n mission, businessobjectives, resources, managers, and competitors!actical ('unctional planning- a decision process that concentrates ondeveloping detailed plans for strategies and tactics for the short term thatsupport an organization's long-term strategic plan

)perational planning- a decision process that focuses on developing detailedplans for day-to-day activities that carry out an organization's tactical plansCross-'unctional planning- an approach to tactical planning in !hichmanagers !or# together in developing tactical plans for each functional areain the rm so that each plan considers the objectives of the other areasMission statement- a formal statement in an organization's strategic planthat describes the overall purpose of the organization and !hat it intends toachieve in terms of its customers, products, and resources(o develop strategic plans, follo! three stepsevelop a mission or vision/stablish long-term goals or objectives

0llocate resources to dierent +s to maximize gro!th and protsBusiness Port'olio- the group of dierent products or brands o!ned by anorganization and characterized by dierent income-generating and gro!thcapabilitiesPort'olio anal&sis- a management tool for evaluating a rm's business mixand assessing the potential of an organization's strategic business unitsBC* gro#th- market share matrix- a portfolio analysis model developed bythe oston Consulting roup that assesses the potential of successful productsto generate cash that a rm can then use to invest in ne! productsSTARS- SBUs with products that have dominant market share in high-growth markets, command

the firm's attention and grab the lion's share of the mone

C0+2 C34+- dominant mar#et share in lo!-gro!th potentialmar#et, rms usually mil# cash co!s of their prots to fund thegro!th of other products in a portfolio5/+(637 809:+- problem children, products !ith lo! mar#etshares in fast-gro!th mar#ets3+- a product nobody !ants, they have small share of a slo!-gro!th mar#et, !hen possible, large rms may sell o their dogs tosmaller rms that may be able to nurture them

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"W)! anal&sis- an analysis of an organization's "trengths andWea#nessesand the )pportunities and !hreats in its external environmentCompetiti+e ad+antage- the ability of a rm to outperform the competition,thereby providing customers !ith a benet the competition can't,istincti+e competenc&- a superior capability of a rm in comparison to its

direct competitors,ierential beneft- properties of products that set them apart fromcompetitors' products by providing uni;ue customer benets*ro#th strategies8ar#et penetration- gro!th strategies designed to increase sales of existingproducts to current customers, nonusers, and users of competitive brands inserved mar#ets8ar#et development- gro!th strategies that introduce existing products tone! mar#ets%roduct development- gro!th strategies that focus on selling ne! products inserved mar#ets

iversication- gro!th strategies that emphasize both ne! products and ne!mar#ets"ituation anal&sis- the rst part of a mar#eting plan that provides a thoroughdescription of the rm's current situation including its internal and externalenvironmentsMarketing audit- a comprehensive revie! of a rm's mar#eting function

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Chapter ist price- price end customer expected to pay as determined by manufacturer&also suggested retail price(rade of functional discounts- discounts o list price of products to members ofchannel of distribution that perform various mar#eting functions5uantity discounts- charging reduced prices for purchases of larger ;uantitiesof a product

Cumulative ;uantity discounts- discounts based on the total ;uantitypurchased !ithin a specied time period7oncumulative ;uantity discounts- discounts based only on the ;uantitypurchased !ithin individual ordersCash discounts- pay producer !ithin certain time, amount due is then cut bycertain percent+easonal discountsynamic pricing- price can be easily adjusted to meet changes in themar#etplace0uctions%rice discrimination *based on !hat they #no! di customer segments are

!illing to pay%sychological issues in pricinguyers' pricing expectations6nternal reference prices- set price or price range in consumers' minds thatthey refer to in evaluating a product's price%rice ;uality inferences%sychological pricing strategies3dd-even pricing- Q1.RR, QJ.R, etc., concert and movie tix- even amts%rice lining- the practice of setting a limited number of dierent specic pricescalled price points, for items in a product line+tripped do!n model cheap, better ;uality priced higher

>egal and ethical considerationsait and s!itch tactic- illegal practice !here an advertised price special isused as bait to get customers into store !ith intention of s!itching them to ahigher-priced item>oss leader pricing- setting prices very lo! or even belo! cost to attractcustomers into storenfair sales acts- state la!s prohibiting suppliers from selling products belo!cost to protect small businesses from larger competitors

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%rice xing- t!o or more rms2orizontal price xing- competitors !ho are ma#ing same productDertical- force retailers to charge certain price%redatory pricing- set very lo! price to drive competitors out of business, then!hen they have a monopoly, increase prices

#$$% &A!T$R (, ),*+, **, *, *, *.

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&hapter ( / $thics

Social profit/ benefit an organi0ation and societ receive from organi0ation doing good stuff

1communit service, being ethical, promoting diversit, and being environmentall friendl"

business ethics/ rules of conduct for an organi0ation

codes of ethics/ written standards of behavior that everone must subscribe to

lack of ethics can cost firms in lawsuits2 customer and emploee efforts can also cost firms

Consumerism/ movement to protect consumers against harmful practices

Consumer Bill of Rights/ right of consumers protected b federal government

3nclude rights to be informed, safe, heard, and choose freel

Discriminatory pricing/ a pricing practice where different customers are charged different process

Corrective advertising - clarifies or 4ualifies previous deceptive claims

Puffery/ claims of a superior product that can not be proven true or untrue

Slotting allowance/ paing a fee to retailers so that the product is on the shelves

Social responsibility - management practice where organi0ations seek to engage in practices thathave a positive effect on societ and promote public good

nvironmental stewardship/ to protect and enhace natural environment

!reen marketing/ create a differential benefit that focuses on the environment

Cause marketing - marketing to link compan to a good cause

"otal #uality management $"%&"- management philosoph that encourages emploees to be apart of 4ualit improvement and promote customer satisfaction

'SO/ international standard organi0ation, set 3S5 )+++ for 4ualit and 3S5 *6+++ for environment

&orporate cultures can be risk-taking, !rofit-centered vs people-centered

Business cycle/ patterns in the econom, including recession, depression, and recover

Consumer confidence/ willingness to spend as a reflection

Discretionary income/ mone after necessities

&ompetition can be either brand1same product, different compan" or product1different products

to satisf same needs"

&onopolistic competition - man firms with slightl different products offer uni4ue consumer

benefits

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&hapter )

!ood ( tangible product

&ore product is the benefits that the customer is buing

7AR8$T3#9 SU!!:3$S B$#$;3TS A#% #5T !R5%U&TS&ustomi0ed benefits are services and such

Durable goods last

)ondurable goodsare consumed

Convenience productsare cheap, available, purchased fre4uentl with minimal effort or

comparison&lassified as staples, impulse products, or emergenc products

Shopping productsspend time and effort in gathering information about these and comparing

alternatives before buing

Specialty productsgood or service with uni4ue characteristics, important to buer, and will devote

a lot of time to buing

*nsought products are ones that the consumer has little awareness of until it is brought to theirattention

B.B&aintenance+ repair+ and opertating $&RO,products are consumed in a short period of time

Specialized servicesare crucial to organi0ation but not part of production

Component partsare manufactured goods or subassemblies of finished items that are needed to

complete products downstream

Also raw materials+ processed materials+ and e#uipment needs

'nnovationis believed to be new and different in the ees of consumers

Continuous innovationsare modifications of an e?isting product to distinguish competitors

8nockoff / copies with slight modification another product

Dynamic continuous innovation/ change in e?isting product that re4uires moderate amounts of

learning or behavior change@

Convergence/ two tech coming together to create a new sstem with benefits greater than each ontheir own

Discontinuous innovation/ totall new product that creates a makor change in how we live#ew product development

'dea generation first step2 brainstorm products that fit needs and compans mission

Product development and screening1like it sounds"

7arketing strateg development

Business analysis/ assess commercial viabilit of product

"echnical development/ new product is refined and perfected

Prototype/ test versions

"est marketing - small market before large

Commercialization-doption1beginning to bu" and diffusion1spread through population"

Awarenessinterestevaluationtrialadoptionconfirmation

&ategories innovators 1.@CD" early adopters $*(@CD" early ma.ority 1(6D" late

ma.ority 1(6D" laggards 1*ED"

&hap *+ / 7anaging the product

Product lines/ a firms total product offering designed to satisf a single need or desire of a

customer

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:arge number of offerings is afull-lineand small number is a limited-line@Upward line is more e?pensive and downward lineis less e?pensive

filling outa product line is adding si0es or stles to previous line

cannibalization/ loss of sales of an e?isting brand to a new brand being introduced@

Product mi// total set of all products that a firm offers for sale

Fualit / measured as level 1relative" and consistenc of 4ualit

Product life cycle - movement from introductiongrowthmaturit 1margins start to narrow as

competition increases"decline

Brand 0 a name, term, smbol or uni4ue element that identifies a product and sets it apart from the

competitionShould be eas to remember and have a name that fits needs of market

Brand e#uity/ value of a brand to an organi0ation

Brand e/tensions/ new product with same brand name as strong e?isting brand

1amily brand/ or umberella brand strateg2 a lot of products under one brand

Store brands+ generic brands and national brands2icensing/ selling the name of brand for someone else to use

Co0branding/ using two brands together to make a new product

'ngredient branding/ advertising the ingredient

"rademark/ brand name, mark, or character legall registered with government

*niversal product code $*PC,- black bars that is readable b scanners and identifies the product