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Chapter 1

Marketing- process of planning and executing the conception, pricing,

promotion, and distribution of ideas, goods, and services to create exchanges
that satisfy individual and organizational objectives
Consumer- the ultimate user of a good or service
1. Marketing concept- a management orientation that focuses on
identifying and satisfying consumer needs to ensure the organization's
long-term profitability
1. Need- recognition of any difference between a consumer's actual state
and some ideal or desired state
1. Want- the desire to satisfy needs in specific ways that are culturally and
socially influenced
1. Benefit- the outcome sought by a customer that motivates buying
behavior--that satisfies a need or want
1. Market- all of the customers and potential customers who share a
common need that can be satisfied by a specific product, who have the
resources to exchange for it, who are willing to make the exchange, and
who have the authority to make the exchange
1. Value proposition- a marketplace offering that fairly and accurately
sums up the value that will be realized if the product or service is
1. Business-to-business marketing- marketing of those goods and
services that business and organizational customers need to produce
other goods and services, for resale or to support their operations
1. Industrial goods- goods bought by individuals or organizations for
further processing or for use in doing business
1. Marketing mix- a combination of the product itself, the price of the
product, the place where it is made available, and the activities tht
introduce it to consumers that creates a desired response among a set of
predefined consumers
a. Four P's-- product, price, promotion, place
1. Promotion- the coordination of a marketer's marketing communications
efforts to influence attitudes or behavior; the coordination of efforts by a
marketer 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 time
and location
1. Customer relationship management (CRM)- a philosophy that sees
marketing as a process of building long-term relationships with
customers to keep them satisfied and to keep them coming back
1. Marketing plan- a document that describes the marketing environment,
outlines the marketing objectives and strategy, and identifies who will be
responsible for carrying out each part of the marketing strategy
1. Mass market- all possible customers in a market, regardless of the
differences in their specific needs and wants

1. Market segment- a distinct group of customers within a larger market

who are similar to one another in some way and whose needs differ from
other customers in the larger market
1. Target market- the market segments on which an organization focuses
its marketing plan and toward which it directs its marketing efforts
Market position- the way in which the target market perceives the product in
comparison to competitors' brands
Product orientation- management philosophy that emphasizes the most
efficient ways to produce and distribute products
Selling orientation- a managerial view of marketing as a sales function, or a
way to move products out of warehouses to reduce inventory
Consumer orientation- a management philosophy that focuses on ways to
satisfy customers' needs and wants
New Era orientation- a management philosophy in which marketing means a
devotion to excellence in designing and producing products that benefit the
customer plus the firm's employees, shareholders, and communities
Utility- the usefulness or benefit consumers receive from a product
Form utility- benefit marketing provides by transforming raw materials into
finished products
Place utility- benefit marketing provides by making products available where
customers want them
Time utility- storing products until they are needed
Possession utility- allowing consumer to own, use ,and enjoy the product

Chapter 2
Business plan- a plan that includes the decisions that guide the entire
Marketing plan- a document that describes the marketing environment,
outlines the marketing objectives and strategy, and identifies who will be
responsible for carrying out each part of the marketing stretegy
Strategic planning- a managerial decision process that matches an
organization's resources and capabilities to its market opportunities for longterm growth and survival
Strategic business units (SBUs)- individual units within the firm that
operates like separate businesses, with each having its own mission, business
objectives, resources, managers, and competitors
Tactical (functional) planning- a decision process that concentrates on
developing detailed plans for strategies and tactics for the short term that
support an organization's long-term strategic plan
Operational planning- a decision process that focuses on developing detailed
plans for day-to-day activities that carry out an organization's tactical plans
Cross-functional planning- an approach to tactical planning in which
managers work together in developing tactical plans for each functional area
in the firm so that each plan considers the objectives of the other areas
Mission statement- a formal statement in an organization's strategic plan
that describes the overall purpose of the organization and what it intends to
achieve in terms of its customers, products, and resources
To develop strategic plans, follow three steps
Develop a mission or vision
Establish long-term goals or objectives
Allocate resources to different SBUs to maximize growth and profits
Business Portfolio- the group of different products or brands owned by an
organization and characterized by different income-generating and growth
Portfolio analysis- a management tool for evaluating a firm's business mix
and assessing the potential of an organization's strategic business units
BCG growth- market share matrix- a portfolio analysis model developed by
the Boston Consulting Group that assesses the potential of successful products
to generate cash that a firm can then use to invest in new products
STARS- 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 money
CASH COWS- dominant market share in low-growth potential
market, firms usually milk cash cows of their profits to fund the
growth of other products in a portfolio
QUESTION MARKS- problem children, products with low market
shares in fast-growth markets
DOGS- a product nobody wants, they have small share of a slowgrowth market, when possible, large firms may sell off their dogs to
smaller firms that may be able to nurture them

SWOT analysis- an analysis of an organization's Strengths and Weaknesses

and the Opportunities and Threats in its external environment
Competitive advantage- the ability of a firm to outperform the competition,
thereby providing customers with a benefit the competition can't
Distinctive competency- a superior capability of a firm in comparison to its
direct competitors
Differential benefit- properties of products that set them apart from
competitors' products by providing unique customer benefits
Growth strategies
Market penetration- growth strategies designed to increase sales of existing
products to current customers, nonusers, and users of competitive brands in
served markets
Market development- growth strategies that introduce existing products to
new markets
Product development- growth strategies that focus on selling new products in
served markets
Diversification- growth strategies that emphasize both new products and new
Situation analysis- the first part of a marketing plan that provides a thorough
description of the firm's current situation including its internal and external
Marketing audit- a comprehensive review of a firm's marketing function

Chapter 6
Consumer behavior- the process involved when individuals or groups select,
purchase, use, and dispose of goods, services, ideas, or experiences to satisfy
their needs and desires
Problem recognition- the process that occurs whenever the consumer sees a
significant difference between his current state of affairs and some desired or
ideal state; this recognition initiates the decision-making process
Information search- the process whereby a consumer searches for appropriate
information to make a reasonable decision
Evaluation of alternatives
Evaluative criteria- the dimensions used by consumers to compare competing
product alternatives (power, style, safety, etc)
Product choice
Heuristics- a mental rule of thumb that leads to a speedy decision by
simplifying the process
Brand loyalty- a pattern of repeat product purchases accompanied by an
underlying positive attitude toward the brand, which is based on the belief that
the brand makes products superior to its competition
Country of origin
Postpurchase Evaluation
Consumer satisfaction/dissatisfaction (CS/D)- the overall feelings or attitude
How much effort put into these decisions depends on
Involvement- the relative importance of perceived consequences of the
purchase Perceived risk- the belief that choice of a product has potentially
negative consequences.
Internal Influences on consumer decisions
Perception- the process by which people select, organize, and interpret
Exposure- i.e. billboards
Perceptual selection- pay attention to some stimuli but not others
Interpretation- associations
Motivation- an internal state that drives us to satisfy needs by activation goaloriented behavior
Hierarchy of needs- categorizes motives according to five levels of importance,
the more basic needs being on the bottom of the hierarchy and the higher
needs at the top
Learning- a relatively permanent change in behavior caused by info or
Behavioral learning theories- focus on how consumer behavior is changed by
external events or stimuli
Classical conditioning- pairing stimuli
Operant conditioning- occurs as the result of rewards or punishments
Stimulus generalization- behavior caused by a reaction to one stimulus occurs
in the presence of other, similar stimuli

Cognitive learning theory- theory of learning that stresses the importance of

internal mental processes and that views people as problem solvers who
actively use information from the world around them to master their
Attitudes- a learned predisposition to respond favorably or unfavorably to
stimuli based on relatively enduring evaluations of people, objects, and issues
Personality- the psychological characteristics that consistently influence the
way a person responds to situations in his or her environment
Self-concept- an individual's self-image that is composed of a mixture of beliefs,
observations, and feelings about personal attributes
Age groups
Family life cycle- a means of characterizing consumers within a family
structure based on different stages through which family members pass as
they grow older
Lifestyles- the pattern of living that determines how people choose to spend
their time, money, and energy and that reflects their values, tastes, and
Psychographics- the use of psychological, sociological, and anthropological factors to construct
market segments
Situational influences on consumer decisions
The physical environment
Social influences on consumer decisions
Culture- the values, beliefs, customs, and tastes valued by a group of people
Subcultures- a group within a society whose members share a distinctive set of
beliefs, characteristics, or common experiences
Social class- the overall rank or social stnading of groups of people within a
society according to the value assigned to such factors as family background,
education, occupation, and income
Group behavior
Reference groups- an actual or imaginary individual or group that has a
significant effect on an individual's evaluations, aspirations, or behavior
Conformity- a chance in beliefs or actions as a reaction to group pressure
Sex roles- society's expectations for men and women
Opinion leaders- a person who is frequently able to influence others' attitudes
or behaviors by virtue of his or her active interest and expertise in one or more
product categories
Peer to Peer E-Commerce
Consumer to consumer (C2C) e-commerce- communications and pruchases
that occur among individuals without directly involving the manufacturer or
Multi-user dungeons
Rooms, rings, and lists
Auction sites

Product rating sites

Protest sites

Chapter 7
Business Markets: Buying a.nd Selling When Stakes Are High
Business to business marketing- marketing of those goods and services that
business and organizational customers need to produce other goods and
services for resale or to support their operations (aka Organizational markets)
Characteristics that make a difference in business markets
Multiple buyers
Number of Customers
Size of purchases
Geographic concentration
Business to business demand
Derived demand- demand for business or organizational
products derived from demand for consumer goods or
Demand for education-->derived demand for
textbooks-->paper-->pulp-->forestry products
Inelastic demand- demand in which changes in price have
little or no effect on the amount demanded
Fluctuating demand
Acceleration principle (multiplier effect)- a
marketing phenomenon in which a small percentage
change in consumer demand can create a large
percentage change in business to business demand (i.e.
air travel)
Life expectancy of products
Joint demand- demand for two or more goods that are used
together to create a product (i.e. automobiles - tires,
batteries, etc)
Classifying business-to-business markets- customers:
Producers- the individuals or organizations that purchase products for use in
the production of other goods and services
Resellers- buy finished goods for the purpose of reselling, renting, or leasing to
others to make a profit and to maintain their business operations
Government marketsCompetitive bids- business buying process in which two or more suppliers
submit proposals for a proposed purchase and the firm providing the better
offer gets the bid
Not-for-profit institutionsNorth American Industry Classification System (NAICS)- numerical coding
system that the US, Canada, and Mexico use to classify firms into detailed
categories according to their business activities
The Nature of Business Buying
The Buying Situation

Buy class- a classification to characterize the degree of time and effort

required to make a decision
Straight rebuy- routine purchases with minimal decision making
Modified rebuy- a previously made purchase that involves some change and
requires limited decision making
New-task buy- new b2b purchase that is complex or risky, requires extensive
decision making
The professional buyer
Centralized purchasing- single dept does all buying for all the company's
The buying center- group of people in an organization who participate in a
purchasing decision
Initiator- recognizes that purchase needs to be made (production employees,
sales manager, anyone)
User- person who ultimately uses product (anyone, secretary)
Gatekeeper- controls flow of information to others (buyer/purchasing agent)
Influencer- affects decision by giving advice and sharing expertise (engineers,
quality control experts, technical specialists, outside consultants)
Decider- makes final purchase decision (purchasing agent, managers, CEO)
Buyer- executes the purchase decision- (purchasing agent)
The business buying decision process
Problem recognition- purchase requisition or request made
Information search- potential suppliers identified, product specifications
developed, proposals obtained
Evaluation of Alternatives- proposals evaluated, samples obtained and
Product and supplier selection- purchase order issued
Just in time (JIT)- inventory management and purchasing processes used to
reduce inventory to very low levels and ensure that delieveries from suppliers
arrive only when needed
Single sourcing- buying a particular product from only one supplier
Multiple sourcing- buy from several different suppliers
Reciprocity- trading partnership, two firms agree to buy from one another
Outsourcing- obtain outside vendors to provide goods and ser vices that
otherwise might be supplied in house
Revenue marketing- buyer firm attempts to identify suppliers who will produce
products according to the buyer firm's specifications
Postpurchase evaluation- users surveyed, performance documented
Electronic Business-to-Business Commerce- internet exchanges between two
or more businesses
Extranet- private corporate computer network that links company depts,
employees, and databases to suppliers customers
Private exchanges- systems that link an invited group of suppliers and partners
over the web

Security-- firewalls-only authorized individuals gain access, encryption- need

right key

Chapter 8
Selecting and Entering a Market
Market fragmentation- creation of many consumer groups due to a diversity
of distinct needs and wants in modern society
Target marketing stretegy- divide total market into different segments based
on custermer characteristics, selecting one or more segments, and developing
products to meets the needs of those specific segments
Segmentation- dividing larger market into smaller pieces
Segmentation variables- dimensions that divide the total market into groups
Demographics- measurable characteristics- gender, age, family structure,
income, social class, race ,ethnicity, geography
Geodemography- combining geography with demographics
Psychographics- VALS- values and lifetyles- psych system that divides entire
US population into 8 segments
Behavorial segmentation- on basis of how they act toward, feel about, or use a
good or service
80/20 rule- 20% of purchasers account for 80% of a product's sales
Usage occasions- when consumers use product most
Target market- group or groups that a firm selects to turn into customers as
result of segmentation and targeting
Segment profiles- description of typical customer in segment
Undifferentiated targeting strategy- appealing to broad spectrum of people---economies of scale!
Differentiated marketing- develop one + products for each of customer groups
with different product needs
Concentrated targeting- focusing efforts on offering one or more products to a
single segment
Customized marketing- an approach that tailors specific products and the
messages about them to individual customers
Mass customization- modify basic good/service to meets needs of individ
Positioning- develping marketing strategy aimed at influencing how a
particular market segment perceives a good or service in comparison to the
Analyze competitors' positions in marketplace
Offer good or service w/ competitive advantage
Finalize marketing mix, put it all together (4 Ps)
Evaluate target market's responses
Repositioning- redoing a product's position to respond to marketplace changes
Brand personality- distinctive image that captures a good or ser vice's
character and benefits
Perceptual map
Customer relationship management (CRM)

Characteristics of CRM
Share of customer- percentage of an individual customer's purchase of a
product that is a single brand
Lifetime value of customer- potential profit generated by single customer's
purchase over their lifetime
Customer equity- financial value of customer relationships throughout lifetime
of relationships
Greater focus on high-value customers
STEPS in CRM marketing
Identify customers and get to know them in as much detail
Diffentiate these customers by needs and value to company
Interact with customers, find ways to improve cost efficiency and effectiveness
of interaction
Customize some aspect of products or services they offer to each customer
(treat each customer differently

Chapter 5
Knowledge is Power
Marketing info system (MIS)- procedure to continuously gather, sort, analyze,
store, and distribute relevant and timely marketing info to managers
Intranet- internal corporate communication network
Marketing intelligence- method to get information about everyday happenings
in marketing environment
Market research- process of collecting analyzing and interpreting data about
customers, competitors, and business environment to improve marketing
Syndicated research- research that collects data on regular basis, sells them to
Custom research- research conducted for single firm to provide specific info
Marketing decision support system (MDSS)- software that allows managers to
conduct analyses and find needed info
Data mining- sophisticated analysis techniques, takes advantage of massive
amount of transaction info available
Steps in marketing research process
Define the problem
Determine the research design
Secondary data- collected for purpose other than purpose at hand
Exploratory research- to generate insights for future, more rigorous studies
Consumer interviews
Focus group
Projective techniques
Case study
Descriptive research
Causal research- cause and effect
Choose the data collection method
Telemarketing, face to face interviews, mail questionnaires, observation,
unobtrusive measures, mechanical observation
Data quality
Validity- extent to which research actually measures what it was intended to
Reliability- free of errors
Representativeness- consumers in study similar to larger group
Design the sample
Probability sampling- each member of population has chance of being included
Nonprobability sampling- personal judgment is used in selecting respondents
Collect the data
Gathering in foreign countries

Singe-source data- info integrated from multiple sources

Analyze and interpret the data
Prepare the research report

Chapter 14
Tailoring marketing communications to customers
Promotion- coordination of a marketer's communications efforts to influence
attitudes or behavior
Informs consumers of new goods, reminds them to continue using product,
persuades them to choose over competition, builds relationships
Integrated marketing communications (IMC)- process used to plan, develop,
execute, and evaluate coordinated, measurable persuasive brand
communication programs over time with targeted audiences
Communications model- process whereby meaning is transferred from a source
to a receiver
Encoding by the marketer
The source
The message
The medium
Decoding by the receiver
Noise- anything that interferes with effective communication
Promotional strategy
Promotion mix
Advertising, sales promotions, public relations, and personal selling
Personal appeals
Mass appeals
Advertising- nonpersonal communication using mass media
Sales promotion
Public relations
Promotion plan- framework that outlines the strategies for developing,
implementing, and controlling the firm's promotional activities
Establish promotion objectives
Create awareness
Inform the market
Create desire
Encourage trial
Build loyalty
Influences on promotion mix
Push strategy- company is trying to convince channel members to offer them
and entice their customers to select these items
Pull strategy- company counting on customers to learn about and express
desire for its products, thus convincing retailers to respond to this demand by
stocking these items
Actions in phases
Intro- build awareness, push stretegy
Growth- stress product benefit
Maturity- persuade brand switching
Decline- reduces spending on promotion mix, maybe revive

Determine and allocate total promotion budget

Top-down budgeting techniques- based on total amount for marketing
Percentage-of sales method- based on certain percentage of either last year's
sales or estimates for present year's sales
Competitive-parity method- organization matches whatever competitors are
Bottom-up budgeting techniques- based on identifyig promotional goals and
allocating enough money to accomplish them
Objective-task method- organization first defines the specific communications
goals it hopes to achieve and then tries to calculate what kind of promotional
efforts it will take to meet these goals
Allocate budget to specific promotion mix
Designing the promotion mix
How advertising, sales promotion, personal selling, and public relations can be
used most effectively
AIDA model- get attention, hold interest, create desire, produce action
Interactive marketing- customized marketing communications elicit a
measurable response from individual receivers
Customizing the message
De-mass marketing- slice market into smaller and smaller pieces
First order response- directly yields transaction, transactional data
Second-order response- customer feedback other than a transaction
Database marketing- the creation of an ongoing relationship with a set of
customers who have an identifiable interest in a product or service and whose
responses to promotional efforts become part of future communication
Builds relationships
Locates new customers
Stimulates cross-selling
Is measurable
Responses trackable
IMC planning model
Start with customer database
Develop promotion strategies
Implement specific promotion tactics
Evaluate IMC communications

Chapter 15
Types of advertising
Product advertising- focuses on specific good/service
Institutional advertising- promotes activities, personality, or point of view of an
organization or company
Advocacy advertising- type of public service advertising provided by an
organization that is seeking to influence public opinion on an issue because it
has some stake in the outcome
Public service ad (PSAs)- advertising run by the media without charge for notfor-profit organization or to champion a certain cause
Advertising campaign
Limited-service agency- provides one or more specialized services such as
media buying or creative development
Full-service agency- provides most of services for campaign, including
research, creation of ad copy and art, media selection, production of final
Developing an Advertising Campaign
Identify target market
Establish message and budget objectives
Set message goals
Set budget
Design the ad
Creative strategy- process that turns a concept into an advertisement
Advertising appeal- central idea or theme of an advertising message
USP- unique selling proposition- focuses on one clear reason why a particular
product is superior
Comparative advertising
Fear appeals
Sex appeals
Humorous appeals
Slogans and jingles
Pretesting- research that goes on in early stages, minimizes mistakes by
getting consumer reactions to ad messages before they appear in media
Copy testing- measures the effectiveness of ads by determining whether
consumers are receiving, comprehending, and responding to the ad according
to plan
Media planning- developing media objectives, strategies, tactics for use
Advertising exposure- degree to which target market will see an advertising
message in a specific medium
Impressions- # of people exposed to message placed in one or more media

Reach- % of target market that will be exposed to media vehicle

Frequency- # times person in the target group will be exposed to message
Gross rating points (GRPs)- compares effectiveness of diff media vehicles'
average reach times frequency
Cost per thousand (CPM)- compare relative cost-effectiveness of different
media vehicles that have diff exposure rates; the cost to deliver a msg to 1,000
people or homes
Posttesting, unaided recall (no hints about ad), aided recall (clues to prompt

Chapter 16
Public relations- communication function that seeks to build good relationships
with an organization's publics, including consumers, stockholders, and
Publicity- unpaid communication about an organization appearing in the mass
guerrilla marketing- ambush consumers with promotional content in places
they arent expecting

Chapter 13
Price planning
Cost-plus pricing- totalling all the costs for the product and then adding an
amount (profit) to arrive at selling price
Price-floor pricing- to maintain full plant operating capacity, a portion of a
firm's output may be sold at a price that covers only marginal costs of
Demand based pricing- selling price based on estimates of demand at diff
Target costing- identify the quality and functionality needed to satisfy
customers and what price they are willing to pay before the product is
designed; the product is manufactured only if the firm can control costs to
meet the required price
Yield-management pricing- charging different prices to diff customers to
manage capacity while maximizing revenues
Pricing strategies based on the competition
Price leadership- one firm first sets its price and other firms in industry follow
with similar price
Pricing strategies based on customers' needs
Value pricing- set prices that provide ultimate value to customers
Everyday low pricing (EDLP)- same as value pricing
New-product pricing
Skimming price- very high, premium price that firm charges for its new highly
desirable product
When successful? Demand is price inelastic (high desirable, unique benefits)
Little chance that competition can enter market quickly
Penetration pricing- firm introduces new product at very low price to
encourage more customers to purchase it
Discourage competitors from entering market
Barrier to entry if prices are so low that company will not be able to recover
development and manufacturing costs
Trial pricing- new product low for limited period of time to lower risk for
To win customer acceptance first, make profits later
Pricing tactics
For individual products
Two-part pricing - (golf clubs charge yearly/monthly fee, plus fees for each
round, cell phones have set #monthly minutes, and per-minute rate for extra
Payment pricing- monthly leases, make ppl less sensitive to total price (sticker
For multiple products
Price bundling- selling 2 or more goods as single package for one price
Captive pricing- tactic for 2 items that must be used together (razor and blade)
Geographic pricing

F.O.B. origin pricing- cost of transporting the product from the factory to the
customer's location is responsibility of customer
FOB delievered pricing- cost of loading and transporting the product to the
customer is included in the selling price and paid by the manufacturer
Zone pricing- customers in different geographic zones pay different
transportation rates
Uniform delivered pricing- adds a standard shipping charge to the price for all
customers regardless of location
Freight absorption pricing- seller absorbs the total cost of transportation
Discounting for members of the channel
List price- price end customer expected to pay as determined by manufacturer;
also suggested retail price
Trade of functional discounts- discounts off list price of products to members of
channel of distribution that perform various marketing functions
Quantity discounts- charging reduced prices for purchases of larger quantities
of a product
Cumulative quantity discounts- discounts based on the total quantity
purchased within a specified time period
Noncumulative quantity discounts- discounts based only on the quantity
purchased within individual orders
Cash discounts- pay producer within certain time, amount due is then cut by
certain percent
Seasonal discounts
Dynamic pricing- price can be easily adjusted to meet changes in the
Price discrimination (based on what they know diff customer segments are
willing to pay)
Psychological issues in pricing
Buyers' pricing expectations
Internal reference prices- set price or price range in consumers' minds that
they refer to in evaluating a product's price
Price quality inferences
Psychological pricing strategies
Odd-even pricing- $1.99, $5.98, etc., concert and movie tix- even amts
Price lining- the practice of setting a limited number of different specific prices
called price points, for items in a product line
Stripped down model cheap, better quality priced higher
Legal and ethical considerations
Bait and switch tactic- illegal practice where an advertised price special is
used as bait to get customers into store with intention of switching them to a
higher-priced item
Loss leader pricing- setting prices very low or even below cost to attract
customers into store
Unfair sales acts- state laws prohibiting suppliers from selling products below
cost to protect small businesses from larger competitors

Price fixing- two or more firms

Horizontal price fixing- competitors who are making same product
Vertical- force retailers to charge certain price
Predatory pricing- set very low price to drive competitors out of business, then
when they have a monopoly, increase prices
NEED CHAPTER 3, 9,10, 11, 17, 18, 12

Chapter 3 Ethics
Social profit benefit an organization and society receive from organization doing good stuff
(community service, being ethical, promoting diversity, and being environmentally friendly)
business ethics rules of conduct for an organization
codes of ethics written standards of behavior that everyone must subscribe to
lack of ethics can cost firms in lawsuits; customer and employee efforts can also cost firms
Consumerism movement to protect consumers against harmful practices
Consumer Bill of Rights right of consumers protected by federal government
Include rights to be informed, safe, heard, and choose freely
Discriminatory pricing a pricing practice where different customers are charged different process
Corrective advertising - clarifies or qualifies previous deceptive claims
Puffery claims of a superior product that can not be proven true or untrue
Slotting allowance paying a fee to retailers so that the product is on the shelves
Social responsibility - management practice where organizations seek to engage in practices that
have a positive effect on society and promote public good
Environmental stewardship to protect and enhace natural environment
Green marketing create a differential benefit that focuses on the environment
Cause marketing - marketing to link company to a good cause
Total quality management (TQM)- management philosophy that encourages employees to be a
part of quality improvement and promote customer satisfaction
ISO international standard organization, set ISO 9000 for quality and ISO 14000 for environment
Corporate cultures can be risk-taking, Profit-centered vs people-centered
Business cycle patterns in the economy, including recession, depression, and recovery
Consumer confidence willingness to spend as a reflection
Discretionary income money after necessities
Competition can be either brand (same product, different company) or product (different products
to satisfy same needs)
Monopolistic competition - many firms with slightly different products offer unique consumer

Chapter 9
Good tangible product
Core product is the benefits that the customer is buying
Customized benefits are bells and whistles
Actual product is the physical thing
Augmented product is product + services and such
Durable goods last
Nondurable goods are consumed
Convenience products are cheap, available, purchased frequently with minimal effort or
Classified as staples, impulse products, or emergency products
Shopping products spend time and effort in gathering information about these and comparing
alternatives before buying
Specialty products good or service with unique characteristics, important to buyer, and will devote
a lot of time to buying
Unsought products are ones that the consumer has little awareness of until it is brought to their
Maintenance, repair, and opertating (MRO) products are consumed in a short period of time
Specialized services are crucial to organization but not part of production
Component parts are manufactured goods or subassemblies of finished items that are needed to
complete products downstream
Also raw materials, processed materials, and equipment needs
Innovation is believed to be new and different in the eyes of consumers
Continuous innovations are modifications of an existing product to distinguish competitors
Knockoff copies with slight modification another product
Dynamic continuous innovation change in existing product that requires moderate amounts of
learning or behavior change.
Convergence two tech coming together to create a new system with benefits greater than each on
their own
Discontinuous innovation totally new product that creates a makor change in how we live
New product development
Idea generation first step; brainstorm products that fit needs and companys mission
Product development and screening (like it sounds)
Marketing strategy development
Business analysis assess commercial viability of product
Technical development new product is refined and perfected
Prototype test versions
Test marketing - small market before large
Adoption (beginning to buy) and diffusion (spread through population)
Awareness interest evaluation trial adoption confirmation
Categories: innovators (2.5%) early adopters (13.5%) early majority (34%) late
majority (34%) laggards (16%)
Chap 10 Managing the product
Product lines a firms total product offering designed to satisfy a single need or desire of a

Large number of offerings is a full-line and small number is a limited-line.

Upward line is more expensive and downward line is less expensive
filling out a product line is adding sizes or styles to previous line
cannibalization loss of sales of an existing brand to a new brand being introduced.
Product mix total set of all products that a firm offers for sale
Quality measured as level (relative) and consistency of quality
Product life cycle - movement from introduction growth maturity (margins start to narrow as
competition increases) decline
Brand - a name, term, symbol or unique element that identifies a product and sets it apart from the
Should be easy to remember and have a name that fits needs of market
Brand equity value of a brand to an organization
Brand extensions new product with same brand name as strong existing brand
Family brand or umberella brand strategy; a lot of products under one brand
Store brands, generic brands and national brands
Licensing selling the name of brand for someone else to use
Co-branding using two brands together to make a new product
Ingredient branding advertising the ingredient
Trademark brand name, mark, or character legally registered with government
Universal product code (UPC)- black bars that is readable by scanners and identifies the product