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133 Cards in this Set
- Front
- Back
- 3rd side (hint)
Requirements of a Market
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-Must need or desire a particular product
-Must have the ability to purchase the product -Must be willing to use their buying power to purchase the product -Must have the authority to buy the product |
None
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Consumer Markets (B2C)
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-Purchasers and individuals in households
-Purchases are for personal consumption, not profit |
None
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Undifferentiated Targeting Strategy
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-Defining an entire (homogeneous) market for a particular product as the target market
-Designing a single marketing mix for, and directing it at the total market |
None
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Segmentation Variables
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Characteristics of individuals, groups, or organizations used to divide a market into segments
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Market Density
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The number of potential customers within a unit of land area
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Personality characteristics
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Marketers appeal to positive/favorable personal characteristics to influence the purchase decision
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Motives
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Marketers use individuals’ differing purchase motives to segment a product market.
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Lifestyles
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Marketers segment markets according to how individuals choose to spend their time in various activities, their income, their interest and opinions, and their education.
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Requirements for segmentation by behavior
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-Benefits sought must be identifiable
-Market must be divisible into recognizable segments using the benefits -One or more segments must be accessible to the marketing effort |
None
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Variables for Segmenting Business Markets
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1. Geographic Location
2. Type of Organization 3. Customer Size 4. Product Use |
None
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Geodemographic Segmentation
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Marketing segmentation that clusters people in zip code areas and smaller neighborhood units based on lifestyle and demographic information
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Micromarketing
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An approach to market segmentation in which organizations focus precise marketing efforts on very small geographic markets
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Sales Estimates
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based on market potential and company sales potential
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None
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Sales Potential Measurement Approaches
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1. Breakdown approach: top-down analysis
2. Build-up approach: bottom-up analysis |
None
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Competitive Assessment
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Who, how many, how large, and how strong?
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Cost Estimates
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-The expense of developing a marketing mix and
-Costs of reaching segment relative to competitors’ costs |
None
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Issues in Selecting a Target Market
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-Do customers’ needs differ enough to warrant the use of market segmentation?
-In which market segment(s) should the firm participate? -Does the firm have the resources and skills to compete effectively in the target market? |
None
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Sales Forecast
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The amount of a product a company expects to sell during a specific period at a specified level of marketing activities
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Executive Judgment
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Based on the intuition of the firm’s managers
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Time-Series Analysis
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Patterns in historical data yield information for use analyzing trends
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Regression Analysis
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Predicting sales based on the relationship between past sales and one or more variables
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Market Tests
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Making a product available in the marketplace and measuring purchases and consumer responses
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Using Multiple Forecasting Methods
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A combination of forecasting methods may yield better results
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Target Market Selection Process
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Step 1: Identify the Appropriate Targeting Strategy
Step 2: Determine Which Segmentation Variables to Use Step 3: Develop Market Segment Profiles Step 4: Evaluate Relevant Market Segments Step 5: Select Specific Target Markets |
None
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Business Markets (B2B)
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-Individuals and groups that purchase products for resale, direct use to produce other products, or use in daily business operations
-Purchasers can be categorized as producers, resellers, government, and institutional markets |
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Concentrated Targeting Strategy
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-Segmenting (dividing) the total market into groups with similar product needs (heterogeneous markets) to design marketing mixes that match those needs
-Focusing on a single market segment using one marketing mix |
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Differentiated Targeting Strategy
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-Targeting two or more segments by developing a marketing mix for each
-Aiming marketing mixes at more people may yield a competitive advantage |
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Segmentation Variables for Consumer Markets
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-Demographic
-Geographic -Psychographic -Behavioristic |
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Demographic Segmentation Variables
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-age
-gender -race -ethnicity -income -education -occupation -family size & life cycle -religion -social class |
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Geographic Segmentation Variables
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-region
-urban, suburban, rural -city size -county size -state size -market density -terrain -climate |
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Market Segment Profile
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-Describes the similarities among potential customers within a segment
-Covers demographic characteristics, geographic factors, benefits sought, lifestyles, brand preferences, and usage rates |
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Psychographic Segmentation Variables
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-personality attributes
-motives -lifestyle |
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Behavioristic Segmentation Variables
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-volume usage
-end use -brand loyalty -price sensitivity |
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Benefit segmentation
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-The division of a market according to benefits that customers want from the product
-Individuals purchase and use products that provide them with benefits that meet their needs. |
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Trend Analysis
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-Cycle analysis
-Seasonal analysis -Random factor analysis |
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Surveys
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Surveys -Customer forecasting survey
-Sales force forecasting survey -Expert forecasting survey -Delphi technique (panel of experts) |
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Buying Behavior
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The decision processes and acts of people involved in buying and using products
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Consumer Buying Behavior
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Buying behavior of people who purchase products for personal use and not for business purposes
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Level of Involvement
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An individual’s intensity of interest in a product and the importance of the product for that person
-Enduring involvement -Situational involvement |
None
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Routinized Response Behavior
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The process used when buying frequently purchased, low-cost items that require little search-and-decision effort
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Limited Problem Solving
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The process that buyers use when purchasing products occasionally or when they need information about an unfamiliar brand in a familiar product category
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Extended Problem Solving
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The process employed when purchasing unfamiliar, expensive, or infrequently bought products
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Impulse Buying
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An unplanned buying behavior resulting from a powerful urge to buy something immediately
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Problem Recognition
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Occurs when a buyer becomes aware of a difference between a desired state and an actual condition -- May occur rapidly or slowly
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Information Search
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-INTERNAL SEARCH: Buyers search their memories for information about products that might solve their problem
-EXTERNAL SEARCH: Buyers seek information from outside sources |
None
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Evaluation of Alternatives
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-Consideration set
-Evaluative criteria -Framing the alternatives |
None
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Consideration set
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A group of brands that the buyer views as alternatives for possible purchase
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Evaluative criteria
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Objective and subjective characteristics that are important to a buyer
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Framing the alternatives
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Describing the alternatives and their attributes in a certain manner to make a particular characteristic appear more important especially to the inexperienced buyer
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Purchase
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-Choosing the product or brand to be bought based on the outcome of the evaluation stage
-The choice of seller may affect the final product selection. -Factors such as terms of sale, price, delivery, and warranties may affect the sale. |
None
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Cognitive dissonance
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A buyer’s doubts shortly after a purchase about whether the decision was the right one
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Situational Influences
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Factors that can influence a buyer’s purchase decision and may cause the buyer to short, lengthen, or terminate the process
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Major Situational Factors
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-Physical surroundings
-Social surroundings -Time perspective -Reason for purchase -Buyer’s momentary mood and condition |
None
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Psychological Influences
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Factors that in part determine people’s general behavior, thus influencing their behavior as consumers
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Perception
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The process of selecting, organizing, and interpreting information inputs to produce meaning
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Information Inputs
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Sensations received through the sense organs
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Selective Exposure
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The process of selecting inputs to be exposed to our awareness while ignoring others
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Selective Distortion
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An individual’s changing or twisting of information when it is inconsistent with personal feelings or beliefs
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Selective Retention
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Remembering information inputs that support personal feelings and beliefs and forgetting inputs that do not
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Perceptual Organization
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Organizing and integrating new information with what is already stored in memory.
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Perceptual Interpretation
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The assignment of meaning to what has been organized based on what is expected or what is familiar
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Attempts to influence interpretation can fail because
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-consumers block out seller’s information.
-consumers interpret seller’s information differently than intended. -consumers discard information that is inconsistent with prior beliefs. |
None
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Motives
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An internal energizing force that directs a person’s behavior toward satisfying needs or achieving goals
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Maslow’s Hierarchy of Needs
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The five levels of needs that humans are motivated to seek and satisfy, from least to most important:
-Physiological needs—food, water, sex, clothing, shelter -Safety needs—security, freedom -Social needs—love, affection, belonging -Esteem needs—respect, recognition, self-worth -Self-actualization needs—personal growth needs |
None
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Learning
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-Changes in an individual’s thought processes and behavior caused by information and experience
-Behaviors that produce satisfying consequences are likely to be repeated. |
None
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How consumers learn about products
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-experiencing the products personally.
-gaining additional product knowledge from seller-provided information. -indirect information from other purchasers/users |
None
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Attitudes
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An individual’s enduring evaluation of, feelings about, and behavioral tendencies toward an object or idea
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Attitudinal Components
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-cognitive
-affective -behavioral |
None
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Cognitive
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Knowledge and information about the object or idea
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Affective
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Feelings and emotions toward the object or idea
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Behavioral
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Individual’s action regarding the object or idea
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Attitude Scale
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A means of measuring consumer attitudes by gauging the intensity of an individual’s reactions to adjectives, phrases, or sentences about an object
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Personality
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A set of internal traits and distinct behavioral tendencies that result in consistent patterns of behavior in certain situations
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Self-concept (self-image)
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Perception or view of oneself
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Lifestyle
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An individual’s pattern of living expressed through activities, interests, and opinions
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Social Influences
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The forces other people exert on one’s buying behavior
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Role
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-Actions and activities that a person in a particular position is supposed to perform based on expectations of the individual and surrounding persons
-Multiple role-expectation sets affect behavior. -Roles influence both general and buying behaviors. |
None
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Consumer socialization
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The process through which a person acquires the knowledge and skills to function as a consumer
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Family Decision-Making Processes
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-Autonomic—equally shared decision-making
-Husband-dominant—husband makes decisions -Wife-dominant—wife makes decisions -Syncratic—decisions made jointly |
None
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Reference Groups
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Any group that positively or negatively affects a person’s values, attitudes, or behavior:
-Membership -Aspirational -Disassociative |
None
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Opinion Leader
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A knowledgeable, accessible individual who provides information about a specific sphere of interests to followers
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Social Class
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-An open group of individuals with similar social rank
-Individuals in the same social class develop and assume common behavioral patterns. have similar attitudes, values, language patterns, and possessions. -Influences many major life decisions -Influences shopping patterns and spending habits |
None
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Culture
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The accumulated values, knowledge, beliefs, customs, objects, and concepts of a society
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Subcultures
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Groups of individuals whose characteristic values and behavior patterns are similar and differ from those of the surrounding culture
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Consumer Buying Decision Process
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-Problem recognition
-Information search -Evaluation of alternatives -Purchase -Postpurchase Evaluation |
None
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Psychological Influences on the Buying Decision Process
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Perception - Motives - Learning
Attitudes - Personality and self-concept - Lifestyles |
None
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Social Influences on the Buying Decision Process
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Roles - Reference groups and opinion leaders
Family Influences - Social Classes Culture and Subcultures |
None
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Business Markets
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Individuals or groups that purchase a specific kind of product for resale, direct use in producing other products, or use in daily operations
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Producer Markets
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Individuals and business organizations that purchase products to make profits by using them to produce other products or using them in operations
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Reseller Markets
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Intermediaries who buy finished goods and resell them for profit:
-Wholesalers purchase products for resale to retailers. -Retailers purchase products and resell them to final customers. |
None
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Factors affecting resellers’ purchase decisions:
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-Level of demand
-Profit potential (sales per square foot) -Supplier’s ability to provide goods on demand -Ease of ordering and producer support -Competing or complementary product characteristics |
None
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Government Markets
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Federal, state, county, and local governments
-Purchase a broad variety of goods and services -Public accountability results in complex buying procedures requiring bids and negotiated contracts |
None
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Institutional Markets
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Organizations with charitable, educational, community, or other non-business goals
-Churches, hospitals, fraternities and sororities, charities, and private colleges |
None
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Characteristics of Transactions with Business Customers
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-Orders are much larger and more costly/expensive.
-Purchases are made more frequently. -Terms of sales contracts are longer. -Several people or committee may be involved in the purchase decision. -A buyer and a seller purchase from each other (reciprocity). |
None
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Attributes of Business Customers
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-Better informed about products purchased
-Demand more detailed product information -Personal goals (in support of organizational goals) may influence buying behavior |
None
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Primary Concerns of Business Customers
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-Price of goods affecting ability to compete
-Return on investment in product -Price of product compared to the benefits it provides -Quality of the product in meeting specifications -Quality of services offered by suppliers in support of their products |
None
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Methods of Business Buying
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-Description
-Sampling -Inspection -Negotiation |
None
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Description
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Products standardized by certain characteristics
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Inspection
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Products with particular characteristics
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Sampling
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Product is homogenous and a single specimen can be evaluated as representative of the entire product
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Negotiation
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Sellers are asked to bid on specified product characteristics and purchasers negotiate with successful bidders
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Types of Business Purchases
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-New-task purchase
-Straight rebuy purchase -Modified rebuy purchase |
None
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New-task purchase
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An initial item purchase to be used to perform a new job or solve a new problem
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Straight rebuy purchase
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The routine purchase of the same products by a business buyer
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Modified rebuy purchase
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A new-task purchase that is changed on subsequent orders or when requirements of a straight rebuy are modified
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Demand for Business Products
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-Derived demand
-Inelasic demand -Joint demand -Fluctuating demand |
None
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Derived demand
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Demand for industrial products that stems from demand for consumer products
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Inelastic demand
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Demand that is not significantly altered by a price increase or decrease
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Joint demand
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Demand involving the use of two or more items in combination to produce a product
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Fluctuating demand
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Demand that varies directly as consumer demand varies
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Business (Organizational) Buying Behavior
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The purchase behavior of producers, government units, institutions, and resellers
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Buying Center
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The people within an organization who make business purchase decisions
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Users
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The people within an organization who actually use the products
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Influencers
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The people within an organization who help develop the specifications and evaluate alternative products
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None
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Buyers
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The people within an organization who select suppliers and negotiate terms of purchase
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Deciders
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The people within an organization who actually choose the products
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Gatekeepers
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The people within an organization who control the flow of information to others in the buying center
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Stages of the Business Buying Decision Process
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-Problem Recognition
-Development of product Specifications -Search for and Evaluation of potential products and Suppliers -Selection of Product and Supplier -Evaluation of Product and Supplier Performance |
None
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Problem Recognition
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Arises under a variety of circumstances both internal and external
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Development of Product Specifications
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Involves assessing the problem or need and determining what is necessary to resolve or satisfy it
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Value Analysis
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An evaluation of each component of a potential purchase
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Vendor Analysis
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A formal systematic evaluation of current and potential vendors
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Multiple Sourcing
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An organization’s decision to use several suppliers
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Sole Sourcing
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An organization’s decision to use only one source
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Evaluation of Product and Supplier Performance
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May result in adjustment of product specifications, corrective action from the supplier, or search for a new supplier
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Influences on the Business Buying Decision Process
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-Environmental Factors
-Organizational Factors -Interpersonal Factors -Individual Factors |
None
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Environmental Factors
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Competitive and economic forces, political forces, legal forces, technological changes, and sociocultural issues
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Organizational Factors
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The company’s objectives, purchasing policies, resources, and the size and composition of the firm’s buying center
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Interpersonal Factors
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Relationships among people in the buying center
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Individual Factors
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The personal characteristics of participants in the buying center
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Systems for classifying industrial, commercial, financial, and service organizations
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-Standard Industrial Classification (SIC)
-North American Industry Classification System (NAICS) |
None
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Identifying Potential Business Customers
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-Census of Business
-Census of Manufacturers -County Business Patterns -Standard & Poor’s Register -Dun & Bradstreet’s Million Dollar Directory |
None
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Estimating Purchase Potential
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The size of the purchase potential of business customers may be estimated using a variable in the business classification data that is correlated with size of customer purchases.
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