BUSI 406: MIDTERM 2
82 Cards in this Set
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Shopping Products
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products that a customer feels are worth the time and effort to compare with competing products.
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Homogeneous shopping products
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shopping products the customer sees as basically the same and wants at the lowest price.
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heterogeneous shopping products
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shopping products that the customer sees as different and wants to inspect for quality and suitability
branding is less important, the more carefully consumers compare price and quality, the less they rely on brand names or labels
Ex: Furniture, clothing, and club membership
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Specialty Products
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consumer products that the customer really wants and makes a special effort to find
it's the customer's willingness to search, not the extent at which it searches
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Unsought Product
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products that potential customers don't yet want or know they can buy - so they don't search for them at all
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New Unsought Products
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products offering really new ideas that potential customers don't know about yet
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Regularly Unsought Prodcuts
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products like gravestones, life insurance, and ecyclopedias - there may be a need, but potential customers aren't motivated to satisfy it
Personal Selling is very important
NPO's try to "sell" their unsought products
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Capital Item
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long-lasting product that is often expensive and can be used and depreciated for many years
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Components
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processed expense items that become part of a finished product - items that are ready for assembly into the final product
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Supplies
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Maintenance, Repair, and Operating - MRO Supplies - expense items that do not become part of a finished product
branding is important for such "nuisance" purchases
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Professional Services
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specialized services that support a firm's operations - usually expense items
Ex: Management Consulting, IT, Advertising Agencies, Food Services
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Market Introduction
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sales are low, customer's aren't looking for the product, informative promotion is needed, most companies experience losses because they spend so much money on Product, Place, and Promotion Development
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Market Growth
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industry sales grow fast - but industry profits rise and start falling
Ex: Innovator begins to make big profits until competitors copy the product and enter the market
Monopolistic Competition with downward sloping demand curves is typical
Towards the end of this stage is when in…
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Market Maturity
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occurs when industry sales level off and competition gets tougher
Industry profits go down because promotion costs rise
There is a long-run downward pressure on prices
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Sales Decline
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new products replace the old
price competition from dying products becomes more vigorous - but firms with strong brands may make profits until the end because they have successfully differentiated their products
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ISO-9000
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A set of international standards on quality management and quality assurance
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Multiple Buying Influence
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several people - perhaps even top management - play a part in purchase decision.
Users - line workers or supervisors
Influencers - engineering or R&D people who write the specs
Buyers - purchasing managers who work with suppliers
Deciders - people with power to select or approve the…
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buying center
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a group of people in the organization who make a purchase decision
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Vendor Analysis
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a formal rating of suppliers on all relevant areas of performance
aim is NOT to get lower price BUT rather to get the lowest total costs associated with purchases
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New-Task Buying
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First-time or unique purchase situation that requires considerable effort by decision makers.
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Straight Rebuy
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a routine repurchase that may have been made many times before.
buyers probably don't bother looking for new information or new sources of supply
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Modified Rebuy
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the in-between process where some review of the buying situation is done - though not as much as new-task buying
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White Papers
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reports designed to help them make decisions about a particular topic
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Competitive Bid
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the terms of sale offered by the supplier in response to the purchase specs posted by a buyer
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operational linkages
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direct ties b/t internal operation of the buyer and seller firms; usually involves ongoing coordination of activities; can reduce total inventory costs; just in time delivery
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Buying Committee
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may decide to add/drop a line or change buying policies
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Marketing Information System (MIS)
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an organized way of continually fathering, accessing, and analyzing information that marketing managers need to make ongoing decisions
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Decision Support System (DSS)
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a computer program that makes it easy for a marketing manager to get and use information as he/she is making decisions
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Marketing Model
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a statement of relationships among marketing variables - enables a manager to look at the sales (and costs) expected with different types of promotion and select the marketing mix that is best for a particular target market
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Marketing Research Process
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Defining the Problem
Analyzing the Situation
Getting Problem-Specific Data
Interpreting the Data
Solving the Problem
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Defining the Problem
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often the most difficult step
it's easy to confuse problems with symptoms
setting research objectives may require more understanding
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Analyzing the Situation
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Situation Analysis - an informal study of what info is already there in the problem area
Analysis of Secondary Data (existing/previous data) and Primary Data (specifically collected for current problem)
Internet directory sources can be useful - Secondary
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Getting Problem Specific Data
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Qualitative - seeks in depth, open ended responses, not yes or no answers.....Ex: Focus Groups of 6-10 people in an informal group setting
Quantitative - seeks structured responses that can be summarized in numbers, percentages, averages, or other statistics
easier and quicker respons…
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Consumer Panels
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a group of consumers who provide information on a continuing basis
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Statistical Packages
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easy-to-use computer programs that analyze data
Ex: Cross Tabulation - one of the most frequently used approaches - shows the relationships of answers to two different questions
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Channel of Distribution
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any series of firms or individuals who participate in the flow of products form producer to final user/consumer
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Direct Marketing
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direct communication between a seller and an individual customer using a promotion method other than face-to-face selling...e.g. online
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Discrepancy of Quantity
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difference between the quantity of products is economical for a producer to make and the quantity final consumers normally want
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Discrepancy of Assortment
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consumers need a wide variety of products but firms usually produce one or few products
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Regrouping Activities
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ways that channel specialists adjust discrepancies
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Accumulating
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a way to adjust quantity discrepancies
involves collecting products from many small producers - especially important in less-developed countries & agricultural markets
many wholesalers and retailers who operate form internet websites focus on this
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Bulk Breaking
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adjusting quantity discrepancy
dividing larger quantities into smaller quantities as products get closer to the final market
Ex: wholesalers selling to other/smaller wholesalers or to retailers
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Sorting
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adjusting assortment discrepancy
separating products into grade and qualities desired by different target markets
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Assorting
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adjusting assortment discrepancy
putting together a variety of products to give a target market what it wants
usually done by those closest to final consumer - retailers or wholesalers
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Traditional Channel Systems
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the various channel members make little or no effort to cooperate with each other. They buy and sell from each other - that's the extent of their relationship
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Vertical Conflicts
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occur between firms at DIFFERENT levels in the channel of distribution
can occur if a producer and retailer disagree about how much promotion effort the retailer should give the producer's product
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Horizontal Conflict
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occur between firms at the SAME level in the channel of distribution
if a retailer is giving a test ride for bikes and then realizes an online retailer is selling them at a lower price while customers are test riding them in the others store
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Channel Captain
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a manager who helps direct the activities of a whole channel and tries to avoid or solve channel conflicts
In US, producers frequently take the lead in channel relations BUT sometimes wholesalers/retailers take the lead (Ex: Wal-Mart, Tesco, etc.)
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Vertical Marketing Systems
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channel systems in which the whole channel focuses on the same target market at the end of the channel
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Corporate Channel Systems
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corporate ownership all along the channel - the firm is going 'direct' BUT actually might be handling wholesaling and retailing
Ex: Sherwin-Williams, Florsheim Shoes
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Vertical Integration
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acquiring firms at different levels of channel activity
Advantages: stable sources of supplies, better control of distribution and quality, greater buying power, and lower executive overhead
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Administered Channel Systems
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the channel members informally agree to cooperate with each other, e.g. routinized ordering and coordinate promotion efforts
Ex: GE, Miller Beer, Scotts Miracle Grow
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Contractual Channel Systems
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channel members agree by contract to cooperate with each other
Ex: McDonald's, Holiday Inn, Ace Hardware, Super Valu, Coca-Cola
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Selective Distribution
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selling through only those intermediaries who will give the product special attention
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Exclusive Distribution
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selling through only one intermediary in a particular geographic area
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Avoid Selling to Retailers That:
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place orders that are too small to justify making calls
make too many returns or request too much service
have a poor credit rating
are not in a position to do a satisfactory job
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Intensive Distribution
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selling a product through all responsible and suitable wholesalers who will stock or sell the product
Convenience Products are common here....laser print cartridges, ring binders, and copier paper
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Multi-Channel Distribution
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occurs when a producer uses several competing channel to reach the same target market - perhaps using several intermediaries in addition to selling directly
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Reverse Channels
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used to retrieve products that customers no longer want - forced by environmental laws often
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5 Basic Ways to Enter International Markets
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Exporting
Licensing - selling the right to use some process, trademark, patent for a fee or royalty - licensee takes most of the risk
Management Contracting - the seller provides only management and marketing - others own production and distribution facilities
Joint Venture - a domesti…
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5 Levels of Brand Familiarity
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Rejection - customers won't buy a brand unless its image is changed
Non-Recognition - customers don't remember the brand
Recognition - customers remember the brand
Preference - target customers usually choose the brand over other brands - habit or previously favorable experience
Insis…
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Lanham Act
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spells out what kinds of marks (including brand names) can be protected and the exact method of protecting them
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Manufacturer Brands
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brands created by producer - Nabisco, MasterCard, McDonald's
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Dealer Brands (private brands)
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created by intermediaries
Ex: Up & Up (Target), Equate (Wal-Mart), Craftsmen and Kenmore (Sears)
often lower priced than manufacturer brands
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Packaging
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involves promoting, protecting, and enhancing the product - both important to sellers and consumers
Advantages: sends a message, may lower distribution costs, reduce storage costs and breakages
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Warranty
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explains what the seller promises about their product
US common law says that producers must stand behind their products - even if they don't offer a specific warranty
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Magnuson-Moss Act
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producers must provide a clearly written warranty if they choose to offer any warranty
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Homogeneous shopping products
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shopping products the customer sees as basically the same and wants at the lowest price.
Ex: Computers, washing machines
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heterogeneous shopping products
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shopping products that the customer sees as different and wants to inspect for quality and suitability
Ex: Dentist - price doesn't matter as much
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Specialty Products
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products that the consumer really wants and make a special effort to find - willingness to search NOT extent of search
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Regularly Unsought Products
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products - like gravestones, life insurance, and encyclopedias - that stay unsought but not unbought forever
personal selling is VERY important
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Expense Item
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a product whose total cost is treated as a business expense in the year it's purchased
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Capital Item
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long-lasting product that can be used and depreciated form many years - often very expensive
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Installation
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capital item
buildings, land rights, major equipment
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Accessories
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short-lived capital items
tools and equipment used in production or office activites
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Raw Materials
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unprocessed expense items
logs, iron ore, wheat
become part of a physical good
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Components
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processed expense items that become part of a finished product
Ex: Airbags in cars
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Supplies
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items that do not become part of a finished product
Maintenance, Repair, and Operating
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Professional Services
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specialized services that support a firm's operations
Ex: IT services, Food services, Consulting
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Screening
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involves evaluating new ideas with a SWOT analyis
Safety and Product Liability must be considered
ROI is crucial
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Development
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usually involved R&D and engineering to design and develop physical product
Computer Aided Design - develop 3D color drawing and packaging/products
Market Tests are costly BUT not doing so is risky
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2 Keys to Improving Service
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Training
Empowerment - giving employees the authority to correct a problem without first checking with management
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