At this age, your 2-3 year old will start experimenting with power, and your child has found a very powerful word. Naturally, your child wants to say it all the time, particularly since this word has such power to get a reaction out of you.
What you need to know:
At this point, ignoring will not be effective. Think of your child as a little energy junkie; anything that gets juice from you will be repeated by your child. Ignoring your child’s use of this swear word is the strategy that most 'experts' recommend, but your child is no dummy. He has sensed your reaction and knows that the new word has power. Since you would not react to the word and help your child figure out what it means, he may try it on your friend. You must explain why the word is problematic and give your child substitutes. Give your child an opportunity to experiment with the word safely. You need to eliminate any power struggle that might be causing your child to torment you with his new bad word.