Chatper 4.5 - The four Ps (Product, Price, Promotion, Place) Flashcards
Boston Matrix (Boston Consulting Group Matrix)
Is a marketing tool for analyzing the product portfolio of a business. It showdown whether products have high or low market share and operate in high or low growth industries
Brand Awareness
Measures the extent to which potential customers or the general public recognize a particular brand. It is usually expressed as a percentage of the sample surveyed.
Brand Development
Is a long-term product strategy that involves strengthening the name and image of a brand to boost its appeal and sales
Brand Loyalty
Occurs when customers buy the same brand of a product time and time again. They are devoted to the brand since they have brand preference over other brand names
Brand Value
Refers to the premium that customers are willing to pay for a brand over and above the value of the product itself, i.e. Customers are willing to pay more for a reputable brand
Branding
Refers to the use of an exclusive name, symbol or design to identify a specific product or organization. It differentiates a product from similar ones by rival firms
Cash Cow
Is a term used by Boston Consulting Group to refer to any product that generates significant money due to its large market share in a mature market
Consumer Goods
Are products bought for personal consumption, such as CONSUMER DURABLES (e.g. furniture, computers, cars) and PERISHABLES (e.g. food and flowers).
Dogs
Are products in the BCG matrix that have low market share and operate in low growth or stagnant markets. Hence, dogs do not generate much cash or profit for a business
Extension Strategy
Is an attempt by marketers to lengthen the life cycle of a particular product, typically used during maturity or early decline stages of the product’s life cycle
Product
Refers to any physics or non-physics item (good or service) that is purchased by commercial or private customers
Product differentiation
Refers to any strategy used to m are a product appear to be distinct from others, such as quality, branding and packaging
Product Life Cycle (PLC)
Is the typical process that products go through from their initial design and launch to their decline and eventual withdrawal. Different products undergo each of the five stages (research, launch, growth, maturity and decline) at varying speeds.
Product Porfolio
Refers to the range of products or strategic business units owned and developed by an organization at any one point in time
Question Marks (or problem children)
Are products in the BCG matrix that compete in high market growth industries, but have low market share. They consume lots of cash but do not generate much profit, if any
Rising Stars (or stars)
Are products in the BCG matrix that have high or rising market share in a high growth market
Cost-plus Pricing (or mark-up pricing)
Involves adding a percentage or predetermined amount of profit to the cost per unit output to determine the selling price
Loss Leader Pricing
Involves setting the price of a product below its cost of production. The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader products
Penetration Pricing
Involves temporarily setting prices so low that rivals, especially smaller firms, cannot compete at a profitable level
Price
Refers to the amount paid by a customer to purchase a good or service
Price Discrimination
In voles charging different prices to different groups of customers for the same product, e.g. Adult and child airline tickets
Price Leadership
Is used for best-selling products or brands in a particular market. Customers perceive there to be few substitutes for such products so the dominant firm can set its own prices. Competitors set their prices based on the price of the market (or price) leader.
Price Skimming
Involves initially charging high prices for innovative or high-tech products. Price is reduced as the novelty wears off and as substitute products appear
Price Wars
Involve businesses competing by a series of intensive price cuts to threaten the competitiveness of rival firms
Psychological Pricing
Involves rounding down numbers such as $9.90 or $14 995 to make prices seem lower (than $10.00 or $15 000 respectively)
Above the line (ATL promotion)
Is any form of paid-for promotion through the mass media (such as television and radio) to reach a wide audience
Advertising
Is a method of informative and/or persuasive promotion that is usually paid for. The aim of commercial advertising is the raise the level of demand for a firm’s products
Advertising Clutter
Refers to the huge volume of advertisements that the public is bombarded with
Below the line (BTL) promotion
Does not use paid-for mass media sources, e.g. Free sales (toiletries, food, drinks, etc.), discount vouchers (to entice customers to buy the product) and added-value promotions (e.g. Special introductory deals).
Direct Marketing
Refers to promotional activities that aim to sell a product straight to a customer rather than by using an intermediary
Guerrilla Marketing
Is a promotional strategy that aims to ambush or catch the attention of customers through innovative, unconventional and/or shocking techniques, on a relatively low budget
Logos
Are a form of product differentiation that use a visual symbol to represent a business, its brands or its products, e.g. Nike’s Swoosh, Rolex’s golden crown, or the globe of Wikipedia
Promotion
Is a component of the marketing mix. If refers to the methods used to inform, persuade and/or remind people about a firm’s products or brands
Promotional Mix
Refers to the combination of individual ATL and BTL promotional methods used by a business, such as advertising, direct marketing, packaging and sales promotion
Public Relations (PR)
Refers to business activities aimed at establishing and protecting the desired image of an organization. PR is concerned with it getting food media coverage, usually without directly paying for it.
Publicity
Is the process of promoting a business and its products by getting positive media exposure without directly paying for it
Sales Promotions
Are short-term incentives designed to simulate demand for a product, e.g. Discount coupons, prize draws, price cuts and trade fairs
Social Media
refers to the marketing practice of gaining Internet traffic through social media websites such as Facebook, Twitter, YouTube and Google
Social Netoweking
refers to any platform used mainly by individuals to build social relationships between people, often because they are friends or share things in common. Social networking services include Google+, Instagram and Facebook
Slogans
Are catchphrases designed to represent to essence of a business or its products using a memorable set of words
Sponsorship
Is a promotional technique that involves funding, supporting or donating resources for an event or business venture in return for prominent publicity
Viral Marketing
Is a promotional strategy that combines online technologies with word of mouth (WOM) techniques. It is usually done through the Internet via emails and social networks
Word of Mouth (WOM)
Is the spreading of marketing messages about a firm and the quality of its products or its customer service. It is perhaps the most cost-effective form of promotion
Agents (or brokers)
Are negotiations who help to sell a vendor’s products, such as real estate agents selling residential and commercial property for their clients
Channels of Distribution
Are the ways that a product gets from the manufacturer to the consumer. Examples include wholesalers, agents, retailers, e-commerce and vending machines
Direct Mail
Refers to promotional materials sent directly to people’s homes or places of work, often with personal details gathered from a database containing information about known customers.
Direct marketing
Refers to any promotional activity that involves making direct contact with customers, e.g. Personal selling and direct mail
Distribution (or place)
Refers to the process of getting the right products to the right customer at the right time and place in the most cost-effective way
Distributors
Are independent businesses that act as intermediaries by specializing in the trade of products made by certain mangufacturors
Intermediaries
Are agents or other businesses that act as a middle person in the chain of distribution
Intermediation
Is the process of using intermediaries in the chain of distribution between the manufacturers and consumers of a product
Retailer
Are the sellers of products to the general public (i.e. Consumers) that operate in outlets (or ‘shops’ in everyday language)
Speciality Channel of Distribution
Is any indirect way to distribute products that does not involve retailers, i.e. Distribution without the use of intermediaries such as e-commerce, vending machines and mail order
Telemarketing
Refers to the use of telephone systems (audio and text messaging) to sell products directly to potential customers
Wholesalers
Are businesses that purchase large quantities of products from a manufacturer and then separate or ‘break’ the bulk-purchases into smaller units for resale, mainly to retailers
