definitions Flashcards
Product
Anything that is of value to a consumer and can be offered through a marketing exchange
innovation
the process by which ideas are transformed into new products and services that will help firms grow
diffusion of innovation
the process by which the use of innovation, whether a product or service, spreads throughout a market group over time and over various categories of adopters
pioneers
new product introductions that establish a completely new market or radically change both the rules of the competition and consumer preferences in a market; also called breakthroughs
disruptive innovation
new product introductions that are simpler, less sophisticated, and usually less expensive than existing products or services
first movers
products pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead
innovators
those buyers who want to be the first to have the new product or service
early adopters
the second group of consumers in the diffusion of innovation model, after innovators to use a product or service innovation; generally don’t like to take as much risk as innovators
early majority
a group of consumers in the diffusion of an innovation model that represents approximately 34% of the population; members don’t like to take much risk and therefore tend to wait until bugs are worked out
late majority
the last group of buyers to enter a new product market
laggards
consumers who like to avoid change and rely on traditional products until they are no longer available
reverse engineering
involves taking apart a competitor’s product, analyzing it and creating an improved product that does not infringe on the competitor.s patents
lead users
innovative product users who modify existing products according to their own ideas to suit their specific needs
concepts
a brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy
concept testing
the process in which a concept statement that describes a product or service is presented to potential buyers or users to obtain their reactions
product development
entails a process of balancing various engineering, manufacturing, marketing and economic considerations to develop a product
prototype
the first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even crafted individually
alpha testing
an attempt by the firm to determine whether a product will perform according to its design and whether it satisfied the need for it was intended; occurs in the firm’s research and development
beta testing
having potential consumers examine a product prototype in a realuse setting to determine its funcationality, performance, potential problems, and other issues specific to its use
premarket tests
conducted before a product or service is brought to market to dtermine how many customers will try and then continue to use it
test marketing
introduces a new product or service to a limited geographical area (usually a few cities) prior to a national launch
product life cycle
defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning
introduction stage
stage of PLC when innovators start buying the product
growth stage
stage of PLC when product gains acceptance, demand and sales increase and competitors emerge in the product category
maturity stage
stage of PLC when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them
decline stage
stage of PLC when sales decline and the product eventually exits the market
core customer value
the basic problem solving benefits that consumers are seeking
associated services
the nonphysical attributes of the product, including product warranty, financing, product support , and after-sale service
product mix
the complete set of all products offered by a firm
product lines
groups of associated items, such as those that consumers use together or think of as part of a group of similar products
product category
an assortment of items that the customer sees as reasonable substitute for one another
brands
the names, terms, designs, symbols, or any other features that identify one seller’s good or service as distinct from those of other sellers
product mix breadth
the number of product lines, or variety, offered by the firm
product line depth
the number of products within a product line
Stock keeping units (SKU)
individual items within each product category; the smallest unit available for inventory control
brand equity
the set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service
brand awareness
measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm’s communications to customers
perceived value
the relationship between a product or service’s benefits and its costs
brand associations
the mental link that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality
brand personality
refers to a set of human characteristics associated with a brand, which has symbolic or self-expressive meanings for consumer
brand loyalty
occurs when a consumer buys the same brands product or service over buying the product from a different supplier within the same category
manufacturer brands
brands owned and managed by the manufacturer
private label brands (store brands)
brands developed and marked by a retailer and available only from that retailer
generic
a product sold without a brand name, typically in commodity markets
family brands
the use of a combination of the company brand name and individual brand name to distinguish from a firm’s products
individual brand
use of individual brand names for each of a firm’s products
brand extension
the use of the same brand name for a new product being introduced to the same or new markets
cobranding
the practice of marketing two or more brands together, on the same package or promotion
brand licensing
a contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, slogan, or characters in exchange for a negotiated fee
service
any intangible offering that cannot be physically possessed
customer service
specifically refers to human or mechanical activities firms undertake to help satisfy their customers’ needs and wants
intangible
a characteristic of service; it cannot be touched, tasted, or seen like a pure produced can
inseparable
a characteristic of a service: it is produced and consumed at the same time - that is, service and consumption are inseparable
inventory
a characteristic of a service: it is perishable and cannot be stored in inventory for future use
service gap
results when a service fails to meet the expectations that customers have about how it should be delivered
knowledge gap
reflects the difference between customers’ expectations and the firm’s perception of those expectations
standards gap
retains to the difference between the frim’s perceptions of customers’ expectations and the service standards it sets
delivery gap
the difference between the firm’s service standards and the actual service it provides to the customer
communication gap
refers to the difference between the actual service provided to customers and the service that the firm’s promotion program promises
service quality
customers’ perceptions of how well a service meets or exceeds their expectations
voice-of-customer programs
an ongoing marketing research system that collects customer insights and intelligence to influence and drive business decisions
zone of tolerance
the areas between consumers’ expectations regarding their desired service and the minimum level of acceptable service - that is the difference between what the customer really wants and what he or she will accept before going elsewhere
empowerment
in the context of service delivery, means allowing employees to make decisions about how service is provided to customers
profit orientation
a company objective that can be implemented by focusing on target profit pricing, maximizing profits, or target return pricing
target profit pricing
a pricing strategy implements by firms when they have a particular profit goal as their overriding concern uses price to stimulate a certain level of sales at a certain profit per unit
maximizing profits strategy
a mathematical model that captures all the factors required to explain and predict sales and profits, which should be able to identify the price at which its profits are maximized
sales-oriented
set prices very low to generate new sales and take sales away from competitors, even if profits suffer
competitor oriented
set price very low to discourage more competitors from entering the market. Set prices higher than a competitor to signal higher quality or market leadership. Match competitor prices to show a similar value
customer-oriented
target a market segment of consumers who highly value a particular product benefit and set prices relatively high (premium pricing)
target return pricing
a pricing strategy implemented by firms less concerned with the absolute level of profits and more interested in the rate at which their profits are generated relative to their investments: designed to produce a specific return on investment, usually expressed as a percentage of sales
competitive parity
a firm’s strategy of setting prices that are similar to those of major competitors
demand curve
show how many units of a product or service consumers will demand during a specific period at different prices
price elasticity of demand
measures how changes in a price affect the quantity of the product demanded; specifically the ratio of the percentage change in quantity demanded to the percentage change in price
elastic
refers to a market for a product or service that is price sensitive, that is relatively small, changes in price will generate fairly large changes in the quantity demanded
inelastic
refers to a market for a product or service that is price-insensitive; that is relatively small changes in price will not generate large changes in the quantity demanded
substitution effect
the consumer’s ability to substitutes other products for the focal brand thus increases the price elasticity of demand for the focal brand
cross-price elasticity
the percentage change for product A that occurs in response to a percentage change in price of product B
complementary products
products whose demand curves are positively related, such that they rise or fall together, a percentage increase in demand for one result in a percentage increase in demand for other
substitute products
products for which changes in demand are negatively related to that is a percentage increase in the quantity demanded product B
monopoly
occurs when only one firm provides the product or service in a particular industry
olihopolistic competition
occurs when only a few firms dominate a market
price wars
occurs when two or more firms compete primarily by lowering their prices
monopolistic competition
occurs when many firms sell closely related by not homogenous products, these products may be viewed as substitutes but are not perfect substitutes
pure competition
occurs when different companies sell commodity products that consumers perceive as substitutable; price usually is set according to the law of supply-demand
grey market
employs irregular but not necessarily illegal methods; generally, it legally circumvents authorized channels of distribution to sell goods at prices lower than those intended by the manufacturer
cross-shopping
the pattern of buying both premium and low prices merchandise or patronizing both expensive status-oriented retailers and price-oriented retailers
distribution channel
the institution that transfers the ownership of goods and moves goods from the point of production to the point of consumption
supply chain management
refers to a set of approaches and techniques firms employ to efficiently and effectively integrate their suppliers, manufacturers, warehouses, stores, and transportation intermediaries into a seamless value chain in which merchandise is produced and distributed in the right quantities, to the right locations, at the right time
logistics management
the integration of two or more activities for the purpose of planning, implementing, and controlling the efficient flow of raw materials, in-process inventory, and finished goods from the point of origin to the point of consumption
distribution centre
a facility for the receipt, storage, and redistribution of goods to company stores or customers; may be operated by retailers, manufacturers, or distribution specialists
channel conflict
results when supply chain members are not in agreement about their goals, roles, or rewards
pull marketing strategy
designed to get consumers to pull the product into the supply chain by demanding that retailers carry it
contractual vertical marketing system
A system in which independent firms at different levels of the supply chain join together through contracts to obtain economies of scale and coordination and to reduce conflict
franchising
a contractual agreement between a franchisor and a franchisee that allows the franchisee to operate a retail outlet, using a name and format developed and supported by the franchisor
corporate vertical marketing system
a system in which the parent company has complete control and can dictate the priorities and objectives of the supply chain; it may own facilities such as manufacturing plants, warehouse facilities, retail outlets, and design studios
strategic relationship (partnering relationship)
a supply chain relationship that the members are committed to maintaining long-term, investing in opportunities that are mutually beneficial; requires mutual trust, open communication, common goals and credible commitments
distribution intensity
the number of channel members to use at each level of the supply chain
intensive distribution
a strategy designed to get products into as many outlets as possible
exclusive distribution
the strategy of grants exclusive rights to sell to one or very few retail customers so no other customers can sell a particular brand
selective distribution
lies between the intensive and exclusive distribution strategies; use a few selected customers in a territory
universal product code (UPC)
the black and white bar code found on most merchandie
electronic data interchange (EDI)
the computer-to-computer exchange of business document from a retailer to a vendor and back
advanced shipping notice
an electronic document that the supplier sends the retailer in advance of a shipment to tell the retailer exactly what to expect in the shipment
vendor-managed inventory (VMI)
an approach in which the manufacturer is responsible for replenishing inventory to meet retailers’ needs
dispatcher
the person who coordinates deliveries to distribution centres
radio frequency identification tages (RFID)
tiny computer chips that automatically transmit to a special scanner all the information about a container’s contents or individual products
omnichannel strategy
selling in more than one channel (e.g. store, kiosk, catalogue)
conventional supermarket
offers groceries, meat, and product with limited sale of non-food items, sich as health and beauty aids and general merchandise in a self-service format
big-box retailer
come in three types: 1. supercentre 2. hypermarket 3. warehouse club larger than a conventional supermarket; carries both foods and non-food items
general merchandise retailers
may be discount stores, specialty stores, category specialists, department stores, drugstores, off-price retailers; may sell through multiple channels, such as the internet and catalogues
discount store
offers a broad variety of merchandise limited service, and low prices
specialty stores
concentrate on a limited number of complementary merchandise categories in a relatively small store
category specialist
offers a narrow variety but a deep assortment of merchandise
category killer
offers an extensive assortment in a particular category, so overwhelming the category that other retailers have difficulty competing
drugstores
a specialty store that concentrates on health and personal grooming merchandise, through pharmaceuticals may represent more than 60% of its sales
off-price retailer
a type of retailer that offers an inconsistent assortment of merchandise at relatively low prices
extreme-value retailer
a general merchandise discount store found in lower-income urban or rural areas
service retailers
firms that primarily sell services rather than merchandise
retail mix
product (merchandise assortment), pricing, promotion, place, personnel, and presentation (store design and display) strategies to reach and serve customers
Cooperative (co-op) advertising
an agreement between a manufacturer and retailer in which the manufacturer agrees to defray some advertising costs
share of wallet
the percentage of the customer’s purchases made from a particular retailer
omnichannel
a strategy that creates a consistent experience for consumers across all distribution channels
omnichannel
a strategy that creates a consistent experience for consumers across all distribution channels
sender
the firms from which an IM message originates; the sender must be clearly identified t the intended audience
deceptive advertising
a representation, omission, act, or practice in an advertisement that is likely to mislead consumers acting reasonably under the circumstances
transmitter
an agent or intermediary with which the sender works to develop the marketing communications; for example, a firm’s creative department or an advertising agency
encoding
the process of converting the sender’s ideas into a message, which could be verbal, visual, or both
communication channel
the medium - print, broadcast the internet - that carries the message
receiver
the person who reads, hears, or sees and processes the information contained in the message or advertisement
decoding
the process by which the receiver interprets the sender’s message
noise
any inference that stems from competing messages, a lack of clarity in the message, or a law in the medium; a problem for all communication channels
feedback loop
allows the receiver to communicate with the sender and thereby informs the sender whether the message was received and decoded properly
objective-and-task method
IMC budgeting methods that determine the cost required to undertake specific tasks to accomplish communication objectives; process entails setting objectives, choosing media, and determining costs
competitive parity method
a method of determining a communications budget in which the firm’s share of the communication expenses is in line with its market share
percentage-of-sales method
a method of determining a communications budget that is based on a fixed percentage of forecasted sales
affordable method
a method of determining a communication budget based on what is left over after other operating costs have been converted
unique selling proposition (UPS)
a strategy of differentiating a product by communicating its unique attributes; often becomes the common theme or slogan in the entire advertising campaign
rational appeal
helps consumers make purchases decisions by offering factual information and strong arguments built around relevant issues that encourage consumers to evaluate the brand favourably on the basis of the key benefits
emotional appeal
aims to satisfy consumers’ emotional desires rather than their utilitarian needs
media planning
the process of evaluating and selecting the media mix that will deliver a clear, consistent, complying message to the intended audience
media mix
the combination fo the media used and the frequency of advertising in each medium
media buy
the purchase of air time or print messages
mass media
channels such as national newspapers, magazines, radio, and television that are ideal for searching large numbers of anonymous audience members
niche media
channels that are focused and generally used to reach narrow segments, often with unique demographic characteristics or interests
advertising schedule
specifies the timing and duration of advertising
pretesting
assessments perfromed before and ad campaign is implemented to ensure that the various elements are working in an integrated fashion adn doing what they are intended to do
tracking
includes monitoring key indicators, such as daily or weekly sales volume, while the advertisment is runnign to shed light on any problems with the message or the medium
pretesting
assessments performed before and ad campaign is implemented to ensure that the various elements are working in an integrated fashion and doing what they are intended to do
tracking
includes monitoring key indicators, such as daily or weekly sales volume, while the advertisement is running to shed light on any problems with the message or the medium
reach
measure of consumers exposure to marketing communications; the percentage of the target population exposed to a specific marketing communication, such as an advertising at least once
frequency
the measure of how often the target audience is exposed to a communication within a specified period of time
reach
a measure of consumers exposure to marketing communications; the percentage of the target population exposed to specific marketing communication, such as advertising at least once
gross rating points (GRP)
a measure used for various media advertising-print, radio, or television
click-through tracking
measures how many times users click on banner advertising on websites
search engine marketing (SEM)
uses tools such as Google AdWords to increase the visibility of websites in search engine results
impressions
the number of times an ad appears to a user
click-through rate (CTR)
the number of times a user clicks on an ad divided by the number of impressions
ROI
used to measure the benefit of an investment
advertising
a paid form of communication from an identifiable source, delivered through a communication channel, and designed to persuade the receiver to take some action, now or in the future
personal selling
the two-way flow of communication between a buyer and selling that is designed to influence the buyer’s purchase decision
sales promotion
special incentives or excitement-building programs that encourage the purchase of a product or service, such as coupons, rebates, contests, free samples, and point-of-purchase displays
direct marketing
marketing that communicates directly with target customers to generate a response or transaction
direct mail/email
a targeted form of communication distributed to a prospective customer’s mailbox or inbox
direct response TV (DRTV)
TV commercials or infomercials with a strong call to action
Public relations
the organizational function that manages the firm’s communications to achieve a variety of objectives, including building and maintain a positive image, handling or heading off unfavourable stores or events, and maintain positive relationships with the media
cause-related marketing
commercial activity in which businesses and charities form a partnership to market an image, product, or service for their mutual benefit; a type of promotional campaign
event sponsorship
a popular PR tool; occurs when corporations support various activities (financially or otherwise) usually in the cultural or sports and entertainment sectors
digital media
tools ranging from simple website content to far more interactive features such as corporate blogs, online games, text messages, social media and mobile apps
blog (weblog or web log)
a web page that contains periodic posts; corporate blogs are a new form of marketing communications
AIDA model
a common model of the series of mental stages through which consumers move as a result of marketing communications
aided recall
occurs when consumers recognize the brand when its name is presented to them
top-of-mind awareness
a prominent place in people’s memories that triggers a response without them having to put any thought into it
lagged effect
a delayed response to a marketing communication campaign
informative advertising
communication use to create and build brand awareness, with the ultimate goal of moving the consumer through the buying cycle to a purchase
persuasive advertising
communication used to motivate consumers to take action
reminder advertising
communication used to remind consumers of a product or to promote repurchases, expecially for products that have gained market acceptance and are in teh amturity stage of their life
product-focused advertising
used to inform, persuade, or remind consumers about a specific product or service
institutional advertisement
used to inform, persuade, and remind consumers about issues related to places, politics, an industry, or a particular corporation
product placement
inclusion of a product in non-traditional situations, such as in a scene in a movie or TV program
public service announcement
advertisement that focuses on public welfare and generally is sponsored by non-profit institutions, civic groups, religious organizations, trade associations, or political groups; a form of social marketing
social marketing
the application of marketing principles to a social issue to bring about attitudinal and behaviour change among the general public or a specific population segment
puffery
the legal exaggeration of praise, stopping just short of deception, lavish on a product
deal
a type of short-term price reduction that can take several forms, such as “featured price” (a price lower than the regular price); a “BOGO” offer; or a certain percentage “more free” offer contained in larger packaging
premium
an item offered for free or at a bargain price to reward some type of behaviour, such as buying, sampling, or testing
contest
a brand-sponsored competition that requires some form of skill or effort
sweepstakes
a form of sales promotion that offers prizes based on a chance of drawing of entrants’ names
sampling
offers potential customers the opportunity to try a product or service before they make a buying decision
loyalty program
specifically designed to retain customers by offering premiums or other incentives to customers who make multiple purchases over time
point-of-purchase (POP) display
a merchandise display located at the point of purchase, such as at the checkout counter in a grocery store
poop-up stores
temporary storefronts that exist for only a limited time and generally focus on a new product or a limited group of products offered by a retailer, manufacturer or service provider; gives consumers a chance to interact with the brand and build brand awareness
cross-promoting
efforts of two or more firms joining together to reach a specific target market
relationship selling
a sales philosophy and process that emphasizes a commitment to maintaining the relationship over the long term and investing in opportunities that are mutually beneficial to all parties
lead
a list of potential customers
qualify
the process of assessing the potential of sales leads
trade shows
major events attended by buyers who choose to be exposed to products and services offered by potential suppliers in an industry
cold calls
a method of prospecting in which salespeople telephone or go to see potential customers without appointments
telemarketing
a method of prospecting in which salespeople telephone potential customers
pre-approach
in the personal selling process, occurs prior to meeting the customer for the first time and extends the qualification of leads procedure, in this step, the salesperson conducts additional research and develops plans for meeting with the customer
closing the sale
obtaining a commitment from the customer to make a purchase
