Definitions for exam 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.
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, if any exist.
product development
Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product.
alpha testing
An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm’s R&D department
beta testing
Having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.
premarket test
Conducted before a product or service is brought to market to determine 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 the product life cycle when innovators start buying the product.
growth stage
Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category.
maturity stage
Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them.
decline stage
Stage of the product life cycle when sales decline and the product eventually exits the market.
core consumer value
the basic problem solving benefits that consumers are seeking
associated services (or augmented product)
The nonphysical attributes of the product, including product warranties, financing, product support, and after-sale service.
consumer products
products and services used by people for their personal use
specialty goods/services
Products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.
shopping goods/services
Products or services, such as apparel, fragrances, and appliances, for which consumers will spend time comparing alternatives.
convenience goods/ services
Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase
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 substitutes for one another.
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.
brand equity
The set of assets and liabiliies 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 expo- sures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm’s communications to consumers.
perceived value
The relationship between a product or service’s benefits and its cost.
brand associations
The mental links 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 consumers.
brand loyalty
Occurs when a consumer buys the same brand’s product or service repeatedly over time rather than buying from multiple suppliers within the same category.
manufacturer brands
Brands owned and man- aged by the manufacturer.
private-label brands
(store brands) Brands developed and marketed by a retailer and available only from that retailer.
generic
A product sold without a brand name, typically in commodities markets.
corporate brand
The use of a firm’s own corporate name to brand all of its product lines and products.
family brand
The use of a combination of the company brand name and individual brand name to distinguish a firm’s products.
individual brand
The use of individual brand names for each of a firm’s products.
brand extension
The use of the same brand name for new products being introduced to the same or new markets.
brand dilution
Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand its believed to hold
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, symbols, or characters
in exchange for a negotiated fee.
intangible
A characteristic of a service; it cannot be touched, tasted, or seen like a pure product can.
inseparable
A characteristic of a service: it is produced and consumed at the same time—that is, service and consumption are inseparable
inconsistent
A characteristic of a service: its quality may vary because it is provided by humans.
inventory
A characteristic of a service: it is perishable and cannot be stored 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
Pertains to the difference between the firm’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 customers.
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.
Zone of tolerance
The area between customers’ 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.
distributive fairness
Pertains to a customer’s perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure.
procedural fairness
Refers to the customer’s perception of the fairness of the process used to resolve complaints about service
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 implemented 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.
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.
sales orientation
A company objective based on the belief that increasing sales will help the firm more than will increasing profits.
competitor orientation
A company objective based on the premise that the firm should measure itself primarily against its competition.
customer orientation
Pricing orientation that explicitly invokes the concept of customer value and setting prices to match consumer expectations.
oligopolistic competition
Occurs when only a few firms dominate a market.
monopolistic competition
Occurs when many
firms sell closely related but not homogeneous 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 laws of supply and demand.
cost-based pricing method
Determines the final price to charge by starting with the cost, without recognizing the role that consumers or competitors’ prices play in the marketplace.
competitor-based pricing method
An approach that attempts to reflect how the firm wants consumers to interpret its products relative to the competitors’ offerings.
value-based pricing method
Focuses on the overall value of the product offering as perceived by consumers, who deter- mine value by comparing the benefits they expect the product to deliver with the sacrifice they will need to make to acquire the product.
price skimming
A strategy of selling a new product or service at a high price that innovators and early adopters are willing to pay to obtain
it; after the high-price market segment becomes saturated and sales begin to slow down, the firm generally lowers the price to capture (or skim) the next most price- sensitive segment.
market penetration pricing
A pricing strategy of setting the initial price low for the introduction of the new product
or service, with the objective of building sales, market share, and profits quickly.
reference price
The price against which buyers compare the actual selling price
of the product and
that facilitates their evaluation process.
odd prices
prices that end in odd numbers, usually 9
everyday low pricing (EDLP)
A strategy companies use to emphasize the continuity of their
retail prices at a level somewhere between the regular, nonsale price and the deep-discount sale prices their competitors may offer.
high/low pricing
A pricing strategy that relies on the promotion of sales, during which prices are temporarily reduced to encourage purchases.
