Glossary Unit 3 Flashcards
Boston Matrix
A method of analyzing brands in a firm’s product portfolio in terms of market share and market growth. Brands are classified as cash cows, dogs, question marks and stars
Brand
The name of a particular product (or company) conjures up a positive image that differentiates the product from other similar products in the mind of the consumer. E.g. Levi jeans are the original and toughest. Branding means developing certain reputations in consumers’ minds
brand family
A range of similar products all selling under the same product brand name
brand Loyalty
Customers tend to repeat purchase a product regularly which is likely to make demand price inelastic
Business to business Marketing
A firms targets its sales on other firms
business to customer marketing
Firms targets its sales on households
cash cow
a brand that has a high market share of a mature market which is not growing fast
confidence intervals
is the range of values that are likely given a set confidence level
confidence levels
is the probability that the research findings are correct. This is expressed as a percent
Correlation
is a statistical technique used to establish the strength of a relationship between two sets of values
Customisation
involves producing a unique good to cater for one individual’s requirements
demographic market segmentation
Markets or customers are targeted on the basis of their age, gender or family makeup.
digital marketing
involves anticipating and satisfying consumer wants using technology; specifically social media, use of search engine marketing and digital display adverts
direct selling
Offering for sale Communication with the consumer offering a sale via letter, e-mail or telephone. Junk mail is often direct selling
distribution channels
Ways of getting the products to where the customer can buy them.
Dog
goods that have a low market share of a mature market which is not growing fast
e-commerce
is the buying and selling of goods and services through the use of electronic media
Elastic
responsive. Usually in the context that a change in price will cause a greater percentage change in quantity. In this case, a drop in price will raise revenue and a rise in price cut revenue. Demand is price elastic when there are many alternative products
extension strategy
Attempts to raise sales when products are reaching the of their product life cycle and have been declining
extrapolation
involves using previous patterns of numerical data to estimate future values
Income Elasticity of demand
measures the responsiveness on consumer demand to changes in income. It shows whether goods are normal or inferior.
Income elasticity of demand =
% change in quantity demanded /
% change in income
If income elasticity of demand is positive then goods are normal, if negative they are inferior.
Industrial Good
are goods bought for use in business processes
Inelastic
unresponsive. Usually in the context that a change in price will cause a smaller percentage change in quantity. In this case a drop in price will cut revenue and a rise in price raise revenue. Demand is price inelastic when there are few alternative products
inferior good
is a product for which demand falls as income rises. It is often of lower quality than its competitors
innovation
introduction of new ideas in business. Product innovation means launching an item never seen before. Process innovation means a novel method of production has been initiated
loss leader
a product sold below cost with the intention of generating other profitable sales
market growth
The percentage change in the volume or value of sales of all the
brands in the product category
Market mapping
Using a graph to plot existing products in terms of various criteria. It can identify various market segments and gaps in the market
Market positioning
refers to the sector of the market the firm is targeting
market segmentation
involves dividing the market up into groups of potential customers, each with different characteristics. If the good can be tailored to the specific demands of a group of people their valuation of it will be higher than the standard version, hence they are likely to buy the new product
Market share
The percentage of total market sales accounted for by one firm.
Market share =
(One firm’s sales of a specific product / Total market sales of the specific product) x 100
market size
The volume or value of sales of a product type
price skimming
Selling at a high price, but low level of sales and targeting richer consumers. Profit is made by achieving high profit margin
marketing
Management process of identifying, anticipating and satisfying consumer requirements profitably. Marketing means giving consumers what they want
marketing decision making
The use of market research and intuition to determine the marketing mix and strategy of the business
marketing mix
How the main elements of the firms marketing strategy are combined. This includes decisions about PRICE, PRODUCT, PROMOTION, PLACEMENT, PROCESS, PEOPLE AND PHYSICAL ENVIRONMENT. Decisions about one of the P’s will have implications for all the rest and should convey the same message for a well-integrated marketing mix
marketing objectives
Any aim that focus on satisfying the consumer and boosting sales
marketing plan
is a set of proposed marketing actions to be undertaken at specified times with the aim of helping the business achieve its marketing objectives. A marketing plan should enable the firm to gain a competitive advantage and deliver a USP and how this benefits specific groups of consumers.
mass marketing
produces a standard product, designed to appeal to a large section of the population
merchandising
Ensuring the products are displayed in an attractive and prominent manner. This ensures a point of sale advertisement
multichannel distribution
describes the case where businesses use more than one channel of distribution
negative correlation
occurs when an increase in the value of x is associated with a decrease in the value of y (or vice versa.) Perfectly negative correlation will have a value of -1
new product development (NPD)
A firm identify, develop and market a novel or improved good or service
niche marketing
targeting a small specialised part of the overall market
normal good
is a product for which demand rises as income increases
penetration pricing
Setting at a low price to try to gain a high market share and brand recognition. This is likely to be a short-run tactic
people element of the marketing mix
The sales personnel or service providers for the product and the impression they give.
persuasive advertising
paid for communication that tries to convince consumers to buy the product through emotions and images rather than facts
physical environment of the marketing mix
ses in value, the value of y also tends to increase (or a fall in the value of x will be associated with a fall in the value of y) In these cases the value of the correlation coefficient will be positive. Perfectly positively correlated variables have a value of +1
predatory pricing
Anti-competitive practice of setting price low enough to drive weaker competitors out of the business
price elasticity of demand
a measure of the extent to which demand for a good reacts to a change in price.
Price elasticity of demand = % change in quantity demanded /
% change in price
price leader
A brand that is in such a powerful position in the market that it can heavily influence the selling price. Other firms may set their prices in a similar range
price skimming
Charging a high price to gain a high profit margin although limiting sales to high income consumers
pricing strategy
Long term goal regarding pricing
pricing tactic
Temporary approach to pricing designed to deal with a short term threat or opportunity
primary marketing research
The collection of information first-hand. This data did not previously exist and is collected by FIELD RESEARCH
problem child
goods or services with a low market share of a fast growing market
process element of the marketing mix
The practical aspects involved in buying the product
product development
Marketing new or modified products to existing customers
product life cycle
The phases which most products go through measured by sales from first introduction to the market, growth, maturity and eventual decline
product portfolio
the range of products that a firm produces
product portfolio analysis
the study of a range of products with a view to decide whether new products should be added to the range or old ones discontinued. It utilizes product life cycle and the Boston Matrix
promotion
Attempts to gain sales by drawing attention to a firm or its products
promotional mix
Co-ordination of different methods of promotion such as branding and Public Relations to achieve marketing targets
psychological pricing
A pricing tactic charging just below a round figure to give the impression of value for money
e.g. charging £4.99 instead of £5
public relations
Obtaining free favourable publicity via reports in independent media
qualitative analysis
examines non-numerical data to draw conclusions about a market. It can be subjective and open to opinion e.g. examining the quality of a rival’s management or new product
qualitative research
In depth investigations into reasons for consumer attitudes or behaviour
quantitative analysis
examines statistical data to draw conclusions about the market. This is objective and quantifiable
quantitative research
Research using pre set questions given to a large enough sample of people to provide statistically valid data
repeat sales
when customers stay loyal to the brand and buy it again
sales forecasting
a prediction of the level of sales revenue for individual products or the whole organisation
sales value
The revenue gained from sales of a product p x q
sales volume
the quantity of an item sold
sampling
Choosing a representative group to survey out of the whole population to find out the characteristics of the whole population
secondary market research
The use of information that has already been collected. This second hand data is collected by DESK RESEARCH
shopping product
These items are purchased fairly often and typically reasonably expensive. Consumers are likely to spend some time gaining information about the product, comparing models and brands as they are not totally familiar with the item
star
goods or services with a high market share of a fast-growing market
strongly correlated data
One variable is closely linked to another so a change in one is connected to a change in the other
target market
the type of customer (market segment) that a firm’s product or
service is aimed at
test market
is the introduction of a product to a certain geographical area, in order to assess its likely success, or evaluate the effectiveness of marketing methods
trend
underlying pattern of change within a set of data
wholesalers
Organisations that buy large quantities from suppliers and sell on in smaller volumes. This can reduce delivery times and avoid the need to hold so much stock
word of mouth communication
Favourable endorsement of your brand to other customers. This is free advertising and often effective but hard to achieve
