Principles of Marketing
Vocabulary Terms and Definitions
PROJECT 1 :: GETTING TO KNOW YOU
marketing¾the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational goals.
marketing concept¾management philosophy according to which a firm’s goals can be best achieved through identification and satisfaction of the customer’s state and unstated needs and wants.
channel management¾process by which a producer or supplier directs marketing activities and involving and motivating the entities comprising its channel of distribution.
marketing-information management¾provides data use for decisions and it provided data about effectiveness of marketing efforts.
pricing¾method adopted by a firm to set its selling price; it usually depends on the firm’s average costs and on the customer’s perceived value of the product in comparison to his/her perceived value of the competing products.
product/service management¾the organizational structure within a business that manages the development, marketing and/or sale of a product or set of products throughout the product life cycle.
promotion¾advancement of a product, idea, or point of view through publicity and/or advertising.
selling¾exchanges a product for currency or something of value.
channel¾the activities and organizations that assist a marketer in moving products (goods or services) from the hands of the marketing company to the hands of the final customer.
channel intensity¾number of intermediaries at each level.
channel length¾number of individual entities comprising the channel of distribution between the producer and the consumer.
distribution patterns¾patterns to successfully distribute a product.
exclusive distribution¾a retail setting strategy typically used by manufacturers of high priced merchandise such as cars and jewelry.
selective distribution¾type of product distribution that lies between intensive distribution and exclusive distribution, and in which only a few retail outlets cover a specific geographical area.
intensive distribution¾marketing strategy under which a firm sells through many outlets as possible so that the consumers encounter the product virtually everywhere they go.
marketing information¾any information used or required to support marketing decisions, often drawn from a marketing information system.
marketing-information management system¾the set of procedures and practices employed in analyzing marketing information gathered continuously from sources inside and outside a firm.
marketing research¾scientific discovery methods applied to marketing decision making.
product/service management¾the organizational structure within a business that manages the development, marketing and sale of a product or set of products throughout the product life cycle. It encompasses the broad set of activities required to get the product to market and to support it thereafter.
PROJECT 2 :: MARKETING PLAN ANALYSIS
marketing mix¾the combination of the marketing tactics: product, price, place (distribution), and promotion.
product¾merchandise; commodities offered for sale.
place¾location.
promotion¾a message issued on behalf of some product or cause or idea or person or institution.
price¾monetary value; the property of having material worth.
goals¾the purpose towards which an endeavor is directed; an objective.
strategies¾a plan of action designed to achieve a particular goal.
tactics¾a plan for attaining a particular goal.
market¾place where commercial promotion, sale, or distribution of goods and/or services takes place.
target market¾a particular group of customers that a business seeks to attract; the customers who fall into a particular target market share similar needs and characteristics.
mass marketing¾a market coverage strategy in which a firm decides to ignore market segment differences and goes after the whole market with one promotion.
marketing segments¾a smaller part of a larger market consisting of customers grouped (i.e., segmented) by characteristics shared by others in the group.
market segmentation¾a key element of a target marketing strategy in which large markets, where customers possess different characteristics, is divided into smaller market segments in which customers are grouped by characteristics shared by others in the segment.
demographic segmentation¾basic objective descriptive classifications of consumers, such as their age, sex, income, education, size of household, ownership of home, etc. This does not include classification by subjective attitudes or opinions of consumers.
geographic segmentation¾areas broken down into general interests and common products bought.
psychographic segmentation¾describes consumers or audience members on the basis of psychological characteristics initially determined by standardized tests; people’s lifestyles and personalities.
behavioral segmentation¾the division of the target market is made according to the pattern in which the people in the market live and spend their time and money.
marketing plan¾a written document that specifies how, where, and to whom a business plans to market its product(s) and/or brand(s).
situation analysis¾evaluating the situation and trends in a particular company’s market. Situation analysts are often called the “three C’s,” which refers to the three major elements that must be studied: customers, cost, and competition.
PROJECT 3 :: SHE SELLS CELL PHONES AT THE CELL STORE
grades¾position in a scale of size, quality, or intensity.
standards¾an acknowledged measure of comparison for quantitative or qualitative value or criterion.
warranty¾a offer, often associated with a purchase, in which a marketer provides customers a level of protection, beyond a guarantee period, that covers repair or replacement of certain product components if found defective within some identified time frame.
express warranty¾an assurance by the seller of property that the goods or property are as represented or will be as promised.
implied warranty¾warranty that is not written but exists under the law.
full warranty¾contract law; as opposed to a limited warranty, a warranty that completely covers the repair or replacement of any defect in a consumer product.
limited warranty¾warranty that imposes certain limitations and is therefore not a full warranty.
guarantee¾assurance offered by a marketer that the product will perform up to expectations or the marketer will support the customer’s decision to replace, have the product repaired or accept a return for a refund.
product life cycle¾the marketing theory that a product moves through different stages of life from its birth to its death.
introduction¾stage within the product life cycle which occurs when a product is released to the market and sales begin though often sales start out slow as the market becomes aware of the product.
growth¾stage within the product life cycle which occurs when a product is widely accepted and often reaches rapid growth characterized by a large percentage sales increase over previous periods.
maturity¾stage within the product life cycle which occurs when product growth slows with total sales increasing but at decreasing rates compared to previous periods.
decline¾stage within the product life cycle which occurs when the market is no longer able to sustain sales levels for a product as sales are decreasing at increasing rates compared to previous periods.
pricing decisions¾usually made by top management or market managers; based on competition, cost, advertising, and sales promotion; the decision of deciding the price of a product.
selling¾exchanges a product for currency or something of value.
channels of distribution¾the activities and organizations that assist a marketer in moving product (goods or services) from the hands of the marketing company to the hands of the final customer.
producer¾a person or company that makes a good.
ultimate consumer¾individual (such as a housewife) or a group (such as a family) which actually consumes or uses a good or service, as distinct from the buyer or shopper who may only be a purchasing agent. Marketers try to identify the ultimate consumers to aim their promotional efforts at them.
industrial user¾part of the channel of distribution when the end user is in an industrial location.
middlemen¾see below.
intermediaries¾firm or person (such as a broker or consultant) who acts as a mediator on a link between parties to a business deal, investment decision, negotiation, etc. In money markets, for example, banks act as intermediaries between depositors seeking interest income and borrowers seeking debt capital. Intermediaries usually specialize in specific areas and serve as a conduit for market and other types of information; also called middlemen.
retailers¾a business that sells goods to the consumer, as opposed to a wholesaler or supplier which normally sell their goods to another business.
wholesalers¾a person or firm that buys a larger quantity of goods from various producers or vendors and resells to retailers.
agents¾a party that has oral or written authority to act for another so as to bring the principal into contractual relationships with other parties.
direct channels¾distribution channel in which a producer supplies or serves directly to an ultimate user or consumer, without any middlemen, agents, distributor, wholesaler or retailer.
indirect channels¾distribution channel in which a producer supplies or serves directly to an ultimate user or consumer, with the help of middlemen, agents, distributor, wholesaler or retailer.
product mix¾the total composite of products offered by a particular organization, consisting of both product lines and individual products.
product item¾a specific version of a product that can be designated as a distinct offer among an organization’s products.
product line¾a group of closely related product items that are considered a unit because of marketing; technical or end use considerations.
width¾number of different entities available for providing the same distribution function (as a distributor, wholesaler, or retailer) at different stages in a distribution channel.
depth¾number of the units of a security that be traded without causing an appreciable change in its price.
consistency¾basic accounting function that one an accounting method is adopted, it should be followed consistently from one accounting period to the next. If, for any reason, the accounting method is changed, a full disclosure of the change and an explanation of its effects on the items of the financial statements must be given in the accompanying notes (footnotes).
expansion¾growth; as in economic recovery.
contraction¾a period of general economic decline; contractions are often part of a business cycle, coming after an expansionary phase and before a recession.
alteration¾change that does not affect the basic character or structure of the thing it is applied to; also see middlemen and alteration.
trading up¾increasing the number of features of a product and improving its quality.
trading down¾reducing the number of features of a product and decreasing its quality.
positioning¾marketing strategy that aims to make a brand occupy a distinct ‘position,’ relative to the competing brands, in the mind of the consumer.
competitive advantage¾superiority gained by a firm when it can provide the same value as its competitors.
brand¾an identifying symbol, word, or mark that distinguishes a product or company from its competitors. Usually brands are registered (trademarked) with a regulatory authority and so cannot be used freely by other parties. For many products and companies, branding is an essential part of marketing.
brand name¾word(s) that identify not only a product but also its manufacturer or producer, such as Apple, Coca Cola, IBM, Shell, Sony, Toyota.
brand symbol¾the swoosh of Nike.
trade character¾ people, animals, animated characters, objects, or the like that are used in advertising a brand and that come to be identified with the brand, in much the same way that a trademark is identified with a brand.
brand recognition¾consumer awareness that a particular brand exists.
brand preference¾measure of brand loyalty in which a consumer will choose a particular brand in presence of competing brands, but will accept substitutes if that brand is not available.
brand insistence¾the stage of brand loyalty where the buyer will accept no alternative and will search extensively for the required brand.
product brands¾a brand that is advertised with a name like Tide, Charmin, or Dawn.
generic brand¾’no-name’ or non-descript brand that is not advertised, and is sold at a price substantially lower than the required brand.
national brand¾brand marketed throughout a national market; owned and promoted usually by large manufacturer.
private/distributor brand¾alternative term for private label.
brand strategies¾long-term marketing concept for a brand, based on the definition of the characteristics of the target customers.
family branding¾main brand under which several new products are introduced to take advantage of its credibility, identity, and name recognition.
individual branding¾marketing policy under which each product has its own brand, different from every other product in the same product family or from the same firm.
brand extensions¾alternative term for line extension.
brand licensing¾the process of creating and managing contracts between the owner of a brand and a company or individual who wants to use the brand in association with a product, for an agreed period of time, within an agreed territory.
co-branding¾in Internet commerce (e-commerce), two firms working together to market a good or service.
brand identity¾visible elements of a brand that together identify and distinguish the brand in the consumer’s mind.
values¾in general, important and enduring beliefs or ideals shared by the member of a culture about what is good or desirable and what is not.
brand cues¾words that guide a buyer’s decision to purchase a product or not; if looking for low calorie food, cues like “lite” or “non-fat” might guide a consumer to buy that product.
brand personality¾the attribution of human personality traits to a brand as a way to achieve differentiation.
touch points¾is the interface of a product, a service, or a brand with customers, non-customers, employees and other stakeholders before, during, and after a transaction respectively, a purchase. This applies for business-to-business as well as business-to-consumer markets.
brand promise¾benefits and experiences that marketing campaigns try to associate with a product in its current and prospective consumers’ minds.
corporate brands¾the practice of using a company’s name as a product brand name.
PROJECT 4 :: PROMO BLITZ
product promotion¾alternative name for advertising specialty; item such as a bag, calendar, cap, clock, diary, pen, etc., given away to current or prospective customer. These items usually carry the name and address of the firm, as well as information on the products and services, and serve as reminders. Also called advertising novelty or promotional product.
primary product promotion¾communication that focuses on the primary products of an organization.
secondary product promotion¾communication that focuses on the secondary products of the organization.
institutional promotion¾communication that focuses on the image of the organization.
public service¾provided or supported by government or its agencies; agency involved in providing public service for or on behalf of a government.