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Marketing terminology
This glossary of 228
marketing terms is designed
to complement
Reference sources and contributors and how to submit new terms.
Abandonment rate | Number of incomplete transactions (or abandoned shopping carts). Can be caused by misleading ads, such as promoting low prices, BUT requiring customers to purchase a different or more of a product to get that price. (Also see Transaction) Accessory | (see Features) Advertising | Paid form of a non-personal communication by industry, business firms, nonprofit organizations, or individuals delivered through the various media. Advertising is persuasive and informational and is designed to influence the purchasing behavior and thought patterns of the audience. Advertising may be used in combination with sales promotions, personal selling tactics, or publicity. (Also see Exposure) Advertising metrics | Ways and means to evaluate, compare, and contrast the effectiveness and efficiency of Internet promotions: Click-through, click-through rate (CTR), conversion rate, cost-per-click (CPC), cost-per-action (CPA), customer acquisition costs, hits, hybrid models, impressions, page view, pay per click (PPC), pay per lead (PPL), pay per sale (PPS), site stickiness, surround session, unique visitors, and website traffic. (Also see Cost per thousand, Reach, and Frequency) Advertising slogan | Catchy words or phrases that help consumers remember a particular product or service. They tend to reflect the product's sustainable competitive advantage or unique selling proposition in simple 2-3 word phrases or jingles. Through repetition over time, a marketer can establish top of mind awareness and recall. Affiliate marketing | Using a network of partners to market a company—usually internet-based in which a company rewards or compensates an affiliate for each customer directed to it. Affiliates can include blogs, shopping sites, and comparison sites. Affinity marketing l Any number of marketing activities targeted to individuals sharing common interests. Ex: an auto accessories manufacturer targeting readers of motoring magazines.
Aggregation
| Form of segmentation that assumes most consumers are alike. Ambush marketing | A covert promotional strategy used by a non-sponsoring organizations to capitalize on the popularity and prestige of its product or service by giving the false impression that it is a sponsor. Nike and Pepsi piggybacked on the atmosphere during the World Cup during which their ads gave the illusion that they were sponsors of the event, even using some of the players in their ads. Americanization | Conformation to American standards and practices by foreigners or immigrants to the United States. This shift towards the American culture has an impact on mainstream entertainment, consumer trends, and consumer needs. With targeted marketing practices, Americanization can also take place in other countries outside of the United States Assorting | Putting together a variety of products to give a target market what it wants, as in selecting various or different item for a gift basket or first aid kit. Attention | A momentary attractions to a stimulus, something someone senses via sight, sound, touch, smell, or taste. Attention is the starting point of the perceptual process in that attention of a stimulus will either cause someone to decide to make sense of it—or reject it. Attitude | A person's point of view toward something (feelings, values, mores). B2B | Business To Business – Business conducted between companies rather than between a company and individual consumers. Ex: A firm that makes parts that are sold directly to an automobile manufacturer (Also see Transformation and Transaction). B2C | Business To Consumer – Business conducted between companies and individual consumers rather than between two companies. A retailer such as Walmart is an example of a B2C company (Also see Retailer). B-roll | Promotional tactic designed to enhance and increase exposure for a marketer's product or service. Video clips are often provided to media outlets (TV, satellite, Internet news sources) for use when covering stories or events. This can also include photos (screenshots), used as background images as the newscaster is reading the story. Banner Ad (see HTML Banner Ad) Behavioral Targeting | Practice of targeting and ads to groups of people who exhibit similarities not only in their location, gender or age, but also in how they act and react in their online environment: tracking areas they frequently visit or subscribe to; subjects or content or shopping categories for which they have registered. Google uses behavioral targeting to direct ads to people based on the sites they have visited. Benefit | A desirable attribute of a good or service, which customers perceives that they will get from purchasing and consuming/using it. Whereas vendors sell features ("a high speed 1/2" drill bit with tungsten-carbide tip"), buyers seek the benefit (a 1/2" hole). BEP | Break Even Point – Sales quantity at which the firm’s total cost will equal its total revenue. Bias | Inserting opinions, or skewing data to mean other than what they say. To avoid bias, use percentages and avoid using biased words that are not qualified with data. To combat bias, ask: What is your statement based upon? (Also see Frequency words)
Blue Ocean Strategy
| creating new market space that attempts to make a competitor
irrelevant.
Brand |
A unique
design,
sign,
symbol,
words, or a
combination
of these,
employed in
creating an
image that
identifies a
product and
differentiates or positions it from
competitors.
Over time, this image becomes
associated
with a level of credibility,
quality, and
satisfaction
in
consumers'
minds. (Also see
differentiation and
positioning). Brand equity | Value of brand's overall strength in the market as measured in loyalty (those who will not switch). Branding | Use of the names, logos, symbols, trademarks, or product design to identify a product. Brand positioning | A distinctive position of careful manipulation of the marketing mix so that a brand adopts to ensure that its target market can set the brand apart from competitors. Ex: Loreal's original USP: "Costs more, but you're worth it," using a higher price point to connote quality. Bundling | Combining products as a package, often to introduce other products or services to the customer. Ex: AT&T offers discounts for customers by combining 2 or more of the following services; cable television, home phone service, wireless phone service, and internet service. Buzz marketing | Low-cost word-of-mouth viral marketing technique that captivates an audience. Relies on key opinion leaders and trendsetters to disseminate information to a select group of consumers, often through rumor or innuendo in an informal or social group setting.. Effective with Generation X and Y consumers who do not trust advertising messages. (Also see viral marketing)
Cannibalization |
Occasions when
a
new product will take market share away from an older brand, as in
the addition of a diet soda product to a previously existing brand line of
sodas. The new diet soda will compete with and perhaps eat away at
the profits of the previously existing products. Caption | Usually appears in the form of text added to help explain the features or benefits that accompany an illustration or photograph in an advertisement. (Steve adds: By adding captions to Illustrations, photos, and charts, readers won't misinterpret or assign a different meaning than that intended by the writer—or advertiser.) Cause-related marketing | Joint funding and promotional strategy in which a percentage of a firm's sales are linked to a charity or other public cause. Unlike philanthropy, money spent in cause-related marketing is considered an expense and is often expected to show a return. Characteristic | Distinguishing feature or attribute of an item, person, or phenomenon that usually falls into either a physical, functional, or operational category. Channels | Any series of firms or individuals that participate in the movement/flow of goods and services from producer to final user. Churn rate | Rate of customers lost (stopped using the service) over a specific period of time, often over the course of a year. Used to compare against new customers gained. Clusters | Customer profiles based on lifestyle, demographic, shopping behavior, or appetite for fashion. Example: Ready-to-eat meals may be heavily influenced by the ethnic make-up of a store’s shoppers, while beer, wine, and spirits categories in the same store may be influenced predominantly by the shopper’s income level and education CMSA | Consolidated Metropolitan Statistical Area - (adjacent to MSA/PMSA with 1 million population). Co-branding | An agreement between two brands to work together in marketing a new product, such as Dreyer's Ice Cream flavored with Baby Ruth candy pieces (promoting both brands on the label). Commercialization | Stage in product development process where the decision to order full-scale production and launch is made. The act of exchange, buying, selling of a commodity on a large scale for profit. This also describes the flow of goods and services from producer to consumer. Comparative advertising | Promotional messaging in which there is specific mention or presentation of competing brands, and a comparison is made or implied. Cellular companies often compare their features or advantages, as in this example of Verizon Wireless using a U.S. map to show 5 times more coverage than AT&T for its 3G network. Competitive cost advantage | An advantage that a firm has over competitors, allowing it to generate greater sales margins and/or retain more customers. It supports the firm's cost structure, product offerings, distribution network and customer support. Competitive intelligence | Process of gathering actionable information on your business' competitive environment. Ex: In 2006, after extensive research to diversify and move into the organic fish market (available at Whole Foods), Walmart bought all the organic fisheries so it would have no competition, and could keep prices low in sync with its USP. Concentrated marketing | A growth strategy in which a firm's resources are focused on a well-defined market niche or population segment. (Also see differentiated marketing) Consumer | A purchaser of a good or service at retail, or an end user not necessarily a purchaser, in the distribution chain of a good or service (gift recipient). Conversion rate | Percentage of customers to purchase a product or service. Also includes percentage of website visitors to sign up for a newsletter, register for membership, or apply for a credit card. Customer advocate | Individual entrusted by management to study the needs of an organization's customers and help it better satisfy them. A role often cited as problem-solver: addressing customer complaints to protect and enhance the organization's image. Consumer-to-business (C2B) | A system in which consumers use online agents (middlemen) to look for a product or service that suits their needs. Examples include Priceline.com and shopbot.com. (Also see middleman) Real World Example: William Shatner, the actor who starred in the original Star Trek series, is estimated to have earned $600 million from the advertisements from Priceline. In these advertisements, Shatner plays the role of the Priceline negotiator who will stop at nothing to save customers money. This is an example of the way Priceline functions as an agent that locates the best prices for hotels, flights, and transportation according to the costumer’s requests and needs. Corporate image | The mental image held by others at the mention of a firm's name. It's a composite psychological impression that's dynamic based on circumstances, media coverage, performance, pronouncements, etc. Similar to a firm's reputation or goodwill, it is the public perception of the firm rather than a reflection of its actual state or position. Large firms use various corporate advertising techniques to enhance their image to improve their desirability as a supplier, employer, customer, borrower, etc CPM | Cost Per Thousand – Used by marketers and advertisers to measure the effectiveness of their media expenditures. Derived by dividing the cost of media purchase divided by the number of consumers reached (in thousands). CPM | Critical Path Method – Method to break down complex projects into simpler tasks, thus identifying more efficient, easiest, and fastest path to completion. Cross-channel marketing | Use of a single marketing channel (such as direct mail or internet) to support or promote another channel (such as retailing). CRM | Customer Relationship Management – Broad term that covers concepts used by companies to manage their relationships with customers, including the capture, storage, and analysis of customer, vendor, partner, and internal process information. Cross-training | When employees are trained to perform various jobs by other groups or individuals to improve job performance. Often aimed at creating a diverse working group to combat an "narrow-minded" work force. Also known as conditioning.
Customer-centric | An
approach to doing business in which a company focuses on creating a
positive consumer experiences at the point of sale and post-sale. A
customer-centric approach helps organizations to differentiate and
position themselves apart from competitors who don't offer the same
experiences. Customer profile | Description of a customer group or type of customer based on various geographic, demographic, and psychographic characteristics; also called shopper profile (may include income, occupation, level of education, age, gender, hobbies, or area of residence, etc.). Profiles provide knowledge needed to select the best prospect lists and to enable advertisers to select the best media. Customer retention | a goal of organizations to keep customers buying their products and services, an essential component to sustaining growth and profitability as it costs more to acquire a new customer than to retain existing customers. Ex: Best Buy has a team that surfs the Internet in search of special offers by competitors on products it offers and make adjustments, as needed. Customer satisfaction | customers' state of mind about a company when their expectations have been met or exceeded, most often leading to brand loyalty and product repurchase. Ex: Nordstrom's Department Store emphasizes a 100-year-old customer service philosophy to generate customer satisfaction (best possible service, selection, quality and value). (Also see Utility) Data | Facts/figures pertinent to a marketing problem. Day-after recall test | Research method testing consumers' memories a day after hopefully seeing an advertisement. Designed to assess the ad's effectiveness. Deceptive advertising (False advertising) | Misleading customers by making claims or promises that are untrue, unproven, or distortions of the truth to promote the sale of goods or services. Often an illegal practice regulated or prosecuted by the secretaries of state.. Demographics | Consumer statistics regarding socioeconomic factors, including gender, age, race, religion, nationality, education, income, occupation and family size. Each demographic category is broken down according to its characteristics by the various research companies. Derived demand | Desire for something produced as a by-product for another product or service, as in the demand for specialty skilled labor for the auto industry, or inherent value in a sports star's endorsement. Ultimate result is customer fulfillment. Differentiated marketing | Sales growth strategy in which several market niches or population segments are targeted with different products for each niche or segment. (Also see concentrated marketing). Differentiation/Product | Differentiation seeks to make a product more attractive by contrasting its unique qualities with competing products. This creates a competitive advantage for the seller when customers view these products as unique or superior. Direct Marketing | Selling via direct contact with the prospective customer. Direct marketing differs from general marketing in that the result of a promotion is measurable in terms of response. Primary direct marketers include magazine publishers, catalog houses, political campaign organizations, and financial institutions. Discount | Reduction off the list price offered by a producer to a buyer; five types of discounts are common: trade, quantity, cash, seasonal and allowances. Marketers issue discounts to increase sales, to move out-of-date items, to reward valuable customers, or use it as a sales promotion. Discretionary income | Amount of income after fixed regular expenses (mortgage/rent, car payment, insurance, taxes) have been paid—monies not yet committed and therefore subject to persuasion techniques on the part of marketers. Ex: Take someone living in a $300/month trailer, who eats Ramen noodles as a staple, and often has his electricity or phone shut off for non-payment. But he drives a brand new Chrysler 300 with $3400 21” custom rims. His esteem need is in direct competition with safety/security and physiological needs for his discretionary income. Distribution | Movement of goods and services through the distribution channel, to the final customer, consumer, or end user, with the movement of payment (transactions) in the opposite direction back to the original producer or supplier. Distribution channel | Path through which goods and services flow from producer to consumer. This can be direct from the vendor to the consumer or may include several intermediaries such as wholesalers, distributors, agents, and retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Diversification | modification of a current product or introduction of a completely new product that expands the organization's current market. Usually involves creating a new customer base and often acquiring specialized expertise. Duopoly | A market that is dominated by two suppliers to the extent that jointly control pricing of goods or services in a defined market. This way, either seller can exert some control over the output and prices, but must consider the reaction of its sole competitor (unless both have formed an illegal collusive duo Ex: If AT&T merges with T-Mobil for this would this give AT&T and T-Mobil an advantage to reduce risk. DVRicide | phenomena of fast-forwarding through TV commercials that consumers see as an inconvenience (as opposed to the Superbowl, in which ads are sometimes watched more than the football game). According to BBC America, commercials have been skipped by 50- 70 percent of viewers. It will be interesting to see how advertisers begin positioning their products into the content of products (ex: Kia car features in episodes of The Glades). Dynamic pricing | Sudden or frequent pricing fluctuations based on changes in customer demand. Product bidding is often the result, as witnessed on eBay and other "how much would you offer" websites offering coupons, premiums, or contests. Thanks to the Internet, many businesses are finding it essential to remain competitive. (Also see Price mix) E-marketing | Activity of promoting a product in electronic media format, such as internet ads, pop up links, e-commerce cell text, or email messages. Economies of scale | Reduction in cost per unit resulting from increased production, realized through operational efficiencies of production or reducing the cost of resources. Electronic media | Includes television, radio, internet, DVD (anything not film- or paper-based). Exclusive distribution | Contracting with single channel members to move the product through the commercialization schedule. (Not to be confused with Exclusive exposure: Selling a product only through a single outlet in a particular region or market. Exclusive retail outlets are expected to perform many, if not most of the marketing functions to promote and support sales.) Exposure | Presentation of a sales promotion piece or advertisement to an individual, such as a person viewing a television commercial or a reader opening a magazine to an advertisement page. The number of exposures achieved is an important measure of the effectiveness of an advertisement as measured in conjunction with the quality of the exposures achieved. (Also see Frequency). For example, if a golf club advertisement is exposed to 1000 golfers; it has greater value than if it is exposed to 1 million non-golfers. Eye tracking | Research method used in advertising to determine which parts of an advertisement tend to get consumer attention. Accomplished by tracking eye movements. Facings | Generally a retail term used to describe the number of products displayed vertically on the same shelf. Marketers often provide incentive or pay to gain this exposure. Feature/Accessory | Characteristics that are offered to the potential consumer that are sought out or desired as an attribute of form, time, place, and possession utility. An accessory is not essential in and of itself, but adds beauty, convenience, or effectiveness to what it is attached. Freemium | (Combination of free and premium) When a product or service, such as a digital application for a smart phone or tablet, is provided free of charge, but a premium is charged for advanced features or functionality. Frequency | Number of times an advertising message is presented within a given time period. In general, number of times something occurs within a specified period of time. Frequency may refer to the issues of a periodical, the purchases made by a customer over time, or the number of times a commercial or an advertisement is aired or printed or reaches its audience. (Also see Exposure) Frequency words | Terms use in marketing plans or proposals that contain bias—unless followed by data (numbers, percentages, indices, etc.). The following require data: usually, constantly, mostly, frequently, typically, generally, continually, sometimes, occasionally, sporadically, intermittently, rarely, seldom, hardly ever. The two exceptions: always (100%) and never (0%). Gamification | Use of gaming concepts to motivate or drive certain behaviors from a target audience. Much like continuity programs, organizations offer awards, points, and other specific offers when customers check in on their websites. It's an incentive, or reward, for multiple visits. Geographic information system (GIS) | demographic databases, digitized maps, and computer software designed to help marketers interpret data and define potential markets.. Ex: Metropolitan Life employs GIS to target customers and boost profits. Geographical segmentation | a defined market segment defined or divided according to geographic units, such as nations, states, regions, counties, cities, or neighborhoods. McDonalds' burgers in India are made from lamb, and in Mexico, chili sauce is added to the beef (Also see Segmentation) Global market | a universal market that can be viewed as a total global economy in which organizations target markets that extend beyond local borders; hence, globalization. Green Marketing | Promotional activities aimed at reflecting the level of its concern for renewable/recycled resources and well-being of the community. For example, Nestle Waters is touting its Eco-Shape bottle as one of the lightest half-liter plastic bottles available. Greenwashing | Organizations that spend more time and money claiming to be "green" through promotional programs than actually implementing business practices that minimize environmental impact. Ex: Hotels that ask guests to reuse sheets or towels; this does little to reduce water and energy. Growth strategy | Strategy aimed at winning larger market share, even at the expense of short-term earnings, such as diversification, product development, market penetration, and market development (from the Marketing Opportunity Grid). Guerrilla marketing | Unconventional methods of performing marketing activities (primarily promotion) on a low budget. It is up to the "guerrilla marketer" to be creative to generate product publicity. It can take many forms, such as social media (pop-up ads on Facebook and Twitter or video clips on YouTube). These tactics are utilized by both small and large-scale companies. (Also see Buzz marketing and Viral marketing) Heat map | Graphic representation of data where varying degrees of a single metric appear by color, such as tracking clicks on a marketer's website. (See image >) Heavy-up | Short period of concentrated advertising in a media schedule. Advantageous when a product is more likely to be used at one specific time. Ex: With an approaching summer, Water Babies Sun Screen will be touting its protection when families will soon be lounging at the beach.
Heterogeneous markets or products
| Geographic markets or products the marketer or customer sees as different. This term also
applies to markets, in that a heterogeneous market is unique or different
from others. As regards the need for winter snow blower equipment,
Minneapolis and Houston Hierarchy of effects | Series of 7 steps that prospective customers move through, from initial product awareness to trial. These steps are divided into cognitive (knowledge about), affective (feelings about), and conative (action tendencies towards purchase) dimensions. Homogeneous markets or products | Geographic markets or products the customer sees is basically the same (sharing similar attributes, or easily substitutable products). Homogeneous markets share similar traits or conditions. As regards the need for winter snow blower equipment, Minneapolis and Cleveland would be homogeneous (same winter weather conditions). Horizontal integration | Distribution strategy in which one company establishes ownership or control of another company’s production, transportation, manufacturing, distribution, or retail outlet. Ex: .Most guitar companies do not manufacture their own low-end guitars. They contract Samick Guitars, the largest guitar manufacturer in the world (Indonesia). Samick can produce them much cheaper than these companies can produce themselves. Samick controls the low-end production channel for these products. HTML banner ad | Form of Internet promotion featuring information or special offers for products and services.These small space "banners" are interactive: when clicked, they open another website where a sales can be finalized. The hosting website of the banner ad often earns money each time someone clicks on the banner ad. Image advertising | Attempt to create a favorable mental picture of a product or firm in mind of consumers to associate the advertised product or firm with certain lifestyles or values. Ex: In some markets, McDonalds' golden arches image is being changed to appear more upscale. (Also see Positioning) Inbound marketing | (where the customer comes to you) Passive sales technique the relies on the customer to find a product (as opposed to marketer-directed promotional efforts to communicate with potential customers). Achieved through website content personalization, media monitoring, and lead nurturing. Institutional advertising | Promotional messages aimed at creating, improving, or reinforcing an organization's image: reputation enhancement, goodwill, advocating ideas. Such efforts are not intended to promote sales; rather, it's a form a corporate advertising, often aimed at vested publics with an interest in how the organization conducts business (stockholders, elected officials). Integrated marketing | Strategy aimed at unifying different marketing mix elements/tactics, such as mass marketing, one-to-one marketing, and direct marketing. It complements and reinforces the market impact of each method in product development, pricing, distribution, promotional programs, and customer service. Intensive distribution | Selling a product through all responsible and suitable wholesalers or retailers who will stock or sell the product. Intermediate good | Physical resources applied to or used in the creation of a final product. For example, sugar may be consumed directly or used in the manufacturing of ice cream. (Changing the shape or form of a resource in the creation of another product is call a transformation. (Also see transformation and transvection)
Jingle |
A
short song used in a promotional announcement, usually mentioning a brand
name Knowledge | A customer's understanding or relationship with an notion or idea. This applies to facts or ideas acquired by study, investigation, observation, or experience, not assumptions or opinions. (Also see Attitude) Labeling | (Also see Positioning) – Description, instructions, and warnings printed on products and packaging as required by law or as an aide to the consumer. Lagniappe (native to Southern Louisiana and Southeast Texas: pronounced "lan-yap") | A little something extra; an unexpected surprise; gifts given to customers at the time of purchase. Ex: It's getting your car washed and vacuumed at no charge when taking it for service at the dealership. Or the chocolate chip cookie at check-in at Doubletree hotels. Landing page | A website page used to collect relevant data from those interested in the content featured on that page. Also known as Lead-capture page. Often used for invitation-only and special offer promotional programs that feature exclusive offers or discounts. A unique method to evaluate effectiveness of Internet marketing programs. Leave-behind | A premium left with prospective customers by a sales person to remind them of the product or service being sold. Logistics | Process of planning, implementing, and controlling the efficient and effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements, internal, and external movements, and return of materials for environmental purposes. Loss leader | Products sold at or below cost to stimulate other profitable sales. Often, popular items are priced below cost to entice customer visits to a retailer's store of website. Can be highly profitable, should customers purchase several other items at the same time. Macromarketing | Study of marketing processes, activities, institutions, and results from a broad perspective such as a nation, in which cultural, political, and social interaction are investigated. It is marketing in a larger context than any one firm: the delivery of a standard of living. Markatainment (marketing + entertainment) | Using other goods and services to entertain customers at the point of purchase. Ex: Best Buy stores a free outdoor screening of the as-yet-unreleased Harry Potter movie for those waiting in line for doors to open for Black Friday sales. This is a form of publicity and sales promotion.
Market | Economic system bringing together the forces of supply and demand for a
particular good or service. A market consists of customers, suppliers, and
channels of
distribution,
and mechanisms for establishing prices and effecting transactions where
exchanges take place. Marketing analytics | scientific process for identifying patterns and relationships in survey data that will increase effectiveness of marketing activities. For example, after more than 40 years the GAP changed its logo, which set off negative postings on various blogs. So much so that the company went back to its original logo. When companies change parts of their strategy without consulting long-time faithful fans, it can cause an uproar and loss of loyalty by loyal customers. (Of course, the other side of this action is that the GAP received lots of free publicity.) Marketing Channels | Connected system of exchange relationships of wholesalers and retailers, developed to build lasting bridges between buyers and sellers. (Also see Commercialization) based on their ability to perform marketing activities more effectively and efficiently than the producer.
Marketing Concept
|
Goal-oriented risk-reducing integrated philosophy practiced by producers
of goods and services that focuses efforts on satisfying the needs of
consumers by allocating resources to satisfy that need, and making a
profit by doing so. Market development | Addition of new geographic markets in which to offer the existing mix of products and services—those NOT currently served by a firm. Marketing Mix | Combination of marketing elements used in the sale of a particular product, sometimes called the 4 Ps: product, price, place, and promotion. Marketing objectives | What an organization wishes to achieve (the end result). They focus on existing products in existing markets, new products for existing markets, existing products for new markets and new products for new markets (Marketing Opportunity Grid). Most importantly, they can be measured in terms of sales volume, sales value, market share, profit, percentage of penetration outlets, awareness and esteem. Savvy marketers also add timelines and assign responsibilities to individuals to assure accountability. Marketing Plan | Set of specific goals (measurable), timelines (when goals are to achieved), and actions required (assignment of responsibility) to successfully implement a marketing strategy. Marketing Research | Process of gathering, analyzing, and interpreting information (data) about a market, product, or service; or about past, present and potential customers' characteristics, such as pricing, spending habits, location, and needs; or about the industry as a whole and its competitors. (Also see related research terms Reliability, Validity, and Bias) Market Saturation | The point at which a market is no longer generating new demand for a firm's products, due to competition, decreased need, obsolescence, or other uncontrollable variables. Market Segmentation | Targeted market or audience for a given product is divided into categories (segments) based on geographic, demographic, or psychographic variables, such as demographic segmentation, geographic segmentation, and psychographic (behavioral) segmentation. Market share | Percentage of sales volume captured by a brand, product, or firm in a given market. Marketing-oriented company | An organization that aligns or adjusts the allocation of its resources to product development, distribution, pricing, and promotional message channeling as dictated by the demands, interests, and needs of its target market. This approach reduces risk and enhances sustainability of the organization. (Also see Marketing concept and Selling orientation) Marketing scorecard | A reporting approach that aligns marketing outcomes with objectives. Allows organizations to set, monitor, and adjust results to reduce risk. EX: Some oil companies use a scorecard to evaluate effectives of their service suppliers. During the life of a project, the supplier is graded on any number of factors; an overall score at the end may well determine whether it will be asked to bid on a future project. Marketing Strategy | Plan allowing the organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. It is comprised of a target market and marketing mix. Market testing | Risk-reduction effort based on planning and executing a regional or local marketing strategy before rolling out nationally. Markets are selected based on demographics that mirror the total potential target market. Also used to test awareness and recall of advertising messages. Mark-up | Dollar amount added to the cost of products to get the selling price (can include incentives such as discounts and allowances), expressed as a percentage of the new selling price. Applies to each channel member. Mark-up chain | Sequence of mark-ups used at different stages in a channel to help determine the price structure among all channel members. This is helpful to marketers when analyzing the profitability of a new product or service. Mass customization | Extension of one-to-one marketing exposure for customizing products and services on a mass scale via personalizing buying interactions for each customer. Mass marketing | Broad unfocussed attempts to appeal to an entire geographic market with one basic marketing strategy utilizing mass distribution and mass media. Also called undifferentiated marketing. (Also see Differentiated marketing) Mergers | buying or combining companies financially using cash and/or stocks. Ex: Bank One and JPMorgan Chase bank form one strategic brand that builds on brand loyalty, and helps both lower risk and obtain more control over financial markets. (Also see Horizontal and Vertical integration) Metamarkets | 2+ markets that are similarly associated with a product or service. They can also be different products spread across different industries, but are closely related in the minds of consumers. (Also see Positioning) Micromarketing | Practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups Middleman | Any person or business entity that plays a marketing role between producer and consumer in a distribution system (buying, selling, transportation, storing, sorting/assorting, grading, financing, research/data sharing). Examples include real estate brokers, banks, insurance companies, trucking/warehouse firms, and auto dealers (Also see Wholesale and Retail) Mobile marketing | Use of mobile technology (iPhone, iPads, netbooks/notebooks) for promotional purposes. A way for companies to connect with customers—anytime and anyplace. The concept is a fairly new form of permission marketing. Moppers | mobile shoppers who use cell phones and other devices such as iPads to browse on-line stores, comparison shop, and get recommendations from friends. Motivation | Implies an emotion or desire that causes the customer to think and act. It's a driving force arising from personal temperament or constitution that can be stimulated through incentives applied to an external influence (as an expected reward) inciting action. In marketing, it's the energy/fuel that drives the thought process, designed to result in a specific action by the consumer (purchase). Mousetrapping | Use of Internet browser tricks to keep a visitor captive at a site, often by disabling the "Back" button or generating pop-up windows (not too marketing-oriented, for sure). MSA | Metropolitan Statistical Area – City > 50k population, or urban center with 100k population. Multichannel distribution | Occurs when a producer uses several competing channels to reach the same target market, perhaps using several middlemen to sell directly (sometimes called dual distribution).
NAICS (North American Industrial Classification System)
|
Standard used by
Federal statistical agencies in classifying business establishments for
the purpose of collecting, analyzing, and publishing statistical data
related to the U.S. business economy. A complete and valid NAICS code
contains six digits and applies to businesses in the United States,
Canada, and Mexico each to have country-specific detail.
Needs
| Basic forces that motivate a person to think about and do something/take
action. In marketing, they help explain the benefit or satisfaction
derived from a product or service, generally falling into the physical
(air > water > food > sleep > sex > safety/security) or psychological
(belonging > esteem > self-actualization > synergy) subsets of Maslow's
Hierarchy of Needs. New product | "New" means substantially changed or altered in form. Technically, "new" has a shelf life of 6 months before it has to be removed (or the product altered again). Simply changing the packaging does not constitute the word "new" being placed on the product, other than to say "New Packaging." Niche | Particular specialty in which a firm has garnered a large market share. Often, the market will be small enough so that the firm will not attract much competition. For example, a company that makes a line of specialty chemicals for exclusive use by the petroleum industry is said to have a niche in the chemical industry. Nonprofit Marketing | Marketing of a product or service in which the offer itself is not intended to make a monetary profit for the marketer. Oligopoly | Condition/situation in which a market is controlled by a small group of firms (at least 2 different organizations, as opposed to monopoly in which there is only one firm).. Ex: In many cities, airlines or mass merchandisers compete against each other for sales. It's all about exerting control over a large part of a defined market. Packaging | Promoting the product on the shelf and protecting the product during shipment. Designing a package also includes consideration or size and weight to make transportation and storage more effective and efficient (as in sizing containers to fit neatly onto pallets).
Penetration
| Process
by which the marketers attempts to increase sales of an existing product
in existing markets, thus minimizing risk. Perception (Perceptual Process) | A process by which consumers make sense of stimuli they get from not only marketer's promotional messages, but also unmet needs (such as a growling stomach to remind them to eat). There are 3 steps in the process: sensing (getting the attention of the customer), selecting (deciding to figure out what it means), and interpreting (assignment meaning and whether to take action). Permission marketing | Building an ongoing relationship of increasing depth with customers based on approval to send or receive email newsletters, catalogs, and other promotional incentives to gain brand recognition and status. Mostly used by on-line marketers to invite consumers to take part in defining the range of services to be offered. Physical Distribution (PD) | Transporting and storing of goods as a part of the commercialization schedule. This is not to be confused with Exposure, which is where the customer wants/expects the product to be available for possession utility Place mix | Those activities involving distribution (moving the product from producer to consumer through channel members called wholesalers and retailers) and exposure (researching and delivering the product where the customers wants or expects it to be available). Marketers enroll channel members based on their ability to perform marketing activities more effectively and efficiently than they can. POS | Point of Sale or POP (point of purchase) – Business or market where products and services are transacted. Also used to convey temporary displays used by marketers to showcase products. Soda companies use POP/POS in advance of sporting or holiday events to feature their products in other parts of the store or warehouse. Another example is gas station pump toppers that advertise daily food or drink specials inside the store.
Positioning
(or Framing)
| How potential buyers see the product,
relative to the position of competitors. It happens in the minds of
the target market. It is the aggregate perception the market has of a
particular company, product, or service in relation to their perceptions
of the competitors. Repositioning involves
changing the identity of a product, relative to the identity of competing
products, in the collective minds of the target market. Predatory pricing | Occurs when a firm charges extremely low prices for a product with the intent of driving competition out of business or out of a specific market. Prices then tend to return to normal once the competitor has been eliminated. While illegal and unethical, it's difficult to prove in court. Preemptive marketing | Building relationships with consumers/clients BEFORE they need your services. This can include introducing an organization's products/services towards building preference, loyalty, even conviction of not having to search for alternatives—when the need arises. Prestige pricing | Setting a high price based on the quality and the demand for which consumers are willing to spend. For example: Starbucks gives a feeling of a high end product by its packaging, delivery and product promise, based on years or consistent promotion in its iconic coffee houses as "creating a product of excellence." (Also see Skimming, used when there is no competition for the product and the price is used as a benchmark. Prestige or a high above pricing approach requires a specific subjective component.) Price bundling | Selling 2 or more goods or services as a single package, as in Taco Bell offers 2 hard tacos, a burrito, and a drink in a package for 1 price (usually a saving if you add up the prices of each individual item). Price gouging | Controversial strategy that sellers sometimes use to charge higher than normal prices for products and services, especially when there is little or no competition. Price mix | Those objectives and strategies marketers apply to setting and managing profits for itself and each channel member. Pricing policies vary among organizations based on internal goals, ROI (return on investment), cost of goods, etc. Primary Data | Facts and figures newly-collected for a project or to solve the current problem. Primary Market | Group of consumers targeted to receive the major share of a marketer's attention, resources, and media expenditures. Procurement | Process (acquisition) of obtaining goods (materials) and services (expertise) from middlemen/suppliers. This is a major component of the Marketing Concept: define customers'' unmet needs; allocate resources; make a profit. (Also see Resources and Marketing Concept). Product adoption curve | Explains that product and services are first purchased and evaluated by innovators and early adopters, after which by early and late majority, and finally laggards. Product development | Creation of products with new or different characteristics than those already offered. This may involve modification of an existing product or formulation of an entirely new product that satisfies a newly-defined set of customer wants or desires. Product life cycle | A concept that explains how products move through distinct stages, from introduction, growth, maturity, decline, and abandonment. Product | Whatever the customer thinks, feels, or expects from an item or idea. From a “marketing-oriented” perspective, products should be defined by what they satisfy, contribute, or deliver vs. what they do or the form utility involved in their development. Ex: A dishwasher cleans dishes but it’s what the consumer does with the time savings that matters most. And ultimately, a dishwasher is about “clean dishes,” not the acting of cleaning them. Product differentiation | Attributes/qualities that make one product stand apart from both competitors and easily-substitutable alternatives. These may not always be favorable, as in the choice of how to finance a purchase or select a course of treatment for a disease. A major component of a marketer's product mix, usually focusing on a product's unique feature. (Also see USP and SCA)
Product Mix
| All
of the products or product lines offered by a firm. Some companies have a
wide product mix geared toward a diverse consumer group. Profit | What remains after all costs (direct & indirect) have been covered from the initial selling price. Promotional Mix | Combination of one or more promotional elements that a firm uses to communicate with customers: often a mix of personal selling, mass selling (advertising, public relations, and publicity), sales promotion, and direct marketing.
Psychographics
|
Criteria for segmenting consumers by lifestyle, attitudes, beliefs,
values, personality, buying motives, and/or extent of product usage—in
essence: activities, interests, and opinions.
Public Relations
(PR)
| Form
of communication that is primarily directed toward gaining
understanding and acceptance by vested groups of what the marketer is
doing. It often tends to deal with issues rather
than specifically with products or services. PR also cannot be
controlled by the organization because it is not purchasing the time or
space in the media, but it offers legitimacy that advertising cannot
claim.
Publicity
|
Involves supplying
information that is factual, interesting, and newsworthy to media not
controlled by the organization (radio, television, magazines,
newspapers, and trade journals). It is an uncontrolled method of placing messages in the media
because the source does not pay the media for placement. Push/Pull strategies | Customers "pull" products towards themselves (creating channels that until now did not exist), while a producer "pushes" a product toward customers by promoting (advertising, sales promotion and discounts/allowances) through an existing channel, one channel member at a time.
Rating |
Broadcast size of an actual listening or viewing audience for a particular
program or commercial as compared to the size of the potential audience
(all households in a geographic area that have broadcast receivers—whether
or not these broadcast receivers are turned on). One rating point
represents 1% of the households making up the potential audience. (Also
see Share) Reach | Size of the audience who listen to, read, view or otherwise are exposed to a particular ad message over a defined time period. Reach may be stated either as an absolute number, or as a fraction of a given population (for instance TV households, men, or those aged 25-34). Referral Premium | Reward offered to customers that introduce new customers, or to employees that bring in suitable recruits. For example, customers at a Miami car wash can earn $ 3.00 off their next wash for each new customer referred. At the end of the month, the customer with the most referrals gets a $50.00 gift card. Relationship Marketing | Emphasizing customer retention and satisfaction rather than a point-of-sale transactions by recognizing the long term value f keeping customers. Reliability | Research study can be replicated and get some basic results (free of errors). Repositioning | Changing a brand's status in comparison to competing brands, usually through changing the marketing mix in response to changes in the marketplace, or due to a failure to reach the brand's marketing objectives. (Also see Positioning and Differentiation) Resource | Economic or productive factors required to accomplish an activity, such as materials, components, land, and capital. Others include energy, entrepreneurship, information, human skills/management expertise.. Retail | Channel members in a distribution network or commercialization schedule that sell directly to the end user. In the U.S., that’s where sales tax is collected. If a producer sells direct to consumers, it is a retailer (it charges and collects sales tax.) It's where possession utility takes place. Revenue | Amounts generated from sale of goods or services, or any other use of capital or assets before any costs or expenses are deducted. Also called sales. Risk | Uncertainty of falling short of goals in a marketing plan. It's also all the unknowns that are uncontrollable by the marketer. That's why researching the needs of the target market is imperative towards reducing risk. ROI (return on investment) | Often used in portfolio management of various products, a firm will set a specific profit return based on funds allocated to produce and market a given product or product line, often expressed as a percentage. SCA | Sustainable Competitive Advantage – A position that a firm occupies in its competitive landscape. A firm possesses an SCA when it has value-creating processes and positions that cannot be duplicated or imitated by other firms over a long term. It takes time and sustained promotional expenditure to establish an SCA. Without both of these criteria, it's probably a USP (unique selling proposition). Secondary Data | Facts and figures already recorded prior to a project. There may be a higher degree of risk due to the length of time that has passed when the data were collected. Segmentation | Clusters of people with similar needs that share other geographic, demographic, and psychographic characteristics, such as veterans, senior citizens, or teens (Also see Geographic Segmentation) Selective distribution | Contracting with several, but not all available channel members to move the product through the commercialization schedule. Attention is given to those channel members willing to give special attention to the product or service, such as employing a sales force to help sell/move the product to the next channel. (Not to be confused with Selective exposure: Providing several different choices where the customer can obtain possession utility. Often marketers select selective channel members based on their ability to push the product to the next channel member through its own sales force.) Selling orientation | A company-centered approach designed to motivate potential customers to buy products and services through various promotional offers, such as quantity discounts, free trial, money-back guarantees, and rebates. This orientation tends to ignore what the customer really needs. (All those extra rolls of toilet paper in your bathroom linen closet probably got there through a selling-oriented coupon or quantity price discount.) Service | An intangible economic activity (buying and selling transaction) that is not stored, and does not result in ownership—such as a check-up at the doctor, or being privileged to attend an EMBA marketing class in Houston at Texas Woman's University. Share | Percentage of a media audience reached with an advertisement among those watching at the time. This is often a misleading term. For example, a 50 share (half of all viewers) means only that half of those watching at that time had the potential to see the ad. But if only half of 2 million TV households in a given market had their TV sets tuned to that program, that would equate to 500,000 households (only half of 1 million TV households). SIC | Standard Industrial Codes for the United States (up to four digits) used from 1930 to 1997. Replaced by the NAICS (National American Industrial Code) in 1997 for North America, 6-digit code.
Skimming
|
Pricing strategy
often used in the introductory and growth stages of the product life cycle
to target
innovators and early adopters that are willing to pay a relatively high
price for the product. Over time, the price may be reduced to take
advantage of production economies of scale achieved by selling higher
volumes. Slotting fees | Fees charged by retailers to obtain exposure (shelf space) for a product. This may take the form of promotional, advertising and stocking fees. Supermarkets often earn more profit from agreeing to carry a marketer’s product than from actually selling the product to customers. Social culturism | Uncontrollable variables that relate to values, religion, tradition, age, and ethnicity that impact the effectiveness of marketing strategies and tactics. Ex: Sales of matzah balls increase dramatically during annual Jewish Passover; then level off for the remainder of the year. Social marketing (social networking) | Seeking to increase the acceptability of a social idea, cause, or practice in a target group or vested public. Ex: Oklahoma State University used social marketing to broaden its image as a conscious global solutions-oriented university. Both enrollment and alumni donations increased. Beyond shortening the distance between friends, Facebook is also an advertising site: Click "like" and you advertise to everyone in your network. Spin | Often a heavily-biased portrayal of an event or situation. Often used in PR campaigns to create and support favorable impressions among vested groups, such as customers, investors, or a specific community. It can also imply disingenuous, deceptive and manipulative tactics. Superstitial | a web-based advertisement format that combines flash and other animation technology with Java Programming to deliver video-like commercials. Supply chain management | Management activities to maximize customer value by ensuring the most effective and efficient commercialization schedule. (Also see Commercialization) Sustainable competitive advantage | See SCA above. Tag line | Slogan or phrase that conveys important attribute or benefits of the product or service. Often, a theme to a campaign that's defined by the product's unique selling proposition or sustainable competitive advantage. Ex: Nike | Just do it; Las Vegas | What happens here, stays here; M&M Candies | Melts in your mouth, not in your hands. (Also see USP and SCA) Target market | Group of persons for which a firm creates and maintains a product mix that specifically fits the needs and preferences of that group. For example, the furniture market can be divided into segments described as Early American, contemporary, or traditional. Target Audience | TA – Group of persons to which the firm generates advertising or other e-marketing efforts towards gaining exposure of their product. Terminal Anchor | TA or (Primary Optical Area / POA) – We learn to read by first scanning the page top left to bottom right. Primary Optical (POA) point is the top left corner, with the Terminal Anchor Point being the last thing we scan at the bottom right (TA).
Tier
pricing | a promotional price-setting tool
that generally affords customers unit price savings for purchasing in
higher quantities. This is an effective way to move more merchandise. For
example: customers that purchase 3 boxes of printer paper save money. The
retailer sign might read: Time to market | Range or amount of time that precedes the commercialization of an enterprise (time it takes to realize an idea and deliver a product to the marketplace). Often this period of time is used to research, refine, and adapt a product to meet customer needs; in addition, promotion can also be used to introduce and educate customers about what it to come. Transactions | An exchange. What one gives up for something else without any change in form to the object, as in buying a pack of gum at the drugstore vs. having a roll of film developed. The latter involves both a transformation (developing the film and printing photo) and a transaction (paying for processing and printing). Transformations | Change in form, function, condition or outward appearance of a good or service. For example, a plastics company buys polymer pellets (transaction) which are then melted and poured into molds to make a child's toy (transformation). Transvection | Series of transformations and transactions that take place throughout the commercialization schedule (from producer to consumer). The transvection is a measure of efficiency in turning raw materials into finished goods. Used by marketers to evaluate and optimize efficiency of their channels. Universal product code (UPC) | Assigned 12-digit number used to identify a product. Translated into barcodes consisting of a series of vertical parallel bars, it can be used for scan entry, by an electronic cash register, or information for product sales and inventory tracking. The first set of digits are the same for all of the manufacturer's products and represent the name of the manufacturer. The next set refers to the product itself and are assigned by the manufacturer to the product of his choice. USP | Unique Selling Proposition – Differentiates and positions it in the mind of the consumer. Unlike an SCA (sustainable competitive advantage), a USP can be adapted, modified, and even changed depending on fluctuations in the market. Utility | Ability of the product to satisfy customers needs and wants. The 4 major marketing utilities include form utility, time utility, place utility, and possession utility. More recent studies include psychological utility. (Also see Customer satisfaction) Validity | In research studies, it means the data collected reflects what it was designed to measure. Often, invalid data also contains bias. Value proposition | Giving customers what they pay for -- unique value that competitors don't offer or emphasize. In Houston, Rice Epicurean Supermarkets host gourmet cooking demonstrations, grocery delivery, unique gourmet products, and catering services. (Also see Differentiation) Vendor | Manufacturer, producer, or seller (can also include wholesalers and retailers and their affiliated sales agents). Vertical integration | strategy for growth in which a company adds new facilities to existing manufacturing or distribution facilities, reducing risk by extending control through its commercialization schedule (distribution channels). It primary purpose is to enable the firm to become more effective and efficient. Ex: By owning the mines, ships, and railroads tracks, Carnegie Steel became vertically integrated as a means to expand/grow. Viral Marketing | Any on-line advertising that relies primarily on word of mouth to gain brand name recognition. Viral Marketing can create the kind of product or service explosion many companies need to grow. It's also highly unpredictable. Wants | To feel the need for, craving, desire, or wish to have or possess. It is often said that "wants are manifestations of unmet needs."
Wholesale
|
Channel members in a distribution network (commercialization schedule)
that sell to other wholesalers and retailers. Generally, it involves sales
to other organizations that are not the intended end user (customer) for
the product. Word-of-mouth (referral marketing) | WOM marketing is an alternative marketing strategy supported by research and technology that encourages consumers to dialogue about products and services through various online and offline tactics, often facilitated by brand ambassadors. (Click here for a Facebook example, posted on 6/17/10). (Also see Guerilla marketing, Buzz marketing and viral marketing) Zone pricing | a pricing strategy by which all customers within a specific geographic zone or region are charged the same price; those more distant pay more due to higher shipping costs. Price zones are set by marketers, not by law.
Students wishing to submit new terms
Term submissions should complement the lecture
discussions and textbook readings.
Copyright 2009 |
Steve Toms |
