MARKETING GLOSSARY

Advertising Any paid form of non personal presentation and promotion of  ideas, goods, or services by an identified sponsor.

Age and life-cycle segmentation Dividing a market into different age and life-cycle groups.

Agent A wholesaler who represents buyers or sellers on a relatively permanent basis, performs only a few functions, and does not take title to goods.

Allowance Promotional money paid by manufacturers to retailers in return for an agreement to feature the manufacturer’s products in some way.

Attitude A person’s consistently favorable or unfavorable evaluations, feelings, and tendencies toward an object or idea.

Behavioral segmentation Dividing a market into groups based on consumer knowledge, attitude, use, or response to a product.

Belief A descriptive thought that a person holds about something.

Benchmarking The process of comparing the company’s products and processes to those of competitors or leading firms in other industries to find ways to improve quality and performance.

Benefit segmentation Dividing the market into groups according to the different benefits that consumers seek from the product.

Brand A name, term, sign, symbol, or design, or a combination of these, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

Brand equity The positive differential effect that knowing the brand name has on customer response to the product or service.

Brand extension Using a successful brand name to launch a new or modified product in a new category.

Brand personality The specific mix of human traits that may be attributed to a particular brand.

Break-even pricing (target profit pricing) Setting price to break even on the costs of making and marketing a product; or setting price to make a target profit.

Business portfolio The collection of businesses and products that make up the company.

Buyers The people who make an actual purchase.

Co-branding The practice of using the established brand names of two different companies on the same product.

Cognitive dissonance Buyer discomfort caused by post-purchase conflict.

Commercialization Introducing a new product into the market.

Competitive advantage An advantage over competitors gained by offering consumers greater value, either through lower prices or by providing more benefits that justify higher prices; An advantage over competitors gained by offering consumers greater value than competitors offer.

Competitive marketing strategies Strategies that strongly position the company against competitors and that give the company the strongest possible strategic advantage.

Concept testing Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal.

Consumer buyer behavior The buying behavior of final consumers—individuals and households who buy goods and services for personal consumption.

Consumer market All the individuals and households who buy or acquire goods and services for personal consumption.

Consumer product Product bought by final consumer for personal consumption.
Consumerism An organized movement of citizens and government agencies to improve the rights and power of buyers in relation to sellers.

Contests, sweepstakes, games Promotional events that give consumers the chance to win something—such as cash, trips, or goods—by luck or through extra effort.

Convenience product Consumer product that the customer usually buys frequently, immediately, and with a minimum of comparison and buying effort.

Convenience store A small store, located near a residential area, that is open long hours seven days a week and carries a limited line of high-turnover convenience goods.

Cost of goods sold The net cost to the company of goods sold.

Cost-plus pricing Adding a standard markup to the cost of the product.

Countertrade International trade involving the direct or indirect exchange of goods for other goods instead of cash.

Cultural environment Institutions and other forces that affect society’s basic values, perceptions, preferences, and behaviors.

Culture The set of basic values, perceptions, wants, and behaviors learned by a member of society from family and other important institutions.
Customer relationship management (CRM) Managing detailed information about individual customers and carefully managing customer “touch points” in order to maximize customer loyalty.

Customer relationship management The overall process of building and maintaining profitable customer relationships by delivering superior customer value and satisfaction.

Customer satisfaction The extent to which a product’s perceived performance matches a buyer’s expectations.

Customerization Leaving it to individual customers to design the marketing offering—allowing customers to be prosumers rather than only consumers.

Deciders People in the organization’s buying center who have formal or informal power to select or approve the final suppliers.

Decline stage The product life-cycle stage in which a product’s sales decline.

Demands Human wants that are backed by buying power.

Demarketing Marketing to reduce demand temporarily or permanently; the aim is not to destroy demand but only to reduce or shift it.

Demographic segmentation Dividing the market into groups based on demographic variables such as age, gender, family size, family life cycle, income, occupation, education, religion, race, gender, and nationality.

Demography The study of human populations in terms of size, density, location, age, gender, race, occupation, and other statistics.

Department store A retail organization that carries a wide variety of product lines—typically clothing, home furnishings, and household goods; each line is operated as a separate department managed by specialist buyers or merchandisers.

Derived demand Business demand that ultimately comes from (derives from) the demand for consumer goods.

Direct marketing Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships; Direct communications with carefully targeted individual consumers to obtain an immediate response.

Direct marketing channel A marketing channel that has no intermediary levels.

Discount A straight reduction in price on purchases during a stated period of time.
Discount store A retail institution that sells standard merchandise at lower prices by accepting lower margins and selling at higher volume.

Diversification A strategy for company growth through starting up or acquiring businesses outside the company’s current products and markets.

Downsizing Reducing the business portfolio by eliminating products or business units that are not profitable or that no longer fit the company’s overall strategy.

Dynamic pricing Charging different prices depending on individual customers and situations.

Economic environment Factors that affect consumer buying power and spending patterns.

E-marketing The marketing side of ecommerce— company efforts to communicate about, promote, and sell products and services over the Internet.

Embargo A ban on the import of a certain product.

Environmentalism An organized movement of concerned citizens and government agencies to protect and improve people’s living environment.

Exchange The act of obtaining a desired object from someone by offering something in return.

Extranet A network that connects a company with its suppliers and distributors.

Fad A fashion that enters quickly, is adopted with great zeal, peaks early, and declines very quickly.

Fashion A currently accepted or popular style in a given field.

Fixed costs Costs that do not vary with production or sales level.

FOB-origin pricing A geographical pricing strategy in which goods are placed free on board a carrier; the customer pays the freight from the factory to the destination.

Franchise A contractual association between a manufacturer, wholesaler, or service organization (a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate one or more units in the franchise system.

Geographic segmentation Dividing a market into different geographical units such as nations, states, regions, counties, cities, or neighborhoods.

Growth stage The product life-cycle stage in which a product’s sales start climbing quickly.

Idea generation The systematic search for new-product ideas.

Idea screening Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible.
Income segmentation Dividing a market into different income groups.

Individual marketing Tailoring products and marketing programs to the needs and preferences of individual customers— also labeled “markets-of-one marketing,” “customized marketing,” and “one-to-one marketing.”

Industrial product Product bought by individuals and organizations for further processing or for use in conducting a business.

Intranet A network that connects people within a company to each other and to the company network.

Introduction stage The product lifecycle stage in which the new product is first distributed and made available for purchase.

Learning Changes in an individual’s behavior arising from experience.

Licensing A method of entering a foreign market in which the company enters into an agreement with a licensee in the foreign market, offering the right to use a manufacturing process, trademark, patent, trade secret, or other item of value for a fee or royalty.
Lifestyle A person’s pattern of living as expressed in his or her activities, interests, and opinions.

Macroenvironment The larger societal forces that affect the microenvironment— demographic, economic, natural, technological, political, and cultural forces.

Market The set of all actual and potential buyers of a product or service.

Market leader The firm with the largest market share in an industry.

Market nicher A firm that serves small segments that the other firms in its industry overlook or ignore.

Market penetration A strategy for company growth by increasing sales of current products to current market segments without changing the product.

Market-penetration pricing Setting a low price for a new product in order to attract a large number of buyers and a large market share.

Market positioning Arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers.

Market potential The upper limit of market demand.

Market segment A group of consumers who respond in a similar way to a given set of marketing efforts.

Market segmentation Dividing a market into distinct groups of buyers who have distinct needs, characteristics, or behavior and who might require separate products or marketing mixes; Dividing a market into distinct groups with distinct needs, characteristics, or behavior who might require separate products or marketing mixes.

Market-skimming pricing Setting a high price for a new product to skim maximum revenues layer by layer from the segments willing to pay the high price; the company makes fewer but more profitable sales.

Marketing A social and managerial process whereby individuals and groups obtain what they need and want through creating and exchanging products and value with others.

Marketing audit A comprehensive, systematic, independent, and periodic examination of a company’s environment, objectives, strategies, and activities to determine problem areas and opportunities and to recommend a plan of action to improve the company’s marketing performance.

Marketing channel (distribution channel) A set of interdependent organizations involved in the process of making a product or service available for use or consumption by the consumer or business user.

Marketing concept The marketing management philosophy that holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors do.

Marketing environment The actors and forces outside marketing that affect marketing management’s ability to build an maintain successful relationships with target customers.

Marketing information system (MIS) People, equipment, and procedures to gather, sort, analyze, evaluate, and distribute needed, timely, and accurate information to marketing decision makers.

Marketing management The art and science of choosing target markets and building profitable relationships with them.

Marketing mix The set of controllable tactical marketing tools—product, price, place, and promotion—that the firm blends to produce the response it wants in the target market.

Marketing offer Some combination of products, services, information, or experiences offered to a market to satisfy a need or want.

Marketing process The process of (1) analyzing marketing opportunities, (2) selecting target markets, (3) developing the marketing mix, and (4) managing the marketing effort.

Marketing research The systematic design, collection, analysis, and reporting of data relevant to a specific marketing situation facing an organization.

Marketing strategy The marketing logic by which the business unit hopes to achieve its marketing objectives.
Maturity stage The stage in the product life cycle in which sales growth slows or levels off.
Microenvironment The actors close to the company that affect its ability to serve its customers—the company, suppliers, marketing intermediaries, customer markets, competitors, and publics.

Micromarketing The practice of tailoring products and marketing programs to the needs and wants of specific individuals and local customer groups— includes local marketing and individual marketing.

Needs A state of felt deprivation.

New product A good, service, or idea that is perceived by some potential customers as new.

New-product development The development of original products, product improvements, product modifications, and new brands through the firm’s own R&D efforts.

Personality A person’s distinguishing psychological characteristics that lead to relatively consistent and lasting responses to his or her own environment.

Political environment Laws, government agencies, and pressure groups that influence and limit various organizations and individuals in a given society.

Postpurchase behavior The stage of the buyer decision process in which consumers take further action after purchase, based on their satisfaction or dissatisfaction.

Price The amount of money charged for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.

Price elasticity  A measure of the sensitivity of demand to changes in price.

Primary data Information collected for the specific purpose at hand.

Product Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or need.

Product bundle pricing Combining several products and offering the bundle at a reduced price.

Product concept The idea that consumers will favor products that offer the most quality, performance, and features and that the organization should therefore devote its energy to making continuous product improvements; A detailed version of the new-product idea stated in meaningful consumer terms.

Product development A strategy for company growth by offering modified or new products to current market segments; Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable product.

Product life cycle (PLC)  The course of a product’s sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline.

Product line A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges.

Product line pricing Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors’ prices.

Product mix (or product assortment) The set of all product lines and items that a particular seller offers for sale.

Product position The way the product is defined by consumers on important attributes—the place the product occupies in consumers’ minds relative to competing products.

Product quality The ability of a product to perform its functions; it includes the product’s overall durability, reliability, precision, ease of operation and repair, and other valued attributes.

Production concept The idea that consumers will favor products that are available and highly affordable.

Promotional pricing Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales.

Psychographic segmentation Dividing a market into different groups based on social class, lifestyle, or personality characteristics.

Psychological pricing A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product.

Public Any group that has an actual or potential interest in or impact on an organization’s ability to achieve its objectives.

Pull strategy A promotion strategy that calls for spending a lot on advertising and consumer promotion to build up consumer demand. If the strategy is successful, consumers will ask their retailers for the product, the retailers will ask the wholesalers, and the wholesalers will ask the producers.

Push strategy A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to wholesalers, the wholesalers promote to retailers, and the retailers promote to consumer

Quota A limit on the amount of goods that an importing country will accept in certain product categories.

Reference prices Prices that buyers carry in their minds and refer to when they look at a given product.
Retailer Business whose sales come primarily from retailing.

Sample A segment of the population selected for marketing research to represent the population as a whole.

Secondary data Information that already exists somewhere, having been collected for another purpose.

Segmented pricing Selling a product or service at two or more prices, where the difference in prices is not based on differences in costs.

Selling concept The idea that consumers will not buy enough of the organization’s products unless the organization undertakes a large-scale selling and promotion effort.

Service Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Service inseparability A major characteristic of services—they are produced and consumed at the same time and cannot be separated from their providers, whether the providers are people or machines.

Service intangibility A major characteristic of services—they cannot be seen, tasted, felt, heard, or smelled before they are bought.

Service perishability A major characteristic of services—they cannot be stored for later sale or use.

Service variability A major characteristic of services—their quality may vary greatly, depending on who provides them and when, where, and how.

Shopping product  Consumer good that the customer, in the process of selection and purchase, characteristically compares on such bases as suitability, quality, price, and style.

Social marketing  The design, implementation, and control of programs seeking to increase the acceptability of a social idea, cause, or practice among a target group.

Societal marketing A principle of enlightened marketing that holds that a company should make marketing decisions by considering consumers’ wants, the company’s requirements, consumers’ long-run interests, and society’s long-run interests.

Societal marketing concept The idea that the organization should determine the needs, wants, and interests of target markets and deliver the desired satisfactions more effectively and efficiently than do competitors in a way that maintains or improves the consumer’s and society’s well being.

Specialty product  Consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort.

Specialty store A retail store that carries a narrow product line with a deep assortment within that line.

Strategic planning  The process of developing and maintaining a strategic fit between the organization’s goals and capabilities and its changing marketing opportunities. It involves defining a clear company mission, setting supporting objectives, designing a sound business portfolio, and coordinating functional strategies.

Style A basic and distinctive mode of expression.

Subculture A group of people with shared value systems based on common life experiences and situations.

Supermarket Large, low-cost, low-margin, high-volume, self-service store that carries a wide variety of food, laundry, and household products.

Superstore A store much larger than a regular supermarket that carries a large assortment of routinely purchased food and nonfood items and offers services such as dry cleaning, post offices, photo finishing, check cashing, bill paying, lunch counters,

Target market A set of buyers sharing common needs or characteristics that the company decides to serve.

Target marketing  The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter.

Tariff A tax levied by a government against certain imported products.
Team selling  Using teams of people from sales, marketing, engineering, finance, technical support, and even upper management to service large, complex accounts.

Technological environment  Forces that create new technologies, creating new product and market opportunities.

Test marketing The stage of new-product development in which the product and marketing program are tested in more realistic market settings.

Transaction A trade of values between two parties.
Unsought product   Consumer product that the consumer either does not know about or knows about but does not normally think of buying.
Variable costs Costs that vary directly with the level of production.

Wants  The form taken by a human need as shaped by culture and individual personality.
Word-of-mouth influence Personal communication about a product between target buyers and neighbors, friends, family members, and associates.
Zone pricing A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price.