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Markets & Consumers
| Term | Definition |
|---|---|
| gross domestic product (GDP) | the total dollar value of goods and services produced by a nation within its borders in a year |
| gross national product (GNP) | the value of all goods and services produced by a country's citizens or organizations, whether located within the country's borders or not |
| economic infrastructure | the quality of a country's distribution, financial, and communications systems |
| level of economic development | the broader economic picture of a country |
| standard of living | an indicator of the average quality and quantity of goods and services consumed in a country |
| least developed country LDC | A country at the lowest stage of economic development |
| developing countries | countries in which the economy is shifting its emphasis from agriculture to industry |
| BRIC countries | Refers to Brazil, Russia, India, and China, the largest and fastest growing of the developing countries with over 40 percent of the worlds population |
| developed country | a country that boasts sophisticated marketing systems, strong private enterprise, and bountiful market potential for many goods and services |
| group of 8 G8 | an informal forum of the eight most economically developed countries that meets annually to discuss major economic and political issues facing the international community |
| business cycle | the overall patterns of change in the economy-including periods of prosperity, recession, depression, and recovery-that affect consumer and business purchasing power |
| competitive intelligence CI | the process of gathering and analyzing publicly available information about rivals |
| discretionary income | the portion of income people have left over after paying for necessities such as housing, utilities, food and clothing. |
| product competition | when firms offering different products compete to satisfy the same consumer needs and wants |
| brand competition | when firms offering similar goods and services compete on the basis of their brands reputation or perceived benefits |
| monopoly | a market situation in which one firm, the only supplier of a particular product, is able to control the price, quality and supply of that product |
| oligopoly | a market structure in which a relatively small number of sellers, each holding a substantial share of the market, compete in a market with many buyers |
| monopolistic competition | a market structure in which many firms, each having slightly different products, offer unique consumer benefits |
| perfect competition | a market structure in which many small sellers, all of whom offer similar products, are unable to have an impact on the quality, price or supply of a product. |
| patent | a legal mechanism to prevent competitors from producing or selling an invention, aimed at reducing or eliminating competition in a market for a period of time |
| nationalization | when a domestic government reimburses a foreign company (often not for the full value) for its assets after taking it over |
| expropriation | when a domestic government seizes a foreign company's assets without any reimbursement |
| local content rules | a form of protectionism stipulating that a certain proportion of a product must consist of components supplied by industries in the host country or economic community |
| US Generalized system of preferences GSP | a program to promote economic growth in developing counties by allowing duty- free entry of goods into the US |
| demographics | statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure |
| cultural values | a society's deeply held beliefs about right and wrong ways to live |
| collectivist cultures | cultures in which people subordinate their personal goals to those of a stable community |
| individualist cultures | cultures in which people tend to attach more importance to personal goals than to those of the larger community |
| social norms | specific rules dictating what is right or wrong, acceptable or unacceptable |
| ethnocentrism | the tendency to prefer products or people of one's own culture |
| bribery | when someone voluntarily offers payments to get an illegal advantage |
| extortion | when someone in authority extracts payment under duress |
| return on investments ROI | the direct financial impact of a firms expenditure of a resource such as time or money |
| popular culture | the music, movies, sports, books, celebrities, and other forms of entertainment consumed by the mass market |
| myths | stories containing symbolic elements that express the shared emotions and ideals of a culture |
| consumer goods | the goods individual consumers purchase for personal or family use |
| services | intangible products that are exchanged directly between the producer and the consumer |
| business to business marketing | the marketing of goods and services from one organization to another |
| industrial goods | goods individuals or organizations buy for further processing or for their own use when the do business |
| e-commerce | the buying or selling of goods and services electronically, usually over the internet |
| shrinkage | losses experienced by retailers due to shoplifting, employee theft, and damage to merchandise |
| anti consumption | the deliberate defacement of products |
| not for profit organizations | organizations with charitable, educational, community, and other public service goals that buy goods and services to support their functions and to attract and serve their members |
| value proposition | a marketplace offering that fairly and accurately sums up the value that will be realized if the good or service is purchased |
| brandfests | events companies host to thank costumers for their loyalty |
| lifetime value of a customer | the potential profit a single customers purchase of a firms products generates over the customers lifetime |
| distinctive competency | a superior capability of a firm in comparison to its direct competitors |
| differential benefit | properties of products that set them apart from competitors products by providing unique customer benefits |
| value chain | a series of activities involved in designing, producing, marketing, delivering, and supporting and product. Each link in the chain has the potential to either add or remove value from the product the customer eventually buys. |
| marketing scorecards | feedback vehicles that report (quantity) how the company or brand is actually doing in achieving various goals |
| metrics | measurements or scorecards marketers use to identify the effectiveness of different strategies or tactics |
| amafessionals | consumers who contribute ideas to online forums for the fun and challenge rather than to receive a paycheck, so their motivation is to gain psychic income rather than financial income |
| consumer-generated content | everyday people functioning in marketing roles, such as participating in creating advertisements, providing input to new product development development, or serving as wholesalers or retailers |
| social networking | online platforms that allow a user to represent him or herself via a profile on a web site and provide and receive links to other members of the network to share input about common interests |
| web 2.0 | the new generations of the world wide web that incorporates social networking and user interactivity |
| physical URLs | new apps that enables user generated clouds of content to form around products; barcode scans allow the user to upload content or see what others have already uploaded |
| folksonomy | a classification system that relies on users rather than pre established systems to sort contents |
| wisdom of crowds | under the right circumstances, groups are smarter than the smartest people in them, meaning that large numbers of consumers can predict successful products |
| open source model | a practice used in the software industry in which companies share their software codes with one another to assist in the development of a better product |
| marketing plan | a document that describes the marketing environment, outlines the marketing objectives and strategy, and identifies who will be responsible for carrying out each part of the marketing strategy |
| mass market | all possible customers in a market, regardless of the differences in their specific needs and wants |
| market segment | a distinct group of customers within a larger market who are similar to one another in some was and whose needs differ from other customers in the larger market |
| target market | the market segment on which an organization focuses its marketing plan and toward which it directs its marketing efforts |
| market position | the way in which the target market perceives the product in comparison to competitors brands |
| marketing mix | a combination of the product itself, the price of the product, the place where it is made available, and the activities that introduce it to consumers that creates a desired response among a set of predefined consumers |
| four Ps | product, price, promotion, and place |
| price | the assignment of value, or the amount the consumer must exchange to receive the offering |
| promotion | the coordination of a marketer's communication efforts to influence attitudes or behavior |
| place | the availability of the product to the customer at the desired time and location |
| market fragmentation | the creation of many consumer groups due to a diversity of distinct needs and wants in modern society |
| target marketing strategy | dividing the total market into different segments on the basis of customer characteristics, selecting one or more segments, and developing products to meet the needs of those specific segments |
| segmentation | the process of dividing a larger market into smaller pieces based on one or more meaningfully shared characteristics |
| segmentation variables | dimensions that divide the total market into fairly homogeneous groups, each with different needs and preferences |
| Generation Y | The group of consumers born between 1979 and 1994 |
| Segmenting Consumer Markets | Consumer markets can be segmented by demographic, psychographic, or behavioral criteria |
| demographics | statistics that measure observable aspects of a population, including size, age, gender, ethnic group, income, education, occupation, and family structure |
| generational marketing | marketing to members of a generation, who tend to share the same outlook and priorities |
| Generation X | the group of consumers born between 1965 and 1978 |
| baby boomers | the segment of people born between 1946 and 1964 |
| metrosexual | a straight, urban male who is keenly interested in fashion, home design, gourmet cooking, and personal care |
| cultural diversity | a management practice that actively seeks to include people of different sexes, races, ethnic groups, and religions in an organization's employees, customers, suppliers, and distribution channel partners |
| geodemography | a segmentation technique that combines geography with demographics |
| geocoding | customizing Web advertising so that people who log on in different paces will see ad banners for local businesses |
| VALS Framework | VALS uses psychological characteristics to segment the US market into eight unique consumer groups |
| psychographics | The use of psychographics, sociological, and anthropological factors to construct market segments |
| VALS (Value and Lifestyles) | A psychographic system that divides the entire US population into eight segments |
| behavioral segmentation | a technique that divides consumers into segments on the basis of how they act toward, feel about, or use a good or service |
| 80/20 rule | a marketing rule of thumb that 20 percent of purchasers account for 80 percent of a product's sales |
| long tail | a new approach to segmentation based on the idea that companies can make money by selling small amounts of items that only a few people want, provided they del enough different items. |
| usage occasions | an indicator used in behavioral market segmentation based on when consumers use a product most |
| targeting | a strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources to try to turn them into customers |
| target market | the market segments on which an organization focuses its marketing plan and toward which it directs its marketing efforts |
| segment profile | a description of the "typical" customer in a segment |
| undifferentiated targeting strategy | appealing to a broad spectrum of people |
| differentiated trageting strategy | developing one or more products for each of several distinct customer groups and making sure these offerings are kept separate in the marketplace |
| concentrated targeting strategy | focusing a firms efforts on offering one or more products to a single segment |
| targeting strategy | marketers must decide on a targeting strategy. should the company go after one total market, one or several market segments, or even target customers individually? |
| custom marketing strategy | an approach that tailors specific products and the messages about them to individual customers. |
| mass customization | an approach that modifies a basic good service to meet the needs of an individual |
| positioning | develop a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition |
| repositioning | redoing a products position to respond to marketplace changes |
| retro brand | a once popular brand that has been revived to experience a popularity comeback, often by riding a wave of nostalgia |
| brand personality | a distinctive image that captures a goods or services character and benefits |
| perceptual map | a technique to visually describe where brands are located in consumers minds relative to competing brands |
| customer relationship management CRM | a systematic tracking of consumers preferences and behaviors over time in order to tailor the value proposition as closely as possible to each individuals unique wants and needs. CRM allows firms to talk to individual customers and to adjust elements of t |
| durable goods | consumer products that provide benefits over a long period of time, such as cars, furniture, and appliances |
| nondurable goods | consumer products that provide benefits for a short time because they are consumed ((such as food) or are no longer useful ( such as newspapers) |
| classification of products | products are classified differently depending on whether they are in the consumer or business market |
| convenience product | a consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum of comparison and effort |
| staple products | basic or necessary items that are available almost everywhere |
| impulse products | a product people often uy on the spur of the moment |
| emergency products | products we purchase when were in dire need |
| shopping products | goods or services for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase |
| intelligent agents | computer programs that find sites selling a particular product |
| specialty products | goods or services that has unique characteristics and is important to the buyer and for which she will devote significant effort to acquire |
| unsought products | goods or services for which a consumer has little awareness or interest until the product or a need for the product is brought to her attention |
| value pricing or everyday low pricing | a pricing strategy in which a firm sets prices that provide ultimate value to customers |
| skimming price | a very high, premium price that a firm charges for its new, highly desirable product |
| penetration pricing | a pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it |
| trial prices | pricing a new product low for a limited period of time in order to lower the risk for a customer |
| percentage of sales budgeting method | a method for promotion budgeting that is based on a certain percentage of either last years sales or on estimates of the present years sales |
| competitive parity budgeting method | a promotion budgeting method in which an organization matches whatever competitors are spending |
| bottom up budgeting techniques | allocation of the promotion budget based on identifying promotion goals and allocating enough money to accomplish them |
| objective task method | a promotion budgeting method in which an organization first defines the specific communication goals it hopes to achieve and then tries to calculate what kind of promotion efforts it will take to meet these goals |
| push strategy | the company tries to move its products though the channel by convincing channel members to offer them |
| pull strategy | the company tries to move its products through the channel by building desire for the products among consumers, thus convincing retailers to respond to this demand by stocking these items |
| supply chain | all the activities necessary to turn raw materials into a good or service and put it in the hands of the consumer or business customer |
| supply chain management | the management of flows among firms in the supply chain to maximize total profitability |
| insourcing | a practice in which a company contracts with a specialist firm to handle all or part of its supply chain operations |
| channel of distribution | the series of firms or individuals that facilitates the movement of a product from the producer to the final customer |
| channel intermediates | firms or individuals such as wholesalers, agents, brokers, or retailers who help move a product from the producer to the consumer or business user. An older term for intermediaries is middlemen |
| breaking bulk | Dividing larger quantities of goods into smaller lots in order to meet the needs of buyers |
| creating assortments | providing a variety of products in one location to meet the needs of buyers |
| facilitating functions | functions of channel intermediaries that make the purchase process easier for customers and manufacturers |
| disintermediation (of the channel of distribution) | the elimination of some layers of the channel of distribution in order to cut costs and improve the efficiency of the channel |
| knowledge management | a comprehensive approach to collecting, organizing, storing, and retrieving a firm's information assets |
| online distribution piracy | the theft and unauthorized repurposing of intellectual property via the internet |
| wholesaling intermediaries | firms that handle the flow of products from the manufacturer to the retailer or business user |
| independent intermediaries | channel intermediaries that are not controlled by any manufacturer but instead do business with many different manufacturers and many different customers |
| merchant wholesalers | intermediaries that buy goods from manufacturers and sell to retailers and other business to business customers |
| take title | to accept legal ownership of a product and assume the accompanying rights and responsibilities of ownership |
| merchandise agents (brokers) | channel intermediaries that provide services in exchange for commissions but never take title to the product |
| channel levels | the number of distinct categories of intermediaries that populate a channel of distribution |
| hybrid marketing system | a marketing system that uses a number of different channels and communication methods to serve a target market |
| slotting allowances | a fee paid in exchange for agreeing to place a manufacturers products on a retailers valuable shelf space |
| conventional marketing system | a multiple level distribution channel in which channel members work independently of one another |
| vertical marketing system | a channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling, and retailing levels |
| horizontal marketing system | an arrangement within a channel of distribution in which two or more firms at the same channel level work together for a common purpose |
| intensive distribution | selling a product through all suitable wholesalers or retailers that are willing to stock and sell the product |
| exclusive distribution | selling a product only through a single outlet in a particular region |
| selective distribution | distribution using fewer outlets than intensive distribution but more than exclusive distribution |
| channel leader | a firm at one level of distribution that takes a leadership role, establishing operating norms and processes based on its power relative to other channel members |
| logistics | the process of designing, managing, and improving the movement of products through the supply chain. Logistics includes purchasing, manufacturing, storage, and transport |
| marketing research ethics | taking an ethical and above-board approach to conducting marketing research that does no harm to the participant in the process of conducting the research |
| marketing information system (MIS) | a process that first determines what information marketing managers need and then gathers, sorts, analyzes, stores, and distributes relevant and timely marketing information to system users |
| intranet | an internal corporate communication network that uses internal technology to link company departments, employees, and databases |
| marketing intelligence system | a method by which marketers get information about everyday happenings in the marketing environment |
| marketing research | the process of collecting, analyzing, and interpreting data and customers, competitors, and the business environment in order to improve marketing effectiveness |
| syndicated research | research by firms that collect data on a regular basis and sell the reports to multiple firms |
| custom research | research conducted for a single firm to provide specific information its managers need |
| marketing decision support system (MDSS) | the data, analysis software, and interactive software that allow managers to conduct analyses and find the information they need |
| data mining | sophisticated analysis techniques to take advantage of the massive amount of transaction information now available |
| research design | a plan that specifies what information marketers will collect and what type of study they will do |
| secondary data | data that have been collected for some purpose other tahn the problem at hand |
| primary data | data from research conducted to help make a specific |
| exploratory research | a technique that marketers use to generate insights for future, more rigorous studies |
| focus group | a product oriented discussion among a small group of consumers led by a trained moderator |
| case study | a comprehensive examination of a particular firm or organization |
| ethnography | an approach to research based on observations of people in their own homes or communities |
| descriptive research | a tool that probes more systematically into the problem and bases its conclusions on large numbers of observations |
| cross sectional design | a type of descriptive technique that involves the systematic collection of quantitative information |
| longitude design | a technique that tracks the responses of the same sample of respondents over time |
| causal research | a technique that attempts to understand cause and effect relationships |
| experiments | a technique that tests predicted relationships among variables in a controlled environment |
Created by:
andunham
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