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Marketing 2
Chapter 7-10
| Term | Definition |
|---|---|
| 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 | 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 |
| Demographics | statistics that measure observable aspects of a population, including size, age, gender, ethnic groups, income, education, occupation, and family structure. |
| Demographics | statistics that measure observable aspects of a population, including size, age, gender, ethnic groups, income, education, occupation, and family structure. |
| Cultural Diversity | A management practice that actively seeks to include people of different sexes, races, and ethnic groups |
| Geographic Segmentation | An approach in which marketers tailor their offerings to specific geographic areas because people's preferences often vary depending on where they live |
| Geodemography | Segmentation technique that combines geography with demographics |
| Geographic Segmentation | An approach in which marketers tailor their offerings to specific geographic areas because people's preferences often vary depending on where they live |
| Micromarketing | The ability to identify and target very small geographic segments that sometimes amount to individuals |
| Psychographics | The use of psychological, sociological, and anthropological factors to construct market segments. |
| Geodemography | Segmentation technique that combines geography with demographics |
| VALS | (Values & Lifestyles) A psychographic system that divides the entire U.S. population into 8 segments |
| VALS segments | Innovators, Thinkers, Believers, Achievers, strivers, experiencers, makers, survivors |
| Behavioral Segmentation | A technigue that divides consumers into segments on the basis of how they act towards, feel about, or use a good o service |
| Psychographics | The use of psychological, sociological, and anthropological factors to construct market segments. |
| VALS | (Values & Lifestyles) A psychographic system that divides the entire U.S. population into 8 segments |
| VALS segments | Innovators, Thinkers, Believers, Achievers, strivers, experiencers, makers, survivors |
| Behavioral Segmentation | A technigue that divides consumers into segments on the basis of how they act towards, feel about, or use a good or service |
| 80/20 Rule | A marketing rule of thumb that 20% of purchasers account for 80% of a products sales |
| Usage Rate | A measurement that reflects the quantity purchased or frequency of use among consumers of a particular product or service |
| Usage Occations | An indicator used in behavioral market segmentation based on when consumers use a product most |
| Targeting | A strategy in which marketers valuate 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 towards which it directs its marketing efforts. |
| Undifferentiated targeting strategy | Appealing to a broad spectrum of people |
| Differentiated targeting 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 firm's efforts on offering one or more products to a single segment |
| Customized 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 or service to met the needs of an individual |
| Positioning | Developing a market strategy to influence how a particular market segment perceives a good or service in comparison to he competition |
| Repositioning | redoing a product's position to respond to marketplace changes |
| Perceptual map | A technique to visually describe where brands are "located" in consumers minds relative to competing brands. |
| attributes | Include features, functions, benefits, and uses of product. Marketers view products as a bundle of attributes that includes the packaging, brand, name, benefits, and supporting features in addition to a physical good. |
| good | A tangible product that we can see, touch, smell, hear, or taste |
| Core Products | all the benefits the product will provide for consumers or business customers |
| Actual Products | The psychical good or the delivered service that supplies the desired benefit |
| Augmented product | The actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale |
| durable oods | 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) |
| Convenience products | A consumer good or service that is usually low priced, widely available, and purchased frequently with a minimum o comparison and effort |
| Consumer Packaged good(CPG) or fast -moving consumer food (fmcg) | A low-cost good that is consumed quickly and replaced frequently |
| Shopping products | goods or services for which consumers spend considerable time and effort gathering information and comparing alternatives before making a purchase |
| specialty products | goods or services that have unique characteristics and are important to the buyer and for which he or 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 his or her attention |
| equipment | expensive goods that an organization uses in its daily operations that last for a long time |
| raw materials | products of the fishing, lumber, agricultural, and mining industries that organizational customers purchase to use in their finished products |
| Innovation | A product that consumers perceive to be new and different from existing products |
| Continuous innovation | a modification of an existing product that sets one brand apart from its competitors |
| Knock off | A new product that copies, with slight modification, the design of an original product |
| Dynamically continuous innovations | A change in an existing product that requires a moderate amount of learning or |
| Discontinuous Innovation | A totally new product that creates major changes in the way we live |
| Research and Development (R&D) | A well - defined and systematic approach to how innovation is done within the firm |
| New Product Development (NPD) | The 7 phases by which firms develop new products, including idea generation, product concept development and screening, marketing strategy development, business analysis, technical development, test marketing and commercialization |
| Idea Generation: Phase 1 | A phase of product development in which marketers use a variety of sources to come up with great new product ideas tat provide customer benefits and that are compatible with the company mission |
| Product Development and screening: Phase 2 | The second step of product development in which marketers test product ideas for technical and commercial success |
| Marketing strategy development: Phase 3 | Marketers must identify the target market, estimate its size, and determine how they can effectively position the product to address the target markets needs |
| Business analysis: Phase 4 | the step in the product development process in which marketers assess a product's commercial viability |
| technical development: phase 5 | The step in the product development process in which company engineers refine and perfect a new product |
| test marketing: phase 6 | Testing the complete marketing plan in a small geographic area that is similar to the larger market the firm hopes to enter |
| simulated test marketing | application of special computer software to imitate the introduction of a product into the market place. Allowing the company to see the likely impact of price cuts and new packaging or even to determine where in the store it should try to place the produ |
| commercialization: phase 7 | the final step in the product development process in which a new product is launched into the market |
| product addoption | the process by which a consumer or business customer begins to buy and use a new god, service, or idea |
| diffusion | The process by which the use of a product spreads throughout a population |
| Innovators | the first segment (2.%) of a population to adopt a new product |
| early adopters | Those who adopt an innovation early in the diffusion process but after the innovators |
| early majority | those whose adoption of a new product signals a general acceptance of the innovation |
| late majority | the adopters tho are willing to try new products when there is little or no risk associated with the purchase. When the purchase becomes an economic necessity, or when there is social pressure to purchase |
| laggards | The last consumers to adopt an innovation |
| Product managment | The systematic and usually team based approach to coordinating all aspects of a products strategy development and execution |
| product line | A firms total product offering designed to satisfy a single need or desire of target customers |
| product line length | determined by the number of separate items within the same category |
| Stock - Keeping Unit (SKU) | A unique identification number for each distinct product |
| cannibalization | the loss of sales of an existing brand when a new item in a product line or product family is introduced |
| product mix | the total set of all products a firm offers for sale |
| product mix width | the numbers of different product lines the firm produces |
| Product Life Cycle (PLC) | A concept that explains how products go through four distinct stages from birth to death: Introduction, growth, maturity, decline |
| Introduction state | The first stage of the Product life cycle in which slow growth follows the introduction of a new product in the market place. No profits because the company is paying for R&D |
| Growth Stage | The second stage in the product life cycle during which consumers accept the product and sales rapidly increase. Profits increase and peak |
| Maturity Stage | The third stage and longest in the product life cycl. during which sales peak and profit margins narrow |
| Decline stage | The final stage in the product life cycle, during which sales decrease as customers needs change |
| brand | A name, a term, a symbol, or any other unique element of a product that identifies one firms products and sets it apart from the competition |
| trademark | the legal term for a brand name, brand mark, or trade character; trade marks legally registered by a government obtain protection for exclusive use in the country |
| brand extension | a new product sold with the same brand name as a strong existing brand |
| sub branding | Creating a secondary brand within a main brand that can help differentiate a product line to a desired target group |
| family brand | a brand that a group of individual products or individual brands share |
| National or Manufactured brands | brands that the product manufacturer owns |
| private-label brands | Brands that a certain retailer or distributer owns and sells< a store brand |
| generic branding | a strategy in which products are not branded and are sold at the lowest price possible |
| licensing | an agreement in which on a firm sells another firm the right to use a brand name for a specific purpose and for a specific time period |
| package | the cover or container for a product that provides product protection, facilitates use, and communicates value |
| Price | The assignment of value, or the amount the consumer must exchange to receive the offering |
| market share | the percentage of a market accounted for by a specific firm, product line, or brand |
| prestige products | products that have a high price and that appeal to status-conscious consumers |
| price elasticity of demand | he percentage change in unit sales that results from a percentage change in price |
| elastic demand | Demand in which changes in price have a large effects on the amount demanded |
| inelastic demand | demand in which changes in price have little or no effect on the amount demanded |
| Variable costs | The cost of production that are tied to and vary, depending on the number of units produced |
| Fixed costs | Cost of production that do not change with the number of units produced |
| total costs | the total of the fixed costs and the variable costs for a set number of units produced |
| break-even analysis | a method for determining the number of units that a firm must produce and sell at a given price to cover all its cost |
| break-even point | the point at which the total revenue and total cost are equal and beyond which the company makes profit; below which the firm will suffer a loss |
| markup | an amount added to the cost of a product to create the price at which a channel member will sell the product |
| gross margin | the markup amount added to the cost of a product to cover the fixed costs of the retailer or wholesaler and leave an amount for a profit |
| list price or manufacturers suggested retail price(MSRP) | The price that the manufacturer sets as the appropriate price or the end consumer to pay |
| cost-plus pricing | a method of setting prices in which the seller totals all the costs for the product and then adds an amount to arrive at the selling price |
| demand-based pricing | a price-setting method based on estimates of demand at different prices |
| yield management pricing | a practice of charging different prices to different customers in order to manage capacity while maximizing revenues |
| Value pricing / Everyday low pricing (EDLP) | 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 |
| price bundling | selling two or more goods or services as a single package for one price |
| captive pricing | a pricing tactic for two items that must be used together; one item is priced very low, and he firm makes its profit on another, high-margin item essential to the operation of the first item |
| FOB origin pricing (Free on board) | A pricing tactic in which the cost of transporting the product from the factory to the customers location is the responsibility of the customer |
| uniform delivered pricing | A pricing tactic in which a firm adds a standard shipping charge to the price for all customers regardless of location |
| freight absorption pricing | a pricing tactic in which the seller absorbs the total cost of transportation |
| trade discounts | discounts off list price of products to members of the channel of distribution who perform various marketing functions |
| quantity discounts | a pricing tactic of charging reduced prices for purchases of larger quantities of a product |
| cash discounts | a discount offered to a customer to entice them to pay their bill quickly |
| seasonal discounts | price reductions offered only during certain times of the year |
| dynamic pricing | a pricing strategy in which the price can easily be adjusted to meet changes in the marketplace |
| internal reference price | a set price range in consumers minds that they refer to in evaluating a product's price |
| Price lining | the practice of settling a limited number of different specific prices, called price points, for items in a product line |
| bait-and-switch | an illegal pricing strategy in which an advertised price special is used as bait to get customers into the store with the intension of switching them to a higher priced item |
| loss leader pricing | The pricing policy of setting prices very low or even below cost to attract customers into a store |
| price fixing | the collaboration of two or more firms setting prices, usually to keep prices high |
| predatory pricing | an illegal strategy in which a company sets a very low price point fot eh purpose of driving competitors out of business |
Created by:
will.oreily