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Marketing Management Glossary

Introductory terms
Market = The set of all actual and potential buyers of a product or service = A group of people or
organisations that have similar needs and wants, the desire to satisfy those needs and wants, the
means of exchange (money) to satisfy their needs and wants, and the ability and authority to make
the exchange (purchase)
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
emarketing = Marketing to reduce demand temporarily or permanently! the aim is not to destroy
demand, but only to reduce or shift it
Marketing management = The analysis, planning, implementation, and control of programs
designed to create, build, and maintain beneficial exchanges with target buyers for the purpose of
achieving organi"ational ob#ectives
$eed = A state of felt deprivation
%ant = The form taken by a human need as shaped by culture and individual personality
&ierarchy of needs = A system of needs which includes physiological needs, the need for
satisfaction, the need for belonging and love, the need for esteem, and the need for self'
actualisation
product = Anything that can be offered to a market for attention, ac(uisition, use, or consumption
that might satisfy a want or need) *t includes physical ob#ects, services, persons, places,
organi"ations, and ideas
+ervice = Any activity or benefit that one party can offer to another that is essentially intangible
and does not result in the ownership of anything
,ustomer value = The difference between the values the customer gains from owning and using a
product and the costs of obtaining the product
,ustomer satisfaction = The extent to which a product-s perceived performance matches a buyer-s
expectations) *f the product-s performance falls short of expectations, the buyer is dissatisfied) *f
performance matches or exceeds expectations, the buyer is satisfied or delighted
,onsumer markets = The most visible markets, which consist of individual customers who buy
products for their own use or for use by other members of their households
*ndustrial markets = Markets made up of organisations which buy in order to produce goods
.xchange = The act of obtaining a desired ob#ect from someone by offering something in return =
A transaction between two or more persons, groups, or organisations in which each party gives up
something of value and receives something of value
Transaction = A trade between two parties that involves at least two things of value, agreed'upon
conditions, a time of agreement, and a place of agreement
/elationship marketing = The process of creating, maintaining, and enhancing strong, value'laden
relationships with customers and other stakeholders
,ompetitive advantage = The part of a firm0s total offering which is superior to that of its
competitors = +omething uni(ue or special that a firm does or possesses that provides an
advantage over its competitors
Terms of core marketing concept = needs, wants, demand, value, cost, satisfaction, marketing,
marketer, exchange, transaction, relationship
,ore benefit = The need that a product fulfils or the problem it solves
1uyers = Those who carry out the formal arrangements for purchase, service, delivery, and
financial terms
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emands = &uman wants that are backed by buying power
+ervice market = All organisations that buy in order to produce services
3ertical markets = The markets on which products are tailored for specific industries
&ori"ontal markets = Markets on which products are sold to a wide range of industries
4tility = A measure of the satisfaction obtained through the receipt of something of value in an
exchange
5orm utility = The usefulness attributable to the form or design of something received
4sers = 6ersons within an organisation who actually put a purchased product to work
+takeholders = Those who use company0s products or services, those who work for the firm,
those who own it, and those who are affected by it
6roduction concept = The philosophy that consumers will favor products that are available and
highly affordable and that management should therefore focus on improving production and
distribution efficiency
6roduct concept = The idea that consumers will favor products that offer the most (uality,
performance, and features and that the organi"ation should therefore devote its energy to making
continuous product improvements) A detailed version of the new'product idea stated in
meaningful consumer terms
+elling concept = The idea that consumers will not buy enough of the organi"ation-s products
unless the organi"ation undertakes a large'scale selling and promotion effort
Marketing concept = The philosophy that business organisations achieve their profit and other
goals by satisfying consumers = The marketing management philosophy that holds that achieving
organi"ational goals depends on determining the needs and wants of target markets and delivering
the desired satisfactions more effectively and efficiently than competitors do
Marketing information system = The continuously interacting structure of people, machines, and
procedures that produces information pertinent to marketing decisions
Marketing intelligence network = A set of procedures and sources designed to monitor the
organisations0 external environments, particularly the competitive environment
Marketing mix = The set of controllable tactical marketing tools7product, price, place, and
promotion7that the firm blends to produce the response it wants in the target market =
Marketing programs including product conception (and development), pricing decisions,
promotion of the product, and distribution to consumers
Marketing control = The process of measuring and evaluating the results of marketing strategies
and plans and taking corrective action to ensure that marketing ob#ectives are achived = The
process of evaluating of achieved results against established standards, and of taking corrective
action to exploit opportunities or solve problems
6eripheral values = 3alues that reflect, but are not as deeply embedded or as fundamental as,
central values
6ersonal income = A persons total income from all sources
Marketing orientation = An approach to business that focuses primarily on what a firm does to
satisfy consumer0s needs
,reativity = A (uality possessed by persons that enables them to generate novel approaches,
generally reflected in new and improved solutions to problems
Marketing Environment and Consumer
Marketing environment = The actors and forces outside marketing that affect marketing
management-s ability to develop and maintain successful transactions with its target customers
Macroenvironment = The larger societal forces that affect the microenvironmentdemographic,
economic, natural, technological, political and cultural forces
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Microenvironment = The forces close to the company that affect its ability to serve
customersthe company, suppliers, marketing channel firms, customer markets,
competitors, and publics
Marketing intermediaries = 5irms that help the company to promote, sell, and distribute its goods
to final buyers! they include resellers, physical distribution firms, marketing service agencies, and
financial intermediaries
,onsumer buyer behavior = The buying behavior of final consumers'individuals and households
who buy goods and services for personal consumption
,onsumer market = All the individuals and house holds who buy or ac(uire goods and services
for personal consumption
5actors of consumer behaviour = cultural, social, personal, psychological
5actors of customer behaviour = environment, organisation, interpersonal relations, personal
character
Motivation = 6ersons0 impulses to take action and the internal and external forces that energise,
mobilise, and direct their behaviour toward goals
6erception = selective attention, distortion recall = The process of becoming aware of
phenomena, whether internal or external, tangible or intangible = The process by which people
select, organi"e, and interpret, information to form a meaningful picture of the world
+timulus = Anything that elicits or accelerates a physiological or psychological activity
,ues = The minor stimuli that shape people0s responses and that support the original stimulus
,onsumer behaviour = The acts of individuals that involve buying and using products, including
the decision processes that precede and determine these acts
.thnic group = The social group determined by culturally transmited, learned traits
emography = The study of the changing characteristics of human populations'factors such as
vital statistics, growth, si"e, density, and distribution
6ersonality = A person9s distinguishing psychological characteristics that lead to relatively
consistent and lasting responses to his or her own environment
Motive (drive) = A need that is sufficiently pressing to direct the person to seek satisfaction of the
need
*nnovators = The first users of the new product
.arly adopters = 6eople who try a new product early in its life cycle without waiting for its
acceptance by a large number of people
.arly ma#ority = 6eople who adopt the product only after it has been accepted somewhat widely
:ate ma#ority = 6eople who do not adopt an innovation until it is widespread use and is
thoroughly accepted
:aggards = *ndividuals, households, or organisations that resists or never adopt the new product
:earning = The relatively permanent changes in thought and behaviour that result from
experience = ,hanges in an individual9s behavior arising from experience
1elief = A descriptive thought that a person holds about something
Attitude = A person9s consistently favorable or unfavorable evaluations, feelings, and tendencies
toward an ob#ect or idea
,omplex buying behavior = ,onsumer buying behavior in situations characteri"ed by high
consumer involvement in a purchase and significant perceived differences among brands
issonance'reducing buying behavior = ,onsumer buying behavior in situations characteri"ed by
high involvement but few perceived differences among brands
&abitual buying behavior = ,onsumer buying behavior in situations characteri"ed by low
consumer involvement and few significant perceived brand differences)
3ariety'seeking buying behavior = ,onsumer buying behavior in situations characteri"ed by low
;
consumer involvement but significant perceived brand differences
$eed recognition = The first stage of the buyer decision process in which the consumer
recogni"es a problem or need
*nformation search = The stage of the buyer decision process in which the consumer is aroused to
search for more information! the consumer may simply have heightened attention or may go into
active information search
6urchase decision = The stage of the buyer decision process in which the consumer actually buys
the product
6ostpurchase behavior = The stage of the buyer decision process in which consumers take further
action after purchase based their satisfaction or dissatisfaction
$ew product = A good, service, or idea that is perceived by some potential customers as new
Adoption process = The mental process through which an individual passes from first hearing
about an innovation to final adoption
1usiness buying process = The decision'making process by which business buyers establish the
need for purchased products and services and identify, evaluate, and choose among alternative
brands and suppliers
erived demand = 1usiness demand that ultimately comes from (derives from) the demand for
consumer goods
+traight rebuy = A business buying situation in which the buyer routinely reorders something
without any modifications
*nfluencers = 6eople in an organi"ation9s buying center who affect the buying decision! they often
help define specifications and also provide information for evaluating alternatives
eciders = 6eople in the organi"ation9s buying center who have formal or informal power to
select or approve the final suppliers
<atekeepers = 6eople in the organi"ation9s buying center who control the flow of information to
others
6roblem recognition = The first stage of the business buying process in which someone in the
company recogni"es a problem or need that can be met by ac(uiring a good or service
<eneral need description = The stage of the business buying process in which the buying
organi"ation decides on and specifies the best technical product characteristics for a needed item
6roduct specification = The stage of the business buying process in which the buying organi"ation
decides on and specifies the best technical product characteristics for a needed item
6erformance review = The stage of the business buying process in which the buyer rates its
satisfaction with suppliers, deciding whether to continue, modify or drop them
=rganisational buying behaviour = The decision making process by which a buying group
establishes the need for goods and services and identifies, evaluates and chooses among
alternative brands and suppliers
,ommercialisation = A process in which marketers establish full'scale production, set prices, lay
out a distribution network, and make final promotion plans to introduce the product in all its
markets
Marketing Research
Marketing information system = 6eople, e(uipment, and procedures to gather, sort, analy"e)
evaluate, and disribute needed, timely, and accurate information to marketing decision makers
Marketing intelligence = .veryday information about developments in the marketing
environment that helps managers prepare and ad#ust marketing plans
Marketing research = The systematic design, collection, analysis, and reporting of data relevent to
a specific marketing situation facing an organi"ation
>
= The systematic and ob#ective research for and analysis of information relevant to the
identification and solution of any problem in the field of marketing
.xploratory research = /esearch that consists of informal attempts to identify and define
problems
escriptive research = Marketing research to better describe marketing problems, situations, or
markets, such as the market potential for a product or the demographics and attitudes of
consumers
Threshold effect = The concept that very few calls on any account tend not to have any effect on
sales until the level of calls reaches a certain level
?ualitative research = /esearch which takes the form of detailed interviews with a small number
of consumers or organisational buyers
+timulated test marketing = An approach to new'product testing that does not involve the actual
marketing of a new product in test sites as in the traditional test marketing, but uses special
consumer reaction research instead
?uantitative research = /esearch based on a statistically valid sampling of a terget market
=bservational research = The gathering of primary data by observing relevant people, actions,
and situations
+urvey research = The gathering of primary data by asking people (uestions about their
knowledge, attitudes, preferences, and buying behavior
.xperimental research = The gathering of primary data by seleting matched groups of sub#ects,
giving them different treatments, controlling related factors, and checking for differences in group
responses
5ocus group interviewing = 6ersonal interviewing that involves inviting six to ten people to
gather for a few hours with a trained interviewer to talk about a product, service, or organi"ation
=nline (*nternet) marketing research = ,ollecting primary data through *nternet surveys and
online focus groups
+creening process = The process which sifts out all ideas that are not feasible or desirable for
organisation
+ample = A trial amount of a product
?uota sample = A sample selected by giving the interviewer a (uota of certain number of
individuals with some specific characteristic, such as a (uota to interview @A men and @A women
+imple random sample = The process in which individual members of a population would have
an e(ual and known chance of being selected as part of a sample
+ystematic random sample = The process in which researchers choose every nth (such as every
tenth or fifteenth) number after starting with a randomly selected number
+tratified random sample = A process that entails breaking the total population into strata, such as
by age groups or income levels, in order to select samples within strata
,onvenience sample = A sample chosen at the convenience of the researcher, such as the first 2AA
individuals to be found who are members of a population
Budgement sample = A sample chosen simply by the #udgement of the researcher as to which
individuals would be representative of the population, and about which no statistical analyses
would be appropriate
+urvey method = A research method based on data gathered by asking respondents to supply
facts, opinions, or other information
?uestionnaire = A data collection instrument that is used for all survey methods
+tructured (uestions = Those (uestions that demand brief and specific answers
4nstructured (uestion = ?uestions that allow respondents a great deal of freedom and creativity
in framing answers
+emi'structured (uestion = ?uestions that include sentence completion items and word
@
association tests
+tatistical demand analysis = Analysis that develops relationship among marketing mix factors
and environmental circumstances and sales
Time series analysis = Analysis that identifies and measures repetitive influences on sales patterns
over time
3alue analysis = A cost'reduction program in which customers study each component of a
supplier9s product to determine whether it can be redesigned, standardised, or produced more
cheaply
3endor analysis = The buying organisation9s systematic evaluation and rating of prospective
suppliers
%ork load analysis = A method which establishes standards for the number of sales calls re(uired
and the time needed to make those calls
,ontests = +trategy that re(uires consumers to compete for pri"es, typically by completing some
type of pu""le or stating why they like the product Cin 8@ words or lessD
elphi techni(ue = The procedure of environmental forecasting by a group of experts who are
solicited anonymously and asked to predict the likelihood and time of occurrence of significant
events
.xperimental method = The method based on the study of the relationship between two or more
variables under controlled conditions
5ocus group = A small number of 0typical9 consumers who discuss their reactions to a product
concept in the presence of a group leader
5orecasting = The prediction of what buyers in a target market are likely to do under a given set
of conditions, such as the prediction of how much of a product will be purchased by a particular
market segment given a particular price of the product
6rospecting = A systematic process of identifying new buyers
,onsumer #uries = A method of pretesting advertisements by using a panel of consumers who are
representative of the target audience and provide ratings, rankings, andEor evaluations of
advertisements
Marketing Strategies
+trategic planning = The process of developing and maintaining a strategic fit between the
organi"ation-s goals and capabilities and its changing marketing opportunites) *t involves defining
a clear company mission, setting supporting ob#ectives, designing a sound business portfolio, and
coordinationg functional strategies
Mission statement = A statement of teh organi"ation-s purpose7what it wants to accomplish in
the larger environment
1usiness portfolio = The collection of business and products that make up the company
6ortfolio analysis = A tool by which management identifies and evaluates that various businesses
that make up the company
+trategic 1usiness 4nit (+14) = A unit of the company that has a separate mission and ob#ectives
and that can be planned independently from other company business) An +14 can be a company
division, a product line within a division, or sometimes a single product or brand
<rowth'share matrix = A portfolio'planning method that evaluates a company-s strategic business
units in terms of their market growth rate and relative market share) +14-s are classified as stars,
cash cows, (uestion marks, or dogs
Market penetration = A strategy for company growth by increasing sales of current products to
current market segments without changing the product
Market development = A strategy for company growth by identifying and developing new market
segments for current company products
F
6roduct development = A strategy for company growth by offering modified or new prodcuts to
current market segments) eveloping the product concept into a physical product in order to
ensure that the product idea can be turned into a workable product
iversification = A strategy for company growth by starting up or ac(uiring businesses outside
the company-s current products and markets
Marketing process = The process of (2) analy"ing marketing opportunites, (8) selecting target
markets, (;) developing the marketing mix, and (>) managing the marketing effort
emand or market levels = population, potential, available, (ualified, served, and penetrated
,ompany strategies = low cost, differentiation, focusing
Market strategies = positioning, innovation, life cycle, competition, global reach
&omogenity and heterogenity = extremes of consistency influencing pricing, targeting, and a si"e
of target segment for product
,ompetitive strategies = challenger, competitive position, market leader, follower, nicher
+trategy = The ma#or ob#ectives of the organisation and a general plan for achieving these
ob#ectives
+trategic management = The management of a strategy! it involves at least four steps, i)e)
analysing, planning, implementing, and control
GAE8A principle = A ClawD which states that GA percent of business in a territory comes from 8A
percent of accounts' and, controversely, that only 8A percent of business comes from the other GA
percent of accounts (which is in reality only approximate)
Marketing strategy = An overall statement of an organisation0s goals in terms of markets (%ho
are our customers) and products (%hat are we selling) = The marketing logic by which the
business unit hopes to achieve its marketing ob#ectives
+trategic business unit = A single business with its own uni(ue goal or mission, its own products
or services, its own identifiable group of customers, its own competitors, its own resources, and a
responsible manager
+trategic control = The control of ma#or strategy directions
Market segment = A group of consumers who respond in a similar way to a given set of
marketing efforts
+egment marketing = *solating broad segments that make up a market and adapting the marketing
to match the needs of one or more segments
$iche marketing = 5ocusing on subsegments or niches with distinctive traits that may seek a
special combination of benefits
Micromarketing = The practice of tailoring products and marketing programs to suit the tastes of
specific individuals and locations7includes local marketing and individual marketing
:ocal marketing = Tailoring brands and promotions to the needs and wants of local customer
groups7cities, neighborhoods, and even specific stores
*ndividual marketing = Tailoring products and marketing programs to the needs and preferences
of individual customers7also labeled one'to'one marketing, customi"ed marketing, and markets'
of'one marketing
+egmentation variables = 5actors by which market segments are formed, e)g), geographic,
demographic, socio'economic, behavioural, and psychographic variables
<eographic segmentation = ividing a market into different geographical units such as nations,
states, regions, counties, cities, or neighborhoods
emographics = A catchall term referring to particular variables describing populations, such as
age or sex
Age and life'cycle segmentation = ividing a market into different age and life'cycle group
<ender segmentation = ividing a market into different groups based on sex
*ncome segmentation = ividing a market into different income groups
H
1ehaviouristic segmentation = A method of segmenting a market by dividing customers into
groups based on their usage, loyalties, or buying responses to a product or service
6sychographics = The system of measurement of life styles
6sychogenic needs = $eeds which arise from learning and socialisation
1ehavioral segmentation = ividing a market into groups based on consumer knowledge,
attitude, use, or response to a product
1enefit segmentation = A method of segmenting markets on the basis of the ma#or benefits
consumers seek in a product or service
=ccasion segmentation = ividing the market into groups according to occasions when buyers
get the idea to buy, actually make their purchase, or use the purchased item
*ntermarket segmentation = 5orming segments of consumers who have similar needs and buying
behavior even though they are located in different countries
Target market = A set of buyers sharing common needs or characteristics that the company
decides to serve
Market targeting = The process of evaluating each market segment-s attractiveness and selecting
one or more segments to enter
ifferentiated marketing = The strategy of pursuing several market segments with particular
products and marketing mixes designed for the needs of each = A type of marketing strategy
whereby a firm offers products or services to a number of market segments and develops separate
marketing strategies for each
4ndifferentiated marketing = The process opposite of market segmentation! i)e), marketers define
their products as broadly as possible and promote a product or service to anyone capable of
making a purchase
,oncentrated marketing = The strategy of focusing on a single, easily defined, profitable market
segment
6roduct'oriented positioning = The strategy that rests on some attribute inherent in a product9s
makeup, packaging, use, or price
Market positioning = Arranging for a product to occupy a clear, distinctive, and desirable place
relative to competing products in the minds of target consumers
6roduct positioning = The proces by wich marketers create and image in buyers9 minds and
control buyers9 perceptions of their product
/epositioning = The conscious effort to change consumers9 perceptions of a product I may be in
order when marketers discover that a product appeals to other market segments
,onsumer oriented positioning = The strategy aimed at getting the consumer to perceive a
product in some uni(ue, personally related manner, regardless of the product9s characteristics
3alue proposition = The full positioning of a brand7the full mix of benefits upon which it is
positioned)
Marketing planning = The process through which an organisation designs the offerings that will
satisfy the needs of its target markets
Marketing research = The systematic and ob#ective research for and analysis of information
relevant to the identification and solution of any problem in the field of marketing
Marketing plan = A written document that contains the firm9s marketing strategy and tactics
6roduct life cycle = The product0s stages of development, which consist of introductory, growth,
maturity and decline stage
emand curve = A curve that specifies the (uantities demanded at various prices at a given time
.xperience curve = A curve reflecting the fact that the costs of doing something tend to decrease
as the organisation gains experience doing it
Market modification = turning non'users to users, entry on new segments, reaching customers of
competitors, more fre(uent and heavier use of product
G
6roduct modification = improvement (uality, features and style of product
Mix modification = special and volume discounts, credit accessibility, broadening assortment,
more outlets, channels, advertising costs, change of message, media, timing, rebates, gifts,
display, territories, delivery speed, and servicing
*ntroductory stage = A stage in a product0s life in which an innovation is alone in the market
<rowth stage = A stage in a product0s life in which sales and profits grow rapidly, competitors are
attracted to the growing market, and cash flow can still be negative because of firm0s efforts to
establish a strong market share ahead of competitors) The market is usually turbulent in this
period
Maturity stage = A stage in which sales growth slows, the market becomes saturated, and profits
are high but begin to decline as market leaders cut prices in order to gain share
ecline stage = A stage in which total demand decreases, leading to a further dropout of
competitors until only a few remain
Alternatives of introductory pricing = slow, and rapid penetration, eventually skimming
,oncept testing = A process involving the accumulation and evaluation of consumers0 reactions to
a new product idea before the product is actually developed
Market share analysis = An evaluation of the firm0s performance in comparison to that of its
competitors
/elative market share = A firm0s market share divided by the market share of its largest
competitor
Marketing audit = A comprehensive, systematic, independent, and periodic examination of a
company-s environment, ob#ectives, strategies, and activities to determine problem areas and
opportunites and to recommend a plan of action to improve the company-s marketing performance
1arrier to entry = ,onditions that make difficult for a firm to enter the market in a particular
industry, such as high advertising budgets
Price
6rice = 1oth the value that buyers place on what is exchanged and the marketers9 estimates of that
value
Target costing = 6ricing that starts with an ideal selling price, then targets costs that will ensure
that the price is met
5ixed costs = ,osts that do not vary with production or sales level
3ariable costs = ,osts that vary directly with the level of production
Total costs = The sum of the fixed and variable costs for any given level of production
emand curve = A curve that shows the number of units the market will buy in a given time
period at different prices that might be charged
6rice elasticity = A measure of the sensitivity of demand to changes in price
1reak'even pricing (target profit pricing) = +etting price to break even on the costs of making and
marketing a product! or setting price to make a target profit
3alue'based pricing = +etting price based on buyers- perceptions of value rather than on the
seller-s cost
3alue pricing = =ffering #ust the right combination of (uality and good service at a fair price
,ustomary pricing = 6ricing that matches buyer9s expectations about the costs of certain items!
prices reflect custom and tradition, and changes are infre(uent
5air trade = The practice through which producers attempt to control the retail price of their
products
+kimming = A strategy that is characterised by a high initial prices and promotional expenditures!
the intent is to Cskim the creamD from the market before anyone else can serve it
isposable income = The amount of personal income left after taxes
J
ownward'sloping demand, the law of = The law predicting that when the price of a good is
rased, less of it is demanded
4pward'sloping supply, the law of = The law stating that when the price of a good is rased (at the
same time that all other things are held constant), more of it will be produced
.lastic demand = A given percentage change in price results in a greater percentage change in the
(uantity .lasticity of demand = The degree to which the (uantity produced and sold will increase
in response to changes in price demanded
4niform delivered pricing = 5reight charges are added to the base price of the product such as
that all buyers pay the same price regardless of their location
6rice fixing = %hen competitors, through formal contracts or collusive actions, #ointly agree upon
prices
%arranty = The producer9s assurance that the product will meet buyers9 expectations or that
buyers will be compensated in some way if the product fails to meet expectations
6enetration = Marketers set low initial prices in an attempt to capture mass markets
6rice lining = A manufacturer or retailer sets a limited number of prices for selected lines of
products
6roduct line pricing = +etting 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
iscounts = The reduction from the list price to be paid by consumers which represents the
revenue source for intermediaries
,ash discounts = 6rice reductions given to buyers who pay for purchases within a stated period!
they are not cash payments
?uantity discount = A price reduction to buyers who buy large volumes
5unctional discount = A price reduction offered by the seller to trade channel members who
perform certain functions such as selling, storing, and record keeping
+easonal discounts = iscounts granted to early or offseason buyers of products that have peak
selling periods
Allowance = 6romotional money paid by manufacturers to retailers in return for an agreement to
feature the manufacturer-s products in some way
+egmented pricing = +elling a product or service at two or more prices, where the difference in
prices is not based on differences in costs
6sychological 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
/eference prices = 6rices that buyers carry in their minds and refer to when they look at a given
product
6romotional pricing = 6ricing that paves the way for a good old'fashioned sale! prices of selected
items are lowered in an effort to attract customers
5)=)1) 6ricing = 5)=)1) stands for Cfree on boardD and is followed by the designation CfactoryD or
CdestinationD to indicate at what point the buyer assumes treight costs and title to the product
4niform'delivered pricing = A geographical pricing strategy in which the company charges the
same price plus freight to all customers, regardless of their location
Kone pricing = A geographical pricing strategy in which the company sets up two or more "ones)
All customers within a "one pay the same total price! the more distant the "one, the higher the
price
6romotional discounts = iscounts for encouraging promotion and sales efforts by intermediaries
1onus packs = +pecial packaging that provides consumers with extra (uantity of merchandise at
no extra charge over the regular price
6rice discrimination = +elling the same product to different customers for different price
2A
,ost'plus pricing = A strategy that assumes a basic cost per unit and then adds a markup to
provide a margin that covers overhead costs and returns a profit
,ostEvolumeEprofit analysis = An approach which calculates the effect on profits of different
prices, given different levels of demand in response to those prices
6rice'off promotions = A strategy that involves temporary price reductions to retailers with the
intent that savings will be passed along to consumers
$on'price competition = %hen firm9s strategy is advanced by components of the marketing mix
other than priceL the product itself, the distribution systMm, or the promotional campaign
6ush money = +pecial bonuses paid by a marketer to an intermediary9s sales force
?uantity discounts = 6rice concessions that are based either on number of units purchased or on
the total dollar amount! they are used to encourage larger orders from a single buyer
Place
istribution channel = A set of interdependent organi"ations involved in the process of making a
product or service available for use or consumption by the consumer or business user
,hannel level = A layer of intermediaries that performs some work in bringing the product and its
ownership closer to the final buyer
irect marketing channel = A marketing channel that has no intermediary levels
*ndirect marketing channel = ,hannel containing one or more intermediary levels
,hannel conflict = isagreement among marketing channel members on goals and roles7who
should do what and for what rewards
,onventional distribution channel = A channel consisting of one or more independent producers,
wholesalers, and retailers, each a separate business seeking to maximi"e its own profits even at
the expense of profits for the system as a whole
&ori"ontal marketing system = A channel arrangement in which two or more companies at one
level #oin together to follow a new marketing opportunity
&ybrid marketing channel = Multichannel distribution system in which a single firm sets up two
or more marketing channels to reach one or more customer segments
*ntensive distribution = +tocking the product in as many outlets as possible
.xclusive distribution = <iving a limited number of dealers the exclusive right to distribute the
company-s products in their territories
+elective distribution = The use of more than one, but fewer than all, of the intermediaries who
are willing to carry the company-s products
*ntegrated logistics management = The logistics concept that emphasi"es teamwork, both inside
the company and among all the marketing channel organi"ations, to maximi"e the performance of
the entire distribution system
Third'party logistics provider = An independent logistics provider that performs any or all of the
functions re(uired to get their clients- product to market
Transit time = The time from receipt of the order to delivery of the goods
,ombined transportation modes = A transportation method which utilises more than one type of
carrier
3ertical conflict = The conflict which occurs between members above and below each other in the
distribution channel'between the manufacturer and intermediaries, or between intermediaries such
as wholesalers and retailers
&ori"ontal conflict = The conflict which arises between wholesalers and retailers of the same
level and type in a channel
*ntertype conflict = The conflict which occurs when different kinds of intermediaries are part of
the distribution channel
,onflict resolution = Accomodation of various channel members to decisions designed to
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promote the overall goals of the distribution channel
&ori"ontal integration = The process which brings together a number of channel members at the
same level and puts them under single ownership
6lace utitility = The usefulness gained when something of value is received where it is wanted
/etailing = All activities involved in selling goods or services directly to final consumers for their
personal, nonbusiness use
+pecialty store = A retail store that carries a narrow product line with a deep assortment within
that line
+upplies = *tems that are not incorporated into the buying organisation9s products!goods needed
to keep everyday operations going
+upply = A relation showing the various amounts of a commodity that a seller would be willing
and able to make available for sale at possible alternative prices during a given period of time, all
other things remaining the same
istribution channels = ,hannels that are made up of manufacturers or service producers and
wholesalers and retailers through which products are marketed to consumers and organisational
buyers
,hannel length = The number of levels in a distribution channel
,hannel strategy = ecisions which center on choosing and attracting the most effective types
and the most efficient number of distributors in the best georgaphical locations
,hannel width = The number of intermediaries found at the same level in the channel
irect channels = The channels in which producers sell directly to final buyers! no intermediaries
are involved
Multiple channles = ,annels which include different kinds of intermediaries at the same level
3oluntary chains = %holesaler'sponsored organisations of independent retailers who practice
bulk buying and similar merchandising techni(ues
6rocurment costs = *nventory expenses that arise from the ordering process itself
+elective demand = A preference among buyers for specific brands
+elective distribution = A systMm in which only a certain number of intermediaries, or those of o
certain type, are chosen to distribute the product
6osition = A product9s category and its relative standing within that category
6roduct line exclusivity = An agreement that the agency will not work on a competing product for
the duration of the relationship
,onvenience stores = +tores featuring convenienceL long store hours (often 8> hours each day),
ease of access, and (uick shopping for items such as bread, milk, eggs, cigarettes, and newspapers
=ff'price retailers = +tores that differ from other discounters in that they feature, almost
exclusively, name'brand and designer label apparel at prices significantly below those in
department and specialty stores
epartment stores = +tores characterised by wide and deep product mixes! individual
departments within store! mid' to upper'level prices! and extensive services
iscount houses = +tores that are much like department stores except that their primary appeal is
low price
iscount store = A retail institution that sells standard merchandise at lower prices by accepting
lower margins and selling at higher volume
+pecialty stores = +tores characterised by narrow product mixes with deep product lines, a high
level of personal services, and relatively high prices
,ategory killer = <iant specialty store that carries a very deep assortment of a particular line and
is staffed by knowledgeable employees
,onvenience store = A small store, located near a residential area, that is open long hours seven
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days a week and carries a limited line of high'turnover convenience goods
,ombination store = +tore that carry over'the'counter and prescription drugs in addition to food
items
5ranchise = A contractual association between a manufacturer, wholesaler, or service organi"ation
(a franchiser) and independent businesspeople (franchisees) who buy the right to own and operate
one or more units in the franchise system
5ranchisor = +uppliers of products and management and marketing expertise that grant
franchisees (dealers) the right to run a chain'like retailing establishments in return for fee and
royalty arrangements
5ranchise organi"ation = A contractual vertical marketing system in which a channel member,
called a franchiser, links several stages in the production'distribution process
*n'home retailing = +elling that usually takes the form of a small party given by a hostess or host
to allow friends and neighbours to examine and order a product line
%arehouse showrooms = +tores that are located on low'rent, suburban sites, and focus on
medium'priced furniture and appliances
%holesaling = All activities involved in selling goods and services to those buying for resale or
business use
%holesaler = =rganisations which buy products from producers or other wholesalers and resell
them to retailers or organisational buyers, or to other wholesalers
:imited'service wholesalers = %holesalers who perform only selected functions
5ull'service wholesalers = =rganisations which provide almost all the functions of intermediaries
and generally are divided into three subgroupsL general merchandise wholesalers, single'line
wholesalers, and specialty wholesalers
<eneral merchandise wholesalers = %holesaler who handle a broad range of products, from food
and drug items to plumbing supplies and automotive accessories
Merchant wholesaler = *ndependently owned business that takes title to the merchandise it
handles
$on'store retailing = /etailing that may be conducted impersonally (through catalogues, direct
mail, and vending machines) or personally (door'to'door selling, in'home retailing, and telephone
sales)
oor'to'door selling = A form of direct marketing which involves personal selling to individuals
in their homes
irect marketing = (2) A form of nonstore retailing in which a promotional message is delivered
directly to potential customers, who respond directly to the company rather than through a
traditional point of sale such as store) (8) $onstore sales to consumers and organisational buyers
via mail and telephone) (;) irect communications with carefully targeted individual consumers
to obtain an immediate response, and cultivate lasting customer relationships
,ost per customer purchasing = A cost effectiveness measure used in direct marketing based on
the cost per sale generated
6rofessional sales representatives = Territory managers whose primary task is persuasive and
creative face'to'face selling and account management
Agents (brokers) = *ntermediaries who help bring manufacturers and retailers together and
arrange sales for a commission payment! they do not takM legal title to products
1roker = A wholesaler who does not take title to goods and whose function is to bring buyers and
sellers together and assist in negotiation
+elling agents = Agents who distribute the entire output of a manufacturer
,ommission merchants = Merchants who receive goods on consignment from producers, takM the
merchandise to a central market, sell at the best price possible, deduct their commission, and
remit the balance to the producer
2;
5reight forwarders = Agencies which provide a combining service by which partial shipments
(usually under @AA pounds) are assembled from several customers
*ndustrial sales people = 6eople who sell goods and services used for producing other goods or
for rendering other services
,ommon carriers = Those transportation providers which offer their services for the use of others,
and are under certain governmental regulations concerning the provision of such services
3ertical marketing systems = A system in which the functions of members at different levels in
the distribution channel have been integrated under the ownership or influence of one member in
order to set shared goals and to achieve effective performance
Promotion
Marketing communications mix (promotion mix) = The specific mix of advertising, personal
selling, sales promotion, public relations, and direct'marketing tools a company uses to pursue its
advertising and marketing ob#ectives
Advertising = Any paid form of non'personal communication, usually delivered through mass
media by an identified sponsor
6ersonal selling = 6ersonal presentation by the firm-s sales force for the purpose of making sales
and building customer relationships
6ublicity = A form of promotion composed of newsworthy messages sent through the media on a
non'paid basis
irect marketing = irect communications with carefully targeted individual consumers to obtain
an immediate response, and cultivate lasting customer relationships
+ales promotion = +hort'term incentives to encourage the purchase or sale of a product or service
*ntegrated marketing communications (*M,) = The concept under which a company carefully
integrates and coordinates its many communications channels to deliver a clear, consistent, and
compelling message about the organi"ation and its products
1uyer'readiness stages = The stages consumers normally pass through on their way to purchase,
including awareness, knowledge, liking, preference, conviction, and purchase
,ommunication = The process of sharing meaning through the use of symbols = The passing of
information, exchange of ideas, or processes of establishing shared meaning between a sender and
a receiver
,ommunications flow = The movement of information through the channels of distribution!
includes the flow of promotion from manufacturers through intermediaries to consumers, and the
flow of market information from consumers back through intermediaries to manufacturers
@'%s model of communication = A model of the communications process that contains five basic
elementsD whoN (source), says whatN (message), in what wayN (channel), to whomN (receiver),
and with what effectN (feedback))
,ognitive processing = The process by which an individual transforms external information into
meaning or patterns of thought and how these meanings are used to form #udgements or choices
about behavior
,ognitive dissonance = A state of psychological tension or post'purchase doubt that a consumer
may experience after making a purchase decision) This tension often leads the consumer to try to
reduce it by seeking supportive information
,ognitive responses = Thoughts that occur to a message recipient while reading, viewing, andEor
hearing a communication
,ompliance = A type of influence process where a receiver accepts the position advocated by a
source to obtain favorable outcomes or avoid punishment
,ommunication ob#ectives = <oals that an organisation seeks to achieve through its promotional
program in terms of communication effect such as creating awareness, knowledge, image,
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attitudes, preferences, or purchase intentions
A*A model = A model that depicts the successive stages a buyer passes through in the personal
selling process includingL attention, interest, desire, and action
,lassical conditioning = A learning process whereby a conditioned stimulus that elicits a response
is paired with a neutral stimulus that does not elicit any particular response) Through repeated
exposure, the neutral stimulus becomes to elicit the same response as the conditioned stimulus
,onditioned response = *n classical conditioning, a response that occurs as a result of exposure to
a conditioned stimulus
5ollow up = The final selling step which involves actions after the sale to ensure that the order is
received on time and as specified
Two'step communication = The notion that communications flow from the media to opinion
leaders, and then from opinion leaders to other members of society
+ource = The communicator sending a message to other party or parties
/eceiver = The person who decodes the message transmited by the source
.ncoding = The process by which a source chooses signs and symbols to construct a message
ecoding = The process of translating or interpreting the symbols of a message to derive its
meaning
,overage = A measure of potential audience that might receive an advertising message through a
media vehicle
5eedback = The response or reaction that a receiver may give the source as a result of messages
+ource credibility = The extent to which the source of a communication is believable to the target
audience
,hannel (medium) = The vehicle for transmitting a message = The method or medium by which
communication travels from a source or sender to a receiver
/eference group = <roups to which people turn in order to measure the acceptability of what they
do
6ull strategy = A strategy through which marketers aim mass promotional efforts at consumers
and customers with the intent to create demand which pulls the product through the channels = A
promotion strategy that calls for spending a lot on advertising and consumer promotion to build
up consumer demand, which pulls the product through the channels
6ush strategy = A strategy through which personal selling and sales promotion are directed at
channel members, who then promote product to consumers = A promotion strategy that calls for
using the sales force and trade promotion to push the product through channels
6ulsing (or flighting) = A strategy of unevenly timed exposure af advertisments
<atekeepers = Those who can control information flow to members of the buying center'and to
prospective suppliers
6romotion = All aspects of the marketing mix designed to communicate with and influence target
markets
6romotion strategy = A communication plan designed to bring about desired buyer behaviours by
employing a mix of the four elements of promotion
6romotion mix = The blend of promotional elements selected and the extent to which each is used
to influence product market, push'pull, readeness and a life cycle
+alesperson = An individual acting for a company by performing one or more of the following
activitiesL prospecting, communicating, servicing, and information gathering
Territorial sales force structure = A sales force organi"ation that assigns each salesperson to an
exclusive geographic territory in which that salesperson sells the company-s full line
6roduct sales force structure = A sales force organi"ation under which salespeople speciali"e in
selling only a portion of the company-s products or lines
,ustomer sales force structure = A sales force organi"ation under which salespeople speciali"e in
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selling only to certain customers or industries
%orkload approach = An approach to setting sales force si"e in which the company groups
accounts into different si"e classes and then determines how many salespeople are needed to call
on each class of accounts the desired number of times
=utside sales force = =utside salespeople who travel to call on customers) Also known as field
sales force
*nside sales force = *nside salespeople who conduct business from their offices via telephone or
visits from prospective buyers
Telemarketing = 4sing the telephone to sell directly to customers
Team selling = 4sing teams of people from sales, marketing, engineering, finance, technical
support, and even upper management to service large, complex accounts
+ales (uotas = +tandards set for salespeople, stating the amount they should sell and how sales
should be divided among the company-s products
Approach = The step in the selling process in which the salesperson meets and greets the buyer to
get the relationship off to a good start
6resentation = The step in the selling process in which the salesperson tells the product OstoryO to
the buyer, showing how the product will make or save money for the buyer
,opyright = The exclusive legal right to reproduce, publish, and sell a literary, musical, dramatic,
or artistic work
:ables = A lable encompasses any printed information on the packaging that describes the
product
*nformative lables = :ables that tell the consumer about the product9s ingredients, use, dating, and
so on
1rand = A name, term, symbol, or design or a combination of them that is intended to identify the
goods or services of one seller or group of sellers and to differentiate them from products of
competitors
1rand e(uity = The value of a brand, based on the extent to which it has high brand loyalty, name
awareness, perceived (uality, strong brand associations, and other assets such as patents,
trademarks, and channel relationships
1rand extension = 4sing a successful brand name to launch a new or modified product in a new
category
,o'branding = The practice of using the established brand names of two different companies on
the same product
5orms of fighting brands = national, own, private, product, family, blanket
1rand loyalty = 6references by a consumer for a particular brand that results in continual
purchase of it
5amily brands = The assignment of the same or similar names to multiple products made by the
same company in which the name of the company is often employed
1rand manager = The individual in an organisation responsible for planning, implementing, and
controlling the marketing program for a particular brand) 1rand managers are sometimes referred
to as product managers
1rand competitors = =ther companies which also manufacture the same product
1rand image = The overall concept of the product as perceived by consumers
1rand insistence = The phenomenon that occurs when consumers demand a certain product and
will go out of their way to get it
1rand mark = The part of a brand which can be recognised but is not utterable
1rand name = The part of a brand which can be vocalised'the utterable
1rand non'recognition = The fact that people do not know the existence of the brand
1rand recognition = The simple awareness that a product exists, apart from competing products
2F
1rand preference = The attitude taken by consumers who have tried a brand and have at least
moderately positive attitudes toward it
1rand re#ection = The re#ection of a brand by a consumer who has negative experience with it
Trade character = A brand mark that represents a human being or an animal associated with a
product
Trade name = The name under which a company chooses to conduct its business, which may or
may not also be a brand name
Trade promotions = 6romotional methods that spur action on the part of channel members, such
as additional orders from retailers or a special push by a wholesaler to promote one
manufacturer9s products
Trade shows = +pecial gathering of buyers and sellers of a line of products, usually once per year,
where new products can be shown and orders taken for a selling season
Trademark = A brand or part of a brand that is given legal protection because it is capable of
exclusive appropriation
,oupon = ,ertificate that gives buyers a saving when they purchase a specified product
*n'pack coupons = coupons that are affixed to the product and allow savings on a future purchase
,lassified advertising = Advertising that runs in newspapers and maga"ines that generally
contains text only and is arranged under subheadings according to the product, service, or
offering) .mployment, real estate, and automotive ads are the ma#or forms of classified
advertising
5ormal sales training = A process used to give new salespeople product knowledge, skill in
selling, information about markets and competition, and guidance on company policies and
practices
,lose = =btaining the commitment of the prospect in a personal selling transaction
,onsumer'franchise'building promotions = +ales promotion activities that communicate
distinctive brand attributes and contribute to the development and reinforcement of brand identity
irect'mail marketing = irect marketing through single mailings that include letters, ads,
samples, foldouts, and other Osalespeople with wingsO sent to prospects on mailing lists
irect'response television marketing = irect marketing via television, including direct-response
television advertising or infomercials and home shopping channels
=nline marketing = Marketing conducted through interactive online computer systems, which
link consumers with sellers electronically
,ommercial online services = +ervices that offer online information and marketing services to
subscribers who pay a monthly fee
.lectronic commerce (e'commerce) = The general term for a buying and selling process that is
supported by electronic means
,orporate %eb site = %eb site that seeks to build customer goodwill and to supplement other
sales channels rather than to sell the company-s products directly
Marketing %eb site = %eb site designed to engage consumers in an interaction that will move
them closer to a purchase or other marketing outcome
=nline ads = Ads that appear while subscribers are surfing online services or %eb sites, including
banners, pop'up windows, Otickers,O and Oroadblocks)O
*ntegrated direct marketing = irect'marketing campaigns that use multiple vehicles and multiple
stages to improve response rates and profits
Product
6roduct = Anything and organisation or individual offers for exchange that may satisfy
customers9 or consumers9 needs or the marketer9s own needs
,onsumer product = 6roduct bought by final consumer for personal consumption
2H
,onvenience products = 6roducts that are widely available, usually inexpensive, and fre(uently
purchased = ,onsumer product that the customer usually buys fre(uently, immediately, and with
a minimum of comparison and buying effort
+hoping products = <oods and services that consumers shop for, comparing (uality, suitability,
style, price, and other factors
+pecialty products = 6roducts perceived by consumers as having uni(ue (ualities, to the point
that no substitutes are acceptable
4nsought products = Those products that consumers do not consciously want or actively seek out
*ndustrial products = 6roducts purchased by an organisation for use either in other products or in
its own operations
6roduct levels = potential, augmented, expected generic, core benefit
,ore product = The basic good or service purchased, aside from its packaging or accompanying
services
5unctional attributes = Things that a product or service does for consumers
Total (uality management (T?M) = 6rograms designed to constantly improve the (uality of
products, services, and marketing processes
.mergency products = Those products that are usually purchased as the result of urgent needs
+taple = <oods which buyers give litle thought when purchasing, other than noting the need for
the item and picking it up
<eneric products = 6roducts which are not branded, are simply packed, and usually are priced
well below both manufacturer9s and private brands
Augmented product = A good, service, or idea enhanced by its accompanying benefits! synthesis
of what the seller intends and the buyer perceives
6roduct (uality = 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
*nnovation = A product which is perceived in the marketplace as being innovative
*mpulse products = Those products which the consumer buys without having established intention
to buy, often feature on racks arranged prominently and enticingly around checkout counters in
supermarkets, drugstores, and variety stores
&omogeneous shopping products = 6roducts among which consumers perceive little difference in
the core benefits
&eterogeneous shopping products = 6roducts that differ from each other on important
dimensions, such as style, design, and personal taste, for which such dimensions tend to
outweight price in the purchasing decision
urable goods = The tangible items that can be expected to survive multiple use
+ervices = Activities, benefits, or satisfactions that are offered to satisfy consumers9 and
customers9 needs
*nternal marketing = Marketing by a service firm to train and effectively motivate its customer'
contact employees and all the supporting service people to work as a team to provide customer
satisfaction
*nteractive marketing = Marketing by a service firm that recogni"es that perceived service (uality
depends heavily on the (uality of buyerIseller interaction
+ervicing = The maintenance of the product in working order so that its benefits are not
diminished
*ndustrial services = +ervices purchased for use in producing the buyer9s products or, more
fre(uently, for use in general operation
6roduct orientation = A philosophy of business which focuses primarily on a firm9s own resources
and products
6roduct line = A grouping of products managed and marketed as a unit because they have similar
2G
functions, are distributed in similar ways, or fall within the certain price range) :ength, breath,
depth and kontinuum is distinguished)
6roduct line breath = The number of product lines in the product mix of an organisation
6roduct line depth = The number of individual items within each product line
:ine extension = 4sing a successful brand name to introduce additional items in a given product
category under the same brand name, such as new flavors, forms, colors, added ingredients, or
package si"es
6roduct class = All the brands of a good and service offered by all competitors to meet a basic
consumer need
1alanced product portfolio = A proper mix of new, growing, and mature products whose sales
provide the cash flow to ensure long'term prosperity
3ariety discrepancy = The difference between the number of different products produced by
marketers and the variety desired by consumers
6roduct competitors = ,ompanies which are filling the same market needs with a slightly
different offering
$ew product development = The development of original products, product improvements,
product modifications, and new brands through the firm-s own /P efforts
*dea generation = The systematic search for new'product ideas
*dea screening = +creening new'product ideas in order to spot good ideas and drop poor ones as
soon as possible
$ew product concept = A detailed version of the new'product idea stated in meaningful consumer
terms
,oncept testing = Testing new'product concepts with a group of target consumers to find out if
the concepts have strong consumer appeal
Marketing strategy development = esigning an initial marketing strategy for a new product
based on the product concept
1usiness analysis = A review of the sales, costs, and profit pro#ections for a new product to find
out whether these factors satisfy the company-s ob#ectives
6roduct development = A strategy for company growth by offering modified or new prodcuts to
current market segments) eveloping the product concept into a physical product in order to
ensure that the product idea can be turned into a workable product
Test marketing = The stage of new'product development in which the product and marketing
program are tested in more realistic market settings = The process in which the product is actually
introduced into selected geographical markets where developers can observe how consumers and
dealers react to the handling, use, and promotion of the product
,ommerciali"ation = *ntroducing a new product into the market
6roduct development process = The process comprising of series of steps involved in getting a
product on the marketL idea generation, screening, feasibility studies, prototype development, test
marketing, and commercionalisation
+e(uential product development = A new'product development approach in which one company
department works to complete its stage of the process before passing the new product along to the
next department and stage
6roduct adaptation = A global marketing strategy whereby the product is adapted to foreign
market needs, but the promotional program used in the domestic market is used in foreign
markets
6roduct invention = A global marketing strategy whereby a new product is created specifically for
the needs of the foreign market, and is then promoted to this market
Adoption process = A process which is made up of the stages that individuals, households, or
organisations go through in accepting an innovation
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6roduct elimination = %ithdrawal of a product from the normal market place
6roduct line extension = evelopment of greater depth by adding new product varieties
6roduct manager (brand manager) = The person who is responsible for initiating, developing, and
implementing product or product line plans
6roduct'market matrix = A visual means of defining a business by its markets and by the products
directed towards those markets
6roduct mix = A company9s total offering of individual products
,reative selling = A type of sales position where the primary emphasis is on generating new
business
International Marketing
,ustomer lifetime value = The amount by which revenues from a given customer over time will
exceed the company-s costs of attracting, selling, and servicing that customer
,ustomer delivered value = The difference between total customer value and total customer cost
of a marketing offerIOprofitO to the customer
Total customer cost = The total of all the monetary, time, energy, and psychic costs associated
with a marketing offer
3alue chain = A ma#or tool for identifying ways to create more customer value
3alue'delivery network = The network made up of the company, suppliers, distributors, and
ultimately customers who OpartnerO with each other to improve the performance of the entire
system
?uality = The totality of features and characteristics of a product or service that bear on its ability
to satisfy stated or implied needs
,ompetitor analysis = The process of identifying key competitors! assessing their ob#ectives,
strategies, strengths and weaknesses, and reaction patterns! and selecting which competitors to
attack or avoid
,ompetitive marketing strategies = +trategies that strongly position the company against
competitors and that give the company the strongest possible strategic advantage
1enchmarking = 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 (uality and performance
Market leader = The firm in an industry with the largest market share! it usually leads other firms
in price changes, new product introductions, distribution coverage, and promotion spending
Market challenger = A runner'up firm in an industry that is fighting hard to increase its market
share
Market follower = A runner'up firm in an industry that wants to hold its share without rocking the
boat
Market nicher = A firm in an industry that serves small segments that other firms overlook or
ignore
Market'centered company = A company that pays balanced attention to both customers and
competitors in designing its marketing strategies
Marketing company = A form of subsidiary organisation which markets, sell, and service the
firm0s products in the host country
erived demand = The demand based on expectations of upcoming demand for other industrial or
consumer products
iffusion process = A process consisting of communication about, and acceptance of, the
innovation throughout the social system over a period of time
*ncome distribution = &ow thoroughly the income in a nation is spread through the population
irect exporting = /efers to the marketing firm9s active efforts to sell its products, made
domestically, in foreign markets
8A
irect investments = An arrangement under which an international marketer invests the funds
necessary to build or purchase its own facilities in the host country
iseconomies of scale = The effort to increase production results in inefficiencies, such as having
to pay higher labour costs for overtime or having to pay more for scarce resources
.conomies of scale = More efficient operations and multiple uses of resources result in
decreasing costs! average variable costs and thus average total costs also decline
.nvironmental monitoring = A systematic group of activities designed to anticipate changes in
external variables that will affect the organisation9s ability to meet its goals
<eographical organisation = The organisation method based on management by region, state,
area, nation, or global sector
<lobal marketing = /efers to any marketing that involves two or more nations
<overnment markets = The purchasing or leasing of goods and services in order to carry out
government functions and to further the public purpose
.xporting = .ntering a foreign market by sending products and selling them through international
marketing intermediaries (indirect exporting) or through the company-s own department, branch,
or sales representatives or agents (direct exporting))
Boint venturing = .ntering foreign markets by #oining with foreign companies to produce or
market a product or service
:icensing = 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
,ontract manufacturing = A #oint venture in which a company contracts with manufacturers in a
foreign market to produce its product or provide its service
Management contracting = A #oint venture in which the domestic firm supplies the management
know'how to a foreign company that supplies the capital! the domestic firm exports management
services rather than products
Boint ownership = A #oint venture in which a company #oins investors in a foreign market to create
a local business in which the company shares #oint ownership and control
irect investment = .ntering a foreign market by developing foreign'based assembly or
manufacturing facilities
+tandardi"ed marketing mix = An international marketing strategy for using basically the same
product, advertising, distribution channels, and other elements of the marketing mix in all the
company-s international markets
Adapted marketing mix = An international marketing strategy for ad#usting the marketing mix
elements to each international target market, bearing more costs but hoping for a larger market
share and return
+traight product extension = Marketing a product in a foreign market without any change
6roduct adaptation = Adapting a product to meet local conditions or wants in foreign markets
6roduct invention = ,reating new products or services for foreign markets
,ommunication adaptation = A global communication strategy of fully adapting advertising
messages to local markets
%hole'channel view = esigning international channels that take into account all the necessary
links in distributing the seller-s products to final buyers, including the seller-s head(uarters
organi"ation, channels among nations, and channels within nations
.xport department = An organisational for used by firms which are primarily exporting their
products to foreign markets, rather than maintaining marketing organisations abroad
.xport trading company = An organisation which provides its exporting expertise and facilities to
many small and medium'si"e firms that could not otherwise engage in multinational marketing
*ndirect exporting = A form of global marketing that takes the least effort on the part of the seller!
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relies on the efforts of export agents who sell the product abroad, often without the specific
knowledge of the manufacturer
Tariff = A tax levied by a government against certain imported products) Tariffs are designed to
raise revenue or to protect domestic firms
?uota = A limit on the amount of goods that an importing country will accept in certain product
categories
.mbargo = A ban on the import of a certain product
.xchange controls = <overnment limits on the amount of foreign exchange with other countries
and on the exchange rate against other currencies
5oreign subsidiaries = An organisational form in which the global marketer establishes its own
companies in foreign markets in order to market, and sometimes manufacture, in those markets
*nternational division = A form of organisation under which a special division of the company is
responsible for the marketing of all the firm9s products throughout the world
Boint ownership = An arrangement whereby an international marketer and an organisation in the
host country create third organisation which they own #ointly
Boint venture = An agreement between a marketing organisation and another organisation, in the
host country, through which the tasks of producing and marketing a product are shared
:icensing agreement = An agreement under which an organisation in the host country is given the
right to make the marketer9s patented (or patentable) product for sale in that market
,onsumerism = An organi"ed movement of citi"ens and government agencies to improve the
rights and power of buyers in relation to sellers
.nvironmentalism = An organi"ed movement of concerned citi"ens, businesses, and government
agencies to protect and improve people-s living environment
.nvironmental sustainability = A management approach that involves developing strategies that
both sustain the environment and produce profits for the company
.nlightened marketing = A marketing philosophy holding that a company-s marketing should
support the best long'run performance of the marketing system
,onsumer'oriented marketing = A principle of enlightened marketing that holds that the company
should view and organi"e its marketing activities from the consumer-s point of view
*nnovative marketing = A principle of enlightened marketing that re(uires that a company seek
real product and marketing improvements
3alue marketing = A principle of enlightened marketing that holds that a company should put
most of its resources into value'building marketing investments
+ense'of'mission marketing = A principle of enlightened marketing that holds that a company
should define its mission in broad social terms rather than narrow product terms
eficient products = 6roducts that have neither immediate appeal nor long'run benefits
6leasing products = 6roducts that give high immediate satisfaction but may hurt consumers in the
long run
+alutary products = 6roducts that have low appeal but may benefit consumers in the long run
esirable products = 6roducts that give both high immediate satisfaction and high long'run
benefits
<ross sales = The total amount that a company charges during a given period of time for
merchandise
,ost of goods sold = The net cost to the company of goods sold
<ross margin = The difference between net sales and cost of goods sold
=perating ratios = /atios of selected operating statement items to net sales that allow marketers to
compare the firm-s performance in one year with that in previous years (or with industry standards
and competitors in the same year))
/eturn on investment (/=*) = A common measure of managerial effectiveness''the ratio of net
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profit to investment
Markup = The percentage of the cost or price of a product added to cost in order to arrive at a
selling price
Markdown = A percentage reduction from the original selling price
Interpersonal Communication:
,ommunication = The exchange of information using a shared set of symbols
$oise = Anything that distorts a message by interfering with the communication process
.ncoding = Translating information into a message in the form of symbols with a shared meaning
,hannel = The observable carrier of the message
=ral communication = ,ommunication in which the sender9s voice is used as the channel
%ritten communication = ,ommunication in which the channel involves written language
/eceiving = /egistration of a message by one or more of receiver9s senses
ecoding = *nterpreting what a message means
$on'verbal communication = ,ommunication through a channel that does not use words
1ody language = <estures, facial experessions, and other movements and positions of the body
6ersonal space = The area around a person that the person feels a right to control (intimate,
personal, social, public one)
Bohari window = A grid that describes tendencies for facilitating or hindering interpersonal
communication
5ormal communication = ,ommunication that flows along the organisation9s lines of authority or
task responsibility
4pward communication = Message directed toward (interpret to) a higher level in the hierarchy
(problems and exceptions, suggestions for improvements, performance reports, grievance and
disputes, financial and accounting)
ownward communication = Message directed (influence) to one or more receivers at a lower
level in the hierarchy (*mplementation of goals, strategies, and ob#ectives, #ob instructions,
procedures and practices, performance feedback, indoctrination
:ateral communication = Message directed to (co'ordinate) someone at the same level in the
hierarchy (intradepartmental problems solving, interdepartmental co'ordination, staff advice to
line departments)
,ommunication network = The patterns of directions in which information flows in an
organisation
,hain network = ,ommunication network in which information travels up and down through the
hierarchy
Q network = ,ommunication network in which information flows upwards and downwards
through the hierarchy, widening to encompass the number of employees reporting to a supervisor
%heel network = ,ommunication network in which information flows to and from a single
person
,ircle network = ,ommunication network in which employees communicate only with ad#oining
members of the organisation
All'channel network = ,ommunication network in which information flows upward, downward,
and laterally among all members of the group
*nformal communication = ,ommunication outside the organisation9s formally authorised
channels
<rapevine = $etwork for informal communication
=ld'boy network = An exclusive group that wields power through shared information
8;
Bargon = Terms that have a precise meaning among specialists but are unfamiliar to non'
specialists
5iltering = Tendency to put a message in the most favourable terms possible, downplaying bad
news and dwelling on successes
+upportive communication = A style of communicating that delivers a message accurately while
supporting and enhancing the relationship between the parties to the communication
Active listening = Accepting responsibility for the accurate understanding of a message by
helping the sender clarify its meaning
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