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Marketing

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The process of planning and executing the conception, pricing, promotion, and distribution of goods and services to facilitate exchanges that satisfy individual and organizational needs.

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Market Segmentation

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The process of dividing the total market into several groups whose members have similar characteristics.

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Target Marketing

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Selecting which market segments and organization can profitably serve.

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Geographic Segmentation

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Dividing a market into geographic regions (e.g., Northeast, Midwest, South, West, North, East; city or county size; and urban, suburban, or rural density).

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Demographic Segmentation

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Dividing a market into demographic categories, such as age, income, or education level (e.g., gender, age, education, race, nationality, life stage, income, household size, and occupation).

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Psychographic Segmentation

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Dividing a market using the group's values, attitudes, and interests (e.g., personalities, values, lifestyle).

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Benefit Segmentation

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Dividing a market by determining which benefits of the product to promote (e.g., comfort, convenience, durability, economy, health, luxury, safety, and status).

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Volume Segmentation

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Dividing a market by usage (volume of use). (e.g., usage and loyalty status.)

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Niche Marketing

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The process of finding small but profitable market segments and creating products for them.

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Relationship Marketing

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A marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements.

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Marketing Management

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The process of overseeing all the aspects of marketing a particular product or service for the purpose of attracting and retaining customers.

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Marketing Mix (The Four Ps)

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Product, Price, Place, and Promotion. The four ingredients of a marketing program.

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Marketing Research

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The analysis of markets to determine opportunities and challenges and to find the information needed to make good marketing decisions.

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Primary Research

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Research collected firsthand by a marketer.

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Focus Group

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A small group of people who meet under the direction of a discussion leader who tries to understand their opinions about a product.

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Secondary Research

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Research collected by a marketer that has already been compiled by others and published in print or online.

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Total Product Offer

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Everything consumers evaluate when deciding whether to purchase a good or service.

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Components of A Total Product Offer

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Reputation, price, brand name, convenience, package, store surroundings, service, internet access, buyer's past experience, guarantee, speed of delivery, and image created by advertising.

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Product Differentiation

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The creation of real or perceived product differences.

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Convenience Goods and Services

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Sometimes called consumer products, are products the consumer wants to purchase frequently and easily, such as milk, ice cream, lottery tickets, soft drinks, bread, and magazines.

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Shopping Goods and Services

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Products a consumer buys only after comparing value, quality, price, and style from a variety of sellers. Shopping goods and services are sold largely through shopping centers where consumers can make comparisons. Examples include clothes, shoes, appliances, and auto repair services.

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Specialty Goods and Services

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Consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth special effort to purchase them. Examples include Rolex watches, expensive wine, jewelry, expensive cigars, and expensive handbags. Also services provided by medical specialists or business consultants would fall into this category.

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Unsought Goods and Services

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Products that consumers are not aware of, or have not necessarily thought of buying, but suddenly find they need them to solve an unexpected problem. Examples would be car towing services, burial services, and dental work.

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Industrial Goods

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Products used in the production of other products -- (e.g., raw materials, major equipment, accessory equipment, components, process materials, maintenance items, and business services.)

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Brand

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A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from those of others.

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Brand Equity

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The combination of factors, such as awareness, loyalty, perceived quality, images, and emotions, that people associate with a given brand name.

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Brand Loyalty

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The degree to which customers are satisfied, like a brand, and are committed to future purchases.

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Loss Leaders

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When a store advertises certain products at or below cost to attract people to the store.

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Product Life Cycle

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A theoretical model of what happens to sales and profits for a product class over time.

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Price

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Price setting is among the most difficult challenges of marketing. A product's price needs to reflect its quality, brand, and image, and it must be high enough to ensure profits but not so high that people are unwilling to pay for it.

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Target Costing

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Designing a product so it satisfies customers and meets the profit margins desired by the firm.

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Price Leadership

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The procedure by which one or more firms that dominate a market set pricing standards that all the others follow.

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Break-Even Analysis Strategy

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Pricing a product based on how many you need to sell in order to make a profit.

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Skimming Price Strategy

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Pricing a new product high to make optimum profit while there's little competition.

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Penetration Strategy

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Pricing a product low to attract many customers and discourage competition.

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Everyday Low Pricing (EDLP) Strategy

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Setting prices lower than competitors and then not offering any special sales.

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High-Low Pricing Strategy

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Setting prices that are higher than EDLP, but offering many special sales where prices are lower than those of competitors.

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Bundling Strategy

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Grouping two or more products together and pricing them as a unit.

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Psychological Pricing (Odd Pricing) Strategy

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Pricing goods and services at price points that make the product appear less expensive than it is.

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Place

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In marketing, the process of getting products to the places where they will be sold.

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Marketing Intermediary

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An organization that assists in moving goods and services from producers to industrial and consumer users.

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Channel of Distribution

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A set of marketing intermediaries, such as wholesalers and retailers that join together to transport and store goods in their path (or channel) from producers to consumers.

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Cost-based Pricing Strategy

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Developing a product's price based on what it will cost to produce it and still maintain a profit. This is a flawed strategy, because in the long run, the market, and not the manufacturer, will decide what the product's price will be. Example: Toys.

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Demand-Based (Target Costing) Pricing Strategy

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Designing a product so it satisfies customers and meets the profit margins desired by the firm, with price being an input of the product development process (not an output). Example: A family sedan automobile.

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Competition-Based (Price Leadership) Pricing Strategy

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Pricing a product based on how competitors price their products -- either at or below their prices. Price leadership is the procedure by which one or more firms that dominate the market set pricing standards that all the others follow. Example: Airlines.

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Break-Even Pricing Strategy

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Pricing a product based on how many you need to sell in order to make a profit according to the Break-Even Point (BEP) formula: Total Fixed Cost divided by Price of 1 Unit - Variable Cost of 1 Unit. Example: Candles.

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Skimming Pricing Strategy

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Pricing a new product high to make optimum profit while there is little competition. Example: Televisions.

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Penetration Pricing Strategy

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Pricing a product low to attract many customers and discourage competition.

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Agents/Brokers

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Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don't take title to the goods.

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Wholesaler

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A marketing intermediary that sells to other organizations.

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Merchant Wholesalers

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Independently owned firms that own the goods they handle.

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Retailer

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An organization that sells to consumers.

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Rack Jobbers

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Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.

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Cash-and-Carry Wholesalers

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Wholesalers that serve mostly smaller retailers with a limited assortment of products.

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Drop Shippers

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Wholesalers that solicit orders from retailers and other wholesalers and have merchandise shipped directly from a producer to a buyer.

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Category Killer

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A store that offers a wide selection of goods in a specific category at competitive prices.

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Promotion Mix

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The combination of promotional tools an organization uses.

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Advertising

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Paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message.

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Product Placement

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Putting products in TV shows and movies, where they will be seen.

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Personal Selling

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The face-to-face presentation and promotion of goods and services.

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Public Relations (PR)

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The management function that evaluates public attitudes, changes policies and procedures accordingly, and executes a program of action and information to earn public understanding and acceptance.

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Publicity

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Any information about an individual, product, or organization that is distributed to the public through the media and is not paid for or controlled by the seller.

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Sales Promotion

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A promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

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Sampling

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Letting consumers have a small sample of a product for no charge.

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Event Marketing

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Sponsoring events such as rock concerts or being at various events to promote your products.

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Viral Marketing

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The term used to describe everything from paying people to say positive things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific Web sites.

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Word-of-Mouth Promotion

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A promotional tool that involves people telling other people about products that they have purchased.

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Integrated Marketing Communication

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Combines all the promotional tools into one comprehensive and unified promotional strategy.

The Four Ps of Marketing: Product, Price, Place, and Promotion – Flashcards

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