BA 223: Principles of Marketing - Exam 2 Review

Comprehensive practice vocabulary flashcards covering STP (Segmentation, Targeting, Positioning), Product, Branding, and Packaging Decisions, Developing New Products, Services Marketing, Supply Chain and Channel Management, and Retailing and Omnichannel Marketing.

Market Segmentation

The process of dividing the total market into groups of consumers with different needs, wants, or characteristics who might require separate products or marketing mixes.

Market Targeting

The process of evaluating the attractiveness of various market segments and selecting which specific segment or segments to pursue based on organizational competencies.

Market Positioning

The process of defining the marketing mix variables so that target customers have a clear, distinctive, and desirable understanding of what the product does in comparison with competing brands.

Geographic Segmentation

The grouping of consumers based on where they live, such as continent, country, region, state, city, neighborhood, or urban versus rural environment.

Demographic Segmentation

The grouping of consumers based on easily measured, objective characteristics such as age, gender, income, and education level.

Psychographic Segmentation

A segmentation method based on how consumers describe themselves in terms of self-values, self-concept, and lifestyle.

Benefit Segmentation

The grouping of consumers based on the specific benefits, value, or utility they differentially seek to derive from a product or service.

Behavioral Segmentation

The segmentation of buyers based on how they use or respond to a product, including occasion segmentation and loyalty or usage segmentation.

Occasion Segmentation

A behavioral segmentation method based on when a product or service is purchased or consumed (e.g., Happy Hour or seasonal closeouts).

Loyalty Segmentation

A behavioral segmentation method that identifies and targets heavy, repeat consumers who are the most profitable for a firm in the long term.

Market Basket Analysis

A mathematical modeling technique that analyzes and associates groups of items that customers purchase together to identify consumer profiles and behavior patterns.

Identifiable (Segment Attractiveness)

The criterion requiring that a firm be able to identify who is in the market segment, verify that the segment is distinct from others, and determine whether it requires a unique marketing mix.

Substantial (Segment Attractiveness)

The requirement that a market segment is large enough in size and possesses sufficient buying power to warrant developing and maintaining a dedicated marketing mix.

Reachable (Segment Attractiveness)

The requirement that a segment can be accessed through persuasive communication and product distribution so consumers know the product exists, understand what it does, and can buy it.

Responsive (Segment Attractiveness)

The requirement that consumers in a target segment react similarly and positively to a firm's offering and value proposition.

Profitable (Segment Attractiveness)

The assessment of both current and future financial potential of a market segment, considering market growth rate, competitiveness, and access costs.

Undifferentiated Targeting Strategy

A mass marketing approach where a firm goes after the entire market with one basic product offer, focusing on common consumer needs rather than differences.

Differentiated Targeting Strategy

A targeting approach where a firm targets several market segments and designs separate, distinct product offerings for each.

Concentrated Targeting Strategy

A niche marketing strategy where a firm selects a single primary market and focuses all its resources on capturing a large share of that specific segment.

Micromarketing

An extreme form of segmentation that tailors products and marketing programs to suit individual customers (one-to-one) or specific local areas.

Value Proposition

The unique set of benefits and value that a company promises to deliver to customers to satisfy their needs better than competitors.

Perceptual Map

A visual display in two or more dimensions illustrating the position of products or brands in the consumer's mind relative to competing brands.

Ideal Points

Specific positions on a perceptual map representing a particular market segment's ideal combination of product attributes.

Product

Anything that delivers value to a consumer and can be offered through a voluntary marketing exchange, including goods, services, ideas, or people.

Core Customer Value

The fundamental problem-solving benefits that consumers are truly buying when they purchase a product or service.

Actual Product

The physical attributes of a product, including its brand name, features, design, quality level, and packaging.

Associated Services

The nonphysical attributes of a product, also called the augmented product, such as warranties, financing, product support, and after-sale service.

Convenience Products

Consumer goods and services that are bought frequently, immediately, at a lower price, and with minimal comparison shopping or buying effort.

Shopping Products

Consumer products that customers purchase less frequently and compare carefully regarding suitability, quality, price, and style before buying.

Specialty Products

Consumer goods and services with unique characteristics or strong brand preference for which buyers are willing to make a special purchase effort and exhibit low price sensitivity.

Unsought Products

Consumer products that consumers either do not normally know about or know about but do not actively think of purchasing, requiring aggressive advertising and personal selling.

Product Mix

The complete set of all products and services offered for sale by a single firm.

Product Line

A group of associated items that consumers tend to use together or think of as part of a group of similar products or services.

Product Mix Breadth

The number of different product lines offered by a firm across its entire product portfolio.

Product Line Depth

The total number of individual product categories or offerings contained within a specific product line.

Brand Equity

The set of assets and liabilities linked to a brand name and symbol that add to or subtract from the value provided by the product or service.

Brand Awareness

A measure of how many consumers in a market are familiar with a brand and what it stands for, built through repeated marketing exposures.

Perceived Value (Branding)

The consumer's subjective evaluation of the relationship between a product's benefits and its monetary and non-monetary costs relative to competitors.

Brand Associations

The mental and emotional links that consumers make between a brand and its key attributes, symbols, slogans, or celebrity endorsers.

Brand Loyalty

A consumer's steadfast commitment to repurchase a brand repeatedly, lowering firm marketing costs and providing insulation from competition.

Manufacturer Brands

Brands owned, managed, and produced by the manufacturer, also referred to as national brands (e.g., Kraft, Nike, Coca-Cola).

Retailer Brands

Products developed and marketed by retailers and available exclusively through that retailer's outlets, also known as store or private-label brands.

Family Brand

A branding strategy where a corporate name is used across all product lines and individual offerings (e.g., Kraft cheeses).

Individual Brand

A strategy where a firm gives separate, independent names to different products or product lines (e.g., Kraft owning Velveeta, Classico, and Jell-O).

Brand Extension

The practice of using the same established brand name to enter a completely different product line, thereby increasing product mix breadth.

Line Extension

The introduction of a new product offering under an existing brand name within the same product line, thereby increasing product line depth.

Brand Dilution

The adverse weakening of consumer perceptions and core brand equity caused by extending a brand name into an ill-fitting or inappropriate product category.

Co-Branding

The marketing of two or more distinct brands together on the same product, promotion, or service to enhance perceived quality.

Brand Licensing

A contractual agreement where a brand owner (licensor) grants another firm (licensee) the right to use its name, logo, or symbols in exchange for royalty fees.

Brand Repositioning

A strategic initiative where marketers change a brand's focus to target new markets or update its image to realign with consumer trends.

Primary Package

The immediate container or wrapper that holds the actual physical product and is directly used by the consumer (e.g., a toothpaste tube).

Secondary Package

The outer carton or wrapping that protects the primary package and displays UPC codes, nutritional information, and branding.

Diffusion of Innovation

The process through which the adoption and use of an innovation spreads across a market group over time and across categories of adopters.

Innovators

The initial $2.5\%$ of buyers who are the very first to adopt an innovation, characterized as venturesome risk-takers.

Early Adopters

The second category of buyers ($13.5\%$) in the diffusion curve who are opinion leaders, well-informed, and crucial for helping an innovation reach mass adoption.

Early Majority

A group representing approximately $34\%$ of the market who adopt a product after testing occurs, bugs are worked out, and lower prices or improved quality emerge.

Late Majority

The $34\%$ of adopters who enter the market only after the product has achieved its full market potential and sales have leveled off.

Laggards

The final $16\%$ of consumers to adopt an innovation, who deliberately resist change and only purchase new products when traditional alternatives are obsolete.

Concept Testing

The stage in the new product development process where a written description and specifications of a product idea are presented to potential customers to obtain feedback.

Alpha Testing

An internal testing procedure during product development where the firm tests a prototype using its own employees to confirm functionality and eliminate flaws.

Beta Testing

A testing phase in product development where potential consumers evaluate a prototype in a real-use setting to assess performance and identify issues.

Premarket Tests

Tests conducted before a product launch where a sample of consumers are exposed to the product in a simulated setting and surveyed to determine purchase intent.

Test Marketing

A mini product launch that introduces a complete marketing mix to a limited geographic area to measure actual market demand and purchase behavior.

Product Life Cycle (PLC)

The theoretical stages that products move through as they enter, grow within, mature in, and ultimately leave the marketplace: introduction, growth, maturity, and decline.

Introduction Stage (PLC)

The initial stage of the product life cycle characterized by low sales, negative or low profits, one or few competitors, and adoption limited to innovators.

Growth Stage (PLC)

The stage of the PLC characterized by rapidly rising sales, growing profits, increasing competition, and adoption by early adopters and early majority.

Maturity Stage (PLC)

The PLC stage where sales reach their peak, profits level off and begin to decline, price competition intensifies, and adoption reaches the late majority.

Decline Stage (PLC)

The final PLC stage where industry sales and profits drop, the number of competitors shrinks, and consumers consist mostly of laggards.

Service

An intangible offering that involves a deed, performance, or effort that cannot be physically possessed or stored.

Intangibility (Services)

The service characteristic where offerings cannot be touched, seen, or tasted, requiring firms to use physical atmospherics and cues to convey quality.

Inseparability

The service characteristic where production and consumption happen simultaneously in real time, preventing consumers from testing the service before purchase.

Heterogeneity

The inherent variability in service quality across encounters resulting from differences in service providers, customer inputs, and operating environments.

Perishability (Services)

The characteristic of services whereby they cannot be stored, stockpiled, or resold for future use, making the matching of supply and demand critical.

Service Gaps Model

A systematic diagnostic framework that examines customer service delivery by identifying four specific gaps that lead to poor service quality.

Knowledge Gap

The difference between customer expectations for service quality and management's perception of those customer expectations.

Standards Gap

The difference between management's perception of customer expectations and the formal service specifications and standards it establishes.

Delivery Gap

The difference between established service standards and the actual service delivered by frontline personnel to the customer.

Communication Gap

The difference between the actual service delivered to customers and the service level promised through the retailer's external communications and advertising.

Reliability (Service Quality)

The service quality dimension assessing the ability of an organization to perform a promised service dependably, accurately, and consistently.

Responsiveness (Service Quality)

The service quality dimension evaluating the willingness of employees to assist customers and provide prompt, helpful service.

Assurance (Service Quality)

The service quality dimension reflecting the knowledge and courtesy of employees and their ability to convey trust and confidence.

Empathy (Service Quality)

The service quality dimension assessing the individualized, caring, and personal attention provided to customers.

Tangibles (Service Quality)

The service quality dimension evaluating the physical appearance of facilities, equipment, personnel, and communication materials.

Zone of Tolerance

The area between a customer's desired level of service expectations and the minimum acceptable service threshold they will tolerate.

Service Recovery

The specialized strategies implemented to resolve problems, appease dissatisfied customers, and restore brand loyalty following a service failure.

Marketing Channel

The set of interdependent institutions and relationships involved in moving a product or service from production through to the ultimate consumer or business user.

Supply Chain Management

The seamless integration of suppliers, manufacturers, warehouses, stores, and transportation to produce and distribute merchandise in the right quantities, locations, and times.

Wholesaler

An intermediary firm that purchases large quantities of goods from manufacturers and resells them in smaller quantities to retailers.

Distribution Center

A shipping facility that receives, stores, and redistributes bulk merchandise to company stores or retail outlets.

Fulfillment Center

An inventory and order-processing warehouse designed specifically to pack and ship products directly to individual end consumers.

Upstream Partners

Firms in the supply chain that supply the raw materials, components, parts, information, and financing needed to create a product (closer to the manufacturer).

Downstream Partners

Channel intermediaries, such as wholesalers, distributors, and retailers, that direct the flow of finished goods toward the final consumer.

Direct Marketing Channel

A distribution channel structure in which the manufacturer sells directly to the consumer without any independent intermediaries.

Indirect Marketing Channel

A distribution structure where one or more intermediaries (such as wholesalers or retailers) operate between the manufacturer and the end consumer.

Franchising

A contractual agreement between a franchisor and a franchisee permitting the franchisee to operate a retail business using a format, brand name, and system supported by the franchisor.

Vertical Channel Conflict

A type of channel disagreement that occurs between members at different levels within the same marketing channel (e.g., between a manufacturer and a retailer).

Horizontal Channel Conflict

A type of channel disagreement that occurs between intermediaries operating at the same level within a distribution channel (e.g., between two competing retailers).

Reward Power

A type of channel power where one member offers monetary or promotional incentives to encourage another channel member to comply with its demands.

Coercive Power

A type of channel power where one member threatens punishment or penalties if another channel member fails to comply with its requests.

Referent Power

A type of channel power derived from a firm's strong prestige or brand equity, causing other channel members to desperately want to associate with it.