Principles of Marketing Unit 1/4

Product

The entity offered by a company to its customers, a combination of tangible and intangible qualities that satisfies needs or wants.

Features of a Product

Characteristics of a product that offer benefits to the customer, including distinguishing features, associated attributes, utilities, exchange value, and customer satisfaction.

Industrial Goods

Goods used for further production of goods or services, including capital goods, raw materials, and component parts.

Consumer Goods

Goods meant for final consumption by consumers, divided into convenience, shopping, and specialty goods.

Convenience Goods

Everyday items that are easily accessible and purchased frequently with minimal effort.

Shopping Goods

Products that consumers buy after careful consideration, comparison, and evaluation of alternatives.

Specialty Goods

Products with unique characteristics or a high level of brand identity, prompting consumers to make a significant effort to purchase them.

Core Benefit Level

The most fundamental level of needs or desires that a consumer wants when they purchase a product.

Generic Product Level

A basic version of a product made up of only the features it needs to operate.

Expected Product Level

A set of qualities and conditions that customers typically expect at the expected level.

Augmented Product Level

Product modifications, additional features, or services that help set the product distinct from its competitors.

Potential Product Level

Possible future augmentations and changes that the product might experience; the product's possibility of future innovation.

Product Plan

The act of charting out and supervising the research, screening, development, and commercialization of new products; the modification of existing lines and the discontinuance of marginal or unprofitable items

Idea Generation

The creation of product ideas, originating from internal or external sources.

Screening

Critical evaluation of product ideas generated to determine consistency with the product policy of the firm.

Business Analysis

An evaluation of a product idea in depth to determine its financial, competitive, and marketing situations.

Product Development

Converting the product idea on paper into a tangible product.

Test Marketing

Testing the product in selected geographical areas to monitor consumer reactions and uncover product faults.

Commercialization

The final stage of product planning where production starts, the marketing program begins to operate, and products flow to the market for sale.

Product Mix

The set of all product lines and items that a particular seller offers for sale to buyers.

Length of product mix

The total number of items in a product mix.

Width of product mix

The number of different product lines offered by the company.

Depth of product mix

The average number of items offered by the company in each product line.

Consistency of product mix

How closely the various product lines are related in production requirements and distribution channels.

Branding

The practice of giving a specified name to a product or group of products of one seller.

Labeling

Part of the product which carries verbal information about the product or the seller.

Packaging

Wrapping of goods or products before they are transported, stored, or delivered to a consumer.

After-Sales Service

Services rendered by a business firm to its customer after the sale of goods is affected.

Product Mix Strategies

Strategies employed by a producer or wholesaler of the product, including expansion, contraction, alteration, positioning, trading up/down, and differentiating products.

Product Life Cycle (PLC)

The progression of a product through distinct stages from its launch to its withdrawal from the market: introduction, growth, maturity, and decline.

Introduction (PLC)

The stage where a product is introduced into the market with a slow rise in sales, low profit, and heavy advertising.

Growth (PLC)

The stage where a product gains market acceptance, sales increase rapidly, and profits improve as costs reduce.

Maturity (PLC)

The stage with keen competition, where sales continue to increase but at a decreasing rate, and competitors increase advertising deals.

Decline (PLC)

The stage where sales start declining due to technological advances, consumer shifts in taste, and increased competition.

Marketing Mix

The combination of strategies and tools used by a company to promote and sell its products or services effectively.

Product (Marketing Mix)

The goods or services offered by a company, focusing on its features, quality, and how it satisfies consumer demands.

Price (Marketing Mix)

The cost consumers pay for the product, involving strategies to set competitive pricing while maintaining profitability.

Place (Marketing Mix)

How and where the product is distributed to reach the target audience, ensuring accessibility.

Promotion (Marketing Mix)

The communication strategies, such as advertising and public relations, used to create awareness and persuade potential customers to make a purchase.

People (Additional P)

The human resources or employees of an organisation who perform a service for the customer.

Process (Additional P)

The system used by the organization so as to deliver service to the customer.

Physical Evidence (Additional P)

The external factors or surroundings which aid the customer in making a judgement about the company.

Neil H. Borden

Coined the term 'Marketing Mix' and identified ingredients such as product planning, branding, and distribution channels.

E. Jerome McCarthy

Categorized the marketing mix ingredients into the universally recognized 4 Ps of marketing – Product, Price, Place, and Promotion.

Boom and Bitner

Contributed to the marketing mix by adding an additional 3 Ps: People, Process, and Physical Evidence.

Convenience Products

Items that are frequently purchased with minimal effort, such as toothpaste or snacks.

Shopping Products

Items that consumers spend more time comparing before purchase, such as clothing, electronics, or furniture.

Specialty Products

High-end, unique products that customers are willing to make a special effort to purchase, like luxury cars or designer clothing.

Unsought Products

Goods that customers do not think of buying or may not know about until the need arises, such as life insurance or emergency repair services.

Distribution Channels

The sub-marketers or intermediaries who distribute the company’s products.

Marketing Environment

All external and internal factors that influence an organization's marketing activities.

Microenvironment

Factors directly connected to the company, such as customers, suppliers, competitors, and intermediaries.

Macroenvironment

Broader societal forces like economic, demographic, technological, political, and cultural influences.

Microenvironment

The immediate, smaller forces within an organisation’s operating sphere that directly influence its ability to serve its customers and achieve its business objectives.

Suppliers

Provide the necessary resources and raw materials required for production.

Intermediaries

Include wholesalers, retailers, distributors, and agents that help in distributing, selling, and promoting the company’s products.

Publics

Groups that have an actual or potential interest in or impact on the organization’s ability to achieve its objectives.

Macroenvironment

The broader external forces that affect not only a single company but all entities within an industry or market.

Demographic Environment

Refers to the statistical study of populations, including factors like age, gender, education, income, occupation, and family structure.

Economic Environment

Includes factors such as economic growth, interest rates, inflation, unemployment, and consumer spending that impact business operations and consumer behavior.

Natural Environment

Encompasses physical resources such as land, water, air, and raw materials that companies use in their operations.

Technological Environment

Refers to the advancements and innovations in technology that affect how businesses operate, produce, and market products and services.

Political Environment

Consists of government policies, political stability, tax laws, regulations, trade agreements, and other political factors that influence business operations.

Cultural Environment

Encompasses the shared values, beliefs, customs, and behaviors of a society that influence consumer preferences and business practices.

Environmental Scanning

The process by which organizations systematically collect and analyze external information to identify potential opportunities and threats that could impact their marketing strategies.

SWOT Analysis

A strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or business venture.

PESTEL Analysis

A strategic tool used to evaluate the external macro-environmental factors that can impact an organization (Political, Economic, Social, Technological, Environmental, Legal).

Porter’s Five Forces Model

A framework for analyzing the competitive forces that shape industries and influence profitability.

Porter’s Five Forces

Competitive rivalry, threat of new entrants, threat of substitutes, bargaining power of buyers, and bargaining power of suppliers.

Competitive Rivalry

Refers to the intensity of competition among existing players in an industry.

Threat of New Entrants

Refers to the possibility that new companies will enter the market, increasing competition.

Threat of Substitutes

This force refers to the likelihood that customers will switch to alternative products or services.

Bargaining Power of Buyers

Refers to the influence customers have over a business.

Supplier power

Refers to the influence suppliers have over businesses.

Internal Environment

The factors within an organization that directly influence its operations, performance, and decision-making.

Corporate Culture

The values, beliefs, and behaviors shared by members of the organization.

External environment

The factors outside the company's boundaries that can affect its operations, strategies, and performance.

Market

Derived from the Latin word ‘Mercatus’, which means merchandise, wares, traffic, trade, or where business is conducted; the aggregate of potential buyers and sellers for a product or service.

Local Market

Markets confined to a specific, limited geographic area, such as a town or city.

Regional Market

Distinct geographical areas where businesses operate, focusing on the specific needs, preferences, and economic conditions of those regions.

National Market

Markets that extend across an entire country.

World / International Market

Markets that include multiple countries, usually within a specific continent or region.

Consumer Goods Market

This market deals with goods purchased by individuals for personal or household use.

Convenience Goods

Everyday items like toothpaste, bread, and soap that consumers purchase frequently with minimal effort.

Shopping Goods

Products like clothing, electronics, and furniture that consumers compare for quality, price, and style before buying.

Specialty Goods

High-end items like luxury cars, designer clothes, and fine jewelry that consumers are willing to spend more effort and time to purchase due to their unique characteristics or brand prestige.

Unsought Goods

Products like life insurance or emergency medical services that consumers do not frequently think about or need until a specific situation arises.

Industrial Goods Market

This market involves goods used in producing other goods or services, purchased by businesses rather than individual consumers.

Raw Materials

Basic materials like iron ore, crude oil, and timber used in manufacturing processes.

Capital Items

Long-term assets such as machinery, buildings, and heavy equipment used in production.

Supplies and Services

Consumables like lubricants, office supplies, and cleaning services necessary for running a business but not directly part of the production process.

Services Market

This market focuses on intangible products that do not result in the ownership of anything; services are consumed at the point of delivery.

Capital Markets

This market involves the trading of financial assets such as stocks, bonds, and other investment instruments.

Stock Market

Platforms like the New York Stock Exchange (NYSE) where shares of publicly traded companies are bought and sold.

Bond Market

Markets where debt securities are issued and traded, such as corporate and government bonds.

Commodity Markets

This market deals with raw or primary products that can be bought and sold; commodities are usually standardized and traded in bulk.

Virtual Markets

Markets that operate online and deal with digital goods and services, providing a platform for transactions that do not involve physical goods.

Consumer Markets

Consists of individuals and households that purchase goods and services for personal or household use.

Business Markets

Involves organizations purchasing goods and services for use in production, operational needs, or for resale.

Government Markets

Comprise government agencies and institutions purchasing goods and services for public use.