Marketing and Value Creation Strategy Flashcards

A deck of 60 vocabulary flashcards reviewing marketing concepts, STP strategies, product classifications, service characteristics, pricing models, and distribution strategy.

Marketing (Core Definition)

The process by which companies engage customers, build strong customer relationships, and create customer value in order to capture value from customers in return.

Marketing (Go & Go Definition)

The process of continuously and profitably satisfying target customer's needs, wants, and expectations superior to competition.

Marketing (AMA Definition)

The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing Management

The art and science of choosing target markets and getting, keeping, and growing customers through creating, delivering, and communicating superior customer value.

Marketer

Someone who seeks a response—attention, a purchase, a vote, a donation—from another party, called the prospect.

Prospect

The party from whom a marketer seeks a response, such as attention, a purchase, a vote, or a donation.

Needs

Basic human requirements that are a basic part of human survival, including physiological, safety, belonging, esteem, self-actualization, and self-transcendence.

Wants

The form human needs take as shaped by culture and individual personality.

Demands

Human wants that are backed by buying power.

Market

The set of actual and potential buyers of a product or service.

Market Segmentation

The process of dividing a market of potential customers into groups, or segments, based on different characteristics.

Geographic Segmentation

Dividing a market based on geographic units such as country, city, density, language, climate, area, and population.

Demographic Segmentation

Dividing a market based on demographic variables such as gender, age, education, income, social status, and life stage.

Psychographic Segmentation

Dividing a market based on psychological characteristics such as values, attitudes, personality, interests, opinions, lifestyle, and concerns.

Behavioral Segmentation

Dividing a market based on consumer behavior variables such as intent, usage, occasion, buyer stage, engagement, benefits, and life cycle.

Targeting

Target market identification that looks at segment characteristics including disposable income, age, and level of education.

Positioning

The process of establishing the image or identity of a brand or product in the consumer's mind so that consumers perceive it in a certain way.

Marketing Mix (4 Ps)

The set of tactical marketing tools consisting of Product, Price, Place, and Promotion.

Modern Marketing Management (4 Ps)

An expanded marketing framework consisting of People, Processes, Positioning, and Performance.

Value Delivery Process

A three-phase process consisting of choosing the value, providing the value, and communicating the value.

Product

Anything that can be offered to a market to satisfy a want or need, including physical goods, services, experiences, events, persons, places, properties, organizations, information, and ideas.

Core Benefit

The fundamental service or benefit that the customer is really buying at the base level of the customer-value hierarchy.

Expected Product

A set of attributes and conditions buyers normally expect when they purchase a product.

Augmented Product

A product level that exceeds customer expectations through additional attributes, services, or benefits.

Potential Product

All the possible augmentations and transformations a product or offering might undergo in the future.

Product Differentiation

Differentiating a physical product through form, features, performance quality, conformance quality, durability, reliability, reparability, style, and customization.

Services Differentiation

Differentiating a service through ordering ease, delivery, installation, customer training, customer consulting, maintenance and repair, and returns.

Design

The totality of features that affect the way a product looks, feels, and functions to a consumer.

Service

Any act or performance one party can offer to another that is essentially intangible and does not result in the ownership of anything.

Intangibility

A service characteristic stating that services cannot be seen, tasted, felt, heard, or smelled before purchase.

Inseparability

A service characteristic stating that services are typically produced and consumed simultaneously.

Variability

A service characteristic stating that service quality depends on who provides them, when and where, and to whom.

Perishability

A service characteristic stating that services cannot be stored for future sale or use.

Self-Service Technologies (SSTs)

Automated tools in service delivery that make transactions more accurate, convenient, faster, and reduce costs.

SERVQUAL Scale

A framework used to measure service quality across five attributes: Tangibles, Reliability, Responsiveness, Assurance, and Empathy.

Tangibles (SERVQUAL)

The appearance of physical facilities, equipment, personnel, and written materials.

Reliability (SERVQUAL)

The ability to perform the promised service dependably and accurately.

Responsiveness (SERVQUAL)

The willingness to help customers and provide prompt service.

Assurance (SERVQUAL)

Employees' knowledge, courtesy, and ability to inspire trust and confidence.

Empathy (SERVQUAL)

Caring, easy access, good communication, customer understanding, and individualized attention given to customers.

Fixed Costs

Costs that do not vary with production level or sales revenue.

Variable Costs

Costs that vary directly with the level of production.

Direct Materials Cost

The sum of costs for raw materials directly incorporated into a manufactured product.

Direct Labor Cost

Wages paid to workers directly involved in manufacturing calculated on a per-piece or per-process basis.

Markup

The difference between the selling price of a good or service and its cost, expressed as a percentage above the cost.

Markup Percentage Formula

The mathematical formula expressed as $\text{Markup Percentage} = \frac{\text{Sales Price} - \text{Unit Cost}}{\text{Unit Cost}} \times 100$.

Target-Return Pricing

A method allowing a product manufacturer to recover a portion of investment per year, given by $\text{Target-Return Pricing} = \text{unit cost} + \frac{\text{desired return} \times \text{invested capital}}{\text{unit sales}}$.

Psychological Pricing

A pricing strategy based on the theory that certain prices have a psychological impact, where prices are often set as odd prices focusing on the first digits.

Loss Leader Pricing

A pricing strategy where a product is sold at a very low price to encourage consumers to buy other products.

Price Lining

A pricing strategy designed to simplify a consumer's buying decision by offering products at distinct price points.

Prestige Pricing

A pricing strategy that disregards unit cost and sets a high price to convey that a product is high-end.

Marginal Pricing

Pricing products at a range below unit cost but higher than unit variable cost, basing price on the extra cost of making one additional unit.

Predatory Pricing

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market.

Going Rate Pricing

A pricing strategy where a company prices its products at the same level or very close to its competitors' prices.

Promotional Pricing

A temporary reduction in the selling price of a product or service in order to induce trial or encourage repeat purchase.

Price Skimming

Establishing a high initial price for a product to skim the cream off the market before gradually reducing the price level.

Penetration Pricing

Entering the market with a low initial price to capture a greater share of the market quickly.

Place (Distribution)

The process in the marketing mix of moving products from the producer to the intended user.

Wholesaling

The sale and distribution of goods to specific customer types such as resellers.

Retailing

The process of bringing a product directly to customers in a retail store.