Marketing Management Exam #2

Product

Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a want or a need

Service

An activity, benefit, or satisfaction offered for sale that is essentially intangible and dos not result in the ownership of anything

Consumer Product

A product bought by final consumers for personal consumption

Convenience Product

A consumer product that customers usually buy frequently, immediately, and with minimal comparison and buying effort

Shopping Product

A consumer product that the customer, in the process of selecting and purchasing, usually compares on such attributes as suitability, quality, price, and style

Specialty Product

A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort

Unsought Product

A consumer product that the consumer either does not know about or knows about but does not normally consider buying

Industrial Product

A product bought by individuals and organizations for further processing or for use in conducting a business

Social Marketing

The use of commercial marketing concepts and tools in programs designed to influence individuals' behavior to improve their well-being and that of society

Product Quality

The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs

Brand

A name, term, sign, symbol, design, or a combination of these, that identifies the products or services of one seller or group of sellers and differentiates them from those of competitors

Packaging

The activities of designing and producing the container or wrapper for a product

Product Line

A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges

Product Mix

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

Service Intangibility

The concept that services cannot be seen, tasted, felt, heard, or smelled before they are bought

Service Inseparability

The concept that services are produced and consumed at the same time and cannot be separated from their providers

Service Variability

The concept that the quality of services may vary greatly depending on who provides them and when, where, and how they are provided

Service Profit Chain

The chain that links service from profits with employee and customer satisfaction

Internal Marketing

Orienting and motivating customer-contact employees and service-support people to work as a team to provide customer satisfaction

Interactive Marketing

Training service employees in the fine art of interacting with customers to satisfy their needs

Brand Equity

The differential effect that knowing the brand name has on customer response to the product or its marketing

Store Brand (Private Brand)

A brand created and owned by a reseller of a product or service

Co-Branding

The practice of using the established brand names of two different companies on the same product

Line Extension

Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category

Brand Extension

Extending an existing brand name to new product categories

New Product Development

The development of original products, product improvements, product modifications, and new brands through the firm's own product development efforts

Idea Generation

The systematic search for new-product ideas

Crowdsourcing

Inviting broad communities of people - customers, employees, independent scientists and researchers, and even the public at large - into the new-product innovation process

Idea Screening

Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible

Product Concept

A detailed version of the new-product idea stated in meaningful consumer terms

Concept Testing

Testing new-product concepts with a group of target consumers to find out if the concepts have strong consumer appeal

Marketing Strategy Development

Designing an initial marketing strategy for a new product based on the product concept

Business Analysis

A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives

Product Development

Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable market offering

Test Marketing

The stage of new product development in which the product and marketing program are tested in realistic market settings

Commercialization

Introducing a new product into the market

Customer Centered New Product Development

New product development that focuses on finding new ways to solve customer problems and create more customer satisfying experiences.

Team Based New Product Development

An approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase effectiveness.

Product Life Cycle

The course of a product's sales and profits over its lifetime

Style

A basic and distinctive mode of expression

Fashion

A currently accepted or popular style in a given field

Fad

A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity

Introduction State

The Product Life Cycle stage in which a new product is first distributed and made available for purchase

Growth Stage

The Product Life Cycle stage in which a product's sales start climbing quickly

Maturity Stage

The Product Life Cycle stage in which a product's sales growth slows or levels off

Decline Stage

The Product Life Cycle stage in which a product's sales fade away

Price

The amount of money charged for a product or service. The sum of the values that customers exchange in return for the benefits they receive from the product or service

Customer-Value Based Pricing

Setting price based on buyers' perception of value rather than on the seller's cost

Good Value Pricing

Offering the right combination of quality and good service at a fair price

Value Added Pricing

Attaching value-added features and services to differentiate a company's offers while charging higher prices (Why you can ask more from your customers)

Cost Based Pricing

Setting prices based on the costs for producing, distributing, and selling the product plus a fair rate of return for effort and risk

Cost Plus Pricing Markup

Adding a standard markup to the cost of the product

Break Even Pricing

Setting price to break even on the costs of making and marketing a product, or setting price to make a target return

Competition Based Pricing

Setting prices based on competitors' strategies, prices, costs, and market offerings

Target Costing

Pricing that starts with an ideal selling price and then targets costs that will ensure that price is met (Set price first, THEN design product around that preferred price)

Price Elasticity

A measure of the sensitivity of demand to changes in price

Market Skimming Pricing

Setting a high price for a new product to skim maximum revenues layer by layer from segments willing to pay the high price. Fewer sales, but more profitable on a sale-by-sale basis. (Not generally a sustainable price, just a "let's see how much we can get initially, then lower later")

Market Penetration Pricing

Setting a low price for a new product to attract a large number of buyers and a large market share. (Follows skimming pricing. More sales, longer term sales, less profit per sale)

Product Line Pricing

Setting 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

Optional Product Pricing

The pricing of optional or accessory products along with a main product

Captive Product Pricing

Setting a price for products that must be used along with a main products. (Razor blades, video games, printer ink)

By Product Pricing

Setting a price for by-products to make the main product's price more competitive

Product Bundle Pricing

Combining several products and offering the bundle at a reduced price

Discount

A straight reduction in price on purchases made during a stated period of time or in larger quantities

Allowance

A reduction from the list price for buyer actions such as trade-ins or promotional and sales support

Segmented Pricing

Selling a product or service at two or more prices, where the difference in prices is not based on the differences in cost. (Movie theater tickets)

Psychological Pricing

Pricing that considers the psychology of prices, not simply the economics; the price says something about the product (Paying more money sends the impression of a better product)

Reference Prices

Prices that buyers carry in their minds and refer to when they look at a given product

Promotional Pricing

Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales

Dynamic Pricing

Adjusting prices continually to meet the characteristics and needs of individual customers and situations (Amazon)

Promotional Mix

The specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships (Advertising, Sales Promotion, Personal Selling, and Public Relations)

Advertising

Any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor

Sales Promotion

Short-term incentives to encourage the purchase or sale of a product or service

Personal Selling

Personal presentation by the firm's sales force for the purpose of making sales and building customer relationships

Public Relations

Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events

Direct Marketing

Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships

Integrated Marketing Communications

Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent, and compelling message about the organization and its products

Push Strategy

A promotion strategy in which the sales force and trade promotion are used to push the product through channels. The producer promotes the product to channel members who in turn promote it to final customers

Pull Strategy

A promotion strategy in which a company spends a lot of money on consumer advertising and promotion to induce final consumers to buy the product, creating a demand vacuum that pulls the product through the channel

Advertising Objective

A specific communication task to be accomplished with a specific target audience during a specific period of time

Affordable Method

Setting the promotion budget at the level management thinks the company can afford

Percentage of Sales Method

Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sales price

Competitive Parity Method

Setting the promotion budget to match competitor's outlays

Objective and Task Method

Developing the promotion budget by 1) Defining specific objectives, 2) determining the tasks that must be performed to achieve these objectives, and 3) estimating the costs of performing these tasks. The sum of these costs is the budget

Advertising Strategy

The plan by which the company accomplishes its advertising objectives. Two main objectives: Creating messages and selecting media

Madison and Vine

The merging of advertising and entertainment

Creative Concept

The compelling big idea that will bring the advertising message strategy to life in a distinctive and memorable way

Execution Style

The approach (style) used to convey an advertising message

Advertising Media

The vehicles through which advertising messages are delivered to their intended audiences

Return on Advertising Investment

The net return on advertising investment divided by the costs of the advertising investment

Advertising Agency

A marketing services form that assists companies in planning, preparing, implementing, and evaluating all or portions of their advertising programs