Marketing Final Exam Vocabulary Review

These vocabulary flashcards summarize key marketing concepts—spanning product and brand management, pricing, distribution channels, promotion, digital tools, and ethics—to help you prepare for Exam 3 (Ch. 10–17 & 3).

Product Life Cycle (PLC)

The course that a product’s sales and profits take over its lifetime, typically moving through introduction, growth, maturity, and decline stages.

Introduction Stage

First PLC phase marked by low sales, high costs per customer, negative profits, few competitors, and a focus on building awareness among innovators.

Growth Stage

PLC phase with rapidly rising sales, rising profits, growing competitors, product proliferation, and targeting early adopters.

Maturity Stage

PLC phase where sales peak and then grow at a decreasing rate; most buyers are repeat purchasers and competition stabilizes.

Decline Stage

Final PLC phase featuring declining sales, reduced promotion, phase-out of weak items, and cost-cutting or harvesting strategies.

Innovators

First consumer segment to adopt a new product—adventurous, willing to take risks, targeted during the introduction stage.

Early Adopters

Consumers who adopt products soon after innovators; opinion leaders targeted heavily during growth stage.

Product Proliferation

Expansion of product lines and varieties to capture a wider market, common in the growth stage.

Line Extension

Adding new items in the same product line under an existing brand (e.g., Diet Coke).

Subbranding

Combining a corporate brand with a new brand name (e.g., Porsche Carrera).

Brand Extension

Using an existing successful brand name to launch a product in a new category (e.g., Ivory soap → Ivory detergent).

Multibranding

Offering each product with a distinct brand name (e.g., P&G marketing Oral-B and Pringles).

Private Branding

Producing goods that are branded by a retailer or wholesaler, such as Costco’s Kirkland Signature.

Mixed Branding

Marketing products under both the firm’s own brand name and that of a reseller.

Brand Equity

The added value a brand name gives a product beyond its functional benefits, providing leverage against price competition and easing extensions.

Skimming Pricing

Setting the highest initial price that customers are willing to pay, then gradually lowering it.

Penetration Pricing

Introducing a product at a low price to attract a mass market and gain market share quickly.

Prestige Pricing

Charging a high price so consumers perceive the offering as valuable; demand curve may slope upward.

Target Pricing

Determining product features and cost structure based on the price consumers are willing to pay.

Bundle Pricing

Offering multiple products together at one price (e.g., 5 for $4) to raise perceived value and sales volume.

Yield Management Pricing

Charging different prices to maximize revenue from a fixed, perishable inventory (e.g., airline seats).

Standard Markup Pricing

Adding a fixed percentage to the cost of all items in a product class.

Cost-Plus Pricing

A variation of markup pricing that adds a specific amount or percentage to total cost for profit.

Target Profit Pricing

Setting a price to achieve a specific dollar amount of annual profit.

Target Return on Sales Pricing

Pricing to earn a predetermined percentage of profit on sales volume.

Target Return on Investment Pricing

Pricing to achieve a specified annual ROI.

Customary Pricing

Pricing set by tradition, standardized channels, or other competitive factors—often seen in vending or candy markets.

Loss Leader Pricing

Selling a product below cost (or free) to attract customers who will buy other higher-margin goods.

Break-Even Analysis

Calculating the quantity that must be sold for total revenue to equal total cost: BEP = Fixed Cost / (Unit Price – UVC).

One-Price Policy

Charging the same price to every buyer for a product or service.

Flexible Price Policy

Charging different prices based on customer segment, demand, or other factors.

Quantity Discount

Price reduction given to buyers purchasing large volumes.

Cash Discount

Price reduction offered to buyers for prompt payment.

Trade-in Allowance

Price reduction for turning in an old item when purchasing a new one (e.g., car trade-ins).

Promotional Allowance

Price reduction granted to wholesalers/retailers for performing advertising or in-store promotion activities.

Dynamic Pricing

Adjusting prices in real time based on demand, competition, or other factors; may risk damaging brand trust if perceived unfair.

Intermediary

Any entity—wholesaler, retailer, or agent—that helps move products from producer to consumer and reduces transaction complexity.

Direct Channel

Distribution path where the producer sells directly to the consumer without intermediaries.

Indirect Channel

Distribution path involving one or more intermediaries between producer and consumer.

Dual Distribution

Using two or more marketing channels to reach one or more customer segments simultaneously.

Disintermediation

When a channel member bypasses another and sells directly, causing vertical conflict.

Vertical Conflict

Disagreement between different levels of the same distribution channel (e.g., manufacturer vs. retailer).

Horizontal Conflict

Disagreement between firms at the same channel level (e.g., retailer vs. retailer).

Vertical Marketing System (VMS)

Channel structure in which one member coordinates or owns multiple levels for greater efficiency and control.

Corporate VMS

Vertical system in which successive production and distribution stages are under single ownership.

Forward Integration

A producer owns the next level down the channel (e.g., manufacturer owning retail stores).

Backward Integration

A retailer or wholesaler owns manufacturing facilities upstream.

Contractual VMS

Independent firms join together via contracts for greater economies or sales impact (e.g., franchising).

Franchising

A contractual arrangement where a franchisor allows a franchisee to operate a business using its brand and processes.

Administered VMS

A vertical system coordinated by the size and influence of one dominant channel member, not ownership.

Horizontal Marketing System

Two or more companies at the same channel level cooperate to pursue a new marketing opportunity (strategic alliance).

Omnichannel

A customer-centric approach integrating all online and offline sales channels to provide a seamless shopping experience.

Showrooming

Shoppers examine merchandise in store but purchase it online at a lower price.

Webrooming

Shoppers research products online first and then buy them in a physical store.

Experiential Retail

Transforming physical stores into engaging destinations offering experiences that can’t be replicated online.

Direct Marketing

Direct communication with carefully targeted consumers to obtain an immediate response (e.g., direct mail).

Public Relations (PR)

Building good relations with publics via favorable publicity, special events, or press conferences.

Sales Promotion

Short-term incentives (coupons, samples) to encourage purchase or trial.

Personal Selling

Personal presentations by a firm’s sales force to make sales and build relationships; reduces wasted coverage.

Wasted Coverage

Promotion that reaches individuals who are not potential buyers; minimized by personal selling and direct marketing.

Integrated Marketing Communication (IMC)

Coordinated use of multiple promotional tools to deliver a clear, consistent, compelling brand message.

Push Strategy

Promotion flow directed primarily at channel intermediaries to push the product through to consumers.

Pull Strategy

Promotion directed at end consumers to generate demand that pulls the product through the channel.

Pioneering Advertisement

Informative ad that introduces a new product, explains how it works, or builds company image.

Competitive Advertisement

Persuasive ad aiming to build brand preference or encourage switching now.

Reminder Advertisement

Ad that keeps the brand top-of-mind and maintains customer relationships, especially in maturity stage.

Reach

Number or percentage of different people exposed to an advertisement.

Frequency

Average number of times an individual in the target audience is exposed to a message.

Gross Rating Points (GRP)

Reach multiplied by frequency; used to compare media plans.

Continuous Schedule

Advertising pattern with steady exposure throughout the year.

Flighting Schedule

Intermittent advertising pattern to match seasonal demand spikes.

Pulse Schedule

Combines continuous and flighting: steady baseline advertising with intensified bursts during peak periods.

Choice Board

Interactive online system letting customers design their own products by selecting attributes.

Collaborative Filtering

Recommender system technique predicting user preferences based on similar users’ behaviors.

Personalization (Digital)

Tailoring marketing content or offers to individual consumers based on data and preferences.

Opt-in Email Marketing

Email communications sent only to consumers who have given permission, increasing relevance and engagement.

Lead Generation Website

Site designed to capture contact information (calls or forms) as its primary conversion.

Cause Marketing

Co-marketing partnership between a for-profit business and a nonprofit, linking sales to support of a charitable cause.

Green Marketing

Marketing products or services based on environmental sustainability and benefits.

Greenwashing

Misleading consumers about a company’s environmental practices or the eco-benefits of a product.

Corporate Social Responsibility (CSR)

A company’s commitment to manage the social, environmental, and economic effects of its operations responsibly and in line with public expectations.