Principles of Marketing – Core Vocabulary

This set of flashcards covers key marketing vocabulary from philosophy and strategy through channels, communication, pricing, planning, sustainability, consumer behaviour, segmentation, and product management.

Marketing

A philosophy and set of activities for creating, communicating, delivering, and exchanging offerings that have value for customers, partners, and society.

Customer Satisfaction

The feeling that a product or service has met or exceeded a buyer’s expectations.

Disconfirmation Paradigm

Model stating satisfaction results from comparing performance (p) with expectations (e): p>e = positive confirmation, p=e = confirmation, p<e = negative confirmation.

Herzberg’s Two-Factor Model

Separates customer service factors into ‘hygiene’ (prevent dissatisfaction) and ‘satisfiers’ (create WOW satisfaction).

Exchange

The act of obtaining a desired product from someone by offering something of value in return; requires five conditions (two parties, value, communication, freedom, desire to deal).

Production Orientation

A philosophy focusing on internal capabilities and production efficiency rather than on consumer wants.

Product Orientation

A philosophy that emphasizes product quality and innovation, assuming customers automatically choose the best product.

Sales Orientation

Managing with the primary goal of maximizing sales volume through aggressive promotion rather than building relationships.

Marketing Orientation (Consumer Orientation)

A philosophy that focuses on satisfying customer wants and needs while meeting organizational objectives.

Societal Marketing Orientation

Extends the marketing concept to include long-term societal welfare alongside customer satisfaction and company profits.

Relationship Marketing

A strategy that focuses on keeping and improving relationships with current customers.

Competitive Advantage (USP)

A set of unique features perceived by the target market as superior and significant over competitors.

Cost Advantage

Being able to offer products at lower costs than competitors, leading to lower prices or higher margins.

Quality Advantage

Competing through superior product or service quality perceived by customers.

Flexibility Advantage

Winning by rapidly adapting products, services, or operations to meet customer needs.

Marketing Process

Sequence: understand business mission, set objectives, analyse information (SWOT), develop and implement strategy, measure and evaluate performance.

Marketing Programme

A coordinated blend of the marketing mix elements designed to achieve objectives.

Marketing Plan

A written document that guides marketing activities and serves as a reference for future actions.

Marketing Channel

A pipeline through which product ownership, communication, payment, and risk flow from producer to consumer.

Intermediary

An independent firm (e.g., wholesaler, retailer, agent) that links producers to end users within a marketing channel.

Contact Efficiency

Reduction in the number of transactions needed when intermediaries consolidate exchanges between producers and consumers.

Transactional Functions

Channel activities such as contacting, promoting, negotiating, and risk taking.

Logistical Functions

Channel activities involving physical distribution and sorting to overcome discrepancies in quantity and assortment.

Facilitating Functions

Channel activities that research markets and provide financing.

Direct Channel

A distribution path in which the producer sells straight to the consumer without intermediaries.

Dual / Multiple Channels

Using two or more distribution channels to reach one or more customer segments.

Reverse Channel

A path through which products move from consumers back to producers for returns, recycling, or repairs.

Intensive Distribution

Strategy to stock a product in as many outlets as possible.

Selective Distribution

Using a limited number of intermediaries in a geographic area.

Exclusive Distribution

Granting a single intermediary rights to sell a product in a specific territory.

Horizontal Conflict

Disagreement among channel members at the same level (e.g., retailer vs retailer).

Vertical Conflict

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

Forward Integration

A producer acquires or establishes its own wholesale or retail outlets.

Backward Integration

A channel intermediary acquires or establishes production facilities.

Physical Distribution (Logistics)

All activities concerned with efficiently moving finished goods and raw materials to the right place at the right time.

Warehousing

System of storing goods until they are needed for sale or production.

Materials Handling

Movement and protection of goods in warehouses, including packaging and bar-coding.

Just-in-Time (JIT)

Inventory strategy that pulls stock through the supply chain exactly when needed, minimizing holding costs.

Order Processing

The flow of goods and information beginning with customer order and ending with product delivery.

Transportation Modes

Rail, road, pipeline, water, air; ranked on cost, transit time, reliability, capability, accessibility, traceability.

Retailing

All activities involved in selling goods or services directly to final consumers for personal use.

Department Store

Retailer offering a wide variety of product lines, organized into separate departments.

Specialty Store

Retailer concentrating on a narrow product line with deep assortments and high service.

Convenience Store

Small retailer located near residential areas, open long hours, carrying limited convenience goods.

Full-Line Discount Store

Retailer offering medium-to-broad assortment of goods at lower prices with minimal service.

Warehouse Club

Large, low-cost, membership-based retailer selling limited lines in bulk quantities.

Leased Department

Area within a retail store rented to an external operator (e.g., fast-food counter in a supermarket).

Non-shop Retailer

Retailer interacting with customers via telephone, mail, TV, internet, kiosks, or vending machines.

Marketing Communication Mix

Combination of advertising, public relations, personal selling, and sales promotion used to reach target market.

Advertising

Paid, non-personal communication about an organization or product by an identified sponsor.

Public Relations (PR)

Function that manages public attitudes and executes programs to earn public understanding and acceptance.

Publicity

Unpaid media coverage about a firm or its products appearing as news.

Personal Selling

Two-way, face-to-face communication to influence buying decisions.

Sales Promotion

Short-term incentives to stimulate immediate demand from consumers, trade, or employees.

Integrated Marketing Communications (IMC)

Coordinated use of all promotional tools to present a consistent message.

AIDA Model

Sequence Attention–Interest–Desire–Action explaining consumer response to marketing messages.

Hierarchy of Effects

Cognitive (awareness, knowledge), affective (liking, preference, conviction), and conative (purchase) stages in decision making.

Push Strategy

Promotional efforts directed at intermediaries to encourage stocking the product.

Pull Strategy

Promotional efforts directed at consumers to stimulate demand and pull product through the channel.

Price

What is exchanged for a product, usually money; generates revenue.

Revenue

Price multiplied by units sold.

Profit

Revenue minus total costs.

Profit-Oriented Pricing

Objectives focusing on profit maximisation, satisfactory profits, or ROI.

Sales-Oriented Pricing

Objectives aiming at market share or sales volume growth.

Status Quo Pricing

Objective of maintaining existing prices or matching competitors.

Price Skimming

Charging a high initial price to skim revenues from eager buyers.

Penetration Pricing

Setting a low initial price to quickly gain market share.

Predatory Pricing

Illegally setting very low prices to drive competitors out, then raising them.

Discounts and Allowances

Price reductions such as quantity, cash, seasonal discounts, promotional allowances, and rebates.

Geographic Pricing

FOB, uniform delivered, zone, freight absorption, or basing-point pricing to reflect shipping costs.

Price Lining

Offering a product line with items at specific price points (e.g., R40, R60, R90).

Leader Pricing

Selling products near or below cost to attract customers.

Odd-Even Pricing

Setting prices just below a round number (R99 vs R100).

Price Bundling

Combining two or more products in a single package at one price.

Two-Part Pricing

Charging two separate amounts to consume a single product (e.g., club fee + usage fee).

Strategic Planning

Managerial process of matching firm objectives and resources with market opportunities.

Mission Statement

Declaration of an organization’s purpose, business, and values guiding decisions.

SWOT Analysis

Assessment of internal strengths and weaknesses and external opportunities and threats.

Boston Consulting Group (BCG) Matrix

Portfolio tool classifying SBUs as Stars, Cash Cows, Question Marks, or Dogs based on growth and market share.

General Electric (GE) Matrix

Portfolio model plotting market attractiveness against business strength to guide investment.

Marketing Audit

Comprehensive, systematic, independent, periodic evaluation of a firm’s marketing activities.

Sustainable Marketing

Creating, producing, and delivering solutions that satisfy customers while addressing economic, environmental, and social goals.

Triple Bottom Line

Framework assessing performance on economic, environmental, and social dimensions.

Green Marketing

Development and promotion of products and processes that are environmentally friendly.

Social Marketing

Using marketing principles to influence behaviour for societal benefit.

Consumer Social Responsibility (CnSR)

Consumers’ consideration of social and environmental impacts in purchasing decisions.

Environmental Scanning

Continuous collection and analysis of external information to identify opportunities and threats.

Opportunity

A favourable external condition that can be exploited for profit.

Threat

An external trend that could harm the firm if not addressed.

Internal Environment

Elements within the firm that it controls, such as marketing mix and operations.

Macro Environment

Uncontrollable external forces: social, demographic, economic, technological, political/legal, competitive, physical.

Universal Living Standards Measure (LSM)

South African segmentation tool grouping consumers by living standards rather than race or income.

Inflation

General rise in prices without equivalent wage increase, reducing purchasing power.

Consumer Behaviour

Processes consumers use to select, purchase, use, and dispose of goods and services.

Problem Recognition

First step of buying process when a consumer perceives a need gap.

Information Search

Seeking value via internal memory and external sources to solve the recognized problem.

Evoked Set

Group of brands a consumer seriously considers during evaluation.

Cognitive Dissonance

Buyer’s post-purchase anxiety caused by conflicting thoughts about the decision.

Consumer Involvement

Degree of interest and effort a consumer invests in the decision process.

Routine Response Behaviour

Low-involvement, habitual buying of inexpensive, frequent purchases.