Marketing Exam 2 Study Guide Flashcards

Comprehensive vocabulary flashcards covering cumulative marketing concepts and Chapters 9, 10, 11, 13, and 14.

5 Cs of marketing

Company, Collaborators, Customers, Competitors, and Context (climate), which together make up a situation analysis.

SWOT analysis

A framework where Strengths and Weaknesses represent internal factors (resources, brand, costs, skills), while Opportunities and Threats represent external factors (market trends, competitors, regulations, technology).

Primary research

Data collected firsthand specifically for the current question or research objective.

Secondary research

Data that already exists, having been previously collected for another purpose.

Insight

A deep, non-obvious understanding of customer motivations, tensions, or behaviors that can be used to guide strategy.

Customer Lifetime Value

The total profit a company expects to earn from a customer over the entire duration of their relationship.

80/20 Rule

A concept stating that roughly $80\%$ of a company's sales come from about $20\%$ of its customers (heavy users).

Personas

Fictional profiles of typical customers, built from research, used to understand customer needs and guide marketing decisions.

Market segmentation

Dividing a market into distinct groups of customers with similar needs, characteristics, or behaviors.

Geographic segmentation

Grouping customers based on where they live, such as by region, city size, climate, or urban versus rural environments.

Demographic segmentation

Grouping customers by measurable objective traits such as age, gender, income, education, family size, and ethnicity.

Psychographic segmentation

Grouping customers according to lifestyle, values, personality, attitudes, and interests.

Behavioral segmentation

Grouping customers by how they act, including their usage rate, brand loyalty, benefits sought, and purchase occasion.

Usage rate

The quantity of a product a customer buys or uses, typically categorized into light, medium, or heavy users.

Target market

The specific segment or segments an organization chooses to serve with its tailored marketing mix.

Product differentiation

The strategy of making a product stand out from competitors through unique features, quality, design, brand, or service.

Positioning

The active process of shaping how customers view and perceive a product relative to competitors.

Position

The actual mental perception or place that a product occupies in the minds of customers relative to competing products.

Perceptual map

A visual display that plots customer perceptions of competing products on two key dimensions/attributes to identify market gaps and set positioning.

Product repositioning

Changing the place a product occupies in customers' minds relative to competitive products, such as by altering messaging, features, or target market.

Job To Be Done

The underlying progress a customer is seeking to make in a specific situation, which guides product strategy toward desired outcomes rather than just demographic traits.

Mass customization

Manufacturing goods or delivering services tailored to individual customers' unique needs while maintaining near mass-production efficiency.

Build-to-order

A manufacturing approach where goods are produced only after a customer order is placed, custom to customer specifications.

Cannibalization

A situation in which sales of a company's new offering displace and reduce sales of its existing products.

Product line

A collection of closely related products that are sold by a single company.

Product mix

The complete set of all products and individual product lines offered for sale by a company.

Product line extension

The practice of adding a new item, variation, size, or flavor to an existing, already established product line.

Brand extension

The practice of utilizing an existing, established brand name to enter a completely different product category.

Open innovation

The practice of sourcing ideas, research, and technology from external entities (such as customers and partners) alongside internal R&D.

Stage-Gate process

A structured innovation framework where new-product development passes through sequential stages separated by formal checkpoints or review gates.

Standard test market

A market test where a new product is sold in selected test cities through normal commercial distribution channels to evaluate real sales performance.

Controlled test market

A market test where an outside research firm contracts a limited set of stores to distribute and monitor the product on store shelves.

Core product

The fundamental layer of a product that represents the basic functional benefit or problem-solving service the customer purchases.

Actual product

The physical attributes of the product, including its design, features, quality level, brand name, and packaging.

Augmented product

The non-physical layer of a product consisting of added values, warranties, customer service, delivery, and post-purchase support.

Durable good

A tangible product that lasts for an extended period of time and survives multiple uses (e.g., cars and appliances).

Nondurable good

A tangible good consumed in one or a few uses, such as food items or shampoo.

Convenience products

Inexpensive items that consumers buy frequently with minimal shopping effort and time (e.g., milk or chewing gum).

Shopping products

Items for which the consumer compares several criteria, such as price, quality, and style, across competing brands before buying.

Specialty products

Items with unique characteristics or strong brand identification for which consumers are willing to make special purchasing efforts.

Unsought products

Items that the consumer either does not know about or knows about but does not normally think of buying until a specific need arises.

Derived demand

Demand for business and industrial products that is driven by or originated from the demand for ultimate consumer goods.

Diffusion of innovation

The process by which the adoption of an innovation spreads throughout a social system over time through successive adopter categories.

Harvesting

A decline-stage strategy in which a company keeps a product on the market while drastically cutting marketing expenditures to maximize short-term cash flow.

Deletion

The deliberate dropping or discontinuing of an underperforming product from an organization's product line.

Product modification

Altering one or more of a product's characteristics, such as quality, performance, or styling, to boost sales and extend its life cycle.

Market modification

An effort by a company to find new customers, discover new uses for existing products, or encourage increased usage among current customers.

Trading up

Adding higher-priced, higher-quality items or features to a product line to appeal to a more premium market segment.

Trading down

Adding lower-priced products to a product line or reducing features to attract price-sensitive customers.

Shrinkflation

The practice of reducing a product's package size or quantity while keeping the retail price unchanged, effectively increasing the per-unit price.

Brand personality

A specific set of human characteristics or traits attributed to and associated with a brand name.

Brand equity

The added marketing and financial value that a brand name endows to a product beyond the functional benefits it provides.

Brand licensing

A contractual agreement where one firm allows another company to use its brand name, logo, or trademark on their products for a royalty fee.

Private branding (private labeling)

A branding strategy where a retailer or wholesaler manufactures products (or has them made) and markets them under its own store brand name.

Branded house

A brand architecture structure where a company applies a single primary master brand across all of its varied product offerings.

House of brands

A brand architecture structure where a firm establishes independent, individual brand names for each product line or offering.

Value pricing

The practice of simultaneously increasing product and service benefits while maintaining or decreasing price to deliver high overall customer value.

Price elasticity of demand

A measure of the percentage change in quantity demanded of a good divided by the percentage change in its price: $\frac{\% \Delta Q}{\% \Delta P}$.

Elastic demand

A market condition where price elasticity is greater than $1$, indicating that a slight price decrease yields an increase in total revenue.

Inelastic demand

A condition where price elasticity is less than $1$, meaning that changes in price generate relatively small changes in quantity, so increasing price raises total revenue.

Contribution margin

The unit selling price minus unit variable cost ($\text{Price} - \text{Unit Variable Cost}$), representing the amount each unit contributes toward covering fixed costs.

Break-even analysis

A quantitative technique that examines the relationship between total revenue and total cost to determine the production volume where profit equals zero.

Skimming pricing

Setting the highest possible initial price that customers really desiring the product are willing to pay, before lowering it systematically over time.

Penetration pricing

Setting a low initial price on a new product to quickly attract large numbers of buyers, discourage competitors, and win market share.

Prestige pricing

Setting a high price so that quality-conscious or status-conscious consumers are attracted to the product and view it as superior.

Price lining

Setting prices for a line of products at a limited number of distinct, predetermined pricing points (e.g., $\$20$, $\$30$, and $\$40$).

Odd-even pricing

Setting prices a few cents or dollars under an even number (e.g., $\$9.99$) to make the price appear psychologically smaller or using even numbers to convey quality.

Target pricing

Determining the price consumers are willing to pay, then working backward to engineer the product's features and cost structure to yield a target profit.

Bundle pricing

Marketing two or more products together in a single package for a combined price that is lower than purchasing them separately.

Standard markup pricing

Adding a fixed percentage markup to the cost of all items in a specific product category to establish selling prices.

Cost-plus pricing

Summing the total unit cost of providing a product or service and adding a specific amount or markup percentage to determine the final price.

Loss-leader pricing

Deliberately selling a product below its customary price or cost to attract customers into a retail store with the hope they will buy other, profitable goods.

Dynamic pricing policy

Adjusting prices in real time based on fluctuating supply and demand conditions, inventory levels, or customer segment characteristics.

Everyday low pricing (EDLP)

A retail pricing strategy emphasizing consistently low list prices across the board with very few temporary price discounts or promotional sales.

Price fixing

An illegal, anticompetitive conspiracy or explicit agreement among competitors to set or maintain prices at a specified level.