Principles of Marketing Exam #3 (Final Exam - Vocab) (Chapters 9-13)

Product

A good, service, or idea consisting of a bundle of tangible and intangible attributes that satisfies consumers’ needs and is received in exchange for money or something else of value 

Services

Intangible activities or benefits that an organization provides to satisfy consumers’ needs in exchange for money or something else of value 

Consumer Products

Products purchased by the ultimate consumer 

Business Products

Products organizations buy that assist in providing other products for resale. Also called B2B products or industrial products 

Convenience Products

Items that the consumer purchases frequently, conveniently, and with a minimum if shopping effort 

Shopping Products

Items for which the consumer compares several alternatives on criteria such as price, quality, or style 

Specialty Products

Items that the consumer makes a special effort to search out and buy 

Unsought Products

Items that the consumer does not know about or knows about but does not initially want 

Four I’s of Services

The four unique elements that distinguish services from goods: intangibility, inconsistency, inseparability, and inventory 

Idle Production Capacity

Occurs when the service provider is available but there is no demand for the service 

Product Item

A specific product that has a unique brand, size, or price 

Product Line

A group of product or service items that are closely related because they satisfy a class of needs, are used together, are sold to the same customer group, are distributed through the same outlets, or fall within a given price range 

Product Mix

Consists of all the product lines offered by an organization 

Protocol

A statement that, before product development begins, identifies (1) a well-defined target market; (2) specific consumers’ needs, wants, and preferences; and (3) what the product will be and do to satisfy customers 

Open Innovation

Practices and processes that encourage the use of external as well as internal ideas and internal as well as external collaboration when conceiving, producing, and marketing new products and services 

New-Product Development Process

The seven stages an organization goes through to identify opportunities and convert them into salable products or services 

New-Product Strategy Development

The stage of the new-product development process that defines the role for a new product in terms of the firm’s overall objectives 

Idea Generation

The stage of the new-product development process that develops a pool of concepts to serve as candidates for new products, building upon the previous stage’s results 

Screening and Evaluation

The stage of new-product development process that internally and externally evaluates new-product ideas to eliminate those that warrant no further effort 

Business Analysis

The stage of the new-development process that specifies the features of the product or service and the marketing strategy needed to bring it to market and make financial projections 

Development

The stage of the new-product development process that turns the idea on paper into a prototype 

Market Testing

The stage of new-product development process that exposes actual products to prospective consumers under realistic purchase conditions to see if they will buy 

Commercialization

The stage of the new-product development process that positions and launches a new product in full-scale production and sales 

Product Life Cycle

Describes the stages a new product goes through in the marketplace: introduction, growth, maturity, and decline 

Product Class

Refers to the entire product category or industry 

Product Form

Pertains to variations of a product within the product class 

Product Modification

Involves altering one or more of a product’s characteristics, such as its quality, performance, or appearance, to increase the product’s value to customers and increase sales 

Market Modification

Strategies by which a company tries to find new customers, increase a product’s use among existing customers, or create new use situations 

Trading Up

Adding value to the product (or line) through additional features or higher-quality materials 

Trading Down

Reducing a product’s number of features, quality, or price 

Branding

A marketing decision in which an organization uses a name, phrase, design, symbols, or combination of these to identify its products and distinguish them from those of competitors 

Brand Name

Any word, device (design, sound, shape, or color) or combination of these used to distinguish a seller’s products or services 

Brand Personality

A set of human characteristics associated with a brand name 

Brand Equity

The added value a brand name gives to a product beyond the functional benefits provided 

Brand Purpose

The reason why a brand exists, the place it has in consumers’ lives, the solution it provides to consumers, and the brand’s role in making society better off. It focuses on a brand’s underlying values and beliefs and its identity and meaning 

Brand Licensing

A contractual agreement whereby one company (licensor) allows its brand name(s) or trademark(s) to be used with products or services offered by another company (licensee) for a royalty or fee 

Multiproduct Branding

A branding strategy in which a company uses one name for all its products in a product class 

Multibranding

A branding strategy that involves giving each product a distinct name when each brand is intended for a different market segment 

Private Branding

A branding strategy used when a company manufactures products but sells them under the brand name of a wholesaler or retailer. Also called private labeling or reseller branding 

Mixed Branding

A branding strategy where a firm markets products under its own name(s) and that of a reseller because the segment attracted to the reseller is different from its own market 

Packaging

A component of a product that refers to any container in which it is offered for sale and on which label information is conveyed 

Label

An integral part of the package that typically identifies the product or brand, who made it, where and when it was made, how it is to be used, and package contents and ingredients 

Seven Ps of Services Marketing

An expanded marketing mix concept for services that includes the four Ps (product, price, promotion, and place or distribution) as well as people, physical environment, and process 

Off-Peak Pricing

Charging different prices during different seasons of the year and different times of the day or during different days of the week to reflect variations in demand for the service 

Capacity Management

Integrating the service component of the marketing mix with efforts to influence consumer demand 

Price (P)

The money or other considerations (including other products and services) exchanged for the ownership or use of a product or service 

Barter

The practice of exchanging products and services for other products and services rather than for money 

Value

The ratio of perceived benefits to price; or Value = (Perceived Benefits / Price) 

Value Pricing

The practice of simultaneously increasing product and service benefits while maintaining or decreasing price 

Profit Equation

Profit = Total Revenue – Total cost; or Profit = (Unit Price x Quantity Sold) - (Fixed Cost + Variable Cost) 

Skimming Pricing

Setting the highest initial price that customers really desiring the product are willing to pay when introducing a new or innovative product 

Penetration Pricing

Setting a low initial price on a new product to appeal immediately to the mass market 

Prestige Pricing

Setting a high price so that quality- or status-conscious consumers will be attracted to the product and buy it 

Odd-Even Pricing

Setting prices a few dollars or cents under an even number 

Bundle Pricing

The marketing of two or more products in a single package price 

Standard Markup Pricing

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

Cost-Plus Pricing

Summing the total unit cost of providing a product or service and adding a specific amount to the cost to arrive at a price 

Target Profit Pricing

Setting an annual target of a specific dollar volume of profit 

Target Return-on-Sales Pricing

Setting a price to achieve a profit that is a specified percentage of the sales volume 

Target Return-on-Investment Pricing

Setting a price to achieve an annual target return on investment (ROI) 

Customary Pricing

Setting a price that is dictated by tradition, a standardized channel of distribution, or other competitive factors 

Above-, At-, or Below-Market Pricing

Setting a market price for a product or product class based on a subjective feel for the competitors’ price or market price as the benchmark 

Loss-Leader Pricing

Deliberately selling a product below its customary price, not to increase sales, but to attract customers’ attention to it in hopes that they will buy other products will large markups as well 

Demand Curve

A graph that relates the quantity sold and price, showing the maximum number of units that will be sold at a given price 

Price Elasticity of Demand

The percentage change in quantity demanded relative to a percentage change in price 

Total Revenue (TR)

The total money received from the sale of a product 

Total Cost (TC)

The total expense incurred by a firm in producing and marketing a product. Total cost is the sum of fixed cost and variable cost 

Break-Even Analysis

A technique that analyzes the relationship between total revenue and total cost to determine profitability at various levels of output 

Pricing Objectives

Specifying the role of price in an organization’s marketing and strategic plans 

Pricing Constraints

Factors that limit the range of prices a firm may set 

Pricing Constraints

Factors that limit the range of prices a firm may set 

Direct to Consumer Marketing Channels

Allow consumers to buy products by interacting with various print or electronic media without a face-to-face meeting with a salesperson 

Multichannel Marketing

The blending of different communication and delivery channels that are mutually reinforcing in attracting, retaining, and building relationships with consumers who shop and buy in traditional intermediaries and online. Sometimes called omnichannel marketing 

Vertical Marketing Systems

Professionally managed and centrally coordinated marketing channels designed to achieve channel economies and maximum marketing impact 

Intensive Distribution

A level of distribution density whereby a firm tries to place its products and services in as many outlets as possible 

Exclusive Distribution

A level of distribution density whereby only one retailer in a specific geographic area carries the firm’s products 

Selective Distribution

A level of distribution density whereby a firm selects a few retailers in a specific geographic area to carry its products 

Channel Conflict

Arises when one channel member believes another channel member is engaged in behavior that prevents it from achieving its goals 

Disintermediation

A source of channel conflict that occurs when a channel member bypasses another member and sells or buys products direct 

Logistics

Those activities that focus on getting the right amount of the right products to the right place at the right time at the lowest possible cost 

Supply Chain

The various firms involved in performing the activities required to create and deliver a product or service to consumers or industrial users 

Bullwhip Effect

The tendency for supply chain managers at different levels of the supply chain to exaggerate the need to increase or decrease inventory in response to variation or lack of predictability in customer demand 

Total Logistics Cost

The expenses associated with transportation, materials, handling and warehousing, inventory, stockouts (being out of inventory), order processing, and return products handling 

Customer Service

The ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience 

Vendor-Managed Inventory (VMI)

An inventory management system whereby the supplier determines the product amount and assortment a customer (such as a retailer) needs and automatically delivers the appropriate items 

Retailing

All activities involved in selling, renting, and providing products and services to ultimate consumers for personal, family, or household use 

Form of Ownership

Distinguishes retail outlets based on whether independent retailers, corporate chains, or contractual systems own the outlet 

Level of Service

Describes the degree of service provided to the customer from three types of retailers: self-, limited-, and full-service 

Merchandise Line

Describes how many different types of products a store carries and in what assortment 

Scrambled Merchandising

Offering several unrelated product lines in a single store 

Telemarketing

Using the telephone to interact with and sell directly to consumers 

Retail Positioning Matrix

A matrix that positions retail outlets on two dimensions: breadth of product line and value added, such as location, product reliability, or prestige 

Retailing Mix

The activities related to managing the store and the merchandise in the store, which include retail pricing, store location, retail communication, and merchandise 

Multichannel Retailers

Retailers that utilize and integrate a combination of traditional store formats and nonstore formats such as catalogs, television home shopping, and online retailing 

Shopper Marketing

The use of displays, coupons, product samples, and other brand communications to influence shopping behavior in a store 

Shopping Experience

A consumer’s perception of an encounter with a store’s physical environment, personnel, and policies and procedures 

Category Management

An approach to managing the assortment of merchandise in which a manager is assigned the responsibility for selecting all products that consumers in a market segment might view as substitutes for each other, with the objective of maximizing sales and profits in the category 

Wheel of Retailing

A concept that describes how new forms of retail outlets enter the market 

Retail Life Cycle

The process of growth and decline that retail outlets, like products, experience, consisting of the early growth, accelerated development, maturity, and decline stages 

Merchant Wholesalers

Independently owned firms that take title to the merchandise they handle