Marketing Principles: Key Terms from Chapters 1-5 (Vocabulary)

Vocabulary flashcards covering core terms and concepts from Chapters 1 and 2 (and related 3-5 concepts) to help study for the marketing exam.

Marketing

Process of creating, communicating, delivering value to customers and building relationships to capture value in return.

Marketing process

Steps: understand needs, design value-driven strategy, construct marketing program, engage customers, and capture value.

Needs

States of felt deprivation that motivate people to act.

Wants

Needs shaped by culture and individual personality.

Demands

Wants backed by purchasing power.

Market offerings

Products, services, experiences that satisfy needs and wants.

Value

Perceived benefits minus perceived sacrifices from a market offering.

Satisfaction

Feeling of pleasure or disappointment after comparing performance with expectations.

Exchanges

Trading items of value between buyer and seller.

Relationships

Ongoing, strong connections with customers built on value over time.

Markets

All actual and potential buyers of a product or service.

Marketing offers (4 Ps)

Complete value offered through Price, Product, Promotion, Place.

Value and satisfaction (customer relationships)

Higher value and satisfaction foster loyalty and long-term relationships.

Segmentation

Dividing a market into distinct groups with different needs or behaviors.

Target marketing

selecting specific market segments to serve to maximize demands and profitability.

Target proposition

Set of benefits a brand promises to deliver to satisfy needs.

CRM (Customer Relationship Management)

Process of building and maintaining profitable relationships by delivering value and satisfaction.

Customer lifetime value

Present value of the total future purchases expected from a customer.

Share of customer

Portion of a customer's purchases captured by a company.

Customer equity

Sum of all customers’ lifetime values.

Marketing offers (Marketing mix)

Tools (4 Ps) used to implement the marketing strategy: Price, Product, Promotion, Place.

Superior customer value

Delivering more value than competitors to foster loyalty and retention.

Loyalty

Customer preference and repeat purchasing behavior.

Retention

Keeping customers over time to maximize value.

Share of market

Company’s portion of total market sales.

Share of customer

Proportion of a customer’s purchases in a product category captured by the company.

Customer equity (revisited)

Total value of the company’s customer base over time.

Market orientation vs product orientation

Market orientation focuses on satisfying customer needs; product orientation focuses on offering the product.

Mission statement

Statement of the organization’s purpose and goals, ideally market-oriented and customer-focused.

Business portfolio

Collection of businesses and products making up the company.

Strategic Business Unit (SBU)

Company division, product line, or brand treated as a separate unit.

Portfolio analysis

Evaluating the mix of businesses/products to prioritize resource allocation.

BCG Growth-Share Matrix

Tool evaluating SBUs by market growth rate (MGR) and relative market share (RMS).

Star

High growth & high market share; requires heavy investment.

Cash cow

Low growth but high market share; generates steady cash with little investment.

Question mark

High growth but low market share; requires cash to build share.

Dog

Low growth and low share; limited cash potential.

Market expansion grid (Ansoff)

Growth options: market penetration, market development, product development, diversification.

Market penetration

Grow by increasing sales of current products to current markets.

Market development

Grow by entering new markets with current products.

Product development

Grow by offering modified or new products to current markets.

Diversification

Grow by introducing new products to new markets.

Value chain

Internal activities a firm performs to design, produce, market, deliver, and support a product.

Value delivery network

All players (suppliers, distributors, customers) who partner to improve the system’s value.

Positioning

Arranging for a product to occupy a clear, distinctive place in customers’ minds.

Differentiation

Creating superior value by distinguishing the offering from competitors.

Microenvironment

Actors close to the company affecting its ability to serve customers.

Macroenvironment

Larger societal forces that affect microenvironment actors.

Company

Internal groups and values shaping the firm’s ability to serve customers.

Suppliers

Entities providing resources needed to produce goods and services.

Market intermediaries

Resellers, distribution firms, marketing services, and financial intermediaries assisting promotion and distribution.

Competitors

Other firms offering competing products and striving to deliver greater value.

Publics

Groups with an interest in or impact on the organization’s objectives.

Demographic

Stats about population (size, age, gender, etc.) used for market insights.

Gen definitions (Baby boomers, Gen X, Millennials, Gen Z, Gen Alpha)

Generational cohorts used to segment markets by age and associated traits.

Economic factors

Market conditions affecting buying power and spending patterns.

Natural factors

Physical environment and natural resources involved in production.

Technological factors

Advances creating new products and opportunities.

Political factors

Laws, regulations, and pressure groups affecting markets.

Cultural factors

Societal values, beliefs, and customs shaping behavior.

Environmental sustainability

Business practices that preserve resources for the long term.

Social responsibility

Ethical framework guiding organizations to benefit society, not just profit.

Cause-related marketing

Partnership with social causes to promote products while supporting charity.

Core beliefs & values

Foundational cultural beliefs passed across generations.

Maslow’s hierarchy of needs

Needs arranged from physiological to self-actualization; order shapes motivation.

Need recognition

Stage where a buyer identifies a want or need.

Information search

Gathering data to inform a buying decision.

Evaluation of alternatives

Assessing options before a purchase.

Purchase decision

Choice to buy a particular product or brand.

Postpurchase behavior

Reaction after purchase, influencing future decisions.

Adoption process stages

Awareness, Interest, Evaluation, Trial, Adoption.

Adopter classes

Innovators, Early Adopters, Early Majority, Late Majority, Laggards.

Rate of adoption influences

Factors like relative advantage, compatibility, complexity, divisibility, communicability.

Straight rebuy

Reorder without modifications.

Modified rebuy

Reorder with some changes.

New task

First-time purchase requiring more information.

System selling

Purchasing a package of products/services to solve a problem.