Marketing Exam Revision: Core Concepts and Terminology

Comprehensive vocabulary flashcards covering key definitions, strategic frameworks, formulas, and concepts from the Marketing Exam Revision Pack.

Marketing

The process of understanding customer needs, creating value for them, and building beneficial relationships that attract, keep, and grow customers to increase long-term profitability.

Customer value

The value customers perceive they receive from an offering.

Customer satisfaction

How well the actual experience matches customer expectations.

Customer relationship

An ongoing connection that can encourage repeat purchase, loyalty, and recommendations.

Exchange

Obtaining something wanted from someone by giving something in return, such as money for a product.

Market offering

A combination of products, services, information, and/or experiences offered to satisfy a need or want.

Need

A basic requirement, such as food, water, shelter, or security.

Want

The particular way a person would like to satisfy a need.

Demand

A want supported by buying power.

Customer insights

Understandings of customers and the market based on marketing information that help create customer value, engagement, and relationships.

Customer analysis

The study of who customers are and how they behave, addressing who buys, why they buy, how they make decisions, where they buy, and when they buy.

Heterogeneity

The principle that consumers are not all alike, arising from individual differences, life experiences, functional needs, self-identity, and marketing activities.

Segmentation

Dividing a market into groups with similar needs or wants to identify what different customer groups exist.

Targeting

Evaluating customer groups and choosing which specific group(s) to focus on and serve.

Positioning

Creating a distinctive place for the brand in target customers' minds relative to competitors.

Geographic segmentation

Segmenting consumers by where they live, such as country, region, city, or neighbourhood.

Demographic segmentation

Segmenting consumers by who they are, such as age, gender, income, occupation, education, or life stage.

Psychographic segmentation

Segmenting consumers by how they think and live, such as beliefs, values, lifestyle, interests, or opinions.

Behavioural segmentation

Segmenting consumers by how they behave towards a product, including knowledge, attitudes, usage, or responses.

Benefit segmentation

Segmenting consumers based on the specific benefit or outcome they want from an offering.

MASDA criteria

The five requirements for effective segmentation: Measurable, Accessible, Substantial, Differentiable, and Actionable.

Mass marketing

A marketing approach that delivers a broadly uniform mix to the entire market, typically using mass advertising.

Segment/niche marketing

A marketing approach that provides different marketing mixes for distinct customer groups using STP, personas, and targeted advertising.

One-to-one marketing

Communicating with individual customers via a personalised marketing mix, typically using big data and personalised advertising.

Mass customisation

Providing products or services that customers can personalise individually while still producing at scale.

Diffusion of innovations

A model describing how a new product, technology, or idea spreads through a market over time across different adopter categories.

Innovators

The first group to adopt an innovation; they are interested in new ideas and emerging technology and seek useful product information and early access.

Early adopters

Consumers who adopt early, recognise potential benefits, and respond to credibility and genuine experience-sharing.

Early majority

Consumers who adopt before the average consumer but are more cautious, prioritising reliability, value, reviews, and real-life benefits.

Late majority

Consumers who adopt after the average consumer, preferring familiar, proven products with ease, affordability, and widespread acceptance.

Laggards

The last group to adopt an innovation; they may resist change and require marketing focused on practical necessity, simplicity, and clear advantages.

Parsimony

Keeping a segmentation approach as simple as reasonably possible while avoiding unnecessary complexity.

Explanatory power

The degree to which chosen segmentation variables successfully explain differences in purchasing behaviour: $\text{Behaviour} = f(\text{segmentation variables})$.

Points of Difference (POD) 4Ds

The four criteria a point of difference must satisfy: Desirable (customers want it), Deliverable (the brand can provide it), Different (distinguishes from competitors), and Durable (can be maintained over time).

Positioning map

A visual map illustrating consumer perceptions of competing brands across two important buying dimensions, where gaps identify potential unmet customer demand.

Actual demand

The amount of a product or service actually purchased in a particular time period and geographic area.

Primary demand

Total demand for an entire market or product category.

Secondary demand

Demand for one specific company or brand.

Potential demand

The maximum possible demand under given conditions: $\text{Potential demand} = \text{number of potential users} \times \text{consumption quantity} \times \text{time}$.

Potential gap

The difference between current demand and potential demand, caused by communication, usage, product, distribution, or competitive gaps.

Market share

A company's sales divided by total market sales expressed as a percentage: $\text{Market share} = \left(\frac{\text{Company sales}}{\text{Total market sales}}\right) \times 100\%$.

Numeric distribution (ND)

The percentage of stores in a market that sell a particular product.

Weighted distribution (%ACV)

Distribution weighted by the relative sales importance of stores, based on the category sales generated.

Supply-based competition

Defining competition from a company or industry perspective using managerial judgement, external data, and formal industry classifications.

Demand-based competition

Defining competition from the customer perspective based on which products consumers see as substitutes for satisfying the same need.

Budget/industry competition

A level of competition where products compete for the same overall consumer spending budget, even if completely unrelated (e.g., hairdryer vs air purifier).

Generic competition

A level of competition where different product types satisfy the exact same basic need (e.g., bottled water vs soft drinks).

Product category competition

Competition between products with similar features and functions (e.g., chocolate cookies vs butter cookies).

Product form competition

Direct competition between very similar products with the same basic features and function, typically differing by brand or attribute levels (e.g., Apple smartphone vs Samsung smartphone).

Cross elasticity of demand

A measure of how demand for product A changes when the marketing variables of product B change; a positive value indicates the products are substitutes.

Substitution in use

A qualitative research method, often conducted using focus groups, that explores how consumers substitute products in specific usage situations.

SWOT analysis

A strategic planning tool that assesses internal, positive Strengths; internal, negative Weaknesses; external, positive Opportunities; and external, negative Threats.

Scenario planning

Developing multiple plausible future states by asking 'what if?' questions; particularly useful when uncertainty is high.

Nash equilibrium

A game theory condition where no player has an incentive to change their strategy unilaterally because their choice represents the best response to other players' choices.

Service

An offering that is mainly intangible and consists of activities, benefits, or experiences without resulting in the ownership of a physical object.

Intangibility

The service characteristic meaning it cannot be touched or examined physically before purchase.

Simultaneous production and consumption

The service characteristic where the service is produced and consumed at the exact same time, making the delivery experience critical.

Inconsistency/variability

The service characteristic where quality varies depending on the provider, the time, and the delivery method.

Perishability

The service characteristic meaning it cannot be stored or inventoried for later use.

Search attribute

A product or service characteristic that can be evaluated before purchase, such as colour, size, or price.

Experience attribute

A product or service characteristic that can only be evaluated properly during or after consumption, such as the taste of a restaurant meal.

Credence attribute

A characteristic that is difficult to evaluate even after consumption because the consumer lacks specialised knowledge or expertise, such as whether medical treatment was necessary.

Foote, Cone & Belding (FCB) matrix

A strategic model for choosing advertising strategy based on consumer involvement (high vs low) and processing type (rational vs emotional).

Brand

A name, symbol, design, or combination of visual elements that identifies a product or service and differentiates it from competitors.

House of brands

A brand architecture where each individual product has an independent name, identity, and market positioning.

Branded house / umbrella

A brand architecture where a single main parent brand is applied across multiple products and categories.

Endorsed brand

A brand architecture where a product maintains its own identity while being visibly supported by an established parent brand.

Individual product brand

A brand structure where a product receives its own specific brand name, positioning, and promise.

Brand extension

Using an existing brand name to enter a completely different product category.

Line extension

Introducing a new product variant, flavour, or form within the same product category under an existing brand name.

Private label

A brand owned and controlled by a retailer, typically sold through its own retail network.

Licensing

An arrangement where a manufacturer pays royalties to use an established brand name owned by another company.

Co-branding

An arrangement where two or more established brand names are associated with a single product offering.

Co-marketing

A cooperative agreement where two or more companies collaborate on marketing and promotional activities while retaining their own distinct brands.

Brand equity

The additional commercial and perceptual value a brand generates beyond the functional physical product, enabling higher pricing and customer loyalty.

Primary data

New data collected specifically for the current research problem at hand, such as via surveys or interviews.

Secondary data

Existing data previously collected by someone else for a different primary purpose, such as sales records or government statistics.

Internal secondary data

Information already held within the business, including past marketing plans, sales reports, and website analytics.

External secondary data

Information collected and published by outside organisations, such as trade associations, government agencies, and industry reports.

Qualitative research

Research aimed at exploring underlying feelings, opinions, experiences, and motivations to answer 'why' and 'how' questions.

Quantitative research

Research focused on numerical measurements and statistical analysis to answer 'how many', 'how much', or 'how often' questions.

Netnography

A market research method that studies online communities and interactions to understand consumer culture, opinions, and behaviours.

Neuromarketing

A research technique measuring physiological and neurological responses, such as heart rate, brain activity, and eye movements, to marketing stimuli.

Social listening

Monitoring online conversations across social media and digital channels to evaluate brand sentiment, competitors, and trends.

Probability sampling

A sampling technique where participants are selected randomly, ensuring every individual has a known chance of selection to enable reliable population inferences.

Convenience sampling

A non-probability sampling technique where respondents are chosen based on ease of access rather than random selection.

Non-response bias

A source of error occurring when individuals who choose not to participate in a study systematically differ from those who do participate.

Panel

A fixed group of respondents who provide marketing data repeatedly over time to track shifts in behaviour and response to marketing activities.

Market potential

The maximum category sales reasonably achievable under specified conditions and time: $\text{Market potential} = \text{Potential customers} \times \text{purchasing rate}$.

Sales potential

The potential sales for a single company based on its projected share: $\text{Sales potential} = \text{Market potential} \times \text{projected market share}$.

Category Development Index (CDI)

An index measuring the relative sales strength of an entire product category in a specific area: $\text{CDI} = \left(\frac{\%\text{ of category sales in area}}{\%\text{ of national population in area}}\right) \times 100$.

Brand Development Index (BDI)

An index measuring the relative sales strength of a specific brand in a specific area: $\text{BDI} = \left(\frac{\%\text{ of brand sales in area}}{\%\text{ of national population in area}}\right) \times 100$.

Delphi method

A forecasting technique that compiles, aggregates, and refines predictions from a panel of independent experts over multiple iterative rounds.