BM Unit 4 Terms

Commercial marketing

is the use of marketing strategies to meet the needs of customers in a profitable way

Ethical code of practice

refers to guidelines that help businesses to act in a moral way by considering what is ethically right or wrong

A market

is a place or process whereby customers and suppliers trade. A market exists where there is a demand for a particular product and where there is a willingness from businesses to supply these projects

Market concentration

measures the degree of competition that exists within a market by calculating the market share of the largest few firms in the industry

Market leadership

refers to firms with the largest market share in a particular market

Market orientation

is a marketing approach adopted by businesses that are outward looking by focusing on making products that they can sell instead of selling products that they make.

Market share

measures the firm’s sales revenues as a percentage of the total sales revenue in the industry

Market size

refers to the magnitude of an industry, usually measured in terms of the value of sales revenue from all the businesses in a particular market, per time period

Marketing

* management process of predicting, identifying, and meeting the needs and wants of customers in a profitable manner
* Get the right product at the right price at the right place at the right time with adequate and effective promotion

Marketing objectives

are the specific marketing goals of an organization. The marketing objectives of for

Marketing strategies

are the medium to long term plan to achieve a firm’s marketing objectives

Needs

are the essential necessities that humans must have to survive

Product orientation

is a market approach used by businesses that are inward looking as they focus on selling products that they can make, rather than making products that they can sell

Social marketing

refers to any activity that seeks to influence social behavior to benefit the target audience and society as a whole

Wants

are human desires, things that people would like to have. Irrespective of a person’s wealth or income, all people have infinite wants.

bait and switch

the bait explains a deal too good to be true then when hooked, they say its unavailable and switch to a pricier alternative

swamping with information

too much info from car dealers and phone plans cause customers to be overwhelmed and prevent them from rational thinking & switching to competitors

fear tactics

exploiting people’s worries and vulnerabilities

‘get rich quick’

implies easy money making without clear conditions

health fraud

untested scientific claims

pester power

using children to harass their parents

product misinterpretation

brand names similar to the well known or highly inaccurate product descriptions

travel fraud

inaccurate descriptions to travelers such as “sea view”

unsubstantiated claims

claims that cannot be proved such as “10 out of 15…”

market planning

refers to structured process of formulating marketing objectives and appropriate marketing strategies to achieve these goals (organic growth strategy)

How to segment

1. geographic location
2. demographic


1. psychographic

Consumer profiles

are the demographic and psychographic characteristics of consumers in different markets

Differentiation

is the act of distinguishing a business or its products from rivals in the industry. It tires to create the perception among customers that the firm’s product is different compared to substitute products from rival businesses

Ethical marketing

refers to the moral aspects of an organization’s marketing strategies. It can be encouraged by the use of moral codes of practice

Market segmentation

is the process of categorizing customers into distinct groups with similar characteristics and similar wants or needs

The marketing mix

is the combination of various elements needed to successfully market a product. It is used to review and develop marketing strategies and is at the heart of marketing planning. It consists of the 4 Ps: product, price, promotion, and place

Marketing objectives

are the targets that the marketing department wishes to achieve

Marketing plan

Refers to the document outlining a firm’s marketing objectives and strategies for a specified time period

Marketing planning

is the systematic process of devising marketing objectives and appropriate marketing strategies to achieve these goals. It requires the collection and analysis of information and a particular market.

Mass marketing

refers to undifferentiated marketing. This is a strategy that ignores targeting individual market segments.

Niche marketing

targets a specific and well defined market segment

Packaging

is a form of non price competition that focuses on the way in which a product is presented to the consumer. Psychologists argue that a person’s mood is affected by aspects of packaging such as color and texture.

Physical evidence

refers to the image portrayed by a business regarding its observable and tangible features

Place

describes the methods of distributing products to customers

Position map/perception map

is a visual aid that shows customer perceptions of a product or brand in relation to others in the market, often by comparing perceptions about price and quality

Price

refers to the amount that customers pay for a particular good or service

Process

is part of the extended marketing mix which refers to the methods and procedures used to give clients the best possible experience

A product

is a physical good or an intangible service. Businesses sell products to fulfil the needs and wants of their customers

Promotion

refers to the strategies used to attract customers to buy a firm’s products.

Branding

helps to differentiate a product from its competitors

Repositioning

is a marketing strategy that involves changing the market’s perception of a firm’s product or brand in comparison to rival firm

Segmentation

is a process of categorising customers into distinct groups of people with similar characteristics and similar buying habits for market research and targeting purposes

Targeting

refers to each distinctive market segment having its own specific marketing mix. Different markets can be targeted depending on whether firms operate in niche or mass markets

Unique selling point

refers to any aspect of a product that makes it stand out from those offered by rival businesses

The boston matrix

is a marketing tool for analysing the product portfolio of a business. It shows whether products have high or low market share and operate in high or low market growth industries

Brand awareness

measures the extent to which potential customers or the general public recognize a particular brand. It is usually expressed as a percentage of the sample surveyed

Brand development

is a long term product strategy that involves strengthening the name and image of a brand to boost its appeal and sales

Brand loyalty

occurs when customers buy the same brand of a product time and time again. They are devoted to the brand since they have brand preference over other brand names

Brand value

refers to the premium that customers are willing to pay a brand over and above the value of the product itself

Cash cow

is a term used to refer to any product that generates significant money due to its large market share in a mature market

Consumer goods

are products bought for personal consumption, such as consumer durables and perishables

Dogs

have low market share and operate in low growth or stagnant markets. Hence, dogs do not generate much cash or profit for a business.

An extension strategy

is an attempt by marketers to lengthen the life cycle of a particular product, typically used during the maturity or early decline stages of the product life cycle.

Product

refers to any physical or non physical items that is purchased by commercial or private customers

Product differentiation

refers to any strategy used to make a product appear to be distinct from others, such as quality, branding, and packaging

The product life cycle

is the typical process that products go through from their initial design and launch to their decline and eventual withdrawal.

* research and development
* launch
* growth
* maturity
* decline

Product portfolio

refers to the range of products or strategic units owned and developed by an organization at any one point in time

Question marks

are products that compete in high market growth strategies, but have low market share. They consume lots of cash but do not generate much profit

Rising stars

are products that have high or rising market share in a high growth market

Cost plus pricing (markup pricing)

involves adding a percentage or predetermined amount of profit to the cost per unit of output to determine the selling price

Loss leader pricing

involves setting the price of a product below its costs of production. The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader product

Penetration pricing

involves setting low prices to gain entry into a new market. Once the product has established market share, prices can be raised

Predatory pricing

involves temporarily setting prices so low that rivals, especially smaller firms, cannot compete at a profitable level

Price

refers to the amount paid by a customer to purchase a good or service

Price discrimination

involves charging different prices to different groups of customers for the same product

Price leadership

is used for best selling products or brands in a particular market. Customers perceive there to be few substitutes for such products so the dominant firm can set its own prices. Competitors set their prices based on the price of the market leader

Price skimming

involves initially charging high prices for innovative or high tech products. Price is reduced as the novelty wears off and as substitute products appear

Price wars

involve businesses competing by a series of intensive price cuts to threaten the competitiveness of rival firms

Psychological pricing

involves rounding down numbers to make the price seem lower

People

are the employees who interact with customers, thereby delivering the service to customers. The reputation of a business largely depends on the training, motivation, and communication skills of employees.

Physical evidence

refers to the tangible aspects of a service

Processes

are the ways in which a service is provided or delivered, including payment systems, queuing times, customer services, after

A service

is an intangible product supplied by a business.

Business etiquette

refers to the mannerism and customs by which business is conducted in different countries.

Cultural exports

are the commercial transfer of ideas and values from one country to another.

Direct investment

refers to a business setting up production and/or distribution facilities in overseas markets.

Exporting

is the practice of selling domestically produced goods and/or services to overseas buyers in order to gain access to larger international markets.

Global marketing

is the marketing of a product by using the same marketing strategy in numerous countries to gain from marketing economies of scale.

Globalization

is the integration and interdependence of the world’s economies, resulting in cultures and tastes converging at an accelerating pace.

International marketing

is the marketing of a firm’s products in foreign countries.

Licensing

occurs when a third

B2B

refers to e-commerce conducted directly for business customers rather than the end user (consumers)

B2C

refers to e-commerce business conducted directly for the end user (consumer)

C2C

is an e-commerce platform such as eBay that enables customers to trade with each other.

* Sold through a classified or auction system
* Products are often used or second hand

E-commerce

is the trading of goods and services via the internet, electronic systems, and computer networks.

E-tailers

are businesses that operate predominantly online. They are difference from retailers that operate physical stores.

Price transparency

refers to the openness in communication about prices being charged by the business. E-commerce allows customers to access price comparisons quite easily.

Spam

refers to unsolicited and superfluous marketing messages via email to pop up advertisements. The common purpose of spamming is the advertise a firm’s products

Viral marketing

is a promotional techniques that relied on the use of online social networks

Premium product

high quality and high price

Economy products

low quality but appropriate low prices

Bargain products

high quality but low prices

Cowboy products

poor quality yet highly priced