Marketing

Marketing

The management task that links the business to the customer by identifying and meeting the needs of customers profitably. It does this by getting the right product at the right price to the right place at the right time

Market size

the total level of sales of all producers within a market

Market growth

the percentage change in the total size of a market (volume or value) over a period of time.

Ease of entry

the lack of barriers for the establishment of new competitors in a market

Homogenous products

goods that are physically identical or viewed as identical by consumers

Segmentation

dividing a market into distinct groups of consumers who share common tastes and requirements

Target marketing

focusing marketing activity on particular segments of the market

Mass marketing

selling to the whole market using a standardised product and the same marketing activities

Consumer good

tangible physical product marketed to end users (consumers)

Consumer service

intangible provision of an activity to end users (consumers)

Market Orientation

an outward-looking approach basing product decisions on consumer demand, as established by market research

Product orientation

an inward-looking approach that focuses on making products that can be made - or have been made for a long time - and then trying to sell them

Social marketing

this approach considers not only the demands of consumers but also the effects on all members of the public involved in some way when firms meet these demands

Market share

the percentage of sales in the total market sold by one business

Market leadership

when a business has the highest market share of all firms that operate in that market

Market share formula

Firm Sales/Total Market Sales

Marketing Objectives

the goals set for the marketing department to help the business achieve its overall objectives

Marketing Planning

the process of formulating appropriate strategies and preparing marketing activities to meet marketing objectives

Marketing mix

the key decisions that must be taken in the effective marketing of a product (Product, Price, Promotion, Place)

Coordinated marketing mix

the key marketing decisions complement each other and work together to give customers a consistent message about the product

Market Segment

a sub-group of a market made up of consumers with similar characteristics tastes and preferences

Target market

the market segment that a particular product is aimed at

Market segmentation

identifying different segments within a market and targeting different products or services to them

Consumer profile

a quantified picture of consumers of a firm's products, showing proportions of age groups, income levels, location, gender and social class.

Niche market

a small and specific part of a larger market

Niche marketing

identifying and exploiting a small segment of a larger market by developing products to suit it

Mass market

a market for products that are often standardised and sold in large quantities

Mass marketing

selling the same products to the whole market with no attempt to target groups within it

Product position map

a graph that analyses consumer perceptions of each of a group of competing products in respect of two product characteristics

Unique selling point

a factor that differentiates a product from its competitors

Sales Forecasting

predicting future sales levels and sales trends

seasonal variation

regular and repeated variations that occur in sales data within a period of 12 months or less.

Cyclical variations

variations in sales occurring over periods of time of much more than a year- they are related to the business cycle

Random variations

may occur at any time and will cause unusual and unpredictable sales figures; e.g. exceptionally poor weather, or negative public image following a high-profile product failure.

Trend

Underlying movement of the data in a time series.

Market research

process of collecting, recording and analysing data about customers, competitors and the market

Primary Research

the collection of first-hand data that are directly related to a firm's needs

Secondary research

collection of data from second-hand sources

Qualitative research

research into the in-depth motivations behind consumer buying behaviour or opinions

Quantitative Research

research that leads to numerical results that can be statistically analysed

Survey

detailed study of a market or geographical area to gather data on attitudes, impressions, opinions and satisfaction levels of products or businesses, by asking a section of the population

Open questions

those that invite a wide-ranging or imaginative response

Closed questions

question to which a limited number of preset answers is offered

Focus groups

a group of people who are asked about their attitude towards a product, service, advertisement or new style of packaging

Observational technique

a qualitative method of collecting and analysing information obtained through directly or indirectly watching and observing others in business environments

Test marketing

marketing a new product in a geographical region before the full-scale launch.

Sample

group of people taking part in a market research survey selected to be representative of the target market overall

Sampling error

errors in research caused by using a sample for data collection rather than the whole target population.

Quota sampling

gathering data from a group chosen out of a specific sub-group

Random sampling

every member of the target population has an equal chance of being selected

Stratified sampling

this draws a sample from a specified sub-group or segment of the population and uses random sampling to select an appropriate number from each stratum

Cluster sampling

using one or a number of specific groups to draw samples from and not selecting from the whole population

Snowball sampling

using existing members of a sample study group to recruit further participants through their acquaintances

Convenience sampling

drawing representative selection of people because of the ease of their volunteering or selecting people because of their availability or easy access

Product

the end result of the production process sold on the market to satisfy a customer need

Consumer durables

manufactured products that can be re-used and are expected to have a reasonably long life, such as cars and washing machines

Product life cycle

the pattern of sales recorded by a product from launch to withdrawal from the market

Extensions strategies

marketing plans that extend the maturity stage of the product before a brand new one is needed

Boston Consulting Group Matrix

a method of analysing the product portfolio of a business in terms of market share and market growth

Brand

an identifying symbol, name, image or trademark that distinguishes a product from its competitors

Brand awareness

extent to which a brand is recognised by potential customers, and is correctly associated with a particular product - can be expressed as a percentage of the target market

Brand loyalty

the faithfulness of consumers to a particular brand as shown by their repeat purchases irrespective of the marketing pressure from competing brands

Brand Development

measures the infiltration of a product's sales, usually per thousand population. If 100 people in 1000 buy a product, it has a brand development of 10.

Brand value (or brand equity)

the premium that a brand has because customers are willing to pay more for it than they would for a non-branded generic product

Family branding

a marketing strategy that involves selling several related products under one brand name (also known as umbrella branding).

Product branding

each individual product in a portfolio is given its own unique identity and brand image (also known as individual branding).

Company or corporate branding

the company name is applied to products and this becomes the brand name

Own-label branding

retailers create their own brand name and identity for a range of products

Manufacturers' brands

producers establish the brand image of a product or a family of products, often under the company's name

Cost-plus pricing

Adding a fixed mark-up for profit to the unit price of a product

Penetration pricing

setting a relatively low price often supported by strong promotion in order to achieve a high volume of sales

Market skimming

setting a high price for a new product when a firm has a unique or highly differentiated product with low price elasticity of demand

Psychological pricing

Setting prices that take account of customers' perception of value of the product

Loss leader

product sold at a very low price to encourage consumers to buy other products

Price discrimination

occurs when a business sells the same products to different consumers at different prices

Promotional pricing

special low prices to gain market share or sell off excess stock - includes 'buy one get one free'

Price leadership

exists when one business sets a price for its products and other firms in the market set the same or similar prices

Predatory pricing

deliberately undercutting competitors' prices in order to try and force them out of the market

Promotion

the use of advertising, sales promotion, personal selling, direct mail, trade fairs, sponsorship and public relations to inform consumers and persuade them to buy

Above-the-line promotion

a form of promotion that is undertaken by a business by paying for communication with consumers

Below-the-line promotion

promotion that is not a directly paid-for means of communication but based on short-term incentives to purchase

Sales promotion

incentives such as special offers or special deals directed at consumers or retailers to achieve short-term sales increases and repeat purchases by consumers

Promotion mix

the combination of promotional techniques that a firm uses to communicate the benefits of its products to customers

Internet marleting

refers to advertising and marketing activities that use the internet, email and mobile communications to encourage direct sales via electronic commerce

Viral marketing

the use of social media sites or text messages to increase brand awareness or sell products

Guerilla marketing

an unconventional way of performing marketing activities on a very low budget

Channel distribution

the chain of intermediaries a product passes through from producer to final consumer

Agent

a business with the authority to act on behalf of another firm

Process

procedures and policies that are put in place to provide the service or product to the consumer

Physical evidence

the ways in which the business and its products are presented to customers

Intangible products

a non-physical product - a service - provided to a consumer such as an insurance policy or a car repair

Tangible product

a physical object that can be touched such as a building, car or clothing

International marketing

Selling products in markets other than the original domestic market

Globalisation

The growing trend towards worldwide markets in products, capital and labour, unrestricted by national barriers

Pan-Global Marketing

adopting a standardised product across the globe as if the whole world were a single market - selling the same good in the same way everywhere

Global localisation

adapting the marketing mix, including differentiated products, to meet national and regional tastes and cultures

Multinational companies

businesses that have operations in more than one country

E-commerce

the buying and selling of goods over the internet

Business-to-business (B2B)

Transactions conducted between a supplying business and a purchasing business

Business-to-consumer (B2C)

transactions conducted directly between a company and consumers who are the end-users of its products or services