Marketing Segmentation, Product Development, and Promotion

These flashcards cover academic definitions relating to market segmentation, targeting, positioning, product development, innovation types, pricing strategies, distribution channels, and marketing communication processes.

Generational Marketing

A targeting approach where members of a generation are marketed to because they tend to share the same outlook, values, and priorities.

Generation Z (iGen)

The group of consumers born after $1994$, characterized as digital natives and the most diverse generation.

Digital Natives

Individuals who spend a significant portion of their time online and expect brands to engage them in two-way digital conversations.

Targeting

The strategy in which marketers evaluate the attractiveness of each potential segment and decide in which of these groups they will invest resources.

Target Market

The specific market segments on which an organization focuses its marketing plan and directs its marketing efforts.

Core Product

The layer of the product concept consisting of all the basic benefits the product provides for consumers or business customers.

Actual Product

The physical good or delivered service that supplies the desired benefit, including features, package, brand, quality, and appearance.

Augmented Product

The actual product plus other supporting features such as a warranty, credit, delivery, installation, and repair service after the sale.

Positioning

Developing a marketing strategy to influence how a particular market segment perceives a good or service in comparison to the competition.

Direct Competitors

Competitors whose offerings are very similar to yours.

Indirect Competitors

Competitors whose offerings are different but potentially provide the same benefits and satisfy the same customer needs.

Positioning Statement

An internal document used by companies to frame how a product is positioned and to ensure marketing communication remains focused on the specific value offered.

Repositioning

The act of redoing a product's position to respond to marketplace changes or to modify its brand image.

Undifferentiated Targeting Strategy

A strategy that appeals to a broad spectrum of people, benefiting from economies of scale by using one product and one message for many customers.

Differentiated Targeting Strategy

A strategy that develops one or more products for each of several customer groups with different product needs.

Concentrated Targeting Strategy

Focusing a firm's efforts on offering one or more products to a single segment, often used by smaller firms or to target niche markets.

Customized Marketing Strategy

An approach that tailors specific products and the messages about them to individual customers.

Segment Profile

A description of the 'typical' customer in a segment, which may include demographics, location, lifestyle, and purchase frequency.

Personas

Fictional characters created by marketers to represent different key potential user types, helping to identify marketing approaches for different needs.

Convenience Product

A consumer good or service that is usually low priced, widely available, and purchased frequently with minimum comparison and effort.

Consumer Packaged Good (CPG)

Also known as a fast-moving consumer good (FMCG), this is a low-cost good that is consumed quickly and replaced frequently.

Staple Products

Basic or necessary items that are available almost everywhere, such as milk, bread, and gasoline.

Impulse Products

Products that consumers buy on the spur of the moment, often requiring visible placement and grabby packaging.

Emergency Products

Products purchased when in dire need, such as bandages or umbrellas, where price and quality may be irrelevant to the immediate decision.

Shopping Products

Goods or services for which consumers spend considerable time and effort gathering information on price, attributes, and quality before purchasing.

Specialty Products

Goods or services with unique characteristics that are important to buyers at almost any price, often involving extended problem-solving and brand loyalty.

Unsought Products

Goods or services for which a consumer has little awareness or interest until a need is brought to their attention, such as insurance or retirement plans.

Geofencing Marketing

The use of GPS or RFID technology to create a virtual geographic boundary, triggering responses when mobile devices enter or leave the area.

B2B Equipment

Expensive goods that an organization uses in its daily operations that last for a long time, including capital items like robotics or accessory items like computers.

MRO Products

Maintenance, repair, and operating goods that a business customer consumes in a relatively short time, such as light bulbs, cleaning supplies, and computer paper.

Raw Materials

Products of the fishing, lumber, agricultural, and mining industries purchased to use in finished products.

Processed Materials

Products created when firms transform raw materials from their original state, such as treated lumber or aluminum ingots.

Component Parts

Manufactured goods or subassemblies of finished items that organizations need to complete their own products, such as silicon chips for computers.

Continuous Innovation

A modification to an existing product that sets it apart from competitors without requiring consumers to learn new behaviors.

Knockoff

A new product that copies, with slight modification, the design of an original product, often sold at lower prices to the mass market.

Dynamically Continuous Innovation

A pronounced modification to an existing product that requires a modest amount of learning or change in behavior to use.

Discontinuous Innovation

A totally new product that creates major changes in the way we live and requires significant learning to use.

Convergence

The coming together of two or more technologies to create a new system with greater benefits than its separate parts, such as smartphones.

Disruptive Innovation

An innovation that creates a new market and value chain, eventually displacing established market-leading firms and products.

First-mover Advantage

The benefit of being the first firm to enter a market with a new product, potentially as a disruptive innovator.

Value Co-creation

The process by which benefits-based value is created through collaborative participation by customers and stakeholders in the new product development process.

Technical Success

Indicates that a product concept is feasible to build physically, regardless of its commercial viability.

Commercial Success

Indicates that a product concept is feasible because there is or will be sufficient consumer demand to warrant its entry into the market.

Business Analysis

The phase in product development where marketers assess a product's commercial viability and its potential impact on sales and profits.

Technical Development

The phase where engineers refine and perfect a product, often resulting in prototypes and applications for patents.

Market Test

A phase where the firm tries out the complete marketing plan in a small slice of the market that is similar to the larger target market.

Commercialization

The final step in new product development involving the full-scale launch of the product into the market.

Crowdfunding

Online platforms that allow thousands of individuals to contribute small amounts of money to fund a new product from a start-up company.

Product Life Cycle (PLC)

A concept that explains how a product changes over its lifetime through four stages: Introduction, Growth, Maturity, and Decline.

Skimming Price

A strategy where a firm charges a high, premium price for its new product with the intention of reducing it in the future.

Penetration Pricing

A strategy where a firm introduces a new product at a very low price to encourage more customers to purchase and gain market share early.

Trial Pricing

Pricing a new product low for a limited period of time to lower the risk for consumers, followed by an increase to regular levels.

Price Segmentation

The practice of charging different prices to different market segments for the same product, such as adult versus child buffet pricing.

Peak Load Pricing

A pricing plan that sets prices higher during periods with higher demand, such as resort hotel rooms in the summer.

Market Share

The percentage of a market accounted for by a specific firm, product line, or brand, defined in terms of sales units or revenue.

Distribution Planning

The process of developing distribution objectives, evaluating environmental influences, and choosing a distribution strategy.

Breaking Bulk

The distribution function of dividing large quantities of goods into smaller lots to meet the needs of buyers.

Creating Assortments

Providing a variety of products in one location so that customers can conveniently buy many different items from one seller at one time.

Facilitating Functions

Functions performed by channel intermediaries that make the purchase process easier, such as offering credit to buyers.

Slotting Allowance

A fee paid by a manufacturer to a retailer in exchange for agreeing to place products on valuable shelf space.

Product Diversion

The distribution of a product through one or more channels not authorized for use by the manufacturer.

Conventional Marketing System

A multilevel distribution channel in which members work independently of one another with limited relationships.

Vertical Marketing System (VMS)

A channel of distribution in which there is formal cooperation among members at the manufacturing, wholesaling, and retailing levels.

Administered VMS

A vertical marketing system where channel members remain independent but work together due to the power of a single member.

Corporate VMS

A vertical marketing system in which a single firm owns the manufacturing, wholesaling, and retailing operations.

Contractual VMS

A vertical marketing system where cooperation is enforced by legal agreements that spell out rights and responsibilities.

Franchise Organizations

A type of contractual VMS where a franchiser allows a franchisee to use the franchise name and marketing plan for a fee.

Horizontal Marketing System

An arrangement where two or more firms at the same channel level work together for a common purpose, such as airline alliances.

Logistics

The process of designing, managing, and improving the movement of products through the supply chain.

Reverse Logistics

Includes activities related to product returns, recycling, material reuse, and waste disposal.

Intensive Distribution

A strategy aiming to maximize market coverage by selling a product through all suitable wholesalers or retailers.

Exclusive Distribution

Limit distribution to a single outlet in a particular region, often used for specialty products with high price tags.

Selective Distribution

A strategy that uses fewer outlets than intensive distribution but more than exclusive distribution.

Order Processing

The series of activities that occurs between the time an order comes in and the time a product goes out.

Warehousing

Storing goods in anticipation of sale or transfer to another member of the channel of distribution.

Materials Handling

The physical identification, checking, sorting, labeling, and moving of products into, within, and out of warehouses.

Supply Chain

The entire process of moving products from raw material suppliers through to the final customer.

Communication Process

The process whereby meaning is transferred from a source to a receiver through a message transmitted via a medium.

Encoding

The process by which a source translates an idea into a physically perceivable form of communication to convey meaning.

Decoding

The process by which a receiver intercepts, interprets, and assigns meaning to a message.

Noise

Anything that interferes with effective communication and can block or distort messages at any stage.

Promotion Mix

The specific communication elements controlled by a marketer, including advertising, sales promotion, public relations, personal selling, and direct marketing.

Intergrated Marketing Communication (IMC)

A strategic business process used to coordinate and evaluate brand communication programs over time.

Internal Reference Price

A set price or price range in the consumer's mind derived from past experience that they refer to when evaluating a product's cost.

Product Advertising

Advertising messages that focus on the features and benefits of a specific good or service.

Institutional Advertising

Advertising that promotes the activities, personality, or point of view of an organization or company rather than a specific brand.

Corporate Advertising

A type of institutional advertising that promotes the company as a whole instead of individual products.

Advocacy Advertising

A type of public service advertising where an organization seeks to influence public opinion on a specific issue in which it has a stake.

Groundswell

A social trend where people use technology to get things they need from each other rather than from traditional corporations.

Personal Selling

Communication between a salesperson and a customer through various platforms like phone, video, or in person.

Transactional Selling

A hard-sell approach that focuses on making an immediate sale with little concern for long-term customer relationships.

Relationship Selling

The process by which a salesperson secures, develops, and maintains long-term, win-win relationships with profitable customers.

Creative Selling Process

A systematic series of steps used by salespeople, including prospecting, preapproach, approach, presentation, handling objections, closing, and follow-up.

Sales Promotion

Short-term incentives, such as coupons, rebates, or samples, used to temporarily change the price/value relationship and encourage purchase.