marketing vocab

actual product

The physical attributes of a product including the brand name, features/design, quality level, and packaging.

associated services

The nonphysical attributes of the product including product warranties, financing, product support, and after-sale service. Also called augmented product.

augmented product

The nonphysical attributes of the product including product warranties, financing, product support, and after-sale service.

brand association

The mental links that consumers make between a brand and its key product attributes; can involve a logo, slogan, or famous personality.

brand awareness

Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers.

brand dilution

Occurs when a brand extension adversely affects consumer perceptions about the attributes the core brand is believed to hold.

brand equity

The set of assets and liabilities linked to a brand that add to or subtract from the value provided by the product or service.

brand extension

The use of the same brand name for new products being introduced to the same or new markets.

brand licensing

A contractual arrangement between firms, whereby one firm allows another to use its brand name, logo, symbols, or characters in exchange for a negotiated fee.

brand loyalty

Occurs when a consumer buys the same brand's product or service repeatedly over time rather than buying from multiple suppliers within the same category.

brand repositioning

A strategy in which marketers change a brand's focus to target new markets or realign the brand's core emphasis with changing market preferences. Also called rebranding.

breadth

Number of product lines offered by a firm; also known as variety.

cannibalize

From a marketing perspective, it is the negative impact on a firm's sales, profits, or market share when one product competes closely with a similar product offered by the same company.

co-branding

The practice of marketing two or more brands together, on the same package or promotion.

consumer product

Products and services used by people for their personal use.

convenience products/services

Products or services for which the consumer is not willing to spend any effort to evaluate prior to purchase.

core customer value

The basic problem-solving benefits that consumers are seeking.

depth

The number of categories within a product line.

family brand

A firm's own corporate name used to brand its product lines and products.

individual brands

The use of individual brand names for each of a firm's products.

line extension

The use of the same brand name within the same product line; represents an increase in a product line's depth.

manufacturer brands

Brands owned and managed by the manufacturer. Also called national brands.

perceived value

The relationship between a product's or service's benefits and its cost.

primary package

The packaging the consumer uses, such as the toothpaste tube, from which he or she typically seeks convenience in terms of storage, use, and consumption.

product

Anything that is of value to a consumer and can be offered through a voluntary marketing exchange.

product line

Group of associated items, such as those that consumers use together or think of as part of a group of similar products.

product mix

The complete set of all products offered by a firm.

retailer/store brand

Brand developed and marketed by a retailer and available only from the retailer. Also called private-label brand.

secondary package

The wrapper or exterior carton that contains the primary package and provides the UPC label used by retail scanners; can contain additional product information that may not be available on the primary package.

shopping products/services

Products or services for which consumers will spend time comparing alternatives, such as apparel, fragrances, and appliances.

specialty products/services

Products or services toward which the customer shows a strong preference and for which he or she will expend considerable effort to search for the best suppliers.

sustainable packaging

Product packaging that has less of a negative impact on the environment.

unsought products/services

Products or services consumers either do not normally think of buying or do not know about.

alpha testing

An attempt by the firm to determine whether a product will perform according to its design and whether it satisfies the need for which it was intended; occurs in the firm's research and development (R&D) department.

beta testing

Having potential consumers examine a product prototype in a real-use setting to determine its functionality, performance, potential problems, and other issues specific to its use.

brainstorming

A group activity used to generate ideas.

concept

Brief written description of a product or service; its technology, working principles, and forms; and what customer needs it would satisfy.

concept testing

The process in which a concept statement that describes a product or a service is presented to potential buyers or users to obtain their reactions.

decline stage

Stage of the product life cycle when sales decline and the product eventually exits the market.

diffusion of innovation

The process by which the use of an innovation, whether a product or a service, spreads throughout a market group over time and over various categories of adopters.

early adopters

The second group of consumers in the diffusion of innovation model, after innovators, to use a product or service innovation represent about 13.5 percent of the population. They generally don't like to take as much risk as innovators but instead wait and purchase the product after careful review.

early majority

A group of consumers in the diffusion of innovation model that represents approximately 34 percent of the population; members don't like to take much risk and therefore tend to wait until bugs are worked out of a particular product or service; few new products and services can be profitable until this large group buys them.

first movers

Product pioneers that are the first to create a market or product category, making them readily recognizable to consumers and thus establishing a commanding and early market share lead.

growth stage

Stage of the product life cycle when the product gains acceptance, demand and sales increase, and competitors emerge in the product category.

innovation

The process by which ideas are transformed into new products and services that will help firms grow.

innovators

Those buyers, representing approximately 2.5 percent of the population, who want to be the first to have the new product or service.

introduction stage

Stage of the product life cycle when innovators start buying the product.

laggards

Consumers, representing approximately 16 percent of the population, who like to avoid change and rely on traditional products until they are no longer available. Sometimes laggards never adopt a product or service.

late majority

The last group of buyers to enter a new product market, representing approximately 34 percent of the population; when they do, the product has achieved its full market potential.

lead users

Innovative product users who modify existing products according to their own ideas to suit their specific needs.

licensing

A method used in developing new products in which a firm buys the rights to use a technology or idea from another firm.

maturity stage

Stage of the product life cycle when industry sales reach their peak, so firms try to rejuvenate their products by adding new features or repositioning them.

outsourcing

A practice in which the client firm hires an outside firm to facilitate some aspect of its business. In the context of new product development, the outsourced firm helps its client develop new products or services.

pioneers

New product introductions that establish a completely new market or radically change both the rules of competition and consumer preferences in a market. Also called breakthroughs.

premarket test

Conducted before a product or service is brought to market to determine how many customers will try and then continue to use it.

product development

Entails a process of balancing various engineering, manufacturing, marketing, and economic considerations to develop a product's form and features or a service's features. Also called product design.

product life cycle

Defines the stages that new products move through as they enter, get established in, and ultimately leave the marketplace and thereby offers marketers a starting point for their strategy planning.

prototype

The first physical form or service description of a new product, still in rough or tentative form, that has the same properties as a new product but is produced through different manufacturing processes, sometimes even the crafted individually.

R&D consortia

A group of firms and institutions, possibly including government and educational institutions, that explore new ideas or obtain solutions for developing new products.

reverse engineering

Taking apart a competitor's product, analyzing it, and creating an improved product that does not infringe on the competitor's patents, if any exist.

test marketing

A method of determining the success potential of a new product; it introduces the offering to a limited geographical area prior to a national launch.

communication gap

A type of service gap; refers to the difference between the actual service provided to customers and the service that the firm's promotion program promises.

customer service

Specifically refers to human or mechanical activities firms undertake to help satisfy their customers' needs and wants.

delivery gap

A type of service gap; the difference between the firm's service standards and the actual service it provides to customers.

distributive fairness

Pertains to a customer's perception of the benefits he or she received compared with the costs (inconvenience or loss) that resulted from a service failure.

emotional support

Concern for others' well-being and support of their decisions in a job setting.

empowerment

In the context of service delivery, means allowing employees to make decisions about how service is provided to customers.

heterogeneity

As it refers to the differences between the marketing of products and services, the delivery of services is more variable.

inseparable

A characteristic of a service: it is produced and consumed at the same time; that is, service and consumption are inseparable.

instrumental support

Providing the equipment or systems needed to perform a task in a job setting.

intangible

A characteristic of a service; it cannot be touched, tasted, or seen like a pure product can.

knowledge gap

A type of service gap; reflects the difference between customers' expectations and the firm's perception of those expectations.

perishable

A characteristic of a service: it cannot be stored for use in the future.

procedural fairness

Refers to the customer's perception of the fairness of the process used to resolve complaints about service.

service

Any intangible offering that involves a deed, performance, or effort that cannot be physically possessed; intangible customer benefits that are produced by people or machines and cannot be separated from the producer.

service gap

Results when a service fails to meet the expectations that customers have about how it should be delivered.

Service Gaps Model

A managerial tool designed to encourage the systematic examination of all aspects of the service delivery process and prescribe the steps needed to develop an optimal service strategy.

service quality

Customers' perceptions of how well a service meets or exceeds their expectations.

standards gap

A type of service gap; pertains to the difference between the firm's perceptions of customers' expectations and the service standards it sets.

voice-of-customer (VOC) program

An ongoing marketing research system that collects customer inputs and integrates them into managerial decisions.

zone of tolerance

The area between customers' expectations regarding their desired service and the minimum level of acceptable service—that is, the difference between what the customer really wants and what he or she will accept before going elsewhere.

break-even analysis

Technique used to examine the relationships among cost, price, revenue, and profit over different levels of production and sales to determine the break-even point.

break-even point

The point at which the number of units sold generates just enough revenue to equal the total costs; at this point, profits are zero.

competitive parity

A firm's strategy of setting prices that are similar to those of major competitors.

competitor orientation

A company objective based on the premise that the firm should measure itself primarily against its competition.

complementary products

Products whose demand curves are positively related, such that they rise or fall together; a percentage increase in demand for one results in a percentage increase in demand for the other.

contribution per unit

The price less the variable cost per unit. Variable used to determine the break-even point in units.

cross-price elasticity

The percentage change in demand for product A that occurs in response to a percentage change in price of product B; see also complementary products.

customer orientation

A company objective based on the premise that the firm should measure itself primarily according to whether it meets its customers' needs.

demand curve

Shows how many units of a product or service consumers will demand during a specific period at different prices.

dynamic pricing

Refers to the process of charging different prices for goods or services based on the type of customer; time of the day, week, or even season; and level of demand. Also called individualized pricing.

elastic

Refers to a market for a product or service that is price sensitive; that is, relatively small changes in price will generate fairly large changes in the quantity demanded.

fixed costs

Those costs that remain essentially at the same level, regardless of any changes in the volume of production.

income effect

The change in the quantity of a product demanded by consumers due to a change in their income.

inelastic

Refers to a market for a product or service that is price insensitive; that is, relatively small changes in price will not generate large changes in the quantity demanded.

maximizing profits

A profit strategy that relies primarily on economic theory. If a firm can accurately specify a mathematical model that captures all the factors required to explain and predict sales and profits, it should be able to identify the price at which its profits are maximized.

monopolistic competition

Competition that occurs when there are many firms that sell closely related but not homogeneous products; these products may be viewed as substitutes but are not perfect substitutes.

monopoly

One firm provides the product or service in a particular industry.

oligopolistic competition

Competition that occurs when only a few firms dominate a market.

predatory pricing

A firm's practice of setting a very low price for one or more of its products with the intent to drive its competition out of business; illegal under both the Sherman Antitrust Act and the Federal Trade Commission Act.