Product
Anything that can be offered to a market for attention, acquisition, use, or consumption that might satisfy a need or want.
Service
Any activity or benefit that one party can offer to another that is essentially intangible and does not result in the ownership of anything
Consumer Product
A product bought by final consumer for personal consumption
Convenience Product
A consumer product that customers usually buy frequently, immediately, and with a minimum comparison and buying effort
Shopping Product
A consumer product that the customer, in the process of selection and purchase, usually compares on such bases as suitability, quality, price, and style
Specialty Product
A consumer product with unique characteristics or brand identification for which a significant group of buyers is willing to make a special purchase effort
Unsought Product
A consumer product that the consumer either does not know about or knows about but does not normally think of buying
Industrial Product
A product bought by individuals and organizations for further processing or for use in conducting business
Social Marketing
The use of commercial marketing concepts and tools in programs designed to influence individuals behavior to improve their well being and that of society
Product Quality
The characteristics of a product or service that bear on its ability to satisfy stated or implied customer needs
Brand
A name, term, sign, symbol, design, or a combination of these that identifies the groups of products or services one seller or group of sellers and differentiates them from those of competitors
Packaging
The activities of designing and producing the container or wrapper for a product
Product Line
A group of products that are closely related because they function in a similar manner, are sold to the same customer groups, are marketed through the same types of outlets, or fall within given price ranges
Product Mix
The set of all product lines and items that a particular seller offers for sale
Brand Equity
The differential effect that knowing the brand name has on customer response to the product or its marketing
Store Brand (Private Brand)
A brand created and owned by a reseller of a product or service
Co Branding
The practice of using the established brand names of two different companies on the same product
Line Extension
Extending an existing brand name to new forms, colors, sizes, ingredients, or flavors of an existing product category
Brand Extension
Extending an existing brand name to new product categories
Service Intangibility
A major characteristic of services - they cannot be seen, tasted, felt, heard, or smelled before they are bought
Service Inseparability
A major characteristic of services - They are produced and consumer at the same time and cannot be separated from their providers
Service Variability
A major characteristic of services - their quality may vary greatly, depending on who provides them and when, where, and how
Service Profit-Chain
The chain that links service firm profits with employee and customer satisfaction
Internal Marketing
Orienting and motivating customer contact employees and supporting service people to work as a team to provide customer satisfaction
Interactive Marketing
Training service employees in the fine art of interacting with customers to satisfy their needs
New-Product Development
The development of original products, product improvements, product modifications, and new brands through the firm's own product-development efforts
Idea Generation
The systematic search for new product ideas
Idea Screening
Screening new-product ideas in order to spot good ideas and drop poor ones as soon as possible
Product Concept
A detailed version of the new-product idea stated in meaningful consumer terms
Concept Testing
Testing new-product concepts with a group of target customers to find out if the concepts have strong consumer appeal
Marketing Strategy Development
Designing an initial marketing strategy for a new product based on the product concept
Business Analysis
A review of the sales, costs, and profit projections for a new product to find out whether these factors satisfy the company's objectives
Product Development
Developing the product concept into a physical product in order to ensure that the product idea can be turned into a workable market offering
Test Marketing
The stage of new-product development in which the product and marketing program are tested in realistic market settings
Commercialization
Introducing a new product into the market
Customer-Centered New Product Development
New-Product development that focuses on finding new ways to solve customer problems and create more customer-satisfying experiences
Team-based new product development
An approach to developing new products in which various company departments work closely together, overlapping the steps in the product development process to save time and increase efficiency
Product Life Cycle
The course of a products sales and profits over its lifetime. It involves five distinct stages: product development, introduction, growth, maturity, and decline
Style
A basic and distinctive mode of expression
Fad
A temporary period of unusually high sales driven by consumer enthusiasm and immediate product or brand popularity
Fashion
A currently accepted or popular style in a given field
Introduction stage
The product life-cycle stage in which the new product is first distributed and made available for purchase
Growth Stage
The product life cycle stage in which a product's sales start climbing quickly
Maturity Stage
The product life cycle stage in which sales growth slows or levels off
Decline Stage
The product life cycle stage in which a products' sales decline
Price
The amount of money charged for a product or service, or the sum of the values that customers exchange for the benefits of having or using the product or service
Value-Based Pricing
Setting price based on buyers' perceptions of value rather than on the seller's cost
Good-Value Pricing
Offering just the right combination of quality and good service at a fair price
Value-Added Pricing
Attaching value-added features and services to differentiate a company's offers and charging higher prices
Cost-Based Pricing
Setting prices based on the costs for producing, distributing, and selling the product, plus a fair rate of return for effort and risk
Fixed Costs (Overhead)
Costs that do not vary with production or sales level
Variable Costs
Costs that vary directly with the level of production
Total Costs
The sum of the fixed and variable costs for any given level of production
Experience Curve (Learning Curve)
The drop in the average per-unit production cost that comes with accumulated experience
Cost-Plus Pricing
Adding a standard markup to the cost of the product
Break-Even Pricing (Target Profit Pricing)
Setting price to break even on the costs of making and marketing a product, or setting the price to make a target profit
Target Costing
Pricing that starts with an ideal selling price, then targets costs that will ensure that price is met
Demand Curve
A curve that shows the number of units the market will buy in any given time period, at different prices that might be charged
Price Elasticity
A measure of the sensitivity of demand to changes in price
Market-Skimming Pricing
Setting a high price for new product to skim maximum revenues layer by layer from the segments willing to pay the high price; company makes fewer but more profitable sales
Market-Penetration Pricing
Setting a low price for a new product in order to attract a large number of buyers and a large market share
Product Line Pricing
Setting the price steps between various products in a product line based on cost differences between the products, customer evaluations of different features, and competitors pricing
Optional-product Pricing
The pricing of optional or accessory products along with a main product
Captive-product Pricing
Setting a price for products that must be used along with a main product, such as blades for a razor and film for a camera
By-product Pricing
Setting a price for by-products in order to make the main products price more competitive
Product Bundle Pricing
Combining several products and offerings the bundle at a reduced price
Discount
A straight reduction in price on purchases during a stated period of time
Allowance
Promotional money paid by manufacturers to retails in return for an agreement to feature the manufacturers products in some way
Segmented Pricing
Selling a product or service at two or more prices, where the difference in price is not based on differences in cost
Psychological Pricing
A pricing approach that considers the psychology of prices and not simply the economics; the price is used to say something about the product
Reference Pricing
Prices that buyers carry in their minds and refer to when they look at a given product
Promotional Pricing
Temporarily pricing products below the list price, and sometimes even below cost, to increase short-run sales
Geographic Pricing
Setting prices for customers located in different parts of the country or world
FOB-origin Pricing
A geographical pricing strategy in which goods are placed free on board a carrier, the customer pays the freight from the factory to the destination
Uniform-delivered Pricing
A geographical pricing strategy in which the company charges the same price plus freight to all customers, regardless of their location
Zone Pricing
A geographical pricing strategy in which the company sets up two or more zones. All customers within a zone pay the same total price; the more distant the zone, the higher the price
Basing-point Pricing
A geographical pricing strategy in which the seller designates some city as a basing point, and charges all customers the freight cost from that city to the customer
Freight-absorption Pricing
A geographical pricing strategy in which the seller absorbs all or part of the freight charges in order to get the desired business
Dynamic Pricing
Adjusting prices continually to meet the characteristics and needs of individual customers and situations
Promotion Mix (or marketing communications mix)
the specific blend of promotion tools that the company uses to persuasively communicate customer value and build customer relationships
Advertising
Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor
Sales Promotion
Short-term incentives to encourage the purchase or sale of a product or service
Personal Selling
Personal presentation by the firms sales force for the purpose of making sales and building customer relationships
Public Relations
Building good relations with the company's various publics by obtaining favorable publicity, building up a good corporate image, and handling or heading off unfavorable rumors, stories, and events
Direct Marketing
Direct connections with carefully targeted individual consumers to both obtain an immediate response and cultivate lasting customer relationships
Integrated Marketing Communications
Carefully integrating and coordinating the company's many communications channels to deliver a clear, consistent and compelling message about the organization and its products
Buyer readiness stages
The stages consumers normally pass through on their way to purchase, including awareness, knowledge, liking, preference, conviction, and purchase
Personal Communication Channels
Channels through which two or more people communicate directly with each other, including face to face, on the phone, through mail or e-mail, or even through an internet "chat
Word-of-Mouth influence
Personal communication about a product between target buyers and neighbors, family, friends, and associates
Buzz Marketing
Cultivating opinion leaders and getting them to spread information about a product or service to others in their communities
Nonpersonal Communication
Media that carry messages without personal contact or feedback, including major media, atmospheres, and events
Affordable Method
Setting the promotion budget at the level management thinks the company can afford
Percentage of sales Method
Setting the promotion budget at a certain percentage of current or forecasted sales or as a percentage of the unit sale price
Competitive Parity Marketing
Setting the promotion budget to match competitors' outlays
Objective and Task Method
Developing the promotion budget by (1) defining specific objectives, (2) determining the tasks that must be performed to achieve these objectives, and (3) estimating the costs of performing these tasks. The sum of these costs is the proposed promotion budget
Push Strategy
A promotion strategy that calls for using the sales force and trade promotion to push the product through channels. The producer promotes the product to channel members who in turn promote it to final consumers
Pull Strategy
A promotion strategy that calls for spending a lot on advertising and consumer promotion to induce final consumers to buy the product, creating a demand vacuum that "pulls" the product through the channel