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Glossary

GLOSSARY

Action programmes—action programmes Affordable method—setting the promotion other industries to identify best practices
should be coordinated with the resources budget at the level management thinks the and find ways to improve quality and per-
and activities of other departments, includ- company can afford. formance.
ing production, finance and purchasing.
Age and life-cycle segmentation—Dividing Benefit segmentation—Dividing the mar-
Adapted global marketing—an international a market into different age and life-cycle ket into segments according to the differ-
marketing strategy that adjusts the marketing groups. ent benefits that consumers seek from the
strategy and mix elements to each interna- product.
Agent—a wholesaler who represents buyers
tional target market, bearing more costs but
or sellers on a relatively permanent basis, Blogs—online journals where people post
hoping for a larger market share and return.
performs only a few functions and does not their thoughts, usually on a narrowly defined
Administered VMS—a vertical marketing take the goods. topic.
system that coordinates successive stages
Allowance—Promotional money paid by Brand extension—Extending an existing
of production and distribution, through the
manufacturers to retailers in return for an brand name to new product categories.
size and power of one of the parties.
agreement to feature the manufacturer’s
Adoption process—The mental process products in some way. Brand—a name, term, sign, symbol, design,
through which an individual passes from or a combination of these, that identifies the
Alternative evaluation—The stage of products or services of one seller or group of
first hearing about an innovation to final
the buyer decision process in which the sellers and differentiates them from those of
adoption.
consumer uses information to evaluate competitors.
Advertising agency—a marketing services alternative brands in the choice set.
firm that assists companies in planning, Brand equity—The differential effect that
Approach—a salesperson meets the cus- knowing the brand name has oncustomer
preparing, implementing and evaluating
tomer for the first time. response to the product or its marketing.
all or portions of their advertising pro-
grammes. Attitude—a person’s consistently favourable Break-even analysis—analysis to determine
or unfavourable evaluations, feelings and the unit volume and euro sales needed to be
Advertising budget—The euros and other
tendencies toward an object or idea. profitable given a particular price and cost
resources allocated to a product or a com-
pany advertising programme. Baby boomers—The 78 million people born structure.
during years following the second World Break-even price—The price at which to-
Advertising media—The vehicles through
War and lasting until 1964. tal revenue equals total cost and profit is
which advertising messages are delivered to
their intended audiences. Base-point pricing—a geographical pricing zero.
strategy in which the seller designates some Break-even pricing (target return pricing)—
Advertising objective—a specific communi-
city as a base point and charges all customers setting price to break even on the costs of
cation task to be accomplished with a spe-
the freight cost from that city to the customer. making and marketing a product or setting
cific target audience during a specific period
of time. Behavioural segmentation—Dividing a price to make a target return.
market into segments based on consumer
Advertising strategy—The strategy by which Broker—a wholesaler who does not take ti-
knowledge, attitudes, uses or responses to
the company accomplishes its advertising tle to goods and whose function is to bring
a product.
objectives. It consists of two major elements: buyers and sellers together and assist in ne-
creating advertising messages and selecting Belief—a descriptive thought that a person gotiation.
advertising media. holds about something.
Budgets—Managers use budgets to project
Advertising—any paid form of non-personal Benchmarking—The process of compar- profitability and plan for each marketing
presentation and promotion of ideas, goods ing one company’s products and processes programme’s expenditures, scheduling and
or services by an identified sponsor. to those of competitors or leading firms in operations.

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knowl. roles promotion budget to match competitors’ vate salespeople. for personal consumption. demand by multiplying a base number by a Business portfolio—The collection of busi. selecting which competitors to attack or avoid. Consumer product—A product bought by for products that must be used along with a costs and market offerings. and rewards – who should do what and for outlays. marketing channel members on goals. competitive review is to identify key com- pany. Competitor-centred company—A compa- services online to final consumers. either by having lower Catalogue marketing—Direct marketing the company’s objectives. Competition-based pricing—Setting prices Captive product pricing—Setting a price based on competitors’ strategies. caused by postpurchase conflict. assessing to reach new business customers. rented licly available information about consumers. and buying efficiencies and better prices. prices or providing more benefits that justify through print. conviction and. reward customers and moti. their communities. ployees. which operate online only and have Complex buying behaviour—Consumer to a purchase. buying behaviour characterised by high edge. describe their market positions and commonly owned and controlled. brands. final consumers for personal consumption. ed online marketing to their operations. Cognitive dissonance—Buyer discomfort niches. Communication adaptation—A global Cannibalisation—The situation in which one communication strategy of fully adapting Consumer market—All the individuals and product sold by a company takes a portion advertising messages to local markets. briefly discuss their strategies. services for personal consumption. a large share of one or a few segments or that play a role in the purchase decision. serve cur. main product. competitors and developments in the mar- lar line and is staffed by knowledgeable em- keting environment. evalu. video or digital catalogues higher prices. Concentrated (niche) marketing—A market- established brand names of two different coverage strategy in which a firm goes after Buying centre—All the individuals and units companies on the same product. ny whose moves are mainly based on com- petitors’ actions and reactions. cess by which business buyers determine Competitive marketing strategies— Causal research—Marketing research to test which products and services their organisa. such as blades for a razor and Competitive advantage—An advantage costs and profit projections for a new prod. what rewards. stimu. Buyer-readiness stages—The stages con. strategies. Business-to-consumer (B-to-C) online Click-and-mortar companies—Traditional marketing—Businesses selling goods and brick-and-mortar companies that have add. carries a very deep assortment of a particu- or supplied to others. making process. liking. Channel conflict—Disagreement among Competitive-parity method—Setting the late purchases. Business promotions—Sales promotion tools used to generate business leads. and reaction patterns. Concept testing—Testing new-product con- Buzz marketing—Cultivating opinion lead. the actual purchase. and households that buy goods and services more competitive. buyer. prices. Competitive marketing intelligence—The services for use in the production of other systematic collection and analysis of pub- Category killer—A giant speciality store that products and services that are sold. consumer involvement in a purchase and Closing—A salesperson asks the customer nally. including awareness. 659 . Chain ratio method—Estimating market vantage. no brick-and-mortar market presence. made haviour of organisations that buy goods and available in stores. pany against competitors and give the tionships. fi. nesses and products that make up the com. games for a computer game console. Strategies that strongly position the com- hypotheses about cause-and-effect rela- tions need to purchase and then find. strengths and rent customers more effectively and obtain product and its ownership closer to the final weaknesses. households that buy or acquire goods and of its sales from other company products. Internet. Commercialisation—Introducing a new behaviour of final consumers – individuals products to make the main product’s price product into the market. Click-only companies—The so-called dot- sumers normally pass through on their way coms. Business-to-business (B-to-B) online mar. Consumer buyer behaviour—The buying By-product pricing—Setting a price for by. Business buying process—The decision pro. preference. Commercial online databases—Collections cepts with a group of target consumers to ers and getting them to spread information of information available from online find out if the concepts have strong con- about a product or a service to others in commercial sources or accessible via the sumer appeal. significant perceived differences among for an order. over competitors gained by offering great- uct to find out whether these factors satisfy er customer value. Competitor analysis—The process of keting—Businesses using online marketing Channel level—A layer of intermediaries identifying key competitors. ate and choose among alternative suppliers company the strongest possible strategic ad- and brands. Chain stores—Two or more outlets that are petitors. Business buyer behaviour—The buying be. or presented online.Glossary Business analysis—A review of the sales. that performs some work in bringing the their objectives. Buyers—People in an organisation’s buying Co-branding—The practice of using the centre who make an actual purchase. that are mailed to select customers. Competitive review—The purpose of a chain of adjusting percentages.

Culture—The set of basic values. ing relationships in which customers. powered by today’s new digital technologies. customer-value-building marketing invest- Convenience product—A consumer prod. the public at large – into the new-product tomer problems and create more customer- innovation process. rather than on the seller’s cost. number of units the market will buy in a giv- imise its own profits. Consumer-to-consumer (C-to-C) online marketing—Online exchanges of goods and Cultural environment—Institutions and Customer-managed relationships—Market- information between final consumers. customer would make over a lifetime of Demands—Human wants that are backed by signed to build customer goodwill. products directly. lection of comprehensive data about indi. em- perceptions. employees. located Customer equity—The total combined cus- tomer lifetime values of all of the company’s Decline stage—The PLC stage in which a near a residential area. learn about their ties of people – customers. opment—New-product development that offers and initiate purchases. at different prices that might Customer lifetime value—The value of profits for the system as a whole. Contract manufacturing—A joint venture in interact with companies and with each other which a company contracts with manufac. Creative concept—The compelling ‘big Customer-centred company—A company keting activities from the consumer’s point idea’ that will bring the advertising mes. wholesalers and retail. satisfying experiences. sometimes pendent scientists and researchers and even focuses on finding new ways to solve cus- even driving transaction terms. centre who have formal or informal power and buying effort. wants and behaviours learned by a uct or provide a service. uct that customers usually buy frequently. to shape their relationships with brands. psychographic ­ Deciders—People in an organisation’s buying immediately and with minimal comparison and behavioural data. and satisfaction. ciple of sustainable marketing that holds a company should view and organise its mar. Customer-centred new-product devel- sumers search out sellers. Cost-based pricing—Setting prices based Customer value analysis—An analysis con- on the costs for producing. vidual customers or prospects. that is open long customers. to select or approve the final suppliers. tem that combines successive stages of changes created by consumers themselves – production and distribution under single Customer satisfaction—The extent to which both invited and uninvited – by which ownership – channel leadership is estab. the rights and power of buyers in relation to sellers. product’s sales decline. channel consisting of one or more inde. member of society from family and other Customer-perceived value—The customer’s important institutions. from marketing information that become pendent producers. Convenience store—A small store. that focuses on customer developments in of view. maintaining profitable customer relation- term customer relationships. levels of production and distribution join to. the basis for creating customer value and Demand curve—A curve that shows the ers. percep. 660 . be charged. the entire stream of purchases that the Corporate (brand) website—A website de. Cost-plus pricing (or mark-up pricing)— Customer value-based pricing—Setting A standard mark-up to the cost of the price based on buyers’ perceptions of value Consumer-oriented marketing—A prin- product. Customer database—An organised col. Consumer-to-business (C-to-B) online marketing—Online exchanges in which con. inde. other forces that affect society’s basic values. demographic. distributing and ducted to determine what benefits target Consumerism—An organised movement of selling the product plus a fair rate of return customers value and how they rate the rela- citizens and government agencies to improve for effort and risk. sage strategy to life in a distinctive and designing its marketing strategies and deliv- memorable way. ships by delivering superior customer value Corporate VMS—A vertical marketing sys- Consumer-generated marketing—Brand ex. Crowdsourcing—Inviting broad communi. buying power. tions. tive value of various competitors’ offers. ments. even at the expense of en time period. turers in a foreign market to produce a prod. hours seven days a week and carries a limit- ed line of high-turnover convenience goods. Deficient products—Products that have Customer insights—Fresh understandings neither immediate appeal nor long-term Conventional distribution channel—A of customers and the marketplace derived benefits. A sales force organisation in which salespeople gether through contracts. ering superior value to its target customers. shaping their own brand experiences and those of other consumers. Glossary Consumer promotions—Sales promotion customer feedback and supplement other Customer relationship management tools used to boost short-term customer sales channels rather than sell the company’s (CRM)— The overall process of building and buying and involvement or enhance long. relationships. a product’s perceived performance matches consumers are playing an increasing role in lished through common ownership. each a separate business seeking to max. including geographic. of sustainable marketing that holds a com- Contribution margin—The unit contribu- pany should put most of its resources into tion divided by the selling price. collect patronage. specialise in selling only to certain customers Customer-value marketing—A principle or industries. evaluation of the difference between all the Contractual VMS—A vertical marketing sys- benefits and all the costs of a marketing offer tem in which independent firms at different Customer (or market) sales force structure— relative to those of competing offers. a buyer’s expectations. preferences and behaviours.

Downsizing—Reducing the business portfo- Desirable products—Products that give lio by eliminating products or business units Experimental research—Gathering pri- both high immediate satisfaction and high that are not profitable or that no longer fit mary data by selecting matched groups of long-term benefits. generation and nationality. the regulation of international trade. Direct marketing channel—A marketing Fad—A temporary period of unusually high Environmentalism—An organised move- channel that has no intermediary levels. current and future living environment. freight from the factory to the destination. style. Differentiated (segmented) marketing—A controlling related factors and checking for Dynamic pricing—Adjusting prices continu- market-coverage strategy in which a firm differences in group responses. service 661 . side the company’s current products and drop in the average per-unit production tial for a product or the demographics and ­markets. observers to watch and interact with con. highly auto. race. Exchange—The act of obtaining a desired market into segments based on variables er volume. includ- Ethnographic research—A form of observa. tronic connections between buyers and Fixed costs—Costs that do not vary with pro- Direct-response television (DRTV) market. situ. recommendations and points Derived demand—Business demand that from various plants and suppliers. Fashion—A currently accepted or popular minder or other item to a person at a par. object from someone by offering something such as age. tion experience. ing—Direct marketing via television. keting plan summarises and overviews the merchandisers. intermediaries. gender. fill them efficiently and deliver goods prove the marketing plan. traditional resellers by radical new types of tribute the company’s products in their ter- tions in terms of size. such as the market poten. gather preliminary information that will help Economic community—A group of nations Differentiation—Differentiating the market define problems and suggest hypotheses. cost that comes with accumulated produc- attitudes of consumers. spending patterns. tone. Descriptive research—Marketing research Diversification—Company growth through to better describe marketing problems. E-procurement—Purchasing through elec- ticular physical or virtual address. style in a given field. family life in return. ritories. giving them different treatments. convenience. to customers as quickly as possible. discontinued or economy that the planet can support indefi- tivate lasting customer relationships. Dissonance-reducing buying behaviour— Execution style—The approach. density. location. sales driven by consumer enthusiasm and ment of concerned citizens and government immediate product or brand popularity. Factory outlet—An off-price retailing op- Direct marketing—Direct connections with eration that is owned and operated by a Environmental sustainability—Developing carefully targeted individual consumers to manufacturer and normally carries the strategies and practices that create a world both obtain an immediate response and cul. manufacturer’s surplus. Exploratory research—Marketing research to and designs separate offers for each. For management demand for consumer goods. ally to meet the characteristics and needs of decides to target several market segments individual customers and situations. or service producers or the displacement of number of dealers the exclusive right to dis- Demography—The study of human popula. subjects. Exporting—Entering a foreign market by Direct investment—Entering a foreign mar. Disintermediation—The cutting out of mar- cycle. Executive summary—This section of a mar- department managed by specialist buyers or Distribution centre—A large. organised to work toward common goals in offering to create superior customer value. a table of contents usually fol- lows this section. mated warehouse designed to receive goods main goals. education. announcement. purchases during a stated period of time or Event marketing (or event sponsorships)— Focus group interviewing—Personal inter- of larger quantities. age. interviewer to talk about a product. Department store—A retail organisation Consumer buying behaviour in situations words and format used for executing an ad- that carries a wide variety of product characterised by high involvement but few vertising message. for senior managers who will read and ap- ultimately comes from (derives from) the ders. Creating a brand-marketing event or serving viewing that involves inviting six to ten peo- Discount store—A retail operation that sells as a sole or participating sponsor of events ple to gather for a few hours with a trained standard merchandise at lower prices by created by others. the customer pays the Discount—A straight reduction in price on sumers in their ‘natural environments’. irregular goods. FOB-origin pricing—A geographical pric- ing direct-response television advertising (or tional research that involves sending trained ing strategy in which goods are placed free infomercials) and home shopping channels. take or. re. on board a carrier. occupation and other statistics. reli- keting channel intermediaries by product Exclusive distribution—Giving a limited gion. family size. sellers – usually online. duction or sales level. lines – each line is operated as a separate perceived differences among brands. that affect consumer purchasing power and or manufacturing facilities. selling goods produced in a company’s Economic environment—Economic factors ket by developing foreign-based assembly home country. the company’s overall strategy. gender. income. Experience curve (learning curve)—The ations or markets. occupation. nitely. race. starting up or acquiring businesses out. often with little modification. Direct-mail marketing—Direct marketing agencies to protect and improve people’s by sending an offer.Glossary Demographic segmentation—Dividing the accepting lower margins and selling at high.

called a franchisor. such retail corporation. counties. Group—Two or more people who interact to Innovative marketing—A principle of sustain- accomplish individual or mutual goals. performance of the entire distribution system. different countries. of net sales remaining after cost of goods consumer may simply have heightened at- sold – calculated by dividing gross margin tention or may go into an active information Following up—A salesperson follows up af- by net sales. 662 . Information search—The stage of the buyer a new product is first distributed and made ment. sion. employees in the fine art of interacting with Income segmentation—Dividing a market customers to satisfy their needs. search. links several product’s sales start climbing quickly. segmentation)—Forming segments of con- price retailer that is either independently sumers who have similar needs and buying Geographic segmentation—Dividing a mar. and preferences of individual customers – tained from data sources within the com- Global firm—A firm that. Horizontal marketing system—A channel Integrated marketing communications Gatekeepers—People in an organisation’s arrangement in which two or more com. they often help define specifications around the world to each other and an and also provide information for evaluating amazingly large information repository. competitors. Interactive marketing—Training service quantity of a needed item. method that evaluates a company’s SBUs in Franchise—A contractual association be. Intermodal transportation—Combining even neighbourhoods. business from their offices via telephone. gains R&D. the Growth-share matrix—A portfolio-planning cess. decision process in which the consumer is available for purchase. nursing homes. by operating also called one-to-one marketing. channels to deliver a clear. ter the sale to ensure customer satisfaction and repeat business. taining one or more intermediary levels. into different segments based on gender. Intensive distribution—Stocking the prod- General need description—The stage in the Idea screening—Screening new-product uct in as many outlets as possible. business buying process in which a buyer ideas to spot good ideas and drop poor ones describes the general characteristics and as soon as possible. The interviewer ‘focuses’ the Gross margin percentage—The percentage aroused to search for more information. able marketing that requires a company to seek Franchise organisation—A contractual ver- real product and marketing improvements. in more than one country. perceived brand differences. networks that connects users of all types a fair price. desired business. prisons and other institu- organisation (a franchisor) and independent tions that provide goods and services to Habitual buying behaviour—Consumer businesspeople (franchisees) who buy the people in their care. cities or Indirect marketing channel—Channel con. (IMC)—Carefully integrating and coordinat- buying centre who control the flow of infor. Generation X—The 45 million people born into different income segments. Good-value pricing—Offering the right Influencers—People in an organisation’s Internet—A vast public web of computer combination of quality and good service at buying centre who affect the buying deci. owned and run or is a division of a larger behaviour even though they are located in ket into different geographical units. Glossary or organisation. tical marketing system in which a channel Growth stage—The PLC stage in which a member. Geographical pricing—Setting prices for Individual marketing—Tailoring products Internal databases—Electronic collections customers located in different parts of the and marketing programmes to the needs of consumer and market information ob- country or world. between 1965 and 1976 in the ‘birth dearth’ Intermarket segmentation (cross-market following the baby boom. new-product ideas. wholesaler or service market share. regions. panies at one level join together to follow a ing the company’s many communications mation to others. the group discussion on important issues. Independent off-price retailer—An off. hospitals. consistent and compelling message about an organisation Gender segmentation—Dividing a market Idea generation—The systematic search for and its products. provide customer satisfaction. marketing and markets-of-one marketing. terms of its market growth rate and relative Institutional market—Schools. Inside sales force—Salespeople who conduct stages in the production-distribution pro. buying behaviour characterised by low- right to own and operate one or more units consumer involvement and few significantly Integrated logistics management—The logis- in the franchise system. clarifies and overcomes any customer ing channel organisations – to maximise the all or part of the freight charges to get the objections to buying. Internet or visits from prospective buyers. new marketing opportunity. as nations. marketing and financial Internal marketing—Orienting and motivat- Industrial product—A product bought by ing customer contact employees and sup- advantages in its costs and reputation individuals and organisations for further pro. tics concept that emphasises teamwork – both Freight-absorption pricing—A geographical Handling objections—A salesperson seeks inside the company and among all the market- pricing strategy in which the seller absorbs out. that purchase or rent goods and services for Introduction stage—The PLC stage in which carrying out the main functions of govern. customised pany network. tween a manufacturer. Government market—Governmental units alternatives. states. production. two or more modes of transportation. porting service people to work as a team to that are not available to purely domestic cessing or for use in conducting a business.

the domestic firm that the firm blends to produce the response strategies. an industry. of target markets and delivering the desired Joint venturing—Entering foreign markets satisfactions better than competitors do. the company to promote. implementing and market sales. Market penetration—Company growth by Lifestyle—A person’s pattern of living as ex. company offers than to the benefits and ex- available for use or consumption by the con- selves rather than through independent periences produced by these products. and helping decision makers to Local marketing—Tailoring brands and pro- of marketing efforts. Marketing control—Measuring and evaluat- duce or market a product or a service. that the objectives are achieved. political and cultural forces. Marketing mix—The set of tactical marketing pays balanced attention to both customers agement know-how to a foreign company tools – product. market. products. a company joins investors in a foreign ments for current company products. actions to accomplish strategic marketing product. reaching consumers with more engaging Marketing management—The art and sci- Market—The set of all actual and potential messages. turns over or is sold during a specified time the marketing strategies and detailed action Marketing channel management—Selecting. wholesalers. Marketing logistics (or physical logical. ing profitable relationships with them. interests and keting strategies and plans into marketing rent market segments without changing the opinions. natural. managing and motivating individual channel on costs. Marketing intermediaries—Firms that help ferent needs. overlook or ignore. fective marketing channels by analysing fighting hard to increase its market share in geography.Glossary Inventory turnover rate (or stockturn Market description—Describes the targeted identifying major channel alternatives and rate)—The number of times an inventory segments in detail and provides context for evaluating those alternatives. place and promotion – and competitors in designing its marketing that supplies the capital. objectives. use the information to generate and validate motions to the needs and wants of local cus- actionable customer and market insights. selling price. or units. forces that affect the microenvironment – marketing programmes. information or experiences an agreement with a licensee in a foreign management’s ability to build and maintain offered to a market to satisfy a need or want. Marketing organisation—The marketing Marketing channel design—Designing ef- Market challenger—A runner-up firm that is department may be organised by function. Market development—Company growth by members and evaluating their performance Joint ownership—A joint venture in which identifying and developing new market seg. setting channel objectives. characteristics or behaviours. developing the needed in- who respond in a similar way to a given set formation. sell and distribute Macroenvironment—The larger societal and who might require separate products or its goods to final buyers. colours. ence of choosing target markets and build- buyers of a product or service. out rocking the boat. Management contracting—A joint venture Market-centred company—A company that in which a domestic firm supplies the man. People and procedures for assessing infor- egory. Marketing implementation—Turning mar- increasing sales of current products to cur- pressed in his or her activities. demographic. Licensing—A method of entering a foreign Marketing environment—The actors and Market offerings—Some combination of market in which a company enters into forces outside marketing that affect marketing products. ing the results of marketing strategies and Market nicher—A firm that serves small seg- Learning—Changes in an individual’s behav. Market leader—The firm in an industry with by joining with foreign companies to pro- the largest market share. into distinct groups of buyers who have dif. price. Line extension—Extending an existing brand Market potential—The upper limit of mar- name to new forms. exports management services rather than it wants in the target market. Market segment—A group of consumers mation needs. ingredi. Marketing concept—A philosophy that market to create a local business in which Market follower—A runner-up firm that holds that achieving organisational goals a company shares joint ownership and wants to hold its share in an industry with. product or customer (or some customer needs. Market share—Company sales divided by distribution)—Planning. plans and taking corrective action to ensure ments that the other firms in an industry iour arising from experience. over time. Marketing information system (MIS)— ket demand. the clutter and create new avenues for selecting one or more segments to enter. successful relationships with target customers. depends on knowing the needs and wants control. Marketing channel (or distribution Marketing myopia—The mistake of paying channel)—A set of interdependent organi- Manufacturers’ sales branches and offices— more attention to the specific products a sations that help make a product or service Wholesaling by sellers or buyers them. sumer or business user. ents or flavours of an existing product cat. neighbourhoods Market segmentation—Dividing a market and even specific stores. sizes. services. 663 . economic. controlling the physical flow of materials. tomer segments – cities. period (often one year) – calculated based programmes. Madison & Vine—A term that has come to final goods and related information from represent the merging of advertising and Market targeting—The process of evaluating points of origin to points of consumption to ­entertainment in an effort to break through each market segment’s attractiveness and meet customer requirements at a profit. techno. combination thereof).

sales. ucts and services and build customer rela- Market-skimming pricing (price skimming)— trolled by marketing. Marketing—The process by which compa. the company that affect its ability to serve its customers – the company. born be- calculated by dividing net marketing contri. online focus groups. Web-based experiments Market-penetration pricing—Setting a low price for a new product to attract a large Net marketing contribution (NMC)—A or tracking consumers’ online behaviour. Marketing return on sales (or marketing ganisation’s purpose – what it wants to ac- ROS)—The percent of net sales attributable complish in the larger environment. analysis and reporting of data rel. atmospheres and events. Off-price retailer—A retailer that buys at ing an initial marketing strategy for a new less-than-regular wholesale prices and sells Motive (drive)—A need that is sufficiently product based on the product concept. sites or even virtual worlds – where people Mark-up—The difference between a com. value from customers in return. Online marketing—Efforts to market prod- cludes only components of profitability con. personality or other characteris- Microenvironment—The actors close to Non-personal communication channels— tics. Micromarketing—Tailoring products and Objective-and-task method—Developing collection. online classifieds and other forms. search-related up two or more marketing channels to reach Marketing website—A website that engages one or more customer segments. Operating ratios—The ratios of selected op- ment of original products. to manufacture or purchase it. number of buyers and a large market share. Web. in which the con- strong customer relationships to capture Online marketing research—Collecting pri- sumer recognises a problem or need. each sales euro going to profit – calculated munities – blogs. Occasion segmentation—Dividing the market to the net marketing contribution – calcu. Media that carry messages without personal Opportunities—Opportunities are external keting intermediaries. ence group who. promotion objectives. measure of marketing profitability that in. at less than retail. actions Mission statement—A statement of the or- and situations. pliers. (2) determining the an organisation. Examples are factory out- pressing to direct the person to seek satis- Marketing strategy—The marketing logic faction of the need. prices. mar. product improve. ads. which the buyer purchases a product or ser. nies create value for customers and build buyer decision process. knowledge. the compa. including display ads. calculated by dividing total ­expenses by net vice for the first time. suppliers. customer markets. It includes local marketing tasks needed to achieve these objectives and and individual marketing. New-product development—The develop. organisation and gain qualitative insights Need recognition—The first stage of the about consumer attitudes and behaviour. ploit to its advantage. because of special skills. consumers in interactions that will move Online focus groups—Gathering a small Natural environment—Natural resources them closer to a direct purchase or other group of people online with a trained mod- that are needed as inputs by marketers or marketing outcome. independents and warehouse clubs. 664 . productivity of a marketing investment – lion children of the baby boomers. Glossary Marketing research—The systematic design. by which the company hopes to create cus. Merchant wholesaler—An independently owned wholesale business that takes title to ments. tween 1977 and 2000. new. Setting a high price for a new product to skim maximum revenues layer by layer from the seg. data by observing relevant people. elements that a company may be able to ex- competitors and publics. The sum of these costs is the proposed keting ROI)—A measure of the marketing Millennials (or Generation Y)—The 83 mil- promotion budget. by dividing net profits by net sales. Needs—States of felt deprivation. purchase or use the purchased item. marketing programmes to the needs and the promotion budget by (1) defining specific evant to a specific marketing situation facing wants of specific individuals and local cus. tionships over the Internet. product modifications and new Opinion leader—A person within a refer- the merchandise it handles. contact or feedback. erating statement items to net sales. service or that are affected by marketing activities. Operating expense percentage—The ­portion Mark-up chain—The sequence of mark-ups New task—A business buying situation in of net sales going to operating e­ xpenses – used by firms at each level in a channel. exerts social influence on others. New product—A good. Observational research—Gathering primary bution by marketing expenses. social networking web- ny makes fewer but more profitable sales. actually make their ation in which the buyer wants to modify by net sales. tomer segments. Net profit percentage—The percentage of Online social networks—Online social com- ments willing to pay the high price. service or idea that socialise or exchange information and pany’s selling price for a product and its cost is perceived by some potential customers as opinions. erator to chat about a product. into segments according to occasions when Modified rebuy—A business buying situ- lated by dividing net marketing contribution buyers get the idea to buy. terms or sup- Marketing strategy development—Design. lets. Online advertising—Advertising that ap- Multi-channel distribution system—A dis- tomer value and achieve profitable customer pears while consumers are browsing the tribution system in which a single firm sets relationships. (3) estimating the costs of performing these Marketing return on investment (or mar- tasks. velopment efforts. product specifications. mary data online through Internet surveys. including major media. Maturity stage—The PLC stage in which a product’s sales growth slows or levels off. brands through the firm’s own product de.

Personal communication channels—Chan. on the phone. 665 . business buying process in which the buying Political environment—Laws. energy to making continuous product im- main product. product or brand during a spe. introduction. form a meaningful picture of the world. customer evaluations of different fea- bring greater value to customers. or e-mail. nels through which two or more people Pro forma (or projected) profit-and-loss statement (or income statement or oper. performance and features and that sumption that might satisfy a want or need. use or con- businesses that make up the company. in the company recognises a problem or Product sales force structure—A sales force acteristics that distinguish a person or group. price. eral products and offering the bundle at a best technical product characteristics for a uals in a given society. acquisition. ing sales and building customer relation. organisation decides on and specifies the and limit various organisations and individ. via mail ating statement)—A statement that shows projected revenues less budgeted expenses satisfy stated or implied customer needs. organise and interpret information to price ranges. expected time of de. relative to competing products in the minds Product invention—Creating new products livery. the business buying process in which the product concept into a physical product to buyer writes the final order with the chosen Positioning—Arranging for a product to oc. pany’s products. modify or drop the fined by consumers on important attributes – arrangement. Positioning built on or services. type of customer. tomer groups. maturity and buyer decision process in which consum- producing the container or wrapper for a decline. sumers in the long term. Product mix (or product portfolio)—The set Price—The amount of money charged for a Performance review—The stage of the busi. Product position—The way the product is de- and decides to continue. marises the main features for all of a com- the firm’s sales force for the purpose of mak. need that can be met by acquiring a good organisation in which salespeople specialise or a service. Product adaptation—Adapting a product products or lines. quantity needed. cupy a clear. Product—Anything that can be offered to a management evaluates the products and ers will favour products that offer the most market for attention. Product quality—The characteristics of a communicate directly with each other. of all product lines and items that a particu- product or a service. are sold to the same cus- age of the unit sales price. return policies and warranties. in selling only a portion of the company’s Pleasing products—Products that give high immediate satisfaction but may hurt con. need) our (brand) is (concept) that (point of Order-routine specification—The stage of Product development—Developing the difference). ucts. government agencies and pressure groups that influence Product bundle pricing—Combining sev. ing. pany’s offer solves the customer’s problems. of target consumers. growth. in. the sum of the values ness buying process in which the buyer lar seller offers for sale. tions. between various products in a product line closely with partners in other company de. It in the field. Pre-approaching—A salesperson learns as based on cost differences between the prod- partments and outside the company to jointly much as possible about a prospective cus. quality. or even through an Internet ‘chat’. Portfolio analysis—The process by which Product concept—The idea that consum.Glossary Optional product pricing—The pricing of Positioning statement—A statement that the organisation should therefore devote its optional or accessory products along with a summarises company or brand position. Primary data—Information collected for the the place the product occupies in consumers’ specific purpose at hand. that customers exchange for the benefits of assesses the performance of the supplier ­ having or using the product or service. or fall within given of the sensitivity of demand to changes in select. and estimates the projected net profit for an Product review—The product review sum- Personal selling—Personal presentation by organisation. minds relative to competing products. product introduction. similar manner. cific planning period. product or service that bear on its ability to cluding face to face. reduced price. Postpurchase behaviour—The stage of the involves five distinct stages: product devel- Packaging—The activities of designing and opment. listing the technical specifica. to meet local conditions or wants in foreign Product specification—The stage of the markets. organised by product line. tures and competitors’ prices. are marketed through the Price elasticity of demand—A measure Perception—The process by which people same types of outlets. market and/or order of Problem recognition—The first stage of the ships. can Product life cycle (PLC)—The course of a Salespeople who travel to call on customers help a company build competitive advantage. tomer before making a sales call. ers take further action after purchase based product. product’s sales and profits over its lifetime. closely related because they function in a current or forecasted sales or as a percent. Percentage-of-sales method—Setting the Presenting—A salesperson tells the ‘value Product line—A group of products that are promotion budget at a certain percentage of story’ to the buyer. distinctive and desirable place into a workable market offering. supported by ap- Outside sales force (or field sales force)— propriate strategy and implementation. meaningful differentiation. showing how the com. typically a year. on their satisfaction or dissatisfaction with a Product line pricing—Setting the price steps Partner relationship management—Working purchase. ensure that the product idea can be turned supplier(s). business buying process in which someone Personality—The unique psychological char. needed item. It takes this form: To (target segment and provements.

communicating. 666 . lected for marketing research to represent growth opportunities through market pen. selling. its product categories. plan- stored for later sale or use. Sales force management—Analysing. where and how. return on advertising investment divided by approaching. implementing and controlling sales economics. non-business use. thing. long term. exists somewhere. and handling or heading off airlines. and sometimes Return on investment (ROI) pricing (or lowing up. not simply the ning. cannot be separated from their providers. service at two or more prices. colleges and many others. Glossary Product/market expansion grid—A portfo. ies who are willing to carry the company’s statement that shows actual revenues less tives being considered. tasted. may vary greatly depending on who pro- Public—Any group that has an actual or po- vides them and when. sales should be divided among the compa.0 technologies to seen. typically a year. even below cost. tential interest in or impact on an organisa. having been collected for Production concept—The idea that con. infor. felt. lifestyle or personality charac. Secondary data—Information that already velopment or diversification. service firm profits with employee and cus- Sales promotion—Short-term incentives to tomer satisfaction. which include pros- Return on advertising investment—The net tomer relationships. to increase short-term sales. keting ROI)—The net return from a market- Service inseparability—Services are pro- Prospecting—A salesperson or company ing investment divided by the costs of the duced and consumed at the same time and identifies qualified potential customers. market development. and does not result in the ownership of any- calls for spending a lot on consumer ad- mation gathering and relationship building. Selling concept—The idea that consumers period. offered for sale that is essentially intangible Pull strategy—A promotion strategy that ing. Salutary products—Products that have low Share of customer—The portion of the cus- creating a demand vacuum that ‘pulls’ a appeal but may benefit consumers in the tomer’s purchasing that a company gets in product through the channel. building up a good line is actually a service. Selective distribution—The use of more Profit-and-loss statement (or income Relevant costs—Costs that will occur in the than one but fewer than all the intermediar- statement or operating statement)—A future and that will vary across the alterna. marily from retailing. handling objections. products. Salesperson—An individual representing a tion’s ability to achieve its objectives. target-return pricing)—A cost-based pricing Sense-of-mission marketing—A principle of Proposal solicitation—The stage of the method that determines price based on a sustainable marketing that holds a company business buying process in which the specified rate of return on investment. Service variability—The quality of services ny’s products. Psychographic segmentation—Dividing Sales 2. proposals. Service profit chain—The chain that links the product. will not buy enough of the firm’s products unless it undertakes a large-scale selling and Promotion mix (or marketing communica. A producer promotes a particular product to another purpose. improve sales force effectiveness and they are bought. pecting and qualifying. given product. ing. motion to push a product through channels.0—The merging of innovative sales Service intangibility—Services cannot be a market into different segments based on practices with Web 2. who in turn promote it to Segmented pricing—Selling a product or available and highly affordable and that final consumers. heard or smelled before social class. marketing investment. the price says something about force activities. banks. ers the psychology of prices. Push strategy—A promotion strategy that etration. company to customers by performing one Service—An activity. tions mix)—The specific blend of promotion ing goods or services directly to final con- tools that the company uses to persuasively sumers for their personal. benefit or satisfaction or more of the following activities: prospect. expenses and net profit for an organisation. servicing. Selling process—The steps that salespeople communicate customer value and build cus. Service retailer—A retailer whose product ing favourable publicity. teristics. follow when selling. Public relations (PR)—Building good relations encourage the purchase or sale of a product with the company’s various publics by obtain. the population as a whole. including hotels. or a service. Purchase decision—The buyer’s decision Sample—A segment of the population se- lio-planning tool for identifying company about which brand to purchase. stories and events. should define its mission in broad social buyer invites qualified suppliers to submit Return on marketing investment (or mar. presenting and demonstrat- Promotional pricing—Temporarily pricing the costs of the advertising investment. Sales quota—A standard that states the corporate image. efficiency. product or brand during a specific planning Retailer—A business whose sales come pri. Retailing—All the activities involved in sell- promotion effort. terms rather than narrow product terms. closing and fol- products below the list price. product de- calls for using the sales force and trade pro. vertising and promotion to induce final consumers to buy a particular product. efficiency. where the dif- the organisation should therefore focus Reference prices—Prices that buyers carry in ference in prices is not based on differences on improving production and distribution their minds and refer to when they look at a in costs. Service perishability—Services cannot be Psychological pricing—Pricing that consid. sumers will favour products that are channel members. pre-approaching. amount a salesperson should sell and how unfavourable rumours.

weaknesses (W). Total market demand—The total volume created and owned by a reseller of a prod- vironmentally responsible marketing that that would be bought by a defined consumer uct or service. under a defined level and mix change. arate decisions involved in a complex buying Strategic planning—The process of develop- situation. ment of routinely purchased food products. consumers’ long-run interests and supply of products and materials for use in Territorial sales force structure—A sales force society’s long-run interests. re- Standardised global marketing—An inter. self-service store that carries which various company departments work Societal marketing concept—The idea that a wide variety of grocery and household closely together. to service large. Team selling—Using teams of people from iours. usually compares on its changing marketing opportunities. devel. share similar values. in the process of select. quality. find the best vendors. Strategic group—A group of firms in an Systems selling (or solutions selling)— Shopping centre—A group of retail busi. Shopping product—A consumer product ing and maintaining a strategic fit between that the customer. Strengths—Strengths are internal capabili- ties that can help a company reach its ob. thus avoiding all the sep- oped. Test marketing—The stage of new-product uct with unique characteristics or brand development in which the product and its Supplier selection—The stage of the business proposed marketing programme are tested identification for which a significant group of buying process in which the buyer reviews in realistic market settings. organisation that assigns each salesperson to Spam—Unsolicited. e-mail messages. price will ensure that the price is met. in a defined marketing a product in a foreign market without any ing the ability of future generations to meet environment. opportunities (O) and threats (T). Store brand (or private brand)—A brand Sustainable marketing—Socially and en. Technological environment—Forces that consumers and society. Threats—Threats are current or emerging national marketing strategy that basically external elements that could potentially Survey research—Gathering primary data challenge a company’s performance. effort. in a defined geographic area. dependent logistics provider that performs Speciality store—A retail store that carries a stream and downstream value-added flows any or all of the functions required to get a narrow product line with a deep assortment of materials. designed to influence individuals’ behaviour ences and situations. Target market—A set of buyers sharing com- Social class—Relatively permanent and or. preferences and buy- markets. industry following the same or a similar Buying a packaged solution to a problem nesses built on a site that is planned. An approach to developing new products in society. uct and market opportunities. the company. final goods and related infor.Glossary Shopper marketing—Using in-store promo. complex accounts. to ensure an appropriate and dependable ments. Third-party logistics (3PL) provider—An in- Supply chain management—Managing up. create new technologies. mon needs or characteristics that the com- dered divisions in a society whose members pany decides to serve. jectives. Telephone marketing—Using the telephone make marketing decisions by considering opment of networks of supplier-partners to sell directly to customers. unwanted commercial an exclusive geographic territory in which Supplier search—The stage of the business that salesperson sells the company’s full line. Straight rebuy—A business buying situation SWOT analysis—An overall evaluation of the tions and advertising to extend brand equity in which the buyer routinely reorders some. within that line. the organisation’s goals and capabilities and Target costing—Pricing that starts with an ing and purchasing. high-volume. engineering. sellers and final consumers. overlapping the steps in the a company’s marketing decisions should products. tech- Social marketing—The use of commercial Subculture—A group of people with shared nical support and even upper management marketing concepts and tools in programmes value systems based on common life experi. the company’s Superstore—A store much larger than a reg. strategy. buying process in which the buyer tries to Speciality product—A consumer prod. interests and behav. owned and managed as a unit. able marketing that holds a company should Supplier development—Systematic devel. defined time period. product development process to save time consider consumers’ wants. uses the same marketing strategy and by asking people questions about their mix in all of a company’s international Total costs—The sum of the fixed and vari- knowledge. low-cost. consumers’ wants. low-margin. the company’s require. and the long-term interests of ular supermarket that offers a large assort. mation among suppliers. sales. non-food items and services. from a single seller. attitudes. of industry marketing effort. buyers is willing to make a special purchase proposals and selects a supplier or suppliers. finance. able costs for any given level of production. to ‘the last mile’ and encourage favourable thing without any modifications. marketing. requirements. making products or reselling them to others. ing behaviour. in-store purchase decisions. and style. ideal selling price and then targets costs that such attributes as suitability. 667 . their needs. client’s product to market. and increase effectiveness. Style—A basic and distinctive mode of ex- pression. in a Straight product extension—Marketing businesses while also preserving or enhanc. Team-based new-product development— to improve their well-being and that of Supermarket—A large. meets the present needs of consumers and group. company’s strengths (S). creating new prod- Societal marketing—A principle of sustain.

Wholesaler—A firm engaged primarily in Unsought product—A consumer product bution channel structure in which produc. required and the time available for selling. sonality. higher-service operations. give it shelf space. Whole-channel view—Designing interna- Variety-seeking buying behaviour—Con. deliver and sup. that the consumer either does not know ers. to design. for resale or business use. want to pass them along to friends. or has so much Users—Members of the buying organisation power that they all cooperate. the higher the price. ultimately. customers. are shaped by culture and individual per. distribu. market. A market-coverage strategy in which a ate a company’s offers and charging higher Wheel-of-retailing concept—A concept firm decides to ignore market segment prices. brand – the full mix of benefits on which it members who pay annual membership fees. combination of quality and good service at operations but later evolve into higher- Uniform-delivered pricing—A geographi. posed of the company. Weaknesses—Weaknesses are internal ele- and push it to consumers. who will actually use the purchased product Word-of-mouth influence—Personal com- Viral marketing—The Internet version of or service. the more distant the cery items. Value chain—The series of internal depart. produce. selling goods and services to those buying ers. low-status with one offer. costs. ability to achieve its objectives. Workload method—An approach to deter- port a firm’s products. wholesaling activities. mining sales force size based on the workload Wants—The form human needs take as they Value delivery network—A network com. family ments that carry out value-creating activities that are so infectious that customers will members and associates. friends. the level of production. low-price. zone. promote it in advertising is positioned. eventu- cal pricing strategy in which the company ally becoming like the conventional retailers Variable costs—Costs that vary directly with charges the same price plus freight to all they replaced. delivery network. that states that new types of retailers usually differences and go after the whole market Value-based pricing—Offering just the right begin as low-margin. wholesalers and retailers act as a unified about or knows about but does not normally Wholesaling—All the activities involved in system. Glossary Trade promotions—Sales promotion tools Value proposition—The full positioning of a podge of other goods at deep discounts to used to persuade resellers to carry a brand. 668 . forging an effective global value the difference between price and variable perceived brand differences. a fair price. tional channels that take into account the Unit contribution—The amount that each sumer buying behaviour characterised by entire global supply chain and marketing unit contributes to covering fixed costs – low consumer involvement but significant channel. munications about a product between tar- word-of-mouth marketing: websites. All customers within a zone pay sells a limited selection of brand name gro- of the entire system in delivering customer the same total price. Zone pricing—A geographical pricing strat- tors and. suppliers. ments that may interfere with a company’s Undifferentiated (mass) marketing— added features and services to differenti. clothing and a hodge- value. customers who ‘partner’ egy in which the company sets up two or Warehouse club—An off-price retailer that with each other to improve the performance more zones. priced. One channel member owns the oth- consider buying. Value-added pricing—Attaching value. e-mail messages or other marketing events get buyers and neighbours. Vertical marketing system (VMS)—A distri. videos. regardless of their location. appliances. has contracts with them.