Glossary

Here you will find the description of some words and phrases that pertain to the Marketing
concepts in the course, and also words and phrases used in the videos and readings. If you
want to add another word or expression that we missed, please suggest it in the forums. If
you need to find a description of a brand used in the videos and readings, see the Brand
Descriptions page.

A
Advertising

A form of marketing communication used to persuade an audience to take or continue some

action, usually with respect to a commercial offering, or political or ideological support.

B
Brand equity

A phrase used in the marketing industry that describes the value of having a well-known
brand name, based on the idea that the owner of a well-known brand name can generate
more money from products with that brand name than from products with a less well-known
name, as consumers believe that a product with a well-known name is better than products
with less well-known names.[1]

Brand management

In marketing, brand management is the analysis of and planning on how that brand is
perceived in the market. Developing a good relationship with the target market is essential
for brand management.[2]

Brand proposition

A brand proposition is a statement about your company, product, services, etc., that clearly
demonstrates to customers what benefits they can derive out of your brand [20].

Break-even analysis

The break-even point in economics, business—and specifically cost accounting—is the point
at which total cost and total revenue are equal, i.e. "even". There is no net loss or gain, and
one has "broken even", though opportunity costs have been paid and capital has received the
risk-adjusted, expected return. [21]
C
Cross-functional team

A cross-functional team is a group of people with different functional expertise working

toward a common goal. It may include people from finance, marketing, operations, and
human resources departments. Typically, it includes employees from all levels of an
organization. [22]

Cost-based pricing

Cost based pricing is one of the pricing methods of determining the selling price of a product
by the company, wherein the price of a product is determined by adding a profit element
(percentage) in addition to the cost of making the product.[23]

Competitor-based pricing

A pricing method that makes use of competitors' prices for the same or similar product as

basis in setting a price. This pricing method focuses on information from the market rather
than production costs (cost-plus pricing) and product's perceived value (value-based pricing).
[24]

Consociality (the degree to which the members of a platform can engage in social interaction
in either physical or virtual space)

Crowdsourcing

The process of obtaining needed services, ideas, or content by soliciting contributions from a
large group of people, and especially from an online community, rather than from traditional
employees or suppliers.[3]

Cult of Done Manifesto

The Done Manifesto posted by Bre Pettis and Kio Stark is a set of working rules based on a
sense of urgency. No time for careful deliberation, move on.

Customer co-creation

The idea that customers can help design and develop products in addition to buying them.
Such activity really helps enhance new product development activities.

Customer segmentation

The practice of dividing a customer base into groups of individuals that are similar in specific
ways relevant to marketing, such as age, gender, interests, spending habits, and so on.[5]
D
Digital authenticity

The degree to which a product’s online promotion provides customers with a genuine
portrayal of its origins, features, and benefits (as well as its limitations). Authentic
promotional campaigns typically focus on telling a story rather than making a claim. This
story is usually connected to the brand in a genuine manner and provides customers with a
sense that the brand has a purpose other than just making money.

Digital marketing

The marketing of products or services using digital channels to reach consumers. The key
objective is to promote brands and product benefits through various forms of digital media
such as the Internet, mobile phones, and social media.

Distribution

Product distribution is the process of making a product or service available for use or
consumption by a consumer or business user, using direct means or using indirect means
with intermediaries.

Doppelgänger brand image

A doppelgänger brand image is a family of disparaging images and stories about a brand that
are circulated in popular culture by a loosely organized network of consumers, antibrand
activists, bloggers, and opinion leaders in the news and entertainment media.

E
Elaboration Likelihood Model (ELM)

As the most popular theory about persuasion, ELM suggests that there are two main routes to
persuasion: (1) the central route, which is cognitive in nature and (2) the peripheral route,
which is more emotional in nature.

F
FUH2 Campaign

This creative viral internet campaign began in 2008 in response to General Motor’s marketing
of the Hummer SUV. In the mid-2000s, General Motors tried to position this brand as the
ultimate 4-wheel drive vehicle capable of taking on any challenge, and used the slogan, “Like
Nothing Else.”

Fused deposition modeling

An additive manufacturing technology commonly used for modeling, prototyping, and

production applications. It is one of the techniques used for 3D printing.[6]

Freemium Model

Freemium, a portmanteau of the words "free" and "premium", is a pricing strategy by which a
product or service is provided free of charge, but money (a premium) is charged for additional
features, services, or virtual (online) or physical (offline) goods that expand the functionality
of the free version of the software.[25]

G
Generic product

Generic brands of consumer products (often supermarket goods) are distinguished by the
absence of a brand name, instead identified solely by product characteristics and identified
by plain, usually black-and-white packaging. Generally, they imitate more expensive branded
products, competing on price.[26]

I
Intangible good

An intangible good is a good that is intangible, meaning that it cannot be touched, as

opposed to a physical good (an object). Digital goods, such as downloadable music and
mobile apps, or virtual goods used in virtual economies are all examples of intangible goods.
[7]

K
L

M
Marginal costs

In economics and finance, marginal cost is the change in the total cost that arises when the
quantity produced has an increment by unit. That is, it is the cost of producing one more unit
of a good.[8]

Market share

Market share is the percentage of a market (defined in terms of either units or revenue)
accounted for by a specific entity.[9]

Multiple sclerosis

It is a demyelinating disease in which the insulating covers of nerve cells in

the brain and spinal cord are damaged.[27]

N
New Retail

A collection of strategies (both physical and digital) that physical retailers are using to react
to the challenges of operating in a digital world.

P
Pareto Principle

This principle comes from the Italian economist Vilfredo Pareto, who found, back in 1896,
that 80% of the land in Italy was owned by 20% of the population. Since this time, this
principle has become known as the 80/20 rule and has been found to apply to a large number
of phenomenon. For example, 80% of the world’s income is controlled by 20% of its
population.[10]

Pay What You Want (PWYW)

A pricing strategy that allows customers to name their own price.

Persuasion

A marketing process that seeks to change a person's attitude or behavior towards an offering.
One of the most common forms of persuasion is advertising.

Placement

Placement aspect of the marketing mix focuses on making a product conveniently accessible
to potential customers. It involves the physical movement of the product from a
manufacturer through a series of marketing channel intermediaries ending with an
independent retailer. Placement involves the important retailing function of displaying the
product upon its shelves.

Price comparison tools

Price comparison tools have allowed pricing to move from prices revealed at the point of
purchase to prices negotiated at the point of consideration. Price comparison has become
easier for customers armed with a smartphone and a price search app such as Price Grabber
or RedLaser. Leveraging these price comparison tools, customers can instantly compare
prices on a physical retailer’s shelf with prices for the exact same product at Amazon.com and
a large number of other online retailers.

Price segmentation

A suitable strategy if you have a narrow product range and can identify groups of prospects
who would buy if the price was lower or who would be prepared to pay a higher price in
return for a factor that they felt added value to the product.[11]

Pricing strategy

A pricing strategy is a firm’s basic approach to how it prices its products. Pricing captures the
value of the product for the firm. Thus, having a good pricing strategy is critical for a firm’s
profitability and very survival. The development of a pricing strategy often entails considering
a product’s cost of production, what customers are willing to pay, and the prices of
competing products.

Product

A product is really anything that fulfills a customer need or want. It is a good, service, or idea
that has a distinctive selling proposition consisting of tangible or intangible attributes.

Product development
Product development is the process of designing, creating, and marketing new products or
services to benefit customers. Sometimes referred to as new product development, the
discipline is focused on developing systematic methods for guiding all the processes involved
in getting a new product to market.[12]

Product segmentation

To operate a product segmentation strategy, carry out research to identify groups of

customers who want benefits or levels of functionality that are not available currently in a
product category. By creating different versions of a product, you can match those
customers’ needs more precisely.

Promotion

Promotion covers the methods of communication that a marketer uses to provide

information about its product. This information – both verbal and visual – is persuasive in
nature, appeals to customers’ intellect or emotions, and influences them to buy your product
instead of your competitor's.

Premium Pricing

Premium pricing (also called image pricing or prestige pricing) is the practice of keeping

the price of one of the products or service artificially high in order to encourage favorable
perceptions among buyers, based solely on the price.[28]

Price elasticity

Price elasticity of demand (PED or Ed), or elasticity, is the degree to which the desire for
something changes as its price rises. [29]

Prosumer

A prosumer is a person who consumes and produces a product. [30]

Q
Quad

An open grassy area located on the University of Illinois at Urbana-Champaign (UIUC)

campus. It is the heart of the campus. Many activities from playing Frisbee to chatting with
friends, napping to studying can be taken place there.

R
Research Online Purchase Offline (ROPO)

Research online, purchase offline (ROPO), also research online, buy offline (ROBO) or Online-
to-Store (O2S-Factor), is a new trend in buying behavior where customers research relevant
product information to qualify their buying decision, before they actually decide to buy their
favorite product in the local store.[19]

Retail

Retail is the process of selling consumer goods and/or services to customers through multiple
channels of distribution to earn a profit.

Rule of 1

Typically only about 1% of all submissions will be useful enough to implement.

Radical innovation

Radical innovation is an invention that destroys or supplants an existing business model.

Unlike architectural or incremental innovation, radical innovation blows up the existing
system or process and replaces it with something entirely new.[31]

Reference prices

A reference price (RP) is the price that a purchaser announces that it is willing to pay for a
good or service. [32]

S
Selective Laser Sintering (SLS)

An additive manufacturing technique that uses a laser as the power source to sinter
powdered material (typically metal), aiming the laser automatically at points in space defined
by a 3D model, binding the material together to create a solid structure.[13]

Shopper marketing

Shopper marketing is "understanding how one's target consumers behave as shoppers, in

different channels and formats, and leveraging this intelligence to the benefit of all
stakeholders, defined as brands, consumers, retailers, and shoppers."

Showrooming

The practice of examining merchandise in a traditional brick and mortar retail store or other
offline setting and then buying it online, sometimes at a lower price. Online stores often offer
lower prices than their brick and mortar counterparts because they do not have the same
overhead cost.[14]

Social recognition

Public acknowledgement of a person's status or merits (achievements, virtues, service, etc.)

Stage-Gate method

The Stage-Gate method from Robert G. Cooper is an approach that can be used to make the
product development process more effective. It is a blueprint for managing the new product
process from an idea to launching a product. Each stage consists of a set of certain cross
functional and parallel activities which must be successfully completed prior to obtaining
management approval to proceed to the next stage of product development. The entrance to
each stage is called a gate.[15]

Stereolithography

An additive manufacturing or 3D printing technology used for producing models, prototypes,

patterns, and production parts up one layer at a time by curing a photo-reactive resin with a
UV laser or another similar power source.[16]

Sharing Economy

The sharing economy is a way of distributing goods and services that differs from the
traditional model of corporations hiring employees and selling products to consumers. [33]

T
Tangible good

Tangible goods are physical products defined by the ability to be touched. They are distinct
from intangible goods, as well as services like a spa treatment [17]

3D printing

3D printing (or additive manufacturing, AM) is any of various processes used to make a three-
dimensional object.

U
User-Generated Content
User-Generated Content occurs when a product’s customers create and disseminate online
ideas about a product or the firm that markets it. These ideas are often in the form of text but
also come in other forms such as music, photos, or videos. UGC has three key characteristics:
(1) The contribution is by users of a product rather than the firm that sells this product; (2) it is
creative in nature and the user adds something new; (3) it is posted online and generally
accessible.

V
Value proposition

Value proposition is a promise of value to be delivered. It's the primary reason a prospect
should buy from you. It explains how your product solves customers’ problems, improves
their situation (relevancy), or delivers specific benefits (quantified value).

Value-based pricing

Value-based price (also value optimized pricing) is a pricing strategy which sets prices

primarily, but not exclusively, according to the perceived or estimated value of a product or
service to the customer rather than according to the cost of the product or historical prices.
[34]

W
Webrooming

The practice of researching items online and then purchasing them in-store, is the reverse of
showrooming – browsing for items in a store and purchasing them online later.[18]

Z
Zero Price Effect

It is a phenomenon whereby the demand for a good, service, or commodity is significantly

greater at a price of exactly zero compared to a price even slightly greater than zero.
Graphically, a zero price effect appears as a discontinuity in the demand curve at a price of
zero. [35]

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