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Term Description
Above the line “Above the Line” is the term commonly used for advertising for which a
payment is made and for which commission is paid to the advertising
agency. Methods of above the line advertising include television and
radio, magazines, newspapers and Internet.
Ad hoc market Ad-hoc research focuses on specific marketing problems. It involves the
research collection of data at one point in time from one sample of respondents
Added value Added value refers to the increase in worth of a product or service as a
result of a particular activity. In the context of marketing, the added
value is provided by features and benefits over and above those
representing the “core product”.
Advertising budget The total amount of money that a marketer allocates for advertising
over a period of time
After-sales service The services received after the original goods or services have been paid
for. Often this service is provided as part of a warranty or guarantee
scheme.
Augmented brand The additional customer services and benefits (“added value”) that are
built around the core product or service offering
Available market The total group of customers who have an interest in a interest in a
product or service, have access to it, and have the ability to buy it
Below the line “Below the line” is a term commonly used to refer to non-media
advertising or promotion when no commission has been paid to the
advertising agency. This includes direct mail, point of sale displays, and
other sales promotions.
Boston Group A means of analysing and categorizing the performance of business units
Matrix in large diversified firms by reference to market share and growth rates.
It was developed by the Boston Consultancy Group (BCG)
Brand A brand is the specific type of the product form. A brand – represented
by a brand name, symbol, design, logo, packaging – is the identity of a
particular product form that customers recognise as being different
from others.
Brand building Developing a brand's image and standing with a view to creating long
term benefits for brand awareness and brand value
Brand equity Brand equity refers to the value of a brand. Brand equity is based on
the extent to which the brand has high brand loyalty, name awareness,
perceived quality and strong product associations. Brand equity also
includes other “intangible” assets such as patents, trademarks and
channel relationships.
Brand extension Brand extension refers to the use of a successful brand name to launch
a new or modified product in a new market. Virgin is perhaps the best
example of how brand extension can be applied into quite diverse and
distinct markets.
Brand image Brand image refers to the set of beliefs that customers hold about a
particular brand. These are important to develop well since a negative
brand image can be very difficult to shake off.
Brand loyalty A strongly motivated and long standing decision to purchase a particular
product or service
Break-even pricing Setting a price to achieve break-even on the costs of making and
marketing a product (direct costs). Breakeven is achieved when the
total contribution from sales priced in this way at least equal the fixed
costs of the business
Build share A strategy based on the Boston Matrix. Here the company can invest to
increase market share (for example turning a "question mark" into a
star)
Business portfolio The business portfolio is the collection of businesses and products that
make up the business.
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Business to Marketing activity directed from one business to another (as opposed to
business a consumer). This term is often shortened to “B2B”
Buying behaviour Buying behaviour concerns the process that buyers go through when
deciding whether or not to purchase goods or services. Buying behaviour
can be influenced by a variety of external factors and motivations,
including marketing activity.
Cash Cows A term used in the Boston Group Matrix. Cash cows are low-growth
businesses or products with a relatively high market share. These are
mature, successful businesses with relatively little need for investment.
They need to be managed for continued profit - so that they continue to
generate the strong cash flows that the company needs for its Stars.
Combination brand A combination brand name brings together a family brand name and an
individual brand name. The idea here is to provide some association for
the product with a strong family brand name but maintaining some
distinctiveness so that customers know what they are getting
Consumer buyers Consumer buyers are those who purchase items for their personal
consumption
Consumer durables Consumer durables have low volume but high unit value. Consumer
durables are often further divided into White goods (e.g. fridge-
freezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD
players; games consoles; personal computers)
Consumer markets Consumer markets are the markets for products and services bought by
individuals for their own or family use
Continuous market Continuous research involves interviewing the same sample of people,
research repeatedly
Contribution Contribution per unit can be defined as selling price less variable costs.
Overall contribution is the difference between total sales revenues and
variable costs
Core product The set of problem-solving or need-meeting benefits that customers are
buying when they purchase a product. Customers are rarely prepared to
pay a premium for these elements of a product.
Cost leadership A strategy of producing goods at a lower cost than the competition. This
usually requires the business to enjoy higher economies of scale or have
some kind of productivity advantage
Cross-selling Using a customer’s buying history to select them for related offers, e.g.
a car alarm for new car buyers.
Customer wants A want is a desire for a specific product or service to satisfy the
underlying need.
Decline stage The last stage of a product's life cycle, during which sales fall rapidly
Differentiation A marketing strategy aimed at ensuring that products and services have
a unique element to allow them to stand out from the rest
Direct marketing The planned recording, analysis and tracking of customer behaviour to
develop a relational marketing strategies
Direct response Direct response advertising is that which incorporates a contact method
advertising such as a phone number, address and enquiry form, web site URL or e-
mail address. This is done with the intention of encouraging the
recipient to respond directly to the advertiser by requesting more
information, placing an order etc. The use of this technique on
television is commonly referred to as DRTV advertising
Distributors Companies that buy and sell on their own account but tend to deal in
the goods of only certain specified manufacturers.
Divest A strategy based on the Boston Matrix. Here the company can divest the
SBU by phasing it out or selling it - in order to use the resources
elsewhere (e.g. investing in the more promising "question marks").
Dogs A term used in the Boston Group Matrix. Unsurprisingly, the term "dogs"
refers to businesses or products that have low relative share in
unattractive, low-growth markets. Dogs may generate enough cash to
break-even, but they are rarely, if ever, worth investing in.
Early adopters People who choose new products carefully and are often consulted by
people from the remaining adopter categories
Early majority People who adopt products just prior to the average person
E-commerce The use of technologies such as the Internet, electronic data exchange
and industry extranets to streamline business transactions
Extinction pricing Extinction pricing has the overall objective of eliminating competition,
and involves setting very low prices in the short term in order to ‘under-
cut’ competition, or alternatively repel potential new entrants.
Family brand name A family brand name is used for all products. By building customer trust
and loyalty to the family brand name, all products that use the brand
can benefit.
Family life cycle The stages of family life based on demographic data that are useful in
defining the markets for certain goods and services. Each group has its
own specific and distinguishable needs and interests.
Fast-moving Fast-moving consumer goods are those that sell in high volumes, with
consumer goods low unit value, and have fast consumer repurchase. Good examples
include ready meals, baked beans, newspapers etc
Focus group A small group of sample customers who are brought together into a
group discussion to measure their response to a marketing stimulus such
as a new brand or product
Full cost pricing Full cost plus pricing seeks to set a price that takes into account all
relevant costs of production
Gender The segmentation of markets based on the sex of the customer. The
segmentation cosmetic industry is a good example of widespread use of gender
segmentation
Going-rate pricing A pricing strategy that sets price largely based on the prices of
competitors
Growth stage The stage at which a product's sales rise rapidly and profits reach a
peak, before levelling off into maturity.
Harvest A strategy based on the Boston Matrix. Here the company reduces the
amount of investment in order to maximise the short-term cash flows
and profits from the SBU. This may have the effect of turning Stars into
Cash Cows.
Hold A strategy based on the Boston Matrix. Here the company invests just
enough to keep the SBU in its present position
Impulse buying Behaviour that involves no conscious planning but results from a
powerful, persistent urge to buy something immediately
Industrial buyers Industrial buyers are those who purchase items on behalf of their
business or organisation
Industrial market Industrial markets involve the sale of goods between businesses. These
are goods that are not aimed directly at consumers.
Inferior goods Inferior goods have a negative income elasticity of demand. Demand
falls as income rises
Initiator A person in a group buying situation (e.g. a family) who first suggests
buying a particular product or service
Innovators Innovators are those who adopt new products first. They are usually
relatively young, lively, intelligent, socially and geographically mobile.
They are often of a high socioeconomic group (“AB’s”).
Internal marketing The process of eliciting support for a company and its activities among
its own employees, in order to encourage them to promote its goals.
This process can happen at a number of levels, from increasing
awareness of individual products or marketing campaigns, to explaining
overall business strategy.
Introduction stage A product's first appearance in the marketplace, before any sales or
profits have been made
Involvement The level of interest, emotion and activity which the consumer is
prepared to expend on a particular purchase
Laggards The group of consumers who are typically last to buy a new product
Late majority People who are quite sceptical about new products but eventually adopt
them because of economic necessity or social pressure
Macro forecasting Macro forecasting is concerned with forecasting markets in total. This is
about determining the existing level of Market Demand and considering
what will happen to market demand in the future.
Manufacturer brand Manufacturer brands are created by producers and bear their chosen
brand name. The producer is responsible for marketing the brand. The
brand is owned by the producer. By building their brand names,
manufacturers can gain widespread distribution (for example by
retailers who want to sell the brand) and build customer
Marker leader The business in a market with the largest market share. The market
leader, particularly one with a dominant market share, is often
“followed” by competitors in terms of pricing and product strategy
Market challenger A business in a market that is fighting hard to increase its market share
Market The process of growing sales by offering existing products (or new
development versions of them) to new customer groups (as opposed to simply
attempting to increase the company’s share of current markets).
Market entry The launch of a new product into a new or existing market. A different
strategy is required depending on whether the product is an early or
late entrant to the market; the first entrant usually has an automatic
advantage, while later entrants need to demonstrate that their products
are better, cheaper and so on.
Market follower A firm that is happy to follow the leaders in a market place without
challenging them, perhaps taking advantages of opportunities created
by leaders without the need for much marketing investment of its own -
see also 'market challenger' and 'market leader'
Market positioning A marketing strategy that will position a business’ products and services
against those of its competitors in the minds of consumers. To achieve
positioning success it is suggested that there are four basic competitive
strategies that a company can follow (based on work by Porter):
- Cost leadership - the company tries to achieve lowest costs of
production and distribution
- Differentiation - making use of specific marketing mixes
- Focus - paying attention to a few market segments
The fourth strategy is a losing strategy in which a business pursues a
middle-of-the-road path. Businesses that try to be good at everything
are rarely particularly good at anything.
Market research The systematic gathering, recording and analysing of data about
Market segment A customer group within the market that has special characteristics
which are significant to marketing strategy
Market share Market share can be defined as the percentage of all sales within a
market that is held by one brand / product or company.
Market targeting Market targeting is the process of evaluating each market segment and
selecting the most attractive segments to enter with a particular
product or product line.
Marketing The all-embracing function that links the business with customer needs
and wants in order to get the right product to the right place at the
right time”
Marketing concept The marketing concept is about matching a business’ capabilities with
customer wants.
Marketing The composite of all data and ideas available within an organisation
intelligence that assists in decision-making.
Maturity stage The stage during which a product's sales curve peaks and starts to
decline, and profits continue to decline.
Micro forecasting Micro forecasting is concerned with detailed unit sales forecasts. This is
about determining a product’s market share in a particular industry and
considering what will happen to that market share in the future
Multi-channel When a business distributes its products through more than one
marketing distribution channel, this is known as multi-channel marketing. Retail
chains, for example Argos, besides using the shops to distribute their
products, quite often also use catalogue selling. The main purpose of
multi-channel marketing is to more effectively reach different customer
segments
Multi-segment A strategy by which a business directs its marketing efforts towards two
strategy or more market segments by developing a marketing mix for each
New product A new product can be defined as a good, service or idea that is
“perceived” by some potential customers as new. It may have been
available for some time, but many potential customers have not yet
adopted the product nor decided to become a regular user of the
product.
Normal goods Normal goods have a positive income elasticity of demand so as income
rise more is demand at each price level
Objectives Measurable aims of a business set for a given period (e.g. marketing
objectives for the next year)
Occasion A basis of segmenting a market based on occasions when buyers get the
segmentation idea to make a purchase, actually buy, or use a purchased item.
Own-label brand Own-label brands are created and owned by businesses that operate in
the distribution channel – often referred to as “distributors”. Often
these distributors are retailers, but not exclusively. Sometimes the
retailer’s entire product range will be own-label. However, more often,
the distributor will mix own-label and manufacturers brands
Packaging The activities of designing and producing the container or wrapper for a
product
Penetration pricing Penetration pricing involves the setting of lower, rather than higher
prices in order to achieve a large, if not dominant market share
Personal selling Oral communication with potential buyers of a product with the
intention of making a sale. The personal selling may focus initially on
developing a relationship with the potential buyer, but will always
ultimately end with an attempt to "close the sale
Porter’s Five An analytic model developed by Michael E. Porter. The five forces in
Forces Model terms of which the model analyses businesses and industries are:
Buyers, Suppliers, Substitutes, New Entrants and Rivals
Portfolio planning Portfolio planning is the process of managing groups of brands and
product lines
Pre-emptive pricing Pre-emptive pricing is a strategy involves setting low prices in order to
discourage or deter potential new entrants to the suppliers market. It
is especially suited to markets in which the supplier does not hold a
patent, or other market privilege and entry to the market is relatively
straightforward.
Prestige pricing Prestige pricing refers to the practice of setting a high price for an
product, throughout its entire life cycle – as opposed to the short term
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Price discrimination Price discrimination occurs when a firm charges a different price to
different groups of consumers for an identical good or service, for
reasons not associated with costs
Price sensitivity Price sensitivity is the effect a change in price will have on customers
Price skimming Price skimming involves charging a relatively high price for a short time
where a new, innovative, or much-improved product is launched onto a
market
Primary research Primary market data is data collected specifically for the market
data research project and obtained directly from the relevant source
Problem/Need The first stage in the buying process where the potential customer
recognition recognises that a problem or a need can be met by buying a product or
a service
Product class Product class is a broad category of product such as cars, washing
machines, newspapers.
Product form Within a product class, there are different forms that the product can
take. For example, people carriers or two-seater sports cars are
product forms within the motor cars product class
Product group A product group (or product line) is a group of brands that are closely
related in terms of their functions and the benefits they provide
Product life cycle The course of a product's sales and profitability over its lifetime. The
model describes five stages, each of which represents a different
opportunity for the marketer:
- Development
- Introduction
- Growth
- Maturity
- Decline
Product map A product map defines the market in terms of the way buyers perceive
key characteristics of competing products
Product mix The set of all product lines and items that a particular business offers
for sale to buyers
Product quality The ability of a product to perform its functions (“fit for purpose”).
Quality is a function of several factors including reliability and ease of
use
Promotion One of the four “P’s” of the marketing mix. Promotion is all about
businesses communicating with customers
Promotional mix The promotional mix consists of a blend of five main kinds of
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Public relations The planned and sustained effort to establish and maintain goodwill and
mutual understanding between an organisation and its publics
Pull promotion Pull promotion, in contrast to Push promotion, addresses the customer
directly with a view to getting them to demand the product, and hence
“pull” it down through the distribution chain. It focuses on advertising
and above the line activities. See also 'push promotion'
Purchase decision The stage in the customer buying process when the purchase decision is
actually made
Push promotion Push promotion relies on the next link in the distribution chain - e.g. a
wholesaler or retailer - to “push” out products to the customer. It
revolves around sales promotions - such as price reductions and point of
sale displays - and other below the line activities. See also 'Sales
Promotion'
Question marks A term used in the Boston Group Matrix. Question marks are businesses
or products with low market share but which operate in higher growth
markets. This suggests that they have potential, but may require
substantial investment in order to grow market share at the expense of
more powerful competitors.
Questionnaire Base document for research purposes, providing the questions and
structure for an interview or self-completion and providing space for
respondents' answers.
Quota sampling A sampling method in which the final choice of respondents is left to
the interviewers, who base their choices on two or three variables (such
as age, sex and education).
Random sampling A sampling method in which all the units in a population have an equal
chance of appearing in the sample.
Retailers Retailers operate outlets that trade directly with household customers
Sales forecast The sales forecast is the expected level of company sales based on a
Sales promotion Sales promotion refers to any activity designed to boost the sales of a
product or service. It may include an advertising campaign, increased
PR activity, a free-sample campaign, offering free gifts or trading
stamps, arranging demonstrations or exhibitions, setting up
competitions with attractive prizes, temporary price reductions, door-
to-door calling, telephone-selling, personal letters on other methods.
Sample A small group of items selected from a larger group to represent the
characteristics of the larger group. Samples are often used in marketing
research because it is not feasible to interview every member of a
particular market; however, conclusions about a market drawn from a
sample always contain a sampling error and must be used with caution.
The larger the sample, in general, the more accurate will be the
conclusions drawn from it
Secondary research Secondary market data is data that has already been obtained, analysed
data and used for other purposes or for general reference
Soft goods Soft goods are similar to consumer durables, except that they wear out
more quickly and therefore have a shorter replacement cycle.
Examples include clothes and shoes.
Stars A term used in the Boston Group Matrix. Stars are high growth
businesses or products competing in markets where they are relatively
strong compared with the competition. Often they need heavy
investment to sustain their growth. Eventually their growth will slow
and, assuming they maintain their relative market share, will become
cash cows.
Strapline A slogan often used in conjunction with a brand name, advertising and
other promotional methods (e.g. “Guinness is good for you”)
Strategic business A SBU is a unit of the company that has a separate mission and
unit (“SBU objectives and that can be planned independently from the other
businesses. An SBU can be a company division, a product line or even
individual brands - it all depends on how the company is organised.
Target market The group of potential customers sharing common needs and
characteristics that a business decides to serve
Test marketing Test marketing occurs when a new product is tested with a sample of
customers, or launched in a restricted geographical area, to judge
customers' reactions. If the product is unsuccessful, the business will
have minimised its costs and can either make changes before the main
launch or decide to discontinue the product. Test marketing has a
disadvantage in that competitors learn about the new product before its
full launch
Threats Threats are any aspect of the external environment which cause
problems and which may prevent achievement of objectives. Almost by
definition, what presents a threat to one business offers an opportunity
to other businesses.
Trademark Legal designation indicating that the owner has exclusive use of a brand
Unique selling A unique selling proposition (“USP”)is a customer benefit that no other
proposition product can claim
Vision The long-term aims and aspirations of the company for itself
Weaknesses Weaknesses are any aspect of the business which may prevent the
business from achieving its objectives. Weaknesses are a source of
competitive disadvantage. Management should seek ways to reduce or
eliminate weaknesses before they are exploited further by the
competition
Wholesaler Often part of the distribution channel; involves the selling of goods in
large quantities to be retailed by others