Marketing Vocabulary.
ever wonder what they mean by that?
A ABC Analysis - an effective way of classifying customer accounts and target customers into three categories, A, B & C where A = most attractive accounts and C = least attractive accounts.
Adoption process (the buying process) - any method that explains the step-by-step way that consumers behave in buying products where they begin with ignorance of a product and move through the 'steps or stages' to purchasing.
Advertising - the placing of a persuasive announcement in audio, video, electronic or printed form with for the purposes of promotion of products or services.
Advertising agency - an organization providing a range of services related to advertising.
Anchor effect - where consumers compare product prices against an established product, like the market leader. The bias created attracts consumers towards this price - the anchor effect.
Antitrust laws - US policy forbidding monopolies, unfair competition and restraints of trade. The laws also forbid lessening of competition by exclusive dealing and price discrimination.
Average customer lifetime - the average time (in days, months or years) a customer buys from your business.
Average lifetime value - the total amount of money spent during the average lifetime (see average lifetime) by a customer.
Average-cost pricing - basing product pricing by using a method of adding a fixed percentage onto the total cost of producing the product.  Top
B Bait & switch advertising - a misleading advertising offer intended to mislead the prospective customer into thinking that the company is selling a product at a price which the company has no intention of doing so. The purpose is to increase inquiries and thus switch the consumer to buy from the company.
Balance of trade - the difference between a country's exports and imports.
Banner advertising - a small rectangular banner placed by companies on other web sites The hosting web site owner is paid revenue for the number of page impressions or the number of click throughs to the client web site
Banner exchange schemes - method of networking whereby companies with complimentary products or services exchange banner adverts to increase traffic to their respective web sites.
Barriers to competition - market forces which make entering the market difficult. Branding, advertising & promotion, patents, market entry restrictions and tariffs are examples of this.
Barriers to market entry - the factors making successful new product development difficult to bring to market like the economy, laws and technical knowledge and ability.
Below-the-line cost - Any cost that is not itemized in a production budget.
Benefit segmentation - dividing prospects and customers into groups based on what benefit they are looking for from a product. For example, some people choose bottled beers due to their perceived better taste whereas others may choose to drink them for 'trend or image' reasons.
Benefit selling - where a salesperson states product benefits that closely match the prospective customer's needs in order to win the sale.
Beta product testing - where software companies will freely distribute an early working version of a new product so that a mass user group can identify glitches and report back the problems to the product development team.
Block plan - a store layout plan with actual sizes, shapes and locations off all store goods.
Body copy - the main text in an advert, company literature or web site
Bonus pack - a pack or carton giving extra away for free or a reduced price.
Boomerang method - A salesperson's method of turning an objection into a reason for acting immediately with the intention of strengthening the possibility of winning the sale.
Boston Growth Matrix - an analytical tool used in portfolio management to categorize products into four areas - cash cows, stars, problem child (question mark) and dogs. This tool developed by the Boston Consulting Group is used to look for possible problems and helps with divesting and harvesting of products.
Brand - the brand is the name, logo and any special property that identifies a product or service in its own right. Legally it is referred to as a trademark. The brand can be a single product, a group of products or the entire offer of a company (e.g., Coca- Cola).
Brand awareness - the level of customer awareness of a brand's existence within a market. Brand choice - the purchase of one brand instead of another where a choice exists.
Brand dilution - weakening of brand image by launching too many line extensions or using the brand name across a wide variety of areas. There are rare examples of this actually working in practice like GE; however, other factors have contributed to the success of brands like GE.
Brand equity - the value or perception of the qualities of a brand within a market, based on attitudes, beliefs and favorable consequences of using the brand.
Brand extension (also called line extension) - The process of launching a new product line using an existing brand name and adding a 'tag' to identify it with. For example SONY Entertainment is a line extension of the SONY brand.
Brand generic - not the same as generic brand! A brand generic is the latter half of a brand identity. XEROX copy machines, XEROX the brand and copy machine the generic.
Brand image - perception of the brand in the mind of a prospective customer. People's beliefs, expectations and feelings about a brand.
Brand indifference - this is where the customer has no preference for one brand over another for whatever reason. Often these customers will purchase brands based on convenience, price or by chance (for further reading on chance try looking up the Bernoulli Principle in marketing textbooks).
Brand logo - The 'badge' of the brand, which may or may not include the brand name.
Brand loyalty - the bond of habit or tendency of a customer to buy a brand based on their beliefs, perception, attitudes and experience of use of that brand. Brand loyal customers have a very high barrier to 'switching' products (see brand switching).
Brand management - the management process carried out by a company and / or its agency responsible for developing all aspects of the brand.
Brand name - The part of a brand represented in letters or numerals. This does not include the logo. Brand positioning (see positioning)
Brand switching - where a customer changes to another brand or exhibits buying behavior that possesses no loyalty to buying one brand over another.
Break-even point - the period in time from product launch when the sales of a product equal the total cost of production, marketing administration and distribution of that product.
Break-even profit point - the time period when total sales costs since launch equals the total cost of product development and all other associated costs since launch. This time period always comes later than the break-even point.
Broadband - also referred to as high speed internet, broadband is Internet access at a high speed. There are various broadband speeds usually 8-20 times faster than a standard modem. Variations of high speed Internet access are known as ASDL (Asymmetric Digital Subscriber Line), DSL (Digital Subscriber Line), T1, T2 etc.
Broadcast quality - the quality of video needed for TV broadcast - this is a much higher quality production (and therefore more expensive) than needed for multimedia or VHS use.
B-roll - a term used when a company produces a corporate or product video. The B-roll is footage not included in the original video and is given to TV and the media with the intention of providing a more detailed insight into aspects of the new image or product.
Brown goods - consumer electronic goods like TVs video's hi-fi.
Budget - Companies refer to the budget as 'sales budget' or 'marketing budget'. Sales budget refers to the amount of sales forecasted over a given period and marketing budget is the amount of money allocated to spend on marketing the product. It can be confusing sometimes.
Buying signal - Salespeople identify buying signals in order to 'close' a sale. These are often key phrases or visual signals given by customers. Top C CAD - Computer Aided Design
Captive market - where a customer is in an environment like a motorway service station or airport and has no other alternative source from which to purchase.
Cartel - an immoral arrangement where like minded businesses fix or set prices to maximize profit.
Category killer - A large store (physical or virtual) that concentrates solely on a very narrow range of products and offers poor service but prices the products very low.
Cause related marketing - a marketing policy using an approach which appeals to the greater good of humanity. For example organic foods or Body shop. These companies aim to do business and protect and respect animal life or the planet. A company adopting this approach must ensure that all of its activities are carried out in a way which supports their claim to be green and eco-friendly.
Channel (also called distribution channel) - the network of organizations and systems for getting the product from the producer to purchaser.
Close - the point at which the salesperson attempts to finish the deal when selling.
Club plan selling - using existing customers or members to gain reward for 'introducing another person' to a product or service.
Comparative advertising - an advert in which reference or inference to another competitive product is made and compares or invites the customer to compare the two. Taking the 'Pepsi challenge' is a good example of this.
Competitive advantage - where one company has an advantage over another because of things like lower production costs, superior product quality or uniqueness.
Contingency planning - making back-up plans in case the main plan fails.
Corporate image - the image that a company portrays to the outside world.
Convergence - a term often used to denote the 'coming together' of TV/Video/PC/Telephone into an integrated household unit.
Corporate Identity (Corporate ID) - the image of a company. This term is also loosely used to describe a company or brand logo, typeface etc.
Corporate Strategy - The main company plan containing a 'mission' human and financial resource strategies together with all the business strategies of the company in priority order.
Cost-plus pricing - selling a range of products by setting the price on the basis of adding a fixed mark-up to the total costs of production and associated costs.
Crisis management - an organized method of minimizing the impact of a serious event, product failure or adverse publicity.
Customer promiscuity - the number or proportion of customers who defect from buying your brand every year.
Customer retention -the number or proportion of customers who are retained (stay doing business with a company) every year. This is usually expressed as a percentage or by using the average customer lifetime value.
Customer satisfaction - the study of looking at customers experience of a product or service against their expectati on. Top D Database marketing - the management process of developing relationships with existing customers and new business prospects by electronically storing and analyzing data to produce useful information on which to make future marketing decisions.
Decision Making Unit (DMU) - The individual or team responsible for making the final buying decision (see also influencers).
Demand curve - a graph showing how price affects the sales of a product with all other variables being constant.
Demand oriented pricing - setting the price on the basis of demand at various prices.
Demographics - Human factors such as age, sex, education, religion, earnings, occupation and geography which are used to classify customers for building target customer groups.
Depth interview - A detailed interview used in market research where the individual expresses a range of views rather than answering yes or no. These are used to a gain deep insight and understanding of issues.
Dichotomous question - a market research question where the answer can either be one choice or another, e.g., yes or no.
Digital Printing - a cost effective way of printing when only a small amount of printed material is required. It differs from lithographic (standard) printing in both quality and cost.
Direct advertising - mass promotion where the advertising material goes to a known target audience, like direct mail.
Direct channel - selling goods from the producer direct to the end user without a middleman. Divesting - where the company sells or 'divests' a product service or category for strategic reasons.
DMA - Direct Marketing Association
Downsizing - Reducing the number of employees and restructuring the company in order to increase profitability. Top E Early Adopters - people who buy a product at a very early stage after launch - before mass take-up of a product but after the innovators who will buy at an earlier stage.
Early and late majority - people who will wait to buy a product until after it has been tried and tested by the innovators and early adopters but buy before the product has become well-established.
E-commerce - The exchange of money (and data) via the Internet to buy goods, gain information from remote sources and transfer money (on-line banking).
EDI (Electronic Data Interchange) - exchange of data between companies to facilitate day-to-day business.
EFTPOS (Electronic Fund Transfer at Point-of-Sale) - selling products to consumers by electronically taking money at the point of sale, e.g., supermarket checkout.
Elasticity - elasticity measures how increasing or decreasing the price affects demand for a product.
Export marketing - the process of marketing goods or services outside the parent companies home country.
Extranet - a closed computer network link to share information between different companies. Top F Flash - animation produced for the web or multimedia using a product calling Macromedia Flash.
Fonts - a typeface, for example Arial, Helvetica, Times New Roman etc.
Forum - a web page which is used to exchange views about a particular subject or subjects where viewers generally have similar interests.
Fragmentation - the fine splitting of markets into segments then fragments as consumers become more selective in their buying behavior or where there is a plethora of product choice.
Frequency - The number of times you get your promotional message across to the average target customer during the period of a campaign.
Full-line pricing - Where there is a dependency of pricing between one product and another in a line of goods sold by that company. Top G Gap Analysis - A complex process identifying the gap between what is being done now in the marketing of a product and where it should be to fall into line with overall strategic objectives. Gap analysis identifies what needs to be done and assesses the cost and probability of achieving it.
GATT - General Agreement on Tariffs and Trade GDP (Gross Domestic Product) - The total value of goods and services produced by a country over a given time.
Generic advertising - advertising aimed not at growing a particular brand but at persuading usage of a particular product area. Generic brand - a product named by its generic class, e.g., DVD player, video etc.
Global advertising - an advertising campaign that is run across many countries and continents with a similar message, modified only slightly for each target country.
Global brand - a brand name used world-wide (like Coca Cola).
GNP (Gross National Product) - a country's total financial output and services output over a given period of time.
Group testing - an expression used in market research where many people are gathered together in the same environment to discuss, taste or test products, services or advertising. Top H Halo effect - an expression used in data management and general business. Data collection defines the term as the carry-over effect seen when data with sample error is used in other calculations. In business, the term often refers to the added effect of one thing upon another.
Hard goods - goods like home furnishings, hardware, finishing and appliances.
Harvesting - a strategy used when a company is in need of money or forecasts a downturn in the long-term market. The company usually maximizes the amount of turnover from a product by a variety of ways, such as lowering the price, saturating the market etc.
Headline - the main heading of an advertisement.
Hit rate - a sales ratio term used to express the number of customers converted for every call made. Hits - the number of times a particular web site or page on a web site has been visited by people surfing the web.
Horizontal integration - the acquisition of businesses in the same market place to strengthen the business and reduce competition.
Hosting - the place or company where a web site is stored so that people can see the site when using the Internet.
HTML email - email with graphics/pictures used for promotion, usually sent by the thousands. Top I IDM - Institute of Direct Marketing
Impulse purchase - a quick buying decision that is made without the customer going through an 'adoption process' first. An example of this is the buying of chocolate at a supermarket checkout.
Influencers - the individuals in a company that have a direct influence on the final decision of any buying choice. These people may be end users, lower management in large companies or any individual that has the ear of anyone on the Decision Making Unit (see Decision Making Unit).
Innovators - people who buy a product soon after launch and without the need for seeking other opinions or experience.
Intranet - a company's internal communication network on which employees can access information and newsletters via a graphics interface such as a browser like Internet Explorer or Netscape. The Intranet may be connected to the Internet for employees to access information, however, people outside the company cannot gain access to the Intranet. Top J JIT (Just in Time) - a manufacturing method used to reduce stock levels by planning to receive goods exactly when they are needed.
JIT II (Just in time II) - an advanced version of JIT where there is a greater relationship between the manufacturer and its suppliers. Often the suppliers will have their personnel working within the manufacturers' plant.
Joint venture - collaboration between two or more companies to make a business project successful. Top K Key account - a company's major account holders.
KVI (Known Value Items) - a set of key brands within a retail environment where their prices are well known by the average consumer. Consumers cannot be aware of every price and so the KVIs are the brands that will make a store look cheap or expensive. Top L Laggards - people who will not buy a product until after it has become well established and owned by a great number of people.
Law of diminishing return - this states that there is a point after which adding things like product features or increasing quality will not be worthwhile as there will be a low return for the company in doing this.
Life cycle - the evolution of a brand from its launch (birth), through to the end of its natural life where the product is deleted from a company's portfolio. There are different kinds of product life cycle depending on the market however and life cycles can range from as little as one year in a high tech environment like computers through to many decades. The life cycle is characterized by a period of slow growth at launch, followed quickly by fast exponential sales growth. The growth in sales slows at the product reaches a maturity phase and later goes into decline. This is then followed by product withdrawal for financial reasons.
Line extension - a new product that has carries the name of an existing brand normally new sizes, tastes, colors, models etc.
List price - the published price of an item, excluding any discount offered by a reseller.
Lithographic printing - a term used to describe the process for printing what is called the 'traditional' way. Most printing of promotional brochures is done in this way (see also digital printing).
Loyalty schemes - a method used for building relationship with customers by obtaining detailed information about their habits, rewarding the for buying from your business and attempting to stop them switching business to a competitor. Top M Macro / micro segmentation - a multi-step approach to business looking at a company's macro environment such as its customers SIC code and size of the buying firm through to micro issues such as order size and urgency.
Macro marketing - this looks at larger marketing issues such as the economy, political situation, changes in legislation etc. on a broad level.
Market coverage - a measure of how many outlets in a given area (compared to the total number of outlets) stock a product.
Market index - an analytical technique used to express two or several factors into numerical form. This is used for a number of reasons including targeting.
Market penetration - a strategy that aims to increase businesses within a market or to maintain business if defending competition from competitors.
Market research - the process of selecting methods of gathering, recording and analyzing market data for marketing purposes.
Market segment - a group of customers in a market with a defined set of needs. Markets usually have a number of these groups and thus are called segments. Further subdivision of segments is known as market fragments.
Market segmentation - The process of looking at the different customer needs within a market and dividing them into different segments based on these needs. (see market segments).
Market share - the percentage of unit or £ sales of any product within its market.
Marketing - (not the technical definition) the process of managing a company's products or services to maximize the profitability of the company (unless the organization is non-profit making). It evaluates current and changing customer needs and market conditions to develop new products or services. The process ensures that all aspects of the product, optimum places for selling, setting prices and its promotion, are conducted in the best way. These same principles are also applied to existing products and company portfolios.
Marketing mix - assigning financial resources to the various elements of the marketing of a product or service. The four P's , Product, Price, Place and Promotion are all allocated a budget for marketing purposes (also see promotional mix).
Marketing Agency - Full-service and non full-service. The majority of marketing agencies provide a high level of marketing advice and expertise on marketing matters. A full service agency, like CSS Global marketing provides a full service in-house with expert understanding of strategy, design, e-business, multimedia, web site development and direct marketing / database development.
Marketing plan - a detailed instruction plan outlining the methods needed for a product to be successful within a market. It evaluates market conditions, previous sales history, SWOT (see SWOT analysis), and future promotion plans. This document is usually for one product or a group of products; however, in smaller businesses it may form the entire company plan.
Mark-up - the extra price that the company sells its product using the cost of production price for the basis of calculating the mark-up.
Maslow's hierarchical needs - a well established theory of Abram Maslow that examines the way humans are motivated and seeks to explain their aspirations. A good tool for use in both marketing and sales.
Media buying - the analysis of client needs by a marketing or advertising agency for subsequent purchase of advertising space on behalf of the client.
Media mix - the allocation of money for spending on media advertising such as TV, radio and press. Micromarketing - the study of the marketing activities of a company.
Mission statement - a public statement of a company's intent. This includes the purpose and strategic aims of the company. The mission forms the basis for all company activities.
Multibrand strategy - the act of a company having one or more products in the same competing market. Soap powder and shampoo are good examples of this.
Multimedia agency - An organization providing 2-D and 3-D interactive presentations for use with computers, web sites and touch-screen kiosks. These agencies rarely deal with traditional design or marketing.
Multiple packaging - a term used for various things including a product that has more than one layer of packaging, such as a foil container inside a cardboard carton.
Mystery shopping - a research method where a representative of the market research company will pose as a customer to assess the level of service provided by a company. Top N National brand - a brand that is marketed throughout one country. However, a national brand may be marketed in different countries under a different name.
Negative advertising - a method of advertising aimed at exposing the weaknesses of competitor products.
New product development - The process of identifying customer needs and bringing a product or service to the market that matches these needs.
Niche marketing - a product aimed at a specific market segment or segments. (see market segments).
Non-price competition - marketing a product without focusing on price. In this situation there will usually be focus on service levels, product choice etc.
Non-profit organization - a Government or charity organization with a remit to serve the public or to benefit good causes. Top O OEM - Original Equipment Manufacturer - companies that buy other companies goods to make its products. PC manufacturers (Cisco, DELL, IBM) are examples of an OEM.
On-line - An activity that takes place over the Internet.
Organogram - a company's organization chart. Top P Parallel pricing - pricing goods in line with the competition.
Perito's Principle - also referred to as the 80:20 rule. 80% of your business comes directly from 20% of your customers.
Point of sale advertising - advertising features, display racks and cardboard cut-outs positioned at the place where customers buy products.
Portal - a term often used to refer to a company that hosts a number of banner adverts with the main aim of generating significant amounts of revenue.
Portfolio management - managing a range or 'portfolio' of products or services and new developments in an integrated way, analyzing the competitors in each market and recommending methods for optimizing the future portfolio.
Pre-marketing - marketing activities prior to product launch.
Premium price - a product with a high price, usually sold on style, quality uniqueness or rarity. These 'exclusive' products are normally sold through selected outlets.
Product line - a company's product or group of products with similar characteristics. Product lines may contain a subdivision of further product lines.
Product manager/ product marketing manager - An individual in a company who is responsible for the marketing of a product or group of products. In larger companies this post reports into the marketing director.
Promotional mix - assigning financial resources to the various elements needed for promoting a product or service. This 'mix' is used as a basis of promoting the product.
Public relations - the process of developing relations and finding positive angles for gaining press and media exposure.
Public sector - Governmental organizations set-up to meet the needs of the country. These bodies generally exist to serve without making a profit.
Pull strategy - a method of gaining extra sales by use of point-of-sale advertising, stocking offers to resellers etc. the purpose here is to pull the product through the distribution channel and push it to customers. This is termed 'push-pull'. Top Q Qualitative - market research used to generate detailed information rather than numbers or percentages.
Qualitative into quantitative research - a method of usage qualitative research as a primary tool in order to develop the ideal way to carry out quantitative market research.
Quantitative - market research used to generate a numerical evaluation of a given parameter in a market place like 'awareness', number of times used etc. Top R R&D (Research & Development) - the process and team responsible for bringing new products to market and improving existing products.
Rate card - the published rate at which a newspaper, TV or radio station sells advertising space or time.
Re-branding - changing the name, image or logo of a current brand on the market.
Relational purchasing - the way customers buy products or services based on their beliefs about a product or company and their relationship with that brand or company. An 'emotional' purchase. (see transactional purchasing for contrast).
Relationship marketing - marketing by development of relationships with customers through tactics like mailings, clubs, magazines etc. The marketing relies on building an effective database of customer and their needs.
Respondent - an individual or company who completes a request like filling in a form, taking part in market research or returning a reply card.
Response driven mechanism - a reply paid card or device used to collect data or gain further interest / sale of a product.
Retailing mix - the development of a plan outlining the optimum way to attract customers, including store position, layout, store design, services offered, advertising and promotion budget. Top S Sample - in market research, a selection of individuals for research that contains a representative sample of the market. In promotion a sample is a small pack of goods distributed to prospective customers in order to experience the product.
Sampling error - the difference between market research findings and actual outcomes - normally this process takes time to see the outcomes before a comparison can be made.
Search engines - an Internet term for a site where you can search for what you are looking for when you insert a series of key words or phrases.
Search Engine Optimization - The process of improving and optimizing a web site on the Internet..
Selected outlets - chosen agencies or resellers of a product or service - often to maintain exclusivity of the product and a high price.
Service Level Agreement (SLA) - an agreement between two parties (either in the same company or with suppliers or customers) that clearly defines the expectations required from one or both parties.
Shared values approach - method of placing products of similar perceived quality within the same promotional setting, or company's product portfolio. It justifies the extra 'premium price' of relatively unknown brands.
SIC (Standard Industrial Classification) - products and establishments are divided into SIC codes depending on various factors. The system was developed by the US Department of Commerce.
Strategic market planning - the decision making process that examines and recommends the best strategies for a company to market new and existing products.
Surfing - spending time using the Internet visiting various sites.
SWOT analysis - a matrix used for examining the Strengths, Weaknesses, Opportunities and Threats for companies, products or service within a market. The idea is to maximize the strengths and opportunities and minimize the weaknesses or threats. SWOT can also be in a quantitative form whereby weighting factors are added to each element of the SWOT. Top T Tactics - Detailed short-term ways of achieving the marketing strategy.
Target customers - A list of customers with common interests that form the focus of your promotion. The list can be individual names or in the case of mass marketing just common characteristics like age, sex income etc. used to generate campaigns that will get to these people.
Target market - the chosen market for a particular product or service.
Test marketing - using various geographical areas to test the likely uptake of a product or service. Factors such as price, advertising campaigns and distribution channels can be changed in the different areas to measure the optimum route to market for product launch.
Transactional purchasing - the way customers buy products or services based on facts and availability like price. This way assumes that the customer has no preference for supplier or brand. The Internet has increased the level of transactional purchasing and as such businesses require a different approach to Internet marketing in many circumstances. A ' non-emotional' purchase decision (see relational purchasing for contrast). Top U Unit pricing - a product that is sold by weights or measures.
USP (Unique Selling Proposition, also referred to as Unique Selling Principle) - a brand's unique property or characteristic that clearly differentiates it from the competition. Top V Vertical integration - the merger or acquisition of two companies within a market but compliment each other because they are within different parts of the channel, e.g., a manufacturer merging with a retail chain, or a supplier merging with a company that buys its products in order to market their goods. Top W Weak product - a product in decline or easily vulnerable to attack due to its poor quality or marketing power.
White goods - Large kitchen appliances so called because of their color. Yield management - The methods used in such industries as airlines and hotels to maximize the amount of profit per unit sold.
WIIFM - What's in it for me? A good way of summarizing what customers want, when choosing to buy something. Top X X-Factor - the 'little something' that makes a product or service extra special. Top Z Zapping - the phenomenon of consumers using the TV remote control during ads. This reduces the effectiveness of advertising campaigns. Top |
