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Instructions: This handout comprises a compilation of certain basic marketing concepts and terms.

This is only a representation and students are requested not to limit their learning to this handoutonly.

Branding -- is a promise, a pledge of quality. It is the essence of a product, including why it is

great, and how it is better than all competing products. It is an image. It is a combination ofwords and letters, symbols, and colors.

Brand - A name, term, sign, symbol, or a combination of these used to identify the products ofone seller or group of sellers and differentiate them from those of competitors.

Brand image - The total of all the impressions the consumer receives from the brand. Theseinclude actual experience, hearsay from other consumers, its packaging, its name, the kind ofstore in which it is sold, advertising, the tone and form of advertising, the media used foradvertising, and the types of people seen using, buying or recommending the brand.

Brand loyalty - The degree of consumer preference for one brand compared to closesubstitutes; it is often measured statistically in consumer marketing research.

Brand Licensing- A popular branding strategy, brand licensing is an agreement in which acompany permits another organization to use its brand on other products for a license fee.Royalties maybe as low as 2 per cent of wholesale revenues or higher than 10 per cent. Mattel,for example, licensed Warner Bros Harry Potter brand for use on board games and toys. Warnerguaranteed royalties of $20 million from Mattel’s licensing fee of 15 percent of gross revenuesearned in these branded products.

Marketing -- the process of planning and executing the conception, pricing, promotion, anddistribution of ideas, goods, services, and people to create exchanges that will satisfyindividual and organizational goals. Marketing activities should attempt to create and maintainsatisfying relationships exchange relationships. To maintain an exchange relationship, buyers

must be satisfied with the obtained good, service, or idea and sellers must be satisfied with thefinancial reward or something else of value received. A dissatisfied customer who lacks trust inthe relationship often searches instead for alternative organizations or products.

Marketing management- Is the process of planning, organizing, implementing and controllingmarketing activities to facilitate exchanges effectively and efficiently. Effectiveness is thedegree to which an exchange helps achieve an organization’s objectives. Efficiency refers tominimizing the resources an organization must spend to achieve a specific level of desiredexchanges.

Market- a market could be a specific location or a geographic location, it is a group of peoplewho as individuals or as organizations have needs for products in a product class and have the

ability, willingness, and authority to purchase such products. In general use, the term marketsometimes refers to the total population or mass market that buys products. There are twotypes of markets- Consumer markets and Business Markets. 

Consumer markets- Purchasers and household members who intend to consume or benefitfrom the purchased products and do not buy to make profits.

Business markets- Individuals or groups that purchase a specific kind of product for resale,direct use in producing other products, or use in general daily operations.

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Personal Selling- Paid personal communication that informs customers and persuades them tobuy products in an exchange situation.

Elements of Personal selling process- The specific activities involved in the selling process

vary among salespeople and selling situations. No two salespeople use the same sellingmethods. Nonetheless, many salespeople move through a general selling process as they sellthe products. This process consists of seven steps- prospecting, pre approach, approach,making the presentation, overcoming objections, closing the sale and following up.

4 P's vs. 4 C's

• Not PRODUCT, but CONSUMER- Understand what the consumer wants and needs.Times have changed and you can no longer sell whatever you can make. The productcharacteristics must now match what someone specifically wants to buy. And part ofwhat the consumer is buying is the personal "buying experience."

• Not PRICE, but COST- Understand the consumer's cost to satisfy the want or need. Theproduct price may be only one part of the consumer's cost structure. Often it's the costof time to drive somewhere, the cost of conscience of what you eat, and the cost ofguilt for not treating the kids.

• Not PLACE, but CONVENIENCE- As above, turn the standard logic around. Thinkconvenience of the buying experience and then relate that to a delivery mechanism.Consider all possible definitions of "convenience" as it relates to satisfying theconsumer's wants and needs. Convenience may include aspects of the physical orvirtual location, access ease, transaction service time and hours of availability.

• Not PROMOTION, but COMMUNICATION- Communicate, communicate, communicate.Many mediums working together to present a unified message with a feedbackmechanism to make the communication two-way. And be sure to include anunderstanding of non-traditional mediums, such as word of mouth and how it caninfluence your position in the consumer's mind. How many ways can a customer hear(or see) the same message through the course of the day, each message reinforcing theearlier images?

Micromarketing- An approach to market segmentation in which organizations focus precisemarketing efforts on very small geographic markets.

Geodemographic segmentation- Marketing segmentation that clusters people in zip codeareas and smaller neighborhood units based on lifestyle and demographic information.

Market density- the number of potential customers within a unit of land area.

Psychographic variables- Marketers sometimes use psychographic variables such as personalitycharacteristics, motives and lifestyles to segment markets. A psychographic dimension can be

used by itself to segment a market or combined with other types of segmentation variables.

Cooperative advertising- Sharing media costs by manufacturer and retailer for advertising themanufacturer’s products.

Dealer Loader- A gift, often part of the display, offered to a retailer who purchases a specificquantity of the merchandise

Premium push money- Extra compensation to sales people for pushing a line of goods.

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AIDA model of communication: A communication model which aims to obtain Attention,Interest, Desire and Action.

Advertising objective: The objective of your communication strategy. To inform of a newdevelopment, persuade or remind.

Benefit: The gain obtained from the use of a particular product or service. Consumerspurchase product/services because of their desire to gain these built in benefits.

Benefit Segmentation: Dividing a market according to the benefit they seek from aparticular product/service.

Brand extension strategy: The process of using an existing brand name to extend on to a newproduct/service e.g. The application of the brand name Virgin on a number of businessactivities.

Competitive Advantage: Offering a different benefit then that of your competitors.

Competitor Analysis: Process of understanding and analysing a competitors strengths andweaknesses, with the aim that an organisation will find a competitive positioning differencewithin the market.

Concept testing: Testing the idea of a new product or service with your target audience.

Brand repositioning: An attempt to change consumer perceptions of a particular brand. Forexample VW has successfully repositioned the Skoda brand.

Data mining: Application of artificial intelligence to solve marketing problems and aidingforecasting and prediction of marketing data.

Dichotomous question: Questions which limit the responses of the respondent eg YES/NO.

Direct marketing: The process of sending promotion material to a named person within anorganisation.

Diversification: A growth strategy which involves an organisation to provide new products orservices. The new products on offer could be related or unrelated to the organisations coreactivities.

Demography: A study of the population.

Demographic segmentation. Dividing the population into age, gender, income and socio-economic groups amongst other variables..

Engels Law: Suggest that peoples spending patterns change as their income rises.

Exclusive distribution: Limiting the distribution of a product to particular retail store to createan exclusive feel to the brand/product.

Econometric modeling: Application of regression techniques in marketing analysis

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Focus Group: A simultaneous interview conducted amongst 6-8 respondents. The aim is toobtain qualitative information on the given topic.

Geographic segmentation: Dividing the market into certain geographic regions e.g. towns,cities or neighborhoods.

Innovator: Those consumers who are the first to adopt a product/service at the beginning ofits lifecycle. They are usually willing to pay a premium to have the benefit of being the first.

Intensive distribution: Distributing a product to as many retail outlets as possible.

Laggards: Those consumers who adopt the product/service as it reaches the end of itslifecycle. They usually pay a competitive price for the benefit of waiting.

Lifestyle segmentation: Analyzing consumers activities, interest and opinion (AIOs) to developa profile on the given segment.

Market Development Strategy: Selling an existing product/service in a new and developing

market.

Mass marketing: The promotion of a product or service to all consumers.

Marketing Planning: A written document which plans the marketing activities of anorganization for a given period. The document should include an environmental analysis,marketing mix strategies and any contingency plans should an organization not reach theirgiven objectives.

Market position: The perception of a product or an organization from the view of theconsumer.

Market research: Analyzing and collecting data on the environment, customers and

competitors for purposes of business decision making.

Modified Rebuy: Where an organization has to make changes to a specific buying situation.

New buy: Where an organization faces the task of purchasing a new product/service. 

Niche marketing: The process of concentrating your resources and efforts on one particularsegment

Objective to task method: Setting a advertising budget based on the desired goals of thecommunication campaign.

Open ended questions: Questions which encourage the respondent to provide their ownanswers.

Paretos Law (80/20) : A rule which suggests that 80% of an organizations turnovers isgenerated from 20% of their customers.

Perceptual map: Mapping a product/organization alongside all competitors in the hope to finda ' positioning gap' in the given market.

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Primary data: The process of organizing and collecting data for an organization.

Product Development Strategy: The development of a new product/service aimed at theorganization existing market. The aim is to increase expenditure within the segment.

Product Cannibalization: Loosing sales of a product to another similar product within the

same product line.

Public relations: The process of building good relations with the organizations variousstakeholders.

Relationship marketing: Creating a long-term relationship with existing customers. The aim isto build strong consumer loyalty.

Sales promotion: An incentive to encourage the sale of a product/service e.g. money offcoupons, buy one, get one free.

Secondary data: Researching information which has already been published.

Segmentation: The process of dividing a market into groups that display similar behavior andcharacteristics.

Straight Rebuy: Where an organization reorders without modification to the specification.

SWOT analysis: A model used to conduct a self appraisal of an organization. The model looksat internal strengths and weaknesses and external environmental opportunities and threats.

Test marketing: Testing a new product or service within a specific region before nationallaunch.

Usage segmentation: Dividing you segment into non, light, medium or heavy users.

Core Competencies-Things a firm does extremely well, which sometimes gives it an advantageover its competition

Market opportunity-A combination of circumstances and timing that permits an organization totake action to reach a target market

Competitive advantage-The result of a company’s matching a core competency toopportunities in the market place. Types of competition-

Brand Competitors-Firms that market products with similar features and benefits to the samecustomers at similar prices.

Product competitors-Firms that compete in the same product class but have products withdifferent features, benefits and prices

Generic competitors-Firms that provide very different products that solve the same problemor satisfy the same basic customer need

Total budget competitors- Firms that compete for limited financial resources of the samecustomers

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Discretionary income- Disposable income available for spending and saving after an individualhas purchased the basic necessities of food, clothing and shelter

Sampling- the process of selecting representative units from a total population

Probability sampling- A sampling technique in which every element in the population being

studied has a known chance of being selected for study

Random sampling – A type of probability sampling in which all units in a population have anequal chance of appearing in the sample

Stratified sampling- A type of probability sampling in which the population is divided in subgroups according to a common attribute and a random sample is then chosen within eachgroup.

Data mining technique- refers to discovery of patterns hidden in databases that have thepotential to contribute to marketers understanding of customers and their needs

Strategic Window-A temporary period of optimal fit between the key requirements of a marketand a firm’s capabilities

Customer Relationship Management- using information about customers to create marketingstrategies that develop and sustain desirable customer relationships.

Customer Value-Value is important element of managing long term customer relationships andimplementing the marketing concept. A value is a customer’s subjective assessment of benefitsrelative to costs in determining the worth of the product.

Mission statement- A long term view of what the organization wants to become

Corporate strategy- A strategy that determines the means for utilizing resources in the various

functional areas to reach organization’s goals. A corporate strategy determines not only thescope of business but also its resource deployment, competitive advantages and overallcoordination of functional areas.

BCG matrix- Boston Consulting Group approach is based on the market growth / market sharematrix and is based of the philosophy that a product’s market growth rate and its marketshare are important considerations in determining its marketing strategy. All the firms SBUs andproducts should be integrated into a single, overall matrix and evaluated to determine overallportfolio strategies. The matrix enables the strategic planner to classify a firm’s products intofour basic types: stars, cash cows, dogs and question marks.

Stars are products with dominant share of the market and good prospects for growth. However,they use more cash than they generate to finance growth, add capacity, and increase marketshare. Example Apple’s Imac computer.

Cash Cows have a dominant share of the market but low prospects for growth typically theygenerate more cash than is required to maintain market share. Bounty the best selling papertowels in US are a cash cow for Procter & Gamble.

Dogs have a subordinate share of the market and low prospects for growth; these products areoften found in established markets. Example- Checkers a fast food chain that features twin

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drive through lanes is experiencing declining profits and market share and may be considered adog relative to other fast food chains with different formats

Questions marks sometimes called “problem children” have a small share of the growingmarket and generally require a large amount of cash to build market share. Mercedes mountainbikes are a question mark relative to Mercedes’ automobile products. The long term health of

the organization depends on having some products that generate cash and provide acceptableprofits and others that use cash to support growth.

Intensive Growth- Growth occurs when current products and current markets have thepotential for increasing sales. Strategies for intensive growth are – Market penetration,Product Development, Market Development

Diversified growth- Growth occurring when new products are developed to be sold in newmarkets.

Michael Porter’s Five Forces Model- Michael Porter described a concept that has becomeknown as the "five forces model". This concept involves a relationship between competitorswithin an industry, potential competitors, suppliers, buyers and alternative solutions to the

problem being addressed. We used the five-forces model as a basic structure and built on itwith concepts from the works of many other authors. The result was a model with over 5,000relational links.

While each industry involves all of these factors, the relational strengths vary. This results in a

set of analyses, including:

• a success potential rating in eleven key areas• a list of strategic strengths and weaknesses• observations on strategic inconsistencies• a written critique of your strategy• a graphic analysis of key marketing concepts• a written draft of a marketing plan

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GATT- General Agreement on tariffs and trade (GATT)- An agreement among nations toreduce worldwide tariffs and increase international trade. Originally signed by 23 nations in1947, GATT provides a forum for tariff negotiations and a place where international tradeproblems can be discussed and resolved. The General Agreement on Tariffs and Trade (typicallyabbreviated GATT) was originally created by the Bretton Woods Conference as part of a largerplan for economic recovery after World War II. The GATT's main purpose was to reduce barriers

to international trade. This was achieved through the reduction of tariff barriers, quantitative restrictions and subsidies on trade through a series of different agreements. The GATT was anagreement, not an organisation. Originally, the GATT was supposed to become a fullinternational organisation like the World Bank or IMF  called the International Trade Organisation. However, the agreement was not ratified, so the GATT remained simply anagreement. The functions of the GATT have been replaced by the World Trade Organisation which was established through the final round of negotiations in the early 1990s.

The history of the GATT can be divided into three phases: the first, from 1947 until theTorquay round, largely concerned which commodities would be covered by the agreement andfreezing existing tariff levels. A second phase, encompassing three rounds, from 1959 to 1979,focused on reducing tariffs. The third phase, consisting only of the Uruguay Round from 1986 to1994, extended the agreement fully to new areas such as intellectual property, services,

capital, and  agriculture. Out of this round the WTO was born. IMF describes itself as "anorganization of 184 countries, working to foster global monetary cooperation, secure financialstability, facilitate international trade, promote high employment and sustainable economicgrowth, and reduce poverty". With the exception of North Korea, Cuba, Liechtenstein, Andorra,Monaco, Tuvalu and Nauru, all UN member states either participate directly in the IMF or arerepresented by other member states.

Marketing Mix -- the blend of product, place, promotion, and pricing strategies designed toproduce satisfying exchanges with a target market.

Market Research -- the process of planning, collecting, and analyzing data relevant tomarketing decision-making. Using a combination of primary and secondary research tools tobetter understand a situation.

Personal Selling -- persuasive communication between a representative of the company andone or more prospective customers, designed to influence the person's or group's purchasedecision.

Place - the process of getting a product from the place it was manufactured into the hands ofconsumers in the right location at the right time.

Positioning -- developing a specific marketing mix to influence potential customers’ overallperceptions of a brand; to develop a specific image of the brand in the minds of consumers.

Price -- the money or other compensation or unit of value exchanged for the purchase or use ofa product, service, idea, or person.

Product -- a good, service, person, or idea consisting of a bundle of tangible and intangiblebenefits that satisfies consumers’ needs and wants.

Promotion -- any type of persuasive communication between a marketer and one or more of itsstakeholder groups. Promotional tools include advertising, personal selling, publicity, and salespromotion.

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Strategic Marketing Planning -- the process of managerial and operational activities requiredto create and sustain effective and efficient marketing strategies, including identifying andevaluating opportunities, analyzing markets and selecting target markets, developing apositioning strategy, preparing and executing the market plan, and controlling and evaluatingresults.

Unique Selling Proposition (USP) -- the one thing that makes a product different than anyother. It's the one reason marketers think consumers will buy the product even though it mayseem no different from many others just like it.

Difference between Joint venture and Strategic Alliance- Joint venture is the partnershipbetween a domestic firm and a foreign firm or government. Joint ventures are especiallypopular in industries that call for large investments. Control of the joint venture can be splitequally or one party may control decision making. These are gaining importance because withthe advent of globalization a number of inexperienced firms are entering the market and itgives a cost advantage as well.

Strategic alliances – are partnerships formed to create competitive advantage on a worldwidebasis. Similar to joint ventures. What distinguishes strategic alliances from other business

structures is that the partners in the alliance may have traditional rivals competing for marketshare in the same product class.

Ansoff Matrix- A common tool used within marketing was developed by Igor Ansoff in1957. His model gives organization five strategic business options. 1. Market

Penetration: This involves increasing sales of an existing product and penetrating the

market further by either promoting the product heavily or reducing prices to increasesales. 2. Product Development: The organization develops new products to aim within

their existing market, in the hope that they will gain more custom and market share. For 

Example Sony launched the Play station 2 to replace their existing model.3. Market

Development: The organization here adopts a strategy of selling existing products to new

markets. This can be done either by a better understanding of segmentation, i.e. who elsecan possibly purchase the product or selling the product to new markets overseas. 4.

Diversification: Moving away from what you are selling (your core activities) to  providing something new e.g. Moving over from selling foods to selling cars.5.

Consolidation: Where the organization adopts a strategy of withdrawing from particular 

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markets, scaling back on operations and concentrating on its existing products in existing

markets.