Glossary BA: Marketing Mix

 

Key Term

Definition

marketing mix

The four marketing activities--product, price, promotion, and distribution--that the firm can control to achieve specific goals within a dynamic marketing environment.

promotion

The marketing activity regarding any physical good, service, or idea that satisfies a want or need.

product

The marketing activity regarding a value placed on an object that is exchanged between a buyer and a seller.

price

A persuasive form of communication that attempts to expedite a marketing exchange by influencing individuals, groups, and organisations to accept goods, services, and ideas.

place

The marketing activity regarding making products available to customers in the quantities desired.

product development

Developing additional and normally related products and services to enhance the range available to existing customers and markets, and thereby increase sales and revenue.

test marketing

The process of testing products among potential users.

commercialisation

The full introduction of a complete marketing strategy and the launch of a product for commercial success.

product classification

A theoretical division between consumer and industrial products.

consumer products

Products for household or family use; they are not intended for any purpose other than daily living.

convenience products

Products that the consumer wants to purchase frequently and with a minimum of effort.

shopping products

Those products that the consumer buys only after comparing value, quality, and price from a variety of sellers.

specialty products

Products that have a special attraction to consumers who are willing to go out of their way to obtain them.

industrial products

Products used directly or indirectly in the operation or manufacturing processes of businesses.

raw materials

Basic, non-processed resources needed as inputs in the production process.

equipment

The machinery and tools used to produce goods and services.

component parts

Processed inputs, but not yet a final product.

processed materials

Processed inputs, but not yet a final product.

product life cycle

A theoretical model of what happens to sales and profits for a product class over time.

product line

A group of closely related products that are treated as a unit because of similar marketing strategies, production, or end-use considerations.

product mix

The combination of product lines offered by a manufacturer.

brand

A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.

branding

The process of naming and identifying products.

packaging

The external container that holds and describes the product.

labelling

The presentation of important information on the package.

product quality

The ability of a product or service to consistently meet or exceed customers' expectations.

psychological pricing

The pricing strategy of setting prices at a level that encourages purchases based on emotional rather than rational responses.

price discounting

Offer temporary price reductions often employed to boost sales.

skimming strategy

The pricing strategy of charging the highest possible price that buyers who want the product will pay.

penetration strategy

The pricing strategy of charging a sufficiently low price so that market share is gained rapidly.

break-even analysis

The process used to determine profitability at various levels of sales.

breakeven point

The level of activity where the total costs incurred in producing and selling a product or service - or pursuing a particular strategy - are equal to the total revenues generated.

fixed cost

Costs that do not vary with the quantity of output produced.

variable cost

Cost that do vary with the quantity of output produced

revenue

The total amount of money received from sales and related business activities.

marketing channel

A group of organisations that move products from their producer to customers.

intermediaries

Organisations that assist in moving goods and services from producers to industrial and consumer users.

middleman

Another word for intermediary.

supply chain

The sequence of linked activities that must be performed by various organisations to move goods from the sources of raw materials to ultimate consumers.

direct marketing

Any attempt to sell a product directly to customers without going through intermediaries such as dealers or other retailers.

retailers

Intermediaries that buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products.

wholesalers

Intermediaries who buy from producers or other wholesalers and sell to retailers.

agent

An agent is the substitute or representative of his principal and derives his authority from him.

physical distribution

All the activities necessary to move products from producers to customers--inventory control, transportation, warehousing, and materials handling.

transportation

The shipment of products to buyers.

warehousing

The design and operation of facilities to receive, store, and ship products.

materials handling

The physical handling and movement of products in warehousing and transportation.

promotion mix

The combination of promotional tools an organisation uses.

advertising

Any paid form of presentation and promotion of goods and services by an identified sponsor to a targeted audience

personal selling

The face-to-face presentation and promotion of products and services.

publicity

Communication to a mass audience that is not paid for by the company.

sales promotion

The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

push strategy

Promotional strategy in which the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise.

pull strategy

Promotional strategy in which heavy advertising and sales promotion efforts are directed toward consumers so that they'll request the products from retailers.

market share

A portion of the existing market that is serviced by the company.

market growth

The rate of expansion of the existing market.

question marks

Goods in a portfolio that may become either stars or poor dogs.

stars

Goods in a portfolio that are very successful and still expanding.

poor dogs

Goods in a portfolio that are neither successful nor expanding.

cash cows

Goods in a portfolio that are successful, but no longer expanding.