Marketing Management summary keywords

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Book summary of marketing management

Marketing is a dynamic and all pervasive subject in business that makes the whole organisation ready to serve the customers. So, success of a business largely depends on the success of marketing.
There are various definitions to marketing. We can generalise the definition, through the definition of the famous marketing author, Phillip Kotler who defines marketing as a social activity directed towards satisfying customer needs and wants through an exchange process. It is a process of identifying consumer needs, developing products and services to satisfy consumer needs, making these products and services available to the consumer through an efficient distribution network and promoting these products and services to obtain greater competitive advantage in the market place.
This emphasises optimum utilisation of resources and concerted effort on the part of the marketing manager to deliver higher value to customers and greater profit to the organisation.
Marketing, as a concept, has evolved over a period of time and has witnessed changes and modifications with the progress of civilisation. It has augmented exchange with dominating paradigms in marketing.
They are production concept, product concept, selling concept, marketing concept and societal concept. People often confuse between selling and marketing.
While selling is more about product push, marketing is about identification and satisfaction of customer need. While selling focuses on the interest of the seller, marketing takes a more welfare view and focuses on consumer satisfaction. Customers and companies are involved in an exchange process in marketing.
The exchange process can range from a simple, economy-based exchange process to generalised exchanges, complex exchanges and symbolic exchanges. Marketing exchange process helps a marketing manager to look at a ‘marketing man’ as unit of evaluation than an ‘economic man’.
Marketing management is a process of identifying consumer needs, selecting target segments, developing products and services and implementing the marketing program for generating higher customer satisfaction and profit for the organisation. Though marketing generates profit for the enterprise, it does not do so at the cost of the consumer or society.
Not-for-profit organisations also use marketing for marketing social causes. Though marketing is the responsibility of a department but for greater success, organisations need to reorient the whole organisation for better market orientation. They need to conduct marketing audit, find out the current level of marketing effectiveness and design programs for better market orientation.
McKinsey has suggested a Seven S framework for building market-oriented companies. Marketing plays a greater role in an emerging economy like India, as it attempts to improve the standard of living of people through greater and better product and service offers.
In the present day, marketing has assumed a process orientation. A company integrates distinct yet related components to create a systemic marketing plan. The term ‘marketing mix’ became popular after Neil H. Borden first coined it in his work, The Concept of Marketing Mix. Marketing has evolved through ages to capture the quaint essence of different orientations to place through compact marketing orientation.
Selling and marketing bring different orientations to business; hence managers are expected to follow different kinds of strategies for business success.
Marketing and sales do often overlap into what is called ‘the pitch’. This is how you deliver the marketing message and is how the marketing turns into the sale.
According to Prof. Theodore Levitt, ‘the difference between selling and marketing is more than semantic’. A truly marketing minded firm tries to create value satisfying goods and services, which the consumers will want to buy.
Many managers use ‘marketing’ and ‘advertising’ as synonyms, though there is a substantial difference between both the concepts. Advertising and marketing bring different repercussions for business; hence managers are expected to follow different kinds of strategies for business success. Advertising amounts to the paid, public, non-personal announcement of a persuasive message by an identified sponsor; the non-personal presentation or promotion by a firm of its products to its existing and potential customers.
In the context of marketing, the third and the final ambiguity exist between the concepts of promotion and advertising. Promotions refer to the entire set of activities, which communicate the product, brand or service to the user.
Promotions refer to the entire set of activities, which communicate the product, brand or service to the user. The idea is to make people aware, attract and induce to buy the product, in preference over others. Promotion may assume several forms.
Marketing as an exchange process has gained significance over the years, as it has tried to conceptualise marketing behaviour. We need to understand why people get engaged in the process of exchange relationships and how exchanges are created, resolved or avoided
A marketing mix is the combination of the elements of marketing and what roles each element plays in promoting your products and services and delivering those products and services to your customers.
Organisations exist because they deliver promised values to customers through their product and service propositions.
Customer value is the net of expected benefits of customers and cost involved in acquiring the product or service. Benefits can be product benefits, brand or company benefits, functional or performance benefits, service benefits and emotional or self-expressive benefits.
Customer has to pay the cost of the product plus the margin of the channel in the form of final price. The latter includes cost of acquiring and inventorying the product, cost associated with using the product, cost of maintaining and repairing the product and cost of delivering the product.
Value research has identified a set of customer values, namely utilitarian value, social value, emotional value, conditional value and epistemic value.
Customer values vary across individuals and time. A particular value may be important for someone whereas others may not find it relevant.
Functional value is at the base of this hierarchy. If a product does not perform its intended function, whatsoever may be the additional value promise, the product will not work in the market.
It is possible to group customers on the basis of value desired from a product category and segment the market on the basis of value expected, to find out clusters of customers with distinct value perceptions.
While customer value is instrumental in arriving at customer satisfaction, customer satisfaction is both an end state value and a measurement tool for marketing success.
Customer value can be classified on the basis of customer roles and universal value expected from the product proposition. Universal values can take the form of performance value, price value and service value.
Customer satisfaction is a measurement of how much the product performance has measured up to the expectation of customers. When performance exceeds the expectation, the customer is delighted.
Companies need to reinvent their value proposition and make them contemporary and relevant to keep the customers loyal and satisfied.
Value can be created by understanding customer needs, designing value driven segments, developing value propositions, linking customer knowledge and business strategy, developing new products and services, delivering customer value through value networks and delivery channels and measuring and monitoring customer satisfaction and retention.
Customer value can be delivered through a series of strategic activities undertaken by the firm. Michael Porter has coined the term value chain to explain the series of activities for the delivery of customer value.
Activities can be grouped as upstream, generic and downstream activities. Upstream activities are undertaken before the production process – in the form of supplies and procurement; downstream activities are undertaken after the primary activity of production is over.
A marketing manager is required to observe and monitor the trend in the external environment and incorporate the results of this observation in business and marketing plans.
The competitive environment is also called micro environment, which covers all those players who have a direct impact on the business of a firm. They include suppliers, competitors, intermediaries and the general public at large.
The broader, macro environment consists of demographical, political, legal, cultural, social, economic, technological and natural environment.
The legal environment makes marketers aware of the rules of the game before they play the game, failing which may result in fines, boycotts, legal restrictions and loss of image for the firm.
Culture is the manifestation of wholesome living of individuals. Cultural factors have a deep impact on consumers as they are inherited from generation to generation.
Social environment explains the way an individual’s consumption is shaped through an interplay of social forces.
The economic environment influences the manner in which consumers will behave toward varying marketing appeals. Economic factors like inflation, income levels, availability of savings, debt and disposable income and stages of business cycle influence marketing decisions.
A natural environment friendly company is likely to derive more goodwill and better market image in today’s world as compared to the past.
Demographical environment explains the influence of factors like population growth, age and income distribution in the population, geographic location and shift of population, on marketing decisions.
Technology is changing the manner in which consumption choices are made. New products and technologies are influencing the way people consume and the way marketers make their products available to consumers.
Environmental scanning is possible through various methods like analysis of available secondary data, development of scanning and intelligence teams in organisations, Delphi technique, content analysis, and scenario building and cross impact analysis.
Behaviour is the study of why, how, what, where, and how often do consumers buy and consume different products and services. It tries to understand the process followed by consumers in making product and brand choices.
Knowledge of consumer behaviour is helpful to the marketing manager in understanding the needs of different consumer segments and developing appropriate marketing strategies for each segment. The study of consumer behaviour also provides an insight into how consumers arrive at the purchase decision and the key variables influencing their decision process.
The consumers follow a decision process characterised by problem recognition, information search, alternative evaluation, purchase decision and post-purchase behaviour. Consumers also play various roles in the purchase process, namely the role of initiator, influencer, gatekeeper, decider, buyer, user, preparer, maintainer and disposer in the context of a purchase decision.
The behavioural patterns shown by consumers in different product choice situations can be classified as routinised purchase behaviour, complex buying behaviour, dissonance reducing buying behaviour and variety seeking buying behaviour.
An individual consumer’s decision to purchase a product is influenced by a number of variables, which can be classified into four categories, namely cultural, social, personal, and psychological factors.
Cultural factors have a broader consumption context through which the consumer learns the significance of consumption. Sub culture, social class, nationality and religion are some of the cultural issues influencing the decision making process.
The social factors include family, reference group, roles and status of individual customer in influencing his consumption behaviour. Consumers differ from one another in terms of their sex, age, education, income, family life-cycle stage, personality and lifestyle and other personal characteristics, which influence their buying behaviour
Understanding the consumer behaviour of the target market is the essential task of marketing managers. Consumers differ fundamentally in income, education level, taste and age.
Consumer is the king around whom the entire system of marketing revolves. If anybody makes the marketing program ignoring the consumer preferences, he probably will not achieve his ultimate objective.
Consumer behaviour findings are used increasingly by profit-oriented organisations to increase profits and non-profit-oriented organisations to advance social causes and fight social ills. But the behaviour of organisational buyers differs significantly from individual buyers. The organisational market consists of businesses, non-profit organisations, government and its departments and other non-consumer organisations like resellers and marketing organisations.
The buying situations in the context of organisational buying are a straight rebuy in which repeat orders are placed, modified rebuy in which the organisation modifies its demand depending on the evolving environment and the task of new buy which is the beginning of every buying process by the supplier with the purchasing organisation.
The decision making process of organisational buyer is more rational and objective oriented, and often more than one person is involved in the process. It involves communication among several departments and in a multi-location firm among several strategic business units and is based on pure financial relationships between the organisation and its suppliers.
Organisational buying behaviour is a multi stage process in which the buyers recognise their organisational or departmental need and then develop exact specifications of the product, its quality and schedule of requirements through intra departmental and within the buying centre deliberations.
Organisational buyers use objective criteria to evaluate the proposals of the supplier and decide for procurement. They also evaluate the performance of the suppliers over a period of time and decide to develop a long-term relationship with them, which would be mutually beneficial.
Organisational buying behaviour is also influenced by various factors. The environmental factors like interest rate, inflation, regulatory policy, credit policy of government, technological life cycle and cultural context prevailing in the country influence the organisational buying.
Organisational factors like policies, procedures, processes and systems; practices built over a period of time have direct bearing on the purchase process. Emergence of business process reengineering and concern for cost control and long-term relationship building has changed the role of the purchase department in an organisations.
It is now given the additional responsibility of contributing towards long-term goals of organisation through cross-functional orientation, and the performance of the purchase department is now linked with incentive programs.
There are interpersonal and personal factors also influencing organisational decision-making. Though the decisions are taken in the context of business individuals bring their own motivation, perception, personality characteristics and demographic factors into the purchase decision process influencing the overall process
Organisational buyer decisions are complex and rational and involve several individuals with diverse backgrounds and expectations. These individual play an important role in the buying center.
Marketing planning of an organization is planning for that organization’s revenue earning activities.
Market oriented strategic planning is necessary to make the organization, its resources and its intent of being in business fit with the evolving environment. It starts with setting down the corporate objectives and should be followed through with strategies and plans for each separate function.
Marketing provides inputs for strategic planning. Strategic planning starts with establishing business mission, objectives and goals of the organization, establishing SBUs, assigning resources to SBUs and developing planning for business growth. Resource allocation to each of the SBUs depends on the market attractiveness and growth potential of that SBU. Marketers use portfolio models like Boston Consulting Group Matrix, Multi-factor Portfolio Matrix of GE and Arthur D Little Portfolio Matrix for evaluating SBUs and assigning resources to each one of them. Business growth planning is possible in various ways.
Companies can grow by doing backward, forward and horizontal integration; by doing concentric, conglomerate and horizontal diversifications and also by deciding on downsizing their business for growing faster in some businesses and coming out of other businesses. Marketing planning plays a vital role in formulating marketing strategies, objectives and goals. Michael Porter has proposed three generic strategies – cost leadership, differentiation and focus strategy for marketing success.
Marketing planning is a forward-looking exercise, which determines the future strategies of an organization with special reference to its product development, market development, channel design, sales promotion, profitability, etc.
Marketing planners should develop a good marketing plan that should cover an executive summary and table of contents, mission statement, summary of performance of the firm in the past, an overview of the market, results of SWOT analysis and portfolio analysis for resource allocation, market assumptions and financial projections for at least three years, marketing strategy to be followed by the firm, different functional and action plans, implementation and control mechanism and a contingency plan in the event of changes in evolving market situations.
A successful marketing plan serves as a guide for implementing marketing management process.
A good marketing management process involves identification of marketing opportunity, selection of target market and positioning for company’s offer, developing and managing the marketing program through product, price, place and promotion plans and developing systems, organizations and procedures to implement, control and evaluate the marketing program.
Market segmentation seeks to carve out a homogenous market out of a large, heterogeneous market. There are a few common bases, which are used in segmentation e.g. demographic, economic, psychographics, etc.
Market segmentation for individual customer markets is different from that of industrial markets. Segmentation in a business-to-consumer market is possible by either segmenting through customer characteristics or on the basis of consumer response to marketing programs.
Segmentation guides marketing managers to identify who are the likely buyers and to spend the resources on these buyers to achieve a time based result.
Segmentation also helps firms to develop differentiated offers to suitably cater to cater different market segments. Segmentation is a scientific process in which the marketing manager identifies the bases or variables on which the market is to be divided, forms segments, and profiles them and then launches marketing programs for each segment.
Segmentation success depends on measurability, response elasticity, worthwhileness, adequate demand potential and profitability of the segment. The attractiveness of a market segment is assessed on factors like accessibility, measurability, communicability, worthwhileness and market viability.
Marketers use three strategic options in target marketing. They are undifferentiated marketing, differentiated marketing and concentrated marketing.
In undifferentiated marketing strategy, the same marketing program is offered to everyone regardless of their differences.
In differentiated marketing, two or more segments are targeted using different marketing programs for each of the segments.
In concentrated marketing strategy, the marketing manager focuses on one segment out of many possible segments.
Demand forecasting, though crucial, is one of the grey areas of marketing management.
It is crucial because without a proper demand forecast the marketing executive cannot determine the type of marketing program to use in order to attain the desired sales and marketing objectives.
Evaluating the demand potential obtained in the market place and preparing a demand forecast is an important function of the sales and marketing managers.
While different approaches and methods can be used for preparing the sales forecast, a combined approach using both the quantitative and executive judgment methods helps in putting realism into the demand forecast.
Product development is an integral part of the marketing-mix. Because of the changes in technology, consumer tastes, and level of competition the current products have limited life spans and must be replaced with newly developed products.
A product is the offer that the consumer ultimately owns in the exchange process. Each product offers some level of core, tangible and augmented benefit to consumers. The functional utility of the product is an explanation of the reason ‘why’ of buying. Products have different layers like core, basic, expected, augmented and potential levels.
The position of a product manager has come to stay as a strategic one in marketing. He takes key decisions related to the product offer in the market.
Product Mix is an assortment of all related and unrelated product that the company offers in the market place. Product mix has got four important elements like width, depth, length and consistency.
Product line decisions are related to the length and depth of each product line and what decisions should the marketer take for each product market segment.
A brand is a term, sign, symbol, logo or design or some combination of these elements intended to identify the brand and differentiate a company’s offer from others in the market place.
Product life cycle can be viewed from different levels of products, like core product, product category, brand and so on. In marketing literature, several prescriptions have been proposed for using product life cycle for formulating marketing strategy.
A typical product life cycle passes through stages of introduction, growth, maturity and decline stage. The characteristics and strategies to be followed at each of these stages vary from one to another.
New product development is a more limited term but includes the technical activities of product research, engineering and design.
The new product ideas emerge by evaluation of idea, market conditions and the nature of the product launched by the company.
The decision to launch a new product should take into consideration company resources, the nature of competition prevailing in the category, and the relevance of that category to consumers.
The new product management can be done through a new product manager, creation of a new product department or constitution of a cross functional team to undertake a new product opportunity.
New product ideas may come from internal sources like company people, dealers and suppliers or from external sources like consumers, commercial market intelligence and competitors.
Once the new product ideas are obtained, the marketer needs to screen the feasibility of these concepts through concept screening. There is a likely chance of making two kinds of errors at this stage.
When the new product manager drops a good idea which could have given substantial success, he is likely to make a ‘drop error’ and when he carries further and commits resources to a bad idea he is likely to make a ‘go error’.
Concept testing is concerned with measuring customer reactions to the idea or concept of a product. In fact, it is a kind of research in which the product idea is screened before any money, time or labor is committed to making the prototype product
The idea of a product with as many details as possible is made known to the customers either verbally or through the use of suitable blueprints. The response of the customers is checked and only if it is found encouraging, then development of product prototype is taken up.
Concept testing can tell whether the product is likely to be a future success or not. To achieve better results, however, product concept should include the finished product itself, with all details, viz., packaging, price category, the brand name, etc.
The new product manager will conduct consumer research in test marketing stage and then take a decision for commercialisation. Correspondingly, the new product manager will develop advertising copy and test their acceptability among target customers.
The innovative new product spreads in a society depending on how consumers become aware, take interest, evaluate alternatives, make a trial and finally adopt the product.
A diffusion process explains how a new product spreads in a societal setting and its diffusion depends on the degree of innovativeness in the new product, the society in which it has to spread and the time for the spread through effective marketing program.
A new product development is a process of developing a marketing offer as a response to emerging market opportunity. Once the new product is commercialised, the marketer needs to monitor life cycle management of this new product.
Companies do not sell all their products directly to consumers. There are two ways of marketing products viz. direct marketing without using the channel and indirect marketing through a set of intermediaries.
Intermediaries help in different kinds of flows in the market between the producer and the end consumer. They help in physical flow, title flow, information flow and cash flow.
The design of a channel starts with understanding the customer’s service expectations. It should help in setting objectives and constraints for the channel.
A company may pursue exclusive, selective and intensive distribution strategy for reaching markets.
Once the channel design decisions are taken and intermediaries are decided upon, the big task is to manage the selected channel. The marketing manager should select appropriate channel by evaluating product, market and producer related factors.
Channel management is a dynamic process as it involves participants not directly under the control of the organisation.
There are three types of primary channel participants, namely manufacturer, wholesaler and retailer.
Howsoever strong the channel design and management decisions may be there is likely to be channel conflict. It is impossible to eliminate channel conflict, so managers should try to resolve and manage the conflict.
Conflict management for building cooperation among intermediaries can be done by identifying the nature and cause of conflict and developing strategies for resolving these conflicts through mediation, arbitration, joint membership and mutual goal sharing across the channel.
The price of the product of a firm constitutes an extremely important element in its marketing-mix. Pricing is the revenue earning component of the product mix.
The price of a product affects other components of the marketing-mix of a firm.
A firm will improve the quality of a product, increase the number of accompanying services and spend more on promotion and distribution, if it feels that it can sell its product at a price high enough to cover the cost of these expenses.
To the consumer, prices determine his purchasing power and standard of living. Goods and services offered by various producers at different prices help the consumer to make buying decisions and satisfy his wants in a better way.
The price structure of a firm is a major determinant of its success as it affects the firm’s competitive position and its market share. If prices are too high, business is lost; if prices are too low, the firm may not make enough to run the business in the long term.
With the help of price, the firm can make an estimate of its revenue and profit. Profit is equal to revenue over cost. Price also helps in determining the quantum of production that a firm should carry.
The management of a firm can make estimates of profits at various levels of production and prices to choose the best possible action for long-term goals of the organisation.
Prices can be decided by analysing the firm’s costs through different pricing methods like full cost methods, target return pricing method and marginal cost method. These methods do not take care of the market condition and current market structure for making a decision.
However the second category of methods is competition based or market based methods, in which the prices are decided on the prevailing market condition and customary pricing methods.
There are specific pricing methods like value pricing, sealed bid pricing, price-quality based pricing and psychological pricing.
The marketer needs to initiate price changes as well as respond to competitor’s price changes, failing which he cannot manage the emerging market opportunity or the threat raised due to competitor’s moves.
The integration marketing communication program needs integration at different levels like at awareness, image, function, coordination, consumer, and stakeholder and relationship management level. The marketing manager needs to integrate communication at all these levels for achieving synergy among various tools of communication.
The integration marketing communication involves various tools like advertising, sales promotion, public relations; personal selling and direct marketing.
Advertising is a paid form of non-personal communication by an identified sponsor through non-personal and mass media to inform persuade and influence an identified audience.
Sales promotion aims directly at inducing purchasers to buy a product. It involves demonstrations, contests, prices-off, coupons, free samples, special packaging and money refund offers.
Public relations are a diverse field incorporating a wide variety of activities in support of both corporate and brand goals. In publicity, the media, rather than the company, become the information source. The credibility that comes from a positive news story can never come from an advertising campaign.
Personal selling involves a face to interaction with the customers wherein there is quick response and personal confrontation.
Direct marketing is an interactive system of marketing, which uses one or more advertising media to affect a measurable response and/or transaction at any location.
The marketing undertaken over the internet and carrying on the transactions on the computer network is termed as digital marketing. In digital marketing, the marketer can visit the customer virtually via internet at his own convenience and present its products. The customer too, visits the marketer’s office virtually and at his own convenience, can view all the products, can leave an enquiry, examine pictures and details of the entire product which a marketer is offering.

Important keyword for mcq and short answer

Adoption Process: This process explains how consumers decide about a new product in the market place.
Adoption: It is the process by which an individual adjusts himself/herself to a new need or situation and learns about new consumptions.
Agent: Intermediaries with legal authority to market goods and services and to perform other functions on behalf of the producer are called agents or brokers.
Awareness: Degree of information intake by the customers.
Behavioural Segmentation: Market segmentation based on consumer’s product related behaviour; typically the benefits desired from a product
Brand Equity: A set of brand assets and liabilities linked to a brand, its name and symbol that add to or subtract from the value provided by a product or service to a firm and/or to that firm’s customers.
Brand: A name, word, mark, symbol, device or a combination thereof, used to identify some product or service of one seller and to differentiate them from those of competitors.
Business Planning: Business planning is a continuous process of making present entrepreneurial decisions systematically and with best possible knowledge of their futurity, and organizing systematically the effort needed to carry out these decisions against expectations through organized feedback.
Buyers: These are the people who have formal authority to select the suppliers and arrange the purchase terms.
Buying Motive: It is the reason why a person or an organisation buys a specific product or makes purchases from a specific firm.
Capital Goods: These are long lasting goods that facilitate developing and managing the finished goods.
Clustered Preference: A preference pattern in which the market reveals distinct clusters of consumer preferences
Commercial Enterprise: These consist of enterprises that purchase organisational products for purpose other than selling to customers.
Company Sales Forecast: The value and volume of a product that a firm expects to sell during a specific period at a given level of company marketing activities.
Competitive Environment: It is the immediate environment in which marketers have to take decisions. The players of this environment are called Actors as they have a direct bearing on marketing decisions. The interactive process that occurs in the market place is known as the competitive environment.
Comprehension: It is the degree of extent of information with the customers.
Concept Testing: Getting information from customers about how well a new product idea fits their needs.
Conditional Value: The conditional value of a choice is the perceived utility acquired by a choice as an outcome of some particular situation or circumstances facing the customer e.g. products associated with a particular time or event.
Consumer Product: A product that is intended for purchase and use by household consumer for non-business purpose.
Convenience Products: Products which satisfy needs but one isn’t willing to spend much time or effort shopping for them.
Corporate Objectives: Corporate objectives help in identifying and achieving the desired future positions or destinations.
Corporate Planning: Corporate planning is a term used to denote a formal, comprehensive and systematic appraisal and internal environment to achieve organizational objectives.
Cost-plus Method: Under this method, the price is set to cover costs (materials, labour and overhead) and pre-determined percentage or profit.
Cross Impact Analysis: It is a method that helps in identifying the extent to which trends or events will impact existing or potential business units, the importance of that business unit to the firm and what is the nature of that impact i.e. immediate or after a period of time.
Cultural Environment: It is everything that is socially learned and shared by the members of the society. It consists of material artefacts and non-material components.
Culture: It is the wholesome way of consumers and explains his mosaic of living. It is a way of living that distinguishes a group of people from others. Culture is learned and transmitted from one generation to another.
Customary Prices: Prices of certain goods become more or less fixed, not by deliberate action on the sellers’ part but as a result of their having prevailed for a considerable period of time.
Customer Delight: When the organisation is able to provide a degree of service that is above the desired value level, this will result in customer delight.
Customer Satisfaction: Consumer satisfaction (goods or services) is the result of a subjective comparison of expected and perceived attribute levels.
De-marketing: Marketers use this strategy in a situation when the brisk demand exceeds manufacturing capacity or outpaces the response time required to gear up a production line.
Delphi Technique: This technique is used to increase the meaning of factual data collected from secondary sources by incorporating expert opinion into it for better environmental monitoring and forecasting.
Demographic Environment Analysis: It is the study of population and its characteristics. Marketers are always interested in population-related growth indices because eventual market growth rate in the long run largely depends on the growth of population.
Demography: The statistical study of human population and its distribution
Differentiation Strategy: A strategy whereby a marketer offers a product that is unique in the industry, provides a distinct advantage or is otherwise set apart from competitors brands in some way or the other, besides price.
Diffused Preference: A preference pattern in which consumer preferences are scattered throughout the market indicating that consumers vary in their preference pattern
Diffusion Process: This is the process by which a new product spreads in a society.
Distribution Channel: A distribution channel for a product is the route taken by the title to the goods as they move from the producer to the ultimate customer.
Drop Error: This is an error, which the product manager commits by dropping a very good purchase idea.
E-Commerce: Conducting business on internet or web
Economic Environment: By economic environment we mean all those macro economic factors like income distribution, level of saving, debt and credit available to consumers and stage in business cycle.
Economic Needs: It is concerned with making the best use of a consumer’s limited resource, as the consumer sees it.
Emergency Products: Products, which are purchased immediately when the need is great.
Emotional Appeals: This attempts to develop positive and negative emotions to motivate people to buy product.
Emotional Value: The emotional value of a choice is the perceived utility acquired from its capacity to stimulate the consumer’s emotions or feelings.
Environmental Scanning: It is a process, which helps the marketing manager to find out important forces outside an organisation, which will shape its business in relation to competitors.
Epistemic Value: The epistemic value of a choice is the perceived utility that comes from the choice’s ability to foster curiosity, provide novelty and satisfy a desire for knowledge.
Evaluation: The stage of the management process during which an organisation determines how well it is achieving the goals set in its strategic planning.
Exchange Process: It occurs when the buyer with a demand and a seller with a product offering confront each other.
Expert Forecasting Survey: Preparation of sales forecasts by experts, such as economists, management consultants, or other professionals outside the firm.
Fiscal Policy: It is concerned with the receipts and expenditures of government. To combat inflation, an economy could reduce government expenditures, raise its revenue through primarily taxes, or do a combination of both.
Functional Value: The functional value of a consumer choice is the perceived functional, utilitarian or physical performance utility received from the choice product’s attributes.
Geographical Pricing: This is a method in which the marketer decides pricing strategy depending on the location of the customer. Multinational firms follow such a pricing strategy as they operate in different geographic locations.
Go Error: This is an error which a new product manager commits by taking a bad idea further and investing in that idea.
Going Rate Pricing: In this method, the firm adjusts its own pricing policy to the general pricing structure in the industry.
Gross Rating Point: A gross rating point is one exposure to one percent of the target population.
Homogeneous Preference: A preference pattern where all customers have similar preference
Homogeneous Shopping Products: Products that customer sees as basically the same and wants at the lowest price.
Horizontal Marketing System: In this system, two or more unrelated companies put their resources together to exploit an emerging market situation.
Image: It is the set of beliefs, ideas and impressions a person holds regarding an object.
Impulse Products: Products bought quickly as unplanned purchases because of a strongly felt need.
Industrial Products: Products, which are used in producing other products.
Inflation: Inflation is a rising price level resulting in reduced purchasing power for the consumer.
Innovators: The first group to adopt new products.
Legal Environment: It is the environment that frames the rules of the game within which firms play their business strategies.
Lifestyle: A person’s activities, interests, attitudes, opinions, values and behaviour patterns in explaining his way of living.
Logistics: The process of strategically managing the physical distribution through the firm and on to customers.
Marginal Cost Pricing: Under marginal cost pricing, fixed costs are ignored and prices are determined on the basis of marginal cost.
Market Development: Trying to increase sales by selling present products in new markets.
Market Fragmentation: The identification of smaller and smaller market segments
Market Potential: The maximum sales possible for all sellers of a product to an identified market segment within a specified time frame.
Market Specialisation: The firm selects a product and launches in different markets without any alteration to the product.
Market Targeting: The Process of segmenting, targeting and positioning an offer in the market
Market-Product Matrix: A matrix that includes the four possible combinations of old and new products, and old and new markets.
Marketing Concept: It proposes that the reason for success lies in the company’s ability to create, deliver and communicate a better value proposition through its marketing offer in comparison to the competitors for its chosen target market.
Marketing Mix: It is a set of actions that a company uses to create an interface with the consumer to enable exchange of value.
Marketing Orientation: It requires the firm to look for consumer needs and the necessity to search for new opportunities to satisfy the consumers in a better way than the competitor.
Marketing: A societal process, by which individuals and groups obtain what they need and want through creating, offering and freely exchanging products and services of value with others.
Middlemen: Middlemen refer to just about anybody acting as an intermediary between the producer and the consumer.
Modified Rebuy: This situation occurs when buyer wants to modify any purchase, i.e. improvement in product specification, price reduction, and change in terms and conditions.
Monetary Policy: It refers to the manipulation of the money supply and market rates of interest.
Moral Appeals: This is directed towards the customer’s sense of being right and ethical.
Motive: A need sufficiently stimulated to move an individual to seek satisfaction
Natural Environment: This covers influences of availability of natural resources, pollution level, growing consumption of finite resources and energy crisis affecting marketing decisions.
New Product: A product that is new in any way for the company concerned.
Odd Pricing: In this method, the buyer charges an odd price to get noticed by the consumer. A typical example of odd pricing is the pricing strategy followed by Bata.
Operational Planning: Planning that focuses on day-to-day operations of the business such as supervision of the sales force, and compensation to intermediaries.
Organisational Distributors and Dealers: These are distributors/dealers who purchase industrial goods and resell them in the same form to commercial, institutional and government bodies.
Perceived Value Pricing Method: In this method, prices are decided on the basis of customer’s perceived value. They see the buyer’s perceptions of value, not the seller’s cost as the key indicator of pricing. They use various promotional methods like advertising and brand building for creating this perception.
Perception: The process carried out by an individual to receive, organise, and assign meaning to stimuli detected by the five senses.
Personal Selling: It involves personal confrontation, response and cultivation.
Personality: The person’s distinguishing psychological characteristics that lead to relatively consistent responses to his or her own environment.
Physiological Needs: These are the innate (i.e. biogenic needs) needs for food, water, clothing and shelter and are also known as primary needs.
Price: Price is the exchange value of goods and services in terms of money.
Product Concept: It has the proposition that consumers will favour those products that offer the most attributes like quality, performance and other innovative features.
Product Development: Offering new or improved products for present markets.
Product Life Cycle: The market response to a new product idea after the product is commercialised and till it eventually goes out of the market.
Product Line: A set of individual products that are closely related.
Product Specialisation: The firm selects specific products and markets each one of them in a different segment
Product: A product is anything, which is offered to the market to satisfy consumer needs and wants.
Production Concept: The Production Concept emerges out of the production orientation. The basic proposition is that customers will choose products and services that are widely available and are of low cost.
Psychographics: It is the science of using psychology and demographics to study the lifestyle patterns of consumers
Psychological Pricing: In this method, the marketer bases prices on the psychology of consumers. Many consumers perceive price as an indicator of quality. While evaluating products, buyers carry a reference price in their mind and evaluate the alternatives on the basis of this reference price. Sellers often manipulate these reference points and decide their pricing strategy.
Purchase Behaviour: Behaviour that indicates the product meets the consumer’s approval and he is willing to buy it.
Rational Appeals: This engages self-interest and allows customers to find out the reason i.e. why of buying.
Reference Group: A group or a person that serves as a point of comparison or reference for an individual in the information of either general or specific values, attitudes or behaviour.
Sales Potential: The maximum sales possible for one company’s product as the firm’s marketing efforts increase relative to competitors.
Sealed Bid Pricing: In this method, the firms submit bids in sealed covers for the price of the job or the service. This is based on firm’s expectation about the level at which the competitor is likely to set up prices rather than on the cost structure of the firm.
Seasonality Analysis: A method of predicting sales in which a manager studies daily, weekly or monthly sales figures to evaluate the degree to which seasonal factors, such as climate, festivals and holiday activities, influence the product’s sales.
Segmentation: The process of segregating a heterogeneous market into a set of homogeneous groups of customers
Selective Specialisation: The firm selects a specific market segment and a product to offer for that segment
Selling Concept: It proposes that customers, be they individual or organisations will not buy enough of the organisation’s products unless they are persuaded to do so through selling effort.
Shopping Products: These are the products that the consumer compares in features and buying criteria with competing brands before making a choice.
Social Value: The social value of a choice is the perceived utility acquired because of the associations between one or more specific social groups and a consumer choice.
Societal Environment: It is the marketer’s relationship with society, in general. It is an explanation of readiness of society to accept the marketing idea.
Societal Marketing Concept: It proposes that the enterprise’s task is to determine the needs, wants and intentions of the target market and to deliver the expected satisfaction more effectively and efficiently than the competitors’ in a way to preserve or enhance the consumer’s and society’s well being.
Specialty Products: These have unique characteristics and brand image that the consumer purchases with less deliberations and evaluations.
Straight Rebuy: This type of situation is found when there is repetitive or routine order processing which is given by buyers to long-term suppliers.
Strategic Business Unit: A Strategic Business Unit (SBU) is a distinct business unit of the business organization in the form of a subsidiary company, department, division or product line with a specific product-market focus and independent authority and responsibility of the manager to take business decisions.
Strategic Marketing Process: The entire sequence of managerial and operational activities required to create and sustain effective and efficient marketing strategies.
Target Return Pricing: In this method, the firm decides the target return that it expects out of business and then decides prices.
Technological Environment: It covers the influence of rapid adoption of technology, shorter life cycle patterns of technology, emergence of new technology, convergence of different technology into embedded product systems and shifts in consumptions
Test Marketing: This is a process of testing the feasibility of the product and its marketing program in a limited and selected market.
Total Customer Value: Total customer value, is the perceived monetary value of the bundle of economic, functional and psychological benefits consumers expect from a given market offering.
Unsought Products: These are the products the consumer does not wish to buy but has to buy like life insurance and fire safety equipments.
Users: These are the firms who purchase industrial products or services to support their manufacturing processes or facilitate the operation of their business in the form of prompt, predictable delivery, quality maintenance and good service.
Value Chain: Value chain consists of five primary activities that include inbound logistics, operations, outbound logistics, marketing and sales and services and four support activities that include procurement, technology development, human resource management and firm infrastructure.
Value Delivery System: A value delivery system includes all the experiences the customer will have on the way to obtaining and using the product or service offer.
Value Pricing: In this method, the marketer charges fairly low price for a high quality offering. This method proposes that price represents a high value offer to consumers.
Vertical Marketing System: It comprises manufacturer, wholesalers and retailers working as a unified system.

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