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Term Description
Above the line Above the Line is the term commonly used for advertising for which a
payment is made and for which commission is paid to the advertising
agency. Methods of above the line advertising include television and
radio, magazines, newspapers and Internet.
ACORN ACORN stands for A Classification Of Residential Neighbourhoods.
ACORN is a database which divides up the entire UK population in terms
of the type of housing in which they live. This can be used for various
purposes in marketing planning and in designing promotional campaigns
Ad hoc market
research
Ad-hoc research focuses on specific marketing problems. It involves the
collection of data at one point in time from one sample of respondents
Added value Added value refers to the increase in worth of a product or service as a
result of a particular activity. In the context of marketing, the added
value is provided by features and benefits over and above those
representing the core product.
Advertising Advertising is any paid form of non-personal presentation and promotion
of ideas, goods and services through mass media such as newspapers,
magazines, television or radio by an identified sponsor.
Advertising budget The total amount of money that a marketer allocates for advertising
over a period of time
After-sales service The services received after the original goods or services have been paid
for. Often this service is provided as part of a warranty or guarantee
scheme.
Agent Part of the distribution channel. An agent is effectively a wholesaler
who represents buyers and sellers on a relatively permanent basis,
performs only a few functions and does not take title to goods
Ambush marketing A deliberate attempt by a business or brand to associate itself with an
event (often a sporting event) in order to gain some of the benefits
associated with being an official sponsor without incurring the costs of
sponsorship. For example by advertising during television coverage of
the event.
Ansoff matrix A model used in strategic marketing planning. The Ansoff
Product/Market matrix model links marketing strategy with the general
strategic direction of a business. It maps four potential product-market
strategies - e.g. market penetration, product development, market
development and diversification - on a matrix showing new versus
existing products along one axis and new versus existing markets along
the other.
Augmented brand The additional customer services and benefits (added value) that are
built around the core product or service offering
Available market The total group of customers who have an interest in a interest in a
product or service, have access to it, and have the ability to buy it
Awareness Advertising or other promotional activity (e.g. public relations) whose
primary purpose is to increases general knowledge of the company, and
to make people feel more positive towards it
Behavioural
segmentation
Behavioural segmentation divides customers into groups based on the
way they respond to, use or know of a product.
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Below the line Below the line is a term commonly used to refer to non-media
advertising or promotion when no commission has been paid to the
advertising agency. This includes direct mail, point of sale displays, and
other sales promotions.
Benchmarking The process of comparing the products and services of a business
against those of competitors in a market, or leading businesses in other
markets, in order to find ways of improving quality and performance
Benefit
segmentation
Benefit segmentation relates to the process of dividing a market based
on the specific benefits consumers seek from a product. For example,
some car buyers want safety and security from their car, while others
look for comfort or speed. A car manufacturer, therefore, has to decide
which benefits to offer and how these benefits should be
communicated to the customer
Boston Group
Matrix
A means of analysing and categorizing the performance of business units
in large diversified firms by reference to market share and growth rates.
It was developed by the Boston Consultancy Group (BCG)
Brand A brand is the specific type of the product form. A brand represented
by a brand name, symbol, design, logo, packaging is the identity of a
particular product form that customers recognise as being different
from others.
Brand building Developing a brand's image and standing with a view to creating long
term benefits for brand awareness and brand value
Brand equity Brand equity refers to the value of a brand. Brand equity is based on
the extent to which the brand has high brand loyalty, name awareness,
perceived quality and strong product associations. Brand equity also
includes other intangible assets such as patents, trademarks and
channel relationships.
Brand extension Brand extension refers to the use of a successful brand name to launch
a new or modified product in a new market. Virgin is perhaps the best
example of how brand extension can be applied into quite diverse and
distinct markets.
Brand image Brand image refers to the set of beliefs that customers hold about a
particular brand. These are important to develop well since a negative
brand image can be very difficult to shake off.
Brand loyalty A strongly motivated and long standing decision to purchase a particular
product or service
Brand recognition A customer's awareness that a brand exists and is an alternative to
purchase
Breakeven Breakeven is achieved when total contribution is equal to total fixed
costs. Addition contribution earned after this point becomes profit
Break-even pricing Setting a price to achieve break-even on the costs of making and
marketing a product (direct costs). Breakeven is achieved when the
total contribution from sales priced in this way at least equal the fixed
costs of the business
Build share A strategy based on the Boston Matrix. Here the company can invest to
increase market share (for example turning a "question mark" into a
star)
Business portfolio The business portfolio is the collection of businesses and products that
make up the business.
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Business to
business
Marketing activity directed from one business to another (as opposed to
a consumer). This term is often shortened to B2B
Buying behaviour Buying behaviour concerns the process that buyers go through when
deciding whether or not to purchase goods or services. Buying behaviour
can be influenced by a variety of external factors and motivations,
including marketing activity.
Cash Cows A term used in the Boston Group Matrix. Cash cows are low-growth
businesses or products with a relatively high market share. These are
mature, successful businesses with relatively little need for investment.
They need to be managed for continued profit - so that they continue to
generate the strong cash flows that the company needs for its Stars.
Channel conflict Disagreement among members of a distribution channel about who
should be paid what and what roles each should play. Channel conflict
often occurs when a business uses a multi-channel approach to
distribution
Cognitive
dissonance
Cognitive dissonance is an customer effect commonly observed after a
major purchase whereby the customer feels uncertainty about whether
the purchase should have been made. Post-purchase promotion
(particularly advertising) has a role to play to reduce the incidence and
effect of cognitive dissonance
Combination brand A combination brand name brings together a family brand name and an
individual brand name. The idea here is to provide some association for
the product with a strong family brand name but maintaining some
distinctiveness so that customers know what they are getting
Competitive
advantage
A competitive advantage is a clear performance differential over the
competition on factors that are important to customers
Competitor
benchmarking
Competitor benchmarking compares customer satisfaction with the
products, services and relationships of the business with those of key
competitors
Consumer buyers Consumer buyers are those who purchase items for their personal
consumption
Consumer durables Consumer durables have low volume but high unit value. Consumer
durables are often further divided into White goods (e.g. fridge-
freezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD
players; games consoles; personal computers)
Consumer markets Consumer markets are the markets for products and services bought by
individuals for their own or family use
Continuous market
research
Continuous research involves interviewing the same sample of people,
repeatedly
Contribution Contribution per unit can be defined as selling price less variable costs.
Overall contribution is the difference between total sales revenues and
variable costs
Core product The set of problem-solving or need-meeting benefits that customers are
buying when they purchase a product. Customers are rarely prepared to
pay a premium for these elements of a product.
Cost leadership A strategy of producing goods at a lower cost than the competition. This
usually requires the business to enjoy higher economies of scale or have
some kind of productivity advantage
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Cross-selling Using a customers buying history to select them for related offers, e.g.
a car alarm for new car buyers.
Customer demand Consumer demand is a want for a specific product supported by an
ability and willingness to pay for it.
Customer loyalty Feelings or attitudes that incline a customer either to return to a
company, shop or outlet to purchase there again, or else to re-purchase
a particular product, service or brand.
Customer need A need is a basic requirement that an individual wishes to satisfy.
Customer
satisfaction
The provision of goods or services which fulfil the customers
expectations in terms of quality and service, in relation to price paid
Customer wants A want is a desire for a specific product or service to satisfy the
underlying need.
Decline stage The last stage of a product's life cycle, during which sales fall rapidly
Demographic
segmentation
Demographic segmentation consists of dividing the market into groups
based on variables such as age, gender family size, income, occupation,
education, religion, race and nationality
Depth interview A lengthy, one-to-one structured interview, examining in detail a
consumer's views about a product
Differentiation A marketing strategy aimed at ensuring that products and services have
a unique element to allow them to stand out from the rest
Direct mail The delivery of an advertising or promotional message to customers or
potential customers by mail.
Direct marketing The planned recording, analysis and tracking of customer behaviour to
develop a relational marketing strategies
Direct response
advertising
Direct response advertising is that which incorporates a contact method
such as a phone number, address and enquiry form, web site URL or e-
mail address. This is done with the intention of encouraging the
recipient to respond directly to the advertiser by requesting more
information, placing an order etc. The use of this technique on
television is commonly referred to as DRTV advertising
Distribution
channel
The network of organisations necessary to distribute goods or services
from the manufacturers to the consumers; the distribution channel
therefore potentially consists of manufacturers, distributors,
wholesalers, and retailers.
Distributors Companies that buy and sell on their own account but tend to deal in
the goods of only certain specified manufacturers.
Divest A strategy based on the Boston Matrix. Here the company can divest the
SBU by phasing it out or selling it - in order to use the resources
elsewhere (e.g. investing in the more promising "question marks").
Dogs A term used in the Boston Group Matrix. Unsurprisingly, the term "dogs"
refers to businesses or products that have low relative share in
unattractive, low-growth markets. Dogs may generate enough cash to
break-even, but they are rarely, if ever, worth investing in.
Early adopters People who choose new products carefully and are often consulted by
people from the remaining adopter categories
Early majority People who adopt products just prior to the average person
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E-commerce The use of technologies such as the Internet, electronic data exchange
and industry extranets to streamline business transactions
Endorsement The promotion of some kind of product recommendation or affirmation,
usually from a celebrity, implying to the potential customer that a
product is good
Expansionistic
pricing
Expansionistic pricing is a more exaggerated form of penetration pricing
and involves setting very low prices aimed at establishing mass markets,
possibly at the expense of other suppliers. Under this strategy, the
product enjoys a high price elasticity of demand so that the adoption of
a low price leads to significant increases in sales volumes
Extinction pricing Extinction pricing has the overall objective of eliminating competition,
and involves setting very low prices in the short term in order to under-
cut competition, or alternatively repel potential new entrants.
Family brand name A family brand name is used for all products. By building customer trust
and loyalty to the family brand name, all products that use the brand
can benefit.
Family life cycle The stages of family life based on demographic data that are useful in
defining the markets for certain goods and services. Each group has its
own specific and distinguishable needs and interests.
Fast-moving
consumer goods
Fast-moving consumer goods are those that sell in high volumes, with
low unit value, and have fast consumer repurchase. Good examples
include ready meals, baked beans, newspapers etc
Focus group A small group of sample customers who are brought together into a
group discussion to measure their response to a marketing stimulus such
as a new brand or product
Forecasting The process of estimating future demand by anticipating what buyers
are likely to do under a given set of marketing conditions (e.g.
economic confidence, disposal income, pricing levels)
Franchising The selling of a licence by the owner (franchisor) to a third party
(franchisee) permitting the sale of a product or service for a specified
period. In business format franchising the agreement will involve a
common brand and marketing format. Many service businesses are
operated under franchise include well-known brands such as Burger
King, KFC and KwikPrint
Full cost pricing Full cost plus pricing seeks to set a price that takes into account all
relevant costs of production
Gender
segmentation
The segmentation of markets based on the sex of the customer. The
cosmetic industry is a good example of widespread use of gender
segmentation
Geographic
segmentation
Geographic segmentation divides markets into different geographical
units
Going-rate pricing A pricing strategy that sets price largely based on the prices of
competitors
Growth stage The stage at which a product's sales rise rapidly and profits reach a
peak, before levelling off into maturity.
Harvest A strategy based on the Boston Matrix. Here the company reduces the
amount of investment in order to maximise the short-term cash flows
and profits from the SBU. This may have the effect of turning Stars into
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Cash Cows.
Hold A strategy based on the Boston Matrix. Here the company invests just
enough to keep the SBU in its present position
Impulse buying Behaviour that involves no conscious planning but results from a
powerful, persistent urge to buy something immediately
Income elasticity of
demand
Income elasticity of demand measures the relationship between a
change in quantity demanded and a change in income
Industrial buyers Industrial buyers are those who purchase items on behalf of their
business or organisation
Industrial market Industrial markets involve the sale of goods between businesses. These
are goods that are not aimed directly at consumers.
Inferior goods Inferior goods have a negative income elasticity of demand. Demand
falls as income rises
Influencer A person in a group buying situation (e.g. a family) who exerts
significant influence in the final buying decision
Initiator A person in a group buying situation (e.g. a family) who first suggests
buying a particular product or service
Innovators Innovators are those who adopt new products first. They are usually
relatively young, lively, intelligent, socially and geographically mobile.
They are often of a high socioeconomic group (ABs).
Intensive
distribution
Intensive distribution aims to provide saturation coverage of the market
by using all available outlets
Internal marketing The process of eliciting support for a company and its activities among
its own employees, in order to encourage them to promote its goals.
This process can happen at a number of levels, from increasing
awareness of individual products or marketing campaigns, to explaining
overall business strategy.
Introduction stage A product's first appearance in the marketplace, before any sales or
profits have been made
Involvement The level of interest, emotion and activity which the consumer is
prepared to expend on a particular purchase
Labelling Packaging information that can be used for a variety of promotional,
informational and legal purposes.
Laggards The group of consumers who are typically last to buy a new product
Late majority People who are quite sceptical about new products but eventually adopt
them because of economic necessity or social pressure
Lifestyle Lifestyle is a persons pattern of living as expressed in his or her
activities, interests and opinions
Lifestyle
segmentation
Lifestyle segmentation of a market is based on identifying lifestyle
characteristics of customers that enable target customer groups to be
identified. Many businesses now segment their markets by lifestyles, as
these are increasingly seen as good predictors of consumer behaviour.
Most companies use off-the-shelf research-agency classifications (such
as the Target Group Index), because of the high cost and complexity of
developing their own.
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Logo A graphic, usually consisting of a symbol and/or group of letters that
identifies a company or brand.
Macro forecasting Macro forecasting is concerned with forecasting markets in total. This is
about determining the existing level of Market Demand and considering
what will happen to market demand in the future.
Mail panels Groups of consumers selected to represent a market or market segment
who agree to be regularly interviewed by mail
Manufacturer brand Manufacturer brands are created by producers and bear their chosen
brand name. The producer is responsible for marketing the brand. The
brand is owned by the producer. By building their brand names,
manufacturers can gain widespread distribution (for example by
retailers who want to sell the brand) and build customer
Marker leader The business in a market with the largest market share. The market
leader, particularly one with a dominant market share, is often
followed by competitors in terms of pricing and product strategy
Market A market is the demand for a particular product or service, often
measured by sales during a specified period.
Market challenger A business in a market that is fighting hard to increase its market share
Market
concentration
Market concentration is the proportion of market value that is owned by
the leading brands or products/companies in the market. Where the
market leaders own a large part of the overall market, the market is
said to be highly concentrated. By contrast, where the market leader
has a relatively small market share and there are many other
competitors, a market is said to be fragmented
Market
development
The process of growing sales by offering existing products (or new
versions of them) to new customer groups (as opposed to simply
attempting to increase the companys share of current markets).
Market entry The launch of a new product into a new or existing market. A different
strategy is required depending on whether the product is an early or
late entrant to the market; the first entrant usually has an automatic
advantage, while later entrants need to demonstrate that their products
are better, cheaper and so on.
Market follower A firm that is happy to follow the leaders in a market place without
challenging them, perhaps taking advantages of opportunities created
by leaders without the need for much marketing investment of its own -
see also 'market challenger' and 'market leader'
Market positioning A marketing strategy that will position a business products and services
against those of its competitors in the minds of consumers. To achieve
positioning success it is suggested that there are four basic competitive
strategies that a company can follow (based on work by Porter):
- Cost leadership - the company tries to achieve lowest costs of
production and distribution
- Differentiation - making use of specific marketing mixes
- Focus - paying attention to a few market segments
The fourth strategy is a losing strategy in which a business pursues a
middle-of-the-road path. Businesses that try to be good at everything
are rarely particularly good at anything.
Market research The systematic gathering, recording and analysing of data about
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problems relating to the marketing of goods and services
Market segment A customer group within the market that has special characteristics
which are significant to marketing strategy
Market
segmentation
Segmentation involves subdividing markets, channels or customers into
groups with different needs, to deliver tailored propositions which meet
these needs as precisely as possible.
Market share Market share can be defined as the percentage of all sales within a
market that is held by one brand / product or company.
Market targeting Market targeting is the process of evaluating each market segment and
selecting the most attractive segments to enter with a particular
product or product line.
Marketing The all-embracing function that links the business with customer needs
and wants in order to get the right product to the right place at the
right time
Marketing audit A systematic examination of a businesss marketing environment,
objectives, strategies, and activities with a view to identifying key
strategic issues, threats and opportunities.
Marketing concept The marketing concept is about matching a business capabilities with
customer wants.
Marketing
intelligence
The composite of all data and ideas available within an organisation
that assists in decision-making.
Marketing plan A detailed statement (usually prepared annually) of how a company's
marketing mix will be used to achieve its market objectives. A
marketing plan is usually prepared following a marketing audit.
Maturity stage The stage during which a product's sales curve peaks and starts to
decline, and profits continue to decline.
Media analysis Media analysis is a term used in advertising. It refers to an investigation
into the relative effectiveness and the relative costs of using the various
advertising media in an advertising campaign
Micro forecasting Micro forecasting is concerned with detailed unit sales forecasts. This is
about determining a products market share in a particular industry and
considering what will happen to that market share in the future
Mission A mission describes the organisations basic function in society, in terms
of the products and services it produces for its customers.
Mission statement A mission statement is a formal description of the mission of a business.
Multi-channel
marketing
When a business distributes its products through more than one
distribution channel, this is known as multi-channel marketing. Retail
chains, for example Argos, besides using the shops to distribute their
products, quite often also use catalogue selling. The main purpose of
multi-channel marketing is to more effectively reach different customer
segments
Multi-segment
strategy
A strategy by which a business directs its marketing efforts towards two
or more market segments by developing a marketing mix for each
New product A new product can be defined as a good, service or idea that is
perceived by some potential customers as new. It may have been
available for some time, but many potential customers have not yet
adopted the product nor decided to become a regular user of the
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product.
Niche marketing Niche marketing refers to the exploitation of comparatively small
market segments by businesses that decide to concentrate their efforts.
Niche segments exist in nearly all markets for example the self-build
sports car segment of the motor industry
Non-personal
communication
Methods of promotion that do not generate any personal feedback.
Advertising is the best example of this
Normal goods Normal goods have a positive income elasticity of demand so as income
rise more is demand at each price level
Objectives Measurable aims of a business set for a given period (e.g. marketing
objectives for the next year)
Occasion
segmentation
A basis of segmenting a market based on occasions when buyers get the
idea to make a purchase, actually buy, or use a purchased item.
Opportunities Opportunities are any feature of the external environment which
creates conditions that a business can exploit to its advantage. If the
business is successful in exploiting opportunities, then it will be better
placed to achieve its objectives.
Own-label brand Own-label brands are created and owned by businesses that operate in
the distribution channel often referred to as distributors. Often
these distributors are retailers, but not exclusively. Sometimes the
retailers entire product range will be own-label. However, more often,
the distributor will mix own-label and manufacturers brands
Packaging The activities of designing and producing the container or wrapper for a
product
Penetration pricing Penetration pricing involves the setting of lower, rather than higher
prices in order to achieve a large, if not dominant market share
Penetration
strategy
A marketing strategy based on low prices and extensive advertising to
increase a product's market share. For penetration strategy to be
effective the market will have to be large enough for the seller to be
able to sustain low profit margins.
Personal selling Oral communication with potential buyers of a product with the
intention of making a sale. The personal selling may focus initially on
developing a relationship with the potential buyer, but will always
ultimately end with an attempt to "close the sale
Porters Five
Forces Model
An analytic model developed by Michael E. Porter. The five forces in
terms of which the model analyses businesses and industries are:
Buyers, Suppliers, Substitutes, New Entrants and Rivals
Portfolio planning Portfolio planning is the process of managing groups of brands and
product lines
Positioning Positioning is how a product appears in relation to other products in the
market
Pre-emptive pricing Pre-emptive pricing is a strategy involves setting low prices in order to
discourage or deter potential new entrants to the suppliers market. It
is especially suited to markets in which the supplier does not hold a
patent, or other market privilege and entry to the market is relatively
straightforward.
Prestige pricing Prestige pricing refers to the practice of setting a high price for an
product, throughout its entire life cycle as opposed to the short term
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opportunistic, high price of price skimming. This is done in order to
evoke perceptions of quality and prestige with the product or service
Price The price of a product may be seen as a financial expression of the
value of that product
Price discrimination Price discrimination occurs when a firm charges a different price to
different groups of consumers for an identical good or service, for
reasons not associated with costs
Price elasticity of
demand
Price elasticity of demand measures the responsiveness of a change in
demand for a product following a change in its own price
Price sensitivity Price sensitivity is the effect a change in price will have on customers
Price skimming Price skimming involves charging a relatively high price for a short time
where a new, innovative, or much-improved product is launched onto a
market
Primary research
data
Primary market data is data collected specifically for the market
research project and obtained directly from the relevant source
Problem/Need
recognition
The first stage in the buying process where the potential customer
recognises that a problem or a need can be met by buying a product or
a service
Product A product is defined as anything that is capable of satisfying customer
needs
Product class Product class is a broad category of product such as cars, washing
machines, newspapers.
Product form Within a product class, there are different forms that the product can
take. For example, people carriers or two-seater sports cars are
product forms within the motor cars product class
Product group A product group (or product line) is a group of brands that are closely
related in terms of their functions and the benefits they provide
Product life cycle The course of a product's sales and profitability over its lifetime. The
model describes five stages, each of which represents a different
opportunity for the marketer:
- Development
- Introduction
- Growth
- Maturity
- Decline
Product map A product map defines the market in terms of the way buyers perceive
key characteristics of competing products
Product mix The set of all product lines and items that a particular business offers
for sale to buyers
Product quality The ability of a product to perform its functions (fit for purpose).
Quality is a function of several factors including reliability and ease of
use
Promotion One of the four Ps of the marketing mix. Promotion is all about
businesses communicating with customers
Promotional mix The promotional mix consists of a blend of five main kinds of
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promotional tools: advertising; direct marketing; personal selling; sales
promotion and public relations
Psychographic
segmentation
Psychographic (or lifestyle) segmentation seeks to classify people
accordingly to their values, opinions, personality characteristics and
interests.
Public relations The planned and sustained effort to establish and maintain goodwill and
mutual understanding between an organisation and its publics
Publicity Promotional activities designed to promote a business and its products
by obtaining media coverage not paid for by the business
Pull promotion Pull promotion, in contrast to Push promotion, addresses the customer
directly with a view to getting them to demand the product, and hence
pull it down through the distribution chain. It focuses on advertising
and above the line activities. See also 'push promotion'
Purchase decision The stage in the customer buying process when the purchase decision is
actually made
Push promotion Push promotion relies on the next link in the distribution chain - e.g. a
wholesaler or retailer - to push out products to the customer. It
revolves around sales promotions - such as price reductions and point of
sale displays - and other below the line activities. See also 'Sales
Promotion'
Qualitative
forecasting
Qualitative forecasting is based on experience and judgement.
Examples include general surveys of customers, distributors and the
sales force
Qualitative
Research
Research that deals with information too difficult or expensive to
quantify, such as subjective opinions and value judgements, typically
unearthed during interviews or discussion groups
Quantitative
forecasting
Quantitative forecasting is based on facts. Good examples include
time-series analysis and statistical surveys of customer purchasing
behaviour
Quantitative
Research
Market research that concentrates on statistics and other numerical
data, gathered through opinion polls, customer satisfaction surveys and
so on. Compare 'qualitative research'
Question marks A term used in the Boston Group Matrix. Question marks are businesses
or products with low market share but which operate in higher growth
markets. This suggests that they have potential, but may require
substantial investment in order to grow market share at the expense of
more powerful competitors.
Questionnaire Base document for research purposes, providing the questions and
structure for an interview or self-completion and providing space for
respondents' answers.
Quota sampling A sampling method in which the final choice of respondents is left to
the interviewers, who base their choices on two or three variables (such
as age, sex and education).
Random sampling A sampling method in which all the units in a population have an equal
chance of appearing in the sample.
Retailers Retailers operate outlets that trade directly with household customers
Sales forecast The sales forecast is the expected level of company sales based on a
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chosen marketing plan and an assumed marketing environment.
Sales promotion Sales promotion refers to any activity designed to boost the sales of a
product or service. It may include an advertising campaign, increased
PR activity, a free-sample campaign, offering free gifts or trading
stamps, arranging demonstrations or exhibitions, setting up
competitions with attractive prizes, temporary price reductions, door-
to-door calling, telephone-selling, personal letters on other methods.
Sample A small group of items selected from a larger group to represent the
characteristics of the larger group. Samples are often used in marketing
research because it is not feasible to interview every member of a
particular market; however, conclusions about a market drawn from a
sample always contain a sampling error and must be used with caution.
The larger the sample, in general, the more accurate will be the
conclusions drawn from it
Secondary research
data
Secondary market data is data that has already been obtained, analysed
and used for other purposes or for general reference
Segmentation
variables or bases
The dimensions or characteristics of individuals, groups or businesses
that are used for dividing a total market into segments.
Selective
distribution
Selective distribution involves a producer using a limited number of
outlets in a geographical area to sell products
Soft goods Soft goods are similar to consumer durables, except that they wear out
more quickly and therefore have a shorter replacement cycle.
Examples include clothes and shoes.
Sponsorship Supporting an event, activity or organisation by providing money or
other resources that is of value to the sponsored event. This is usually
in return for advertising space at the event or as part of the publicity
for the event.
Stars A term used in the Boston Group Matrix. Stars are high growth
businesses or products competing in markets where they are relatively
strong compared with the competition. Often they need heavy
investment to sustain their growth. Eventually their growth will slow
and, assuming they maintain their relative market share, will become
cash cows.
Strapline A slogan often used in conjunction with a brand name, advertising and
other promotional methods (e.g. Guinness is good for you)
Strategic business
unit (SBU
A SBU is a unit of the company that has a separate mission and
objectives and that can be planned independently from the other
businesses. An SBU can be a company division, a product line or even
individual brands - it all depends on how the company is organised.
Stratified sampling A sampling method in which the population of interest is divided
according to a common characteristic or attribute and a probability
sampling is then conducted within each group
Strengths Strengths are a particular skill, resource or distinctive competence
which the business possesses and which will enable it to achieve its
stated objectives. Strengths are a source of competitive advantage. As
such they should be protected and built upon.
Target market The group of potential customers sharing common needs and
characteristics that a business decides to serve
Telemarketing Telemarketing (sometimes also referred to as telesales) is a method
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of direct marketing in which the telephone is used to contact potential
customers in order to reduce the time spent in making personal visits.
Traditionally, products such as double glazing and central heating have
been marketed using this technique
Telephone surveys Surveys in which respondents' answers to a questionnaire are recorded
by interviewers on the phone
Test marketing Test marketing occurs when a new product is tested with a sample of
customers, or launched in a restricted geographical area, to judge
customers' reactions. If the product is unsuccessful, the business will
have minimised its costs and can either make changes before the main
launch or decide to discontinue the product. Test marketing has a
disadvantage in that competitors learn about the new product before its
full launch
Threats Threats are any aspect of the external environment which cause
problems and which may prevent achievement of objectives. Almost by
definition, what presents a threat to one business offers an opportunity
to other businesses.
Trademark Legal designation indicating that the owner has exclusive use of a brand
Undifferentiated
marketing
Undifferentiated marketing is the marketing of a product aimed at the
widest possible market. For example, in the holiday market, the sale of
short-haul summer-sun package holidays to the Mediterranean is an
undifferentiated mass-market product.
Unique selling
proposition
A unique selling proposition (USP)is a customer benefit that no other
product can claim
Vision The long-term aims and aspirations of the company for itself
Weaknesses Weaknesses are any aspect of the business which may prevent the
business from achieving its objectives. Weaknesses are a source of
competitive disadvantage. Management should seek ways to reduce or
eliminate weaknesses before they are exploited further by the
competition
Wholesaler Often part of the distribution channel; involves the selling of goods in
large quantities to be retailed by others