Glossary !

Brand Equity
Brand equity is the differential effect that brand knowledge has on buyer
response. The key components of brand equity are brand awareness and
brand associations.

Brand Extension
A new product that uses an existing product’s brand name.

Concentrated Marketing
The organization selects a single market segment and focuses all resources
on meeting customer needs of that segment.

Comparative Advantage
An organization is said to have a comparative advantage when it possesses
unique skills and resources that are valued by customers.

Comparative Advantage Theory

A theory of competition that suggests firms should seek to build a
comparative advantage in resources that will support a marketplace position
of competitive advantage (superior customer value), and, thereby, superior
financial performance.

Competitive Advantage
A competitive advantage exists when an organization successfully delivers
perceived value more effectively and efficiently than competition. In other
words, when a firm has a marketing mix that the target market sees as
offering better customer value than a competitor's mix.

Customer Activity Cycle

A tool for mapping out the entire chain of activities customers must engage
in to produce benefits sought.

Customer Equity
The net present value of expected cash flows from customers, both current
and potential.

Customer Satisfaction
Customer’s post hoc evaluation of a consumption experience.

Differentiated Marketing
Similar to concentrated marketing except that the firm develops a unique
marketing program – positioning and marketing mix - for each target market
segment.

DMP (Decision-Making Process)

The buyer’s decision-making process.

DMU (Decision-Making Unit)

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All those with power and stake in the decision-making process.

Early Leader
Early leaders are firms that establish a dominant position in the market
before the end of the growth phase. Early leaders enter an average of 13
years after pioneers, yet are much more successful.

The Four P’s

An organizing framework for thinking about the marketing mix. Product - the
offering or ‘input’ that produces buyer benefits (eg, physical product and
features, service aspects, brand image, website functions). Place - the ‘right’
product to the ‘right’ buyer at the ‘right’ place at the ‘right’ time (e.g,
channel logistics, information, delivery). Promotion - communications about
the firm’s offering (eg, advertising, public relations, direct mail, viral
marketing, permission marketing). Price - an important component of a
buyer’s ‘total cost’ (eg, price, financing, billing, fees, rent, discounts).

The Five C’s

The five components of the situation analysis – company, customers,
collaborators, competitors, and climate.

Generic Customer Benefits

A framework for thinking about generic drivers of perceived benefits that cut
across industries:

Product Benefits
Benefits derived from product consumption.

Service Benefits
Benefits derived from service experience.

Reputation Benefits
Benefits derived from the offering and supplier's image and reputation.

Relationship Benefits -- Benefits derived from maintaining a relationship

with the supplier (e.g., better understanding of needs, membership in a
community, etc)

Generic Customer Costs

A framework for thinking about generic drivers of perceived costs that cut
across industries:

Perceived Price -- Perceptions of price (e.g., fairness, value)

Transaction Costs -- Time, Monetary, Psychological, and Effort costs

associated with obtaining an offering (e.g., travel time, storage costs)

Production Costs -- Time, Monetary, Psychological, and Effort costs

associated with producing desired benefits (e.g., preparing a meal, installing
irrigation pipe).

Robin Joseph – Niche

Perceived Risk -- Monetary and Psychological risk from using a particular
product or service.

Generic Value Drivers

A classification scheme for thinking about benefits (product, service,
reputation, and relationship) and costs (price, transaction costs, production
costs, and risk) from the customer’s point of view.

Generic Value Positions

Three basic strategies for achieving superior perceived value – benefit
leadership, low cost advantage, and dominant value.

Lifetime Value of the Customer

Lifetime Value of the Customer (LVC) is a measure of customer equity - the
net present value of future customer cash flows and costs.

Marketing
Marketing is the process of planning and executing the conception, pricing,
promotion, and distribution of goods, services, and ideas to create exchanges
with target groups that satisfy customer and organizational objectives.

The Marketing Concept

The marketing concept holds that the key to achieving organizational goals
consists in determining the needs and wants of target markets and delivering
the desired satisfaction more effectively and efficiently than competitors. In
other words, the key to success is to deliver superior value efficiently.

The Marketing Mix

The marketing mix is the firm’s offering to the target segment --it is how the
firm will deliver on it’s value proposition.

Marketing Myopia
Failure to adequately define, understand, anticipate, and/or respond to the
marketplace and marketplace dynamics; and/or narrowly focusing on one
aspect of the organization, rather than taking a balanced approach.

Market Orientation
The entire organization is focused on delivering superior value efficiently. A
market-oriented firm envisions a value proposition that is thoroughly
grounded in an understanding of the marketplace and its dynamics. The
organization - people, processes, structure, resources, skills, and tasks - is
aligned to support the value proposition. All decisions, from strategic
investments in building capabilities to day-to-day operational decisions are
guided by the value proposition. To make market-oriented decisions, the firm
systematically gathers information on customers and competitors (both
current and potential), analyzes that information for the purpose of
developing marketing knowledge, and uses such knowledge to guide the
creation, selection, implementation, and adaptation of marketing strategy
and tactics.

Robin Joseph – Niche

Marketing Strategy
Marketing strategy is the process of determining what value we will provide
and to whom. What group(s) of customers should we serve? And not serve?
What value should we offer? What should we not offer?

Mass Marketing
Treating the entire market as if all customers had the same needs and
offering the same marketing mix to all buyers.

Perceived Value
The customer’s perception of what they actually get (total perceived
benefits) relative to what they have to give up (total perceived costs).

PEST
An acronym for the portion of the Situation Analysis dealing with
macroenvironmental forces and trends P.E.S.T. stands for Political/Legal,
Economic/Ecological, Social/Cultural, and Technological

Perceptual Mapping
A tool for measuring customer perceptions and preferences regarding an
organization’s market offering and those of it’s competitors.

Pioneering Advantage
A (questionable) theory stating that market pioneers enjoy significant
advantages in the long-run.

Positioning
Selection of a meaningful and distinct competitive value position as
perceived by the target customer.

Positioning Statement
A concise, simple, and creative statement of our ‘points of difference’
relative to the competition.

Pull Strategy
Stimulating end-user demand to 'pull' a product through the channel (e.g.,
building brand equity).

Push Strategy
'Pushing' a product through the channel to end-users (e.g., via incentives
such as merchandising allowances).

Segmentation
Grouping together buyers with similar preferences that can be served with a
distinct marketing mix.

Situation Analysis
A framework for analyzing business situations.

Robin Joseph – Niche

STP
STP – segmentation, targeting, and positioning - is an organizing framework
for thinking about the process of formulating marketing strategy.

Superior Customer Value

Customers perceive the value provided by our marketing mix to be better
than the competition’s marketing mix.

Target Market
A group of customers that we are seeking to serve.

Targeting
Selecting which group(s) of customers to serve and not serve.

Total Product
The entire offering as perceived from the customer’s point of view.

Transaction Costs
Time, effort, psychological, and monetary costs that a customer must incur
during the pre-consumption, consumption, and post-consumption phases of
producing the benefits they seek.

The Value Cycle

The value cycle is a conceptual framework showing how organizations can
build a continuous cycle for creating value. Importantly, it integrates the
internal (comparative advantage, competitive advantage, and accounting
measures of performance) and market-based perspectives (value proposition,
customer perceived value, and market-based measures of performance).

Value Components
The set of perceived benefits and perceived costs that determine perceived
value (see ‘generic value components’).

Value Disciplines
To align organizational processes with the value proposition, organizations
utilize three basic internal strategies – or ‘value disciplines’ – for creating
value: operational excellence ( ‘supply chain management’); product
leadership (‘management of innovation’); and customer intimacy (‘customer
relationship management’).

Value Drivers
Aspects of the firm’s offering that affect perceived value (see ‘generic value
drivers’).

Value Position
The target set of benefits and costs that we intend to provide, as perceived
by a customer in the target segment (see ‘generic value positions’).

The Value-Profit Chain

Robin Joseph – Niche

 The value-profit chain is a useful tool for diagnosing and evaluating business
models. It takes a systems view of value creation by linking together
comparative advantage in resources, competitive advantage in delivering
value, customer advantage in terms of customer equity, and financial
performance.

Value Proposition
A value proposition envisions a target ‘marketplace position’ – how the firm
will create a match between firm capabilities, it’s offering, and target market
needs. So, choosing a value proposition means selecting whom to serve (the
target market) as well as what to provide (the value position). A good value
proposition should provide a basis for building a comparative advantage in
resources, gaining a competitive advantage in delivering value, and
achieving superior financial performance.

Robin Joseph – Niche