Digital Marketing Glossary

Terms Definition
Aspects of Sales and Marketing The Aspects of Sales and Marketing are based on the six most common and often distinct career fields related to Sales and Marketing. They are Marketing Strategy (MS), Marketing Research (MR), Digital Marketing (DM), Corporate Sales (CS), Branding and Advertising, and Retail Marketing (RM).
Assumptions An assumption can be defined as anything that is considered to be true without proof.
Auctions Auction is a publicly held sale at which property or goods are sold to the highest bidder(buyer) or prospective sellers compete to offer the lowest price
Average Inventory Level This metric represents the average amount of inventory available during a certain period of time. It is calculated as: (Inventory at start of period + Inventory at end of period) / 2.
Barter System More than a thousand years ago, when coins and other forms of money were not yet popular, the typical and most common way people procured their products or services was through the barter system—the direct exchange of goods or services without the use of money.
BCG Advantage Matrix BCG Advantage Matrix is a two by two matrix, which was developed to categorize business units on two parameters—size of the advantage and number of approaches to achieve the advantage.
BCG Advantage Matrix BCG Advantage Matrix is a two by two matrix, which was developed to categorize business units on two parameters—size of the advantage and number of approaches to achieve the advantage.
BCG Growth-Share Matrix The BCG Growth-Share Matrix, originally conceptualized by the Boston Consulting Group (BCG) in the late 1960s to evaluate various business units, can be applied equally well to products or services. It consists of a two-by-two matrix containing four quadrants, with the vertical axis depicting market growth rate and the horizontal axis showing market share.
Behavioral Segmentation This tool involves segmenting customers on the basis of their consumption behavior or attitude towards a product and also takes into account their lifestyles and patterns of buying and/or using the product.
Brand Loyalty This metric is reflected by how many customers purchase a brand repeatedly. It indicates the commitment that customers have towards a brand and is the basis of a strong relationship between the brand and its customers. The underlying metrics for brand loyalty may be the percentage of repeat customers out of total customers, the frequency of repeat purchases, and the degree to which other brands are also purchased along with the brand under consideration.
Brand Perception Brand perception refers to how prospective and current customers react to seeing or hearing about a company’s product or brand and how the company is perceived within the market
Brand Recall This metric is an indicator of how many customers or prospective customers mention a brand when a relevant cue is provided to them.
Break-Even Analysis Break-even analysis helps companies identify the minimum amount of product that they must sell at a given price to cover their costs.
Business Unit Strategy The Corporate Marketing Strategy, which is a component of the overall Corporate Strategy, is further divided into various Business Unit or Geographic Strategies, which in turn is further divided into particular Product or Brand Strategies for each product or brand.
Cash Rebates Companies offer cash rebates during certain periods to quickly sell their products and clear stock without lowering the list price.
Company Commissioned Reports These are research reports created or commissioned by a company to understand specific areas of the company’s strengths and weaknesses which may have significant impact on the decisions to be made by the marketing strategy teams.
Competition Analysis Competition analysis involves examining the competitive landscape for competing products with a view to understanding the company’s current product portfolio relative to other similar products, determining opportunities for product differentiation, and identifying new product development options.
Competition Analysis Competition analysis involves examining the competitive landscape for competing products with a view to understanding the company’s current product portfolio relative to other similar products, determining opportunities for product differentiation, and identifying new product development options
Competitor Selection Criteria This tool involves selecting and evaluating potential competitors and their competing products through the use of specific objective criteria. The criteria are generally the critical success factors in the industry.
Constraints A constraint is a limitation or restriction that creates certain boundaries or obstacles.
Conventional Mass Media Marketing Unlike a seller’s marketplace where sellers have the advantage over customers, mass media marketing features multiple manufacturers, thus shifting the balance of power in favor of consumers. Primary channels used for mass media marketing are print advertising (newspaper, magazine, insert, or run of paper), mass mailers, television (network, cable, or syndicated), and radio (national, local, satellite, or podcast, and out of home advertising (billboards, street furniture e.g bus shelters, transit, alternative e.g. stadiums).
Corporate Finance Strategy This defines how a company will manage its finances, attain funding, and financially sustain its operations. The Finance Strategy should include forecasts and projections and summarize costs, income, and investments.
Corporate Human Resource Strategy This maps the human resource capabilities within the company and considers talent management and acquisition needs to sustain growth.
Corporate Marketing Strategy This defines how a company will position, target, market, and sells the planned products. It also defines the metrics, targets, and budgets for all marketing activities.
Corporate Operations Strategy This defines how a company will manage its operational activities, manufacture its products (or provide services), and provide the corresponding customer support and warranty.
Corporate Product Strategy This defines the products or services a company may want to offer, and the research and development efforts required to create them.
Corporate Strategy This defines the overall direction of the company that takes into consideration an assessment of the existing capabilities of the company and external opportunities and threats.
Customer Acquisition Cost This metric represents the total cost that a company incurs in convincing a single customer to purchase its product and the cost of repeat purchases within a specific time period.
Customer Feedback Customer Feedback includes improvement suggestions, compliments, and complaints. Complaints and improvement suggestions highlight areas where a company needs to make changes and adjustments and where its current positioning might not be working as desired.
Customer Lifetime Value Customer Lifetime Value places an upper limit on how much a company should spend on acquiring a new customer. Customer Lifetime Value represents the total profits that a customer generates for a company or a product over a certain time period.
Customer Personas Personas are highly detailed fictional characters, representative of particular types of users in a market segment. They are created to help the marketing team identify who buyers are, what they are trying to accomplish, how they think, what goals drive their behaviors, how they buy, and why they make certain decisions.
Customer Reach Customer reach metrics are an indicator of how many existing customers and potential new customers a Sales and Marketing initiative is able to reach through Marketing Aspects such as Branding and Advertising, Retail Marketing, Corporate Sales, and Digital Marketing.
Decision Tree Analysis Decision Tree Analysis is used to evaluate the best option from a number of mutually exclusive options when an organization is faced with an investment decision.
Decision Tree Analysis Decision Tree Analysis is used to evaluate the best option from a number of mutually exclusive options when an organization is faced with an investment decision
Decline Stage In the Decline stage of the product life cycle, the market for a product starts to deteriorate, and sales begin to decline as the product reaches its saturation point.
Demand Chain Planning Demand chain planning involves reviewing details of the supply chain with customers and then working backwards to ensure that customers’ demands are adequately met.
Demographic Segmentation This tool is primarily used for consumer markets. It involves segmenting the market along one or more demographic variables.
Differentiated Strategy When an organization directs its marketing efforts at two or more segments by developing a different marketing mix for each segment, it is using a differentiated targeting strategy. Each marketing mix for this strategy typically varies depending on product features, distribution methods, promotion methods, and pricing. After successfully using a focused strategy in one market segment, an organization might expand into other segments, therefore switching to a differentiated strategy.
Discounted Cash Flow This tool is used to determine the financial attractiveness of a particular investment opportunity, which could range from a single product to an entire business unit. It determines the present-day value of future free cash flows expected to be generated by the opportunity (i.e., operating cash flow minus capital expenditures which represents the actual cash flow available for future opportunities), which are then discounted using the weighted average cost of capital.
Discounted Cash Flow This tool is used to determine the financial attractiveness of a particular investment opportunity, which could range from a single product to an entire business unit. It determines the present-day value of future free cash flows expected to be generated by the opportunity (i.e., operating cash flow minus capital expenditures which represents the actual cash flow available for future opportunities), which are then discounted using the weighted average cost of capital.
Distribution Channels Distribution channel is defined as a medium through which a company’s product or service is delivered to end customer.
Distribution Strategy The Distribution Strategy for a product or service identifies the key areas involved in delivering the product or service to customers.
Downtime Downtime refers to periods when a system is unavailable or fails to provide or perform its primary function.
Economies of Scale Economies of Scale occur when there is a significant decrease in the unit cost of production with an increase in the scale of operations or production.
Elastic Demand An elastic demand is one in which a change in price significantly impacts the quantity demanded for a product or service.
Environmental Scanning Environmental scanning consists of performing a thorough assessment of external environmental factors, gathering relevant information, and considering opportunities and threats that can impact the company.
Environmental Scanning Environmental scanning consists of performing a thorough assessment of external environmental factors, gathering relevant information, and considering opportunities and threats that can impact the company
Essential Marketing Aspects Marketing Strategy and Marketing Research are referred to as Essential Marketing Aspects. Both of these Aspects are mandatory and should be used to define, measure, and provide direction for the overall marketing efforts of a company.
Exclusive Distribution Exclusive Distribution is a strategy whereby a company uses only one distribution partner to sell its product in a certain market.
Experience/Learning Curve An Experience Curve (also known as a Learning Curve) explains the decline in the cost per unit due to accumulated production experience.
External Factors External factors play a major role in developing a solid and comprehensive Corporate Strategy. Examples of external factors that play a role in strategic planning include government regulations, market conditions, emerging technology, regional culture, demographic changes, and the global economy.
External Factors External factors play a major role in developing a solid and comprehensive Corporate Strategy. Examples of external factors that play a role in strategic planning include government regulations, market conditions, emerging technology, regional culture, demographic changes, and the global economy.
External Strategic Consultants External strategic consultants are commonly hired by senior management to help with strategic planning. In addition to organizing and leading sessions, third party consultants may also provide expert, unbiased opinions about key strategic decisions. Consultants are expected to provide thorough research data in addition to their expert knowledge during the strategic decision-making process.
External Strategic Consultants External Strategic Consultants are commonly hired by senior management to help with strategic planning
Fill Rate This metric refers to the percentage of demand (represented by customer orders) that is fulfilled by the stock on hand. It indicates the ability of the current inventory to fulfill demand.
Focused or Concentrated Strategy When an organization directs its entire marketing efforts toward a single market segment using one marketing mix, it is said to be using a focused or concentrated strategy.
Fragmented New-Age Marketing In recent times, the media has become increasingly fragmented with several hundred television and radio channels, as well as a large variety of print media, including newspapers, magazines, and trade publications. Moreover, since the late 1990s, with the increasing popularity of the internet and, more recently, smartphones, many options now exist for advertisers to reach a global audience using digital media marketing methods such as mobile phone apps, Google, Facebook, Twitter, LinkedIn, YouTube, gamification, and proximity marketing (e.g., Foursquare). With all of these options, many marketers find it beneficial to use an integrated approach to marketing by leveraging the strengths of various types of media.
Frequency This metric represents the number of times a specific communication has been viewed by consumers in target markets through any of the Marketing Aspects.
Future Competitive Analysis Performing a future competitive analysis involves actively scanning the industry (or other industries) for new entrants, emerging technologies, and other developments that pose a serious competitive threat to a company or its products in the future. This exercise is critical for the long-term success of the company because the greatest competition could come from outside the industry and, in extreme cases, could make an entire industry obsolete.
Future Competitive Scenarios Future competitive scenarios are potential future events that pose a serious competitive threat to a company or its products.
Gain-Sharing Pricing In a gain-sharing pricing situation, both the seller and purchaser share in any gains that are made above a pre-determined threshold.
Gap Analysis The HR team can conduct a gap analysis to compare the current state of the organization against the desired state to identify any required changes.
Gap Analysis Gap Analysis is used to compare the current state of a system against the desired state to identify any required changes
GE-McKinsey Matrix The GE-McKinsey Matrix was developed in response to the shortcomings of the BCG Matrix, which does not account for a number of factors. It was originally used for a visual representation of GE’s 150 business units to determine which business units were doing well, which needed support, and which should be discontinued. However, the matrix can also be applied to a product portfolio. It evaluates each product on two parameters, market attractiveness and product position, which are the labels of the axes on the matrix.
GE-McKinsey Matrix The GE-McKinsey Matrix was developed in response to the shortcomings of the BCG Matrix, which does not account for a number of factors. It was originally used for a visual representation of GE’s 150 business units to determine which business units were doing well, which needed support, and which should be discontinued. However, the matrix can also be applied to a product portfolio. It evaluates each product on two parameters, market attractiveness and product position, which are the labels of the axes on the matrix.
Generic Reports These are research reports that are not specific to a company or its industry. They contain information about political, economic, social, technological, regulatory, and environmental trends that could impact the company’s Marketing Strategy.
Geographic Strategy The Corporate Marketing Strategy (which is a component of the overall Corporate Strategy) is further divided into Business Unit or Geographic Strategy, which in turn is further divided into Product or Brand Strategy for each product or brand.
Going Rate Pricing In oligopolistic industries that sell commodities—such as salt, steel, or light bulbs—all companies charge approximately the same price because there is not a great deal of product variation, innovation, or options for reducing manufacturing costs.
Growth Stage In the Growth Stage of the product life cycle, the market accepts the product, and sales begin to increase. This growth makes it possible for the company to invest more money in distribution, promotion, and advertising to maximize the potential of this stage in the life cycle
High Level Goals When establishing the metrics against which to measure the success of the Marketing Strategy, the Marketing team must work with Senior Management and with other departments in order to ensure that appropriate and relevant data is being collected and that success criteria are consistent with the overall goals of the organization. Failure to take into consideration the high level goals of the business can result in the team focusing on metrics that do not contribute to the overall success of the business or that conflict with metrics at other levels and in other divisions or other functional areas of the business.
Hill Framework The Hill Framework for formulating Operations Strategy involves the following steps: 1. Defining the corporate objectives 2. Developing a Marketing Strategy needed to fulfill the corporate objectives 3. Identifying the competitive factors based on which consumers prefer one company over another and then classifying them into order qualifiers and order winners 4. Defining the operational structure to deliver those products 5. Specifying the infrastructure and resources needed to implement the operations
Hill Framework The Hill Framework for formulating Operations Strategy involves the following steps: 1. Defining the corporate objectives 2. Developing a Marketing Strategy needed to fulfill the corporate objectives 3. Identifying the competitive factors based on which consumers prefer one company over another and then classifying them into order qualifiers and order winners 4. Defining the operational structure to deliver those products 5. Specifying the infrastructure and resources needed to implement the operations
Identify Competition The first step in defining the competitive positioning for a company’s products or services is to identify the main competitors for those products or services. This entails creating a list of all potential competitors and then analyzing their strengths, key product features, operational excellence, and market share information to best identify the closest rivals from the customer’s viewpoint.
Industry Benchmarks To establish a benchmark, management identifies the best companies in the industry, or in another industry where similar processes exist. It then compares the company’s own practices and processes to the best practices and processes of those leading organizations studied.
Industry Reports These reports are specific to a company’s industry and may contain current industry trends, present difficulties, legal and regulatory norms, and promising future developments. Industry reports are typically published by consulting firms or by industry associations and are available to any company, generally at a price.
Inelastic Demand An inelastic demand refers to a situation in which there is no significant change in the quantity demanded due to a change in the price of the product or service.
Intensive Distribution Intensive Distribution is a strategy whereby a company places its products and services in as many outlets or distribution channels as possible.
Introduction Stage The Introduction stage is the stage of the product life cycle when the marketing team emphasizes promotion and the product’s initial distribution.
Key Performance Indicators (KPIs) Key Performance Indicators (KPIs) are used to assess and compare current performance levels. KPIs are metrics that reveal how a company is performing on certain critical aspects that are key to success in its industry.
Levels of Sales and Marketing Strategy The Corporate Marketing Strategy, which is a component of the overall Corporate Strategy, is further divided into various Business Unit or Geographic Strategies, which in turn is further divided into particular Product or Brand Strategies for each product or brand.
Low-interest Financing To enhance sales of products that are at a high price point, companies often offer low-interest financing to customers who prefer to pay in monthly installments rather than a lump sum amount upfront.
Macro-environment The external environments within which the factors are classified are the macro-environment and the micro-environment. Macro-environmental factors are those over which a company does not have much control or influence.
Market Analysis Market analysis involves analyzing market data to identify patterns and predict future events. The purpose of performing a market analysis is to understand the attractiveness of a market.
Market Attractiveness Report The Market Attractiveness Report contains detailed information on potential markets and their relative attractiveness. Some factors that may be identified in the Market Attractiveness Report include market size, market trends, market growth rate and profitability, and key success factors for the market.
Market Definition A market is defined as the set of potential customers who have a demand for the product category that includes the company’s product. It sets the boundaries within which segmentation is carried out. The definition should be broad enough so that the company can reasonably hope to acquire a share of the market within a timeframe that generates revenues commensurate with its corporate objectives. The market definition should also take into account the most likely future market scenarios so that the definition continues to stay valid in the long term.
Market Growth Rate Market growth rate forecasts use previous data and future trend indications to predict the future growth rate of markets.
Market Opportunity Analysis Concepts related to analyzing the external environment and evaluating the internal capabilities of a company
Market Segment Attractiveness Matrix After segmenting the market, a company needs to identify the most attractive segments to target. This tool primarily involves mapping a company’s strengths against the attractiveness of each market segment, and then selecting only those segments that provide the best prospects for growth of the company.
Market Segmentation Identifying the markets and the specific segments in which the business competes is critical to establishing and executing a focused Marketing Strategy. The market is the set of potential customers who have a demand for the company’s products or services, and segmentation enables the business to design marketing initiatives that tap into key characteristics of each segment.
Market Segmentation Identifying the markets and the specific segments in which the business competes is critical to establishing and executing a focused Marketing Strategy. The market is the set of potential customers who have a demand for the company’s products or services, and segmentation enables the business to design marketing initiatives that tap into key characteristics of each segment.
Market Segments The output of using any of the segmentation tools is a description of the various market segments a company wants to consider. The descriptions should contain the characteristics of each segment that differentiate one segment from another.
Market Segments A market segment refers to a subset of consumers, businesses, or countries who have common needs and priorities. It is a Marketing Strategy to divide the entire market in variuos segments based on different criteria
Market Size This dimension defines the size and potential of the markets under consideration. Market size is calculated on the basis of current sales volume for the market.
Market Trend Analysis A market trend analysis is an analysis of past and current market behavior and dominant patterns of the market and consumers. An important aspect of conducting a trend analysis for an organization is to obtain insights on the market scenario, consumer preferences, and the macroeconomic environment.
Market Trends Market Trends show the overall growth or decline of a market, competitor activities, and customer behavior over time. Current market trends can also help in predicting future market trends
Market-Product Grid A Market-Product Grid is a tool that is used to relate the market segments of potential buyers to product offerings or potential marketing actions. It is particularly useful when a differentiated targeting strategy is being used in a heterogeneous market.
Maturity Stage In this stage of the product life cycle, sales reach their peak. The product is well established and the aim for the company is to maintain a sizeable market share.
Maximum Capacity This metric refers to the quantifiable units of service in a given time frame that a company can handle at a one hundred percent resource utilization rate.
Media Coverage This metric represents the number of mentions, articles, or stories about a product in the media, including newspaper, radio, magazines, television, and digital sites.
Micro-environment The micro-environment of a company consists of environmental factors that have a more direct impact on the operations and success of the business. Some of these factors pertain to customers, distributors, suppliers, and other stakeholders.
Multi-voting Technique Members of senior management vote on a list of initiatives in multiple rounds. In each round, the initiative that receives the least number of votes is removed. After a few iterations, only the most important initiatives remain.
Multi-voting Technique Members of senior management vote on a list of initiatives in multiple rounds. In each round, the initiative that receives the least number of votes is removed. After a few iterations, only the most important initiatives remain.
Net Promoter Score Net Promoter Score is a metric used to measure customer loyalty that was developed by Fred Reichheld of Bain & Company in association with Satmetrix in 2003. It is measured by asking customers how likely they are to recommend a company’s product to a friend, relative, or colleague
Online Marketplaces A market segment refers to a subset of consumers, businesses, or countries who have common needs and priorities. It is a Marketing Strategy to divide the entire market in variuos segments based on different criteria
Online Networking The internet has made the world a smaller place. People can now have access to their networks at all times. These changes have significantly impacted the way in which people communicate with each other and, in turn, have created new possibilities for innovative business models.
Order Qualifiers These factors are those that enable a product to qualify for purchase.
Order Qualifiers Order Qualifiers are factors that enable a product to qualify for purchase
Order Winners These factors are the key reasons behind customers purchasing a product, so excelling in these factors improves a company’s chances of closing the sale and getting new business.
Order Winners These factors are the key reasons behind customers purchasing a product, so excelling in these factors improves a company’s chances of closing the sale and getting new business.
Organizational capabilities Organizational capabilities are those that allow a company to achieve its organizational goals and gain a competitive advantage. Capabilities can originate from any function or may already be fundamental to a company.
Perceived Value Pricing Perceived value pricing involves pricing goods or services based on the value consumers place on them and the price they are willing to pay, rather than on the costs involved in bringing them to market.
Perceptual Maps Perceptual mapping is a technique used to visually display the perceptions of customers and examine the positioning of a company’s product relative to those of the competition. These maps are two-dimensional, with the axes being two parameters on which customer perceptions of different products are measured.
PESTEL Analysis The PESTEL Analysis (also referred to as ‘PESTLE Analysis’) framework is used to analyze macro-environmental factors that are sources of opportunities and threats, and therefore positively or negatively impact the organization, its customers, and/or its suppliers. The six factors of the PESTEL Analysis framework are Political Factors, Economic Factors, Social Factors, Technological Factors, Environmental Factors and Legal Factors.
Points of Parity Points of parity for a product are those characteristics of a company’s product that are not unique but are rather on par with competing products.
Porter’s Five Forces model Porter’s Five Forces model is used to analyze the long-term attractiveness of an industry. Understanding the interaction of these forces with the existing competing organizations helps explain the differences in profitability amongst industries. The five forces are Threat of New Entrants, Bargaining Power of Customers, Bargaining Power of Suppliers and Competitive Rivalry.
Positioning Statement Positioning Statement is generally a short sentence or phrase that captures the essence of the value a company’s products offer to its target customers.
PPP An important concept that needs to be considered when pricing products in multiple countries is “Purchasing Power Parity” (PPP). PPP is based on the premise that the price of identical goods—in the absence of transaction costs, taxes, and trade restrictions—should be the same in different markets when measured using the same currency. Several economists believe that the concept of PPP provides a better indication of pricing of the same product across various countries (and hence should be used) when compared using official exchange rates. Although there are multiple measures for PPP, “The Big Mac Index” is a popular standard.
Price Elasticity of Demand Price Elasticity of Demand (PED) measures the responsiveness of the demand for a product or service to a change in its price. Specifically, it measures the percent change in quantity demanded in response to a one percent change in price when all other determinants of demand are kept constant. Mathematically, PED is calculated as follows: Price Elasticity of Demand = % Change in Quantity Demanded % Change in Price
Pricing Strategy The Pricing Strategy for an organization should be oriented towards creating a sustainable brand perception and sustainable profitability for the brand while growing and maintaining a healthy market share. It typically includes the following information: • the recommended pricing for products or services over a period of time in different target market segments and a rationale for the price point • an indication of how the Pricing Strategy aligns with the products’ positioning statement and the company’s overall Corporate Strategy • the number of units that must be sold to break even, the projected units the company anticipates it will sell, and the expected profitability of the product • the strategy to deal with possible changes in the environment, such as changes in prices offered by competitors and increases in production costs • the strategy for any discounts, special offers, or rebates, and the costs associated with these • the Total Cost of Ownership, including cost of warranties and after-purchase servicing
Primary Marketing Research When existing industry reports, internal company reports, or generic reports are insufficient for understanding the external factors that can impact a company, the company may choose to conduct primary marketing research in order to improve knowledge of the marketplace, reduce risk, and improve marketing decisions. Such marketing research projects generally involve understanding the perceptions of various entities that are knowledgeable about various external factors that may impact the company, through tools such as interviews, group discussions, and survey questionnaires.
Prioritization Matrix Criteria and weighted ratings are used to determine the relative importance of different initiatives. Each initiative is assigned a rating for each criterion and then the weights are applied. The initiatives with the higher total weighted scores are assigned higher priority.
Prioritization Matrix A prioritization technique in which criteria and weighted ratings are used to determine the relative importance of different initiatives
Prioritization Techniques Criteria and weighted ratings are used to determine the relative importance of different initiatives. Each initiative is assigned a rating for each criterion and then the weights are applied. The initiatives with the higher total weighted scores are assigned higher priority.
Prioritization Techniques There are a number of prioritization techniques that can be used by senior management when deciding which initiatives or activities are the most important and thus should be implemented first. Some of the most frequently used prioritization tools are as follows: 1. Multi-voting technique 2. Strategy Grid 3. Prioritization Matrix
Process-Oriented Approach The SMstudy® Guide explains Sales and Marketing concepts through a practical, process-oriented approach. This helps Sales and Marketing professionals understand the specific processes they should follow to be effective in their Sales and Marketing roles. Each process has associated inputs, tools, and outputs that are recommended for use.
Product Availability Product Availability metrics indicate whether a product is available for purchase at the time and place customers are looking to purchase the product or other competing products from competitors.
Product Life Cycle Analysis Product Life Cycle Analysis is a useful tool to determine metrics and objectives that align with the current stage of the product in its life cycle. A product life cycle is divided into four stages of development: 1. Introduction Stage 2. Growth Stage 3. Maturity Stage 4. Decline Stage
Product or Brand Marketing Strategy Each Product or Brand Marketing Strategy (also referred to as ‘Marketing Strategy’ in this book) defines Sales and Marketing objectives for each product or brand, which then drive specific tactics involving other Marketing Aspects (i.e., Marketing Research, Digital Marketing, Corporate Sales, Branding and Advertising, and Retail Sales).
Product Portfolio Analysis Understanding the overall product portfolio of a company, and evaluating the current and future product lines is an important component of the Marketing Strategy. Peter Drucker (1973) proposed a classification method for analyzing a company’s product portfolio based on each product’s current and expected profitability. After the classification exercise, the marketing team is able to pinpoint products that contribute to the company’s strengths and those that do not. Accordingly, support and investment for each product can be decided.
Product Positioning Creating a differentiated product positioning involves identifying the value that a company’s products offer to target customers relative to the value offered by competitors. Product Positioning creates an image of the company’s products for consumers, highlighting the most important benefits that differentiate the product from similar products in the market.
Product Positioning Creating a differentiated product positioning involves identifying the value that a company’s products offer to target customers relative to the value offered by competitors. Product Positioning creates an image of the company’s products for consumers, highlighting the most important benefits that differentiate the product from similar products in the market.
Product-Process Matrix Robert Hayes and Steven Wheelwright first introduced the Product-Process Matrix to analyze the relationship between the product life cycle and the manufacturing process. This Matrix includes two dimensions, namely, product structure or product life cycle and the process structure or process life cycle. This model is used to identify which stage of the product life cycle a product is in, and then the appropriate process strategy is mapped to that stage.
Product-Process Matrix The Product-Process Matrix was first introduced by Robert Hayes and Steven Wheelwright for analyzing the relationship between the product life cycle and the manufacturing process. The Product-Process Matrix consists of two dimensions: the product structure/product life cycle and the process structure/process life cycle. This model is used to identify which stage of the product life cycle a product is in, and then the appropriate process strategy is mapped to that stage.
Profitability This metric is calculated as a ratio of profits to sales and is represented as a percentage.
Psychographic Segmentation This tool is primarily used for consumer markets and involves segmenting buyers along one or more psychological variables.
Psychological Discounting Companies may set high list prices on their products, creating the perception of a high-quality product, and then offer huge discounts leading customers to believe that they are getting a great deal.
Purchase Timing Companies use relevant events as opportunities to increase the sale of their products to new customers who, in some instances, may not otherwise be exposed to their brands. Companies may provide their products at lower prices or offer complimentary product samples in order to introduce their brands to potential customers, and possibly increase future product sales by growing the total customer base.
RATER Model The RATER Model, which is widely used to establish service quality criteria, helps measure the efficiency of customer service delivery. The model highlights five areas that customers generally consider to be important when using a service: • Reliability—The ability to provide the promised service consistently and in a timely manner • Assurance—The knowledge, skills, and expertise of employees to create trust and credibility • Tangibles—The physical delivery of the service provided • Empathy—The relationship between employees and customers • Responsiveness—Competency in providing quick, high-quality service to customers
RATER Model The RATER model, which is widely used to establish service quality criteria, helps in measuring the efficiency of customer service delivery. The model highlights five areas that are considered important by the customers when using a service: • Reliability—Ability of the organization to provide the promised service consistently and in a timely manner • Assurance—Knowledge, skills, and expertise of the employees in creating trust and credibility • Tangibles—Physical delivery of the service provided • Empathy—The relationship between employees and customers • Responsiveness—Competency in providing quick and high-quality service to customers
Resource Utilization Rate This metric measures the time that people spend working on projects and tasks. Resource utilization measures the allocation of a resource on a specific set of work, including client and internal work.
Risk-Sharing Pricing Risk-Sharing Pricing is a strategy that businesses may employ when there is potential for consumers to avoid buying a particular item because of a perceived risk associated with the product. In a risk-sharing pricing scenario, the seller shares some of the risk with the buyer or takes on all of the risk to induce a favorable buying decision.
ROI Return on Investment (ROI) is a widely used tool that measures the benefits a company receives from a specific investment—like launching a product—against the cost of the investment. It is a highly flexible tool where the benefit and the cost can be represented by any metric that is suited to the analysis at hand. ROI is represented by the following: Return on Investment = (Benefit from Investment – Cost of Investment) / Cost of Investment
Sales Growth This metric represents the growth in revenues for a product during a certain time period. It can be represented either as a percentage growth or in absolute terms. It is one of the primary metrics used by marketing teams to determine the success of the Marketing Strategy and is also the easiest to measure
Seasonal Pricing Some companies may discount products based on the season of the year
Secondary Marketing Research Secondary Marketing Research involves the use of content and information that is currently available within the company or in the market through primary research that has already been conducted and is readily obtainable through company reports, trade journals, industry publications, and/or the Internet.
Selective Distribution Selective Distribution is a middle of the road approach whereby a company uses a few delivery channels to distribute a moderate volume of products.
Seller’s Marketplace The Industrial Revolution in the eighteenth and nineteenth centuries marked a shift to mass production in factories (e.g., textile manufacturing). During this time, transportation infrastructure improved significantly with inventions such as the steam engine and more efficient ships. The banking system was further developed and the exchange of money became easier. Communication was also substantially improved through the development of the postal system and the use of telegraphs. Furthermore, goods were produced more efficiently and economically in factories and could be sold to a wider market. This created the seller’s marketplace. The main objective of the seller’s marketplace is to establish a supply chain to procure products, and then establish a distribution channel to sell the products to a wide variety of customers, often referred to as “mass marketing.” Emphasis on branding and advertising is minimal in a seller’s marketplace
Senior Management Direction and Insights This is provided by senior management based on their experience and insights related to the business.
Share of Heart Share of Heart is an indicator of how many customers or prospective customers mention the brand first when a relevant cue, such as industry, product category, usage situation, or customer need, is provided to them. In addition, however, share of heart indicates the number of consumers who identify the brand in consideration as the one they will buy,
Share of Mind This metric is an indicator of how many customers or prospective customers mention the brand first when a relevant cue, such as industry, product category, usage situation, or customer need, is provided to them. In addition, however, share of heart indicates the number of consumers who identify the brand in consideration as the one they will buy.
SMART Framework The SMART framework is a method that can help determine the appropriate metrics and objectives to measure performance of the Marketing Strategy. SMART is an acronym for Specific, Measurable, Attainable, Relevant, and Time-bound.
Social Media Coverage This metric represents the number of times any activity or content related to a product is shared on various social media channels. It may also include the number of customers who have subscribed to a company’s social media channel.
Special Customer Pricing Some customers are more valuable and loyal to a brand over their lifetime than others. To reward such loyalty, companies often provide special offers exclusively for their loyal customers.
Special Event Pricing Companies may provide special promotional pricing to generate additional sales during special events.
Stock-out A stock-out refers to an event where the current inventory level is not sufficient to meet demand.
Strategy Grid This is a frequently used prioritization technique. A two by two grid is created with “feasibility” and “need” on the two axes and “high” and “low” as the two categories on which initiatives are rated. The initiatives are then plotted on the grid and the ones that fall under “high need” and “high feasibility” are addressed first.
Strategy Grid This is a frequently used prioritization technique. A two by two grid is created with “feasibility” and “need” on the two axes and “high” and “low” as the two categories on which initiatives are rated. The initiatives are then plotted on the grid and the ones that fall under “high need” and “high feasibility” are addressed first.
SWOT Analysis Identifying opportunities and threats, together with strengths and weaknesses, constitute what is commonly known as a SWOT (Strengths, Weaknesses, Opportunities, and Threats) Analysis.
Target Costing A Target Cost is the maximum amount of cost that can be incurred to create a product while still earning the required profit margin at a particular selling price. Target costing involves determining the actual cost of a product or service after considering the desired profit margin. Mathematically, Target Cost is calculated as follows: Target Cost = Expected Selling Price – Desired Profits
Target Segment Once a company has identified all market segments, explored the competition, and then compiled the details of competitive products, it should then analyze the various segments and the strengths, weaknesses, opportunities, and threats faced by the company in order to identify the target segments in which the business would be most competitive. This process involves identifying the type of customers a company plans to target and the product categories under which it intends to create products.
Total Cost of Distribution The total cost of distribution should include all the costs incurred to deliver the company’s product or service to the end user. If there are multiple channels of distribution for a product or service, the total cost for each of the different distribution channels should be calculated. This will help the company determine the most efficient distribution channel, and ensure that the pricing of the company’s products includes distribution costs.
Total Cost of Ownership The Total Cost of Ownership (TCO) for a product or service is the net cost incurred by the consumer throughout the product’s lifetime.
Traditional Marketplace Traditional marketplaces are usually small markets where price negotiations and other decisions related to sales are made quickly—often by one or two persons.
Undifferentiated Strategy If an organization selects an entire market as its target segment for a particular product, it is said to be using an undifferentiated targeting strategy. In an undifferentiated targeting strategy, the company assumes that all customers in the target market for a specific product have similar wants and needs that can therefore be satisfied with a single marketing mix.
Unit Elastic Demand If the percent change in demand for a product or service is directly proportionate to the percent change in its price, the product or service is said to possess unitary elasticity.
Value Chain Analysis Value Chain Analysis is used to analyze the value created by a company’s current activities. It explores where more value can be added, as well as where value is not being added throughout the chain of activities. It is a useful tool for internal analysis of strengths (activities that add value) and weaknesses (activities that do not add value).
Value Network Analysis Value Network Analysis involves looking not only at a company’s supply chain and its customers, but also at the supply chains of the company’s vendors and their customers. Value for the end customer is created through the inter-relationships of these entities and all these relationships together make up the value network.
Value Pricing Some companies acquire customers by pricing their products or services quite low, even if the offering is high quality. Value pricing does not simply mean lowering prices; it involves reengineering operations and reducing costs to become a low-cost provider. Value pricing is generally carried out by companies that are ahead of the competition in the experience curve.
Value Stream Mapping Value stream mapping involves describing in detail the current flow of information and materials required to deliver a product or service to customers, and then analyzing the flow to identify opportunities to reduce waste, decrease production and delivery times, and improve other operational metrics.
Value Stream Mapping Value Stream Mapping involves describing in detail the current flow of information and materials required to deliver a product or service to customers, and then analyzing the flow to identify opportunities to reduce waste, decrease production and delivery times, and improve other operational metrics
Warranty A warranty is a guarantee or promise made to consumers regarding the product or service.

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