Bronis Verhage
ISBN: 9789001818661
http://www.marketingfundamentals.noordhoff.nl
© 2016 Noordhoff Uitgevers bv
GLOSSARY
Chapter 7 Product strategy and services marketing
Product A combination of tangible and intangible characteristics that enable an object
or service to satisfy a customer need.
Core product The basic function or (intangible) problem-solving benefits that the
product provides, such as satisfying the customer’s need for convenience (Core
benefit).
Actual product Combination of product and service features that deliver the core
benefit to the customer, such as design, quality level, ease of use and brand name.
Augmented product Intangible, psychological benefits and service-based features –
part of the company’s promotion, price or distribution strategy – that make a product
more attractive, such as an extended warranty, free home delivery and installation.
Product attributes A mix of tangible and intangible product features, functions and
benefits that affect customers’ brand choice.
Consumer goods Products sold to individuals or households for their personal use or
consumption (Consumer products).
Ultimate consumer Individual – not always the buyer – who uses or consumes the
product (end user).
Business products Products or industrial goods (e.g. production equipment, materials,
supplies, software) sold to organizations that resell them, or use them to make their
own products or to provide a service.
Convenience products Items that the consumer buys frequently and immediately,
with a minimum of shopping effort.
Staples Homogeneous convenience products, such as sugar, often bought on the basis
of price.
Impulse goods Convenience products bought without pre-planning or careful
decision-making, such as a pack of chewing gum at the store’s checkout.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Emergency goods Products purchased when the consumer urgently needs the item,
such as an umbrella during a downpour.
Shopping products Products for which the consumer typically compares the quality,
price and style of a few alternatives before buying them, such as cameras or clothing.
Specialty products High-involvement products (such as parachutes) or services (such
as child care) for which consumers are willing to make a special effort.
Unsought products Products of which consumers either aren’t aware, don’t want to
think about or suddenly discover they need in order to solve an unexpected problem.
Non-durable consumer products Consumer packaged goods (for example, shampoo)
or products with a life cycle of less than 3 years, such as clothes.
Product mix The collection of products that a manufacturer offers, including its
product lines, product types and brands; also referred to as product assortment by
resellers.
Product line Group of closely related items in the company’s product mix that meet
the same needs, appeal to the same types of customers or use the same distribution
channels.
Product type Individual product (e.g. Gillette’s Fusion razor) that – because of certain
product attributes – differs from other types (Gillette Mach3) of the same product.
Product item A product type listed as a distinct offering with an article number in the
company’s catalogue or on its website.
Product mix width The number of product lines that a company sells: the more
product lines, the wider the product mix.
Product mix length The total number of items that a company sells.
Product line depth The number of items (brands, types, models, sizes) in a product
line.
Product mix consistency The extent of similarity between the products a company
offers.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Scrambled merchandising A retailer offering products that are not related to the
store’s main product lines, such as a supermarket selling cosmetics and other nonfood
items.
Assortment height The average price level of the product items or brands in a
company’s product mix or in a product line.
Product mix pricing strategy Pricing the company’s products in its product lines or
assortment so as to maximize profits on the total product mix.
Product line pricing Pricing products in the company’s product assortment that are
consumption-related (such as wine and cheese) or complementary in their use
(computer hardware and software) in relation to one another.
20/80 rule A principle stating that about 20% of the products that a company offers
account for 80% of its total sales.
Core assortment Products – about twenty percent of the retailer’s merchandise mix –
with a high turnover rate.
Peripheral assortment Products – about eighty percent of the retailer’s merchandise
mix – with a low turnover rate, but high profit margin.
Product line extension Adding a (closely) related product to the current product line –
in order to satisfy a different customer need – through a trading-up, trading-down, line
filling or brand extension strategy.
Trading up Product assortment strategy that involves lengthening the product line
with a higher priced, better quality product to meet the needs of the high end of the
market (Up-market stretch).
Trading-down Lengthening the product line with a lower priced, lower quality product
to reach a larger target market (Down-market stretch).
Downgrading Rare positioning strategy designed to influence the customer’s
perception through quality and price reductions or changes in store format and
ambience.
Upgrading Positioning strategy designed to influence the customer’s perception
through quality improvements, price increases or enhancement of the store format.
Ma rk eti n g Fu n da m e n tal s, An In t e rn ati o n al P e r sp e ctiv e
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Line-filling Expanding the product line by adding more items within the existing range
of products and prices.
Brand stretching Launching new products or product items under an existing,
successful brand name, possibly in new market segments through a line extension or
brand extension strategy.
Line extension Using the existing brand name for new product items in the same
product line, such as introducing new flavours, ingredients or package sizes.
Brand extension Using the existing brand name with an established brand image for
new products in a different product category (Spin-off).
Product life cycle Graphic visualization of the stages that a new product passes
through over time – from birth to death – in the marketplace (PLC).
Introduction stage First stage of the product life cycle, in which most consumers are
not even aware of the product and its potential uses.
Primary demand The total demand for a new product type that the pioneering firm
can beneficially stimulate by convincing the target market to use the type of product,
rather than its own brand.
Selective demand Demand for a specific brand, rather than a type of product.
Growth Stage of the product life cycle in which sales grow at an increasing rate, and
faster than ever (Rapid growth stage).
Turbulence Stage of the product life cycle in which most consumers are aware of the
product and – as strong competitors are fighting for market share – sales continue to
grow, but at a decreasing rate.
Maturity Stage of the product life cycle in which sales peak and prices, along with
profits, keep falling.
Decline Stage of the product life cycle when sales of the whole product class begin to
fall rapidly because of the saturated market, changing tastes and new technologies.
Retrenchment strategy Strategy in the PLC’s decline stage in which a company pulls
out of unattractive market segments, but can profitably continue to serve customers
who still want the product.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Product class Group of products that are homogeneous or perceived as substitutes
for each other in terms of meeting a consumer need.
Market stretching Extending a product’s life cycle in the PLC’s maturity stage by
tapping new markets or through product improvements.
Product quality The combined features of a product that affect its ability to meet the
customers’ wants and needs.
Six Sigma A quality management system designed to satisfy customers by achieving
quality through a systematic process of developing near-perfect products and services.
Quality management Analysis, planning, implementation and control of all activities
that consistently improve the technical quality of the firm’s production process and
products.
ISO 9000 standard Certification for production and service facilities – as determined
by the International Organization for Standardization – enabling a company to meet
high quality standards.
Price/quality ratio Measure to assess if a product offers value for money.
Warranty Written statement of how the seller will compensate a buyer for any
shortcoming in a product due to production errors or faulty materials within a certain
period after being purchased.
Guarantee The assurance that a product is as represented and will provide the
expected performance.
Customer service Every form of assistance before, during and after the purchase that
will make a product more valuable for customers and easier to buy or use.
Satisfier The features of a product that, from a customer’s point of view, significantly
improve its quality and are reasons to buy it.
Dissatisfier A product’s missing features that may be a reason for consumers not to
buy it.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Mass customization The use of flexible computer-aided manufacturing systems
allowing marketers to offer individually tailored products to a large number of
customers cost-effectively.
One-to-one marketing Customized marketing strategy to create long-term
relationships with individual customers.
Brand A name, symbol or design that a company uses to identify its products or
services and differentiate them from those of others.
Brand name Part of a brand that can be spoken, including letters, words and
numbers.
Brand mark Element of a brand that cannot be vocalized, such as McDonald’s Golden
Arches (Logo).
Trademark A distinctive sign – legally registered and protected – that a company uses
to help identify and distinguish its products.
Battle of the brands Fight between manufacturers and retail distributors for power
and control of the distribution channel.
Manufacturer brand Brand owned by the product’s maker, sold and advertised
nationwide (National brand).
Premium brand Manufacturer owned, widely available brand with the highest
perceived quality and price.
Standard brand Manufacturer owned brand with a smaller market share and
somewhat lower quality and price than a premium brand.
Distributor brand Brand that is owned and controlled by a retailer, wholesaler or
other type of reseller.
Private label Brand exclusively produced for a chain store or voluntary chain and
priced lower than other brands.
Generic brand Plainly packaged, lowest priced product, identified only by a generic
class (such as ‘tea’) or product characteristics.
Co-branding Putting two well-known brand names from different companies on a
single product, such as Gillette and Duracell.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Family brand Selling multiple products under the umbrella of a single brand name
(Umbrella brand).
Family branding strategy Strategy – common in the automobile industry – to give
products in the same product line a single brand name, making it easier to launch new
models that benefit from the brand’s reputation.
Individual brand A unique brand name for each product in a portfolio.
Benelux Trademarks Act Trademark legislation providing legal protection for brands –
through registration – against imitation by competitors.
Product design The form or structure of a product
Styling The physical appearance of a product that, from a marketing perspective,
should be both functional and attractive.
Product features Specific design characteristics that enable a product to perform
certain tasks.
Reverse engineering Disassembling a competitor’s product to analyze its components
and production process, in order to make a new product at reduced costs.
Package Wrapper or container for a product, used to protect, promote, transport and
identify the product.
Packaging One of the most noticeable product attributes that influence the buyer’s
perception and brand choice.
Packaging functions Combination of communication and commercial objectives, such
as providing product information, creating an image, product differentiation and
stimulating consumption.
Label Integral part of the package that identifies the product’s name, brand,
manufacturer, net contents, country of origin, ingredients and nutritional values.
Product information Legally required data on a package, including storage
instructions and expiration date.
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Bronis Verhage
http://www.marketingfundamentals.noordhoff.nl
ISBN: 9789001818661
© 2016 Noordhoff Uitgevers bv
Universal Product Code Numerical barcode printed on packages that can be read by
optical scanner systems and processed by computers, providing a wealth of
information. (UPC).
Brand image Consumer perception of the brand’s personality that arouses certain
feelings or emotions.
Product differentiation In the context of a product mix: Offering various products that
differ in styling, quality, price or other features from the company’s other offerings in
order to appeal to buyers looking for variety (Differentiation).
Service An intangible activity that gives users a certain level of satisfaction, but that
does not involve ownership and cannot be stored.
Services marketing Systematically stimulating sales of ‘intangible activities’ by
facilitating the exchange process between service providers and buyers.
Intangible Characteristic that potential buyers cannot physically examine, touch, or
taste a service before making a purchase decision.
Services continuum Spectrum, ranging from primarily tangible to primarily intangible
to identify a product or service based on this combination of attributes (Product-service
continuum).
Inseparability Characteristic that services are produced and received at the same time
and cannot be separated from the service provider.
Perishability Characteristic that a service cannot be stored for future use and looses
its value if not used when available.
Heterogeneity Characteristic that a service varies in quality, making it difficult to
consistently meet customer expectations.
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