Ag Decision Maker

extension.iastate.edu/agdm
Product Marketing Terms File C5-14

Advertising – A paid form of communication and Brand – An identification (name, symbol, etc.) of
promotion involving a product and its attributes. a product that is unique and distinguishable from
• Advertising campaign – A marketing message(s) competitor’s products.
focused on a target audience over an extended • Brand leveraging – Using the power of an existing
period. brand name to support a company’s entry into a
• Advertising platform – The product attributes and new, but related, product category.
issues conveyed in an advertising message to the • Brand line extension – Using an established
target audience. product’s brand name to launch a new, slightly
• Advertising target market – The specific group of different item in the same product category.
individuals identified as willing and able buyers at • Brand mark – The symbol or design associated
which an advertising message is aimed. with a brand.
• Advertising theme – The central message of an • Brand name – The words or numbers associated
advertising campaign that is repeated throughout with a brand.
the campaign. • Dealer brand – A brand that is created and owned
• Cooperative advertising – Advertising (usually in- by an intermediary.
store) that is designed and paid for cooperatively • Flanker brand – A new brand introduced into
by both the marketer and retailer. the market by a company that already has an
• Selective demand advertising – Advertising in established brand in the same product category. It
which the marketer attempts to create awareness is designed to compete in the same category but
of, and provide information about, a specific target a different consumer group.
brand. • Generic name – A brand name associated with
• Slice-of-life advertising – An advertising message the type of a product rather than with a specific
that portrays consumers in situations similar to product.
their perceptions of their own lifestyles. • Manufacturer’s brand – A brand that is owned and
• Testimonial – An advertising message that is marketed by the manufacturer that produces the
presented by someone who is viewed as an expert branded product.
or user of the product. • Trademark – Legal production against copycats of
• Vertical cooperative advertising – Advertising by a brand.
marketers at different stages of the distribution Channel of distribution – A product’s trip from
system who advertise jointly. producer or manufacturer to the buyer.
Agent – An intermediary who does not take title to • Consumer – The ultimate user of a product.
merchandise but facilitates exchanges by bringing • Buyer’s remorse – The anxiety associated with a
buyers and sellers together. buyer’s perception that they made a poor purchase
• Commission merchant – An agent that sells for decision.
manufacturers. • Consumer market – A market dominated as
• Manufacturer’s agent – An independent consumers as buyers.
sales representative who works for several • Early buyers – Consumers who look for new
manufacturers of related but non-competing products or product attributes and often buy a
product lines. product early in its life cycle.
• Selling agent – An individual who is responsible • Early majority – Consumers who watch early
for all of the marketing activities for a buyer’s response to new products before buying.
manufacturer. • Laggards – Consumers who are strongly oriented
toward existing products and are the last buyers
of a new product.
Reviewed September 2021
Page 2 Product Marketing Terms

Coupon – A certificate that entitles a consumer to a • Market breakdown technique – The sales forecast
price reduction or a cash refund. for a large unit is divided into forecasts for smaller
units.
Demand – A schedule of the amount of a product that • Market buildup technique – Forecast information
will be purchased at various prices. on market segments is aggregated to arrive at a
• Derived demand – A demand that is predicated on total sales forecast.
another demand. For example, the demand for • Market share analysis – The sales forecast for
cattle by meat packers is derived from the demand the firm is based on the forecast for the industry
for beef by consumers. (based on assumption of market share).
• Effective demand – The combination of the desire • Scenario analysis – A description of future
to buy a product and the financial ability to buy outcomes is developed based on probabilities of
the product. occurrence and cause-and-effect relationships.
• Elastic demand – When a percentage change in • Simple trend analysis – Historical data is used to
price results in a greater percentage change in project future trends.
quantity demanded. Income – Money received in return for labor or
• Inelastic demand – When a percentage change in services provided, sale of assets and return on
price results in a smaller percentage change in investments.
quantity demanded.
• Joint demand – When the demand for two • Discretionary income – The amount of disposable
different products are complementary. income a consumer has remaining after essentials
• Selective demand – Demand for a particular such as food, shelter and clothing are purchased.
product brand. • Disposable income – The amount of after-tax
• Unitary demand – When a percentage change in income a consumer has available for spending.
price results in the same percentage change in Intermediary – An independent or corporate-owned
quantity demanded. business that helps move products from the producer
Discount – A deduction from the list price in the form to the ultimate consumer.
of cash or something else of value. • Intermediate market – A set of wholesalers and
• Cash discount – A discount offered to buyers who retailers that buy goods from others and re-sells
pay for the product within a stated period. them.
• Seasonal discount – A discount offered to • Merchant middleman – An intermediary that takes
customers who purchase a product during a title to the products it distributes.
season of the year when demand for the product Label – A tag or part of a package that provides
is low. information about a product.
• Quantity discount – A discount offered to buyers • Grade label – Product quality is identified by a
who purchase larger than normal quantities of the number, word or letter.
product. • Descriptive label – Describes the important
Forecasting – To predict the quantity of a product attributes of a product.
that will be sold at various times in the future. • Informative label – Explains the use or preparation
• Barometric techniques – Using the analyses of past of a product.
trends to predict the future. • Open dating – Provides the expected shelf life of a
• Delphi technique – A panel of experts is asked product.
to assign rankings and probabilities to various • Nutritional labeling – Describes the ingredients
factors that may influence future events. of a food product (i.e., amounts of protein, fat,
carbohydrates, calories, etc.)
Product Marketing Terms Page 3

Market – A group of individuals with unsatisfied • Consumer panel – A group of consumers who
wants and needs who are willing and able buyers. It provide information about a product and its
can be defined as narrowly as a specific place where attributes.
buying and selling takes place or as broadly as the • Demographics – Statistics about population
demand for a product. (gender, age, marital status, birthrate, mortality
• Contestable markets – Rivalry among competitors rate, education, income and occupation).
keeps profits to a competitive level. • Observational approach – Observing people’s
• Horizontal market – Includes a broad spectrum of behavior and recording these observations.
industries. • Secondary source – Published data that has been
• Industrial market – Consists of firms that engage in collected by a public or private sector organization
the manufacture of products. and provided (published) to users.
• Institutional market – Not-for-profit organizations • Test-marketing – Introducing a small amount of a
that buy products for use in achieving a particular new product into a market to identify consumer
goal or mission. acceptance.
• Market segment – A portion of a large market • Primary data – Data collected from the actual
group of customers within a broader market who market (surveys, panels, interviews, etc.)
possess a common set of characteristics. A group Marketing strategy – Marketing approach or method
of buyers within a market who have similar wants used to achieve a marketing goal.
and needs. • Differentiated marketing – Where a broad market
• Market share – The number of units of a product is segmented and a separate marketing program is
(or their dollar value) expressed as a percentage of designed for each market segment.
the total number of units sold by all competitors • Industrial marketing – Designing a product and its
in a given market. The percentage of the total attributes for industrial customers.
amount of product sold in a market that is sold by • Market aggregation – A single marketing program
an individual company. focuses on all potential consumers.
• Market structure – The number and size • Market atomization – Treating each individual
distribution of firms in a market. consumer as a unique market segment.
• Marketing audit – A systematic and periodic • Positioning – Communicating a distinct place for a
examination of an organization’s marketing product or a brand in the minds of consumers.
environment, including its goals, strategies and • Product differentiation – Using promotion and
activities. other marketing activities to convince consumers
• Marketing information system – A set of that the product is different from, or better than,
procedures and methods for the regular planned those of competitors.
collection, analysis, and presentation of marketing • Social media marketing – The use of social media
information. or social networks to market a product.
• Marketing intelligence system – Activities • Target marketing – A market segment is identified
for monitoring the external environment for and marketing activities are focused on the
emerging trends. segment.
• Marketing mix – Focusing on product, price, place • Trading down – When a company known for
and promotion to create a successful marketing selling high-priced products offers lower-priced
program (the four P’s of marketing). products for sale.
Marketing research – A systematic and objective • Trading up – When a company known for selling
approach to developing and providing information low-priced products offers higher-priced products
for decision making regarding a specific marketing for sale.
problem. Packaging – Designing and producing the container
• Causal studies – Research where cause-and-effect or wrapper for a product.
relationships are explored.
Page 4 Product Marketing Terms

Personal selling – Person-to-person communication • Penetration pricing – The price is set low in order
in which the receiver provides immediate feedback to generate the greatest possible penetration of the
on the source’s message. market (largest market share).
• Predatory pricing – Aggressive pricing against
Purchasing – To obtain a product in exchange for a rival with the intent of driving them out of
money or its equivalent. business.
• Just-in-time purchasing – Parts or ingredients are • Price lining – Prices are set at various levels so
provided just before production in order to reduce that products are sorted into different categories
inventory costs. or product lines based on product attributes.
• Price-off – A price reduction used to entice
Price – The amount of money asked in exchange for
customers to try a product or expand usage of it.
something else (e.g. product).
• Psychological pricing – A product is priced to
• Even pricing – A form of psychological pricing in psychologically appeal to consumers.
which the price is an even number. • Skimming – The price is set high to skim off those
• Limit pricing – The practice where a firm can buyers in the market who are willing to pay a high
discourage entry into the industry by charging a price for the product.
low price.
Pricing strategies (cost based) – Approaches to
• List price – The initial price of a product. Also
setting prices based on the cost of producing the
termed the base price.
product.
• Transfer price – The price at which a good or
resource is transferred from one enterprise • Break-even pricing – Setting the price of a product
(strategic business unit) to another within the based on the cost of producing the product so that
firm. Market price is usually used as the basis for the seller will break-even.
determining transfer price. • Cost-plus pricing – An extension of break-even
pricing where the price is based on the cost of
Price fixing – When several firms in an industry
producing the product plus a profit margin.
collectively establish the price for a product.
• One-price policy – The same price is charged to all
• Horizontal price fixing – Marketers of the same or customers who purchase the same quantity of the
similar products collectively decide to set their product under the same conditions.
price at the same level. • Target return pricing – The price is based on
• Vertical price fixing – Marketers at different levels a specific rate of return on the capital used in
of the distribution system collectively set the retail producing and marketing the product.
price. • Unit pricing – Pricing that is based on a standard
Pricing strategies (market based) – Approaches to measure of quantity.
setting prices based on the willingness of the buyer to Pricing strategies (geography based) – Approaches to
purchase the product. setting price based on the location and transportation
• Bait-and-switch pricing – A product is priced low costs associated with delivering the product to the
to lure customers into the store. Then an attempt buyer.
is made to persuade them to buy a more expensive • Basing-point pricing – One or more geographic
product. locations are established from which the rate that
• Customary pricing – A traditional price level is a buyer is charged is calculated.
used. • Freight absorption – The price includes the same
• Flexible price policy – The product is sold to freight rate as the freight rate of the competitor
different customers at different prices. that is located nearest to the buyer.
• Loss leader – A product that is priced below its • Uniform delivered pricing – The same price level is
normal price in order to attract customers to a quoted to all buyers regardless of their location.
store.
Product Marketing Terms Page 5

• Uniform FOB (free on board) pricing – A price based • Tying agreement – When the producer forces
on pickup at the seller’s loading dock. The buyer the dealer to buy additional products in order to
absorbs any freight charges. secure one highly desired product.
• Zone pricing – The geographic market area is Promotion – Providing and communicating favorable
divided into zones. Every buyer in a zone is information about a product to potential buyers.
charged the base price plus the standard freight
rate for that zone. • Advertising – A paid form of communication and
promotion involving a product and its attributes.
Product – Something produced that is sold to willing • Point-of-purchase promotion – Locating attention-
buyers. getting information at the place of purchase.
• Convenience products – Inexpensive and • Promotional discount – A discount is offered
frequently purchased products that consumers to intermediaries for carrying out promotional
want to buy with the least possible effort. activities.
• Product life cycle – A series of stages in the life of • Sales promotion – Techniques used to stimulate
a product that begins with commercialization and current sales.
ends with removal from the market. • Publicity – Product information is communicated
• Product line – A group of products that are similar through mass media but not paid for.
in attributes. • Public relations – Activities to communicate a
• Product mix – The range of products that a favorable image of a company or its product to
company offers to its customers. promote goodwill.
• Product portfolio – A strategic view of a company • Pull strategy – A promotional strategy intended
from the perspective of its range of products and to stimulate demand which will pull products
the stage of each product in its life cycle. through the distribution system.
• Product re-launch – Finding new markets and new • Pulsing strategy – An on-going marketing
product uses to reinvigorate product sales. campaign that is combined with short bursts of
• Rollout – Launching a new product in a series of heavy advertising.
geographic areas over an extended period of time. • Push strategy – A promotional strategy intended
• Specialty products – Products designed for unique to push products through the distribution system
markets. and present them to consumers.
Product distribution – The process of providing Quality control – The traditional approach to quality
a product when and where it is desired by the in which problems are detected after manufacturing
consumer. and an effort is made to remove sub-standard
• Exclusive distribution – Where the number products before shipping to customers.
of intermediaries is limited to one for each Retailing – All activities used to sell products to
geographic territory. ultimate consumers.
• Extensive distribution – A distribution program
that seeks the widest possible geographic • Specialty-line retailer – A limited-line retailer that
coverage. carries only one or two product lines, but offers
• Industrial distributor – An independently owned substantial depth and expertise in those lines.
operation that buys, stocks and sells industrial Selling – Assisting or persuading a prospective
products. customer to buy a product.
• Selective distribution – Where there are a limited
• Prospecting – Seeking and identifying potential
set of outlets in a given territory.
buyers.
• Physical distribution – All the activities of
distribution from the point of procurement to the Transaction – An exchange between two or more
ultimate consumer. parties.
Page 6 Product Marketing Terms

Value proposition – How a product will provide

value to its customers. Why a product will provide
sufficient value to its customers to be worth its price.

Wholesaling – All of the activities involved in selling

products to retailers: to industrial, institutional, farm
and professional businesses; or to other types of
wholesaling intermediaries.
• Broker – A wholesaler whose primary purpose
is to supply market information and establish
contacts to facilitate sales for clients.
• Full-service wholesaler – A wholesaler who
performs a full range of services for its customers.
• Limited-service wholesaler – A wholesaler who
performs a limited number of services for its
customers.
• Mail-order wholesaler – A limited-service
wholesaler that sells by means of catalogs.
• Single-line wholesaler – A full-service wholesaler
that carries only one or two product lines.
• Specialty-line wholesaler – A full-service
wholesaler that carries a limited number of
products for customers with specialized needs.
• Manufacturer’s sales branch – A wholesaling
establishment that is owned and operated by a
manufacturer separately from its factories.
• Merchant wholesaler – A wholesaling business
that is independently owned and takes title to the
products it sells.
• Truck wholesaler – A limited-service wholesaler
that specializes in selling and delivery services.
• Wholesaler – An intermediary that distributes
products primarily to commercial or professional
users.

This institution is an equal opportunity Prepared by Don Hofstrand

provider. For the full non-discrimination retired extension value added
statement or accommodation inquiries, go to agriculture specialist
www.extension.iastate.edu/diversity/ext. www.extension.iastate.edu/agdm