Talking the Talk: the Marketing Lexicon

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Like any specialty, marketing has a language of its own. Recognizing some important terms and dropping them into conversations when talking to your marketing consultant would help us solve your business challenges. Below are a few of the more common, non-obvious, and important definitions.

80/20 principle — 80% of business (or profit) comes from the top 20 percent of customers.

AIDA model — all promotional activities should create one or more of these four: Attention, Interest, Desire, and Action.

Commodity — an item with features indistinguishable from its competitors.

Demand curve — the relationship between price and quantity; as the former goes up; the latter goes down (compare to “supply curve”).

Demographics — the statistical data of a given population (compare to “psychographics”).

Early adopters — customers who will take a chance on a new product. Often influential trendsetters. (Sometimes called “pioneer buyers.”)

Elasticity/inelasticity — when small changes significantly affect demand, the product/market is said to be elastic; if they won’t, it is said to be inelastic.

Equilibrium price — the going market price.

Facilitators — a catch-all term for advertising agencies, design firms, product testing labs, wholesalers, retailers, etc.

Generic market — customers with only broadly similar needs to which products can be easily substituted (compare to “product market”).

Law of diminishing demand — as the price is raised, demand falls. The Law of increasing demand is the opposite.

Marketing concept — all activities — product research to after-sale service — are focused totally on customers’ wishes (compare to “production concept”).

Micromarketing — catering to the specific needs of small populations. (Sometimes called “niche marketing,” or “segmentation marketing.”)

MSA (Metropolitan Statistical Area) — an economic area or unit with a reasonably large city at its center.

PLC (Product Life Cycle) — Expenses are usually highest right after introduction; profits highest at maturity.

Positioning — placing a product of service in its best light for selling.

Prestige pricing — setting a high price to imply high quality or status.

Primary data — denotes newly discovered information (compare to “secondary data”).

Primary demand — is for a product category, not a specific brand.

Product market — customers with very specific needs and little latitude for substitutions (compare to “generic market”). Production concept/orientation — making products without prior marketing input.

Psychographics — the lifestyle data of individuals. Normally comprised of Activities, Interests, and Opinions (AIO) (compare to “demographics”).

Pulsing — a strategically uneven distribution of promotional activity. (Sometimes called “flighting.”)

Pure market/competition — a situation where there are similar products, knowledgeable customers, and affordable prices.

Sales promotion — an activity that stimulates sales at the point-of-purchase.

Scale economies — the more products produced, the more prices will drop.

Secondary data — a research term that denotes already published information (compared to “primary data”).

Segmentation — breaking an activity/product down into several relevant categories.

SKU — Stock Keeping Unit, the specific inventory number assigned to each product by a retailer.

Stimulus-response model — circumstances in which individuals respond in the same way to stimuli.

Supply curve — what suppliers are willing to supply at certain prices (see “demand curve”).

Threshold — the point at which an effort becomes productive.

Turn rate — how long an item sits on a retailer’s shelf—a key to profitability in high-volume, low-margin (profit) stores.

Utility — the power to satisfy customer needs.

Written By Andy Brenits

Andy Brenits is Principal of Brenits Creative, and President of the Board of Directors of InSource. An experienced mentor and teacher, Andy has taught undergraduate and graduate classes at Pratt Institute, Rowan University, The Art Institute of Phoenix, Sessions.edu, and most recently at Columbia University. When he isn’t proactively managing his to-do list, he’s busy cooking and taking photographs of his cactus flowers and family.

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