Design and Marketing Dictionary

Showing posts with label Product. Show all posts

Endorsed brands (Sub-brands)

Product or service brand name dominated by the family major brand, i.e. Nestle KitKat. This support by an “umbrella” brand name adds credibility and value.

The distinction of value and status that a brand carries within its category. This positioning ensures that customers and prospects from the brand’s target market can distinguish it from its competitors. The successful strategy for Brand positioning should involve varied and well studied elements, integrated in accordance with the image of the brand and the company’s business objectives.

See also: Brand competition, Product positioning

Royalty revenue

Payments owed by users of intellectual property to the legal owner of it. Patented products, copyrighted works and franchises are usually explicitly subjected to royalties. Contracts could be negotiated into various terms and conditions though it is common that Royalty revenues are agreed based on a certain percentage of income that is obtained using the given property.

See also: Licensing, Super distribution, Stock music, Needledrop

Brand licensing

Indirect marketing technique – a contract between an owner of a brand (licensor) and a company or an organization that markets certain product and/or service (licensee). The licensor extends his brand presence or obtains fixed royalty revenues while Licensee’s party is enabled to employ the associations with the brand (Brand associations) for his own purposes, accelerating reach of consumer segments efficiently.

Brand attributes (Brand associations)

Rational and/or emotional associations entailed to a brand by its customers and potential buyers. They can be favourable or unfavorable; tangible or intangible; positive or negative and also can have varying extends of relevance and significance within the different consumer groups and customer segments. Brand attributes originate from customer experiences and should correspond to the specifics of brand positioning and differentiation in a category.

See also: Brand pyramid, Brand architecture, Brand equity

Counterfeit goods (Fake goods)

Counterfeit goods are products offered to the market from a manufacturer under the brand name of another company without the permission of the original owners. Counterfeit goods could carry fully identical or copied with indistinguishable differences trademarks that belong to the original products. Their quality is always poor. The practice of producing and selling Counterfeit goods is illegal and punishable by criminal and civil laws. Depending on the type of product put in this vicious practice, counterfeiting could be highly harmful to consumers (i.e. counterfeit baby food, medications, nutrients, cosmetics). It also damages brand owners’ reputation, retailers of the original products as well as local economies with loss of custom tax and duties.

Commoditization

Pricing strategy seeking to deploy standard and cheap technology of production, thus diminishing the differentiation between the manufactured goods. In such situation consumers loose motivation to pay premiums on quality brands since they are offered only look-a-like products and are left to make their choices only on the price.

Soft goods (Consumable goods)

Non-durable goods completely consumed out in one’s usage over some period of time, usually defined to span for less than 3 years. Besides specific usage, soft goods move faster on the market than hard goods.

Hard goods (Durable goods)

Hard goods feature longer periods of successive purchases. Unlike soft goods, they do not completely wear out and could be used longer than 3 years. Durable stuff at home include furniture, kitchen appliances, family car while the soft is represented by personal care cosmetics, detergents, gasoline, etc.

Product alliance (Service alliance)

Strategic partnership between two/ several companies that may be motivated by various reasons (lower production costs/ marketing costs). By virtue of such alliance two or more business entities agree to act jointly on the market for their new or existing products (or services)

Product development prescreen

One of the first initial steps from product development processing after the idea generation whose purpose is to preliminary evaluate market performance, to test, and also to analyze new product’s initial concept.

Product/ market matrix (Ansoff matrix)

Diversion management tool used to properly link company’s marketing strategy with its strategic directions in general in order to achieve business growth. Its matrix is simple, with four quadrants, designated to draw out current and new product opportunities, correlated to current/ new markets, respectively. This strategic management instrument is also known after the name of Igor Ansoff who introduced it in the late 1950s in his Harvard business reviews.

Product diversification

Strategic expansion of existing products through exploiting additional market potential. Diversification is achieved by entering additional market and/or by strategizing pricing. Very often products are also being improved into their new versions and placed on new markets and/ or on new price levels.

Product use test

Evaluation step at processing product development that involves delivering the new product to potential consumers or other businesses from the reference market groups, asking them to use it for a certain period and give their opinion on the new product in return. The feedback of the test is aimed at the verification of the product’s attributes in line with satisfying consumer needs and consumer target groups.

Actual product

Unlike augmented and core levels of a product, the actual-part of a product represents its physical and tangible characteristics – according to Three-level Products theory. Actual-product aspects include design, brand, quality segment, packaging.

See also: Augmented product, Core product

Augmented product

According to Three-level Products theory, Augmented product’s dimension holds some appealing add-on values at the last Level 3 – the products features, patterned after the values at Level 1 (Core product) and at Level 2 (Actual product). It usually comprises non-physical benefits which may be free of charge or not included, such as warranties, post-purchase service, free assembly and/or delivery, etc. Market competition mechanisms at this level often lead to affirming third-levels benefits as something that is always given and inclusive, i.e. customers expect their new cars coming with a free service at all times.

See also: Core product, Actual product

Core product

The basic needs that a product or service satisfy when purchased. Benefits at this level are not tangible. With the examples of a car, the core products are comfort, convenience and flexibility i.e. having the ease at going where you want and when you want to.

See also: Augmented product, Actual product

Deficient products

Products of imperfect quality, ensuring continuous purchases throughout time. Otherwise many of companies would close up as soon as every customer of a product is supplied for lifetime.

Productivity enhancements

"Productivity" is determined by efficiency of production, i.e. it measures output (revenues) as per unit of input (investments). Most often productivity enhancements are derived from technology developments, logistic improvements and increased skill of labor.

Manufacturer’s image

Consumer's perception on producer's identity, who offers some kind of products on the market; people's impression of a business when hearing company's name. It may consist of a huge variety of advertisements, public events, facts, stories, etc. - everything associated with the company behind the products as well as products features, too.