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.

Osborne effect (Osborne myth)

Negative effect on sales and company’s credibility as a result of improper  pre-announcement of a new product. One of the immediate outcomes of it is that customers that might have placed orders on the current product would choose to cancel them in order to get the new version later on. This term was introduced in 1980s after the real company “Osborne Computer Corporation” went bankrupt after misjudging time period between a new product announcement and launching it actually on the market.

Trickle-down theory

Trend-setters originate from high socioeconomic levels and trend adopters who accept new movements belong to levels of lower standard status.

See also: Trickle-up theory, Trickle-across theory

Opinion leaders

Members or professionals within a particular consumer group who have significant influence on others because of their special achievements or background. Since the opinion leaders very often direct other consumers to buy and use certain products, and also certain brands, it has always been of concern for the marketers to distinguish opinion leaders in order to approach them efficiently.

Fashion cycle

Period of time during which a certain style of apparel and type of accessories in fashion industry go through certain stages of rise, peak and abandonment and after that preferences change into another fashion mode. Fashion traits first gain acceptance and after some time lose it with consumers’ needs for fresh and new methods in this field.

Trickle-up theory (Prole drift)

Consumption trends featuring movements that were initially generated and typical among members of lower social-standing levels and gradually gained acceptance by consumers from higher socioeconomic levels, for example punk style, sports apparel, jeans, etc.

See also: Trickle-down theory, Trickle-across theory

Vendor profitability analysis

Tool of statement applied to evaluate gross margin that was earned from a vendor’s merchandise by tracking down all annual sales from the previous year, including the retrace of all discounts, markups, transportation costs, etc.

Customer value model (CVM)

CVM combines qualitative with quantitative approaches to researching how customers from targeted segments on the market rank among quality, image and price of a brand. This kind of analysis weighs the significance of each of the above separately according the consumers’ expectations and should guide marketers’ through splitting their efforts efficiently before launching/ developing new products (or services) and setting sales tools.

Cash conversion cycle (CCC)

Accounting metric information for the manager within organizations that aims at measuring the time for which each investment in the production and sales process will bring cash flow from business’s customers. This metric helps keeping track on the periods of time needed to process sales of inventory, the periods of time needed to collect the receivables from customers/ clients and afforded periods of time negotiated to pay all suppliers without any penalties.

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.

Bivariate analysis

Quantitative analysis, comparing the relation between two variables that are often expressed with x/ y. The measurements of these variables under such research could be per category/ nominal terms, also intervals/ ratio… ordinal variables, others. If one of the variables is a subsequence to the other, their relation is determined by some extend of correlation and the subsequent is a dependant variable, while its cause is an independent variable.

Byline

Additional row under the titles in newspapers, online media or magazines that refers the reader to some info details like author’s name, date, resources, etc. Generally bylines are positioned just before the text of the posts/ articles, though, due to the design, they could also be placed somewhere else for the reader.

Marketing objective

Needed result to be achieved within a marketing campaign or within a period of time. Objectives are broader than goals, i.e. objectives comprise specific goals and steps for the desired effect to take place. Methods of tracking, control and evaluation of campaigns, as well as choosing most efficient marketing channels and marketing communications depend on the type of an objective that is being sought out as an outcome.

Fashion swing

Bringing back styles that where fashionable long years ago, for example long skirts, shoes with thick platforms, flares (hippie style), etc.

Opportunity cost

The value (money, time, recourses, investments) behind an asset that is due in order to obtain it. Although opportunity costs are of great economic significance, they are not subject to record in the accounting of the companies; they are being analyzed businesswise in light of project’s cost benefits.

Retail shrinkage

The lost of products from the point of purchasing from vendors by a retailer to the point of sales (POS) to buyers. This lost could be due to employees theft, shoplifting, administrative mistakes, vendor fraud or spoiling products’ packs.

Cumulative quantity discount

The type of quantity discount that is used to induce larger sales volume that is based on multiple purchases over a certain period of time. It could be offered as a discount, cash or free products.
See also: Noncumulative quantity discount

Inventory planning

In the context of merchandise management – once a retailer has set the amount of budget to be spent on buying from vendors, he has to decide what kind of items he will be offering to the customers during the planned period, for example – trendy items, new colors to an existing mix, basic stock, high- or low-priced items, etc.

Pay from scan (Consignment)

The case when a vendor retains his ownership on the stock of a retailer even with the right to set its price to the consumer. Vendor gets paid when items are sold thus reducing the risk of overstocking and unsold seasonal items.

Customer selectivity

One component of market share analysis measuring the portion of purchases by an average customer from the company under scope, compared identically to the portion of purchases from an average company. This size is being expressed into percentages.

T-test

When sample testing results cover insufficient sample, T-test is applied to study out a single average value by comparing two cases scoring the same metrics.

See also: Z-test

Desk research (Secondary research)

Generally, collecting data that already exists rather than subjecting ad-hoc research activities to specially designated project initiative. It is considered low-cost approach though it could turn a waste of time if the researcher is not experienced and knowledgeable on the objectives, exploited techniques, and processing.    Also referred to as “collateral research”, desk research could be performed internally (from the company itself as a starting point), or externally – online, screening governmental data or directly interviewing customers.

Customer relationship management (CRM)

Fundamental component of business processes within a company, involving all aspects of marketing communications, product development, and customer experience. CRM efforts focus customers in order to increase revenues, market shares and customer loyalty.

Cluster centroid

The statistic metrics represented in Cluster analysis, expressing the average values of variable characteristics of all objects or cases that belong to a particular cluster.

Diary methodology (Diaries data collection)

Diaries are often used as a method in marketing data collection surveys and they are most efficient if items to be studied are not of major significance in every day life and/or are easily forgotten by consumers. This method utilizes retrospective, i.e. the respondents are asked to point out little items or events that have occurred during a specific period within the past. Due to this method some aspects from consumer behaviors are being clearly outlined, for example - purchasing, media, travelling habits.

ACORN (A Classification Of Residential Neighborhoods)

System directory enabling quick marketing segmentation for UK (grouped  into 39 district types) and the US (39 district types). Classification is based on multiple criteria, such as average income, ownerships of home, area facilities, travel means, composition, demography, etc., etc. Segmentation is quick and easy under this directory by simply entering consumers' postcodes.

Cluster analysis (Numerical taxonomy)

Also referred to as “Classification analysis” – classifying the varied cases or objects into more simplistic groups as per their common similarities. Cluster analysis is applied by marketers mainly to determine marketing segments and consumer targets efficiently. It is also used to position products, develop new ones, determine test markets, interpret statistical data/ consumer behaviors, etc. For example, a cluster analysis research would identify distinct drinker types, such as the sociable, the status-minded, the introverted… others. Unlike factor analysis which is focused on the number of variables that are being examined, Cluster analysis diminishes them along with other cases and/ or observations in order to form simple sets of relatively homogeneous groups.

Balanced scale

In the context of market research and questionnaires, it enlists positive and negative items equally thus encouraging respondents to make a fair choice.

Business process outsourcing (BPO)

Contracting responsibilities and operations of some business functions of a company as a service to a third-party provider. BPO is being applied to successfully enhance operational flexibility of a business by transforming fixed to variable costs, focusing on core business and speeding up operational processes thus retaining entrepreneurial agility by avoiding enlarging bureaucratic clumsiness.

Value mapping

Specific analysis that focuses on the key stakeholders (the customers and the suppliers) of a business, conducted to deliver insights about strengthening of the relationships with their parties and optimizing all the costs involved. It draws up the way  to adding extra value where it would be most beneficial for the company and relevant to the market.

Z-test

A test applied by market researchers in order to compare sample results of an actual study with an initial hypothesis on those results, especially when data is on large scales or intervals.

See also: T-test

Meme theory

The word “meme” is borrowed from genetics and was introduced by the biologist Clinton Richard Dawkins in his book “The Selfish Gene” (1976) that presented a concept on how the dissemination of cultural phenomena evolve. Views, perceptions, ideas, fashion, music, catchy phrases, products and technologies are all examples of meme that spread into popular culture and human behavior analogously to genes.

Target rating points (TRPs), Gross rating points (GRPs)

TRP as a measurement in marketing is focusing on that ratio of all recipients through the whole reached audience (i.e. through the Gross rating points – GPRs) that are considered to be the “right target” for a specific product and/or service. TRPs are thus subdivisions out of GPRs. For example, an advertiser spends in a campaign using radio as a channel to reach all men in a region (GPR) while the core target for his products are men 35-55 years of age (TRP). Determining both in a right way is critical to employment of marketing channels of communication

Marketing Opportunity Analysis (MOA)

In-depth study of existing and potential opportunities on the market, focusing on competition, demand trends and peculiarities of market segments.

Retention rate metrics

In the context of marketing, Retention rate metrics are applied to index and monitor companies’ recent abilities to acquire and keep their own customers. This term is appropriate in contractual situations in which clients/ patients/ employees/ etc. decide to stay on while the period stated in the agreements runs up. In situations that are not under contract, like in purchases, catalogue sales, etc., the term “Current customers” is more appropriate instead. Retention rate is the ratio between the number of customers that choose to go on their contractual terms with a company and those whose obligations expire in the overall perspective. It could also be referred to as “Plowback ratio”.

Cluster centers (Initial clusters)

Starting technique that is used prior to a separate cluster formation – centers are picked up, usually just by good guessing or randomization and subjected to in-depth modifications afterwards, based on comparing specific features of the objects or the cases.

White papers

Informational reports provided by a company in order to highlight specifics of  its services, solutions or products; sales and marketing presentations to potential customers prior to the actual purchase, white papers may also be designated to explain some features of technologies or methods used.

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

Research and development (R&D)

Specific type of activities within a company that vary from one business sector to another. Their core models are mainly referring either to bringing new products, or gathering new knowledge. R&D is crucial in the marketing field as modern customers are being watched closely in order to analyze their needs and place the right offer so that businesses advance with sales upfront of their market competition.

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

Social Cost Benefit Analysis (SCBA)

Measuring the social impact of a private project or a state policy, i.e. how these would affect people’s lives is analyzed. Social Costs measure negative impact, while Social Benefits stand for the positive impact. SCBA focuses on factors like environmental effects, traffic, demography, i.e. aspects of no market pricing. It is typically used before launching larger project in building and construction. Sometimes SCBA may also affect projects pricing.