A pricing strategy where companies charge the maximum amount customers are willing to pay.
The act of noticing an advertisement or commercial; a component of information or perceptual processing. Given that consumers typically focus on items relevant to their needs, attitudes, or beliefs, attention is inherently selective. There have been instances in advertising history where attention was captured by the advertisement itself rather than the product being promoted.
Mental position or emotional feelings about products, services, companies, ideas, issues, or institutions. Attitudes are shaped by demographics, social values, and personality.
B2C Internet Marketing involves direct interactions and transactions between businesses and consumers through online platforms, exemplified by companies like Amazon.com.
A bargain hunter can either be a consumer highly sensitive to prices or an investor seeking undervalued stocks with the hope for price appreciation.
Big-ticket items refer to retail products that carry a substantial size and price, often requiring customers to purchase them on credit. These items typically include large appliances and automobiles.
Brand association refers to the degree to which a particular brand is connected with the general product category in the minds of consumers. It often leads to consumers referring to the product by brand name rather than its generic name.
Brand Development is a measure of the infiltration of a product's sales, usually per thousand population. It indicates the percentage of market penetration or how well a brand is doing in a specific region.
Qualities that consumers associate with a specific brand, expressed in terms of human behavior and desires, which relate to the price, quality, and situational use of the brand.
Brand loyalty refers to the degree to which a consumer consistently purchases a specific brand over other brands. It is influenced by several factors such as quality, price, consumer attitudes, family or peer pressure, and relationships with salespeople.
Bundling is a marketing strategy that combines multiple products or services into a single package offered at a more competitive price.
Buyer behavior is a field of study crucial for understanding how buyers make their purchase decisions, influenced by personality, sociodemographic characteristics, and lifestyle. It plays an essential role in modern marketing strategies.
Cognitive dissonance is a psychological theory that explains the mental discomfort experienced by a person who holds two or more contradictory beliefs, values, or attitudes, especially when their behaviors contradict these beliefs.
Comparison Shopping is the process whereby a consumer gathers as much information as possible about particular products and services for comparison before purchasing them. It involves visiting stores, comparing advertisements, and conducting related research.
Complementary goods are products that are often consumed together, where the demand for one increases when the price of the other decreases, and vice versa.
Consumer behavior involves understanding how and why individuals make purchasing decisions, influenced by internal and interpersonal factors. Marketers use this knowledge to create effective stimuli that prompt sales by aligning with customer personalities and needs.
Consumer sovereignty refers to the ability of consumers to obtain exactly what they want by paying a price that is satisfactory to suppliers. It is considered a prerequisite of properly functioning markets. However, sovereignty can be limited by factors such as lack of information, constraints on prices and supplies, and third-party influences on purchasing decisions.
Consumer surplus is an economic concept that represents the excess value a consumer derives from consuming goods over the amount paid for those goods.
Convenience food refers to processed food products and prepared meals designed for fast and easy consumption, appealing to individuals who lack the desire or time to cook.
Frequently purchased consumer items that provide convenience in terms of time savings and utilitarianism. Examples include hair spray, shaving cream, and tissues.
A customer profile is a detailed description of a specific customer group or type, typically based on various demographic, psychographic, and/or geographic characteristics. It is used by businesses to understand and target their audience more effectively.
Demand represents the economic expression of the desire and the ability to pay for goods and services. It is distinct from mere need or desire as it encapsulates the willingness to exchange value for varying amounts of goods or services, depending on the price asked.
The price that consumers are willing to pay in the market for a given quantity of output. It is derived from the demand schedule or demand curve.
A demand schedule is a table that showcases the relationship between the price of a good or service and the quantity demanded at different price levels. It is a fundamental concept in economics that helps illustrate consumer behavior and market dynamics.
A research technique conducted in person in the field by a trained interviewer to understand consumer motivations in the purchase decision process.
DINKs is an acronym for Dual-Income, No Kids, referring to a family unit where there are two incomes and no children. It often includes couples who collectively earn higher discretionary incomes.
Direct-action advertising, also known as direct-response advertising, aims to elicit an immediate response or action from the target audience, such as making a purchase, signing up for a newsletter, or visiting a website.
Discretionary income is the amount of spendable income remaining after the purchase of physical necessities, such as food, clothing, and shelter, as well as the payment of taxes. Marketers of goods other than necessities compete for the consumer's discretionary dollars by appealing to various psychological needs, as distinguished from physical needs.
A fundamental characteristic of the demand for most goods and services, resulting in lower quantities demanded as the price increases, producing a curve that slopes downward on a graph.
Elastic demand (supply) refers to the sensitivity of the quantity demanded (supplied) of a good or service to changes in its price. It is a measure of how consumer or producer behavior changes with price fluctuations.
The Family Life Cycle describes various stages in family life resulting in different buying patterns. It accounts for changes in family structure and behavior accompanying the progression from birth to death.
Fashion refers to the style of conduct or dress that is being followed by individuals at a particular time. It encompasses clothing, accessories, lifestyle, and behavior trends that evolve seasonally, based on consumer tastes, cultural influences, and social dynamics.
A focus group is a form of market research where a small group of people, usually 5-10, is asked about their attitudes toward a product, concept, advertisement, idea, or packaging. This detailed feedback helps in improving or tailoring products to market needs.
A broad group of buyers with approximately the same general needs, who can choose from different sellers offering varying ways to satisfy those needs.
Hidden inflation refers to a subtle price increase implemented by offering a smaller quantity or poorer quality of a product or service with no change in its original price.
House-to-House Sampling is a marketing strategy involving the direct distribution of product samples to individual homes to encourage trial and eventual purchase, often aiming to stimulate word-of-mouth promotional effects.
House-to-house selling, often referred to as door-to-door selling, is a direct sales technique where sales representatives visit potential customers at their homes, either with or without an appointment, to pitch products or services.
In economics, the income effect refers to the change in purchasing power and quantity demanded of goods due to a change in consumers' real income resulting from a price change.
Income Elasticity of Demand measures the extent to which the demand for a good is affected by a change in income. High elasticity indicates luxury goods, while low elasticity points to necessities.
Income groups are collections of consumers or other entities that are categorized based on their incomes. This classification allows for the analysis of economic behaviors and the targeting of policies or products to specific income segments.
An inferior good is a type of product for which demand decreases as the income of the consumers rises, leading to a greater consumption of more expensive alternatives.
Leader pricing is a strategic reduction in the price of a high-demand product to attract customers to a retail store or to stimulate a direct-mail purchase, potentially inspiring additional full-price purchases. Also known as loss leader pricing.
A mall is a public area that connects individual stores within a shopping center, generally enclosed for a convenient and climate-controlled shopping experience.
The additional usefulness or satisfaction a consumer receives from the consumption of one more unit of a good.
A comprehensive analysis of market profile, encompassing the demographic characteristics of potential buyers for a product or product line.
A market segment is one of two or more subgroups within a target market. Different marketing mix strategies can be developed to reach each of the target market segments.
Market segmentation is the process of dividing a broad consumer or business market, normally consisting of existing and potential customers, into sub-groups of consumers (known as segments) based on some type of shared characteristics. The goal is to identify high-yield segments — that is, those segments that are likely to be the most profitable or that have growth potential — so that these can be targeted with tailored marketing strategies.
A market test is the exposure of goods or services to a small sample of the entire market to test various marketing strategies. This helps in evaluating the potential demand for a product before a full-scale launch.
Marketing research involves the systematic gathering, recording, and analyzing of data related to the movement of goods and services from producer to consumer. It covers market analysis, product research, and consumer research.
Motivational research encompasses psychological studies aimed at understanding the underlying motivations behind consumer purchases and responses to advertising appeals.
A normal good is a type of good for which demand increases as consumer income increases, holding all other factors constant. This inverse relationship between income and demand exemplifies how purchasing power influences consumer behavior.
Off-price stores are retail stores that offer merchandise at prices lower than traditional retail stores. These stores acquire out-of-season products and distressed merchandise from other retailers and manufacturers.
A one-time buyer is a customer who has made only one purchase from a retailer or service provider and has not returned for subsequent transactions. Understanding one-time buyers is crucial for businesses aiming to increase customer retention and repeat sales.
An opinion leader is an individual whose ideas and behavior serve as a model to others, influencing the attitudes and behavior changes of their followers.
Persuasion is the act of inducing attitude changes and influencing a target market to action, by appealing to reason or emotion. It is a primary objective of modern advertising aimed at creating effective advertisements using various persuasive elements.
Promotional advertising aimed at encouraging product sampling and brand switching to influence consumer behavior and increase market share.
Positioning refers to the strategic process by which a brand or product is marketed in a specific manner in order to achieve a unique, desired perception in the target audience’s mind, relative to competitors.
Prestige pricing is a pricing strategy that entails setting prices at a higher level to reflect the assumption that consumers associate higher prices with higher quality. This strategy targets consumers who value premium products and are willing to pay more for perceived superior quality.
Price inelasticity refers to a situation in which the demand for a product or service is not significantly affected by changes in its price. This phenomenon occurs when consumers have few or no substitutes for the product or when it represents a small portion of their budget.
Pricey refers to products or services offered at prices at or near the top of what the market will bear, or in investment terms, offering or bidding prices that are significantly above or below the current market value.
Primary demand refers to the total market demand by consumers for non-capital goods rather than specific brands, focusing on the intrinsic need for a product category as a whole.
Psychographics involves determining market segmentation based on consumer psychological profiles. It encompasses various psychological attributes such as interests, values, attitudes, and lifestyle preferences, providing a deeper understanding of consumer behavior.
Quantity demanded refers to the specific amount of a particular good that buyers are willing to purchase in the market at a given price level. It is a key concept in economics that helps in understanding the dynamics of supply and demand.
Reduced rates refer to prices that are lower than the standard or basic rate, frequently used as an incentive to attract new customers or through special allowances and discounts.
A sample buyer is an individual who purchases or obtains a product sample, often at a special introductory rate or for free, to evaluate its quality or efficacy before committing to a full-sized purchase.
Sampling is a fundamental aspect of fields like marketing research and sales promotion, facilitating the study and testing of small groups to draw conclusions or stimulate usage in larger populations cost-effectively.
Sex stereotyping involves attributing specific traits, behaviors, abilities, or roles to individuals based on their sex or gender. This phenomenon can manifest in various aspects of life, such as employment, credit ratings, consumer behavior, and more. It is a form of prejudice that places expectations and limitations on individuals simply because of their sex, often resulting in discrimination and unequal treatment.
Consumer products that require considerable time, concentration, and research to make an informed judgment about their relative merits and price.
An expression frequently used by retailers to comply with federal regulations when advertising special sales, often highlighting strikingly low prices to encourage customer perception of value.
Subliminal advertising refers to advertising messages that are presented below the threshold of consciousness, making them undetectable to the conscious mind but able to influence subconscious behavior.
The substitution effect in economics refers to the change in consumption patterns due to a change in the relative prices of goods. When the price of a good decreases, consumers are more likely to substitute it for other goods, increasing their consumption of the now cheaper good. Conversely, when the price of a good increases, consumers will tend to switch to substitutes that have become relatively cheaper.
The specific group of consumers at which a company aims its products and services, generally defined by demographic and psychographic characteristics such as age, sex, education, income, and buying habits.
The Tax Wedge represents the economic effect of taxes which can potentially inhibit specific results by creating a wedge between the economic activities of producers and consumers.
Test marketing is a form of marketing that occurs during the product-testing step of the overall product development process, where selected areas are chosen for the actual introduction of the product. Sales and consumer reactions are monitored for an overall evaluation.
A soft-offer technique that allows a first-time buyer to examine, use, or test a product for a short period of time before deciding to purchase or return it; also called free trial offer, free examination offer.
