Glossary: The role of marketing

Glossary of key terms: Unit 4.1 The role of marketing

Commercial marketing

Marketing strategies that focus on meeting the demands (needs and wants) of customers in a profitable way. The main purpose is to generate benefits for the owners of the business, such as shareholders.

For-profit organization

A commercial organization sells goods and/or services in order to earn a profit for its owners.

Goods

Tangible (physical) products, such as tennis balls, cakes, shoes and cars.

Market

The collective term for the buyers and sellers of a particular product.

Market growth

The increase in the size of a market. It is usually expressed as the percentage increase in the market size over a given period of time.

Market leader

Refers to the firm with the largest market share in the industry.

Market orientation

An approach to marketing that focuses on meeting the specific demands (desires and needs) of customers and potential customers.

Market share

A measure of the size of a business in comparison to others in the same industry, by calculating its proportion of the total value of sales revenue in the industry.

Market size

The number of people in a certain market who are potential customers of a product or service.

Marketing

The business function of determining the goods and services required to meet the needs and wants of customers in a sustainable way.

Marketing objectives

The targets of the marketing department within an organization, in order to help achieve the overall objectives of the business.

Mass markets

Industries that buy and sell mass markets products, catering for a broad range of target markets, e.g. bottled water or breakfast cereal.

Niche markets

Industries that buy and sell highly specialised products to cater for a small and select target market, e.g. snowboarders.

Non-profit organization (NPO)

A business that does not primarily aim to earn a profit but to serve a purpose beyond the organization itself, for the betterment society as a whole.

People

The employees who deliver the customer service element of the extended marketing mix.

Physical evidence

The observable and tangible aspects of a service, e.g. in a hotel, this could include the lighting, ambience, cleanliness, aroma, presentation of hotel staff, and the physical size of the building.

Place

Distribution channels that enable customers to conveniently buy the product, such as wholesalers, retailers, agents or vending machines.

Price

The amount paid for a particular good or service. Pricing decisions must entice customers, yet allow the firm to be profitable.

Process

As part of the extended marketing mix (for services) this refers to the way that a service is provided, e.g. payment systems, waiting times and queueing systems, after-sales care, and methods of delivery.

Product

A tangible good or an intangible service that satisfies the needs or wants of the customer.

Product orientation

An approach to marketing that focuses on making products a business knows how to make well, rather than primarily concentrating on the needs and desires of potential customers.

Promotion

Communicating relevant product information to inform and persuade customers to buy the good or service.

Services

Intangible (non-physical) products, such as taxi rides, haircuts, visits to the cinema or theatre, and restaurants.

Social marketing

Marketing activities that aim to influence or change people’s attitudes and behaviour for the good of society as a whole, rather than primarily to make a profit.

Target markets

The group or groups of customers that businesses aim their products at, e.g. females, children, high-income earners or a particular ethnic group of customers.

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