AIPMM Certification Examination

Glossary of Terms:

1. Product and Service Definitions

a. Product Anything that can be offered to a market for attention, acquisition, use, or
consumption and that might satisfy a want or need. Includes physical objects, services,
events, persons, places, organizations, ideas, or some combination thereof.
b. Augmented product A product enhanced by the addition of related services and benefits,
e.g. installation, warranty, maintenance and repair services, etc.
c. Actual product The tangible features of a product, including styling, quality level, features,
brand name and packaging; also called the Formal Product or Tangible Product.
d. Core product The intangible benefit or service offered by a product; for example, the core
product offered to a purchaser of shampoo is clean, healthy hair.
e. Service A form of product that consists of activities, benefits, or satisfactions offered for sale
that are essentially intangible and do not result in the ownership of anything. Examples:
banking, hotel, airline, retail, tax preparation, home repairs. Services have the following four
qualities:
Intangibility Incapable of being touched or seen
Inseparability Not capable of being separated
Variability Designed so that an attribute or property can be varied
Perishability Easily undergo a transformation or a change of position or action

2. Product Types

a. Consumer Products Products and services bought by final consumers for personal
consumption.
b. Convenience Products Purchased frequently & immediately.
c. Low priced Mass advertising. Many purchase locations Examples: candy, soda,
newspapers.
d. Shopping Products Bought less frequently; Higher price; Fewer purchase locations;
Comparison shop. Examples: furniture, clothing, cars, appliances.
e. Specialty Products Special purchase efforts High price Unique characteristics Brand
identification Few purchase locations Examples Lamborghini, Rolex Watch.

3. Product Line Decisions

a. Product Line Length Strategy of offering for sale several related products Unlike product
bundling where several products are combined into one, lining involves offering several
related products individually.
b. Line Consistency How closely related the products that make up the line.
c. Line Vulnerability The percentage of sales or profits that are derived from only a few
products in the line.
d. Line Stretching Introducing new products into a product line.
e. Filling Adding a new product within the current range of an incomplete line.
f. Width of product mix The number of different product lines sold by a company.
g. Length of product mix Total number of products sold in all lines.

4. Branding

a. Brand A name, term, sign, symbol, or design, or a combination of these, that identifies the
maker or seller of a product or service.
b. Brand Identity Name, term, symbol or design intended to signify the goods or services of
seller(s) to differentiate them from competitors.

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 c. Branding Creating, maintaining, protecting, and enhancing products and services.
d. Brand Positioning Understanding what the brand stands for…its associations, assets,
personality…to whom it is directed and in what competitive context it exists.
e. Brand Equity Value perceived by consumers over time; the value built-up in a brand;
accumulated a mass of positive sentiment; the positive differential effect that knowing the
brand name has on customer response to the product or service.

5. Brand Development

a. Line Extension Introduction of additional items in a given product category under the same
brand name (e.g., new flavors, forms, colors, ingredients, or package sizes).
b. Brand Extension Using a successful brand name to launch a new or modified product in a
new category.
c. Multi-branding Offers a way to establish different features and appeal to different buying
motives.
d. New Brands Developed based on belief that the power of its existing brand is waning and a
new brand name is needed. Also used for products in new product category.

6. Product Life Cycle Management

a. Product Life Cycle The stages that products go through from development to withdrawal
from the market.
b. Product Portfolio The range of products a company has in development or available for
consumers at any one time. Managing product portfolio is important for cash flow.
c. Product Life Cycle Management (PLC,PLM) Determines if each product has a different life
cycle. Determines revenue earned. Contributes to strategic, marketing planning. Helps the
firm to identify when a product needs support, redesign, reinvigorating, withdrawal, etc. Helps
in new product development planning. Helps in forecasting and managing cash flow.
d. Product Life Cycle Stages Development, Introduction/Launch, Growth, Maturity, Saturation,
Decline, Withdrawal.

7. Special Life Cycles:

a. Styles Basic and distinctive mode of expression. Once accepted, popularity will vary over
time.
b. Fashion A currently accepted or popular style. Gains acceptance, peaks, then declines.
Tend to go in cycles with generations.
c. Fads Gain rapid acceptance, peak early, and decline quickly. Tend to attract limited market.
Products that are novel and do not address basic needs.

8. Product Strategy

a. Strategic planning The process of developing and maintaining a strategic fit between the
organization’s goals and capabilities and its changing marketing opportunities. Defining a
clear company mission, setting supporting objectives, designing a sound business portfolio,
and coordinating functional strategies.
b. Mission statement A statement of the organization’s purpose-what it wants to accomplish in
the larger environment. Not product-oriented, completely market-oriented.
c. Business portfolio The collection of businesses and products that make up the company.
d. Portfolio analysis A tool by which management identifies and evaluates the various
businesses making up the company.
e. Strategic business unit A unit of the company that has a separate mission and objectives
and that can be planned independently from other company businesses.
f. BCG Growth-share Matrix A portfolio-planning method that evaluates a company’s strategic
business units in terms of their market growth rate and relative market share.

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 g. The Boston Matrix A means of analysing the product portfolio and informing decision
making about possible marketing strategies.
h. Product-Market Expansion Grid A portfolio-planning tool for identifying company growth
opportunities through market penetration, market development, product development, or
diversification.
i. Porter Competitive Forces Model Four forces -- the bargaining power of customers, the
bargaining power of suppliers, the threat of new entrants, and the threat of substitute
products -- combine with other variables to influence a fifth force, the level of competition in
an industry.
j. Kotler Model Market Leader; Market Challenger; Market Follower; Market Nicher.
k. Treacy & Wiersema Value Disciplines Model Operational excellence; Customer intimacy;
Product leadership.
l. Porter’s Competitive Advantage/Scope Model Cost leadership; Differentiation; Cost
Focus; Differentiation Focus.

9. Value Chains

a. Value Chain The series of departments which carry out value-creating activities to design,
produce, market, deliver, and support a company’s product.Example: Textiles (designing,
weaving or knitting, dyeing, rolling).
b. Value Delivery Network (Value System) The network made up of the company, suppliers,
distributors, and ultimately, customers who “partner” with each other to improve the
performance of the entire system. Example: Cotton » Textiles » Apparel » Retailer.

10. Marketing Strategy

a. Marketing Strategy The marketing logic by which the business unit hopes to achieve its
marketing objectives. Analysis, Planning, Implementation, Control.
b. Market Segmentation Dividing a market into distinct groups with distinct needs,
characteristics, or behaviour who might require separate products or marketing mixes.
c. Market Segment A group of consumers who respond in a similar way to a given set of
marketing efforts.
d. Market Targeting The process of evaluating each market segment’s attractiveness and
selecting one or more segments to enter.
e. Market Positioning Arranging for a product to occupy a clear, distinctive, and desirable
place relative to competing products in the minds of target consumers.
f. Marketing Mix The set of controllable tactical marketing tools-product, price, place, and
promotion- that the firm blends to produce the response it wants in the target market.
g. 4C’s of Connectedness Customer solution, Customer cost, Convenience, Communication.
h. Stages of Adoption Awareness, Interest, Evaluation, Trial, Adoption.

11. Pricing

a. Value-based Pricing Setting price based on buyers’ perceptions of value rather than on the
seller’s cost.
b. Everyday Low Pricing (EDLP) Charging a constant low price with few discounts or
promotional sales; used successfully by Wal-Mart, suits busy consumers, encourages
impulse buying due to trust.
c. Cost-based Pricing Adding a fixed markup to the cost of the product.
d. Skimming Policy Set price high to “skim” the maximum amount of revenue from various
segments of the market.
e. Penetration Pricing Setting a low initial pricing to penetrate the market deeply and win a
large market share.
f. Price Elasticity Elastic products: lower price to maximize revenue; Inelastic products: raise
price to maximize revenue.

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 12. Sales Channels

a. Distribution Channel Provides place, time, and possession utility demanded by customers.
b. Channel conflict Disagreement between channel members over goals and roles, who should do
what and for what rewards.
c. Marketing logistics Physical distribution of the products.
d. Supply chain management Managing value-added flows between suppliers, the company,
resellers, and final users.

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