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Although we try to avoid unnecessary jargon on this site, there are a few terms which are used regularly throughout the site and it may benefit readers to familiarize themselves with certain concepts in order to fully benefit from the articles and information available here. For a comprehensive listing of terms, visit this link to the American Marketing Association: www.marketingpower.com/live/mg-dictionary.php |
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| MARKET ORIENTATION (MO) |
A term widely used in research to identify an organizational culture that produces organization wide generation of market intelligence, dissemination of the intelligence, and responsiveness to it. There are 3 behavioral components associated with MO which are a customer orientation, competitor orientation, and inter-functional co-ordination. |
| ORGANIZATIONAL CULTURE | Simply, organization culture is 'the way we do things around here'. More formally, it is a shared system of meanings and values held by the organizations members. |
| ENTREPRENEURIAL ORIENTATION AND CULTURE |
An entrepreneurial orientation is an orientation focused on finding and proactively exploiting opportunity through innovation. Small firms are inherently entrepreneurial and may exhibit characteristics such as risk taking, acting quickly, informal and open communications etc. However, it is not unusual for SME's to lose their entrepreneurial characteristics as they mature and this maybe detrimental to performance. It also includes the ability to leverage resources.
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| INNOVATION |
Innovation is a broad term referring to several types of innovation. Without over elaborating, the term is related to change and not only radical product innovation. For example, changes in organizational structure, services, systems etc. would be regarded as innovation.
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| EMPIRICAL RESEARCH |
This literally means 'what is' and is evidence that is based on observation or experience. Do not confuse the term with theory that is perhaps not particularly relevant to practice. Many articles on this site will be based on empirical research which allows us to disseminate cutting edge thought and practice that is highly relevant to practicing managers.
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| POSITIONING |
The process of creating an image of a product/service in the mind of a customer in relation to competing brands. The concept was popularized by Al Ries and Jack Trout in the late 70's. For example, when you think of Volvo, safety comes to mind, or Duracell battery created an image of long lasting.
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| INTERNAL MARKETING |
The simple idea that if you are going to perform well in the external market place your internal market place (people) must be motivated and energized to deliver the right results to your clients. Internal marketing means understanding what drives and motivates your people and then putting these ideas into practice in a high performance work culture and system.
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| DIFFERENTIATION STRATEGY |
A term popularized by the Harvard Professor Michael Porter along with his other generic strategies of focus and cost leadership. It basically means that a firm should provide value to customers by differentiating themselves along key attributes and benefits deemed as important by customers. For example, a small retail shop carrying specialty items that are sourced and supplied in a manner that large firms find difficult to imitate.
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| FOCUS |
Another of Porters generic strategies, this approach suggests that a firm find a segment or niche that is underdeveloped or been neglected by larger firms and put its energy in to serving and developing the customers in this area. Of course, a niche can grow into a substantial market that attracts a number of strong players. For example Quicken, the leading personal financial software company, initially started in what was a small area. It resulted in Microsoft offering US$2b for the company.
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| COST LEADERSHIP |
The final of Porters generic strategies, a firm which follows a cost leadership strategy concentrates on developing the lowest cost structure and hence is able to offer the lowest price for its products/services. By building market share, the cycle can be reinforcing as greater economies leads to lower costs and this can be supported by what is known as the experience curve.
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| EXPERIENCE CURVE |
The finding that as the number of units produced doubles, there is a 20% decrease in the costs associated with production. Hence a firm which can gain market share quickly will benefit from lowering its production costs faster then its competitors because of the learning that occurs.
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| COMPETITIVE ADVANTAGE |
Simply stated, competitive advantage is what makes you different and/or better than your competitors. What are the capabilities within the firm that allows you to deliver superior products and services. When we say superior, we mean superior from the customers point of view, what they deem as valuable, not what the organization thinks.
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| VALUE PROPOSITION |
This is as realistic statement about why customers will buy from you. It is not marketing hype or a clever slogan, it is a truthful exploration of what value you deliver to your customers and why they consider your firm a good firm to do business with.
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STRATEGIC PHILANTHROPY |
Defined as the synergistic use of an organization's core competencies to address key stakeholder interests and to achieve both organizational and societal benefits. Strategic philanthropy goes beyond pure sponsorship or cause related marketing which are tactical level tools that tend to be short term in nature and are designed to increase sales and/or brand awareness and affinity with the target market. |
MARKETING RETURN ON INVESTMENT (ROI) |
The premise of marketing ROI is quite simple. Identify various marketing effort alternatives and fund those ones that meet a certain ROI threshold or criteria, sometimes known as the hurdle rate. It differs from traditional ROI calculation for capital expenditure due to the often small incremental investments that can be made and hence it tends to be flexible in nature. |