Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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private label 410
IMPLICATIONS
Marketers can take advantage of the primacy effect in individual learning
and impression formation by ensuring that the most important infor-
mation or other stimuli is at the beginning of any series of information
or stimuli that marketers wish consumers to remember. Alternatively,
marketing researchers should recognize the primacy effect as a bias
among consumers when they are asked to recall serial information that
they have previously encountered.
APPLICATION AREAS AND FURTHER READINGS
Consumer Behavior
Buda, R., and Zhang, Y. (2000). ‘Consumer Product Evaluation: The Interactive
Effect of Message Framing, Presentation Order, and Source Credibility,’ Journal
of Product and Brand Management, 9(4/5), 229–242.
Haugtvedt, Curtis P., and Wegener, Duane T. (1994). ‘Message Order Effects in
Persuasion: An Attitude Strength Perspective,’ Journal of Consumer Research, 21(1),
June, 205–218.
Online Marketing
Murphy, J., Hofacker, C., and Mizerski, R. (2006). ‘Primacy and Recency Effects on
Clicking Behavior,’ Journal of Computer-Mediated Communication, 11(2), article 7,
http://jcmc.indiana.edu/vol11/issue2/murphy.html Accessed: 8 October 2007.
BIBLIOGRAPHY
Asch, S. E. (1946). ‘Forming Impressions of Personality,’ Journal of Abnormal and Social
Psychology, 41, 258–290.
primary data see data types
primary demand see demand
principle(s) of see specific entries, e.g. least effort, principle of
prisoner’s dilemma see game theory
private brand see private label
private goods see goods
private label
(also called own label, private brand, or store brand)
DESCRIPTION
The offering of a good under the brand of a retailer.
KEY INSIGHTS
While almost all retailers carry goods offered under any number of
regional, national, or international brands (also called ‘name brands’ and
with some of these called ‘leading brands’), it is increasingly common
for retailers to also carry goods under their own brand name. Today,
some retailers are even pursuing marketing strategies where they offer
almost all of their goods under their own label. Many of such brands are
positioned as lower-priced alternatives to major brands within a product
category, although some privately branded products are also positioned
as higher in quality and are also offered at a higher price.
411 private label
In addition to offering goods under a private label, firms may also offer
goods under a generic brand, which is where there is only an indication of
a product’s category (e.g. cola, potato chips, milk) and a complete absence
of any brand or brand name on its packaging. Such offerings can provide
retailers with yet another way of providing customers with alternatives
to well-known brands in terms of price, quality, or value.
KEY WORDS Retail, branding
IMPLICATIONS
Private label goods may be used by a retailer for any number of rea-
sons including obtaining higher overall sales volumes and higher profit
margins in relation to those for name brands. At the same time, many
manufacturing firms find profitable niches in manufacturing private
label goods for retailers. Some manufacturing firms even produce goods
offered under both their own international brand and private labels as a
means to increase their production volumes and achieve scale economies
that can lower their costs. Thus, whether a marketer’s firm produces and
offers a product under a leading brand or one to be offered under one
or more private labels, a greater knowledge of the strategies and tactics
associated with the use of private label goods may assist the marketer
with identifying feasible strategic options and developing competitive
marketing strategies.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Mills, D. E. (1999). ‘Private Labels and Manufacturer Counterstrategies,’ European
Review of Agricultural Economics, 26(2), June, 125–146.
Harris, Brian F., and Strang, Roger A. (1985). ‘Marketing Strategies in the Age of
Generics,’ Journal of Marketing, 49(4), Autumn, 70–81.
Marketing Management
Batra, Rajeev, and Sinha, Indrajit (2000). ‘Consumer-Level Factors Moderating the
Success of Private Label Brands,’ Journal of Retailing, 76, Summer, 175–191.
Retail Marketing
Burt, S. (2000). ‘The Strategic Role of Retail Brands in British Grocery Retailing,’
European Journal of Marketing, 34(8), 875–890.
Marketing Research
Burton, S., Lichtenstein, D. R., Netemeyer, R. G., and Garretson, J. A. (1998). ‘A Scale
for Measuring Attitude toward Private Label Products and an Examination of its
Psychological and Behavioral Correlates,’ Journal of the Academy of Marketing Science,
26(4), 293–306.
Halstead, D., and Ward, C. (1995). ‘Assessing the Vulnerability of Private Label
Brands,’ Journal of Product and Brand Management, 4(3), 38–48.
BIBLIOGRAPHY
Mills, David E. (1995). ‘Why Retailers Sell Private Labels,’ Journal of Economics &
Management Strategy, 4(3), Fall, 509–528.
private sector marketing see commercial marketing
problem child see product portfolio analysis
product classifications, consumer 412
problem recognition see buyer decision process
product characteristics theory see characteristics theory
product classifications, consumer
DESCRIPTION
Products purchased for individual or household use arranged into meaningful
categories according to specific marketing-related criteria.
KEY INSIGHTS
Consumer product classifications arrange consumer offerings into cate-
gories that are meaningful to marketers. Common product classifications
of consumer products include: convenience products—items that customers
typically buy often, quickly, and with very little effort (including effort to
make brand comparisons); shopping products—items for which consumers
typically make product and/or brand comparisons using criteria such as
price and quality; specialty products—items which consumers perceive to
be unique in one or more characteristics, including brand identification
and thereby leading a sizeable number of such consumers to make a spe-
cial effort to purchase; and unsought products—items that are unknown to
consumers or ones that the consumers do not typically think of purchas-
ing. While such products are characterized according to criteria relating
to consumer buying behavior, there are still other means of classifying
consumer products including those that consider product qualities from
a societal perspective (see societal classification of products) as well as
by characteristics that may or may not be restricted to consumer products
(see goods).
KEY WORDS Product categories
IMPLICATIONS
A better understanding of the nature of consumer products can provide
marketers of such products with insights that may lead to more effective
marketing strategies and tactics. For example, most makers of inkjet
printers market their ink cartridges and photopaper for such printers
in such a way that emphasizes their uniqueness as a means to dissuade
consumers from making brand comparisons involving price, even though
other such brands may be perfect equivalents.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Murphy, P. E., and Enis, B. M. (1986). ‘Classifying Products Strategically,’ Journal of
Marketing, 50(3), 24–42.
Marketing Management
Brown, L. G. (1989). ‘The Strategic and Tactical Implications of Convenience
in Consumer Product Marketing,’ Journal of Consumer Marketing, 6(3), Summer,
13–19.
Retail Marketing
Bucklin, Louis P. (1963). ‘Retail Strategy and the Classification of Consumer Goods,’
Journal of Marketing, 27, January, 50–55.
413 product levels
Marketing Research
Ratneshwar, S., and Shocker, A. D. (1991). ‘Substitution in Use and the Role of
Usage Context in Product Category Structures,’ Journal of Marketing Research, 28,
281–295.
Consumer Behavior
Sudman, Seymour (1971). ‘Overlap of Opinion Leadership across Consumer Prod-
uct Categories,’ Journal of Marketing Research, 8(2), May, 258–259.
BIBLIOGRAPHY
Kotler, Philip, and Armstrong, Gary (2006). Principles of Marketing, 11th edn. Upper
Saddle River, NJ: Pearson Education, Inc.
product concept see marketing management orientation
product development see new product development; product-
market investment strategies
product development stage see product life cycle
product expansion see product-market investment strategies
product levels
DESCRIPTION
Characteristically different ways that a firm’s offering is able to add customer
value.
KEY INSIGHTS
The offerings of a firm are able to add customer value in three basic ways.
First, any product offering ultimately has a core benefit, or essence, that a
customer wishes to obtain. A buyer of a treadmill, for example, may ulti-
mately be purchasing it for the core benefit of increased cardiovascular
fitness, or even more generally, a greater sense of well-being. Second, any
offering involves an actual product, which is a product in some real form
(e.g. features, packaging, brand name, design, level of quality). All electric
treadmills, for example, have a speed adjustment control, with some also
having an elevation adjustment control. Third, an offering also involves
an augmented product, which is the set of additional services and benefits
that accompany the offering’s purchase (e.g. warranty, installation, after-
sales service, delivery, financing). Two treadmills may be identical in
terms of both their core benefit and actual product, for example, but may
differ in terms of the length of the warranty as well as what particular
parts are covered by the warranty. Starting with the core benefit, each
of the two successive levels provides a means for marketers to add more
customer value
KEY WORDS Benefits, features, value-added characteristics
IMPLICATIONS
While some marketers focus on how a product’s features provide value
to a customer and others focus on what the product’s core benefit is,
marketers should recognize that a product can add customer value in
product life cycle 414
several interrelated ways—ways which include augmented product offer-
ings. Thus, by giving greater attention to the many different ways that
an offering can create customer value, marketers have an opportunity
to develop and provide offerings in ways that not only increase their
value but also in the ability of the firm to increase the profitability that
corresponds with the added value.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Crane, Andrew (2001). ‘Unpacking the Ethical Product,’ Journal of Business Ethics,
30(4), 361–373.
Ravald, A., and Groenroos, C. (1996). ‘The Value Concept and Relationship Market-
ing,’ European Journal of Marketing, 30(2), 19–30.
Services Marketing
Berry, Leonard L., and Parasuraman, A. (1991). Marketing Services: Competing through
Quality. New York: Free Press; Toronto: Maxwell Macmillan Canada; New York:
Maxwell Macmillan International.
Storey, C., and Easingwood, C. J. (1998). ‘The Augmented Service Offering: A
Conceptualization and Study of its Impact on New Service Success,’ Journal of
Product Innovation Management, 15, 335–351.
Marketing Research
Green, Paul E., and Srinivasan, V. (1990). ‘Conjoint Analysis in Marketing: New
Developments with Implications for Research and Practice,’ Journal of Marketing,
54(4), October, 3–19.
Mittal, Vikas, Kumar, Pankaj, and Tsiros, Michael (1999). ‘Attribute-Level Perfor-
mance, Satisfaction, and Behavioral Intentions over Time: A Consumption-
System Approach,’ Journal of Marketing, 63(2), April, 88–101.
BIBLIOGRAPHY
Kotler, Philip, and Armstrong, Gary (2006). Principles of Marketing, 11th edn. Upper
Saddle River, NJ: Pearson Education, Inc.
product life cycle
DESCRIPTION
A series of states in a product’s existence described in terms of its sales and
profitability.
KEY INSIGHTS
The life cycle of a product is often viewed as being characterized by a
number of states, or stages, including the product development stage, where
there are development costs and no sales as yet; the introduction stage,
where sales growth is slow and profitability is negative due to high prod-
uct introduction costs; the growth stage, where sales dramatically increase
due to rapid market acceptance and where profits increase as well; the
maturity stage, where sales growth slows, plateaus, and may begin to
decline as a result of product saturation in the market and where profits
plateau and may begin to decline as a result of increased marketing costs
to defend the product against competing offerings; and the decline stage,
where both sales and profits are falling. It is often acknowledged that
there are different marketing strategies that are appropriate for different
415 product life cycle
stages. However, as appealing as the product life cycle concept is to
many marketers, there remains the difficulty of determining just what
stage a product is actually in (e.g. one may not be able to tell whether
sales have plateaued permanently or temporarily). Additionally, it is also
recognized that marketers have means to lengthen or shorten a product
life cycle, adding further complexity to decisions about when to develop
and introduce new products to take the place of others in decline.
KEY WORDS Life cycle, sales, profitability
IMPLICATIONS
The product life cycle provides a useful means of conceptualizing the life
stages of a product that a marketer might expect to observe from the time
of a product’s inception to its demise. In addition, the conceptualization
may provide a useful means of making sense of past events associated
with product sales and profitability performance. Its ability to assist
with the proactive development of appropriate marketing strategies is
far more limited, however, as a result of the inability to understand a
product’s precise location within its own in-process life cycle.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Klepper, S. (1996). ‘Entry, Exit, Growth and Innovation over the Product Life-Cycle,’
American Economic Review, 86, 562–583.
Anderson, C. R., and Zeithaml, C. P. (1984). ‘Stage of the Product Life Cycle, Business
Strategy, and Business Performance,’ Academy of Management Journal, 27, 5–24.
Lambkin, Mary, and Day, George S.(1989). ‘Evolutionary Processes in Competitive
Markets: Beyond the Product Life Cycle,’ Journal of Marketing, 53(3), July, 4–20.
Marketing Management
Parker, Philip M. (1992). ‘Price Elasticity Dynamics over the Adoption Life Cycle,’
Journal of Marketing Research, 29(3), August, 358–367.
Business-to-Business Marketing
Thorelli, Hans B., and Burnett, Stephen C. (1981). ‘The Nature of Product Life Cycles
for Industrial Goods Businesses,’ Journal of Marketing, 45(4), Autumn, 97–108.
Golder, P. N., and Tellis, G. J. (2004). ‘Growing, Growing, Gone: Cascades, Diffusion,
and Turning Points in the Product Life Cycle,’ Marketing Science, 23(2), 207–218.
International Marketing
Samiee, Saeed, and Roth, Kendall (1992). ‘The Influence of Global Marketing Stan-
dardization on Performance,’ Journal of Marketing, 56(2), April, 1–17.
Niss, H. (1996). ‘Country of Origin Marketing over the Product Life Cycle: A Danish
Case Study,’ European Journal of Marketing, 30(3), 6–22.
Marketing Research
Asiedu, Y., and Gu, P. (1998). ‘Product Life Cycle Cost Analysis: State of the Art
Review,’ International Journal of Production Research, 36(4), 883–908.
Marketing Modeling
Cox, William E., Jr. (1967). ‘Product Life Cycles as Marketing Models,’ Journal of
Business, 40(4), October, 375–384.
BIBLIOGRAPHY
Day, George S. (1981). ‘The Product Life Cycle: Analysis and Applications Issues,’
Journal of Marketing, 45(4), Autumn, 60–67.
Polli, R., and Cook, V. (1969). ‘Validity of the Product Life Cycle,’ Journal of Business,
42(4), 385–400.
product line 416
Ryan, C., and Riggs, W. E. (1996). ‘Redefining the Product Life Cycle: The Five-
Element Product Wave,’ Business Horizons, 39(5), 33–41.
product line
DESCRIPTION
Among a firm’s offerings, a group of individual offerings that share one or
more meaningful characateristics.
KEY INSIGHTS
A product line comprises offerings with something meaningful in com-
mon. At the same time, that which is meaningful can be described any
number of ways. It is common to characterize a product line by several
key dimensions. Product line length refers to the number of items in the
product line (e.g. the number of distinctly different styles of running
shoes). Product line depth refers to the number of versions offered for each
product in the product line (e.g. the number of sizes and colors for each
distinctly different style of running shoe). Additionally, when firms have
multiple product lines, such lines can be characterized by product line mix
width, which refers to the number of different product lines carried by
the firm (e.g. running shoes and walking shoes).
KEY WORDS Product group, line
IMPLICATIONS
Marketers have many strategic decisions to make regarding a product
line’s length and depth as well as the width associated with product line
mixes. While such decisions are clearly dependent on both consumer
demand and the firm’s assets and competencies, a greater understanding
of product line-related research, and modeling approaches in particular,
can potentially assist the marketer in making product line decisions that
may also lead to sustainable competitive advantages.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Wind, Y., and Claycamp, M. (1976). ‘Planning Product Line Strategy: Matrix
Approach,’ Journal of Marketing, 40, 2–9.
Moorthy, K. Sridhar (1984). ‘Market Segmentation, Self-Selection, and Product Line
Design,’ Marketing Science, 3(4), Autumn, 288–307.
Kekre, S., and Srinivasan, K. (1990). ‘Broader Product Line: A Necessity to Achieve
Success?’ Management Science, 36(10), 1216–1231.
Marketing Management
Dobson, Gregory, and Kalish, Shlomo (1988). ‘Positioning and Pricing a Product
Line,’ Marketing Science, 7(2), Summer, 107–125.
Marketing Research
Tang, Christopher S., and Ho, Teck-Hua (1998). Product Variety Management: Research
Advances. Boston: Kluwer Academic.
Marketing Modeling
Green, Paul E., and Krieger, Abba M. (1985). ‘Models and Heuristics for Product Line
Selection,’ Marketing Science, 4(1), Winter, 1–19.
417 product-market investment strategies
McBride, Richard D., and Zufryden, Fred S. (1988). ‘An Integer Programming
Approach to the Optimal Product Line Selection Problem,’ Marketing Science, 7(2),
Summer, 126–140.
BIBLIOGRAPHY
Morein, J. (1975). ‘Shift from Brand to Product Line Marketing,’ Harvard Business
Review, 53, 56–64.
product line pricing see pricing strategies
product-market expansion grid see product-market investment
strategies
product-market investment strategies
(also called growth strategies)
DESCRIPTION
Generic strategies of the firm in the pursuit of growth.
KEY INSIGHTS
Firms seeking to grow for any reason (management directive, share-
holder pressure, etc.) typically need to make strategic investments in
one or more areas of their operations. To understand where to invest,
firms must, either explicitly or implicitly, establish a strategic direction
for growth. One explicit means for analyzing a firm’s growth options
involves the use of a product-market expansion grid,orAnsoff matrix more
specifically, which characterizes options for growth and investment along
‘market’ and ‘product’ dimensions, where each is distinguished further
by either being ‘existing’ or ‘new.’ The four common categories for
product-market investment are therefore: market penetration, where the
firm’s growth is directed at existing markets and the use of present
or existing products; market development (or market expansion), where the
firm’s growth is directed at new markets and the use of present or
existing products; product development (or product expansion), where the
firm’s growth is directed at new product development for present or
existing markets; and diversification, where the firm’s growth is directed
at new product development for new markets. In the latter category,
while diversification can be considered to be a matter of degree, it is
also not uncommon to distinguish conceptually between related and
unrelated diversification, where related diversification is where there are
certain assets and competencies within the firm that can be leveraged
in its pursuit of synergy with its other products and/or market operations
and where unrelated diversification is where the area of investment involves
no real synergistic relationship with the firm’s other products and/or
market operations. An extension of the Ansoff matrix’s four-quadrant
approach to product-market investment analysis is to consider as well
the possibility of integration as yet another avenue of firm growth, such
as where a firm engages in vertical integration to acquire both suppliers
and customer organizations. (See integration.)
product marketing 418
KEY WORDS Investment, generic growth strategies
IMPLICATIONS
A challenging question faced by many marketers is in what direction
the firm should grow. Addressing such a question requires marketers to
identify feasible options for growth and engage in analyses to understand
better their possible benefits and costs in relation to the firm’s marketing
and business objectives. As such, a greater understanding of the many
different product-market investment strategies and the many issues asso-
ciated with each can assist the marketer with making growth-related
decisions that ultimately meet a set of important criteria including being
feasible, generating an attractive return on investment, and supporting a
sustainable competitive advantage.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Slater, S. F., and Narver, J. C. (1993). ‘Product-Market Strategy and Performance:
An Analysis of the Miles and Snow Strategy Types,’ European Journal of Marketing,
27(10), 33.
Rosa, Jose Antonio, Porac, Joseph F., Runser-Spanjol, Jelena, and Saxon, Michael S.
(1999). ‘Sociocognitive Dynamics in a Product Market,’ Journal of Marketing, 63,
Fundamental Issues and Directions for Marketing, 64–77.
Cool, K., Dierickx, I., and Jemison, D. (1989). ‘Business Strategy, Market Structure
and Risk-Return Relationships: A Structural Approach,’ Strategic Management Jour-
nal, 10(6), 507–522.
Gatignon, Hubert, and Xuereb, Jean-Marc (1997). ‘Strategic Orientation of the Firm
and New Product Performance,’ Journal of Marketing Research, 34(1), Special Issue
on Innovation and New Products, February, 77–90.
BIBLIOGRAPHY
Aaker, David A. (2005). Strategic Market Management. New York: John Wiley & Sons,
Inc.
product marketing
DESCRIPTION
Marketing efforts involving tangible, physical offerings.
KEY INSIGHTS
While the term ‘product’ conveys that which is tangible, its broader usage
also includes any item of commerce more generally (e.g. services). Never-
theless, product marketing is most often used to refer to the marketing of
tangible objects or items which are created through processes of produc-
tion. As such, the term is often used in comparisons and contrasts with
services marketing (see services marketing). Unlike service offerings, for
example, tangible offerings are able to be described precisely as they
can be subject to quantitative measure. Because physical offerings are
able to be perceived by the senses, their marketing necessarily involves
giving considerable attention to their observable elements (e.g. how such
products look to the eye, feel to the touch, taste to the tongue, sound
to the ear, and/or smell to the nose). Thus, for some products, aesthet-
ics becomes a critically important marketing consideration in addition
419 product portfolio analysis
to product functionality and performance. In addition to attention to
physical characteristics, however, effective product marketing may also
involve approaches that seek to enhance such characteristics through
abstract associations, as where a relatively good-tasting carbonated drink
consisting of flavored sugar water is associated with youthfulness and
authenticity.
KEY WORDS Tangible goods, physical objects, items of commerce
IMPLICATIONS
Clearly, products take many shapes and forms and can be described in
numerous ways (see product classifications, consumer; goods; societal
classification of products). Understanding such characteristics is often
critical to product marketing success since the actual product is a major
focus of marketing attention. Yet, effective product marketing recognizes
that there are other aspects of the product that also add customer value
(see product levels). While, in comparison to service offerings, there is
often less attention to people in the firm’s marketing mix (see marketing
mix) as perceived by current and potential customers, astute product
marketers also recognize that effective product marketing often requires
careful attention to the firm’s related intangible offerings (e.g. after-sales
service) as well as product positioning that involves associations with
abstract concepts as a means to enhance perceived product value.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Kotler, P. (1965). ‘Competitive Strategies for New Product Marketing over the Life
Cycle,’ Management Science, 9, B104–119.
Marketing Management
Collier, Richard A. (1995). Profitable Product Management. Oxford: Butterworth-
Heinemann.
Online Marketing
Shaw, M., Subramaniam, C., and Gardner, D. (1999). ‘Product Marketing on the
Internet,’ in Handbook of Electronic Commerce. Berlin: Springer-Verlag.
Business-to-Business Marketing
Gordon, G. L., Calantone, R. J., and di Benedetto, C. A. (1993). ‘Business-to-Business
Service Marketing: How does it Differ from Business-to-Business Product Market-
ing?’ Journal of Business and Industrial Marketing, 8(1), 45–57.
BIBLIOGRAPHY
Shostack, G. L. (1977). ‘Breaking free from Product Marketing,’ Journal of Marketing,
41(2), 73–80.
product portfolio analysis
(also called portfolio analysis)
DESCRIPTION
The systematic analysis and evaluation of a firm’s set of offerings.