Need to brush up on some business and marketing terminology? Look no further!
I have used a few terms here that are familiar to some, others may know exactly what they mean (even better than me) while others may not have a clue as to what they mean.
Just for clarification purposes and to ensure we are all on the same page, I am going to briefly discuss some of my most frequently used terms.
Marketing Mix – a marketing mix is simply the combination of all the different avenues of advertising you undertake for your product. Some may work better than others, and some may even work more synergistically together.
For example, you may advertise in the newspaper, on certain TV channels and on Google AdWords using specific keywords to target an audience. All of these items together create your marketing mix.
Outsourcing vs. Offshoring – it is important that I make this distinction as the two can often get confused, and I use the term outsourcing very often. Many people often hear outsourcing and they immediately think of American jobs being exported to other countries. While this is a form of outsourcing, this is a specific type of outsourcing called Offshoring.
Outsourcing has a much broader definition simply meaning to subcontract or hire an outside firm to handle a certain business task (or tasks). This subcontractor can be a firm located within the same country as your business or outside of your country.
Internalization – this is the opposite of outsourcing. This is where instead of hiring an outside firm to handle a business task, you either handle the business task yourself or acquire a company that would normally handle the task. This is an option for businesses who have determined that internalization would be cheaper than outsourcing.
Delegating – Most already know this, but for those that don’t, delegating is distributing tasks to others, generally your coworkers/subordinates. I personally use the terms delegating and outsourcing interchangeably since they are similar. If you change the scope of oursourcing from “firm” to “self” where you are outsourcing tasks to someone other than yourself (as opposed to outsourcing tasks to a firm other than your own), this is essentially delegating. If you are a one-man business, all delegation is outsourcing.
Product Positioning – I am probably not using the official marketing definition for this term, however, when I mention product positioning, I am referring to the image of your product and what specific needs your target market has that you are claiming your product will fulfill. Marketers will often use a celebrity for product positioning to model who they are targeting and what needs the firm is looking to meet.
Note: doing a quick Wikipedia search for Product Positioning describes this term as being “‘how potential buyers see the product’ and is expressed relative to the position of competitors”.
Synergy – I have never used this term before (except in the definition of Marketing Mix) however, I think it is a very important term to know. Synergy means that the combination of something will be greater than the sum of its parts. In the case of a marketing mix, if you have two methods that work better together than they do separately, you have synergy. Synergy is something you should always strive for as it will make any and all operations of your business more efficient.
Niche Marketing – this is when you target a very specific, smaller demographic. For example, targeting all Cannondale bicycle riders in the New York area would be niche marketing. Niches can be broader, but for small business purposes, defining narrow niches such as this can be more worthwhile.
Niche marketing is especially useful for smaller businesses who can’t compete with the marketing budgets that the larger companies have. Since the larger companies are more dominant in the market for your product, niche marketing allows you to more personally target those that may feel less connected with the broader marketing efforts of the bigger guys.
Unique Selling Proposition (USP) – Your USP is a statement in your marketing campaign that highlights a specific benefit of your product. The purpose of the USP is to set you apart from your competition by being unique. Thus, it is important that you either highlight a unique benefit, or highlight a benefit in a unique way. Since you may have many competitors offering the same product as you, your USP gives you the opportunity to be different, and allows you to present yourself as the only solution for certain problems.
As I mention new terms that might not be self explanatory, I will add them to this post and reference the term to this article. I hope these definitions cleared up any confusion some had.