glossary

'L'

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Labeling - Sellers must label products. The label may be simple or elaborately designed. In any case, the law may require additional information. First, the label identifies the product or brand. The label might describe the product: who made it, where it was made, what it contains, how it is to be used & how to use it safely. Consumerists have lobbied for additional labeling laws to require open dating (to describe the product freshness), unit pricing (to state the product cost in standard measurement units), and finally, the label promotes the product through its attractive graphics.

Laddering - Can be used to trace a person’s motivations from the stated instrumental ones to the more terminal ones.

Laddering Up - Relates to asking questions to help the marketer get a deeper understanding of the person’s motivation.

Latent Demand - Exists when a substantial number of people share a strong need for something that does not exist in the form of an actual product or service.

Latent Market - Consists of people who share a similar need or want for something that do not yet exist. 

Lead - A piece of information of possible use in the search for a prospective client.

Leading Edge Baby-Boomer Cohort - See Baby Boomers

Leads - People or organizations you know nothing or very little about.

Lead Time (Promotion Planning) - Is the time necessary to prepare the program prior to launching it: initial planning, design, and approval of package modifications or material to be mailed or distributed; preparation of advertising and point-of-sale materials; notification of field sales personnel; establishment of allocations for individual distributors; purchasing and printing of special premiums or packaging materials; production of advance inventories in preparation for release at a specific date; and finally, the distribution to the retailer.

Leadership - The process by which a sales manager attempts to influence the activities of salespeople.

Lean Production - Many manufacturers have moved toward a new way of manufacturing called lean production, which enables them to produce a greater variety of high quality products at lower cost, in less time, using less labor. Among the elements of this new system are just-in-time production, stricter quality control, frequent and reliable delivery from supplier, supplies locating closer to major customers, computerized purchasing systems, stable production schedules made available to suppliers, and single sourcing with early supplier involvement.

Leapfrogging - Actively creating a shortcut in the networks in order to accelerate natural contagion.

Learn Testing - A test to see how easily the name of a product is pronounced.

Lease - A contract granting use or occupation of property during a specified period in exchange for a specified rent.

Leasing - Many industrial buyers lease instead of buy heavy equipment like machinery & trucks. The lessee gains a number of advantages: conserving capital, getting the latest products, receiving better service, and gaining some tax advantages. The leaser often ends up with a larger net income and the chance to sell to customers who could not afford outright purchase.

Legitimacy - Salesperson will attempt to convince the buyer of the relevant reputation and experience of the salesperson's company.

Levels of Products:

1. Formal Product - the larger "packaging” of the core product.    What the target market recognizes as the tangible offer.

2. Core product - the most fundamental level, answers the question, "what is the buyer really buying?"

3. Augmented product - the totality of benefits that the person receives or experiences in obtaining the formal product.

Levels of Service - Retailers can position themselves as offering one of four levels of service:

• Self-service - Self-service is the cornerstone of all discount operations. Many customers are willing out their own locate-compare-select process to save money.

• Self-selection - Customers find their own goods, although they can ask for assistance.

• Limited service - These retailers carry more shopping goods, and customers need more information and assistance. The stores also offer services (such as credit and merchandise-return privileges).

• Full service - Sales people are ready to assist in every phase of the locate-compare-select process. Customers who like to be waited on prefer this type of store. The high staffing cost, along with the higher proportion of specialty goods and slower-moving items and the many services, results in high-cost retailing.

Leverage - The ratio of debt to total assets. 

Leverage Products - These products have high value and cost to the customer but involve little risk of supply because many companies make them. The supplier knows that the customer will compare market offerings and cost, and it needs to show that its offering minimizes the customer’s total cost.

Liaison - Is a person who interpersonally connects two or more cliques without belonging to either clique.

License - Is the grant of permission or rights, the granting being done by a party that has the right to do so.

Licensee - The one obtaining permission to use (or make or sell) the product (the buyer).

Licensing - Granting the rights to make, use, or sell a proprietary product, process or service in return for payment.

Licensing Agreement - A formal embodiment of this arrangement, specifying the parameters of the permission granted - including the territory in which it can be used, the length of time for which permission is granted, and other terms and conditions of use - as well as the amount and schedule of payments to be made.

Licensor - The party granting permission to use a licensable subject matter owned by another.

Life Stage - Persons in the same part of the life cycle may differ in their life stage. Life stage defines a person’s major concern. These life stages present opportunities for marketers who can help people cope with their major concerns.

Lifetime Value Marketing - Direct marketers develop a plan for lifetime marketing to each valuable customer, based on knowledge of life events and transitions.

Limited Liability Company - A form of business structure designed to combine the best of corporate and partnership attributes into one entity. 

Limited Service Wholesalers - Offer fewer services to suppliers & customers than full-service wholesalers.

Line Extensions - Existing brand name extended to new sizes or flavors in the existing product category.

Line Filling - A product line can also be lengthened by adding more items within the present range. There are several motives for line filling: reaching for incremental profits, trying to satisfy dealers who complain about lost sales because of missing items in the line, trying to utilize excess capacity, trying to be the leading full-line company, and trying to plugholes to keep out competitors.

Line Stretching - Occurs when a company lengthens its product line beyond its current range. The company can stretch its line downmarket, upmarket or both ways.

List Price - A standard price charged to all customers.

Listening - Ability to derive meaning from sounds that are heard.

Loan-to-Value Ratio - A measure of how heavily mortgaged a property is and how likely the owner is to default on his or her debts.

Lobbying - Refers to the effort to deal with legislators and government officials to defeat unwanted legislation and regulation and/or to promote wanted legislation and regulation.

Local Marketing - Target marketing is leading to marketing programs tailored to the needs of local customer groups. Those favoring localizing a company’s marketing see national advertising as wasteful because it fails to address local needs.

L-O-C-A-T-E - An acronym for methods to uncover important needs: Listen, Observe, Combine, Ask questions, Talk to others, Empathies.

Location Pricing - The same product is priced differently at different locations even though the cost of offering at each location is the same.

Lock-out Revenue - The dollars generated from a customer over time because of the customer's perceived hassles associated with switching to a competitor.

Logical Reasoning - Persuasive techniques that appeal to the prospect’s common sense by applying logic through reason.

Logistics Alliances – One Company offers logistical services for another company’s product.

Long Term Ally - A salesperson who helps customers reach long-term goals.

Longer Payment Terms - Sellers can stretch loans over longer periods and thus lower the monthly payments.

Loss Leader Pricing - A popular product is priced low to attract a large number of buyers who can be expected to buy the firm's other products.

Lost Customer Analysis - Companies should contact customers who have stopped buying or who have switched to another supplier to learn why this happened. Not only is it important to conduct exit interview when customers first stop buying; it is also necessary to monitor the customer loss/rate.

Lot Size - The number of units the cannel permits a typical customer to purchase on one occasion.

Low Interest Financing - Instead of cutting its price, a company can offer customers low-interest financing.

Low Markup, Higher Volume - is usually mass-merchandisers and discount stores.

Lower Price Good - The challenger can offer an average or lower quality product at a much lower price. Firms that establish themselves through a lower-price strategy, however, can be attacked by firms whose prices are even lower.

Lower Upper Social Class - Persons, usually from the middle class, who have earned high income or wealth through exceptional ability in their professions or business. They tend to be active in social and civic affairs and to buy the symbols of status for themselves and their children. They include the nouveau riche, whose pattern of conspicuous consumption is designed to impress those below them.

Loyal Buyers - companies must invest in relationship building and customer intimacy.

Loyalty - Consumers have varying degrees of loyalty to specific brands, stores, and companies. Buyers can be divided into four groups accord to brand loyalty status:

1. Hard-core loyals: Consumers who buy one brand all the time.

2. Split loyals: Consumers who are loyal to two or three brands.

3. Shifting loyals: Consumers who shift from one brand to another.

4. Switchers: Consumers who show no loyalty to any brand.
    

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