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Business Unit 6
Business Essentials
| Term | Definition |
|---|---|
| Marketing | Any activities a company undertakes to promote the buying or selling of a product or service. |
| Marketing Concept | The idea that an organization must find out what consumers desire and then develop goods and services that fulfill those desires (needs and wants). |
| Strategic Marketing Process | A nine-step process to determine the optimum strategy for marketing – a marketing strategy being of plan of action for developing, pricing, distributing, and promoting products. |
| Product Positioning | Determining where a product fits in the marketplace relative to the competition. |
| Perceptual Mapping | A tool for product positioning. |
| Product Orientation | The marketing approach generally associated with the Industrial Revolution and the periods immediately preceding it when products were offered to the public based on their function, ingenuity, and efficient production. |
| Sales Orientation | The marketing approach most closely associated with the early part of the 20th century when supply caught up with demand and there began to be an excess of manufactured goods especially on the market. |
| Market Orientation | A modern approach to marketing, advocated from the 1960s onward, requiring organizations to gather information about customer needs, share that information throughout the firm, and use that information to help build long-term relationships with customers. |
| Market | A group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas. |
| Target Market | A specific group of consumers on whose needs and wants a company focuses its marketing efforts. |
| Market Segment | A collection of individuals, groups, or organizations who share one or more characteristics and thus have relatively similar products needs and wants. |
| Market Segmentation | A strategy whereby a business divides the total market into groups of people who have relatively similar needs. Marketers tend to utilize one or more of five types of segmentation: geographic, demographic, psychographic, behavioral, and sociographic. |
| Total-Market Approach | An approach whereby a firm tries to appeal to everyone and assumes that all buyers have similar needs. |
| Concentration Approach | A market segmentation approach whereby a company develops one marketing strategy for a single market segment. |
| Multi-Segment Approach | A market segmentation approach whereby the marketer aims its efforts at two or more segments, developing a marketing strategy for each. |
| Market Research | A systemic, objective process of getting information about potential customers to guide marketing activities. |
| Buying Behavior | The decision processes and actions of people who purchase and use products. (Also called consumer behavior.) |
| The Marketing Mix (4Ps) | The four marketing activities – product, price, place (distribution), and promotion – that the firm can control to achieve specific goals within a dynamic marketing environment. |
| Total Product Concept | One of the ways that Marketing experts get involved in product development. Views the development process through the lens of consumer desires, behaviors, promotional needs, and more. |
| Product Classification | The description of a product based on a hierarchial tree which separates and further describes B2C from B2B products. |
| Product Line | A group of closely related products that are treated as a unit because of similar marketing strategy, production, or end-use consideration. |
| Product Identity | A product’s level of quality, its branding, packaging, and labeling in order to shape the consumers perception of a product. If f properly shaped and introduced and promoted, identity can help grasp all-important “mind share” and then “wallet share.” |
| Wallet Share | The ability of a company to earn a consumers discretionary dollars. |
| Mind Share | The ability of a company to closely connect its identity and even brands with a certain product or type of product. |
| Branding | The process of naming and identifying products. |
| Labeling | The presentation of important or required information on a package. |
| Product Life Cycle | The four-stage cycle which looks at individual product performance in terms of revenues, but more importantly profitability. |
| Price | The amount of money that a product sells for at the time of purchase. Usually includes the (Cost of Production). |
| Markup | The percentage (or amount) of money that an intermediary adds to the cost of a product in order to come up with a price. It answers the question: Is the customer willing to pay cover costs and desired profits? Buyers want to purchase at minimum markup. |
| Margin | The percentage of profitability that a sale of a product generates. It answers the question: What’s left over from revenues after expenses are covered? Sellers try to maximize margin. |
| Cost | The amount that has been spent to make the product and bring it to market. |
| Value | The product’s perceived worth at any point in time. A customer’s subjective assessment of benefits relative to costs in determining the worth of a product. |
| “Cost Plus” Pricing | The pricing strategy of adding on a flat pre-determined percentage to the cost in order to determine the selling price. |
| Pricing Matrix | A quadrant analysis tool used to help determine the appropriate pricing strategy for a product. |
| Economy Pricing | A pricing strategy whereby sellers undercut competitors with similar products. They are generally willing to earn slim profit and bank on volume. |
| Premium Pricing | A pricing strategy whereby sellers charge as much as the market will bear for a product with no comparable substitute. High pricing becomes part of the brand image and product desirability. |
| Market Penetration Pricing | A pricing strategy whereby sellers set a price to lure buyers away from competitors, often so as to enter the market at a low price and raise it as the product becomes known. |
| Skimming Pricing | A pricing strategy whereby sellers upcharge while the product is unique, such as when trying to take advantage of a fad product’s short-term popularity. |
| Distribution | Making products available to customers. There are usually four channels of distribution, three forms, and two main strategies. |
| Sales Outlet | Where the product is sold. |
| Sales Channel | A group of organizations that moves products from their producer to consumers. (Also called a Marketing Channel, or a Channel of Distribution.) |
| Intermediary | A business entity which does not produce the good sold to the end consumer but instead purchases it and re-sells it. |
| Retailer | Intermediaries who buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products. |
| Wholesaler | Intermediaries who buy from producers or from other wholesalers and sell to retailers. |
| Direct Channel | Moving a product from the producer to the consumer directly with no intermediaries. |
| Retail Channel | Moving a product from producer to a retailer who can display, promote, and complete the sales of the product to the consumer on behalf of the manufacturer. The retailer usually pays the producer for the product, and then offers it for sale with a markup. |
| Wholesale Channel | Moving a product from producer to wholesaler and then to retailer before selling to the end consumer. The wholesaler buys the product and re-package it in order to make it suitable for sale or use to various retailers (and more rarely to end consumers). |
| Agent Channel | Moving a product from producer, through an agent, and then to a wholesaler and/or retailer before selling to the end consumer. |
| Transactional Function | Activities performed by channel members which complete and record a sale, handle returns, negotiate contracts – anything which tends to generate paperwork (especially financial documentation). |
| Logistical Function | The planning and coordinating of inbound and outbound and third-party services for physically move, sorting and storing products. |
| Facilitating Function | Activities performed by channel members to assist consumers in getting to a purchase decision. For example, assistance with research. |
| Promotional Function | Activities performed by channel members that are designed to create and maintain an image of a product in buyer’s minds. |
| Push Strategy | An attempt to motivate intermediaries to push the product down the channel to their respective customers and ultimately to the end consumer. |
| Pull Strategy | The use of promotion to create consumer demand for a product so that consumers exert pressure on the marketing channel members to make the product available. |
| Physical Distribution | The part of logistics that focuses on transportation, warehousing, and materials handling of physical product. |
| Promotion | The publicization of an organization, a good (product or service), or related persons or ventures, so as to increase sales or public awareness. |
| Promotion Mix | The four elements which combine to create integrated marketing communications. The Promotion Mix includes: Advertising, Personal Selling, Publicity, and Sales Promotion. |
| Traditional Promotion | Promotion through classic media such as television, radio, magazines, billboards, in-store displays, public signage, phone calls, and other media that was in use prior to the advent of the information age. |
| Digital Promotion | Promotion through media enabled by computerization and particularly via channels only available since the widespread use of “smart” technology. Includes the use of websites, applications, podcasts and streaming services, and more. |
| Tradigidal Promotion | The utilization of traditional media to “push” the consumer through the promotion channel to experience the seller’s or producer’s digital environment or media. The intent is to create a more informative and interactive sales experience for the consumer. |
| Integrated Marketing Communications | Coordinating the promotion mix elements and synchronizing promotion so that it is one unified effort and results in the desired message being transmitted to and received by the customer. |
| Advertising | A paid form of non-personal communication transmitted through a mass-medium, such as a television commercial or a magazine advertisement. |
| Personal Selling | Direct, two-way communication with buyers or potential buyers. This can be done in person, via telephone, over a chat, or other means of connecting the buyer and seller. |
| Publicity | Non-personal communication transmitted through the mass media but not paid for directly by the business. |
| Direct Marketing | The use of non-personal media to communicate products, information, and the opportunity to purchase via media such as mail, telephone, or the internet. |
| Price | The amount of money that a product sells for at the time of purchase. |
| Markup | The percentage (or amount) of money that an intermediary adds to the cost of a product in order to come up with a price. |
| Margin | The percentage of profitability that a sale of a product generates. |
| Cost | The amount that has been spent to make the product and bring it to market. |
| Value | The product’s perceived worth at any point in time. |
| “Cost Plus” Pricing | The pricing strategy of adding on a flat pre-determined percentage to the cost in order to determine the selling price. |
| Pricing Matrix | A quadrant analysis tool used to help determine the appropriate pricing strategy for a product. |
| Economy Pricing | A pricing strategy whereby sellers undercut competitors with similar products. |
| Premium Pricing | A pricing strategy whereby sellers charge as much as the market will bear for a product with no comparable substitute. |
| Market Penetration Pricing | A pricing strategy whereby sellers set a price to lure buyers away from competitors |
| Skimming Pricing | A pricing strategy whereby sellers upcharge while the product is unique |
Created by:
Pl237112
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