Untitled Flashcards Set

What does product differentiation refer to?

The creation of a product feature or product image that differs enough from existing products to attract customers.

What is product positioning?

The process of distinguishing a product or service from similar products or services offered to the same market.

What are the factors determining the price decision?

Cost of production, competitive market conditions, competitors’ prices, marketing objectives, and whether it is a new or existing product.

What is penetration pricing?

Setting a relatively low price often supported by strong promotion to achieve a high volume of sales.

What is market skimming?

Setting a high price for a new product when a firm has a unique or highly differentiated product with low customer sensitivity to price.

What is psychological pricing?

Setting prices that take into account the customer's perception of the value of the product.

What is odd-even pricing?

A psychological pricing tactic where prices are stated in odd amounts, like $.99, to make them seem lower.

What is a loss leader?

A product sold at a very low price to encourage consumers to buy other products in the market.

What is price discrimination?

Occurs when a business sells the same product to different consumers at different prices.

What does sales promotion include?

Direct inducements such as coupons and package inserts to tempt consumers to buy products.

What are the steps in personal selling?

Preparation, greeting, listening to the customer, showing the product or service, dealing with objections, closing the sale, follow-up, and asking for references.

What are the types of advertising objectives?

Informative, persuasive, and reminder.

What is branding?

The process of using symbols to communicate the qualities of a product made by a particular producer.

What does the distribution channel refer to?

A network of interdependent companies through which a product passes from producer to end user.

What is an intermediary?

An individual or firm that helps to distribute a product.

What is the difference between debt and equity financing?

Debt involves borrowing money that needs to be paid back, while equity involves raising funds through selling ownership stakes in a company.

What is an angel investor?

A wealthy individual who invests in businesses.

What is a venture capitalist?

An investor or investment company that specializes in financing new, high-potential entrepreneurial companies.

What is an income statement?

A report that records the revenue, costs, and profit (or loss) of a business over a given period of time.

What does a balance sheet provide?

Detailed information about a firm’s assets, liabilities, and owners’ equity at one point in time.

What is the significance of profit for an entrepreneur?

Profit indicates that the entrepreneur is adding value and results from their choices.