2.1 - 2.2 AP Business Terms

marketing

the process of generating awareness of a company’s brand and helping people find value in the company’s products; the process of promoting, selling, and delivering products that satisfy customers’ needs and wants.

customer data

is the information businesses collect about their customers to better understand, serve, and engage them.

demographic data

descriptive information about people’s identity, situation, and background.

psychographic data

information on people’s cognitive and behavioral characteristics.

market segmentation

the process of dividing a market into groups based on wants, needs, common interests and behavior, and demands.

target customers

individuals whose characteristics make them more likely to purchase a product.

customer profile

a fictional representation of a business’s target customer.

customer acquisition cost

the marketing cost of acquiring a new customer; calculated by dividing the total marketing, advertising, and sales cost of acquiring customers by the total number of customers acquired.

customer lifetime value

the estimated amount of money that a customer will spend on a business’s products over the course of the customer - business relationship.

referrals

an existing customer’s recommendations of a business to a potential customer.

data breaches

an event in which data is stolen or used for criminal purposes.

identity theft

the fraudulent use of someone’s data to impersonate them and access their bank accounts, borrow money, or obtain services such as healthcare or phone services.

consumer behavior

the set of selection, purchase, and consumption activities consumers use to address their needs and wants.

personal factors

consumer characteristics that help to determine what individuals need and want, as well as what they have the ability to buy.

psychological factors

mental and emotional processes that influence what consumers feel is important to buy.

sociological factors

social and cultural influences that help determine what consumers find appropriate, desirable, and acceptable to buy.

situational factors

temporary influences specific to the consumer’s circumstances or conditions that affect purchasing decisions.

purchasing patterns

habits or trends in consumer behavior over time.

consumer psychology

the study of how and why consumers make purchasing decisions.

the scarcity principle

the idea that consumers want things more when they are perceived as being rare.

the authority principle

the idea that consumers are more likely to buy something if it is endorsed by an authority figure.

the consensus principle

the idea that consumers are motivated to buy when their social group is in general agreement about the desirability of a product.

the liking principle

the idea that consumers are more inclined to make purchases from people they like or can relate to.

the reciprocity principle

the idea that consumers feel more obliged to buy something when the seller gives them something of value.

the consistency principle

the idea that consumers are attracted to products that are consistent with their self-image, values, and commitments.

the unity principle

the idea that consumers are motivated to purchase a product by feelings of belonging to a group that purchases that product.