Business Essentials: Marketing, Product Development, Pricing, and Distribution

Comprehensive vocabulary flashcards covering marketing fundamentals, the external environment, market segmentation, consumer behavior, product development, the product life cycle, pricing tactics, distribution channels, and promotional strategies.

Marketing

The activities of creating, communicating, and delivering value to customers, as well as managing customer relationships in ways that benefit the organization and its stakeholders.

Value

A product's benefits versus its cost, delivered by offering a better product, having a lower price, or having better business operations.

Utility

The ability of a product to satisfy a human want or need through four forms: form (what), time (when), place (where), and possession (ownership).

Consumer Goods

Physical products purchased by individuals for personal use.

Industrial Goods

Physical products purchased by companies for business or production purposes.

Services

Products having nonphysical features, such as information, expertise, or an activity that can be purchased.

Relationship Marketing

The practice of building lasting relationships with customers and suppliers.

Customer Relationship Management (CRM)

Methods to build better information connections with clients in order to develop stronger company-client relationships.

Data Mining

The collection and analysis of information about customers.

External Marketing Environment

The outer factors surrounding a company's marketing plan, strategies, and decisions, consisting of political-legal, sociocultural, technological, economic, and competitive forces.

Substitute Products

Alternative goods or services that satisfy the same customer need.

Direct Substitutes

Similar products within the same product category that satisfy the same customer need.

Indirect Substitutes

Different products that fulfill the same customer need in a different way.

Brand Competition

Competition based on consumer perceptions, brand image, and unique benefits associated with a particular company's products rather than just physical features.

Marketing Plan

A detailed strategy for focusing marketing efforts on consumers' needs and wants.

Marketing Objectives

The specific goals that outline what is to be accomplished by marketing efforts.

Marketing Strategy

The specific plan identifying how marketing objectives will be accomplished, encompassing the target market and marketing mix.

Target Market

A specific group of people with similar wants and needs who are intended to purchase a company's product.

Marketing Mix

The combination of product, pricing, promotion, and place (distribution) strategies used to market products.

Product Differentiation

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

Integrated Marketing Strategy

The practice of blending together the 4 Ps of the marketing mix to ensure compatibility with one another and with the company's non-marketing activities.

Market Segmentation

The process of dividing a total market into categories of customer types, or segments.

Product Positioning

Fixing, adapting, and communicating the nature of a product to the designated target market.

Geographic Variables

Segmentation characteristics based on location units such as neighborhoods, countries, or regions.

Demographic Variables

Segmentation characteristics of a population such as age, income, and gender.

Psychographic Variables

Consumer characteristics based on lifestyles, opinions, and interests.

Behavioral Variables

Segmentation characteristics based on consumer usage patterns, such as purchase frequency and reasons for purchasing.

Consumer Behavior

The decision process by which people buy and consume products, influenced by psychological, personal, social, and cultural factors.

Brand Loyalty

A pattern of regular, consistent consumer purchasing based on satisfaction with a product's or brand's performance.

Evoked Set

The specific group of brands or products that a consumer will actively consider buying when seeking information.

Rational Motives

Logical reasons that influence a consumer's decision to purchase a product.

Emotional Motives

Personal and non-objective reasons that influence a consumer's decision to purchase a product.

Consumer Buying Process

The multi-stage sequence consumers go through when making purchases: Recognize Need, Seek Info, Evaluate Alternatives, Purchase Decision, and Post Evaluation.

Product Features

Tangible and intangible qualities that a company builds into its products.

Value Package

A product marketed as a bundle of value-adding attributes and features, offered at a reasonable cost.

Convenience Goods

Inexpensive physical goods that are purchased regularly and consumed rapidly with minimal effort.

Shopping Goods

Moderately expensive goods that are purchased infrequently after comparison of style, price, and quality.

Specialty Goods

Rarely purchased physical goods with unique characteristics for which consumers expend significant buying effort.

Product Mix

The entire group of all products that a company makes available for sale.

Product Line

A group of closely related products that function in a similar manner, sell to the same customer group, and are used in similar ways.

Seven-Step Development Process

The sequence for developing new products: product ideas, screening, concept testing, business analysis, prototype development, product testing, and commercialization.

Product Life Cycle (PLC)

The series of stages in a product's commercial life: Introduction, Growth, Maturity, and Decline.

Branding

The practice of using symbols, names, or designs to communicate the qualities of a product made by a particular company.

Brand Awareness

The extent to which a brand name comes to mind when a consumer considers a particular product category.

Product Placement

A promotional tactic that gains brand exposure by featuring goods within movies, television shows, video games, and other media.

National Brands

Brand-name products produced and widely distributed across the country by the manufacturing company.

Private Brand

Brand-name products that a wholesaler or retailer commissions, packages, and sells under its own store label.

Packaging

The physical container in which a product is sold, advertised, or protected.

Pricing

The process of determining what a company will receive in exchange for its products.

Pricing Objectives

The strategic goals that sellers hope to achieve through setting prices, such as profit-maximizing (revenue) or increasing market share (unit volume).

Price Skimming

A new product pricing tactic of setting an initially high price to cover development costs and generate high early profits before competitors enter.

Penetration Pricing

A new product pricing tactic of setting an initially low price to establish market presence and rapidly build sales volume.

Bundling Strategy

A pricing tactic of grouping several products together and selling them as a single package at a reduced overall price.

Psychological Pricing

A pricing approach that takes advantage of the fact that consumers do not always respond purely rationally to stated prices.

Odd-Even Pricing

A psychological pricing tactic based on consumer preference for odd numbers just below a whole round dollar amount, such as setting a price at $\$99.99$ instead of $\$100.00$.

Discount

A direct price reduction offered to buyers as an incentive to make a purchase.

Cost-Oriented Pricing

Setting a selling price by adding a desired profit margin to the per-unit costs of production, expressed as $\text{Selling Price} = \text{Costs} + \text{Profit}$.

Markup

The dollar amount or percentage added to an item's production or purchase cost to arrive at a profitable selling price, where on a per-unit basis $\text{Markup} = \text{Profit}$.

Distribution Channel

The network of interdependent companies through which a product passes from original producer to final user.

Intermediary Companies

Middlemen that assist in distributing products from manufacturers to end consumers, primarily including wholesalers and retailers.

Retailers

Intermediaries that display, merchandise, and sell products directly to the final end-use consumers.

Wholesalers

Intermediaries who purchase goods from producers, warehouse the merchandise, and resell it to retailers.

Direct Channel

A distribution pathway in which goods travel straight from the producer to the consumer without using any intermediaries.

Distribution Mix

The specific combination of distribution channels used by a firm to deliver its goods to end consumers.

Channels of Distribution

The primary paths linking producers to end users, including Channel 1 (Direct), Channel 2 (Retail), Channel 3 (Wholesale), and Channel 4 (Agents or Brokers).

Sales Agent

An independent business entity whose sales force represents and sells related product lines from a few producers directly to industrial B2B clients.

Intensive Distribution

A distribution strategy where a product is distributed through as many wholesale and retail outlets as possible.

Selective Distribution

A distribution strategy where a producer filters outlets and uses only specific retailers who provide special attention to selling the product.

Exclusive Distribution

A distribution strategy in which a manufacturer gives a single retailer or a very limited number of retailers exclusive rights to sell its products within a defined geographic territory.

E-Intermediary

An Internet-based distribution channel member that gathers information across sellers to present buying options or helps deliver electronic products to buyers.

Syndicated Selling

An online sales arrangement where two or more business entities coordinate to sell products or services together.

Affiliate Marketing

A marketing model in which an external website publisher or content creator receives a commission for referring customers to a seller's business.

Physical Distribution

The logistics and operational activities required to move a finished product efficiently from producer to consumer, prominently comprising warehousing and transportation.

Push Strategy

A promotional approach that focuses on marketing a product to wholesalers and retailers so they will stock, push, and merchandise it to final consumers.

Pull Strategy

A promotional approach that directs marketing directly at end consumers to generate consumer demand, prompting buyers to demand the product from retailers.

Promotional Mix

The specific blend of promotional tools used to communicate with consumers, consisting of advertising, personal selling, sales promotions, and public relations & publicity.

Advertising

Any paid, nonpersonal communication transmitted through mass media by an identified sponsor to inform or persuade an audience.

Advertising Media

The communication channels and devices used to transmit a seller's marketing message to potential consumers.

Personal Selling

Direct, one-on-one communication between a sales representative and an individual prospective customer to encourage a purchase.

Order Processing

A routine personal selling task where a salesperson receives customer orders and oversees their handling and fulfillment.

Creative Selling

A personal selling task where a salesperson actively persuades buyers to purchase products by presenting information regarding product benefits.

Prospecting

The first step in the B2B personal selling process, involving identifying and locating potential prospective clients.

Qualifying

The step in the personal selling process of evaluating whether prospective leads have the authority to make purchasing decisions and the financial ability to pay.

Closing

The critical step in the personal selling process in which the salesperson asks the prospective customer to buy the product.

Sales Promotion

Short-term marketing activities, such as coupons, premiums, loyalty programs, POS displays, and trade shows, designed to stimulate immediate consumer buying.

Publicity

Information about a company, product, or event that is broadcast or published by independent mass media without charge to attract public notice.

Public Relations

Company-directed communications designed to build favorable goodwill with the general public or effectively address unfavorable events.