Unit 4 - Marketing [HL] - IB Business Management 2024 First Exams

All of IB Business Management Unit 4 SL&HL key terms

Concentration Ratio

An indicator of the degree of competition in an industry by calculating the sum of the market share held by the largest specified number of firms in the industry.

Ethical Code of Practice

Guidelines that help businesses to act in a moral way by considering what society accepts as ethically right or wrong.

Market Concentration

Measures the degree of competitiveness that exists within a market by calculating the market share of the largest few firms in the industry.

Market Growth

Refers to the rate at which the size of a market is increasing, typically expressed as the percentage increase in the market size of an industry per year.

Market Leadership

The position of a business that has the largest market share in a given market for a particular good or service.

Market Orientation

A marketing approach adopted by businesses that are outward looking by focusing on making products that they can sell, rather than selling products they can make.

Market Share

Measures an organization’s portion of the total value of sales revenue in a specific industry.

Market Size

Refers to the magnitude of an industry, usually measured in terms of the value of sales revenue from all the businesses in a particular market, per time period.

Marketing

The management process of predicting, identifying and meeting the needs and wants of customers, usually in profitable ways.

Marketing Objectives

The specific marketing goals of an organization, such as increased sales revenue, greater market share and market leadership.

Marketing Strategies

The medium- to long-term plan to achieve an organization’s marketing objectives.

Product Orientation

Marketing approach used by businesses that are inward looking as they focus on selling products that they can make rather than making products that they can sell.

Consumer Profiles

Demographic and psychographic characteristics of consumers in different markets, such as their age, gender, occupation or income level.

Differentiation

The art of distinguishing a business or its products from rivals in the industry.

It tries to create the perception among customers that the organization’s product is different (unique or special) compared to substitute products in the market.

Market Segmentation

The process of categorizing customers into distinct groups with similar characteristics (such as age or gender) and similar wants or needs.

Marketing Audit

A review of the current position of an organization’s marketing mix, in terms of its strengths and weaknesses and consideration of opportunities and threats.

Marketing Objectives

The targets that the marketing department wishes to achieve, such as sales growth or increased market share.

Marketing Plan

A document outlining an organization’s marketing objectives and the marketing strategies to be used to achieve these objectives.

Marketing Planning

A systematic process of devising marketing objectives and appropriate marketing strategies to achieve these goals.

Market Segment

Refers to a distinct group of customers with similar characteristics (such as age or gender) and similar wants or needs.

Marketing Strategies

The various long-term actions taken by a business to achieve its marketing goals.

Mass Marketing

Refers to undifferentiated marketing. This marketing strategy ignores targeting individual market segments.

Niche Marketing

Targets a specific and well-defined market segment, such as high-end specialty goods.

Product Position Map OR Perception Map

A visual tool that reveals customer perceptions of a product or brand in relation to others in the market, oſten by comparing perceptions about price and quality.

Repositioning

A marketing strategy that involves changing the market’s perception of a firm’s product or brand in comparison to rival businesses.

Segmentation

The process of categorizing customers into distinct groups of people with similar characteristics and buying habits for market research and targeting purposes.

Segmentation can be done by using demographic, geographic and psychographic factors.

Target Market

Refers to a clearly identifiable group of customers that marketers choose to focus their efforts on, such as children, adults, men or women for a particular product.

Targeting

Refers to each distinctive market segment having its own specific marketing mix, depending on whether the business operates in niche or mass markets.

Unique Selling Point OR Unique Selling Proposition (USP)

Refers to any aspect of a good or service that makes it stand out (in a positive way) from those offered by competitors.

Seasonal Variations

Periodic fluctuations in sales revenues during different times of the year.

Cyclical Variations

Recurrent fluctuations in sales revenues linked to the economic cycle of booms and slumps.

Sales Forecasting

A quantitative management technique used to predict a firm’s level of sales over a given time period.

Random Variations

Unpredictable fluctuations in sales revenues caused by erratic and irregular factors that cannot be reasonably anticipated.

Time Series Analysis

A sales forecasting technique that attempts to predict sales levels by identifying the underlying trend from a sequence of actual sales figures.

Academic Journals

Periodical publications from educational and research institutions that publish data and information relating to a particular academic discipline.

Ad-hoc Market Research

Market research conducted as and when required in order to deal with a specific problem or issue.

Continuous Market Research

Market research that is conducted on an ongoing basis, rather than a one-off (ad-hoc) basis.

Convenience Sampling

Uses research participants who are easy (convenient) to reach.

It relies on the ease of reach because of the convenient availability of volunteers.

Focus Groups

Forming small discussion groups to gain insight into the attitudes and behaviour of respondents.

The group is typically made up of participants who share a similar customer profile.

Government Publications

A type of secondary market research refers to official documents and publications released by government entities and agencies.

Interviews

A type of primary research that involve discussions between an interviewer and interviewees to investigate their personal circumstances, preferences and opinions.

Market Analysis

A form of secondary market research that reveals the characteristics, trends and outlook for a particular product or industry, such as market size, market share and market growth rate.

Market Research

Refers to marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers.

Media Articles

A type of secondary market research referring to the documents (articles) in print or online media.

They are written by skilled journalists and authors.

Observations

A method of primary research that involves watching how people behave or respond in different situations.

Online Secondary Market Research

Sources available on the Internet for research purposes.

These include media articles, government publications, academic journals and market analyses available on the Internet.

Population

All potential customers of a particular market.

Primary Marketing Research

Gathering new data for a specific purpose, using methods such as surveys, interviews, focus groups and observations.

Qualitative Market Research

Getting non-numerical responses from research participants in order to understand their behaviour, attitudes and opinions.

Quantitative Market Research

Collecting and using factual and measurable information rather than people’s perceptions and opinions

Quota Sampling

Using a certain number of people (known as the quota) from different market segments for primary market research purposes.

Random Sampling

Gives everyone in the population an equal chance of being selected for the sample.

Sample

A selected group or proportion of the population used for primary market research purposes.

Sampling

A primary research technique that selects a sample of the population from a particular market for research purposes.

Sampling Errors

Caused by mistakes made in the sample design, such as an unrepresentative sample being used or the sample size being too small.

Secondary Market Research

Involves the collection of second-hand data and information that already exists, previously gathered by others, such as media articles and government publications.

Survey

A document that contains a series of questions used to collect data for a specific purpose.

Surveys are the most common method of primary research.

Brand

Refers to a name that is identifiable with a product of a particular business.

Brand Awareness

Measures the extent to which people recognize a particular brand.

Brand Development

Refers to the ongoing and long-term marketing process of improving and enlarging the brand name in order to boost sales revenue and market share.

Brand Loyalty

Occurs when customers buy the same brand of a product repeatedly over time.

Brand Switching

Occurs when consumers turn to alternative brands mainly because the original brand has lost some of its former appeal.

Brand Value

Refers to the premium that customers are willing to pay for a brand name over and above the value of the product itself.

Branding

Refers to the practice of using an exclusive name, symbol or design to identify a specific product or organization

Consumer Goods

Products bought for personal consumption, such as furniture, computers and fresh flowers.

Customer Loyalty Schemes

A form of sales promotion used to entice customers to stick to the brand by rewarding devoted customers.

Extension Strategies

Attempts by marketers to lengthen the life cycle of a particular product, typically used during the maturity or early decline stages of the product’s life cycle.

Genericised Brands

So popular that they become synonymous with the name of the product itself.

Global Brands

Highly popular products sold with exactly the same (or very similar) marketing strategies in overseas markets, using the same brand name in different countries.

Innovators

Consumers who strive to be the first to own a certain product, usually due to the prestige or loyalty to a particular brand or product.

Intangible Products

Non-physical services, such as haircuts bus rides and visits to the cinema.

Logos

A form of branding that uses a visual symbol to represent a business, its brands or its products.

Marketing Myopia

Exists when a business becomes complacent about its product strategy, thereby failing to keep up with market changes.

Multi-brand Strategy

Involves a business developing two or more brands in the same product category.

Producer Goods

Products purchased for commercial (business) use, rather than for private consumption.

Product

Refers to any physical or non-physical item (good or service) that is purchased by commercial or private customers.

Product Cannibalisation

Occurs when brands from the same business directly compete with each other.

Product Differentiation

Refers to any strategy used to make a product appear to be distinct from others, such as quality, branding and packaging.

Product Life Cycle (PLC)

Refers to the typical process that products go through from their initial design and launch to their eventual decline and withdrawal at varying speeds.

Product Portfolio

Refers to the collection of products owned by an organization at any one point in time.

Prototype

A trial product, produced to assess the potential success of the product.

Slogans

Catchphrases used to represent the essence of a business or its products in a memorable way.

Tangible Products

Physical goods, such as cars, computers and smartphones.

Test Marketing

The trialling a new product with a sample of customers, perhaps in a limited geographical area, to determine the reactions of customers and to gather valuable feedback before a full launch.

Trademark

Gives legal protection to the owner to have exclusive use of the brand name.

Competitive Pricing

The practice of a business setting the price of its goods or services at the same or similar level to that of its competitors.

Contribution Pricing

The practice of setting the selling price of a product higher than the direct costs of production per unit in order to ensure there is a positive contribution made towards payment of indirect costs.

Cost-plus Pricing / Mark-up Pricing

Involves adding a percentage or specific amount of profit to the cost per unit of output in order to determine the selling price.

Dynamic Pricing

The practice of varying the price of a good or service to reflect changing market demand, such as during different times of the day or year.

Loss Leader Pricing

Involves setting the price of a good or service below its costs of production.

The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader product.

Mark-up

Refers to the extra amount charged by a business on top of its unit costs of production in order to earn a positive profit margin.

The mark-up can be expressed as an absolute amount.

(e.g. $10 per unit) or as a percentage of the cost (e.g. 75% per unit).

Penetration Pricing

Involves setting low prices in order to gain entry into a new market.

Once the product or brand has established market share, prices can be raised.

Predatory Pricing

Involves temporarily setting prices so low that competitors, especially smaller businesses, cannot compete at a profitable level.

Premium Pricing

When the price of a good or service is set significantly higher than similar competing products, usually because the product is of higher quality or is sufficiently unique to justify the premium price.

Price

Refers to the value of a good or service.

It is the amount paid by a customer to purchase the product.

Price Elasticity of Demand (PED)

Measures the degree of responsiveness of demand for a product due to a change in the price of that product.

Price Wars

Involve businesses competing by a series of continuous and/or intensive price cuts to threaten the competitiveness of rival firms in the market.

Pricing Methods

The various methods of setting the amount that customers pay for certain goods and services.

Above the Line (ATL) Promotion

Is any form of paid-for promotion through the mass media (such as television and radio) to reach a broad audience.

Advertising

A method of informative and/or persuasive promotion that is usually paid for.

The aim of commercial advertising is to raise the level of demand for a firm’s products.