Entrepreneurship guide

Direct Distribution

Product goes directly from the manufacturer to the consumer; offers cost savings and faster change but requires large investments in warehouses, retail outlets, and staff.

Indirect Distribution

Product is distributed using intermediaries (middlemen) such as wholesalers who sort, group, and assort products and serve as the main connection between manufacturers and many retailers.

Vertical Conflict

Conflict occurring between different levels of the distribution channel (manufacturer, wholesaler, retailer).

Horizontal Conflict

Conflict occurring between different channel members at the same level (side-to-side competition).

Persuasive Letters

Letters intended to convince others to make changes or take action.

Sales Letters

Persuasive letters written by the sales department to convince others to buy products or services.

Press Releases

Persuasive communications written by the public relations department to convince the press to cover an event.

Goodwill Letters

Letters such as thank-you, sympathy, congratulatory, or new-hire introductions, usually written by HR.

Reports

Documents that study an issue or problem, collect data, and present findings, typically including an executive summary, table of contents, and bibliography.

Teleconference

A seminar or conference hosted over the phone.

Webinar

A web-based seminar or conference hosted over the internet.

Letterhead

Displays a firm’s logo, name, address, telephone, and fax.

Inside Address

The address of the person receiving the letter.

Return Address

The address of the person sending the letter.

Salutation

The greeting of a letter (e.g., “Dear Sir or Madam”).

Complimentary Close

The closing phrase of a letter (e.g., Sincerely, Regards).

Signature Block

Four blank lines followed by the writer’s typed name and job title.

Enclosure Notation

Indicates an attachment is included with the letter.

Copy Notation

Shows who received copies of the letter (cc, pc).

Reference Initials

Indicates the writer’s and typist’s initials.

Economic Good

A physical object that satisfies wants or needs and has monetary value.

Economic Service

A non-tangible activity that satisfies wants or needs and has monetary value.

Inflation

A rise in general price levels causing purchasing power to fall.

Deflation

A general decline in prices, often due to reduced money or credit supply.

Stagflation

Slow economic growth and high unemployment combined with rising prices.

Scarcity

Limited resources available to satisfy unlimited wants and needs.

Antitrust Acts

Laws protecting consumers and businesses from monopolies and unfair competition.

Sherman Act

Prevents collusion and price-fixing agreements among competitors.

Clayton Act

Prevents mergers or acquisitions intended to create monopolies.

Wheeler-Lea Act

Prevents false advertising, bait-and-switch, and deceptive practices.

Robinson-Patman Act

Prevents price discrimination between buyers.

Monopoly

Complete market control by one business.

Oligopoly

Market control by a few large firms.

Empathy

Putting yourself in another person’s position and understanding their perspective.

Accrual Accounting

Accounting method matching revenues and expenses at the time of the transaction.

Cash Accounting

Accounting method matching revenues and expenses when cash is received.

Income Statement

Financial statement listing revenues, expenses, and profit.

Revenues

Money a company actually receives.

Cost of Goods Sold

Direct costs of producing goods, including materials and labor.

Gross Profit

Revenues minus cost of goods sold.

Net Profit

Gross profit minus operating expenses and taxes; the bottom line.

Assets

Items a business owns.

Current Assets

Assets that can be quickly converted into cash.

Fixed Assets

Long-term assets not easily converted into cash.

Liabilities

What a business owes.

Current Liabilities

Short-term debts payable within one year.

Fixed Liabilities

Long-term debts taking more than one year to repay.

Mean

The average value.

Mode

The value that occurs most frequently.

Median

The middle value in a data set.

Causal Research

Research examining cause-and-effect relationships by manipulating variables.

Exploratory Research

Research conducted to discover information and define a marketing issue.

Descriptive Research

Research that gathers specific information about a known issue.

Response Error

Occurs when survey respondents answer incorrectly or incompletely.

Likert Scale

A scale measuring level of agreement from strongly disagree to strongly agree.

Primary Data

Data collected for a specific purpose or project.

Secondary Data

Data collected for purposes other than the current issue.

Quantitative Research

Research based on numbers, counts, and measurements.

Qualitative Research

Research based on meanings, opinions, and characteristics.

Marketing Plan

A blueprint and action plan for an organization’s marketing efforts.

Executive Summary

A brief section summarizing a longer report.

SWOT Analysis

Analysis of internal strengths and weaknesses and external opportunities and threats.

Forecasting

Business projections based on historical data, trends, and estimates.

Strategy

A plan chosen to achieve a goal or solve a problem.

Tactics

The methods used to carry out a strategy.

Aptitude

A natural ability to do something well.

Skill

An ability developed through training or practice.

Risk Management

Applying resources to minimize or control negative events.

Information Management

Protecting confidential business and customer information.

Database

A system that stores customer and business information.

Intranet

An internal company network used to share information.

Price Fixing

Illegal agreement among competitors to set prices.

Price Gouging

Charging unethically high prices during emergencies.

Skimming Pricing

Setting high initial prices to recover R&D costs and signal quality.

Penetration Pricing

Setting low initial prices to encourage widespread adoption.

Loss-Leader Pricing

Pricing near cost to attract customers who buy other products.

Bundle Pricing

Selling related products together at a perceived value.

Multiple-Unit Pricing

Selling several units of a product for one price.

Introduction Stage

Product life-cycle stage focused on awareness, early adopters, and high failure risk.

Growth Stage

Stage marked by rising demand, expanding distribution, and new competitors.

Maturity Stage

Stage of slowed growth, heavy competition, and market saturation.

Decline Stage

Stage of falling sales where products may be rejuvenated or discontinued.

Corporate Branding

Promoting the overall corporate brand name.

Product Branding

Promoting individual product brand names.

Co-Branding

Linking two brands to create a new product identity.

Brand Positioning

Creating a distinct brand image in the consumer’s mind.

Brand Preference

Consumer loyalty toward a preferred brand with acceptance of substitutes.

Brand Awareness

Degree to which consumers recognize a brand.

Brand Extension

Using an existing brand to introduce new products.

Brand Licensing

Allowing another company to use a brand for a fee.

Product Mix

All products a company offers.

Product Line

A group of related products made by the same company.

Product Width

Number of product categories a business offers.

Product Depth

Variety of products within a single product line.

Advertising

Paid promotion intended to inform, persuade, or remind customers.

Publicity

Promotion through independent media sources.

Public Relations

Efforts to build positive relationships between a business and the public.

Sales Promotion

Short-term incentives designed to stimulate sales.

Trade Shows

Large industry events promoting contact between manufacturers and buyers.

Headline

Attention-grabbing phrase at the top of an advertisement.