Financial Management and Marketing Concepts Study Guide

A comprehensive set of vocabulary flashcards covering key concepts in financial management and marketing as outlined in the lecture notes.

Financial Management (FM)

Focuses on long-term capital decisions for growth.

Managerial Accounting (MA)

Focuses on short-term operational cash flow.

Time Value of Money

A dollar today is worth more than a dollar tomorrow, captured through Present Value (PV) and Future Value (FV) calculations.

Cost of Capital

The rate of return a company must earn on investments to satisfy investors, also known as the 'hurdle rate'.

Opportunity Cost

The value of the next-best alternative foregone when a financial decision is made.

Capital Expenditure (CapEx)

Long-term investment in fixed assets such as renovation, modernization, and expansion of tangible assets.

Leverage

Using borrowed funds to amplify potential returns; a strategy balancing debt and equity for growth versus risk.

Depreciation & Amortization

Accounting methods for reducing asset value over time, which also reduces taxable income.

Cannibalization

When a new product takes sales from an existing product within the same company, potentially seen as a strategic move.

B2B (Business-to-Business)

A market where one business sells products or services to another business.

B2C (Business-to-Consumer)

A market where a business sells products or services directly to individual consumers.

Consumer Purchase Decision Process

A five-step model that includes Need Recognition, Information Search, Evaluation of Alternatives, Purchase Decision, and Post-Purchase Evaluation.

Segmentation

The process of grouping customers by shared characteristics to identify distinct groups for targeting.

Targeting

The strategy of choosing which segmented group of customers to focus marketing efforts on.

Positioning

Establishing a unique place for a product in the minds of the target customers versus competitors.

Elastic Demand

A situation where a price increase causes a proportionally larger decrease in demand, indicating consumer sensitivity to price changes.

Inelastic Demand

A situation where a price increase causes a proportionally smaller decrease in demand, showing less sensitivity to price changes.

Push vs. Pull Promotion

Push promotes products to distributors to stock and sell them; Pull creates consumer demand to 'pull' the product through the supply chain.

Marketing Mix

The combination of Product, Price, Promotion, and Place strategies used to market a product.

Perceived Value

What a customer believes a product is worth based on its benefits versus the costs.