Introduction to Business: Product, Promotion, Distribution, and Pricing

Comprehensive vocabulary flashcards covering marketing fundamentals, product planning, promotional strategies, distribution channels, supply chain logistics, and pricing objectives from Chapters 12 and 13.

Product

Anything that an organization offers to satisfy consumer needs and wants.

Goods-and-Services Spectrum

A continuum ranging from pure goods that do not include any services (e.g., a bottle of ketchup or a package of socks) to pure services that do not include any tangible goods (e.g., financial consulting or a piano lesson).

Core benefit

The most fundamental layer of a product that satisfies the consumer's essential needs.

Actual product

The physical good or delivered service that provides the core benefit to the consumer.

Augmented product

The additional goods and services provided alongside the actual product that sharpen the product's competitive edge.

Convenience products

Inexpensive goods and services that consumers buy frequently with limited consideration and analysis.

Shopping products

More expensive products that consumers buy less frequently and shop around for.

Specialty products

Much more expensive products that consumers seldom purchase.

Unsought products

Goods and services that hold little interest or even negative interest for consumers.

Business products

Products purchased to use either directly or indirectly in the production of other products, including installations, accessory equipment, raw materials, component parts, and business services.

Product differentiation

Attributes that make a good or service different from other products that compete to meet the same or similar customer needs.

Quality level

A measure of how well a product performs its core functions.

Product consistency

The reliability of a product in delivering its promised level of quality.

Product features

The specific characteristics of a product.

Customer benefits

The advantages that a customer gains from a specific product feature.

Product line

A group of products that are closely related to each other.

Product Mix Width and Depth

Two structural dimensions of a firm's product mix: width represents the number of different product lines offered, while depth represents the quantity of individual brand items offered within each product line.

Cannibalization

The risk of a company's new product lines decreasing the sales of its current products.

Product mix

The total number of product lines and individual items sold by a single firm.

Line extensions

Similar products introduced under the same brand name.

Brand extension

A new product, in a new category, introduced under an existing brand name.

Brand equity

The overall value of a brand to an organization.

Licensing

Purchasing the right to use another company’s brand name or symbol.

Cobranding

The agreement of established brands from different companies joining forces to market the same product.

National brands

Brands owned and initiated by a producer (such as Kraft).

Store brands

Brands owned by a retailer (such as Great Value), also known as private labels, dealer brands, or retail brands.

Discontinuous innovation

Brand-new ideas that radically change how people live.

Dynamically continuous innovation

Innovations characterized by marked changes to existing products.

Continuous innovation

An innovation that features a slight modification of an existing product.

New Product Development Process

A structured six-step sequence for commercializing innovations: Idea Generation, Idea Screening, Analysis, Development, Testing, and Commercialization.

Observability

A diffusion characteristic measuring the visibility of a product to other potential consumers.

Trialability

A diffusion characteristic measuring the ease with which potential consumers can sample a new product.

Product Life Cycle (PLC)

The model tracking category sales and category profits across four stages: Introduction, Growth, Maturity, and Decline. Notably, profits tend to peak in Growth, while sales tend to peak in Maturity.

Positioning statement

A statement detailing how the marketer would like the target market to envision a product relative to the competition.

Integrated marketing communications (IMC)

The coordination of marketing messages through every promotional vehicle to communicate a unified impression about a product.

Push strategy

A promotional approach that targets marketing efforts toward the distribution channel to push products through to the consumer.

Pull strategy

A promotional approach that targets marketing efforts directly toward consumers to generate demand and pull products through the channel.

Distribution strategy

A plan for delivering the right product to the right person at the right place at the right time.

Marketing Intermediary Transaction Efficiency

The function of a channel intermediary in streamlining distribution by drastically reducing the number of individual transactions required between multiple manufacturers and customers.

Direct channel

A distribution process that links a producer and a customer directly with no intermediaries.

Retailers

Distributors that sell products directly to the ultimate users, typically in small quantities, that are stored and merchandized on the premises.

Wholesalers

Distributors that buy products from producers and sell them to other businesses or nonfinal users.

Merchant wholesalers

Wholesale distributors that take legal possession or title of the goods they sell.

Agents/brokers

Distributors who connect buyers and sellers to facilitate sales without taking title of the goods.

Intensive distribution

A distribution strategy that involves placing products in as many retail stores and outlets as possible.

Selective distribution

A distribution strategy that involves placing products only with preferred retailers.

Exclusive distribution

A distribution strategy that establishes only one retail outlet in a given geographic area.

Category Killer

A retail store type that dominates its category by offering a huge variety of one type of product (e.g., OfficeMax, Best Buy, Staples, PetSmart).

Department Store

A retail store that offers a wide variety of merchandise (e.g., clothes, furniture, cosmetics) and usually provides a high level of service (e.g., Nordstrom, Macy's).

Discount Store

A retail store that offers a wide array of merchandise at significantly lower prices and with less service than most department stores (e.g., Target, Walmart).

Supercenter

A giant store that sells a complete selection of food and general merchandise at a steep discount in a single enormous location (e.g., Walmart Supercenters, Super Target).

Warehouse Club

A retail store that sells discounted food and general merchandise to club members in a large warehouse format (e.g., Costco, Sam's Club).

Elements of the Supply Chain

The sequential path encompassing Raw Materials, Logistics, Warehouse/Storage, Production, Warehouse/Storage, Logistics, and Distributors—Marketing and Sales.

Logistics

A subset of supply chain management (SCM) that focuses on the tactics involved in moving products along the supply chain.

Penetration pricing

A pricing strategy focused on boosting sales volume through rock-bottom initial prices.

Everyday-low pricing (EDLP)

Long-term discount pricing designed to drive high sales volume consistently.

High/low pricing

A pricing strategy offering special sales on some products while maintaining higher prices on others.

Loss-leader pricing

Pricing a product temporarily below cost to attract customers into a store.

Skimming pricing

Offering new products at a premium price to maximize profits or create prestige.

Breakeven Analysis

The process of determining the number of units a firm must sell to cover all costs, using the formula: $\text{Breakeven Quantity} = \frac{\text{Fixed Costs}}{\text{Price} - \text{Variable Costs}}$.

Gross Profit

The dollar gap between the price and cost of an item on a per-product basis (e.g., \5\text{ price} - \$2\text{ COGS} = \$3\text{ gross profit}$).

Gross Margin

Gross profit expressed as a percentage of the selling price (e.g., $\frac{\$3}{\$5} = 0.6 = 60\%$).

Markup

Gross profit expressed as a percentage of the product's cost (e.g., $\frac{\$3}{\$2} = 1.5 = 150\%$).

Odd pricing

A pricing practice that ends prices in numbers below even dollars and cents (e.g., $\$1.99$) to create the perception of greater value.