Marketing and Business Terms: BCG Matrix, Pricing, Promotion, and Product Lifecycle

above-the-line

mass media promotion, often run by agencies, emphasizing awareness

agent

a negotiator that acts as an intermediary between buyers and sellers

BCG Matrix

tool used to analyze products in relation to market share and growth rate

below-the-line

targeted promotion, often run by the business, emphasizing action

benefit

the stated impact a feature has on a customer (answers the 'so what?')

brand

intangible concept of a business, including what it claims and how it is perceived

"Cash Cow" (BCG)

high market share + low growth rate; can 'harvest' for profit

competitive pricing

price is determined by what competitors charge for a similar item

cost-based pricing

price is determined by adding an amount to the cost to make the item

demand-based pricing

price is determined by how much customers are willing to pay

digital marketing

also known as online marketing, is promotion done through the internet

direct marketing

activities that promote to a customer without intermediaries

distribution channel

the route a product takes from production to purchase

"Dog" (BCG)

low market share + low growth rate; likely to be 'divested'

dynamic pricing

adjusting a price in real time to reflect market conditions

feature

a specific attribute or function of a product

labeling

necessary information on product packaging (or attached to the product)

loss leader

a product priced at or below cost intentionally to attract customers

market saturation

when product volume in the market is maximized; few new buyers

markdown

the decrease in the price of a product from its original price

markup

the difference between a product's price and cost

packaging

the container in which a physical product is placed

penetration pricing

a product's launch price is lower to build a customer base

Place (4 P's)

where and how a business delivers products to customers (aka: distribution)

Price (4 P's)

the amount a customer pays in exchange for a product (note: not 'cost')

price skimming

a product's launch price is higher to recover initial costs

Product (4 P's)

the output of a business; it can be a good, service, or both

product life cycle

the progression of a product from development to decline

product life cycle stages

development, introduction, growth, maturity, decline

product line

a category or group of related products

product portfolio (mix)

total collection of goods and/or services that a business sells

Promotion (4 P's)

communication of a business's desired messages to the market

psychological pricing

the idea that certain types of prices affect customer behavior

public relations (PR)

the practice of maintaining a favorable public image

"Question Mark" (BCG)

low market share + high growth rate; should be 'built' up

retailer

any business that sells products to end customers for their use, not for resale

social media marketing

the strategic use of social media to promote a business

"Star" (BCG)

high market share + high growth rate; should be 'held'

variant

a slightly different version of the same product, like sizes, colors, flavors

wholesaler

business that buys products in bulk, then resells them in smaller amounts

Extended Marketing Mix

adds '3 P's' to address marketing products that are a service

People (7 P's)

how workers interact with and represent the business to customers

Physical Evidence (7 P's)

tangible cues that assure a customer of the business's service

Process (7 P's)

the manner in which the service is provided (SOPs, customer service ...)

elastic demand

demand for a product changes in response to different prices

elasticity of demand

the degree to which changes to a product's price affect its demand

inelastic demand

demand for a product does not change in response to different prices

product development

creating a new product or improving an existing product

research & development

systematic activities to innovate and introduce products

sales forecasting

quantitative tool used to predict sales levels over a specific period