A Level Business Edexcel 1.3 Marketing Key Terms

Boston matrix

A grid measuring a company's product portfolio by market share against market growth.

Branding

Differentiating a product/service by developing its name to create an image, even a 'character'.

B2B: Business to Business

Marketing priorities when a business is selling to other firms, not to consumers.

B2C: Business to Consumer

Marketing priorities when businesses are trying to persuade consumers to buy and stay.

Cash cow

A product/brand with a high share of a slow-growing market sector, that can be 'milked' using its positive cash flow to invest in potential rising stars.

Competitive pricing

Pricing in line with rivals, or perhaps below (when you're a weak-ish No 2 to a strong No 1 brand).

Consumer behaviour

How consumers act, e.g. in response to highly innovative new product launches.

Cost plus pricing

Calculating the unit cost then adding a planned profit %

Customer loyalty

Whether customers keep buying from you, either actively (they love you!) or passively (no alternative).

Design mix

The combination of 3 design objectives (function, economic, aesthetics) used for a particular product.

Distribution channels

Changes in ownership as a product gets from producer to consumer, e.g. selling to retail chain, then H/H

Dog

A product with a low share of a static or declining market (when cash flows turn negative it's delisted)

Emotional branding

Creating triggers in consumers' minds that may lead to strong feelings (love, even) from consumers

Ethical sourcing

Designing a product based partly on morally sound supply sources, e.g. recycled plastics

Extension strategies

Medium-long term plans to extend a product's profitable life cycle.

Market saturation

Everyone who wants one has got one, so future sales prospects are bleak.

Marketing strategy

A medium-long-term plan for meeting a company's marketing objectives

Online distribution

Using an online distribution channel instead of physical retailing.

Penetration pricing

Pricing below the market rate to 'buy' market share - probably hoping to boost prices later on.

Predatory pricing

Consciously setting prices low enough to drive rivals out of business. Illegal, but virtually unprovable.

Price comparison sites

Online sites that appear to offer an objective comparison between rivals' prices, to how value for money

Price skimming

Pricing high to establish a reputation for quality and to enjoy fat profit margins, but perhaps low volumes

Pricing strategy

Medium-long-term plan for how your prices will be set, e.g. choosing cost-plus instead of competitive

Problem child

A product with a small share of a growing market/sector - may prove to be a star of tomorrow

Product life cycle

The theory that all products follow a similar path of birth, growth, maturity and decline.

Product portfolio

The range of brands owned by a company, set out to identify the marketing budget priorities

Psychological pricing

Pricing below psychological price barriers, e.g. at £9.99 instead of £10.10

Rising star

A product with a high share of a growing market or sector, profitable today and more so tomorrow

Social trends (and distribution)

How trends such as the switch from products to services affect physical distribution such as shops

Stages in the product life cycle

Birth, growth, maturity and decline - and how pricing and other marketing may vary over these stages.

Unique Selling Point (USP)

Something valued by customers that no other product has, e.g. Nespresso coffee has George Clooney

Unit cost

The total cost of production of one unit, e.g. variable cost plus fixed cost per unit

Viral marketing

The way social media retweets and likes can make a brand 'go viral' - and therefore seen by millions