IGCSE Business Studies Unit 3 (Marketing) - Definitions

Market Orientation

An approach to marketing that prioritizes identifying the needs and desires of consumers and then creating products and services that satisfy them

Product Orientation

An approach to marketing that focuses on making products according to businesses resources and then trying to market them to customers

market share

A business's product sales as a percentage of total sales for that industry

Market growth

The percentage change in the total size of a market (volume or value) over a period of time.

market leader

The firm or product in an industry with the largest market share

Marketing Objectives

The goals set for the marketing department to help the business achieve its overall objectives

Marketing Strategies

The medium to long term plan to achieve a firm's marketing objectives by using an appropriate marketing mix

Marketing Mix

The set of tactical marketing tools - product, price, place, and promotion (4ps) - that the firm blends to produce the response it wants in the target market

Target Market

A group of people with some shared characteristics that a company has identified as potential customers for its products.

Market Segment

A subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs

Market Segmentation

Dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require different products or marketing strategies. This can be done by different characteristics such as age, gender, income level etc.

Niche Market

A narrowly selected target market segment of a larger market. Often these customers have specific needs

Mass Market

A very large market in which products with mass appeal are targeted

unique selling proposition/point (USP)

The distinctive benefits that make a product different than any other. The reason marketers believe consumers will buy a product rather than it's competitors

Differentiation

Making a product different from other similar products

market research

The activity of gathering information about consumers' needs and preferences.

Primary Research

Conducting research to collect new data to solve a marketing information need. Methods include questionnaires, interviews, observations, focus groups and/or experiments

Secondary Research

Analyzing information from previously conducted research. Sources may include company accounts, government websites, market research reports, academic journal articles

focus group

A primary research method in which a group of seven to ten people from a given target market participate in a group discussion led by a moderator

quota sampling

A sampling method where the researcher selects a sample that reflects the characteristics of the whole population

Snowballing sampling

A sampling method where existing participants recruit additional participants from among their acquaintances

stratified sampling

A type of probability sampling in which the population is divided into groups with a common attribute and a random sample is chosen within each group

random sampling

A method of sampling that gives each person in a group the same chance of being selected

cluster sampling

A sampling technique in which clusters of participants that represent the population are used

convenience sampling

A sampling method which involves using a sample of people who are readily available to participate

Product lifecycle

A theoretical model which shows the sales of a product/business/brand/ market over time. There are generally seen to be for distinct phases: introduction, growth, maturity, decline.

Extension strategies

Marketing strategies to extend the maturity stage of the product lifecycle.

Boston Matrix (BCG Matrix)

A 2x2 matrix model that analyses a firm's product portfolio according to growth rate of the market and the relative market share of products within the market. Products are categorised as either a Question Mark/Problem Child, Star, Cash Cow or Dog

Boston Matrix - Dogs

A product with a low market share and low market growth

Boston Matrix - Star Product

A product with a high market share and high market growth

Boston Matrix - Problem Child / Question Mark

A product that has low market share but operate in a high growth market. These products have potential but require investment to hopefully gain market share and become Stars

Boston Matrix - Cash Cow

A product that has high market share but in a low growth market. They are successful, established products that don't require much investment

brand awareness

Measures how many consumers in a market are familiar with the brand and what it stands for; created through repeated exposures of the various brand elements (brand name, logo, symbol, character, packaging, or slogan) in the firm's communications to consumers.

brand loyalty

A customer's favorable attitude toward a specific brand

Brand Development

A long-term product strategy that involves strengthening the name and image of a brand to boost its appeal and sales.

brand value

The total financial value of a brand as a result of income, potential income, and brand awareness. This can be difficult to measure

cost-plus pricing

A pricing strategy in which the seller totals all the costs of producing a good or service and then adds an amount for mark-up to arrive at the selling price

penetration pricing

A pricing strategy in which a firm introduces a new product at a very low price to encourage more customers to purchase it, and then may raise the price later

price skimming

A pricing strategy which involves setting a higher price for a new product when it first enters the market. As the product evolves, the price drops accordingly. Price skimming is often used with high-tech or other innovative products

price discrimination

A pricing strategy which involves selling the same good at different prices to different customers

loss leader

A pricing strategy which involves a product being priced at or below cost for the purpose of drawing customers into purchasing additional more profitable products

price leadership

A pricing strategy in which one or more dominant firms set the pricing practices that all competitors in an industry follow

predatory pricing

The practice of charging a very low price for a product with the intent of driving competitors out of business or out of a market

psychological pricing

The practice of using the power of psychology to push consumers to buy more products. Examples include odd pricing, prestige pricing, bundle pricing

Above the line promotion

A form of promotion that involves paying for advertising communication with consumers via messages broadcast in the media

Below the line promotion

Methods of promotion that are not paid-for communications but instead uses other incentives to encourage consumers to buy. Examples include sales promotions, social media, viral marketing, guerrilla marketing, Direct sales, public relations

Promotional Mix

The combination of promotional tools—including advertising, public relations, personal selling, sales promotion, and social media etc—used to reach the target market and fulfill the organization's overall goals

viral marketing

The digital version of word-of-mouth marketing: leveraging customers to promote a product or service by encouraging them to share videos, ads, and other marketing content with their friends

Social Media Marketing

The utilization of social media or social networks to market a product, company, or brand. This can be through paid reach or organic reach

Guerrilla marketing

The use of unconventional, low-cost, creative marketing strategies that grab the attention of customers

sales promotion

Using short-term incentives to encourage the purchase or sale of a product or service. Examples include using coupons/vouchers, competitions, discounts, free gifts.

Merchandising

Merchandising refers to the promotion of products at the point of sale through displays, signage etc.

distribution channel

The means by which a business distributes their product or service to the customer, possibly through the use of intermediaries such as retailers, wholesalers or agents

Ecommerce

The buying and selling of goods and services over the internet

Four-part moving average

A quantitiative method used for sales forecasting that involves averaging four adjacent terms in a time series. The starting point progresses gradually through the time series. This identifies the underlying trend in the data.

Three-part moving average

A quantitiative method used for sales forecasting that involves averaging three adjacent terms in a time series. The starting point progresses gradually through the time series. This identifies the underlying trend in the data.

Sales Forecasting

A quantitative technique that attempts to estimate the future level of sales a business expects to achieve, over a given time period.

time series analysis

A forecasting method that uses historical sales data to discover patterns in the firm's sales over time and generally involves identifying underlying trends in addition to seasonal, cyclical and random variations

seasonal trend

A data pattern change due to seasonal fluctuations

random fluctuations

Fluctuations in sales due to unpredictable events such as weather, media, natural disasters, pandemics

Cyclical Fluctuations

Variations in sales that occur over long periods of time due to the business cycle (growth, boom, recession, trough)

Glocalisation

The practice of selling goods in different national markets, but adapting the goods or services to better appeal to consumer tastes in different markets