IB

Key Terms and Definitions

1. Marketing is the management process of predicting, identifying and meeting the needs and wants of customers in a profitable manner.

2. Market leadership refers to firms with the largest market share in a particular market.

3. Market orientation is a marketing approach adopted by businesses that are outward looking by focusing on making products that they can sell, rather than selling products that they can make.

4. Market share measures the value of a firm’s sales revenues as a percentage of the total sales revenue in the industry.

5. Market size refers to the magnitude of an industry, usually measured in terms of the value of sales revenue from all the businesses in a particular market, per time period.

6. Product orientation is a marketing approach used by businesses that are inward looking as they focus on selling products that they can make, rather than making products that they can sell.

7. Consumer profiles are demographic and psychographic characteristics of consumers in different markets.

8. Differentiation is the act of distinguishing a business or its products from rivals in the industry. It tries to create the perception among customers that the firm’s product is different compared with substitute products from rival businesses..

9. Market segmentation is the process of categorizing customers into distinct groups with similar characteristics and similar needs or wants for market research and targeting purposes.

10. Convenience sampling uses subjects that are easy to reach. It relies on ease of reach and volunteers because of their availability.

11. Focus groups involve forming small discussion groups to gain insight into the attitudes and behavior of respondents. The group is typically made up of participants who share a similar customer profile.

12. Interviews involve discussions between an interviewer and interviewees to investigate their personal circumstances and opinions. Beliefs, attitudes and feelings can be examined in detail.

13. Market analysis reveals the characteristics and the trend for a particular product or industry.

14. Market research refers to marketing activities designed to discover the opinions, beliefs and preferences of potential and existing customers in order to identify and anticipate their needs and wants.

15. Observations involves watching how people behave or respond in different situations. It can be done under controlled situations or as real-life situations.

16. Population refers to all potential customers in a particular market. 

17. Primary research is market research that involves fathering new data first-hand for a specific purpose.

18. Qualitative market research involves getting non-numerical answers and opinions from respondents. .

19. Quantitative market research is about collecting and using factual and measurable information rather than opinions.

20. Random sampling gives everyone in the population an equal chance of being selected for the sample.

21. Sample is a selected proportion of the population used for primary market research purposes.

22. Marketing mix is the combination of various elements needed to successfully market a product. It is used to review and develop marketing strategies and is at the heart of marketing planning. It consists of the 4 P’s: product, price, place and promotion.

23. Marketing plan refers to the document outlining a firm’s marketing objectives and strategies for a specified time period.

24. Mass marketing refers to undifferentiated marketing. This is a strategy that ignores targeting individual market segments.

25. Niche marketing targets a specific and well-defined market segment.

26. Targeting refers to each distinctive market segment having its own specific marketing mix. Different markets can be targeted depending on whether firms operate in niche or mass markets.

27. Unique selling point refers to any aspect of a product that makes it stand out from those offered by rival businesses.

28. Branding refers to the use of an exclusive name, symbol or design to identify a specific product or organization. It differentiates a product from similar ones offered by rival firms.

29. Triple bottom line the three pillars of sustainable development

30. Cost-plus pricing involves adding a percentage or predetermined amount of profit to the cost per unit of output to determine the selling price.

31. Loss leader pricing involves setting the price of a product below its production costs. The purpose is to entice customers to buy other products with high profit margins in addition to purchasing the loss leader product.

32. Penetration pricing involves setting low prices to gain entry into a new market. Once the product has established market share, prices can be raised.

33. Price skimming involves initially charging high prices for innovative or high-tech products. Price is reduced as the novelty wears off and as substitute products appear.

34. Psychological pricing involves rounding down numbers such as $9.99 to make prices seem lower, than $10.00.

35. Above the line (ATL) promotion is any form of paid-for-promotion through mass media to reach a wide audience.

36. Advertising is a method of informative and/or persuasive promotion that is usually paid for. 

37. Below the line (BTL) promotion doesn’t use paid-for-mass media sources.

38. Guerilla marketing is a promotional strategy that aims to ambush or catch the attention of customers through unusual, innovative, unconventional and/or shocking techniques, on a relatively low budget.

39. Promotion is a component of the marketing mix. It refers to the methods used to inform, persuade and/or remind people about a firm’s products or brands.

40. Promotional mix refers to the combination of individual ATL and BTL promotional methods used by a business, such as advertising, direct marketing, packaging, sales promotion.

41. Publicity is the process of promoting a business and its products by getting positive media exposure without directly paying for it..

42. Sales Promotion are short-term incentives designed to stimulate demand for the product.

43. Social media refers to the marketing practice of gaining internet traffic through social media websites.

44. Viral marketing is a promotional strategy that combines online technologies with word of mouth (WOM) techniques. It is usually done through the internet via emails or social networks.

45. Distribution channels are the ways that a product gets from the manufacturer to the consumer.

46. Distribution/Place refers to the process of getting the right products to the right customers at the right time and place in the most cost-effective way.

47. Distributors are independent businesses that act as intermediaries by specializing in the  trade of products made by certain manufacturers.

48. Intermediaries are agents or other businesses that act as a middle person in the chain of distribution.

49. Retailers are the sellers of products to the general public that operate in outlets.

Wholesalers are businesses that purchase large quantities of products from a manufacturer and then separate or ‘break’ the bulk-purchases into smaller units for resale, mainly to retailers.