Business Vocab Units 13 - 18

Chapter 13

Benefit Segmentation - Dividing the market by determining which benefits of the product to talk about.

Brand Name - A word, letter, or group of words or letters that differentiates one seller’s goods and services from those of competitors.

Business-to-Business (B2B) Market - All the individuals and organizations that want goods and services to use in producing other goods and services or to sell, rent, or supply goods to others.

Consumer Market - All the individuals or households that want goods and services for personal consumption or use and have the resources to buy them.

Customer Relationship Management (CRM) - The process of learning as much as possible about customers and doing everything you can over time to satisfy them—or even exceed their expectations—with goods and services.

Demographic Segmentation - Dividing the market by age, income, and education level.

Environmental Scanning - The process of identifying the factors that can affect marketing success.

Focus Group - A small group of people who meet under the direction of a discussion leader to communicate their opinions about an organization, its products, or other given issues.

Geographic Segmentation - Dividing the market by cities, counties, states, or regions.

Marketing - The activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing Concept - A three-part business philosophy: (1) a customer orientation, (2) a service orientation, and (3) a profit orientation.

Marketing Mix - The ingredients that go into a marketing program: product, price, place, and promotion.

Marketing Research - The analysis of markets to determine opportunities and challenges, and to find the information needed to make good decisions.

Market Segmentation - The process of dividing the total market into groups whose members have similar characteristics.

Mass Marketing - Developing products and promotions to please large groups of people.

Niche Marketing - The process of finding small but profitable market segments and designing or finding products for them.

One-To-One Marketing - Developing a unique mix of goods and services for each individual customer.

Primary Data - Data that you gather yourself (not from secondary sources such as books and magazines).

Product - Any physical good, service, or idea that satisfies a want or need plus anything that would enhance the product in the eyes of consumers, such as the brand name.

Promotion - All the techniques sellers use to inform people about and motivate them to buy their products or services.

Psychographic Segmentation - Dividing the market using the group’s values, attitudes, and interests.

Relationship Marketing - Marketing strategy with the goal of keeping individual customers over time by offering them products that exactly meet their requirements.

Secondary Data - Information that has already been compiled by others and published in journals and books or made available online.

Target Marketing - Marketing directed toward those groups (market segments) an organization decides it can serve profitably.

Test Marketing - The process of testing products among potential users.

Volume (or usage) Segmentation - Dividing the market by usage (volume of use).

Chapter 14

Brand - A name, symbol, or design (or combination thereof) that identifies the goods or services of one seller or group of sellers and distinguishes them from the goods and services of competitors.

Brand Association - The linking of a brand to other favorable images.

Brand Awareness - How quickly or easily a given brand name comes to mind when a product category is mentioned.

Brand Equity - The value of the brand name and associated symbols.

Brand Loyalty - The degree to which customers are satisfied, like the brand, and are committed to further purchases.

Brand Manager - A manager who has direct responsibility for one brand or one product line; called a product manager in some firms.

Break-even analysis - The process used to determine profitability at various levels of sales.

Bundling - Grouping two or more products together and pricing them as a unit.

Commercialization - Promoting a product to distributors and retailers to get wide distribution, and developing strong advertising and sales campaigns to generate and maintain interest in the product among distributors and consumers.

Competition-based pricing - A pricing strategy based on what all the other competitors are doing. The price can be set at, above, or below competitors’ prices.

Concept Testing - Taking a product idea to consumers to test their reactions.

Convenience Goods and Services - Products that the consumer wants to purchase frequently and with a minimum of effort.

Dealer (Private-Label) Brands - Products that don’t carry the manufacturer’s name but carry a distributor or retailer’s name instead.

Distributed Product Development - Handing off various parts of your innovation process—often to companies overseas.

Dynamic Pricing - Pricing strategy used to maximize profit by changing the price based on demand.

Everyday Low Pricing (EDLP) - Setting prices lower than competitors and then not having any special sales.

Generic Goods - Nonbranded products that usually sell at a sizable discount compared to national or private-label brands.

High-Low Pricing Strategy - Setting prices that are higher than EDLP stores, but having many special sales where the prices are lower than competitors’.

Industrial Goods - Products used in the production of other products. Sometimes called business goods or B2B goods.

Knockoff Brands - Illegal copies of national brand-name goods.

Manufacturers’ (national brands) - The brand names of manufacturers that distribute products nationally.

Penetration Strategy - Strategy in which a product is priced low to attract many customers and discourage competition.

Price Leadership - The strategy by which one or more dominant firms set the pricing practices that all competitors in an industry follow.

Product Analysis - Making cost estimates and sales forecasts to get a feeling for profitability of new-product ideas.

Product Differentiation - The creation of real or perceived product differences.

Product Life cycle - A theoretical model of what happens to sales and profits for a product class over time; the four stages of the cycle are introduction, growth, maturity, and decline.

Product Line - A group of products that are physically similar or are intended for a similar market.

Product Mix - The combination of product lines offered by a manufacturer.

Product Screening - A process designed to reduce the number of new-product ideas being worked on at any one time.

Psychological Pricing - Pricing goods and services at price points that make the product appear less expensive than it is.

Shopping Goods and Services - Those products that the consumer buys only after comparing value, quality, price, and style from a variety of sellers.

Skimming Price Strategy - Strategy in which a new product is priced high to make optimum profit while there’s little competition.

Specialty Goods and Services - Consumer products with unique characteristics and brand identity. Because these products are perceived as having no reasonable substitute, the consumer puts forth a special effort to purchase them.

Target Costing - Designing a product so that it satisfies customers and meets the profit margins desired by the firm.

Total Fixed Costs - All the expenses that remain the same no matter how many products are made or sold.

Total Product Offer - Everything that consumers evaluate when deciding whether to buy something; also called a value package.

Trademark - A brand that has exclusive legal protection for both its brand name and its design.

Unsought Goods and Services - Products that consumers are unaware of, haven’t necessarily thought of buying, or find that they need to solve an unexpected problem.

Value - Good quality at a fair price. When consumers calculate the value of a product, they look at the benefits and then subtract the cost to see if the benefits exceed the costs.

Variable Costs - Costs that change according to the level of production.

Chapter 15

Administered Distribution System - A distribution system in which producers manage all of the marketing functions at the retail level.

Agents/Brokers - Marketing intermediaries who bring buyers and sellers together and assist in negotiating an exchange but don’t take title to the goods.

Cash-and-Carry Wholesalers - Wholesalers that serve mostly smaller retailers with a limited assortment of products.

Channel of Distribution - A whole set of marketing intermediaries, such as agents, brokers, wholesalers, and retailers, that join together to transport and store goods in their path (or channel) from producers to consumers.

Contractual Distribution System - A distribution system in which members are bound to cooperate through contractual agreements.

Corporate Distribution System - A distribution system in which all of the organizations in the channel of distribution are owned by one firm.

Direct Marketing - Any activity that directly links manufacturers or intermediaries with the ultimate consumer.

Direct Selling - Selling to consumers in their homes or where they work.

Drop Shippers - Wholesalers that solicit orders from retailers and other wholesalers and have the merchandise shipped directly from a producer to a buyer.

Exclusive Distribution - Distribution that sends products to only one retail outlet in a given geographic area.

Freight Forwarder - An organization that puts many small shipments together to create a single large shipment that can be transported cost-effectively to the final destination.

Inbound Logistics - The area of logistics that involves bringing raw materials, packaging, other goods and services, and information from suppliers to producers.

Information Utility - Adding value to products by opening two-way flows of information between marketing participants.

Intensive Distribution - Distribution that puts products into as many retail outlets as possible.

Intermodal Shipping - The use of multiple modes of transportation to complete a single long-distance movement of freight.

Logistics - The marketing activity that involves planning, implementing, and controlling the physical flow of materials, final goods, and related information from points of origin to points of consumption to meet customer requirements at a profit.

Marketing Intermediaries - Organizations that assist in moving goods and services from producers to businesses (B2B) and from businesses to consumers (B2C).

Materials Handling - The movement of goods within a warehouse, from warehouses to the factory floor, and from the factory floor to various workstations.

Merchant Wholesalers - Independently owned firms that take title to the goods they handle.

Online Retailing - Selling goods and services to ultimate customers (e.g., you and me) over the Internet.

Outbound Logistics - The area of logistics that involves managing the flow of finished products and information to business buyers and ultimate consumers (people like you and me).

Place Utility - Adding value to products by having them where people want them.

Possession Utility - Doing whatever is necessary to transfer ownership from one party to another, including providing credit, delivery, installation, guarantees, and follow-up service.

Rack Jobbers - Wholesalers that furnish racks or shelves full of merchandise to retailers, display products, and sell on consignment.

Retailer - An organization that sells to ultimate consumers.

Reverse Logistics - The area of logistics that involves bringing goods back to the manufacturer because of defects or for recycling materials.

Selective Distribution - Distribution that sends products to only a preferred group of retailers in an area.

Service Utility - Adding value by providing fast, friendly service during and after the sale and by teaching customers how to best use products over time.

Social Commerce - A form of electronic commerce that involves using social media, online media that support social interaction, and user contributions to assist in the online buying and selling of products and services.

Supply Chain (Value Chain) - The sequence of linked activities that must be performed by various organizations to move goods from the sources of raw materials to ultimate consumers.

Supply-chain Management - The process of managing the movement of raw materials, parts, work in progress, finished goods, and related information through all the organizations involved in the supply chain; managing the return of such goods, if necessary; and recycling materials when appropriate.

Telemarketing - The sale of goods and services by telephone.

Time Utility - Adding value to products by making them available when they’re needed.

Utility - In economics, the want-satisfying ability, or value, that organizations add to goods or services when the products are made more useful or accessible to consumers than they were before.

Wholesaler - A marketing intermediary that sells to other organizations.

Chapter 16

Advertising - Paid, nonpersonal communication through various media by organizations and individuals who are in some way identified in the advertising message.

Infomercial - A full-length TV program devoted exclusively to promoting goods or services.

Integrated Marketing Communication (IMC) - A technique that combines all the promotional tools into one comprehensive and unified promotional strategy.

Interactive Promotion - Promotion process that allows marketers to go beyond a monologue, where sellers try to persuade buyers to buy things, to a dialogue in which buyers and sellers work together to create mutually beneficial exchange relationships.

Personal Selling - The face-to-face presentation and promotion of goods and services.

Podcasting - A means of distributing audio and video programs via the Internet that lets users subscribe to a number of files, also known as feeds, and then hear or view the material at the time they choose.

Product Placement - Putting products into TV shows and movies where they will be seen.

Promotion Mix - The combination of promotional tools an organization uses.

Prospect - A person with the means to buy a product, the authority to buy, and the willingness to listen to a sales message.

Prospecting - Researching potential buyers and choosing those most likely to buy.

Publicity - Any information about an individual, product, or organization that’s distributed to the public through the media and that’s not paid for or controlled by the seller.

Public Relations (PR) - The management function that evaluates public attitudes, changes policies and procedures in response to the public’s requests, and executes a program of action and information to earn public understanding and acceptance.

Pull Strategy - Promotional strategy in which heavy advertising and sales promotion efforts are directed toward consumers so that they’ll request the products from retailers.

Push Strategy - Promotional strategy in which the producer uses advertising, personal selling, sales promotion, and all other promotional tools to convince wholesalers and retailers to stock and sell merchandise.

Qualifying - In the selling process, making sure that people have a need for the product, the authority to buy, and the willingness to listen to a sales message.

Sales Promotion - The promotional tool that stimulates consumer purchasing and dealer interest by means of short-term activities.

Sampling - A promotional tool in which a company lets consumers have a small sample of a product for no charge.

Trial Close - A step in the selling process that consists of a question or statement that moves the selling process toward the actual close.

Viral Marketing - The term now used to describe everything from paying customers to say positive things on the Internet to setting up multilevel selling schemes whereby consumers get commissions for directing friends to specific websites.

Word-Of-Mouth Promotion - A promotional tool that involves people telling other people about products they’ve purchased.

Chapter 17

Accounting - The recording, classifying, summarizing, and interpreting of financial events and transactions to provide management and other interested parties the information they need to make good decisions.

Accounting Cycle - A six-step procedure that results in the preparation and analysis of the major financial statements.

Accounts Payable - Current liabilities involving money owed to others for merchandise or services purchased on credit but not yet paid for.

Annual Report - A yearly statement of the financial condition, progress, and expectations of an organization.

Assets - Economic resources (things of value) owned by a firm.

Auditing - The job of reviewing and evaluating the information used to prepare a company’s financial statements.

Balance Sheet - Financial statement that reports a firm’s financial condition at a specific time and is composed of three major accounts: assets, liabilities, and owners’ equity.

Bonds Payable - Long-term liabilities that represent money lent to the firm that must be paid back.

Bookkeeping - The recording of business transactions.

Cash Flow - The difference between cash coming into and cash going out of a business.

Certified Public Accountant (CPA) - An accountant who passes a series of examinations established by the American Institute of Certified Public Accountants (AICPA).

Cost of Goods Sold (Or Costs of Goods Manufactured) - A measure of the cost of merchandise sold or cost of raw materials and supplies used for producing items for resale.

Current Assets - Items that can or will be converted into cash within one year.

Depreciation - The systematic write-off of the cost of a tangible asset over its estimated useful life.

Double-Entry Bookkeeping - The practice of writing every business transaction in two places.

Financial Accounting - Accounting information and analyses prepared for people outside the organization.

Financial Statement - A summary of all the transactions that have occurred over a particular period.

Fixed Assets - Assets that are relatively permanent, such as land, buildings, and equipment.

Fundamental Accounting Equation - Assets = Liabilities + Owners’ equity; this is the basis for the balance sheet.

Government and Not-For-Profit Accounting - Accounting system for organizations whose purpose is not generating a profit but serving ratepayers, taxpayers, and others according to a duly approved budget.

Gross Profit (or Gross Margin) - How much a firm earned by buying (or making) and selling merchandise.

Income Statement - The financial statement that shows a firm’s profit after costs, expenses, and taxes; it summarizes all of the resources that have come into the firm (revenue), all the resources that have left the firm, expenses, and the resulting net income or net loss.

Independent Audit - An evaluation and unbiased opinion about the accuracy of a company’s financial statements.

Intangible Assets - Long-term assets (e.g., patents, trademarks, copyrights) that have no real physical form but do have value.

Journal - The record book or computer program where accounting data is first entered.

Ledger - A specialized accounting book or computer program in which information from accounting journals is accumulated into specific categories and posted so that managers can find all the information about one account in the same place.

Liabilities - What the business owes to others (debts).

Liquidity - The ease with which an asset can be converted into cash.

Managerial Accounting - Accounting used to provide information and analyses to managers within the organization to assist them in decision making.

Net Income or Net Loss - Revenue left over after all costs and expenses, including taxes, are paid.

Notes Payable - Short-term or long-term liabilities that a business promises to repay by a certain date.

Operating Expenses - Costs involved in operating a business, such as rent, utilities, and salaries.

Owners’ Equity - The amount of the business that belongs to the owners minus any liabilities owed by the business.

Private Accountant - An accountant who works for a single firm, government agency, or nonprofit organization.

Public Accountant - An accountant who provides accounting services to individuals or businesses on a fee basis.

Ratio Analysis - The assessment of a firm’s financial condition using calculations and interpretations of financial ratios developed from the firm’s financial statements.

Retained Earnings - The accumulated earnings from a firm’s profitable operations that were reinvested in the business and not paid out to stockholders in dividends.

Statements of Cash Flows - Financial statement that reports cash receipts and disbursements related to a firm’s three major activities: operations, investments, and financing.

Tax Accountant - An accountant trained in tax law and responsible for preparing tax returns or developing tax strategies.

Trial Balance - A summary of all the financial data in the account ledgers that ensures the figures are correct and balanced.

Chapter 18

Budget - A financial plan that sets forth management’s expectations, and, on the basis of those expectations, allocates the use of specific resources throughout the firm.

Capital Budget - A budget that highlights a firm’s spending plans for major asset purchases that often require large sums of money.

Capital Expenditures - Major investments in either tangible long-term assets such as land, buildings, and equipment or intangible assets such as patents, trademarks, and copyrights.

Cash Budget - A budget that estimates cash inflows and outflows during a particular period like a month or a quarter.

Cash Flow Forecast - Forecast that predicts the cash inflows and outflows in future periods, usually months or quarters.

Cost of Capital - The rate of return a company must earn in order to meet the demands of its lenders and expectations of its equity holders.

Debt Financing - Funds raised through various forms of borrowing that must be repaid.

Equity Financing - Money raised from within the firm, from operations or through the sale of ownership in the firm (stock or venture capital).

Factoring - The process of selling accounts receivable for cash.

Finance - The function in a business that acquires funds for the firm and manages those funds within the firm.

Financial Control - A process in which a firm periodically compares its actual revenues, costs, and expenses with its budget.

Financial Management - The job of managing a firm’s resources so it can meet its goals and objectives.

Financial Managers - Managers who examine financial data prepared by accountants and recommend strategies for improving the financial performance of the firm.

Leverage - Raising needed funds through borrowing to increase a firm’s rate of return.

Line of Credit - A given amount of unsecured short-term funds a bank will lend to a business, provided the funds are readily available.

Operating (or Master) Budget - The budget that ties together the firm’s other budgets and summarizes its proposed financial activities.

Promissory Note - A written agreement with a promise to pay a supplier a specific sum of money at a definite time.

Risk / Return Trade-Off - The principle that the greater the risk a lender takes in making a loan, the higher the interest rate required.

Secured Loan - A loan backed by collateral (something valuable, such as property).

Term-Loan Agreement - A promissory note that requires the borrower to repay the loan in specified installments.

Trade Credit - The practice of buying goods and services now and paying for them later.

Unsecured Loan - A loan that doesn’t require any collateral.

Venture Capital - Money that is invested in new or emerging companies that are perceived as having great profit potential.