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313 Cards in this Set

  • Front
  • Back
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
Exchange
people giving up something to receive something they would rather have
Production Orientation
a philosophy that focuses on the internal capabilities of the firm rather than on the desires and needs of the market place
Sales Orientation
the ideas that people will buy more goods and services if aggressive sales techniques are used and that high sales result in high profits
Marketing Concept
the idea that the social and economic justification for an organization's existence is the satisfaction of customer wants and needs while meeting organizational objectives
Market Orientation
a philosophy that assumes that a sale does not depend on an aggressive sales force but rather on a customer's decision to purchase a product. It is synonymous with the marketing concept
Societal Marketing Orientation
the idea that an organization exists not only to satisfy customer wants and needs and to meet organizational objectives but also to preserve or enhance individuals' and society's long-term best interests
Customer Value
the relationship between benefits and the sacrifice necessary to obtain those benefits
Customer Satisfaction
customer's evaluation of a good or service in terms of whether it has met their needs and expectations
Relationship Marketing
a strategy that focuses on keeping and improving relationships with current customers
Empowerment
delegation of authority to solve customers' problems quickly- usually by the first person that the customer notifies regarding a problem
Teamwork
collaborative efforts of people to accomplish common objectives
Corporate Social Responsibility
business's concern for society's welfare
Sustainability
the idea that socially responsible companies will outperform their peers by focusing on the world' social problems and viewing them as opportunities to build profits and help the world at the same time
Pyramid of Corporate Social Responsibility
a model that suggests corporate social responsibility is composed of economic, legal, ethical, and philanthropic responsibilities and that the firm's economic performance supports the entire structure
Ethics
the moral principles or values that generally govern the conduct of an individual or a group
Morals
the rules people develop as a result of cultural values and norms
Code of Ethics
a guideline to help marketing managers and other employees make better decisions
Target Market
a defined group most likely to buy a firm's product
Environmental Management
when a company implements strategies that attempt to shape the external environment within which it operates
Component Lifestyles
the practice of choosing goods and services that meet one's diverse needs and interests rather than conforming to a single, traditional lifestyle
Demography
the study of people's vital statistics, such as their age, race and ethnicity, and location
Generation Y
people born between 1979 and 1994
Generation X
people born between 1965 and 1978
Baby Boomers
people born between 1946 and 1964
Multiculturalism
when all major ethnic groups in an area- such as a city, county, or census tract- are roughly equally represented
Purchasing Power
a comparison of income versus the relative cost of a set standard of good and services in different geographic areas
Inflation
a measure of the decrease in the value of money, expressed as the percentage reduction in value since the previous year
Recession
a period of economic activity characterized by negative growth, which reduces demand for good and services
Basic Research
pure research that aims to confirm an existing theory or to learn more about a concept or phenomenon
Applied Research
an attempt to develop new or improved products
Food and Drug Administration (FDA)
a federal agency charged with enforcing regulations against selling and distribution adulterated, misbranded, or hazardous food and drug products
Consumer Product Safety Commission (CPSC)
a federal agency established to protect the health and safety of consumers in and around their homes
Federal Trade Commission (FTC)
a federal agency empowered to prevent persons or corporations from using unfair methods of competition in commerce
Consumer Behavior
processes a consumer uses to make purchase decisions, as well as to use and dispose of purchased goods or services; also includes factors that influence purchase decisions and product use
Consumer Decision-Making Process
a five-step process used by consumers when buying goods or services
Need Recognition
result of an imbalance between actual and desired states
Stimulus
any unit of input affecting one or more of the five senses: sight, smell, taste, touch, hearing
Want
recognition of an unfulfilled need and a product that will satisfy it
Internal Information Search
the process of seeking information in the outside environment
External Information Search
the process of seeking information in the outside environment
Nonmarketing-Controlled Information Source
a product information source that is not associated with advertising or promotion
Marketing-Controlled Information Source
a product information source that originates with marketers promoting the product
Evoked Set (Consideration Set)
a group of brands, resulting from an information search, from which a buyer can choose from
Cognitive Dissonance
inner tension that a consumer experiences after recognizing an inconsistency between behavior and values or opinions
Involvement
the amount of time and effort a buyer invests in the search, evaluation, and decision processes of consumer behavior
Routine Response Behavior
the type of decision making exhibited by consumers buying frequently purchased, low-cost goods and services; requires little search and decision time
Limited Decision Making
the type of decision making that requires a moderate amount of time for gathering information and deliberating about an unfamiliar brand in a familiar product category
Extensive Decision Making
the most complex type of consumer decision making, used when buying an unfamiliar, expensive product or an infrequently bought item; requires use of several criteria for evaluating options and much time for seeking information
Culture
the set of values, norms, attitudes, and other meaningful symbols that shape human behavior and the artifacts, or products, of that behavior as they are transmitted from one generation to the next
Value
the enduring belief that a specific mode of conduct is personally or socially preferable to another mode of conduct
Subculture
a homogeneous group of people who share elements of the overall culture as well as unique elements of their own group
Social Class
a group of people in a society who are considered nearly equal in status or community esteem, who regularly socialize among themselves both formally and informally, and who share behavioral norms
Reference Group
a group in society that influences an individual's purchasing behavior
Opinion Leader
an individual who influences the opinions of others
Socialization Process
how cultural values and norms are passed down to children
Personality
a way of organizing and grouping the consistencies of an individual's reactions to situations
Self-Concept
how consumers perceive themselves in terms of attitudes, perceptions, beliefs, and self-evaluations
Ideal Self-Image
the way an individual would like to be
Real Self-Image
the way an individual actually perceives himself or herself
Lifestyle
a mode of living as identified by a person's activities, interests, and opinions
Perception
the process by which people select, organize, and interpret stimuli into a meaningful and coherent picture
Selective Exposure
the process whereby a consumer notices certain stimuli and ignores others
Selective Distortion
a process whereby a consumer changes or distorts information that conflicts with his or her feelings of beliefs
Selective Retention
a process whereby a consumer remembers only that information that supports his or her personal beliefs
Motive
a driving force that causes a person to take action to satisfy specific needs
Maslow's Hierarchy of Needs
a method of classifying human needs and motivations into five categories in ascending order of importance: physiological, safety, social, esteem, and self-actualization
Learning
a process that creates changes in behavior, immediate or expected, through experience and practice
Belief
an organized pattern of knowledge that an individual holds as true about his or her world
Attitude
a learned tendency to respond consistently toward a given object
Market
people or organizations with needs or wants and the ability and willingness to buy
Market Segment
a subgroup of people or organizations sharing one or more characteristics that cause them to have similar product needs
Market Segmentation
the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups
Segmentation Bases (Variables)
characteristics of individuals, groups, or organizations
Geographic Segmentation
segmenting markets by region of a country or the world, market size, market density, or climate
Demographic Segmentation
segmenting markets by age, gender, income, ethnic background, and family life cycle
Family Life Cycle (FLC)
a series of stages determined by a combination of age, marital status, and the presence or absence of children
Psychographic Segmentation
market segmentation on the basis of personality, motives, lifestyles, and geodemographics
Benefit Segmentation
the process of grouping customers into market segments according to the benefits they seek from the product
Usage-Rate Segmentation
dividing a market by the amount of product bought or consumed
80/20 Principle
a principle holding that 20% of all customers generate 80% of the demand
Target Market
a group of people or organizations for which an organization designs, implements, and maintains a marketing mix intended to meet the needs of that group, resulting in mutually satisfying exchanges
Undifferentiated Targeting Strategy
a marketing approach that views the market as one big market with no individual segments and thus uses a single marketing mix
Concentrated Targeting Strategy
a strategy used to select one segment of a market for targeting marketing efforts
Niche
one segment of a market
Multisegment Targeting Strategy
a strategy that chooses two or more well-defined market segments and develops a distinct marketing mix for each
Cannibalization
a situation that occurs when sales of a new product cut into sales of a firm's existing products
One-to-One Marketing
an individualized marketing method that utilizes customer information to build long-term, personalized, and profitable relationships with each customer
Positioning
developing a specific marketing mix to influence potential customers' overall perception of a brand, product line, or organization in general
Position
the place a product, brand, or group of products occupies in consumers' minds relative to competing offerings
Product Differentiation
a positioning strategy that many firms use to distinguish their products from those of competitors
Perceptual Mapping
a means of displaying or graphing, in two or more dimensions, the location of products, brands, or groups of products in customers' minds
Repositioning
changing consumers' perceptions of a brand in relation to competing brands
Marketing Information
everyday information about developments in the marketing environment that managers use to prepare and adjust marketing plans
Decision Support System (DSS)
an interactive, flexible computerized information system that enables managers to obtain and manipulate information as they are making decisions
Database Marketing
the creation of a large computerized file of customers' and potential customers' profiles and purchase patterns
Marketing Research
the process of planning, collecting, and analyzing data relevant to a marketing decision
Marketing Research Problem
determining what information is needed and how that information can be obtained efficiently and effectively
Marketing Research Objective
the specific information needed to solve a marketing research problem; the objective should be to provide insightful decision-making information
Management Decision Problem
a broad-based problem that uses marketing research in order for managers to take proper actions
Secondary Data
data previously collected for any purpose other than the one at hand
Marketing Research Aggregator
a company that acquires, catalogs, reformats, segments, and resells reports already published by marketing research firms
Research Design
specifies which research questions must be answered, how and when the data will be gathered, and how the data will be analyzed
Primary Data
information that is collected for the first time; are used for solving the particular problem under investigation
Survey Research
the most popular technique for gathering primary data, in which a researcher interacts with people to obtain facts, opinions, and attitudes
Mall Intercept Interview
a survey research method that involves interviewing people in the common areas of shopping malls
Computer-Assisted Personal Interviewing
an interviewing method in which the interviewer reads the questions from a computer screen and enters the respondent's data directly into the computer
Computer-Assisted Self-Interviewing
an interviewing method in which a mall interviewer intercepts and directs willing respondents to nearby computers where the respondent reads questions off a computer screen and directly keys his or her answers into a computer
Central-Location Telephone Facility (CLT)
a specially designed phone room used to conduct telephone interviewing
Executive Interview
a type of survey that involves interviewing businesspeople at their offices concerning industrial products or services
Focus Groups
seven to ten people who participate in a group discussion led by a moderator
Open-Ended Question
an interview question that encourages an answer phrased in the respondent's own words
Closed-Ended Question
an interview question that asks the respondent to make a selection from a limited list of responses
Scaled-Response Question
a closed-ended question designed to measure the intensity of a respondent's answer
Observation Research
a research method that relies on four types of observation: people watching people, people watching an activity, machines watching people, and machines watching an activity
Mystery Shoppers
researchers posing as customers who gather observational data about a store
Ethnographic Research
the study of human behavior in its natural context; involves observation of behavior and physical setting
Experiment
a method a researcher uses to gather primary data
Sample
a subset from a larger population
Universe
the population from which a sample will be drawn
Probability Sample
a sample in which every element in the population has a known statistical likelihood of being selected
Random Sample
a sample arranged in such a way that every element of the population has an equal chance of being selected as part of the sample
Nonprobability Sample
any sample in which little or no attempt is made to get a representative cross section of the population
Convenience Sample
a form of nonprobability sample using respondents who are convenient or readily accessible to the researcher- for example, employees, friends, or relatives
Measurement Error
an error that occurs when there is a difference between the information desired by the researcher and the information provided by the measurement process
Sampling Error
an error that occurs when when a sample somehow does not represent the target population
Frame Error
an error that occurs when a sample drawn from a population differs from the target population
Random Error
an error that occurs when the selected sample is an imperfect representation of the overall population
Field Service Firm
a firm that specializes in interviewing respondents on a subcontracted basis
Cross-Tabulation
a method of analyzing data that lets the analyst look at the responses to one question in relation to the responses to one or more other questions
Unrestricted Internet Sample
a survey in which anyone with a computer and internet access can fill out the questionnaire
Screened Internet Sample
an internet sample with quotas based on desired sample characteristics
Recruited Internet Sample
a sample in which respondents are prerecruited and must qualify to participate. They are then e-mailed a questionnaire or directed to a secure web site
Scanner-Based Research
a system for gathering information from a single group of respondents by continuously monitoring the advertising, promotion, and pricing they are exposed to and the things they buy
BehaviorScan
a scanner-based research program that tracks the purchases of 3000 households through store scanners in each research market
InfoScan
a scanner-based sales-tracking service for the consumer packaged-goods industry
Competitive Intelligence (CI)
an intelligence system that helps managers assess their competition and vendors in order to become more efficient and effective competitors
Product
everything, both favorable and unfavorable, that a person receives in an exchange
Business Product (Industrial Product)
a product used to manufacture other goods or services, to facilitate an organization's operations, or to resell to other customers
Consumer Product
a product bought to satisfy an individual's personal wants
Convenience Product
a relatively inexpensive item that merits little shopping effort
Shopping Product
a product that requires comparison shopping because it is usually more expensive than a convenience product and is found in fewer stores
Speciality Product
a particular item that consumers search extensively for and are very reluctant to accept substitutes
Unsought Product
a product unknown to the potential buyer or a known product that the buyer does not actively seek
Product Item
a specific version of a product that can be designated as a distinct offering among an organization's products
Product Line
a group of closely related product items
Product Mix
all products that an organization sells
Product Mix Width
the number of product lines an organization offers
Product Line Depth
the number of product items in a product line
Product Modification
changing one or more of a product's characteristic
Planned Obsolescence
the practice of modifying products so those that have already been sold become obsolete before they actually need replacement
Product Line Extension
adding additional products to an existing product line in order to compete more broadly in the industry
Brand
a name, term, symbol, design, or combination thereof that identifies a seller's products and differentiates them from competitors' products
Brand Name
the part of a brand that can be spoken, including letters, worlds, and numbers
Brand Mark
the elements of a brand that cannot be spoken
Brand Equity
the value of company and brand names
Global Brand
a brand where at least 20 percent of the product is sold outside its home country or region
Brand Loyalty
a consistent preference for one brand over all others
Generic Product
a no-frills, no-brand-name, low-cost product that is simply identified by its product category
Manufacturer's Brand
the brand name of a manufacturer
Private Brand
a brand name owned by a wholesaler or a retailer
Individual Branding
using different brand names for different products
Family Brand
marketing several different products under the same brand name
Cobranding
placing two or more brand names on a product or its package
Trademark
the exclusive right to use a brand or part of a brand
Service Mark
a trademark for a service
Generic Product Name
identifies a product by class or type and cannot be trademarked
Persuasive Labeling
a type of package labeling that focuses on a promotional theme or logo and consumer information is secondary
Informational Labeling
a type of package labeling designed to help consumers make proper product selections and lower their cognitive dissonance after the purchase
Universal Product Codes (UPCs)
a series of thick and thin vertical lines (bar codes), readable by computerized optical scanners, that represent numbers used to track products
Warranty
a confirmation of the quality or performance of a good or service
Express Warranty
a written guarantee
Implied Warranty
an unwritten guarantee that the good or service is fit for the purpose for which it was sold
New Product
a product new to the world, the market, the producer, the seller, or some combination of these
New-Product Strategy
a plan that links that new-product development process with the objectives of the marketing department, the business unit, and the corporation
Product Development
a marketing strategy that entails the creation of marketable new products; the process of converting applications for new technologies into marketable products
Brainstorming
the process of getting a group to think of unlimited ways to vary a product or solve a problem
Screening
the first filter in the product development process, which eliminates ideas that are inconsistent with the organization's new product strategy or are obviously inappropriate for some other reason
Concept Test
a test to evaluate a new-product idea, usually before any prototype has been created
Business Analysis
the second stage of the screening process where preliminary figures for demand, cost, sales, and profitability are calculated
Development
the stage in the product development process in which a prototype is developed and a marketing strategy it outlined
Simultaneous Product Development
a team-oriented approach to new-product development
Test Marketing
the limited introduction of a product and a marketing program to determine the reactions of potential customers in a market situation
Simulated (Laboratory) Market Testing
the presentation of advertising and other promotion materials for several products, including a test product, to members of the product's target market
Commercialization
the decision to market a product
Adopter
a consumer who was happy enough with his or her trial experience with a product to use it again
Innovation
a product perceived as new by a potential adopter
Diffusion
the process by which the adoption of an innovation spreads
Product Life Cycle (PLC)
a concept that provides a way to trace the stages of a product's acceptance, from its introduction (birth) to its decline (death)
Product Category
all brands that satisfy a particular type of need
Introductory Stage
the full-scale launch of a new product into the marketplace
Growth Stage
the second stage of the product life cycle when sales typically grow at an increasing rate, many competitors enter the market, large companies may start to acquire small pioneering firms, and profits are healthy
Maturity Stage
a period during which sales increase at a decreasing rate
Decline Stage
a long-run drop in sales
Marketing Channel (Channel of Distribution)
a set of interdependent organizations that ease the transfer of ownership as products move from producer to business user or consumer
Channel Members
all parties in the marketing channel that negotiate with one another, buy and sell products, and facilitate the change of ownership between buyer and seller in the course of moving the product from the manufacturer into the hands of the final consumer
Supply Chain
the connected chain of all of the business entities, both internal and external to the company, that perform or support the logistics function
Discrepancy of Quantity
the difference between the amount of product produced and the amount an end user wants to buy
Discrepancy of Assortment
the lack of all the items a customer needs to receive full satisfaction from a product or products
Temporal Discrepancy
a situation that occurs when a product is produced but a customer is not ready to buy it
Spatial Discrepancy
the difference between the location of a producer and the location of widely scattered markets
Retailer
a channel intermediary that sells mainly to consumers
Direct Channel
a distribution channel in which producers sell directly to consumers
Dual Distribution (Multiple Distribution)
the use of two or more channels to distribute the same product to target markets
Strategic Channel Alliance
a cooperative agreement between business firms to use the other's already established distribution channel
Supply Chain Management
a management system that coordinates and integrates all of the activities performed by supply chain members into a seamless process, from the source to the point of consumption, resulting in enhance customer and economic value
Intensive Distribution
a form of distribution aimed at having a product available in every outlet where target customers might want to buy it
Selective Distribution
a form of distribution achieved by screening dealers to eliminate all but a few in any single area
Exclusive Distribution
a form of distribution that establishes one or a few dealers within a given area
Logistics
the process of strategically managing the efficient flow and storage of raw materials, in-process inventory, and finished goods from point of origin to point of consumption
Logistics Information System
the link that connects all of the logistics functions of the supply chain
Supply Chain Team
an entire group of individuals who orchestrate the movement of goods, services, and information from the source to the consumer
Mass Customization (Build-to-Order)
a production method whereby products are not made until an order is placed by the customer; products are made according to customer specifications
Just-in-Time Production (JIT)
a process that redefines and simplifies manufacturing by reducing inventory levels and delivering raw materials just when they are needed on the production line
Order Processing System
a system whereby orders are entered into the supply chain and filled
Electronic Data Interchange (EDI)
information technology that replaces the paper documents that usually accompany business transactions, such as purchase orders and invoices, with electronic transmission of the needed information to reduce inventory levels, improve cash flow, streamline operations, and increase the speed and accuracy of information transmission
Inventory Control System
a method of developing and maintaining an adequate assortment of materials or products to meet a manufacturer's or a customer's demand
Materials Requirement Planning (MRP) (Materials Management)
an inventory control system that manages the replenishment of raw materials, supplies, and components from the supplier to the manufacturer
Distribution Resource Planning (DRP)
an inventory control system that manages the replenishment of goods from the manufacturer to the final consumer
Materials-Handling System
a method of moving inventory into, within, and out of the warehouse
Outsourcing (Contract Logistics)
a manufacturer's or supplier's use of an independent third part to manage an entire function of the logistics system, such as transportation, warehousing, or order processing
Electronic Distribution
a distribution technique that includes any kind of product or service that can be distributed electronically, whether over traditional forms such as fiber-optic cable or through satellite transmission of electronic signals
Promotion
communication by marketers that informs, persuades, and reminds potential buyers of a product in order to influence an opinion or elicit a response
Promotional Strategy
a plan for the optimal use of the elements of promotion: advertising, public relations, personal selling, and sales promotion
Competitive Advantage
one or more unique aspects of an organization that cause target consumers to patronize that firm rather than competitors
Promotional Mix
the combination of promotional tools (the 4 P's) used to reach the target market and fulfill the organization's overall goals
Advertising
impersonal, one-way mass communication about a product or organization that is paid for by a marketer
Public Relations
the marketing function that evaluates public attitudes, identifies areas within the organization the public may be interested in, and executes a program of action to earn public understanding and acceptance
Publicity
public information about a company, product, service, or issue appearing in the mass media as a news item
Sales Promotion
marketing activities- other than personal selling, advertising, and public relations- that stimulate consumer buying and dealer effectiveness
Personal Selling
a purchase situation involving a personal paid-for communication between two people in an attempt to influence each other
AIDA Concept
a model that outlines the process for achieving promotional goals in terms of stages of consumer involvement with the message; the acronym stands for attention, interest, desire, and action
Push Strategy
a marketing strategy that uses aggressive personal selling and trade advertising to convince a wholesaler or a retailer to carry and sell particular merchandise
Pull Strategy
a marketing strategy that stimulates consumer demand to obtain product distribution
Integrated Marketing Communications (IMC)
the careful coordination of all promotional messages for a product or a service to assure the consistency of messages at every contact point where a company meets the consumer
Advertising Response Function
a phenomenon in which spending for advertising and sales promotion increases sales or market share up to a certain level buy then produces diminishing returns
Institutional Advertising
a form of advertising designed to enhance a company's image rather than promote a particular product
Product Advertising
a form of advertising that touts the benefits of a specific good or service
Advocacy Advertising
a form of advertising in which an organization expresses its views on controversial issues or responds to media attacks
Pioneering Advertising
a form of advertising designed to stimulate primary demand for a new product or product category
Competitive Advertising
a form of advertising designed to influence demand for a specific brand
Comparative Advertising
a form of advertising that compares two or more specifically named or shown competing brands on one or more specific attributes
Advertising Campaign
a series of related advertisements focusing on a common theme, slogan, and set of advertising appeals
Advertising Objective
a specific communication task that a campaign should accomplish for a specified target audience during a specified period
Advertising Appeal
a reason for a person to buy a product
Unique Selling Proposition
a desirable, exclusive, and believable advertising appeal selected as the theme for a campaign
Medium
the channel used to convey a message to a target market
Media Planning
the series of decisions advertisers make regarding the selection and use of media, allowing the marketer to optimally and cost-effectively communicate the message to the target audience
Cooperative Advertising
an arrangement in which the manufacturer and the retailer split the costs of advertising the manufacturer's brand
Infomercial
a 30-minute or longer advertisement that looks more like a TV talk show than a sales pitch
Advergaming
placing advertising messages in web-based or video games to advertise or promote a product, service, organization, or issue
Media Mix
the combination of media to be used for a promotional campaign
Cost per Contact
the cost of reaching one member of the target market
Reach
the number of target consumers exposed to a commercial at least once during a specific period, usually four weeks
Frequency
the number of times an individual is exposed to a given message during a specific period
Audience Selectivity
the ability of an advertising medium to reach a precisely defined market
Media Schedule
designation of the media, the specific publications or programs, and the insertion dates of advertising
Continuous Media Schedule
a media scheduling strategy in which advertising is run steadily throughout the advertising period; used for products in the latter stages of the product life cycle
Flighted Media Schedule
a media scheduling strategy in which ads are run heavily every other month or every two weeks, to achieve a greater impact with an increased frequency and reach at those times
Pulsing Media Schedule
a media scheduling strategy that uses continuous scheduling throughout the year coupled with a flighted schedule during the best sales periods
Seasonal Media Schedule
a media scheduling strategy that runs advertising only during times of the year when the product is most likely to be used
Product Placement
a public relations strategy that involves getting a product, service, or company name to appear in a move, tv show, radio program, magazine, newspaper, video game, book, or commercial for another product; on the internet; or at special events
Sponsorship
a public relations strategy in which a company spends money to support an issue, cause, or event that is consistent with corporate objectives, such as improving brand awareness or enhancing corporate image
Cause-Related Marketing
a type of sponsorship involving the association of a for-profit company and a nonprofit organization; through the sponsorship, the company's product or service is promoted, and money is raised for the nonprofit
Crisis Management
a coordinated effort to handle all the effects of unfavorable publicity or of another unexpected unfavorable event
Consumer Sales Promotion
sales promotion activities targeting the ultimate consumer
Trade Sales Promotion
sales promotion activities targeting a marketing channel member, such as a wholesaler or retailer
Coupon
a certificate that entitles consumers to an immediate price reduction when they buy the product
Rebate
a cash refund given for the purchase of a product during a specific period
Premium
an extra item offered to the consumer, usually in exchange for some proof of purchase of the promoted product
Loyalty Marketing Program
a promotional program designed to build long-term, mutually beneficial relationships between a company and its key customers
Frequent Buyer Program
a loyalty program in which loyal consumers are rewarded for making multiple purchases of a particular good or service
Sampling
a promotional program that allows the consumer the opportunity to try a product or service for free
Point-of-Purchase Display
a promotional display set up at the retailer's location to build traffic, advertise the product, or induce impulse buying
Trade Allowance
a price reduction offered by manufacturers to intermediaries, such as wholesalers and retailers
Push Money
money offered to channel intermediaries to encourage them to "push" products- that is, to encourage other members of the channel to sell the products
Relationship Selling (Consultative Selling)
a sales practice that involves building, maintaining, and enhancing interactions with customers in order to develop long-term satisfaction through mutually beneficial partnerships
Sales Process (Sales Cycle)
the set of steps a salesperson goes through in a particular organization to sell a particular product or service
Lead Generation (Prospecting)
identification of those firms and people most likely to buy the seller's offerings
Referral
a recommendation to a salesperson from a customer or business associate
Networking
a process of finding out about potential clients from friends, business contacts, coworkers, acquaintances, and fellow members in professional and civic organizations
Cold Calling
a form of lead generation in which the salesperson approaches potential buyers without any prior knowledge of the prospects' needs or financial status
Lead Qualification
determination of a sales prospect's 1. recognized needs, 2. buying power, and 3. receptivity and accessibility
Preapproach
a process that describes the "homework" that must be done by a salesperson before he or she contacts a prospect
Needs Assessment
a determination of the customer's specific needs and wants and the range of options the customer has for satisfying them
Sales Proposal
a formal written document or professional presentation that outlines how the salesperson's product or service will meet or exceed the prospect's needs
Sales Presentation
a formal meeting in which the salesperson presents a sales proposal to a prospective buyer
Negotiation
the process during which both the salesperson and the prospect offer special concessions in an attempt to arrive at a sales agreement
Follow-Up
the final step of the selling process, in which the salesperson ensures that delivery schedules are met, that the goods or services perform as promised, and that the buyers' employees are properly trained to use the products
Price
that which is given up in an exchange to acquire a good or service
Revenue
the price charged to customers multiplied by the number of units sold
Profit
revenue minus expenses
Return on Investment (ROI)
net profit after taxes divided by total assets
Yield Management Systems (YMS)
a technique for adjusting prices that uses complex mathematical software to profitably fill unused capacity by discounting early purchases, limiting early sales at these discounted prices, and overbooking capacity
Variable Cost
a cost that varies with changes in the level of output
Fixed Cost
a cost that does not change as output is increased or decreased
Average Variable Cost (AVC)
total variable costs divided by quantity of output
Average Total Cost (ATC)
total costs divided by quantity of output
Marginal Cost (MC)
the change in total costs associated with a one-unit change in output
Markup Pricing
the cost of buying the product from the producer plus amounts for profit and for expenses not otherwise accounted for
Keystoning
the practice of marking up prices by 100 percent, or doubling the cost
Profit Maximization
a method of setting prices that occurs when marginal revenue equals marginal cost
Marginal Revenue (MR)
the extra revenue associated with selling an extra unit of output or the change in total revue with a one-unit change in output
Break-Even Analysis
a method of determining what sales volume must be reached before total revenue equals total costs
Selling Against the Brand
stocking well-known branded items at high prices in order to sell store brands at discounted prices
Extranet
a private electronic network that links a company with its suppliers and customers
Prestige Pricing
charging a high price to help promote a high-quality image
Price Strategy
a basic, long-term pricing framework, which establishes the initial price for a product and the intended direction for price movements over the product life cycle
Price Skimming
a pricing policy whereby a firm charges a high introductory price, often coupled with heavy promotion
Penetration Pricing
a pricing policy whereby a firm charges a relatively low price for a product initially as a way to reach the mass market
Unfair Trade Practice Acts
laws that prohibit wholesalers and retailers from selling below cost
Price Fixing
an agreement between two or more firms on the price they will charge for a product
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