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211 Cards in this Set
- Front
- Back
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4Ps
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the traditional elements of the marketing mix
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Above the line
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the use of non-targeted mass media advertising to reach a mass audience. The aim is to raise product awareness and reinforce brand identity.
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Advertising
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paid for non-personal communication using mass media that aims to persuade and inform
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Advertising elasticity
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measures their responsiveness of demand to a given change in advertising
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Agent
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individuals or businesses that sell products on behalf of an organisation
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AIDA
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a communication model which aims to obtain Attention, Interest, Desire and Action
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Ansoff's matrix
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a framework for identifying four strategic options for growth in terms of markets and products
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Asset led
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firms markets products that (a) match customers want and (b) match their own strengths
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Audit
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an investigation into an area of business activity
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Average cost
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the cost of making one item ie unit cost
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Below the line
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the use of targeted non-advertising methods to reach potential customers. The aim is to secure sales.
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Benefit
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the gain obtained from the use of a particular product
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Boston matrix
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a tool used to analyse the product portfolio of a business against market share and market growth
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Brand
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a named product customers distinguish from other products eg McDonalds
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Branding
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the process of creating a distinctive image for a product that sets it apart from its rivals
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Break even
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the minimum level of units sold for revenue to cover all costs - the business is making neither a profit or loss
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Budget
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an agreed plan forecasting future income and expenditures or other quantifiable targets
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Budget holder
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the individual responsible for a particular budget and accountable for explaining adverse and favourable variance to their line manager
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Business activity
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the process of turning inputs such as raw materials into outputs ie goods and services
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Business cycle
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fluctuations in the level of economic activity over time causing booms and slumps. Also called the economic cycle.
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Business to business (B2B)
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describes activities between businesses, eg manufacturer to wholesaler
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Business to customer (B2C)
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describes the activities of businesses selling goods or services to end consumers.
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Buying behaviour
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the decision process customers go through in deciding whether or not to purchase a good or service
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Calculated risk
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a number value of the chance of bad outcome from a decision. Eg a 75% or 75
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Cannibalisation
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one part of a business grows by taking sales from another
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Cartel
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a group set up by rival firms to take common action eg agree prices, market share or exchange information on costs
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Cash cow
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in Ansoff's matrix a product with high market share in a slow growing market
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Clearing price
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market clearing price is the one price which leaves neither unsold products nor unsatisfied demand ie equilibrium price.
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Collusion
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when rival producers cooperate or collaborate eg agree a minimum market price.
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Commission
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payment method linked to sales eg 10% commission means a £10 bonus for every £100 of sales
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Competition
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when rival firms in the same industry contend for customers
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Competition pricing
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when the selling price of a firm's product is set taking into account the price charged by rivals
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Competitive advantage
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being able to offer a product which customers prefer to rivals
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Competitive market
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an industry made up of many rival sellers each competing for the same customers.
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Competitor analysis
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the process of identifying and analysing a competitors strengths and weaknesses
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Confidence levels
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the number of times out of 100 the results of a survey are expected to be representative
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Constraints
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factors that restrict business activity, both internal and external
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Consumer
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the individual or business who finally uses a product
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Consumer durable
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long lasting goods bought by households eg cars and washing machines
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Consumer goods
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products targeted at private individuals rather than organisations
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Contribution
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the difference between revenue from the sale of a product and the direct costs of producing that item
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Contribution pricing
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a price is set that covers the variable (direct) cost of making an item, plus an extra amount (contribution) towards fixed costs and, eventually, net profit
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Corporate culture
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the shared attitudes, values and behaviours within an organisation which affect expectations of staff
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Corporate objectives
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a specific target the entire organisation aims to achieve through the combined activity of staff and departments
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Cost plus pricing
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price is set by adding a percentage mark up to average cost
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Culture
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refers to shared attitudes, values and behaviours of a group
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Customer order fulfilment
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how a business delivers items requested B122by consumers
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Customer orientation
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the focus of the business is on customer requirements rather than production capabilities
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Customer preferences
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the likes and dislikes that influence a buyer’s selection of a particular product
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Customers
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individuals or organisations that buy a product
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DAGMAR
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Defining Advertising Goals for Measured Advertising Results
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Data mining
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the process of analysing data to establish patterns and relationships between variables
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Demand
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the amount of a product consumers are willing and able to purchase at various prices in a given time period eg one month
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Demand curve
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a graph showing the amount of a product consumers are willing and able to buy at different prices, in a given period of time eg one month
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Desk research
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secondary research
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Dichotomous question
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questions which limit the responses of the respondent eg YES/NO.
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Differentiated marketing
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targeting two or more different market segments
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Diffusion
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the process where a new idea or new product is taken up by producers and consumers
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Direct mail
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a type of below the line promotion where firms send personalised communications to customers eg ‘junk mail’ and email
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Direct marketing
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the process of sending promotion material to a named person within an organisation.
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Direct selling
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firms contact customers through telesales, direct mail etc bypassing retailers
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Distribution
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the methods used to get products from the manufacturer to the end consumer
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Distribution channels
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the system of delivery used to get a product from producer to final customer. Title of ownership changes.
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Diversification
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an organisation offers a new (for them) product in new (for them) market
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Early Adopter
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Consumers who purchase a product at the initial stages of its lifecycle
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Early Majority
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Consumers who adopt a product soon after it has been established
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E-commerce
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electronic commerce is the use of the internet to buy or sell products
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Economic growth
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an increase a country's GDP, over time. Output, income and employment rise
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Elasticity
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measures the response of one variable, eg demand, to a change in another variable, eg price
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Entrepreneur
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the individual who owns and runs their own business and takes risks in the hope of profit
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Exchange rate
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the price of one currency in terms of another currencies $2/£ means the price of one UK £ pound is two US$ dollars
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Exclusive distribution
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limiting distribution of a product to premium outlet to create an exclusive brand image
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Exports
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domestically made products sold overseas
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Extension strategy
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a set of actions which aim to maintain sales of products in the maturity phase of the product life cycle or revive sales of declining products
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Fast moving consumer goods
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fmcg are low price goods that sell in high volumes and are often repurchased eg baked beans
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Field research
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primary research
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Focus group
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a small meeting of customers discuss a product or topic, guided by a moderator
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Forecast
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an attempt to estimate the future value of a variable eg sales
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Full costing
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a costing method where all direct and indirect costs are allocated to one business unit called a cost centre
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Gap in the market
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no business is yet providing a product with a combination of features customers may need eg medium quality low priced fashion clothing
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Globalisation
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the process of ever increasing business activity taking place across national boundaries creating worldwide markets and interdependence
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Gross profit margin
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the proportion of a product's selling price that is gross profit. Overheads are ignored.
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Growth
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an increase in production levels. Expansion
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Guerrilla marketing
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unconventional promotional tactics unexpected by the target market
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Image
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perceptions of a product, brand or organisation held by others
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Imports
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domestic purchase of goods and services produced overseas
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Income elasticity of demand
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measures the responsiveness of demand for a product to a given change in income
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Income tax
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a government charge on individual's earnings. Gross income less income tax is disposable income
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Industrial goods
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goods bought by businesses as opposed to consumers
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Inferior goods
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products whose sales fall as incomes rise. Items with a negative income elasticity of demand
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Intermediaries
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an agent or go-between
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Invention
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discovery or creation of a new product eg DVDs and sliced bread
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Laggards
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consumers who purchase a product in the late stages of its lifecycle.
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Law
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the body of rules that govern and regulate the way our society operates
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Loss leader
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products sold at a price that does not cover unit cost to encourage the purchase of other profitable items eg printers and printer ink
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Luxuries
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items whose demand varies significantly with income. The demand for luxury items is income elastic
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Marginal cost
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the cost of making one extra item
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Margin of safety
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the difference between the actual level and break even level of output
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Mark up
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the amount added to unit cost to set the selling price - usually expressed as a percentage. The amount of profit from the sale of an item.
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Market
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any place where buyers and sellers meet to trade products eg a shop or the internet
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Market analysis
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a study of customers and competitors for a product that identifies eg size, growth, trends and market share
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Market development
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selling an existing product into a new (for them) market.
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Market growth
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an increase in total market sales - by value volume
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Market leader
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the firm with the largest market share
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Market led
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where outward looking consumer orientated firms only make what they can sell
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Market penetration
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a low risk strategy for growth by increasing sales of existing products in existing markets
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Market research
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collecting and analysing data about potential customers, competitors, markets and products
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Market segment
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a section of the total market made up of customers with similar requirements and behaviours
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Market share
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the proportion of total market sales held by a firm or one of its products, expressed as a percentage. Market share = product sales/ market size.
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Market shortage
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demand exceeds supply at a given price. Consumers are unable to buy all they want at that price.
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Market size
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total sales of all the firms in a given market expressed by value (ie in money terms eg £1bn) or by volume (ie number of units sold eg 200,000 units).
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Market structure
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the characteristics of a market eg the number of firms in the industry, barriers to entry and the extent to which rival firms compete for customers
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Marketing
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the management process responsible for identifying, anticipating and satisfying customer requirements profitably. (CIM)
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Marketing mix
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the elements of a firm's marketing strategy designed to meet customer requirements eg product price, promotion and place (4Ps)
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Marketing objective
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are the expected outcome from marketing activities, eg to achieve a market share of 25% within two years
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Marketing plan
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a report summarising research results and setting out strategy and tactics to achieve marketing objectives.
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Marketing research
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a process involving market research, product testing, and competitor analysis
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Marketing strategy
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the long term plan by which the organisation intends to achieve its marketing objectives
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Mass marketing
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a single product offering is targeted at the entire market, rather than individual segments
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Mass production
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manufacture of large amounts of standardised products often use flow production and conveyor belts
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Media
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channels of communication eg posters and TV
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Monitoring
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the process of tracking performance and results over time
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Monopoly
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a firm with 25% or more market share
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Multinational
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a business that makes products in more than one country
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Necessities
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products whose sales are stable as income changes. Items with income inelastic demand
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New product development
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the process of identifying developing and assessing new goods and services
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Niche market
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a small, specialist segment of the market
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Niche marketing
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focusing marketing efforts on one small segment of the market
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Non price competition
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tactics used by firms to increase sales other than price cuts eg loyalty cards and competitions
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Objectives
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a specific target an organisation sets itself to achieve through its activity - its aim
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Office of Fair Trading
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a government body that enforces consumer protection law and competition law
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Organisation
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1)a business 2) the internal structure of the business
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Outsourcing
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using an external organisation to perform or provide work previously done in-house. Also called subcontracting
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Packaging
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the outer wrapping used to protect and promote products
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Penetration pricing
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firms set a low price to gain market share and name/brand recognition,
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Performance indicators
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measures used to assess achievement eg productivity and ROCE
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Personal selling
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promotion through a sales force. Staff work directly with a customer until a sale is made
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Place
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the point where products are made available to customers. Distribution
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Positioning
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where firms adjust the marketing mix of a product to meet the specific requirements of a given target market.
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Press release
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a document sent to the media about a business or its products encouraging further reporting
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Price
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the amount of money for which a product is sold
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Price discrimination
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where a monopolist charges a different price for the same product to different market segments
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Price elastic demand
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a given change in price causes a larger percentage change in demand
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Price elasticity of demand
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measures the responsiveness of quantity demanded for a product to a given change in its price
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Price inelastic demand
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a given change in price causes a smaller percentage change in demand
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Price maker
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a business with the ability to set or influence the market price
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Price skimming
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where firms charge a relatively high price for a short time for a new product
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Price taker
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a business with little ability to influence market price
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Pricing method
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the method used by organisations to set their selling price
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Primary data
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the process of organising and collecting data for an organisation.
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Product led
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where inward looking firms try to sell what they make
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Product life cycle
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the phases of sales a product follows over time
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Product line
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a group of similar product items offered by a firm that meet broadly similar customer requirements
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Product map
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categorises products in a market by two characteristics. Used to identify market gaps
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Product mix
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the total range of products sold by an organisation
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Product orientation
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the focus of the business is on production capabilities rather than customer requirements
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Product portfolio
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the range of goods and services offered by an organisation ie the product mix
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Profit
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income left from revenue after costs are deducted. Profit = revenue - costs. There are many types of profit.
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Profit margin
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(1) the difference between selling price and unit cost (2) profit as a percentage of sales revenue (3) profit per £ of sales
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Promotion
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any form of communication used to inform, persuade, or remind people about an organisation or its products
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Promotional mix
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the combination of promotion methods used by a firm to communicate with stakeholders
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Psychological pricing
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when price is set to encourage a perception of value for money eg 99p instead of £1
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Public relations
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the process of building good relations with the organisations various stakeholders.
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Qualitative research
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the collection and analysis of data about ‘why’ issues eg consumer attitudes.
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Quantitative research
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the collection and analysis of factual objective ‘hard’ data
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Questionnaire
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a set of questions used to gather data from respondents
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Quota sampling
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a sampling method that selects respondents in proportion to a given characteristic eg gender
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Quotation
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An offer to supply products at a stated price and under specified terms and conditions
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R&D
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Research and development. The creative work undertaken to apply scientific and technological innovations to products and processes
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Random sampling
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each member of the population has an equal chance of being selected as a respondent
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Research and development
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The creative work undertaken to apply scientific and technological innovations to products and processes
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Respondent
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individuals selected to take part in a survey
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Restrictive practices
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any business activity that inhibits free competition between rival firms eg price fixing or agreeing markets shares
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Resources
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human, physical or financial assets used to help achieve business objectives
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Royalty
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payment made to the owner of property for the use of a product, idea or brand eg by franchisees to franchisors
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Sales promotion
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short term schemes which encourage customers to buy now rather than later eg time limited 2-for-1 offers
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Sample
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a group of people (subjects) selected for within the entire target population for study.
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Sampling
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the process of selecting a group of people (subjects) for study that is representative of the entire target population
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Scale
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the production level achieved by a business.
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Secondary data
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researching data that has already been published.
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Segment
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a group of customers with similar characteristics and requirements. A submarket
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Segmentation
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The process of dividing a market into separate sections made up of customers with similar characteristics and requirements
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Socio-economic group
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dividing a population into groups based typically on income and occupation
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Special orders
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when customers ask for a discount on normal price.
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Sponsorship
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a method of promotion where an organisation pays to be associated with an event or person
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Stakeholder
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Any group with an interest in an organisation’s performance eg the local community, customers and owners
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Strategy
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the long term plan of action by which an organisation aims to achieve its objectives. Decided by senior managers
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Subject
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individuals chosen from the entire population for surveying
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Submarket
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a market segment (part of the market) made up of customers with similar requirements
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Substitute
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a rival product customers can buy eg butter is a substitute for margarine
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Supply
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the amount of a product firms are willing and able to provide at different market prices in a given time period, eg one month
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Survey
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the process of collecting data by asking questions
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SWOT analysis
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an audit (assessment) of the current internal strengths andweaknesses and external opportunities and threats facing an organisation
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Tactics
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the short term, day-to-day decisions taken to achieve a strategy
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Tactics
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short term plans for implementing strategy
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Target market
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a specific group of customers (segment) at which an organisations aims its products
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Targeting
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where a business selects and focuses its business activity on one or more market segment
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Telemarketing
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the use of the telephone the telephone for promotion and sales
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Test marketing
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trialling a new product within a specific region before national launch.
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Title of ownership
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legal right of possession
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Trend
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(1) a persistent long term movement in data (2) the general direction in which something is tending to move
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Uncertainty
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the extent to which a value or event is unknown or doubted
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Unit cost
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the cost of producing one item ie average cost
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Unit contribution margin
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the difference between the selling price and unit variable cost of making an item
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Unit variable cost
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is the direct cost of making one item- fixed costs are ignored
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USP
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a unique selling point is the feature of a product that make it stand out from items supplied by competitors
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Value analysis
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a study of a product to see if the firm can adjust its processes to provide a given function at lower unit cost - without sacrificing quality
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Variable costs
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costs dependent on the level of output
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Viral marketing
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encouraging the recommendation of an organisation or its products through word of mouth, particularly via the internet
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Wholesaler
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an intermediary in the channel of distribution that buys from producers and sells to retailers or customers
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Zero budgeting
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the budget is reset to zero and budget holders have to justify every pound to be spent in the next time period.
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