Chapters 5,6, 7

Foreign exchange (FX) rate

the relative value of one currency to another

Three basic types of "product businesses"

-Manufacturing is the making of a tangible product -Wholesale is the buying in quantity from a manufacturer and selling to a retailer -Retail is selling to an individual customer.

competitive strategy

combines your business definition with your competitive advantage

tactics

the specific ways in which a business carries out its strategy

promotion

the use of advertising and publicity to get your marketing message to your potential customers.

publicity

free mention of your business

business definition

the offer: what products and services will be sold? target market: which consumer segment will the business focus on? production capability: how will that offer be produced an delivered to those customers? problem solving: what problem does the business solve for its customers?

break-even analysis

the point at which a business sells enough units to cover its fixed costs tells you if your marketing plan is viable. fixed cost/gross profit per unit= break even units gross profit per unit= unit price -cogs

gross profit

total sales revenue minus total cost of goods sold

Importance of a marketing plan

-demonstrating that your company can grow and offer returns to investors -evaluating the competitive and industry environments -illustrating the pricing strategy -detailing the promotional plan and budget

six factors of competitive advantage

-quality -price -location -selection -service -speed/turnaround

4 P's

Product: should meet or create customer need. Price: low enough so people will buy, high enough that a business can make a profit place: location where you choose to market your product promotion: the development of the popularity and sales of a product or service through advertising, pub, or other devices.

market segment

a group of consumers or businesses that have a similar response to a particular type of product or service.

market

a group of people or organizations that may be interested in buying a given product or service, has the resources to purchase it, and is permitted by law and regulation to do so.

foundation

a not-for-profit organization that manages donated funds, which it distributes through grants to individuals or to other non profit organizations that help people and social causes.

strategy

a plan for how an organization or individual intends to outdo competitors

currency

a term for money when it is exchanged internationally

not-for-profit organization

an entity formed with the intention of addressing social or other issues, with any profits going back into the organization to support its mission

goodwill

an intangible asset generated when a company does something positive that has value.

trademark

any word, name, symbol, or device used by an organization to distinguish the product

wholesale

buying in bulk from manufacturers and selling smaller quantities to retailers

direct labor

employees that actively produce or deliver a product or service

Building your brand

choose an easy name to remember, describes your business, and helps establish mind share create a logo that becomes a symbol of your product develop a good reputation create a brand personality communicate your brand personality to tgt market

positioning

distinguishing a product or service from similar products or services being offered to the same market.

demographics

dividing a population based on a variable such as age, gender, income, or education

psychographic

dividing a population by psychological differences such as values (conservative, liberal, open-minded, traditional), lifestyle (sedentary, active), personality traits (Type A, worrier, shy, extroverted), and social group (white collar, blue collar).

secondary research

is carried out indirectly through existing resources

primary research

is conducted directly on a subject or subjects.

manufacturing

making or producing a tangible product

marketing vs. selling

markketing is the business function that identifies your customers and their needs and wants the way a business communicates its competitive advantage.

CRITICAL components of a marketing plan

opportunity analysis marketing analysis financial projections implementation time line measurement supplemental information

advertisement

paid announcement that a product or service is for sale

cause-related marketing

promotional efforts inspired by a commitment to a social, environmental, or political cause

cost of services sold

same as cogs, just with services, the cost of an additional unit of a service.

retail

selling individual items to consumers

logo

short for logotype, a company trademark or sign

behavioral

splitting the market by observable purchase behaviors such as brand loyalty or responsiveness to price.

economics of one unit of sale (EOU)

the amount of gross profit that is earned on each unit of the product or service a business sells ex: one item (one tie) EOU= 7-3=4 Gross profit per unit= 4

unit of sale

the basic unit of the product or service sold by the business

market research

the collection and analysis of data regarding target markets, industries, and competitors.

cost of goods sold

the cost of materials used to make the product and the cost of labor directly used to make the product.

marketing

the development and use of strategies for getting a product or service to customers and generating interest in it.

unique selling proposition (USP)

the distinctive feature and benefit that sets a company apart from its competition

barriers to entry

the factors that contribute to the ease or difficulty of a new competitor joining an established market

product life cycle

the four states that a product or service goes through as it matures in the market--introduction, growth, maturity and decline

core values

the fundamental, ethical, and moral philosophy and beliefs that form the foundation of the organization and provide broad guidance to all decision making.

philanthropy

the giving of money, time, or advice to charities in an effort to help solve a social or environmental problem.

competitive advantage

whatever you can do better than the competition that will attract customers to your business