MGMT 375 Test 3

market expansion

A strategy whose goal is growth, based on selling in areas or to groups previously not served by the business.

market penetration

A strategy whose goal is growth, based on selling more of the firm's product or service to the existing customer base.

vision statement

A very simple 5-10 word sentence or tagline that expresses the fundamental idea or goal of the firm.

informational plans

Give potential customers or suppliers information about the company and its product or service.

value proposition

Small business owners' unique selling points that will be used to differentiate their products and/or services from those of the competition.

business plan

document designed to detail the major characteristics of a firm - product or service, industry, market, operation

cognitive dissonance

doubt that occurs after a purchase has been made. an inconsistency between experience and belief

target market

group of people on which a marketer focuses promotion and sales efforts

optimum pricing

highest price that will produce your desired level of sales in your intended market

promotional mix

how much of each message conveyance you will use to sell your product as well as your objective in using each one

elasticity

idea that the market's demand for a product or service is sensitive to changes in its price

advertising

often used to support the corporate identity and value propositions that are established through public relations efforts. part of conveying your message to customers, outlets include: newspapers, magazines, billboards, tv, internet, and banners

sale leads

people who receive a promotional impression and who give some thought to buying the product

segmentation

process of dividing the market into smaller portions of people who have common characteristics

inelastic product

product for which there are few substitutes and for which a change in price makes very little difference in quantity purchased

predetermined market segments

professionally compiled target audiences based on shared demographic, financial, shopping, and psychographic characteristics

prospect

sales leads who actually make some sort of effort to learn more about the product, service, or business

target market

segment or segments selected for concentrated marketing efforts

prestige or premium pricing

setting a price above that of the competition so as to indicate a higher quality or that a product is a status symbol

skimming

setting a price at the highest level the market will bear, usually because there is no competition at the time

partitioned pricing

setting the price for a base item and then charging extra for each additional component

captive pricing

setting the price for an item relatively low and then charging much higher prices for the expendables it uses

customer retention

techniques that focus on efforts to promote satisfaction with and interest in the firm

law of supply and demand

the economic theory that describes how the demand for products or services and the supply of them affect each other

internal understanding

the extent to which employees, investors, and family members involved in the business know the business's purposes and operations

risks

the parts of a business or business plan that expose the firm to any kind of loss - profits, sales, reputation, assets, customers, and so on

price lining

the practice of setting (usually) three price points: good quality, better quality, best quality

core product

the very basic description of what a product is - a bar of soap, a house-cleaning service

elastic product

there are any number of substitutes and for which a change in price makes a difference in quantity purchased

taglines

(also known as a slogan) memorable catchphrase that captures the key ideas of a business, its services, product, or customer

most common critical risk

-overstated numbers - numbers that are wrong - inadequate cushion : not enough money to fall back on - inadequate payback - narrative and financials do not fit : plan calls for actions that are not possible with the amount of money - no direct customer connection - uncertain sales - overlooked competition - experience deficits - "what" problems - deadly aggravations : looking and sounding professional

elevator pitch

30 second/100 words or less action oriented description of a business designed to sell the idea of the business to another

bundling

combining two or more products in one unit and pricing it less than if the units were sold separately

executive summary

One- or two-page (250-500 words) overview of the business, its model, market, expectations, and immediate goals. typically put at beginning

periodic or random discounting

Sales conducted at either predictable or non-predictable intervals

odd-even pricing

Setting a price that ends in the number 5, 7, or 9.

total product

The entire bundle of products, services, and meanings of your offering; includes extras like service, warranty, or delivery, as well as what the product means to the customer.

external legitimacy

The extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business or the owner's family.

Customer Relationship Management (CRM)

The process of tracking the customer's different contacts with the firm, and using this data to help improve sales as well as the customer's experience.

marketing funnel

The rule of thumb in marketing is that it takes a large number of people to be made aware of your product in order to find a purchaser.

peak pricing

The strategy of charging a higher price during periods of high demand, and a lower price during periods of slack demand. Intended to both maximize revenue and shift excess demand to periods in which it can be more easily accommodated.

internal reference price

a consumer's mental image of what a product's price should be

new entrant business

a firm whose product or service is established elsewhere, but is new to this market

sales promotion

a form of communication that encourages the customer to act immediately, such as coupons, sales, or contest

mission statement

a paragraph that describes the firms goals and competitive advantages

product expansion

a strategy whose goal is growth, based on selling existing customer a product or service they have never bought before

markup

amount an entrepreneur adds to costs to provide a profit

margin

amount of profit, usually stated as a percentage of the total price

markup pricing

an amount is added to the cost of a product to set the retail price and provide a profit

external reference price

an estimation of what a price should be based on information external to a consumer, such as advice, advertisements, or comparison shopping

price gouging

charging an outrageously high price for something

off-peak pricing

charging lower prices at certain times to encourage customers to come during slack periods

multiple or bonus pack

combining more than one unit of the same product and pricing it lower than if each unit were sold separately

impression

what it is called when someone notices a promotional effort