Shared Flashcard Set

Details

Entreprenuership
MKT 475 Test Chp. 9-15
161
Marketing
Undergraduate 4
02/18/2011

Additional Marketing Flashcards

 


 

Cards

Term
Pure Good Example
Definition
shampoo
Term
Good Dominated
Definition
A car (comes with warranties and service)
Term
Hybrid Example
Definition
A restaurant– Which is more important, the food or the atmosphere and service?
Term
Service Dominated Example
Definition
Your taxes. You get the service of having them done, but also the papers to send in and a copy to keep.
Term
Pure service example
Definition
Having your car washed
Term

 

Inseparability
Definition

 

service cannot be disconnected from the provider
Term
Separable
Definition
It doesn’t matter who you buy it from, the product is the same
Term
Non-perishable
Definition
If you don’t sell it today you can sell it tomorrow
Term

 

Heterogeneity
Definition
each time the service is provided, it will be slightly different
Term

 

Augmented product
Definition

 

core product, plus features that tend to differentiate it from the competition
brand names, quality levels, packaging
Term
Core product
Definition

basic description of what a product is

 

Example: automobile

Term

 

†Total product
Definition

 

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.
Term
Branding Guidelines
Definition

 

Be careful about infringing on trademarks
Describes firm or product and is easy to remember: “Discount Furniture”
Creative spellings are eye-catching; don’t go overboard
Beware of selecting a name too narrow to allow the firm to grow
Term
Stages of New Product Development
Definition
  1. Idea Generation/Source of Business Ideas
  2. Idea Screening for Business Potential
  3. Idea Evaluation/Feasibility Study
  4. Product Development
  5. Commercialization
Term
The Product Life Cyle (Introduction)
Definition

 

Sales slowly take off and then begin to grow
Very important to build brand awareness
Heavy introductory marketing expenses will suppress profits
Competition is generally low
Term
Product Life Cycle (Growth)
Definition

 

Acceptance of the product increases rapidly
Advertising and promotion are much less critical
Goal in this time is to maximize market share
Prices tend to drop as production becomes more efficient
Term
Product Life Cycle (Maturity)
Definition

 

Sales will level off and start to decline
Profits follow suit
Competition becomes fierce; price competition begins to rise
Advertising will suggest new uses for the product
Term
Product Life Cycle (Decline)
Definition

 

Decline can be slow or fast, steady or unsteady
May come from introduction of new technology
May also be caused by a shift in consumer preferences
Sales and profits fall during this stage
Term

 

†Services go through same four stages:
Definition

 

Easier to extend life cycle, and virtually eliminate the decline stage of a service
Services are often much easier to change “on the run”
Term
price is central to ______ strategy
Definition
competitive strategy
Term

 

Price is directly related to your company’s _______and sales volume
Definition
 gross revenue
Term

 

†Optimum price
Definition

 

refers to the highest price that would produce your desired level of sales (or revenues) in your target market.
Term

 

†Inelastic product
Definition

 

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

 

†Elastic product
Definition

 

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

 

†Internal reference price
Definition

 

a consumer’s mental image of what a product’s price should be
Term

 

†External reference price
Definition

 

an estimation of what a price should be based on advice, advertisements, or comparison shopping
Term
 Breakeven Calculation
Definition

 

Breakeven   =   Total Fixed Costs

                  Price – Variable Cost

Term
MAP (Minimum Advertised Pricing).
Definition

 

MAP requires you not advertise below a certain price but does not regulate what the product actually sells for.

Term

 

†Skimming
Definition

 

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

 

†Prestige or premium pricing
Definition

 

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

 

†Odd-even pricing
Definition

 

Setting a price that ends in the number 5, 7, or 9.
Term
Partitioned pricing
Definition

 

Setting the price for a base item and then charging extra for each additional component.
Term

 

†Captive pricing
Definition

 

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

 

†Price lining
Definition

 

The practice of setting (usually) three price points: good quality, better quality, best quality.
Term

 

†Periodic or random discounting
Definition

 

Sales conducted at either predictable or non-predictable intervals.
Term

 

†Off-peak pricing
Definition

 

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

 

†Bundling
Definition

 

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

 

Multiple or bonus pack
Definition

 

Combining more than one unit of the same product and pricing it lower than if each unit were sold separately.
Term
Price-Lowering Techniques
Definition

 

†Coupons, Rebates, Loyalty and Referral Programs
Term
Rebates
Definition

 

†Allows manufacturers to give discounts directly to final consumers
†Can increase sales without a “price reduction”
†Allows manufacturers to gather consumer information – name, address, etc.
†Low redemption rates decrease cost of the promotion
Term

 

Electronics rebate redemption rates are ____on average
Definition
40%
Term
English Auction
Definition

 

†English – price starts low and climbs (buyers compete)
Term
Dutch Auction
Definition

 

†Dutch – price starts high and drops (buyers compete)
Term
Reverse Auction
Definition

 

†Reverse – sellers compete against each other ("e-procurement“)
Term
Bid pricing is common for _______ contracts
Definition
government contracts
Term

 

Value proposition
Definition

 

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

 

Occasion of product use, user status, usage rate, loyalty status, readiness to purchase, and attitude toward product
Term

 

†Succinct Message
Definition

 

Your key point in as few and as memorable words as possible
effective
Term

 

†Promotional Mix
Definition

 

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

 

†Sales promotion
Definition

 

A form of communication that encourages the customer to act immediately, such as coupons, sales, or contests.
Term

 

†Keyword and description tags
Definition

 

Terms included in the hidden portion of a Web page which are used by search engines such as Yahoo! and Google to describe your Web site and evaluate its focus and category placement.
Term
Personal Selling Structure
Definition
Prospect and evaluate->Prepare->Present-> Close->Follow up
Term

 

†Cognitive dissonance
Definition

 

Doubt that occurs after a purchase has been made.
An inconsistency between experience and belief.
Term

 

†Customer relationship management (CRM)
Definition

 

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.
Term

 

†Market penetration
Definition

 

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

 

†Product expansion
Definition

 

A strategy whose goal is growth, based on selling existing customers a product or service they have never bought before.
Term

 

†Market expansion
Definition

 

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

 

†Diversification
Definition

 

A strategy whose goal is growth, based on adding new products or services to the firm’s existing collection of offerings.
Term

 

†Customer vector
Definition

 

A type of CRM report which segments by customer (or customer group) on purchases or dates of purchase
Term

 

†Press relations
Definition

 

Activities used to establish and promote a favorable opinion by the media.
Term

 

†Press release
Definition

 

A written announcement intended to draw news media attention to a specific event.
Term

 

†Issue recognition
Definition

 

A concept in public recognition which alludes to the extent to which the public is familiar with the issue or problem at hand.
Term
What is Newsworthy?
Definition

Trendiness

Proximity

Public Importance

Power

Currency

Public Interest

Term

 

†Proximity
Definition

 

A concept in public recognition which alludes to the impact level of the issue being discussed.
Term

 

†Public importance
Definition

 

(1) Things that are considered important to large numbers of otherwise unrelated people
(2) things that are of civic importance, as opposed to private or corporate entities.
Term

 

†Currency
Definition

 

A concept in public importance which alludes to the degree to which the issue is immediate in its impact.
Term

 

†Public interest
Definition

 

(1) Things that are generally considered to be beneficial to large numbers of people,
(2) civic causes and benefits, as opposed to private and corporate benefits.
Good story, human interest, visuals, cultural resonance
Term

 

†Publicity
Definition

 

Information about your company and its activities that is disseminated to the public in order to going their good opinion.
Term

 

Basics of Press Release

Definition

 

Attention – catchy headline
Interest – pique their interest
Desire – details of opening information
Action – contact information
Term
RFM Scoring
Definition
Recency, Frequency, Monetary Transactions
Term

 

†Microinventory
Definition

 

A set of goods or service that consists of only one or a few items.
Term

 

†Wholesaler
Definition

 

A middleman business which buys (typically in large quantities) and sells (typically in smaller quantities) to businesses rather than consumers.
Term

 

†Agent
Definition

 

A middleman business which represents a manufacturer’s product or service to other business-to-business middleman firms.
Term

 

†Born international
Definition

 

A new firm that opens a Web site immediately, thus being exposed to customers from around the world.
Term

 

†Indirect exporting
Definition

 

Exporting using intermediaries such as agents, export management companies, or export trading companies.
Term

 

†Freight forwarders
Definition

 

Firms specializing in arranging international shipments— packaging, transportation, and paperwork.
Term

 

†Letter of credit
Definition

 

A document issued by a bank that guarantees a buyer’s payment for a specified period of time upon compliance with specified terms.
Term

 

†Documentary draft
Definition

 

A draft which can be exercised only when presented with specified shipping documents.
Term

 

Three types of locations

Definition

 

†At the client’s location
†At a mutually accessible location
†At your firm’s location
Term
client’s location
Definition

 

Services include such things as house or office cleaning, pest control, remodeling, lawn and gardening services, carpet cleaning, and similar services which must be performed at the client’s house
As the firm grows, it may outgrow its home-based headquarters
Term
Mutually accessible location
Definition

 

Too much specialized equipment to be readily transported
A need for at least some client involvement
Barbershops, dentist offices, video rental stores restaurants
Term

 

Sheltered workshop
Definition

 

A nonprofit organization or institution that provides business services by using handicapped or rehabilitated workers
Term

 

†Ethnographic research
Definition

 

data gathered by simple observation – seeing what consumers do, rather than asking them
Term

 

†Scalar questions
Definition

 

Questions that are answered by some sort of scale; for example, “On a scale of 1 to 5, how do you like this book?”
Term

 

†Dichotomous questions
Definition

 

Questions that have only two possible choices; for example, “Have you shopped here before?”
Term

 

†Bot
Definition

 

A Web-based program that uses artificial intelligence techniques to automate tasks such as searches.
Term

 

†Differentiated strategy
Definition

 

A marketing strategy in which a marketer selects two or more distinct groups of consumers and designs specific marketing mixes to meet their needs.
Term
Accrual Method
Definition

 

Under the accrual method, transactions are counted when the order is made, the item is delivered, or the services occur, regardless of when the money for them (receivables) is actually received or paid. In other words, income is counted when the sale occurs, and expenses are counted when you receive the goods or services.
Term
Cash Method
Definition

 

†Under the cash method, income is not counted until cash (or a check) is actually received, and expenses are not counted until they are actually paid.
Term

 

†Tax accounting
Definition

 

An accounting approach based on specific accounting requirements set by governmental taxing agencies.
Term

 

†Financial accounting
Definition

 

A formal, rule-based set of accounting principles and procedures intended for use by outside owners, investors, banks, and regulators.
Term

 

†Business entity concept
Definition

 

The concept that a business has an existence separate from that of its owners.
Term

 

†Going concern concept
Definition

 

The accounting concept that a business is expected to continue in existence for the foreseeable future.
Term

 

†Owners’ equity
Definition

 

whatever value is left after all liabilities have been paid.
Term
Only two reasons to do accounting
Definition

 

1.To produce information that is useful to you for managing your business
2.To meet legal or contractual requirements
Term

 

†MACRS rate
Definition

 

the Modified Accelerated Cost Recovery System
lets taxpayers depreciate more of the cost earlier
Term

 

†Five common financial statements
Definition

 

Income statement
Statement of retained earnings
Statement of owner’s equity
Balance sheet
Cash flow statement
Term

 

†Retained earnings
Definition

 

The sum of all profits and losses, less all dividends paid since the beginning of the business.
Term

 

†Articulate
Definition

 

The concept that information flows from the income statement through the statements of retained earnings and owners’ equity to the balance sheet.
Term

 

†Financial flexibility
Definition

 

A business’s ability to manage cash flows in such a manner that the company can respond appropriately to unexpected opportunities and needs.
Term

 

†GAAP
Definition

 

Generally Accepted Accounting Principles are the standardized rules for accounting procedures
used in all audits and submissions of accounting reports to the government.
Term

 

†Investing activities
Definition

 

The purchase and sale of land, buildings, equipment, and securities.
Term

 

†Cost-volume-profit analysis
Definition

 

A managerial accounting technique which looks at the fixed and variable costs of a business to arrive at a number of unit sales (volume) to maximize profits.
Variable, fixed costs
Term

 

†Breakeven point
Definition

 

The point at which total costs equal gross revenue.
Term

 

†Pro forma
Definition

 

indicates estimated or hypothetical information
Term

 

†Cost of goods sold budget
Definition

 

A schedule that shows the predicted cost of product actually sold during the accounting period.
Term

 

†Activity-based cost estimates
Definition

 

An accounting method which assigns costs based on the different types of work a business does in order to sell a particular product or service.
Term

 

†Variance
Definition

 

The difference between an actual and budgeted revenue or cost
Term

 

†Variance analysis
Definition

 

The process of determining the effect of price and quantity changes on revenues and expenses.
Term
Favorable variances would result in
Definition
profits being greater than budgeted, all other things being equal;
Term
Unfavorable variances would result in
Definition
profits being less than budgeted, all other things being equal.
Term

 

Cash-to-cash cycle
Definition

 

The time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale.
Also called operating cycle
Term

 

†Demand deposits
Definition

 

Money held in checking and savings accounts.
Term

 

†Marketable securities
Definition

 

Stocks and bonds that are traded on an open market.
Term

 

†Commercial paper
Definition

 

Notes issued by credit-worthy corporations.
Term

 

†Bearer
Definition

 

Any person or business entity who possesses a security.
Term
cash flow from investing
Definition

 

2.Cash can be obtained from investments the business has made, such as stocks, bonds, land, buildings, or equipment
Term
cash flow from operations
Definition

 

1.Cash can be obtained by selling the products and services of the business and collecting cash from customers.
Term

 

†Company book balance
Definition

 

The sum of cash inflows and cash outflows recorded in the firm’s accounting records.
Usually called the cash account
Term

 

†Bank ledger balance
Definition

 

The sum of deposits and withdrawals recorded in a bank’s accounting records.
Term

 

†Bank available balance
Definition

 

The sum of money that has actually been received and paid out of a depositor’s account.
Term

 

†Clearinghouse
Definition

 

An entity that processes checks and electronic fund transfers for banks and other financial organizations.
Term

 

†Float
Definition

 

Delays in the movement of money among depositors and banks.
Term

 

†Reconciling
Definition

 

An accounting process that identifies the causes of all differences between book and bank balances.
Term

 

†Charge back
Definition

 

A reduction in the bank account of a merchant by a credit card company.
Term

 

†Cash disbursements budget
Definition

 

A schedule of the amounts and timings of payments of cash out of a business.
Term

 

†Cash receipts budget
Definition

 

A schedule of the amounts and timings of the receipt of cash into a business.
Term

 

Most common ways employees
steal cash

Definition

 

1.Larceny
2.Skimming
3.Phony disbursements
Term

 

†Deposits and progress payments
Definition

 

Cash payments received before product is completed or delivered.
Term

 

†Discounts for prompt payment
Definition

 

A reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner.
Term

 

†Noncore projects
Definition

 

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business.
Term

 

†Factoring receivables
Definition

 

Borrowing money secured by a firm’s accounts receivable.
Term

 

†Trade discounts
Definition

 

Percentage discounts from gross invoice amounts provided to encourage prompt payment.
Term

 

†Consignment
Definition

 

The practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold.
Term

 

†Barter
Definition

 

The practice of trading goods and services without the use of money.
Term

 

†Timing purchases
Definition

 

A method of controlling the timing of cash outflows that is invisible to suppliers and vendors.
Term

 

†Gaming the payment process
Definition

 

Using methods to appear to be paying bills on time, when in fact payment is being delayed or avoided.
Term

 

†Growth trap
Definition

 

A financial crisis that is caused by a business growing faster than it can be financed.
Term
Guy Kawasaki
Definition

 

†Managing director of Garage Technology Ventures, an early-stage venture capital firm
†Columnist for Entrepreneur Magazine and Forbes
†Author of nine books including The Art of the Start, Selling the Dream, and The Macintosh Way.
†Previously, he was an Apple Fellow at Apple Computer, Inc.
Term
Apple Fellow
Definition

 

†A person who has been designated as such by Apple Computer in recognition of their extraordinary technical or leadership contributions
†Each Apple Fellow acts as a leader and a visionary, guiding the company in their particular area of expertise.
†The Apple Fellowship has been awarded so far to very few individuals
Term
According to Guy Kawasaki
Definition

 

†Approximately 10 million business are formed each year
†Approximately 3000 businesses per year get venture capital funding
 †You will be the primary source of the start up funds for you business
†Besides you funding will come from the three Fs
Friends
Family
Fools
†Do not start a business because it is a “hot” industry
†Start a business that you love
†If you are not willing to put your hands in people’s mouths don’t become a dentist
Term
Sources of Financing for Small Businesses
Definition

 

†The number one source is from the owners (or potential owners) themselves.

The other major sources include family and friends, credit cards, trade credit, banks, and other commercial lenders

Term

 

†Equity capital
Definition

 

Money contributed to the businesses in return for part ownership of the business.
Term
Corporation
Definition

 

A legal “artificial” entity that is formed by filing specific documents with a state government.
Term

 

†Limited liability company (LLC)
Definition

 

A legal form of business organization that is created by filing required documentation with a state government.
have a choice, under federal tax law, of being taxed as either corporations or partnerships.
Term

 

†Limited partnership
Definition

 

A legal form of business organization that is created by filing required documentation with a state government;
one or more partners may have no liability for the debts and actions of the partnership.
Term

 

†Sole proprietorship
Definition

 

A business owned by a single individual who is responsible for all debts and claims against the business.
Term

 

†Gain on investment
Definition

 

The percentage amount that the payout of an investment differs from original cost
Calculated as (payout − investment + dividends)/ investment.
Term
Why Use Equity Capital?
Definition

 

1.You will reduce your own exposure to financial loss
2.Your business will not have increased costs in the form of interest
3.Bringing outside investors into an existing business can often reenergize it by providing new ideas, procedures, and processes
Term

 

†Community development organization
Definition

 

An organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specific geographic area.
Term

 

†Small business investment companies
Definition

 

Private businesses that are authorized to make SBA insured loans to start-ups and small businesses.
Term
The four Cs of Borrowing
Definition

character

captial

collertal

conditions

Term

 

†Accelerator
Definition

 

An organization that supports startup technology businesses by providing inexpensive office space, a variety of support services, and resources
most are associated with universities.
Term

 

†Collateral
Definition

 

Something of value given or pledged as security for payment of a loan
may consist of financial instruments, such as stocks, bonds, and negotiable paper, or of physical goods, such as trucks, machinery, land, or buildings.
Term

 

†Tax credits
Definition

 

Direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria.
Term
Forms of Gift Financing
Definition

tax abatements

Grants

Tax Credits

Economic Development Agency

Foundation

Term

 

†Economic development agency
Definition

 

A government organization that works to increase economic activity in the form of job opportunities within a specific geographic area.
Term

 

†Weighted average cost of capital (WAC)
Definition

 

The expected average future cost of funds.
Term

 

†Financial leverage
Definition

 

A measure of the amount of debt relative to total investment.
Term

 

†Optimum capital structure
Definition

 

The ratio of debt to equity that provides the maximum level of profits.
Term

 

Accredited investors
Definition

 

The SEC’s term for individuals with a net worth greater than $1 million or a personal annual income of at least $200,000 in each of the two most recent years
who are therefore qualified to make private equity investments in businesses.
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