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| 1. Bait-and-switch advertising: Promoting a low-priced item to attract customers to whom the business then tries to sell a higher priced item |
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| 2. Business cycles: Periods of expansion and contraction in economic activities |
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| 3. Capital: Assets of a business |
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| 4. Cash flow: The movement of funds into and out of a business; determines the amount of cash the business has to work with at any given time |
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| 5. Costs: The expenses involved with manufacturing, promoting, and distributing a product |
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| 6. Elastic demand: A form of demand for products in which changes in price correspond to changes in demand |
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| 7. Fixed costs: Business costs that are not affected by changes in sales volume |
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| 8. Growth stage: The product life cycle stage in which sales rise rapidly |
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| 9. Inelastic demand: A form of demand in which changes in price do not affect demand |
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| 10. Introductory stage: The product life cycle stage when the product first appears in the marketplace |
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| 11. Law of supply and demand: Economic principle which states that the supply of a good or service will increase when demand is great and decrease when demand is low |
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| 12. Market price: Actual price that prevails in a market at any particular moment |
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| 13. Market share: An organization’s portion of the total industry sales in a specific market |
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| 14. Mark-up: The difference between the cost of a product and its selling price |
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| 15. Maturity stage: The product life cycle stage in which sales peak and then increase at a slower rate or start to decline |
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| 16. Monopolistic competition: A type of market structure in which a lot of businesses sell similar products that have only a few differences |
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| 17. Obsolescence: The state of being outmoded or unfashionable |
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| 18. Oligopoly: A market structure in which there are relatively few sellers, and industry leaders usually determine prices |
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| 19. Operating expenses: All of the expenses involved in running a business |
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| 20. Price discrimination: An illegal activity in which a business charges different customers different prices for similar amounts and types of products |
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| 21. Price fixing: Illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the consumer |
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| 22. Pricing objectives: Goals a company hopes to accomplish through its pricing strategies |
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| 23. Product life cycle: The stages through which goods and services move from the time they are introduced on the market until they are taken off the market |
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| 24. Product mix: The particular assortment of goods and services that a business offers in order to meet the needs of its market(s) and its company goals |
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| 25. Profit: The income left once all expenses are paid |
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| 26. Profit maximization: A profit-oriented pricing objective intended to give the firm the most possible profit |
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| 27. Profit-oriented pricing: A category of pricing objectives that focus on profit for the business |
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| 28. Pure competition: A market structure in which there are many businesses selling a lot of identical products for about the same price to many buyers |
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| 29. Pure monopoly: A condition in which a market is controlled by one supplier, and there are no substitute goods or services readily available |
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| 30. Quality: The degree of excellence of a good or service—how good it is |
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| 31. Return on investment: A profit-oriented pricing objective in which the business bases the amount of profit it wants to earn on the amount of its capital investment |
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| 32. Return on sales: A profit-oriented pricing objective in which the business bases the amount of profit it wants to earn on the amount of its sales; often called target return |
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| 33. Sales-oriented pricing: A category of pricing objectives that focus on increasing total amount of income from sales |
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| 34. Sales volume: The amount of a firm’s sales; usually expressed in dollars |
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| 35. Selling price: The amount a seller charges the purchaser for a good or a service |
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| 36. Target market: The particular group of customers a business seeks to attract |
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| 37. Target return: See return on sales |
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| 38. Total costs: All of a business's costs, both fixed and variable |
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| 39. Unit pricing: A pricing technique in which consumers are given the price per unit (pound, ounce, etc.) for products |
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| 40. Variable costs: Business costs that change according to changes in sales volume |
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