CLEP Principles of Marketing flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Marketing mix

The set of controllable tactical tools a firm blends to produce the response it wants in its target market: product, price, place, and promotion, extended to people, process, and physical evidence for services.

Microenvironment

The actors close to the company that affect its ability to serve customers: the company itself, suppliers, marketing intermediaries, customer markets, competitors, and publics.

Discretionary income

Money remaining after taxes and after paying for necessities such as food, housing, and clothing. Changes in discretionary income most directly affect demand for luxury and nonessential goods.

Societal marketing concept

The idea that a company should balance three considerations when setting strategy: company profits, consumer wants, and society's long-run interests, including environmental and social welfare.

Marketing intermediaries

Firms that help the company promote, sell, and distribute its goods to final buyers, including resellers, physical distribution firms, marketing services agencies, and financial intermediaries.

Market segmentation

Dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors who might require separate products or marketing programs.

Behavioral segmentation

Dividing buyers into groups based on knowledge, attitudes, uses, or responses to a product, including occasions, benefits sought, user status, usage rate, and loyalty status.

Concentrated targeting

A niche strategy in which a firm selects one segment and pursues a large share of it rather than a small share of a large market, gaining efficiency and deep expertise.

Value proposition

The full mix of benefits on which a brand is positioned, answering why a target customer should buy from this brand rather than a competitor.

Perceptual map

A visual plot of competing brands on two or more attributes as consumers perceive them. Empty spaces on the map may indicate an unoccupied positioning opportunity.

Cognitive dissonance

Postpurchase doubt experienced when a buyer notices drawbacks of the chosen brand or attractive features of rejected alternatives; marketers reduce it with reassurance and follow-up communication.

Derived demand

Business demand that ultimately comes from the demand for consumer goods. A rise in consumer demand for cars, for example, increases business demand for steel and parts.

Buying center

The group of people within an organization who participate in a purchase decision, playing roles of users, influencers, deciders, purchasers, and gatekeepers.

Straight rebuy

A routine business purchase in which the buyer reorders the same item from an approved supplier without modification; it is the least risky and most common buying situation.

Selective distortion

The tendency of people to interpret information in a way that supports what they already believe, which is why marketers must work to build and maintain brand meaning.

Augmented product

The additional services and benefits built around the core and actual product, such as delivery, installation, warranty, credit, and after-sale service, used to differentiate offers.

Product mix width

The number of different product lines a company carries. Length counts total items across lines, and depth counts the variants offered within each item.

Service inseparability

A service characteristic meaning services cannot be separated from their providers; production and consumption occur simultaneously, so provider quality and customer interaction shape the outcome.

Brand equity

The differential effect that knowing a brand name has on customer response to the product or its marketing, reflected in awareness, loyalty, perceived quality, and associations.

Break-even quantity

The sales volume at which total revenue equals total cost, computed as fixed cost divided by the difference between unit price and unit variable cost.

Price elasticity of demand

The percentage change in quantity demanded divided by the percentage change in price. Absolute values below one indicate inelastic demand, where raising price increases total revenue.

Market-skimming pricing

Setting a high initial price for a new product to capture maximum revenue from segments willing to pay it, then lowering price to reach more price-sensitive buyers.

Captive-product pricing

Pricing a main product low and making profit on required supplies or accessories, such as razors and blades or printers and ink cartridges.

Channel level

A layer of intermediaries that performs work in bringing the product and its ownership closer to the final buyer; a direct channel has no intermediary level.

Selective distribution

Using more than one but fewer than all willing intermediaries in an area; common for shopping goods and brands that want control over service and image.

Vertical marketing system

A channel structure in which producers, wholesalers, and retailers act as a unified system, either corporate, administered, or contractual, to control behavior and reduce conflict.

Disintermediation

The cutting out of channel intermediaries by product or service providers, often through direct online sales, which can provoke conflict with existing channel members.

Pull strategy

A promotion approach that directs marketing effort at final consumers to encourage them to demand the product from retailers, pulling it through the channel.

Cost per thousand (CPM)

A media efficiency measure computed as advertising cost divided by audience size in thousands; it allows comparison of the cost of reaching audiences across different media vehicles.

Objective-and-task budgeting

Setting the promotion budget by defining specific communication objectives, determining the tasks needed to reach them, and estimating the cost of performing those tasks.

Secondary data

Information that already exists somewhere, having been collected for another purpose. It is cheaper and faster than primary data but may be outdated, incomplete, or irrelevant.

Probability sample

A sample in which every member of the population has a known, nonzero chance of selection, allowing sampling error to be measured; types include simple random and stratified samples.