1.3 keywords Flashcards
design
The process of creating a new product or service.
prototype
A test model of a planned design used to see if it functions properly with durability, reliability and safety.
branding
The marketing practice of creating a name, symbol or design that identifies and differentiates a product from other products.
sustainability
Making a product that uses materials that will be around for future generations.
corporate brand
A brand that represents the whole company as well as its products. For example, every JCB construction vehicle features the JCB company logo.
capacity utilisation
This measures actual usage of your facilities as a percentage of the maximum possible, eg a half empty hotel has 50% capacity utilisation.
Capacity Utilisation = Actual Output / Maximum Output x 100
price
The amount paid by a customer for a good or service.
pricing tactics
The use of pricing tools over the short term in response to opportunities and threats.
skimming pricing
Setting a high price initially to maximize profit per unit then lowering it at a future date.
penetration pricing
Setting a low price when launching a new product in order to get established in a market.
cost plus pricing
Adding a percentage mark-up to the costs of producing a product to get the price.
competitive pricing
Pricing strategies based on the prices charged by rival firms.
predatory pricing
Setting a lower price than average in attempt of forcing rivals out of business.
physiological pricing
Setting a price slightly below a rounded figure e.g. £9.99.
loss leader pricing
Pricing a product below cost in order to attract further, profitable business.
ethical sourcing
Using materials, components and services from suppliers that respect the environment, treat their workforce well and generally trade with integrity.
opportunity cost
The cost of missing out on the next best alternative when making a decision (for committing resources).
product life cycle
Describes the stages a product goes through from when it was first thought of until it finally is removed from the market.
Research & Development, Introduction, Growth, Maturity, Decline, Extension
wholesaler
The middleman between the producer and retailers, who breaks bulk down from container lorry-loads into manageable parcels, such as a case of 12.
barrier to entry
Factors that make it hard for new firms to break into an existing market e.g. strong brand loyalty to the current market leaders.
e-commerce
Electronic commerce - transactions carried out online.
extension strategy
Marketing activities used to prevent sales from declining.
Boston matrix
A model used to analysis a firm’s product portfolio by considering market share in relation to market growth
portfolio analysis
An analysis of the market position of a firm’s existing products. It is used as part of the marketing planning process.
