2.2 key terms

• Aesthetics


  How things appeal to the senses; do they look great, smell good, feel nice, sound solid and taste great?
• Manufacture


  Making the product cheaply enough to make it profitable
• Extension strategy


  An attempt to prolong sales of a product for the medium to long term, to prevent it from entering its decline stage
• Function


  How well the product or service works for the customer, for example, are the beds comfotable at a hotel; does the smartphone take sharp photos?
• Product differentiation

  The extent to which consumers see your product as being distinct from its rivals
• Product life cycle

  The theory that every product goes through the same four stages of introduction, growth, maturity and decline
• Profit margins


  Profit as a percentage of the seling price (one unit) or as a percentage of total sales revenue (for the business as a whole)
• Branding

  Giving your product or service a name that helps recall and recognition, and gives a sense of personality
• 1. newsletters

  Regular updates on the activities of a business sent electronically to actual or potential customers
• Promotional strategy


  A medium-to-long term plan for communicating with your target customers
• Sponsorship


  When companies pay to have brand associated with an iconic individual or event (usually connected with sports or the arts)
• Viral advertising


  When people start to spread your message for you thought social means, be it word of mouth or via social media
• Distribution


  How ownership changes as a product goes from producer to consumer
• 1. tailer


  An electronic retailer; in other words purchasing electronically, either by e-commerce or, more likely these days, mobile commerce (m-commerce)
• Retailer


  A shop or chain of shops, usually selling from a building in a high street or shopping centre
• Budget


  A ceiling on the amount of money that can be spent a marketing budget of £1 million means the marketing manager can spend up to that figure, but no more
• Inform decisions


  Evidence that can be used to make a better decision; a company can gain a better understanding of its customer through the 4Ps, which helps in decision making
• Product Portfolio


  The range of goods and services offered by any one business
• Economies of scale


  A situation where average costs (of production, distribution and sales, for example) fall as a business increases the amount of product that it produces, distributes and sells
• Markup


  The amount of money added to the cost price of a product or service to make the final retail price