WF Marketing Lap 3 Make Cents Glossary 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 2. Business cycles: Periods of expansion and contraction in economic activities 3. Capital: Assets of a business 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 5. Costs: The expenses involved with manufacturing, promoting, and distributing a product 6. Elastic demand: A form of demand for products in which changes in price correspond to changes in demand 7. Fixed costs: Business costs that are not affected by changes in sales volume 8. Growth stage: The product life cycle stage in which sales rise rapidly 9. Inelastic demand: A form of demand in which changes in price do not affect demand 10. Introductory stage: The product life cycle stage when the product first appears in the marketplace 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 12. Market price: Actual price that prevails in a market at any particular moment 13. Market share: An organization’s portion of the total industry sales in a specific market 14. Mark-up: The difference between the cost of a product and its selling price 15. Maturity stage: The product life cycle stage in which sales peak and then increase at a slower rate or start to decline 16. Monopolistic competition: A type of market structure in which a lot of businesses sell similar products that have only a few differences 17. Obsolescence: The state of being outmoded or unfashionable 18. Oligopoly: A market structure in which there are relatively few sellers, and industry leaders usually determine prices 19. Operating expenses: All of the expenses involved in running a business 20. Price discrimination: An illegal activity in which a business charges different customers different prices for similar amounts and types of products 21. Price fixing: Illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the consumer 22. Pricing objectives: Goals a company hopes to accomplish through its pricing strategies 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 marketl o s s a r y 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 25. Profit: The income left once all expenses are paid 26. Profit maximization: A profit-oriented pricing objective intended to give the firm the most possible profit 27. Profit-oriented pricing: A category of pricing objectives that focus on profit for the business 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 29. Pure monopoly: A condition in which a market is controlled by one supplier, and there are no substitute goods or services readily available 30. Quality: The degree of excellence of a good or service—how good it is 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 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 33. Sales-oriented pricing: A category of pricing objectives that focus on increasing total amount of income from sales 34. Sales volume: The amount of a firm’s sales; usually expressed in dollars 35. Selling price: The amount a seller charges the purchaser for a good or a service 36. Target market: The particular group of customers a business seeks to attract 37. Target return: See return on sales 38. Total costs: All of a business's costs, both fixed and variable 39. Unit pricing: A pricing technique in which consumers are given the price per unit (pound, ounce, etc.) for products 40. Variable costs: Business costs that change according to changes in sales volume