A low price designed to help a product enter the market and gain market share rapidly.
penetration pricing
Direct, two-way communication with buyers and potential buyers.
personal selling
All the activities necessary to move products from producers to customers—
inventory control, transportation, warehousing, and materials handling.
physical distribution
Charging the highest possible price that buyers who want the product will pay.
price skimming
Brands, which may cost less than manufactured brands, which are owned and controlled by a wholesaler or retailer.
private distributor brands
A group of closely related products that are treated as a unit because of similar marketing strategy, production, or end-use considerations.
product line
All the products offered by an organization.
product mix
The use of promotion to create and maintain an image of a product in
buyers’ minds.
promotional positioning
A pricing strategy that encourages purchases based on emotional rather than rational responses to the price.
psychological pricing
Nonpersonal communication transmitted through the mass media but not paid for directly by the firm.
publicity
The use of promotion to create consumer demand for a product so that
consumers exert pressure on marketing channel members to make it available.
pull strategy
An attempt to motivate intermediaries to push a product down to their
customers.
push strategy
The degree to which a good, service, or idea meets the demands and
requirements of customers.
quality
Intermediaries that buy products from manufacturers (or other intermediaries) and sell them to consumers for home and household use rather than for resale or for use in producing other products.
retailers
Direct inducements offering added value or some other incentive for buyers to enter into an exchange.
sales promotion
A form of market coverage whereby only a small number of all available
outlets are used to expose products.
selective distribution
A trial minilaunch of a product in limited areas that represent the potential
market.
test marketing
A brand that is registered with the U.S. Patent and Trademark Office and is
thus legally protected from use by any other firm.
trademark
The shipment of products to buyers.
transportation
The design and operation of facilities to receive, store, and ship products.
warehousing
Intermediaries that buy from producers or from other wholesalers and sell to
retailers.
wholesalers
The recording, measurement, and interpretation of financial information.
accounting
The four steps of an accounting system: examining source documents,
recording transactions in an accounting journal, posting recorded transactions, and preparing financial statements.
accounting cycle
Amounts owed to a company’s suppliers for goods/services purchased with
credit.
accounts payable
Money owed the company by customers or clients who have promoted to pay for products at a later date.
accounts receivable
All unpaid financial obligations incurred by an organization.
accrued expenses
A summary of a corporation’s financial information, products, and growth
plans for owners and potential investors.
annual report
Ratios that measure how well a firm uses its assets to generate each $1 of
sales.
asset utilization ratios
A firm’s economic resources, or items of value that it owns.
assets
A “snapshot” of a company’s financial position at a given moment.
balance sheet
An internal financial plan that forecasts expenses and income over a set period of time.
budget
The movement of money through a business on a daily, weekly, monthly, or
yearly basis.
cash flow
Private accountants who, after rigorous examination, are certified by the
Institute of Management Accountants and who have some managerial
responsibility.
certified management accountants (CMA)
An individual who has been certified by the state in which he or she practices
to provide accounting services ranging from the preparation of financial
records and the filing of tax returns to the complex audits of corporate
financial records.
certified public accountant (CPA)
The amount of money a firm spent to buy or produce the products it sold
during the period to which the income statement applies.
cost of goods sold
Assets that are used or converted into cash within the course of a calendar
year; also called short-term assets.
current assets
Current assets divided by current liabilities.
current ratio
A ratio indicating how much of the firm is financed by debt and how much by
owners’ equity.
debt to total assets ratio
Ratios that measure how much debt an organization is using relative to other
sources of capital, such as owners’ equity.
debt utilization ratios
The process of spreading the costs of long-lived assets such as buildings and equipment over the total number of accounting periods in which they are
expected to be used.
depreciation
The actual cash received for each share owned.
dividends per share
A system of recording and classifying business transactions that maintains the balance of the accounting equation.
double-entry bookkeeping
Net income or profit divided by the number of stock shares outstanding.
earnings per share
The costs incurred in the daily operations of an organization.
expenses
A book or computer program with separate files for each account.
general ledger
Revenues minus the cost of goods sold required to generate revenues.
gross income (or profit)
A financial report showing the profitability of a firm over a period of time.
income statement
Sales divided by total inventory.
inventory turnover
A time-ordered list of account transactions.
journal
