IB Business Management 4.5 the Seven Ps of the Marketing Mix Key Definitions

Agents act as intermediaries between producers and buyers but do not take ownership of the goods.

The BCG Matrix (Boston Consulting Group Matrix) is a strategic tool used in business management to analyze a company’s product portfolio and help with investment decisions. It categorizes products or business units based on market growth rate and relative market share.

A brand is a name, term, sign, symbol, or design (or a combination of these) that identifies the goods or services of a seller and differentiates them from competitors.

Brand awareness measures how well consumers recognize and recall a brand.

Brand development involves creating and refining a brand's identity to resonate with its target audience.

Brand loyalty measures the extent to which customers repeatedly choose a brand over competitors.

Brand value refers to the financial and non-financial benefits a brand brings to a business.

The movement of money into and out of a business over a specific period. It includes both cash inflows (receipts) and cash outflows (payments).

Competitive pricing involves setting prices based on what competitors charge, ensuring your product remains attractive in the market.

Contribution is the amount of money left after subtracting variable costs from sales revenue. It helps cover fixed costs and, once those are covered, contributes to profit.

Contribution pricing focuses on setting prices based on the contribution margin — how much each sale contributes to covering fixed costs after variable costs are deducted.

Cost-plus pricing is a straightforward method where a business calculates the total cost of producing a product and then adds a mark-up to ensure profit.

Distribution channels are the pathways through which products travel from the producer to the consumer. They can be direct or involve intermediaries.

Dynamic pricing involves adjusting prices in real-time based on demand, competition, or other factors.

Economies of scale occur when a business's average cost per unit decreases as its production scale increases.

A loss leader is a product sold below cost to attract customers, with the expectation that they will purchase other profitable items.

Marketing mix customization involves tailoring the 7Ps (Product, Price, Promotion, Place, People, Process, and Physical Evidence) to meet the specific needs of different markets or products.

Penetration pricing involves setting a low initial price to attract customers and gain market share quickly.

Physical evidence refers to the tangible elements that accompany a service, helping customers evaluate its quality and reliability.

Predatory pricing involves setting prices extremely low to drive competitors out of the market.

Premium pricing involves setting high prices to convey a sense of luxury, quality, or exclusivity.

Price elasticity of demand measures how sensitive consumer demand is to changes in price. This helps businesses predict the impact of pricing decisions on sales and revenue.

The process refers to the steps a business takes to provide its product or service to customers.

The Product Life Cycle (PLC) is a framework that outlines the stages a product goes through in the market such as introduction, growth, maturity, and decline.