Marketing Terminology

Environmental scanning is used to continuously monitor and respond to changes in events external to the organization, which may impact the business. Changes can be drastic such as Hurricane Ike, or they can occur over time like demographic data. Sudden changes require quick action, like ordering gas cans and water before Ike hit Texas. Demographic changes allow for better planning and product development for the new markets, like Hispanic products or Baby Boomer services.

Price Freedom is the concept that the more a marketer can differentiate the product the more can be charged for said product. For example, Heinz Ketchup is the standard for the venerable tomato condiment and thus can charge more for their ketchup than competitors. Another example is the Toyota Prius which has defined itself through great design and engineering in addition to great marketing is able to charge more for each car than a comparable vehicle.

IAO variables or psychographics are demographics which include factors such as age, gender, income and education, and including additional variables like interests, values, lifestyles and behaviors. Psychographics give the marketer a more detailed set of data on which allow for better targeting of the market and a more efficient use of marketing dollars.