X Y Z|
equipment Business goods that have substantial value and are used in
an organization’s operations.
indicator of buying power A market factor that is related to sales
and expenditures and serves as an indirect estimate of purchasing power.
vertical marketing system An arrangement that coordinates distribution
activities through the market and/or economic power of one channel member or
the shared power of two channel members.
process The set of successive decisions an individual or organization
makes before accepting an innovation.
rate The speed or ease with which a new product is accepted.
activities involved in presenting to an audience a nonpersonal, sponsor-identified,
paid-for message about a product or an organization.
agency An independent company that provides specialized advertising
services and may also offer more general marketing assistance.
campaign All the tasks involved in transforming a theme into a coordinated
advertising program to accomplish a specific goal for a product or brand.
media The communications vehicles (such as newspapers, radio, and television)
that carry advertising as well as other information and entertainment.
middleman A firm that never actually takes title to (i.e., owns) products
it helps market but does arrange the transfer of title.
wholesaling middleman An independent firm that engages primarily in
wholesaling by actively negotiating the sale or purchase of products on behalf
of other firms but does not take title to the products being distributed.
food-processing firms, and other large-scale farming-related enterprises.
sequence of steps in various forms of promotion, notably personal selling and
advertising, consisting of attracting Attention, holding Interest,
arousing Desire, and generating buyer Action.
marketing plan A written document that presents the master blueprint
for a year’s marketing activity for a specified organizational division or major
Economic Cooperation forum (APEC) A trade pact among 18 Pacific Rim
nations that seeks the elimination of major trade barriers.
of Southeast Asian Nations (ASEAN) An agreement creating a free-trade
zone among Brunei, Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
learned predisposition to respond to an object or class of objects in a consistently
favorable or unfavorable way.
company An agent wholesaling middleman that helps assembled buyers
and sellers complete their transactions by providing auctioneers who do the
selling and physical facilities for displaying the sellers’ products.
vending A form of nonstore retailing where the products are sold through
a machine with no personal contact between the buyer and seller.
fixed cost The total fixed cost divided by the number of units produced.
fixed cost curve A graph of average fixed cost levels showing a decline
as output increases because the total of the fixed costs is spread over an increasing
number of units.
revenue The unit price at a given level of unit sales. It is calculated
by dividing total revenue by the number of units sold.
total cost The total cost divided by the number of units produced.
total cost curve A graph of average total costs, which starts high,
then declines to its lowest point, reflecting optimum output with respect to
total costs (not variable costs), and then rises because of diminishing returns.
variable cost The total variable cost divided by the number of units
variable cost curve A graph of average variable cost levels, which
starts high, then declines to its lowest point, reflecting optimum output with
respect to variable costs (not total costs), and then rises.
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boomers Americans born during the 10 years following World War II.
of payments The accounting record of all of a country’s transactions
with all the other nations of the world.
sheet A financial statement that summarizes the assets, liabilities,
and net worth of a company at a given time.
ad A boxed-in promotional message often appearing at the top of a Web page.
exchange of goods and/or services for other products.
price The price of one unit of the product at its point of production
or resale. Same as list price.
segmentation Market segmentation based on consumers’ product-related
behavior, typically the benefits desired from a product and the rate at which
the consumer uses the product.
Consulting Group (BCG) matrix A strategic planning model that classifies
strategic business units or major products according to market shares and growth
refusal to buy products from a particular company or country.
name and/or mark intended to identify and differentiate the product of one seller
or a group of sellers.
equity The value a brand adds to a product.
label The application of the brand name alone to a product or package.
licensing See trademark licensing.
manager See product manager.
brand mark The
part of a brand that appears in the form of a symbol, design, or distinctive
color or type of lettering.
name The part of a brand that can be vocalized—words, letters, and/or
number of product lines offered for sale by a firm.
analysis A method of calculating the level of output at which total
revenue equals total costs, assuming a certain selling price.
point The level of output at which total revenue equals total costs,
assuming a certain selling price.
Something given in exchange for services or protection, it is common in foreign
agent wholesaling middleman that brings buyers and sellers together and provides
market information to either party and that ordinarily neither physically handles
products being distributed nor works on a continuing basis with those sellers
A program that enables its users to access electronic documents included
in the World Wide Web on the Internet.
analysis One stage in the new-product development process, consisting
of several steps to expand a surviving idea into a concrete business proposal.
cycle The three recurring stages in an economy, typically prosperity,
recession, and recovery.
format franchising An agreement, covering an entire method (or format)
for operating a business, under which a successful business sells the right
to operate the same business in different geographic areas.
market The total of all business users.
marketing The marketing of goods and services to business users, as
contrasted to ultimate consumers.
product A product that is intended for purchase and resale or for purchase
and use in producing other products or for providing services in an organization.
services market The total set that deals in data and information such as
marketing research firms, ad agencies, public utilities, and financial, insurance,
legal, or real estate firms.
advertising Advertising that is directed at businesses.
users Business, industrial, or institutional organizations that buy
goods or services to use in their own organizations, to resell, or to make other
buy classes Three
typical buying situations in the business market—namely new-task buying, modified
rebuy, and straight rebuy.
center In an organization, all individuals or groups involved in the
process of making a purchase decision.
motive The reason why a person or an organization buys a specific product
or makes purchases from a specific firm.
roles The users, influencers, deciders, gatekeepers, and buyers who
make up a buying center.
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Situation in which a firm introduces new products to stimulate sales but
the profit comes at the expense of other products sold by that firm.
group of companies that produce similar products and act collectively to restrain
competition in manufacturing and marketing.
discount A deduction granted to buyers for paying their bills within
a specified period.
store A type of retail institution that has a narrow but very deep
assortment, low prices, and few to moderate customer services. It is designed
to “destroy” all competition in a specific product category.
agent In the process of diffusion, a person who seeks to accelerate
the spread of a given innovation.
assembly Strategy in which a distributor takes over the final assembly role,
which allows products to be customized, thus shortening delivery time because
manufacturers often delay custom projects so they don’t disrupt their production
conflict A situation in which one channel member perceives another
channel member to be acting in a way that prevents the first member from achieving
its distribution objectives.
control The actions of a firm to regulate the behavior of other companies
in its distribution channel.
power The ability of a firm to influence or determine the behavior
of another channel member.
market Individuals and/or organizations that are the recipients of
a nonprofit organization’s money or services. Same as recipient market.
Electronic research technique that tracks the pages visited, the amount
of time at a page, and the items purchased by individuals as they navigate a
filtering Electronic research technique that compares a person’s selections
and the purchases of previous visitors and enables a site to recommend current
products that may be of interest to the visitor.
planning, forecasting, and replenishment (CPFR) Method by which a producer
or wholesaler and a customer, ordinarily a retail chain, jointly and interactively
develop sales forecasts through a shared website.
Agreement between two separate companies, or two divisions within the same company,
to place both of their respective brands on a particular product or enterprise;
also called dual branding.
information environment As contrasted with the social information environment,
all communications directed to consumers by organizations and individuals involved
Market of the South (MERCOSUR) An agreement between Argentina, Brazil, Paraguay,
and Uruguay to allow 90% of trade, among these countries, to occur tariff-free.
verbal or nonverbal transmission of information between someone wanting to express
an idea and someone else expected or expecting to get that idea. The four elements
are a message, a source of the message, a communication channel, and a receiver.
sales branch See manufacturer’s sales branch.
advertising A form of selective-demand advertising in which an advertiser
either directly (by naming a rival brand) or indirectly (through inference)
points out the differences among competing brands.
intelligence The process of gathering and analyzing publicly available
information about the activities and plans of competitors.
strategy See single-segment strategy.
Metropolitan Statistical Area (CMSA) A giant urban center consisting
of two or more adjacent Primary Metropolitan Statistical Areas.
advertising Advertising that is directed at consumers.
behaviour A discipline dealing with how and why consumers purchase ( or don't purchase ) products and services.
buying-decision process The series of logical stages, which differ for consumers
and organizations, that a prospective purchaser goes through when faced with
a buying problem.
product A product that is intended for purchase and use by household
consumers for nonbusiness purposes.
Product Safety Act Federal legislation that created the Consumer Product
Safety Commission (CPSC), which has authority to establish mandatory safety
standards for many consumer products.
cargo-handling system in which shipments of products are enclosed in large metal
or wood receptacles that are then transported unopened from the time they leave
the shipper’s facilities until they reach their destination.
logistics An arrangement under which a firm outsources various physical
distribution activities to one or more independent firms.
manufacturing An arrangement in which a firm in one country arranges
for a firm in another country to produce the product in the foreign country.
legal relationship that allows a firm to enter a foreign market indirectly,
quickly establish a market presence, and experience a limited amount of risk.
vertical market system An arrangement under which independent firms—producers,
wholesalers, and retailers—operate under contracts specifying how they will
operate in order to improve their distribution efficiency and effectiveness.
approach In marketing cost analysis, an accounting method in which
only direct expenses are allocated to each marketing unit being analyzed.
goods A category of tangible consumer products that the consumer has
prior knowledge of and purchases with minimum time and effort.
store A type of retail institution that concentrates on convenience-oriented
groceries and nonfoods, typically has higher prices than other grocery stores,
and offers few customer services.
An inactive data file, placed on the computer’s hard drive after the user
connects to a particular website, used to record the visitor’s activities while
connected to the site.
advertising Advertising promoting products of two or more firms that
share its cost.
chain An organization of two or more centrally owned and managed stores
that generally handle the same lines of products.
vertical marketing system An arrangement under which a firm at one
level of a distribution channel owns the firms at the next level or owns the
analysis A statistical refinement of the direct-derivation method,
an approach to demand forecasting that takes into account how close the association
is between potential sales of the product and the market factor affecting its
of goods sold A financial figure showing the value of the merchandise
sold during a given period, calculated by adding the value of any merchandise
on hand at the beginning of the period to the net cost of what is purchased
during the period and then deducting the value of whatever remains at the end
of the period.
per thousand (CPM) The media cost of gaining exposure to 1,000 persons
with an ad.
pricing A major method of price determination in which the price of
a unit of a product is set at a level equal to the unit’s total cost plus a
desired profit on the unit.
arrangement under which domestically made products are traded for imported goods.
complex of symbols and artifacts created by a society and handed down from generation
to generation as determinants and regulators of human behavior.
discount A quantity discount based on the total volume purchased over
a specified period.
specialization One method of organizing selling activities in which
each sales person is assigned a specific group of customers, categorized by
type of industry or channel of distribution, to which to sell. Same as market
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set of related data that are organized, stored, and updated in a computer.
mining Method used to identify patterns and meaningful relationships in
masses of data that would be unrecognizable to researchers.
warehouse A collection of data from a variety of internal and external sources,
compiled by a firm for use in conducting transactions.
support system (DSS) A procedure that allows a manager to interact
with data and methods of analysis to gather, analyze, and interpret information.
stage The fourth, and final, part of a product life cycle during which
the sales of a generic product category drop and most competitors abandon the
method A forecasting technique, applicable to sales forecasting, in
which a group of experts individually and anonymously assesses future sales,
after which each member has the chance to offer a revised assessment as the
group moves toward a consensus.
forecasting The process of estimating sales of a product during some
segmentation Subdividing markets into groups based on population factors
such as size, age, and growth.
characteristics of human populations, including such factors as size, distribution,
store A large-scale retail institution that has a very broad and deep
product assortment, tries not to compete on the basis of price, and offers a
wide array of customer services.
relative variety of sizes, colors, and models offered within a product line.
label The part of a product that gives information about its use, construction,
care, performance, and/or other pertinent features.
jobber See drop shipper.
advantage Any feature of an organization or brand perceived by customers
to be desirable and different from those of the competition.
disadvantage Any feature of an organization or brand perceived by customers
to be undesirable and different from those of the competition.
A process by which an innovation spreads throughout a social system over
costs Separate expenses that are incurred totally in connection with
one market segment or one unit of the sales organization. Same as separable
method An approach to demand forecasting that directly relates the
behavior of a market factor to estimated demand.
foreign investment A method through which a company can build or acquire
production or distribution facilities in a foreign country.
distribution A channel consisting only of producer and final customer,
with no middlemen providing assistance.
investment The actions of a company to build or acquire its own production
facilities in a foreign country.
marketing A form of nonstore retailing that uses advertising to contact
consumers who, in turn, purchase products without visiting a retail store.
selling A form of nonstore retailing in which personal contact between
a sales person and a consumer occurs away from a retail store. Sometimes called
tests Measuring or predicting the sales volume attributable to a single
ad or an entire advertising campaign.
Collection of lists of websites organized by topics and subtopics.
The replacement of some traditional intermediaries in a process due to the growth
of Internet-based sales.
retailing A retailing approach that uses price as a major selling point
by combining comparatively low prices and reduced costs of doing business.
store A large-scale retail institution that has a broad and shallow
product assortment, low prices, and few customer services.
center A facility that has under one roof an efficient, fully integrated
system for the flow of products—taking orders, filling them, and preparing them
for delivery to customers.
channel The set of people and firms involved in the transfer of title
to a product as the product moves from producer to ultimate consumer or business
market Individuals and/or organizations that contribute money, labor,
or materials to a nonprofit organization. Same as contributor market.
shipper A merchant wholesaler that does not physically handle the product
being distributed, but instead sells merchandise for delivery directly from
the producer to the customer. Same as desk jobber.
process of selling products in foreign markets at prices below the prices charged
for these goods in their home market.
pricing A form of price adjustment that occurs instantly and frequently
in accordance with what the market will bear.
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adopters A group of consumers that includes opinion leaders, is respected,
has much influence on its peers, and is the second group (following the innovators)
to adopt an innovation.
majority A group of fairly deliberate consumers that adopts an innovation
just before the “average” adopter in a social system.
environment A set of factors, including the business cycle, inflation,
and interest rates, that affect the marketing activities of an organization.
order quantity (EOQ) The optimal quantity for reorder when replenishing
inventory stocks, as indicated by the volume at which the sum of inventory-carrying
costs and order-processing costs are at a minimum.
principle A situation in which a large proportion of the total orders,
customers, territories, or products account for only a small share of the company’s
sales or profit, and vice versa.
of demand A price-volume relationship such that a change of one unit
on the price scale results in a change of more than one unit on the volume scale.
commerce The buying and selling of goods and services through the use of
data interchange (EDI) Computer-to-computer transmission of orders, invoices,
or other business information.
information A form of networking involving the creation of a corporate website
to post information about the firm.
networks Individuals or organizations linked via some form of telecommunications.
transactions Purchases made directly from a firm’s website.
resource planning (ERP) systems Strategy in which the various business functions
of sales, manufacturing, purchasing, distribution, financial management, and
human resources are integrated through the use of computer programs; also called
monitoring The process of gathering information regarding a company’s
external environment, analyzing it, and forecasting the impact of whatever trends
the analysis suggests. Same as environmental scanning.
scanning See environmental monitoring.
rules and standards of moral behavior that are generally accepted by a society.
Union (EU) A political and economic alliance among most of the countries
of Western Europe that seeks to liberalize trade among its members.
stage of the management process during which an organization determines how
well it is achieving the goals set in its strategic planning.
low pricing (EDLP) A pricing strategy that involves consistently low
prices and few, if any, temporary price reductions.
act of voluntarily providing a person or organization something of value in
order to acquire something else of value.
dealing The practice by which a manufacturer prohibits its dealers
from carrying products of its competitors.
distribution A strategy in which a supplier agrees to sell its product
only to a single wholesaling middleman and/or retailer in a given market.
policy The practice by which a producer requires each middleman to
sell only to customers located within an assigned territory.
judgment A method of sales forecasting that consists of obtaining opinions
regarding future sales volume from one or more executives.
price The price at which customers consciously or unconsciously value
a product—what they think the product is worth.
method of gathering primary data in which the researcher measures the results
of changing one variable in a situation while holding all others constant.
agent A middleman that operates either in a manufacturer’s country
or in the destination country and that negotiates the sale of the product in
another country and may provide additional services such as arranging for international
financing, shipping, and insurance on behalf of the manufacturer.
merchant A middleman operating in a manufacturer’s country that buys
goods and exports them.
activities by which a firm sells its product in another country, either directly
to foreign importers or through import-export middlemen.
warranty A statement in written or spoken words regarding restitution
from seller to customer if the seller’s product does not perform up to reasonable
A network that links a large number of firms at different levels of a distribution
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materials Business goods that have received some processing and will
undergo further processing as they become part of another product.
parts Business goods that already have been processed to some extent
and will be assembled in their present form (with no further change) as part
of another product.
product or style that becomes immensely popular nearly overnight and then falls
out of favor with consumers almost as quickly.
group of two or more people related by blood, marriage, or adoption living together
in a household.
branding A strategy of using the company name for branding purposes.
life cycle The series of life stages that a family goes through, starting
with young single people, progressing through married stages with young and
then older children, and ending with older married and single people.
packaging A strategy of using either highly similar packages for all
products or packages with a common and clearly noticeable feature.
style that is popularly accepted and purchased by successive groups of people
over a reasonably long period of time.
process A series of buying waves by which a style becomes popular in
a market; similar to diffusion of an innovation.
cycle Wavelike movements representing the introduction, rise, popular
acceptance, and decline of the market’s acceptance of a style.
obsolescence See style obsolescence.
Trade Commission Act A federal law, passed in 1914, prohibiting unfair
competition and establishing the Federal Trade Commission.
advantage Strategy of entering a market during the introductory stage of
a product in order to build a dominant position; also called pioneer advantage.
cost A cost that remains constant regardless of how many items are
produced or sold.
pricing Arrangement where a purchaser pays a stipulated single price and
then can consume as much or as little of the product as desired.
strategy A pricing strategy under which a seller charges different
prices to similar customers who buy identical quantities of a product. Same
as variable-price strategy.
on board) factory pricing A geographic pricing strategy whereby the
seller quotes the selling price at the point of production and the buyer selects
the mode of transportation and pays all freight costs. Same as FOB mill pricing.
pricing See FOB factory pricing.
group A preliminary data-gathering method involving an interactive
interview of 4 to 10 people.
demand The process of estimating sales of a product during some future period.
Same as demand forecasting.for-profit
services firms Those that sell to consumers or other businesses with profitable
operations as a primary goal.
type of contractual vertical marketing system that involves a continuing relationship
in which a franchiser (the parent company) provides the right to use a trademark
plus various management assistance in return for payments from a franchisee
(the owner of the individual business unit).
absorption pricing A geographic pricing strategy whereby the seller
pays for (absorbs) some of the freight charges in order to penetrate more distant
forwarder A specialized marketing institution that serves firms by
consolidating less-than-carload or less-than-truckload shipments into carload
or truckload quantities and arranging for door-to-door shipping service.
in Freight charges paid by a buyer.
The act of packing and shipping orders to customers.
approach In marketing cost analysis, an accounting method in which
all expenses—direct and indirect—are allocated to the marketing units being
wholesaler An independent merchant middleman that performs a full range
of wholesaling functions (from creating assortments to warehousing).
discount See trade discount.
obsolescence See technological obsolescence.
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Agreement on Tariffs and Trade (GATT) An organization, formed in 1948
and now comprising over 100 countries, that seeks to develop fair-trade practices
among its members.
Electric (GE) business screen A planning model developed by General
Electric that classifies strategic business units or major products based on
two factors, market attractiveness and business position.
X Those people in the U.S. who were born between approximately 1966
and 1976. Also called baby busters, twentysomethings, or boomerangers.
Y Those people in the U.S. who were born between either 1976 and 1994, or
1978 and 1982. Also called echo boomers, or millenium generation.
product A product that is packaged in a plain label, is sold with no
advertising and without a brand name, and goes by its generic name, such as
“tomatoes” or “paper towels.”
segmentation Subdividing markets into groups based on their locations.
specialization One method of organizing selling activities, in which
each sales person is assigned a specific geographic area—called a territory—in
which to sell.
sales teams A type of personal selling where a team of sales people
is responsible for all of its company’s sales to an account anywhere in the
strategy A strategy in which essentially the same marketing program is employed
around the world.
market The segment of the business market that includes federal, state,
and local units buying for government institutions such as schools, offices,
hospitals, and military bases.
label The part of a product that identifies the products judged quality
(grade) by means of a letter, number, or word.
marketing Practice of buying a product in one country, agreeing to distribute
it in a second country but diverting it to a third country; also called export
River ordinance Law that restricts door-to-door salespeople by requiring
them to register and purchase a license.
margin The amount of money that is left after cost of goods sold is
subtracted from net sales.
margin percentage The ratio of gross margin to net sales.
stage The second part of a product life cycle during which the sales
and profits of a generic product category rise and competitors enter the market,
causing profits to decline near the end of this part of the cycle.
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characteristic of a service indicating that each unit is somewhat different
from other units of the same service.
of effects The stages a buyer goes through in moving toward a purchase,
specifically awareness, knowledge, liking, preference, conviction, and purchase.
pricing A pricing strategy that combines frequent price reductions
and aggressive promotion to convey an image of very low prices.
business market A situation where a given product is usable in a wide
variety of industries.
conflict A form of channel conflict occurring among middlemen (either
of the same type or different types) at the same level of distribution.
single person, a family, or any group of unrelated persons who occupy a housing
tentative supposition that if proven would suggest a possible solution to a
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principle A concept related to performance evaluation stating that
the summary data (tip of the iceberg) regarding an activity may hide significant
variations among segments of this activity.
stage of the management process during which an organization attempts to carry
out its strategic plans.
warranty An intended but unstated assurance regarding restitution from
seller to customer if the seller’s product does not perform up to reasonable
agent An agent wholesaling middleman that brings together sellers and
buyers in different countries. Export agents work in the country in which the
product is made; import agents work in the country in which the product will
quota A limit on the amount of a particular product that can be brought
into a country.
buying A form of low-involvement decision making; purchases made with
little or no advance planning.
statement See operating statement.
retailer A company with a single retail store that is not affiliated
with a contractual vertical marketing system.
costs Expenses that are incurred jointly for more than one marketing
unit and therefore cannot be totally charged to one market segment.
distribution A channel consisting of producer, final customer, and
at least one level of middleman.
tests Measuring or predicting the effects of advertising by using a
factor other than sales volume.
demand A price-volume relationship such that a change of one unit on
the price scale results in a change of less than one unit on the volume scale.
rise in the prices of goods and services.
investigation The stage in a marketing research study at which preliminary,
readily available data are gathered from people inside and outside the company—middlemen,
competitors, advertising agencies, and consumers.
country’s levels and capabilities with respect to transportation, communications,
selling See direct selling.
adopter categories Groups of people differentiated according to when
they accept a given innovation.
group of venturesome consumers that are the first to adopt an innovation.
characteristic of a service indicating that it cannot be separated from the
creator-seller of the service.
selling Situation where the customer comes to the sales person, includes
retail stores and telephone order takers.
products that are an organization’s major, expensive, and long-lived equipment
and that directly affect the scale of operations in an organization producing
goods or services.
advertising Advertising that presents information about the advertiser’s
business or tries to create a favorable impression—build goodwill—for the organization.
characteristic of a service indicating that it has no physical attributes and,
as a result, is impossible for customers to taste, feel, see, hear, or smell
before they buy it.
of distribution The number of middlemen used by a producer at the retail
and wholesale levels in a particular territory.
distribution A strategy in which a producer sells its product through
every available outlet in a market where a consumer might reasonably look for
rates The percentage amounts either charged to lend money or paid to
transportation The use of two or more modes of transportation to move
a shipment of freight.
market Sales, market potential, or sales potential in foreign (or nondomestic)
marketing The activities of an organization to market its products
in two or more countries.
Global network of networks linking millions of users, originally created
to link researchers at many different sites and allow them to exchange information.
selling The offering of goods or services to customers over the Internet.
survey A method of gathering data by posting questionnaires on a firm’s
website or by e-mailing them to a sample of individuals.
A local electronic network created by linking the personal computers of
individuals in a company or department.
stage The first part of a product life cycle during which a generic
product category is launched into the market in a full-scale marketing program.
Same as pioneering stage.
demand A price-volume relationship such that the higher the price,
the greater the unit sales.
quality standards The International Organization for Standardizations
certification to assure that firms conform to specific standards in processes,
procedures, operations, controls, and management.
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venture A partnership arrangement in which a foreign operation is owned
in part by a domestic company and in part by a foreign company.
(JIT) A form of inventory control, purchasing, and production that
involves buying parts and supplies in small quantities just in time for use
in production and then producing in quantities just in time for sale.
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demand A condition in which total revenue declines when a product’s
price is increased or decreased in relation to the prevailing market level.
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part of a product that carries information about the product and the seller.
group of tradition-bound consumers who are the last to adopt an innovation.
Trademark Act A federal law passed in 1946 that made it illegal for
organizations to make false claims about their own products.
majority A group of skeptical consumers who are slow to adopt an innovation
but eventually do so to save money or in response to social pressure from their
leader pricing, an item on which price is cut.
pricing A pricing and promotional strategy in which temporary price
cuts are made on a few items to attract customers.
in behavior resulting from observation and experience.
of involvement The amount of effort that is expended in satisfying
business arrangement whereby one firm sells to another firm (for a fee or royalty)
the right to use the first company’s brand, patents, or manufacturing processes.
that relate to a person’s activities, interests, and opinions.
store A type of retail institution that has a narrow but deep product
assortment and customer services that vary from store to store.
extension One form of product-mix expansion in which a company adds
a similar item to an existing product line with the same brand name.
price See base price.
strategy A strategy used to develop customized marketing programs for each
law A regulation specifying the proportion of a finished product’s
components and labor that must be provided by the importing country.
operating laws A constraint on how, when, or where retailing can be conducted.
leader In leader pricing, an item on which price is cut to a level
that is below the store’s cost.
Faithfulness in a particular brand or retailer so that the consumer purchases
that brand or from that retailer without considering alternatives.
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survey A method of gathering data by mailing a questionnaire to potential
respondents, and asking them to complete it and return it by mail.
organization A variation of customer specialization that usually involves
team selling to better service key accounts.
process of planning, implementing, and evaluating the efforts of a group of
people working toward a common goal.
agent An agent wholesaling middleman that sells part or all of a manufacturer’s
product mix in an assigned geographic territory. Same as manufacturers’ representative.
representative See manufacturers’ agent.
sales branch A manufacturer’s sales facility that carries a stock of
the product being sold. Same as company sales branch.
sales facility An establishment that engages primarily in wholesaling
and is owned and operated by a manufacturer but is physically separated from
sales office A manufacturer’s sales facility that does not carry a
stock of the product being sold.
cost The cost of producing and selling one more unit; that is, the
cost of the last unit produced or sold.
cost curve A graph of marginal cost levels, which slopes downward until
marginal costs start to increase, at which point it rises.
revenue The income derived from the sale of the last unit.
reduction from the original selling price.
percentage The ratio of the total dollar markdowns to total net sales
during a given period.
or organizations with wants to satisfy, money to spend, and the willingness
to spend the money. Alternatively, any person or group with whom an individual
or organization has an existing or potential exchange relationship.
aggregation strategy A plan of action under which an organization treats
its total market as a single segment—that is, as one mass market whose members
are considered to be alike with respect to demand for the product—and thus develops
a single marketing mix to reach most of the customers in the entire market.
Same as mass-market strategy and undifferentiated-market strategy.
factor An item or element that (1) exists in a market, (2) may be measured
quantitatively, and (3) is related to the demand for a good or service.
analysis A sales forecasting method that assumes the future demand
for a product is related to the behavior of certain market factors and, as a
result, involves determining what these factors are and then measuring their
relationships to sales activity.
stage The third stage in the evolution of marketing management in which
companies identify what customers and tailor all their activities to satisfy
those needs as efficiently as possible.
pricing A strategy in which the initial price of a product is set low
in relation to the target market’s range of expected prices.
potential The total sales volume that all organizations selling a product
during a stated time period in a specific market could expect to achieve under
system A form of inventory control in which a purchase by a final customer
activates a process to produce and deliver a replacement item.
segmentation The process of dividing the total market for a good or
service into several smaller groups, such that the members of each group are
similar with respect to the factors that influence demand.
segments Within the same general market, groups of customers with different
wants, buying preferences, or product-use behavior.
share The proportion of total sales of a product during a stated time
period in a specific market that is captured by a single firm.
analysis A detailed analysis of the company’s share of the market in
total as well as by product line and market segment.
pricing A strategy in which the initial price of a product is set high
in relation to the target market’s range of expected prices.
specialization See customer specialization.
tests One stage in the new-product development process, consisting
of acquiring and analyzing actual consumers’ reactions to proposed products.
person or organization that desires to stimulate and facilitate exchanges.
total system of business activities designed to plan, price, promote, and distribute
want-satisfying products to target markets to achieve organizational objectives.
audit A comprehensive review and evaluation of the marketing function
in an organization—its philosophy, environment, goals, strategies, organizational
structure, human and financial resources, and performance.
concept A philosophy of doing business that emphasizes customer orientation
and coordination of marketing activities in order to achieve the organization’s
cost analysis A detailed study of the Operating Expenses section of
a company’s profit and loss statement.
information system (MkIS) An ongoing, organized procedure to generate,
analyze, disseminate, store, and retrieve information for use in making marketing
intermediary An independent business organization that directly aids
in the flow of products between a marketing organization and its markets.
mix A combination of the four elements—product, pricing structure,
distribution system, and promotional activities—used to satisfy the needs of
an organization’s target market(s) and, at the same time, achieve its marketing
research The development, interpretation, and communication of decision-oriented
information to be used in the strategic marketing process.
amount added to the cost of a product to arrive at the price at which the seller
would like to make a transaction. Alternatively, the difference between the
selling price of an item and its cost. Same as markon.
need hierarchy A structure of five need levels, arrayed in the order
in which people seek to gratify them.
customization Developing, producing, and delivering affordable products
with enough variety and uniqueness that nearly every potential customer can
have exactly what he or she wants.
strategy See market aggregation strategy.
stage The third part of a product life cycle during which the sales
of a generic product category continue to increase (but at a decreasing rate),
profits decline largely because of price competition, and some firms leave the
middleman A firm that actually takes title to (i.e., owns) products
it helps to market.
wholesaler An independently owned firm that engages primarily in wholesaling
and takes title to products being distributed. Sometimes called a wholesaler.
of sales-force compensation The three types of compensation plans are salary,
straight commission, and a combination plan.
Statistical Area (MSA) An urban area in the U.S. with a center of population
of at least 50,000 and a total MSA population of at least 100,000.
business firm that renders services directly related to the purchase and/or
sale of a product as it flows from producer to consumer.
The concept of marketing to a small segment of consumers.
brand A brand owned by a retailer or a wholesaler.
marketing effort Marketing endeavors that do not produce results commensurate
with the resources expended.
organization’s statement of what customers it serves, what needs it satisfies,
and what types of products it offers.
mix extension One
form of product-mix expansion in which a company adds a new product line to
its present assortment.
rebuy In the business market, a purchasing situation between a new
task and a straight rebuy in terms of time and people involved, information
needed, and alternatives considered.
need sufficiently stimulated to move an individual to seek satisfaction.
corporation A truly worldwide enterprise, in which the foreign and
the domestic operations are integrated and are not separately identified.
strategy A strategy in which a firm has more than one brand of essentially
the same product, aimed either at the same target market or at distinct target
correlation analysis A more sophisticated form of correlation analysis that
allows the inclusion of more than one market factor in the calculation.
channels The use by a producer of more than one channel of distribution
for reasons such as achieving broad market coverage or avoiding total dependence
on a single arrangement.
packaging The practice of placing several units of the same product
in one container.
strategy A plan of action that involves selecting two or more different
groups of potential customers as the firm’s target markets.
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of delivered purchases A financial figure calculated by taking gross
purchases at billed cost, deducting sales returns, sales allowances, and cash
discounts for early payment, and adding freight in.
net profit The
amount of revenue that remains after a firm pays the cost of merchandise and
its operating expenses.
percentage The ratio of net profit to net sales.
net sales The
net amount of sales revenue, out of which the company will pay for the products
and all its expenses.
Individuals or organizations linked together to share data, exchange information
and ideas, and perform tasks.
new product A
vague term that may refer to (1) really innovative, truly unique products, (2)
replacement products that are significantly different from existing ones, or
(3) imitative products that are new to a particular firm but are not new to
department An organizational structure for product planning and development
that involves a small unit, consisting of five or fewer people, and that reports
to the president.
development process A set of six stages that a new product goes through,
starting with idea generation and continuing through idea screening, business
analysis, prototype development, market tests, and eventually commercialization
(full-scale production and marketing).
strategy A statement identifying the role a new product is expected
to play in achieving corporate and marketing goals.
buying In the business market, a purchasing situation in which a company
for the first time considers buying a given item.
marketing A strategy in which goods and services are tailored to meet
the needs of small market segments.
marketers Sellers that pursue single segments within the total market.
markets A small, targeted segment.
consumers that never adopt an innovation.
market The total set of churches, colleges and universities, museums,
hospitals and other health institutions, political parties, labor unions, and
discount A quantity discount based on the size of an individual order
of one or more products.
competition A strategy in which a seller maintains stable prices and
attempts to improve its market position by emphasizing other (nonprice) aspects
of its marketing program.
organizations Those groups that provide services but do not have a profit
retailing Retailing activities resulting in transactions that occur
away from a retail store.
American Free Trade Agreement (NAFTA) An agreement among the United
States, Canada, and Mexico to eliminate tariffs between the countries.
American Industry Classification System (NAICS) Coding system similar to
the SIC, but has 20 rather than 10 industry sectors, to provide a more detailed
and contemporary classification scheme.
services organizations (N-F-P) Those groups that have a profit goal because
growth and existence depend on generating revenue in excess of costs.
labeling The part of a product that provides information about the
amount of calories, fat, cholesterol, sodium, carbohydrates, and protein contained
in the package’s contents.
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desired outcome. Same as goal.
method A method of gathering primary data by observing the actions of a
person without direct interaction.
odd pricing A
psychological pricing strategy that consists of setting prices at uneven (or
odd) amounts, such as $4.99, rather than at even amounts, such as $5, in the
belief that these seemingly lower prices will result in larger sales volume.
retailer A type of retail institution, often found in the areas of
apparel and shoes, that has a narrow and deep product assortment, low prices,
and few customer services.
market structure dominated by a few firms, each marketing similar products.
strategy A pricing strategy under which a seller charges the same price
to all similar customers who buy identical quantities of a product.
shipping A transportation firm offers multiple modes of transportation of
goods to its customers.
retailing Electronic transactions made over the Internet in which the purchaser
is the ultimate consumer.
expense ratio Operating expenses divided by net sales.
expenses The marketing, administrative, and miscellaneous costs, but
not the cost of goods purchased or manufactured, incurred by a firm.
statement A financial statement summarizing the firm’s income, expenses,
and profit or loss over a given period of time. Same as income statement and
profit and loss statement.
supplies The “convenience” category of business goods, consisting of
tangible products that are characterized by low dollar value per unit and a
short life and that aid in an organization’s operations without becoming part
of the finished product.
strategies Broad plans of action by which an organization intends to
achieve its goals and fulfill its mission. These plans are for (1) the total
organization in a small, single-product company or (2) each SBU in a large,
multiproduct or multibusiness organization.
sales The kind of personal selling group in which sales people go to
the customers, making contact by mail, telephone, or face-to-face.
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firms Companies that specialize in the delivery of small packages and high-priority
the activities of designing and producing the container or wrapper for a product.
sales analysis A method of sales forecasting that applies a flat percentage
increase to the volume achieved last year or to the average volume of the past
buying motives The reasons why a consumer chooses to shop at a particular
process carried out by an individual to receive, organize, and assign meaning
to stimuli detected by the five senses.
competition A market structure in which product differentiation is
absent, buyers and sellers are well informed, and the seller has no discernible
control over the selling price.
characteristic of a service indicating that it is highly transitory and cannot
interview A face-to-face method of gathering data in a survey.
selling The personal communication of information to persuade somebody
to buy something. Alternatively, the direct (face-to-face or over-the-phone)
presentation of a product to a prospective customer by a representative of the
organization selling it.
selling process The logical sequence of prospecting, preapproach, presenting,
and postsale services that a sales person takes in dealing with a prospective
individual’s pattern of traits that influences behavioral responses.
distribution All the activities involved in the flow of products as
they move physically from producer to consumer or industrial user. Same as logistics.
distribution management The development and operation of processes
resulting in the effective and efficient physical flow of products.
facilities The building—including its location, design, and layout—that
serves as a store for a retail firm.
service The transporting of loaded truck trailers on railroad flatcars.
stage See introduction stage.
obsolescence A strategy that is intended to make an existing product
out of date and thus to increase the market for replacement products. There
are two forms: technological and style.
process of deciding now what we are going to do later, including when and how
we are going to do it.
and legal forces A set of factors, including monetary and fiscal policies,
legislation, and regulations, that affect the marketing activities of an organization.
An entrance and guide to the World Wide Web.
The way a product, brand, or organization is viewed in relation to the competition
by current and prospective customers.
product’s image in relation to directly competitive products as well as other
products marketed by the same company. Alternatively, a firm’s strategies and
actions related to favorably distinguishing itself from competitors in the minds
of selected groups of consumers. Same as product positioning.
stamp pricing See uniform delivered pricing.
cognitive dissonance The anxiety created by the fact that in most purchases
the alternative selected has some negative features and the alternatives not
selected have some positive features.
service Maintenance and repairs as well as other services that are
provided to customers in order to fulfill the terms of a firm’s warranty and/or
to augment the firm’s revenues.
amount of money and/or other items with utility needed to acquire a product.
competition A strategy in which a firm regularly offers products priced
as low as possible, usually accompanied by a minimum of services.
customization Method of establishing prices based on how much different
people value a product.
differential The difference in prices of an identical brand from one area
discrimination A situation in which different customers pay different
prices for the same product.
elasticity of demand The responsiveness of quantity demanded to price
lining A pricing strategy whereby a firm selects a limited number of
prices at which it will sell related products.
war A form of price competition that begins when one firm decreases
its price in an effort to increase its sales volume and/or market share, the
other firms retaliate by reducing prices on competing products, and additional
price decreases by the original price cutter and/or its competitors usually
competition One form of market-based pricing in which price is set
above the prevailing market level.
below competition One form of market-based pricing in which price is
set below the level of your main competitors.
objective The desired outcome that management seeks to achieve with
its pricing structure and strategies.
to meet competition A pricing method in which a firm ascertains what
the market price is and, after allowing for customary markups for middlemen,
arrives at its own selling price.
data New data gathered specifically for the project at hand.
advertising Advertising that is designed to stimulate demand for a
generic category of a product.
Metropolitan Statistical Area (PMSA) A Metropolitan Statistical Area
in the U.S. that has a population of at least 1 million.
Ink statutes State legislation intended to punish “untrue, deceptive, or
warehouse A warehouse that is owned and operated by the firm whose
products are being stored and handled at the facility.
brand A brand that is owned by a manufacturer or other producer.
set of tangible and intangible attributes, which may include packaging, color,
price, quality, and brand, plus the seller’s services and reputation. A product
may be a good, service, place, person, or idea.
abandonment A decision and subsequent action by a firm to drop a product
that has insufficient and/or declining sales and lacks profits.
advertising Advertising that focuses on a particular product or brand.
alteration A strategy of improving an existing product.
and trade name franchising A distribution agreement under which a supplier
(the franchiser) authorizes a dealer (the franchisee) to sell a product line,
using the parent company’s trade name for promotional purposes.
color The hue(s) given to a particular product, including its packaging.
counterfeiting The unscrupulous placement of a brand name on a product
without the legal right to do so.
design The arrangement of elements that collectively form a good or
differentiation A strategy in which a firm uses promotion to distinguish
its product from competitive brands offered to the same aggregate market.
liability A legal action alleging that an illness, accident, or death
resulted from the named product because it was harmful, faulty, or inadequately
life cycle The aggregate demand over an extended period of time for
all brands comprising a generic product category.
line A broad group of products intended for essentially similar uses
and having similar physical characteristics.
manager An organizational structure for product planning and development
that makes one person responsible for planning new products as well as managing
established products. Same as brand manager.
growth matrix A planning model that consists of four alternative growth
strategies based on whether an organization will be selling its present products
or new products to its present markets or new markets.
mix The set of all products offered for sale by a company.
contraction A strategy in which a firm either eliminates an entire
line or simplifies the assortment within a line.
expansion A strategy in which a firm increases the depth within a particular
line and/or the number of lines it offers to consumers.
committee An organizational structure for product planning and development
that involves a joint effort among executives from major departments and, especially
in small firms, the president and/or another top-level executive.
positioning See positioning.
quality See quality.
specialization One method of organizing selling activities so that
each sales person is assigned one or more product lines to sell.
stage The first stage in the evolution of marketing management, in
which the basic assumption is that making a good product will ensure business
and loss statement See operating statement.
element in an organization’s marketing mix that serves to inform, persuade,
and remind the market of a product and/or the organization selling it in the
hope of influencing the recipients’ feelings, beliefs, or behavior.
allowance A price reduction granted by a seller as payment for promotional
services performed by buyers.
budgeting method The means used to determine the amount of dollars
allocated to promotion in general and/or to specific forms of promotion.
mix The combination of personal selling, advertising, sales promotion,
public relations, and publicity that is intended to help an organization achieve
its marketing objectives.
theory Freudian theory that argues people have subconscious drives
that cannot be satisfied in socially acceptable ways.
segmentation Subdividing markets into groups based on personality dimensions,
life-style characteristics, and values.
obsolescence See style obsolescence.
relations Communications efforts that are designed to favorably influence
attitudes toward an organization, its products, and its policies.
warehouse An independent firm that provides for a fee storage and handling
facilities for individuals or companies.
special form of public relations that involves any communication about an organization,
its products, or its policies through the media that is not paid for by the
strategy Promotional effort directed primarily at end users so they
will ask middlemen for the product.
strategy Promotional efforts directed primarily at middlemen that are
the next link forward in the distribution channel for a product.
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evaluation bases In sales-force evaluation, subjective criteria for
appraising the performance of sales people.
degree to which a product meets the expectations of the customer. Same as product
evaluation bases In sales-force evaluation, specific, objective criteria
for appraising the performance of sales people.
discount A deduction from a seller’s list price that is offered to
a buyer when a large quantity of the product is purchased.
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Rraw materials Business
goods that become part of another tangible product prior to being processed
in any way.
A discount on a product that a customer obtains by submitting a form or
certificate provided by the seller.
market See client market.
group A group of people who influence a person’s attitudes, values,
to deal A situation in which a producer that desires to select and
perhaps control its channels declines to sell to some middlemen.
strategy A strategy used to market a product to different regions by recognizing
distinctions in climate, custom, or taste.
marketing An ongoing interaction between a buyer and a seller in which
the seller continuously improves its understanding of the buyer’s needs, and
the buyer becomes increasingly loyal to the seller because its needs are being
so well satisfied.
selling An attempt by a sales person or organization to develop a deeper,
longer-lasting relationship built on trust with key customers—usually larger
Reestablishing a product’s attractiveness in the target market.
price maintenance A pricing policy whereby a manufacturer seeks to
control the prices at which middlemen resell their products.
market One segment of the business market, consisting of wholesaling
and retailing middlemen that buy products for resale to other organizations
or to consumers.
scanners The electronic devices at retail checkouts that read the bar code
on each item.
trade See retailing.
firm engaged primarily in retailing.
cooperative A type of contractual vertical marketing system that is
formed by a group of small retailers who agree to establish and operate a wholesale
sale, and all activities directly related to the sale, of goods and services
to ultimate consumers for personal, nonbusiness use. Same as retail trade.
on investment A commonly used measure of managerial performance, calculated
by dividing net profit by either total assets or equity.
on marketing investment A way for firms to measure profit gain from marketing
Act A federal law passed in 1936 that was intended to curb price discrimination
by large retailers and the granting by manufacturers of proportionally unequal
promotional allowances to large retailers or wholesalers.
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allowance A situation in which a customer who is dissatisfied with
a product keeps it but is given a reduction from the selling price.
automation (SFA) Strategy of equipping sales people with laptop computers,
cellular phones, fax machines, and pagers to give them access to databases,
the Internet, and e-mail to help them manage accounts more effectively.
composite A method of forecasting sales that consists of collecting
from all sales people estimates of sales for their territories during the future
period of interest.
forecast An estimate of probable sales for one company’s brand of a
product during a stated time period in a specific market and assuming the use
of a predetermined marketing plan.
stage The second stage in the evolution of marketing management, in
which the emphasis is on using various promotional activities to sell whatever
the organization produces.
potential The portion of market potential that a specific company could
expect to achieve under ideal conditions.
promotion Demand-stimulating devices designed to supplement advertising
and facilitate personal selling.
return A situation in which a customer returns merchandise and receives
a refund equal to the full purchase price in cash or credit.
team See selling center.
analysis A detailed study of the Net Sales section of a company’s profit
and loss statement.
merchandising The main source of horizontal channel conflict, a strategy
under which a middleman diversifies by adding product lines not traditionally
carried by its type of business.
discount A deduction from the list price that is offered to a customer
for placing an order during the seller’s slack season.
data Available data, already gathered for some other purpose.
advertising Advertising that is intended to stimulate demand for individual
distribution A strategy in which a producer sells its product through
multiple, but not all possible, wholesalers and retailers in a market where
a consumer might reasonably look for it.
perception The process of screening all the marketing stimuli to which
an individual is exposed on a daily basis.
way a person sees himself/herself. Same as self-image.
agent An agent wholesaling middleman that essentially takes the place
of a manufacturer’s marketing department by marketing the manufacturer’s entire
center A group of people representing a sales department as well as
other functional areas in a firm (such as finance, production, and research
and development) that work cooperatively to achieve a sale. Sometimes called
a sales team or team selling.
expenses See direct costs.
identifiable, intangible activity that is the main object of a transaction designed
to provide want-satisfaction to customers.
encounter In services marketing, a customer’s interaction with any
service employee or with any tangible element, such as a service’s physical
quality The degree to which an intangible offering meets the expectations
of the customer.
center A planned grouping of retail stores that lease space in a structure
that is typically owned by a single organization and that can accommodate multiple
goods A category of tangible consumer products that are purchased after
the buyer has spent some time and effort comparing the price, quality, perhaps
style, and/or other attributes of alternative products in several stores.
strategy An extreme variation of a one-price strategy in which all
items sold by a firm carry a single price.
strategy A plan of action that involves selecting one homogeneous segment
from within a total market to be the firm’s target market. Same as concentration
data A data-gathering method in which exposure to television advertising
and product purchases can be traced to individual households.
analysis The act of gathering and studying information pertaining to
one or more specified aspects of an organization. Alternatively, a background
investigation that helps in refining a research problem.
influences A temporary force, associated with the immediate purchase
environment, that affects behavior.
allowance A fee that some retailers charge a manufacturer in order
to place its product on store shelves.
problem A situation confronting many firms, in which revenue from an
order is less than allocated expenses because several costs, such as billing
and direct selling, are essentially the same regardless of order size.
and cultural forces A set of factors, including life-styles, social
values, and beliefs, that affect the marketing activities of an organization.
class A division of, or ranking within, society based on education,
occupation, and type of residential neighborhood.
information environment As contrasted with the commercial information
environment, all communications among family members, friends, and acquaintances
marketing concept A revised version of the marketing concept under
which a company recognizes that it should be concerned about not only the buyers
of its products but also other people directly affected by its operations and
with not only tomorrow but also the long term.
goods A category of tangible consumer products for which consumers
have a strong brand preference and are willing to expend substantial time and
effort in locating and then buying the desired brand.
store A type of retail institution that has a very narrow and deep
product assortment (often concentrating on a specialized product line or even
part of a specialized product line), that usually strives to maintain manufacturers’
suggested prices, and that typically provides at least standard customer services.
in the adoption process The six steps a prospective buyer goes through
in deciding whether to purchase something new.
Industrial Classification (SIC) system A coding system developed by
the federal government that groups firms into similar types of businesses and
thus enables a company to identify and analyze small segments of the business
and certification A requirement that a product contain or exclude certain
ingredients or that it be tested and certified as meeting certain restrictive
theory The theory that learning occurs as a person (1) responds to
some stimuli and (2) is rewarded with need satisfaction for a correct response
or penalized for an incorrect one.
rate The number of times the average inventory is turned over, or sold,
during the period under study.
rebuy In the business market, a routine, low-involvement purchase with
minimal information needs and no great consideration of alternatives.
alliance A formal, long-term agreement between firms to combine their
capabilities and resources to accomplish global objectives.
business unit (SBU) A separate division for a major product or market
in a multiproduct or multibusiness organization.
company planning The level of planning that consists of (1) defining
the organization’s mission, (2) analyzing the situation, (3) setting organizational
objectives, and (4) selecting appropriate strategies to achieve these objectives.
marketing planning The level of planning that consists of (1) conducting
a situation analysis, (2) developing marketing objectives, (3) determining positioning
and differential advantage, (4) selecting target markets and measuring market
demand, and (5) designing a strategic marketing mix.
planning The managerial process of matching a firm’s resources with
its market opportunities over the long run.
window The limited amount of time in which a firm’s resources coincide
with a particular market opportunity.
broad plan of action by which an organization intends to reach its objectives.
distinctive manner of presentation or construction in any art, product, or endeavor.
obsolescence A form of planned obsolescence in which superficial characteristics
of a product are altered so that the new model is easily differentiated from
the previous model and people become dissatisfied with it. Same as fashion
obsolescence and psychological obsolescence.
in a culture that exhibit characteristic behavior patterns sufficient to distinguish
them from other groups within the same culture.
list price A pricing policy whereby a manufacturer recommends to retailers
a final (retail) price that should provide them with their normal markups.
combination of a discount house and a complete grocery store.
type of retail institution that has a moderately broad and moderately deep product
assortment spanning groceries and some nonfood lines, that offers relatively
few customer services, and that ordinarily emphasizes price in either an offensive
or defensive way.
retailing A retailing method that features several related product
lines, a high degree of self-service, largely centralized checkout, and competitive
people or firms that supply the goods or services that an organization needs
to produce what it sells.
chain management The combination of distribution channels and physical distribution
to make up the total marketing system.
method of gathering primary data by interviewing people in person, by telephone,
or by mail.
of buyer intentions A form of sales forecasting in which a firm asks
a sample of current or potential customers how much of a particular product
they would buy at a given price during a specified future period.
assessment Identifying and evaluating an organization’s most significant
strengths, weaknesses, opportunities, and threats.
approach to physical distribution The unification of individual physical
selling Providing a total package of related goods and services to
solve a customer’s problem (needs).
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specific means by which a strategy is implemented.
market A group of customers (people or organizations) for whom a seller
designs a particular marketing mix.
tax imposed on a product entering a country.
selling See selling center.
obsolescence A form of planned obsolescence in which significant technical
improvements result in a more effective product. Same as functional obsolescence.
of science for industrial and commercial purposes.
form of nonstore retailing in which a sales person initiates contact with a
shopper and also closes the sale over the telephone.
Consumer Protection Act Federal law that requires telemarketers to keep
a “do-not-call” list of consumers who request that they not receive telephone
solicitations, it restricts the indiscriminant use of automatic telephone dialing
systems, and it prohibits marketers from sending advertising to a facsimile
machine without first obtaining the recipient’s permission.
survey A method of gathering data by interviewing people over the telephone.
marketing A method of demand forecasting in which a firm markets its
new product in a limited geographic area, measures the sales, and then—from
this sample—projects the company’s sales over a larger area. Alternatively,
a marketing research technique that uses this same approach to judge consumers’
responses to a strategy before committing to a major marketing effort.
cost The sum of total fixed cost and total variable cost for a specific
quantity produced or sold.
cost concept In physical distribution, the recognition that the best
relationship between costs and profit must be established for the entire physical
distribution system, rather than for individual activities.
quality management (TQM) A philosophy as well as specific procedures,
policies, and practices that commit an organization to continuous quality improvement
in all of its activities.
variable cost The sum of all variable costs.
balance In international business, the difference between the value of a
nation’s imports and the value of its exports.
barriers Created by governments to restrict trade and protect domestic industries,
these are the most common legal forces affecting international marketers.
discount A reduction from the list price that is offered by a seller
to buyers in payment for marketing functions the buyers will perform. Same as
brand that has been adopted by a seller and given legal protection.
infringement Act of manufacturing products with names and packaging similar
to well-known goods in order to achieve sales.
Law Revision Act A federal law, passed in 1988, that broadened the
Landham Trademark Act to encompass comparisons made in promotional activity.
licensing A business arrangement in which the owner of a trademark
grants permission to other firms to use the owner’s brand name, logotype, and/or
character on the licensee’s products in return for a royalty on sales of those
products. Same as brand licensing.
down A product-line strategy wherein a company adds a lower-priced
product to a line to reach a market that cannot afford the higher-priced items
or that see them as too expensive.
up A product-line strategy wherein a company adds a higher-priced product
to a line in order to attract a broader market and, through its added prestige,
helps the sale of its existing lower-priced products.
analysis A statistical method of forecasting sales over the long term
by using regression analysis or over the short term by using a seasonal index
theory In fashion adoption, a fashion cycle that moves horizontally
and simultaneously within several socioeconomic levels.
theory In fashion adoption, a fashion cycle that flows downward through
several socioeconomic levels.
theory In fashion adoption, a fashion cycle in which a style first
becomes popular with lower socioeconomic levels and then flows upward to become
popular among higher levels.
distributor See truck jobber.
jobber A merchant wholesaler that carries a selected line of perishable
products and delivers them by truck to retail stores. Same as truck distributor.
contract The practice by which a manufacturer sells a product to a
middleman only under the condition that the middleman also buy another (possibly
unwanted) product from the manufacturer.
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consumers People who buy goods or services for their own personal or
household use in order to satisfy strictly nonbusiness wants.
strategy See market aggregation strategy.
acts State laws intended to regulate some forms of leader pricing that
are intended to drive other products or companies out of business. Same as unfair-sales
acts See unfair-practices acts.
delivered pricing A geographic pricing strategy whereby the same delivered
price is quoted to all buyers regardless of their locations. Same as postage
design The design of products in such a way that they can be used by
all consumers, including disabled individuals, senior citizens, and others needing
goods A category of consumer tangible products that consists of new
products the consumer is not yet aware of or products the consumer is aware
of but does not want right now.
attribute in an item that makes it capable of satisfying human wants.
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ratio of perceived benefits to price and any other incurred costs.
added The dollar value of a firm’s output minus the value of the inputs
it purchased from other firms.
chain The combination of a company, its suppliers, and intermediaries, performing
their own activities, to add value to a product.
pricing A form of price competition in which a firm seeks to improve
the ratio of a product’s benefits to its price and related costs.
principles that are a reflection of people’s needs, adjusted for the realities
of the world in which they live.
cost A cost that changes directly in relation to the number of units
produced or sold.
strategy See flexible-price strategy.
team An organizational structure for product planning and development
that involves a small group, with representatives from engineering, production,
finance, and marketing research, that operates like a separate small business,
and that typically reports directly to top management.
business market A situation where a given product is usable by virtually
all the firms in only one or two industries.
conflict A form of channel conflict occurring among firms at different levels of the same channel, typically producer versus wholesaler or producer versus retailer.
marketing system (VMS) A tightly coordinated distribution channel designed
to improve operating efficiency and marketing effectiveness.
marketing Strategy of spreading positive information about a company from
one person to another, often utilized by smaller firms.
chain A type of contractual vertical marketing system that is sponsored
by a wholesaler who enters into a contract with interested retailers.
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Wwarehouse club A
combined retailing and wholesaling institution that has a very broad but very
shallow product assortment, very low prices, few customer services, and is open
only to members. Same as wholesale club.
label The part of a product that tells consumers not to misuse the
product and informs them of almost every conceivable danger associated with
assurance given to buyers that they will be compensated in case the product
does not perform up to reasonable expectations.
A collection of Web files beginning with a home page that is accessible
through a unique address.
Act A federal law, passed in 1938, that amended the Federal Trade Commission
Act by strengthening the prohibition against unfair competition, especially
false or misleading advertising.
club See warehouse club.
trade See wholesaling.
sale, and all activities directly related to the sale, of goods and services
to businesses and other organizations for resale, use in producing other goods
and services, or the operation of an organization.
middleman A firm engaged primarily in wholesaling.
owned subsidiary A business arrangement in foreign markets in which
a company owns the foreign operation in order to gain maximum control over its
marketing program and production operations.
Trade Organization (WTO) Created in 1995, as the governing body of global
commerce, consisting of 135-member countries and accounting for 90% of world
Wide Web Collection of hyperlinked multimedia databases stored all over
the world and accessible via the Internet.
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pricing A geographic pricing strategy whereby a seller divides its
market into a limited number of broad geographic zones and then sets a uniform
delivered price for each zone.