1. economic infrastructure
    The internal facilities of a country available for con-ducting business activities, especially the communication, transportation, distribution, and financial systems
  2. economic indicator
    The data collected over time that reflect economic activity and general business conditions.
  3. economic man
    A model of human behavior assumed by economists in analyzing market behavior. The economic person is a rational person who attempts to maximize the utility received from his/her monetary outflows and sacrifices.
  4. economic order quantity
    The order quantity that minimizes the total costs of processing orders and holding inventory.
  5. economics
    1. The science that deals with human wants and satisfaction. 2. The science that deals with a person's efforts to satisfy his/her wants through the use of the scarce resources of nature.
  6. ecosystem
     The interactions of members of a distribution channel, or the interaction of a company and its products with consumer environments are examples of marketing applications.
  7. effective frequency
    An advertiser's de-termination of the optimum number of exposure opportunities required to effectively convey the advertising message to the desired audience or target market.
  8. efficient market hypothesis
    In its so--called "semi-strong" form, this hypothesis states that in setting security prices at any time, the market correctly uses all publicly available information about the underlying corporations whose stocks are traded in the market. In the absence of inside information, this implies that investors cannot consistently achieve performance in excess of the market "average" for any given level of risk. The "semi-strong" hypothesis enjoys wide acceptance in financial economics.
  9. eighty-twenty principle
    The situation in which a disproportionately small number (e.g., 20 percent) of salespeople, territories, products, or customers generate a disproportionately large amount (e.g., 80 percent) of a firm's sales or profits. This phenomenon can be identified and addressed by conducting a sales analysis and cost analysis.
  10. Elaboration Likelihood Model (ELM)
    A model of attitude formation and change that proposes that the process by which attitudes change depends upon the message recipient's level of motivation. According to Petty and Cacioppo, the authors of the ELM, when motivation is high, the message recipient will pay attention and respond to the quality of message arguments. When motivation is low, the message recipient will be more responsive to peripheral elements of the message (e.g., music, spokesperson attractiveness, etc.).
  11. elastic demand
    1. A situation in which a cut in price increases the quantity taken in the market enough that total revenue is increased. 2. A situation in which a given change in the price of an economic good is associated with a more than proportionate change in the quantity that buyers would purchase. 3. A situation in which the percentage of quantity taken "stretches" more than the percentage drop in price.
  12. elastic supply
    1. A situation in which a percentage increase in price attracts a greater percentage of' products offered to the market. 2. A situation in which the percentage of goods offered "stretches" more than the percentage increase in price.
  13. elasticity
    The degree that an economic variable changes in response to a change in another economic variable.
  14. elasticity of expectation
    A measure of the changes in prices of goods and changes in the quantity taken by the market stemming from expectations by consumers.
  15. electronic data interchange (EDI)
    1. (physical distribution definition) The intercompany, application-to-application exchange of business transactions in a standard data format. 2. (retailing definition) The interfirm computer-to-computer transfer of information, as between or among retailers, wholesalers, and manufacturers.
  16. Elimination-By-Aspects (EBA) model
    A brand choice model that represents the ultimate selection decision as a series of eliminations. Each alternative available for choice is viewed as having some set of aspects (e.g., product features). At each stage of the choice process an aspect is selected (with probability proportional to that aspect's importance for this consumer), and all alternatives still being considered that do not possess the selected aspect are eliminated. The process continues until only one alternative remains, and that remaining item is assumed to be the one chosen by the consumer (Tversky 1972). Although more difficult to calibrate and apply than Luce's Choice Axiom model for choices, it does avoid the independence from irrelevant alter-natives property of the latter model, which is often seen as an appealing feature of the EBA model. It has led to the development of other hierarchical/ sequential choice models, including the Hierarchical Elimination Model (Tversky and Sattath 1979) and Generalized Elimination Model (Hauser 1986).
  17. emulative product
    A new product that imitates another product already on the market. It is somewhat different from previous products (not a pure "me-too" product), but the difference is not substantial or significant
  18. endless chain method
    A method of prospecting in which a salesperson asks customers to suggest other customers who might be interested in the salesperson's offerings
  19. environmental impact analysis
    The assessment of the impact of a strategy or decision on the environment, especially the ecological consequences of the strategy or decision.
  20. environmental monitoring
    The activities aimed at keeping track of changes in external factors that are likely to affect the markets and demand for a firm's products and services. Among the external factors usually considered are the economic, social, demographic, political, legal, cultural, and technological forces.
  21. equilibrium point
    A situation in which the quantity and price offered by sellers equals the quantity and price taken by buyers
  22. equilibrium price
    A price that equates supply and demand, i.e., the price at which the market clears.
  23. erratic demand
    A pattern of demand for a product that is varied and unpredictable - e.g., the demand for large automobiles.
  24. event creation
    The use of communication techniques such as news releases, press conferences, etc., to call attention to activities to promote a company, product, or service. Also, it is the development of a special activity, showing, display, or exhibit designed to demonstrate products or to connect the product to favorable products or activities.
  25. Event Marketing
    Promotional strategy linking a company to an event (sponsorship of a sports competition, festival, etc.). Often used as a synonym for “sponsorship.” The latter term is preferable, however, because not all sponsorships involve an event, per se. Source: IEG
  26. everyday low price (EDLP)
    1. (retailing definition) A policy or strategy of retail pricing whereby presumably low prices are set initially on items and maintained, as opposed to the occasional offering of items at special or reduced sales prices. 2. (sales promotion definition) A pricing approach in which the product is offered to retailers and consumers at a consistently low cost rather than reducing price periodically through sales promotion activities
  27. evoked set
    1. (consumer behavior definition) The set of alternatives that are activated directly from memory. 2. (consumer behavior definition) The set of possible products or brands that the consumer may be considering in the decision process. It is the set of choices that has been evoked and is salient as compared with the larger number of available possible choices. For example, from the many brands of breakfast cereals on super-market shelves, it is the half a dozen brands (or so) that the buyer may re-member and be considering for purchase.
  28. exclusive dealing
    A restriction that is imposed by a supplier on a customer forbidding the customer from purchasing some type of product from any other supplier. This restriction is subject to an examination of whether it substantially lessens competition or restrains trade. Exclusive dealing should not be con-fused with exclusive distributorships, a term applied to arrangements in which a supplier promises not to appoint more than one dealer in each territory.
  29. expressed warranty
    1. (retailing definition) A guarantee supplied by either the retailer or the manufacturer that details the terms of the warranty in simple and easily understood language so customers know what is and what is not covered by the warranty. 2. (product development definition) The spoken or written promises made by the seller of a product about what will be done if the product proves to be defective in manufacture or performance. This contrasts with promises that are only implied by common knowledge of the product or by customary practices in a trade. Expressed warranties are usually restricted to stated periods of time.
  30. extension pricing policy
    A pricing policy that requires that the price of an item be the same around the world and that the customer absorb freight and import duties. This is also known as ethnocentric pricing policy.
  31. extensive problem solving
    1. (consumer behavior definition) A choice involving substantial cognitive and behavioral effort. 2. (consumer behavior definition) In the choice process, this includes those decisions that consume considerable cognitive activity and thought, as compared to routinized response behavior and habitual decision making.
  32. extrinsic reward
    A reward that is external to the individual such as money, food, or a pat on the head. An intrinsic reward is one that is internal within the person such as feeling good for a job well done.
  33. F.O.B. destination
    A shipping term that indicates the seller pays the freight to the destination. Title does not pass until the merchandise reaches its destination; thus, the seller assumes all risks, loss, or damage while goods are in transit, except for the liability of the carrier
  34. face value
    The printed financial value of a coupon (actual savings). The face value can be either a specific monetary amount, a percentage discount, or combination offer with another product.
  35. facilitating agent
    A business firm that assists in the performance of distribution tasks other than buying, selling, and transferring title (e.g., bank, transportation company, warehouse).
  36. factor
    1. A specialized financial institution engaged in factoring accounts receivable and lending on the security of inventory. 2. A type of commission house that often advances funds to the consignor, identified chiefly with the raw cotton and naval stores trades.
  37. factory outlet center
    A shopping center that specializes in manufacturers' outlets that dispose of excess merchandise or that may serve as an alternate channel of distribution.
  38. Fair Credit Reporting Act (1970)
    This act is designed to ensure accuracy of credit reports and to allow consumers the right to learn the nature of the information and challenge and correct erroneous information.
  39. Fair Debt Collection Practices Act (1978)
    An act that specifies that a third party debt collector (i.e., one who collects debts owed to another), cannot communicate with the consumer in connection with the debt at any unusual time or place, and may not harass or abuse any person in connection with the collection of the debt.
  40. Fair Packaging and Labeling Act (1966)
    This act requires that labels on consumer commodities identify the type of product being sold, the name and address of the supplier, and where applicable, the quality and contents of each serving. The act also authorizes the FTC and FDA to issue regulations concerning specific products covering items such as ingredient statements, package size standards, "slack-fill" packaging, and sales price representations.
  41. family brand
    A brand that is used on two or more individual products. The product group may or may not be all of that firm's product line. The individual members of the family also carry individual brands to differentiate them from other family members. In rare cases there are family brands that have as members other family brands, each of which has individual brands. Automobiles fit the latter situation, as with Oldsmobile (family) Cutlass (family) Ciera (individual).
  42. fashion coordination
    The function of analyzing fashion trends in order to ensure that the merchandise offered for sale in various related apparel departments is of comparable style, quality, and appeal.
  43. fashion cycle
    The process by which a particular design, activity, color, etc., comes into some popularity and then phases out. This cycle of adoption and rejection is quite similar to the product life cycle, but the fashion cycle uses different terms to describe its phases: (1) distinctiveness phase, in which the style is eagerly sought; (2) emulation stage, in which its popularity grows; and (3) economic stage, in which it becomes available at lower prices to the mass market.
  44. fear appeals
    Communications material that attempts to persuade or manipulate by using frightening message content (e.g., not using Brand X deodorant will lead to a miserable social life). The relationship between fear and persuasibility seems to be curvilinear such that moderate levels of fear appear to be more effective than the use of either mild fear or strong fear. The difficulty is in the definitions and measurement of what are mild, moderate, and extreme fear appeals
  45. Federal Trade Commission Act (1914)
    This act placed a blanket prohibition against "unfair methods of competition" and created the FTC to enforce it
  46. fighting brand
    A line extension of a main brand that is marketed by one producer to compete directly with the lower-priced products of other producers in a given market. The fighting brand usually has a separate brand identity and a low price. Its quality is usually lower than that of the main brand; it may only be temporarily on the market; and its purpose is to hold customers without having to lower the price of the main brand.
  47. financial analyst
    A person who investigates, evaluates, and advises clients on the value and risk of investment offerings
  48. financial quota
    A quota that focuses on financial criteria such as gross margin or contribution to overhead. Financial quotas are used to make salespeople conscious of the cost and profit implications of what they sell. Financial quotas are often stated in terms of direct selling expenses, gross margin, or net profit. They are most applicable when the firm's market penetration approaches saturation levels. In such instances, increasing sales or market share is difficult, so an emphasis on selling efficiency and cost control becomes a logical mechanism for increasing profits
  49. flanking
    An indirect strategy aimed at capturing market segments whose needs are not being served by competitors. Flanking can be executed by targeting either a geographical segment or a consumer segment (group) that is not being well served by competitors, when the competitor is unwilling or unable to retaliate.
  50. flash report
    As soon as the day's sales figures have been read on whatever kind of register is in use, a tentative, unaudited report is released to give management the day's results for comparison with budget or perhaps last year's sales figure
  51. flat rate
    A price charged for advertising space or time that does not include discounts based on the quantity of space or time purchased by the advertiser.
  52. floating exchange rate
    An exchange rate that is determined by private supply and demand and that is free to respond to market forces.
  53. follower advantage
    The ability of nonpioneering market entrants to gain long-term competitive advantages due to late entry. Mechanisms that lead to follower advantage include resolution of demand and market uncertainty, shifts in technology or customer needs, the ability to free-ride on first-mover investments in buyer education and infrastructure development, and learning from the pioneer's product, positioning, or marketing mistakes
  54. foot-in-the-door technique
    A technique in which compliance is gained for a relatively large request by first gaining compliance to a relatively minor request; the compliance with the minor request positively affects later compliance with the larger request. For example, getting someone to make a small donation to a charity can be used to increase the probability that he/she will donate more later. The first, small request is the foot in the door.
  55. forced sale
    A sale of products at less than market price due to the urgent need for a merchant to liquidate merchandise assets, generally to meet the demand of creditors. It is also the sale of goods or property under order from the court: an ordered public auction sale.
  56. foreign direct investment
    Investing in a country with control or influence over the direction of the investment. For balance of payments purposes, any holding of more than 20 percent of the shares of a company is considered direct as opposed to portfolio investment
  57. franchising
    A contractual system of distributing goods and services whereby one party (the franchisor) grants to another party (the franchisee) the right to distribute or sell certain goods or services; the franchisee agrees to operate the business according to a marketing plan substantially prescribed by the franchisor; and the franchisee operates the business substantially under a trademark or trade name owned by the franchisor.
  58. free merchandise
    A trade sales promotion technique in which an additional amount of the product is offered without additional cost as an incentive to purchase a minimum quantity. The incentive is typically offered for a limited period of time.
  59. frequency
    The number of times a person, household, or member of a target market is exposed to a media vehicle or an advertiser's media schedule within a given period of time. This number is usually expressed as an average frequency (the average number of exposures during the time period) or as a frequency distribution (the number of people exposed once, twice, three times, etc.). (See also effective frequency.)
  60. full-line pricing
    In this situation, all items in a given line are priced relative to each other, or are discounted as a total package. Changes on any one item take into consideration the prices of the other items in the line, and the seller's intention is to enhance sale of the total line.
  61. functional theory of attitudes
    A theory of attitudes based on the idea that attitudes develop to satisfy certain functions, e.g., needs or goals, for the individual. According to this theory, attitudes reflect the underlying motives of the individual, thus, the theory is sometimes referred to as a motivational approach to attitudes.
  62. garbology
    The study of consumer behavior and preferences for foods and products by examining disposed goods and other items found in the trash and garbage.
  63. gatekeeper
    Usually, the individual who controls the flow of information from the mass media to the group or individual. It also is used to indicate the individual who controls decision making by controlling the purchase process. In a traditional family, the mother often functions as the gatekeeper between the child and his/her exposure to the mass media and the purchase of toys or products. In an organization, the purchasing agent is often the gatekeeper between the end user and the vendor of products or services.
  64. general merchandise store
    An establishment primarily selling household linens and dry goods, and either apparel and accessories or furniture and home furnishings. Establishments that meet the criteria for department stores, except as to employment, are included in this classification. Included for Census purposes are establishments whose sales of apparel or of furniture and home furnishings exceed half of their total sales, if sales of the smaller of the two lines in combination with dry goods and household linens accounts for 20 percent of total sales.
  65. general sales manager
    This manager has overall responsibility for corporate, group, or division sales. Sales management at this level is concerned with developing sales policies, strategies, and plans that support the overall marketing plan. In a small company the general sales manager may supervise all salespeople directly. As the number of salespeople increases, however, supervision of salespeople must be delegated to field sales managers. In a functionally organized company, the general sales manager reports to the marketing manager or the chief executive. In a divisionalized corporation, the general sales manager reports to the division marketing manager or to the division manager. In a divisionalized company with a centralized sales organization, the general sales manager reports to the chief executive or to a group executive.
  66. general-line wholesaler
    A wholesaler who carries a complete stock of one type of merchandise, corresponding roughly to a substantial majority of the total merchandise requirements of customers in a major line of trade or industry classification.
  67. generic advertising
    A product that is named only by its generic class (e.g., drip-grind coffee, barber shop). Other products have both an individual brand and a generic classification (Maxwell House drip-grind coffee, Maurice's barber shop). Generic brand products are often thought to be unbranded, but their producer or reseller name is usually associated with the product, too. This approach is usually associated with food and other packaged goods, but many other consumer and industrial products and services are marked as generics
  68. generic strategies
    Generalized plans that work across a range of industries and markets. They provide management with a set of strategic options, one (or a combination) of which can be chosen for application in a specific situation. Generic strategies do not provide specifics and the detail needed to be developed for any specific situation.
  69. genericize
    Colloquial term used to describe what happens to a brand name when it becomes so well recognized by consumers that the brand serves as the overall category name. For example: Kleenex, Xerox, Scotch tape, Jello, Roller Blades, Post-it notes and Band-Aid
  70. global marketing
    1. (global marketing definition) A marketing strategy that consciously addresses global customers, markets, and competition in formulating a business strategy. 2. (consumer behavior definition) An approach to international strategy that argues for marketing a product in essentially the same way everywhere in the world.
  71. global strategy
    A strategy that seeks competitive advantage with strategic moves that are highly interdependent across countries. These moves include most or all of the following: a standardized core product that exploits or creates homogenous tastes or performance requirements, significant participation in all major country markets to build volume, a concentration of value-creating activities such as R&D and manufacturing in a few countries, and a coherent competitive strategy that pits the worldwide capabilities of the business against the competition.
  72. good guy-bad guy routine
    A negotiation strategy in which one member of a sales team makes an attractive offer to the prospect (a good guy) and another member discusses the difficulty in making such an attractive offer (a bad guy). The objective of the strategy is to get the prospect to accept the good guy's proposal.
  73. government information on industrial markets
    The set of data about industrial markets that the government collects and distributes. It tends to be organized around the Standard Industrial Classification (SIC) system.
  74. gravity model
    A theory about the structure of market areas. The model states that the volume of purchases by consumers and the frequency of trips to the outlets are a function of the size of the store and the distance between the store and the origin of the shopping trip.
  75. green marketing
    1. (retailing definition) The marketing of products that are presumed to be environmentally safe. 2. (social marketing definition) The development and marketing of products designed to minimize negative effects on the physical environment or to improve its quality. 3. (environments definition) The efforts by organizations to produce, promote, package, and reclaim products in a manner that is sensitive or responsive to ecological concerns.
  76. gross cost of merchandise sold
    The gross cost of merchandise handled less the closing inventory at cost. The gross cost of merchandise sold is subtracted from net sales to calculate maintained markup. Maintained markup is then adjusted by cash discounts and workroom costs to determine gross margin of profit.
  77. gross domestic product (GDP)
    1. An estimate of the total national output of goods and services produced in a single country in a given time period and valued at market price. 2. GDP equals gross national product less net property income from abroad.
  78. gross investment
    The total market value of all capital goods included in the gross national product in a given period.
  79. gross national product (GNP)
    1. The money value of a nation's entire output of final commodities and services in a given period. 2. Personal consumption expenditures plus gross private domestic investment plus net exports of goods plus government purchases of goods and services. The U.S. Department of Commerce has published continuously the national income statistical series since 1947. In former years gross national product was emphasized by politicians, the press, etc.; in more recent years gross domestic product has been emphasized.
  80. gross profit
    1. Net sales minus cost of goods sold. 2. The difference between purchase price of an item and the sale price.
  81. gross rating point (1) (GRP)
    A measure of the total amount of the advertising exposures produced by a specific media vehicle or a media schedule during a specific period of time. It is expressed in terms of the rating of a specific media vehicle (if only one is being used) or the sum of all the ratings of the vehicles included in a media schedule. It includes any audience duplication and is equal to the reach of a media schedule multiplied by the average frequency of the schedule
  82. Gross Rating Point (2)
    One percentage point of a specified target audience. Total GRPs for a campaign can be calculated by the formula ‘Reach times average frequency’. This is a measure of the advertising weight delivered by a medium or media within a given time period. A given total of gross rating points may be arrived at by adding together ratings from many different spots. GRPs may, thus, sum to more than 100% of the total target audience. Source: IEG
  83. group product manager
    This manager reports to the marketing manager and supervises several product managers and/or brand managers in companies, or divisions of companies in which there are more product managers and/or brand managers than the marketing manager can supervise directly.
  84. growth objectives
    The needed and desired performance results to be reached by means outside the present products and markets. Objectives are identified by a direct translation of business goals from the growth strategy. The growth objectives guide decision making so a firm can reduce the gap between the forecasts of profit contribution of present products and markets from the overall objectives.
  85. growth stage of product life cycle
    The second stage of the product life cycle, during which sales are increasing at an increasing rate, profits are increasing, and competitors enter the market. Product differentiation takes place, and price competition begins. Industry profits usually taper off as the product category enters the third (mature) stage, during which sales increases come only at a declining rate and eventually cease.
  86. growth strategy
    Market share expan-sion is the prime objective under this strategy, even at the expense of short-term earnings. The firm may seek to expand market share through a number of alternative routes. First, the firm may seek new users who may previously have been loyal to other brands, or tended to switch, or were not users of the category at all. The second way in which the firm can expand its market share is to expand usage by current users: for instance, by identifying and promoting new uses.
  87. guerilla marketing
    Unconventional marketing intended to get maximum results from minimal resources
  88. Guttman scale
    A general procedure to determine whether or not the responses of subjects to a set of items form a scale. If the items form a scale, only a limited number of response patterns are possible, and relative nonoccurrence of deviant patterns allows the recovery of the order of the individuals and category boundaries of the items from the observed data
  89. habitual decision making
    The choices or decisions made out of "habit" without much deliberation or product comparison
  90. halo effect
    A problem that arises in data collection when there is carry-over from one judgment to another
  91. hard goods
    As compared with soft goods, which have a textiles base, these goods mainly comprise hardware, home furnishings, and furniture and appliances. These goods are usually also durable goods.
  92. hand-to-mouth buying
    The purchase by a business in the smallest feasible quantities for immediate requirements.
  93. harvesting strategy
    The maximization of short-run cash flow from a business in expectation of a deterioration of market share and eventual withdrawal from the market. The cash flow raised is directed toward other areas of business where it is needed
  94. heuristic
    1. (consumer behavior definition) A proposition that connects an event with an action. Heuristics usually simplify decision making. For example, "buy the cheapest brand" is a choice heuristic that would simplify purchase. 2. (consumer behavior definition) The simplified "rules of thumb" by which decisions are made
  95. hierarchy of needs
    A theory proposed by Maslow (1943) concerning the specific order of the development of needs. He proposed that needs develop in an individual in a sequential order from lower to higher needs, ranging from physiological needs to safety needs (security, order) to belongingness and love needs. Then esteem needs (prestige, respect) and self-actualization (self- fulfillment) follow. Higher order needs emerge as lower order ones are more or less satisfied.
  96. high-pressure selling
    A selling approach in which the salesperson attempts to control the sales interaction and pressure the customer to make a purchase
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