Marketing Essentials: Glossary of Terms

AAbsolute advantage: A country has special natural resources or talents that allow it to produce an item at the lowest cost possible

Ad layout: A rough draft that shows the general arrangement and appearance of a finished ad

Adjacent colours: Colours located next to each other in the colour wheel that contrast only slightly

Advertising: Any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor

Advertising agencies: companies that work jointly with business clients to develop advertising campaigns

Advertising campaign: The creation and coordination of a series of advertisements (both broadcast and print) around a particular theme to promote a product

Advertising proof: prepared by a newspaper or magazine to show exactly how an ad will appear in print

Agents: intermediaries that bring buyers and sellers together

Agreement: A specific commitment that each member makes with a group

Allowance: a partial return of the sale price for merchandise that the customer has kept

Articles of Incorporation: filed with the corporation and securities bureau in a state department of commerce; they identify the name and address of your business, its purpose, the names of the initial directors, and the amount of stock to be issued to each director

Asset: anything of monetary value that you own

Attitude research: marketing research designed to obtain information on how people feel about certain products, ideas, or companies

BBaby Boom Generation: the 76 million babies born in the United States between 1946 and 1964

Balance of trade: the difference in value between exports and imports of a nation

Balance sheet: a summary of a business’ assets, liabilities, and owner’s equity

Banner ad: a wide shallow rectangle at the top or bottom of a web page that takes the user to the advertiser’s web page when clicked with a mouse

Bar graph: a drawing made up of parallel bars whose lengths are proportional to the qualities being measured

Basic stock list: inventory monitoring plan used for staple items that should always be in stock

Benefits: privileges, or monetary payments beyond salary or wages, that go with a job

Blind check method: Way of checking inventory that requires the receiver to write the description of the merchandise, count the quantities received, and list them on a blank form or dummy invoice

Blocks: things that interfere with understanding the message, including distractions, emotional blocks, and planning a response

Bonded warehouse: public or private warehouses that store products requiring the payment of a federal tax

Boomerang method: handling an objection by bringing it back to the customer as a selling point

Brand extension: a branding strategy that uses an existing brand name for an improved or new product in the product line

Brand licensing: the legal authorization by a trademarked brand owner to allow another company (the licensee) to use its brand, brand mark, or trade character for a fee

Brand mark: the part of the brand that is a symbol or design

Brand name: the word, group of words, letters, or numbers representing a brand that can be spoken

Brand: A name, term, design, or symbol (or combination of them) that identifies a business or organization and its products

Break-even point: the point at which sales revenue equals the costs and expenses of making and distributing a product

Brick and mortar retailers: traditional retailers that sell goods to the customer from their own physical stores

Broadcast media: advertising that uses radio and television

Browser: the software program that allows you to view web pages

Budget accounts: charge accounts that allow for the payment of a purchased item over a certain time period without a finance charge

Bundle pricing: psychological pricing technique that includes several complementary products in a package that is sold at a single price

Business cycle: recurring slow-down and growth of an economy

Business philosophy: describes how you think your business should be run and shows your understanding of your business’ role in the marketplace

Business plan: a proposal that describes a new business to potential investors and lenders

Business risks: the possibility of business loss or failure

Business: all of the activities involved in producing and marketing goods and services

Business-to-business (B2B) selling: form of selling that takes place in a manufacturer’s or wholesaler’s showroom (inside sales) or a customer’s place of business (outside sales)

Buying behaviour: the process individuals use to decide what they will buy, from where they will buy it, and from whom they will buy it

Buying signals: the things customers do or say to indicate a readiness to buy

CCapital: the money needed to start and operate a business

Capitalism: an economic system characterized by private ownership of businesses and marketplace competition

Carload: the minimum number of pounds of freight needed to fill a boxcar

Cash flow statement: a monthly plan that shows when you anticipate cash coming into the business and when you expect to pay out cash

Cash on delivery (COD) sale: a transaction that occurs when a customer pays for merchandise at the time of delivery

Cash sale: A transaction in which the customer pays for the purchase with cash or a check

Category management: a process that involves managing product categories as individual business units

Centralized buying: buying for all branches in a central location, such as company headquarters

Channel of distribution: the path a product takes from the producer or manufacturer to the final user

Channels: the avenues by which a message is delivered

Circle graph: a geometric representation of the relative sizes of the parts of a whole

Clip art: illustrations that take the form of images, stock drawings, and photographs

Closing the sale: obtaining positive agreement from the customer to buy

Co-branding strategy: a branding strategy that combines one or more brands to increase customer loyalty and sales for each individual brand

Cold canvassing: a salesperson tries to locate as many potential customers as possible without checking out leads beforehand

Collateral: something of value that a borrower pledges to a lender to ensure repayment of a loan

Command economy: the government is responsible for answering the three basic economic questions

Common carrier: A company that provides transportation services to any business in its operating area for a fee

Communication: the process of exchanging information, ideas, and feelings

Communist: countries that have a totalitarian form of government which runs everything

Community relations: The activities that a business uses to acquire or maintain the respect of the community

Comparative advantage: The value that a nation gains by selling the goods it produces most efficiently

Competition: the struggle between companies for customers

Consensus: a decision that each team member agrees to

Consignment buying: goods are paid for only after they are purchased by the final customer

Consumer: person who uses the product

Consumer affairs specialists: People who design programs to reflect customer needs for informationConsumer Price Index (CPI): measures the change in price over time of some 400 specific retail goods and services used by the average urban household

Consumerism: the societal effort to protect consumer rights by putting legal, moral, and economic pressures on business

Contract carrier: a for-hire carrier that provides equipment and drivers for specific routes, according to agreements between the carrier and the shipper

Controlling: the process of comparing what you planned with actual performance that involves setting standards, evaluating performance, and solving problems revealed

Cooperative advertising: a cost sharing arrangement whereby both a supplier and a local advertiser pay for advertising

Copy: the selling message in a written advertisement

Corporation: A business that is chartered by a state and legally operates apart from the owner or owners

Cost per thousand (CPM): the media cost of exposing 1,000 readers to an ad

Cost-plus pricing: pricing concept in which all the costs and expenses are calculated, and then the desired profit is added to arrive at a price

Credit: the opportunity to obtain money, goods, or services immediately in exchange for a promise to pay in the future

Customer: person who buys the product

Customer benefits: the advantages or personal satisfaction that a customer wil get from a good or service

Customer profile: information about the target market with regard to age, income level, ethnic background, occupation, attitudes, lifestyle, or geographic residence of the targeted customer

Customs brokers: specialists licensed by the U.S. Treasury Department

DData analysis: the process of compiling, analyzing, and interpretying the results of primary and secondary data collection

DBA: ‘Doing Business As’ designation for a sole proprietorship or partnership

Debit card: an ATM card used to make a purchase at a store

Debt capital: raising funds by borrowing money that will be repaid later

Decentralized buying: local store managers or their designated buyers are authorized to make special purchases for their individual stores

Demand: the amount or quantity of goods and services that consumers are willing and able to buy at various prices

Demographics: statistics that describe a population in terms of personal characteristics

Depression: a period of prolonged recession

Derived demand: the demand for industrial goods based on the demand for consumer goods and services

Direct check method: way of checking inventory in which the merchandise is checked directly against the actual invoice or purchase

Direct close: the method of asking for the sale

Direct contact: the process of visiting potential employers in person or calling them on the telephone

Direct distribution: goods or services are old from the producer directly to the consumer

Disclaimer: a statement that contains exceptions to and exclusions from a warranty

Discount pricing: pricing technique that involves the seller’s offering reductions from the usual price

Discretionary income: the money left from a person’s net income after paying for basic living necessities such as food, shelter, and clothing

Display: the visual and artistic aspects of presenting a product to a target group of customers

Disposable income: the money left from a person’s gross income after taxes have been paid

Distractions: blocks to effective listening that include noises, environmental factors, interruptions, and competing thoughts

Dollar control: method of stock control that represents the planning and monitoring of the total inventory investment that a business makes during a stated period of time

Drop shippers: wholesalers that own the goods they sell but do not physically handle the actual products

Ee-commerce: the buying and selling of goods through the use of electronic networks, usually the Internet

Economic risks: type of business risks that occur from changes in overall business conditions

Economy: the way a nation makes economic choices

Elastic demand: situations in which a change in price creates a change in demand

Embargo: a total ban on specific goods coming into and out of a country

Emotional blocks: biases against the opinions expressed by the sender that prevent understanding

Emotional motive: a feeling experienced by a customer through association with a product

Empathize: to understand a person’s situation or frame of mind

Employee discounts: discounts to encourage workers to buy the products their employer sells or manufactures

Empowerment: encouraging team members to contribute to and take responsibility for the management process

Endless chain method: salespeople ask previous customers for names of potential customers

Entrepreneurs: people who organize, manage, and take the risk of owning and operating a business

Entrepreneurship: the process of starting and managing your own business; the skills of people who are willing to risk their time and money to run a business

Equilibrium: the point at which the amount of product supplied exactly equals the amount of product demanded

Equity capital: raising money from within your company or by selling part of the interest in the business

e-tailing: retailers selling products over the internet to the customer

Ethics: guidelines for good behaviour

Euro: the currency of the European Union

European Union (EU): Europe’s trading bloc

Everyday low prices (EDLP): low prices are set on a consistent basis with no intention of raising them or offering discounts in the future

Exchange: when something is sold in the marketplace; merchandise brought back to be replaced by other merchandise

Exclusive distribution: form of distribution that involved protected territories in a given geographic area

Excuses: insincere reasons for not buying or not seeing a salesperson

Exempt carrier: carrier or agricultural products, free from direct regulation of rates and operating procedures

Experimental method: research technique in which a researcher observes the results of changing one or more marketing variables while keeping certain other variables constant under controlled conditions

Exports: goods and services that are sold to other countries

Express warranty: warranty that is explicitly stated, in writing or spoken words, to encourage a customer to buy

Extended coverage: optional insurance coverage on a basic property coverage policy

Extension: the result of multiplying the number of units by the cost per unit

Extensive decision making: used when there has been little or no previous experience with an item

FFactors of production: the technical term economists use for resources (land, labour, capital, entrepreneurship)

Feature-benefit selling: matching the characteristics of a product to a customer’s needs and wants

Feedback: the receiver’s response to the message

Fidelity bonds: protects a business from employee dishonesty

Finance: money or anything that can be sold very quickly to get money; borrowing money

Fixtures: permanent or movable store furnishings, such as display cases, shelving, counters, racks, and benches

Flexible-price policy: pricing policy that permits customers to bargain for merchandise

Floor limit: the maximum amount a salesperson may allow a customer to charge without getting special authorization

Forced-choice questions: survey questions that ask respondents to choose answers from possibilities given on a questionnaire

Foreign Corporation: corporation incorporated under the laws of a different state from the one in which it does business

Form utility: changing raw materials or putting parts together to make them more useful; dealing with making, or producing, things

Formal balance: when a large item is placed on one side of a display, an equally large item should be placed on the other side

Franchise: a grant or right to sell a parent company’s product or service within a given area or territory

Free enterprise system: system in which individuals start and operate their own businesses without government involvement

Freight forwarders: private companies that combine less-than truckload shipments from several different businesses and deliver them to their destinations; in international business, companies licensed by the U.S. Maritime Commission to handle export details

Full warranty: a warranty that guarantees that if a product is found to be defective within a given warranty period, it will be repaired or replaced at no cost to the purchaser

GGeneral partnership: each partner shares in the profits and losses of the business

Generation X: the more than 40 million Americans born between 1965 and 1976

Generation Y: the 77 million Americans born between 1977 and 1997

Generic brands: brands that represent a general product category and do not carry a company or brand name

Geographics: segmentation of the market based on where people live

Goods: the kinds of things you can touch or hold in your hand

Green marketing: companies make an effort to produce and promote environmentally safe products

Greeting approach method: the salesperson welcomes the customer to the store

Gross domestic product (GDP): a measure defined as the value of all final goods and services produced within a given country (output of a region)

Gross national product (GNP): a measure defined as the value of all final goods and services produced by a given country’s citizens within a year (output of the nationals of a region)

Gross profit: the difference between sales revenue and the cost of goods sold

Gross sales: the total of all sales for any period of time

IHeadline: the saying that gets the readers’ attention, rouses their interest by providing a benefit, and leads them to read the rest of the ad

Home page: website page that has links to other pages throughout the site

Horizontal organization: self-managing teams that set their own goals and make their own decisions

Human risks: type of business risks caused by human mistakes, as well as the unpredictability of customers, employees, or the work environment

IIllustration: the photograph or drawing used in print advertisement

Implied warranty: a warranty that exists automatically by state law whenever a purchase takes place

Imports: goods and services purchased from other countries

Incentives: higher priced products earned and given through contests, sweepstakes, and rebates

Income statement: a summary of a business’ income and expenses during a specific period, such as a month, a quarter, or a year; often called profit and loss statement

Indirect distribution: selling the goods or services involves one or more intermediaries between the producer and customer

Industrial market: based on, or derived from, the demand for consumer goods and services

Inelastic demand: situations in which a change in price has very little effect on demand for a product

Inflation: a period where the general prices of goods and services are rising

Informal balance: balancing a large item with several small ones

Infrastructure: the physical development of a country, including its roads, ports, sanitation facilities, and utilities, especially telecommunications

Initiative: doing what needs to be done without being urged

Installment accounts: charge accounts that allow for payment over a period of time

Institutional advertising: advertising attempts to create a favourable impression and goodwill for a business or organizations

Institutional promotion: communication used by a business to create a favourable image for itself

Insurance policy: a contract between a business and an insurance company to cover a certain business risk

Integrated distribution: form of exclusive distribution in which manufacturers own and run their own retail operations

Intensive distribution: form of distribution that involves the use of all suitable outlets to sell a product

Interest: the money paid for the use of money borrowed or invested

Intermediaries: distribution channel that provides value to producers because they have expertise in areas that producers do not have

Inventory management: the process of buying or storing products for sale while controlling costs for ordering, shipping, handling, and storage

Inventory: an amount of goods stored, including raw materials, purchased components, manufactured subassemblies, works in process, packaging materials, and finished goods

Invoice: customer bill included with delivered merchandise when filling a PO-based order

JJargon: technical or specialized vocabulary used by members of a particular profession or industry

Job description: written statements listing the requirements of a particular job

Joint ventures: partnerships that allow companies to participate in another country’s economy

Just-in-time (JIT) inventory system: an arrangement in which suppliers deliver parts and raw materials just before they are needed for production

JLabel: an information tag, wrapper, seal, or imprinted message that is attached to a product or its package

Land: everything on the earth that is in its natural state (e.g. ore, pasture, trees)

Law of diminishing marginal utility: law that states that consumers will buy only so much of a given product, even though the price is low

Layaway: merchandise removed from stock and kept in a separate storage area until the customer pays for it

Layman’s terms: words the average customer can understand

Liability: a debt that you owe

Lifestyle goals: reflect on your vision of how you see yourself living in the future

Limited decision making: used when a person buys goods and services that he or she has purchased before but not regularly

Limited partnership: each limited partner is liable for any debts only up to the amount of his or her investment in the company

Limited warranty: a warranty that may exclude certain parts of the product from coverage or require the customer to bear some of the expense for repairs resulting from defects

Line graph: a graph that uses a line joining points representing changes in variable quantity, usually over a specific period or time

Loss leader: an item priced at cost to draw customers into a store

MMaintained markup: the difference between an item’s final sale price and its cost

Management: the business function used to plan, organize, and control all available resources to reach company goals

Manufacturer brand: brand owned and initiated by manufacturers; also called producer brands

Market: all potential customers who share common needs and wants, and who have the ability and willingness to buy the product

Market economy: economy in which there is no government involvement in economic decisions

Market position: marketer’s relative standing in relation to their competitors

Market research: the systematic gathering, recording, analyzing, and presentation of information related to marketing goods and services

Market segmentation: a way of analyzing a market by specific characteristics in order to create a target market

Market share: a firm’s percentage of the total sales by volume generated by all competitors in a given market

Marketing concept: businesses must satisfy customer’s needs and wants in order to make a profit

Marketing information system: a set of procedures and methods that regularly generates, stores, analyses, and distributes marketing information for use in making marketing decisions

Marketing mix: four basic marketing strategies, collectively known as the four Ps – produc, place, price, and promotion

Marketing research: the marketing function that links the consumer, customer, and public to the market through information

Marketing: the process of developing, promoting, and distributing products to satisfy customers’ needs and wants

Marketplace: wherever two or more people agree to buy and sell a product (physical or electronic)

Markup pricing: pricing concept used by wholesalers and retailers involved in acquiring goods for resale; based on the difference between the price of an item and its cost

Marquee: an architectural canopy that extends over a store’s entrance

Media research: marketing research that focuses on issues of media selection and frequency

Media: the agencies, means, or instruments used to convey advertising messages to the public

Memorandum buying: the supplier agrees to take back any unsold goods by a certain date

Merchandise approach method: the salesperson makes a comment or asks questions about a product in which the consumer shows interest

Mini-nationals: midsize and smaller companies that have operations in foreign countries

Mission statement: describes the ultimate goals of a company

Mixed-brand strategy: a branding strategy that involves simultaneously offering a combination of manufacturer, private distributor, and generic brands

Model stock list: inventory monitoring plan used for fashionable merchandise

Monopoly: exclusive control over a product or the means of producing it; a Parker Brothers board game

Multinational Corporations (Multinationals, MNCs): large corporations that have operations in several countries

Multiple-unit pricing: setting prices to suggest a bargain and help increase sales volume

NNational spot radio advertising: used by national firms to advertise on a local station by station basis

Nationalize: government takes ownership of property and the owners get nothing in return

Natural risks: type of business risks that result from natural causes such as floods, tornadoes, hurricanes, fires, lightning, droughts, earthquakes, and unexpected changes in normal weather conditions

Net income: the amount left after the total expenses are subtracted from gross profit

Net sales: the amount left over after gross sales have been adjusted for returns and allowances

Net worth: the difference between the assets of a business and its liabilities

Network radio advertising: a broadcast from a studio to all affiliated radio stations throughout the country

Networking: finding contacts among people you know, including family and friends, former employers, and professional people you know personally

Never-out list: inventory monitoring plan used for best-selling products that make up a large percentage of sales volume

News release: a prewritten story about a company that is sent to the various media

Non-price competition: businesses choose to compete on the basis of factors not related to price

Nonprofit organizations: service organizations not operated fro the purpose of making a profit

Nonverbal communication: expressing yourself through body language

North American Free Trade Agreement (NAFTA): an international trade agreement among the United States, Canada, and Mexico

OObjection analysis sheet: lists common objections and possible responses to them

Objections: concerns, hesitations, doubts, or other honest reasons a customer has for not making a purchase

Observation method: a research technique in which the actions of people are watched and recorded either by cameras or observers

Odd-even pricing: setting prices that all end in either odd or even numbers

On-approval sale: customer permitted to take merchandise home for further consideration

One-price policy: pricing policy in which all customers are charged the same price for goods and services

Online advertising: advertising messages on the internet

Open-ended questions: questions that require more than a yes or no answer; survey questions that ask respondents to construct their own response

Opening cash fund: the coins and currency designated for the register for the given day’s business

Open-to-buy: the amount of money left for buying goods after all other expenses have been considered

Organization chart: a diagram of the various jobs and functions that are found in a company

Organizational buyers: people who buy goods for business purposes, usually in much greater quantities than the average consumer

Organizing: a coordinated effort to reach a company’s planning goals

PPackage: the physical container or wrapping for a product

Paraphrase: restating (objections) in a different way

Partnership: a legal agreement between two or more people to be jointly responsible for the success or failure of a business

Penetration pricing: pricing policy that sets the initial price for a new product very low

Performance bonds: insurance against loss that might occur when work or a contract is not finished on time or as agreed; also called surety bonds

Perpetual inventory system: tracks the number of items in inventory on a constant basis

Personal selling: any form of direct contact occurring between a salesperson and a customer

Physical distribution: all the activities that help to ensure that the right amount of product is delivered to the right place at the right time

Physical inventory system: method of physical inventory control in which stock is inspected or actually counted to determine the quantity on hand

Pie chart: a circular graph that looks like a pie cut into slices of different sizes, to represent the percentages of the whole of different parts

Place utility: having a product where consumers can buy it

Planning goals: small steps you take to get from where you are now to where you want to be

Planning: the first step in the management process that involves deciding what will be done and how it will be accomplished

Planogram: computer-developed diagrams that show retailers how and where products within a category should be displayed on a shelf at individual stores

Point-of-sale research: a powerful form of research that combines natural observation with personal interviews to get people to explain buying behaviours

Point-of-sale (POS) system: computers used in retailing that feed information directly from merchandise tags or product labels into a computer

Possession utility: the exchange of a product for some monetary value

Pre-approach: getting ready for the face-to-face encounter in a selling situation

Premiums: low cost items given to consumers at a discount or for free

Pre-retailing marking method: pricing information is marked on merchandise in advance on the purchase order

Press kit: a folder containing articles, news releases, feature stories, and photographs about a company, product, or person

Prestige pricing: setting higher-than-average prices to suggest status and prestige to the consumer

Price competition: competition that focuses on the sale price of a product

Price discrimination: a firm charges different prices on different units not related to differences in the cost of producing those units

Price fixing: competitors agree on certain price ranges within which they set their own prices

Price lining: pricing technique that requires a store to offer all merchandise in a given category at certain prices

Price: the value of money (or its equivalent) placed on a good or service

Primary data: data obtained for the first time and used specifically for the particular problem or issue under study

Principal: amount of money that you borrow to start your business

Print media: written advertising that may be included in everything from newspapers and magazines to direct mail, signs, and billboards

Private carrier: carrier that transports goods for an individual business

Private distributor board: brand owned and initiated by wholesalers and retailers; also called private brands, store brands, or dealer brands

Private sector: businesses not associated with government agencies

Private warehouse: a facility designed to meet the specific needs of its owner

Privatization: the process of selling government-owned businesses to private individuals

Problem definition: a business clearly identifies a problem or research issue and the information necessary to solve it

Product depth: the number of product items offered within each product line

Product features: basic, physical, or extended attributes of the product or purchase

Product item: a specific model, brand, or size of a product within a product line

Product life cycle: the stages that a product goes through during its life, including introduction, growth, maturity, and decline

Product line: a group of closely related products that are manufactured or sold by a business

Product mix: all of the different products a company makes or sells

Product modification: an alteration in a company’s existing product

Product planning: making decisions about those features that are needed to sell a business’ products, services, or ideas

Product positioning: focused on the image a product projects

Product promotion: communication used by a business to convince potential customers to buy its products instead of buying from a competitor

Product research: marketing research that centers on evaluating product design, package design, product usage, and consumer acceptance of new and existing products

Product width: the number of different product lines a business manufactures or sells

Production: the process of creating, growing, manufacturing, or improving on goods and services

Productivity: output per worker per hour

Products: goods and services, both of which have monetary value and satisfy customer’s needs and wants

Profit: the money earned from conducting business after all costs and expenses have been paid

Promotion: any form of communication a business or organization uses to inform, persuade, or remind

Promotional advertising: advertising designed to increase sales

Promotional mix: a combination of the different types of promotion

Promotional pricing: the psychological pricing technique generally used in conjunction with sales promotions when prices are lower than average

Promotional tie-ins: sales promotional arrangements between one or more retailers or manufacturers

Prospect: a potential customer; also called lead

Prosperity: point in the business cycle when the economy flourishes; also called expansion

Psychographics: studies of consumers based on social and psychological characteristics

Psychological pricing: pricing techniques that create an illusion for customers or that make shopping easier for them

Public relations: any activity designed to create a favourable image toward a business, its products, or its policies

Public sector: local, state, and federal government agencies and services, such as public schools and public libraries

Public warehouse: a facility that offers storage and handling facilities to individuals or companies

Publicity: a specific kind of public relations that involves placing positive and newsworthy information about a business, its products, or its policies in the media

Pull policy: promotion policy designed to create consumer interest

Purchase order: a legal contract between the buyer and the supplier

Push policy: promotion policy used only with the next partner in the distribution channel

QQuality check method: checking inventory to inspect the workmanship and general characteristics of the received merchandise

Quorum: a proportion of the membership needed to conduct official business

Quota: limits either the quantity or the monetary value of a product that may be imported

RRack jobbers: wholesalers that manage inventory and merchandising for retailers by counting stock, filling it in when needed, and managing store displays

Rational motive: a conscious, logical reason for a purchase

Realistic goal: goal that you have a reasonable chance of achieving

Real-time inventory system: system of inventory that lets a company constantly track every product it sells from when it’s manufactured, or when it arrives in its warehouse, to when the customer orders it online, to when it arrives at the buyer’s door

Receiving record: a form that is used to describe the goods received by a business

Recession: a period of economic slowdown that lasts for two quarters, or six months

Recovery: the increase in overall economic activity

Regular charge accounts (30-day charge accounts): charge accounts that allow customers to charge purchases during a month and pay the balance in full within 30 days after they are billed

Relationship marketing: strategies businesses use to stay close to their customers

Resident buying offices: retailers’ representatives in a central market

Retailers: channel of distribution that buys goods from wholesalers or directly from manufacturers and resells them to the final consumer

Return: merchandise brought back for a cash refund or credit

Return on investment (ROI): a calculation used to determine the relative profitability of a product

Reverse auction: companies post what they want to buy and suppliers bid for the contract

Revolving accounts: charge accounts for which the retailer determines the credit limit and when payments are due

Risk management: the systematic process of managing an organization’s risk exposure to achieve objectives in a manner consistent with public interest, human safety, environmental factors, and the law

Risk: the possibility of financial loss; the potential for loss or failure in relation to the potential for improved earnings

Routine decision making: used when a person needs little information about the product he or she is buying

SSales incentives: awards given to managers and employees who successfully meet or exceed a sales quota

Sales promotion: all marketing activities, other than personal selling, advertising, and public relations, that are used to stimulate consumer purchasing and sales effectiveness

Sales tax: a fee placed on the sale of goods and services

Sales transaction: the process of recording a sale and presenting the customer with proof of payment

Sample: a part of the target population that is assumed to represent the entire population

Scarcity: the difference between wants and needs and available resources

Seasonal discounts: offered to buyers willing to buy at a time outside the customary buying seasons

Secondary data: data that have already been collected for some purpose other than the current study

Selective distribution: form of distribution in which a limited number of outlets in a given geographic area are used to sell the product

Service approach method: the salesperson asks the customer if he or she needs assistance

Service close: explains services that overcome obstacles or problems

Services: the kinds of things you can’t physically touch; tasks performed for a consumer

Shortages: market situation in which demand exceeds supply

Signature: logotype (logo) symbol used to distinctly identify a business

Six-month merchandise plan: the budget that estimates planned purchases for a six-month period

Skimming pricing: pricing policy that sets a very high price for a new product

Slogan: a catch phrase or small group of words that are combined in a special way to identify a product or company

Slotting allowance: a cash premium paid by the manufacturer to a retail cahin for the costs involved in placing a new product on its shelves

Socialist: countries that try to reduce the differences between rich and poor

Sole proprietorship: a business owned and operated by one person

Source marking: use of the Universal Product Codes (UPCs) in which the seller or manufacturer marks the price before delivering the merchandise to the retailer

Specialty media: relatively inexpensive, useful items with an advertiser’s name printed on them

Spot check method: way of checking inventory in a random check of one carton in a shipment

Standing-room-only close: used when a product is in short supply or when the price will be going up in the near future

Start-up costs: a projection of how much money you will need in your first year of operating a business

Stock turnover: the number of times the average inventory has been sold and replaced in a given period of time

Stockholders: the people who own the corporation with limited liability

Stockkeeping unit (sku): each item or group of related items in a unit control inventory system

Storage: the marketing function of holding goods until they are sold

Store layout: the way store floor space is used to facilitate and promote sales and to best serve the customer

Storefront: the store’s sign, marquee, outdoor lighting, banners, planters, awnings, windows, and the building itself (its design and setting)

Subchapter S corporation: a small business that is taxed like a partnership or proprietorship

Suggestion selling: selling additional goods or services to the customer

Superior point method: salesperson acknowledges objections as valid yet still offsets them with other features and benefits

Supply: the amount or quantity of goods and services that producers will provide at various prices

Surpluses: market situation in which supply exceeds demand

Survey method: a research technique in which information is gathered from people through the use of surveys and questionnaires

TTarget marketing: focusing all marketing decisions on a very specific group of people who you want to reach

Tariff: a tax on imports; also called duty

Telemarketing: the process of selling over the telephone

Test marketing: type of marketing research that occurs when a new product is placed in one or more selected geographic areas

Third party method: handling objections by using a previous customer or another neutral person who can give a testimonial about the product

Tickler control: method of physical inventory in which a small portion of the inventory is physically counted on each day so that the entire inventory is accounted for on a regular basis

Time utility: having a product available at a certain time of year or a convenient time of day

Ton-mile: the movement of one ton of freight one mile

Trade discounts: the way manufacturers quote prices to wholesalers and retailers

Trade name: identifies the company or a division of a particular corporation

Trademark: a brand name, brand mark, trade name, trade character, or a combination of these, that is given legal protection by the federal government

Transportation: the marketing function of moving products from a seller to a buyer

Trial close: an initial effort to close a sale

UUnit control: method of stock control which measures quantities of merchandise that a business handles during a stated period of time

Unit pricing: method of pricing that allows consumers to compare prices in relation to a standard unit or measure, such as an ounce or a pound

Universal Product Code (UPC): bar code used for electronic entry

Universal Vendor Marketing (UVM): product code that appears as a series of numbers across the top of a price tag

Unlimited liability: as a sole proprietor, your financial liability is not limited to the investment in the business, but extends to your total ability to make payments

Utility: the attributes of a product or service that make it capable of satisfying customer’s needs and wants

VValidity: the questions asked in a questionnaire measure what was intended to be measured

Values: beliefs that guide the way people live

Visual merchandising: the coordination of all the physical elements in a place of business that are used to project the right image to its customers

WWant slips: customer requests for items that are not carried in the store

Warranty: a promise, or guarantee, given to a customer that a product will meet certain standards

Warranty of fitness for a particular purpose: the seller advises a customer that a product is suitable for a particular use and the customer acts on that advice

Warranty of merchantability: a promise from the seller that the product sold is fit for its intended purpose

Which close: customer is encouraged to make a decision between two items

Wholesale and retail buyers: people who purchase goods for resale; they forecast customers’ needs and buy the necessary products to meet those needs

Wholesalers: obtain goods from manufacturers and resell them to industrial users, other wholesalers, and retailers

World Trade Organization (WTO): a global coalition of 153 governments that makes the rules governing members’ international trade