Marketing Glossary A B C D E F G H I J K L M N O P Q R S T U V W XYZ AANA - abbrev. Australian Association of National Advertisers AARDS - abbrev. Australian Advertising Rate and Data Service. ABC Account Classification - the classification of customer accounts within a sales territory or region into groups according to their size and potential, and, therefore, their importance; the classification is used primarily to determine call frequency. ABC Inventory Analysis - the classification of goods held in inventory according to sales volume; the classification is used primarily to determine stock location within the warehouse. Above-the-Line Advertising - advertising which employs one of five main media - the press, television, radio, cinema and posters. See Below-the-Line Advertising. ABS - abbrev. Australian Bureau of Statistics. Absolute Cost Advantage - the cost advantage one company has over another if it has a cheaper source of raw materials, control of superior knowledge through patents, cheaper manufacturing or assembly costs, or similar benefit. Absolute Costs - the minimum costs that an organisation must bear to remain in business. See Absolute Cost Advantage. Absolute Product Failure - a new product introduction which does not manage to recover its production and marketing costs; the company incurs a financial loss. Accelerated Test Marketing - market testing of consumer goods using a simulated store technique rather than an actual test market; also referred to as Laboratory Test Markets and Purchase Laboratories. Accelerator Principle - the notion that an increase or reduction in consumer demand will affect several layers of demand in organisational markets; for example, an increase in consumer demand for soft drinks will will lead to an increased demand by retailers for soft drinks, an increased demand by soft drink bottlers for aluminium cans, an increased demand by aluminium can manufacturers for aluminium sheet, an increased demand by aluminium sheet manufacturers for aluminium ore, and so on. See Derived Demand. Acceptable Price Range - an expectation in the minds of consumers regarding price levels for a product category; consumers are reluctant to buy below the acceptable price range for fear that the product will be inferior, or above it because the expected benefit of the product is not worth the price. Access Barriers - factors such as tariffs and legal restrictions which reduce the size of a market by preventing potential customers from purchasing a particular product. Accessibility - one of the four major requirements (with actionability, measurability and substantiality) for useful market segmentation; accessibility expresses the notion that the segment targeted must be able to be reached and served adequately by the firm's promotion and distribution system. See Actionability; Measurability; Substantiality. Accessory Equipment - goods and materials purchased by organisations for use in production, administrative, clerical or marketing activities, but not directly in the manufacture of finished products. Account Executive - see Account Manager. Account Manager - a sales representative responsible for a major customer account or group of major accounts; also referred to as an account executive. Account Objectives - the specific aims and sales goals to be achieved within a specified period by a salesperson for an account for which he or she is responsible. Account Penetration Ratio - a measure used to evaluate salespeople; the percentage of accounts from which orders are secured is calculated to provide a measure of whether the salesperson is working the territory in a systematic way or simply "milking" major accounts. Account Representative - a salesperson with direct responsibility for one specific major account or a group of major accounts. Account Strategies - broad methods employed in achieving the objectives set by a salesperson for a particular account. Accountants' Marketing - a term sometimes used to describe an approach to marketing characterised by an emphasis on short-term sales results rather than on long-term survival and growth, and by a lack of innovation. Acid-Test Ratio - one of three ratios commonly used to evaluate a firm's liquidity; calculated by dividing cash by current liabilities. See Current Ratio; Quick Ratio. Action Plan - see Action Program. Action Program - a detailed plan showing how major marketing tasks will be managed and implemented, who will do them, and when; also called an Action Plan. Actionability - one of the major requirements (with accessibility, measurability and substantiality) for useful market segmentation; actionability expresses the notion that the segment targeted must be of an appropriate size for the company's resources to handle. See Accessibility; Measurability; Substantiality. Active Listening - listening that is more than passively hearing what the customer is saying; implies the need for a salesperson to think while listening and to evaluate what is being said. Activity Quota a common form of sales assignment, goal or target used to measure a sales representative's performance in relation to his or her selling activities; activities used in this way include total calls made, total sales made, number of new accounts opened, number of displays set up, and so on. Other common forms of sales quotas are unit volume quotas, dollar volume quotas, gross margin quotas and net profit quotas. See Sales Quota. Activity Reports - reports requiring salespeople to provide details (such as number of calls made, new accounts opened, displays arranged, dealer sales meetings attended and so on) as a measure of their activity in a given period. ACTU - abbrev. Australian Council of Trade Unions. Actual Product - the tangible features of a product, including styling, quality level, features, brand name and packaging; also called the Formal Product or Tangible Product. See Augmented Product; Core Product. Ad Hoc Marketing Research - marketing research conducted in response to a specific, one-time-only need. Adaptation Approach to Pricing - an approach in global marketing in which an organisation allows an affiliate or subsidiary to set the most desirable price, provided it is profitable, in its own region; also referred to as the Polycentric Approach. See also Extension Approach; Geocentric Approach. Adaptive Control System - a system of marketing control which allows for changes to be made to marketing objectives during a planning period as well as to the performance to meet the objectives; a pro-active marketing control system. See After-the-Fact Control System; Marketing Control System; Reactive Marketing Control System; Steering Control System. Adaptive Selling - a technique in selling which calls for the salesperson to adapt his or her social style to that of the buyer in order to maximise effectiveness. See Social Style. Adaptive Strategies - domestic marketing tactics, plans and methods which have been altered to suit local conditions in foreign markets. Adaptivising - a planning philosophy implying a firm's intention to continue to maintain, and expand, its present operations; to do better things in the future than have been done in the past. See Optimising; Satisficing. Added Value - the increased worth of a firm's offering as a result of marketing; four factors which generate the additional value are features, quality, customer perception (or image) and exclusiveness. ADI - See Area of Dominant Influence. ADMA - abbrev. Australian Direct Marketing Association. Administered Channel Arrangement - see Administered Vertical Marketing System. Administered Prices - cost-oriented pricing in which a firm bases its prices on considerations within the firm rather than on customer considerations. Administered Vertical Marketing System - a co-ordinated system of distribution channel organisation in which the flow of products from producer to end-user is controlled by the power and size of one member of the channel system rather than by common ownership or contractual ties. See Contractual Vertical Marketing System; Conventional Marketing System; Corporate Vertical Marketing System; Vertical Marketing System. Adopter Category - the ranking into which adopters of a new product fall according to their willingness and speed to embrace a new product; adopter categories are normally listed as innovators, early adopters, early majority, late majority and laggards. See Diffusion of Innovation. Adoption - the choice of one product over another. Adoption of Innovation Curve - a normal distribution curve illustrating the fact that customers vary widely in their willingness or readiness to purchase new products. See Diffusion of Innovation. Adoption Process - the series of stages, including awareness, interest, evaluation, trial and rejection or adoption, which consumers go through in their decision-making process; also called the Adoption Sequence. Adoption Rate Determinants - factors which influence the rate of adoption of a new product. See Communicability; Compatibility; Complexity; Divisibility; Relative Advantage. Adoption Sequence - see Adoption Process. Advance Australia Foundation - a partly government-funded organisation, established in 1979 as Project Australia, formed to promote the sale of Australian-made products. Advantage - see Competitive Advantage. Advantage Matrix - see Boston Consulting Group Advantage Matrix. Adversarial Shopper - a consumer whose shopping behaviour is characterised by a determination to get good value at a low price; a bargain hunter; one who regards all prices as negotiable. Advertising - the paid, public, non-personal announcement of a persuasive message by an identified sponsor; the non-personal presentation or promotion by a firm of its products to its existing and potential customers. See Promotion. Advertising Agency - a firm specialising in the creation, design and media placement of advertisements, and in the planning and execution of promotional campaigns. See Full-Service Advertising Agency; Limited-Service Advertising Agency. Advertising Allocation - see Advertising Budget. Advertising Allowance - a discount given to a retailer by a supplier whose brand or product is featured in the store's newspaper, television or radio advertising or in catalogs, flyers or similar promotional pieces. See Allowances; Discounts. Advertising Appropriation - see Advertising Budget. Advertising Budget - the sum allocated in a particular accounting period for expenditure on advertising; also called an Advertising Allocation or an Advertising Appropriation. Advertising Budget Determination - decisions pertaining to the amount to be allocated to advertising expenditure in a given period; common approaches to advertising budget determination include arbitary allocation, percent of sales, competitive parity, objective and task and budgeting models. See All-We-Can-Afford Method; Percentage-of-Sales Method; Competitive Parity Budgeting; Objective and Task Method of Budgeting; Computer Modelling. Advertising Control - Advertising Copy - the content and context of a message contained in an advertisement. Advertising Effectiveness - the degree to which the objectives of an advertisement or advertising campaign have been achieved; the effectiveness is commonly gauged by measuring the effect on sales, brand awareness, brand preference, etc. See Communication Effect of Advertising; Sales Effect of Advertising. Advertising Elasticities - measurements of the effect on other marketing variables of various levels of advertising expenditure; for example, measurement of the effect of high levels of advertising on consumer perceptions of price, or the measurement of the low levels of advertising on consumer perceptions of product quality. Advertising Exposure - one presentation of an advertisement to an audience; advertising managers must decide how many "exposures" will be required to achieve their goal or objective. Advertising Federation of Australia - an association representing the interests of Australian advertising agencies. Advertising Goal - a particular communication task to be accomplished with a specific target audience in a given period of time. Advertising Impact - see Impact. Advertising Institute of Australia - an association representing the interests of individuals within the advertising industry in Australia. Advertising Media - outlets or vehicles (for instance, newspapers and magazines, television, radio, cinema, posters, etc) used in communication between advertisers and customers. Note that advertising media is a plural term; its singular form is advertising medium. Advertising Medium - see Advertising Media. Advertising Message - the central, underlying idea or theme within an advertisement. Advertising Objectives - specific aims or intentions of an advertisement (for example, to inform, to persuade, to remind). Advertising Planning Process - the steps or stages taken in planning an advertising campaign; the steps include identifying the target market, establishing the advertising objectives, developing the advertising budget, developing the advertising strategies, selecting the appropriate media, and evaluating the advertising effectiveness. Advertising Platform - the basic issues or selling points that a company wishes to have included in an advertising campaign. Advertising Research - research done to test the effectiveness of advertising; this may include the pre-testing and post-evaluating of specific advertisements and campaigns. Communication-effect research attempts to measure whether the advertising communicates effectively; sales-effect research attempts to measure whether it produces the desired level of sales. Advertising Site Advertising Space Advertising Standards Council - a body comprising representatives from the retail trade, trade unions, academics, advertising agencies and the media established to administer voluntary advertising codes and to provide a vehicle for consumer complaints about advertising. Advertising Target - the entire market, or some part of it, which a firm wishes to attract with its advertisement. Advertising Testing - ADvertising-to-Editorial Ratio - the measure of the proportion of advertising space to editorial matter in a newspaper or magazine. Advertising-to-Marketing Ratio - a marketing control measure used to determine whether the amount spent on advertising in a given period was excessive; total advertising expenditure is expressed as a percentage ot total marketing expenditure. Advertising-to-Sales Ratio - a marketing control measure used to determine whether the amount spent on advertising in a given period was excessive; total advertising expenditure is expressed as a percentage of total sales revenue. Advertising Wearout - see Consumer Wearout. Advertorial Advertising - advertising in which the sponsoring organisation declares its position on a matter of public interest (usually of a controversial nature). See Advocacy Advertising. Adviser Approach - a closing technique in which a salesperson specifies all that a customer will require to solve the problem at hand, and advises (or counsels) that the offer be accepted; also referred to as the Counsellor Close. See Close. Advocacy Advertising - a paid, overtly-sponsored communication or message which presents information or a point of view on a controversial public issue, idea or cause. See Advertorial Advertising. Aesthetic Needs - see Self-Actualisation Needs. AFA - abbrev. Advertising Federation of Australia. AFAMI - abbrev. Associate Fellow of the Australian Marketing Institute. AFCO - abbrev. Australian Federation of Consumer Organisations. Affordable Method - see All-We-Can-Afford Method. AFMA - abbrev. Associate Fellow of the Marketing Association of Australia and New Zealand. Aftermarket - the market for parts and supplies for machines, equipment, etc after they have been purchased. After-the-Fact Control System - a system of marketing control in which corrective action is taken at the end of a planning period when marketing performance does not meet expectations; changes are made in an attempt to rectify the situation for the next planning period. See Adaptive Control System; Marketing Control System; Reactive Marketing Control System; Steering Control System. Agent - an intermediary or middleman who facilitates the flow of goods and services from producer to end-user, but who, unlike other members of the distribution channel, does not take title to them. Agribusiness - the marketing of food and fibre products. Agricultural Cooperative - an organisation formed by a group of farmers to achieve some or all of the advantages of large-scale marketing. Agricultural Substitute - a product that is manufactured from farm produce but which is a substitute for a more traditional farm commodity. For example, soy-protein steaks are a substitute for beef steaks. AIA - abbrev. Advertising Institute of Australia. AIDA Concept - a formula used in selling to produce a favourable response from a customer. The assumption is that the salesperson must first make the potential customer aware of a product; foster interest; stimulate desire; and, finally, encourage action (to purchase). See Formula Selling. AIDCA - acronym for Awareness, Interest, Desire, Conviction, Action; mental states which supposedly lead a potential customer to a buying decision. See Formula Selling. Aided Recall Test - a method of post-testing the effectiveness of an advertisement or advertising campaign; respondents are shown products, brand names, trademarks, etc to assist their memories. See Unaided Recall Test. AIM - abbrev. Australian Institute of Management. AIO Statements - expressions of a person's attitudes towards, interests in, and opinions of, a product. See Psychographics. All-We-Can-Afford Method - a simple method of determining a budget (for advertising, etc) in which the amount allocated is the amount that can be afforded; also called the What-We-Can Afford Method, the Affordable Method and the Arbitrary Method. See Advertising Budget Determination. Allowances - amounts deducted from an invoice in return for prompt payment, large quantity purchase, special promotions etc of goods and services supplied. See Discount. Alternative Advertising - advertising which uses media other than the traditional media; examples of alternative advertising include advertising signs on parking meters and supermarket shopping trolleys, in-store video screens, etc. Alternative Close - a closing technique in which a salesperson presents two alternatives in an attempt to get a commitment from the buyer to one, (eg. "The red or the black?", "Cash or card?") See Close. Alternative Media - media vehicles, apart from the traditional ones, which are available for promotional purposes; examples of newer alternative media are video catalogs and audiotext. See Video Calalog; Audiotext. AMA - abbrev. American Marketing Association AMI - abbrev. Australian Marketing Institute. Amiable (Social Style) - one of four social styles (with Analytical, Driver and Expressive) commonly used to classify salespeople and their customers in terms of their communication approach; Amiables are characterised by high responsiveness and low assertiveness. See Analytical; Driver; Expressive; Assertiveness; Responsiveness; Social Style. Analytical (Social Style) - one of four social styles (with Amiable, Driver and Expressive) commonly used to classify salespeople and their customers in terms of their communication approach; Analyticals are characterised by low responsiveness and low assertiveness. See Amiable; Driver; Expressive; Assertiveness; Responsiveness; Social Style. Anchor Store - a popular, major retailer located within a shopping mall to attract mall patronage. Ansoff Matrix - a tool, devised by Igor Ansoff, to provide a logical framework for the understanding and development of marketing objectives; the basis of the matrix is the degree of newness of the products to be sold and of the markets to be targeted. Anticipatory Pricing - the practice of setting a somewhat higher price than would otherwise have been chosen in expectation of cost inflation, government price control, or similar environmental circumstance. APN - abbrev. Australian Product Number. Approach - the stage in the selling process in which a salesperson contacts a potential customer to make an appointment or to present a product. Arbitrary Method - see All-We-Can-Afford Method. Area Market Potential - an estimate of the amount of sales, in units and dollars, that might be possible in a given territory or region under a given level of industry marketing effort under given environmental conditions. Area Market Specialist - a marketing manager, with good local knowledge, located in a high-volume, distinctive market to support the sales effort. Area of Dominant Influence - the geographic region covered by a particular television station; also referred to as the station's Designated Marketing Area (DMA). Arm's-Length Price - the price which various governments force companies to charge to discourage "dumping" abuses; the arm's length price is the price charged by competitors for the same or similar product. ASC - abbrev. Advertising Standards Council. ASCC - abbrev. Australian Standard Commodity Classification. Asch Phemonenon - a tendency, first recorded by the psychologist S.E.Asch, for an individual's purchase decisions to be influenced highly by reference groups and group norms. See Group Influences; Reference Group. Aseptic Packaging - a packaging method developed in Sweden in the 1950s; made of paper, foil and plastic aseptic packaging keeps foods bacteria-free for months without refrigeration. See Packaging; Primary Packaging; Secondary Packaging; Shipping Packaging. ASIC - abbrev. Australian Standard Industrial Classification. Aspirational Group - a sub-category of a reference group, consisting of individuals (not necessarily known personally) with whom a person desires to be associated. See Contactual Reference Group; Dissociative Reference Group; Membership Group; Reference Groups. Assemblers - wholesaling firms specialising in the buying of small quantities of farm produce to resell to other firms in bulk; also referred to as the Assembly Market. Assembly Market - see Assemblers. Assertiveness - the human characteristic or quality which determines the degree to which individuals are directive and competitive in manner as opposed to non-directive and co-operative. See Social Style. Asset Turnover - a ratio used to evaluate the profitability of a firm; net sales in a given period are divided by total assets. Asset-Based Marketing - a marketing approach which uses the knowledge and skills a company has already developed as the basis for growth. Assorting - the practice of putting together a wide variety of produce in one location, as in a department store. Assortment Strategies - options available to a reseller in determining the assortment of products and services to be carried. See Broad Assortment; Deep Assortment; Exclusive Assortment; Scrambled Assortment. Assumptive Close - a closing technique in which a salesperson simply assumes that the purchaser has agreed to buy the product, and proceeds to write up the order, wrap the merchandise, etc. See Close. At-Home TV Shopping - a form of non-store retailing in which products are shown on a television screen and presented enthusiastically by an announcer to stimulate impulse purchasing using credit card and telephone. See Non-Store Retailing. ATC - See Average Total Cost. Atmospherics - the combination of store decor, physical characteristics and amenities provided by a retailer to develop a particular image and attract customers. Atomistic Competition - see Pure Competition. Attention Attitude Tracking - measuring the degree of satisfaction with a product through an on-going study of consumer attitudes towards it. Attitudes - enduring favourable or unfavourable feelings, emotions and action tendencies towards a issue or subject. Attributes - see Features. Audience - the intended receivers of an advertiser's message. Audience Attention Probability - the degree to which a target consumer is likely to pay attention to an advertisement in a particular media outlet; for example, the audience attention probability of an advertisement for a new shampoo is likely to be greater in a women's magazine than in a daily newspaper. Audience Profile Audience Quality - a measure of the kind and quality of the target consumers likely to be exposed to the advertisement. Audience Research Audience Tune-Out - a phenomenon which occurs when relatively large groups of a radio or TV audience drop concentration, or stop listening altogether, for a period; audience tune-out may result from high clutter levels of commercial advertising or station or channel promotions in the non-programming time. See Clutter; Clutter Level. Audimeter - a mechanical instrument or device for monitoring television usage and program choice (for ratings surveys, etc); colloquially called a people-meter or black box. See Single Source Data. Audiotext - a relatively new, alternative promotional medium in which an advertiser's recorded message is reached by an interested potential purchaser by telephone. See Alternative Media. Audimeter - an electronic device to record which particular television channel is tuned to by a household; marketing research firms use audimeters attached to a sample of TV sets to measure national exposure to TV advertisements; commonly referred to as a "peoplemeter" or "black box". See Advertising Effectiveness. Audit - see Marketing Audit. Augmented Product - a product enhanced by the addition of related services and benefits, eg. installation, warranty, maintenance and repair services, etc. See Core Product; Tangible Product. Australian Advertising Rate and Data Service - a popular media reference guide (commonly called AARDS) subscribed to by advertising agencies, public relations consultancies, etc; the service provides regularly up-dated information on media companies, rates, technical specifications, circulations, readership profiles, etc. Australian Association of National Advertisers - an association representing the interests of large marketing companies in the advertising industry. Australian Bureau of Statistics - an Australian government agency which classifies organisations according to their economic activity, and collects and disseminates statistical information about Australian industry. Australian Council of Trade Unions - the central body of the trade union movement in Australia; formed in the 1920s to represent the interests of trade unions nationally, its major concerns are industrial relations and wage payments to union members. Australian Direct Marketing Association - an association, established in 1967, to represent the interests of direct mail marketers; a diverse group, consisting of individual and corporate members including direct marketing agencies, mailing houses, telemarketing bureaus, list brokers, charities, fund raisers and mail order merchandisers, it attempts to formulate and control appropriate standards of practice in direct marketing. Australian Federation of Consumer Organisations - the umbrella group for the consumer movement in Australia. Australian Marketing Institute - an association of marketing professionals founded in Sydney in 1933 as The Institute of Sales and Business Management; the aims of the Institute include the provision of aid and support to members in the furtherance of their careers, and the representation of the best interests of members to business, governments and the public. Australian Product Number - a number allocated systematically to a product to distinguish it by producer, size, style, etc; the number, also translated into bar code form, is used in marketing decision-making, including stock control and inventory level adjustment. See Bar Code. Australian Standard Commodity Classification - a system developed by the Australian Bureau of Statistics as a method of defining and classifying products. Australian Standard Industrial Classification - a system developed by the Australian Bureau of Statistics as a method for classifying business establishments (shops, factories, etc) into classes, on the basis of their major activity, by industry. Australian Standards, The - a basic guide to product standards for a wide range of products, published by the Standards Association of Australia. Authoritarian Leadership Style - a style of leadership characterised by an insistence upon obedience to authority. See Democratic Leadership Style. Authorisation - see Brand Authorisation. Automatic Merchandising - the selling of goods by use of vending machines. Automatic Response Behaviour - see Routine Response Behaviour. Automatic Vending Autonomic Decision - a purchase decision made by either spouse independently. See Syncratic Decision. Available Market - that part of the total market which professes an interest in a product, can afford to purchase it, and is not prevented by access barriers from reaching it. See Access Barriers; Market Entry Barriers. Average Cost - the average cost per unit of production of a set or group of products; the total cost of production divided by the total number produced; the Unit Cost. See Long-Run Average Cost; Short-Run Average Cost. Average Cost Pricing - a pricing method in which a markup for profit is added to the average cost of production. See Cost-Plus Pricing. Average Fixed Cost - a measure of cost control, calculated by dividing the total fixed cost of the goods produced by the number of units sold. Average Revenue - a measure used in price setting, calculated by dividing the total revenue by the number of units sold. Average Total Cost - a measure of cost control, calculated by dividing the total cost of the goods produced by the number of units sold. Average Variable Cost - a measure of cost control, calculated by dividing the total variable cost of the goods produced by the number of units sold. Aversive Factors - qualities about people that turn others against them and may prevent the development of successful working relationships. Awareness Awareness Set - the brands of which a consumer is aware; normally, the awareness set will be less than the total set of brands. See Choice Set; Evoked Set; Inept Set; Inert Set.