glossary

'M'

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4 Basic Dimensions of Marketing Activity - All marketing organizations must somehow accommodate the following

• Functions

• Geographical Units

• Products

• End-Use Markets

5 M's of Advertising -

• Mission: What are the advertising objectives?

• Money: How much can be spent?

• Message: What message should be sent?

• Media: What media should be used?

• Measurement: How should the results be evaluated?

Maintenance Marketing - The task of the marketer facing full demand.

Management Contract - A contract for owners of foreign companies to manage their businesses for a fee. The management firm may even be given the option to purchase some share in the managed company within a stated period.

Management Control Systems - A process wherein a manager evaluates each salesperson’s performance, comparing it to performance goals and rewarding or penalizing a salesperson based on that comparison.

Manufacturer Agent - Represent two or more manufacturers of complementary lines.  They enter into a formal written agreement with each manufacturer covering pricing policy, territories, order-handling procedure, delivery service and warranties, and commission rates.  Most manufactures’ agents are small businesses, with only a few skilled salespeople. 

Manufacturing - Are people responsible for the smooth running of the factory to produce the right products in the right quantities at at the right time for the right cost.

Manufacturers' Rep - Independent sales representatives that are not employed by the companies which provide the products and services they sell... manufacturers' reps typically represent multiple manufacturers in complementary industries and sometimes represent competing lines within industries.

Manufacturer's Sales Representative - A person who works for an organization that produces a product.

Margin - The difference between the selling price of a product or service and the cost of producing, delivering or acquiring the product or service.

Marginal Credit Customers - Consumers who may have had some slow pay problems, but generally pay their bills.

Market - The set of all actual and potential buyers of a product.

Market-Challenger Strategies:

1. Direct-market strategy (head on strategy) - a challenger tries to beat the market leader through sheer doggedness and fight.

2. Backdoor strategy (end run/blind side) - the challenger runs around the dominant firm rather than into it.

3. Guppy strategy - attacking smaller competitors rather than the market leader.

Market Demand - For a product is the total volume that would be bought by a defined customer group in a defined geographical area in a defined time period in a defined marketing environment under a defined marketing program.

Market Evolution 4-Stages -

1. Emergence - The new product can be designed to meet the preferences of one of the corners of the market (a single-niche strategy). Two or more products can be simultaneously launched to capture two or more parts of the market (a multiple-niche strategy). The new product can be designed for the middle of the market (a mass-market strategy).

2. Growth - If the new product sells well, new firms will enter the market, ushering in a Market-growth stage.

3. Maturity - Eventually, the competitors cover and serve all major market segments and The market enters the maturity stage.

4. Decline - Eventually, demand for the present products will begin to decrease, and the Market will enter the decline stage. Either society’s total need level declines or a new technology replaces the old.

Market Forecast - The market demand corresponding to the expected effort.

Market Map - An Alternative device for determining communication objectives.

Market Share Pricing - When a company produces a huge volume, set prices at or below competitors to win share, and keep bringing down their price as their costs fall. Reasons this is favored;

1. The market appears to be highly price sensitive, and therefore a low price will stimulate more rapid market growth.

2. The unit costs of production and distribution fall with accumulated production experience.

3. A low price would discourage actual and potential competition.

Market Skimming - When firms want to take advantage of the fact that some buyers stand ready to pay a much higher price than others because the product has high present value to them. They will initially price to yield a high profit margin per unit sold.

Marketing - Human activity directed at satisfying needs and wants through exchange processes.

Marketing Audit - A comprehensive, systematic, independent, and periodic examination of a company's - or business unit's - marketing environment, objectives, strategies, and activities with a view of determining problem areas and opportunities and recommending a plan of action to improve the company's marketing performance.

Marketing Communications Mix - four major tools:

1. Advertising - any paid form of non-personal presentation and promotion of ideas, goods, or services by an identified sponsor.

2. Personal Selling - Oral presentation in a conversation with one or more prospective purchasers for the purpose of making sales.

3. Sales promotion - short-term incentives to encourage purchase or sale of a product or service.

4. Publicity – non-personal stimulation of demand for a product, service, or business unit by planting commercially significant news about it in a published medium or obtaining favorable presentation of it upon radio, TV, or stage that is not paid for by the sponsor.

Marketing Communications Budget - Four common methods.

• Affordable Method:  This method completely ignores the role of promotion as an investment and the immediate impact of promotion on sales volume.  It leads to an uncertain annual budget, which makes long-range planning difficult.

• Percentage-of-Sales Method:  This method is when companies set promotion expenditures at a specified percentage of sales (either current or anticipated) or of the sales price. 

• Competitive-Parity Method – When companies set their promotion budget to achieve share-of-voice parity with competitors. 

• Objective-and-task method – This method calls upon marketers to develop promotion budgets by defining specific objectives, determining the tasks that must be performed to achieve these objectives, and estimating the costs of performing these tasks. 

Marketing Concept - The idea stating that the key task of the organization is to determine the needs and wants of target markets and to adapt the organization to delivering the desired satisfactions better than competition.

Marketing Controllers - Purpose is to monitor marketing expenses and activities; work in the controller office and have a specialization in the marketing side of business.

Marketing Environment - The totality of forces and institutions that are external and potentially relevant to the firm.  Four Levels:

1. Task Environment - Consisting of the institutions that help the organization carry out its major task, such as suppliers, distributors, and final buyers.

2. Competitive Environment - Consisting of the institutions that compete with the organization for customers and scarce resources. 

3. Public Environment - Consisting of institutions that watch or regulate the activities of the organization.

4. Macro Environment - The major societal forces that shape the character of business opportunities and threats. 

Marketing Intermediaries - Institutions that facilitate  the distribution of the company's outputs to the final markets. There are three main types:

1. Merchant Middlemen - are business units - such as wholesalers and retailers - that buy, take title to, and resell merchandise.

2. Agent Middlemen - are business units -  such as brokers and sales reps - that negotiate purchase or sales but do not take title to merchandise.

3. Facilitators - are business units -  such as transportation companies, warehouses, and banks - that assist in the performance of distribution but neither take title to goods not negotiate purchases or sales.

Marketing Management - The planning and control of programs designed to create and maintain beneficial relationships with target markets for the purpose of organizational objectives.  It relies on an analysis of the target market.

Marketing Mix - A set of controllable variables and their levels that the firm uses to influence the target market.

Marketing Mix Decision - Develops an appropriate product, price, distribution, and promotion program for that market.

Marketing Organization Decision - Determines the best way for the firm to achieve and maintain control over its international business operations.

Marketing Plans:

A)    Corporate Plan - describes the overall business plan for the corporation.

B)     Divisional Plan - describes the division's plan for growth and profitability.  It describes marketing, financial, manufacturing, and personnel strategies and may use a short, intermediate, or long run planning horizon.

C)     Product-line Plan - describes objectives, goals, strategies, and tactics for a specific product line. 

D)    Product Plan - describes objectives, goals, strategies, and tactics for a particular product or product category.

E)     Brand Plan - describes objectives, goals, strategies, and tactics for a specific brand within the product category.

F)     Market Plan - a plan for developing and serving a particular market.

G)    Product/Market Plan - a plan for marketing a particular product or product line of the company in a particular industrial or geographical market.

H)    Functional Plan - A plan for one of the major functions, such as marketing, manufacturing, manpower, finance, or research and development.  It also describes plans for sub-functions within a major function, such as, in the case of marketing, an advertising plan, a sales promotion plan, a sales-force plan, and a marketing research plan. 

Marketing Research:

1.      Association tests - what images come to mind.

2.      Learning tests - how easily is the name pronounced.

3.      Memory tests - how well is the name remembered.

4.      Preference tests -  which names are preferred.

Marketing Research Firms - Are hired to develop a forecast for a particular market through interviewing customers, distributors, and other knowledgeable parties.

Marketing Sensitivity of Demand - The difference between market potential and market minimum.

Marketing Strategy - A consistent, appropriate, and feasible set of principles through which a particular company hopes to achieve its long-run customer and profit objectives in a particular competitive environment.  Factors to consider:

1. The company's competitive size and position in the market

2. The company's resources, objectives, and policies

3. The competitor's marketing strategies

4. The target market's buying behavior

5.  The stage of the product life cycle

6.  The character of the economy

Marketing Systems Development - The task of developing a marketing organization, information system, planning system, and control system that promises to accomplish the company's objectives in the target market. 

Market Minimum - Base sales.

Market Potential - An upper limit to market demand / the limit approached by market demand as industry marketing effort goes to infinity, for a given environment.  

Markets (four generic types) -

1. Consumer Market - Individuals and households buying for personal use.

2. Producer Market - Individuals and organizations buying for purpose of producing.

3. Reseller Market - Individuals and organizations buying for the purpose of reselling.

4. Government Market - Governmental units buying for the purpose of carrying out governmental functions.

Market Segmentation Offers Companies 3 Top Benefits:

1. Sellers are in a better position to spot and compare market opportunities.

2. Sellers can make finer adjustments of their product and marketing appeals.

3. Sellers can develop marketing programs and budgets based on a clearer idea of the response characteristics of specific market segments.

Market-Selection Decision - Determines which markets to enter.

Marketing/Sales Department - Is staffed with business-oriented persons who pride themselves on a practical understanding of the world, like to see many new products with sales points that can be talked about to customers, and feel compelled to pay attention to the bottom line.

Marketing Strategies (Determining)- In the face of declining sales, if it is decided to stay in the market, the firm faces further strategic choices.

• Continuation Strategy - In which case it continues its past marketing strategy: some market segments, channels, pricing, and promotion. The product simply continues to decline until at last it is dropped from the line.

• Concentration Strategy - In which case it concentrates its resources only in the strongest markets and channels while phasing out its efforts elsewhere.

• Harvesting Strategy - In which case it sharply reduces its expenses to increase its current profits, knowing this will accelerate the rate of sales decline and ultimate demise of the product.

Market Value - The price at which a ready, willing, and informed person would buy something; the price property would command in the current market.

Mark-Up - The amount added to the product cost to determine its selling price.

Maslow's Hierarchy of Needs

PHYSICAL

1. Physiological - the fundamentals of survival, including hunger and thirst.

2. Safety - concern over physical survival, ordinary prudence, which might be overlooked in striving to satisfy hunger or thirst.

SOCIAL

3. Belongingness and love - striving to be accepted by intimate members of one's family and to be an important person to them.  This striving could also include others to whom the person feels close. 

4. Esteem and status - striving to achieve a high standing relative to others, including desire for mastery, reputation, and prestige.

SELF

5. Self-actualization - a desire to develop a personal system of values leading to self-realization.

Mass Market to Micro-markets - Companies are abandoning the “shotgun approach” that aimed at a mythical “average” consumer and are increasingly designing their products and marketing programs for specific micro-markets, many of which can be reached thru specialized magazines, direct mail, or Web sites. Micro-markets differentiate by age, sex, ethnic background, education, geography, lifestyle, and other characteristics. Each group has strong preferences and is reached through increasingly targeted communication media and distribution channels.

Master Broker - Individual who has been certified and designated by the American Cash Flow Association to work with Diversified Cash Flow Specialists.

Matrix Organization (Three Dimensional) -  Where there are two layers of program management in addition to one layer of resource management.

Mature Business - Is low in major opportunities and threats.

Maturity Stage's Three Phases - From the product life cycle.

1. Growth Maturity Phase - Where the rate of sales growth starts to decline because of distribution saturation. There are no new distribution channels to fill, although some laggard buyers are continuing to enter the market.

2. Stable Maturity Phase - When sales become level on a per capita basis because of market saturation. Most potential consumers have tried the product, and future sales are governed by the rate of population growth and replacement demand.

3. Decaying Maturity Phase - The absolute level of sales now starts to decline as some of the customers move toward other products and substitutes.

Measurability - The degree to which the size and purchasing power of the resulting segments can be measured.

Media -  The channels of communication or influence.

Media Selection - The problem of finding the best way to deliver the desired number of exposures to the target audience.

Media Types (Major) -

• Magazines - Pros: Hi geographic and demographic selectivity; credibility and prestige; high-quality reproduction; long life; good pass-along readership. Cons: Long ad purchase lead time; some waste circulation; no guarantee of position.

• Newspapers - Pros: Flexibility; timeliness; good local market coverage; broad acceptance; high believability Cons: Short life; poor reproduction quality; small “pass-along” audience.

• Television - Pros: Combines sight, sound, and motion; appealing to the senses; high attention; high reach Cons: High absolute cost; high clutter; fleeting exposure; less audience selectivity.

• Direct Mail - Pros: Audience selectivity; flexibility; no ad competition within the same medium; personalization Cons: Relatively high cost; “junk mail” image.

• Radio - Pros: Mass use; high geographic and demographic selectivity; low cost Cons: Audio presentation only; lower attention than television; non-standardized rate structures; fleeting exposure.

• Outdoor - Pros: Flexibility; high repeat exposure; low cost; low competition; Cons: Limited audience selectivity; creative limitations.

• Yellow Pages - Pros: Excellent local coverage; high believability; wide reach; low cost Cons: High competition; long ad purchase lead time; creative limitations.

• Newsletters - Pros: Very high selectivity; full control; interactive opportunities; relative low cost Cons: Costs could run away.

• Brochures - Pros: Flexibility; full control; can dramatize messages Cons: Over production could lead to runaway costs.

• Telephone - Pros: Many users; opportunity to give a personal touch Cons: Relative high cost unless volunteers are used.

• Internet -  Pros: High selectivity; interactive possibilities; relatively low cost Cons: Relatively new media with a low number of users in some countries.

• E-Mail - E-mail allows users to send a message or file from on computer directly to another. The message arrives almost instantly but is stored until the receiving person turns on the computer. Marketers send sales announcements, offers and other messages to e-mail addresses—sometimes to a few individuals, sometimes to large groups.

• Fax mail - Fax machines enable one party to send a paper-based message to another party over telephone lines. Marketers have begun to send fax mail announcing offers, sales, and events to prospects and customers.

• Voice mail - Voice mail is a system for receiving and storing messages at a telephone address. Telephone companies sell this service as a substitute for answering machines. Some marketers have set up programs that will dial a large number of telephone numbers and leave the selling message in the recipients’ voice mailboxes.

• Mail-Order - Wholesalers send catalogs to retail, industrial, and institutional customers featuring jewelry, cosmetics specialty foods and other small items. Main customers are business in small outlying areas. No sales force is maintained. Orders are filled and sent by mail, truck, or other means or transportation.

Mega-Hub - A person who communicates to many people through mass media such as radio, TV and the Internet.

Memory - Ability to recall information over time.

Merchandise Approach - An approach in which the salesperson waits until a browsing customer pauses to examine a product and then moves in to discuss its benefits.

Merchandising - Sales promotion as a comprehensive function including market research development of new products, coordination of manufacture and marketing, and effective advertising and selling. This includes in-store presentations and any other supportive activities that in turn increases product turns.

Merchant Middlemen - Intermediaries such as wholesalers and retailers that buy, take title to, and resell the merchandise.

Message - Information conveyed in the sales presentation.

Message Development - The consequence of leaving out the creative factors is that a substantial part of the movement of market shares remains unexplained. There is no doubt that differences in creative strategy are important in advertising success. Advertisers go through three stages to develop their message:

• Message Generation - is the activity of developing a number of alternative possible messages about the product. Either inductively or deductively.

  • Four types of rewards from an offering:

    1. Rational

    2. Sensory

    3. Social

    4. Ego Satisfaction

  • May visualize these rewards from

    1. Results-of-use experience

    2. Product-in-use experience

    3. Incidental-to-use experience

• Evaluation and Selection - The task of selecting the best message out of a large number of possibilities calls for the introduction of criteria for judging the communication potency of different messages. Appeals are based on three scales

  • Desirability

  • Exclusiveness

  • Believability

• Execution - The impact of an advertisement depends not only upon what is said but also upon how it is said. It is the task of the creative people in the advertising agency to find the style, tone, words, and format factors that make or an effect message execution strategy.

  • Slice of Life

  • Life Style

  • Fantasy

  • Mood or image

  • Musical

  • Personality Symbol

  • Technical Experience

  • Scientific Evidence

  • Testimonial Evidence

Message Execution Styles - It is the task of the creative people in the advertising agency to find the style, tone, words, and format factors that make for effective message execution. Any message can be put across in different execution styles such as:

• Slice-of-Life - This shows one or more persons using the product in a normal setting.

• Life Style - This emphasizes how a product fits in with a life style.

• Fantasy - This creates a fantasy about what might happen in connection with the use of a product.

• Mood or Image - This builds an evocative mood or image around the product - beauty, love or serenity. No claim is made about the product except through suggestion.

• Musical - This shows one or more persons or characters singing a song or jingle involving the product.

• Personality Symbol - This creates a character that represents or personifies the product.

• Technical Expertise - This features the care that the company exercises and the experience it has in selecting the ingredients for this product or in manufacturing the product.

• Scientific Evidence - This presents survey or scientific evidence that the brand is preferred to or outperforms one or more other brands.

• Testimonial Evidence - This features a highly credible or likable source endorsing the product.

Messages -The use of creative factors in a message in advertising expenditures. 

Microsite - A microsite is a limited area on the web managed and paid for by an external advertiser/company. Microsites a particularly relevant for companies selling low-interest products such as insurance.

Middleman - The person that facilitates direct contact between buyers and sellers

Minor Points Close - A close where the salesperson asks the prospect to make a low-risk decision on a minor element of a product.

Misrepresentation - A legal cause of action; a theory on which an injured party seeks damages. It arises when a salesperson makes erroneous statements or offers false promises regarding a product’s characteristics and capabilities.

Mobile Office - Vehicles converted to mobile offices.

Model - The specification of a set of variables and their interrelationships designed to represent some real system or process, in whole or in part. 

Modified Re-Buy Purchase - Purchases in which a buyer seeks a similar product but wants or needs to negotiate different terms.

Money Hours - The hours in a sales professional's day where s/he can talk with prospects and/ or customers... the most valuable hours of a salesperson's day.

Money Objection - A price-oriented objection.

Moral Appeals - Appeals to the receiver's sense of what is right and proper to do.

Mortgage - A written instrument that creates a lien by pledging real property as security for a debt.

Motivation - The arousal, intensity, direction, and persistence of effort directed toward job tasks over a period of time.

Motivation Mix - Five broad classes of factors used to motivate salespeople.

Multichannel Marketing - Too many U.S. manufacturers think their job is done once the product leaves the factory. They should pay attention to how the product moves within the foreign country. They should take a whole-channel view of the problem of distributing products to final users. There are three major links between seller and ultimate user. The first link, seller’s international marketing headquarters, the export department or international division makes decision son channels and other marketing-mix elements. The second link, channels between nations, gets the products to the borders of the foreign nation. The decisions made in this link include the types of intermediaries (agents, trading companies) that will be used, the type of transportation (air, sea), and the financing and risk arrangements. The third link, channels within foreign nations, gets the products from their entry point to final buyers and users.

Multiple Brand Strategy - Enables a company to lock up more distributor shelf space & to protect its major brand by setting up flanker brands. Seiko establishes different brand for its higher-price (Seiko Lasalle) and lower-priced watches (Pulsar) to protect its flanks.

Multiple Question Approach (SPIN) - An approach where the salesperson uses four types of questions -- Situation, Problem Implication, and Need-payoff -- to get a better understanding of the prospect’s business.

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