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MAIL ORDER HOUSE (RETAIL). A retailing business that receives its orders primarily by mail or telephone and generally offers its goods and services for its sale from a catalogue or other printed material. Comment. Other types of retail stores often conduct a mail order business, usually through departments set up for that purpose, although this fact does not make them mail order houses. On the other hand, some firms that originally confined themselves to the mail order business now also operate chain store systems.
MANUFACTURER'S AGENT. An agent who generally operates on an extended contractual basis; often sells within an exclusive territory; handles non-competing but related lines of goods; and possesses limited authority with regard to prices and terms of sale. He may be authorized to sell a definite portion of his principal's output. Comment. The manufacturer's agent has often been defined as a species of broker. In the majority of cases this seems to be substantially accurate. It is probably more accurate in seeking to define the entire group not to classify them as a specialized type of broker but to regard them as a special variety of agent since many of them carry stocks. The term "Manufacturer's Representative" is sometimes applied to this agent. Since this term is also used to designate a salesman in the employ of a manufacturer, its use as a synonym for "Manufacturer's Agent" is discouraged.
MARGINAL COST. The change in total cost resulting from the production of one additional unit.
MARGINAL REVENUE. The change in total revenue resulting from the sale of an additional unit.
MARKET. (1) The aggregate of forces or conditions within which buyers and sellers make decisions that result in the transfer of goods and services. (2) The aggregate demand of the potential buyers of a product or service under given conditions (such as price, availability, buyer awareness). In either case, the definition usually implies a specific geographical area.
MARKET DELINEATION. The process of determining potential purchasers and their identifying characteristics.
MARKET GROWTH. The second stage in the product life cycle when a new product's sales are growing fast.
MARKET POTENTIAL (ALSO MARKET OR TOTAL MARKET). A calculation of maximum possible sales opportunities for all sellers of a good or service during a stated period.
MARKET SEGMENTATION. The act of dividing or partitioning a market into distinct groups of potential buyers where each such group might require a separate product and/or marketing mix.
MARKET SHARE. The portion of a market controlled by a particular producer. Reaching a specified share of market is often stated as a goal of a marketing plan.
MARKET TESTING. The marketing for test purposes of a new or improved product and/or a new or improved advertising or sales promotion plan. Typically, market testing is done within a limited and self-contained territory. Tools of marketing research are used in interpreting the test.
MARKETING. The performance of business activities that direct the flow of goods and services from producer to consumer or user. Comment. The task of defining Marketing may be approached from at least three points of view. (1) The "legalistic" of which the following is a good example: "Marketing includes all activities having to do with effecting changes in the ownership and possession of goods and services." It seems obviously of doubtful desirability to adopt a definition which throws so much emphasis upon the legal phases of what is essentially a commercial subject. (2) The "economic" examples of which are: "That part of economics which deals with the creation of time, place, and possession utilities." "That phase of business activity through which human wants are satisfied by the exchange of goods and services for some valuable consideration." Such definitions are apt to assume somewhat more understanding of economic concepts than are ordinarily found in the market place. (3) The "factual or descriptive" of which the definition suggested by the committee is an example. This type of definition merely seeks to describe its subject in terms likely to be understood by both professional economists and business men without reference to legal or economic implications. This definition seeks to include such facilitating activities as marketing research, transportation, certain aspects of product and package planning, and the use of credit as a means of influencing patronage.
MARKETING CHANNELS. The paths taken by a product on its way to the consumer.
MARKETING CONCEPT. A guiding-light philosophical orientation which holds that the key to achieving organizational goals consists in determining the needs, wants and desires of target markets, and matching those needs/wants/desires to an integrated marketing mix so as to deliver the target markets' desired satisfactions more effectively and efficiently than competitors while maximizing profits.
MARKETING COST ACCOUNTING. The branch of cost accounting which involves the allocation of marketing costs according to customers, marketing units, products, territories, or marketing activities.
MARKETING COST ANALYSIS. The study and evaluation of the relative profitability or costs of different marketing operations in terms of customers, marketing units, commodities, territories, or marketing activities. Comment. Marketing Cost Accounting is one of the tools used in Marketing Cost Analysis.
MARKETING FUNCTION. A major specialized activity or group of related activities performed in marketing. Comment. There is no generally accepted list of marketing functions, nor is there any generally accepted basis on which the lists compiled by various writers are chosen. The reason for these limitations is fairly apparent. Under this term students of marketing have sought to squeeze a heterogeneous and non-consistent group of activities. Some of them are broad business functions with special marketing implications; others are peculiar to the marketing process. The function of assembling is performed through buying, selling, and transportation. Assembling, storage, and transporting are general economic functions; selling and buying are more nearly individual in character. Most of the lists fail sadly to embrace all the activities a marketing manager worries about in the course of doing his job.
MARKETING INFORMATION SYSTEMS. Methods, either manual or computerized, for systematic gathering, editing, storage, and retrieval of data relevant to the marketing of goods and services. Such systems may include methods for summarizing and analyzing the data for either short-range or long-range purposes.
MARKETING MANAGEMENT. The planning, direction and control of the entire marketing activity of a firm or division of a firm, including the formulation of marketing objectives, policies, programs and strategy, and commonly embracing product develop-ment, organizing and staffing to carry out plans, supervising marketing operations, and controlling marketing performance. Comment. In most firms the man who performs these functions is a member of top management in that he plays a part in determining company policy, in making product decisions, and in coordinating marketing operations with other functional activities to achieve the objectives of the company as a whole. No definition of his position is included in this report because there is no uniformity in the titles applied to it. He is variously designated Marketing Manager, Director of Marketing, Vice President for Marketing, Director or Vice President of Marketing and Sales, General Sales Manager.
MARKETING MIX. The blending of the elements of product planning, distribution strategy, promotion, and price to meet the needs of a specific market.
MARKETING MODEL. Any representation which aids understanding of one or more characteristics of a market. Models take many forms, varying from concrete versions, such as physical models of equipment and facilities, to abstract versions, such as mathematical or statistical models of share interchanges among competing brands.
MARKETING PLANNING. The work of setting up objectives for marketing activity and of determining and scheduling the steps necessary to achieve such objectives. Comment. This term includes not only the work of deciding upon the goals or results to be attained through marketing activity but also the determination in detail of exactly how they are to be accomplished.
MARKETING POLICY. A course of action established and disseminated in order to obtain consistency of marketing decisions and operations under recurring and essentially similar circumstances.
MARKETING RESEARCH. The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. Such research may be undertaken by impartial agencies or by business firms, or their agents. Marketing research is an inclusive term which includes various subsidiary types: (1) market analysis, of which product potential is a type, which is the study of the size, location, nature, and characteristics of markets. (2) sales analysis (or research), which is the systematic study and comparison of sales (or consumption) data. (3) consumer research, of which motivation research is a type, which is concerned chiefly with the discovery and analysis of consumer attitudes, reactions, and preferences. (4) advertising research, of which advertising evaluation is a type, which is aimed toward improving the use of non-personal aids to marketing, primarily the mass media. The techniques of operation research and statistics are often useful in marketing research.
MARK UP. The amount of money added to cost to determine the selling price.
MERCHANDISING. The planning and supervision involved in marketing the particular merchandise or service at the places, times, and prices and in the quantities which will best serve to realize the marketing objectives of the business. Comment. This term has been used in a great variety of meanings, most of them confusing. The usage recommended by the Committee adheres closely to the essential meaning of the word. The term is most widely used in the sense in the wholesaling and retailing trades. Many manufacturers designate this activity as Product Planning or Management and include in it such tasks as selecting the article to be produced or stocked and deciding such matters as the size, appearance, form, packaging, quantities to bought or made, time of procurement, and price lines to be offered.
MOTIVATION RESEARCH. A group of techniques developed by the behavioral scientists which are used by marketing researchers to discover factors influencing marketing behavior. Comment. These techniques are widely used outside the marketing sphere, for example, to discover factors influencing the behavior of employees and voters. The Committee has confined its definition to the marketing uses of the tool. Motivation Research is only one of several ways to study marketing behavior.
MULTIDIMENSIONAL SCALING. A statistical technique that looks at consumer perceptions of several product features and compares product positions based on features sometimes called perceptional mapping.
MULTILEVEL MARKETING. A method of marketing through independent distributors who both sell product and recruit other distributors. The recruiting distributor receives a commission on sales made by several levels of recruits below him. Sometimes call a pyramid or network marketing,
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