Perreault−McCarthy: Basic
Marketing: A
Global−Managerial
Approach, 14/eBack Matter Glossary © The McGraw−Hill
Companies, 2002G-4 Glossary
Elastic demandIf prices are dropped, the quantity demanded
will stretch enough to increase total revenue.
Elastic supplyThe quantity supplied does stretch more if the
price is raised.
Electronic data interchange (EDI)An approach that puts
information in a standardized format easily shared between dif-
ferent computer systems.
Emergency productsProducts that are purchased immedi-
ately when the need is great.
EmpowermentGiving employees the authority to correct a
problem without first checking with management.
Empty nestersPeople whose children are grown and who are
now able to spend their money in other ways.
EncodingThe source in the communication process deciding
what it wants to say and translating it into words or symbols that
will have the same meaning to the receiver.
Equilibrium pointThe quantity and the price sellers are will-
ing to offer are equal to the quantity and price that buyers are
willing to accept.
Everyday low pricingSetting a low list price rather than rely-
ing on a high list price that frequently changes with various
discounts or allowances.
Exclusive distributionSelling through only one middleman
in a particular geographic area.
ExpectationAn outcome or event that a person anticipates or
looks forward to.
Expense itemA product whose total cost is treated as a busi-
ness expense in the period it’s purchased.
ExpensesAll the remaining costs that are subtracted from the
gross margin to get the net profit.
Experience curve pricingAverage-cost pricing using an esti-
mate of futureaverage costs.
Experimental methodA research approach in which
researchers compare the responses of two or more groups that are
similar except on the characteristic being tested.
Export agentsManufacturers’ agents who specialize in export
trade.
Export brokersBrokers who specialize in bringing together
buyers and sellers from different countries.
ExportingSelling some of what the firm produces to foreign
markets.
Extensive problem solvingThe type of problem solving con-
sumers use for a completely new or important need—when they
put much effort into deciding how to satisfy it.
FacilitatorsFirms that provide one or more of the marketing
functions other than buying or selling.
FactorA variable that shows the relation of some other vari-
able to the item being forecast.
Factor methodAn approach to forecast sales by finding a rela-
tion between the company’s sales and some other factor (or
factors).
FadAn idea that is fashionable only to certain groups who are
enthusiastic about it—but these groups are so fickle that a fad is
even more short-lived than a regular fashion.
Family brandA brand name that is used for several products.
Farm productsProducts grown by farmers, such as oranges,
wheat, sugar cane, cattle, poultry, eggs, and milk.
FashionCurrently accepted or popular style.
Federal Fair Packaging and Labeling ActA 1966 law
requiring that consumer goods be clearly labeled in easy-to-
understand terms.
Federal Trade Commission (FTC)Federal government
agency that polices antimonopoly laws.
FinancingProvides the necessary cash and credit to produce,
transport, store, promote, sell, and buy products.
Fishbone diagramA visual aid that helps organize cause and
effect relationships for “things gone wrong.”
Fixed-cost (FC) contribution per unitThe selling price per
unit minus the variable cost per unit.
Flexible-price policyOffering the same product and quanti-
ties to different customers at different prices.
F.O.B.A transportation term meaning free on board some vehi-
cle at some point.
Focus group interviewAn interview of 6 to 10 people in an
informal group setting.
Foreign Corrupt Practices ActA law passed by the U.S.
Congress in 1977 that prohibits U.S. firms from paying bribes to
foreign officials.
Form utilityProvided when someone produces something tan-
gible.
Franchise operationA franchisor develops a good marketing
strategy, and the retail franchise holders carry out the strategy in
their own units.
Freight absorption pricingAbsorbing freight cost so that a
firm’s delivered price meets the nearest competitor’s.
Freight forwardersTransportation wholesalers who combine
the small shipments of many shippers into more economical
shipping quantities.
Full-cost approachAll costs are allocated to products, cus-
tomers, or other categories.
Full-line pricingSetting prices for a whole line of products.
Functional accountsThe categories to which various costs
are charged to show the purposefor which expenditures are
made.
General merchandise wholesalersService wholesalers who
carry a wide variety of nonperishable items such as hardware,
electrical supplies, plumbing supplies, furniture, drugs, cosmetics,
and automobile equipment.
General storesEarly retailers who carried anything they could
sell in reasonable volume.
Generic marketA market with broadlysimilar needs—and
sellers offering various and often diverseways of satisfying those
needs.
Generic productsProducts that have no brand at all other
than identification of their contents and the manufacturer or
middleman.
Gross margin (gross profit)The money left to cover the
expenses of selling the products and operating the business.
Gross national product (GNP)The total market value of
goods and services produced in an economy in a year.