Market Research: The process of gathering, recording, analyzing, and reporting information regarding customers or potential customers.
Data: Facts discovered in the market research process.
Primary Data: Facts collected for the first time for the problem under study.
Survey: A series of questions asked to a select and representative group of people to obtain quantitative data.
Observation: An information-gathering technique that involves watching people by using other people or by using a camera.
Focus Group: A small group of 8–15 people who provide qualitative data through their opinions about a business, its products, or other issues under the direction of a discussion leader.
Sample Size: The number of people questioned for a survey.
Secondary Data: Facts that have been collected previously for a purpose other than the problem being studied.
Qualitative Research: Research that is used to discover consumer information whose validity can then be assessed with quantitative research questions.
Quantitative Research: Research often used to answer questions about quantities and amounts using a large sample of consumers.
Competition: In business, competition refers to other businesses that are trying to attract the same customers as your own business.
Consultative selling: When a salesperson relies primarily on the customer to determine which product most closely matches his or her needs.
Consumability: The speed with which products are used up and must be purchased again. Automobiles have low consumability; paper towels have high consumability.
Marketability: The ease with which products can be sold. “Hot” items, such as the latest smartphone, have high marketability. Three-year-old smartphones have low marketability.
Merchandise: The product, or goods, that a retail store has for sale.
Perishable: Product that has a limited shelf life and must be sold rather quickly, such as milk or batteries.
Price points: The typical selling prices at which goods are sold. Televisions, for example, may have price points at $500, $1,000, $1,500, and so on.
Product: The goods that a factory manufactures and that a retail store offers for sale to customers.
Profitability: The amount of money that can be made from the sale of a particular product. Some items, such as goods in a grocery store, typically have low profitably, while others, such as computers or cars, may have much higher profitability.
Seasonal: Goods whose sales fluctuate according to the time of year. Sporting goods such as skis and swimsuits are seasonal, but some goods, such as whole turkeys or pumpkins, may be tied to a particular holiday or time of year.
Strip Mall: Typically a neighborhood space composed of a group of separate stores that are connected by sidewalks and that have parking lots in front of the stores.
Business District: An unenclosed shopping area that has evolved without a lot of planning and that features a variety of stores.
Freestanding Location: A store that is unattached to other stores.
Trade Area: A business’s geographic surroundings, which provide most of the customers.
Traffic: The term used to define the number of people who go by a store location during a given time.
Competitive Business: One that sells the same or comparable merchandise.
Complementary Business: One that sells merchandise that is related to, but not the same as, an area business’s goods.
Lease: A contract between a landlord and a tenant for use of a property for a specified amount of time in exchange for a specified amount of rent.
Fixed-rate Lease: One that charges the tenant a specific amount of rent each month.
Percentage Lease: One that bases the amount of rent on a percentage of the sales generated in the space.
Triple Net (NNN) Lease: One that charges the tenant rent plus the three operating costs of the rented property.
Price: The amount of money a business charges for items it offers for sale.
Cost: The amount of money the store pays to purchase the merchandise from a supplier.
Profit: The total revenue of a business less all expenses over a specific period of time.
Margin: The difference between the retail price of an item and the cost of the item to the store.
Supply and Demand: The principle that describes the amount of product available to sell and the willingness of customers to buy that product.
Market Share: The percentage that a store has of the total sales in its trading area.
Markdown: Reduction in price of merchandise to increase sales of a product not selling according to projections.
Promotion: The positive communication a business has with its customers.
Product Promotion: Promotion of a store’s merchandise.
Institutional Promotion: Promotion meant to heighten a store’s image.
Personal Selling: A type of promotion that involves the use of paid sales associates to interact with the store’s customers.
Sales Promotion: A type of promotion that involves the use of activities meant to encourage customers to make purchases.
Advertising: Communication to customers paid for by a business.
Circular: An insert into a magazine or newspaper that typically contains product graphics and special offers.
Public Relations: The use of unpaid references to a business to further a positive impression.
Publicity: A form of public relations that involves calling attention to a newsworthy aspect of the business.
Promotional Mix: The combination of the types of promotion a
business uses.
Federal Trade Commission (FTC): An agency of the federal government that enacts and enforces advertising laws that protect consumers.
Cease and Desist Order: An order issued by the FTC that forces advertisers to discontinue false or bait-and-switch advertising.
Bait and Switch: The illegal practice of advertising a product at a low price and then stocking little to none of that product, with the intention of selling customers a more expensive item.
Address List: A set of email addresses of potential customers, either purchased from a third party or generated internally.
Bounce: An email that cannot be delivered.
Spam: Any email that a recipient does not wish to receive.
Cost Per Name: The expense incurred developing an email list divided by the number of people who opened and read the email.
CAN-SPAM Act: A federal law that placed guidelines on mass commercial emails.
Response Rate: The effectiveness of an email campaign, measured by the number of people who responded divided by the number of emails sent.
Subject Line: The part of an email a recipient can read before actually opening the message.
Loyalty Program: Any program that tries to build and maintain a base of repeat customers.
Staffing: The assignment of workers to jobs within a business.
Staffing Level: The number of workers assigned to jobs at a particular time.
Understaffing: When there is not enough staff to handle the customers.
Overstaffing: When there are too many staff members in the store for the customer traffic.
Wages: The payments made to employees for the hours that they work.
Buyer: The person who is responsible for purchasing the merchandise for a store.
Open-to-Buy: The amount of money available to a buyer for purchasing items for a store.
Vendor: A business from which a buyer purchases merchandise.
Inventory: The total amount of goods a business has, including goods in the backroom and on the sales floor.
Stock: Another term for inventory.
Invoice: The vendor’s bill for stock purchased.
Inventory Control: The management of the merchandise a store has
for sale.
Just-in-Time Inventory Control System: A usually computerized method of inventory control that involves linking a store to its suppliers through a computer system that purchases new inventory automatically as sales are made.
Physical Inventory System: An inventory system that makes use of periodic counts of stock to ascertain stock levels.
Perpetual Inventory System: An inventory system that keeps track of stock items on a continual basis.
Stock Turnover: A tool that measures how often stock is sold during a given time period.
Store Layout: The arrangement of store fixtures, equipment, and merchandise.
Grid Layout: A type of store layout that is characterized by long rows of shelving with aisles between the rows.
Loop Layout: A type of store layout that is designed to lead customers from the front of the store, through the store, and back to the front or in a loop around the store.
Free Flow Layout: A type of store layout that features merchandise on fixtures, arranged in asymmetrical or free flowing patterns on the sales floor.
Spine Layout: A type of store layout that features a center aisle that extends from the front of the store to the back.
Fixtures: Permanent or transportable store furnishings that are used to hold and display merchandise.
Impulse Purchases: Usually small items of merchandise that are purchased with little or no thought on the part of the customer.
Point of Purchase (POP) Displays: Sales promotional tools that are designed to encourage impulse purchasing and highlight special offers.
Related Merchandise: Items that are related to each other and that usually sell together.
Shrinkage: The term used to describe inventory losses resulting from shoplifting, employee theft, inaccurate paperwork, damaged or misplaced merchandise, and vendor error.
Physical Inventory: A count and inspection of all the merchandise in a store.
Book Value: The amount of money inventory is shown to be worth in the business’s records.
Shoplifting: The removal of items from a store with the intention of not paying for them.
Employee Theft: The unauthorized taking of merchandise by an employee from an employer.
Start-up Costs: The costs associated with opening and operating a new business for a period of time, usually one year.
Sweat Equity: Unpaid work, mental and physical, that a business owner puts into a business, increasing its value.
Asset: Any tangible item of value an individual owns.
Liability: Any debt an individual owes.
Net Worth: The difference between an individual’s total assets and total liabilities.
Income Statement: A report that outlines projected business revenue and business expenses for a period of time.
Balance Sheet: A report that summarizes a business’s assets and liabilities, and the owner’s equity.
Cash Flow Statement: A report that provides information about when cash comes into a business and when that cash will be spent.
Principal: The amount of a loan.
Interest: The amount of money an individual pays to the lender for use of the money borrowed.
Interest Rate: The interest on a loan expressed as an annual percentage.
Data: Facts discovered in the market research process.
Primary Data: Facts collected for the first time for the problem under study.
Survey: A series of questions asked to a select and representative group of people to obtain quantitative data.
Observation: An information-gathering technique that involves watching people by using other people or by using a camera.
Focus Group: A small group of 8–15 people who provide qualitative data through their opinions about a business, its products, or other issues under the direction of a discussion leader.
Sample Size: The number of people questioned for a survey.
Secondary Data: Facts that have been collected previously for a purpose other than the problem being studied.
Qualitative Research: Research that is used to discover consumer information whose validity can then be assessed with quantitative research questions.
Quantitative Research: Research often used to answer questions about quantities and amounts using a large sample of consumers.
Competition: In business, competition refers to other businesses that are trying to attract the same customers as your own business.
Consultative selling: When a salesperson relies primarily on the customer to determine which product most closely matches his or her needs.
Consumability: The speed with which products are used up and must be purchased again. Automobiles have low consumability; paper towels have high consumability.
Marketability: The ease with which products can be sold. “Hot” items, such as the latest smartphone, have high marketability. Three-year-old smartphones have low marketability.
Merchandise: The product, or goods, that a retail store has for sale.
Perishable: Product that has a limited shelf life and must be sold rather quickly, such as milk or batteries.
Price points: The typical selling prices at which goods are sold. Televisions, for example, may have price points at $500, $1,000, $1,500, and so on.
Product: The goods that a factory manufactures and that a retail store offers for sale to customers.
Profitability: The amount of money that can be made from the sale of a particular product. Some items, such as goods in a grocery store, typically have low profitably, while others, such as computers or cars, may have much higher profitability.
Seasonal: Goods whose sales fluctuate according to the time of year. Sporting goods such as skis and swimsuits are seasonal, but some goods, such as whole turkeys or pumpkins, may be tied to a particular holiday or time of year.
Strip Mall: Typically a neighborhood space composed of a group of separate stores that are connected by sidewalks and that have parking lots in front of the stores.
Business District: An unenclosed shopping area that has evolved without a lot of planning and that features a variety of stores.
Freestanding Location: A store that is unattached to other stores.
Trade Area: A business’s geographic surroundings, which provide most of the customers.
Traffic: The term used to define the number of people who go by a store location during a given time.
Competitive Business: One that sells the same or comparable merchandise.
Complementary Business: One that sells merchandise that is related to, but not the same as, an area business’s goods.
Lease: A contract between a landlord and a tenant for use of a property for a specified amount of time in exchange for a specified amount of rent.
Fixed-rate Lease: One that charges the tenant a specific amount of rent each month.
Percentage Lease: One that bases the amount of rent on a percentage of the sales generated in the space.
Triple Net (NNN) Lease: One that charges the tenant rent plus the three operating costs of the rented property.
Price: The amount of money a business charges for items it offers for sale.
Cost: The amount of money the store pays to purchase the merchandise from a supplier.
Profit: The total revenue of a business less all expenses over a specific period of time.
Margin: The difference between the retail price of an item and the cost of the item to the store.
Supply and Demand: The principle that describes the amount of product available to sell and the willingness of customers to buy that product.
Market Share: The percentage that a store has of the total sales in its trading area.
Markdown: Reduction in price of merchandise to increase sales of a product not selling according to projections.
Promotion: The positive communication a business has with its customers.
Product Promotion: Promotion of a store’s merchandise.
Institutional Promotion: Promotion meant to heighten a store’s image.
Personal Selling: A type of promotion that involves the use of paid sales associates to interact with the store’s customers.
Sales Promotion: A type of promotion that involves the use of activities meant to encourage customers to make purchases.
Advertising: Communication to customers paid for by a business.
Circular: An insert into a magazine or newspaper that typically contains product graphics and special offers.
Public Relations: The use of unpaid references to a business to further a positive impression.
Publicity: A form of public relations that involves calling attention to a newsworthy aspect of the business.
Promotional Mix: The combination of the types of promotion a
business uses.
Federal Trade Commission (FTC): An agency of the federal government that enacts and enforces advertising laws that protect consumers.
Cease and Desist Order: An order issued by the FTC that forces advertisers to discontinue false or bait-and-switch advertising.
Bait and Switch: The illegal practice of advertising a product at a low price and then stocking little to none of that product, with the intention of selling customers a more expensive item.
Address List: A set of email addresses of potential customers, either purchased from a third party or generated internally.
Bounce: An email that cannot be delivered.
Spam: Any email that a recipient does not wish to receive.
Cost Per Name: The expense incurred developing an email list divided by the number of people who opened and read the email.
CAN-SPAM Act: A federal law that placed guidelines on mass commercial emails.
Response Rate: The effectiveness of an email campaign, measured by the number of people who responded divided by the number of emails sent.
Subject Line: The part of an email a recipient can read before actually opening the message.
Loyalty Program: Any program that tries to build and maintain a base of repeat customers.
Staffing: The assignment of workers to jobs within a business.
Staffing Level: The number of workers assigned to jobs at a particular time.
Understaffing: When there is not enough staff to handle the customers.
Overstaffing: When there are too many staff members in the store for the customer traffic.
Wages: The payments made to employees for the hours that they work.
Buyer: The person who is responsible for purchasing the merchandise for a store.
Open-to-Buy: The amount of money available to a buyer for purchasing items for a store.
Vendor: A business from which a buyer purchases merchandise.
Inventory: The total amount of goods a business has, including goods in the backroom and on the sales floor.
Stock: Another term for inventory.
Invoice: The vendor’s bill for stock purchased.
Inventory Control: The management of the merchandise a store has
for sale.
Just-in-Time Inventory Control System: A usually computerized method of inventory control that involves linking a store to its suppliers through a computer system that purchases new inventory automatically as sales are made.
Physical Inventory System: An inventory system that makes use of periodic counts of stock to ascertain stock levels.
Perpetual Inventory System: An inventory system that keeps track of stock items on a continual basis.
Stock Turnover: A tool that measures how often stock is sold during a given time period.
Store Layout: The arrangement of store fixtures, equipment, and merchandise.
Grid Layout: A type of store layout that is characterized by long rows of shelving with aisles between the rows.
Loop Layout: A type of store layout that is designed to lead customers from the front of the store, through the store, and back to the front or in a loop around the store.
Free Flow Layout: A type of store layout that features merchandise on fixtures, arranged in asymmetrical or free flowing patterns on the sales floor.
Spine Layout: A type of store layout that features a center aisle that extends from the front of the store to the back.
Fixtures: Permanent or transportable store furnishings that are used to hold and display merchandise.
Impulse Purchases: Usually small items of merchandise that are purchased with little or no thought on the part of the customer.
Point of Purchase (POP) Displays: Sales promotional tools that are designed to encourage impulse purchasing and highlight special offers.
Related Merchandise: Items that are related to each other and that usually sell together.
Shrinkage: The term used to describe inventory losses resulting from shoplifting, employee theft, inaccurate paperwork, damaged or misplaced merchandise, and vendor error.
Physical Inventory: A count and inspection of all the merchandise in a store.
Book Value: The amount of money inventory is shown to be worth in the business’s records.
Shoplifting: The removal of items from a store with the intention of not paying for them.
Employee Theft: The unauthorized taking of merchandise by an employee from an employer.
Start-up Costs: The costs associated with opening and operating a new business for a period of time, usually one year.
Sweat Equity: Unpaid work, mental and physical, that a business owner puts into a business, increasing its value.
Asset: Any tangible item of value an individual owns.
Liability: Any debt an individual owes.
Net Worth: The difference between an individual’s total assets and total liabilities.
Income Statement: A report that outlines projected business revenue and business expenses for a period of time.
Balance Sheet: A report that summarizes a business’s assets and liabilities, and the owner’s equity.
Cash Flow Statement: A report that provides information about when cash comes into a business and when that cash will be spent.
Principal: The amount of a loan.
Interest: The amount of money an individual pays to the lender for use of the money borrowed.
Interest Rate: The interest on a loan expressed as an annual percentage.