| advertising allowance | Either a percentage of gross purchases or a flat fee paid to the retailer for advertising the manufacturer's product.
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| buyback allowance | A manufacturer's offer to pay for an old product so that it will be taken off the shelf to make room for a new product.
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| catalogs | Reference books mailed to prospective customers that list, describe, and often picture the products sold by a manufacturer, wholesaler, jobber, or retailer.
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| cents-off promotion | A short-term reduction in the price of a product designed to induce trial and usage. Cents-off promotions take various forms, including basic cents-off packages, one-cent sales, free offers, and box-top refunds.
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| combination offers | A sales promotion device in which two related products are packaged together at a special price, such as a razor and a package of blades. Sometimes a combination offer may be used to introduce a new product by tying its purchase to an established product at a special price.
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| company conventions and dealer meetings | Events held by manufacturers to introduce new products, sales promotion programs, or advertising campaigns.
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| consumer sales promotions | Marketing, advertising, and sales promotion activities aimed at inducing trial, purchase, and repurchase by the consumer. Also called pull strategy.
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| contest | A sales promotion device for creating consumer involvement in which prizes are offered based on the skill of the entrants.
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| cooperative (co-op) advertising | The sharing of advertising costs by the manufacturer and the distributor or retailer. The manufacturer may repay 50 or 100 percent of the dealer's advertising costs or some other amount based on sales. See also horizontal cooperative advertising, vertical cooperative advertising.
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| coupon | A certificate with a stated value that is presented to a retail store for a price reduction on a specified item.
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| customer lifetime value (LTV) | The total sales or profit value of a customer to a marketer over the course of that customer's lifetime.
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| data access | Characteristic of a database that enables marketers to manipulate, analyze, and rank all the information they possess in order to make better marketing decisions.
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| data management | The process of gathering, consolidating, updating, and enhancing the information about customers and prospects that resides in a company's database.
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| database | The corporate memory of all important customer information: name and address, telephone number, NAIC code (if a business firm), source of inquiry, cost of inquiry, history of purchases, and so on. It should record every transaction across all points of contact with both channel members and customers.
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| database marketing | Tracking and analyzing the purchasing patterns of specific customers in a computer database and then targeting advertising to their needs.
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| direct marketing | A system of marketing in which companies build their own database of customers and use a variety of media to communicate with them directly such as through ads and catalogs.
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| direct-response advertising | An advertising message that asks the reader, listener, or viewer to respond to the sender. Direct-response advertising can take the form of direct mail, or it can use a wide range of other media, from matchbook covers or magazines to radio, TV, or billboards.
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| direct sales strategy | Strategy where representatives sell to customers directly at home or work rather than through a retail establishment or other intermediary.
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| direct selling | Face-to-face selling away from a fixed retail location. Usually refers to a method of marketing consumer goods—everything from encyclopedias and insurance to cosmetics and nutritional products.
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| display allowances | Fees paid to retailers to make room for and set up manufacturers' displays.
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| diverting | Purchasing large quantities of an item at a regional promotional discount and shipping portions to areas of the country where the discount isn't being offered.
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| electronic couponing | In supermarkets, the use of frequent- shopper cards that automatically credit cardholders with coupon discounts when they check out. Also using touch-screen videos at the point of purchase, instant-print discounts, rebates, and offers to try new brands.
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| forward buying | A retailer's stocking up on a product when it is discounted and buying smaller amounts when it is at list price.
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| freestanding inserts (FSIs) | Coupons distributed through inserts in newspapers.
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| game | A sales promotion activity in which prizes are offered based on chance. The big marketing advantage of games is that customers must make repeat visits to the dealer to continue playing.
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| in-store sampling | The handing out of free product samples to passing shoppers.
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| personal selling | A sales method based on person-toperson contact, such as by a salesperson at a retail establishment or by a telephone solicitor.
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| point-of-purchase (P-O-P) advertising | Materials set up at a retail location to build traffic, advertise the product, and promote impulse buying. Materials may include window displays, counter displays, floor and wall displays, streamers, and posters.
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| polybagging | Samples are delivered in plastic bags with the daily newspaper or a monthly magazine.
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| premium | An item offered free or at a bargain price to encourage the consumer to buy an advertised product.
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| push money (PM) | A monetary inducement for retail salespeople to push the sale of particular products. Also called spiffs.
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| push strategy | Marketing, advertising, and sales promotion activities aimed at getting products into the dealer pipeline and accelerating sales by offering inducements to dealers, retailers, and salespeople. Inducements might include introductory price allowances, distribution allowances, and advertising dollar allowances to stock the product and set up displays.
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| rebates | Cash refunds on items from cars to household appliances.
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| RFM formula | The RFM formula is a mathematical model that provides marketers with a method to determine the most reliable customers in a company's database, according to Recency, Frequency, and Monetary variables.
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| sales promotion | A direct inducement offering extra incentives all along the marketing route—from manufacturers through distribution channels to customers—to accelerate the movement of the product from the producer to the consumer.
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| sampling | Offering consumers a free trial of the product, hoping to convert them to habitual use.
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| slotting allowances | Fees that manufacturers pay to retailers for the privilege of obtaining shelf or floor space for a new product.
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| spiff | See push money.
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| sweepstakes | A sales promotion activity in which prizes are offered based on a chance drawing of entrants' names. The purpose is to encourage consumption of the product by creating consumer involvement.
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| telemarketing | Selling products and services by using the telephone to contact prospective customers.
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| trade advertising | The advertising of goods and services to middlemen to stimulate wholesalers and retailers to buy goods for resale to their customers or for use in their own businesses.
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| trade concentration | More products being sold by fewer retailers.
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| trade deals | Short-term dealer discounts on the cost of a product or other dollar inducements to sell a product.
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| trade promotions | See push strategy.
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