Marginal Propensity to Consume – The fraction of each extra dollar that consumers will spend on consumption, given an extra dollar of real income.
Marginal Propensity to Save – The fraction of each extra dollar that consumers will save, given an extra dollar of real income.
Marginal Revenue (MR) – the net change in total revenue that results from producing and marketing one additional unit.
Marginal Unit – The last unit, i.e.,that unit whose acquisition or loss is under consideration.
Marginal Utility – The change in total utility due to purchasing or consuming one additional unit of a product.
Markdown – 1. (pricing definition) The amount of a reduction from the selling price. 2. (retailing definition) A reduction in the original or previous retail price of a piece of merchandise. For management purposes, a markdown is stated as a percentage of net sales in contrast with off-retail percentage.
Markdown Cancellation – An upward price adjustment that is offset against a former markdown. The most common example is the restoration of a price to a former markdown. The most common example is the restoration of the price to original retail after the goods have been marked down temporarily for purposes of a special sales event.
Markdown Control – Any system ensuring that every markdown taken is accounted for, so that book retail inventory may be kept in line with the actual physical inventory.
Markdown Money – The funds provided by a vendor to a retailer to cover decreased gross margin from markdowns and other merchandising issues.
Market Attractiveness – A measure of the profit potential inherent in the structure of a market industry. There are a multitude of factors contributing to (and which can be used to measure) market attractiveness. The major categories and some examples from each of the categories are provided in the following: 1. market factors – market growth rate, market size, and life cycle stage; 2. economic and technological factors – investment intensity, industry capacity, barriers to entry or barriers to exit, and access to raw materials; 3. competitive forces -types of direct rivals, structure of competition and substitution treats, bargaining power of buyers and suppliers; and 4. environmental factors – regulatory climate, degree of social acceptance, and human factors.
Market Attractiveness– Competitive Position Matrix – In this matrix, each business unit or product is classified jointly by market attractiveness and the strength of the competitive position. The market attractiveness-competitive position matrix is a multifactor portfolio model developed by McKinsey and General Electric (GE), with each dimension of the matrix being based on multiple factors. It is sometimes called a nine-block matrix because each of the two dimensions is divided into three levels.
Market Concentration – The degree to which relatively few firms account for a large proportion of the market such as in an oligopolistic situation. It is also known as the concentration ration.
Market Coverage – The number of available outlets in a given line of retail or wholesale trade, relative to a saturation level, that are selling a manufacturer’s brand in a given market area. Manufacturers typically follow one of three forms of market coverage: exclusive distribution, intensive distribution, or selective distribution.
Market Coverage Strategies – Alternative approaches that a company can use to select and target markets. Five common market coverage strategies are: 1. single market concentration, focusing on one part of the market; 2. product specialization, making one product for all markets; 3. market specialization, making all products for one market; 4. selective specialization, making products for multiple niches; and 5. full coverage, making a product for every customer.
Market Crystallization – A market development stage that refers to the effort needed to identify a latent market (i.e., organizations that share a similar need or want for something that does not yet exist) and to work to crystallize that need. The result is a new method or service that can satisfy all or part of the market. For example, the videotext market is in the market crystallization phase. It appears to have some market benefits, but those benefits have not been fully developed.
Market Defense – The strategic moves that attempt to minimize or deter threatening actions by existing potential competitors. Strategic moves can deter all or some of the prospective challengers by making the profit prospects so unattractive and risky that the market share gains are not worth pursuing. Deterrence strategies include the following: 1. signaling intentions to defend, 2. foreclosing avenues for attack by building barriers to entry or mobility, 3. increasing entry costs or investments, and 4. reducing market attractiveness by lowering prices. If challengers cannot be deterred, then the purpose of market defense is to contain challengers’ moves and minimize the damage.
Market Demand – The total volume of a given product or service bought by a specific group of customers in a specified market area, during a specific time period.
Market Development – The expansion of the total market served by a business, achieved by 1. entering new segments – by expanding the geographic base of the business or by using new channels to reach unserved customers 2. conversion of nonusers – by lower prices or increased (or especially designed) promotion ; and 3. increasing usage by present users – by developing and promoting new uses for the product.
Market Economy – 1. (environment definition) An economic system in which decisions concerning production and consumption are made by individuals and organizations without intervention by a central planning authority. The economic “laws of supply and demand” operate relatively unrestrained by governmental direction, as contrasted with the planned economy. 2. (economic definition) An economy in which decisions about what and how much to be produced and marketed are made by the collective action of competitors vying for customer patronage.
Market Evolution – The market (or industry) life cycles describe the evolution of the market. These cycles have a similar shape to the product life cycle and similarly, have a number of distinct stages: 1. embryonic – the product class and industry definitions are virtually synonymous, diffusion rates are gradual, and there is considerable uncertainty about the product; 2. growth – the industry structure develops, the introduction of new product classes becomes easier as consumers become more knowledgeable, and the channels facilitate the marketing of new product classes established; and 3. maturity – an established infrastructure facilitates rapid introduction and diffusion of new product variants or product classes, competitors jockey for position, and older products have to make adjustments to protect their declining position.