Concentration – The degree to which a small number of firms in an industry account for a large proportion of the economic activity of that industry. Frequently used as one factor for determining the existence of Monopoly elements in the industry. Because it has been the basis for Anti-Trust activity, major firms in an industry try to avoid excessive concentration. See: Market Structure
Concentration, Economic – A measure of dominanceof a market exercised by the top few firms in the industry.
Concentration Diversification – Expansion in similar markets, the activity confined to existing structure inside the company.
Concentration Ratio – 1. (environment definition) A statistical measure, such as the percentage of a total industry’s sales accounted for by the largest three firms in the industry, representing the degree of concentration in the market. 2. (strategic marketing definition) The proportion of industry shipments accounted for by the four largest firms in that industry, expressed as a percentage. This measure describes the structure of competition and yields insights into the intensity of rivalry in an industry.
Concentration Strategy – In this strategy, a company chooses to pursue a large share of one or more submarkets rather than chasing a small share of a large market. The strategy can be somewhat risky if the demand in the submarket falls away or if one or more competitors enter the submarket.
Concentric Zone Theory – A theory of urban land-use patterns, developed by William Burgess, that states that a city will assume the form of five concentric urban zones; the central business district, the zone in transition, the zone of working persons’ home, the zone of better residences, and commuters zone. Growth is accomplished by the expansion of each zone into the next zone.
Concept – A briefly stated idea or theme for possible use as the organizing idea for an advertisement or advertising campaign.
Concept Evaluation Stage – A stage of the new product development cycle in which ideas for new products are evaluated. Initially the product idea may be evaluated in the basis of words, pictures or models, The purpose of the concept evaluation stage is to determine whether an idea is worth further investment. The concept evaluation stage follows the idea of generation stage.
Concept Statement – A verbal and/or pictorial statement of a concept (for a product or for advertising) that is prepared for presentation to potential buyers or users to get their reaction prior to its being implemented. product concepts are followed by prototypes; advertising concepts by one of several forms of semi-finished production.
Concept Statement, Commercialized – A term used in distinguishing two types of product concept statements. A commercialized product concept statement is prepared in an advertising format, as a persuasive statement. A non-commercialized product concept statement is prepared in neutral, non-persuasive format.
Concept Test – A qualitative and quantitative examination of consumer reactions to a proposed advertising idea.
Concept Testing and Development – The process in which a concept statement is presented to potential buyers or users, for their reactions. These reactions permit the developer to estimate the sales value of the concept (whether product or advertising) and to make changes in it so as to enhance its sales value.
Concession – See: Leased Department
Conclusive Research – An organized study or investigation to produce evidence on which management may make a decision. Before this may be done, it is frequently necessary to do Exploratory Research. Because of the confidential nature of conclusive research, much of it is not publicly reported. It may well be the most common type of marketing research undertaken. See: Performance Research
Concurrence – Duplication of the structure resulting from the joining of marketing elements. This may be horizontal, as in the instance of associations in the same industry on both the retail and the wholesale levels; or it may be vertical, as in the instance of channels distribution of competing firms in the same field.
Condense Type – Any type style with narrower-than-usual Characters, thus permitting more characters to the line. See: Extended Type
Conditional Probability – The measure chance of occurrence that is assigned to event A when it is known that the event B has occurred; or that would be assigned to event A if it were known that the event B had occurred.
Conditional Sale – A contract for sale of an item in which title does not pass to the buyer until payment is completed as require by the contract. Possession and risk of loss are assumed by the buyer.
Conditional Sale Contract – An agreement under which the title does not pass to the buyer until the buyer has fulfilled his/her contract obligations. The buyer assumes complete responsibility upon delivery, must maintain the article purchased, and must make a regular payments. if the buyer defaults, the seller may repossess, use the proceeds of a sale of the item to satisfy the remaining obligation, and refund the excess, if any, above the cost of repossession and sale, to the buyer. If the proceeds of a sale are insufficient, the buyer is still technically liable to the seller for the remainder.
Confidence Interval – The range within which a population mean or a population total is located with a known level of probability.
Confirmation – In consumer satisfaction theory, confirmation refers to a situation in which a product performs exactly as it is expected to, e.i., prepurchase expectations are confirmed.
Confirmation (of order) – From a retailer’s standpoint, the official order of a store for goods made out on the retailer’s order form and countersigned by the buyer and merchandise manager. It is distinguished from the memoranda that buyers often make out on vendor’s order blanks that are not official orders and are not binding on the store. From the vendor’s standpoint, it is the acknowledgement of the buyer’s order by the vendor. It is the buyer’s legal acceptance of the offer made by the buyer generally in writing.
Confounded Variable – In marketing Research, an independent variable of an extraneous sort whose influence on the dependent variable is associated with the true explanatory variable in such a way as to make necessary special techniques to separate the extraneous influence. Examples of confounded variables are: seasonal variations, competitive changes, and changes in consumer’s tastes.
Confusion of Goods – The intermingling of the goods of two or more different owners where once so mixed the goods are difficult or even impossible again to separate. See: Pooling
Conglomerate – A firm with large diversified holdings acquired through acquisitions and mergers. It is also known as a multimarket firm.
Conglomerate Integration – Acquisition of one company by another in an unrelated business and not necessarily in the same, or on the same level of, the channel of distribution.
See: Horizontal Integration
Conglomerate Market Competition – Refers to the sale of the same product by different types of dealers and distributors. The result of the trend toward scramble merchandising, which has had the effect of multiplying channels of distribution.
Conglomerate Merger – The merger of companies in unrelated businesses, such as the merger of automobile manufacturers with electronics products manufacturers, or of airlines with hotels and car rental companies.
Congruent Innovation – One of the four-way classification of the new products as to degrees of newness, this type is not of a concept accepted by the society and just about the same as an already existing product. For all practical considerations, it is not actually an innovation because it brings about no change in established consumption patterns. The other three are: Continuous, Discontinuous and dynamically Continuous. Proposed by Thomas S. Robertson
Congruent Production Diversification – Additional products or lines of products are added to a firm’s offerings based on the firm’s technological skills and/or physical plant. A policy which may be dictated by the firm’s financial position or structure. Same as: Production-Oriented Diversification