Formula Selling

Formative Research – The market research , usually on target customers, carried out before a marketing program is begun in order to help formulate effective strategy and tactics.

Formula Selling – A selling approach in which the sales presentation is designed to move the customer through the stages in the decision-making process such as get the customer’s attention, develop interest, build desire, and secure action.

Forward Buying – 1. (industrial definition) The practice of buying materials in a quantity exceeding current requirements in order to receive volume discounts or to ensure availability. 2. (sales promotion definition) A situation in which retailers buy more of a product on deal than they intend to sell during the deal period. These additional products are warehoused or stored and sold later at full price or margin.

Forward Stock – 1. (physical distribution definition) Inventory placed in the channel of distribution in advance of customer commitment. 2. (retailing definition) Merchandise carried on the selling floor, rather than in a reserved stockroom.

Franchise – The privilege, often exclusive, granted to a distributor or dealer by a franchisor to sell the franchisor’s products within a specified territory. A franchise is an example of a contractual vertical marketing system.

Franchising – A contractual system of distributing goods and services whereby one party (the franchisor) grants to another party (the franchisee) the right to distribute or sell certain goods or services; the franchise agrees to operate the business according to a marketing plan substantially prescribed by the franchisor; and the franchisee operates the business according to a marketing plan substantially under the trademark or trade name owned by the franchisor.

Free Alongside Ship (F.A.S.) – Under this contract the seller must place goods alongside, or available to, the vessel or other mode of transportation and pay all charges up to that point. The seller’s legal responsibility ends once he or she has obtained a clean wharfage receipt.

Free Goods – An additional amount of product offer as a reward to the consumer or reseller for purchasing certain product or vlume of product.

Free Merchandise – A trade sales promotion technique in which an additional amount of the product is offered without additional cost as an incentive to purchase a minimum quantity. The incentive is typically offered for a limited period of time.

Free Sample – A consumer sales promotion technique in which a regular or specially sized quantity of the product is given away without cost to prospective purchasers.

Free Standing Insert (fsi) 1. (sales promotion definition) A preprinted advertising page(s), commonly offering coupons or other promotional activities, that is inserted into a separate publication, such as newspaper. 2. (advertising definition) Preprint advertising of one or more pages that is loosely inserted between the pages of a newspaper or magazine.

Free Trade Area – The area of jurisdiction encompassing a group of countries that have agreed to abolish all internal barriers to trade between the member countries.

Free-Flow Pattern – A store layout arrangement consisting of a series of circular, octagonal, oval, or U-shaped fixture patterns, resulting in curving aisles characterized by a deliberate absence of uniformity.

Free-Form – A store design used primarily in specialty stores or within the boutiques of larger stores that arranges fixture and aisles in an asymmetrical pattern.

Free-On-Board (FOB) – This implies loading on a transportation vehicle at some designated point. After the letters f.o.b., there is generally a designation of a place where title and control pass to the buyer. For example, f.o.b. plant means that the control and title to the goods pass to the buyer at the seller’s plant of origin.

Freight Absorption Pricing – A policy of pricing in which the seller picks up the tab for transportation. This is usually done in order to meet the delivered price of a local competitor.

Freight Bill – The document used by carriers to charge for transportation services provided.

Freight Classification – All products transported by common carriers are grouped together into common freight classifications based upon the characteristic of the product that influences cost of handling and transport.

Freight Forwarder – 1. (physical distribution definition) The freight forwarder combines small shipments from different shippers into larger shipments for scale economies in the purchase of inter city transportation. The freight forwarder functions as a wholesaler of transportation services. 2. (global marketing definition) Specialists in traffic operations, custom clearances and shipping, and tariffs, and schedules. They assist exporters in determining and paying freight, fees, and insurance charges. hey usually handle freight from port of export to overseas port of import. In the U.S. they are licensed by the Federal Maritime Commission.

Freight-All-Kinds Rate (FAK) – A mixture of different products are delivered in a combination to a single or limited number of destinations. Rather than determine the classification and rate for each product, an average rate is applied for a total shipment. This simplifies paperwork associated with the bill of lading freight bills.

Frequency – The number of times a person, household, or member of a target market is exposed to a media vehicle or an advertiser’s media schedule within a given period of time. This number is usually expressed as an average frequency (the average number of exposures during the time period) or as a frequency distribution (the number of people exposed once, twice, three times, etc.)

Frequent Shopper Program – A continuity incentive program offered by a retailer to reward customers and encourage repeatbusiness. The reward is usually based on either purchase volume or number of store visits.

Fringe Sizes – The sizes that are either very large or very small, if offered at all, are offered in very limited depth because of the thin market demand for them. Some stores specialize in fringe sizes or out sizes – e.g., tall women’s shops; petite size shops.

Fulfillment – The gathering of orders or offers from sales promotion event and the process of completing the event by distributing items integral to the event such as premiums, rebates, bounce back offer, or ordered merchandise.

Full-Cost Pricing – An approach whereby prices are determined after all functional costs have been allocated.

Full-Line Forcing – A form of tying arrangement in which a supplier forces a dealer to carry the full line of products. This has not been treated as per se unlawful by the courts; the restriction may be upheld as reasonable when the supplier can demonstrate a legitimate business need for the dealers to carry the full line.

Full-Line Pricing – In this situation, all items in a given line are priced relative to each other, or are discounted as a total package. Changes on any one item take into consideration the prices of the other items in the line, and the seller’s intention is to enhance sale of the total line.

Full-Line Sales Organization – In this organization, each company or division salesperson sells all products to all accounts in a geographic territory. This is an appropriate strategy when the product line is not large, is nontechnical, and is sold through one channel of distribution. It is a lower cost strategy than specializing by product, market, or type of account.

Full-Service (of retailing) – The offering of an adequate number of salespeople and sales supporting services to give customers the full range of expected services. It is usually compared to limited services, which implies some expected services are not offered – e.g., credit.

Functional Discount – The discount given to middlemen or others who act in the capacity of performing distributive services that would otherwise have to be performed by the manufacturer itself. The discount sometimes prevails regardless of the quantities involved.

Functional Expense Classification – A type of expense classification system that identifies the purpose of an expenditure. The major functions promoted by the National Retail Merchants Association are (1) administration, (2) occupancy, (3) publicity, (4) buying, and (5) selling.

Functional Middleman – A middleman who ordinarily assists directly in effecting a change in ownership but does not take title to the goods in which the middleman deals. The middleman specializes in the performance of a single marketing function or a limited number of such functions, one of which is usually related to the transfer of title.

Functional Organization – In a functionally organized company, the managers of each major function (such as marketing, production, research and development, and finance) report to the chief executive, who provides overall direction and coordination. Similarly, in a functionally organized marketing department, the managers of the major marketing functions (such as sales, advertising, marketing research, and product planning) report to the marketing manager. Comment: The advantage of this form is that it provide specialization by function, while coordination of functions is provided by the chief executive. The same can be said for the functional marketing department in which direction and coordination of marketing functions is provided by the marketing manager.

Functional Product Grouping – The categorizing and displaying of merchandise by common end users.

Functional Theory of Attitudes – A theory of attitudes based on the idea that attitudes develop to satisfy certain functions, e.g., needs or goals, for the individual. According to this theory, attitudes reflect the underlying motives of the individual, thus, the theory is sometimes referred to as motivational approach to attitudes.

Fundraising – The technique used to solicit contributions or other support for an organization from outside interests.

Funnel Approach – An approach to question sequencing that get its name from its shape, starting with broad questions and progressively narrowing down the scope.

Future Dating – A dating method that allows the buyer additional time to take advantage of the cash discount or to pay the net amount of the invoice.

Future Transaction – A commitment to take or deliver a currency at a specified future date.

Futurism – A philosophy or perspective that focuses on the importance of serious thinking about and planning for the future.

Futurology -The prediction of future developments by an intensive study of past and present trends, using a variety of techniques, from imagination to the Delphi technique to computer simulations. Perspectives of the future are useful in contingency planning and have been used for strategic long range planning. It is used interchangeably with future research.

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