Profit Maximization Objective – A firm sets as its major objective that maximization of long-run profits. If not stated, this is often the assumed objective of a firm. There are, however, many other variables that may provide the basis of objectives for a firm. Other objectives relate to such variables as sales growth, market share, risk diversification, innovation, etc.
Profit-Volume Ratio – The dollar contribution per unit divided by the unit price. The profit-volume ratio indicates the rate at which fixed costs are recovered and, after the break-even point has been reached, the rate at which profits are earned as sales volume increase.
Profiteering – The taking advantage of a situation as famine or natural disaster to charge exorbitant prices and realize excessive profits.
Profits – The excess of total revenues over total costs in a given time period.
Programmed Merchandise Agreement – A joint venture in which a specific retailer and supplier develop a comprehensive merchandising plan to market supplier’s product lines.
Programmed Merchandising – The careful planning and concentration of purchases with a limited number of preferred, or key, vendors. It is usually for an entire line of merchandise and for extended periods of time, such as a year.
Projective Technique – 1. (consumer behavior definition) A psychological method of uncovering subconscious material within subjects. Ambiguous stimuli such as the thematic Apperception Test, sentence completion test, word association tests, or Rorschach ink blots are presented to subject who are asked to verbalize their perceptions and reactions. The assumption is that if psychological needs, values, and anxieties affect perception of reality, those can be uncovered by analysis of responses to vague stimuli. 2. (marketing research definition) A method of questioning respondents using a vague stimulus that respondents are asked to describe, expand on, or build a structure around; the basic assumption is that an individual’s organization of the relatively unstructured stimulus is indicative of the person’s basic perceptions of the phenomenon and reaction to it.
Promotion Mix – The various communication techniques such as advertising, personal selling, sales promotion, and public relations/product publicity available to a marketer that are combined to achieve specific goals.
Promotion Models -Models to estimate the effect of a promotion (e.g. temporary price change, etc.) include models based on market response functions, or a combination of empirical data with management subjective judgment as in BRANDAID. Promotion models often are stochastic and based on behavioral assumptions regarding retailers and consumers. Many of these models decompose the value of the promotion into components such as increased loyalty among current customers, attraction of deal prone switchers, etc. Inventory control-based promotion, models have also been proposed, incorporating the inventory carrying costs of consumers and retailers. the increased availability and popularity of scanner data have focused attention on promotion models.
Promotion, Word-of-Mouth – The product/service information, experience, and opinions discussed by consumers in social contex.
Promotional Advertising – Advertising intended to inform prospective customer of special sales. It announces the arrival of new and seasonal goods, and it features, creates, and promotes a market for the merchandise items in regular stock.
Promotional Allowance – 1. (retailing definition) An allowance given by vendors to retailers to compensate the latter for money spent in advertising a particular item in local media, or for preferred window and interior display space used for the vendors’ product. 2. (sales promotion definition) The payments, price reductions, or other inducements used to reward channel members for participation in advertising and/or sales promotion programs.
Promotional Campaign – The combination of various advertising, public relations, sales promotion, and personal selling activities used by the marketer over a period of time to achieve predetermined goals.
Promotional Department Store – A departmentalized store concentrating on apparel that sells a substantial portion of its merchandise in response to frequent promotions.
Promotional Elasticity of Demand – A measure of the change in quantity demanded relative to the change in promotional activity.
Promotional Package – The collection of sales promotion materials and offers developed by the seller to influence retailers, wholesalers, or salespeople to support a particular promotional theme.
Promotional Stock – A retailer’s stock of goods offered at an unusually attractive price in order to obtain volume trade. It generally represents special purchases from vendors.
Proof-of-Purchase – Some element of the product or package used as evidence that the consumer has purchased the product. Common proofs-of-purchase are labels, boxtops, ingredients listings, etc.
Propaganda – The ideas, information, or other material commonly disseminated through the media in an effort to win people over to a given doctrine or point of view.
Propensity to Consume – The relationship between consumption and saving at all levels of income.
Proprietary – The private or exclusive ownership of such things as a process, design, or patent that competitors cannot duplicate. In the pharmaceutical industry, proprietary products are those over-the-counter products that are differentiated from prescription products.
Proprietary Drugs – Drug products not requiring a physician’s prescription, patent medicines, or over-the-counter remedies.
Proprietary Store – An establishment selling the same merchandise as a drug store, except that prescriptions are not filled and sold.
Prospect – A potential qualified customer who has the willingness, financial capacity, authority, and eligibility to buy the salesperson’s offering.
Prospecting – The process of identifying and qualifying potential customers.
Prosperity – The phase of business cycle characterized by high-level production, increased demand for capital goods, and a tendency toward full employment.