Business Glossary

exploration of the size, characteristics, and potential of a market to find out, before developing any new product or service, what people want and need. Market research is an early step in marketing-which stretches from the original conception of a product to its ultimate delivery to the consumer.

In the stock market, market research refers to technical analysis of factors such as volume, price advances and declines, and market breadth, which analysts use to predict the direction of prices.

form of banking automation that connects the customer service desk in a bank office with the bank's customer records in the back office. Direct linkage to a Customer Information File enables branch account officers to book new loan applications directly with the bank's loan processing system, and also permits faster look-up of customer account information to answer questions on rates, new services, and so on. (The term platform originated in the period when banking officers sat at desks on a platform slightly elevated above the main banking floor, but today is used to describe the customer service area in a bank's lobby.) Platform automation in bank branches also can speed the processing time in handling credit applications, because paperwork is reduced.

credit card promoted under a sponsoring agreement between an organization and a card issuing bank. In exchange for making available its membership list, the sponsor receives some compensation from the issuing bank, usually part of issuer's net interest income. The issuer may waive annual fees for affinity cardholders, or even offer the card at a lower rate than ordinary bank cards.

bank employee who manages a customer's accounts much as a broker manages a client's securities portfolio. Each personal banker services specific customers, opens new accounts, takes loan applications, answers questions about other banking services, and in general acts as a personal financial advisor.

financial services accessed via the Internet's World Wide Web. An Internet bank exists only on the Internet, the global network of computer networks without any "brick and mortar" branch offices. By eliminating the overhead expenses of conventional banks, Internet banks theoretically can pay consumers higher interest rates on savings than the national average. Banks use the Internet to deliver information about financial services, replace transactions done in branch offices, which eliminates the need to build new branches, and to service customers more efficiently. Internet banking sites offer the prospect of more convenient ways to manage personal finances, and such services as paying bills on-line, finding mortgage or auto loans, applying for credit cards, and locating the nearest ATM or branch office. Some Internet banks also offer 24-hour telephone support, so customers can discuss their needs with bank service representatives directly.

concept in financial services marketing whereby an account officer or Customer Service Representative tries to meet all of a consumer's needs, or to the extent permitted by regulation. Relationship banking is an attempt to advance the sales culture in bank marketing beyond order taking to a more pro-active form of direct selling. Instead of selling financial services one at a time, an account officer attempts to gain an understanding of the consumer's needs and offer services that fulfill those needs. Commercial banks and other financial institutions have attempted to apply the concept of relationship banking through personal banker and private banking programs.

outline of the characteristics of the inhabitants of a particular consumer region. Used primarily in developing marketing strategies. A market profile will describe demographics, geographical data, lifestyle patterns, consumer needs and preferences, and socioeconomic conditions within a particular market.

1. public place where products or services are bought and sold, directly or through intermediaries. Also called marketplace.
2. aggregate of people with the present or potential ability and desire to purchase a product or service; equivalent to demand.
3. securities markets in the aggregate, or the New York Stock Exchange in particular.
4. short for market value, the value of an asset based on the price it would command on the open market, usually as determined by the market price at which similar assets have recently been bought and sold.
5. as a verb, to sell. See also marketing.

group of persons for whom a firm creates and maintains a product mix that specifically fits the needs and preferences of that group. For example, the furniture market can be divided into segments described as Early American, contemporary, or traditional. A marketer may choose to target the entire furniture market with the generalized product, promotion, distribution, and pricing strategy meant to appeal to everyone, or may go after one segment of the furniture market with a customized strategy or several segments of the furniture market with more than one strategy.

Market segments can be defined in several other ways besides product types-for example, consumer types, channel of distribution, or price levels. Consumer market segments are defined in terms of geographic (place of purchase or use), demographic (age, income, occupation of consumer), and psychographic (buying motives, product usage level, lifestyle) criteria.

Selecting a target market segment for a product rather than attempting to sell to the entire market can be a more efficient use of promotion dollars, because a greater market share can be achieved by capturing most or all of a segment via a carefully directed marketing plan that reaches precisely the right people with the right message than by trying to capture market share with a generic approach. It is also a better use of production resources if they can be concentrated on a single product and/or package, thus experiencing economies of scale. For example, a factory that only makes metal bed frames can operate with less equipment, expertise, and materials than a similar size company that makes metal bed frames, sofa beds, dining room tables, and office furniture.

Target marketing makes better use of distribution dollars as well, enabling marketers to concentrate on developing working relationships with department-store chains or on developing a business-tobusiness sales force, but not both.

selling via a promotion delivered individually to the prospective customer. Direct marketing differs from general marketing in that the result of a promotion is measurable in terms of response; also, direct marketing is largely dependent upon the use of customer files and lists. Frequently associated with mail order firms, direct marketing also includes a variety of promotion media such as door-to-door selling, videotextservices, newspaper inserts, telemarketing, cards, and package inserts. Direct marketing is a more personal type of promotion than advertising. The primary users are magazine publishers, catalog houses, political campaign organizations, and financial institutions.take-one

1. public place where products or services are bought and sold, directly or through intermediaries. Also called marketplace.
2. aggregate of people with the present or potential ability and desire to purchase a product or service; equivalent to demand.
3. securities markets in the aggregate, or the New York Stock Exchange in particular.
4. short for market value, the value of an asset based on the price it would command on the open market, usually as determined by the market price at which similar assets have recently been bought and sold.
5. as a verb, to sell. See also marketing.

outline of the characteristics of the inhabitants of a particular consumer region. Used primarily in developing marketing strategies. A market profile will describe demographics, geographical data, lifestyle patterns, consumer needs and preferences, and socioeconomic conditions within a particular market.

selling via a promotion delivered individually to the prospective customer. Direct marketing differs from general marketing in that the result of a promotion is measurable in terms of response; also, direct marketing is largely dependent upon the use of customer files and lists. Frequently associated with mail order firms, direct marketing also includes a variety of promotion media such as door-to-door selling, videotextservices, newspaper inserts, telemarketing, cards, and package inserts. Direct marketing is a more personal type of promotion than advertising. The primary users are magazine publishers, catalog houses, political campaign organizations, and financial institutions.take-one

group of persons for whom a firm creates and maintains a product mix that specifically fits the needs and preferences of that group. For example, the furniture market can be divided into segments described as Early American, contemporary, or traditional. A marketer may choose to target the entire furniture market with the generalized product, promotion, distribution, and pricing strategy meant to appeal to everyone, or may go after one segment of the furniture market with a customized strategy or several segments of the furniture market with more than one strategy.

Market segments can be defined in several other ways besides product types-for example, consumer types, channel of distribution, or price levels. Consumer market segments are defined in terms of geographic (place of purchase or use), demographic (age, income, occupation of consumer), and psychographic (buying motives, product usage level, lifestyle) criteria.

Selecting a target market segment for a product rather than attempting to sell to the entire market can be a more efficient use of promotion dollars, because a greater market share can be achieved by capturing most or all of a segment via a carefully directed marketing plan that reaches precisely the right people with the right message than by trying to capture market share with a generic approach. It is also a better use of production resources if they can be concentrated on a single product and/or package, thus experiencing economies of scale. For example, a factory that only makes metal bed frames can operate with less equipment, expertise, and materials than a similar size company that makes metal bed frames, sofa beds, dining room tables, and office furniture.

Target marketing makes better use of distribution dollars as well, enabling marketers to concentrate on developing working relationships with department-store chains or on developing a business-tobusiness sales force, but not both.