Exam 3

equity theory

A theory of motivation that holds that worker satisfaction is influenced by employees’ perceptions about how fairly they are treated compared with their coworkers.

expectancy theory

A theory of motivation that holds that the probability of an individual acting in a particular way depends on the strength of that individual’s belief that the act will have a particular outcome and on whether the individual values that outcome.

goal-setting theory

A theory of motivation based on the premise that an individual’s intention to work toward a goal is a primary source of motivation.

Hawthorne effect

The phenomenon that employees perform better when they feel singled out for attention or feel that management is concerned about their welfare.

hygiene factors

Extrinsic elements of the work environment that do not serve as a source of employee satisfaction or motivation.

job enlargement

The horizontal expansion of a job by increasing the number and variety of tasks that a person performs.

job enrichment

The vertical expansion of a job by increasing the employee’s autonomy, responsibility, and decision-making authority.

job rotation

The shifting of workers from one job to another; also called cross-training.

job sharing

A scheduling option that allows two individuals to split the tasks, responsibilities, and work hours of one 40-hour-per-week job.

Maslow’s hierarchy of needs

A theory of motivation developed by Abraham Maslow; holds that humans have five levels of needs and act to satisfy their unmet needs. At the base of the hierarchy are fundamental physiological needs, followed in order by safety, social, esteem, and self-actualization needs.

motivating factors

Intrinsic job elements that lead to worker satisfaction.

motivation

Something that prompts a person to release his or her energy in a certain direction.

need

The gap between what is and what is required.

punishment

Anything that decreases a specific behavior.

reinforcement theory

A theory of motivation that holds that people do things because they know that certain consequences will follow.

reward

Anything that increases a specific behavior.

scientific management

A system of management developed by Frederick W. Taylor and based on four principles: developing a scientific approach for each element of a job, scientifically selecting and training workers, encouraging cooperation between workers and managers, and dividing work and responsibility between management and workers according to who can better perform a particular task.

Theory X

A management style, formulated by Douglas McGregor, that is based on a pessimistic view of human nature and assumes that the average person dislikes work, will avoid it if possible, prefers to be directed, avoids responsibility, and wants security above all.

Theory Y

A management style, formulated by Douglas McGregor, that is based on a relatively optimistic view of human nature; assumes that the average person wants to work, accepts responsibility, is willing to help solve problems, and can be self-directed and self-controlled.

Theory Z

A theory developed by William Ouchi that combines U.S. and Japanese business practices by emphasizing long-term employment, slow career development, moderate specialization, group decision-making, individual responsibility, relatively informal control over the employee, and concern for workers.

want

The gap between what is and what is desired.

assembly process

A production process in which the basic inputs are either combined to create the output or transformed into the output.

bill of material

A list of the items and the number of each required to make a given product.

blockchain technology

Refers to a decentralized “public ledger” of all transactions that have ever been executed. It is constantly expanding, as “completed” blocks are added to the ledger with each new transaction.

business process management (BPM)

A unified system that has the power to integrate and optimize a company’s sprawling functions by automating much of what it does.

CAD/CAM systems

Linked computer systems that combine the advantages of computer-aided design and computer-aided manufacturing. The system helps design the product, control the flow of resources needed to produce the product, and operate the production process.

cellular manufacturing

Production technique that uses small, self-contained production units, each performing all or most of the tasks necessary to complete a manufacturing order.

computer-aided design (CAD)

The use of computers to design and test new products and modify existing ones.

computer-aided manufacturing (CAM)

The use of computers to develop and control the production process.

computer-integrated manufacturing (CIM)

The combination of computerized manufacturing processes (such as robots and flexible manufacturing systems) with other computerized systems that control design, inventory, production, and purchasing.

continuous improvement

A commitment to constantly seek better ways of doing things in order to achieve greater efficiency and improve quality.

continuous process

A production process that uses long production runs lasting days, weeks, or months without equipment shutdowns; generally used for high-volume, low-variety products with standardized parts.

critical path

In a critical path method network, the longest path through the linked activities.

critical path method (CPM)

A scheduling tool that enables a manager to determine the critical path of activities for a project—the activities that will cause the entire project to fall behind schedule if they are not completed on time.

customization

The production of goods or services one at a time according to the specific needs or wants of individual customers.

e-procurement

The process of purchasing supplies and materials online using the internet.

electronic data interchange (EDI)

The electronic exchange of information between two trading partners.

enterprise resource planning (ERP)

A computerized resource-planning system that incorporates information about the firm’s suppliers and customers with its internally generated data.

fixed-position layout

A facility arrangement in which the product stays in one place and workers and machinery move to it as needed.

flexible manufacturing system (FMS)

A system that combines automated workstations with computer-controlled transportation devices—automatic guided vehicles (AGV)—that move materials between workstations and into and out of the system.

Gantt charts

Bar graphs plotted on a time line that show the relationship between scheduled and actual production.

intermittent process

A production process that uses short production runs to make batches of different products; generally used for low-volume, high-variety products.

inventory

The supply of goods that a firm holds for use in production or for sale to customers.

inventory management

The determination of how much of each type of inventory a firm will keep on hand and the ordering, receiving, storing, and tracking of inventory.

ISO 14000

A set of technical standards designed by the International Organization for Standardization to promote clean production processes to protect the environment.

ISO 9000

A set of five technical standards of quality management created by the International Organization for Standardization to provide a uniform way of determining whether manufacturing plants and service organizations conform to sound quality procedures.

job shop

A manufacturing firm that produces goods in response to customer orders.

just-in-time (JIT)

A system in which materials arrive exactly when they are needed for production, rather than being stored on-site.

lean manufacturing

Streamlining production by eliminating steps in the production process that do not add benefits that customers want.

make-or-buy decision

The determination by a firm of whether to make its own production materials or to buy them from outside sources.

Malcolm Baldrige National Quality Award

An award given to recognize U.S. companies that offer goods and services of world-class quality; established by Congress in 1987 and named for a former secretary of commerce.

manufacturing resource planning II (MRPII)

A complex computerized system that integrates data from many departments to allow managers to more accurately forecast and assess the impact of production plans on profitability.

mass customization

A manufacturing process in which goods are mass-produced up to a point and then custom-tailored to the needs or desires of individual customers.

mass production

The manufacture of many identical goods at once.

materials requirement planning (MRP)

A computerized system of controlling the flow of resources and inventory. A master schedule is used to ensure that the materials, labor, and equipment needed for production are at the right places in the right amounts at the right times.

operations management

Management of the production process.

outsourcing

The purchase of items from an outside source rather than making them internally.

perpetual inventory

A continuously updated list of inventory levels, orders, sales, and receipts.

process layout

A facility arrangement in which work flows according to the production process. All workers performing similar tasks are grouped together, and products pass from one workstation to another.

process manufacturing

A production process in which the basic input is broken down into one or more outputs (products).

product (or assembly-line) layout

A facility arrangement in which workstations or departments are arranged in a line with products moving along the line.

production

The creation of products and services by turning inputs, such as natural resources, raw materials, human resources, and capital, into outputs, which are products and services.

production planning

The aspect of operations management in which the firm considers the competitive environment and its own strategic goals in an effort to find the best production methods.

production process

The way a good or service is created.

program evaluation and review technique (PERT)

A scheduling tool that is similar to the CPM method but assigns three time estimates for each activity (optimistic, most probable, and pessimistic); allows managers to anticipate delays and potential problems and schedule accordingly.

purchasing

The process of buying production inputs from various sources; also called procurement.

quality

Goods and services that meet customer expectations by providing reliable performance.

quality control

The process of creating quality standards, producing goods that meet them, and measuring finished goods and services against them.

robotics

The technology involved in designing, constructing, and operating computer-controlled machines that can perform tasks independently.

routing

The aspect of production control that involves setting out the work flow—the sequence of machines and operations through which the product or service progresses from start to finish.

scheduling

The aspect of production control that involves specifying and controlling the time required for each step in the production process.

Six Sigma

A quality-control process that relies on defining what needs to be done to ensure quality, measuring and analyzing production results statistically, and finding ways to improve and control quality.

supply chain

The entire sequence of securing inputs, producing goods, and delivering goods to customers.

supply-chain management

The process of smoothing transitions along the supply chain so that the firm can satisfy its customers with quality products and services; focuses on developing tight bonds with suppliers.

Total Quality Management (TQM)

The use of quality principles in all aspects of a company’s production and operations.

value-stream mapping

Routing technique that uses simple icons to visually represent the flow of materials and information from suppliers through the factory to customers.

benefit segmentation

The differentiation of markets based on what a product will do rather than on customer characteristics.

big data

Large data sets and systems and solutions developed to manage large accumulations of data.

brainstorming

A method of generating ideas in which group members suggest as many possibilities as they can without criticizing or evaluating any of the suggestions.

bundling

The strategy of grouping two or more related products together and pricing them as a single product.

buyer behavior

The actions people take in buying and using goods and services.

capital products

Large, expensive items with a long life span that are purchased by businesses for use in making other products or providing a service.

competitive advantage

A set of unique features of a company and its products that are perceived by the target market as significant and superior to those of the competition; also called differential advantage.

convenience products

Relatively inexpensive items that require little shopping effort and are purchased routinely without planning.

cost competitive advantage

A firm’s ability to produce a product or service at a lower cost than all other competitors in an industry while maintaining satisfactory profit margins.

culture

The set of values, ideas, attitudes, and other symbols created to shape human behavior.

customer satisfaction

The customer’s feeling that a product has met or exceeded expectations.

customer value

The ratio of benefits to the sacrifice necessary to obtain those benefits, as determined by the customer; reflects the willingness of customers to actually buy a product.

demographic segmentation

The differentiation of markets through the use of categories such as age, education, gender, income, and household size.

differential competitive advantage

A firm’s ability to provide a unique product or service with a set of features that the target market perceives as important and better than the competitor’s.

distribution strategy

Creating the means by which products flow from the producer to the consumer.

dynamic pricing

Computer algorithms that allow for prices to change based on demand.

environmental scanning

The process in which a firm continually collects and evaluates information about its external environment.

exchange

The process in which two parties give something of value to each other to satisfy their respective needs.

expense items

Items (purchased by businesses) that are smaller and less expensive than capital products and usually have a life span of less than one year.

experiment

A marketing research method in which the investigator changes one or more variables—price, packaging, design, shelf space, advertising theme, or advertising expenditures—while observing the effects of these changes on another variable (usually sales).

five Ps

The traditional 4Ps of marketing: product, price, promotion, place (distribution), now with people added as a key marketing component, which together make up the marketing mix.

focus group

A group of eight to 12 participants led by a moderator in an in-depth discussion on one particular topic or concept.

geographic segmentation

The differentiation of markets by region of the country, city or county size, market density, or climate.

leader pricing

The strategy of pricing products below the normal markup or even below cost to attract customers to a store where they would not otherwise shop.

line extension

A new flavor, size, or model using an existing brand name in an existing category.

loss leader

A product priced below cost as part of a leader-pricing strategy.

market segmentation

The process of separating, identifying, and evaluating the layers of a market in order to identify a target market.

marketing

The process of discovering the needs and wants of potential buyers and customers and then providing goods and services that meet or exceed their expectations.

marketing concept

Identifying consumer needs and then producing the goods or services that will satisfy them while making a profit for the organization.

marketing database

Computerized file of customers’ and potential customers’ profiles and purchase patterns.

marketing mix

The blend of product offering, pricing, promotional methods, distribution system, and strategies for utilizing people that creates an offering that brings a specific group of consumers superior value.

marketing research

The process of planning, collecting, and analyzing data relevant to a marketing decision.

niche competitive advantage

A firm’s ability to target and effectively serve a single segment of the market, often within a limited geographic area.

observation research

A marketing research method in which the investigator monitors respondents’ actions without interacting directly with the respondents; for example, by using cash registers with scanners.

odd-even (psychological) pricing

The strategy of setting a price at an odd number to connote a bargain and at an even number to suggest quality.

one-to-one marketing

Creating a unique marketing mix for every customer.

penetration pricing

The strategy of selling new products at low prices in the hope of achieving a large sales volume.

personality

A way of organizing and grouping how an individual reacts to situations.

prestige pricing

The strategy of increasing the price of a product so that consumers will perceive it as being of higher quality, status, or value.

price skimming

The strategy of introducing a product with a high initial price and lowering the price over time as the product moves through its life cycle.

pricing strategy

Setting a price based upon the demand for and cost of a good or service.

product

In marketing, a good, service or idea, along with its perceived attributes and benefits, that creates value for the customer.

product life cycle

The pattern of sales and profits over time for a product or product category; consists of an introductory stage, growth stage, maturity, and decline (and death).

product manager

The person who develops and implements a complete strategy and marketing program for a specific product or brand.

product strategy

Taking the good or service and selecting a brand name, packaging, colors, a warranty, accessories, and a service program.

promotion strategy

The unique combination of personal selling, traditional advertising, publicity, sales promotion, social media, and e-commerce to stimulate the target market to buy a product. Sometimes referred to as the promotion mix.

psychographic segmentation

The differentiation of markets by personality or lifestyle.

reference groups

Formal and informal groups that influence buyer behavior.

relationship marketing

A strategy that focuses on forging long-term partnerships with customers by offering value and providing customer satisfaction.

shopping products

Items that are bought after considerable planning, including brand-to-brand and store-to-store comparisons of price, suitability, and style.

specialty products

Items for which consumers search long and hard and for which they refuse to accept substitutes.

survey research

A marketing research method in which data is gathered from respondents, either in person, by telephone, by mail, at a mall, or through the internet to obtain facts, opinions, and attitudes.

target market

The specific group of consumers toward which a firm could direct its marketing efforts. It is often divided into segments so that marketing strategies can be directed to a more specific target.

test marketing

The process of testing a new product among potential users.

unsought products

Products that either are not planned as a purchase by a potential buyer or are known but the buyer does not actively seek them, such as funeral services.

volume segmentation

The differentiation of markets based on the amount of the product purchased.

5Ps

The traditional 4Ps of marketing: product, price, promotion, and place (distribution), now with packaging added as a key marketing component.

advertising

Any paid form of nonpersonal presentation by an identified sponsor.

advertising media

The channels through which advertising is carried to prospective customers; includes newspapers, magazines, radio, television, outdoor advertising, direct mail, social media, and the internet.

agents

Sales representatives of manufacturers and wholesalers.

audience selectivity

An advertising medium’s ability to reach a precisely defined market.

breaking bulk

The process of breaking large shipments of similar products into smaller, more usable lots.

brokers

Go-betweens that bring buyers and sellers together.

cost per thousand (CPM)

Cost per thousand contacts is a term used in expressing advertising costs; refers to the cost of reaching 1,000 members of the target market.

distribution (logistics)

Efficiently managing the acquisition of raw materials by the factory and the movement of products from the producer to industrial users and consumers.

distribution channel

The series of marketing entities through which goods and services pass on their way from producers to end users.

e-commerce

E-commerce refers to the development and maintenance of a company’s website and the facilitation of commerce on the website, such as the ability for customers to order products online and other activities.

frequency

The number of times an individual is exposed to an advertising message.

industrial distributors

Independent wholesalers that buy related product lines from many manufacturers and sell them to industrial users.

integrated marketing communications (IMC)

The careful coordination of all promotional activities—media advertising, sales promotion, personal selling, and public relations, as well as direct marketing, packaging, and other forms of promotion—to produce a consistent, unified message that is customer focused.

manufacturer

A producer; an organization that converts raw materials to finished products.

manufacturers’ representatives

Salespeople who represent noncompeting manufacturers; function as independent agents rather than as salaried employees of the manufacturers.

marketing intermediaries

Organizations that assist in moving goods and services from producers to end users.

merchant wholesaler

An institution that buys goods from manufacturers (takes ownership) and resells them to businesses, government agencies, other wholesalers, or retailers.

personal selling

A face-to-face sales presentation to a prospective customer.

promotion

The attempt by marketers to inform, persuade, or remind consumers and industrial users to engage in the exchange process.

promotional mix

The combination of advertising, personal selling, sales promotion, and public relations used to promote a product.

prospecting

The process of looking for sales prospects.

public relations

Any communication or activity designed to win goodwill or prestige for a company or person.

publicity

Information about a company or product that appears in the news media and is not directly paid for by the company.

qualifying questions

Inquiries used by salespeople to separate prospects from those who do not have the potential to buy.

reach

The number of different target consumers who are exposed to a commercial at least once during a specific period, usually four weeks.

retailers

Firms that sell goods to consumers and to industrial users for their own consumption.

sales promotion

Marketing events or sales efforts—not including advertising, personal selling, and public relations—that stimulate buying.

sales prospects

The companies and people who are most likely to buy a seller’s offerings.

social media

A relatively new marketing channel that includes platforms such as Facebook, Twitter, LinkedIn, Pinterest, and Instagram.

wholesalers

Firms that sell finished goods to retailers, manufacturers, and institutions.