Small Business Glossary: M
macroeconomics: A branch of economics that monitors broad performance indicators and economic systems to understand how the economy works as a whole. Macroeconomics covers subjects like the Gross National Product (GNP), unemployment rates, balance of payments, trade deficits, inflation and deflation, fiscal and monetary policy, economic growth, consumption, and investment levels.
management: 1. The group of individuals who supervise or control a business, project, or event. 2. The skills employed to organize and lead a business to accomplish desired goals efficiently and effectively. 3. The act of planning, organizing, staffing, leading, and directing a project or business.
management by objectives (MBO): 1. Aligning organization-wide effort by setting and prioritizing agreed-upon measurable objectives that are monitored periodically, with compensation and other rewards allocated on the basis of successful performance. 2. An employee performance-appraisal approach that involves assignment of measurable actions to each manager who then assigns related measurable tasks to staff, with evaluation of the manager and staff based on progress made toward the defined targets.
management information systems (MIS): Organizational tools, usually computer-based, that gather, process, and report information used to help manage a business effectively at every level, including finance, resource and people management, enterprise planning, supply chain management, customer relationship development, and project management, among others.
margin: 1. The difference between revenue and the cost of goods sold. 2. A type of investment account that allows the investor to borrow against account holdings to purchase securities, known as buying on margin. 3. The portion of the interest rate on an adjustable rate mortgage over and above the adjusted index rate. 4. The difference between the face value of a loan and the market value of collateral offered to secure the loan. 5. A term used in commodity training to describe the difference between the current or spot price of a commodity and the forward or predetermined selling price. 6. The blank space bordering text in an ad or document.
markdown: A reduction in price in order to stimulate a buyer to purchase goods, often used as an inventory reduction device.
market: 1. (noun) The group of consumers who are likely to buy the products or services that your business offers. 2. (verb) To advertise your business to consumers in a structured way.
market domination: An indicator of the competitive strength of a business, product, or brand in an overall or niche market, usually determined by comparing the market share of all competitors to determine which one controls the greatest percentage of business, with a 60 percent market share generally considered a reflection of market dominance.
market forces: Conditions that impact the performance and direction of a free market. These conditions alter the behavior of buyers and sellers, affect the prices of goods and wages, and shift supply and demand trends without any influence from the government.
market penetration: A measure of the degree to which a business or industry has achieved recognition and sales within a target market, calculated by dividing the number of customers or sales of the business by the number of customers or sales in the target market area over a specific time period. For instance, if the market area is comprised of 50,000 households and the business serves 5,000, its penetration is 10%.
market position: 1. How a business, product, or brand is perceived by consumers to be unique and meaningfully different from all other providers of similar solutions. 2. The market share ranking of a business, product, or brand in terms of sales volume within its competitive arena.
market research: The process of collecting and analyzing information about markets and consumers to provide a basis for business and marketing decisions about new products and services, distribution channels, pricing and competitive strategies, and other factors relevant to customer wants and needs.
market saturation: The point at which a business has captured close to a majority of the potential sales in its target market and is no longer able to generate sales increases due to factors such as competition, an aging product, changing market tastes and trends, or other reasons.
market segment: Within the full roster of customers of a business, a subgroup of individuals sharing at least one unique common need, want, or characteristic that is different from all other customers and that the business can target through precisely aimed marketing campaigns.
market share: The portion of sales that a single business within a product category and target market captures over a specific time period. Calculated by dividing total sales volume by the sales volume of a particular business and used to give an indication of the size and competitive rank of the business.
market situation: A snapshot of the size, dynamics, and trends of the market in which an individual, business, or organization operates, including a description of changes affecting the industry, market area, and customer base.
market-based valuation; comparable sales market of pricing: An approach used primarily in setting the asking price for houses and businesses for sale by identifying the selling prices of similar recently sold offerings.
marketing: The process through which an individual, business, or organization reaches, influences, prompts purchases and repeat business from, and develops loyalty from those in the target market audience.
marketing communications; MarCom: Messages and media that deliver information about the features, benefits, and value of a product, business, or brand, distributed through sales literature, print and broadcast mediums, the Internet, and other forms of advertising, direct mail, social media, and personal presentations.
marketing goal: The overall sales or brand awareness target that marketing programs seek to achieve.
marketing mix: The combination of efforts a business employs to achieve its marketing goals and objectives. Devised by adjusting product, price, promotion, and place (commonly known as distribution) strategies in order to arrive at a unique plan that balances market interests with business profitability.
marketing objective: A measurable result a marketer aims to achieve within a defined time period in order to support a business’s overall marketing or business goal.
marketing plan: A document that details how a business, organization, or individual will achieve marketing success over a period of time. This plan includes a statement of goals and objectives; definitions of the current market situation, positioning statement, and brand promise; and detailed descriptions of the product, pricing, distribution, and promotion strategies to be followed in order to reach the defined target audience, prompt desired consumer actions, inspire initial and repeat business, and build customer loyalty.
marketing strategies: The product, pricing, promotion, and distribution (also called place) approaches a marketer uses to address the interests of customers and prospective customers and the realities of the business, industry, and market environment.
marketing’s four Ps: The four categories that cover the functions marketers employ to achieve marketing goals and objectives. These categories address the marketer’s product, price, promotions, and distribution, which is referred to as place.
markup: An amount added by a seller to the cost of an item being resold or used in production; computed as a percentage of either the cost or the selling price. Added in order to make a profit.
mass communication: The process of a single person or organization transmitting a message to a large segment of the population, usually using mass media outlets such as print publications and broadcast media as opposed to targeted communications to individuals or precisely defined market segments.
mass media: The collection of established communication outlets reaching large numbers of people in broad cross-sections of the general public, primarily including newspapers, radio, and television networks.
media: All the means of communication that provide the public with news and entertainment, usually along with advertising; include newspapers, radio, TV, and the Internet.
media broker: An individual or business that represents a range of media outlets and assembles plans and makes ad buys that reach target audiences and fit the marketing objectives of an advertiser.
media buyer: The title of a person who plans media schedules and arranges media placements, called buys, directly for a client or through an advertising agency or media planning firm.
media mix: A media plan that uses more than one form of media (for example, a newspaper and television) to gain greater and more frequent advertising impressions.
media plan: A schedule of ad placements designed to match an advertiser’s budget while achieving multiple impressions on a target audience that corresponds to an advertiser’s customer profile.
media relations: The process of establishing editorial contacts and relationships, distributing news releases and story ideas, and becoming a trustworthy news source in order to gain favorable, unpaid editorial coverage, called publicity.
media schedule: A list of media outlets in which an ad will appear, including dates, costs, and size or length of the scheduled ads; the result of a media plan.
mediation: An informal process that involves assisted negotiation between parties of a disagreement, usually entered into voluntarily as an alternative to arbitration or litigation. Led by an impartial third party and resulting in a negotiated settlement when successful.
Medicare: A U.S. national health program through which certain medial and hospital expenses of the aged and the needy are pair for from federal (mostly Social Security) funds.
memo of understanding (MOU); letter of agreement; letter of intent: A document describing a mutual agreement between negotiating parties, including guidelines for how the parties agree to work together and any next steps necessary to implement the agreement, which may include development of a formal legal contract or agreement.
memorandum; memo: An informal and public written communication within a business that makes an announcement, discusses procedures, reports on business activities, or disseminates employee information.
mentor: An experienced person who agrees to serve as teacher, counselor, guide, or advisor to another, often younger or less experienced, person.
mentoring: Educational or professional guidance provided by an experienced, influential, and more senior individual who counsels, teaches, and supports a promising junior-level individual who is seeking to develop increased ability and achieve increased stature or responsibility in the future. Similar to coaching, but with a greater emphasis on personal involvement and support than on short-term outcomes.
merchandising: 1. Selling goods in exchange for money. 2. Practices and operations promoting commercial activity. 3. Activities that stimulate in-store sales, including how goods are displayed, priced, and promoted in order to make them visually apparent and appealing.
merge: To combine two or more corporations by transferring all property to a single corporation, which continues to function, having absorbed the other corporation.
merger: The combining of two businesses into one new entity.
mergers and acquisitions (M&A): 1. A term used to refer to the consolidation of companies either by combining the two into a new entity, called a merger, or by one purchasing and subsuming the other, called an acquisition. 2. An area of specialty in the investment banking and financial communities that features the management, financing, and strategy involved in buying, selling, and combining companies.
merit pay; pay-for-performance; performance-based pay: Basing an employee’s compensation and pay increases on achievement of goals and objectives over a specified time period according to agreed-upon and measurable performance criteria.
META tag: Coded data in hypertext markup language (HTML) that provides information about a Web page that isn’t visible to site users but that search engines and browsers can access to see a short description and keywords for the page, which are used when adding the page to a site index.
mezzanine funding: Venture capital invested in a business during the period preceding a company’s plans to sell its first shares of stock to the public through an initial public offering (IPO), structured so that proceeds from the stock sale will repay what is also called late-stage financing.
microeconomics: The study of how economic indicators reflect consumer and business behavior, in contrast with macroeconomics, which studies performance of the economy as a whole.
mine: To extract useful, often previously unknown, information from a large amount of data.
mission statement: A description of what a business is and what it does to achieve its vision, which is the ultimate purpose or aspiration of the business.
mobile app: Short for mobile application; software designed to be downloaded to portable devices including smartphones, for free or at a price, to provide extreme usefulness or entertainment to users.
mobile commerce; M-commerce: Businesses and customers transacting sales via smartphone, often using mobile apps; considered the intersection of traditional retail with e-commerce because it removes any distinction between online and offline channels, allowing customers to use either approach to access the same goods, services, and information, supported by the same business operations.
monarch paper: High-quality paper that's slightly smaller than standard-size paper, used for personal business letters with the employee's name and the business's address printed on it.
monopoly: A business environment in which a single entity has complete control of an industry, business category or service offering; the opposite of a competitive marketplace.
motto: A word, phrase, or sentence chosen to express the goals and ideals of a business.
multichannel marketing: Providing customers with multiple channels of access in order to facilitate the purchase of goods and services. For example, selling through a company’s retail store, Web site, and mail order catalog.
multilevel marketing; network marketing: A direct sales system through a pyramid shaped organization where participants receive commissions on their own sales as well as on the sales of those they recruit into the business. This model results in a hierarchy of multiple levels of compensation, thus the term multilevel marketing.
multimodal: Having or involving several different forms.
multiple-of-earnings valuation: A method of business valuation that involves multiplying the historical or projected annual earnings of a business by a number of usually 1 to 5, with higher multiples determined by the attractiveness of the business as an easily transferable, financially strong, and well-regarded enterprise with good future prospects.