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Small Business Glossary: P

packaged goods: A product category comprised of nondurable consumable products bought through retail outlets. Includes food and beverages, clothing and footwear, tobacco, cleaning products, and any other items purchased relatively frequently at a low unit price.

pageview: A term indicating a single visit to a Web page by a user. Used to monitor site traffic.

paid search marketing: Achieving online visibility by placing paid ads in search engine results and on Web pages containing keywords matched to the ad content.

partnership: 1. An unincorporated legal form of business structure that involves multiple individuals, called general partners, who manage the business and share profits and responsibility for debts, sometimes in addition to limited partners who serve as investors responsible for debt only to the limit of their investments. 2. A formal or informal agreement between individuals to collaborate and cooperate to achieve mutually agreed-upon goals and objectives.

passport: A government document issued to a citizen for travel to another country, certifying identity and citizenship.

pass-through tax entity: The legal structure of a business entity that isn’t subject to taxation because it’s allowed to pass annual taxable income straight through to shareholders in proportion to their ownership, thereby avoiding double taxation; tax-through entities include partnerships, limited liability companies (LLCs), and S corporations.

patent: Exclusive property rights granted by the U.S. government to inventors in order to prevent others from making, using, offering for sale, or selling the patent owner’s invention throughout the U.S., or importing the invention into the U.S., for a defined period of usually 20 years.

payment structure: The means by which a seller agrees to accept payment from a purchaser, sometimes in an all-cash payment at time of purchase, but often with payments over time or a closing-day down payment followed by seller-financed loan payments, balloon payments, or earn-out payments.

pay-per-click advertising: The most common form of online advertising. Displayed ads are charged to the advertiser only when clicked by a Web user; paid for at a pre-negotiated per-click rate.

peer review: A process by which performance or quality of work is evaluated by individuals who are experienced in the same field and equivalently qualified as those creating the work under evaluation. Used frequently in academia, medicine, and software development.

pension: A fixed retirement benefit amount, based on salary level and length of service, that an employee receives if he or she stays at the same business until retirement.

perceptional mapping : A market research technique in which consumer perceptions and attitudes are surveyed, plotted, and graphically displayed on a chart that helps companies understand consumer experiences and impressions; used in the planning and design of future product development or improvements.

performance appraisal: A meeting with an employee in which you review that employee's performance over the past period (usually a year) and give feedback.

performance evaluation; employee review: A process designed to evaluate an employee’s job performance by analyzing accomplishments, shortcomings, strengths, and weaknesses and to communicate the employee’s suitability for continued employment and advancement.

period: An amount of time that business documents cover, such as annually or quarterly.

perks: A term commonly used to describe employee benefits and fringe benefits.

permission marketing: A term coined by marketer Seth Godin to define a marketing approach that requires customers’ advance approval before advertisers directly contact them, implemented by inviting people to subscribe to newsletters, join mailing lists, or otherwise request information to launch a customer-initiated business relationship.

permit: An official document granting consent to a certain activity.

personal brand: The set of beliefs about who an individual is and what he or she stands for and does best; the reputation of an individual that is communicated and reinforced across all forms of media and in all online and offline interactions.

personal guarantee: An agreement by an individual to assume liability and responsibility for a debt held by a business or other individual and granting a lender claim to the guarantor’s assets in case of default.

personal leave: Time off without pay granted by companies to employees who must leave work to attend to unexpected needs or events not addressed by other leave policies such as vacation or sick leave.

personal services contract: A legal agreement between an employer and employee that outlines and clarifies the terms of work to be performed. Typically includes the scope of the work, the time period over which the work is to be performed, compensation and payment schedule, billing and payment procedures, grounds for termination, and any other information defining the working arrangement.

phonetic: Writing the speech sounds in a word or words, disregarding accurate spelling.

pickup rate: A discounted rate for ad placement in a newspaper, which newspapers give in return for running the same ad two or more times in the same week.

pipeline: 1. Within the sales process, the system of developing a list of qualified prospects who have been introduced to and indicated interest in an offering but who aren’t yet ready to make a purchase. 2. Within the production system, work in process but not yet completed. 3. In the transfer of goods or information, a distribution vehicle.

planning horizon: The period of time addressed by a business, marketing, strategic, or action plan.

podcast: A sound file that can be accessed online and downloaded to personal digital audio players.

point of difference; point of distinction; unique selling proposition (USP): A statement of the beneficial attributes that positively distinguish a product or service from competing offerings. Used by marketers as the underlying message in advertising and sales communications.

point of purchase: A term used interchangeably for the point of sale, where the buying transaction takes place, and the point of selection, where the buying decision is made and customers view in-store promotional tools such as counter, window and aisle displays, banners, shelf promotions, and take-one coupons.

point of sale: A retail space where purchase transactions occur and where retailers and product marketers employ promotional tools in order to stimulate impulse purchases.

policy and procedural manual: A document that provides a guide to the policies followed and procedures used by a business in its day-to-day operations; often used as a training guide.

pop-up ad: An ad that may appear on a Web user’s computer screen when a new Web page is opened, often covering part of the content the user is trying to reach and, as a result, making pop-up ads one of the least popular forms of online advertising. When the ad becomes visible only when the user navigates away from a Web page it’s called a pop-under ad.

pop-up store: A retail location in a short-term selling space in available mall or street locations, usually opening with very little advance notice, offering high-demand consumer offerings, and then quickly closing or transitioning to provide a different retail offering.

positioning: A term used by marketers to describe the process of determining what meaningful and unfilled niche a business, product, or brand is designed to fill, filling it, and working to perform so well that customers have no reason to allow any competitive offering into the same market position.

premium offer: A sales promotion device that most commonly offers a free gift with the purchase of a complementary product; for examples a free toothbrush with the purchase of toothpaste. However, premium offers sometimes take the form of two complementary products packaged together and offered at a price lower than their usual combined prices.

premium-price strategy: Strategic pricing of goods and services at the high end of a possible price range either because the product actually is of higher quality than less expensive competitors or because it’s positioned as a prestigious offering to appeal to members of an exclusive group.

prepaid expenses: An accounting term for items or services that have been purchased but not yet received, such as insurance premiums or service retainers, that are reflected on a balance sheet under the category of current assets.

press kit; media kit: A folder containing background information that helps editors, writers, and reporters produce stories. A business’s press kit usually includes information such as company history, product and service fact sheets, high-quality artwork, copies of brochures and other sales literature, the most recent annual report or financial summary, and contact information of executives and those who can be reached for additional information. More recently, the contents of press kits have been posted on business Web sites in an online press room.

price elasticity: The ability to raise prices while retaining high consumer demand, usually as a result of high brand value and often leading to a premium-price strategy.

price war: An period of intense competition during which businesses seeking to gain market share progressively lower their prices until either one or more leaves the market or all participants determine that the practice has reached a point where there’s nothing to be gained by further price reductions.

pricing strategy: Planning, determining, and presenting the price of a product or service with an aim to optimize the likely success and profitability of the product while also supporting the goals and objectives of a business and addressing opportunities and constraints of the marketplace. A key function of strategic marketing.

primetime: The hours when broadcast audiences are greatest. Usually between 7 and 11 p.m. for television audiences and during morning and afternoon drive times for radio audiences.

principal amount: The face value of a loan or other financial obligation excluding any interest owed, which declines over the repayment period and is stated as the amount due.

print media: Printed forms of communication that carry information and, usually, advertising. Primarily newspapers and magazines, but also directories, newsletters, booklets, pamphlets, and other materials.

private label; private brand: Products manufactured by one company to be sold under the brand name of a second company, an approach used by large retailers to offer groceries, cosmetics, clothing, and packaged goods produced by others but presented under the retailer’s own brand; examples include Kirkland for Costco and Archer Farms for Target.

pro forma: Preparation of financial statements using best-estimated projections for the period ahead. These projections may reflect anticipated changes such as additional staffing, business or equipment acquisitions, or projected sales increases. Pro forma statements are prepared to compare previous, actual performance with projected future performance.

proceeds: The money or profit derived from a sale or business venture.

procurement: The detailed and complete process employed by many businesses to obtain goods and services. Includes procedures for purchase planning and standards, supplier research and selection, purchase requisition, negotiation and financing procedures, item delivery and receipt, invoice approval, payment, and other similar purchasing and inventory control functions.

Producer Price Index (PPI): An economic and inflation indicator based on a family of indexes compiled by the U.S. Bureau of Labor Statistics to measure price changes for goods and services at the produce or wholesale level.

product: A good offered for sale. If the good is intangible, it’s usually called a service.

product life cycle: The stages a product passes through from initial development to withdrawal from the market. Reflected by an increase, crescendo, and decline in sales during the periods of introduction, sales growth, product maturity, market saturation, and, finally, sales decline that prompts either withdrawal or reinvention of the offering.

product mix: The variety and nature of products or product lines a company produces or a retailer stocks.

product strategy: Planning related to the offerings of a business through the introduction of new products; the communication of different uses, benefits, or distinctions of existing products; shifting marketing emphasis from one product to another; or renaming or relabeling products to best address the wants, needs, tastes, and trends of customers. A key function of strategic marketing.

productivity: 1. An economic term for the rate at which goods or services are produced. 2. A measurement of the efficiency of a person, machine, system, workforce, nation, or other entity, calculated by dividing output over a specific time period by input, which includes costs or resources invested in the production effort.

proficiency: A high degree of competency and skill.

profit: Sales revenue (and other sources of income) minus expenses (and losses) for a period.

profit and loss statement: A commonly used term for an income statement, which is a financial statement that summarizes money earned and spent over a specified period and up to the date when the report was run. Includes all revenue minus all costs and expenses to arrive at a bottom line called net profit.

profit objective: The amount of profit a business hopes to clear from the sale of its products or services; often a negotiating point between a buyer and seller.

profit ratio; profit margin: A key business financial indicator calculated by dividing net income by total sales.

profit sharing plan: A motivational program through which employees receive a share of a business’s generated profits based upon a predetermined formula for allocation and distribution. The share may take the form of stock or cash, and may be paid immediately or deferred until retirement.

projected cash flow: An estimate of the timing and amounts of cash inflow and outflow over a specific period. Usually used to determine if a business will need to borrow funds to sustain operations and, if so, how much cash will be required and when the loan can be repaid.

promisor; obligor: A legal term found in contract law defining a person who makes a promise to another, the promise, to fulfill an obligation that is often detailed in a promissory note, loan note, or note payable.

promissory note; loan agreement; loan note; note payable: A written promise that a borrower (the promisor) will pay a sum of money to a designated person (the payee or promisee) at a fixed time or on demand, outlined in a document that defines the borrower, lender, principal amount being loaned, interest rate, and repayment terms. An unsecured promissory note includes no path of recourse if the buyer defaults on the repayment obligation, while a secured promissory note gives the lender a legal right to collateral that can be seized as recourse in the event of default.

promotion: A marketing program aimed at increasing sales over a short time period by offering an incentive that prompts customers to take immediate action.

promotion strategy: The way a business plans to communicate its marketing message. Defines the target customer, market area, marketing message, creative approach, and marketing channels to be used to achieve sales goals within the confines of an allocated budget. A key function of strategic marketing.

proprietary information: Private information that is confidential within a business and not intended for public dissemination because it contains trade secrets and financial, production, client, or other facts that give the company a competitive edge. Proprietary information is often protected by policies that prohibit disclosure outside of the business or for personal gain.

prospect: 1. (noun) A potential customer, or a job candidate with positive attributes. 2. (verb) To search for opportunity; in sales, to search for potential customers.

protocol: The accepted or expected way to behave in a certain situation.

proxemics: The study of how people use and structure space or spatial arrangements.

psychographics: A study of personality characteristics that affect consumer behavior and patterns. Used to segment customers into groups based on such information as beliefs, values, and attitudes.

public accountant: An accounting professional who may prepare financial statements but who, in most states, is not permitted to provide public attestation of financial statements or conduct formal accounting audits because he or she has not completed certification requirements to attain the designation of certified public accountant.

public domain: Property available for copy or distribution without permission or payment of royalties either because it is ineligible for copyright protection or because copyrights have expired.

public relations: Activities that aim to establish, maintain, and improve a favorable relationship with those upon whom the success of an organization depends, conducted through programs that develop media relations, employee relations, community relations, industry relations, government relations, and issue and crisis management plans.

public tender; open tender: As part of a public procurement program, a bidding process open to all qualified suppliers that generally requires sealed bids which are subsequently opened and discussed in public before a contract is awarded.

publicity: A communication approach that results in unpaid mentions in print, broadcast, or online news or feature coverage; usually the result of public relations, media relations, and news releases.

pull marketing: A strategic marketing approach that aims to heighten consumer interest in and knowledge of a product in order to develop a level of demand that pulls products and services through distribution channels and into the marketplace.

push marketing: A strategic marketing approach focused on distribution channels aiming to inspire wholesalers, distributors, and retailers to promote one offering over the offerings of competing products in order to push the product toward consumers. Often inspired by discounts, kickbacks, and other types of incentives.

pyramid scheme: An unsustainable and fraudulent business model that promises financial benefits to those who join by paying an entry fee to the person who recruited them, with each recruit enticing more people into the program with the understanding that income from payments made by new recruits will accrue to the early joiner. Such schemes rarely sell anything of value and ultimately collapse when the demand for recruiting income outstrips the supply of new recruits.

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