Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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gestalt theory 230
generation following generation Z (defined generally as being from the
mid-2000s to a date estimated at 2017). According to various marketing
researchers, each of the above generational cohorts shares certain
characteristics that enable them to have identifiable influences in the
societies in which they live.
KEY WORDS Age, cohorts
IMPLICATIONS
Marketers of offerings that have generational appeal may benefit from
a greater understanding of the different characteristics of generational
cohorts. Whether the marketer is concerned with targeting a single
generation or multiple generations, a greater awareness of the many
different generational differences, expectations, and influences can assist
the marketer in being responsive to changes that, while occurring rel-
atively slowly, may nevertheless be important influences to the firm’s
longer-term marketing strategy.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Cleaver, M., and Muller, T. E. (2002). ‘The Socially Aware Baby Boomer: Gaining a
Lifestyle-Based Understanding of the New Wave of Ecotourists,’ Journal of Sustain-
able Tourism, 10(3), 173–190.
Marketing Strategy
Muller, T. E., and Cleaver, M. (2000). ‘Targeting the CANZUS Baby Boomer Explorer
and Adventurer Segments,’ Journal of Vacation Marketing, 6(2), 154–169.
Richie, K. (1995). ‘Marketing to Generation X,’ American Demographics, 17, April,
34–39.
Mitchell, V., and Freestone, O. (2004). ‘Generation Y Attitudes towards E-ethics and
Internet-Related Misbehaviours,’ Journal of Business Ethics, 54, 121–128.
Bennett, G., and Lachowetz, T. (2004). ‘Marketing to Lifestyles: Action Sports and
Generation,’ Y. Sport Marketing Quarterly, 13(4), 239–243.
BIBLIOGRAPHY
Smith, J. W., and Clurman, A. (1997). Rocking the Ages: The Yankelovich Report on
Generational Marketing. New York: Harper.
Coupland D. (1991). Generation X: Tales for an Accelerated Culture. New York: St
Martin’s.
Bainbridge, J. (1999). ‘Keeping up with Generation Y,’ Marketing, 18, February,
37–38.
Wellner, A. S. (2000). ‘Generation Z,’ American Demographics, 22(9), September,
61–64.
generic strategies see strategies, generic
geographic segmentation see segmentation
gestalt theory
DESCRIPTION
Theory aimed at understanding and explaining phenomena that are
perceived as possessing qualities which transcend the sum of their ele-
ments and which are unable to be described only in terms of their
elements.
231 global marketing
KEY INSIGHTS
Based on research by Wertheimer (1912) and others, gestalt theory
encompasses a range of psychological and philosophical principles involv-
ing perceptions in their relation to forms, complete patterns, organized
wholes in experience or other characterizations of phenomena. For exam-
ple, one principle of gestalt perception is that the perception of ambigu-
ous stimuli tends to be as good (e.g. meaningful, simple, or strong) as the
sensory input allows.
KEY WORDS Systems, forms, elements, organization
IMPLICATIONS
Gestalt theory’s emphasis on understanding and explaining perceptions
of phenomena where perceptions of qualities transcend the sums of
their respective elements suggests the potential for the theory to provide
unique marketing insights into complex phenomena ranging from ethics
to consumption behavior.
APPLICATION AREAS AND FURTHER READINGS
Marketing Ethics
Hunt, Eugene H., and Bullis, Ronald K. (1991). ‘Applying the Principles of Gestalt
Theory to Teaching Ethics,’ Journal of Business Ethics, 10(5), May, 341–347.
Consumer Behavior
Hoyt, Elizabeth E. (1944). ‘The Place of Gestalt Theory in the Dynamics of Demand,’
American Journal of Economics and Sociology, 4(1), October, 81.
Thompson, Craig J. (1997). ‘Interpreting Consumers: A Hermeneutical Framework
for Deriving Marketing Insights from the Texts of Consumers’ Consumption
Stories,’ Journal of Marketing Research, 34(4), November, 438–455.
Marketing Research
Hunt, Shelby D. (1993). ‘Objectivity in Marketing Theory and Research,’ Journal
of Marketing, 57(2), April, 76–91.
BIBLIOGRAPHY
King, D. Brett, and Wertheimer, Michael (2004). Max Wertheimer & Gestalt Theory.
New Brunswick: Transaction Publishers.
Wertheimer, M. (1912). ‘Experimentelle studien über das sehen von Bewegung,’
Zeitschrift für Psychologie, 61, 161–165.
Giffen goods see goods
global marketing
(also called worldwide marketing)
DESCRIPTION
Marketing by a firm on a worldwide scale.
KEY INSIGHTS
Firms engaged in global marketing commit themselves to applying their
assets and competencies on a broad international scale where global
operations are managed and coordinated to meet global objectives. While
a global marketing approach sometimes conveys the view that the firm’s
glocal marketing 232
marketing is performed in essentially the same way globally, a firm’s
global marketing strategy and practice can be far more complex and
adaptations based on global differences are clearly within the broad scope
of global marketing.
KEY WORDS Worldwide operations
IMPLICATIONS
Whether a firm is seeking to expand marketing operations to a world-
wide scale or the firm is already operating on such a scale, a greater
knowledge of the many marketing strategies and practices within the
domain of global marketing can be beneficial for increasing the firm’s
global marketing effectiveness as well as in country and regional markets.
For example, global marketing concepts and frameworks can assist the
global marketer with assessing better the extent to which the firm’s offer-
ings are sensitive to different economic and sociocultural environments,
thereby providing the marketer with insight into how and to what extent
the interactions of the firm’s offerings with such environments can and
should be managed.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Jeannet, J. P., and Hennessey, H. D. (1998). Global Marketing Strategies, 4th edn.
Boston: Houghton Mifflin.
Johansson, J. K. (1997). Global Marketing: Foreign Entry, Local Marketing, and Global
Management. Chicago: IRWIN.
Samiee, Saeed, and Roth, Kendall (1992). ‘The Influence of Global Marketing Stan-
dardization on Performance,’ Journal of Marketing, 56(2), April, 1–17.
Marketing Management
Keegan, Warren J. (2002). Global Marketing Management. Upper Saddle River, NJ:
Prentice Hall.
Advertising
de Mooij, Marieke K. (2005). Global Marketing and Advertising. Thousand Oaks, Calif.:
Sage Publications Inc.
BIBLIOGRAPHY
Kotabe, M., and Helsen, K. (2000). Global Marketing Management, 2nd edn. New York:
John Wiley & Sons, Inc.
glocal see glocal marketing
glocal marketing
DESCRIPTION
Marketing on a global scale that emphasizes customization at the level of local
culture.
KEY INSIGHTS
Glocal marketing involves a combination of global marketing and local
marketing. Firms adopting such an approach thus have clear global
aspirations yet also recognize the benefit of understanding and working
233 Goodhart’s law
with local culture in the development and provision of their offerings.
Despite the fact that the approach has significant intuitive appeal among
marketers, the term is rarely used in conveying the concept and implica-
tions that it represents.
KEY WORDS Global marketing, local marketing, culture
IMPLICATIONS
As global marketing presents numerous challenges and opportunities to
marketers with global aspirations, a better understanding of the glocal
marketing concept can help to focus the marketer’s efforts in achieving
an appropriate balance between global and local marketing. Whether the
marketer’s efforts rely on global information technologies or a global
presence of the firm’s personnel, the need to establish a compromise
between global and local efforts should clearly be examined as a means
to increase overall marketing effectiveness.
APPLICATION AREAS AND FURTHER READINGS
Business-to-Business Marketing
Karlsson, Christer (2003). ‘The Development of Industrial Networks: Challenges
to Operations Management in an Extraprise,’ International Journal of Operations &
Production Management, 23(1), 44–61.
Marketing Strategy
Svensson, G. (2001). ‘ “Glocalisation” of Business Activities: A “Glocal Strategy”
Approach,’ Management Decision, 39(1), 6–18.
Kickbush, I. (1999). ‘Global + Local = Glocal Public Health,’ Journal of Epidemiology
and Community Health, 53, 451–452.
Cobley, Paul (2004). ‘Marketing the “Glocal” in Narratives of National Identity,’
Semiotica, 150(1–4), 197–225.
BIBLIOGRAPHY
Dovey, Kim (1999). Framing Places: Mediating Power in Built Form. London: Routledge.
golden rule see marketing, rules of
Goodhart’s law
DESCRIPTION
The general principle that, once an economic or social indicator is made a
target as part of an economic or social policy, the target becomes distorted by
the very act of targeting it.
KEY INSIGHTS
Developed in the context of monetary policy by Goodhart (1975), Good-
hart’s law has since expanded in scope to include target indicators for
any policy having social or economic consequences. In essence, the law
asserts that any effort to develop specific rules aimed at pursuing a partic-
ular economic or social initiative will inevitably foster rational behaviors
to evade such rules. Indicators, measures, or surrogate measures consid-
ered to have valuable information content for the purpose of assessing
or evaluating economic or social performance will ultimately lose their
goods 234
usefulness as a result of the visibility given to them and the ensuing
rational behavior of individuals or organizations to use such informa-
tion in ways that run counter to the original purpose of using such
measures.
KEY WORDS Economic indicators, social indicators, targets, policy, perfor-
mance measures
IMPLICATIONS
Marketers involved in establishing measures and indicators for the pur-
pose of pursuing particular economic or social agendas must be aware
of the possibility for such measures to lose usefulness as a result of
the very act of targeting such measures. Marketers must recognize that
Goodhart’s law may apply at a level influencing the actions of groups or
individuals in an organization as well. For example, if a large firm were
to assess the value of subsidiaries’ research and development efforts by
counting the number of patents each subsidiary generates per year, such
a target might lead subsidiaries to diminish the quality of their research
and development efforts and focus instead on increasing the quantity of
patents generated, even though patent quality forms part of the firm’s
valuation of the research itself.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Beckett, R., and Jonker, J. (2002). ‘AccountAbility 1000: A New Social Standard for
Building Sustainability,’ Managerial Auditing Journal, 17(1–2), 36–42.
Kopits, George, and Craig, Jon (1998). Transparency in Government Operations. IMF
Occasional Paper 158. Washington, DC: International Monetary Fund.
International Marketing
Jao, Y. C. (2001). The Asian Financial Crisis and the Ordeal of Hong Kong. Westport, Conn.:
Quorum Books.
Grote, Rainer, and Marauhn, Thilo (2006). The Regulation of International Financial
Markets: Perspectives for Reform. Cambridge: Cambridge University Press.
BIBLIOGRAPHY
Goodhart, C. A. E. (1975). ‘Monetary Relationships: A View from Threadneedle
Street,’ in Papers in Monetary Economics, volume i. Reserve Bank of Australia.
Chrystal, K. Alec, and Mizen, Paul D. (2001). ‘Goodhart’s Law: Its Origins, Meaning
and Implications for Monetary Policy,’ paper prepared for the Festschrift in
honour of Charles Goodhart, 15–16 November 2001, the Bank of England.
goods
DESCRIPTION
Tangible, physical entities that increase utility or, more generally, anything
pertaining to commerce that increases utility.
KEY INSIGHTS
Goods are often associated with tangible physical products but broader
use of the term includes that which is intangible, e.g. services. Key
characterizations of goods include:
235 goods
Brown goods—televisions, stereos, and more generally, audio, video,
telecommunications, computing and printing goods (the term being
derived from the historically brown finish of television and stereo
cabinets).
Capital goods—fixed assets (e.g. machinery, equipment) used in the
production of other goods.
Consumer goods—goods purchased for individual or household use.
Credence goods—goods for which the utility derived from its use or
consumption is almost equally difficult to ascertain at all points in
time (e.g. vitamin supplements).
Durable goods or hard goods—goods that do not wear out quickly and are
used over time as opposed to being consumed all at once (e.g.
automobiles, appliances).
Experience goods—goods with features and characteristics which are
difficult to observe in advance of purchase but are easily observable
upon use or consumption.
Fast moving consumer goods (or FMCGs)—frequently purchased consumer
goods further characterized by low prices and low purchase risk (e.g.
toiletries, detergent, batteries, light bulbs).
Final goods—goods which are ready to use or consume and require no
further processing.
Giffen goods—goods for which demand decreases as their price decreases
and for which demand increases and their price increases (e.g.
inferior-quality staple foods where demand is driven by poverty).
Inferior goods—goods for which demand decreases as income increases.
Intermediate goods—goods used as inputs in the production of other goods
(e.g. raw materials, partly finished goods).
Luxury goods—goods at the high end of the market in terms of quality
and price and for which demand increases as income increases but to
an extent proportionally more than income (e.g. luxury automobiles).
Non-durable goods or soft goods—goods that are used up when consumed
and which generally last three years or less (e.g. food, clothing).
Normal goods—goods for which demand increases as income increases.
Private goods—goods for which one person’s consumption reduces the
quantity available to others and for which there can be exclusion by
both producers and consumers in the sense that the producer can
restrict use of the product to those willing to pay for it and where the
consumer is not forced to consume the good.
Public goods—commodities or services which, if supplied to one person,
can be made available to others at no extra cost.
Search goods—goods with features and characteristics easily observable
before purchase.
Service goods—goods characterized by their inherent intangibility as well
as their inability to be stored, and with their production occurring at
the same time as consumption (see service characteristics).
Superior goods—goods which make up a larger proportion of
consumption as income rises.
goods 236
Veblen goods—goods (e.g. certain expensive wines or perfumes) where
consumers’ preference for buying the goods increases as their price
increases and for which consumers’ preference for buying them
decreases as their price falls, a phenomenon also referred to as the
Veblen effect as it indicates that such goods are sought precisely because
of their expensiveness.
White goods—large electrical home appliances such as refrigerators,
freezers, washing machines, diswashers, and dryers (the term being
derived from their typical white enamel finish).
Yellow goods—goods associated with construction and earth-moving
equipment, quarrying equipment, and forklift trucks.
KEY WORDS Products, services, utility
IMPLICATIONS
Clearly, goods can be viewed as varying categorically including the extent
to which the utility derived from their use can be observed before pur-
chase and upon consumption and in the change in their demand with
price and consumer income. As such, it is imperative that the marketer of
the firm’s offerings understand such characteristics and more in order to
stimulate and manage better the demand for the offerings in competitive
markets. For example, when firms in an industry offer consumers a range
of high- and low-value credence goods, there may clearly be instances
where some firms offer low-value goods at high prices as consumers are
unable to assess value easily. At the same time, marketers should seek
to understand carefully how and to what extent demand for their goods
is sensitive to changes in price—something that may vary dramatically
between, and within, given categories of goods.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Avlonitis, G. J., and Gounaris, S. P. (1997). ‘Marketing Orientation and Company
Performances: Industrial vs. Consumer Goods Companies,’ Industrial Marketing
Management, 26(5), September, 385–402.
Desai, Preyas, and Purohit, Devavrat (1998). ‘Leasing and Selling: Optimal Market-
ing Strategies for a Durable Goods Firm,’Management Science, 44(11), Part 2 of 2,
November, S19–S34.
Vickers, J. S., and Renand, F. (2003). ‘The Marketing of Luxury Goods: An
Exploratory Study: Three Conceptual Dimensions,’ Marketing Review, 3(4),
459–478.
Wernerfelt, Birger (1994). ‘Selling Format for Search Goods,’ Marketing Science,3,
Summer, 298–309.
Marketing Management
Dupre, K., and Gruen, T. (2004). ‘The Use of Category Management Practices
to Obtain a Sustainable Competitive Advantage in the Fast-Moving-Consumer-
Goods-Industry,’ Journal of Business & Industrial Marketing, 19(7), 444–459.
Marketing Modeling
Erdem, Tulin, and Keane, Michael P. (1996). ‘Decision-Making under Uncertainty:
Capturing Dynamic Brand Choice Processes in Turbulent Consumer Goods Mar-
kets,’ Marketing Science, 15(1), 1–20.
237 government marketing
Neelamegham, R., and Jain, D. (1999). ‘Consumer Choice Process for Experience
Goods: An Econometric Model and Analysis,’ Journal of Marketing Research, 36(3),
373–386.
International Marketing
Baden-Fuller, C. W. L., and Stopford, J. M. (1991). ‘Globalization Frustrated: The
Case of White Goods,’ Strategic Management Journal, 12, 493–507.
Retail Marketing
Bucklin, Louis P. (1963). ‘Retail Strategy and the Classification of Consumer Goods,’
Journal of Marketing, 27(1), January, 50–55.
Services Marketing
Vargo, S. L., and Lusch, R. F. (2004). ‘The Four Service Marketing Myths,’ Journal of
Service Research, 6(4), May, 324–335.
Advertising
Ekelund, R., Mixon, F., and Ressler, R. (1995). ‘Advertising and Information: An
Empirical Study of Search, Experience and Credence Goods,’ Journal of Economic
Studies, 22, 33–43.
BIBLIOGRAPHY
Leibenstein, H. (1950). ‘Bandwagon, Snob, and Veblen Effects in the Theory of
Consumers’ Demand,’ Quarterly Journal of Economics, 64, 183–207.
Hunt, Shelby D. (1976). ‘The Nature and Scope of Marketing,’ Journal of Marketing,
40(3), July, 17–28.
Kotler, Philip, and Armstrong, Gary (2006). Principles of Marketing, 11th edn. Upper
Saddle River, NJ: Pearson Education, Inc.
goods-characteristics theory see characteristics theory
government marketing
(also called public sector marketing or governmental marketing)
DESCRIPTION
Marketing efforts associated with the legislative and public administration
activities of organizations and institutions.
KEY INSIGHTS
Government marketing encompasses a range of activity in organizations
tasked with the provision of offerings for the good of the public. Such
organizations may be in areas of the public sector and at any level, includ-
ing central government (e.g. federal), regional government, and local or
municipal government. For any government organization, government
marketing is therefore concerned with enhancing the effectiveness and
efficiency of the organization in terms of its ability to identify and meet
the needs and wants of the set of individuals that it has been tasked to
serve. In the provision of health services, for example, a government
organization may be involved in the promotion practices supporting
healthy lifestyles (e.g. eating five servings of vegetables a day) while at
the same time involved in counter-marketing initiatives (e.g. in efforts
to target smoking—see counter-marketing). Still other organizations
serving the public may be involved in demarketing initiatives (e.g. to
government marketing 238
reduce road congestion in a city—see demarketing). In addition, while
firms in the private sector are regularly engaged in marketing activities
to fend off competition from other firms in their industries, govern-
ment organizations may also use marketing initiatives as a means to
respond to private and public competition, as when a government postal
service faces increasingly stiff competition from private parcel delivery
firms.
KEY WORDS Public administration, government operations
IMPLICATIONS
A greater understanding of government marketing may assist mar-
keters engaging in such efforts to become increasingly effective and
efficient in meeting public needs and wants in relation to their organ-
izations’ aims and objectives and overall charters. While the insti-
tutional nature of many government organizations may pose certain
unique challenges (see institutional marketing), marketers in such
organizations nevertheless have a wide range of marketing approaches
to consider and pursue in developing effective marketing strategies
and programs for the benefit of their constituents and their own
organizations.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Conway, A., and Whitelock, J. (2004). ‘Can Relationship Marketing Enhance Stra-
tegic Thinking in the Public Sector? A Study of the Perceived Relationship
between Subsidised Theatres and their Government Funders/Regulators,’ Inter-
national Journal of Nonprofit and Voluntary Sector Marketing, 9(4), 325–334.
Walsh, K. (1989). Marketing in Local Government. London: Longman.
Tourism Ireland (2003). Marketing Strategy 2004–2006: Operating Plans 2004. Dublin:
Tourism Ireland.
Marketing Management
Lovelock, C. H., and Weinberg, C. B. (1984). Marketing for Public and Nonprofit Man-
agers. New York: John Wiley & Sons.
Walsh, K. (1994). ‘Marketing and Public Sector Management,’ European Journal of
Marketing, 28(3), 63–71.
Services Marketing
Kearsey, A., and Varey, R. J. (1998). ‘Managerialist Thinking on Marketing for Public
Services,’ Public Money and Management, January–March, 51–61.
Massey, A. (ed.) (1997). Globalization and Marketization of Government Services.
Basingstoke: Macmillan Press Ltd.
Online Marketing
Leatherman, John (2001). Internet Commerce: Challenges for the Rural Public Sector. Madi-
son: Center for Community Economic Development, University of Wisconsin—
Extension.
International Marketing
Lovelock, C. H. (1981). ‘International Perspectives on Public Sector Marketing,’
in M. P. Mokwa and S. E. Permut (eds.), Government Marketing: Theory and Practice.
New York: Praeger Publishing.
239 gray markets
Marketing Research
Bernhardt, K. J. (1981). ‘Consumer Research in the Federal Government,’ in M. P.
Mokwa and S. E. Permut (eds.), Government Marketing: Theory and Practice. New
York: Praeger Publishing.
BIBLIOGRAPHY
Lamb, Charles W. (1987). ‘Public Sector Marketing is Different,’ Business Horizons,
July–August, 56–60.
Chapman, D., and Cowdell, T. (1998). New Public Sector Marketing. London: Financial
Times/Pitman, London.
Mokwa, M. P., and Permut, S. E. (eds.) (1981). Government Marketing: Theory and
Practice. New York: Praeger Publishing.
Coffman, Larry L. (1986). Public-Sector Marketing: A Guide for Practitioners. New York:
Wiley.
governmental marketing see government marketing
grassroots marketing see word-of-mouth marketing
gravity theory
DESCRIPTION
In the context of trade, a view which holds that the amount of trade between
any two entities is negatively influenced by their distance apart and positively
influenced by the product of their respective outputs.
KEY INSIGHTS
According to gravity theory, distance is viewed as a deterrent to travel.
Shorter distances between trading partners will be likely to result in
more trade than that for longer distances. Such a view finds empirical
support in many urban and international trade studies and provides
a basis for much site location analysis in evaluating the relationship
between trade and travel for destination locations of the same type and
size.
KEY WORDS Location analysis, distance, trade
IMPLICATIONS
Gravity theory provides a basis for evaluating business locations in rela-
tion to customer locations or trading partner locations. As such, analytical
models drawing upon gravity theory can be used to establish the attrac-
tiveness of a location for trade, as in establishing the best location for a
new grocery store in a particular city.
APPLICATION AREAS AND FURTHER READINGS
Marketing Modeling
Curry, B., and Moutinho, L. (1994). ‘Intelligent Computer Models for Marketing
Decisions,’ Management Decision (London, Bradford), 32(4), 30.
Stanley, Thomas J., and Sewall, Murphy A. (1976). ‘Image Inputs to a Proba-
bilistic Model: Predicting Retail Potential,’ Journal of Marketing, 40(3), July, 48–
53.
Cadwallader, Martin (1975). ‘A Behavioral Model of Consumer Spatial Decision
Making,’ Economic Geography, 51(4), October, 339–349.