Dacko S.G. The Advanced Dictionary of Marketing Putting Theory to Use
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temperament theory 530
individuals recall that recent events occurred farther back in time than
is actually the case. Forward telescoping is where individuals recall that
distant events occurred more recently in time than is actually the case.
An example of forward telescoping is when a respondent who is asked if
she had purchased an expensive pair of shoes in the past year recalls and
reports on an expensive shoe purchase that actually occurred eighteen
months prior.
KEY WORDS Event recall, reporting, time
IMPLICATIONS
Telescoping has important implications for marketing researchers con-
cerned with accurately understanding and predicting consumer behav-
ior. For example, research by Morwitz (1997) suggests that on average,
consumers underestimate the time since purchasing a durable good.
Further, findings by Morwitz (1997) suggest that the magnitude of for-
ward telescoping errors increases and the propensity to make backward
telescoping errors decreases with the time since the purchase of a good.
Marketing researchers should be cognizant of telescoping errors in recall
and reporting since telescoping can have a significant effect on future
purchase intentions. At the same time, marketing researchers should
also consider that telescoping biases are observed to vary across different
demographic segments.
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Cook, W. A. (1987). ‘Telescoping and Memory’s Other Tricks,’ Journal of Advertising
Research, 27, February–March, RC5–RC8.
Morwitz, V. G. (1997). ‘Why Consumers Don’t Always Accurately Predict their own
Future Behavior,’ Marketing Letters (New York), 8(1), 57–70.
BIBLIOGRAPHY
Morwitz, Vicki G. (1997). ‘It Seems like Only Yesterday: The Nature and Conse-
quences of Telescoping Errors in Marketing Research,’ Journal of Consumer Psychol-
ogy, 6(1), 1–29.
temperament theory
DESCRIPTION
A theory that models human behavior into personality types, where it predis-
poses individuals to think, act, relate, learn, and be motivated in systematically
varying ways.
KEY INSIGHTS
Temperament theory falls within the realms of behavioral studies and
psychological influences on personalities. The different dimensions of
temperament, such as emotionality and sociability, are tested in research
for their influence on receptivity to marketing communication activi-
ties, such as advertising responses, consumer preferences and lifestyles
(Moore and Homer 2000).
KEY WORDS Personality, behavior
531 ten percent, rule of
IMPLICATIONS
As marketing involves a study of consumer psychology in understand-
ing behavior, attitudes, and forecasted actions, a greater knowledge of
temperament theory-based research on personality types may potentially
provide the marketer with fresh insights which are ultimately useful for
developing segmentation and positioning strategies.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Penrose, Edith Tilton (1995). The Theory of the Growth of the Firm. Oxford: Oxford
University Press.
Marketing Management
Volkema, R. J., and Gorman, R. H. (1998). ‘The Influence of Cognitive-Based Group
Composition on Decision-Making Process and Outcome,’ Journal of Management
Studies (Oxford), 35(1), 105–121.
International Marketing
Samli, A. Coskun (1995). International Consumer Behavior: Its Impact on Marketing Strat-
egy Development. Westport, Conn.: Quorum Books.
Marketing Research
Walle, A. H. (2001). ‘Machiavelli, Humanistic Empiricism and Marketing Research,’
Management Decision, 39(5/6), 403–406.
Consumer Behavior
Grubb, Edward L., and Grathwohl, Harrison L. (1967). ‘Consumer Self-Concept,
Symbolism and Market Behavior: A Theoretical Approach,’ Journal of Marketing,
31(4), 1, October, 22–27.
BIBLIOGRAPHY
Moore, D. J., and Homer, P. M. (2000). ‘Dimensions of Temperament: Affect Inten-
sity and Consumer Lifestyles,’ Journal of Consumer Psychology, 9(4), 231–232.
ten foot rule see marketing, rules of
ten percent, rule of
DESCRIPTION
The generalization that it is almost impossible for any single research study
to come up with a variable which accounts for more than ten percent of the
variation in any particular measure of business performance.
KEY INSIGHTS
Put forth by Wensley (1997), the rule of ten percent (or rule of 10%) is a
generalization that draws upon decades of research on factors that seek
to explain business performance. In particular, reviews of such studies
lead to the generally accepted conclusion among marketing researchers
that the number of factors which account for business performance is
so many that it is extremely unlikely that any single research study will
ever be able to explain more than 10% of the variability in any business
performance measure (e.g. return on investment). While the inclusion of
additional measures has been shown to explain a considerably greater
test marketing 532
amount of variation in performance between different businesses—in
some cases between 25% and 33%—the disadvantage of the complexity
introduced by such studies is that they present a far greater challenge to
providing managerially useful guidance.
KEY WORDS Marketing research, firm performance, management guid-
ance
IMPLICATIONS
Based upon the rule of 10%, marketers should be wary of pursuing
strategies based on the assumption that there exists a simple relationship
between a particular business approach and the achievement of strong
business performance. Instead, marketers should recognize that there
are, more often than not, multiple and interacting factors that influence
business performance and any strategy based on the pursuit of a single
approach to achieve success is likely to be poorly guided and ultimately
insufficient.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Vining, A., and Meredith, L. (2000). ‘Metachoice for Strategic Analysis,’ European
Management Journal, 18(6), 605–618.
BIBLIOGRAPHY
Wensley, Robin (1997). ‘Explaining Success: The Rule of Ten Percent and the
Example of Market Share,’ Business Strategy Review, 8(1), 63–70.
test marketing
DESCRIPTION
A pilot trial of a firm’s offering on a small scale in actual or simulated market
conditions at a time before its full-scale introduction and commercialization.
KEY INSIGHTS
The aim of test marketing is to understand better the market’s accep-
tance of the offering and how well the marketing will perform if fully
commercialized. Test marketing further allows the opportunity for fine-
tuning the marketing strategy and marketing mix elements developed
in support of a new product development effort. (See also new product
development.) Test marketing can be done in certain representative
geographic areas in the market or otherwise done through the use of
product development simulation models.
KEY WORDS Market testing, new product introduction
IMPLICATIONS
The aim of market testing before introducing the new offering to the
market on a much larger scale is to reconcile the difference between what
marketers think consumers want and what consumers actually want.
Test marketing can help define the difference or similarity in order to
improve any of the marketing mix elements before commercial market
introduction. Problems in using simulated test marketing techniques may
533 testing effect
arise, however, out of the inability of some models and techniques to
capture realistic market dynamics. On the other hand, when an offering
is test marketed in the actual market, there is the risk that competing
firms may become aware of the firm’s plans and learn from the effort in
a way that gives the competitor a head start in developing a competitive
response.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Mohammed, Salleh A., and Easingwood, C. (1993). ‘Why European Financial Insti-
tutions do not Test-Market New Consumer Products,’ International Journal of Bank
Marketing, 11(3), 23.
Marketing Research
Silk, Alvin J., and Urban, Glen L. (1978). ‘Pre-Test-Market Evaluation of New
Packaged Goods: A Model and Measurement Methodology,’ Journal of Marketing
Research, 15(2), May, 171–191.
Urban, Glen L., and Katz, Gerald M. (1983). ‘Pre-Test-Market Models: Validation and
Managerial Implications,’ Journal of Marketing Research, 20(3), August, 221–234.
Clancy, Kevin J., Shulman, Robert S., and Wolf, Marianne (1994). Simulated Test
Marketing: Technology for Launching Successful New Products. New York: Lexington
Books.
Cameron, Trudy A., and James, Michelle D. (1987). ‘Estimating Willingness to Pay
from Survey Data: An Alternative Pre-Test-Market Evaluation Procedure,’ Journal
of Marketing Research, 24(4), November, 389–395.
BIBLIOGRAPHY
Klompmaker, J. E., Hughes, G., and Haley, R. (1976). ‘Test Marketing in New Product
Development,’ Harvard Business Review, 54, 128–138.
testing effect
DESCRIPTION
Any effect of testing or test taking on the responses of an individual.
KEY INSIGHTS
In the measurement of responses of individuals exposed to some stimuli
or experimental treatment, respondent views are often obtained through
comparisons of pre-treatment and post-treatment tests. Yet, such an
approach is vulnerable to a testing effect where the pre-treatment test
may sensitize and distort consumer reactions to the treatment itself.
Another type of testing effect is where, relative to information that
is to be remembered by an individual, the likelihood of retrieving such
information from memory is enhanced when an individual engages in
periodic self-testing activity.
KEY WORDS Testing, measurement, bias
IMPLICATIONS
Marketers engaged in marketing research should be aware of possible
testing effects adversely influencing or biasing the findings and inter-
pretations of research studies. Designing research studies that control
for such effects, such as through studies that include the use of control
groups, may be beneficial in obtaining more meaningful research results.
top-down marketing 534
APPLICATION AREAS AND FURTHER READINGS
Marketing Research
Banks, Seymour (1964). ‘Designing Marketing Research to Increase Validity,’ Journal
of Marketing, 28(4), October, 32–40.
Lohse, G. L., Bellman, S., and Johnson, E. J. (2000). ‘Consumer Buying Behavior
on the Internet: Findings from Panel Data,’ Journal of Interactive Marketing , 14 (1),
15–29.
Marketing Education
Deck, D. William, Jr. (1998). ‘The Effects of Frequency of Testing on College Stu-
dents in a Principles of Marketing Course’, Ph.D. Dissertation, Virginia Tech.
BIBLIOGRAPHY
Churchill, Gilbert A., and Iacobucci, Dawn (2005). Marketing Research: Methodological
Foundations, 9th edn. Mason, Oh.: Thomson-South-Western.
Glover, J. A. (1989). ‘The “Testing” Phenomenon: Not Gone But Nearly Forgotten,’
Journal of Educational Psychology, 81, 392–399.
text message marketing see mobile marketing
theory . . . see specific entries, e.g. X, theory
theory of/theories of . . . see specific entries, e.g. marketing, theory of
third sector marketing see non-profit marketing
through-the-line marketing see above-the-line marketing; below-
the-line marketing
top-down marketing
DESCRIPTION
An approach to market analysis, market definition, and marketing strategy
developmentthat tends tospecify markets in terms of competitive capabilities
and resource transferability.
KEY INSIGHTS
The top-down marketing approach reflects the need of corporate and
business level management to understand the capacity of a business
unit to compete and apply resources to secure a sustainable competitive
advantage (Day 1981). The other approach to market analysis is a bottom-
up approach emphasizing customer requirements or usage patterns
when defining markets (see bottom-up marketing). While the latter is
employed by marketing planners and programme managers within the
framework of a chosen product market, the top-down approach is more
at a corporate strategic planning level.
KEY WORDS Capabilities, resources
IMPLICATIONS
The top-down approach involves viewing markets as arenas of profitable
competition where corporate resources can be utilized to achieve differ-
ential advantage (Day 1981). Using this approach involves defining the
scope of the business, the broad strategic thrust of each strategic business
535 total integrated marketing
unit, its opportunities in new markets as well as current and forecasted
performance within served markets. Achieving a clearer, deeper, and
more comprehensive market definition and understanding, however,
often calls for integrating the top-down and the bottom-up approaches
to market analysis and marketing strategy development.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Jaworski, B. J., and Kohli, A. K. (1996). ‘Market Orientation: Review, Refinement,
and Roadmap,’ Journal of Market Focused Management, 1(2), 119–136.
Hutt, Michael D., Reingen, Peter H., and Ronchetto, John R., Jr. (1988). ‘Tracing
Emergent Processes in Marketing Strategy Formation,’ Journal of Marketing, 52(1),
January, 4–19.
Marketing Management
McDonald, Malcolm, and Morris, Peter (2000). The Marketing Plan in Colour: A Pictorial
Guide for Managers. Oxford: Butterworth-Heinemann.
Mantrala, Murali K., Sinha, Prabhakant, and Zoltners, Andris A. (1992). ‘Impact of
Resource Allocation Rules on Marketing Investment-Level Decisions and Prof-
itability,’ Journal of Marketing Research, 29(2), May, 162–175.
Ambler, T. (2000). ‘Marketing Metrics,’ Business Strategy Review, 11(2), 59–66.
BIBLIOGRAPHY
Day, George S. (1981). ‘The Product Life Cycle: Analysis and Applications Issues,’
Journal of Marketing, 45(4), Autumn, 60–67.
Park, C. Whan, and Smith, Daniel C. (1989). ‘Product-Level Choice: A Top-Down or
Bottom-Up Process?’ Journal of Consumer Research, 16, December, 289–299.
total integrated marketing
DESCRIPTION
An integrated approach for firms to manage change in the marketplace
and maintain competitiveness by integrating marketing imperatives into all
functions in the firm creating an integrated system.
KEY INSIGHTS
Rather than viewing marketing as the domain of the marketing depart-
ment of a firm, the total integrated marketing approach establishes the
primacy of marketing by requiring that every single person in the firm
work toward winning and keeping customers. The lack of integration of
all the firms’ capabilities towards this goal is considered to be the main
reason why firms fail (Hulbert, Capon, and Piercy 2003).
KEY WORDS Integration, functional integration
IMPLICATIONS
The total integrated marketing approach implies dropping long-held mar-
keting assumptions and moving towards accepting an integrated change
process aimed at improving profits and increasing sales. In adopting the
total integrated marketing approach, the firm puts the focus of mar-
keting within the implicit functions of each of the firm’s departments.
Attracting and keeping customers becomes the overriding goal ema-
nating from a customer-centric organization, with integrated planning
towards that starting at the firm’s top level.
traditional marketing 536
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Moenart, R. K., Souder, W. E., De Meyer, A., and Deschoolmester, D. (1994). ‘R&D–
Marketing Integration Mechanisms, Communication Flows, and Innovation Suc-
cess,’ Journal of Product Innovation Management, 11, 31–45.
Marketing Management
Parry, M. E., and Song, X. M. (1993). ‘Determinants of R&D: Marketing Integration
in High Tech Japanese Firms,’ Journal of Product Innovation Management, 10(1), 4–22.
Services Marketing
Ho, K., Jacobs, L., and Cox, J. (2003). ‘Go away! Don’t Bother me! I Don’t Want your
Money!’ Journal of Services Marketing, 17(4/5), 379–392.
Sales
Piercy, N. F., and Lane, N. (2005). ‘Strategic Imperatives for Transformation in the
Conventional Sales Organization,’ Journal of Change Management, 5(3), 249–266.
Piercy, N. F., and Lane, N. (2003). ‘Transformation of the Traditional Salesforce:
Imperatives for Intelligence, Interface and Integration,’ Journal of Marketing Man-
agement (Helensburgh), 19(5/6), 563–582.
BIBLIOGRAPHY
Hulbert, James M., Capon, Noel, and Piercy, Nigel (2003). Total Integrated Marketing:
Breaking the Bounds of the Function. New York: Free Press.
trade marketing see business-to-business marketing
trade secret see intellectual property
trademark see intellectual property
traditional marketing
(also called by-the-book marketing or one-to-many marketing)
DESCRIPTION
The use of marketing approaches that rely on conventional wisdom and where
such practices have typically proven to be sufficiently effective in the past.
KEY INSIGHTS
Such a marketing approach, which may include the use of traditional
mass promotion (a one-to-many marketing approach), may be adopted by
organizations that are interested in relying on traditional practices for
their marketing but they may miss out on opportunities in pioneering
new approaches and can be vulnerable to competitors who do so.
KEY WORDS Conventional wisdom, tradition
IMPLICATIONS
While an organization may embrace tradition in selecting its mar-
keting approaches, the current rate of change in marketing practice
suggests that marketers should not discount adopting pioneering new
approaches—even when pursuing the firm’s traditional strategic mar-
keting objectives. In particular, marketers should continually seek to
537 transaction cost theory
identify and understand new approaches to marketing in order to be able
to evaluate their costs and benefits relative to approaches traditionally
adopted and pursued by the organization.
APPLICATION AREAS AND FURTHER READINGS
Online Marketing
Scullin, S. S., Fjermestad, J., Jr, and Romano, N. C. (2004). ‘E-relationship Market-
ing: Changes in Traditional Marketing as an Outcome of Electronic Customer
Relationship Management,’ Journal of Enterprise Information Management, 17(6),
410–415.
Social Marketing
Shrum, L. J., Lowrey, Tina M., and McCarty, John A. (1995). ‘Applying Social and
Traditional Marketing Principles to the Reduction of Household Waste,’ American
Behavioral Scientist, 38(4), 646–657.
Sleich, K. (1986). ‘Traditional Marketing of Livestock and Meat in West Africa:
Experiences from the Ivory Coast,’ Quarterly Journal of International Agriculture, 25,
6–21.
BIBLIOGRAPHY
Rowsom, M. (1998). ‘Bridging the Gap from Traditional Marketing to Electronic
Commerce,’ Direct Marketing, 60(9), 23–25.
trait centrality see warm/cold effect
trait validity see validity
transaction cost see cost
transaction cost theory
DESCRIPTION
A theory that departs from the view of the firm as a complex structure of
marketing exchanges to one that is based on governance mechanisms that
improve efficiency of operations and internal resource allocations, reducing
transaction costs.
KEY INSIGHTS
The theory as applied to marketing addresses mechanisms for interor-
ganizational governance in marketing channels. It accounts for the
efficiency implications of organizing relationships in marketing chan-
nels through means for reducing potential costs related to carrying
out safeguarding, adaptation, and evaluation processes of marketing
relationships (Heide 1994).
KEY WORDS Governance, channels, interorganizational relationships
IMPLICATIONS
A greater knowledge of transaction cost theory-based research can
potentially assist the marketer with the more effective structuring of
inter-firm relationships. Decisions about where decision-making should
lie, for example, are focal issues which are directly assessed with the
transaction cost theory perspective.
transactional marketing 538
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Chiles, Todd H., and McMackin, John F. (1996). ‘Integrating Variable Risk Prefer-
ences, Trust, and Transaction Cost Economics,’ Academy of Management Review,
21(1), January, 73–99.
Rangan, V. K., Corey, E. R., and Cespedes, F. (1993). ‘Transaction Cost Theory:
Inferences from Clinical Field Research on Down Stream Vertical Integration,’
Organization Science, 4, 454–477.
Marketing Management
Heide, Jan B., and John, George (1992). ‘Do Norms Matter in Marketing Relation-
ships?’ Journal of Marketing, 56(2), April, 32–44.
Rugman, A. M., and Verbeke, A. (1992). ‘A Note on the Transnational Solution and
the Transaction Cost Theory of Multinational Strategic Management,’ Journal of
International Business Studies, 23(4), 761–771.
International Marketing
Hennart, Jean-François (1991). ‘The Transaction Costs Theory of Joint Ventures:
An Empirical Study of Japanese Subsidiaries in the United States,’ Management
Science, 37(4), April, 483–497.
Business-to-Business Marketing
Dahlstrom, Robert, and Nygaard, Arne (1999). ‘An Empirical Investigation of Ex
Post Transaction Costs in Franchised Distribution Channels,’ Journal of Marketing
Research, 36(2), May, 160–170.
BIBLIOGRAPHY
Heide, J. B. (1994). ‘Interorganizational Governance in Marketing Channels,’ Journal
of Marketing, 58(1), 71–91.
Williamson, O. E. (1998). ‘Transaction Cost Economics: How it Works; Where it is
Headed,’ De Economist, 146(1), 23–58.
Williamson, O. E. (1979). ‘Transaction-Cost Economics: The Governance of Contrac-
tual Relations,’ Journal of Law and Economics, 22, October, 233–261.
transactional marketing
DESCRIPTION
Marketing focused on transactions with customers as opposed to ongoing
relationships with customers.
KEY INSIGHTS
The emphasis of transactional marketing is on single transactions or
individual exchange events. By being only concerned with each indi-
vidual transaction independent of other transactions with a customer,
the marketing approach is not concerned with the firm’s relationship
with the customer. In business-to-business marketing, it is an approach
to marketing that relies on selling to intermediaries in one-off transac-
tions, where competition between those intermediaries creates higher
value for the transaction marketer and improved choice for the end
buyer. Compared to relationship marketing that relies on maintaining
interdependence and partnering between value chain players, transac-
tion marketing focuses on the independence of marketing actors. This
allows freedom of choice to those marketing actors to choose transaction
partners on the basis of self-interest when making their decisions (Sheth
and Parvatiyar 1994).
539 tribal marketing
KEY WORDS Individual transactions
IMPLICATIONS
In business-to-business marketing, the transactional marketing approach
allows for bargaining and bidding and resultant efficiencies in support of
lower-cost purchases. The rationale behind using it is that competition
and self-interest are the drivers of creating value. Relationships between
marketing actors are kept at a distance. It is challenged by the emergence
of relationship marketing, where it is based on creating higher quality
and reducing transactional costs by sharing resources, hence improving
marketing productivity (Sheth and Sisodia 1995). In consumer market-
ing, transaction marketing is also challenged by relationship marketing,
where the view is that, in certain product markets, it can be more
expensive to attract new customers than to keep existing customers.
APPLICATION AREAS AND FURTHER READINGS
Marketing Strategy
Webster, F. E., Jr. (1992). ‘The Changing Role of Marketing in the Corporation,’
Journal of Marketing, 56, October, 1–17.
Business-to-Business Marketing
Cornette, Guy, and Pontier, Suzanne (2002). ‘Transactional Marketing versus Rela-
tionship Marketing: The US Automobile Market Evolution,’ International Journal of
Automotive Technology and Management, 2(2), 177–189.
BIBLIOGRAPHY
Sheth, Jagdish N., and Parvatiyar, Atul (1994). Relationship Marketing: Theory, Methods
and Applications, Atlanta: Center for Relationship Marketing.
Sheth, Jagdish N., and Sisodia, Rajendra S. (1995). ‘Feeling the Heat,’ Marketing
Management, 4, Fall, 8–23.
trial see adoption process
tribal marketing
DESCRIPTION
A marketing approach which presents consumers with offerings that not only
satisfy their specific needs for it, but also allows them to connect to others.
KEY INSIGHTS
The tribal marketing approach focuses on the importance for consumers
to link in to their surroundings and to a communal co-presence through
the offerings they consume. It is represented through a micro-social
group of individuals who share similar experiences and emotions and
form links together in loosely interconnected communities (Cova and
Cova 2002).
KEY WORDS Connecting, community
IMPLICATIONS
The tribal marketing approach is most suitable for specific products and
services that can hold people together, strengthening community links