• A
• B
• C
• D
• E
• F
• G
• H
• I
• J
• K
• L
• M
• N
• O
• P
• Q
• R
• S
• T
• U
• V
• W
• Z

Term	Definition
Package	The envelope or container or look of your outgoing direct mail piece.
Pain point	A problem that customers wish to eliminate or reduce.
Par value	The face value of a security, stamp or other good.
Paradox of choice	The finding that additional choices made available for consumers tends to increase customer anxiety and decrease consumer happiness.
Paradox of thrift	If a single individual consumes less, her savings will increase; but if everyone consumes less, the result may be lower rather than higher savings overall. The attempt to increase saving is thwarted if an increase in the saving rate is unmatched by an increase in investment (or other source of aggregate demand such as government spending on goods and services). The outcome is a reduction in aggregate demand and lower output so that actual levels of saving do not increase.
Paradox of value	The disconnect between utility and price in a marketplace. The classic example involves diamonds and water. Diamonds generally cost more than water, but water is much more important to consumers.
Pareto criterion	According to the Pareto criterion, a desirable attribute of an allocation is that it be Pareto-efficient. See also: Pareto dominant.
Pareto dominant	Allocation A Pareto dominates allocation B if at least one party would be better off with A than B, and nobody would be worse off. See also: Pareto efficient.
Pareto efficiency	A state in the market such that there is no other way to reallocate resources without making at least one party worse off. Note that this does not imply that a Pareto efficient market maximizes total efficiency or production.
Pareto efficiency curve	The set of all allocations that are Pareto efficient. Often referred to as the contract curve, even in social interactions in which there is no contract, which is why we avoid the term. See also: Pareto efficient.
Pareto efficient	An allocation with the property that there is no alternative technically feasible allocation in which at least one person would be better off, and nobody worse off.
Pareto improvement	A change that benefits at least one person without making anyone else worse off. See also: Pareto dominant.
Participation rate	The ratio of the number of people in the labour force to the population of working age. See also: labour force, population of working age.
Partnership	The process of two or more entities sharing ownership of a particular business and its assets, profits, or losses.
Pass-through entities	A business entity (such as a sole proprietorship, partnership, or S corporation) whose income is taxed as the owner’s personal income at the individual rate rather than as business income for federal income taxes
Patent	A right of exclusive ownership of an idea or invention, which lasts for a specified length of time. During this time it effectively allows the owner to be a monopolist or exclusive user.
Pay the price	To be subjected to a punishment as a consequence of a prior misdeed.
Pay what you want pricing	A misguided form of pricing. Instead of the producer setting a price, he asks the “buyer” to set his own price. In most cases this will result in significantly lower income and an influx of cheapskates.
Paye	Pay as you earn. A method of collecting income tax on behalf of the Government by taking it directly from your employees’ weekly/monthly pay.
Payoff	The benefit to each player associated with the joint actions of all the players.
Payroll	An inventory of everyone a company must pay (employees, contractors, and anyone else in a labor agreement with the company), as well as a record of what each person must be paid including salary, wages, and benefits.
Paywall	A barrier preventing access to information on an internet site. Websites implementing a paywall will generally require users to provide an email address, a payment, or both before information may be accessed.
PC	Personal Computer. The versatile desktop workstation used for hundreds of applications. They can be used to access a marketing database resident on a mainframe.
PEG ratio	A method to value a share of stock that takes expected growth into account. It is calculated by dividing a company’s P/E ratio by its annual earnings per share growth. The lower the result, the better for the buyer. A result of 1 is considered break
Penetration	Ratio Your customers as a percentage of the universe that defines your customer’s type of household or business. “We had a penetration ratio in that zip code of 8%.”
Penetration pricing	The temporary use of exceedingly low prices in order to enter a new market with strong competition.
Penny auction	An auction that requires the payment of a fee for each bid a participant places.
Penny stock	A stock noted for its low price and often sold sold over the counter, rather than on an exchange. The current American threshold is $5 per share.
People management	People management is defined as a set of practices that encompass the end-to-end processes of talent acquisition, talent optimization, and talent retention while providing continued support for the business and guidance for the employees of an organization.
Perfect competition	A market in which all producers sell commodity goods and none have substantial pricing power. Thus each is forced to accept the market price.
Perfectly competitive equilibrium	Such an equilibrium occurs in a model in which all buyers and sellers are price-takers. In this equilibrium, all transactions take place at a single price. This is known as the law of one price. At that price, the amount supplied equals the amount demanded: the market clears. No buyer or seller can benefit by altering the price they are demanding or offering. They are both price-takers. All potential gains from trade are realized. See also: law of one price.
Performance-related pay	A pay which varies, at least partially, with a worker’s performance. See also: piece-rate work.
Persona	A profile of a fictional individual whose traits characterize a group of real people (often customers or users). These profiles allow stakeholders to better understand the motivations and needs of their buyers/users.
Personalization	The process of including personal references in an outgoing mail piece such as “Thank you for your order of Feb. 23 for six boxes of hard candy, Mrs. Williams.” With laser letters, personalization does not cost more than non-personalized letters.
Perverse incentive	Motivation for another to perform a specified action but unexpectedly leads to an undesirable result
Philanthropy	Making donations to charities in order to improve human wellbeing.
Phillips curve	An inverse relationship between the rate of inflation and the rate of unemployment.
Piece-rate work	A type of employment in which the worker is paid a fixed amount for each unit of the product made.
Pigouvian subsidy	A government subsidy to encourage an economic activity that has positive external effects. (For example, subsidizing basic research.)
Pigouvian tax	A tax levied on activities that generate negative external effects so as to correct an inefficient market outcome. See also: external effect, Pigouvian subsidy.
Pigovian tax	A surcharge on activity that causes negative externalities.
Piracy	The unauthorized duplication of intellectual property.
Planned obsolescence	A vendor’s intentional design, engineering, and support decisions that reduce an offering’s useful life span.
Plunge protection team	A controversial governmental working group that is focused on maintaining confidence in the financial markets. It was created by President Ronald Reagan and consists of the Secretary of the Treasury, the chairman of the Federal Reserve, the chairman of the Security and Exchange Commission and the chairman of the Commodity Futures Trading Commission.
Plunger	An older term for a speculator
Poa	Priced on agreement
Policy (interest) rate	The interest rate set by the central bank, which applies to banks that borrow base money from each other, and from the central bank. Also known as: base rate, official rate. See also: real interest rate, nominal interest rate.
Political accountability	Accountability achieved by political processes such as elections, oversight by an elected government, or consultation with affected citizens. See also: accountability, economic accountability.
Political institutions	The rules of the game that determine who has power and how it is exercised in a society.
Political rent	A payment or other benefit in excess of the individual’s next best alternative (reservation position) that exists as a result of the individual’s political position. The reservation position in this case refers to the individual’s situation were he or she to lack a privileged political position. See also: economic rent.
Political system	A political system determines how governments will be selected, and how those governments will make and implement decisions that affect all or most members of a population.
Polluter pays principle	A guide to environmental policy according to which those who impose negative environmental effects on others should be made to pay for the damages they impose, through taxation or other means.
Population of working age	A statistical convention, which in many countries is all people aged between 15 and 64 years.
POS	Point of Sale. A cash register.
Positioning	Underlying brand message
Positive economics	A study of what occurs in a marketplace.
Positive feedback (process)	A process whereby some initial change sets in motion a process that magnifies the initial change. See also: negative feedback (process).
Positive thinking	Positive thinking helps with stress management and can even improve your performance at work.
Post experience good	An offering whose value can not be determined prior to use or even during use. Its value can only be determined after use.
Postal pre-sort	Sorting outgoing letters in a special way to take advantage of postal discounts.
Postwar accord	An informal agreement (taking different forms in different countries) among employers, governments, and trade unions that created the conditions for rapid economic growth in advanced economies from the late 1940s to the early 1970s. Trade unions accepted the basic institutions of the capitalist economy and did not resist technological change in return for low unemployment, tolerance of unions and other rights, and a rise in real incomes that matched rises in productivity.
Potemkin village	The use of deliberately falsified evidence in order to convince a third party as to an item’s greatness and desirability. Named after an eighteenth century attempt to convince Catherine II of the great wealth in Crimea via the use of fake, but impressive
Power	The ability to do (and get) the things one wants in opposition to the intentions of others, ordinarily by imposing or threatening sanctions.
Preapproval letter	Documentation from a lending institution that provides a non binding estimate of the total amount that a mortgage seeker can borrow.
Precautionary saving	An increase in saving to restore wealth to its target level. See also: target wealth.
Predatory pricing	A pricing strategy characterized by low prices intended to prevent competition from other suppliers.
Predictive Model	A model which predicts the response to a promotion.
Predistribution policy	Government actions that affect the endowments people have and their value, including the distribution of market income and the distribution of privately held wealth. Examples include education, minimum wage, and anti-discrimination policies. See also: redistribution policy.
Preferences	A description of the benefit or cost we associate with each possible outcome.
Present Discounted Value	A financial process for calculating the present value of an amount of money to be received or paid in the future. The formula is PDV = V / (1 + i)n where V = future value, i = market rate of interest, n = time in years.
Present value	Comparison of the money available to the company in the future with the value of money it currently holds, e.g. due to interest.
Prestige pricing	The strategy of charging excessively high prices in order to improve a good’s image and desirability. Not to be confused with price gouging.
Price	The cost of a good or service.
Price ceiling	The maximum price allowed. The lower the price, the greater the shortages that will be experienced by the market.
Price discrimination	A selling strategy in which different prices are set for different buyers or groups of buyers, or prices vary depending on the number of units purchased.
Price elasticity	A measure of the effect of price changes on consumer demand. The greater the effect, the more elastic the pricing.
Price elasticity of demand	The percentage change in demand that would occur in response to a 1% increase in price. We express this as a positive number. Demand is elastic if this is greater than 1, and inelastic if less than 1.
Price fixing	A collusion between producers to maintain prices at a certain level. This business practice is illegal in the United States, but some foreign cartels such as OPEC utilize this strategy. Price fixing schemes often unravel because participants are incentivized to cheat by selling excess inventory at below
Price floor	The minimum price allowed.
Price gap	A difference in the price of a good in the exporting country and the importing country. It includes transportation costs and trade taxes. When global markets are in competitive equilibrium, these differences will be entirely due to trade costs. See also: arbitrage.
Price gouging	The practice of charging excessive prices for items after a sudden increase in demand.
Price increase letter	Written notification from vendor to customer used to soften the blow when the amount charged is set to go up
Price justification letter	Written information that can be used to help convince buyers that an offering is worth its cost
Price maker	A vendor that can set prices independent of the going rate.
Price markup	The price minus the marginal cost divided by the price. It is inversely proportional to the elasticity of demand for this good.
Price skimming	A strategy that involves setting a high initial price in order to maximize the per unit income from each sale. Over time the price is reduced in successive cuts so as to continually maximize the per unit income from the remaining pool of potential buyers.
Price taker	A vendor of a commodity who is forced to sell its wares at the going rate.
Price-based environmental policy	A policy that uses a tax or subsidy to affect prices, with the goal of internalizing the external effects on the environment of an individual’s choices.
Price-setting curve	The curve that gives the real wage paid when firms choose their profit-maximizing price.
Price-taker	Characteristic of producers and consumers who cannot benefit by offering or asking any price other than the market price in the equilibrium of a competitive market. They have no power to influence the market price.
Pricing power	The ability of a firm to increase its prices without losing customers.
Primary deficit	The government deficit (its revenue minus its expenditure) excluding interest payments on its debt. See also: government debt.
Primary labour market	A market in which workers are typically represented by trade unions, and enjoy high wages and job security. See also: secondary labour market, segmented labour market.
Primary markets	See also: secondary and primary markets
Principal agent problem	A statement about misaligned incentives. The representative of an organization may optimize his decisions for his own benefit, not that of the organization that he represents. A statement about misaligned incentives. The representative of an organization may optimize his decisions for his own benefit, not that of the organization that he represents.
Principal–agent relationship	This relationship exists when one party (the principal) would like another party (the agent) to act in some way, or have some attribute that is in the interest of the principal, and that cannot be enforced or guaranteed in a binding contract. See also: incomplete contract. Also known as: principal–agent problem.
Prioritization	Prioritization is the activity that arranges items or activities in order of importance relative to each other. In the context of medical evaluation it is the establishment of the importance or the urgency of actions that are necessary to preserve the welfare of client or patient.
Prisoners’ dilemma	A game in which the payoffs in the dominant strategy equilibrium are lower for each player, and also lower in total, than if neither player played the dominant strategy.
Private equity	Funds and investors that directly invest in private companies.
Private good	A good that is both rival, and from which others can be excluded.
Private limited company	A type of legal company structure that, among other features, limits the personal liability of the company owners so that they can’t be made bankrupt by company debts.
Private property	Something is private property if the person possessing it has the right to exclude others from it, to benefit from the use of it, and to exchange it with others.
Privatisation	The process of moving state-owned assets into the private sector.
Proactiveness	Proactive Attitude (PA) is a personality characteristic which has implications for motivation and action. It is a belief in the rich potential of changes that can be made to improve oneself and one’s environment.
Procedural judgements of fairness	An evaluation of an outcome based on how the allocation came about, and not on the characteristics of the outcome itself, (for example, how unequal it is). See also: substantive judgements of fairness.
Process innovation	An innovation that allows a good or service to be produced at lower cost than its competitors.
Procyclical	Tending to move in the same direction as aggregate output and employment over the business cycle. See also: countercyclical.
Producer price index	A measure of inflation in goods bought and manufactured by British-based industry.
Producer surplus	The price at which a firm sells a good minus the minimum price at which it would have been willing to sell the good, summed across all units sold.
Product elasticity of demand (ped)	The degree to which demand for products or services changes with the price. Essential goods, such as food, do not experience an increase in demand when the price changes, and are deemed “inelastic”, but non-essential goods do.
Product innovation	An innovation that produces a new good or service at a cost that will attract buyers.
Production	A function in an advertising agency of producing letters and other direct mail pieces. Also the programmers in a service bureau who work on such direct mail pieces.
Production function	A graphical or mathematical expression describing the amount of output that can be produced by any given amount or combination of input(s). The function describes differing technologies capable of producing the same thing.
Production possibilities frontier	The set of outputs that maximize a party’s output. Many examples depict a country’s potential output of two items: guns and butter.
Productized service	A service that has been packaged as a product. The benefits of doing so include ease of marketing and specialization.
Profile	A way of describing your typical customer. You create a profile by modeling your database. The profile could tell you that your typical customer was a woman of 35-54 with an income of $25-$50K.
Profit	Accountants define profit as the difference between income and expense. Economists also subtract opportunity costs from income.
Profit and loss account	A financial statement that shows any incomes or outgoings of a company over a certain period of time so as to show the net profit or loss for that time.
Profit and loss statement	Report outlining the total amount of sales (rev­enues) and total costs (expenses). The difference between these figures is your profit.
Profit margin	The difference between the price and the marginal cost.
Progressive (policy)	An expenditure or transfer that increases the incomes of poorer households by more than richer households, in percentage terms. See also: regressive (policy).
Project management	Project management is the application of processes, methods, skills, knowledge and experience to achieve specific project objectives according to the project acceptance criteria within agreed parameters. Project management has final deliverables that are constrained to a finite timescale and budget.
Property rights	Legal protection of ownership, including the right to exclude others and to benefit from or sell the thing owned.
Prospect	A potential customer who you have targeted.
Prospecting	Mailing or telemarketing to prospects who are not yet your customers.
Protectionist policy	Measures taken by a government to limit trade; in particular, to reduce the amount of imports in the economy. These are designed to protect local industries from external competition. They can take different forms, such as taxes on imported goods or import quotas.
Prudential policy	A policy that places a very high value on reducing the likelihood of a disastrous outcome, even if this is costly in terms of other objectives foregone. Such an approach is often advocated where there is great uncertainty about the conditions under which a disastrous outcome would occur.
Psychographics	A way of grouping people by wealth, orientation, hobbies and interests.
Psychological pricing	A method to reduce the perceived price of an item by reducing its least significant digits so that the total price falls below a traditional price threshold. For instance, psychological pricing may be used by a retailer to reduce the price of an item from $20 to $19.97. Although the price is essentially unchanged, consumers will subconsciously evaluate the item as being significantly cheaper.
Public bad	The negative equivalent of a public good. It is non-rival in the sense that a given individual’s consumption of the public bad does not diminish others’ consumption of it.
Public good	A good for which use by one person does not reduce its availability to others. Also known as: non-rival good. See also: non-excludable public good, artificially scarce good.
Pull	The percent response to your offer by mail or phone.
Pull demand forward	To encourage sales to customers who would have bought at a later date. This usually requires additional expense and effort upon the part of the vendor. Short term cash flow will increase (due to a higher number of sales). On the other hand, sales in subsequent periods will be reduced as those who would have placed orders in those time periods will have already made their purchases. term cash flow will increase (due to a higher number of sales). On the other hand, sales in subsequent periods will be reduced as those who would have placed orders in those time periods will have already made their purchases.
Pump and dump	A marketing technique for those with questionable morals. It consists of a push to artificially increase the perceived value of an item (pump), and then the sale of a massive quantity of that good quickly at an inflated price (dump) before anyone catches on. Often used in the context of financial stocks (especially penny stocks).
Purchasing power	A measure of the strength of a currency. The larger the measure, the more goods that can be bought by a unit of currency.
Purchasing power parity	A ratio of the value of two different currencies.
Purchasing power parity (ppp)	A statistical correction allowing comparisons of the amount of goods people can buy in different countries that have different currencies. See also: constant prices.
Pure impatience	This is a characteristic of a person who values an additional unit of consumption now over an additional unit later, when the amount of consumption is the same now and later. It arises when a person is impatient to consume more now because she places less value on consumption in the future for reasons of myopia, weakness of will, or for other reasons.
Purge	To eliminate undesirable names from a list.