Key Terms and Definitions

Chapter 2

CUG: A currently useful generalisation is an empirical generalisation that can be tested by asking the question ‘does this seem to work?’

Marketing orientation: an organisation’s commitment to the philosophy of mutually satisfying exchange relationships.

Market orientation: an organization’s focus on achieving mutually satisfying exchange relationships through the professional practice and management of the marketing function.

Porter’s five forces: are the five forces governing competition in an industry – the threat of new entrants, the threat of substitution, the bargaining power of suppliers, the bargaining power of customers, and the rivalry between current competitors.

Diamond of National Competition: is an analytical model that assess the determinants of national competitive advantage – factor conditions, demand conditions, related and supporting industries, and firm strategy, structure and rivalry.

Clusters: a grouping of industries that occurs as a consequence of both vertical relationships with suppliers and customers and also as a result of horizontal relationships based upon shared technologies and common customers (e.g. the agricultural dairy-food cluster in Denmark).

Competitive advantage: when either an organization's product or service offers the same benefits to consumers at a lower cost or exceeds those benefits (Porter, 1980).

Internal environment: the level of the marketing environment that concerns the situation within an organization.

Strategy, corporate: “is the pattern of major objectives, purposes, or goals, and essential policies and plans for achieving those goals, stated in such a way as to define what business the company is in or is to be in, and the kind of company it is or is to be” (Andrews, 1971)

Tacit Knowledge: is the type of knowledge that resides in the skills and practices of individuals or groups who are demonstrably superior in the performance of given tasks. It is thus more difficult to capture compared to explicit knowledge.

Explicit knowledge: is the type of knowledge that can be communicated formally through traditional educational processes.