Glossary - Agribusiness Management - page 424

direct selling A process that involves prospecting for new customers, pre-call planning,
getting the customer's attention and interest, making presentations, handling objections,
closing the sale, and servicing the account in direct, on-on-one contact with customers.
directing One of the four tasks of management; involves guiding the efforts of others
toward achieving a common goal and leading, supervising, motivating, delegating, and
evaluating human resources.
directors See board of directors .
discount pricing A method of pricing that offers customers a reduction from the published
or list price for specifi ed reasons, such as volume purchases or preseason ordering.
discount rate The interest rate used to determine the present value of a stream of cash
fl ows to be received in the future.
discounted loan A loan where the amount of interest to be paid is deducted from the
amount the lender provides the borrower; amount of loan - amount of interest paid =
amount of available capital.
discounting A method of converting a future value to a present value by adjusting the
future value by its discount rate.
distribution In marketing, one of the four elements of the marketing mix (also known as
place); involves all decisions related to how the product moves from the manufacturer
to consumer.
d istributor system A system of channel management that uses both middleman-distribu-
tors, or wholesalers, and dealers to move products to customers.
diversifi cation The process of entering alternative lines of business that pose different
risks and opportunities so that the likelihood of a loss in one area will be offset by the
possibility of gain in another.
division of labor The process by which jobs are broken into components and then are
assigned to members or groups.
d ormant partner A partner not active in managing the partnership and not known by the
general public; retains limited liability.
early adopters The second group of buyers (next 13.5 percent after innovators) to try a
new idea, product, or service; tend to be progressive and well-respected individuals.
early majority The third group of buyers (next 34 percent after the early adopters) to try
a new idea, product, or service; tend to be deliberate people who see themselves as fairly
progressive, but not generally as leaders.
earnings on sales ratio A fi nancial ratio measuring profi tability; (net operating profi t / net

sales).
e conomic profi t A measure of profi t that takes into consideration alternative uses for the
resources; accounting profi t less opportunity cost.
e conomic value analysis

A method of pricing that is based on the economic value of a

product.
e conomics The study of how scarce resources (land, labor, capital and management) are
allocated to meet the needs of a society with unlimited wants.
economies of scale A production situation where the larger the scale of the operation, the
lower the per-unit cost.
effi ciency ratios A class of fi nancial ratios that measures the output or production of a
system or process per unit of input.
effi cient consumer response (ECR) An information-based system that links distributors
and suppliers together with retail supermarkets; the food industry's concept of supply
chain management.