CA Foundation Business & Commercial Knowledge Study Material Chapter 6 Common Business Terminologies – Marketing Terminology
Marketing Terminology
- Advertising: Any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, radio, TV, Internet by an identified sponsor.
- Advertising agency: An organization consisting of experts who render advertising services for payment in terms of fee or commission or both.
- Advertising campaign: An organization’s programme of advertising for a specific time period. Advertising copy The advertisement containing the message, photograph and other details. Advertising media The channels (e.g. print and electronic media) used to carry advertisements. Advice note A document sent by a seller informing the buyer of dispatch of goods.
- Agent: A person authorised to act on behalf of another (principal, like buyer and seller and do not take ownership of goods.
- Auction: An agent who sells goods through action on behalf of his principal.
- After sale service: The services provided by the manufacturer/dealer to the buyers after selling the product/service.
- Barrier to trade: Something that makes trade between two countries more difficult or expensive, e.g. a customs duty on imports.
- Barriers to entry/exit: A barrier to entry/exit of new firms in the market, e.g. economies of scale, government policy.
- Benchmarking: The process of comparing the products / services, or business processes of an enterprise against the best firm in the industry with the objective of improving quality and performance.
- Brand: A name, symbol, design, logo or a combination thereof to identify a product and to differentiate it from competing products.
- Brand equity: The estimated value of a brand on the basis of brand’s loyalty.
- Brand recognition: Customers awareness of existence of a brand as an alternative for buying.
- Brand loyalty: Commitment of customers to a brand.
- Business-to-business (B2B): Marketing activities between two business firms carried through Internet. Business model: A company’s approach for converting its strategy into moneymaker.
- Business portfolio: A company’s set of businesses or products.
- Buying behaviour: The process used by buyers to decide whether or not to buy a product/service. It depends upon several internal and external factors.
- Cash discount: A reduction in the price of products/services given to customers who buy on cash basis.
- Competitive advantage: An advantage which a firm has over its competitors.
- Competitive position: The position that a firm takes to face its competitors.
- Conglomerate diversification: Starting or acquiring businesses which have no synergy with the firm’s exiting business. For example, ITC a tobacco company diversified into hotels, garments, foods and beverages, paper and paper board and agri business.
- Consortium: A group of several firms which work together to buy something or to build something.
- Consumer market: The market for products and services which people buy for their own/family’s use.
- Corporate culture: The values beliefs, traditions, rituals, etc. shared by the members of an organization.
- Cross-selling: Selling related products to buyers of a product. For example, selling handkerchief, ‘ Socks, ties to buyer of shirts/trousers.
- Catalogue: A small booklet containing details about the products, their prices etc. of a firm.
- Chain stores: A group of similar stores selling same products at the same prices, e.g. Bata Stores. Also known as multiple shops.
- Channel of distribution: The route that a product takes to move from the manufacturer to consumers.
- Clearing agent: An agent who takes care of customs formalities for imported goods.
- Consumers’ cooperative store: A retail stored set up by consumers as a cooperative society to get 1 products of daily use at reasonable prices by eliminating middlemen.
- Customer demand: A customer’s ability and willingness to buy a product/service.
- Customer need: A basic requirement which a person wishes to satisfy.
- Customer loyalty: A customer’s inclination to buy repeatedly from the same shop or store.
- Customer satisfaction: The ability of a product/service to meet the customers expectations in terms of quality and performance in relation to the price paid.
- Customer wants: The desire for a product/service to satisfy the underlying need. For example,
hunger the need whereas food is the want. - Departmental Store: A large retail store selling a wide range of goods under one roof, goods being
arranged in different departments. - Differentiation: Giving a unique identity to a product/service so that it stands out from rival
product/services. - Direct marketing: Selling products/services directly to consumers, e.g. telemarketing.
- Diversify: Increasing the range of products /services which a firm produces and sells.
- E-commerce: Business transactions made through electronic means e.g. Internet,
- Economies of scale: Reduction in cost per unit due to large scale operations.
- External environment: The forces and conditions that influence a company’s strategies and competitive position.
- Factor: An agent who keeps the goods of others for sale on commission basis.
- Fast moving consumer goods (FMCG): Products of duly use which are low priced, frequently purchased and sell in large volumes, e.g. biscuits, soaps, tooth pastes, packed juices, etc.
- Forecasting: The process of estimating future demand on the basis of price levels, disposable incomes and other relevant factors.
- Forwarding agent: The agent who attends to customs formalities on behalf of an exporter. Grading: Classifying agricultural products into different grades on the basis of their quality level.
- Hire purchase: Buying goods and making payments in installments, goods considered on hire until the payment of the final installment.
- Indent: A purchase order sent abroad for importing goods.
- Innovators: Young and intelligent consumers who are the first to adopt new products.
- Internal marketing: The process of earning support for a company and its activities from its employees.
- Invoice: A written statement containing details of goods sold. It is sent by the seller to the buyer.
- Itinerants: Retailers having no fixed place for selling. They move from place to place to sell their goods. Also known as mobile traders.
- Joint venture: A new enterprise jointly established by two or more firms for some specific purpose and mutual benefit.
- Labelling: Putting labels on products to indicate its name, contents, price date of manufacture and their necessary details.
- Marketing: The process of discovering, creating and delivering value to satisfy the needs of a target market at a profit.
- Market development: The process of offering existing or modified products to new groups of customers.
- Market entry: Launching a new product into an existing market or a new market.
- Market leader: A firm having control over a specific market.
- Marketing Mix: A firm’s mix of product, price, place and promotion. In case of services it consists of three other elements people, process and physical evidence. ‘
- Marketing plan: The plan covering the use of marketing mix to achieve the firm’s marketing objectives.
- Market positioning: The marketing strategy for placing a firm’s products/services against competing products/services in the minds of consumers.
- Market research: The process of systematically collecting, recording and analysing data about problems concerning the marketing of products and services.
- Market segmentation: Dividing the total market into different parts on the basis of consumer’s characteristics to deliver tailor made offering to each part.
- Market share: The sales of a product/brand or firm divided by total sales of similar products/ brands of firms in the industry.
- Market targeting: The process of comparing all market segments and choosing the most attractive segment for a product/service.
- Mass marketing: Delivering the same message through mass media to all consumers.
- Merger: Combination of two or more firms into a single firm to expand business operations.
- Mission: The unique purpose of a company that differentiates it from other companies in the industry, defines it scope of operations and reflects its values and priorities.
- Niche marketing: Concentrating efforts on relatively small market segments e.g. herbal tea for health conscious consumers.
- Opportunities: Favourable conditions in the external environment of business.
- Packing: Designing and manufacturing suitable packages for various types of products.
- Packing: Putting the product into its package.
- Personal selling: Oral communication with prospective buyers to make a sale and develop relationships with them.
- Physical distribution: Activities involved in physical movement of goods from producers to consumers e.g. transportation, warehousing, order processing and inventory control.
- Pre-emptive pricing: Setting low prices to discourage entry of new suppliers in the market.
Price discrimination: Charging different prices from different customers for the same product service for reasons other than costs. - Price elasticity of demand: Change in demand due to change in price.
- Price sensitivity: The effect of change in price on customers.
- Price: The value of product/service expressed in terms of money.
- Publicity: Promotion of an organisation and its products/services in mass media without payment. Retails Traders who sell directly to customers or ultimate users.
- Penetration pricing: Charging a relatively low price to gain quick market acceptance of new product/service.
- Salesmanship: The process of persuading people to buy a product/service through face-to-face interaction.
- Sales promotion: Any activity used to boost the immediate sales of a product or service e.g. free samples, price off, etc.
- Target marketing: Using appropriate advertisements to reach out to a group of consumers having similar characteristics.
- Tele marketing: Using telephone to contact people and sell a product service.
- Test marketing: Testing of a new product with a sample group of customers to judge their reactions.
- Unique selling proposition (USP): A customer benefit that no other product/service can claim.