CA Foundation Business & Commercial Knowledge Study Material – Marketing Terminology

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.