ICAI Notes- Marketing Terminology | Business and Commercial Knowledge (Old Scheme) - CA Foundation PDF Download

MARKETING TERMINOLOGY

Advertising Campaign: An organization’s programme of advertising activities over a particular period with specific aims, for example an increase in sales or awareness of a product.

Advertising: Advertising is any paid form of non-personal presentation and promotion of ideas, goods and services through mass media such as newspapers, magazines, television or radio by an identified sponsor.

After-Sales Service: The services received after the original goods or services have been paid for. Often this service is provided as part of a warranty or guarantee scheme associated with the product/service purchased.

Agent: Agent is a part of the distribution channel. An agent is effiectively a wholesaler who represents buyers and sellers on a relatively permanent basis, performs only a few functions and does not take title to goods.

Barrier to Trade: Something that makes trade between two countries more difficult or expensive. For example: A tax on imports.

Barriers to Entry/Exit: Economic or other characteristics of a marketplace that make it difficult for new firms to enter or exit. Examples include: economies of scale; product differentiation; capital requirements; cost disadvantages other than size; access to distribution channels; government policy; etc.

Benchmarking: Benchmarking is the process of comparing the products and services of a business against those of competitors in a market, or leading businesses in other markets, in order to find ways of improving quality and performance. An analysis of competitor strengths and weaknesses; used to evaluate a firm’s relative competitive position, opportunities or improving, and success/failure in achieving such

improvement.

Brand Equity: Brand equity refers to the value of a brand. Brand equity is based on the extent to which the brand has high brand loyalty, name awareness, perceived quality and strong product associations. Brand equity also includes other “intangible” assets such as patents, trademarks and channel relationships.

Brand Loyalty: It is a strongly motivated and long standing decision of the customer to purchase a particular product or service.

Brand Recognition: It is a customer’s awareness that a brand exists and is an alternative to purchase.

Brand: A brand is the specific type of the product form. A brand – represented by a brand name, symbol, design, logo, packaging – is the identity of a particular product form that customers recognise as being different from others.

Business Model: A company’s business model is management’s storyline for how the strategy will be a money maker.

Business Portfolio: The business portfolio is the collection of businesses and products that make up the business.

Business to Business: Marketing activity directed from one business to another. This term is often shortened to “B2B”.

Buying Behaviour: Buying behaviour concerns the process that buyers go through when deciding whether or not to purchase goods or services. Buying behaviour can be influenced by a variety of external factors and motivations, including marketing activity.

Cash Discount: A reduction in the price of goods given to encourage sale on case basis.

Competitive Advantage: Advantages that a firm has over its competitors.

Competitive Position: The position that a firm has or wishes to achieve within its industry as measured against its competition.

Conglomerate Diversification: A strategy of growing a firm by acquiring other firms for investment purposes; usually little or no anticipated synergy with the acquired firm.

Consortium: Consortium is a combination of several companies working together for a particular purpose, for example in order to buy something or build something.

Consumer Markets: Consumer markets are the markets for products and services bought by individuals for their own or family use.

Corporate Culture: Corporate Culture refers to a company's values, beliefs, business principles, traditions, ways of operating, and internal work environment.

Cross-Selling: Using a customer’s buying history to select them for related offers. For example: Selling a car alarm and music systems to new car buyers.

Customer Demand: Consumer demand is a want for a specific product supported by an ability and willingness to pay for it.

Customer Loyalty: Feeling or attitude that inclined a customer either to return to a company, shop or outlet to purchase there again, or else to re-purchase a particular product, service or brand.

Customer Need: A need is a basic requirement that an individual wishes to satisfy.

Customer Satisfaction: The provision of goods or services which fulfil the customer’s expectations in terms of quality and service, in relation to price paid.

Customer Wants: A want is a desire for a specific product or service to satisfy the underlying need.

Differentiation: A marketing strategy aimed at ensuring that products and services have a unique element to allow them to stand out from the rest.

Direct Marketing: When businesses and non-profit organizations market their products, services or causes directly to consumers based on consumer interests. Examples include catalogues and other postal mailings, telemarketing, text messages, emails, ads on a mobile device and internet advertising.

Distribution Channel: The network of organisations necessary to distribute goods or services from the manufacturers to the consumers; the distribution channel therefore potentially consists of manufacturers, distributors, wholesalers, retailers and E-tailers.

Diversify: A company, increases the range of goods or services it produces and sells.

E-Commerce: The use of technologies such as the Internet, electronic data exchange and industry extranets to streamline business transactions.

Economy of Scale: A reduction in costs through larger operating units, spreading fixed costs over large numbers of items/units.

External Environment: The conditions and forces that define a firm’s competitive position and influences its strategic options. Also, called Competitive Environment.

Fast-Moving Consumer Goods (FMCG): Fast-moving consumer goods are those that sell in high volumes, with low unit value, and have fast consumer repurchase. Examples include, soaps, toothpastes, hair oils, jams, ketchups, packed juices, ready meals, baked beans, etc.

Forecasting: The process of estimating future demands by anticipating what buyers are likely to do under a given set of marketing conditions. For example: Economic confidence, disposal income, pricing levels, etc.

Innovators: Innovators are those who adopt new products first. They are usually relatively young, lively, intelligent, socially and geographically mobile. They are often of a high socioeconomic group.

Internal Marketing: The process of eliciting support for a company and its activities among its own employees, in order to encourage them to promote its goals. This process can happen at a number of levels, from increasing awareness of individual products or marketing campaigns, to explaining overall business strategy.

Joint Venture: A third party commercial operation established by two or more firms to pursue a particular market, resource supply, or other business opportunity. It is created and operated for the benefit of the coowners.

Long-Term Objectives: A firm’s intended performance over a multi-year period of time; usually includes measures such as competitive position profitability, return on investment, technology leadership, productivity, employee relations and development, public responsibility.

Market Development: The process of growing sales by offering existing products (or new versions of them) to new customer groups.

Market Entry: The launch of a new product into a new or existing market. A different strategy is required depending on whether the product is an early or late entrant to the market; the first entrant usually has an automatic advantage, while later entrants need to demonstrate that their products are better, cheaper and so on.

Market Leader: The company that has control over a certain market.

Market Positioning: A marketing strategy that will position a business’ products and services against those of its competitors in the minds of consumers.

Market Research: The systematic gathering, recording and analysing of data about problems relating to the marketing of goods and services.

Market Segmentation: Dividing consumers into groups based on different consumer characteristics, to deliver specially designed advertisements that meet these characteristics as closely as possible.

Market Share: Market share can be defined as the percentage of all sales within a market that is held by one brand / product or company.

Market Targeting: Market targeting is the process of evaluating each market segment and selecting the most attractive segments to enter with a particular product or product line.

Marketing: Marketing is the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential. It pinpoints which segments the company is capable of serving best and it designs and promotes the appropriate products and services.

Marketing Mix: It refers to the firm’s marketing elements. It is common to describe these elements in terms of 4Ps of marketing, viz., Product, Price, Place and Promotion. For services marketing usually three additional Ps are referred to, viz, People, Processes and Physical Evidence.

Marketing Plan: A detailed statement (usually prepared annually) of how a company’s marketing mix will be used to achieve its market objectives. A plan is usually prepared following a marketing audit.

Mass Marketing: When many consumers receive the same message from businesses and non-profit organizations through mass media, such as broadcast television, radio and newspapers, regardless of consumer interests.

Merger: Merger is considered to be a process when two or more companies come together to expand their business operations.

Mission: The unique purpose of a firm that sets it apart from firms of its type; identifies scope of operations including markets, customers, products, distribution, technology, etc. in manner that reflects values and priorities of the firm’s strategies.

Niche Marketing: Niche marketing refers to the exploitation of comparatively small market segments by businesses that decide to concentrate their efforts. Niche segments exist in nearly all markets. For example: atta noodles for health conscious.

Opportunities: Opportunities are any feature of the external environment which creates conditions that a business can exploit to its advantage. If the business is successful in exploiting opportunities, then it will be better placed to achieve its objectives.

Personal Selling: Oral communication with potential buyers of a product with the intention of making a sale. The personal selling may focus initially on developing a relationship with the potential buyer, but will always ultimately end with an attempt to “close the sale”.

Pre-Emptive Pricing: Pre-emptive pricing is a strategy involves setting low prices in order to discourage or deter potential new entrants to the suppliers market.

Price Discrimination: Price discrimination occurs when a firm charges a different price to different groups of consumers for an identical good or service, for reasons not associated with costs. For example, bottled water is priced differently in shopping malls and cinema halls.

Price Elasticity of Demand: Price elasticity of demand measures the responsiveness of fia change in demand for a product following a change in its own price.

Price Sensitivity: Price sensitivity is the effect a change in price will have on customers.

Price Skimming: Price skimming involves charging a relatively high price for a short time where a new, innovative, or much-improved product is launched onto a market.

Price: The price of a product may be seen as a financial expression of the value of that product.

Publicity: Promotional activities designed to promote a business and its products by obtaining media coverage not paid for by the business.
Sales Promotion: Sales promotion refers to any activity designed to boost the sales of a product or service. It may include an advertising campaign, increased PR activity, a free-sample campaign, arranging demonstrations or exhibitions, setting up competitions with attractive prizes, temporary price reductions, door-to-door calling, telephone-selling, personal letters on other methods.

Short-Term Objectives: Usually one year objectives sometimes known as Annual Objectives. They often coincide with Long-Term Objectives; they usually indicate the speed at which management wants the organization to progress.

Stakeholder: A person, group, or business that has an interest in the outcomes of a firm’s operations.
Strength: A skill, resource, or other advantage that a firm has relative to its competitors that is important to serving the needs of customers in its marketplace.

Target Marketing: Reaching out to a group of consumers sharing common consumer characteristics with the most appropriate advertisements.

Telemarketing: Using the telephone to contact individuals about an advertiser’s products or services, or to get support for a cause.

Test Marketing: Test marketing occurs when a new product is tested with a sample of customers, or launched in a restricted geographical area, to judge customers’ reactions.

Threats: Threats are any aspect of the external environment which cause problems and which may prevent achievement of objectives. Almost by definition, what presents a threat to one business offers an opportunity to other businesses.

Unique Selling Proposition (USP): A unique selling proposition is a customer benefit that no other product can claim.

Weakness: A limitation or lack of skills, resources, or capabilities that impedes a firm’s effective performance.