Business Terminologies

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Business Terminologies

Active Listening: This is where the listener aims to understand, not just hear; they can achieve this through concentrating, asking linked questions, using empathy statements, summarizing and use of appropriate body language such as nodding.

Advertising: The activity of attracting public attention to a product or business by paid announcements in print, broadcast and electronic media.

AIDA Attention, Interest, Desire, Action: a model describing the stages that promotion can take a target audience through: is often used to set promotional objectives

Ambient Media: Originally known as 'fringe media'. New types of advertising media that surround us in our daily lives, including: petrol pump advertising projected onto buildings, on car parking tickets, cricket pitches

Ansoff Matrix: A model showing the possible product-market strategies of an organization; these are considered the main marketing strategies and comprise: market penetration, product development, market development and diversification

Barter: An exchange of products and/ or services for other products and/ or services; some firms use it to minimize cash purchases.

BCG (Boston Consulting Group): Matrix Also known as “The Boston Box”. This 2 x 2 matrix is a model to help a firm analyze its product portfolio. The two axes are relative market share and annual market growth and the four quadrants are: Dogs - low relative market share and low annual market growth Stars - high annual market growth and high relative market share Cash Cows - high relative market share and low annual market growth Question marks (also known as problem children) - low relative market share and high annual market growth.

Behavioral Segmentation Classifying: the market into groups of people according to the similarity in way they behave or interact with a product. This includes identifying those who require the same benefit from a product or service and those who use a product or service in the same way. It is increasingly recognized that this should be the starting point for market segmentation.

Below the Line: All forms of promotion except advertising (i.e. those on which agencies are not paid commission). It includes: public relations, sales promotions, direct mail, point of sale.

Benefit: The value of the product or service experienced by the consumer, which is distinct from features. Sales people should sell on benefits supported by features.

Body Language: The main non verbal communication method and includes the way you stand or sit, facial expressions, gesticulations, how you hold your head and use your eyes.

Brand: A name, term, design, symbol or any other feature that identifies one seller?s good or service as distinct from those of other sellers.

Brand Extension: A strategy whereby a firm uses an existing brand name for a new product to be marketed to the same market.

Broker: A particular type of agent who tends to trade on behalf of the customer, rather than the principal and so will tend to have agreements with many principal organizations.

Business Plan: A plan that states the long-term direction of a company and includes audit, mission, objectives, strategies, forecasts, cash flows and controls.

Business to Business (B2B): Can refer to a market, product or industry whereby the context is of a firm selling to another organization to either use the product or service or change into another product or service, rather than a consumer buying for personal consumption.

Business to Consumer (B2C): Can refer to a market, product or industry whereby the context is of a firm selling to an individual for his own personal consumption, rather than to an organization for their use or consumption.

Buying Criteria: A written, or unwritten, checklist of the requirements of the purchaser when making a buying decision example: price, speed of delivery, quality and so on.

Buying Signal: A communication from a prospect indicating they are ready to make a purchase. Buying signals may be non-verbal, such as a nod, or verbal, such as an interested question. Example: when could it be delivered?

Cash and Carry: A type of distributor, or wholesaler, who performs a variety of functions but does not give credit, nor transport goods to their customers.

Channel of Distribution Channelling! goods from their origin to their ultimate destination and involves the use of intermediaries, or middlemen such as wholesalers and retailers. Factors that impact the selection of channels include: the customers, the product, competitors, size and resources, channel power.

Closed Questions: These are a type of question used in marketing research. They are questions where all the possible answers are provided by the researcher.

Dichotomous Questions: Providing possible answers of yes or no

Closed Gestures: These are a negative form of body language where a person appears to be protecting their body and so they have their legs crossed or arms folded; however, gesture clusters should be noted, rather than individual gestures.

Closing Questions: These are questions that are designed to bring fact finding discussions to an end, so the prospects can be moved forward to take a purchase decision.

Cold Calling: This is the process of telephoning or calling at the door of people or companies who have not previously expressed an interest in the product, service or firm.

Commercial Buyers: Those who buy on behalf of a business. This involves more logic than emotion, although emotion still plays a part. Factors influencing commercial buyers are: who instigates the process, competition, quantity, value, quality, repeat business and price.

Commercial Market: This is also known as a business, or industrial, market and is one where companies buy goods or services for consumption in their business or to transform the goods into other products to be sold.

Commission Remuneration: Paid to a salesperson following the successful completion of a sale; is usually a percentage of sales revenue.

Communication: Channel Elements within the Promotions Mix that an organisation uses to communicate with target audiences.

Comparative Advertising: A type of advertising that a firm uses to compare their products or services directly with competitors. Needs to be used with care and is illegal in some countries.

Competition-Based Pricing: This is where a product is priced according to its perceived value against competing brands.

Competitions: A form of Sales Promotions that is used to gain interest from a target audience, whereby they may win a prize.

USP Unique Selling Proposition: The Competitive Advantage that a firm has to put them in a better position than competitors.

Competitive Parity: A pricing strategy whereby a firm charge a price similar to other brands or the market leader. The objective is to prevent a price war and the firm should have a differential advantage other than price.

Consumer! An individual who uses a product or service (they may not be the buyer).

Corporate Hospitality: A PR technique of entertaining clients or people who are not direct employees but are Stakeholders and can have a beneficial effect on the organization; they are typically potential customers, key account customers, intermediaries and the media.

Corporate Identity Physical: Reinforcement of the personality of a firm which is reflected by consistent use of brand names, symbols, logos, colours, typefaces; the identify aims to reinforce the Corporate Image.

Corporate Image! A firm's personality, which can only be defined by the public. Firms use corporate identity and PR to enhance their image.

Corporate Strategy! A firm's long-term business plan (see Business Strategy).

Cost-Based Pricing! This includes strategies where the major consideration is covering the firm?s costs and is a favorite amongst accountants.

Cross Selling! different parts of a product range, that they have not previously bought, to an existing customer.

Cultural Empathy! When a sales person (or firm) achieves a rapport, or understanding, of a customer?s culture.

Culture! It is a set of beliefs, values and attitudes. Our culture involves all things around us; it is very complex and includes our language, religion, education, social behaviour, politics and social attitudes. It can have a huge impact on our buyer behaviour. Organisations also have a culture, which is the organisation?s philosophy of a company and is reflected in its mission and aims.

Customer! A person or company who purchases goods or services. They are not necessarily the “consumer”, i.e. the end user.

Customer Lifetime Value (CLV)! The profitability of a customer during the lifetime of the relationship with the firm; this is distinct from their value during one transaction.

Customer Loyalty! The extent to which a customer tends to repurchase from a specific firm, organization or a particular brand.

Customer Relationship Management (CRM)! The planning, implementation and control of all interactions with customers, clients and sales prospects.

Customer Service Means! by which a firm provides customers with service that equals or exceeds their expectations.

Data Processing! The process of obtaining, recording and maintaining information which is able to be retrieved and used: often involves new technology.

Database Marketing! The use of a database for storing information about customers so that specific groups can be selected and targeted for marketing activity.

Decider! A role within the Decision Making Unit (DMU). The Decider makes the final decision regarding the product or service to be bought; they are often technical experts and/or purse holders.

Decision Making Unit (DMU)! The group of people involved in a purchasing decision; includes: the initiator, gatekeeper, influencer, decider, financier, buyer, user.

Demographic Segmentation! A method of segmenting markets by demography.

Demography Information! profiling a population in terms of their age, gender, income, stage in the family life cycle, religion and social class; is frequently used for segmenting consumer markets.

Desk Research (Secondary Research)! This involves collecting data from existing sources, as opposed to Field, or Primary, Research. Secondary sources include internal sources and external sources, such as the internet, government statistics, trade directories and so on. There are several potential problems associated with secondary research but it is often plentiful and free, or inexpensive.

Differential Advantage! The customer benefits a firm offers better than its competitors. This may be a brand’s USP or some advantage the firm has through its operations, such as a low cost base or technology that it uses.

Direct Close! This is the simplest closing method and just involves asking the prospect for the order.

Direct Mail ! A method of below-the-line promotion that communicates directly with a target audience through the mail.

Direct Marketing! may refer to direct distribution or direct promotions. Direct distribution involves a firm dealing directly with the end user, rather than through a middleman. Direct promotion involves a firm communicating directly with a target audience or enabling the audience to communicate directly with them and includes: direct mail, the internet, personal selling, telemarketing, direct response advertising and e-mail.

Direct Response Advertising (DRA)! Is both advertising and direct marketing. It involves using advertising media (above-the-line) to communicate with audiences and includes mechanisms for the target audience to communicate directly with the firm, such as: a phone number, address, e-mail or inquiry form.

Discrimination Pricing! A pricing strategy whereby a firm charges different prices for different market segments. Is also called Segmentation Pricing.

Distribution! The Place element of the marketing mix. It involves the process of getting the goods from the supplier to the user and involves channel management and physical distribution management.

Distribution Channel Channelling! goods from their origin to their ultimate destination and involves the use of intermediaries, or middlemen such as wholesalers and retailers.

Distribution Research Researching! to make distribution decisions. Cooper identifies 3 key areas [1]: warehouse research, transportation research, retail outlet research.

Distribution Strategy! The extent of market exposure that a firm provides it products with and depends on the type and image of product, its value and size and dispersion of customers. The three strategies are: Intensive, Selective, Exclusive.

Diversification! A marketing strategy that a firm may pursue to develop new products in new markets.

Domestic Buyers! Those who buy for their own consumption. This often involves more emotion than logic, although logic may still play a part. Factors influencing domestic buyers are: frequency, importance, social class.

Domestic Market! This is a consumer market or where customers buy for personal consumption.

Early Payment Discount! Is a reduction in price to the buyer for paying before the due invoice date, often paid on delivery.

Early Payment Discount! Is a reduction in price to the buyer for paying before the due invoice date, often paid on delivery.

E-commerce Selling! goods electronically, usually over the Internet.

E-marketing Marketing! effort using electronic means such as e-mail and the internet; incorporates e-commerce and promotion.

Granularity: is the extent to which a material or system is composed of distinguishable pieces or grains. It can either refer to the extent to which a larger entity is subdivided, or the extent to which groups of smaller indistinguishable entities have joined together to become larger distinguishable entities

Error management: (EM) starts after an error has occurred; it attempts to block negative error consequences, to reduce their negative impact, or to deal quickly with error consequences once they occur.

Business Alliance: is an agreement between businesses, usually motivated by cost reduction and improved service for the customer. Alliances are often bounded by a single agreement with equitable risk and opportunity share for all parties involved and are typically managed by an integrated project team. An example of this is code sharing in airline alliances.

Empire-building: refers to the tendency of countries and nations to acquire resources, land, and economic influence outside of their borders in order to expand their size, power, and wealth.

Digital strategy: is the process of specifying an organization's vision, goals, opportunities and related activities in order to maximize the business benefits of digital initiatives to the organization.

Bestshoring: also known as rightshoring is the process of identifying the best location to move manufacturing, IT or business processes for a company. The decision is to be based on quantifiable criteria which are intended to take subjective and political input out of the decision cycle. Many companies use external consulting firms to make these decisions.

Business rule: is a rule that defines or constrains some aspect of business and always resolves to either true or false. Business rules are intended to assert business structure or to control or influence the behavior of the business.

Asset stripping: is a method in which a company or an individual, known as a corporate raider, attains control of another company, and then auctions off the acquired company's assets.

Cash cow: is business jargon for a business venture that generates a steady return of profits that far exceed the outlay of cash required to acquire or start it.

Customer attrition: also known as customer churn, customer turnover, or customer defection, is the loss of clients or customers.

Adaptability: is a feature of a system or of a process. This word has been put to use as a specialized term in different disciplines and in business operations.

Active Listening: This is where the listener aims to understand, not just hear; they can achieve this through concentrating, asking linked questions, using empathy statements, summarizing and use of appropriate body language such as nodding.

Advertising: The activity of attracting public attention to a product or business by paid announcements in print, broadcast and electronic media.

AIDA Attention, Interest, Desire, Action: a model describing the stages that promotion can take a target audience through: is often used to set promotional objectives.

Ambient Media Originally: known as 'fringe media'. New types of advertising media that surround us in our daily lives, including: petrol pump advertising projected onto buildings, on car parking tickets, cricket pitches.

Ansoff Matrix: A model showing the possible product-market strategies of an organization; these are considered the main marketing strategies and comprise: market penetration, product development, market development and diversification. The 2 x 2 matrix axes are: new and existing products along one axis and new and existing markets along the other.

Barter: An exchange of products and/ or services for other products and/ or services; some firms use it to minimize cash purchases.

BCG (Boston Consulting Group): This 2 x 2 matrix is a model to help a firm analyze its product portfolio. The two axes are relative market share and annual market growth and the four quadrants are: Dogs - low relative market share and low annual market growth Stars - high annual market growth and high relative market share Cash Cows - high relative market share and low annual market growth Question marks (also known as problem children) - low relative market share and high annual market growth.