Marketing Terms for IBPS PO Exam- 17 June 2012: II

Read here the important Marketing terms which we have jotted down keeping in mind their importance for the upcoming IBPS PO Exam scheduled to be conducted on 17 June 2012.

Consumer buyers: Consumer buyers are those who purchase items for their personal consumption

Consumer durables: Consumer durables have low volume but high unit value. Consumer durables are often further divided into White goods (e.g. fridge freezers; cookers; dishwashers; microwaves) and Brown goods (e.g. DVD players; games consoles; personal computers)

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

Consumer Price Index: It is a price index covering the prices of consumer goods.

Consumer Price Index: It is a price index that features the rates of consumer goods

Contingency Fund: It is more or less similar to that extra little bit of savings that all mothers set aside in case of an emergency. Likewise, the government has created this fund to help it tide over difficult situations. The fund is at the disposal of the President to meet unforeseen and urgent expenditure, pending approval from Parliament. The amount that is withdrawn from the fund is recouped.

Continuous market research: Continuous research involves interviewing the same sample of people, repeatedly

Core product: The set of problem-solving or need-meeting benefits that customers are buying when they purchase a product. Customers are rarely prepared to pay a premium for these elements of a product.

Countervailing Duties (CVD): This is levied on imports that may lead to price rise in the domestic market. It is imposed with the intention of discouraging unfair trading practices by other countries.

CRR means Cash Reserve Ratio. Banks in India are required to hold a certain proportion of their deposits in the form of cash. However, actually Banks don't hold these as cash with themselves, but deposit such case with Reserve Bank of India (RBI)/ currency chests, which is considered as equivalent to holding cash with RBI. This minimum ratio (that is the part of the total deposits to be held as cash) is stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, when a bank's deposits increase by Rs 100, and if the cash reserve ratio is 6%, the banks will have to hold additional Rs 6 with RBI and Bank will be able to use only Rs 94 for investments and lending/ credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be able to use for lending and investment. This power of RBI to reduce the lendable amount by increasing the CRR, makes it an instrument in the hands of a central bank through which it can control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the banking system.

Current Account Deficit: This deficit shows the difference between the nation's exports and imports.

Current Account Surplus: Excess of receipts over expenditure on current account in a country's balance of payments.

Custom Duties: These duties are levied on goods whenever they are either brought into the country or exported from the country. The importer or the exporter pays custom duties.

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

Customer loyalty: Feelings or attitudes that incline 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.

Demand For Grants: It is a statement of estimate of expenditure from the Consolidated Fund. This requires approval of the Lok Sabha.

Direct marketing: The planned recording, analysis and tracking of customer behaviour to develop a relational marketing strategies

Direct Taxes: Taxes paid directly by the person or organisation on whom they are levied. Income Tax and Corporate Tax fall under this tax category

Disinvestment: It is the dilution of government's stake in Public Sector Undertakings.

Early adopters: People who choose new products carefully and are often consulted by people from the remaining adopter categories

ECB: External Commercial Borrowing

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

Endorsement: The promotion of some kind of product recommendation or affirmation, usually from a celebrity, implying to the potential customer that a product is good

ESPO: Employee Stock Option Loan

Excise duties: These duties refer to duties imposed on goods manufactured within the country.

Finance Bill: It is the government's proposals for imposition of new taxes, modification of the existing tax structure or continuance of the existing tax structure beyond the period approved by Parliament.

Fiscal Deficit: It is the difference between the Revenue Receipts and Total Expenditure.

Fiscal Policy: Fiscal policy is a change in government expenditure and/or taxation designed to influence economic activity. These changes are designed to control the level of aggregate demand in the economy. Governments usually bring about changes in taxation, volume of spending, and size of the budget deficit or surplus to affect public expenditure.

FRBM Act: Enacted in 2003, the Fiscal Responsibility and Budget Management Act required the elimination of revenue deficit by 2008-09. This means that from 2008-09, the government was to meet all its revenue expenditure from its revenue receipts. Any borrowing was to be done to meet capital expenditure i.e. repayment of loans, lending and fresh investment. The Act also mandates a 3% limit on the fiscal deficit after 2008-09; one that allows the government to build capacities in the economy without compromising on fiscal stability.

Fringe Benefit Tax (FBT): It is the tax levied on the ‘fringe benefit' / perks given by a company to its employees. Companies could no longer get away with marking such expenses as ‘ordinary business expenses' and escape tax when they actually gave out club memberships to their employees. Employers had to now pay a tax (FBT) on a percentage of the expense incurred on such perquisites. This tax was introduced in the 2005-06 budget.

Gender segmentation: The segmentation of markets based on the sex of the customer. The cosmetic industry is a good example of widespread use of gender segmentation, Geographic segmentation, Geographic segmentation divides markets into different geographical units

Gross Domestic Product: Total market value of the goods and services manufactured within the country in a financial year. GROSS NATIONAL PRODUCT Total market value of the finished goods and services manufactured within the country in a given financial year, plus income earned by the local residents from investments made abroad, minus the income earned by foreigners in the domestic market.

Growth stage: The stage at which a product's sales rise rapidly and profits reach a

GST: A GST (Goods and Services Tax) contains the entire element of tax borne by a good / service including a Central and a state-level tax.

Income Tax: This is the tax levied on individual income from various sources like salaries, investments, interest, etc.

Indirect Taxes: Taxes imposed on goods manufactured, imported or exported such as Excise Duties and Custom Duties.

Inflation: A progressive increase in prices of goods and services. It is the percentage rate of change in the price level. In inflation, everything tends to appear more valuable except money.

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.

Laggards: The group of consumers who are typically last to buy a new product

Marginal Standing Facility Rate:  Under this scheme, Banks will be able to borrow upto 1% of their respective Net Demand and Time Liabilities".  The rate of interest on the amount accessed from this facility will be 100 basis points (i.e. 1%)  above the repo rate. This scheme is likely to reduce volatility in the overnight rates and improve monetary transmission.

Market segmentation: Segmentation involves subdividing markets, channels or customers into groups with different needs, to deliver tailored propositions which meet these needs as precisely as possible.

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.