Marketing: The
all-embracing function that links the business with customer needs and wants in
order to get the right product to the right place at the right time"
Minimum Alternate Tax
(MAT): It's known that a company pays tax on profits as per the Income-Tax Act.
If a company's tax liability is less than 10% of its profits, it has to pay a
minimum alternate tax of 10% of the book profits.
MODVAT: It stands for
Modified Value Added Tax and is a way of giving some relief to the final
manufacturers of goods on Excise Duties borne by their suppliers.
Monetized
Deficit: Measures the level of support the RBI provides to the Centre's borrowing
program.
National Debt: Total outstanding
borrowings of the central government exchequer.
Non-Plan
Expenditure: Expenses that don't form a part of the government's
five year plan. These expenses consist of Revenue and Capital Expenditure on
interest payments, Defense Expenditure, subsidies, postal deficit, police,
pensions, economic services, loans to public sector enterprises and loans as
well as grants to State governments, Union territories and foreign governments.
Non-Tax
Revenue: Any loan given to state governments, public institutions, PSUs come with
a price (interests) and forms the most important receipts under this head apart
from dividends and profits received from PSUs. The government also earns from
the various services including public services it provides.
Peak Rate: it is the highest
rate of Custom Duty applicable on an item.
Per capita
income: The national income of a country, or region, divided by its population.
Performance
Budget: it is a compilation of programs and activities of different ministries
and departments.
Plan
Expenditure: Consists of both Revenue Expenditure and Capital
Expenditure of the Center on the Central Plan, Central Assistance to States and
Union Territories.
Plan Outlay: Plan Outlay is the
amount for expenditure on projects, schemes and programmes announced in the
Plan. The money for the Plan Outlay is raised through budgetary support and
internal and extra-budgetary resources. The budgetary support is also shown as
plan expenditure in government accounts.
Primary
Deficit: Fiscal Deficit minus Interest payments
Product life cycle: The course of a
product's sales and profitability over its lifetime. The model describes five
stages, each of which represents a different opportunity for the
marketer: - Development, Introduction, Growth, Maturity, Decline.
Product: A product is
defined as anything that is capable of satisfying customer
Progressive Tax
Structure: a tax structure in which the marginal tax rate increases as the level of
income increases.
Promotion: One of the four
"P's" of the marketing mix. Promotion is all about
Proportional
Tax: a tax taking the same percentage of income regardless of the level of
income.
Public Account: it is an account
where money received through transactions not relating to consolidated fund is
kept.
Public Debt: The difference
between borrowings and repayments during the year is the net accretion to the
public debt. Public debt can be split into two heads, internal debt (money
borrowed within the country) and external debt (funds borrowed from non-Indian
sources).
Regressive Tax: a tax in which the
poor pay a larger percentage of income than the rich. It is the opposite of
Progressive Tax.
Repo (Repurchase)
rate: It is the rate at which the RBI lends shot-term money
to the banks against securities. When the repo rate increases borrowing from
RBI becomes more expensive. Therefore, we can say that in case, RBI
wants to make it more expensive for the banks to borrow money, it increases the
repo rate; similarly, if it wants to make it cheaper for banks to borrow money,
it reduces the repo rate.
Revenue budget: Consists of Revenue
Receipts and Revenue Expenditure of the government.
Revenue
Deficit: It is the difference between Revenue Expenditure and Revenue Receipts.
Revenue
Surplus: Opposite of Revenue Deficit, it is the excess of Revenue Receipts over
Revenue Expenditure.
Reverse Repo rate is the rate at
which banks park their short-term excess liquidity with the RBI. The
banks use this tool when they feel that they are stuck with excess funds and
are not able to invest anywhere for reasonable returns. An increase in the
reverse repo rate means that the RBI is ready to borrow money from the banks at
a higher rate of interest. As a result, banks would prefer to keep more and
more surplus funds with RBI.
Revised
Estimates: usually given in the following budget, it is the difference between the
Budget Estimates and the actual figures.
SEBI: Securities and
Exchange Board of India
Securities
Transaction Tax (STT): STT is a small tax you need to pay on
the total amount you pay or receive in a share deal. In the 2004-05 Budget, the
government did away with the tax on profits earned on the sale of shares held
for over a year (known as long-term capital gains tax) and replaced it with
STT.
SLR: Statutory
Liquidity Ratio. Every bank is required to maintain at the close of business
every day, a minimum proportion of their Net Demand and Time Liabilities as
liquid assets in the form of cash, gold and un-encumbered approved securities.
The ratio of liquid assets to demand and time liabilities is known as Statutory
Liquidity Ratio (SLR). RBI is empowered to increase this ratio up to
40%. An increase in SLR also restrict the bank's leverage position
to pump more money into the economy
Special Economic Zone
Scheme: A new export promotion scheme entitled ‘Special Economic Zone'
(SEZ) was introduced in the Export and Import (EXIM) Policy which came into
effect from 1.4.2000. The Scheme envisages a simple and transparent policy and
procedure for promotion of exports with minimum paper work. The most important
feature of the Scheme is that the SEZ area is considered essentially as a
foreign territory for the purposes of trade operations, duties & tariffs.
Therefore, goods supplied to SEZ from the Domestic Tariff Area (DTA) are
treated as deemed exports and goods brought from SEZ to DTA are treated as
imported goods.
Subsidies: Financial aid
provided by the Center to individuals or a group of individuals to be
competitive. The grant of subsidies is also aimed at improving their skills of
those who benefit from the subsidies.
Subvention: This is how a
government bears the loss that financial institutions incur when asked to give
farmer loans below the market rates.
Surcharge: This is an extra bit
of 10% on the tax liability that individuals pay for earning more than Rs. 10
lakh. Companies with revenue of up to Rs. 1 crore are spared.
TRAI: Telecom
Regulatory Authority of India
Treasury Bill
(T-BILLS): These are bonds (debt securities) with maturity of less than a year.
These are issued to meet short-term mismatches in receipts and expenditure.
VAT: This tax is based on
the difference between the value of output and the value of inputs used to
produce it. The aim here is to tax a firm only for the value it adds to the
manufacturing inputs, and not the entire input cost. Thus, VAT helps avoid a
cascading of taxes as a product passes through different stages of
production/value addition.
Vote On
Account: It is a sort of interim budget where the government presents accounts
required to keep the process on until the next government takes over.
Ways And Means
Advance (WMA): RBI is the banker for both Central and State
governments. Hence, it provides a breather to manage mismatches in their
receipts and payments in the form of ways and means advances.
What is the Union
Budget?: The Union Budget is the annual report of India as a country. It contains
the government of India's revenue and expenditure for the end of a particular
fiscal year, which runs from April 1 to March 31. The Union Budget is the most
extensive account of the government's finances, in which revenues from all
sources and expenses of all activities undertaken are aggregated. It comprises
the revenue budget and the capital budget. It also contains estimates for the
next fiscal year.
Wholesale Price
Index: Prices of goods that are dealt with wholesale (mostly inputs to production,
rather than finished commodities).
Above the line: "Above the
Line" is the term commonly used for advertising for which a payment is
made and for which commission is paid to the advertising agency. Methods of
above the line advertising include television and radio, magazines, newspapers
and Internet.
Ad hoc market
research: Ad-hoc research focuses on specific marketing problems. It involves the
collection of data at one point in time from one sample of respondents.
Added value: Added value
refers to the increase in worth of a product or service as a result of a
particular activity. In the context of marketing, the added value is
provided by features and benefits over and above those representing the
"core product".
Ad-Valorem
Duties: These are the duties determined as a certain percentage of prices of the
product.
AIDA: Attention
Interest Desire Action
AIFI: All India
Financial Institution
ALCO: Asset-Liability
Management Committee
ALM: Asset/
liability management involves a set of techniques to create value and manage
risks in a bank.
Ambush marketing: A deliberate
attempt by a business or brand to associate itself with an event (often a
sporting event) in order to gain some of the benefits associated with being an
official sponsor without incurring the costs of sponsorship
AMC: Asset
Management Committee
Annual Financial
Statement: It is a statement of receipts and expenditure of states for the
financial year, presented to Parliament by the government. It is divided into
three parts: Consolidated Fund, Contingency Fund and Public Account.
Appropriation Bill: It is presented
to Parliament for its approval, so that the government can withdraw from the
Consolidated Fund the amounts required for meeting the expenditure charged on
the Consolidated Fund. No amount can be withdrawn from the Consolidated Fund
till the Appropriation Bill is voted is enacted.
Appropriation
Bill: This Bill is like a green signal enabling the withdrawal of money from
the Consolidated Fund to pay off expenses. These are instruments that
Parliament clears after the demand for grants has been voted by the Lok Sabha.
Augmented brand: The additional
customer services and benefits ("added value") that are built around
the core product or service offering
Balance Of
Payments: The difference between demand and supply of a country's currency in the
foreign exchange market.
Balance Of
Trade: The difference between monetary value of exports and imports of output
in an economy over a certain period of time. It is the relationship between a nation's
imports and exports.
Banking Cash
Transaction Tax (BCTT): BCTT is a small tax on cash withdrawal
from bank exceeding a particular amount in a single day. The basic idea is to
curb the black economy and generate a record of big cash transactions. This tax
was introduced in 2005-06 budget.
Behavioural
Segmentation: Behavioural segmentation divides customers into
groups based on the way they respond to, use or know of a product.
Bond: A negotiable
instrument evidencing debt, under which the issuer promises to pay the holder
its face value plus interest as agreed.
Brand building: Developing a
brand's image and standing with a view to creating long term benefits for brand
awareness and brand value
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 extension: Brand extension
refers to the use of a successful brand name to launch a new or modified
product in a new market. Virgin is perhaps the best example of how brand
extension can be applied into quite diverse and distinct markets.
Brand image: Brand image
refers to the set of beliefs that customers hold about a particular brand.
These are important to develop well since a negative brand image can be very
difficult to shake off.
Brand loyalty: A strongly
motivated and long standing decision to purchase a particular product or
service
Budget
estimates: It is an estimate of Fiscal Deficit and Revenue Deficit for the year.
The term is associated with estimates of the Center's spending during the
financial year and income received as proceeds of tax revenues
Budgetary
Deficit: Such a situation arises when expenses exceed revenues. Here the entire
budgetary exercise falls short of allocating enough funds to a certain area.
Business to
business: Marketing activity directed from one business to another (as opposed to
a consumer). This term is often shortened to "B2B"
businesses
communicating with customers.
Capital Budget: Capital Budget keeps
track of the government's capital receipts and payments. This accounts for
market loans, borrowings from the Reserve Bank and other institutions through
sale of Treasury Bills, loans acquired from foreign governments and recoveries
of loans granted by the Central government to State governments and Union
Territories.
Capital Budget: It consists of
capital receipts and payments. It also incorporates transactions in the Public
Account. It has two components: Capital Receipt and Capital Expenditure.
Capital budget: The list of
planned capital expenditures prepared usually annually Capital Gain and Loss.
The difference between the price that is originally paid for a security and
cash proceeds at the time of maturity (face value of bond) or at the time of
sale (selling price of a bond or stock). When the difference is positive,
it is a gain, but when it is negative, it is a loss.
Capital Expenditure: It consists of
payments for acquisition of assets like land, buildings, machinery, equipment,
as also investments in shares etc, and loans and advances granted by the
Central government to state and union territory governments, government
companies, corporations and other parties.
Capital
expenditure: Long-term in nature they are used for acquiring
fixed assets such as land, building, machinery and equipment. Other items that
also fall under this category include, loans and advances sanctioned by the
Center to the State governments, union territories and public sector
undertakings.
Capital Goods: Goods used in the
manufacturing of finished products
Capital investments: Money used to
purchase permanent fixed assets for a business, such as machinery, land or
buildings as opposed to day-to-day operating expenses.
Capital Market: Market in which
financial instruments are bought and sold.
Capital
Payments: Expenses incurred on acquisition of capital assets
Capital
Receipt: Capital Receipts consist of loans raised by the Center from the market,
government borrowings from the RBI & other parties, sale of Treasury Bills
and loans received from foreign governments. Other items that also fall under
this category include recovery of loans granted by the Center to State
governments & Union Territories and proceeds from the dilution of the
government's stake in Public Sector Undertakings.
Capital
Receipt: The main items of capital receipts are loans raised by the government
from public which are called market loans, borrowings by the government from
the Reserve Bank of India and other parties through sale of Treasury Bills,
loans received from foreign governments and bodies and recoveries of loans
granted by the Central government to state and union territory governments and
other parties. It also includes proceeds from disinvestment of government
equity in public enterprises.
Capital Structure: The composition
of a firm's long-term financing consisting of equity, preference shares, and
long-term debt.
Capital: Funds invested
in a firm by the owners for use in conducting the business.
CCI: Competition
Commission of India
Central Plan
Outlay: It refers to the government's budgetary support to the Plan. It is the
division of monetary resources among different sectors in the economy and
ministries of the government.
CENVAT: This is a replacement
for the earlier MODVAT scheme and is meant for reducing the cascade effect of indirect
taxes on finished products. This is more extensive scheme with most goods
brought under its preview
CESS: This is an additional
levy on the basic tax liability. Governments resort to cess for meeting
specific expenditure. For instance, both corporate and individual income is at
present subject to an education cess of 2%. In the last Budget, the government
had imposed another 1% cess as secondary and higher education cess on income
tax to finance secondary and higher education.
Cognitive dissonance: Cognitive dissonance
is an customer effect commonly observed after a major purchase whereby the
customer feels uncertainty about whether the purchase should have been made.
Post-purchase promotion (particularly advertising) has a role to play to reduce
the incidence and effect of cognitive dissonance
Combination brand: A combination
brand name brings together a family brand name and an individual brand name.
The idea here is to provide some association for the product with a strong
family brand name but maintaining some distinctiveness so that customers know
what they are getting
Competitive
advantage: A competitive advantage is a clear performance differential over the
competition on factors that are important to customers
Competitor
benchmarking: Competitor benchmarking compares customer
satisfaction with the products, services and relationships of the business with
those of key competitors
Consolidated
Fund: This is one big reservoir where the government pools all its funds
together. The fund includes all government revenues, loans raised and
recoveries of loans granted.
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.
