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Above
The Line Marketing - ATL - The segment
of marketing activities focused on media campaign ( TV,
Radio, newspapers, Internet )
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Accounts
payable
- The amount
which the company owes to its supplier for materials
purchased on credit.
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Accounts
receivable - The
amount owed to the company by customers for sales made
on credit.
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Accumulated
depreciation - The
sum of all the past depreciation expenses on the fixed
assets; the portion of the value of the fixed assets
which has been 'used up' so far.
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Accumulated
profit/loss - The
total of all profits made up to and including the
current period and retained in the company.
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Assets
- The items owned by the
company at the moment at which the balance sheet is
drawn up; alternatively understood as the uses of the
company funds available.
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Average
costing - Accounting
method by which the cost of all the goods is averaged
equally across the total quantity.
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Bad
debts - Money
owed to the company by debtors who default on their
debt.
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Balance
sheet - The
basic financial statement which provides a snapshot of
the company situation at a particular moment of time,
recording the assets and liabilities of the company.
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Below
The Line Marketing - BTL - The segment
of marketing activities focused on retail outlet (
Positioning, Merchandising, Outlet Branding )
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Backward Stock Reserve stock in the outlet placed in the
storeroom. This stock is not directly accessible to the
Consumers. Store Managers and Employees are managing
stock between shopping area ( Forward Stock ) and the
Store Room ( Backward Stock ).
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Best Practice The term used for knowledge of activity used to be
successful in term of sales, profit, and process
efficiency. This knowledge is presented in documented
way ( descriptions, calculations, photos, ... ), in
order to help the others to be in position to use it in
other situation, to replicate system that brings result
in certain field.
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Book
value - The
value at which an item appears in the company
accounts (as opposed to its market value or
current value).
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Carbonated
Soft Drinks ( CSD ) - Also known as
Sparkling Soft Drinks
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Cash
- The amount of cash
held by the company at the moment at which the
balance sheet is drawn up.
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Cash
beginning - The
amount available in cash at the beginning of a
period; always equal to cash end of the previous
period.
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Cash
end - The
amount available in cash at the end of a period;
equal to cash beginning + all cash in items - all
cash out items.
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Cash
flow - The
changes in the cash position during a period.
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Cash
flow statement - The
basic financial statement which shows the money
coming into and going out of the company during a
certain time period.
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Cash
in - Cash
amounts received by the company during the period.
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Cash
out - Cash
amounts paid out by the company during the period.
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Cash
sales - The
sales of the period for which cash payment is
received.
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Collection
of previous sales - Cash
received for sales made on credit in previous
periods.
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Consumer Shoppers are individuals who visit the
retailing outlets with purpose of Product or
Service for their own use ( consumption ) or for
their family etc.
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Cost
of goods sold - The
cost (of purchasing or production) of the products
which are included as sales of the period.
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Delisting of SKU The process of removing the product from sales.
This can be initiated from Supplier in case of
declining product, or from Retailer when he wants
to optimize the range of products for better
profit results.
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Depreciation
- The
portion of a fixed asset's value which is
allocated to each period of its use, based on the
estimated length of its usable lifetime.
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Dividends
- Payment made to
shareholders out of a company's earnings.
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Equity
capital - Money
invested by the shareholders (owners) of the
company.
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FCM Channel Future Consumption market, the segment of
outlets in the market where purchased products are
consumed some time after being purchased, e.g. at home.
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First
In First Out (FIFO) - Inventory
accounting method by which the oldest goods in
stock are sold first.
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Fixed
asset - An
asset that a company expects to keep for a
relatively long period of time and which is used
in running the business, such as property,
premises or equipment.
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Fixed
cost - Costs
which do not depend on the quantity of products
made or sold, but are a set amount for the period.
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FEFO First Expires First Out. This is the rule of
management of products, first of all those with
limited shelf life. This rule says that during the
refilling of the shelf new products should be
placed behind those older products. This is done
in order to avoid expired products on the shelf.
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FMCG
Fast Moving Consumer
Goods. The wide variety of different groups
of products that have many differences in purpose,
way of using or price, but all have one common
thing we buy them on daily basis. These
products are food, beverages, cigarettes, hygienic
items, cleaning products, ... The FMCG Company is the one dealing
primarily with FMCG products.
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Forward
Stock Stock in the outlet placed in the shopping
area, on the shelves. This stock is accessible to
shoppers.
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Goodwill
- The value of the
potential for a business to make money in the
future based on an acquired reputation and
established market position.
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Gross
fixed assets - Purchase
value of investments in fixed assets.
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ICM Channel Immediate Consumption Market, the segment
of outlets in the market where purchased products
are consumed immediately, e.g. Restaurants,
Caffes, ...
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Impulse
Purchase
Unplanned purchase that happens during visit
to outlet caused by visual input. During shopping
consumers are consciously focused on essential
products ( Bread, Milk, ... ) and usually have
pre-planning of buying these products.
Non-essential products are usually not in the
shopping list, but they are mostly bought when
shoppers walk on them in the outlet. This is the
reason why the Positioning, Space range and
Merchandising is important for Companies that
selling non-essential products.
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Income
statement - See
Profit & loss statement.
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Initial
financial statements - The
financial statements of the company showing its
sources of financing before any business
operations have started.
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Interest
expense - Cost
of borrowing money through a loan.
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Inventory
- Products owned by
the company and held in stock at the end of the
period.
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Inventory
accounting - The
method used to calculate the value or cost of
inventory which appears in the company's financial
statements.
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Inventory
write-off - The
deduction of some inventory value as an expense of
the period.
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KPI
( Key Performance Indicator ), also known
as KBI ( Key Business Indicator ) or Metric,
represents the business process output that is
measured and compared with expected standard of
performance.
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Last
In First Out (LIFO) - Inventory
accounting method by which the newest goods in
stock are sold first.
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Liabilities
- The items owed by
the company at the moment at which the balance
sheet is drawn up; alternatively understood as the
sources of funds for the company.
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Liquidity
- Refers to how soon
a particular asset or liability position on the
balance sheet will become a cash movement.
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Listing
Fee
Financial compensation requested by retailers
from their Suppliers, as a "favor" or for
covering «expenses» of listing a new product.
This is possible in situation when Retailer have
sufficient market power to impose this condition.
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Listing
of SKU
The process of making product available for
sales in the outlet.
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Loan
- Money borrowed for
which the lender receives interest.
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Loan
repayment - The
reimbursement of the amount borrowed through a
loan.
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Long-term
credit - Money
borrowed over the long-term, ie. which is not
required to be paid back within a few periods.
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Long-term
liability - A
source of financing which the company intends to
keep in its books for a relatively long period of
time; one which does not need to be paid back
soon: usually long-term loans and equity capital.
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Material
& labour expenses- The
cost of purchasing materials and paying for labour
needed for the production of goods.
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Merchandising
The process of effective arrangement of
products in the place of sales with the purpose of
enhancing the sales from that point.
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Net
cash flow - The
change in cash amount during a period: cash in
minus cash out.
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Net
fixed assets - The
remaining value of the investment in long-term
assets after deduction of accumulated
depreciation.
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Numeric
Distribution
The Availability of Product in the market
expressed as a percentage of outlets that have
product listed versus total universe of outlet.
Example: Outlet universe is 100 outlet; 45 outlets
have specific product in portfolio; Numeric
Distribution = 45%.
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OOS
or Stock Out.
Stock Out ( Out Of Stock ) situation is when certain SKU is not
available on stock for some period of time. Bad
Stock Management, problems with Supply or some
other reason causes this.
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Opportunity
cost - The
value of options which were foregone in favour of
another; these are included as part of the cost of
choosing the particular alternative.
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Other
liabilities - The
sum of a firm's means of financing that are not
provided by shareholders but by other debtholders
such as Banks and Suppliers..
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Owner's
equity - The
sum of all items representing Shareholders wealth
such as Equity Capital, Reserves, Profit/Loss of
the accounting period. It is equal to the sum of
what the company owns minus what it owes to other
debtholders such as Banks, Suppliers.
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Payment
of previous purchases - Cash
payment for purchases made on credit in previous
periods.
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Period
cost - A
cost of running the business operations of a
company during a particular period, counted as an
expense on the profit & loss statement.
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Portfolio
Assortment of products or Services offered by
Supplier Company.
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Principal
- The amount of money
borrowed in a loan.
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Production
cost per unit - Total
production costs of the period divided by the
number of units produced.
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Production
costing account - Statement
of all the costs going into the production of
goods, used to calculate the cost of a single
unit.
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Profit The earning of the business owner after all
expenses are being deducted from his revenue.
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Profit
Story The "bait" of the Sales presentation.
Every Sales Presentation has to have something
that will answer to Customer's question: "What is
in for me?". This is important element of
approach to the customer, because customers are
not always ready to accept proposals for
suppliers. Profit Story can be based on drawing
attention of the Customer by offering him deal
that will increase his sales, profit, number of
shoppers, image, ...
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Profit/loss
(period) - The
difference between the sales revenue and the total
costs of the period.
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Profit
& loss statement - The
basic financial statement which shows the results,
or profit performance, achieved by a company over
a period of time.
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Purchases
paid in cash - Goods
bought during the period and paid for in cash.
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Ratio
- A calculation done
by dividing one number into another.
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Rent
- Period expense for
use of certain items.
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Retained
earnings - Profit
(or loss) made in previous periods and kept in the
company, ie. not paid out to shareholders as
dividends.
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Retailer
- Is the Company that sell Product or Service
to Consumer
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Return
on investment (ROI) - A
measure of the amount made on invested capital;
equal to the accumulated profit or loss divided by
the equity capital invested.
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Return
on sales (ROS) - A
measure of the profitability of the business
operations; equal to the earnings before interest
and taxes divided by sales revenue.
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Revenue
The Financial income from the sales of
Product or Service in certain period of time.
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- Recommended Sales Price; The retail
price level that is recommended by Supplier to
Retailers. The purpose of RSP is intention to
obtain the price that will bring the opimum of
Product sales, Revenue and Profit. It also leads
to W-W and W-W-W sitiation. |
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Sales
turnover - Total
amount of money from sales of the product.
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Safety
Stock Rule 1,5.
Safety Stock is extra stock with the purpose to
assuring supply security even if sell-out suddenly
increase. The Safety Stock is obtained through
calculation, taking into account current stock,
previous orders, trends and expectations. Example
of Safety Stock management is
Rule 1,5.
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Sell-In
is the process of selling of the product from
Supplier to the Retailer. This sales does not
represent consumption, because consumers still
have to buy this product.
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Sell-Out is the process of selling of the product from
retailer to The Shoppers ( Consumer ).
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Shareholder
- A person or
institution who has invested money in a business
in exchange for the ownership of a portion of the
company.
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Short-term
credit - Money
borrowed which must be paid back within a short
time period; contrasted with loan because no
interest is charged.
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Short-term
liability - A
source of financing which needs to be paid back
relatively quickly, usually within the next
accounting period.
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SKU Stock
Keeping Unit, the product, the article.
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S.M.A.R.T.
Targets
Specific Measurable Achievable
Realistic Time Bound. Abbreviation is standing
for words representing basic characteristic of
what the balanced target should be. .
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Supplier
The Company who is supplying other Company with
Product or Service. Usually they do not sell to
final Consumer but to Retailers.
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Turnover
( Sales ).
Turnover is expression how many times some product
has been sold from the reserved space on the
shelf. Example: Shelf has capacity 100 packages of
product. During 1 month additional 500 packages
has been refilled in the shelf. Turnover = 500 /
100 = 5X monthly.
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| W-W
or Win-Win situation is the example of
Business transaction where the both parties
benefits ( Supplier and Retailer ). On the
contrary is the Win-Loose situation where one side
loose. |
Variable
cost - Costs
which depend on the quantity of products made.
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| W-W-W
or Win-Win-Win situation is the example
of Business transaction where all involved parties
benefits from the transaction ( Supplier, Retailer
and Consumer ) |
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