Channel: A channel usually refers to a waterway or ditch, a passage for water flow. But it has now been introduced into the business field, extended to mean the sales route of goods, the circulation path of goods, referring to the manufacturer's goods being sold to different regions through a certain social network or agents to achieve sales purposes. Hence, the channel (MARKETING CHANNEL) is also called a network. Channels can be divided into long channels and short channels. According to the level of intermediary involvement, distribution channels are divided by the number of levels, such as zero-level, one-level, two-level, three-level channels. Generally speaking, the longer the channel, the greater the potential for market expansion, but the lower the company's control over product sales and the clarity of information feedback. The design of the channel directly affects the company's revenue and development. Zero-level channels are the main channels for large or expensive products and products that are technically complex and require specialized services. In zero-level channels, products or services are sold directly by the producer to the consumer. Marketing Channels Refers to the path through which products or services are transferred, consisting of all organizations involved in the transfer activities to make the product or service available for use or consumption. Marketing channels can be divided into manufacturer-led, retailer-led, service provider-led, and other forms based on the dominant member. The fundamental task of marketing channels is to connect producers with consumers or users, enabling the products or services produced by producers to be delivered to the right people at the right time, in the right place, and in the right form. Modern channel theory has gradually flattened from the original long-line channels. Traditional channels consist of distributors, first-level wholesalers, second-level wholesalers, and terminal stores, with profits being divided among the channel. More and more companies are abandoning first-level and second-level wholesalers and directly controlling terminals, which is conducive to product distribution and moderately attacking competitors in the channel. Controlling the channel can be said to be a necessary means of doing marketing well, and there is even a saying that "the channel is king." GT refers to traditional circulation channels (wholesale markets, ordinary supermarkets) AFH refers to away-from-home channels (hotels, restaurants, joint promotions, factories, custom products, etc.) OTCR: Modern Trade Sales Representative CR-TT: Sales Representative - Traditional Trade CR-MT: Sales Representative - Modern Trade Multi-channel sales: Refers to selling our products through different sales channels. Definition of Modern Trade: Originated in the early 1990s, generally refers to the intensive circulation link from manufacturer to consumer, mainly including large international hypermarkets, warehouse-style chains, specialty stores, etc. Definition of Traditional Trade: Originated in the late 1970s, generally refers to the fragmented circulation link from manufacturer to consumer, narrowly referring to mom-and-pop stores, grocery stores, and circulation retail stores. Modern trade is represented by supermarket systems; traditional trade is represented by wholesale channels. Channels generally include traditional sales channels and modern sales channels. Traditional sales channels mainly include: stores; modern sales channels mainly include: hypermarkets, supermarkets, the Internet, etc. Doing channels refers to the development and maintenance of channels. The specific work content roughly includes: channel entry, channel promotion, channel control, etc. Channel Terms Hypermarket: A hypermarket is a type of retail location, generally with a large sales area and a full range of products. Many hypermarkets combine warehouse retail forms. Hypermarkets are key protected customers for companies. Supermarket/Department Store: A collective term for department stores and supermarkets. Generally, department stores include department stores, specialty stores, and exclusive stores; supermarkets are further divided into warehouse-style supermarkets, chain supermarkets, convenience stores, etc. Convenience Store: A type of retail store, usually dealing in daily necessities, often small in size, mainly operated as chains, often open 24 hours. Sweeping the Streets: In a specific regional market, to achieve the goal of full distribution of products, the activity of stocking, displaying, and activating all retail stores in the area. Commonly used for product categories with high purchase frequency and where the market has been refined. The method is to divide the area into different sections, and sales personnel visit or restock stores one by one along the route. This method ensures no store is missed, hence the term "sweeping the streets." Promotion: Promotion is the use of various short-term incentive tools to stimulate consumers and intermediaries to buy a specific product or service quickly or in larger quantities. Promotion is one of the promotional tools. Merchandising: Merchandising is a supervisory and promotional behavior at the point of sale, achieved through regular visits by the company's sales personnel. During visits, sales of the company's products at the outlet are recorded, and sales and inventory information is collected to facilitate timely replenishment. During merchandising, it is necessary to help the outlet maintain product placement, display, and activation, with the aim of ensuring smooth sales. Route Arrangement: In merchandising operations, the visits of the company's sales personnel need to follow a certain route order to save time and more comprehensively cover all sales outlets. Sales Guide: A sales guide is a behavior where the company sets up sales personnel at the point of sale to recommend their own products and help consumers choose suitable products based on their needs. Store Activation: The process of making products more attractive through display, layout, and atmosphere creation. These treatments focus not only on the coordination between the product and promotional tools in the store but more importantly on the placement of the product itself, which can influence consumers' purchasing psychology. First-level Market: A first-level market, relative to the company's products, is the company's key market, characterized by strong demand. Second-level Market: A second-level market is second only to the first-level market. FMCG Company Specific Terms SKU SKU = STOCK KEEPING UNIT, the unit of measurement for inventory in and out, which can be in pieces, boxes, pallets, etc. SKU is a necessary method for logistics management in large supermarket chains' DC (Distribution Centers). It has now been extended to mean the abbreviation for a product's unique code, with each product corresponding to a unique SKU number. Note: The full English term is STOCK KEEPING UNIT, abbreviated as SKU, defined as the smallest usable unit for inventory control, for example, in textiles, a SKU usually represents specification, color, and style. STOCK KEEP UNIT. This is a method for customers to number and classify goods after receiving them into the warehouse. Usually, it is like SKU#12356. It is also translated as inventory unit, stock unit, inventory keeping unit, cargo storage unit, inventory preservation unit, unitized unit, single item, variety, and based on business, it can be the smallest retail unit, smallest sales unit, smallest management unit, inventory count unit, etc.; in professional logistics terminology, it is explained as "storage grid." In other words, to help understand: First, we should understand the definition of a single item, which refers to a type of commodity that includes specific natural and social attributes. For a commodity, when its brand, model, configuration, grade, color, packaging capacity, unit, production date, shelf life, use, price, origin, and other attributes differ from other commodities, it can be called a single item. In chain retail stores, a single item is sometimes called a SKU (translated as the smallest inventory unit, full English term STOCK KEEPING UNIT, abbreviated as SKU, defined as the smallest usable unit for inventory control, for example, in textiles, a SKU usually represents specification, color, and style). Of course, the concept of a single item is different from the traditional "variety"; using the concept of a single item can distinguish different attributes of different commodities, thereby providing great convenience for product procurement, sales, logistics management, financial management, and the development of POS and MIS systems. For example, Coca-Cola sold in single cans is a single item SKU, while Coca-Cola sold in whole packs is another single item; these two single items are different in inventory management and sales. In the traditional sense, canned Coca-Cola is a variety, regardless of its sales model. It is not difficult to see that in both foreign and domestic definitions and explanations, there are basically three concepts: item, code, and unit. These three concepts represent three aspects: 1. Item: The item can be understood in conjunction with the above explanations of single item, SKU, and variety. That is, as long as attributes are different, then it is a different item (SKU). This can be seen as analyzing and understanding SKU from the perspective of a product. There are many attributes, and it is easy to understand that brand, model, configuration, grade, color, production date, shelf life, use, price, origin, etc., can be intuitively distinguished; but packaging capacity, unit, storage location, etc., are not so easy—does a single item placed in a box, or a box placed on a pallet, mean it is no longer the same product? Is the same product placed in Asia different from that in America? That is to say, as long as the same product has different ways of preservation, management, sales, and service, then it (SKU) is no longer the same. 2. Code: This concept is based on information systems and goods coding management. As introduced in "Item," different items (SKUs) have different codes. In this way, we can analyze inventory and sales status based on different SKU data. When you use logistics or ERP systems, you will find text boxes like SKU#:12356. This long-term situation has led many friends to think that SKU is the product code. But here, the product, as mentioned in "Item," is not a general concept of product, but a very precise product concept. 3. Unit: Basically, it is based on management, and this name is a product of digital management. But what is the difference between this "unit" and our usual "unit"? Look at the different packaging units of products, and the SKU is different—then you will know. That is to say, management methods precise to SKU can adapt to the current logistics competition. In fact, I think the use of information systems has had a great impact on it. Without precise codes to distinguish different SKUs of the same product, it is difficult to carry out unitized management to SKU. Common Terms in Marketing I. Promotional Terms in Marketing What is marketing? Many people in marketing are still vague about it. It is the work of inspiring consumer demand and making them desire a certain product. 1. Sales Promotion (SP): Sales promotion refers to the general term for various activities that a company formulates based on market conditions and its own capabilities, through overall planning, to promote product sales within a certain period. Sales promotion is a component of marketing. The main methods of sales promotion include: advertising, sales promotion, personal selling, and public relations. 2. Promotional Activities: Promotional activities are a form of sales promotion. They are time-limited, using one or more forms to stimulate consumers to buy products in a time-limited game, using methods at the point of sale or off-site, often with the main stimulus being increasing the added value of the product. 3. Personal Selling: A method of one-on-one selling using individual personnel. This method can achieve sales by one person. In the professional sales process and at the closest distance to consumers, companies also use personal selling to promote sales. 4. Sales Promotion: There are many ways of sales promotion. For example, promotion can be called sales promotion, and personal selling can also be called sales promotion. In marketing activities, product placement, market activation, advertising, channel policies, and even rewards for sales personnel can all be called sales promotion activities. 5. Channel Assistance: As the name implies, it is a behavior that helps channel members sell. The general method is: the company sends people to help first-level or second-level channel members distribute products faster, making channel members more confident in the product, thereby achieving a higher enthusiasm for sales. 6. Bundled Sales: When selling a product, selling another product along with it; or giving away a product when selling a product; or combining related products of a product and selling them as a product series—all these are bundled sales behaviors. 7. Profit Concession Promotion: It is a behavior of selling a product at a price lower than the original price during the sales process. Profit concession promotion occurs not only in the company's business with channel members but also in stores. Companies generally use holidays and the transition between peak and off-peak seasons for profit concession promotions. 8. Advertising Rewards: Advertising rewards mostly occur in the company's marketing activities with distributors. Distributors are the company's representatives in a region, responsible not only for sales in the region but also for market construction. Therefore, companies use advertising rewards to encourage distributors to sell more products and better build and improve the market. Advertising rewards can be implemented in various ways, such as: selling a certain amount, rewarding a certain amount of advertising expenses; or using advertising subsidies; or deducting from payment collections. 9. Public Relations: Public relations behavior is not the handling of interpersonal relationships as we usually imagine. In marketing activities, public relations occurs everywhere, for example: public relations with distributors, with the media, with sales personnel, and with consumers; public relations is needed for product sales, and for brand enhancement; in short, public relations is an indispensable part of a company's daily operations. 10. On-site Promotion: On-site promotion refers to promotional activities at the point of sale, generally using methods such as on-site lucky draws, scratch cards, and buy-one-get-one-free. II. Terminal Promotion Control 1. Sweeping the Streets: In a specific regional market, to achieve the goal of full distribution of products, the activity of stocking, displaying, and activating all retail stores in the area. Commonly used for product categories with high purchase frequency and where the market has been fully segmented. The method is to divide the area into different sections, and sales personnel visit and restock stores one by one along the route, with the aim of not missing any store, hence the term "sweeping the streets." 2. Deep Cultivation: Based on the characteristics of the product and consumers' purchasing habits, a comprehensive measurement and setting of various levels of retail outlets in terms of distribution, display design, role design, and target design, to achieve the best consumer contact process for the product in the market. Commonly used for fast-moving consumer goods with high purchase frequency and where the market has been fully segmented. The meaning of deep cultivation is that each level of store has different responsibilities. Generally, many small stores are difficult for companies to take care of, so deep cultivation can also be understood as an increase in the company's responsibilities. 3. Extensive Cultivation: Relative to deep cultivation, the product manufacturer does not fully directly participate in retail site sales, and does not set more responsibilities for sellers, but allows natural circulation. The method is to sell products through distribution channels such as distributors and wholesalers, and the manufacturer generally does not directly face the retail site. 4. Promotion: Promotion refers to the use of various short-term incentive tools to stimulate consumers and intermediaries to buy a specific product or service quickly and/or in larger quantities. Promotion is one of the promotional tools. Commonly used promotional tools are divided into three categories: consumer promotions, trade promotions, and sales force promotions. 5. Merchandising: Merchandising refers to the company's supervisory and promotional behavior at the point of sale—store sales—achieved through regular visits by the company's sales personnel. During visits, sales of the company's products at the outlet are recorded, and sales and inventory information is collected to facilitate timely replenishment. During merchandising, it is necessary to help the outlet maintain product placement, display, and activation, with the aim of ensuring smooth sales. 6. Route Visits: In merchandising activities, the visits of the company's sales personnel should be arranged according to a certain route to save time and more conveniently and comprehensively cover all sales outlets. A company will arrange different routes in a region and assign multiple sales personnel to visit according to time divisions. III. Terminal Promotion Control 1. Sales Guide: A sales guide is a behavior where the company sets up sales personnel at the point of sale to recommend their own products and help consumers choose suitable products based on their needs. Generally, durable consumer goods use this behavior more often. 2. Consultative Selling: This is a form of sales behavior. It can be used in direct sales, and can also be achieved through sales guide behavior at the point of sale. It mainly involves recommending products from the consumer's perspective, a sales technique that can also be placed in other sales service forms. 3. Activation: It is the process of making products attractive through effective environmental planning, atmosphere creation, and product display, so that the company's products at the end channel (point of sale) can attract consumers to visit, stimulate their purchase desire, and ultimately promote purchase, achieving a rapid increase in overall sales. 4. Store Activation: The activation of independent stores (such as specialty stores, product counters in department stores, etc.), including the activation of product display, layout, and atmosphere creation within these areas. These treatments focus not only on the coordination between the product and promotional tools in the store but more importantly on the placement and handling of the product itself. The placement and handling of products can lead consumers to have different purchasing mindsets, so companies need to train sales personnel to learn activation methods. 5. End Display: The placement of products at the point of sale should be carried out in a way that consumers accept, called end display. The rules and methods of placement should be summarized based on the conditions of the store and the feelings of consumers, while considering the packaging elements and appeal elements of the product, and displaying them in a way that is easier for consumers to see and more convenient to accept. 6. End: The end, also called the terminal, is the closest distance in sales activities to direct contact with consumers, generally referring to the store. Basic Retail Terms Bar Code: An internationally used symbol to represent certain product information. Generally printed on the outer packaging of goods, it is a pattern of black and white stripes. In-store Code: A bar code printed inside the supermarket, used when there is no bar code on the product or the product bar code is damaged, causing the bar code to be invalid. In-store codes are applied for and printed in the receiving department. Fresh Bar Code: The price bar code for weighed goods, printed by the electronic scale when weighing. Point of Sale (POS): A sales information management system, mainly performing cash register functions. Its basic components are: product bar codes, POS cash register system, and backend computer. Also called a single cash register. Pallet: A wooden or plastic board used for transporting goods. (There are wooden pallets and plastic pallets.) Pallet Consolidation: Combining goods from two or more pallets onto one pallet in an organized manner. Pulling the Face: When the shelves are not fully stocked, use the first-in, first-out principle to move products forward to make the display full and abundant. Picking Up Loose Items: Picking up stray items abandoned by customers in various corners. Checkout End Cap: The shelf in front of the checkout counter used to display goods. First In, First Out: Products that arrive first are sold first. Stack Base: Also known as the "promotion area," usually built with pallets, wire baskets, or turnover boxes. Counter: Refers to the glass counter in the boutique area or tobacco and alcohol area used to display valuable goods. Stacking Goods: Stacking or placing goods. Changing the Program: The replacement of products between two consecutive promotional flyers. The display and prices of the corresponding promotional products must be changed. Price Change: Changing the retail price or purchase price of a product. Price Tag: A tag used to indicate the selling price and other content of a product. Price tags must be printed on company-designed paper using a computer, not handwritten. Replenishment: The operation where a merchandiser replenishes out-of-stock products to the shelves at regular or irregular intervals according to the specified display position of each product. Out of Stock: The inventory of a product is zero. Exchange: Customers or the store exchange purchased products with the store (or manufacturer) according to relevant regulations. Tasting: On-site processing of some promotional foods and allowing customers to taste them on the spot. Clearance: A price reduction activity to clear remaining stock. Membership Card: A certificate of membership qualification. Slow-moving: Refers to the phenomenon where product sales are not obvious or difficult to sell. Best-selling: Refers to the phenomenon where product sales are good or easy to sell. Average-selling: Refers to the phenomenon where product sales are neither good nor bad. Write-off: Products that cannot be sold due to deterioration, broken packaging, or damage, and need to be treated as waste. Demagnetization: The work of removing the magnetic property of the anti-theft code attached to products during the cash register process. Inventory Count: Regularly counting the products in the store to accurately grasp the operating performance and inventory status during the period. Inventory: Refers to products that have not yet been sold. Gift: To stimulate sales, a certain quantity of products is given as a gift to customers who purchase a certain amount of the product. Order Number: The number of each batch of purchase orders placed with suppliers. Negative Inventory: The book sales volume is greater than the book inventory, usually caused by computer input errors, loss, damage, etc. Sales per Square Foot: Refers to the sales per unit area. Sales per Meter: Refers to the sales per meter of the straight-line length of the sales surface on supermarket shelves. Product Turnover Rate: Average product sales divided by average inventory. Product Inventory Cycle: Average product inventory divided by average sales, calculated in days. Supermarkets generally use the product inventory cycle to control capital utilization and strengthen control over product sales time. Shelf: The main area in the store for storing products, which makes shopping orderly for customers and reflects the store's business model. Shelves can be divided into sales areas, display areas, and storage areas. End Cap: Located at the ends of shelves, used to display a large number of products for sales and storage. Sales Unit: A quantity of a product sold to a customer. A sales unit can have different packaging quantities. Price Label: Attached to the corresponding product, including: product number, product description, origin, specification, and grade. Composite Packaging: The supplier puts several products together as a packaging for one sales unit. Impulse Shopping: Shopping behavior beyond the plan. Display Item: A sales sample, which should be complete, operable, clean, and safe. Safety Passage: The fire passage reserved in the design of the supermarket building to evacuate in emergencies. Refrigerated Cabinet: A cold cabinet used to display products that need refrigeration, with a temperature of 0°C to 5°C. Freezer Cabinet: A cold cabinet used to display frozen food, with a temperature below -18°C. Fresh-keeping Warehouse: A cold storage used to store food that needs refrigeration, with meat storage temperature at 0°C and vegetable temperature below 10°C. Promotion Cart: A cart specially used for display, tasting, and other activities in the supermarket. Group Buying: One-time large-volume shopping. High Inventory: Refers to the situation where product inventory and sales volume differ too much. Causes: out-of-season products, inaccurate ordering, high prices, special circumstances, problem products. Distribution and Channels Distribution: Refers to the process of moving products from the manufacturer (producer) to the user (consumer); and all the firms participating in this transaction process constitute the so-called "channel," also known as the "marketing channel" or "distribution channel." Functions of the channel: The firms in the channel provide more added value to the products in circulation. Channel firms provide one or more of the following functions:

  1. Repackaging the large quantities produced by the producer into small quantities that general consumers can buy at retail.
  2. Assorting the product types needed by consumers.
  3. Performing the function of storage after the product is manufactured and before the consumer purchases it.
  4. Transporting the product to places where consumers can buy it.
  5. Providing product information to consumers and also providing consumer market information to the manufacturer. Main Members of the Channel Retailer: The so-called "retail" refers to all activities that directly sell products or services to customers for their personal or household use as the final use. Retailers exist because they can bring additional added value to customers: such as a good shopping environment, providing products of reputable brands, explanations by sales personnel, convenience of location, etc. Wholesaler: The so-called "wholesale" refers to all activities that sell products or services. The sales target must be "people or organizations that intend to resell the product or service" or "people or organizations that use the product or service for other commercial purposes," not final consumers or household units. "Wholesaler" refers to an organization mainly engaged in wholesale activities. Common Market Terms I. Market Concept Terms 1. Market: A market is a kind of interest demand of a group of people, a common demand of a group of people with common characteristics for the core interests of a certain product. 2. Marketing: The complete process of a company or profit-making group or organization inspiring the needs of specific groups and satisfying those needs. Inspiring needs: making consumers realize that they have needs and need this product. Satisfying needs: enabling consumers to buy or accept this product. 3. Demand: A consumer's purchase idea and desire for a specific product that they have the ability to buy and are willing to buy. Only desires that simultaneously meet the conditions of ability to buy and willingness to buy can be called demand. 4. Explicit Demand: Explicit demand refers to needs that consumers can clearly describe and proactively propose (for example, consumers may directly say: I am thirsty, I need water; I need a sweater, etc.); companies should focus on grasping and understanding consumers' explicit needs. 5. Implicit Demand: Implicit demand refers to needs that consumers do not directly propose and cannot clearly describe. This kind of need is often proposed by producers based on technological development, predictions of market changes, etc. This kind of need needs to be guided. Companies should stimulate consumers' implicit needs, and better understand and empathize with customers to better satisfy consumers' implicit needs. 6. Potential Market: A potential market refers to a situation where a considerable number of consumers may have a strong desire for certain items, but existing products or services cannot meet this need. At this time, this part of the demand constitutes a potential market. One of the tasks of marketing is to measure the scope of the potential market and develop effective goods and services to meet these needs. 7. Market Potential: Refers to the limit quantity that market demand tends toward when marketing efforts reach infinity in a given environment for a specific product category or industry. Market potential is an estimated value. In actual practice, the final market capacity is often smaller than the estimated market potential. II. Market Behavior Terms 1. Impulse Buying: The behavior of buying immediately on a whim. Impulse buying behavior is related to the consumer's personality traits. Generally, women are more prone to impulse buying than men; some product categories are also prone to impulse buying, such as cosmetics, beverages, clothing, etc. 2. Rational Consumption: Relative to impulse buying, rational consumption refers to the purchase decision and purchase behavior made by consumers after careful analysis, comparison, and research. Correspondingly, men are more rational in consumption; consumers are also more rational when purchasing high-unit-price or highly functional products. 3. Brand Loyalty: Brand loyalty refers to the phenomenon where consumers are first satisfied with a certain brand of product, and then show a loyal attitude to this brand when choosing this type of product. Brand loyalty is generally for fast-moving consumer goods. Durable consumer goods have relatively weak brand loyalty due to low purchase frequency. 4. Decision Makers: The group of people who have the right to make purchase decisions. They decide the product category, brand, time, how to buy, how much to buy, etc. The purchase decision maker is not necessarily the user of the product. For example, the decision maker for baby products is often the mother; the purchase decision maker does not necessarily directly buy the product; the decision maker may be a single person or multiple people making decisions together. 5. Purchasers: The people who carry out the purchase behavior (when a child and mother are choosing children's food in the store, the child can choose the food they like. At this time, the child is the decision maker, and the mother is the actual purchaser). 6. Promotion Target: The promotion target is for the company's promotion work, the question of who to promote to. For example, the company's advertising promotion target, promotion target, etc. The promotion target can be the user, purchaser, decision maker, influencer, or none of these. The scope of the promotion target should be determined based on the company's marketing and advertising strategy. III. Market Strategy Terms (I) 1. STP Marketing: The core of modern marketing strategy, called STP marketing. STP is the abbreviation of SEGMENTING, TARGETING, POSITIONING, which in Chinese means: market segmentation, target market selection, and positioning. That is, under the idea of differentiated marketing, segment the market and find a reasonable market position in the selected target market. 2. Differentiated Marketing: Refers to the behavior of designing a series of meaningful differences to distinguish the company's products from competitors' products. Companies use differentiated marketing because consumers have different preferences and tendencies, and over time, consumer preferences change. Differentiation can give consumers more choices. 3. Market Segmentation: Defining some characteristics and dividing the entire market into many market segments based on these characteristics (for example, the market can be segmented based on variables such as consumer gender, age group, occupation characteristics, lifestyle habits, etc.). 4. Market Segments: The small markets divided according to various variable characteristics are called market segments (for example, in the juice beverage category, concentrated juice, low-purity juice, pulp drinks, etc., can be subdivided to suit different consumers' tastes, drinking habits, drinking occasions, etc.). 5. Target Market: After dividing the market segments, the company should determine which segment or segments to enter based on the product's characteristics, resource status, and the status of each market segment. The selected market segments are called target markets. 6. Market Positioning: The concept that a product forms in the minds of consumers in each target market. Positioning can explain to consumers the difference between this product and competing products. It is the core of the product that the company provides to consumers, and consumers will also use this as a basis to understand the brand and the providing company. 7. Market Research: Research work that collects and analyzes consumer information, market information, and marketing decision results. Common market research content includes: market potential analysis, market share analysis, competitive analysis, sales analysis, regional market analysis, etc. Common market research methods include: telephone interviews, questionnaires, door-to-door interviews, group interviews, etc. 8. Marketing Audit: A comprehensive, systematic, independent, and periodic examination of a company's or business unit's marketing environment, objectives, strategies, and activities, aimed at determining the scope of problems and opportunities and proposing action plans to improve the company's marketing performance. IV. Market Strategy Terms (II) 1. Market Share: Market share is one of the important indicators for evaluating the competitive position of a company or brand. It refers to the percentage of the company's products or brands in the overall market sales within a certain market scope. 2. Competitive Products: Products that have a competitive relationship with the company's products. The scope of competitive products includes: other brands in the same product category as the company's products, and other categories of products that have a substitution relationship with a certain product. 3. 4P: The 4P in marketing is the abbreviation of the four traditional marketing mix elements. The 4Ps refer to PRODUCT, PRICE, PLACE (channel, distribution), and PROMOTION. 4. 4C: The four marketing factors proposed in recent years. The 4Cs refer to CONSUMER, COMMUNICATION, COST (cost, value), and CONVENIENCE. The proposal of 4C reflects the deepening of customer and service concepts in modern marketing; 4C pays more attention to consumers' feelings and their thoughts when purchasing products, rather than the 4P era's complete focus on conveying and informing the company's product benefits. 5. Integrated Marketing: Integrated marketing refers to the marketing state when all departments of the company can serve the interests of customers. The result of doing so constitutes integrated marketing. To achieve integrated marketing, first, various marketing functions—sales personnel, advertising, product management, marketing research, etc.—must coordinate with each other; second, the marketing department must coordinate well with other departments of the company. 6. Relationship Marketing: Relationship marketing refers to marketing practice activities that establish long-term satisfactory relationships with key members of the company (customers, suppliers, distributors, etc.). The purpose is to maintain long-term performance and business. The ultimate result of relationship marketing is the ability to build the company's marketing network. The focus of relationship marketing should be on: (1) Maintaining customers; (2) Maintaining long-term continuous contact with customers; (3) Focusing on customer value; (4) Emphasizing the degree of customer service; (5) Committing to meeting customer expectations; (6) All company personnel paying high attention to quality. 7. Market Leader Strategy: A form of competitive strategy. Most industries have a recognized market leader company that holds the largest market share in the relevant product market. It usually plays a leading role for other companies in price changes, new product introductions, distribution coverage, and promotion intensity. Companies adopting market leader strategies include General Electric, Kodak, IBM, Procter & Gamble, etc. 8. Market Follower Strategy: Participating in competition without disrupting the market situation. Companies occupying second, third, and later positions in the industry can be called followers. Within their capabilities, some companies can be quite large, such as Colgate, Ford, Westinghouse, PepsiCo, TCL, Konka, etc. 9. Market Expansion: Expansionary market activities in market areas that the company or brand has not developed or explored. The concept of this market may be geographically undeveloped or a specific undeveloped group of people. Market expansion is a competitive market strategy. 10. Market Building: The purpose of market building is to consolidate the company's or brand's existing market and maintain market share. This is a defensive market strategy. Common Terms in Promotion I. Promotional Terms in Promotion What is promotion? Many people in marketing are still vague about it. It is the work of inspiring consumer demand and making them desire a certain product. 1. Sales Promotion (SP): Sales promotion refers to the general term for various activities that a company formulates based on market conditions and its own capabilities, through overall planning, to promote product sales within a certain period. Sales promotion is a component of promotion. The main methods of sales promotion include: advertising, sales promotion, personal selling, and public relations. 2. Promotional Activities: Promotional activities are a form of sales promotion. They are time-limited, using one or more forms to stimulate consumers to buy products in a time-limited game, using methods at the point of sale or off-site, often with the main stimulus being increasing the added value of the product. 3. Personal Selling: A method of one-on-one selling using individual personnel. This method can achieve sales by one person. In the professional sales process and at the closest distance to consumers, companies also use personal selling to promote sales. 4. Sales Promotion: There are many ways of sales promotion. For example, promotion can be called sales promotion, and personal selling can also be called sales promotion. In marketing activities, product placement, market activation, advertising, channel policies, and even rewards for sales personnel can all be called sales promotion activities. 5. Channel Assistance: As the name implies, it is a behavior that helps channel members sell. The general method is: the company sends people to help first-level or second-level channel members distribute products faster, making channel members more confident in the product, thereby achieving a higher enthusiasm for sales. 6. Bundled Sales: When selling a product, selling another product along with it; or giving away a product when selling a product; or combining related products of a product and selling them as a product series—all these are bundled sales behaviors. 7. Profit Concession Promotion: It is a behavior of selling a product at a price lower than the original price during the sales process. Profit concession promotion occurs not only in the company's business with channel members but also in stores. Companies generally use holidays and the transition between peak and off-peak seasons for profit concession promotions. 8. Advertising Rewards: Advertising rewards mostly occur in the company's marketing activities with distributors. Distributors are the company's representatives in a region, responsible not only for sales in the region but also for market construction. Therefore, companies use advertising rewards to encourage distributors to sell more products and better build and improve the market. Advertising rewards can be implemented in various ways, such as: selling a certain amount, rewarding a certain amount of advertising expenses; or using advertising subsidies; or deducting from payment collections. 9. Public Relations: Public relations behavior is not the handling of interpersonal relationships as we usually imagine. In marketing activities, public relations occurs everywhere, for example: public relations with distributors, with the media, with sales personnel, and with consumers; public relations is needed for product sales, and for brand enhancement; in short, public relations is an indispensable part of a company's daily operations. 10. On-site Promotion: On-site promotion refers to promotional activities at the point of sale, generally using methods such as on-site lucky draws, scratch cards, and buy-one-get-one-free. II. Advertising Terms in Promotion Advertising is the activity of conveying product information and sales information to appropriate target consumers at the right time, in the right way and cost, with the help of appropriate carriers, under clear objectives. Advertising is an important part of the overall market plan and one of the promotional tools. Advertising narrows the distance between products and consumers' minds and psychology. 1. Soft Advertising: A non-direct advertising method, manifested as interviews, reports, boss stories, event utilization, etc., in newspapers or on TV. It seems not to appear as advertising, but actually plays the role of advertising or public relations. 2. Hard Advertising: An advertising form that appears directly in the media, directly using the product or brand as the core expression content to inform and promote the product or brand to consumers. 3. Appeal: A statement about the benefits that the product brings to consumers in advertising. It includes the content of the appeal, the way of the appeal, and the object of the appeal, that is, what the advertisement says, to whom it says it, and how it says it. Appeal is to tell consumers their needs, not to tell them what you have; appeal generally lets consumers feel through a sentence or a classic language, rather than in a way that makes consumers understand. 4. Emotional Appeal: In marketing advertising, the information transmitted by advertising can be emotional or rational. Emotional appeal refers to evoking strong emotions and feelings (such as excitement, pity, anger, fear, etc.) in the audience through certain metaphors or hints in the advertisement, thereby attracting their attention. For example, fear appeal is a typical example of emotional appeal. 5. Rational Appeal: Rational appeal refers to emphasizing the attribute characteristics of the product in the advertisement and describing the reasons for consumers to buy through certain logic. Rational appeal advertisements hope for consumers' rational shopping motives, such as logical judgment. 6. Unique Selling Proposition: The advertising concept vigorously promoted by the famous American advertiser Rosser Reeves, abbreviated as USP. According to Reeves, USP has three rules: First, you must have a clear proposition, that is, you buy this product and get a specific benefit; Second, this proposition must be unique, which other competitors cannot provide or do not provide; Third, this proposition must help sales. 7. Creativity: The process of analyzing and organizing the content to be expressed in advertising, and then expressing the selling point of the product or brand, the concept of the product or enterprise in a way that can be recognized by consumers and with strong appeal. Creativity is carried out under conditions that conform to the reality of the product and the conditions of the times, that is, it is a free flight within rules. Breaking away from rules is not called creativity, but fantasy. 8. POP Advertising: The abbreviation of POINT OF PURCHASE ADVERTISING, meaning point-of-purchase advertising, referred to as POP advertising. It is roughly divided into four types: one is hanging POP advertising, two is product price cards and display cards POP advertising, three is POP advertising combined with products, and four is large shelf-type POP advertising. All advertising objects set up in commercial spaces, purchase places, around and inside retail stores, and where products are displayed belong to POP advertising. 9. DM Advertising: The abbreviation of DIRECT-MAIL-ADVERTISING, an advertising form sent directly to potential customers by mail, E-MAIL, etc. Now, store flyers, street leaflets, etc., all belong to DM advertising. 10. CF Advertising: Usually refers to advertisements made with film and used for broadcasting on media, such as movie trailers, TV commercials, multimedia ads, etc. Since TV commercials are the most common, CF sometimes replaces TV commercials, although TV commercials are also often abbreviated as TVC. III. Terms in Advertising A 1. Focus Advertising: Set up in front of the point of sale, near the point of sale, or inside the store, mainly in the form of light boxes, flat road signs, and stall combinations, used to attract passersby and build image. Focus advertising is not an independent form of a single advertisement; it may be a group of market tools forming an advertisement, or it may be a store's decoration form achieving advertising effects. Like street newsstands, cold drink stalls, etc., can be combined into focus advertising forms. 2. Print Advertising: From the perspective of design and production, all static, two-dimensional advertising forms are called print advertising. 3. Media: In marketing, media refers to the intermediary used to transmit information between product producers and potential customers. Simply put, media is a series of communication tools, such as newspapers, magazines, television, etc. Media can be divided into: print media, electronic media, digital media, outdoor media, etc. 4. Media Analysis: The analysis and consideration of the publishing media by advertising planners or media planners based on advertising goals and strategies. Media analysis includes the following content: media type analysis, media communication effect analysis (including both qualitative and quantitative levels), media audience analysis, media geographic analysis, etc. 5. Media Plan: A set of media coordination arrangements for advertising strategies and plans. This step includes: ★ Determining the expected reach, frequency, and impact; ★ Selecting the main media types; ★ Selecting specific media vehicles; ★ Determining the timing of communication and the allocation of geographic media. 6. Media Mix: Media mix refers to the combination state of using more than two media or using more than two publishing forms of the same media within a period of time in the advertising publishing plan. There is no right or wrong in the form of media mix; the way to judge right or wrong is the result of the media mix relative to the frequency of information that consumers may accept in a relative time. Therefore, media mix is to let consumers accept reasonable information times in a relative time. 7. Cost Per Thousand: Cost per thousand is one of the common indicators for evaluating media communication effects. It refers to the cost of a medium reaching one thousand audiences. 8. Gross Rating Points: Adding the audience ratings of a specific carrier at different times to get the total audience rating delivered is what we often call gross rating points, also called total audience rating. This indicator is obtained by multiplying reach and frequency (that is, the total number of viewers of an advertisement multiplied by the average number of views per viewer). To calculate gross rating points, the formula can also be used: GRP = Reach (%) * Average Exposure Frequency. IV. Terms in Advertising B 1. Media Buying: The purchase of time, format, and space for specific advertising media. This is an important part of the company's advertising media activities. 2. Broadcast Media: Broadcast media, also called electronic media, refers to media categories such as radio and television that transmit information through airwaves or electronic circuits. 3. Advertising Weight: ADVERTISING WEIGHT, refers to the proportion of advertising in different media or different regions. Advertisers seem to agree with this: the audiences of different media are different. Those who often read newspapers may not listen to the radio, and those who often listen to the radio have no time to watch TV, so they like to spread their advertising "evenly" across various media. In fact, the holders of this view often have no basis, just by feeling. We believe that different products may have different choices, and the premise for judgment and decision is consumer research. 4. Advertising Share: ADVERTISING SHARE, the proportion of a certain product brand's advertising in a specific market to the advertising of all brands in the market, also called voice share. 5. Advertising-to-Sales Ratio: ADVERTISING-TO-SALES RATIO, the percentage of total advertising expenditure in a period to total sales in the same period. This advertising-to-sales (A/S) ratio can be applied to a brand product, a company, or even the entire industry, and is widely used as a standard measure for setting advertising budgets. The industry advertising/sales ratio also shows the competitive situation of the industry. After comparing the company's and brand's A/S ratio with competitors, it is easy to gauge the opponent's advertising offensive. 6. Net Advertising Value: A value similar to the Advertising Effectiveness Index (AEI) for evaluating advertising effects, but slightly different. Net advertising value directly represents: in the period after advertising dissemination, how much of the increase in product sales is due to the communication effect of advertising. 7. Defining Advertising Goals for Measured Advertising Results: The title of a famous article written by Russell Colley in 1961, usually abbreviated as DAGMAR. This article provides a research framework for the difficult goal of advertising, that is, how to measure the effect of advertising (and thus determine appropriate advertising costs). To some extent, the only standard for advertising success is the growth of sales, but this is the result of long-term accumulation. In the short term, it can be determined by surveying changes in consumer awareness and attitudes toward the product. This provides research clues for studying the role of advertising in the process of consumers' deepening awareness and trust in a product. 8. Free-Standing Inserts: FSI refers to advertising single pages, booklets, etc., inserted in newspapers and reaching consumers with the newspaper distribution. 9. Word-of-Mouth Advertising: Every salesperson hopes that customers who buy satisfactory products will immediately introduce the product to friends and neighbors. This kind of oral advertising is very effective. Common Product Terms I. About Products (I) 1. Product: Anything offered to the market that can satisfy a need or desire. Products include tangible goods, services, places, organizations, and ideas. 2. Consumer Goods: A. Fast-moving consumer goods: Fast turnover, generally non-durable consumer goods, fast consumption, high purchase frequency, relatively cheap, such as beverages, instant food, daily toiletries, etc.; B. Durable consumer goods: Durable consumer goods also belong to tangible products. They have a relatively long use time and relatively high prices, such as cars, refrigerators, air conditioners, etc. 3. Functional Products: Functional products refer to products with high technological content, high value, complex operation, or closely related to consumers' material and personal interests, and are more influenced by rational thinking. 4. Service Products: Service products are intangible, inseparable, variable, and perishable, and need to produce results. They generally require more quality control, supplier credibility, and applicability, such as haircuts and financial investment services. 5. Value: Value refers to the consumer's evaluation of a product's ability to meet his various needs. When evaluating the value of a product, consumers mainly consider the lowest possible acquisition and ownership use costs. 6. Product Positioning: Positioning is a creative work on existing things. It takes things as the starting point, such as a commodity, a service, a company, an institution, or even a person... But the object of positioning is not these, but the thoughts of potential customers. That is to say, it is to determine a suitable position for the product or other objects in the minds of potential customers. Once this position is established, it will make people first consider a certain positioned thing when they need to solve a specific consumption or other problem. Therefore, positioning refers to the company designing its own products and image, and communicating with the target audience by conveying specific information of the enterprise (organization) or brand, thereby determining a distinctive and valuable position in the minds of target customers, distinguishing the enterprise or brand from competitors, and occupying the market segment. 7. Product Concept: The core benefit and value that a product provides to customers is the service or benefit that customers really need, that is, the benefit that the product can bring to consumers. II. About Products (II) 1. Product Selling Point: The benefit points of a certain product that distinguish it from similar products, temporarily support the growth of product sales, and are outside the core benefits. These benefit points are purchase factors generated around the core benefits of the product. For example, if a product has a very good package, this package is a selling point; the service benefit of a product is also a selling point. Generally, when companies use promotional activities, they add selling points to products. 2. Packaging: Refers to the process of designing and producing containers or wrappings for products, and also refers to these containers or wrappings themselves. Packaging materials themselves include three levels: primary packaging, secondary packaging, and transport packaging. 3. Product Name: The name of the product, a label and symbol for the product. For example, "Ganmaotong" on the market is a product name for treating colds, and "Giant" is a name for a bicycle. 4. Trademark: A trademark is a legal term in business, referring to the words, symbols, and marks registered by a company. Products have trademarks, which are the brand identification symbols of the product; companies have trademarks, which are the brands of the company. 5. Differential Pricing: Refers to the producer modifying the base price of the product to adapt to differences in customers, products, geographic locations, etc. Generally, companies first position their products in the market, and this positioning determines the price that the product is suitable for or should conform to the group's affordability and acceptance. 6. Price Elasticity: Price elasticity is closely related to market demand or demand potential. For example, if the market demand is 10,000 units and the price is 1 yuan, when demand changes to 100,000 units, the price will correspondingly decrease, and when demand shrinks, the price will rise. For example, when Galanz microwave ovens were in the rising stage of the product market, demand increased sharply, and the low-price strategy adopted by the company at that time made good use of price elasticity. If it were not for the market conditions at that time and the low-price strategy was adopted, it would be a price war. 7. Market Penetration Pricing: Market penetration pricing is a strategy of the company, with the premise that this product should be a product that the public may consume. The method of this strategy is that the company mass-produces the product based on market and estimated conditions, reduces the production cost of the product, and then puts it on the market in large quantities, causing the price of the product in the market to naturally decrease. This method is called market penetration pricing. III. About Products (III) 1. Skimming Pricing: Skimming pricing is generally used during the launch period of a brand-new product. This product contains a certain technical content or a certain patent component. Skimming pricing is to make the profit space of the product larger, and then gradually reduce the price. 2. Product Mix: This is the structure of all products produced and sold by a company, also called product assortment, referring to the entire set of products or product items that a specific seller can provide to consumers. The product mix can be examined using the four indicators of width, length, depth, and consistency. 3. Product Line: A group of related products produced by one company, also called a product series. 4. Product Recall: Refers to the manufacturer taking back products that have been sent to wholesalers, retailers, or end users. The typical reason for a product recall is that the sold product is found to have defects. 5. Core Product: In the usual sense, the core product may refer to a company's leading product. But in the vocabulary of marketing experts, the so-called core product refers to the core function of a product. It is the intangible benefit and service function that a product can provide, and it is what customers really buy. 6. Complementary Goods: If a rise (fall) in the price of one good leads to a fall (rise) in the demand for another good, the two goods are complementary goods. 7. Price Sensitivity: Refers to the degree of impact of price increases or decreases on the sales of products and services, also called price elasticity. 8. Suggested Price: Many manufacturers suggest the price at which retailers should sell products. This helps retailers operating in the same market and provides price guidance. It can also determine the price at which manufacturers sell goods to retailers, for example, 50% of the suggested retail price. 9. Inferior Goods: When the price of a good remains unchanged, if consumer demand for the good decreases as income increases, this type of good is called an inferior good. 10. Predatory Pricing: A pricing strategy that restricts competition by driving competitors or potential competitors out of the market. 11. Deceptive Pricing: An unethical and illegal pricing method. Typically, it claims price discounts in the form of "original price 158 yuan, now 79 yuan," but in fact, the "original price" is fabricated, and there is no price discount at all. 12. Entry Deterrence Pricing: In a market situation where demand exceeds supply, large companies and big brands with market advantages set their products at a very low price to block small competitors from entering the market, thereby protecting their market share. IV. Product Planning 1. Product Planning: ★ Product planning refers to the complete process from discovering and researching consumer needs to satisfying consumer needs with appropriate products. It includes market demand analysis, product technology research and development, product concept appeal, packaging, promotion, display, channels, etc. ★ The content of product planning mainly includes: design and interpretation of product benefit points, brand benefit points, packaging, channels, logistics, sales, and other benefit points; ★ The purpose of product planning is to give existing products emotional factors, move consumers and channel members with benefits, and achieve sales growth goals. 2. Product Life Cycle: Product life cycle refers to the dynamic process of a class of products being born, growing, developing, and declining in the market. Generally, according to the popularity rate of products in the market, it is divided into: introduction period, growth period, maturity period, and decline period. 3. Product Market: Product market refers to the needs of a group of people. For a specific product, the same needs bring specific groups of people together, which constitutes the product market. 4. Product Series: Refers to a series of products composed of each group of different but related product items, which complement each other in function. For example, cameras, lenses, and tripods constitute a product series. 5. Product Line Extension: A competitive marketing strategy. A company launches many styles of products, often under the same brand, to cater to the needs of various market segments while occupying more shelf space to limit the entry of competitors. These products are sometimes called flank products, relative to the leading products. 6. OEM: OEM, the abbreviation of ORIGINAL EQUIPMENT MANUFACTURE, means "original equipment manufacturer." OEM is commissioned production, actually a "contract manufacturing" method. Its meaning is that the brand producer does not directly produce products, but uses its own "key core technologies" to design and develop new products, control sales "channels," and hand over specific processing tasks to other enterprises. The manufacturer undertaking this processing task is called an OEM manufacturer, and the products produced are OEM products. Source: FMCG Distribution Internal Reference -END-