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An economic condition where investment capital is hard to secure is referred to as a credit crunch. Investors and banks become wary of lending funds to corporations and individuals which drives up the price of debt products for borrowers. It is often an extension of a recession and a credit crunch makes it almost impossible for companies to borrow as lenders are scared about instances like bankruptcies or defaults which could lead to high rates. It is also known as a credit squeeze or credit crisis and occurs independently of a sudden change in the rates of interest. Individuals and businesses that could earlier obtain loans to expand operations or to finance major purchases suddenly end up unable to acquire such funds. This effect can be felt throughout the entire economy because of a drop in homeownership rates and businesses being forced to cut back because of capital shortage. The credit crunch is often followed by a period where lenders are too lenient in offering c...

A person who guarantees to pay the debt of a borrower in an event when the borrower defaults on a loan obligation is called as a guarantor. He acts as a co-signer as they pledge their own services or assets when the original debtor is not able to perform their obligations. A guarantor may also be depicted as a person who certifies the true likeness of an individual who applies for a product or service. He is also known as a Surety. Guarantor is usually someone above the age of 18 who is a resident of the country where the payment agreement applies. The guarantor is expected to maintain a good credit history with sufficient income to cover loan payments if any possible chances arise. Once they enter an agreement, the contract would remain as a binding force till the end of the repayment period. An individual can represent himself as his guarantor where he guarantees the loan with security like an asset he owns. However, in most of the cases, a third-party guarantor is requir...

The process of buying an undervalued company with an intention to sell off its assets and generate profit for the shareholders is known as asset stripping. The individual assets of the company such as its equipment, real estate, intellectual property or brands, would be more valuable than the company as a whole due to certain factors like poor management or economic conditions. Its result is often a dividend payment for the investors and either a less-viable company or bankruptcy. Asset stripping is an action that is often engaged in by corporate raiders who buy undervalued companies to extract value out of them. This was very popular during 1970-1980s and is still seen in some of the investment activity conducted by private equity firms. This activity makes a company weak, especially one that has less collateral for borrowing and may have its value-producing assets stripped out, making it less able to support the debt the company has. The proceeds gained from asset stripping wou...

Cost advantages that are reaped by businesses when production becomes efficient is known as economies of scale. Businesses achieve it by increasing the production and lowering costs as costs are spread over a large number of goods which can be both fixed and variable. Generally, the size of the business matters when it comes to economies of scale as the larger the business is, more would be their cost savings. Economies of scale could be internal and external where internal is based on management decisions and external ones are based on outside factors. Considered to be an important concept for any business belonging to any industry, it represents the competitive advantages and cost savings held by larger businesses over smaller ones. There are various reasons why economies of scale mean lower per-unit costs. Firstly, the specialisation of labour and integration of technology helps in boosting production volumes. Secondly, lower per-unit costs comes from ...

Bargain bin refers to the unsorted selection of merchandise that has been discounted in price like software, CDs and tools. The major reasons for providing discounts can be the due to the closure of a production company, a steep decline in the popularity of an item in the aftermath of a scandal or a fad, or because a particular product line being discontinued. The term bargain bin originates from the fact that such items would be found in an isolated bin and not on store shelves. A similar term, “Bargain basement”, is now used as a synonym which means a basement in downtown department stores. Here, merchandise for clearance are placed regardless of which section of the store it came from. If a seller wants to sell different types of products as soon as possible, which may be due to various reasons, he keeps all the products in a single box rather than keeping it at their designated shelves and sells at a heavy discount rate so as to attract more customers. The reaso...

Omnichannel marketing is referred to the process of integrating an organization’s channels, processes and strategies to gain the ability to engage with its consumers at any time, from any place and from any device. It has become key to the success of marketing as customers engage with the organization in different ways like in a physical store, via websites, mobile apps, virtual catalogs and social media. They also interact with businesses through smartphones, tablets, computers and laptops. The challenge for businesses is to make all these interactions seamless, effective and consistent for all its customers. Consumers expect more personalised communication when interacting with businesses through various channels and devices and those who do not keep up that level lose their ground to its competitors. One of the biggest challenges faced by organizations taking up omnichannel marketing is to break free from traditional marketing campaigns. This strategy requires an entir...

Digital Asset Management (DAM) is referred to the process of the content management system (CMS)that stores and manages rich media or digital data like photos, music, video, animations, podcasts and other multimedia content and also managing its digital rights and permissions. It involves creating an archive, developing an infrastructure to preserve and manage the digital assets of a business and search functionality that allows its end users to identify, locate and retrieve an asset. Digital asset are those assets managed and stored in a digital format detailed by its metadata describing asset content, means of encoding, ownership and access rights. In simple words, DAM is a group of database records that contains metadata explaining the file name, its format and details regarding its content and usage. This can be used to create and manage database and helps a business to store rich media cost-effectively. DAM is categorized into many- brand asset management, libr...

Break even pricing is a practice in accounting pricing where the price point at which a business’ offerings will earn zero profits on a sale i.e., cost is equal to revenue. Break even pricing is a common accounting tool that is used by businesses to set a strategy for pricing for their product portfolio. It is calculated by the management of a company to make informed decisions if in case it wants to put a check on costs or increase production. The business can choose to set a price that is lower than the break even point. But, here, the business would be gaining revenues and would not be earning profits. The main motive of businesses in this case is to increase its market share rather than increasing their profits earned. Mainly, ecommerce firms are operating with this method but they have been able to tap into the market share. Break even pricing helps a company to set the lowest acceptable price and it is calculated by using the formula: (Total fixed ...

Customer churn rate is the percentage of the subscribers or customers who have canceled or has not renewed their subscriptions during a certain period of time. It is an important metric for businesses whose customers pay on a recurring basis like that of SaaS or other subscription-based businesses. If your customer does not stick around your business long enough for you to regain your average acquisition cost of customers i.e., CAC, regardless of your monthly revenue, then the firm is in trouble. Customer churn rate can be reduced by starting the customers off on the right foot by giving them a welcome email, dedicated 1:1 and online customer onboarding or by creating educational content on blogs, social media, etc. This educates the customers and gives a feeling of optimal value for your product or service. Then, ask the customers for feedbacks at key moments to re-engage with them. Build a good rapport and faith with customers through proactive communication. And fin...

Smarketing is referred to the process of integrating sales with marketing processes of a company. Its objective is focused on the sales and marketing functions to have a common integrated approach or targets. This process can lead to an annual growth in revenue of up to 20%, as per a study conducted in 2010. The objective of smarketing is to promote a product or service offered by a company to its potential buyers and also integrates this process with the activities of the sales department. Sales and marketing departments of a firm should be able to meet frequently to agree on a common terminology and should use data throughout the entire process in sales and marketing to identify good prospects and to follow up on how well they are being followed up. Smarketing works to its best levels when a business follows closed-loop reporting by tracking its success with particular prospective customers from the marketing stage through direct sales efforts. It is believed...

A niche market is the subset of a market in which a specific product is focused on. It defines the product features that aim at satisfying specific market needs, price range, production quality and demographics of the targeted audience. It is considered as a small market segment. Every product cannot be categorized by its market niche. It is highly specialized and aims in the survival of the firm among various competitors. Established companies like Hewlett-Packard also create products for different niches like the all-in-one machine for printing, faxing and scanning manufactured targeting home office niche. Product vendors and other trade businesses are referred to as mainstream providers or otherwise narrow demographics niche market providers which are colloquially shortened to niche market providers. Marketing a product or service to a niche is much easier when compared to that of a broad market since a niche has more elements in common be it in terms of needs...

Earnings per share (EPS) is the portion of a firm’s profit that is allocated to each share of common stock. It serves as an indicator of the profitability of a company. It is calculated using the following formula: EPS = (Net Income or Earnings – Preferred Dividends)/ Weighted Average Common Shares For example, a firm reported net income of $4 million. During the same time period, the firm has a total of 10 million shares outstanding. In such situations, the firm’s quarterly earnings per share or EPS would be $0.40 i.e., $4million/10 million shares = $0.40 EPS is a carefully scrutinized metric which is used as a barometer to gauge the profitability of a firm per unit of a shareholder ownership. As such, it is a key driver of share prices and is used as a denominator in the frequently used P/E (profit to earnings) ratio. To calculate EPS, balance sheet and income statement are used to calculate the weighted average number of common shares, dividends paid on the ...

Multilingual content marketing refers to the process of content marketing done in more than one language. It is considered to be a difficult task especially with the difference in cultural beliefs and expectations coming into play. As per the Common Sense Advisory study in the year 2012, it takes 12 languages to reach at least 80% of the total Internet users. In multilingual content marketing, content is not only produced in English but also in different languages like French, German, Korean and so on to reach untapped customers in regions where these languages are native. This type of marketing does not have a content marketing strategy but follows the one used for content marketing itself with a cohesive message that resonated with your customers in any selected languages. Before starting off with multilingual content marketing, first, conduct a thorough research to understand your market in accordance to the local preferences. Then, create content that goes along with y...

In digital marketing, A/B Testing or Split Testing is the process of comparing two variants simultaneously to test small differences. This helps marketing departments to take data-backed decisions and remove the guesswork. As a result, companies can understand why certain marketing efforts did not hit the mark, thereby giving them insights into constructing much better versions for their users. A/B Testing is now being commonly used as it became economical with the development of digital platforms. It also paved the way in providing insights to the company about user behaviour, increasing chances for the rate of conversion. Be it the title of a newsletter/mail, ad text, text on call-to-action buttons or a web page’s layout, this testing method gives you insights that might influence customer behaviour. To start with A/B Testing, determine the metric of success for your marketing campaign. It could be the no. of sales, click-through rate, downloads, sign-up, etc. Trial ...

Top of the funnel marketing is used to refer to activities and campaigns that focus on lead generation and targeting consumers in the top portion of the marketing funnel. These activities include content marketing through social media, blog posts, paid advertising, free trials, etc. The main objective of the top of the funnel marketing activity is for lead generation and thereby converting those leads into their customers. Every marketer filters prospective customers or clients from their pool of database. The prospects who are interested in the product/ service they sell through are filtered through top, middle and bottom of the marketing and sales funnel.   People interested in the brand or product sticks on whereas the others leave the funnel, making the group smaller. The upper part of the funnel focuses on spreading awareness, educate prospects and create a brand image for the product. The key elements of top of the funnel content should be catchy, easy to underst...

Sale and ‘nothing but Sale’ – That’s exactly what transactional marketing is all about. Unlike other marketing techniques that focus on building long-term relationships, transactional marketing focuses only on sale.   In this type of marketing technique, retailers encourage customers with shopping coupons, discounts and events to make the sale happen. It not only enhances the percentage of sales but also acts as a motivation for your target audience to buy the products. In short, we don’t boost the transactional marketing to develop their ongoing relationship with the customer, instead, Transactional marketing is to majorly maximise the business efficiency by increasing the individual SALES. The strategy is built around a single purchase and not with doing volumes. Transactional marketing has its roots in the renowned “Four P’s of marketing mix – product, pricing, placement and promotion. •    Product – This process involves of creating a quality prod...