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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...

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 ...

Acqui-hiring or Acq-hiring or talent acquisition, a combination of the words acquisition and hiring, is referred to the process of acquiring a company to recruit its employees with or without showing interest in its current offerings or their continued operation. Those companies that engage in buying say it is talent acquisition and it typically comes with a per head price. The process also provides a relatively favourable exit strategies for employees with the prestige of being bought by a bigger company which is combined with the typical hiring process. Acqui-hiring has been increasingly becoming common in VC-based startup companies especially within the tech-sector. As of March 2013, Facebook was the largest performer of this process with over 12 in the last five fiscal quarters. Other brands like Twitter, Yahoo and Google are also ranked alongside Facebook for similar practices. This activity is facilitated by acqui-sourcing which is the process of identifying organiza...

A qualitative methodology that is used to describe consumers based on psychological attributes is called as psychographics. It has been applied in the study of personality, values, attitudes, opinions, interests and lifestyles. Though psychographics is often equated with lifestyle research, it has been argued that it should apply to the study of cognitive approaches including attitudes, interests, beliefs and opinions while lifestyle should apply to the study of overt behaviour.   As this research method focuses on interests, activities & opinions, they are sometimes abbreviated as ‘AIO variables’. The study of individuals or communities using psychographic can be valuable in marketing, demographics, opinion research, social research and prediction. Psychographic attributes can be contrasted with the variables of behaviour like purchase data and usage rate, along with organizational descriptors or firmographic variables like industry, number of employees and fu...

A management term linked to an element that is necessary to achieve an organization or project’s mission is called as Critical Success Factor (CSF). It is also known as the Key Result Area (KRA) or Key Success Factor (KSF). CSF is a critical factor/ activity required for ensuring an organization’s success. CSF term was initially used in data analysis and business analysis. For example, the critical success factor for a successful IT project is user involvement. It should not be confused with success criteria as they are outcomes of a project or achievements of an organization that is necessary to consider the project or organization as a successful one. Success criteria is defined with the objectives and key performance indicators (KPIs) may be its quantifying unit. The concept of success factors for CSF was developed by D Ronald Daniel of McKinsey & Company in the year 1961. John F Rockart refined this process into critical success factors during 1979-81. And in...

Account-based marketing or in short ABM, known as key account marketing also, is referred to a strategic approach to market business based on account awareness. Here, the organization considers and communicates as markets of one to its individual prospect or customer accounts. It is typically employed in sales organizations belonging to the enterprise level. ABM helps companies to increase their account relevance; engage in deals earlier and higher; align the marketing activities with the strategies of the sales team; get the best value out of marketing; inspire customers with compelling content and to identify specific contact areas at specific markets belonging to a specific market. ABM brings together industry, product/service or channels like direct, social or PR to focus on individual accounts. As the market becomes more commoditized, customers can only see little or no difference between the suppliers and its competitors regarding price as the only obvious differen...

Top-of-mind awareness (TOMA) refers to a technique to measure how well brands rank in the minds of consumers. It is an important concept in consumer behavior, marketing communications and research. In Marketing Metrics, it is defined as the first brand that comes to the mind when a customer is asked an unprompted question about a category. The percentage of customers for whom a given brand is in their top of the mind can be measured. Top-of-mind awareness is more often defined as the most remembered or recalled brand names. It is a special form of brand awareness built by companies through media exposure via media like Internet, radio, newspapers, magazines, television and social media. In a survey conducted among nearly 200 senior marketing managers, 50% from the total responded that they found top-of-mind metric very useful. Top-of-mind can be achieved through social media by targeting a niche group of customers and then building brand awareness with regular ...

Solution selling is a methodology used in sales where a salesperson focuses on the customer’s problems to address it with appropriate offerings of the company rather than just promoting it. Here, the solution for the problem is linked to the product and its benefits received from using it. Solution selling is usually used in sales where products are a part of the elements making a solution to a customer’s problem. The term was developed by Frank Watts in the year 1975. He began teaching “solution selling” as an independent consultant and then presented his sales process to Xerox Corporation as a one-day workshop in the year 1982. Next year, Electronics magazine portrayed his method as an unmistakable trend in the distribution of systems-related products. Solution selling has become somewhat a generic topic in the marketplace with its core brand carrying distinct characteristics. Those brands that follow this method generally apply an approach like that of consultative sa...

Attack marketing or guerrilla marketing or ambush marketing is a type of marketing that incorporates a set of creative and strategic techniques which are used to build and raise public awareness that surrounds a person, place,  b schools in kerala event or a product. It utilizes the strength of social interactions to execute non-traditional marketing campaigns so as to drive sales, increase brand awareness and to create a long term buzz for a specific business. This marketing strategy is used by various marketing, advertising, public relations, and promotional event marketing agencies to promote products and services of popular brands and events all around the world. It can be altered to fit the marketing programs for all budgets be it small or large. For example, Coca-Cola’s “Happiness” campaign is one of the best examples of a successful attack-style marketing campaign. Filmed and released on YouTube along with a tag “where will happiness strike next?” this campaign ...

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...

Bounce rate is an internet marketing term that is used in web traffic analysis which represents the percentage of users visiting a website and then leaves or bounce rather than continuing browsing the website. It is calculated by counting the number of single web page visits by a user and divides it by the total number of visits. Bounce rate (in percentage) = Number of visits in a single page by a user / Total visits to the website Bounce rates are helpful in determining the effectiveness or the performance of an entry or landing web page in generating interest of users. The web page that has a low bounce rate means that it is effectively causing visitors or users to view other pages of that website. High bounce rates indicate that the website is performing ineffectively without attracting the interests of visitors. They usually visit an entry page and leave. Interpreting bounce rate measure should be relevant to the business objectives of a website and also its de...

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 ...