Below you will find a list of 20 commonly used phrases in SNHU's undergrad Business courses. If you have questions about your marketing assignments, please join the Marketing and Business Office Hours session. See the schedule linked at the bottom of this page.
Business Vocabulary List:
- Asset: An item of value a business owns, can be tangible (physical items) or intangible (items you cannot touch), current (could easily convert to cash), or non-current (could turn into long-term cash value). Assets generate value for a business and are a measure of overall business health.
- Example: A landscaping business's current tangible assets may include accounts receivable, inventory, and cash on hand. Their non-current assets could consist of land, company vehicles, tools, and machinery. Intangible assets, such as an established reputation, client relationships, and contracts, would be typical. Overall, these assets represent the current business's total value and its ability to generate future revenue.
- B2B: Business-to-business or B2B, refers to commerce transactions that occur between two (or more) businesses rather than an individual consumer. B2B refers to sales made by a manufacturer to a wholesaler, retailer, or other business.
- Example: In the aerospace industry, manufacturers produce components for aircraft, such as landing gear, which are then sold directly to aircraft manufacturers (not customers). Multiple manufacturers then use those parts for repairs or aircraft production, typically through long-standing business relationships.
- B2C: Business-to-consumer transactions happen between a business and an individual consumer. B2C commerce is typically for personal use because the purchaser is an individual, not a business.
- Example: An artist sells personalized stickers and stationery on Etsy. Customers can navigate to this artist's Etsy page and send them a message with their personalization preferences. The customer then pays the artist and receives their items in the mail, without any interaction with a third party.
- Brand awareness: The extent to which customers recognize and remember a brand by its name, logo, or other advertising elements. Businesses want higher brand awareness because it makes them more likely to be considered compared to competitors. This results in increased sales and customer loyalty over time.
- Example: A local law office creates a catchy jingle and a recognizable logo that airs on the radio, appears on social media, is used in print materials, and appears on billboards throughout the community. The hope is that, over time, individuals will remember these advertising materials and that this office will come to mind first if they need legal assistance.
- Cash flow: The movement of money in and out of a business over a given period, such as monthly, quarterly, or annually. It tracks in and outflows, therefore providing a real-time picture of a company's financial health. This measure shows a business's ability to pay employees, meet its bills, and fulfill its supply contracts.
- Example: A social media company tracks its cash flow via a tracking system. They track cash inflows, such as payments received and retainer fees, and outflows, such as rent, software, utilities, and salaries.
- Communication: Business communication is the process of sharing information between a company and its external and internal stakeholders. Written communication (emails, reports, policy updates), spoken communications (phone calls, presentations, meetings), and audiovisual formats (social media or video) are typical communication methods.
- Example: A bank revises a policy affecting customers. An internal communication package, such as employee emails, updates to the employee handbook, and meetings, begins before the change is made. External communication includes customer-facing announcements, customer service script updates, in-app notifications, and social media posts that ensure customers are informed.
- Distribution: The process by which a product moves its goods or services from its producer to the consumer. Distribution plans differ based on consumer needs and the overall marketing strategy. Options include retail, wholesale, and direct-to-consumer distribution channels.
- Example: An energy drink brand whose owner has a significant social media presence chooses direct-to-consumer distribution via e-commerce, social media, and an online store. This promotion and distribution decision skips retailers and wholesalers because the consumer base already exists, and the company can save money by keeping distribution steps minimal.
- EBITDA: A financial metric used to evaluate a company's financial health and profitability. The acronym stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. EBITDA provides a snapshot of a business's performance, highlighting its cash flow potential. The formula is EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization.
Example: A company with a net income of $1.8 M income + $230,000 interest, + $460,000 taxes, + $320,000 depreciation, + $150,000 amortization = $2,960,000 EBITDA. This EBITDA can be used to justify specific valuations.
- KPI: Key Performance Indicator. Quantifiable value that is used to track if an organization, individual, or team is meeting their specific goals.
- Example: "Achieve a growth rate of 8% by the end of Q1 through opening our new location."
- Market Research: The process of gathering, analyzing, and interpreting data about a product, service, potential market, target audience, customers, or competitors. This process allows businesses to make informed decisions about the current and future competitive landscape.
- Example: An entrepreneur wants to open a restaurant, but first conducts market research. They do demographic research through the U.S. Census Bureau. This market research also involves analyzing the competition by looking at local restaurants, their menus, reviews, and locations. Regulatory research, local food trends, and potential customer feedback are then analyzed to determine the optimal restaurant environment before investments are made.
- Pricing: The amount of money a company chooses to charge for its product or service. Pricing reflects the value a company believes it is offering consumers, as well as the market position it prefers. Differing pricing strategies can signal quality and/or status in comparison to similar products in the market.
- Example: A sneaker brand uses most of the same materials as a budget sneaker company but sets a higher price to position their product as luxury. This company then prices its sneakers at a premium to signal high-end quality and attract customers who are attracted to luxury
- Primary vs secondary research: Primary research is the research collected by a business that is new and specific to a current business need or idea. This research format results in highly relevant and tailored outcomes, but it can be cost- and time-consuming. The secondary research process uses existing data published by others within industry reports or market analyses. Secondary research is fast and less costly, but can be less specific and/or outdated.
- Example: A toy company launching a new product conducts primary research by bringing in children and their families to test the toy. After the testing process, data from both observations and a questionnaire will be used to guide the launch process. If only secondary research were conducted, by reviewing existing industry reports and an analysis of competitors' product lines, this information may provide context, but not current child preferences.
- Procurement: The process of procurement involves the end-to-end progression of goods or raw materials through a business. Procurement consists of identifying, selecting, negotiating, and managing stages to ensure product standards and budgets are met.
Example: In the automotive industry, the procurement process is critical to a properly managed supply chain. An auto company first identifies the parts needed, such as seat fabric, then researches and negotiates with multiple suppliers to obtain the materials. Next, the supplier relationship will be drafted up and signed via a business contract, and there will be ongoing quality and supplier assessments
- Public Relations: The use of strategic communication techniques that allows a business to shape its public perception. Public relations also enables a business to manage relationships and the company narrative with various stakeholders (investors, customers, media, etc.). PR (Public Relations) also handles media relations during crisis management and in matters of company reputation.
Example: A major soda company faces a crisis when testing reveals that its ingredients are not as clean as it has claimed. Rather than going silent, the company launches its "Pop 4 Transparency" campaign to rebuild consumer trust. They acknowledge their mistake, show a behind-the-scenes documentary about their new recipe, launch community engagement sessions, and run a social media campaign and sweepstakes for free soda. This transforms the potential disaster into an opportunity for the company to build trust and demonstrate accountability to its customers.
- Qualitative vs quantitative data: Quantitative data is data that can be measured or counted. Quantitative data is objective and derived from numerical survey results, polls, sales figures, or interviews. Qualitative data is non-numerical and often is collected through human opinions. Focus groups, open-ended surveys, interviews, and observations can be used to collect qualitative data.
Example: A soda company launching a new flavor uses sales ratings and customer surveys to assess market potential (quantitatively). They also collect data by running focus groups where new flavors are tried and receiving feedback on them (qualitative) before moving forward with a launch.
- Scalability: The capacity to grow and expand operations, revenue, and market share without being constrained by limited resources. Scalable businesses can increase output and handle larger consumer demand without straining their current infrastructure (to the point of turning customers away). They can evolve and become more efficient as needs increase.
Example: A local babysitting service starts with two employees. The service quickly becomes popular and, as demand grows, becomes strained. To become scalable, they promptly hire and train a team of qualified caregivers, develop a client management system, and build a trustworthy brand through proportional increases in staff and resources.
- SMART Goal: SMART goals are an acronym and framework that help businesses set and achieve goals to improve overall performance. SMART stands for S: Specific (goals must be well-defined), M: Measurable (quantifiable), A: Achievable (realistic), R: Relevant (aligned with business), and T: Time-bound (has a clear deadline).
- Example: "Complete client follow-up calls within 24 hours of service completion, achieving a 96% completion rate for the next 6 months." S: client follow-up calls, M: within 24 hrs, 96% completion rate, A: have staff and software needed, R: improves customer satisfaction and retention, T: measured in 6 months.
- SWOT analysis: A planning tool that helps organizations understand their current strengths, weaknesses, opportunities, and threats. A 2x2 grid with one quadrant assigned to each of the four categories. This grid allows business decisions to be informed by the current state.
- Example: A donation-based thrift store run out of a church lists strengths as low operating costs and strong community support. However, they have weaknesses such as low control over inventory selection and quality. These opportunities could include partnering with local schools and nonprofit organizations to drive awareness. Threats could consist of the fact that large, well-known thrift chains have greater visibility and therefore attract more donations and support.
- ROI: The total net profit returned to a company after the cost of investment, showing if the investment was effective. Formula: ROI = (Profit – investment cost) / investment x 100.
- Example: If a subscription box company spends $1,000 on TikTok posts, which generate $2,400 in revenue, the ROI would be 2,400 - 1,000 / 1,000 x 100 = 140% ROI.
- USP: Unique Selling Proposition (USP) is the unique benefit or advantage that makes one product or service more appealing than the competition. It helps businesses figure out where they fit in the market and who their target market is. It answered: "Why should someone choose our band?"
- Example: A soccer cleat made from 100% recycled materials uses its environmentally friendly alignment in its marketing campaign. This unique feature will attract soccer fans who are also environmentally conscious athletes because this gear performs while also aligning with sustainable values.
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