MARKETING

Marketing

Marketing

is defined by the American Marketing Association as the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Marketing

Marketing practice tends to be seen as a creative industry, which includes advertising, distribution and selling.

Marketing

Marketing is influenced by many of the social sciences, particularly psychology, sociology, and economics.

Marketing

is a complete process within the business which includes:

-Finding out what the customer wants – this is called market research and involves finding out what types of products are wanted (product policy) and what prices consumers are prepared to pay.

-Helping to produce the right product at the right price.

-Persuading customers to buy it – by means of advertising and packaging.

-Getting the product to the customer in the most convenient and efficient way – distribution.

Market research

Marketing

Marketing Mix contained 4 elements: product, price, place, and promotion.

Marketing

Product

: The product aspects of marketing deal with the specifications of the actual goods or services, and how it relates to the end-user's needs and wants.

-It involves decisions about the product’s quality, its style and design, the branding policy (what to call it and how to ensure that customers recognise the ‘brand name’), how to package it, and what guarantees to offer.

Marketing

Price

: This refers to the process of setting a price for a product, including discounts.

Marketing

Place:

This refers to the channel by which a product or service is sold.

Marketing

Promotion

: This includes advertising, sales promotion, publicity, and personal selling. Branding refers to the various methods of promoting the product, brand, or company.

Marketing

Marketing- product

Product policy

in marketing involves:

-Finding out what people want in a particular product and what they use it for.

-Deciding what the product should look like: this involves making sure that the design is not only up-to-date but that it is suitable for people to use.

-Making sure that the price is right for the people who the company thinks will be likely to buy the product.

-Getting the ‘slot’ in the market right with regard to other factors such as status.

Marketing- product

Product life cycle

Almost all products have a lifetime during which they are used.

-Firstly, the product will be very new to the market and only a few people will know about it.

-After a while the product will become widely known and, its producers hope, popular.

At the end of a product’s life it will become less popular and will be replaced by other newer products.

Marketing- product

The product variation

is a change of the product properties in timing, i.e. an "old" product is changed and replaced by a new.

Marketing- product

Product differentiation

(also known simply as "differentiation") is the process of distinguishing the differences of a product or offering from others, to make it more attractive to a particular target market. This involves differentiating it from competitors' products as well as ones own product offerings.

Marketing-product

Product innovation

involves the introduction of a good or service that is new or substantially improved. This includes, but is not limited to, improvements in functional characteristics, technical abilities, or ease of use.

Marketing-product

Product elimination:

The removal of products from the PRODUCT PORTFOLIO once they have reached the decline stage of the life cycle. Usually the choice rests between immediate withdrawal and phasing it out slowly.

Marketing-product

A durable good or a hard good is a good which does not quickly wear out, or more specifically, it yields services or utility over time rather than being completely used up when used once.

Marketing-product

Perishable goods: the goods that can not last for a long time without going to be bad or decay.

Marketing-product

Convenience goods: Widely

distributed and relatively inexpensive goods which are purchased frequently and with minimum of effort, such as gasoline (petrol), newspapers, and most grocery items.

Marketing-product

Specialty good:

Item that is extraordinary or unique enough to motivate people to make an unusual effort to get it.

Examples are designer clothes, exotic perfumes, limited-edition cars, stunning designs, works of famous painters.

Marketing-price

Cost recovery pricing: setting the price to cover costs.

Costs

Direct costs

are costs to make the product including such things as raw materials, pay and energy (these can also be called Variable Costs). The direct costs increase as the amount produced increases and decrease as the amount decreases.

Indirect costs

(or fixed costs or overheads) are costs to provide the firm in which the product is to be made or, simply, for the firm to remain in existence. Indirect costs consist of rent for offices and factories, management salaries, and administrative costs. They are usually the same however many units of the product are made. 

Marketing-price

Penetration pricing

is the pricing technique of setting a relatively low initial entry price, often lower than the eventual market price, to attract new customers. The strategy works on the expectation that customers will switch to the new brand because of the lower price.

Marketing-price

Price skimming

is a pricing strategy in which a marketer sets a relatively high price for a product or service at first, then lowers the price over time.

Marketing-place

—

Distribution channel: Path

or 'pipeline' through which goods and services flow in one direction (from vendor to the consumer). A distribution channel can be as short as being direct from the vendor to the consumer or may include several inter-connected intermediaries such as wholesalers, distributors, agents, retailers. Each intermediary receives the item at one pricing point and moves it to the next higher pricing point until it reaches the final buyer. Also called channel of distribution or marketing channel.

Marketing-place

Direct Sales:

a retail channel for the distribution of goods and services.

Marketing-place

—

Indirect sales through partners, is a strategic possibility for growth and incremental sales for vendors. Though invaluable, no direct sales force, can hope to achieve the same coverage and breadth of expertise as an effective channel partner network. For sustainable growth, vendors and distributors are looking beyond their internal resources to extend their sales opportunities with the right partners.

Marketing-promotion

—

Promotion involves disseminating information about a product, product line, brand, or company. Promotion is generally sub-divided into two parts:

—

Above the line promotion: Promotion in the media (e.g. TV, radio, newspapers, Internet and Mobile Phones in which the advertiser pays an advertising agency to place the ad

—

Below the line promotion: Much of this is intended to be subtle enough for the consumer to be unaware that promotion is taking place. E.g. sponsorship, product placement endorsements, sales promotion, merchandising, direct mail, personal selling, public relations, trade shows.

Marketing-promotion

 Promotional mix:

1 Advertising- Any paid presentation and promotion of ideas, goods, or services by an identified sponsor. Examples: Print ads, radio, television, billboard, direct mail, brochures and catalogs, signs, in-store displays, posters, motion pictures, Web pages, banner ads, and emails.

Marketing-promotion

 Promotional mix:

2 Personal Selling - A process of helping and persuading one or more prospects to purchase a good or service or to act on any idea through the use of an oral presentation. Examples: Sales presentations, sales meetings, sales training and incentive programs for intermediary salespeople, samples, and telemarketing. Can be face-to-face or via telephone.

Marketing-promotion

 Promotional mix:

3 Promotions- Incentives designed to stimulate the purchase or sale of a product, usually in the short term. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating premiums, trade shows, trade-ins, and exhibitions.

Marketing-promotion

 Promotional mix:

4 Public relations - Paid intimate stimulation of supply for a product, service, or business unit by planting significant news about it or a favorable presentation of it in the media. Examples: Newspaper and magazine articles/reports, TVs and radio presentations, charitable contributions, speeches, issue advertising, and seminars.

Marketing

•

AIDA

•

USP

•DAGMAR

•

Symbolic pricing

•

Benefit claim

•

Pioneering advertising

•Competitive advertising

•

Retention advertising

Marketing

9. MIS.

10.Contest

11. Refund

12. Premium

13. Price-off

14. Coupon

o

PRICING

oQuestions to answer

1. What is the price you pay for your apartment?

-rent

2. What is the price you pay for your education?

-tuition

3. What is the price you pay to your doctor or dentist?

-a fee

4. What is the price you pay to the airline, taxi and bus companies?

-a fare

5. What is the price you pay for the local services?

-a rate

o

Questions to answer

6.What is the price you pay for the money you borrow?

-charges and interest

7. What is the price you pay for driving your car on a motorway?

-a toll

. What is the price you pay to the company that insures you?

-premium

9. What is the price you pay to the guest speaker?

-an honorarium

10. What is the price paid to the government official to help some character steal?

oQuestions to answer

8-a bribe

11. What is the price collected by the trade union?

-dues

12. What is the price you pay to your regular lawyer to cover his/her services?

-a retainer

13. What is the price of an executive?

-a salary

14. What is the price of a salesperson?

-a commission

15. What is the price of a worker?

-a wage

o

The role and perception of price

o

Price is the value that is placed on something.

oPrice is any common currency of value to both buyer and seller.

o

Price directly generates the revenues, serves as a communicator, a bargaining tool and a competitive weapon.

o

The customer’s perspective

o

Price represents the value they attach to whatever is being exchanged.

oIn assessing price, the customer is looking specifically at the expected benefits of the products:

o

The seller’s perspective

o

Profit

= Total revenue – Total cost

o

Total revenue

= Quantity sold *                         Unit price

oTotal cost

= Production cost +           Marketing cost + Selling cost

o

Psychological effects of price

o

Low price = negative statement about the product’s quality.

o

A sudden reduction in price of an established product = quality has been compromised.

oHigh price might actually attract customers.

o

External influences on pricing

•

Customers and consumers

•

Demand and price elasticity

•Channels of distribution

•

Competitors

•

Legal and regulatory framework

o

External influences on pricing

1. Customers and consumers

o

The bigger the area, the more discretion the marketer has in setting price.

o

External influences on pricing

2. Demand and price elasticity

o

Demand determinants

n

Changing consumer taste and needs

n

Recession

nCompetitors’ products and price

o

Price elasticity of demand

n

Sales respond to price variations: elastic.

n

Sales stable after price change: inelastic.

oExternal influences on pricing

3. Channels of distribution

oExternal influences on pricing

4. Competitors:

oMonopoly

: only 1 supplier - rare

o

Oligopoly

: a small number of powerful providers dominate the market.

o

Monopolistic competition

: competitors, each with differentiated product.

o

Perfect competition

: competitors, each with products undistinguishable - rare

oExternal influences on pricing

5. Legal and regulatory framework:

oWatchdog bodies

o

Internal influences on pricing

•Organisational objectives

•

Marketing objectives

•

Costs

o

Internal influences on pricing

1. Organisational objectives

o

Corporate strategy: target volume sales, target value sales, target growth, target profit figures

oMarket leader or niche

o

New entrant or established

o

Can be both short-term and long-term

o

Internal influences on pricing

2. Marketing objectives

o

Focus on specific target markets and the position desired with them.

oDepends on product’s life cycle:

n

Intro. stage

: lower price - invite trial

n

Growth & early maturity

: raise price

n

Late maturity & decline

: price reduction

oInternal influences on pricing

3. Costs

oTotal costs

include:

n

Operating and

n

Servicing costs

o

A product’s selling price generally represents:

nIts total cost (unit cost plus overheads), &

n

Profit or “risk reward”

o

The process of price setting

o

1. Pricing objectives

o

Financial objectives

: short/long-term

oSales and marketing objectives

n

Market share and positioning

n

Volume sales

n

Status quo: preserve the status quo – happy with current situation

oPrice war (undercutting), price matching, improve product / service / communication

o

Survival 

o

2. Demand assessment

o

Marketers need to assess demand levels for a product at any given price.

oThis involves a great deal of managerial skills as there are many variables.

o

3. Pricing policies and strategies

oNew product pricing strategies

n

Price skimming

: high price, then lower

n

Penetration pricing

: low price, then high up

o

Product mix pricing strategies:

nA product range starts with basic products, then price steps up with additional features

o

Managing price changes:

n

Price are not static because of competitive pressure, Cost inflation, new opportunities

o

4. Setting the price range

oThe cost-volume-profit relationship

n

Fixed costs

n

Variable costs

n

Marginal costs

nTotal costs

o

Setting the price range

n

Cost-based method

n

Demand-based method

nCompetition-based method

o

The cost-volume-profit relationship

o

Fixed costs

: do not vary with output in the short term (salaries, rent, etc.)

o

Variable costs

: vary according to the quantity produced (raw materials, etc.)

oMarginal costs

: change that occurs to total cost if 1 more unit is added

o

Total costs

: all the cost incurred

o

Breakeven analysis

: the point at which total revenue = total cost

o

A. Cost-based methods

oMark-up price = costs + profit

  (giá cộng lời vào vốn)

o

Cost-plus pricing = costs + fix %

(định giá có lãi)

o

Experience curve pricing

(định giá theo đường cong kinh nghiệm)

o

B. Demand-based pricing

o

When demand is strong, the price goes up; when it is weak, the price goes down.

oNeed a good understanding of the nature and elasticity of demand.

o

Psychological pricing: customer-based

n

Rely on the consumer’s emotive responses, subjective assessments and feelings.

n

Applicable to higher involvement products.

o

C. Competition-based pricing

o

Depends on:

nThe structure of the market

n

The product’s perceived value in the market

o

Can be:

n

Cost-leader

with price-oriented approach

nPrice-follower

bases on the going-rate for the product

o

5. Pricing tactics and adjustments

o

Price can vary to reflect specific customer needs, the market position.

oMarketers should set up a framework for pricing discretion.

o

Special adjustments can be made for short-term promotional purposes

o

Discounts, allowances, trade-in

o

Zoned pricing: single, multiple zones

lArbitration

l

Three branches of the U.S. Federal Government

l

US judicial system

l

Vietnam’s Judicial System

l

Arbitration

l

A form of alternative dispute resolution (ADR),

lIs a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the "arbitrators"), by whose decision (the “award") they agree to be bound.

l

Arbitration

l

It is a settlement technique in which a third party reviews the case and imposes a decision that is legally binding for both sides.

l

Is most commonly used for the resolution of commercial disputes, particularly in the context of international commercial transactions.

lCan be either voluntary or mandatory and can be either binding or non-binding.

lMediation

l

Can be binding or not binding

l

An alternative to court action

l

Eg: in divorce situations – in America 50% marriages end up at divorces.

lArbitration

l

Has been the dominant force in dispute resolution in areas such as:

Ø

Shipping

Ø

Commodities, and

ØConstruction

l

Takes place in private place, unlike litigation in the court.

l

Arbitration

l

A neutral forum with a panel of three arbitrators:

ØOne chosen by one party

Ø

One chosen by the other party

Ø

One chosen either by the parties or the two party-appointed arbitrators.

l

Arbitration

l

Main centres for international arbitration are: Paris, London, Geneva, Stockholm, New York, Hong Kong and Singapore.

ØStockholm: east-west trade disputes

Ø

London: shipping & commodities

l

Name recognition

l

Paris

: home of the International Chamber of Commerce and its rules.

lLondon

: home of the London Court of International Arbitration.

l

Geneva

l

Arbitration

l

Arbitration bodies

try hard to get their standard arbitration clause put into people contracts, so they have a captive market once disputes arise.

lThey do this by publicising their activities and their rules.

l

Arbitration

l

What people look for in an arbitration is:

Ø

Speed

ØCost effectiveness

Ø

Confidentiality, and

Ø

Reliability.

l

Arbitration

The choice of the venue depends on:

l

The availability of good experienced arbitrators.

l

The availability of good experienced arbitration lawyers, and expert witnesses such as accountants and engineers.

lThe cost of these people.

l

The support that local legal system gives to arbitration.

l

Accessibility: flight access, good facilities, administrative back-up, good telecommunications, IT support, and climate.

l

Arbitration

lNational legislation

has to lend its support to such an important economic activity as arbitration.

l

Terms

l

Dispute resolution

l

Arbitrators

lAward

l

A third party reviews the case

l

Imposes a decision

l

Legally binding

lNon-binding

lTerms

l

Voluntary

l

Mandatory

l

International commercial disputes

lShipping / Commodities / Construction

l

In private place

l

Litigation in the court.

l

A panel of three arbitrators

l

Terms

lName recognition

l

Arbitration bodies

l

standard arbitration clause

l

A captive market

lSpeed, Cost effectiveness, Confidentiality, and Reliability.

l

Legislation

•UNIT 1

International Trade

•

I. Overview of International trade

•

International trade: Purchase, sale, or exchange of goods and services across national borders.

•Foreign Direct Investment (FDI): Purchase of physical assets or a significant amount of the ownership of a company in another country to gain a measure of management control.

•

Portfolio Investment: Investment that does not involve obtaining a degree of control in a company.

•

II. Benefits of International trade

•

Open doors to new entrepreneurial opportunity across nations.

•Provide a country’s people with greater choice of goods and services.

•

An important engine for job creation in many countries.

•

III. Theories of International trade

1.Mercantilism: Trade theory holding that nations should accumulate financial wealth, usually in the form of gold, by encouraging exports and discouraging imports.

2. Absolute advantage: Ability of a nation to produce a good more efficiently than any other nation.

3. Comparative advantage: Inability of a nation to produce a goods more efficiently than other nations, but an ability to produce that good more efficiently than it does any other good.

4. Factor proportions theory: Trade theory holding that countries produce and export goods that require resources (factors) that are abundant and import goods that require resources in short supply.

•IV. The balance of trade

•

Visible trade consists of all those goods which can be seen and touched such as machines, televisions, motorcycles, refrigerators, food, raw materials…

•

Invisible trade refers to all those items which we export, which cannot be seen or touched such as sales of insurance, banking services, airline seats or sea cargo….

•

The balance of trade is the difference in value between imports and exports of goods over a particular period.

•

V. The balance of payments

•The balance of payments is the difference between the amount of money one country pays to other countries, especially for imports, and the amount it receives, especially for exports.

•Current account

•

Current account is a national account that records transactions involving the import and export of goods and services, income receipts on assets abroad, and income payments on foreign assets inside the country

•Current account surplus (a trade surplus): When a country exports more goods, services, and income than it imports.

•

Current account deficit (a trade deficit): When a country imports more goods, services and income than it exports.

•

2. Capital account

•

Capital account: A national account that records transactions involving the purchase or sale of assets

•

VI. Exporting

•

Export procedures

-Transport the goods to the docks or airport

-Pass them through customs

-Clear them through another set of customs on arrival

-Present them to the correct customers

•

2. Export documents

-Bill of lading (B/L): containing details of the goods being shipped, their destination and which ship they will be traveling.

-Export invoice: The ‘bill’ to the customer, requiring payment once he has received the goods.

-Certificate of origin: To prove the goods have come from UK for example and are not being imported under false pretences from a different country whose goods might be prohibited from entry.

-Certificate of value: To prove the goods are worth what the invoice says they are worth.

-Customs declaration: A signed statement of what 

•2. Export documents

-Declaration of dangerous goods: Required by international law for certain classes of goods such as explosives or volatile chemicals.

-Certificate of insurance: Needed by the shipping company, or airline, or by your customer, so that they can be assured that the value of the goods is covered should an accident happen.

-Health certificate: Needed for drugs and similar products and for transport of animals.

-Import licences: Permission to import your goods. Needed for certain countries and products.

•

VII. Reasons for governmental intervention in trade 

1. Cultural motives

-The cultures of countries are slowly altered by exposure to the people and products of other cultures.

-Cultural influence of the United States: the United States, more than any other nations, is seen as a threat to national cultures around the world.

•

Reasons…

2.Political motives

-To protect jobs

-To preserve national security

-To respond to ‘unfair’ trade

-To gain influence

•

Reasons…

3. Economic motives

-To protect infant industries

-To pursue strategic trade policy

•

VIII. Methods of restricting trade

•Tariffs: Government tax levied on a product as it enters or leaves a country.

-To protect domestic producers

-To generate revenue

2. Quotas: Restriction on the amount (measured in units or weight) of a good that can enter or leave a country during a certain period of time.

- Reasons for import quotas:

+To protect domestic producers by placing a limit on the amount of goods allowed to enter the country.

+To force companies of other nations to compete against one another for the limited amount of imports allowed.

- Reasons for export quotas:

+To maintain adequate supplies of a product in the home market.

+To restrict supply on world markets, thereby increasing the international price of the good.

•

3. Embargoes: Complete ban on trade (imports and exports) in one or more products with a particular country.

4. Local content requirements: Laws stipulating that a specified amount of a good or service be supplied by producers in the domestic market.

5. Administrative delays: Regulatory control or bureaucratic rules designed to impair the rapid flow of imports into a country.

6. Currency controls: Restrictions on the convertibility of a currency into other currencies

•

IX. Organizations in international trade

1. The International Monetary Fund (IMF)- set up in 1974 to ensure that the world’s currencies were kept at reasonably stable rates against each other.

2. The United nations Conference on Trade and Development (UNCTAD) - set up in the mid-1960s.

3. The General Agreement on tariffs and trade (GATT) – set up after World War II

4. World Trade Organization (WTO)

—

Unit 2: Banking

—

Types of Bank

—

Central Bank

—

A central bank, reserve bank, or monetary authority is the entity responsible for the monetary policy of a country or of a group of member states. It is a bank that can lend money to other banks in times of need.

—

 Its primary responsibility is to maintain the stability of the national currency and money supply, but more active duties include controlling subsidized-loan interest rates, and acting as a lender of last resort to the banking sector during times of financial crisis.

—Functions of a central bank

—

implementing monetary policy

—

controlling the nation's entire money supply

—

the Government's banker and the bankers' bank ("lender of last resort")

—managing the country's foreign exchange and gold reserves and the Government's stock register

—

regulating and supervising the banking industry

—

setting the official interest rate – used to manage both inflation and the country's exchange rate – and ensuring that this rate takes effect via a variety of policy mechanisms

—

Naming of central banks

—Many countries use the "Bank of Country" form (e.g., Bank of England, Bank of Canada, Bank of Russia).

—

 Some are styled "national" banks, such as the National Bank of Ukraine;

—

 Central banks may incorporate the word "Central" (e.g. European Central Bank, Central Bank of Ireland).

—

The word "Reserve" is also often included, such as the Reserve Bank of Australia, Reserve Bank of India, Reserve Bank of New Zealand, the South African Reserve Bank, and U.S Federal Reserve System.

—Commercial Bank

—

A commercial bank is a type of financial intermediary and a type of bank.

—

Commercial banking is also known as business banking.

—

It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits

—

Commercial bank is the term used for a normal bank to distinguish it from an investment bank.

—

It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds.

—

The role of commercial banks

—

processing of payments by TT, EFTPOS, internet banking

—

issuing bank drafts and bank cheques

—accepting money on term deposit lending money by overdraft, installment loan, or other means

—

providing documentary and standby letter of credit, guarantees, performance bonds, securities underwriting commitments and other forms of off balance sheet exposures

—

safekeeping of documents and other items in safe deposit boxes

—

currency exchange, sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar financial products as a “financial supermarket”

—Investment Bank

—

An Investment Bank is a financial institution that deals with raising capital, trading in securities and managing corporate mergers and acquisitions.

—

 Investment banks profit from companies and governments by raising money through issuing and selling securities in the capital markets (both equity, bond) and insuring bonds (selling credit default swaps), as well as providing advice on transactions such as mergers and acquisitions.

—

A majority of investment banks offer strategic advisory services for mergers, acquisitions or other financial services for clients, such as the trading of derivatives, fixed income, foreign exchange, commodity, and equity securities.

—

Merchant bank

—In banking, a merchant bank is a financial institution primarily engaged in offering financial services and advice to corporations and wealthy individuals on how to use their money.

—

The term can also be used to describe the private equity activities of banking.

—

Universal Bank

—

A universal bank participates in many kinds of banking activities and is both a Commercial bank and an Investment bank.

—

 Historically there was a distinction drawn between pure investment banks and commercial banks.

—

 In the US, the regulatory barrier to the combination of investment banks and commercial banks has largely been removed, and a number of universal banks have emerged in both jurisdictions.

—

Building society to chuc xay dung nha tra gop

—

A building society is a financial institution, owned by its members, that offers banking and other financial services, especially mortgage lending.

—

Supranational bank sieu quoc gia

—

A supranational entity is formed by two or more central governments to promote economic development for the member countries. Supranational Institutions finance their activities by issuing bond debt and are usually considered part of the sub-sovereign debt market. Some well-known examples of supranational institutions are the World Bank, European Bank for Reconstruction and Development; European Investment Bank; Asian Development Bank, Inter-American Development Bank.

—

Finance house cong ty tai chinh

—

The Finance House provides you with the ability to source Mortgages, Insurance and much more.

—

This facility can help you find the right deal for you and in many cases you can apply online for the product of your choice.

—

Personal Banking

—

Transaction account- Current account

—

A transactional account (NA: checking account or chequing account, UK : current account or cheque account) is a deposit account held at a bank or other financial institution, for the purpose of securely and quickly providing frequent access to funds on demand, through a variety of different channels. Because money is available on demand these accounts are also referred to as demand accounts or demand deposit accounts.

—Features

—

cash money (coins and banknotes)

—

cheque and money order

—

giro (funds transfer, direct deposit) chuyen tien truc tiep qua ngan hang

—direct debit (pre-authorized debit) giay uy nhiem chi, ghi no truc tiep

—

standing order (automatic funds transfer) lenh tra tien dinh ky

—

ATM card or debit card

—

SWIFT: Society of Worldwide Interbank Financial Telecommunication - International account to account transfer.

—Deposit account or time or notice account

—

A money deposit at a banking institution that cannot be withdrawn for a preset fixed 'term' or period of time. When the term is over it can be withdrawn or it can be rolled over for another term. Generally speaking, the longer the term the better the yield on the money.

—Personal account

—

A personal account is an account for use by an individual for their own needs. It is a relative term to differentiate the said accounts from those accounts for corporate or business use.

—

The term "personal account" may be used generically for financial accounts at banks and for service accounts such as accounts with the phone company, or even for e-mail accounts.

—

Standing order

—

A standing order is an instruction a bank account holder gives to their bank to pay a set amount at regular intervals to another account. The instruction is sometimes known as a banker's order. They are typically used to pay rent, mortgage or other fixed regular payments. Because the amounts paid are fixed, a standing order is not usually suitable for paying variable bills such as credit card, or gas and electricity bills.

—

Standing orders are available in the banking systems of several countries, including Germany, the United Kingdom, Barbados, the Republic of Ireland, Netherlands, Russia and presumably many others. In the United States, and other countries where cheques are more popular than bank transfers, a similar service is available, in which the bank automatically mails a cheque to the specified payee.

—

Cheque

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A cheque or check is a negotiable instrument instructing a financial institution to pay a specific amount of a specific currency from a specified demand account held in the maker/depositor's name with that institution. Both the maker and payee may be natural persons or legal entities.

—Cheques generally contain

- place of issue

- cheque number

- date of issue

- payee

- amount of currency

- signature of the drawer

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routing / account number

-fractional routing number

- Counterfoil cuong’sec

- Payee

- Drawee (Drawer’s bank)

- Drawer

- Account number

- Sort cord

- Date

- crossing su. Gach ngang 1 ngan phieu

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Canadian cheque

—British cheque

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Types of cheques

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An order check – A crossed cheque

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A bearer check – An open cheque

—A counter check

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Credit card

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A credit card is part of a system of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services. The issuer of the card grants a line of credit to the consumer (or the user) from which the user can borrow money for payment to a merchant or as a cash advance to the user.

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Debit card

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A debit card (also known as a bank card or check card) is a plastic card which provides an alternative payment method to cash when making purchases. Functionally, it can be called an electronic check, as the funds are withdrawn directly from either the bank account (often referred to as a check card), or from the remaining balance on the card. In some cases, the cards are designed exclusively for use on the Internet, and so there is no physical card.

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ATM card

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An ATM card (also known as a bank card, client card, key card or cash card) is an ISO/IEC 7810 card issued by a bank, credit union or building society.It can be used:at an ATM for deposits, withdrawals, account information, and other types of transactions, often through interbank networks

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Some ATM cards can also be used:at a branch, as identification for in-person transactionsat merchants, for EFTPOS (point of sale) purchases

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Smart card

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A smart card is in any pocket-sized card with embedded integrated circuits which can process data.

—Microprocessor cards contain volatile memory and microprocessor components.

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Using smartcards also is a form of strong security authentication for single sign-on within large companies and organizations.

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Financial Statements

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Financial Statements

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Provide an overview of a business' financial condition in both short and long term.

lFinancial Statements

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Profit and Loss Account

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Balance sheet

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Source and Application of Funds Statement

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Profit and Loss Account

lShows revenue and expenditure

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Gives figures for:

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Total sales or turnover

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Costs and overheads

lOverheads

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Refer to an ongoing expense of operating a business, but do not directly generate profits.

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Include accounting fees, advertising, depreciation, insurance, interest, legal fees, rent, repairs, supplies, taxes, telephone bills, travel and utilities costs.

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Profit and Loss Account

    Total sales / Turnover / Revenue

(Promotion)

     Net sales

(Sales costs / Cost of goods sold)

     Gross profit

(Total expenses: SG&A expenses, etc)

     Net profit before tax

(Tax)

     Net profit after tax

            Dividends

            Retained profit (to reinvest or reserve)

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Balance Sheet

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Shows the financial situation of the company on a particular date (generally the last day of its financial/fiscal year)

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Lists:

   1. Company’s assets

,

   2.

Liabilities, and

   3. Shareholders’ funds.

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Balance Sheet

1. Company’s assets:

everything of value that is owned by a person or company. Include:

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Cash investments + Property

(buildings, machines, etc.)

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Debtors

: money owed by customers (account receivable)

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Assets

lAssets

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Current assets

include money in bank, cash at vault, investments, money owed by customers, inventory.

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Long-term assets: fixed assets

(buildings, equipment, machines), financial assets, investment property, intangible assets .

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Assets

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Intangible assets

are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place.

lExamples are goodwill danh tieng’, copyrights, trademarks, patents and computer programs.

lAssets

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Goodwill

reflects the ability of the entity to make a higher profit than would be derived from selling the tangible assets.

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Balance Sheet

2. Liabilities

= creditors (account payable), consist of the money that a company will have to pay to someone else, such as taxes, debts, interest, mortgage payment, suppliers.

lBalance Sheet

3. Shareholders’ funds:

lShare capital

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Share premium

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Company’s reserves (year’s retained profits)

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Book-keeping

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Is the recording of the value of asset, liabilities, income, and expenses in the daybooks nhat. ki’, journals bien ban/so? goc’, and ledgers so? cai’, in which debit and credit entries are chronologically posted to record changes in value.

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Book-keeping

lDaybook

is a descriptive and diary-like record of day-to-day financial transactions.

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Journal

is a formal and chronological record of financial transactions before their values are accounted in general ledger as debits and credits.

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Ledger

is a record of accounts, each recorded individually (on a separate page) with its balance.

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Book-keeping

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Debit

and credit: respectively represent a reduction of liability in asset, and the other representing a balancing increase in liability or reduction of asset.

lDebit

: A debit is recorded on the left hand side of a T account

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Credit

: A credit balance is recorded on the right hand side of a 'T' account

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Book-keeping

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Single-entry bookkeeping system

also single-entry accounting system is a one sided accounting entry to maintain financial information.

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Double-entry bookkeeping

means each txn is recorded in two accounts: one is debited and the other is credited, so that the total debits of the transaction equal to the total credits.

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Double-entry bookkeeping

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Assets = Liabilities + Owners’/Shareholders’ Equity

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Assets – Liabilities = Shareholders’ Equity

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Shareholders’ Equity = Net Assets

lCompany’s market capitalization

is

   Total share value = Shares No. * Market price

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Market Capitalization

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Giá trị vốn hoá thị trường là thước đo qui mô của một công ty, là tổng giá trị thị trường của một công ty, được xác định bằng số tiền bỏ ra để mua lại toàn bộ công ty này trong điều kiện hiện tại.

lGiá trị vốn hoá thị trường tương đương với giá thị trường của cổ phiếu nhân với số cổ phiếu phổ thông đang lưu hành.

lSource & Application of Funds Statement

Different names:

lThe sources and uses of funds statement

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The funds flow statement

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The cash flow statement

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The movements of funds statement

lThe statement of changes in financial position

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Source & Application of Funds Statement

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Shows the flow of cash IN and OUT of the business between balance sheet dates.

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Includes:

ØSources of Funds, and

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Application of Funds

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Source & Application of Funds Statement

Sources of funds

include:

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Trading revenues,

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Depreciation provisions,

lBorrowing,

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The sale of assets, and

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The issuing of shares.

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Source & Application of Funds Statement

Applications of funds

include:

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The purchase of fixed or financial assets,

lThe payment of dividends,

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The repayment of loans, and

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Trading losses (in a bad year).

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Consolidated Accounts

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If a company has a majority interest in other companies, the balance sheets and profit and loss accounts of the parent company and the subsidiaries are normally combined in consolidated accounts.(Bao’ cao’ ket’ toan’ tong? Hop./Tai' khoan? Hop. Nhat’)

lFinancial terms

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Profit and Loss Account

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Balance sheet

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Cash flow statement

lSG&A, Income, Interest expenses

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Overheads

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Utility costs

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Tangible vs Intangible assets

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Financial terms

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Current assets

lInventory

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Cash in vault

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Long-term assets

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Fixed assets

lFinancial assets

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Debtors - Account receivable

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Financial terms

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Investment property

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Goodwill

lLiabilities

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Creditors – Account payable

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Mortgage payment

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Shareholders’ funds / Net assets / Owner Equity / Shareholders’ Equity

lFinancial terms

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Share capital

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Share premium

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Reserve / retained profit

lBook-keeping

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Daybooks / Journals / Ledgers

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Single-entry / Double-entry bookkeeping

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Company’s market capitalization

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Financial terms

lSources of fund

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Trading revenues

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Depreciation provisions

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Borrowing

lThe sales of assets

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The issuing of shares

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Applications of fund

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Financial terms

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The purchase of fixed or financial assets,

lThe payment of dividends,

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The repayment of loans, and

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Trading losses (in a bad year).

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Consolidated accounts

lMajor interest

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Parent vs Child company