A guide to the terminology used within the industries we work with.

1. FMCG

Fast Moving Consumer Goods refers to any product which is regularly bought by consumers for their personal consumption or use. It usually refers to food, drink, personal care and household products.

2. CATEGORY MANAGEMENT

The term Category Management was first used in the early 1990’s. It encapsulates the key elements of:

• Meeting consumer and shopper needs
• Maximising financial returns
• Retailers and Suppliers working together to achieve the above

The Institute of Grocery Distribution’s (IGD) definition incorporates these elements:

 "Category management is the strategic management of product groups through trade partnerships, which aims to maximise sales and profit by satisfying consumer needs."

Products are grouped to reflect consumers’ needs based on; how they are consumed or used, or the way that they are purchased.

IGD defines a category as:

 “A category is a group of products or services that reflect consumer usage or purchase behaviour”

3. BOGOF

Buy One Get One Free is a term used in Retail to describe the promotional mechanic of offering a product for sale with the benefit of receiving another product free. These promotions are attractive to consumers however for manufacturers and retailers they can generate little or no profit. The key commercial benefit is to drive consumption and therefore market share Other promotions include Buy One Get Second Half price and Three for Two offers.

4. ACCOUNT MANAGEMENT

Larger Customers who regularly buy from Suppliers can be referred to as “Accounts”. These Customers need special attention and communication to ensure that they continue to perform well and buy the company’s products. Account Managers are responsible for the relationship management and ensuring jointly agreed plans that help deliver profitable growth.

5. BRAND MANAGEMENT

Brand Management is the function within an organisation responsible for defining the strategy for a brand or group of brands. Brand Managers work closely with other functions including Research and Development, Finance and Sales to ensure the profitable growth of their brand portfolio. Their responsibilities can include New Product Development, Advertising and Promotions, Pricing and Packaging.

6. F.O.B.

Free On Board is an International Term of Sale that means the seller fulfills his or her obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

This often relates to goods imported from the Far East.

7. PRIVATE (OWN) LABEL

In retailing an own label product is one that is labeled by the retailer as its ‘own brand’ even the retailer has taken no more than a supervisory role in the production of the item.
Companies may choose to own brand or own label items they are buying and selling in order to build the value of their own brand name or so that they can appear to cover a wider product range than they actually do.
Some branded manufacturers choose to make private label products however others decide to remain as purely branded suppliers.

8. OVERRIDER

An overrider is a discount offered to a customer by a supplier. The discount is based on the volume of product sold within a specific time period. It is usually linked to growth of the suppliers sales however may include other variables including specifying a minimum range or certain promotions. The overrider discount is usually not deducted from invoice. It is a separate payment.

9. CONSUMER DATA

This is a valuable tool to assist in the effective development of sales and profit for Manufacturers and suppliers. Consumer data can be collected in a variety of ways and can be both quantative and qualitative. Data can be collected at point of purchase via EPOS (Electronic Point of Sale – the till!) and retailers loyalty cards. There are organisations which supply data which has been tailored to be specific to a company or market sector.

10. ECR = EFFECTIVE CONSUMER RESPONSE

Efficient Consumer Response or ECR is a business concept aimed at better satisfying consumer needs, through businesses and trading partners working together.

ECR principles support the belief that business success comes from delighting the consumer through meeting or exceeding their expectations. This can only be done through working together to remove inefficiencies and costs that add little value to the consumer. This principle applies to the grocery industry and many, if not all, other industry sectors.

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