Pir Mehr Ali Shah

Arid Agriculture University, Rawalpindi

Office of the controller of Examinations
Final Exam / Spring 2020 (Paper Duration 48 hours)
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Course No.: …………………MGT-351…..………………….Course Title: INTRODUCTION TO MARKETING

Total Marks: ……….……30…………………………Date of Exam: ………........6/8/2020.......……………………………..
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Degree: …BSCS……………………………………………. Semester: ……………6TH……..………… Section: ………B………
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Registration No.: ………………17-Arid-566………….……… Name: …………Mirza Shahzaib……………..

Answer the following questions in the specified area (add more lines/insert images if needed).

Q.No.1. Give the detailed explanation of pricing strategies.

(05)
Answer:

Pricing Strategy:
Activities geared toward finding a product's pinnacle-rated rate, generally consisting of average
advertising goals, client call for, product attributes, competition' pricing, and market and monetary
trends.

Penetration Pricing or Pricing to Gain Market Share:

A few businesses adopt those techniques in an effort to enter the marketplace and to advantage
market percent. Some agencies both provide some offerings freed from rate or they preserve a low
charge for his or her products for a confined period this is for a few months. This technique is utilized by
the groups high-quality for you to set up their consumer base in a specific market. For instance France
telecom gave away loose phone connections to customers so that you can seize or gather most customers
in a given market. Similarly the Sky TV gave away their satellite television for computer dishes absolutely
free in case you want to set up a market for them. This gives the corporations a begin and a patron base.

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In the same way there are few groups that keep their product value low as their introductory provide that
is a manner of introducing themselves within the market and growing a patron base. Similarly whilst the
corporations want to sell a advanced product or service they do beautify the fees of the goods and
services for that specific time.

Price Skimming:
Price skimming sees a agency charge a higher charge because it has a tremendous competitive
benefit. However, the advantage has a bent no longer to be sustainable. The excessive fee attracts new
competition into the marketplace, and the rate necessarily falls because of improved deliver.
Manufacturers of digital watches used a skimming approach in the Seventies. Once extraordinary
producers had been tempted into the marketplace and the watches have been produced at a decrease
unit fee, one-of-a-kind marketing and advertising and marketing strategies and pricing processes are
carried out. New merchandise have been developed and the marketplace for watches received a
reputation for innovation.
Use of Psychological Pricing Strategies
Psychological pricing Strategies is an technique of collecting the purchaser’s emotional reply
instead of his rational respond. For example a enterprise will rate its product at Rs ninety nine in place of
Rs one hundred. The charge of the product is within Rs 100 this makes the consumer enjoy that the
product is not very luxurious. For maximum customers rate is an indicating element for purchasing or now
not purchasing for a product. They do now not have a look at the whole thing else that motivates the
product. Even if the market is unknown to the customer he'll even though use price as a purchase detail.
For instance if an ice cream weighted one hundred gms for Rs one hundred and a lesser splendid ice
cream weighted hundred gms is available at Rs 150, the customer will buy the two hundred gms ice cream
for Rs a hundred and fifty due to the truth he sees income in buying the ice cream at lower charge
Consumers aren't conscious rate is also a trademark of outstanding.

Competitive pricing
Competitive pricing is the method process of selecting strategic fee to first-class take benefit of a product
based marketplace relative to opposition. This approach method is used that agencies which might be
promoting similar merchandise considering the fact that offerings are range from enterprise to
commercial enterprise, even as the attribute of the goods continue to be identical.

Premium pricing
It is the pricing approach when a commercial enterprise sets its costs better than its competitors. For new
commercial enterprise agency when there may be need of luxury service or product, premium approach
often work high-quality. You assume extra from premium price phase while your product is extra specific.
For top class pricing to be a success, you need to try to form your customers perception of cost. This can
be executed inside the way you marketplace and talk your product.

Value Pricing a Product:

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 Let me first be clean about what rate pricing method, fee pricing is lowering the price of a product
due to outdoor elements that may affect the earnings of the product for instance opposition and
recession; fee pricing does not imply that the employer has delivered some component or prolonged the
rate of a product. When the company is afraid of things which includes competition or recession affecting
their income and earnings the company considers price pricing. For example McDonalds the famous food
chain has commenced price meals for his or her consumer seeing that they have started out going thru
opposition with other fast meals chains. They provide a meal or a aggregate of a few products as a
decrease price in which the consumer feels emotionally content cloth fabric and maintains to buy their
products.

Loss Leader Pricing:

A loss chief or chief is a product bought at a low rate (i.E. At price or underneath value) to
stimulate distinctive profitable profits. This could help the groups to increase its market share as an
entire. Loss leader technique is typically utilized by retailers that allows you to lead the customers into
shopping for merchandise with better marked-up prices to supply an growth in income instead of buying
the leader product this is sold at a lower fee. When a "featured brand" is priced to be bought at a lower
price, retailers will be predisposed not to sell huge quantities of the loss chief merchandise and
additionally they will be inclined to buy much less portions from the provider as properly to prevent loss
for the business enterprise.[6] Supermarkets and eating locations are an notable instance of retail
corporations that observe the method of loss chief.

Contribution pricing:
Contribution pricing can be very just like marginal fee pricing. The direct value of manufacturing
for each product is calculated and price is then set at a better degree. The difference most of the direct
charges in step with unit and the fee is called the contribution. Contribution pricing is in which the price
charged is based mostly on the variable expenses of producing. A charge is ready that is extra than the
variable fees, so that a contribution is made towards constant prices. For instance, if the variable prices
are $four in line with unit and the groups sells the best for $6, then each unit bought will make a
'contribution' to If standard regular prices are $1,000, then the company will need to make 500 devices to
break-even.

Predatory pricing:
Predatory pricing involves charging very low prices, the intention being to cast off competition
just so the provider can price significantly higher costs later. The predator is willing to sell at a loss – under
rate – for a period, inside the desire that its opponents both go bust or decide stop promoting that
product. When competing agencies have left the market, the predator pushes fees back up. Predatory
pricing, even as a achievement, can assist the predator set up or re-installation a monopoly. Dumping –
exporting items at a decrease price than at home or decrease than the price of producing – is a form of

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predatory pricing. It is a way used to address new agencies that input a marketplace. If a monopoly is
enjoying mega-earnings, it's miles certain to attract new gamers into the scene.
Q.No.2. what is promotion explain its types objectives, channels, and budgeting in detail.
(05)
Answer:

Promotion:
Promotion is a term used frequently in advertising and marketing and is one of
the factors of advertising mix. It refers to elevating patron awareness of a product or brand, generating
sales and growing brand loyalty. It involves an entire set of sports that talk about the product, brand or
carrier to the user. The simple idea behind promoting is to make humans aware, entice and induce to buy
the product, in choice over different similar product available within the marketplace.
The contemporary age is the age of excessive competition. Therefore, manufacturers must think of recent
and surprising approaches of verbal exchange approximately their product to the customer. Demand
advent is an imperative need of commercial enterprise. Sales do now not take area robotically without
promotion or marketing communication despite the fact that a product is excellent.
promotion includes the introduction and growth of demand. After product development, it's miles
introduced in the market and its call for is created thru promotional activities. Promotion is similar to the
spark plug within the advertising mix of a company.
Promotion is a term used regularly in marketing and is one of the elements of marketing mix. It refers to
raising customer recognition of a product or emblem, producing sales and growing logo loyalty. It involve
an entire set of activities that communicate approximately the product, logo or provider to the consumer.

Types of Promotion:
Advertising: Presentation and promoting of thoughts, goods, or offerings with the aid of
using the usage of an recognized sponsor. Examples: Print advertisements, radio, television,
billboard, direct mail, brochures and catalogs, symptoms, in-keep presentations, posters, motion snap
shots, Web pages, banner advertisements, and emails.

Personal selling: A process of helping and persuading one or more potentialities to buy an good or
service or to act on any idea thru the use of an oral presentation. Examples: Sales presentations, sales
conferences, sales training and incentive programs for intermediary salespeople, samples, and
telemarketing. Can be face-to-face or via cellphone.

Sales merchandising: Media and non-media advertising and marketing communication are hired for
a pre-decided, restrained time to increase patron demand, stimulate market demand or enhance product
availability. Examples: Coupons, sweepstakes, contests, product samples, rebates, tie-ins, self-liquidating
rates, change indicates, change-ins, and exhibitions.

Public relations: Paid intimate stimulation of deliver for a product, provider, or enterprise unit
through planting good sized information about it or a favorable presentation of it within the media.

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Examples: Newspaper and mag articles/reviews, TVs and radio presentations, charitable contributions,
speeches, difficulty advertising and marketing, and seminars.

Direct Marketing is a channel-agnostic shape of advertising that lets in corporations and nonprofits
to speak straight to the customer, with marketing techniques which includes cellular messaging,
electronic mail, interactive consumer web sites, on-line show commercials, fliers, catalog distribution,
promotional letters, and outside advertising.
Corporate photo may be taken into consideration as a 6th element of promoting blend. The Image of an
agency is a critical factor in marketing. If the recognition of a agency is terrible, customers are less willing
to buy a product from this organization as they could were, if the company had a very good image.
Sponsorship is every now and then brought as an 7th issue.

New Media is likewise every so often taken into consideration an detail of the promotion mix.

The following are the primary objectives of promotion:

1. To create product and brand awareness: Several sales advertising techniques are
fantastically powerful in exposing customers to merchandise and types for the primary time and
might serve as key promotional additives within the early levels of latest product and brand
creation. This focus is the premise for all different future promotional activities. Promotional
activities inspire the customers to try new products and emblem and the sellers additionally to
push the new merchandise and types.

2. To create interest: Sales promotions are very effective in developing interest in a product. In
fact, creating hobby is frequently taken into consideration the most vital use of sales advertising.
In the retail industry an appealing income promoting can considerably create customer interest.

3. To offer records: Promotional activities provide big statistics about the product to the clients.
This goes a long manner in converting interest into real sales.

4. To stimulate demand: Effective promotional sports can stimulate call for for the product by
using convincing the customers to buy the goods.

5. To reinforce the Brand: Promotion can be used to enhance or make stronger the brand
inside the minds of the customers. This will ensure repeat sales of the product ultimately.

6. To Attract to new customers: Sales promotion measures additionally play an vital

function in attracting new customers for an employer. Usually, new customers are those men and
women which might be dependable to other brands. Samples, gifts, prizes, and so forth. Are used
to encourage customers to try a new brand or shift their patronage to new dealers.

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 7. To induce current clients to buy extra: Promotion sports can boom the purchases
made via the prevailing clients by way of making them consume extra amount or consume on
extra events.

8. To help the company to remain competitive: Companies undertake income

promotion sports if you want to continue to be competitive in the marketplace. Therefore, inside
the cutting-edge aggressive international no firm can escape sales advertising activities.

9. To boom sales in off-seasons: Sales of the products obviously reduce in the course of the
low season. Therefore promotional activities may be implemented at some stage in the off-season
to keep or even increase the income. Techniques which includes off-season discounts, low season
offers can obtain this.

10. To upload to the inventory of the sellers: Dealers like wholesalers and outlets
normally address a selection of products. Their selling hobby will become easier when the
manufacturer supplements their efforts by sales promotion measures. When a product or service
is properly supported by means of sales promoting, sellers are routinely precipitated to have
more of such gadgets.

11. To Keep Existing Customers: A income promotion may be geared closer to retaining
existing customers, particularly if a new competitor is probable to enter the marketplace.

12. To clear inventory: Promotional techniques can be efficiently used to clean unsold stock by
means of giving powerful gives.

CHANNELS
1. Pay-Per-Click Marketing
As far as advertising and marketing channels move, pay-in step with-click advertising and marketing is still
an unbeatable juggernaut, mainly with the diverse alternatives now available to brands. There is a getting
to know curve for every platform, so if you could come up with the money for to lease an company to
address your campaigns for you, we glaringly advocate that. There are dominating forces inside the PPC
world in recent times: Google Ads and Facebook/Instagram Ads. Google search commercials will assist
you hook up with customers who're attempting to find products or services like yours.
Meanwhile, Google’s show advertisements and Facebook’s paid social advertisements will allow you to
create call for and introduce your services to clients who might not be searching or maybe realize you
exist.

2. Social Media
Social media is a big player within the advertising global proper now. Customers are actively looking for
brands they prefer or are inquisitive about and increasing numbers of users are taking to social media to
investigate or make buying decisions.

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Social media additionally gives valuable community-building possibilities that you absolutely won’t
discover anywhere else. Whether you’re just sharing behind-the-scenes content in your personal page or
creating a collection involving your commercial enterprise, you should be leveraging social media for all
it’s well worth.

3. Email Marketing
Email advertising is the satisfactory approach of direct response advertising and marketing there may be.
Users have opted into hearing from you, so they’re more willing to open the ones messages to learn
about the contemporary merchandise, sales and the way to advantage from them.

4. Your Website
Some organizations don’t think about their internet site as a marketing channel, however in reality, it
could be the most critical one. This is where users will come when they’re inquisitive about learning more
about your business, and if they are able to discover answers to their questions fast, they won’t stick
around lengthy sufficient to find out. Your website online need to offer an amazing first impression and it
must without a doubt represent your business, emblem, products and services within the way you need.

5. Content Marketing and search engine marketing

Content marketing is kind of like a savings account. As time goes on, you get compounding hobby, making
it even extra precious. Your evergreen posts can provide SEO benefits for a very long term to come as
humans maintain to look them out, and all your content material can offer valuable courting constructing
and lead generation skills.
Content advertising demonstrates authority and knowledge, all whilst assisting you attain customers at
different stages of the funnel and hitting as many keywords as you could. It’s been one of our excellent
advertising and marketing channels at Disruptive Advertising in latest years.

6. Word of Mouth Marketing

Word of mouth advertising has usually been one of the simplest advertising and marketing channels, and
so one can preserve on an on-going basis. You’ll brush it off if a salesclerk tells you which you want that
watch, however when your friend points out how much they love wearing it each day because of all the
clever functions, you’ll take greater word. There are two primary strategies to inspire word of mouth
advertising and marketing. Referral packages and motivating online reviews for different platforms on
line, such as Google, LinkedIn, and Yelp.

Budget in Detail
A promotional budget is a detailed amount of cash set apart to promote the products or beliefs of a
commercial enterprise or corporation. Promotional budgets are created to anticipate the essential fees
associated with growing a commercial enterprise or keeping a emblem name. The price range is often set
in line with a percent of sales or earnings a good way to maintain an predicted increase rate.

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The advertising and marketing and advertising and marketing of a enterprise tough time to expect, i.E.,
why a percent technique is probably used. A promotional budget may be accelerated in anticipation of
new product traces are set to be released inside the near destiny. High promotional budgets can reduce
profits at some stage in the length such assets are expended. Companies can also permit for such higher
fees primarily based on an assumption that income or recognition will boom among customers.

How Promotional Budgets are Spent?

Promotional budgets normally include cash placed towards advertising throughout mediums consisting of
radio, television, Internet and print. A employer’s promotional budget can include fees for e mail
campaigns, social media outreach and out of doors signage. The promotional finances may additionally go
closer to hiring outside experts and specialists, who broaden the campaigns and location ads in
appropriate media and locations. This can consist of contracting marketing intelligence corporations to
interpret information that indicates how bucks spent on advertising and marketing translate into new or
habitual enterprise for the agency.

Types of Promotion Budget:

1. Affordable Method:
Many corporations rent the affordable method for determining the promotion finances. The
merchandising budget is about in a way which the organization can come up with the money for. This
method is a subjective evaluation, because it will pay little interest to the lengthy-term promotional
desires of a carrier. This technique does not consider the role of merchandising in sales extent.
Employment of low-cost technique very often effects in an uncertain annual budget, making the long-
variety making plans difficult.

2. Percentage of Sales Method:

Under this method, advertising expenditure is decided as a percentage of income.
The advantages of percentage of income method are:
First, expenditure on marketing is closely related to the sales. So, the corporation can without difficulty
find the money for to spend a precise percentage of sale on promoting.
Second, this approach helps an analysis of the connection among promotion value and promoting price
per unit.
Third, this technique guarantees balance whilst competition also are spending the equal percentage of
income on merchandising.

3. Competitive-Parity Method:
Under this technique, advertising expenditure of the company is equal to the quantity spent through
competition. This technique follows the coverage of the competition in respect of advertising price range.
It is based on the idea that competitor’s expenditure represents the prudence of the enterprise.

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Since the promoting finances of one company is in parity with the competitor, promoting war is avoided.
However, this method has certain limitations. There is not any assurance that competition’ merchandising
finances represents collective knowledge of the enterprise. Companies range in recognition, resources,
targets and opportunities. So, the promotion budget appropriate to at least one company may not be
appropriate to the alternative.

4. Objective and Task Method:

Under this method, marketers determine merchandising budget with the aid of defining specific goals,
figuring out duties to be finished to accomplish the goals and estimating the value of appearing those
duties. This approach is rational as it sets the promoting price range at a price that's required to realize
the goal of the company.

Q.No.3. what is publicity and advertisement? Discuss about its scope, planning, development, and its
implementation also clarify the difference between them.
(05)
Answer:
Introduction: The phrases marketing and publicity are used interchangeably by lots of us. But
there is a considerable difference between the 2. The critical difference among the 2 is that; former is a
paid merchandising of products accomplished with the aim of increasing income volume. However, the
latter is an unpaid promotion through a 3rd party aimed at growing a buzz or revealing a public hobby
tale. However, both advertising and marketing and exposure are used as a promotional device by using
agencies. Each of them has a specific purpose and manner of advertising the emblem and its
merchandise. When marketing develops a emblem name, publicity may additionally create a bad impact
on sales of a product.

What is Advertising?
Advertising is a paid advertising method followed in in search of the attention of potential clients in the
direction of a product with the aid of drafting a creative message and circulating it a number of the mass
target market thru distinct media sources.

Characteristics:
One manner communication: Advertising may be termed as a one-way conversation technique. Here, the
employer introduces the potential clients to its product through numerous media resources, and the
consumer’s comments or reaction can not be taken.
Paid Activity: Advertising activities proper from the introduction of an advertisement, i.E. The message to
the shopping for of a media slot for making the advert live, the entirety calls for finance.
Promotional Tool: It is purposefully carried out as a method of advertising mix with the purpose of
generating income and increasing the customer base for a product.

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Involves Creativity: Since it's miles a one-way verbal exchange, it must be fantastically influential.
Therefore to go away an impact at the target audience, the message, in addition to its presentation,
should be very creative and innovative.
Impersonal in Nature: Advertising is normally impersonal, i.E. It's miles carried out with the goal of
focused on a massive target audience thru the standard media like television, newspaper, radio, and so
forth.

What is Publicity?
Publicity is the manner of unpaid advertising via the third party usually media which capabilities the
whole information approximately the product or the emblem within the shape of news or buzz.

Characteristics:
Belongs to Public Relations: Publicity is a part of public family members on the grounds that its efforts
are directed closer to establishing and keeping sturdy enterprise relations.
Non-Paid Activity: It is a free promotional pastime finished by means of a 3rd birthday party to unfold
information approximately the product.
Media Oriented: Publicity is pushed and initiated via the clicking or the media to create news about the
product.
Controlled by using Third Party: The message to be added through the clicking release or information or
other media is controlled by means of the 1/3 celebration, i.E. The publisher or the media house.
Involves Low Cost: Publicity might also include the minimum value incurred on arrangements of publicity
activities.

Publicity
Scope
The scope of exposure is described inside the marketplace as The predominant purpose why the phrase
exposure become accepted batter as advertisement as, it's miles the paintings of advertising and
marketing controller got here inside the trendy category of public members of the family. Publicity is the
time period that conveys the broader implications of the responsibilities that advertising or publicity is
intended to fulfill.

Planning
Following elements are don't forget whilst making plans your exposure approach
•Firstly in reality outline your goals, what you want
•Identify your target audience, As there businesses you in particular need to attain than add into list.
•Select the best approach to attain each target audience.
•Be innovative, diversify you publicity.
•Include digital median and social media for your plan.

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•Determine the resources which might be needed to fulfill your dreams, and don’t neglect to plan to your
budget.
•Your exposure outreach does now not ending at the event. Send out images in your web sites and social
media to inspire individuals this time and for the following 12 months.
•Keep copies of your price range and press releases for next 12 months help and planning.
•Partner with associated organizations and leaders in other disciplines to enhance your promotional
reach.

Development and implementation

Development and implementation of exposure entails
•For growing and enforcing any business strategy for publicity your first need to become aware of your
audience. Their demographics and so forth.
•Selecting media for improvement and enforcing, like newspaper and magazines, radio, window show,
festivals and exhibition.
•Write a content material for publicity
•See the fulfillment and change your growing subject matter if there is an difficulty and if clients no longer
fulfill.

Advertisement
Scope
The scope of the advertisement is increasing everyday.
Scope of advertising by using deliverables
Once the budget for product is determined, than the advertising and marketing plan can be projected
greater. A unique scope of works and capabilities may be outlined which are required with the aid of
deliverables. Agencies are now create a proposed aid plan.
Scope of marketing by means of allocating deliverables
For green work, allocating the form of deliverables, which encompass TV, cell, press, magazines etc, which
are based totally at the previous requirements can be greater insightful after previous plan.
Scope of advertising by way of approach
Once the deliverables are allocated, the groups are outline the strategic requirements by way of logo and
broaden a scope of work based totally on preceding requirements for similar strategic deliverables.

Planning
Advertising plan may contain following steps
• Start with you purpose, that what do you want? Are you seeking to appeal to your clients closer
to your organization? What type of customers you need and in what time period?
• Then develop your budget, built advertising and marketing plan this is in shape to your price
range.

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• Define your target market, What are your target audience. When you're targeted on growing
income, it's miles beneficial to realize who is most probably to buy your product.
• Determine what products or services you may feature.
• Complete your SWOT evaluation, method company strengths, weaknesses, possibilities and
threats. What is your enterprise center? What do you try this come up with advantage in future.
• Build your advertising and marketing plan, The most important element to reply 3 things. What,
when and where. What form of commercial are you going to execute? When are you going to execute?
And Where are you going to execute?
• Consider different low fee strategies
• Launch your marketing, Keep the whole lot constant, regardless of the medium or channel.
Consistency could be very essential at the same time as launching commercial.
• Analyze outcomes

Development and implementation

Development and implementation of commercial includes some degrees that are as follows

Identify Target audience

First pick out your audience. Small companies create products or services to satisfy the needs of their
customers. But no one among goods appeals to mass audience. Advertising supervisor ought to target
clients with certain traits. Study the demographic research to determine your target audience.
Demographic take a look at includes age, schooling, earnings.

Selecting advertising media

Select advertising and marketing media which can be appropriate for your goal customers. Media
encompass newspaper, magazine, yellow pages, radio, net, tv advertising and marketing. Many social
media web site are also to be had including facebook, twitter. The right choice of media whilst
improvement of marketing will assist you reach customers who're most possibly to buy your service or
product.

Create your content

Create content material on your advertising and marketing. Content relates to distinct words, dialogue
and art work contained in commercials. Design content also are needed to suit unique format of the
selected medium.

Test Advertisement strength

Test your AD, approach test effectiveness of your advertising at some point of the various levels. Continue
observe of demographics of recent clients to make sure which you are concentrated on the proper clients.
Test media resources to realize approximately which supply give the income. Conduct cellphone calls to
check customer remember for your enterprise slogan.

Advertisement Publicity

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 Advertising is solely a paid form of verbal exchangePublicity is an nearly loose form of communique,
used by an organization. however now and again cash is likewise worried.

Advertising is a communication that is corporation Publicity is a verbal exchange which is a

driven. public pushed.

Advertising is a protracted-term strategy used by the

Publicity is a brief-time period method for reaching
enterprise to increase the brand popularity of the the very short or on the spot desires.
agency.

Advertisement given approximately the product The exposure given can also reflect the individual or
or services may boom income or lowers the organization inside the effective or terrible feel now
income. and again.

Mostly enterprise corporations use advertising and

Organizations as well as film manufacturers, cinema
marketing for speaking approximately the products
stars involve in publicity to attract the human beings
or offerings for growing their emblem focus. to buy their product or watch their show, and many
others.
Every enterprise business enterprise uses advertising
Not each business enterprise use publicity as their
techniques and set apart some money for advertising
communication method and do not placed apart any
fees. cash for publicity.
The effects or advantages acquired from the
The effects or benefits obtained from publicity
commercial marketing campaign can be calculated
cannot be without difficulty calculated.
and measured effortlessly.

Q.No.4. what is distribution? Discuss about the channel selection criteria, also discuss its importance,
function and recent trends in retailing and wholesaling.
(05)
Answer:

Distribution Channel:
Manufactures create a distribution path, a distribution chain or a distribution channel to get the
product out of the manufacturing unit, onto the physical location, positioned the price tag on it and on
the shelf, geared up for the patron attain for it. The distribution channels do now not really have an effect
at the price they have an impact on other advertising and marketing choices. A distribution selection
ought to give the product a completely unique function within the market.
Types of Distribution Channels:
Channels of distribution can be divided into the direct channel and the oblique. Indirect channels
can in addition be divided into one-level, -stage, and three-level channels based completely on the wide
variety of intermediaries between manufacturers and clients.

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• Direct Channel or Zero-degree Channel (Manufacturer to Customer)
Direct promoting is one of the oldest varieties of promoting products. It doesn’t incorporate the
inclusion of an intermediary and the producer gets in direct touch with the patron at the aspect of sale.
Some examples of direct channels are peddling, logo retail stores, taking orders at the organization’s
internet site, and so forth. Direct channels are usually used by manufacturers selling perishable gadgets,
high-priced items, and whose audience is geographically concentrated. For example, bakers, jewelers, and
so forth.
• Indirect Channels (Selling Through Intermediaries)
When a producer includes a intermediary/intermediary to promote its product to the give up
patron, it's miles stated to be using an indirect channel. Indirect channels may be labeled into 3 types:

1.One-degree Channel (Manufacturer to Retailer to Customer):

Retailers purchase the product from the producer and then sell it to the clients. One-degree
channel of distribution works amazing for producers dealing in shopping items like clothes, shoes,
fixtures, toys, and plenty of others.

2. Two-Level Channel (Manufacturer to Wholesaler to Retailer to Customer):

Wholesalers purchase the general public from the manufacturers, breaks it down into small
packages and sells them to stores who ultimately promote it to the prevent customers. Goods which can
be long lasting, standardized and incredibly less expensive and whose goal market isn’t restricted to a
confined region use -degree channel of distribution.

3. Three-Level Channel (Manufacturer to Agent to Wholesaler to

Retailer to Customer):
Three degree channel of distribution involves an agent besides the wholesaler and shop who
assists in promoting goods. These dealers come on hand when items need to move fast into the market
quick after the order is located. They are given the responsibility to deal with the product distribution of a
particular location or district in cross returned of a sure percent charge. The sellers may be classified into
splendid stockiest and wearing and forwarding sellers. Both the ones retailers keep the inventory on
behalf of the company. Super stockiest purchase the stock from producers and promote them to
wholesalers and stores of their area. Whereas, sporting and forwarding stores art work on a commission
basis and offer their warehouses and load information for order processing and ultimate mile deliveries.

Dual Distribution:
When a manufacturer uses a couple of marketing and marketing channel simultaneously to reach
the end user, he's stated to be using the dual distribution technique. They might also open their personal
showrooms to sell the product immediately even as at the same time use net marketplaces and other
shops to attract extra clients.
A perfect example of merchandise bought via twin distribution is smartphones.

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Factors Determining the Choice of Distribution Channels:
Selection of the suitable advertising channel is tough. It is amongst the ones few strategic choices
which both make or ruin your company.
Even though direct selling receives rid of the middleman charges and gives greater control in the arms of
the manufacturer, it adds as a lot because the internal workload and will increase the fulfilment fees.
Hence the ones 4 factors have to be considered earlier than determining whether to choose the direct or
oblique distribution channel.

What to Consider Before Choosing a Distribution Channel

Before you pick out a distribution channel to your merchandise, there are a spread of factors to do not
forget.
• Type of product. If your product is perishable or is risky, you'll want it to reach quick and in managed
situations. You may additionally moreover want to use an immediate distribution technique.
• Market. Are you promoting merchandise to customers or one of a kind corporations? A=πr^2 they more
likely to buy from brick and mortar retailers, web web sites like Amazon, or dealers on social media? Can
you ship straight away, or do you want to paintings with stores? Knowing who your ideal clients are will
help you come to be privy to the most efficient manner to get products to them.
• Middlemen. Depending to your wishes and the demands to your time, a intermediary can help
distribute merchandise speedy and efficiently. Whether or now not a intermediary makes experience will
depend on your budget, marketplace, and cutting-edge commercial enterprise relationships.

Effective channels:
E-commerce is the maximum green distribution channel to be had for a business organization. It
decreases dramatically the want to use multiple garage locations, multiple distributers and marketers to
connect you to shops to sell your product line.

How to Choose a Channel of Distribution

Once you have got a feel of the form of distribution channel on the way to paintings exceptional in your
agency and clients, you want to select a specific opportunity. Depending in your business and in which
your customers are positioned, you can need multiple. To pick the proper channels, you could want to:
1. Consider your competitors. What strategies are your competition the use of? Why? Does it offer a
qualitative advantage over extraordinary channels? If there's a distribution channel that your competitors
have ignored, you may benefit a bonus thru the use of it. For example, if your competition are particularly
dispensing products thru large-container stores, taking benefit of direct earnings thru the net can give you
a unique mindset.
2. Examine fees and blessings. After deciding on a manner of distribution, developing the manual systems
that go with it is time-ingesting and pricey. Once your organization is orientated around a particular
distribution channel, it's tough to reverse your preference. Carefully weigh the expenses and benefits
associated with every preference earlier than committing sources to it.

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3. Rank your options. After examining the one-of-a-kind techniques to be had to you, rank them through
order of preference in keeping with what's going to net you the very excellent income at the prevent of
the 12 months, minus associated costs. Choose the selection that permits you to gain the maximum
customers while ultimate within your price variety.
4. Have a plan for increase. You also can discover that pursuing one distribution channel doesn’t ward off
you from including more channels as you got greater capital, or that as your commercial agency expands
you want more strategies of connecting clients with merchandise. Keep up along with your market and
competition so you can preserve to make knowledgeable picks about distribution as your market grows.

Importance of Distribution Channels:

When it comes to the significance of marketing channels, the percentage of their fees within the very last
selling fee ought to be emphasized. The significance of distribution channels for
manufacturers/manufacturers lies within the fact that traders want to embody their products into their
keep’s assortment. Therefore, manufacturers/manufacturers take a look at sure varieties of buying and
selling organizations, i.E. Buying and promoting agency gadgets, and use them within the development
and innovation of their channels.
On the other hand, for buyers, particularly shops, the overall overall performance of the buying and
selling device, i.E. Its business corporation unit types, is important. A keep(keep) can then control the
distribution channel, i.E. The entire deliver chains. It is vital to take into account that the development of
vertical and hybrid advertising and advertising structures can correctly perform inside the marketplace, so
it's miles vital to obtain top sufficient integration of manufacturers/manufacturers and buyers in positive
systems, i.E. In price chains.
The significance of distribution channels for financial gadget can mainly be seen in the system
improvement and channel integration. Therefore, vertical advertising and marketing systems inside the
USA, as an instance, cowl 70 to 80% of patron gadgets marketplace.

Functions of Distribution Channels:

The number one function of distribution channel is to collect the goods from unique producer and
make it to be had to the patron. Apart from this, the channel members moreover perform some of
different capabilities like searching for, wearing stock, selling, transporting, financing, and lots of others.
These functions permit merchandise and facts glide from producer to consumer in a timely and effi cient
way.
The most important capabilities done thru the distribution channels can be divided into following
categories:
1. Transactional Functions:
These capabilities relate to the numerous transactions done for shifting the products from one
channel cease to other. It consists of competencies like shopping for, selling and threat bearing. These
features are finished with the aid of manner of channel individuals. The items are offered by means of the

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manufacturer or producer to numerous intermediaries who in turn sell it to the closing consumer.
Movement of products additionally include alternate within the name of goods from one to some other.
2. Logistical Functions:
These encompass features like assembling, storage, grading and transportation for physical
movement of the products from one area to each other. It can be very necessary that the goods are well
assorted and saved at the proper vicinity. Channel members want to make certain that stored gadgets are
transported at proper time, so that it is made available to the purchasers.
3. Facilitating Functions:
These skills facilitate the overall performance of diverse features by the channel participants.
With these features, sports via the channel individuals can be done effortlessly. It consists of financing,
credit facilities, after-sale offerings, protection, and so on. Purchase of maximum of the goods these days
are discovered through various services like mortgage facility, credit score facilities, loose servicing, and
so on.

2020 Wholesale Distribution Trends

Marketing is a dynamic discipline and is stimulated with the aid of the internal and outside
factors. Environment is changing all at once and so the tendencies in advertising skills.
2020 Wholesale Distribution Trends:

First, the direct-to-patron (D2C) trend is taking off a logo-new level of competition because it
gains traction in the retail and customer products industries. Look no similarly than Nike; beneath its new
D2C technique, the retail large may want to trim down its range of distribution partners from 30,000 to
attention on 40.

Second, monetary signs for wholesale distribution aren’t as bullish as they had been as soon as.
According to the National Association of Wholesale Distributors, the modern 12-month increase fee is
7.5%, however the quarterly increase rate is a smaller four.7%. This change indicates that the industry is
at the decrease back facet of the industrial corporation cycle.
1. Retail and customer products groups are more and more embracing the direct-to-consumer (D2C)
model, which makes them compete right now with the conventional wholesale distribution version.
Recently, Nike as part of its new D2C strategy, introduced it'll reduce the quantity of distribution
companions from 30,000 to interest on simply forty.
2. Exploring e-change as a strategic lever for improving sales and customer support.
3. Adding new capabilities through focused acquisitions or divesting misaligned areas of the economic
business enterprise.
4. Leveraging statistics technological understanding and analytics to better resource enterprise-large
preference making.

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5. Identifying new techniques for recruiting, sourcing, and training to quality familiarize their people with
the advances in robotics, artificial intelligence, and automation.
6. Building strategic agility and versatility into their supply chains.
7. Expanding worldwide trade to offset the impact of China and steadily develop alternate global
resources.
8. Focusing on green warehouse control and environment integration.

Q.No.5. Discuss these concepts in detail:

1. Break even analysis.
2. Importance of pricing
3. Cost based pricing
4. Target pricing
(10)
Answer:

Break even evaluation:

It tells us what number of product are had to promote to cowl cost. It tells
us at what level your company, product, services may be worth while. But any other manner, it tells us
about wide variety of product or services we want to sell to as a minimum cowl cost.
To perform this analysis we want 3 portions of information.
1. Fixed price
2. Average value to make each product
3. Average sale charge per product
Importance:
It measures loss and earnings of production and sales at unique levels
Forecast the consequences of adjustments in sale costs
Coordinate the connection between constant and variable costs.
Forecast the effect of fee and performance modifications on profitability.
Formula:
Break Even Point (in units) = Fixed Costs/Contribution Per Unit
Examples:
For instance, say Happy Ltd has constant charges of Rs. 10,000 vs Sad Ltd has constant fees of Rs.
1,00,000 selling comparable products, Happy Ltd might be in a position to interrupt regardless of the sale
of lesser merchandise in comparison to Sad Ltd.
Its benefits are:
 Catch missing fees
 Set revenue goals

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  Make smarter selections
 Fund your enterprise
 Better pricing
 Cover constant charges

Importance of pricing:
What is price?
A commercial enterprise sets the fee at which it sells its product or offerings.
“it manner value or quantity at which something is valued.
It tells approximately destiny of product, acceptability of product to the purchaser and profitability of
product .It is device of competition.
Importance:
1. Most flexible advertising blend variable
2. Setting the right rate
3. Trigger of first impact
4. Important a part of sales promotion
5. Influences call for stage
6. Determine the profitability
7. Means of comparison
Pricing is crucial because of the following factors
1.Flexible element of advertising blend :
It is most adjustable issue of advertising mix. It can be modified
rapidly compared to other factors. Price is very flexible and can be trade in keeping with the scenario.
Therefore, it is very essential component of advertising and marketing mix.
2.Right level pricing:
It is extraordinarily extensive to restoration price at proper level. Low charges may
also entice customers. In order to maintain balance among profitability and extent of income, it's miles
crucial to fix the proper price.
3. Price creates first impression:
Price is first element that patron notices first. If a product is priced too
excessive, then the purchaser may also get bored in understanding extra. But if he thinks that a product is
affordable, then he would attempt to get greater records approximately it. Therefore price is a critical
factor that influences a customer’s selection.
4.Vital elements of sales merchandising:
Being the maximum flexible aspect of advertising mix, rate is the
most important a part of the income promoting. In order to inspire greater sales, the advertising and
marketing supervisor can also reduce the price. In case of products whose call for is fee sensitive, even a

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small discount in charge will cause higher income extent. However charges need to not be fluctuated too
frequently to stimulate income.

Cost based pricing

Cost primarily based pricing is a process of placing the charge because of including a earnings margin to
the price of the product or service. This pricing approach guarantees that certain profit is obtained above
overall fee.
Examples
When figuring out charges for products and services, companies generally follow fee primarily based
pricing. This way to fix expenses by using calculating overall price after which adding a pre-defined
percent as profit margin. For instance, if the manufacturing price of a computer is US$1,000 and the rate
is defined like price plus 10%, whilst the producer sells a laptop to the distributor charges US$1100. This is
US$1,000 plus a $100 of earnings.

Disadvantages of Cost-Based Pricing

 Cost-based pricing does not remember demand or competition.
 Notably, corporations want to be privy to the general costs to sell a product.
 If competition are generating the equal product for much less, however sell it for the same price,
the ones competitors will make extra earnings.
 So, to keep up, other businesses could need to hold expenses low or fee a better price.
 Usually, fee-primarily based pricing consequences in notably one-of-a-kind prices from the market
fee. This should mean that a agency is promoting a product with a rate that's manner too high or
too low.
 If a competitor is selling at a higher rate and consumers pay for that, meaning clients are inclined
to pay that quantity for a product. On the alternative hand, in case you're charging a whole lot
better than a competitor, you will possibly get fewer customers.
 Either manner, the company will lose profits.
 Since no business enterprise sells its product in a silo, it is nearly continually crucial to remember
what competitors are doing. This is a simple case of supply and call for.
 Additionally, this approach ought to bring about an inefficient method of manufacturing and
production. Any company that uses value-based totally pricing might not need to don't forget the
manufacturing procedure since the value is exceeded to the purchaser.
 And streamlining dealer and production charges is an important manner that a organization can
lessen prices and boom its earnings margins.

Target pricing

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In goal pricing, the promoting charge for a product is determined first. Based at the marketing
department the maximum aggressive rate that the clients would be willing to pay is fixed as a selling
charge.
Now, the desired income margin is deducted from the promoting price to reach at a cost within which the
production branch could have to produce the product or procurement department might have you got
the product.
Example
For example, ABC Ltd. Is in the business of manufacturing dresses or uniform for high college ladies. The
average fee at which the dresses promote in the marketplace is a thousand. So, ABC Ltd. Also fixes the
promoting price of 1500 for its up-scale variety of uniform.
Now, the preferred markup is 25% on selling fee. So the profit margin is 500 according to uniform. Hence,
the fee fee within which the producing branch could ought to manufacture each single dress can be one
thousand (1500-500). In order for that product line to be worthwhile, ABC Ltd. Has to ensure that its
general cost in line with unit doesn’t exceed 1000. And the decrease is capable of deliver down the value
in keeping with unit; higher may be its income per dress. Target pricing can triumph over the restrictions
of Cost-plus pricing.
Advantages of goal pricing
 It is a dynamic method of rate determination that takes under consideration and responds to
marketplace factors of demand and supply while figuring out the promoting price.
 It outcomes are in higher profitability for commercial enterprise by manner of decreasing fee
 It offers the possibilities to sell efficient and most excellent usage of assets inside the agency.
 It results in innovative and everlasting approaches of bringing down the price of the product and
ends in everlasting technological and monetary gains for the employer.
 It ends in the provision of price-brought products and services to the customers. Many-a-times,
the business enterprise passes on the benefits of value discount to the clients and therefore
they're capable of revel in better merchandise at lower costs.
 As a end result of a proactive technique to fixing the rate, the enterprise is better equipped to are
expecting and reply to marketplace changes. Coordination amongst its numerous departments
which includes production, advertising and marketing, design, and engineering permits it to shape
a cohesive strategy within the event of any foremost shift in traits.
Disadvantages of target pricing
 Target pricing is predicated on estimating the very last selling fee of the product efficaciously. Any
error in this front may additionally motive the entire advertising method to fail.
 Estimating too low a price and then therefore fixing very rigid constraints on cost may additionally
vicinity the load on the production branch.

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