MARKETING MANAGEMENT

UNIT 1

What is Marketing Management?:(Marketing is the process of exchange of ownership of goods and services
from seller to the buyer). Management is the process of getting things done in an organised and efficient
manner. Marketing Management identifies market opportunities and comes out with appropriate strategies for
exploring those opportunities profitably. Marketing Management performs all managerial functions in the field
of marketing.It has to implement marketing programme and evaluate continuously the effectiveness of
marketing-mix. It has to remove the deficiencies observed in the actual execution of marketing plans, policies,
and procedures. It looks after the marketing system of the enterprise.
INTRO:(Marketing management is the process of decision making, planning, and controlling the marketing
aspects o f a company in terms of the marketing concept, somewhere within the marketing system.) (The
marketing concept is simple in principle but often very difficult), (The concept is that a company can more
effectively serve its own objectives if it will integrate the various aspects of its marketing activities explicitly so
as to meet the preferences of its customers.)(This process of marketing management takes place “some-
where” within the marketing system. Having seen the marketing system portrayed, you know that
“somewhere” can be within any of the many, many companies—manufacturing, wholesaling and retailing—
that make it up. Marketing management is practiced in every one of them.)

DEF:According to Philip Kotler, “Marketing Management is the art and science of choosing target markets and
building profitable relationship with them. Marketing management is a process involving analysis, planning,
implementing and control and it covers goods, services, ideas and the goal is to produce satisfaction to the
parties involved”.

FEATURErs

1. Managerial Process:(Marketing management is a managerial process involving planning, organising,

decision making, forecasting, directing, coordinating and controlling.)

2. Consumer Centric:(All marketing activities are consumer centric. The consumers are the king. Marketing
activities are based on the premise of “make what the market wants”. )The principal (objective of marketing is
to create new customers and to retain current customer

3. Research Analysis:(The basis function of marketing is identification of consumer’s needs and wants .This
requires continuous and systematic collection of data, analysis and reporting of data relevant to marketing
activities. This helps the management to understand consumer’s needs, wants,)
4. Planning and Development:Marketing involves planning and development of goods and services.
Organizations make a continuous endeavour towards planning, development and innovation of product and
services so as to meet the changing demand, taste and preferences of the consumers.
5. Building Marketing Framework:.(Marketing structure depends upon the size of the enterprise, geographical
coverage of the operation, number of product lines, nature of product, size of customers.)
7. Promotional and Communication Process:
(The ultimate objective of a firm is to maximise sales volume and profit.) This can be achieved through
promotion and communication about the goods and services. enables (the firm to provide information about the
product to the customers.)
8. Controlling of Activities:. This process involves measuring the actual performance with the standard and
identifying the deviations and taking corrective actions.

BASIC MARKETING CONCEPTS

What Is Marketing?:Marketing refers to activities a company undertakes to promote the buying or
selling of a product or service. Marketing includes advertising, selling, and delivering products to
consumers or other businesses. Some marketing is done by affiliates on behalf of a
company.Professionals who work in a corporation's marketing and promotion departments seek to get
the attention of key potential audiences through advertising. Promotions are targeted to certain
audiences and may involve celebrity endorsements, catchy phrases or slogans, memorable
packaging or graphic designs and overall media exposure.
Mean :Marketing is the process of getting potential clients or customers interested in your products
and services marketing involves researching, promoting, selling, and distributing your products or
services.This centres is the study of market and consumer behaviours and it analyses the
commercial management of companies in order to attract, acquire and retain customers (hopefully
instilling brand loyalty) by satisfying their wants and needs.  

Def :Philip Kotler defined marketing as "Satisfying needs and wants through an exchange process".
[13]
 and a decade later defines it as “a social and managerial process by which individuals and groups
obtain what they want and need through creating, offering and exchanging products of value with
others.”[13]

5 Marketing Concepts are;(in below)

UNDERSTANDING CUSTOMERS

5 Techniques to Help You Truly Understand Your Customers

What Is a Customer?
A customer is an individual or business that purchases another company's
goods or services. Customers are important because they drive revenues;
without them, businesses have nothing to offer. Most public-facing businesses
compete with other companies to attract customers, either by aggressively
advertising their products or by lowering prices to expand their customer
bases.

Optimizing the customer experience  is a great way to get new customers. It’s also one of the best ways
of fostering customer loyalty.
According to Teradata, only 41%  of marketing executives are using customer engagement data to inform
their marketing strategy.
Despite this, marketers and other organizational leaders alike are neglecting the customer
before and after the sale. The biggest barrier to even beginning is usually the lack of a deep
understanding of the customer in the first place.
Having a comprehensive understanding of your customers is key to achieving core business goals.
Whether you’re trying to build (or optimize) the customer experience, create more engaging content
or increase sales . Knowing your customers better than they do is key.
In this article, I’m going to outline 5 techniques you can implement to understand your customers better.
We’ll look at both qualitative and quantitative data, as well as at the tools and mindsets you need to
equip to get started successfully.

MEAN

Understanding customers is the key to giving them good service. To give good customer care you must
deliver what you promise. But great customer care involves getting to know your customers so well that you
can anticipate their needs and exceed their expectations.

DEF

General: A party that receives or consumes products (goods or services) and has the ability to choose
between different products and suppliers. See also buyer.
 Quality control: Entity within a firm who establishes the requirement of a process (accounting, for
example) and receives the output of that process (a financial statement, for example) from one or more
internal or external suppliers.-

1. Apply Intelligent Customer Engagement

An optimized customer experience is valuable for revenue and retention. If you get it right, it can be a
source of customer insight.

Engaging with your customers in real-time has become more easily accessible thanks to new tools.
Messenger is becoming an ever more popular customer service channel, while tools like Drift allow you
to talk with your customers as they browse your website:

SurveyGizmo suggests these three key principles  to follow when designing a survey:
 Remove bias: Ask the customer for their opinion without projecting your own. Get their
uninfluenced, impartial opinion. You want genuine insights, even if they’re negative. An example of
this could be something as simple as “What do you think we could do better?”
 Be concrete: Use simple language that asks for feedback on a specific topic. For example,
“How have you improved marketing effectiveness using our software?” will help to determine the
value your customers are getting from you.
 Focus: Your surveys should address one area of the customer experience. The aim is to get
insights that you can then act upon.
Keep these things in mind as you personalize your customer survey with questions pertaining to your
brand and product.

2. Create More Robust Buyer Personas

Many marketers make the mistake of using generic demographics like age, profession, and location to
develop their buyer personas. These data points simply don’t provide enough information to create
messaging that resonates with your audience on an emotional level.

One way to dig deeper into customer preferences is to use the Acquisitions tab on Google Analytics to
see which social media outlets, industry blogs and professional forums your site traffic comes from.
Then, apply this information to your personas so you can find out where and when to reach them more
effectively.

3. Generate Data from Customer Analytics

From clicking on a link to reading through a web page, every customer action offers valuable insight
into customer behavior.

To determine how customers interact with your website, you can try a user behavior tracking tool. Tools
like Google Analytics and Inspectlet  are great tools for gathering insights such as time on page and
bounce rate. Inspectlet can even provide short videos of users on your page in real time.
The behavioral data you collect should lead you to conclusions about what your audience doesn’t
understand, what they do and don’t like, and how you can create a stronger website experience.

If there’s one page people spend more time on than others, analyze that page’s content to see what’s
retaining people’s attention. Most importantly, if there’s a page with a high bounce rate, try to see
what’s making people leave.
4. Anticipate, Predict, and Plan for the Future

Creating a plan for future customer engagement is just as important as creating a plan for the present.
This puts customer experiece teams in the right frame of mind to respond to customers during stressful
or challenging situations.

Predictive modeling software mines existing customer data to identify cyclical patterns and trends that
can inform decision making. Two great tools are RapidMiner  and Angoss’ customer analytics , both of
which create realistic future models.
To see how predictive modeling informs customer strategy, imagine you work for a SaaS company that
wants to adjust its product roadmap to anticipate customer needs.

5. Traverse Your Customer’s Path

The only way to understand the unique and dynamic customer buying journey is to put yourself in your
customer’s shoes.

This is made possible by an advanced technique called customer journey mapping  — a method where
companies create a detailed, graphical representation of the customer journey based on  critical touch
points  — interactions between a customer and your brand before, during, or after purchase.

Let’s use Uber as an example to define touchpoints and see how they apply to customer journey
mapping. Minor touch points include activities like downloading the app, or following the app on social
media.
Major touch points, on the other hand, include things like requesting a ride, or completing driver
training. Once touch points are defined, explore the circumstances affecting each touchpoint.
COMPANY ORIENTATION TOWARDS MARKETING

Company Orientation towards the marketplace

What Is a Company?
A company is a legal entity formed by a group of individuals to engage in and
operate a business—commercial or industrial—enterprise. A company may be
organized in various ways for tax and financial liability purposes depending on
the corporate law of its jurisdiction.

The line of business the company is in will generally determine which

business structure it chooses such as a partnership, proprietorship,
or corporation. These structures also denote the ownership structure of the
company.

As the market has changed, so has the way the company deals with the marketplace. The
company orientation towards marketplace deals with the concepts which a company may apply while targeting a
market. There are basically five different orientations which a company takes towards the marketplace.

Production Concept – In this concept the company mainly tries to increase production irrespective of
demands of the customer. The production concept is almost extinct now with companies paying more and more
attention to the customer. Read more about The Production concept.

The concept is mainly based on the principle that, “as the productivity levels increase, cost of production
decreases, and as a result, customer will be able to purchase a product at a cheaper rate, which in turn
accelerates the sales of the company.”
Selling concept – The selling concept believes that customers will not buy products unless persuaded to do so.
As we know, this is true even today in case of certain products such as insurance. Although the customer should
use it, they rarely do. Read more about The Selling concept.

Product Concept – The product concept says that customers will always buy products which are better in terms
of quality performance and features. The concept is especially applicable in terms of electronics and other
techno gadgets nowadays. Read more about The Product concept.

For a product to be successful under this concept, it should stand apart from the rest of the crowd. Let’s
take Apple and Google for example. The end products of these companies are not only of the best quality, but
are also very exclusive. Hence, companies willing to adapt ‘product concept’ marketing strategy should not only
keep themselves updated with the ever changing technical trends, but also the needs of their customers.

Marketing Concept – Just like selling is a necessity, similarly branding and marketing are a necessity in some
products. The marketing concept proposes that the success of a firm depends on the marketing efforts of the
company in delivering a value proposition. Read more about The Marketing Concept.

For a company to achieve its sales target, a great marketing strategy coupled with a proper branding are
absolutely important. Marketing concept thus indicates that for a company and its product to be successful, it
needs to approach the customers with a value proposition and to deliver the same without fail.

Societal Marketing Concept – The societal marketing concept leads to a company orientation which believes
in giving back to the society what it had received from the society. This concept believes that the company is
profiting because of society and hence it should also take measures to make sure the society also benefits from
the company. Read more about the Societal Marketing Concept.

If a company has benefited from the society, it should reciprocate the same by striving towards benefiting the
society. This is one of the fastest growing marketing concepts which is quite capable of creating an indelible
impression in the minds of customers, and along the way, help itself create an unparalleled brand image.

The company orientation towards the market place thus depends on the application of the above 5 concepts.
Some of these concepts are not applicable in todays market whereas others are applicable sector by sector

TRANSACTIONS VS RELATIONSHIP MARKETING

What is Relationship Marketing?

Relationship marketing is a strategy in which businesses work to build and establish long-term relationships
with their customers. Instead of focusing on selling one product or having one interaction, brands that engage in
as relationship marketing are focused on efforts to build bonds and loyalty between the business and its
audience. How? By implementing tactics such as buyer incentives (coupons and promotions), engaging in
conversations on social media, and referral programs.
Relationship marketing is a lengthier process than transactional marketing, requiring more time, energy and
resources than the short-term presence of transactional marketing, which relies on acquiring new customers
through completed transactions. What will you do to keep those new customers long-term, however? Ah, that's
where relationship marketing comes in.
So, you can see, how relationship marketing and transactional marketing might co-mingle: new customers
pulled in through transactional marketing must be nurtured through relationship marketing to keep them sticking
around. Likewise, customers nurtured through relationship marketing must be targeted in a transactional sense
to encourage them to make purchases and spend money.

What is Transactional Marketing?

Where relationship marketing focuses more on building connections and bonds, transactional marketing is more
geared toward making a sale. This includes what some people might consider aggressive sales tactics (think
''limited time offer'' and ''call now!'') in order to complete a sale.
Transactional marketing also focuses heavily on product features and value in order to create more transactions
to pad the bottom line. For example, if you've ever attended a timeshare presentation (or perhaps heard about
one), you know that sales agents use intense selling tactics in order to close the deal. These sales agents aren't
necessarily concerned with building lifelong relationships, but getting new timeshare owners to sign on the
dotted
DIFFERENCE BETWEEN BOTH
The writers of the book, “Internal Marketing Directions for Management”; Varey and Lewis explain the way in
which transactional marketing distinguish from relationship marketing:

Focus – The focal point of transactional marketing is driving customers towards individual sale, while
relationship marketing keeps an eye on retaining the customers.

Orientation – The business orientation strategy of transactional marketing concerns on product essential roots,
whereas marketing relationship business orientations focus on product advantages and organizational
resolutions.

Time Boundary – The time boundary of transactional marketing is short-lived when in fact relationship

marketing time boundary is far-reaching.

Customer Concentration -The customer concentration in transactional marketing is low-lying comparatively to

relationship marketing where they focus on building a bond with customers.

Information – The information of transactional marketing is essence of communication while relationship

marketing is product of communication.

Contact – The contact or the connection of the transactional marketing is very poor when fact in relationship
marketing is there is a magnificent connection with customers.

ANALYSING MARKETS AND CUSTOMERS

How to do a market analysis for a business plan

A key part of any business plan is the market analysis. This section needs to demonstrate both your
expertise in your particular market and the attractiveness of the market from a financial standpoint.

This article first look at what we mean exactly by market analysis before looking at how to make a good one for
your business plan.
What is a market analysis?
A market analysis is a quantitative and qualitative assessment of a market. It looks into the size of the market
both in volume and in value, the various customer segments and buying patterns, the competition, and the
economic environment in terms of barriers to entry and regulation.

How to do a market analysis?

The objectives of the market analysis section of a business plan are to show to investors that:

 you know your market

 the market is large enough to build a sustainable business

In order to do that I recommend the following plan:

1. Demographics and Segmentation

2. Target Market

3. Market Need

4. Competition

5. Barriers to Entry

6. Regulation

The first step of the analysis consists in assessing the size of the market.

Demographics and Segmentation

When assessing the size of the market, your approach will depend on the type of business you are selling to
investors. If your business plan is for a small shop or a restaurant then you need to take a local approach and try
to assess the market around your shop. If you are writing a business plan for a restaurant chain then you need to
assess the market a national level.

Depending on your market you might also want to slice it into different segments. This is especially relevant if
you or your competitors focus only on certain segments.

Volume & Value

There are two factors you need to look at when assessing the size of a market: the number of potential customers
and the value of the market. It is very important to look at both numbers separately, let's take an example to
understand why.

that you have the opportunity to open a shop either in Town A or in Town B:
Although Town B looks more competitive (10 competitors vs. 2 in Town A) and a smaller opportunity (market
size of £100m vs. £200 in Town A), with 1,000 potential customers it is actually a more accessible market than
Town A where you have only 2 potential customers.

Potential customer?

The definition of a potential customer will depend on your type of business. For example if you are opening a
small shop selling office furniture then your market will be all the companies within your delivery range. As in
the example above it is likely that most companies would have only one person in charge of purchasing
furniture hence you wouldn't take the size of these businesses in consideration when assessing the number of
potential customers. You would however factor it when assessing the value of the market.

Market value

Estimating the market value is often more difficult than assessing the number of potential customers. The first
thing to do is to see if the figure is publicly available as either published by a consultancy firm or by a state
body. It is very likely that you will find at least a number on a national level.

Competition

The aim of this section is to give a fair view of who you are competing against. You need to explain your
competitors' positioning and describe their strengths and weaknesses. You should write this part in parallel with
the Competitive Edge part of the Strategy section.

The idea here is to analyse your competitors angle to the market in order to find a weakness that your company
will be able to use in its own market positioning.

One way to carry the analysis is to benchmark your competitor against each of the key drivers of demand for
your market (price, quality, add-on services, etc.) and present the results in a table.

Regulation

If regulation is a barrier at entry in your sector then I would advise you to merge this section with the previous
one. Otherwise this section should be just a tick the box exercise where you explain the main regulations
applicable to your business and which steps you are going to take to remain compliant.

Now you know how to do a market analysis for a business plan! I hope you found this article useful. If so please
share it, and if not let us know what we need to improve.

CUSTOMER ANALYSIS
The purpose of undertaking customer analysis as part of a business plan is to examine the consumers
most likely to purchase your product or service in-depth. Brands can establish different groups of
customers and the needs of those customers. By understanding what motivates them to make a purchase,
brands can build their business around providing solutions to those needs.

Customer analysis should move through three different stages.

 You first need to identify who your current customers are. The more detailed understanding you have
of your customers the better. This one group of customers should then be split into sub-groups that
have similar traits and motivations. You can also identify target customers you are not yet reaching.
 Customer analysis must then show what the needs of these different customer groups are.
 You then need to work out what bridges these two, identifying how the company’s products meet the
needs of each customer group. How do you provide solutions to their pain points?
Using the Voice of the Customer to Turn Threats Into Opportunities
In the age of the consumer, bringing the voice of the customer into the heart of the business can improve
customer experience to differentiate your brand.
READ THE ARTICLE

Who are your customers?

You can learn more about your customers in a variety of ways, and a mix of research methods will give you the
most accurate results. It is best to gather as much information as possible, and to not fall into thinking details are
irrelevant. Details like age, gender, location, demographics and psychographics are all important, but so are their
interests, other brands they like, publications they read and so on.

Talking to them and running a survey will be the best way of hearing about them in their own words, although
that does come with biases. Reduce this by complementing that research with sales data, CRM data, and
speaking to customer-facing employees. Once you have identified these groups, social data can elaborate your
understanding by providing a more holistic view of the groups.

It’s also worth considering at this stage if the buyer and user are the same person. In a B2B setting, the buyer
might hold budget responsibility but not actually use the service/software/product. In a B2C setting, there are
several situations when a buyer might not be the user; a toy water pistol or a diamond ring are unlikely to be
used by the purchaser.

Segment these groups

You cannot undertake an accurate customer analysis without segmenting your audience into groups whose
members are homogenous while being distinct from other groups. Your segmentation criteria should be:

 Measurable: Your analysis should identify the size of a market segment so that you can decide to what
extent efforts should be focused on the segment
 Distinguishable: Observable differences that are clearly defined must exist in order to characterize
segments
 Substantial: The market needs to be large enough to justify segmenting, with each segment substantial
enough to make it worthwhile
 Financial: There will be additional costs when marketing to multiple, separate groups, so the predicted
income must exceed these costs
 Accessible: Your marketing messages should be accessible to each market segment. Different groups
will respond better to different forms of advertising

Develop customer profiles

Take your data, your segmentation criteria, some educated guesswork, and develop some buyer personas. It
helps to have personas so you can visualize a human rather than aiming for an abstract idea.

Elements to include in a buyer persona include:

 Background and responsibilities: including job title, career path, and their primary job
responsibilities
 Demographics: gender, age, income, family, and location
 Communication: which channels do they prefer? What is their demeanor? Do they have an assistant?
  Media and influencers: which publications do they follow, and which individuals are leading the
conversation in their world?
 Challenges vs proposition: The challenges they face in implementing their primary job goals and how
your product or service can help them overcome those issues
 Objections: common reasons why this persona wouldn’t choose your product
 Common language: what language should you use to appeal to their needs?
 Quotes: adding some qualitative data in the form of quotes can really help to bring the personas to life
and remind you there are real people behind these aggregated models

Discover their needs

The next step in customer analysis is to get a good idea of what the customer’s needs are. By understanding their
needs, several departments can gear their output towards answering these questions, rather than taking an “If
you build it, they will come” approach.

INTEGRATED MARKETING CONCEPT

Integrated Marketing is an approach to creating a unified and seamless experience for consumers to interact
with the brand/enterprise; it attempts to meld all aspects of marketing communication such as advertising,
sales promotion, public relations, direct marketing, and social media, through their respective mix

Defining integrated marketing

Traditionally, definitions of integrated marketing focus on integrated marketing communications (IMC), but we
believe these are no longer fit for purpose since they imply an old media mindset of campaigns with broadcast
and push communications that are one-way and not interactive. Digital media and the web have brought us the
opportunity to share via social media (including UGC, user-generated content) and create immersive
experiences on websites and in mobile apps. We can also personalize across ads, website, and email through
techniques like re-targeting and website personalization.

We also need to plan our communications around cross-device usage to reach what comScore rightly highlights
as the Multichannel majority and to consider we should look beyond burst campaigns to longer-term continuous
online visibility as people and businesses look for our products, services, and brands, which Gartner have
called Two-speed marketing.

Given this changed reality of marketing today we define Integrated marketing as:

"A strategic approach to integrating communications and interactive experiences targeting defined audiences
and individuals which coordinates all aspects of marketing of a brand including Paid media (offline
advertising, direct marketing and online display and programmatic); Earned media (Organic search fuelled by
content marketing, PR and online influencer outreach) and Owned media (including social media, on-site UX,
customer service and direct messaging through email and mobile) in order achieve consistent messaging
customised where possible by channel which presents a unified and seamless experience to consumers across
the customer lifecycle or path to purchase".

This builds on this definition of Integrated marketing from the DMA, which also emphasizes the use of
communications and experience together.

Integrated Marketing is an approach to creating a unified and seamless experience for consumers to interact
with the brand/enterprise; it attempts to meld all aspects of marketing communication such as advertising, sales
promotion, public relations, direct marketing, and social media, through their respective mix of tactics,
methods, channels, media, and activities, so that all work together as a unified force. It is a process designed to
ensure that all messaging and communications strategies are consistent across all channels and are centered on
the customer.
That's not to say integration stops at coordinating across individual digital channels. Many more traditional ad
mediums have retained their effectiveness, and also need to be integrated with digital campaigns. TV has proved
particularly resilient in this regard, as shown by the chart from thinkbox TV below and the persistence of offline
media as a high percentage of investment in IAB data on ad and media spend.

Why integrate marketing channels?

Different channels have different strengths and weaknesses, and different types of content suit different channels
better - Twiter is good for short, witty and pithy messages, whilst Pinterest is great for content related to design,
and aspirational content works best on Instagram. So why not play to each individual channel's strengths and
design marketing for that channel specifically, rather than attempting to integrate all channels?

The answer is customers don't care enough to pay attention to all your different messaging, and by not using one
clear communications strategy to amplify your brand, your message will simply be lost in the constant stream of
content that all consumers are subject to every day. For example, the brand storytelling report showed that 85%
of consumers couldn't name a memorable story told to them by a brand.

That means all of the thousands of brand's storytelling efforts were completely forgotten by over four out of five
people. You may think your marketing is the best thing in the world, but the reality is pretty much everyone is
going to forget it very quickly. To make an impact you have to coordinate messaging. Have you ever wondered
why McDonald's are constantly advertising? Everyone knows who McDonald's are. Everyone knows what
McDonald's offer and there is one on every street corner. So why do they advertise? Because there is power in
reminding consumers about your brand, even if they already know that it exists. And of course, they may want
to change the perception of its values and what it offers. This is why consistent messaging across channels is so
critical. Without it, your message will fail to make an impact and you will just be yelling into a gale.

Examples of successful integrated marketing.

IMC Tools

The eight major Integrated Marketing Communication tools are as follows:-

Advertising

Advertising refers to any paid form of non-personal promotion of products or services by an identified sponsor.

The various media used are print (newspapers and magazines), broadcast (radio and television), network

(satellite, wireless and telephone), electronic (web page, audio and videotape) and display (billboards, signs and

posters).

The primary advantage of advertising is that it reaches geographically dispersed consumers. Consumers

generally tend to believe that a heavily advertised brand must offer some ‘good value’ but at the same time,

advertising proves to be an expensive form of promotion.

Sales promotion

It is a variety of short-term incentives to encourage trial or purchase of a product or service. It may

include consumer promotions – focused towards the consumer – such as a distribution of free samples, coupons,

offers on purchase of higher quantity, discounts and premiums or trade promotions – focused on retailers – such

as display and merchandising allowances, volume discounts, pay for performance incentives and incentives to

salespeople.

Sales promotion helps to draw the attention of the consumers and offers an invitation to engage in a transaction

by giving various types of incentives.

Personal Selling

Face-To-Face interaction with one or more buyers for the purpose of making presentations, answering questions

and taking orders. This proves to be the most effective tool in the later stages of the buying process.

Public Relations

A variety of programs directed toward improving the relationship between the organisation and the public.

Advertising is a one-way communication whereas public relations is a two-way communication which can

monitor feedback and adjust its message for providing maximum benefit. A common tool used here is publicity

which capitalizes on the news value of the product or service so that the information can be disseminated to the

news media.

Direct Marketing

Direct Marketing involves the use of mail, telephone, fax, e-mail, or internet to communicate directly with or

solicit response or dialogue from specific customers or prospects. Shoppers have started relying on credit cards

and online purchasing more than ever which makes it essential for marketers to approach the consumers directly

thus helping them in the purchase process.

Companies have a database of contact details of consumers through which they send catalogues and other

marketing material making it easier for the consumer to purchase online. The relevance of direct marketing has

increased in recent years.

Events and Experiences

These are company sponsored activities and programs designed to create brand-related interactions with

customers. Sponsorships improve the visibility of the company. Companies provide customers with an
experience of using the product which ends up leading to a higher brand recall than competitors. These events

prove to be engaging with the audience.

Social Media Marketing

The concept of social media marketing basically refers to the process of promoting business or websites through

social media channels. Companies manage to get massive attention on such channels and can interact with

consumers as and when they are browsing the internet.

New and modern ways of communications are developing on these social media platforms and are proving to be

the future of promotions. They have the ability to be highly interactive and up to date with the customers.

Mobile Marketing

Mobile marketing involves communicating with the consumer via a mobile device, either to send a simple

marketing message, to introduce them to a new participation-based campaign or to allow them to visit a mobile

website.

Cheaper than traditional means for both the consumer and the marketer, mobile marketing really is a streamlined

version of online marketing the use of which is increasing as time progresses. Examples are advertisements that

we see on mobile applications..

DEFINING ND DELIVERING CUSTOMER VALUE

Customers perceive value differently during the sales process. Your new business efforts must provide
value just as your products and services do after sale. If a sales associate is attempting to engage their leads
without providing appropriate value, their communication will sound like a sales pitch and will be rejected.

It is essential that your sales engagement provides value in exchange for time, attention, and consideration. So
how can your team provide value at each step of the sales cycle? Here are five ways to unlock your team’s
ability to find ways to deliver.

DEF

Customer Value Definition

Customer value is the satisfaction a consumer feels after making a purchase for goods or services relative to

what she must give up to receive them. A consumer doesn't consider value just in terms of money spent, but can

also consider the time it takes to obtain a purchased product and interactions with customer service personnel.

Customer value has several tiers and is best thought of as a hierarchy, according to Destination Marketing's

website. This hierarchy determines the importance of services in the mind of the consumer in terms of what the

consumer expects and does not expect from the purchase experience.
1. Give an Outsider’s Perspective

Sometimes an impartial observer, or someone that is not invested in the outcome, can see things more clearly.
Your team should be looking for ways to use that outside perspective to give their leads some insight or help to
solve a problem they are facing. Sometimes that detachment will open a new way for your customer to look at
their business and teach them something of value in the process. Find ways to deliver unique industry research
before it becomes common knowledge. You will start to be perceived as experts who are delivering new
perspectives of value.

2. Tie Everything to Their Business Strategy

Understanding your customer’s business strategy might give your team the framework to find and present tools
and services to support them more effectively. When your associates consistently tie their engagement back to
the customer’s business strategy, they are sure to deliver relevant value.

3. Business Model Changes

Business models are constantly evolving, often faster than most people’s ability to stay informed. When your
team is up-to-the-minute with the latest in the industry, they can be the expert that introduces new ideas for
consideration to your customers. When your team stays on the cutting edge, they elevate their sales process to
the level of teacher and advisor.

4. Understanding Niches

When your team knows your market inside and out, they begin to develop a sense of specific segments and
niches. Minor changes in strategy and language will go miles in making them more relevant and focused. They
will sound like an ‘insider’, who understands the nuances of the business. Buyers will be more comfortable
sharing key insights with them, which leads to a better alignment of solution and value.

5. Audience Insights

Any time that you can teach your customers something new about their customers you are sure to be providing
them with value. Every sales and marketing department is trying to get inside the heads of their customers. If
your team can provide valuable insights about your customer’s audience and market, they will be positioned for
success.

When your team consistently provides value with every engagement, their performance will increase
dramatically. Customers do not want to hear from sales people, but they are always interested in important
updates about their industry. They are not usually excited to hear a sales presentation, but they may be open to a
webinar that will help them implement a crucial part of their business strategy.

Providing customer value is a job that never ends. The moment that any business tries skating by without
delivering value is the day they start to become obsolete. You are in business to make money, and will succeed
to the extent that you create and deliver value before and after the sale.

CUSTOMER SATISFACTION

WHAT IS CUSTOMER SATISFACTION?

Quality Glossary Definition: Customer satisfaction

Customer satisfaction is defined as a measurement that determines how happy customers are with a company’s
products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a
company determine how to best improve or changes its products and services.

An organization’s main focus must be to satisfy its customers. This applies to industrial firms, retail and
wholesale businesses, government bodies, service companies, nonprofit organizations, and every subgroup
within an organization.

Model of Customer Satisfaction

WHO ARE THE CUSTOMERS?

Customers include anyone the organization supplies with products or services. The table below illustrates some
supplier-customer relationships.
Note: that many organizations are both customers and suppliers.

WHAT DOES IT TAKE TO SATISFY THE CUSTOMER?

Organizations should not assume they know what the customer wants. Instead, it is important to understand
the voice of the customer, using tools such as customer surveys, focus groups, and polling. Using these tools,
organizations can gain detailed insights as to what their customers want and better tailor their services or
products to meet or exceed customer expectations.

Customer Satisfaction Process Improvement

VALUE CHAIN Porter's Value Chain(in xerox)

MARKETING ENVIRONMENT

The marketing activities of the business are affected by several internal and external factors. While some of the

factors are in the control of the business, most of these are not and the business has to adapt itself to avoid being
affected by changes in these factors. These external and internal factors group together to form a marketing

environment in which the business operates.

Table of Contents
What is Marketing Environment?

Marketing Environment is the combination of external and internal factors and forces which affect the

company’s ability to establish a relationship and serve its customers.

The marketing environment of a business consists of an internal and an external environment. The internal

environment is company-specific and includes owners, workers, machines, materials etc. The external

environment is further divided into two components: micro & macro. The micro or the task environment is also

specific to the business but external. It consists of factors engaged in producing, distributing, and promoting the

offering. The macro or the broad environment includes larger societal forces which affect society as a whole.

The broad environment is made up of six components: demographic, economic, physical, technological,

political-legal, and social-cultural environment.

“A company’s marketing environment consists of the actors and forces outside of marketing that affect

marketing management ability to build and maintain successful relationships with target customers”. – Philip

Kotler

Components of Marketing Environment

The marketing environment is made up of the internal and external environment of the business. While the

internal environment can be controlled, the business has very less or no control over the external environment.

Internal Environment

The internal environment of the business includes all the forces and factors inside the organisation which affect

its marketing operations. These components can be grouped under the Five Ms of the business, which are:

 Men

 Money

 Machinery

 Materials

 Markets

The internal environment is under the control of the marketer and can be changed with the changing external

environment. Nevertheless, the internal marketing environment is as important for the business as the external

marketing environment. This environment includes the sales department, marketing department, the

manufacturing unit, the human resource department, etc.

External Environment

The external environment constitutes factors and forces which are external to the business and on which the

marketer has little or no control. The external environment is of two types:

Micro Environment

The micro-component of the external environment is also known as the task environment. It comprises of

external forces and factors that are directly related to the business. These include suppliers, market

intermediaries, customers, partners, competitors and the public

 Suppliers include all the parties which provide resources needed by the organisation.

 Market intermediaries include parties involved in distributing the product or service of the

organisation.

 Partners are all the separate entities like advertising agencies, market research organisations, banking

and insurance companies, transportation companies, brokers, etc. which conduct business with the

organisation.

 Customers comprise of the target group of the organisation.

 Competitors are the players in the same market who targets similar customers as that of the

organisation.

 Public is made up of any other group that has an actual or potential interest or affects the company’s

ability to serve its customers.

Macro Environment

The macro component of the marketing environment is also known as the broad environment. It constitutes the

external factors and forces which affect the industry as a whole but don’t have a direct effect on the business.

The macro-environment can be divided into 6 parts.

Demographic Environment

The demographic environment is made up of the people who constitute the market. It is characterised as the

factual investigation and segregation of the population according to their size, density, location, age, gender,

race, and occupation.

Economic Environment

The economic environment constitutes factors which influence customers’ purchasing power and spending

patterns. These factors include the GDP, GNP, interest rates, inflation, income distribution, government funding

and subsidies, and other major economic variables.

Physical Environment

The physical environment includes the natural environment in which the business operates. This includes the

climatic conditions, environmental change, accessibility to water and raw materials, natural disasters, pollution

etc.

Technological Environment

The technological environment constitutes innovation, research and development in technology, technological

alternatives, innovation inducements also technological barriers to smooth operation. Technology is one of the

biggest sources of threats and opportunities for the organisation and it is very dynamic.

Political-Legal Environment

The political & Legal environment includes laws and government’s policies prevailing in the country. It also

includes other pressure groups and agencies which influence or limit the working of the industry and/or the

business in the society.

Social-Cultural Environment

The social-cultural aspect of the macro-environment is made up of the lifestyle, values, culture, prejudice and

beliefs of the people. This differs in different regions.

Importance of Marketing Environment

Every business, no matter how big or small, operates within the marketing environment. Its present and future

existence, profits, image, and positioning depend on its internal and external environment. The business

environment is one of the most dynamic aspects of the business. In order to operate and stay in the market for

long, one has to understand and analyze the marketing environment and its components properly.
Essential for planning

An understanding of the external and internal environment is essential for planning for the future. A marketer

needs to be fully aware of the current scenario, dynamism, and future predictions of the marketing environment

if he wants his plans to succeed.

Understanding Customers

Thorough knowledge of the marketing environment helps marketers acknowledge and predict what the customer

actually wants. In-depth analysis of the marketing environment reduces (and even removes) the noise between

the marketer and customers and helps the marketer to understand consumer behaviour better.
Tapping Trends

Breaking into new markets and capitalizing on new trends requires a lot of insight about the marketing

environment. The marketer needs to research about every aspect of the environment to create a foolproof plan.
Threats and Opportunities

Sound knowledge of the market environment often gives a first-mover advantage to the marketer as he makes

sure that his business is safe from future threats and taps the future opportunities.
Understanding the Competitors

Every niche has different players fighting for the same spot. A better understanding of the marketing

environment allows the marketer to understand more about the competitions and about what advantages do the

competitors have over his business and vice versa.

MARKETING ENIVRONMENT DECISIONS

The marketers should manage all the types of marketing decisions by taking into account the environmental
aspect as well. The marketing decisions should not only be right but they should also be taken at right time.
The marketing decisions are mainly divided into four categories. You may also say these categories the
different types of marketing decisions taken by the management at the making marketing plans for the
products.

Types of Marketing Decisions

There are four categories or areas, which always kept in mind, while making different sorts of marketing plans
for different products and services.

1. Product
2. Price
3. Place (Distribution)
4. Promotion

In the 60s, the term “marketing mix” became familiarize. There are certain activities that are included as the
ingredients of marketing mix like branding, distribution channel, product planning, pricing, advertising,
packaging, promotions, personal selling, display, physical handling, servicing and fact finding & analysis.

The Marketing Mix

The marketing manager should control the parameters of 4Ps of marketing keeping in view the external &
internal constraints of marketing environment. The main objective is to take decisions that focus 4P’s on target
market customers in order to develop perceived value & produce favorable response.

1. Product Decisions

Product is related to physical, tangible products as well as services. There are certain decisions that are related to
the product like

 Functionality
 Brand Name
 Quality
 Safety
 Warranty
 Packaging
 Styling
 Repairs & support
 Accessories & services

2. Price Decisions:
Following are some of important Marketing Decisions related to pricing.

 Pricing Strategy (penetration, skim etc)

 Suggested retail price
 Seasonal pricing
 Cash & early payment discounts
 Bundling
 Price discrimination
 Price flexibility
 Volume discounts & wholesale pricing

3. Place (Distribution) Decisions

The availability of product to the customers is referred to as distribution. Following are some of the examples of
distribution decisions.

 Market coverage (Exclusive, inclusive or selective distribution)

 Distribution channels
 Inventory management
 Specific channel members
 Order processing
 Warehousing
 Distribution centers
 Reverse logistics
 Transportation

4. Promotion Decisions:

Marketing decisions include promotion decisions which are important content of the marketing mix in which
different aspects of marketing communication occurs. The information about the product is communicated
with an objective to produce positive customer response. Following are some of the important promotion
decisions.

 Promotional strategy (pull, push etc)

 Sales promotion
 Advertising
 Public relations & publicity
 Personal selling & sales force
 Marketing communication budget

MARKETING RESEARCH AND INFORMATION

Marketing Information: Need of Information for Marketing Research

Marketing Information: Need of Information for Marketing Research!

Marketing information is an ongoing and repetitive process of collection and processing and presenting of

pertinent information. But marketing research is an intermittent or irregular activity on a project to project basis

and it is concerned with solving specific and typical marketing problems.

Of course, it is a major component of marketing information system. Marketing information system is defined

as “a set of procedures and methods for the regular and planned collection, analysis and presentation of

information in making marketing decision.

A marketing information system continuously gathers data, i.e., facts and figures from the internal and external

sources of information. This information is sorted out, classified analysed and stored for future use. In a

company operating under the marketing concept, we must have an organised set of procedures, information

handling routines, and reporting techniques designed specifically to meet the need for relevant information for

marketing decision.

Marketing Information System (MIS) is the answer to fulfill the need for co-ordinated systematic and

continuous information gathering and processing.

ADVERTISEMENTS:

(a) Types of Information Needed: Information pertaining to following components of MIS:

MIS performs six functions:

1. Assembling of marketing data.

2. Processing, i.e., editing, tabulating and summarising the data.

ADVERTISEMENTS:

3. Analysing the data, i.e., finding out percentage, ratios etc.

4. Storage and retrieval, i.e., filing, indexing and relocating the data.

5. Evaluation regarding accuracy and reliability of data.

6. Dissemination or distribution of relevant wanted information to decision makers.

(b) Marketing Information’s are broadly classified as under:

There are following three major components of marketing information:

1. Internal marketing information.

ADVERTISEMENTS:

2. Marketing Intelligence.

3. Marketing Research Projects.

4. Marketing Science Systems.

1. Internal Marketing Information:

It is secured through accounting system. Data on sales, inventories, costs, cash flows, accounts receivables and

payables etc. constitute the data generated from within the firm.

2. Marketing Intelligence:

External marketing information in the form of marketing intelligence system is another component of MIS. It

keeps marketing executives well informed about current marketing environments and changing conditions in the

market.

Census data, market news and reports, newspapers, trade papers, magazines, i.e., Business India, Advertising

and Marketing, trade shows, books company annual reports etc. Salesmen may act as eyes and ears to the

market place and as intelligent agents they can supply current information on buyer behaviour, dealer behaviour

and also on competitors.

Marketing intelligence acts as a mirror of marketing environment reflecting precisely how things are going on in

the market. MIS stands between the marketing environment and marketing decision makers. Marketing, data

flows from the environment to the MIS. Marketing data is processed by the system and converted into

marketing information flow which goes to the marketers for decision making.

Plans and programmes are based on this information flow. In business planning, marketers select, screen,

synthesis and combine internal and external information inputs in order to effectively manage customer

relations, meet competition and secure—harmonious interaction with its ever-changing environment.

3. Marketing Research (MR):

MR has wider meaning and scope than Market Research. MR is the systematic gathering, recording and

analysing of data about problems connected with the market place, i.e., problems relating to product, price,

distribution and promotion.

4. Marketing Science Systems:

Use Operations Research techniques for taking decision on Marketing-Mix and Profitability etc.

(c) Types of Marketing Information:

In respect of marketing research it is said that “its major and single contribution is in augmenting the

effectiveness of marketing decision”— Marketing research has become a very important tool for the success’ of

a business enterprise in respect of its ability to make correct and sound marketing decisions.
Marketing research is the basis of sound marketing decisions.

The advantages of marketing research (MR) are as follows:

(i) MR helps the management of a firm in planning its product line by providing accurate and up-to-date

information about the customers’ demands, their changing tastes, attitudes, preferences and buying habits etc.

(ii) MR helps the manufacturer to adjust his production according to the conditions of demand.

(iii) MR helps to establish correlative relationship between the product brand and consumers needs and

preferences.

(iv) It helps the manufacturer to secure economics in the distribution of his products.

(v) It helps the manufacturer and dealers to find out the best way of approaching the potential buyers.

(vi) It helps the manufacturer in improving the quality of its product.

(vii) It guides the manufacturer in advertising and sales promotional efforts.

(viii) It helps the management in determining the actual prices and price ranges.

(d) Explain the socio-economic factor effecting the marketing environment:

The social factors influencing the marketing environment are as follows:

(i) Family Small or large family, likes and dislikes and style of living affect the marketing environment.

(ii) The age, family income, occupation and Life style etc. affect the marketing environment.

(iii) The education levels, culture, religion tastes and preferences of individual members in the society also

affect the marketing environment.

(iv) Economic factors which influence the marketing environment are as follows:

a) Personal Income

b) Family Income
c) Income expectation

d) Disposable savings

e) Consumer credits available etc.

(v) The overall economic factors like GDP, per capita income and overall economic environment of a country

also influence the marketing environment.

(vi) Technological advancement and technological environment, religions, situations and ethical considerations

also may influence the marketing environment.

(e) “Pavlov’s”:

Experiment for salivating the dogs has considerable relevance for a marketing man”. According to the Stimulus-

Response (S-R Model) model, a buyer behaviours can be influenced by manipulating the drives, stimuli and

responses of the buyer.

The model rests on man’s ability, at learning, forgetting and discriminating. The stimulus-response learning

theory states that there develops a bond between behaviour producing stimulus and a behaviour response (SR

bond) on account of the conditioning of behaviour and formation of habits.

This concept was explained by Pavlov’s experiment on salivating dogs. Pavlov’s experiments brought out

associations by conditioning. The dog started salivating each time upon hearing the church bell even though no

food was served. The dog’s behaviour was conditioned.

It is related to behaviour-producing stimulus (bell ringing) and behaviour response (salivation). The S.R. bond

established causes a set pattern of behaviour learnt by the object-dog. In terms of consumer behaviour, an

advertisement would be stimulus whereas purchase would be a response. According to S-R theory, learning is

dependent on drive (i.e., Thirst), stimulus or Cue (advertisement) and Response (i.e., Purchase) and

Reinforcement (i.e., reduction in drive or stimulus).

(f) Suitable Market Segmentation Strategy for the manufacturers of

(a) Bi-cycles;

(b) Cosmetics;

(c) Wick-stoves.

Market Segmentation is the process of dividing a potential market into district sub-markets of consumers with

common needs and characteristics. Market segmentation is the starting step in applying the marketing strategy.

Once segmentation takes place, the marketer targets the identified customer groups with proper marketing mix

so as to position the product as perceived by the target segments.

Market segments are large identifiable groups like customers interested in:

(a) Bi-cycles:

Middle class or lower middle income group in towns and villages requiring mobility. Sports cycle and Racing

cycle categories are used by middle and upper middle class customers in towns and cities. Similarly, Bi-cycles

and Tri-cycles for children are preferred by middle class and upper middle class.

(b) Cosmetics:

Middle class and upper middle class families in towns, cities and some in rural areas are the target customer

groups. Varieties and price including utilities are the main drives for the target groups of customers.

(c) Wick-stoves:

Lower middle class families and families residing in slum localities in large towns and cities are the main target

groups of customers. Quality, price and distribution characteristics should form the preferential drives for the

target customer groups.

(d) Significance of Market Research and Consumer behaviour:

This is clearly evident from the declining demand trend for scooters and improving demand trend for Motor-

cycles.

MARKET REASEARCH
What is Market Research?

However, what is a market research?

First, it is a collection of activities with a final purpose to bring you an understanding of your customers’
behavior in a particular market where your business operates. Second, it is the processes that take information
from the market and after that extracts specific data related to current and future customer’s behavior in order to
enable you to prepare an effective marketing strategy.

Despite customers, market research as a process will also analyze your competitors in a specific market.
Another important thing that is covered by research is effectiveness analysis of small business marketing
campaigns.

Basic Questions You Need to Answer Through Market Research

So, when you approach to market research you will need to answer the following basic questions:

 Who are the target customers for your company?

 How often will those customers purchase specific products or services?
 What is the price of the specific product or services that your competitors offer on the market?
 How much are they willing to pay for that products and services to you?
 How much is a dimension of the market that is currently served by your competitors?
 What impressions are you making with your own marketing campaigns?

Thus, market research is the process of objective identification, collection, analysis, and distribution of
information. This information will assist you in the decision-making process related to problem identification
and finding solutions and opportunities in the market.  The task of market research is to provide you with
important, accurate, reliable, valid, and current information in real time.

The Benefits of the Market Research

There are many benefits for entrepreneurs and small businesses when it comes to the market research process.
Here are some of them:

 Excellent market research and quality decision making based on the facts received from marketing
research will ensure the sure survival of your company on the market.
 With quality market research, you can identify opportunities for your company and at the same time
will prevent threats that will come from the market.
 You will always know and constantly will learn about your customers, your competitors and your
marketing efforts.
 You can easily succeed in lowering risks about new products or services that you plan to introduce on a
specific market because these products and services will be arranged especially for the real market
demand.
 This process will give you all basic marketing benchmarks that you must complete. In such a way, you
can evaluate your marketing efforts and constantly improve the overall marketing strategy for your
company.
Market Research Process

The basic process of market research can be explained with six different stages::

 The first stage: identify the research purpose;

 The second stage: collect data from the market;
 Third stage: evaluate already collected data;
 Fourth stage: analyze already collected and evaluated data;
 The fifth stage: interpret already analyzed data;
 Sixth stage: disseminate the final product from market research to all decision-makers in your
company.

Sources of Information for Market Research

In these processes, the second stage is one of the most important and also the hardest stage to complete. The
quality of the research in large part will rely on the quality of the data collected from the market. Information
about the markets can be covered from different sources.

Here, I will mention some possible sources that you can use in order to collect required data from the market:

1. Current customers

Collecting data from the current customers will depend on your own creativity. You can collect data simply
asking for customer’s feedback. Also, you can collect this data from your sales team, that is in continuous
contacts with the customers. Information received directly from your customers is one of the most valuable
information for you. This information will bring you a really good background for your research. Your current
customers also can tell you what your strengths are and more importantly your weakness.

2. Business magazines

Business magazines are valuable sources of business information that can be useful for the purpose of your
market research. In magazines, you can find already finished analysis that can be valuable for your business.
You can find information about your customers, competitors or different marketing campaigns in the industry.

3. Surveys

Surveys also can be used to collect information about individuals and their opinions about the different products
on the market. This is very valuable information for every business. You can use customer surveys, random
interviews, feedback sheets, phone surveys, web-form survey, e-mail based survey and so on.

4. Government agencies

Government agencies collect the most important statistical information about markets. Also, they give some
type of forecasting related to the specific markets. Contact these type of agencies and ask for information about
your target market.
5. Internet

The internet is an unlimited source of information. Google is a good starting point to see what an internet user
search for. You can also use Google’s trends that can give you valuable information about trends in the search
engine. On the internet, you can find various already finished analysis that you can use for the purpose of your
research. Read more about how to use google search data to improve your business offer.

As you can see, required and need information can be everywhere around you. The key point is simply to start
noting information and use it for your market research and decision-making process.

ADOPTING MARKETING FOR NEW LIBERALIZED ECONOMY

An Overview of Process of Adapting Marketing to new Liberalised Economy
Marketing students seeking Adapting Marketing to New Liberalised Economy assignment help must learn
about the ever-evolving and ever-changing trends of marketing which are now being widely accepted and
adopted in new economic environment. The new economy has experienced evolvement in the technological
front wherein the advanced economy of a country is promoting a new belief and implementation of advanced
practices that is being extensively adopted by modern age firms.
Adapting Marketing to New Liberalised Economy Assignment Writing Help Discusses the Alteration of
Beliefs in New as well as Old Economy
BookMyEssay caters to the needs of students who seek Adapting Marketing to New Liberalised
Economy assignment help online. The major insights that students seek by opting for this assignment writing
services topic is to learn the difference between marketing trends that were present in old economy but has
undergone great transformation with the advent of time. The new economy has left a strong impact on the
marketing practices followed by contemporary business assignment firms.

 Shift in the trend of organizing marketing trends as per customer segments – Earlier marketing
plans were focused on assigning marketing expert’s basis the category and type of product that was to
be marketed. But the trend has undergone drastic evolvement as now marketing groups are created to
understand and cater to the needs of customer groups who belong to different industries and segments.
In short, marketing trends in new economy have turned customer-focussed rather being product-
centric.
 Emphasising on Customer Loyalty Rather Than Short-Term Profitable Value – Adapting
Marketing to New Liberalised Economy assignment homework help also discusses a crucial change in
marketing practices which have now become concentrated on providing lifetime value for customers.
The new offerings are developed to attract customers for a lifetime rather than focussing on reaping
profits from the potential businesses.
 Marketing Adaptation by all the Departments: Another successful matting trend or tip is to hand
over the job of marketing to all the departments. This help in creating a feeling of responsibility among
all the associated parties who get to make contribution in the company’s income growth as well as
overall prosperity.
 Shift from Financial Scorecard to Marketing Scorecard – Unlike previous times when a company’s
performance was solely assessed on its financial achievements, new economics businesses put core
focus on examining the marketing scorecard which presents a company’s sales revenue, customer
iteration, CSAT, among other aspects. In the new economy it is believed that marketing performance of
a company make a great impact on the financial performance of a firm.
 Valuing Stakeholders Over Shareholders: In new liberalised economy, senior management takes it
as their sole responsibility to create affluence for all its partners and clients. their belief that every party
having stake in their business must get favourable results from the business performance. It is precisely
focussing on creating a win-win situation for all the stakeholders.
 Brand Building through performance – Taking help from advertising assignment and spending loads
of money in buying digital spaces is a marketing trend followed in the old economy. In the current
times, customers are the one who can market a brand like no one else can. It can be done by creating
bigger and better experiences for them to ensure high-end brand performance. Their word-of-mouth
recommendations will do wonders at building brands. The brand performance can be bettered by
hosting events, working towards maintaining and sustaining public relations, etc.
  Prioritising Customer Retention Over Client Acquisition – The task of finding new customers is not
as difficult as is to retain the customers in hand. Companies operating in the new economy have
realised the need of retaining clients by offering them much more than the obvious products/services.
 Measuring customer satisfaction – Another important aspect covered in Adapting Marketing to New
Liberalised Economy assignment help. As per this evolved marketing trend, new economies put serious
emphasis on measuring and evaluating customer satisfaction along with learning about the factors that
have results in bettering the client experience.
 Less promising – more delivering – New economy player believe in hiding their cards and setting
expectations at a moderate level. Delivery of additional services therefore help in getting absolute
client happiness

DIGITALIZATION AND CUSTOMIZATION

Digital marketing is the component of marketing that utilizes internet and online based digital technologies

such as desktop computers, mobile phones and other digital media and platforms to promote products and
services.[1][2] Its development during the 1990s and 2000s, changed the way brands and businesses use
technology for marketing.[3] As digital platforms became increasingly incorporated into marketing plans and
everyday life,[4] and as people increasingly use digital devices instead of visiting physical shops,[5][6] digital
marketing campaigns have become prevalent, employing combinations of search engine
optimization (SEO), search engine marketing (SEM), content marketing, influencer marketing, content
automation, campaign marketing, data-driven marketing,[7] e-commerce marketing, social media
marketing, social media optimization, e-mail direct marketing, display advertising, e–books, and optical
disks and games have become commonplace. Digital marketing extends to non-Internet channels that provide
digital media, such as television, mobile phones (SMS and MMS), callback, and on-hold mobile ring tones.
[8]
 The extension to non-Internet channels differentiates digital marketing from online marketing.[9]

Developments and strategies

One of the major changes that occurred in traditional marketing was the "emergence of digital marketing"
(Patrutiu Baltes, Loredana, 2015), this led to the reinvention of marketing strategies in order to adapt to this
major change in traditional marketing (Patrutiu Baltes, Loredana, 2015).
As digital marketing is dependent on technology which is ever-evolving and fast-changing, the same features
should be expected from digital marketing developments and strategies. This portion is an attempt to qualify or
segregate the notable highlights existing and being used as of press time. [when?]

 Segmentation: More focus has been placed on segmentation within digital marketing, in order to target
specific markets in both business-to-business and business-to-consumer sectors.
 Influencer marketing: Important nodes are identified within related communities, known as
influencers. This is becoming an important concept in digital targeting.[40] Influencers allow brands to take
advantage of social media and the large audiences available on many of these platforms. [40] It is possible to
reach influencers via paid advertising, such as Facebook Advertising or Google Adwords campaigns, or
through sophisticated sCRM (social customer relationship management) software, such as SAP C4C,
Microsoft Dynamics, Sage CRM and Salesforce CRM. Many universities now focus, at Masters level, on
engagement strategies for influencers.
To summarize, Pull digital marketing is characterized by consumers actively seeking marketing content while
Push digital marketing occurs when marketers send messages without that content being actively sought by the
recipients.

 Online behavioural advertising is the practice of collecting information about a user's online activity
over time, "on a particular device and across different, unrelated websites, in order to deliver
advertisements tailored to that user's interests and preferences [41][42]. Such Advertisements are customized as
per the user behavior and pattern.
 Collaborative Environment: A collaborative environment can be set up between the organization, the
technology service provider, and the digital agencies to optimize effort, resource sharing, reusability and
communications.[43] Additionally, organizations are inviting their customers to help them better understand
how to service them. This source of data is called User Generated Content. Much of this is acquired via
company websites where the organization invites people to share ideas that are then evaluated by other
users of the site. The most popular ideas are evaluated and implemented in some form. Using this method
 of acquiring data and developing new products can foster the organizations relationship with their customer
as well as spawn ideas that would otherwise be overlooked. UGC is low-cost advertising as it is directly
from the consumers and can save advertising costs for the organisation.
 Data-driven advertising: Users generate a lot of data in every step they take on the path of customer
journey and brands can now use that data to activate their known audience with data-driven programmatic
media buying. Without exposing customers' privacy, users' data can be collected from digital channels
(e.g.: when customer visits a website, reads an e-mail, or launches and interact with brand's mobile app),
brands can also collect data from real world customer interactions, such as brick and mortar stores visits
and from CRM and sales engines datasets. Also known as people-based marketing or addressable media,
data-driven advertising is empowering brands to find their loyal customers in their audience and deliver in
real time a much more personal communication, highly relevant to each customers' moment and actions. [44]
An important consideration today while deciding on a strategy is that the digital tools have democratized the
promotional landscape.

 Remarketing: Remarketing plays a major role in digital marketing. This tactic allows marketers to
publish targeted ads in front of an interest category or a defined audience, generally called searchers in web
speak, they have either searched for particular products or services or visited a website for some purpose.
 Game advertising: Game ads are advertisements that exist within computer or video games. One of
the most common examples of in-game advertising is billboards appearing in sports games. In-game ads
also might appear as brand-name products like guns, cars, or clothing that exist as gaming status symbols.
The new digital era has enabled brands to selectively target their customers that may potentially be interested in
their brand or based on previous browsing interests. Businesses can now use social media to select the age
range, location, gender and interests of whom they would like their targeted post to be seen by. Furthermore,
based on a customer's recent search history they can be ‘followed’ on the internet so they see advertisements
from similar brands, products and services,[45] This allows businesses to target the specific customers that they
know and feel will most benefit from their product or service, something that had limited capabilities up until
the digital era.
Channels
Digital Marketing Channels are systems based on the Internet that can create, accelerate, and transmit product
value from producer to a consumer terminal, through digital networks.[52][53] Digital marketing is facilitated by
multiple Digital Marketing channels, As an advertiser one's core objective is to find channels which result in
maximum two-way communication and a better overall ROI for the brand. There are multiple digital marketing
channels available namely;[54]

1. Affiliate marketing - Affiliate marketing is perceived to not be considered a safe, reliable and easy
means of marketing through online platform. This is due to a lack of reliability in terms of affiliates
that can produce the demanded number of new customers. As a result of this risk and bad affiliates it
leaves the brand prone to exploitation in terms of claiming commission that isn't honestly acquired.
Legal means may offer some protection against this, yet there are limitations in recovering any losses
or investment. Despite this, affiliate marketing allows the brand to market towards smaller publishers,
and websites with smaller traffic. Brands that choose to use this marketing often should beware of
such risks involved and look to associate with affiliates in which rules are laid down between the
parties involved to assure and minimize the risk involved.[55]
2. Display advertising - As the term implies, online display advertising deals with showcasing
promotional messages or ideas to the consumer on the internet. This includes a wide range of
advertisements like advertising blogs, networks, interstitial ads, contextual data, ads on the search
engines, classified or dynamic advertisement etc. The method can target specific audience tuning in
from different types of locals to view a particular advertisement, the variations can be found as the
most productive element of this method.
3. Email marketing - Email marketing in comparison to other forms of digital marketing is considered
cheap; it is also a way to rapidly communicate a message such as their value proposition to existing or
potential customers. Yet this channel of communication may be perceived by recipients to be
bothersome and irritating especially to new or potential customers, therefore the success of email
marketing is reliant on the language and visual appeal applied. In terms of visual appeal, there are
indications that using graphics/visuals that are relevant to the message which is attempting to be sent,
yet less visual graphics to be applied with initial emails are more effective in-turn creating a relatively
 personal feel to the email. In terms of language, the style is the main factor in determining how
captivating the email is. Using casual tone invokes a warmer and gentle and inviting feel to the email
in comparison to a formal style. For combinations; it's suggested that to maximize effectiveness; using
no graphics/visual alongside casual language. In contrast using no visual appeal and a formal language
style is seen as the least effective method.[56]
4. Search engine marketing - Search engine marketing (SEM) is a form of Internet marketing that
involves the promotion of websites by increasing their visibility in search engine results pages
(SERPs) primarily through paid advertising. SEM may incorporate Search engine optimization, which
adjusts or rewrites website content and site architecture to achieve a higher ranking in search engine
results pages to enhance pay per click (PPC) listings.
5. Social Media Marketing - The term 'Digital Marketing' has a number of marketing facets as it supports
different channels used in and among these, comes the Social Media. When we use social media
channels ( Facebook, Twitter, Pinterest, Instagram, Google+, etc.) to market a product or service, the
strategy is called Social Media Marketing. It is a procedure wherein strategies are made and executed
to draw in traffic for a website or to gain attention of buyers over the web using different social media
platforms.
6. Social networking service - A social networking service is an online platform which people use to build
social networks or social relations with other people who share similar personal or career interests,
activities, backgrounds or real-life connections
7. In-game advertising - In-Game advertising is defined as "inclusion of products or brands within a
digital game."[57] The game allows brands or products to place ads within their game, either in a subtle
manner or in the form of an advertisement banner. There are many factors that exist in whether brands
are successful in their advertising of their brand/product, these being: Type of game, technical
platform, 3-D and 4-D technology, game genre, congruity of brand and game, prominence of
advertising within the game. Individual factors consist of attitudes towards placement advertisements,
game involvement, product involvement, flow or entertainment. The attitude towards the advertising
also takes into account not only the message shown but also the attitude towards the game. Dependent
of how enjoyable the game is will determine how the brand is perceived, meaning if the game isn't
very enjoyable the consumer may subconsciously have a negative attitude towards the brand/product
being advertised. In terms of Integrated Marketing Communication "integration of advertising in
digital games into the general advertising, communication, and marketing strategy of the firm" [57] is an
important as it results in a more clarity about the brand/product and creates a larger overall effect.
8. Online public relations
o Video advertising - This type of advertising in terms of digital/online means are
advertisements that play on online videos e.g. YouTube videos. This type of marketing has seen
an increase in popularity over time.[58] Online Video Advertising usually consists of three types:
Pre-Roll advertisements which play before the video is watched, Mid-Roll advertisements which
play during the video, or Post-Roll advertisements which play after the video is watched. [59] Post-
roll advertisements were shown to have better brand recognition in relation to the other types,
where-as "ad-context congruity/incongruity plays an important role in reinforcing ad
memorability".[58] Due to selective attention from viewers, there is the likelihood that the message
may not be received.[60] The main advantage of video advertising is that it disrupts the viewing
experience of the video and therefore there is a difficulty in attempting to avoid them. How a
consumer interacts with online video advertising can come down to three stages: Pre attention,
attention, and behavioural decision.[61] These online advertisements give the brand/business
options and choices. These consist of length, position, adjacent video content which all directly
affect the effectiveness of the produced advertisement time,[58] therefore manipulating these
variables will yield different results. Length of the advertisement has shown to affect
memorability where-as longer duration resulted in increased brand recognition.[58] This type of
advertising, due to its nature of interruption of the viewer, it is likely that the consumer may feel
as if their experience is being interrupted or invaded, creating negative perception of the brand.
[58]
 These advertisements are also available to be shared by the viewers, adding to the
attractiveness of this platform. Sharing these videos can be equated to the online version of word
by mouth marketing, extending number of people reached. [62] Sharing videos creates six different
outcomes: these being "pleasure, affection, inclusion, escape, relaxation, and control".[58] As well,
videos that have entertainment value are more likely to be shared, yet pleasure is the strongest
motivator to pass videos on. Creating a ‘viral’ trend from mass amount of a brands advertisement
can maximize the outcome of an online video advert whether it be positive or a negative outcome.
CUSTOMIZATIONS MARKETING

Customization refers in the context of international marketing to a country-tailored product strategy which

focuses on cross-border differences in the needs and wants of target customers, appropriately changing products
in order for them to match local market conditions.[1] Therein, customization follows a market-driven orientation
(as opposed to a product-driven orientation) and aims at increasing customer satisfaction by adapting the
company's products to local needs.

Customerization Defined
Customerization is a strategy by which an organization's products or services are individualized through
personal engagement and dialogue with its customers. In contrast, customization is a modification made to a
product or service to suit a specific purpose. There is a difference between customerization and customization.
A company can customize products to fit a customer's specifications. In this case, the company creates the
product value. But, customerization results in a co-created value. In a customerization strategy both the
company and the consumer contribute to the resulting product value.

REASONS AND STRATEGIES

1. Customize CRM System to Wow Your Customers

Every business unit even in the same industry will differ from one another, in various criteria, ranging from the

size of the company to place, to business/delivery model. This ever-changing market environment with a

different business unit, a different style of operation, and a different set of needs will demand a unique solution.

A common CRM for a global level MNC and for a localized e-commerce business will not work the same

way. Customized CRM Software has been one of the most sought solutions in the market because CRM deals

with the collection of correct and relevant data for business activity, which becomes the base for analysis and

future action, it becomes imperative that CRM software works in synchronization with the business unit and

caters to its specific demand.

Streamlining the process and making it available when you want it and then using it to convert the lead is going

to offer an edge over others. Easier conversation, reduced the problem and increased sales is what you love to

see, right?

2. Customize Live Chat Platforms To Connect with the Audience 24x7

It is a well-known fact that handling the customers is no easy task. The live chat software is a tool that grants the

businesses to create a better customer experience and for this, they need the custom-made software, uniquely
designed only for them. The live chat will not only help you to decrease your operating cost but also save time

for employees per day.

Installing the live chat software for big companies is an obvious tool and the benefits are convincing in all ways.

From extending the automation to your employees and customers to using multiple languages to deal with

customers from all fronts, it helps you to connect to your audience emotionally and makes a conversation easier

and short. Imagine a customer explaining his/her problem for 15 minutes straight. What did you get? Probably

an annoyed customer vowing to never call up again. Not too good for the business.

A clever call routing, less-hold time and personalized yet professional touch in the conversation is what an live

chat software is capable of. IVR is a 24x7 call centre rep that never goes off duty.

3. Customize The Website To Carve A Niche In The Market

This is one of the primary things to do and unfortunately, not many businesses have taken it seriously. A good

website is like the bright and tidy showroom that showcases your products/services and gives an ample idea

about your well-being. How many of us would like to scroll the shabby looking, jargon-filled and illegible

content? Not many.

A beautifully building business website with legible fonts, intelligent use of the keywords and one that is

offering a brief and convincing details on the products/services proves beneficial to the business. Check where

your competitor is lacking and fill that lacuna with your intelligence. Personal or professional, both websites

have the advantage of being recognized for their look and feel and yes, people love to read fresh and interesting

content and look at testimonials and photos.

4. Customize Communication To Attain A Closer Relationship With Customers

Correct and apt communication is the backbone of any business activity and businesses recognizing

business customers and their needs will alleviate credibility and imbibes the reliability factor.
A small sample survey showed, an advertising mail, with no personal touch, generally finds its place in the spam

folder, however, similar advertising mail, addressing the reader by his/her name, and with interactive content,

induces the reader to click on the link to check out the offer. Nowadays the e-commerce company, after the

consent, also verifies the cookies of the Internet browsing of customers.  The sites records the surf history and

later offers based on the readers' interest, then analyzing Internet surfing history.

Remember that you are dealing with the human brain, seeing hundreds of emails daily and if they can't find your

email relevant and meaningful, they won't bother to even have a second glance over it, forget about clicking the

link.

5. Remodel Business Processes / Tools to Suit the Needs of Mass

As discussed above every enterprise even if in similar industry varies from another enterprise / business unit,

with its unique set of requirements and deliverables, hence to optimize the operation to maximize the return by

efficient functioning, customizing processes of use.

It's wise to adapt, as rigidity has finished many businesses, and will continue to do so if the changing

atmosphere that is encountered when running a business is not taken into consideration. A customized business

process offers you a chance to check and make necessary changes wherever possible/necessary to keep up with

the times and ever-changing business environment. Whether that means employing physical asset management

software or your marketing team using digital asset management software with different types of metadata, a

customized business process is important as it makes sure you are not using age-old business practices that have

become obsolete.

6. Customize Business Cards to Create an Effective Recall Value

A business card is not only a graceful way to create a reminisce but a manifestation that you want to reach out to

more people personally and professionally to expand your business. A customized business card with concrete
messages , you use used for both personal and professional reasons and while it is a tangible way to connect

with more audience, potential clients and advertise your business, it also lets you brand your products and

services in a desirable way.

Sit with a professional graphic designer and work together as exactly what you want on it - logo, contact details,

products and services, etc. short, simple yet uniquely designed trendy business card will help you gain

credibility, offer a chance to spread the word and make sure that your card is distinctly remembered by the

associates from among the many that they receive daily!

CHANGING MARKETING PRACTICES

The definition above implies that marketing includes doing research, promotion, advertisement and distribution
of the services and goods for sale. ... Business management in relation to effective marketing
practices describes methods of high level business organization and operation.

INTRO

The marketing world of today and hence business world is not as it was. It is radically different because of

major and interlinking societal forces that have created new consumer behaviours, new opportunities, new

challenges and new threats.

One should read two latest titles in marketing management area namely “Beyond Disruption” by Mr. Jean-

Marie Dru and “Radical Marketing by Mr. Sam Hill and Glenn Ruskin. The first one is published by John

Wieley and Sons of New York and the second one by Harper Collins of New-York. Both the books highlight the

change factors.

These business and marketing change drivers are:

1. Ever Changing Technology:

This is the digital age and therefore, information age. The industrial world of past was featured by mass

production and consumption, the stores filled with inventories, advertising everywhere, and liberal

discounting.The changed information age promises to leading to more accurate levels of production, more

targeted communications and more relevant pricing. The business has termed electronic where much of the

business is carried on electronic networks intranet, extranets and the internet.Technology which is fast changing
is responsible for reducing business costs, improving the quality, and increasing the quantity where products are

within each reach of consumers of even lowest income.

2. Globalisation:

The local and national markets are turned into global markets where the companies are able market their

products and services in other countries of the world at best prices of best quality and in required quantities.

This has been possible because of revolutionary changes in the means of transportations, shipping, and

communication. This made luxuries of the past as the comforts and necessities in the present day situation.

3. Deregularisation:

To take advantage of international market, many countries have deregualised the industries and commerce with

a view to create more and more growth opportunities and higher degree of competitive strengths.More and more

foreign companies are engaged in industrial and commercial activities of both goods and services which were

held at bay. This has led to further opening and widening that brings in more foreign capital and latest

technology one hand and generating gainful employment opportunities which in turn support the increasing

demand and supply conditions.

4. Privatisation:

Privatisation is at its best now. Governments of various countries have realized that it pays to privatise the

industrial and commercial sectors of their economies. In case of India, we have privatisation of services namely,

banking, airways, roadways, shipping, insurance power, infrastructural activities and even defence products.

Public sector is shrinking for better that has led to improved efficiency and profitability.

5. Customer Empowerment:

Customers of these days are expecting higher quality service and a degree of customerisation on an increasing

scale. They demand more convenience as they have problem of time management as they have been the part of

rat race of earning decent living.As a result they perceive lesser real product differences and portray less brand

loyalty. They are exposed to extensive product information from internet and other sources that permit them to

shop more intelligently. They are showing greater price sensitivity in their search for value.
6. Customerisation:

The companies are producing individually differentiated products whether they are ordered in person, on phone

or on line. By going on line, the companies are enabling the consumers to design their own specifications of a

given product to meet their individual requirements.As a result, the companies have the capacity to interact with

each customer personally so that there is a possibility of personalizing messages, services, and the relationship,

in addition to individualized product designs.By using smart software and the latest manufacturing equipment, a

marketing house can increasingly increase their sales. As orders will be cut- to-order, the companies need not

invest too much in unwanted inventories.

7. Intense Competition:

Today brand manufacturers are facing heightened and tougher competition both from domestic and foreign

brands that has resulted in rising promotion costs and shrinking profit margins. Further, they are slapped by

powerful retailers who command limited shelf-space and are putting out their own store brands in competition

with national brands.

8. Industry Convergence:

The industry boundaries are getting blurred at an increasingly incredible rate as companies are recognising that

new opportunities are at the intersection of two or more industries. In the past the companies remained in only in

core area or areas. Now it is not so. For instance pharmaceutical companies of past were purely chemical

companies. Now they have been adding closely allied lines for taking full advantage of synergy.They are adding

bio-genetic research capacities in order to formulate new drugs, new cosmetics (cosmoneuticals) and new foods

(nutriceuticals). It is not a surprise when Cosmetics Company adds dormitology drugs to its port-folio.

What is true of these pharmaceutical companies is true of other lines. There is a convergence of compuring and

consumer electronics industries where companies like Dall, Hewlett-Packard, and Gateway released a flow of

entertainment devices right from MP3 players to plasma TVs and camcorders.

9. Retail Transformation:

Small retailers are now facing a “do or die” situation because there is growth of powerful giant retailers both

from home and abroad. India’s millions of small stores are terrified of the onslaught from domestic and foreign

retailers.
These store based retailers are facing growing competition from catalog houses, direct mart firms, newspaper,

magazine, and T.V direct to consumer ads, home shopping T.V., and e-commerce on the internet.In response,

these entrepreneurial retailers are building entertainment into stores with coffee bars, lectures, demonstrations

and performances. That is they are marketing an ‘experience’ than a product assortment.

10. Disintermediation:

The success of the established online companies of the world namely, AOL, Amazon, Yahoo, eBay, E’TRACE

and the like is quite amazing. They are known for creating disintermediation in the delivery of products and

services, virtually struck, terror in the hearts of many established manufacturers and retailers.

In response to disintermediation, good many traditional companies engaged in reinter mediation and became

what is called as “brick-and click”, adding online services to their existing offers. Many brick-and click

competitors became stranger. Contenders than pure “click” firms since they had a larger pool, of resources to

work and work established brand names.

In such a situation that has undergone a thorough change, the marketers have to be very agile and alert and take

steps forward only on conforming that it is safer and profitable to do so.

E MARKETING

E-marketing is a process of planning and executing the conception, distribution, promotion, and pricing of
products and services in a computerized, networked environment, such as the Internet and the World Wide Web,
to facilitate exchanges and satisfy customer demands

MEAN

Internet marketing (also known as online marketing, digital marketing, emarketing, or web marketing,) is an all-
inclusive term used to describe marketing activities conducted online. For this reason, internet marketing
encompasses a wide range of strategies and tactics, such as social media marketing, content marketing, pay-per-
click, and search engine optimization.

TYPES
Marketing) are also known as Internet Marketing, Web Marketing, Digital Marketing, or Online Marketing. E-
marketing is the process of marketing a product or service using the Internet. Emarkerting not only includes
marketing on the Internet, but also includes marketing done via e-mail and wireless media. It uses a range of
technologies to help connect businesses to their customers.
Table of Contents +
Like many other media channels, e-marketing is also a part of integrated marketing communications (IMC),
which helps a brand grow across different channels. E-marketing has become a pivotal tactic in the marketing
strategy adopted by companies using several digital media channels.

Advantages of E-marketing
Certain advantages of emarketing are discussed as below:
1. Much better return on investment from than that of traditional marketing as it helps increasing sales revenue.
2. E-marketing means reduced marketing campaign cost as the marketing is done through the internet
3. Fast result of the campaign as it helps to target the right customers.
4. Easy monitoring through the web tracking capabilities help make emarketing highly efficient
5. Using e-marketing, viral content can be made, which helps in viral marketing.

Types of e-marketing
There are several ways in which companies can use internet for marketing. Some ways of e-marketing are:
1. Article marketing
2. Affiliate marketing
3. Video marketing
4. Email marketing
5. Blogging
6. Content marketing
TELEMARKETING
Telemarketing (sometimes known as inside sales,[1] or telesales in the UK and Ireland) is a method of direct
marketing in which a salesperson solicits prospective customers to buy products or services, either over the
phone or through a subsequent face to face or web conferencing appointment scheduled during the call.
Telemarketing can also include recorded sales pitches programmed to be played over the phone via automatic
dialing.
Telemarketing is defined as contacting, qualifying, and canvassing prospective customers using
telecommunications devices such as telephone, fax, and internet. It does not include direct mail marketing. [2]

Telemarketers :: Job Description. Solicit donations or orders for goods or services over the telephone. Deliver
prepared sales talks, reading from scripts that describe products or services, to persuade potential customers to
purchase a product or service or to make a donation.
Different Types of Telemarketing

 1. Inbound Telemarketing

 It consists of receiving incoming telephone calls from costumers. It is often generated by broadcast advertising.
This will be through social media, email marketing or direct marketing. The goal of inbound telemarketing is to
take orders for a wide variety of products from consumers. In short, inbound telemarketing is being initiated by
the customer.  This allows them to contact the company so it is very important that they are being handled well.
According to studies, customers will even pay more for good customer service. And since they are the ones
reaching you through inbound calls, this gives you the opportunity to make them feel valued.

The best example of this is when you saw an advertisement on facebook about a service that you are interested
in. You wanted to learn more about that service and all you have to do is to call the number on the commercial.
An inbound telemarketer will then accept your call. This type of marketing strategy is actually more profitable.
This is because the customers are already showing interest in calling. It can entail more customer relationship
management (CRM) tools and strategies. And with the help of professional and well-trained agents, inbound
telemarketing can help you towards success.

2. Outbound Telemarketing

Contrary to inbound telemarketing, outbound telemarketing initiates calls. For a successful outbound sales
campaign, Outbound agents generally require more training and product knowledge. This is because they are
more involved in the actual selling of the product. The operator in this industry works on a cold prospect list.
This type of call is actually called cold calling. The reason behind this is that prospects still don’t have any idea
about the product or brand that is going to be introduced. So it is very important that the agent is knowledgeable
about the product. They must know how to market a specific product or service to consumers.
 An example of an outbound telemarketer is when your local internet provider has the latest upgrade. And you
still have no idea about it. Then an outbound telemarketer will call you and introduce you to the new service
they have. The main role of the agent is to raise awareness about the product or services that a business offers.
Convincing consumers to avail of the service is also part of their marketing strategy. The proactive sales
approach is what this strategy is all about. 

2. B2B Telemarketing

B2B telemarketing is all about using calling as a channel. This is for business to business transactions. It is
either to sell or to build linkage between two companies. B2B telemarketing can help you in finding the right
people to have as costumers. Like the outbound telemarketing, it enables you to raise awareness about your
brand. It can also direct your business to new opportunities. This can help you grow and build credibility among
existing and future clients.

B2B telemarketing industry requires experienced and professional agents. It is because B2B telemarketers
engage in interactions that allow them to become a good decision-maker. They generally handle subject matter
with full expertise. Discussion on solutions is a top priority. This is an effective method for getting more
business opportunities in B2B. And if the first call is being handled well, it can be the first step to an effective
sales process.

4. B2C Telemarketing

B2C telemarketing targets the direct consumer. These consumers potentially show interest in the product or
service. This type of telemarketing is product-driven as the agents deal directly with the customers or end-users.
It is almost the same as the outbound telemarketing. The sales of the company depend on the telemarketer that
handles the outbound calls.

B2C is a transaction-based industry that involves a single-step buying and selling process. This type of
telemarketing is actually a great way of bringing more clients. This is by informing them about the product and
services of a company. Outbound and B2C telemarketing do not wait for consumers to make a call. They
proactively start the call to customers. And then they strategically market the product. Competition exists in the
corporate world. And it is becoming hard for businesses to achieve goals. But with the help of B2C, even small
and growing business can perform well amidst the competition.

CAUSE MARKETING

Cause marketing is marketing done by a for-profit business that seeks to both increase profits and to better
society in accordance with corporate social responsibility, such as by including activist messages in advertising.
[1]

A similar phrase, cause-related marketing, usually refers to a subset of cause marketing that involves the
cooperative efforts of a for-profit business and a non-profit organization for mutual benefit. A high-profile form
of cause-related marketing occurs at checkout counters when customers are asked to support a cause with a
charitable donation. Cause marketing differs from corporate giving (philanthropy), as the latter generally
involves a specific donation that is tax-deductible, while cause marketing is a promotional campaign not
necessarily based on a donation.
Point-of-sale. When a cashier ask you for a donation or encouraging advertisements are displayed at the
register. March of Dimes and Kmart have a successful point-of-sale campaign by asking customers to donate
during checking out.

Purchase or action triggered donation. A consumer buys a product and a donation is made to a cause. On
World AIDS day, Starbucks donates 5 cents for every beverage purchased.

Licensing. A company pays to use a nonprofit’s brand on its product. (RED)™ is an example that works with
iconic brands and organizations to develop (RED)-branded products and services, that when purchased, trigger
corporate giving to the Global Fund.

Message Promotion. A company puts it resource to promoting a cause-forward message. Ben & Jerry’s Scoop
it Forward campaign created a partnership with Target and VolunteerMatch.  Using a tasty way to raise funds
and awareness. Thanking volunteers and letting people where they can sign up to volunteer.

Employee Engagement. When a company uses employee volunteers for social good. When Home Depot’s
employees volunteer for local Habitat for Humanity projects, they are participating in an employee engagement
campaign.

Digital Programs. Using the web and social media based services to promote and collect donations.

Cause marketing is a great tool for any organization. Let us know any cause marketing you see on a regular
basis or any companies you see doing a great job at cause marketing–including your nonprofit!

SOCIETIAL MARKETING

Societal Marketing Concept Examples, Advantages, Importance, Diagram

 The Societal
Marketing Concept puts Human welfare on top before profits and satisfying the wants.

Societal Marketing emphasizes on social responsibilities and suggests that to sustain long-term success, the
company should develop a marketing strategy to provide value to the customers to maintain and improve both
the customers and society’s well being better than the competitors.

Societal marketing concept holds that a company should make good marketing decisions by considering
consumer’s wants, the company’s requirements, and society’s long-term interests.

Societal Marketing creates a favorable image for the company increases sales. It is not the same as the terms of
social marketing and social media marketing. It is a term closely related to CSR and sustainable development.

It emphasizes social responsibilities and suggests that to sustain.

It calls for sustainable marketing, socially and environmentally responsible marketing that meets the present
needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet
their needs.

The global warming panic button is pushed and a revelation is required in the way we use our resources. So
companies are slowly either fully or partially trying to implement the societal marketing concept.

The societal marketing concept is one of the 5 marketing concepts.

History of Societal Marketing Concept

In the 1960s and 70’s the unethical practices of many companies became public. The concept of Social
Marketing surfaced in 1972; a more socially responsible, moral and ethical model of marketing, countering
consumerism. Philip Kotler introduced the concept of social marketing and societal marketing.

The societal marketing concept evolved from older concepts of CSR and sustainable development and
implemented by several companies to improve their public image through activities of the customer and social
welfare.
 Three Considerations of Societal Marketing Concept

Companies should balance three considerations in setting their marketing strategies: company profits, the
consumer wants, and society’s interests.

1. Society (Human Welfare)

Companies must make sure the products, services, actions, investment innovations servers society first.

2. Consumers (Satisfaction)
Products and services should be satisfying the consumer’s needs.

3. Company (Profits)
Building long-term customer relationships, being socially responsible, and providing satisfactory products are
important for profit-making and wealth maximization.

Societal Marketing Concept Video and Slideshow

Watch this video explaining marketing concepts and societal marketing concept.

Objectives of Societal Marketing Concept

 To maintain a long-term relationship with customers.

 To create a better image in the society for the company than it’s competitors.

 To carry out its social responsibilities.

 Developing community awareness towards its brands.

 To carry out its social responsibilities.

 To increase the consumer base and market share.

Societal Marketing Concept Advantages and Benefits

 It helps to build a better image for the company.

 It gives a competitive advantage over the competitors.

 Useful in customer retention and long-term relationships.

 Increases sales and market share.

 Facilitate expansion and growth in the long term.

 Products and company policies should prioritize social welfare and society in general.

 Economic resources are properly used.

 Societal marketing raises the living standard of people in society.

 It ensures economic planning more significant and more fruitful to society.

Importance of Societal Marketing Concept

Societal Marketing is very important to society, the environment, and businesses. This concept was developed in
order to tackle the consumerism and profit only the motive of business.

The societal marketing concept helps to maximize profits for the organization and creates a long-term
relationship with customers.

It encourages developing products that benefit society in the long run and satisfies consumers.

Examples of Societal Marketing

Most recent examples of societal marketing are the super bowl 2017 ads of several companies.

Most ads took on issues like the environment and immigration. These come after President Donald Trump
implemented executive orders that raised controversies.

 Kia’s “Hero’s Journey” commercial starring Melissa Mccarthy is the prime example of societal
marketing.

 CocaCola release an ad that shows people of different ethnicity and singing “America is Beautiful”  in
different languages.

 Airbnb’s #WeAccept super bowl 2017 ad.

 Budweiser ad showing how a company founded by its immigrant founder.

The societal marketing does not stop there.

Societal marketing policies are what making companies actively trying to change social policy, taking part in
social activities, investing time and money in corporate social responsibility.

Societal marketing concept questions whether the pure marketing concept overlooks possible conflicts between
consumer short-run wants and consumer long-run welfare.

The societal marketing concept holds “marketing strategy should deliver value to customers in a way that
maintains or improves both the consumer’s and society’s well-being”.

Instruments of Societal Marketing

Philip Kotler identified four categories of products based on long-term benefits and immediate satisfaction:

 Deficient products bring neither long-run or short-term benefits.

 Pleasing products bring a high level of immediate satisfaction but cause long-term harm
long in society.

 Salutary products bring low short-term satisfaction, Nut Benefit society in the long run.

 Desirable products bring both long-run benefits and immediate satisfaction.

Based on societal marketing, Kotler suggested deficient products must be eliminated from the market.

The pleasing and salutary products need modification so that they can bring both long-run benefits to society
and immediate satisfaction to the consumer.

Meaning that these products should be launched on the market without turning them into desirable products.

This way, rather than focusing on selling products, the focus is on consumer and society well-being.

RURAL MARKETING

Definition: Rural marketing refers to the framing and application of various marketing principles and strategies
along with the marketing mix by the companies to capture the potential market and satisfy the needs of the
people living in the remote areas of the country.

Ways of Rural Marketing

The rural marketing involves two primary elements; one is rural and second is urban. The exchange of goods
between these two markets can be understood in the following ways:

 Urban to Rural: The products manufactured in cities such as the FMCG products, fertilizers,
consumer durables, etc. are made available in the remote areas. This is termed as urban to rural
marketing.
 Rural to Urban: The goods manufactured or grown in rural areas or villages, including crops and
other agricultural products, handicraft items, pottery products, etc. are sold to the consumers of urban
areas. It is known as rural to urban marketing.
 Rural to Rural: When a rural manufacturer sells products like cattle, pottery, carts, etc. to other
villages, it is called as rural to rural marketing.

Features of a Rural Market

What do we understand by a rural market? What differentiates it from an urban market?

The rural market can be understood as the selling and distribution or exchange of goods in the village or remote
areas. The following characteristics will help us to understand the rural market better:
Low Standard of Living: The village lifestyle is quite conservative and straightforward. People here spend
more on necessities instead of luxury goods, making it very different from that of city life.

Large and Scattered Market: A significant percentage of the population resides in villages. There are
numerous villages located throughout the country, with a small group of people living in each of them. Thus, the
rural market is spread over a vast area.

Traditional Outlook: The village population tend to stick to their traditions and are resistant to change due to
low literacy level. However, the rural youth is initiating development though at a slower pace.

Agriculture is Major Source of Income: The village population is highly dependant upon the agricultural
income for their living. In the case of crop failure, the rural people have low disposable income.

Development of Infrastructure: The rural areas lack proper infrastructure facilities such as appropriate
transportation, cemented roads, communication network, banks, warehouses, etc.

Diverse Socio-Economic Background: Since the fertility of the land is uncertain and covers a large
geographical rural area, there is a social-economic diversity in the people of these areas.

Seasonal Demand: The seasons and stages of agriculture, influence the demand for goods and services in rural
markets. Hence they have two major seasons, namely kharif and ragi.

Prevalence of Spurious Brands: In rural areas, people are more price-conscious and illiterate. Due to this,
several fake brands penetrate these markets with cheap products that look similar to the original ones.

Low Literacy Level: The percentage of illiteracy is quite high in remote areas. Thus, disconnecting them with
the print media and therefore, the marketers use another medium such as radio, roadshows and nukkad dramas
for rural marketing.

Heterogeneous Market: The people living in the villages belong to different religion, culture, social and
economic backgrounds, linguistics, etc. and therefore have disparate perspective and demands.

Rural Marketing Environment

All markets exist in an external environment where the business organizations function. The following are the
environmental factors which influence the trade practices in rural marketing:

Political Changes

The government’s intervention in the trade and commerce practices promoting the small scale rural industries
and penetration of other business units in the rural areas to enhance the condition of people living in these areas,
influence the rural markets to a great extent.
Social Changes

The social environment consists of the following:

 sociological factors, i.e., rural consumer’s lifestyle, preference and habits;

 anthropological factors determine the culture and the way of living of the consumer and;
 psychological factors constitute of the attitude, perception, behaviour, personality and mental
soundness of the consumer.

All these factors also influence the rural markets.

Technological Changes

With technological advancement, marketers make use of the latest marketing tools and strategies. Also, the
modes of communication and transportation have been improvized to produce the goods or services available to
rural consumers in a short period.

Economic Changes

The marketers need to consider economic factors, including a healthy competition, consumer welfare and

optimal price to conquer the rural markets.

Physical Changes

Another essential factor is the physical distribution of the goods or services into the rural markets, which can be
achieved through the development of infrastructure.

Ethical Changes

Business ethics are essential for achieving the long-term goals of the organization. Thus, the moral values of the
company play a key role in marketing the products in rural areas.

GREEN MARKTING

What is Green Marketing?

Green marketing is the marketing of environmentally friendly products and services. It is becoming more
popular as more people become concerned with environmental issues and decide that they want to spend their
money in a way that is kinder to the planet.

Green marketing can involve a number of different things, such as creating an eco-friendly product, using eco-
friendly packaging, adopting sustainable business practices, or focusing marketing efforts on messages that
communicate a product’s green benefits.

This type of marketing can be more expensive, but it can also be profitable due to the increasing demand. For
example, products made locally in North America tend to be more expensive than those made overseas using
cheap labor, but they have a much smaller carbon footprint because they don’t have to fly across the globe to get
here. For some consumers and business owners, the environmental benefit outweighs the price difference.

LOHAS

Consumers who prefer to purchase green products even though they might be more expensive fall into the
‘LOHAS’ category. LOHAS stands for Lifestyles of Health and Sustainability. According to Wikipedia:
 “LOHAS describes an integrated, rapidly growing market for goods and services that appeal to consumers
whose sense of environmental and social responsibility influences their purchase decisions.”

These consumers are active supporters of environmental health and are the heaviest purchasers of green and
socially responsible products. They also have the power to influence other consumers.

Green Marketing Methods

Beyond making an environmentally friendly product, business owners can do other things as part of their green
marketing efforts. The following can all be part of a green marketing strategy:

 Using eco-friendly paper and inks for print marketing materials

 Skipping the printed materials altogether and option for electronic marketing
 Having a recycling program and responsible waste disposal practices 
 Using eco-friendly product packaging
 Using efficient packing and shipping methods
 Using eco-friendly power sources
 Taking steps to offset environmental impact

Importance # 1. Environmental Advantages:

Going green is an environmentally responsible choice. It is estimated that 40 percent of all greenhouse gases in
the United States comes from energy production that businesses use to heat, cool and light workplaces.
Reducing these energy needs reduces carbon dioxide output, helping to control global warming. As businesses
use more natural resources than individual consumers, recycling business materials and conserving water
contribute to conservation on a larger scale.
Importance # 2. Economic Advantages:
The reduction in waste equals lower operating costs and more savings. Eco-friendly business equipment and
practices such as – low-wattage or LED lights, use of natural lighting, water conservation policies, mandatory
recycling and hybrid company vehicles save money on utilities, fuel and office supplies. This generates instant
cash flow. Further going green puts a business in a positive light in the eyes of customers, potential investors,
distributors, activists, watchdog groups, communities and prospective employees.
Importance # 3. Sustainability:
Going green is about sustainability; this sustainability translates to sustainable profits in green sectors with
secure futures. The future-safe markets include biomaterials, green buildings, personal transportation, smart
grids, mobile applications and water filtration.
Importance # 4. Efficient Use of Resources:
Today, human demands and needs are unlimited but resources are short enough that cannot fulfill the human
needs. Markets need to facilitate the consumers by utilizing resources efficiently.
Importance # 5. Planned Techniques:
It needs to develop well planned techniques and innovative policies to achieve the organizational goals
effectively without any wastage of time and other resources. Green marketing examples of different products
and services develops a growing interest among customers throughout the world.
Importance # 6. Consumer Attraction:
Green marketing examples of different products attracts the consumers regarding environment protection.
People are so much conscious about their environment and variations in behavior. Green marketing is
considered as growing marketing that helps to design socially and sustainable products.
Importance # 7. Innovation:
Green marketing helps to design such kinds of products that are economically affordable and satisfy the human
needs efficiently. It produces innovative green products that consume less resource.
Importance # 8. Competitive Advantage:
Companies enjoy competitive advantage over other companies in the market through green marketing examples.
Today, companies which adopt green marketing techniques gain more competitive advantage over other
companies which are not conscious about such techniques and environment. Companies which develop
innovative products and services with innovative qualities at affordable rates are successful in the market.
Green marketing is a group of activities that are designed to meet the consumer’s demands and needs at
affordable price range.

EMOTIONAL MARKETING

Emotional marketing refers to marketing and advertising efforts that primarily use emotion to make your
audience notice, remember, share, and buy. Emotional marketing typically taps into a singular emotion, like
happiness, sadness, anger, or fear, to elicit a consumer response.

Mean

Emotional Marketing is messaging that builds your ego. It makes you feel smarter, bolder, more sophisticated,
or just about any other emotion that is fundamental to your self-esteem. By making you feel better about
yourself, the brand transcends mere product status and becomes a friend. This is what gives your brand that
special something that builds life-long attachment. These are brands that share your values and priorities. You
name-drop the brand name to say something important about yourself. They “get you,” and you get them.
People are so passionate about these brands that they wear the logos on their chest, tattoo them on their body,
and herald them in the social networking profile. “I’m a Jack Daniels man.” “I hate the Yankees and believe in
Red Sox Nation.” Harley isn’t just a motorcycle, it’s lifestyle, and there is a large group of people who refuse to
eat at fast food restaurants that serve Pepsi instead of Coke.

That is the genius of emotional marketing. It slips in under our radar. Because these are emotions we WANT to
feel, the ads seem comforting and familiar. It’s drip marketing that slowly waters our deepest hopes of being the
people we dream of becoming.
There are six important types of emotional appeals:

 Self-esteem
 Authority/Experts
 Happy
 Sad
 Fear
 Anger and Disgust

Let’s look at what makes emotional marketing so powerful and how you can use emotional marketing to
connect with more prospective customers, create more loyal customers, and increase sales.

What is Emotional Marketing?

Emotional marketing refers to marketing and advertising that primarily uses emotional appeals to make your
customers and prospective customers notice, remember, share, and buy your company’s products or services.

For example, there’s an intricate psychology involved in designing memorable, unique custom business logos.

Similarly, emotions play a crucial role in product packaging design.

Even the name of your business plays an important role in creating emotional reactions in your customers and
prospective customers.

There are many different emotions but eight primary ones: anger, fear, sadness, disgust, surprise, anticipation,
trust, and joy.

Robert Plutchik psychoevolutionary theory of emotion illustrates different emotions through a “wheel of
emotions”.

Does emotional marketing  influence what we buy?

Studies show that powerful memories come from intense emotional experiences.

Marketing efforts that tap into those memories access intense emotions. Those emotions are often responsible
for that pricey purchase made on a whim.

The emotional content in advertising is far more influential than its informative content. David Frenay, Co-
Founder at Emolytics, writes:

Thanks to many millennia of evolution at work, our emotional responses are so intuitive and deeply ingrained
into our brains that we instinctively “react” before thinking or rationalizing a decision. We often don’t recognize
how irrational many of our decisions are. And if asked, many people will insist that they favor logic over
emotion.

The Institute of Practitioners in Advertising (IPA) looked at 1,400 case studies from the past three decades to
explore what types of advertising campaigns were the most effective.

IPA compared the effectiveness of persuasive advertising that focused on making an emotional appeal and
advertisements that focused on information and logic-based arguments.

The marketing with emotional content was twice as successful as the marketing using the informative content.
 Image credit – NeuroScienceMarketing.

Why is emotion more persuasive than information?

Our brains are great at processing emotions. Brains understand and interpret emotions quickly, and the memory
of those emotions persists for a long time.

As for facts… I challenge you to remember the capital of each of the United States.

Compelling, emotional stories can work well across cultures and languages.

For example,  “Giving” is a 3 minute commercial for Thailand mobile phone service provider True Move. The
story begins with a young boy caught stealing medicine for his sick mother. A nearby small restaurant owner
helps the boy by buying the medicine and also gives the boy soup to take home to his mom.

Watch the video to see the story unfold – it’s a powerful and emotional message conveyed in very simple, short
video. Your tears won’t be from cutting onions.

What are the different types of emotional appeals?

Which emotions should your business use to boost the power of a marketing message?

You have a range of emotions to consider, but they can easily be broken down into two categories: positive,
feel-good emotions, and negative emotions like fear and anger.

You might think that positive emotions are a better choice, but that is not always the case.

Positive and negative emotional appeals can be equally persuasive.

Think about your business and which of the following emotional appeals would work best for your brand’s
identity.

Lane Bryant’s advertising uses self-esteem messaging throughout to help speak directly to its target audience,
plus-sized women. Image courtesy of Lane Bryant
Self-esteem

Appeals to self-esteem target the customer’s desire to feel good about themselves.

Plus-size clothing chain Lane Bryant tapped into this with their “I’m No Angel” and “This Body” campaigns.

Adweek reported the ads resonated with women on social media:

“The Lane Bryant #IMNOANGEL initiative celebrates women of all shapes and sizes by redefining society’s
traditional notion of sexy with a powerful core message: ALL women are sexy,” the brand says.

It’s a direct dig at Victoria’s Secret, and social media is loving it. Women have jumped on the trending hashtag,
posting their own photos and declarations with #ImNoAngel.

Creating these feel-good emotions increase your customer’s positive impression of your product. Using an
emotional marketing message feels more genuine.

Focus on messages that feel personal to your audience, and tap into a message that resonates with them in a
positive way.
Authority / Experts

Credibility and unbiased opinion can have massive sway over consumer opinion. Nielsen research shows:

 85 percent of consumers regularly or occasionally seek out trusted expert content when considering a
purchase.
 69 percent of consumers read product reviews written by trusted experts before making a purchase.
 67 percent of consumers agree that an endorsement from an expert makes them more likely to make a
purchase.

Hearing from an expert on a subject makes a claim more believable and carries more weight with consumers.

Trident gum’s “4 out of 5 dentists” campaign began in the 80s, initially appealing to customers using an expert
opinion. Trident revived this campaign in recent years to excellent effect and introduced a new spin on “expert”
marketing. They launched a series of irreverent ads that examined “the 5th dentist” and capitalized on
authoritative opinion with an entertaining spin.

Find an expert with enough name recognition that their words carry weight, or create your own expert using a
tongue-in-cheek approach.

Apple’s marketing often centers around positive, good feelings, and this classic campaign for Apple’s iPod is a
great example of that in action. Image courtesy of Apple.
Happy 

Campaigns that conjure up good feelings, joy, and happiness are powerful ways to connect with consumers.

A study by the New York Times examined their most shared articles. Articles that created a happy reader
response were shared more often than those that prompted negative feelings.

Apple uses this power of happy emotion in their recent marketing campaigns.

Apple’s move toward a joyful marketing approach is evident in their “Practically Magic” ads. They use color,
magic, and joy to emphasize what their products will make consumers feel.

We agree – those red balloons make us pretty happy.

That happiness makes us eager to spread our joy.

Enthusiasm is contagious.

That’s one reason why positive business taglines, for example, create stronger brand identities, compared to
negative taglines.

Try to incorporate positive language into your marketing: fun, success, achievement, joy… This will give
consumers a positive and pleasurable association with your brand.

And then, they’ll share the love.

--
Sad

Marketing that makes people feel sad is powerful.

None of us will ever forget that ASPCA commercial featuring Sarah McLachlan.

Devastating images of dogs and cats paired with McLachlan’s tearjerker “Angel” will never be forgotten by
heartbroken viewers everywhere.

You might wonder why any company would intentionally break the hearts of their audience.

The New York Times reported the ad was the ASPCA’s most successful fundraising effort. They raised
approximately $30 million from the campaign.

In marketing, creating sadness can persuade people to act.

Show consumers a problem and demonstrate how sad and difficult it is.

Then provide them with the solution, and move them from sadness to empowerment.

Fear 

Fear is a primal emotion that marketers use to motivate a change.

Fear appeals are impactful, but they need to be used carefully. Appeals that are too intense or harshly presented
can sometimes backfire.

One reason for this is that people tend to avoid unpleasant or upsetting imagery.

But fear is motivating because we are biologically programmed to run from scary situations.

Our bodies and minds compel us to act when we are faced with fear-inducing things.

In marketing, you can illustrate a vivid threat – like lung cancer to smokers – and then offer viewers the way to
escape it.

Always’ Like A Girl campaign. Image courtesy of Always.

Anger and Disgust

Anger and disgust are negative emotions, but they can still provoke a positive reaction if used properly in a
campaign.

Always’ “Like a Girl” campaign took a demeaning, anger-inducing phrase and transformed it into a positive and
memorable experience.

Many companies will also use anger, but they will put aim that anger toward their competitors.

When Dollar Shave Club illustrated the frustration of buying commercial brand razors, they tapped into a
common problem. Then they offered their solution.
Using anger toward your competitors is a great strategy to encourage your customers to try out your brand
instead.

Wrapping up

Every business should understand how to connect emotions to their brand, and which emotions can best support
what their brand offers.

A well thought out, emotional appeal to your customers is an extremely effective marketing strategy that
connects you with customers in a meaningful, lasting way.

 GUERILLA MARKETING

Guerrilla marketing is an advertisement strategy in which a company uses surprise and/or unconventional

interactions in order to promote a product or service.[1] It is a type of publicity.[2] The term was popularized
by Jay Conrad Levinson's 1984 book Guerrilla Marketing.
Guerrilla marketing uses multiple techniques and practices in order to establish direct contact with the
customers.[3] One of the goals of this interaction is to cause an emotional reaction in the clients, and the ultimate
goal of marketing is to get people to remember products or brands in a different way than they are accustomed
to.
As traditional advertising media channels—such as print, radio, television, and direct mail[4]—lose popularity,
marketers and advertisers have to find new strategies to get their commercial messages to the consumer.
Guerrilla marketing focuses on taking the consumer by surprise to make a big impression about the product or
brand.[5] This in turn creates buzz about the product being marketed. It is a way of advertising that increases
consumers' engagement with the product or service, and is designed to create a memorable experience. By
creating a memorable experience, it also increases the likelihood that a consumer, or someone who interacted
with the campaign, will tell their friends about the product. Thus, via word of mouth, the product or service
being advertised reaches more people than initially anticipated.
Guerrilla marketing is relatively inexpensive, and focuses more on reach rather than frequency. [citation needed] For
guerrilla campaigns to be successful, companies don't need to spend large amounts, they just need to have
imagination, energy and time.[6] Therefore, it has the potential to be effective for small businesses, especially if
they are competing against bigger companies.
The message to consumers is often designed to be clear and concise. This type of marketing also works on
the unconscious mind,[citation needed] as purchasing decisions are often made by the unconscious mind. To keep the
product or service in the unconscious mind requires repetition, so if a buzz is created around a product, and it is
shared amongst friends, it enables repetition.[7]

Etymology and origin

The term "guerrilla marketing" is traced to guerrilla warfare, which employs atypical tactics to achieve an
objective. In 1984, the term guerrilla marketing was introduced by Leo Burnett's creative director Jay Conrad
Levinson in his book Guerrilla Marketing.[8][9][10] The term itself was from the inspiration of guerrilla warfare
which was unconventional warfare using different techniques from usual and small tactic strategies used by
armed civilians. It involves high imagination and energy to execute a guerrilla marketing campaign. This kind of
marketing is purely focusing on taking the consumer by surprise, creating a greater impression and eventually
leading to buzz through word-of-mouth or social media platforms. Guerrilla marketing is perfect for any small
or medium size businesses to bring their product or services to its consumers without investing more money on
advertisements. This has also been used by large companies to show the difference from its competitors and to
make use of social media campaigns. Lately, individuals use unconventional methods of job hunting or to work
more.[11] As a result, the concept of street marketing was born. It has evolved from being only the application of
activities on the streets, to be the development of innovative practices of promotion.[12] For example, one method
used by many enterprises to promote their products or services on the streets is the distribution of fliers. This
activity does not focus on creativity, but on making publicity on the streets. However, with the passage of time,
companies have developed more unconventional techniques to catch the attention of the clients.[13]
Types
Ambient marketing
Main article: Ambient awareness

Ambient communication is advertising presented on elements of the environment, including nearly every
available physical surface.[14] It is a compilation of intelligence, flexibility, and effective use of the atmosphere.
These kinds of ads can be found anywhere and everywhere from hand dryers in public bathrooms and petrol
pumps through to bus hand straps and golf-hole cups.[15]
Ambush marketing
Main article: Ambush marketing

Ambush marketing is a form of associative marketing, used by an organization to capitalize upon the awareness,
attention, goodwill, and other benefits, generated by having an association with an event or property, without
that organization having an official or direct connection to that event or property. [16]
It is typically seen at major events where rivals of official sponsors attempt to build an association with the
event and increase awareness for their brands, sometimes covertly. For example, Nike during the 2012 London
Olympics created 'find your Greatness' spots where they featured athletes from several locations called London
(but without showing the real London or referring to the Olympic games) which was intended to build a strong
association between London Olympics and Nike.[17]
Stealth marketing
Main article: Stealth marketing

Stealth marketing is a deliberate act of entering, operating in, or exiting a market in a furtive, secretive or
imperceptible manner, or an attempt to do so.[18]
Viral/buzz marketing
Main article: Viral marketing

Viral marketing describes any strategy that encourages individuals to pass on a marketing message to others,
creating the potential for exponential growth in the message's exposure and influence. Like viruses, such
strategies take advantage of rapid multiplication to explode the message to thousands, to millions. Off the
Internet, viral marketing has been referred to as "word-of-mouth", "creating a buzz", "leveraging the media",
"network marketing", But on the Internet, for better or worse, it's called "viral marketing".[19]
Main article: Buzz marketing

Similarly, buzz marketing uses high-profile media to encourage the public to discuss the brand or product.
[15]
 Buzz marketing works best when consumer's responses to a product or service and subsequent endorsements
are genuine, without the company paying them. Buzz generated from buzz marketing campaigns is referred to as
"amplified WOM" (word-of-mouth), and "organic WOM" is when buzz occurs naturally by the consumer. [15]
Grassroots marketing
Main article: Grassroots

Grassroots campaigns aim to win customers over on an individual basis. A successful grassroots campaign is
not about the dissemination of the marketing message in the hope that possible consumers are paying attention,
but rather highlights a personal connection between the consumer and the brand and builds a lasting relationship
with the brand.[20]
Astroturfing
Main article: Astroturfing

Astroturfing is among the most controversial guerrilla marketing strategies, and has a high risk factor for the
company marketing the product or service.[21] Astroturfing derives from artificial “turf”, often used in stadiums
or tennis courts – also known as fake grass. Hence, fake endorsements, testimonials and recommendations are
all products of Astroturfing in the public relations sector.[21] Astroturfing involves generating an artificial hype
around a particular product or company through a review or discussion on online blogs or forums by an
individual who is paid to convey a positive view. This can have a negative and detrimental effect on a company,
should the consumer suspect that the review or opinion is not authentic, damaging the company's reputation or
even worse, resulting in litigation.[21]
Street marketing

Main article: Street marketing

Further information: Tissue-pack marketing

Street marketing uses unconventional means of advertising or promoting products and brands in public areas.
The main goal is to encourage consumers to remember and recall the brand or product marketed. As a division
of guerrilla marketing, street marketing is specific to all marketing activities carried out in streets and public
areas such as parks, streets, events etc. Street marketing also encompasses advertising outdoors, such as
on shopping trolleys (shopping carts, in the US), public toilets, sides of cars or public transport, manhole covers,
footpaths, rubbish bins, etc.[22]
Street marketing isn't confined to fixed advertisements. It is common practice for organisations to use brand
ambassadors who distribute product samples or discount vouchers, and answer queries about the product while
emphasizing the brand. The brand ambassadors may be accompanied by a kiosk which contains the product
samples or demonstration materials, or they may be wearing a "walking billboard". The physical interaction
with consumers has a greater influencing power than traditional passive advertising.[23]
Street marketing is understood as mobilizing not only the space of the streets but also the imagination of the
street: that of street culture and street art.[24] The Y-generation broadly consisting of young urbanites (15 – 30
years old), is often put forth as the most susceptible target for the campaigns due to its associations with the
culture of the street.[25]
According to Marcel Saucet and Bernard Cova,[13] street marketing can be used as a general term encompassing
six principal types of activities:

 Distribution of flyers or products

This activity is more traditional and is the most common form of street marketing employed by brands.

 Product animations
This consists of personalizing a high-traffic space using brand imagery. The idea is to create a micro-universe in
order to promote a new product or service.

 Human animations
The goal of such actions is to create a space in which the brand's message is communicated through human
activity.

 Road shows
This form of mobile presentation is based on the development of means of transport: Taxi, bike, Segway, etc.

 Uncovered actions
These activities involve the customization of street elements.

 Event actions
These activities take the form of spectacles, such as flash mobs or contests. The idea is to promote a product,
service or brand value through organization of a public event.

UNIT 2

STRATEGIC MARKETING PLANNING

Strategic marketing is a method through which an organisation differentiates itself from its competition by
focusing on its strengths to provide better service and value to its customers. This is an organisation's plan to
target people and convert them into consumers of the organisation's products and services.
 STRATEGIC MARKETING
Strategic Marketing is a process of planning, developing and implementing maneuvers to obtain a competitive
edge in your chosen niche. This process is necessary to outline and simplify a direct map of the company’s
objectives and how to achieve them. A company wanting to secure a certain share of the market, should ensure
they clearly identify their mission, survey the industry situation, define specific objectives and develop,
implement and evaluate a plan to guarantee they can provide their customers with the products they need, when
they need them. Of course, the central objective of any company will be customer satisfaction so they may
dominate the market and become leaders in their industry and thus providing substantial business satisfaction. In
order to do that, three phases of marketing strategy must be perfected to create delight in their customers and
beat out the competition.

THREE PHASES OF STRATEGIC MARKETING PROCESS

1. Planning Phase

The planning phase is the most important as it analyzes internal strengths and weaknesses, external competition,
changes in technology, industry culture shifts and provides an overall picture of the state of the organization.
This phase has four key components that will provide a clear diagram of where your company is and what it is
doing.

 SWOT Analysis – Defines the strengths, weaknesses, opportunities and threats of your business and
reveal your company’s position in respect to the market. To maximizes strengths and minimize weaknesses an
organization must perform the following:
o Analyze competitors

o Research company’s current and prospective customers

o Assess company

o Identifying trends in the company’s industry

Once this analysis is complete the results should be used as a basis for developing the company’s marketing
plan, which should be measurable and attainable.

 Marketing program – Once the needs of the customers have been determined, and the decisions have
been made about which products will satisfy those needs, a marketing program or mix must be developed. This
marketing program is the how aspect of the planning phase, which focuses on the 4Ps and the budget needed for
each element of the mix.

 Set marketing and product goals

o Once the customer needs are understood, goals can be set to meet them, thus increasing the
chances of success with new products.

o Find points of difference: like your company’s unique selling point, each product should also
have a certain set of traits or characteristics that makes it superior to the competitive substitute. For example,
your product could be longer lasting, more accessible, more reliable or very user-friendly so the buyers will
choose it over the competition each time.

o Position the product: market so that in people’s minds your product is the “go to” for their
problem. Through emotional and mental marketing customers will associate your brand with their solution and
eliminate choice. For example, many mothers use “Pampers,” when referring to diapers, as this brand has been
positioned as the go to in baby diapering needs.

o Select target markets: based on the research and their commonalities, that way needs and goals
are both met.
 Market-Product focus and Goal Setting – Once the questions of where the company stands and what
it wants to achieve are answered, the next step in the planning process is determining where the resources will
be allocated, and how to turn plans into focused action. To do this, customers should be divided into segments to
 determine what specific marketing technique will reach each targeted group and what each group needs. Next
measurable goals should be set to get the needed products to the various groups, thus fulfilling the marketing
objectives. For example, if customers are divided into groups of common needs it’s easier to market them and
provide what they have proven to need at the time. And as well, if customers are grouped by their common
response to marketing, then the cooperation will know the right decisions to make to reach that specific market
segment.
o Price strategy: focuses on the list price, price allowances (reductions), discounts, payment
periods, and credit contracts.

o Place (Distribution) Strategy: the final ‘P’ in the marketing mix should focus on distribution
channels, outlets and transportation to get the product to the customer when they need it.

o Promotion Strategy: this element of the program should focus on direct marketing,
advertising, public relations and sales promotions that create brand awareness.

o Product Strategy: this element focuses on the features, packaging, branding and warranty of
the product.

2. Implementation Phase

The implementation phase is the action portion of the process. If the firm cannot carry out the plan that was
determined in the early stages, then the hours spent planning were wasted. However, if the planning was
adequately and competently structured, then the program can be put into effect through a sales forecast and a
budget, using the following four components.

 Obtaining Resources – sums of cash to develop and market new products.

 Designing marketing organization – there should be put in place a marketing hierarchy to properly
see the plans to fruition.

 Developing planning schedules – time needs to be allocated to specific tasks so they can be
accomplished.

 Executing the marketing plan – effectively executing the marketing plan will take attention to detail,
and focus on the strategy and tactics defined in your marketing plan.

3. Evaluation or Control Phase

The evaluation phase is the checking phase. This process involves ensuring that the results of the program are in
line with the goals set. The marketing team, especially the manager will need to observe any deviations in the
plan and quickly correct negative deviations to get back on course; for example fluctuations of the dollar creates
a lesser need for the product than in the past, then the production of said product should be repurposed for a new
more desired item. And they should exploit the positive divergences as well, for example if sales are better than
predicted for certain products then there could be more resources allocated to greater production or distribution
of the same item.

A few ways to evaluate the effectiveness of your marketing strategy include paying attention to:

 Strategy versus tactic – strategy defines goals and tactic defines actions to achieve goals.

 Measurable versus vague – have milestones that define when you’ve achieved your goals.

 Actionable versus Contingent – According to Inc.com: “A strategic goal should be achievable

through the tactics that support it, rather than dependent upon uncontrollable outside forces.”

 Marketing strategy should be backed by a business plan with tactical moves to accomplish goals, or it
is useless.
 GUIDELINES FOR EFFECTIVE STRATEGIC MARKETING PROCESS
A well thought out plan for offering value and solutions to your target market allows the company to discover
the needs of the targeted customers and fulfill those needs in a cost effective and timely fashion. This in turn
allows for the marketing team to be able to measure a company’s value based on your ideal customer’s response
to your product and strategy. Some guidelines to ensure this strategy is effective are:

1. Set measurable, achievable goals by ensuring they are clear, structured and measurable it will be easier
to accomplish your purpose.

2. Base plans on facts and validated assumptions through market research.

3. Use simple, clear and precise plans to detail what benefits you will offer your clients and how.
Customers are driven by needs and desires so a clear plan will target those to gain customer loyalty.

4. Have a feasible plan by using research to decide the best way to connect with and engage your ideal
customers and then implement a plan your company can afford and carry to fulfillment to do so.

5. Ensure control and flexibility by customizing your business plans and goals to match the needs of the
customers, as they determine the success or failure of your company.
[cp_modal

PROBLEMS TO EXPECT IN THE STRATEGIC MARKETING PROCESS

While creating the perfect marketing plan for your company, there are certain issues that could arise to deter the
process. Here are a few possible issues to be prepared to face:

 Organizational Issues such as Poor Assumptions: – assuming customer needs without validation,
lack of skilled workforce to implement the plans once they are arrived at, loss of sight of customer needs during
the planning phase and changing demographic of consumers.

 Issues in the Marketing Department such as: inflexibility, performance assessment problems,
coordination problems, poor information management and human relations issues.

 General problems such as: trouble obtaining marketing feedback, issues related to cost of marketing
and problems integrating collected information into plans.

P.E.S.T: TRENDS TO CONSIDER WHEN IMPLEMENTING MARKETING STRATEGIES

According to Business news daily, while industry related factors could affect a company’s performance, outside
factors can also play a major role in the outcome of a business’s plans. To determine the role of the external
factors, it is recommended that companies perform a PEST analysis. Below is a break-down of what the four
factors analyze.

 Political – this analyzes how legal issues and government regulations affect profit and consumer
behavior. The major considerations of the political aspect are tax guidelines, political stability, trade regulations
and embargos, employment laws and safety regulations. An example of this analysis and how it works is
looking at the effects of political instability in a foreign market and how it affects your company’s plans.

 Economic – this factor looks at the outside economic issues that affect a firm’s success. Companies
should pay attention to economic growth, inflation rates, exchange, interest rates and local business cycles.
Changes in interest rate could improve or decrease the company’s bottom line.

 Social – demographic and cultural aspects affect whether a company can compete in the market or not.
The social factor helps businesses to examine why customers purchase and what exactly their needs are. Issues
to consider include lifestyle changes, health consciousness, environmental responsibility awareness, and
attitudes toward work, education levels, population growth rates and country demographics. A certain shift in
educational requirements may result in career changes that could reflect in changing needs of the customers.
 Technical – this aspect considers how technology impacts product placement and marketing.
Technology can bring advantages and challenges that will increase or decrease production level. Specific areas
to consider are new technological advancements, the use of technology in marketing, the role of the Internet and
the impact of the information technology changes. The introduction of the Internet has created an expectation of
instant gratification in today’s consumer; so social media marketing has to be considered an option.

BUYER BEHAVIOUR

Buyer Behavior

Buyer behavior is the study of how an individual or a group of customers select and analyze a product or
service. It attempts to understand the decision making process of a customer while selecting a product or
service out of all the myriad alternatives available in the market. Buyer Readiness Stages. Buyers.

Form # 1. Complex Behaviour:

This behaviour occurs when customers get very much involved in the purchase, and acquaint themselves with
brands and quality differences.
This behaviour normally occurs in three steps:
(i) Firstly, the buyer develops beliefs about the product.
(ii) Secondly, attitudes or willingness to accept get developed in the buyer.
(iii) Thirdly a well thought out choice is made.
This applies to costly products about which not much is known to the consumer in the early stages. This is
probable when a person wants to buy a PC or a Laptop. There are too many product features to consider and
compare, especially if the buyer is unfamiliar with computers and their peripherals.
Marketers must quickly grasp the fact that the customer is getting highly involved.
They must try to:
(i) Support the buyer in his/her information gathering,
(ii) Support customer in the assessment actions by providing complete information on comparing product
features,
(iii) Highlighting product benefits,
(iv) Promoting the firm’s reputation and
(v) Try to influence the buyer through mutual friends, previous buyer.
Retailers of products in which high involvement is normal, must understand consumer education, and the
manner in which he/she gathers information on the product. Strategies to assist the buyer in helping him/her to
learn about product attributes and their relative importance, and the way in which the firm’s brand fulfils the
consumer’s requirements will be needed.
In such cases, personal meetings with the buyer, print media presented in a simple form, and regular projection
of benefits will have to be adopted by the retailer.
Form # 2. Dissonance Reducing Behaviour:
Sometimes, in spite of high involvement, the buyer may find it difficult to differentiate between brands.
High involvement occurs when the product to be purchased is:
(i) Costly,
(ii) Needed infrequently, and
(iii) The purchase is viewed as a high risk.
The buyer will go around to collect data, but on not making much of headway with comprehending the data, will
decide quite hastily based on price or customer convenience. In other words, the customer does not know much
about product category.
After the purchase, the customer may experience some regret, on realizing more about the product, and its weak
spots. He/she might hear about the comparative advantages of other brands. This regret is also known as
‘dissonance’, which may develop new beliefs and attitudes among customers.
If there is too much of regret, then beliefs, contrary to those earlier, may appear in the customer. Retailers have
to make customers stick to their brands, and must take precautions (or dissonance reducing steps) to make sure
that the information they supply will not result in a change of beliefs.
I bought an assembled computer some time ago, after prolonged discussion with friends and sellers. The
decision to buy was made primarily on the basis of costs, since I was unaware of technical details. A few
months later, I realized that maintaining the computer became a problem. I am now determined that I will never
buy or support the purchase of an assembled computer. I am also annoyed with the salesman who sold it to me.
Form # 3. Habitual Behaviour:
For many products, we never think and apply our minds while making purchases. The best example is groceries.
We have fixed brands, tried and accepted through years of purchasing experience. When we buy now we rarely
get involved, and we pick the same brand from habit.
It is now known from research that the habit and low involvement emerges out of low cost and frequent
purchasing. The decision sequence of belief, attitude and behaviour is avoided in such cases. Nor is extensive
information seeking followed.
There are mistaken views of this type of behaviour that this is a form of brand loyalty. Brand loyalty emerges
from considerable thinking and analysis of product features, which is in fact high involvement. In the case
depicted above, the involvement is rather low. It is a sort of habit, which is dominant. The buying is quick and
passive. The buying behaviour first starts from brand beliefs and passive learning.
Retailers use low price and promotion to create such low involvement habits. TV advertisements are very
effective devices. The ‘Pizza Hut’ or ‘Lux Toilet Soap’ are common examples.
Experienced retailers have four strategies for attempting to convert low involvement products into one of
high involvement:
(i) The first is to try to link the product to some involving issue. Some examples are a number of toothpastes
with gum protection, a cooking oil brand with reducing cholesterol, and a detergent with complete removal of
food stains.
(ii) The second strategy is to link the product to a personal issue or situation, like a cup of a certain tea with
removing stress and tiredness after a session of hard work. Another example is a cream for removing backaches.
(iii) The third is often used in India. This refers to using advertisements to evoke strong emotions, like a
deodorant, which attracts a long line of girls like the pied piper, or the capacity of a clothes washer to be
‘magical’ in washing stains from clothes.
(iv) The fourth is a well-used strategy, to add features to a normal good. An example is the ability to clean
clothes (normal), and also soften the surface (added).
Form # 4. Variety Seeking Behaviour:
There are some products in which involvement during buying is very low, but they become significant later,
during or after initial consumption. Some examples are condiments. We might shift from Bedekar to Priya to
Mother’s pickles just because we need a change of taste once in a while. Or a consumer may shift toothpastes
frequently for not very significant reasons. The customer is probably seeking variety.
The strategies depicted by different retailers are- reminder advertising, or significant presence on shelves, or
stealing customers by price reduction or projecting special and new qualities of competing products.
Compaq Computers, a multi-national hardware firm, captured the market by drastically reducing prices, and
maintaining a low price level for two years. Reducing commissions to the very minimum possible created the
low prices. When they had more than 50% of the country’s market they reverted to normal prices.
The problem is that a retailer has to keep a close watch on the early behaviour of the customer to classify or
categorize him/her. Once categorized, the dealing with the customer has to be according to strategies of a
standard kind, derived from experience. The customer can depict complex, dissonance reducing, variety seeking
and habitual behaviour.
Most groceries have very little brand differences and are bought with little involvement. Personal clothing
demands some involvement, but can become habitual. The costly product will require involvement, and the
buying is very carefully considered. Variety seeking is normally indicative of low involvement.

IMPORTANCE

1. Bargaining – A trend of bargaining is often found in the behaviour of buyers. They prefer buying goods by
reducing the price as told by the seller. Indian buyers too do not frame uniform price policy. The trend of
bargaining is still in vogue in the Indian markets.
2. Quality vs. Price – Buyers focus on price instead of the variety of the goods. They therefore, prefer high price
goods. A little bit change has come now because the consumers have now begun purchase of quality goods on
higher price.
3. Brand or Trademark Consciousness – It is the characteristic of the behaviour of buyer that he appears now
aware of the brand of items and considers these goods authentic and of higher quality.
4. Changing Consumption Patterns – Owing to widespread education, increase in income and standard of living
as also desire of more comforts, the pattern of consumption is now being changed. The low income group and
high income group are increasingly buying fridge, tape recorder, cooler, sewing machines etc.
5. Role of Women – The role of women is increasing day to day in the manner of decisions for purchase. The
women do purchase of all kinds particularly in families where the husbands earn the bread.
6. Credit and Guarantee – New motives for purchase are getting their way rapidly because of having credit and
guarantee facility available in the market. Such facilities are developing the trade and commerce.
7. Complaining – Buyers are gradually being aware of their rights. They have started exhibiting their complaints
through media and the representations before the concerned authorities and the forums. They can lodge their
complaint before consumer forum and thus, can receive the compensation against the damage/loss so sustained.

CONSUMER

Consumers are people or organizations that purchase products or services. The term also refers to hiring goods
and services. They are humans or other economic entities that use a good or service. ... Therefore, in
the market for toys, the buyer and consumer are often different people.

Who Is the Consumer?

Before you examine the role of the consumer in your marketing plan, make sure you understand exactly who
the consumer is. People sometimes use the two terms interchangeably, but the term “consumer” has a more
distinct definition compared to “customer.” A customer is simply a buyer, while a consumer is the individual
who both buys and uses the product or service. A consumer is a customer, but a customer isn’t always a
consumer in a business transaction. A consumer also is called the end user.

Consumer behavior is often influenced by different factors. Marketers should study consumer purchase patterns
and figure out buyer trends. In most cases, brands influence consumer behavior only with the things they can
control; like how IKEA seems to compel you to spend more than what you intended to every time you walk into
the store.

So what are the factors that influence consumers to say yes? There are three categories of factors that influence
consumer behavior:

1. Personal factors: an individual’s interests and opinions that can be influenced by demographics (age, gender,
culture, etc.).

2. Psychological factors: an individual’s response to a marketing message will depend on their perceptions and
attitudes.

3. Social factors: family, friends, education level, social media, income, they all influence consumers’ behavior.

Types of consumer behavior

There are four main types of consumer behavior:

1. Complex buying behavior

This type of behavior is encountered when consumers are buying an expensive, infrequently bought product.
They are highly involved in the purchase process and consumers’ research before committing to invest. Imagine
buying a house or a car; these are an example of a complex buying behavior.

2. Dissonance-reducing buying behavior

The consumer is highly involved in the purchase process but has difficulties determining the differences
between brands. ‘Dissonance’ can occur when the consumer worries that they will regret their choice.
Imagine you are buying a lawnmower. You will choose one based on price and convenience, but after the
purchase you will seek confirmation that you’ve made the right choice.

3. Habitual buying behavior

Habitual purchases are characterized by the fact that the consumer has very little involvement in the product or
brand category. Imagine grocery shopping: you go to the store and buy your preferred type of bread. You are
exhibiting a habitual pattern, not strong brand loyalty.

4. Variety seeking behavior

In this situation, a consumer purchases a different product not because they weren’t satisfied with the previous
one, but because they seek variety. Like when you are trying out new shower gel scents.

What affects consumer behavior?

Many things can affect consumer behavior, but the most frequent factors influencing consumer behavior are:

1. Marketing campaigns
Marketing campaigns influence purchasing decisions a lot. If done right and regularly, with the right marketing
message, they can even persuade consumers to change brands or opt for more expensive alternatives. Marketing
campaigns can even be used as reminders for products/services that need to be bought regularly but are not
necessarily on customers’ top of mind (like insurance for example). A good marketing message can influence
impulse purchases. 

2. Economic conditions
For expensive products especially (like houses or cars) economic conditions play a big part. A positive
economic environment is known to make consumers more confident and willing to indulge in purchases
irrespective of their personal financial liabilities. Consumers make decisions in a longer time period for
expensive purchases and the buying process can be influenced by more personal factors at the same time. 

3. Personal preferences
Consumer behavior can also be influenced by personal factors, likes, dislikes, priorities, morals, and values. In
industries like fashion or food personal opinions are especially powerful. Advertisement can, of course, help but
at the end of the day consumers’ choices are greatly influenced by their preferences. If you’re vegan, it doesn’t
matter how many burger joint ads you see, you’re probably not gonna start eating meat because of that.

4. Group influence
Peer pressure also influences consumer behavior. What our family members, classmates, immediate relatives,
neighbors, and acquaintances think or do can play a significant role in our decisions. Social psychology impacts
consumer behaviour. Choosing fast food over home-cooked meals, for example, is just one of such situations.
Education levels and social factors can have an impact.

5. Purchasing power
Last but not least, our purchasing power plays a significant role in influencing our behavior. Unless you are a
billionaire, you will take your budget into consideration before making a purchase decision. The product may be
excellent, the marketing could be on point, but if you don’t have the money for it, you won’t buy it. Segmenting
consumers based on their buying capacity will help marketers determine eligible consumers and achieve better
results.
Customer behavior patterns
Buying behavior patterns are not synonymous with buying habits. Habits are developed as tendencies towards
an action and they become spontaneous over time, while patterns show a predictable mental design. Each
customer has his unique buying habits, while buying behavior patterns are collective and offer marketers a
unique characterization. Customer behavior patterns can be grouped into:

1. Place of purchase
Most of the time customers will divide their purchases in several stores even if all items are available in the
same store. Think of your favorite hypermarket: although you can find clothes and shoes there as well, you’re
probably buying those from actual clothing brands.

When a customer has the capability and the access to purchase the same products in different stores, they are not
permanently loyal to any store, unless that’s the only store they have access to. Studying customer behavior in
terms of choice of place will help marketers identify key store locations.

2. Items purchased
Things to consider: the items that were purchased and how much of each item was purchased. Necessity items
can be bought in bulk while luxury items are more likely to be purchased less frequently and in small quantities.
The amount of each item purchased is influenced by the perishability of the item, the purchasing power of the
buyer, unit of sale, price, number of consumers for whom the item is intended, etc. Analyzing a shopping cart
can give marketers lots of consumer insights.

3. Time and frequency of purchase

Customers will go shopping according to their feasibility and will expect service even during the oddest hours;
especially now in the era of e-commerce where everything is only a few clicks away. It’s the shop’s
responsibility to meet these demands by identifying a purchase pattern and match its service according to the
time and frequency of purchases. One thing to keep in mind: seasonal variations and regional differences must
also be accounted for.

4. Method of purchase
A customer can either walk into a store and buy an item right then and there, or order online and pay online via
credit card or on delivery. The method of purchase can also induce more spending from the customer (for online
shopping, you might also be charged a shipping fee for example). The way a customer chooses to purchase an
item also says a lot about the type of customer he is.

ORGANIZATIONAL BUYERS
organizational buyers. People in charge of purchasing products and services for organizations, governments
and business. Organizational buyers make buying decisions for their organizations and purchase products and
services professionally. This type of buyer tends to be more knowledgeable than normal consumers.

DEF

Organizational Buyer Behavior

Individual consumers are not the only buyers in a market. Companies and other organizations also need goods
and services to operate, run their businesses, and produce the offerings they provide to one another and to
consumers. These organizations, which include producers, resellers, government and nonprofit groups, buy a
huge variety of products including equipment, raw materials, finished goods, labor, and other services. Some
organizations sell exclusively to other organizations and never come into contact with consumer buyers.
B2B markets have their own patterns of behavior and decision-making dynamics that are important to
understand for two major reasons. First, when you are a member of an organization, it’s helpful to appreciate
how and why organization buying decisions are different from the decisions you make as an individual
consumer. Second, many marketing roles focus on B2B rather than B2C marketing, or they may be a
combination of the two. If you have opportunities to work in B2B marketing, you need to recognize how the
decision-making process differs in order to create effective marketing for B2B customers and target segments.

Following are the stages in the Organizational Buying process:

Stage-1 – Problem Recognition:
The first stage of the business buying process in which someone in the company recognizes a problem or need
that can be met by acquiring a good or a service.
Stage-2 – General Need Description:
At this stage of business buying Process Company describes the general characteristics and quantity of a needed
item.
Stage-3 – Product Specification:
At this stage of the business buying process buying organization decide on the product and specifies the best
technical product characteristics for a needed item.
Stage-4 – Value Analysis:
An approach to cost reduction, in which components are studied carefully to determine if they can be
redesigned, standardized or made by less costly methods of production.
Stage-5 – Supplier Search:
At this stage of the business buying process buyer tries to find the best vendors.
Stage-6 – Proposal Solicitation:
The stage of the business buying process in which the buyer invites qualified suppliers to submit proposals.
Stage-7 – Supplier Selection:
The stage of the business buying process in which the buyer reviews proposal and selects a supplier or suppliers.
Stage-8 – Order-Routine Specification:
The stage of the business buying process in which the buyer writes the final order with the chosen suppliers,
listing the technical specifications, quantity needed, expected time of delivery, return policies and warranties.
Stage-9 – Performance Review:
The stage of the business buying process in which the buyer rates its satisfaction with suppliers, deciding
whether to continue, modifies or drops them.

MARKET SEGMENTATION

Market segmentation is the process of dividing a market of potential customers into groups, or segments,
based on different characteristics. The segments created are composed of consumers who will respond similarly
to marketing strategies and who share traits such as similar interests, needs, or locations.

What is market segmentation?

Market segmentation is the process brands use to divide their target market into smaller segments of people that
share common characteristics to optimize their marketing, advertising and sales efforts.
What is market segmentation?

Market segmentation is a business practice relying on research that leads the direction of how a business divides

its target market into smaller, more manageable groups based on common ground they share. Simply put,

customers of each market segment have similar characteristics that businesses can leverage to optimize their

marketing, advertising, and sales efforts.

The purpose of segmentation is that you are able to introduce a more tailored message that will be received

successfully. This is advantageous for companies who may have a product or service in the marketplace that

boasts multiple benefits or uses for different types of customers.

Have you ever heard the phrase: “You can’t be everything for everybody”? The same proves true with one

marketing solution. As a marketer, you can’t solve everyone’s problem or appeal to every single person, which

is why market segmentation can be such an effective growth strategy to implement.

Four types of market segmentation

As you can imagine, there are many different approaches you can take when segmenting your target market.

This article will walk you through the four main types of market segmentation and provide examples to help you

get started.

Geographic segmentation

Geographic segmentation targets customers based on a predefined geographic border. Differences in interests,

values, and preferences vary dramatically throughout cities, states, and countries, so it is important for marketers

to recognize these differences and advertise accordingly.

Tip: Different countries (and even different states) recognize different holidays, so it's important to keep up to
date on different events around the world. At WeVideo.com, Max Thorpe highlights the importance of keeping
your finger on the pulse of different holidays and events to spur new marketing initiatives.

Think about products such as parkas and bathing suits. Parkas will be sold for most of the year in the colder,

northern half of the country, whereas southern areas may only be able to find parkas in specialty stores during

the winter. Bathing suits, on the other hand, are sold year-round in the warmer states but only sold during spring

and summer in the cooler states.

Understand where your prospects are utilizing real-time buyer intent data from review platforms like G2. This

data provides insights into the location of current and potential customers researching your product.

Demographic segmentation

Demographic segmentation divides a market through variables such as age, gender, education level, family size,

occupation, income, and more. This form of segmentation is a widely used strategy due to specific products

catering to obvious individual needs relating to at least one demographic element.

Perhaps the most obvious variable of them all, age is important for marketers to understand and advertise

accordingly due to the fast-paced nature of preference changes within the various stages of life. Even media

consumption differs greatly between each generation, so it’s important to recognize what your target age range

is and which channels they use to consume information.

Psychographic segmentation

Unlike geographic segmentation and demographic segmentation, psychographic segmentation focuses on the

intrinsic traits your target customer possesses. Psychographic traits can range from values, personalities,

interests, attitudes, conscious and subconscious motivators, lifestyles, and opinions. To understand your target

customers on this level, methods such as focus groups, surveys, interviews, and case studies can all prove

successful in compiling this type of conclusion.

Think about the lifestyle of someone who lives in a small, beach town and surfs for a living versus someone

who lives in a big city working in corporate America. Each of their wants and needs on a daily basis are

incredibly different, and marketers must recognize those differences to be successful.

Characteristics will vary based on company size for B2B brands. Read customer reviews as part of your

marketing strategy; they will give you a number of psychographic insights, including the needs and opinions

of your target market.

Behavioral segmentation

Behavioral segmentation has similar measurements to psychographic segmentation but focuses on specific

reactions and the way customers go through their decision making and buying processes. Attitudes towards your

brand, the way they use it, and their knowledge base are all examples of behavioral segmentation. Collecting

this type of data is similar to the way you would find psychographic data. Review websites can also be a helpful

tool when searching for this information.

Brand loyalty is an excellent example of behavioral segmentation. I bet while reading this article you can think

of one brand that you consistently buy and trust enough to purchase its new line without even reading the

reviews. This type of brand loyalty produces a consistent buying pattern, which is categorized as a behavioral

trait. Marketers work hard to get consumers to love and stay loyal to their brand for a consistent purchase cycle.

TARGETING SEGMENTATION

Definition of 'Target Market'

Definition: Target market is the end consumer to which the company wants to sell its end products too. Target
marketing involves breaking down the entire market into various segments and planning marketing strategies
accordingly for each segment to increase the market share.

Target Marketing and Market Segmentation

Target marketing can be your key to increasing sales

Target marketing involves breaking a market into segments and then concentrating your marketing efforts on
one or a few key segments consisting of the customers whose needs and desires most closely match your
product or service offerings. It can be the key to attracting new business, increasing sales, and making your
business a success.

The beauty of target marketing is that aiming your marketing efforts at specific groups of consumers makes the
promotion, pricing, and distribution of your products and/or services easier and more cost effective and provides
a focus to all of your marketing activities.

For instance, suppose a catering business offers catering services in the client’s home. Instead of advertising via
a newspaper insert that goes out to everyone, the caterer would first identify the target market for its services. It
could then target the desired market with a direct mail campaign, flyer delivery in a particular residential area,
or a Facebook ad aimed at customers in a specific area, thereby increasing its return on investment in marketing
and bringing in more customers.
Social media platforms, such as Facebook, LinkedIn, Twitter, and Instagram, have sophisticated options to
allow businesses to target users based on market segments. A bed-and-breakfast business, for example, could
target married Facebook followers with an ad for a romantic weekend getaway package. LinkedIn, on the other
hand, is more B2B oriented, so you can target businesses using a variety of criteria such as number of
employees, industry, geographic location, and so on.

Although you can approach market segmentation in many different ways, depending on how you want to slice
up the pie, three of the most common types are demographic segmentation, geographic segmentation, and
psychographic segmentation.

Demographic Segmentation

Demographic grouping is based on measurable statistics, such as:

 Gender
 Age
 Income level
 Marital status
 Education
 Race
 Religion  

Demographic segmentation is usually the most important criterion for identifying target markets, which means
that knowledge of demographic information is crucial for many businesses. A liquor vendor, for instance, might
want to target its marketing efforts based on the results of Gallup polls, which indicate that beer is the beverage
of choice for people under the age of 54—particularly in the 18 to 34 range—whereas those aged 55 and older
prefer wine.

Geographic Segmentation

Geographic segmentation involves segmenting the market based on location. Home addresses are one example,
but depending on the scope of your business, you could also use:

 Neighborhood
 Postal or ZIP code
 Area code
 City
 Province or state
 Region
 Country (if your business is international)

Geographic segmentation relies on the notion that groups of consumers in a particular geographic area may have
specific product or service needs. For example, a lawn care service may want to focus its marketing efforts on a
particular town or subdivision inhabited by a high percentage of older residents.

Psychographic Segmentation

Psychographic segmentation divides the target market based on socioeconomic class or lifestyle preferences.

 The socioeconomic scale ranges from the affluent and highly educated at the top to the uneducated and
unskilled at the bottom. The UK-based National Readership Survey segregates social class into six categories:

Social Grade Social Status Occupation

A Upper class Higher managerial, administrative, or professional

B Middle class Intermediate managerial, administrative, or professional

Supervisory, clerical, junior managerial, administrative, or

C1 Lower middle class
professional

Skilled working Skilled manual labor

C2
class

D Working class Semi- and unskilled manual labor

E Subsistence class Unemployed, seasonal, or casual

The lifestyle-preferences classification involves values, beliefs, interests, and the like.  Examples include people
who prefer an urban lifestyle as opposed to a rural or suburban lifestyle, people who are pet lovers, or people
with a keen interest in environmental issues.

Psychographic segmentation is based on the premise that the choices people make when purchasing goods
and services reflect their lifestyle preferences or socioeconomic class.

Target Marketing Case Study: McDonald's

According to QSR magazine's 2017 QRS 50, McDonald's is the largest fast-food chain in the U.S. ranked by
sales. It's also one of the most successful examples of demographic target marketing, aiming its products at
children, teenagers, and young urban-dwelling families by offering PlayPlaces & Parties, the Arch Card
(reloadable cash card), free wifi, Happy Meals that include toys such as Marvel Studios characters, special
promotions, and clever ad campaigns. Targeted advertising and aggressive pricing have enabled McDonald's to
capture 17 percent of the fast-food market share in the U.S. as of 2015.

However, as millennials surpassed baby boomers in 2016 to become the largest generation in the U.S.
workforce, McDonald's sales have been in decline as fast-food style menu items, such as the ubiquitous Big
Mac and fries, have less appeal to millennials. In response, McDonald's has altered its marketing strategy to
target the millennial generation by advertising fresher, healthier menu options and upscale coffee products such
as espressos.

POSITIONING AND DIFFERENCIATION STRATEGIES

DIFFERENTIATION AND POSITIONING

Differentiation and Positioning are the last steps of the marketing strategy. We know which customers we want
to serve, having segmented the market and targeted the most promising segment(s). But how are we going to
serve the selected customers? This involves differentiating ourselves from other offerings in the market:
Differentiation. Also, we aim at a position in the market and in customers’ minds: Positioning.
Differentiation and Positioning are strongly related and depend on each other. Positioning, which is the process
of arranging for a product to occupy a clear, distinctive and desirable place relative to competing products in the
minds of target customers, depends on the differentiation, and vice versa. Because through the differentiation,
which is the process of actually differentiating the product to create superior customer value, we can achieve the
desired position in customers’ minds.

We will now look at the process of differentiating and positioning in more detail.

-
Differentiation and Positioning – Closely related Activities
 The differentiation and positioning process consists of three steps:

1. Identifying a set of differentiating competitive advantages on which to build a position

2. Choosing the right competitive advantages

3. Selecting an overall positioning strategy.

Then, the company has to deliver its promises by effectively communicating and delivering the chosen position
to the selected market.

Differentiation
In order to achieve a strong position in the segment the company has chosen, it has to find ways to set itself
apart. To do so, it has to deal with competitive advantages. In other terms, each firm must differentiate itself and
its offer by building a unique bundle of benefits. This bundle of benefits should appeal to a substantial group
within the chosen and targeted segment. You see that by means of this differentiation, the right position in
customers’ minds can be achieved, leading to a strong correlation of differentiation and positioning.

The firm can differentiate itself by identifying possible value differences and competitive advantages and then
choosing the right ones. Find out how differentiating works in particular.
Positioning
What position should the product occupy in consumers’ minds? That is dealt with by positioning. The place a
product occupies in consumers’ minds relative to competing products is called the product’s position. Thus, it is
not our own position of our product, but the way we would like our customers to think about it. This involves
perceptions, impressions and feelings that customers should have for the product in comparison to competing
products. Differentiation and Positioning are strongly related to each other. By differentiating the product, the
company can achieve the position it wants to achieve in consumers’ minds.

Finding the right positioning strategy requires selecting a value proposition and developing a positioning
statement. Find out how positioning works in particular.

Delivering the chosen Differentiation and Positioning Strategy

A differentiation and positioning strategy is worthless if it is not realized. Differentiation and positioning should,
in other words, be delivered. That means that once a position has been chosen, the company must take steps to
actually deliver and communicate the desired position to the target consumers. The means to do so is the
marketing mix. If the company wants to build a strong position on basis of better quality, it must deliver better
quality. Thus, the marketing mix elements have to support the chosen position. If the company pursues a more-
for-more positioning strategy, it needs high-quality products, high prices, high-quality distribution and
advertising in high-quality media.

Realizing the chosen differentiation and positioning strategy by means of the marketing mix is the only way to
achieve the desired position in consumers’ minds.

Positioning

Positioning is about the mind of the consumer: placing a company or a brand (sometimes they are the same, e.g.,

Carbonite, CakeLove, and Sugar Bakery & Sweet Shop) in the consumer’s mind in relation to the

competition.Al Ries and Jack Trout, Positioning: The Battle for Your Mind (New York: McGraw-Hill, 2001), 3.

The positioning decision is often the critical strategic decision for a company or a brand because the position

can be central to customers’ perception and choice decisions. Further, because all elements of the marketing
program can potentially affect the position, it is usually necessary to use a positioning strategy as a focus for

developing the marketing program. A clear positioning strategy can ensure that the elements of the marketing

program are consistent and supportive.David A. Aaker and Gary Shansby, “Positioning Your

Product,” Business Horizons, May–June 1982, 56–62.

Both big and small businesses practice positioning, but small businesses may not know it as positioning. The

small business owner thinks about positioning intuitively, does not use the terminology, and does not always

know how to promote the position. Additionally, in many if not most small businesses, “the positioning of

products is based on the opinions of the business owner, his or her family, and selected friends and

family.”“Product Positioning,” Inc., accessed December 1, 2011, 

What Is Market Positioning?

(click to see video)

A discussion of positioning.

Successful positioning of a small business or its brand is built on a well-defined target market combined with

solid points of differentiation. There are six approaches to positioning that the small business owner should

consider:David A. Aaker and Gary Shansby, “Positioning Your Product,” Business Horizons, May–June 1982,

56–62.

1. Positioning by attribute. The most frequent positioning strategy. The focus is on a particular attribute,

a product feature, or customer benefit. CakeLove in Maryland positions itself as “cakes from scratch”

with natural ingredients (not the least of which is butter, lots of it).

2. Positioning by price/quality. A very pervasive approach to positioning. Some small companies and

brands offer more in terms of service, features, or performance, and a higher price serves to signal this

higher quality to the customer. As an example, Derry Church Artisan Chocolates are very expensive,

but they position themselves as having the very high quality that justifies a high price.Jim T. Ryan,

“Sweet Strategy: Artisan Chocolatier Eyes Internet, Corporate Giving for Growth,” Central Penn

Business Journal, November 26, 2010, 3–6.

 3. Positioning by use or application. Focuses on how a product is used or different applications of the

product. A solitary custom tailoring shop located in a downtown professional office area could position

itself as the only tailor where you can conveniently go “for lunch.”

4. Positioning by product user. The focus shifts from the product to the user. KIND Snacks are cereal

bars positioned as a snack bar for those who are interested in a snack that is wholesome, convenient,

tasty, healthy, and “economically sustainable and socially impactful.”“Our Story,” KIND Healthy

Snacks, accessed December 8, 2011, www.kindsnacks.com/our-story. It is a great snack for hikers and

campers.

5. Positioning by product class. Focuses on product-class associations. A cleaning service that uses only

green products and processes can position itself as the green choice in cleaning services. Healthy

Homes Cleaning is an example of a green cleaning business.

6. Positioning with respect to a competitor. Comparing a small business brand to its competitors. Some

comparisons will be very direct; others will be subtle.Dana-Nicoleta Lascu and Kenneth E.

Clow, Essentials of Marketing (Mason, OH: Atomic Dog Publishing, 2007), 181. A small manufacturer

that does not miss delivery times and makes products that are free of flaws can position itself on the

basis of timely delivery and manufacturing excellence.Lisa Nielsen, “Product Positioning and

Differentiation Strategy,” Chron.com, accessed June 1, 2012, http://smallbusiness.chron.com/product-

positioning -strategy-3350.html.

DEF

Differentiation and positioning considerations are relevant to each element of the marketing mix as well as to
onground and online marketplaces. The small business should be working toward a competitive advantage
—“the ability to perform in one or more ways that competitors cannot or will not match.”Philip Kotler and
Kevin Lane Keller, Marketing Management (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 276.

Differentiation strategy is one of the most important marketing strategy in today’s business environment. With

so many brands and so many varieties of products and so much advertising noise, it becomes very difficult but
ultimately very necessary to differentiate your brand from competition. Thus, Differentiation strategy is being
used by all top companies for their products. There are various ways to differentiate your product.

Page Contents
1) Innovation / Invention –

The best way to implement differentiation strategy is to invent or innovate. By innovating or inventing, you
become the market leader because your product is the first entrant in the market. Inventions are of course
difficult and require regular R&D expenditure. But innovations are more practical and are a Differentiation
strategy used by technological companies like Apple and Google.
2) Product-level differentiation –

Observed in many industries, Differentiation strategy can be executed at product level too. Taking an example
of the tourism industry, tour packages of all companies are different and the tour package might have its own
differentiating factors. Some might be giving international tours whereas others will be giving national and
regional tours only. Thus, by incorporating product differentiation strategy at product level, the brands can
differentiate themselves from competitors in the eyes of the customer.

3) Price differentiation –

The most used form of differentiation strategy is price differentiation. In the above example of tour packages,
some brands might give the luxury package whereas other brands might give a cheap and affordable pricing.
Mobile handset companies like Samsung and apple target the cream segment whereas companies
like Micromax and Xolo target the price sensitive segment. Price segmentation is the biggest Differentiation
weapon in the hands of marketers.

4) Branding –

Your promotion mix and the marketing communications of the company play a crucial role in the differentiation
strategy of your product. Companies like Pepsi and Coke rely heavily on their branding efforts to convert the
customer to their products. Thus, youngsters will like pepsi, young adults will like Thums up, families will
like Fanta, and Coke can be an all time favorite for everyone. Your promotion mix helps you target the correct
segment and hence plays a crucial role in differentiation.

5) Packaging –

If you go to any publications and ask them what are the critical factors in selling a book, the publication agency
will say that, after the story of the book, the top cover of the book plays a critical role in the success of the book.
In fact, many a times, customers might buy a book based on the top cover. Thus, packaging is important. The
same can be seen when you enter a mall and you have 100’s of shelves with different types of cereals, soaps,
shampoos, detergents etc. At such a time, the color, the packaging, the taglines, the ease of handling can play an
important role in converting the customer to your brand. The tetrapack introduced by Frooti in the Indian market
was a wonderful example of Packaging playing a role in differentiation strategy.

6) Service pre sale and post sale –

Word of mouth marketing is another product differentiator and all brands targeting a niche audience know the
importance of word of mouth marketing. And how does word of mouth marketing happen? Through very good
pre and post sales service. Ever heard a friend say that not only does the restaurant serve good food, but the
service and the ambiance are awesome as well? Thats the service i am talking of. If your service is beyond
customers expectation, than that can be a big boost to your differentiation strategy.

7) Point of customer interaction –

There are Sec A, B and C segment customers. You have to ensure that you take care of all kinds of customers
when they interact with your company. For this, you have to take care of point of interactions and ensure that
the customer has a good experience whenever he interacts with the company. In fact, banks and retail
showrooms regularly have audits to ensure that the front end staff is polite and helpful to customers because this
can be a major point for differentiation. A service company, which does not have good interactions with the
customer will always suffer in its profits and operations.

8) User convenience –

The banking industry shows us an example of how User convenience can help you in your differentiation
strategy. The banks differentiate themselves with the type of net banking services they offer as well as the
number of ATM’s that they have in your vicinity. This is an excellent example of differentiation through user
convenience. If you are taking care of user convenience, the customer will always come back to you. This is the
reason why, even though there are so many big retail outlets in the market, the smaller shops still run well. This
is because they give personalized service to a handful of customers and the customers find it convenience to
shop at the local retail store.

9) Offer variety of products –

Another way to implement differentiation strategy is to attack the psychology of the customers. Many a
customer will tell you that they picked a brand just because the brand had more variety in the number of
products it offered. A customer, during prospecting, likes to have more variety so that he finds the right product
and can pick that product for himself. Thus, the more variety of products you offer, the more chances you have
of getting a higher positioning in the mind of the customer and therefore, differentiating yourself from
competition. This is a high investment strategy, because you need to invest in a product line, but it is useful and
profitable in the long run.

Thus, there are many ways for implementing a differentiation strategy. What the company has to realise is that it
cannot sit back and enjoy the customers loyalty today. In this saturated business environment, each and every
company has to take steps to differentiate itself from competition and ensure that it has a high positioning in the
customers mind. An example of this is websites and google. If a website is not in the top 10 pages of google,
than it is likely to be ignored by 50-60% of the searchers on google. Thus, by improving your website and your
content, you can reach the top 10 on google and differentiate your website from others.

MARKETING MIX

Definition: The marketing mix refers to the set of actions, or tactics, that a company uses to promote its brand
or product in the market. The 4Ps make up a typical marketing mix - Price, Product, Promotion and Place.

Marketing is simplistically defined as ‘putting the right product in the right place, at the right price, at the right
time.’ Though this sounds like an easy enough proposition, a lot of hard work and research needs to go into
setting this simple definition up. And if even one element is off the mark, a promising product or service can fail
completely and end up costing the company substantially.

The use of a marketing mix is an excellent way to help ensure that ‘putting the right product in the right place,
…’ will happen. The marketing mix is a crucial tool to help understand what the product or service can
offer and how to plan for a successful product offering. The marketing mix is most commonly executed
through the 4 P’s of marketing: Price, Product, Promotion, and Place.

These have been extensively added to and expanded through additional P’s and even a 4C concept. But the 4Ps
serve as a great place to start planning for the product or even to evaluate an existing product offering.

© Entrepreneurial Insights

In this article, we will look at 1) the four P’s, 2) history of the marketing mix concept and terminology,
3) purpose of the marketing mix, 4) key features of the marketing mix, 5) developing a marketing mix,
6) key challenges, and 7) marketing mix example – Nivea.
THE FOUR P’S

Product
The product is either a tangible good or an intangible service that is seem to meet a specific customer need or
demand. All products follow a logical product life cycle and it is vital for marketers to understand and plan for
the various stages and their unique challenges. It is key to understand those problems that the product is
attempting to solve. The benefits offered by the product and all its features need to be understood and the unique
selling proposition of the product need to be studied. In addition, the potential buyers of the product need to be
identified and understood.

Price
Price covers the actual amount the end user is expected to pay for a product. How a product is priced will
directly affect how it sells. This is linked to what the perceived value of the product is to the customer rather
than an objective costing of the product on offer. If a product is priced higher or lower than its perceived value,
then it will not sell. This is why it is imperative to understand how a customer sees what you are selling. If there
is a positive customer value, than a product may be successfully priced higher than its objective monetary value.
Conversely, if a product has little value in the eyes of the consumer, then it may need to be underpriced to sell.
Price may also be affected by distribution plans, value chain costs and markups and how competitors price a
rival product.

Promotion
The marketing communication strategies and techniques all fall under the promotion heading. These may
include advertising, sales promotions, special offers and public relations. Whatever the channel used, it is
necessary for it to be suitable for the product, the price and the end user it is being marketed to. It is important to
differentiate between marketing and promotion. Promotion is just the communication aspect of the entire
marketing function.

Place
Place or placement has to do with how the product will be provided to the customer. Distribution is a key
element of placement. The placement strategy will help assess what channel is the most suited to a product.
How a product is accessed by the end user also needs to compliment the rest of the product strategy.

The Marketing Mix

HISTORY OF MARKETING MIX CONCEPT AND TERMINOLOGY

The marketing mix concept gained popularity following an article titled “The Concept of the Marketing Mix”
by Neil Borden published in 1964. Borden explained how he started using the term inspired by James Culliton
who in the 1940s described the marketing manager as a ‘mixer of ingredients.’ Borden’s article detailed these
ingredients as product, planning, price, branding, distribution, display, packaging, advertising, promotions,
personal selling among many others. Eventually E. Jerome McCarthy clustered these multiple items into four
high level categories that we now know as the 4 P’s of marketing. “Its elements are the basic, tactical
components of a marketing plan”. Together, elements in these four categories help develop marketing strategies
and tactics.

PURPOSE OF MARKETING MIX

The 4P’s were formalized and developed over the years by experts to ensure the creation and execution of a
successful marketing strategy. Through the use of this tool, the attempt is to satisfy both the customer and the
seller. When properly understood and utilized, this mix has proven to a key factor in a product’s success.

KEY FEATURES OF MARKETING MIX

Interdependent variables
The marketing mix is made up of four unique variables. These four variables are interdependent and need to be
planned in conjunction with one another to ensure that the action plans within all four are complimentary and
aligned.

Help Achieve Marketing Targets

Through the use of this set of variables, the company can achieve its marketing targets such as sales, profits, and
customer retention and satisfaction.

Flexible Concept
The marketing mix is a fluid and flexible concept and the focus on any one variable may be increased or
decreased given unique marketing conditions and customer requirements.

Constant Monitoring
It is vital to keep an eye on changing trends and requirements, within the company as well as in the market to
ensure that the elements in marketing mix stays relevant and updated.

Role of Marketing Manager

A mature, intelligent and innovative marketing manager needs to be at the helm of the marketing mix. This
pivotal role means that this manager is responsible for achieving desired results through the skill manipulation
of these variables.

Customer as a focal point

A vital feature of the marketing mix is that the customer is the focal point of the activity. The value of the
product is determined by customer perceptions and the goal is to achieve a satisfied and loyal customer.

This video shows how you can create value by using the marketing mix.

DEVELOPING A MARKETING MIX

Intuition and creative thinking are essential job requirements for a marketing manager. But relying on just these
can lead to inaccurate assumptions that may not end up delivering results. To ensure a marketing mix that is
based in research and combines facts with innovation, a manager should go through the following systematic
process:

Step 1: Defining Unique Selling Proposition

The first item on the marketing manager’s agenda should be to define what the product has to offer or its unique
selling proposition (USP). Through customer surveys or focus groups, there needs to be an identification of how
important this USP is to the consumer and whether they are intrigued by the offering. It needs to be clearly
understood what the key features and benefits of the product are and whether they will help ensure sales.

Step 2: Understanding the Consumer

The second step is to understand the consumer. The product can be focused by identifying who will purchase it.
All other elements of the marketing mix follow from this understanding. Who is the customer? What do they
need? What is the value of the product to them? This understanding will ensure that the product offering is
relevant and targeted.
Step 3: Understanding the Competition
The next step is to understand the competition. The prices and related benefits such as discounts, warranties and
special offers need to be assessed. An understanding of the subjective value of the product and a comparison
with its actual manufacturing distribution cost will help set a realistic price point.

Step 4: Evaluating Placement Options

At this point the marketing manager needs to evaluate placement options to understand where the customer is
most likely to make a purchase and what are the costs associated with using this channel. Multiple channels may
help target a wider customer base and ensure east of access. On the other hand, if the product serves a niche
market then it may make good business sense to concentrate distribution to a specific area or channel. The
perceived value of the product is closely tied in with how it is made available.

Step 5: Developing Communication / Promotion strategy

Based on the audience identified and the price points established, the marketing communication strategy can
now be developed. Whatever promotional methods are finalized need to appeal to the intended customers and
ensure that the key features and benefits of the product are clearly understood and highlighted.

Step 6: Cross-check of the Marketing Mix

A step back needs to be taken at this point to see how all the elements identified and planned for relate to each
other. All marketing mix variables are interdependent and rely on each other for a strong strategy. Do the
proposed selling channels reinforce the perceived value of the product? Is the promotional material in keeping
with the distribution channels proposed? The marketing plan can be finalized once it is ensured that all four
elements are in harmony and there are no conflicting messages, either implicit or explicit.

PRODUCT DECISIONS

Product decisions revolve around decisions regarding the physical product (size, style, specification, etc.)

and product line management. Product decisions are based on how much the organisation has to adjust
the product on the standardisation - adaptation continuum to differing market conditions.

MEAN

The decisions about the product types to be offered represent the most critical decisions in determining the
future of a company. The management must first decide what products to offer in the market place before other
intelligent product decisions pertaining to the product’s physical attributes, packaging branding, and so on, can
be made. There are two distinct levels at which such changes take place, namely: • the product-mix level and •
the product-line level. The Committee on Definitions of the American Marketing Association has defined
product-mix as ‘the composite of products offered for sale by a firm or business unit’. The same committee has
defined product-line as ‘a group of products that are closely related either because they satisfy a class of need,
are used together, are sold to the same customer groups, are marketed through the same type of outlet or fall
within given price range’ (Alexander, 1980).
CONCEPT OF PRODUCT

Product is one of the important elements of marketing mix. A marketer can satisfy consumer needs and wants

through product. A product consists of both good and service. Decisions on all other elements of marketing mix

depend on product. For example, price is set for the product; promotional efforts are directed to sell the product;

and distribution network is prepared for the product. Product is in the center of marketing programme.

Therefore, product has a major role in determining overall success of marketing efforts.

A marketer tries to produce and sell such products that satisfy needs and wants of the target market. Other words

used for product are good, commodity, service, article, or object. In marketing literature, product has

comprehensive meaning.

Definitions of Product:

Term product has been variously defined by the experts in the field.

Let us examine some standard definitions:

1. Philip Kotler:

“Product is anything that can be offered to someone to satisfy a need or a want.”

2. William Stanton:

“Product is complex of tangible and intangible attributes, including packaging, colour, price, prestige, and

services, that satisfy needs and wants of people.”

3. W. Alderson:
“Product is a bundle of utilities, consisting of various product features and accompanying services.”

Types of Product:

A company sells different products (goods and services) to its target market.

They can be classified into two groups, such as:

1. Consumer Product, and

2. Industrial Products

1. Consumer Products:

Consumer products are those items which are used by ultimate consumers or households and they can be used

without further commercial and engineering processes.

Consumer products can be divided into four types as under:

i. Convenient Products:

Such products improve or enhance users’ convenience. They are used in a day-to-day life. They are frequently

required and can be easily purchased. For example, soaps, biscuits, toothpaste, razors and shaving creams,

newspapers, etc. They are purchased spontaneously, without much consideration, from nearby shops or retail

malls.

ii. Shopping Products:

These products require special time and shopping efforts. They are purchased purposefully from special shops

or markets. Quality, price, brand, fashion, style, getup, colour, etc., are important criteria to be considered. They

are to be chosen among various alternatives or varieties. Gold and jewelleries, footwear, clothes, and other

durables (including refrigerator, television, wrist washes, etc.).

iii. Durable Products:

Durable products can last for a longer period and can be repeatedly used by one or more persons. Television,

computer, refrigerator, fans, electric irons, vehicles, etc., are examples of durable products. Brand, company

image, price, qualities (including safety, ease, economy, convenience, durability, etc.), features (including size,
colour, shape, weight, etc.), and after-sales services (including free installation, home delivery, repairing,

guarantee and warrantee, etc.) are important aspects the customers consider while buying these products.

iv. Non-durable Products:

As against durable products, the non-durable products have short life. They must be consumed within short time

after they are manufactured. Fruits, vegetables, flowers, cheese, milk, and other provisions are non-durable in

nature. They are used for once. They are also known as consumables. Mostly, many of them are non-branded.

They are frequently purchased products and can be easily bought from nearby outlets. Freshness, packing,

purity, and price are important criteria to purchase these products.

v. Services:

Services are different than tangible objects. Intangibility, variability, inseparability, perishability, etc., are main

features of services. Services make our life safe and comfortable. Trust, reliability, costs, regularity, and timing

are important issues.

The police, the post office, the hospital, the banks and insurance companies, the cinema, the utility services by

local body, the transportation facilities, and other helpers (like barber, cobbler, doctor, mechanic, etc.,) can be

included in services. All marketing fundamental are equally applicable to services. ‘Marketing of services’ is the

emerging facet of modern marketing.

2. Industrial Products:

Industrial products are used as the inputs by manufacturing firms for further processes on the products, or

manufacturing other products. Some products are both industrial as well as consumer products. Machinery,

components, certain chemicals, supplies and services, etc., are some industrial products.

Again, strict classification in term of industrial consumer and consumer products is also not possible, For

example, electricity, petroleum products, sugar, cloth, wheat, computer, vehicles, etc., are used by industry as

the inputs while the same products are used by consumers for their daily use as well.

Some companies, for example, electricity, cements, petrol and coals, etc., sell their products to industrial units as

well as to consumers. As against consumer products, the marketing of industrial products differs in many ways.
Industrial products include:

1. Machines and components

2. Raw-materials and supplies

3. Services and consultancies

4. Electricity and Fuels, etc.

INTRO

Product concept is the understanding of the dynamics of the product in order to showcase the best qualities and
maximum features of the product. Marketers spend a lot of time and research in order to target their attended
audience

PRODUCT MIX AND LINE DECISIONS

Definition: The Product Mix also called as Product Assortment, refers to the complete range of products that
is offered for sale by the company. In other words, the number of product lines that a company has for its
customers is called as product mix.

What is Product Mix

 Umar Farooq June 25, 2018

A product is anything that is offered to a market to satisfy customer wants and needs. Product includes both
tangible and intangible items available for sale in the market. A company may sell one product or many types of
products at a time i.e. Samsung LEDs, mobile devices, tablets etc.
A product line is a group of closely related products with similar functions, customer groups, outlets and same
price ranges. The example of Nike product line includes, Footwear, Apparel and Sports equipment and every
product line have similar products.
What is Product Mix
Product mix or product assortment is a set of total number of products lines that a seller offers in the market to
its buyers. The company may have one or several product lines and each product line may have several
products. When these product lines get together are known as product mix of the company.
Product Mix – Width
Width or breath is the company’s product mix that means the total number of product lines that a company
offers to sell.

For instance, if a company offers milk and yogurts, this indicates the that its product mix has two lines.
Similarly, a cosmetic company manufactures four different types of products – jewellery, cosmetics, fashion and
household items. Its product mix width is 4.

Product Mix – Depth

Depth of product mix means the total number of products a company offers within a certain product line. There
may be different variations in the product e.g. size, flavor, taste and many other characteristics. For example,
Medicam toothpaste sells four sizes and two flavors mean it has a depth of eight.

Another thing I want to discuss is average depth of product line. Suppose a company first line depth is 8 and
second one is 10 the average depth is 19.
 Product Mix – Length
The length of product mix means total number of products within a company’s product lines. For example, if a
company has 10 product lines and each line has 3 product variations then product mix length is (10×3) = 30.

Length of the product mix refers to the total number of products in the mix. If a company has 5 product lines
and 10 products under each product lines, the length of the mix will be 50 [5 x 10].

Product Mix Consistency

At last, the consistency of a product mix is the close relationship between different product lines. The more
product variation means less product consistency. For example, a dairy company has two product lines milk and
yogurt. Both the lines have same users and distribution channels. Due to low product variation and high product
mix consistency. Take another example of Philips Electronics with 7 product lines having high production mix
variation and low consistency.

LINE DECISIONS

Product Line Decisions

Production-Mix Decisions:

An organization is required to bring changes in product mix to make it adaptable according to the needs of
consumer. Product mix decisions refer to addition, deletion or modification of product in product mix. Primary
aim of product mix decisions is sales and profit maximization.

Product mix decisions can be explained as follows:

 Product Line Decisions

o Line stretching decisions
 Downward Stretching
 Upward stretching
 Two Way Stretching
 Line Filling Decisions

Product Line Decisions:

Product line refers to a group of same products. Product line decisions refer to decisions relating to addition or
deletion of product from the existing product line. Addition and deletions in product can be explained as
follows:

Line Stretching Decisions:

Line stretching implies increasing the length of product line. It can take place in three directions.

a) Downward Stretching:Downward stretching refers to addition of a new product into existing

product line but at a lesser price. For example; TATA introduced low cost car “Nano” in the
market.
b) Upward Stretching:

Upward stretching is the opposite of downward stretching. When an organization adds a new product in the
current product line but at higher price than the existing one, it is called upward stretching. For example; Parle
started with low cost biscuits like Parle G then introduced high cost product of same category like Hide and
Seek.

c) Two-way Stretching:
 Two way stretching refers to addition of product in product line in both the directions. So, a low priced as well
as a high priced product are added at the same time in product line. Marriot- Hotels & Resorts started
Renaissance Hotels to serve upper end of the market and Town Place suites to serve lower section of the market.

Line Filling Decisions:

Product line filling involves adding a new product in the existing product line to face competition and increase
consumer base. Under product line filling price of the new product is normally same. For example, Maruti
Suzuki introduced Alto when Maruti Zen was already available in the same range.

Line Pruning Decisions:

Line pruning decisions refer to removal of unprofitable product from the product line. For example Pepsi
launched Pepsi Gold but the product was not successful in the market. So after some time it was removed from
the market.

PRODUCT LIFE CYCLE

The product life cycle is the process a product goes through from when it is first introduced into the market
until it declines or is removed from the market. The life cycle has four stages - introduction, growth, maturity
and decline.

A product life cycle is the cycle that a product goes through, from development to decline. It's typically broken
up into six stages. Business owners and marketers use the product life cycle to make important decisions and
strategies on advertising budgets, product prices, and packaging.

Stages of a Product Life Cycle

1. Development

2. Introduction

3. Growth

4. Maturity

5. Saturation

6. Decline

1. Development

The development stage of the product life cycle is the research phase before a product is introduced to the
marketplace. This is when companies bring in investors, develop prototypes, test product effectiveness, and
strategize their launch. Due to the nature of this stage, companies spend a lot of money without bringing in any
revenue because the product isn't being sold yet.

This stage can last for a long time, depending on the complexity of the product, how new it is, and the
competition. For a completely new product, the development stage is hard because the first pioneer of a product
is usually not as successful as later iterations.
2. Introduction

The introduction stage is when a product is first launched in the marketplace. This is when marketing teams
begin building product awareness and reaching out to potential customers. Typically, when a product is
introduced, sales are low and demand builds slowly.

Usually, this phase is focused on advertising and marketing campaigns. Companies build their brand, work on
testing distribution channels, and try to educate potential customers about the product. If those tactics are
successful, the product goes into the next stage — growth.

3. Growth

During the growth stage, consumers have accepted the product in the market and customers are beginning to
truly buy-in. That means demand and profits are growing, hopefully at a steadily rapid pace.

The growth stage is when the market for the product is expanding and competition begins developing. Potential
competitors see success and want in. During this phase, marketing campaigns often shift from getting customers
to buy-in to the product to establishing a brand presence so consumers choose them over developing
competitors.

Additionally, as companies grow, they'll begin to open new distributions channels and add more features and
support services.

4. Maturity

The maturity stage is when the sales begin to level off from the rapid growth period. At this point, companies
begin to reduce their prices so they can stay competitive amongst growing competition.

This is the phase where a company begins to become more efficient and learns from the mistakes made in the
introduction and growth stages. Marketing campaigns are typically focused on differentiation rather than
awareness. This means that product features might be enhanced, prices might be lowered, and distribution
becomes more intensive.

During the maturity stage, products begin to enter the most profitable stage. The cost of production declines
while the sales are increasing.

5. Saturation

During the product saturation stage, competitors have begun to take a portion of the market and products will
experience neither growth nor decline in sales.
Typically, this is the point when most consumers are using a product, but there are many competing companies.
At this point, you want your product to become the brand preference so you don't start to enter the decline stage.

Again, marketers need to focus on differentiation in features, brand awareness, price, and customer service. The
competition reaches its apex at this stage.

6. Decline

Unfortunately, if your product doesn't become the preferred brand in a marketplace, you'll typically experience a
decline. Sales will decrease during the heightened competition and are hard to overcome.

Additionally, consumers might lose interest in your product as time goes on, just like the CD example I
mentioned earlier.

If a company is at this stage, they'll either discontinue their product, sell their company, or innovate and iterate
on their product in some way.

To extend the product life cycle, successful companies can implement new advertising strategies, reduce their
price, add new features to their increase value proposition, explore new markets, or adjust brand packaging.

The best companies will usually have products at several points in the product life cycle at any given time.

STRATIGIC IMPLIFICATIONS

Implementation of a marketing strategy can improve business profitability because of implications for all

aspects of the company's operations. The marketing strategy focuses company attention on particular target

market segments and makes it clear what product characteristics are required for successfully satisfying

customer needs. This focus eliminates marginal operations that don't contribute to business growth and

promotes a streamlined approach to the company's business.

Customers

The main implication of a marketing strategy is the orientation toward meeting customer needs that results in

increased customer satisfaction. Once you have identified your target market and the characteristics of your

targeted customers through surveys and market studies, you can focus on strategies to serve your customers

better than your competition. Customer impressions of your company improve with this focus, and your image

in the marketplace becomes more positive. Such a marketing strategy is designed to gain new customers as you

build a more favorable reputation.

Products

A marketing strategy has important implications for product design and promotion. Once you know what your

customers want, you have to ensure that the product features meet their needs or change the design to add

corresponding features. Instead of convincing customers to buy the product you have, you offer them the

product they need and promote the features they want. A marketing strategy focused on offering products that

suit your target market promotes innovation and improves product quality. The marketing strategy then specifies

that you run ads promoting the innovative nature and high quality of your products.

Performance

With improved customer satisfaction and innovative products of high quality, your company can increase both

sales and profitability. Your marketing strategy projects the increased demand based on market studies and

allows you to plan production to meet it. At the same time, your marketing strategy identifies the price that

members of the target market are willing to pay for the newly revised product. A well-implemented marketing

strategy lets you plan for increased production with confidence while reducing costs by eliminating expensive

product features that your target market members don't value. The result is improved company performance.

Employees

For employees, an effective marketing strategy implementation means working for a more successful company.

Better company performance improves employee morale, and high-quality products result in high levels of

commitment to the organization. The customer-orientation of the marketing strategy gives employees increased

job satisfaction as they deal with customers who have positive experiences with company products and in

customer service. Such an atmosphere is conducive to excellent team spirit and employee cooperation to achieve

ambitious company objectives.

NEW PRODUCT DEVELOPMENT PROCESS

New Product Development

If a company wants to be successful in the long-term, it has to engage in new product development process to
introduce new products and satisfy its customers’ needs. There are thousands of new products enter into the
process but only few reach to the market. Therefore, it is very important to understand your customers, market
conditions and competitors who are offering the same type of products. Every product goes through 8 steps of
new product development process.

Idea Generation
Idea generation is the first step of New Product Development process. It is a systematic search to find out new
ideas. It comes from everywhere and in any form. In the first stage, new ideas are collected from many sources,
which are
 Internal Sources. Mostly, large companies have their own formal Research and Development
department. But normally any employee can come up with a good idea.
 Customers. A company should always listen to customers’ questions, complaints and feedbacks that
help to generate new product ideas to satisfy customer problems.
 Competitors. To generate ideas companies can conduct competitors swot analysis.
 Distributors and suppliers. Also known as collaborators are close to the market. They know the
consumer problems and new ideas and techniques to address these problems.
Idea Screening
Idea generation can provide us with a pool of ideas. But the second step of new product development process is
to find good ideas and drop the poor one. Following are some of the factors influencing evaluating criteria to
make it succeeded

 Is the product useful to customer’s needs?

 Company objectives and resources (people and skills)?
 Company strengths and weaknesses?
 Affordability, advertising and distribution?
 Current trends?
 What is the expected return on investment
Concept Development and Testing
Concept development and testing is the third step of new product development process. A product concept
provides a detailed description of the idea, keep in mind your consumer perspective.

Those ideas qualify the screening stage to become a concept and it must be tested. Companies cannot launch a
new product without properly testing the concept. Concept testing help companies to investigate customers
reactions before introducing to the market.

A more physical and visual presentation is required for a more reliable concept test. The concept further engages
target market. After exposing the concept, companies ask questions from consumers. Companies want to know
the customer’s reactions in term of feedback. Is the concept appealing or not and fulfilling the customers wants?

Marketing Strategy and Business Analysis

In this step, the company develops marketing and business strategy to introduce a new product in the market
successfully. The company engages different business units – to perform marketing and financial analysis – to
meet the marketing objectives.

The company initially explain target market and product positioning. It should also explain sales forecast,
market share and profit both in short and long-run. The company also describes the marketing mix strategy.

Business analysis involves a detailed review of company cost, sales, profit projections whether the company is
satisfied with objectives.

Product Development
When all the marketing and business strategies are finalized. In this step, the product concept is transformed into
a physical product. In the development stage, a prototype is designed that is functional and able to satisfy the
consumer wants. The product undergoes serious tests to make sure its effectiveness and performance.

Test Marketing
After designing a successful prototype, it is introduced for further research and feedback. With the help of test
marketing, the company tries to understand the consumers and dealers feedback and reaction. Important changes
are made in the actual product if needed. This step completes the process empowers the company to successfully
introduce the new product in the market.

Commercialization
Test marketing helps the company to make decisions and launch the new product in the market.
Commercialization is introducing the new product in the target market.  The marketing mix strategies are
applied.  Four decisions are important when launching a new product.

 When to introduce the product.

 Where to launch a new product in single or multiple location, national or international market.
 To whom the company must decide distribution and promotion (already decided in test marketing
phase).
  How (action plan) a company should introduce the new product in the target market.
CONSUMERADOPTION PROCESS

5 Stages of Consumer Adoption Process

5 stages of the consumer adoption process are awareness, interest, evaluation, trial, and adoption. The adoption
process for a new product is the mental process through which an individual passes from first learning about an
innovation to final adoption.

The adoption process is the mental process through which an individual passes first hearing about an innovation
to final adoption.

A new product is a good, service or idea that is perceived by some potential customers as new.

And we define the adoption process as the mental process through which an individual passes from first learning
about an innovation to final adoption.

5 Stages of Consumer Adoption Process

1. Product Awareness

The consumer becomes aware of the new product but lacks information about it.

Initially, the consumer must become aware of the new product. Awareness leads to interest and the customer
seeks information about the new product.

2. Product Interest

The consumer seeks information about the new product.

Once the information has been gathered, the consumer enters the evaluation stage and considers buying the new
product.

3. Product Evaluation

Next, in the trial stage, the consumer tries the product on a small scale to improve his or her estimate of its
value.

The consumer considers whether trying the new product makes sense.

4. Product Trial

The consumer tries the new product on a small scale to improve his or her estimate of its value.
If the consumer is satisfied with the product, he or she enters the adoption stage, deciding to use the new product
fully and regularly.

5. Product Adoption

The consumer decides to make full and regular use of the new product.

The new product is a good, service or idea that is perceived by some potential customers as new. Now we
discuss the buyer decision process for new products.

INTRO

Once a product is introduced in the market, the major challenge rests with the marketing function. The product

so introduced is to be ‘adopted’ i.e., purchased and diffused i.e., percolated throughout the markets. Any ‘new

idea or brand catches on through a gradual process which starts with some adopting it easily and others doing so

only after the so-called ‘opinion leaders’ have satisfied themselves and set an example.

The faster it happens, the better it is for the firm. Adoption is the decision of an individual to use the product;

while, diffusion is the collective spread of individual adoption decisions throughout a market. Thus, adoption

process is concerned with the individual whereas the diffusion process is concerned with the aggregate

behaviour.

The fundamental reason for studying the diffusion and adoption processes is to increase the level of

understanding of how? When? And why? New products are accepted or rejected. Naturally a more

comprehensive understanding of this process will enhance the success of future new product introductions.

PRICE SETTING

DEF

The process of coming up with a cost to consumers of a good or service produced by a business. Marketing
managers often influence the price setting process for goods and services that they help promote, although the
price level of a product is typically set based on its production and distribution costs, as well as the value of the
product perceived by targeted consumers.

Pricing objectives are the goals that guide your business in setting the cost of a product or service to your
existing or potential consumers. ... Some examples of pricing objectives include maximising profits, increasing
sales volume, matching competitors' prices, deterring competitors – or just pure survival.

OBJECTIVES

Pricing For Profit

This objective is aimed, simply, at making as much money as possible for your business – and to maximise price
for long-term profitability.
Price has both a direct and indirect effect on your profits - the direct effect relates to whether the price actually
covers the cost of producing the product. Price affects profit indirectly by influencing how many units sell. The
number of products sold also influences profit through economies of scale, i.e. the relative benefit of selling
more units.

 Profit margin maximisation: seeks to maximise the per-unit profit margin of a product. This objective
is typically applied when the total number of units sold is expected to be low.

 Profit maximisation: seeks to earn the greatest pound amount in profits. This objective is not
necessarily tied to the objective of profit margin maximisation.

Sales-Related Objectives

Sales-oriented pricing objectives seek to boost volume or market share. A volume increase is measured against a
company's own sales across specific time periods.

A company's market share measures its sales against the sales of other companies in the industry. Volume and
market share are independent of each other, as a change in one doesn't necessarily activate a change in the other.

The main sales-related pricing objectives include:

 Sales growth: It is assumed that sales growth has a direct positive impact on profits so pricing
decisions are taken in way that sales volume can be raised. Setting a price, altering or modifying
policies are targeted to improve sales.

 Targeting market share: Pricing decisions are taken in such a way that enable your company to
achieve targeted market share. Market share is a specific volume of sales determined in the light of
total sales in an industry. For example, your company may try to achieve a 25% market share in the
relevant industry.

 Increase in market share: Sometimes, price and pricing are taken as the tools to increase market
share. When you realise that your market share is lower than expected it can be raised by appropriate
pricing; pricing is aimed at improving market share.

Competition-Related Objectives

Every company tries to react to their competitors with appropriate business strategies. With reference
to price they may wish:

 To face up to the competition: today’s markets are characterised by intense competition and

companies set and modify their pricing policies so as to respond to their competitors.  Many companies
use price as a powerful tool to react to the level and strength of competition.

 To deter competitors: to prevent the entry of competitors can be one of the main pricing objectives. 
To achieve this objective, a company keeps its price as low as possible to minimise profit attractiveness
of products. In some cases, a company reacts offensively to prevent entry of competitors by selling
products at a loss.

 Signal quality: buyers believe that a high price is related to high quality.  In order to create a positive
image in customers' minds that your product is superior to that offered by close competitors you will
design your prices accordingly. 
FACTORS

1. Costs

First and foremost you need to be financially informed. Before you set your pricing, work out the costs involved
with running your business. These include your fixed costs (the expenses that will come in every month
regardless of sales) and your direct costs (the expenses you incur by producing and delivering your products and
services).

2. Customers

Know what your customers want from your products and services. Are they driven by the cheapest price or by
the value they receive? What part does price play in their purchase decision?

Also look at what you are selling, are your current customers buying high-end or low-end products and
services? This information will help you determine if your price is right, what level of service or inclusions you
should be offering and lastly if you are targeting the right market. It may be that you need to change your market
to make your business more profitable.

3. Positioning

Once you understand your customer, you need to look at your positioning. Where do you want to be in the
marketplace? Do you want to be the most expensive, luxurious, high-end brand in your industry, the cheapest,
beat it by 10% brand or somewhere in the middle? Once you have decided, you will start to get an idea of your
ideal pricing.

4. Competitors

This is one of the key times you can give yourself permission to do a little competitor snooping. What are they
charging for different products and services? What inclusions and level of service are they offering for those
prices? What customers are they attracting with their pricing? And how are they positioned in the marketplace?
The answers to these questions will give you an industry benchmark for your pricing.

5. Profit

One of the most important questions business owners neglect to ask themselves is, “How much profit do I want
to make?” They tend to look at what others charge and then pull a figure out of the air to be competitive without
giving consideration to how much profit the want and need.

While you may be in business for the passion and to add value to the lives of others, you also need to add value
to your own. So give careful consideration to what your time is worth.

METHODS

1. Mark-up Pricing Method:

This is the most commonly used method. The method is also known as cost-plus pricing. In this method, a

standard mark-up (or profit margin) is added to the product costs. This method is used in construction business,

professions, and even for consumer goods. The method can be used only when company has necessary data

about various costs and expected sales. Company may prefer fixed per cent of costs or fixed per cent of selling

price.
2. Perceived-value pricing Method:

Perceived-value pricing is a market-oriented method for setting the price. Here, price is based on the consumers’

perceived value of the product. Consumers’ views on price are given priority. Company takes consumers’

perception of value as a key to set the price, and not its own cost and objectives.

Company tries to measure the views of buyers regarding price of the product. Manager explains the consumers

about total offers, including core product (key benefits and features), product-related aspects (like brand image,

reputation, novelty, etc.), and product- related services (such as after-sales services like free installation, free

home delivery, guarantee, etc.) and asks them to estimate price for that product or for total benefits offered by

the product.

The key to the perceived-value pricing method is to measure accurately the market’s perception of the offer’s

value. The seller with inflated views of his offers will overprice the product while with underestimated views

will charge less than what it should be. Market research is needed to estimate market perception of price.

3. Going-rate Pricing Method:

This is also said as competitive parity method. Even, sometimes, it is called as competition- oriented pricing.

The method is, normally, followed by small firms, said as ‘the followers’ In going- rate pricing method, the

company gives less attention to its own costs, objectives, or product demand. But, pricing decision is largely

based on competitors’ prices.

The company may charge the same, more, or less than major competitors. The notion is “follow the leader,” or

“leader is right.” One must note that company doesn’t select a price, which is far below or much higher than the

real. However, competitors’ pricing is taken as a base. And, final price may be set slight high or low depending

upon objectives, qualities of product, and services offered.

4. Sealed-bid Pricing Method:

Sealed-bid pricing is followed in construction or contract business. It is also a competitive pricing method. Here,

price is selected on the basis of sealed bids (quotation or estimated price) for the jobs.
The firm sets its price on expectations of how competitors will price the product. The firm wants to win the

contract requires submitting the lower price than competitors. However, costs and profits are not totally ignored.

The firm cannot set price below the costs.

It is called as tender pricing also. In response to the proposal of jobs or works, interested parties (businessmen or

marketers) have to fill the tender (send quotation or estimated costs) stating price and conditions of work and

send in forms of sealed-bids.

The bid is an offer of price for particular work or product. Generally sealed-bids (sealed envelops containing a

bid) are invited for a competitive work. Offers or proposals come from charitable trusts, companies,

organisations, or governments. In our country, we say this method as “tender,” and proposal of jobs as a “tender

notice.”

Mostly, the tender notice is published in newspapers or circulars. The offer or proposal for work contains type

of work or job, time to complete the work, quality of work, and other similar conditions.

In response to the tender or proposal, interested parties have to send sealed-bids stating their prices and

conditions within the permitted time. In this method, the party inviting the sealed-bids is customer and those

who bid by sealed quotations are the marketers (because they will serve the inviting party).

On a due date – either publicly or otherwise – the sealed-bids (or quotations) are opened, and the bid with lower

price and more favourable conditions is selected. Rate of selected bid is the price for the job. The selected bid is

given the business. The method has its plus and minus points.

5. Target Return Pricing:

This is one of the cost-oriented methods for setting price of the product. Here, the firm determines that level of

price at which it can yield the target return on investment. Here, return on investment is taken as a base for price

determination.

Attempts are made to recover the cost of investment. Mostly, government Companies, public utilities,

cooperative societies, and the similar organisations fix pricing for their products on this basis to ensure

minimum return on investment.

6. Break-even Analysis Method:

Some companies set the price for their products by Break-Even Analysis (BEP method). It is a managerial tool

that establishes relationship among costs, volume of sales, and profits. It is also known as cost-volume-profit

analysis.

It involves developing tables and/or charts that help a company to determine at what level of sales, the revenue

will be equal to the total costs. Under this method, attempts are made to find out volume of sales at which total

costs are just equal to the sales revenue. This is such a level of sales at which there is no profit, no loss.

Sales Revenue = Total Costs.

This level is called BEP (break-even point), at which the firm has neither profits nor losses. The firm just covers

its total costs. When sales revenue exceeds the total costs, the result is profit; and when sales revenue is less than

total costs, the result is loss. Thus, BEP is the position of sales at which sales revenue is just equal to total costs.

BEP can be calculated either by a formula or by a chart.

PRICE ADOPTING POLICIES

1. Competition-Based Pricing Strategy

Competition-based pricing is also known as competitive pricing or competitor-based pricing. This pricing
strategy focuses on the existing market rate (or going rate) for a company’s product or service; it doesn’t take
into account the cost of their product or consumer demand.

Instead, a competition-based pricing strategy uses the competitors’ prices as a benchmark. Businesses who
compete in a highly saturated space may choose this strategy since a slight price difference may be the deciding
factor for customers.

With competition-based pricing, you can price your products slightly below your competition, the same as
your competition, or slightly above your competition. For example, if you sold marketing automation
software, and your competitors’ prices ranged from $19.99 per month to $39.99 per month, you’d choose a
price between those two numbers.

Whichever price you choose, competitive pricing is one way to stay on top of the competition and keep your
pricing dynamic.
2. Cost-Plus Pricing Strategy

A cost-plus pricing strategy focuses solely on the cost of producing your product or service, or your COGS.
It’s also known as markup pricing since businesses who use this strategy “mark up” their products based on how
much they’d like to profit.

To apply the cost-plus method, add a fixed percentage to your product production cost. For example, let’s say
you sold shoes. The shoes cost $25 to make, and you want to make a $25 profit on each sale. You’d set a price
of $50, which is a markup of 100%.

Cost-plus pricing is typically used by retailers who sell physical products. This strategy isn’t the best fit for
service-based or SaaS companies as their products typically offer far greater value than the cost to create them.

3. Dynamic Pricing Strategy

Dynamic pricing is also known as surge pricing, demand pricing, or time-based pricing. It’s a flexible pricing
strategy where prices fluctuate based on market and customer demand.

Hotels, airlines, event venues, and utility companies use dynamic pricing by applying algorithms that consider
competitor pricing, demand, and other factors. These algorithms allow companies to shift prices to match when
and what the customer is willing to pay at the exact moment they’re ready to make a purchase.

4. Freemium Pricing Strategy

A combination of the words “free” and “premium,” freemium pricing is when companies offer a basic version
of their product hoping that users will eventually pay to upgrade or access more features. Unlike cost-plus,
freemium is a pricing strategy commonly used by SaaS and other software companies. They choose this strategy
because free trials and limited memberships offer a “peek” into a software’s full functionality — and also build
trust with a potential customer before purchase.

With freemium, a company’s prices must be a function of the perceived value of their products. For example,
companies who offer a free version of their software can’t ask users to pay $100 to transition to the paid version.
Prices must present a low barrier to entry and grow incrementally as customers are offered more features and
benefits.
5. High-Low Pricing Strategy

A high-low pricing strategy is when a company initially sells a product at a high price but lowers that price
when the product drops in novelty or relevance. Discounts, clearance sections, and year-end sales are examples
of high-low pricing in action.

High-low pricing is commonly used by retail firms who sell seasonal or constantly-changing items, such as
clothing, decor, and furniture. What makes a high/low pricing strategy appealing to sellers? Consumers enjoy
anticipating sales and discounts, hence why Black Friday and other universal discount days are so popular.

6. Hourly Pricing Strategy

Hourly pricing, also known as rate-based pricing, is commonly used by consultants, freelancers, contractors, and
other individuals or laborers who provide business services. Hourly pricing is essentially trading time for
money. Some clients are hesitant to honor this pricing strategy as it can reward labor instead of efficiency.

7. Skimming Pricing Strategy

A skimming pricing strategy is when companies charge the highest possible price for a new product and then
lower the price over time as the product becomes less and less popular. Skimming is different than high-low
pricing in that prices are lowered gradually over time.

Technology products, such as DVD players, video game consoles, and smartphones, are typically priced using
this strategy as they become less relevant over time. A skimming pricing strategy helps recover sunk costs and
sell products well beyond their novelty, but the strategy can also annoy consumers who bought at full price and
attract competitors who recognize the “fake” pricing margin as prices are lowered.

8. Penetration Pricing Strategy

Contrasted with skimming pricing, a penetration pricing strategy is when companies enter the market with an
extremely low price, effectively drawing attention (and revenue) away from higher-priced competitors.
Penetration pricing isn’t sustainable in the long run, however, and is typically applied for a short time.

This pricing method works best for brand new businesses looking for customers or for businesses who are
breaking into an existing, competitive market. The strategy is all about disruption and temporary loss … and
hoping that your initial customers stick around as you eventually raise prices.
(Another tangential strategy is loss leader pricing, where retailers attract customers with intentionally low-
priced items in hopes that they’ll buy other, higher-priced products, too. This is precisely how stores like Target
get you — and me.)

9. Premium Pricing Strategy

Also known as premium pricing and luxury pricing, a prestige pricing strategy is when companies price their
products high to present the image that their products are high-value, luxury, or premium. Prestige pricing
focuses on the perceived value of a product rather than the actual value or production cost.
Prestige pricing is a direct function of brand awareness and brand perception. Brands who apply this pricing
method are known for providing value and status through their products — which is why they’re priced higher
than other competitors. Fashion and technology are often priced using this strategy because they can be
marketed as luxurious, exclusive, and rare.

10. Project-Based Pricing Strategy

A project-based pricing strategy is the opposite of hourly pricing — this approach charges a flat fee per project
instead of a direct exchange of money for time. It is also used by consultants, freelancers, contractors, and other
individuals or laborers who provide business services.

Project-based pricing may be estimated based on the value of the project deliverables. Those who choose this
pricing strategy may also create a flat fee from the estimated time of the project.

11. Value-Based Pricing Strategy

A value-based pricing strategy is when companies price their products or services based on what the customer is
willing to pay. Even if they can charge more for a product, they decide to set their prices based on customer
interest and data.
If used accurately, value-based pricing can boost your customer sentiment and loyalty. It can also help you
prioritize your customers in other facets of your business, like marketing and service. On the flip side, value-
based pricing requires you to constantly be in tune with your various customer profiles and buyer personas and
possibly vary your prices where your customers vary.

INITIATING PRICE CHANGES

Initiating and Responding to Price Change
Initiating to Price Change
After goods have been produce, price is determined on the basis of its cost and taking reasonable  profit. The
price so determined may also need changes. Due to external and internal environmental effects, prices may need
changes. Two main strategies can be adopted in leadership pricing as follows:

1. Initiating price cut

Every business firm wishes to increase its sale quantity. Changes in price may be needed to achieve
such objective. So, the producer should cut down necessary amount of leadership price of the products.
Sometimes companies’ products can enter in more markets segments only after cutting down prices. This
strategy should be adopted in order to face strong competition. Otherwise, there may appear a situation either to
quit the market segment or abandon the production. On the other side, there may be a compulsion to cut down
prices of products to control the target market segments.

2. Initiating price increase

Sometimes a strategy to increase in price may be adopted not affecting sale quantity. Price may need some
changes due to cost inflation. Price may need changes due to government’s policy to control price or to increase
revenue. On the other hand, demand for products may grow suddenly. In such situation, one needs price change.
In the situation, one needs price change. In the situation when all continuations are suitable, price may be
increased according to the time. However, such increase should be very low percent. Price should not be
increased at the rate which may spoil the image and competition of the company.

Responding to Price Change

While changing price of any products, many reactions may come from concerned sides. At first reaction may
come from consumers. Such reactions may be positive when price is cut down and negative when it is increased.
The company should carefully as well as logically answer both reactions. In the same way, competitors’
reactions may also come. The company should give satisfactory answer to them with all reasons such as cost,
market study, transport expenses, administrative expenses, etc. The following strategies should be adopted to
face reactions of competitors and distributors.

1. Maintaining Price
The producers should try their best to maintain price at the same rate. Producers may cut down some percent
of profit. The existing market segments can be maintained with such strategy. Along with this, opportunity can
be found to enter new market segments. In this way, sale quantity may increase.

2. Increasing price and quality

Producer may increase in existing quality and price. Production companies may bring in markets the new
products or adding new features to the products challenging their competitors. Little more prices of such
products do affect competitors so much. However, such analysis cannot last long. Other competitors also may
adopt such strategy. This may be only a periodical means to stop competitors’ reactions. After sometime, the
company should seek other alternatives.

3. Reducing price
Most of the customers become conscious about price. So, the producer should cut down the price of the products
after certain time. Competitors of similar products also may adopt this strategy. The producers who cannot adopt
such policy may get compelled to quit main market segments among many segments. Such markets once quitted
 need very hard labor to supply products to there again. Policy of taking low percent of profit should be adopted.
Even decreasing price, quality, features and services should be maintained same. Only then, products can
control markets.

UNIT3

MARKETING COMMUNICATION

Marketing communications are those techniques that the company or a business individual uses to convey

promotional messages about their products and services. Experts of marketing communication design different

types of persuasive communication and send it to the target audience.

Marketing communication includes Advertising, Sales Promotion, Events and Experiences (sponsorship),

Public Relations and Publicity, Direct Marketing, Interactive Marketing, Word-of-Mouth Marketing,

Personal Selling. These tools of communication are collectively called as Marketing Communication Mix.

Definition: The Marketing Communication refers to the means adopted by the companies to convey messages

about the products and the brands they sell, either directly or indirectly to the customers with the intention to
persuade them to purchase.

In other words, the different medium that company adopts to exchange the information about their goods and
services to the customers is termed as Marketing Communication.

The marketer uses the tools of marketing communication to create the brand awareness among the potential
customers, which means some image of the brand gets created in their minds that help them to make the
purchase decision.

Marketing communication includes Advertising, Sales Promotion, Events and Experiences (sponsorship), Public
Relations and Publicity, Direct Marketing, Interactive Marketing, Word-of-Mouth Marketing, Personal Selling.
These tools of communication are collectively called as Marketing Communication Mix.

Elements of Marketing Communication Mix

1. Advertising: It is an indirect, paid method used by the firms to inform the customers about their goods
and services via television, radio, print media, online websites etcAdvertising is one of the most widely used
methods of communication mix wherein the complete information about the firm’s product and services can be
communicated easily with the huge target audience coverage.
2. Sales Promotion: The sales promotion includes the several short-term incentives to persuade the
customers to initiate the purchase of the goods and services. This promotion technique not only helps in
retaining the existing customers but also attract the new ones with the additional benefits.Rebates, discounts,
paybacks, Buy- one –get- one free scheme, coupons, etc. are some of the sales promotion tools.
3. Events and Experiences: Several companies sponsor the events such as sports, entertainment,
nonprofit or community events with the intention to reinforce their brand in the minds of the customers and
create a long term association with them.

The name of the firm sponsoring the event can be seen on the playground boundaries, player’s jerseys, trophies,
awards in the entertainment shows, hoardings on stage, etc.
4. Public Relations and Publicity: The companies perform several social activities with a view to
creating their positive brand image in the market. The activities that companies are undertaking such as,
constructing the public conveniences, donating some portion of their purchase to the child education, organizing
the blood donation camps, planting trees, etc. are some of the common moves of enhancing the Public Relations.
5. Direct Marketing: With the intent of technology, the companies make use of emails, fax, mobile
phones, to communicate directly with the prospective customers without involving any third party in between.
6. Interactive Marketing: Interactive Marketing has recently gained popularity as a marketing
communication tool, wherein the customers can interact with the firms online and can get their queries resolved
online.

Amazon is one of the best examples of interactive marketing wherein the customers make their choice and can
see what they have chosen or ordered in the recent past. Also, Several websites offer the platform to the
customers wherein they ask questions and get the answers online such as answer.com.

7. Word-of- Mouth Marketing: It is one of the most widely practiced method of communication tool
wherein customer share their experiences with their peers and friends about the goods and services they bought
recently.This method is very crucial for the firms because the image of the brand depends on what customer
feels about the brand and what message he convey to others.
8. Personal Selling: This is the traditional method of marketing communication wherein the salesmen
approach the prospective customers directly and inform them about the goods and services they are dealing in. It
is considered as one of the most reliable modes of communication because it is done directly either orally, i.e.,
face to face or in writing via emails or text messages.

Thus, marketing Communication mix refers to the different tools that a firm can adopt to inform, persuade, and
remind the customer about the product and services it sells.

IMPORTANCE

1. Effective Communication Builds and Maintains Relationships

It is good to have marketers in your organization who have excellent personal communication skills. As a
professional marketer, you must create emotional connections with your clients. You have to make your
potential customers feel valued and comfortable when telling them about your company’s goods and services.

If you use the right interpersonal skills when talking to customers and other stakeholders, you will succeed in
building long-term relationships. However, you have to nurture all the productive relationships. Therefore, when
marketing your goods and services, you have to convince your clients how your goods and services will provide
long-term solutions to their needs.

2. Facilitates Innovation When Marketing

Innovation is a necessity in the marketing process. When marketing your company’s goods and services, you
must be creative. If you have effective communication skills, you will be able to come up with innovative ideas
when interacting with your potential clients. Marketers with poor communication skills have limited ideas.
Marketing needs creative extroverts who have the urge to succeed.

The marketers must have the passion for what they are doing to bring a positive impact to the organization. If
you are innovative, you will be able to use your potential fully to convince your potential clients to trust your
brand. People like listening to creative marketers who are able to convey their ideas well.
3. Enhances Transparency

If you want to maintain transparency in your organization, you need to communicate regularly with your
employees and customers. You need to use innovative approaches to communicate with your potential clients
daily or twice per week. Effective communication shows that you understand their needs. Also, it proves that
your organization is ready to provide solutions consistently.

As a business owner, you need to be transparent when communicating with your marketers because they are
your brand ambassadors. If you create a transparent relationship with them, they will convince your potential
customers across the world to trust your brand, which will bring growth and development to your business.

4. Overcomes Marketing Obstacles

Running a business successfully is not a walk in the park. It comes with challenges, which needs proper
preparation to overcome them. As a marketer, there are challenges that you are likely to encounter. For instance,
language and cultural barriers hinder many marketers from expressing their ideas to the clients in an excellent
manner.

That is the reason why we need effective communication to facilitate the marketing process. If you have the
right communication skills, you will be able to use the right approaches when interacting with specific target
groups. For instance, you need to learn and understand the language of your target customers. If you understand
their culture, needs, and language well, you will be able to establish constructive friendships and connections,
which will make the marketing process smooth.

5. Effective Communication Establishes Professionalism When Marketing

Although you need to create friendships with your potential clients, the relationships should be professional.
Therefore, when marketing your company’s goods and services, you have to use a professional language that
does not affect the personal lives of your customers. Even if a professional marketer understands his or her roles
well, it is hard to succeed without effective interpersonal skills.

As a marketer, you must know how to communicate with people in every scenario. Excellent interpersonal skills
will enable you to connect with your potential clients well. Therefore, there will be confidence and
professionalism when marketing goods and services sold by your business.

Additionally, you need to give your clients a chance to share their opinions regarding your company’s products
or services. Their positive and negative opinions will help you in analyzing your marketing strategies and
improving on your weaknesses.

6. Boosts the Morale of the Marketer

Confidence and motivation are two crucial features that effective communication brings to a professional
marketer. If you do not have the right skills to customize marketing conversations to fit each client’s needs, you
will find yourself in trouble when interacting face-to-face with your customers. The ability to express your ideas
perfectly will play a significant role in boosting motivation and morale when speaking to your audiences about
your brand.

When clients realize that you are confident when expressing yourself, they will develop trust towards the goods
and services of your business. They will be eager to visit your local or online store to see and purchase products
or services from your organization.

Therefore, whether you are using online platforms, face-to-face conversations, or television adverts to do
marketing, you need to have effective communication skills to win customers. Communication is vital to
marketing because it brings everyone on the same page. Listening to your clients enables you to come up with
long-lasting solutions to solve their needs.
PROMOTION DECISIONS

A marketer has five promotion tools at his/ her disposal for carrying out the promotion activities – Advertising,
personal selling, publicity, sales promotions, and direct selling. Each of these offer advantages and
disadvantages for different conditions in the market. To help utilise an effective promotion plan, most of the
organisations follow the steps shown in the figure.

1) Marketing Plan – The marketing plan of the organisation gives the direction for all the promotion decisions.
Marketing planning involves analysing the organisations capabilities, economic conditions, competitors and
customers to list out the strengths, weaknesses, threats and opportunities (SWOT analysis). This sets the
framework and gives direction for promotion activities.
2) Defining the Target audience – It becomes important for an organisation to clearly define its target
audience. Unless the firm has clear target audience, the communication message as well as tools for dispersing
this message will be like shooting an arrow in the dark. The target audience consists of potential buyers, current
buyers, media, individual, groups, public at large, intermediaries, etc. that can influence the sale of the product.
Basis the target audience, a marketer decides on the content of the message, its dispersing frequency, tools to
communicate, and at which places to disperse it, etc.
3) Promotion objective – Promotion objective is directed towards a favourable response from buyers to drive
sales, increase market share, create a positive image of the brand, and retaining the customers by way of
reminding the brand for future, etc. These can be long term as well as short term. The basis for this is the
marketing program of the organisation. In order to drive immediate sales, organisations adopt direct mail and
personal selling. For creating awareness about the product and creating demand, promotion tools like TV
advertising, sales promotions are utilised. For creating and altering the image, organisations opt for Public
Relation programs- organise events like blood donation, marathons, etc. for health awareness in the society. This
helps an organisation create an image that it is committed to society. Similarly organisations invest in eco-
friendly infrastructure that utilises solar power for operations, etc. which is often highlighted in press, etc.
Advertisements

The marketers have to decide to what extent the audience’s perceptions, attitudes, beliefs, and behaviour should
change. Depending on this the marketer decides on the frequency of dispersing the message in the market
relevant to the objective of how fast the change should occur.
The objective usually revolves around defining a desired response –
– Creating awareness,
– Educating the buyers, (what could be the reason for not buying?, negative perception to be changed),
– Influence buying, differentiate,
– remind, persuade.
For example, Motorola launched its Moto G models in India. Its promotion objective was to capture market
share via creating awareness about its product highlighting a better priced product with high end features.

4) Designing the Message – The next step involves designing a message that will serve the promotion
objective. There are lot of ways in which a message can be constructed. When designing a message the marketer
has to consider these things – message content and message structure or format. The results of a well-designed
message are substantial. The message content includes images and logos along with the text message. The
message structure or format consists of graphics, colour, clarity, presentation content in case of personal selling,
etc.
The local culture and beliefs need to be considered when designing a message. Certain colour selection or image
selection might be fine in one region and may be considered offensive on other region. For example, semi-nude
models doing the advertisements will have negative reaction in some Asian countries while they will be
acceptable in European countries. When Gerber launched its baby products in Africa, they went ahead with the
same packaging and image of a baby on the package. The company later learned that companies in Africa put
picture of the product which is inside the package.

Organisations determine which strategy will have most advantageous result in the target market. Some
organisations highlight the specific benefits that the customer may regard as beneficial to them – Unique selling
proposition (USP). Subway’s stress on “Eat Fresh”, Domino’s, “Pizza delivery in 30 minutes or its free” are
good examples of unique selling propositions. The organisations communicate value to the customers.
Advertisements

Marketers strive to understand the culture and belief system of the target market to ensure maximum impact of
the message. For example, Amazon has been creating advertisements to target the family values of the Indian
market. Almost all the advertisements have an elder in the family who is emotionally touched by the need of a
family member, and comes across an option of a product available among 60 million products on Amazon India
website.
5) Promotion budget – Deciding on the promotion budget is one of the most difficult decision a marketer takes.
If the right tool is not selected because of budget constraints, the entire process of promotion or even marketing
goes waste. For most of the companies, the promotion budget forms the biggest chunk of the cost components.
There are many ways of assigning budget for promotion activities. The marketing plan sets the direction for
promotion budget decisions. Below are the common methods for setting budget for promotion-
Affordable method – an organisation sets aside a budget as it deems affordable without much concerns of the
impact it will make on the sales and revenues. When a company is doing well in the market, the promotion
budget will be high and if the product is not doing good and generating less revenue, the promotion budget is
less. The budget is decided after taking all expenditures into consideration. Whatever returns are left deducting
the expenditures, a promotion budget is decided. This is the most ineffective way of deciding the promotion
budget, as the end results of promotion are not taken into consideration.
In Percentage of sales method, the budget is set aside basis the projection of sales for the year. Instead of a
promotion plan taking priority, the sales determine the promotion budget. It doesn’t considers the market
opportunities. Though illogical, it has advantages like, simple to calculate and less risky as it is linked to sales.

In Competitive Parity method, the budget is assigned depending on that of the competitors. The marketers who
follow this method believe that this avoids promotion wars, and the wisdom of the industry as a whole is reliable
for setting promotion budgets. Though this method considers competition, this method is unreliable as the
objectives, opportunities, resources, and brand image of the organisations are not always the same.

The Objective and Task method relies on proper objective setting and the tasks that need to be performed to
achieve these objectives. The costs for performing these tasks are calculated which determine the promotion
budget. Though this method is logical, it is not easy to implement as it involves research as well as analysis
before arriving at the final number.

6) Select the promotion tool – Marketers have to select the most efficient promotion tool to ensure the message
is dispersed as intended. It usually involves a three step process.
• First selecting the promotion tool. For example, advertising.
• In the second step, the marketer needs to choose from various advertising components live TV, radio, print,
billboards, display signs, symbols and logos, etc.
• Thirdly, the marketer has to decide on the aspect within each component. In TV advertising, for example,
which TV shows the target customer usually watches and at which time maximum coverage can be attained.
The promotion tool selection usually depends on the cost, coverage, and availability with regard to the target
market. The communication strategy has to adapt to the market environment of each target market or region.
Else, a communication message as well as the tool should be acceptable in all target markets.
Advertisements

7) Decide promotion mix – An organisation has to wisely use its promotion budget over the promotional tools.
Each of these tools offer advantages and disadvantages. An average person is bombarded with many messages
in a day. It is the job of the marketer to choose the appropriate channel or channels so that the message generates
a favourable response in the target market. For example, a consumer product like stain remover meets the need
of both the consumer as well as business markets. To reach these two markets, an organisation will need to
adopt advertising as well as print ads in business journals. The scope of further penetration in the market
increases if the organisation adopts enthusiastic salesmen for personal selling.
8) Evaluation and management – A marketer’s job doesn’t ends at implementing the promotion tools and
sending the message across in the target market.
First the job of the marketer is to study the response of buyers, and make changes to its promotion strategy if the
expected response is not achieved. He/ she has to employ different tools to influence, remind, persuade, or
educate the customers about the product. For example, when a product moves through the different stages of its
product life cycle, different strategies are needed at each of these stages to generate maximum sales.
Secondly, even if the promotion strategy is successfully implemented, a regular study of the target market is
needed to consider various environmental factors like competitor’s promotion strategy, economic changes,
policy changes by government, behavioural changes of customers, etc. These factors have to be constantly
monitored, evaluated, and corrective actions should be taken accordingly.

INTEGRATED MARKETING COMMUNICATION

Integrated Marketing Communications (IMC) is a concept under which a company carefully integrates and

coordinates its many communications channels to deliver a clear and consistent message. It aims to ensure the

consistency of the message and the complementary use of media.

What Is Integrated Marketing Communication?

Integrated Marketing Communications (IMC) is a concept under which a company carefully integrates and

coordinates its many communications channels to deliver a clear and consistent message. It aims to ensure the

consistency of the message and the complementary use of media.

IMC is an integration of all marketing tools, approaches and resources within a company which maximizes

impact on the consumer mind resulting in maximum profit at minimum cost.

It uses several innovative ways to ensure that the customer gets the right message at the right place and right

time.

IMC Tools

The eight major Integrated Marketing Communication tools are as follows:-

Advertising

Advertising refers to any paid form of non-personal promotion of products or services by an identified sponsor.

The various media used are print (newspapers and magazines), broadcast (radio and television), network

(satellite, wireless and telephone), electronic (web page, audio and videotape) and display (billboards, signs and

posters).

The primary advantage of advertising is that it reaches geographically dispersed consumers. Consumers

generally tend to believe that a heavily advertised brand must offer some ‘good value’ but at the same time,

advertising proves to be an expensive form of promotion.

Sales promotion

It is a variety of short-term incentives to encourage trial or purchase of a product or service. It may

include consumer promotions – focused towards the consumer – such as a distribution of free samples, coupons,

offers on purchase of higher quantity, discounts and premiums or trade promotions – focused on retailers – such

as display and merchandising allowances, volume discounts, pay for performance incentives and incentives to

salespeople.

Sales promotion helps to draw the attention of the consumers and offers an invitation to engage in a transaction

by giving various types of incentives.

Personal Selling

Face-To-Face interaction with one or more buyers for the purpose of making presentations, answering questions

and taking orders. This proves to be the most effective tool in the later stages of the buying process.

The advantage is that the message can be customized to the needs of the buyer and is focused on building a

long-term relationship with the buyer.

Public Relations

A variety of programs directed toward improving the relationship between the organisation and the public.

Advertising is a one-way communication whereas public relations is a two-way communication which can

monitor feedback and adjust its message for providing maximum benefit. A common tool used here is publicity

which capitalizes on the news value of the product or service so that the information can be disseminated to the

news media.

Articles in the media prove to be more objective than advertisements and enjoy high credibility. Also, it has the

ability to reach the hard-to-find consumers who avoid targeted communications.

Direct Marketing

Direct Marketing involves the use of mail, telephone, fax, e-mail, or internet to communicate directly with or

solicit response or dialogue from specific customers or prospects. Shoppers have started relying on credit cards

and online purchasing more than ever which makes it essential for marketers to approach the consumers directly

thus helping them in the purchase process.

Companies have a database of contact details of consumers through which they send catalogues and other

marketing material making it easier for the consumer to purchase online. The relevance of direct marketing has

increased in recent years.

Events and Experiences

These are company sponsored activities and programs designed to create brand-related interactions with

customers. Sponsorships improve the visibility of the company. Companies provide customers with an

experience of using the product which ends up leading to a higher brand recall than competitors. These events

prove to be engaging with the audience.

Social Media Marketing

The concept of social media marketing basically refers to the process of promoting business or websites through

social media channels. Companies manage to get massive attention on such channels and can interact with

consumers as and when they are browsing the internet.

New and modern ways of communications are developing on these social media platforms and are proving to be

the future of promotions. They have the ability to be highly interactive and up to date with the customers.

Mobile Marketing

Mobile marketing involves communicating with the consumer via a mobile device, either to send a simple

marketing message, to introduce them to a new participation-based campaign or to allow them to visit a mobile

website.

Cheaper than traditional means for both the consumer and the marketer, mobile marketing really is a streamlined

version of online marketing the use of which is increasing as time progresses. Examples are advertisements that

we see on mobile applications.

IMC PLANNING PROCESS

6 Steps in the IMC Planning Process

You might be surprised at just how many businesses and organizations I talk with that do not have an
integrated marketing communications (IMC) strategy in place. From B2B to B2C, large to small, an IMC
strategy is as essential as a business plan.
There are typically six steps in the IMC planning process. Each are important in their own right and can be
applied to practically any business or organization, no matter the size or industry. While your plan might utilize
each marketing communications function differently, the overall idea remains the same.
Below are the major steps to keep in mind when developing your IMC strategy.
Step 1: Know your target audience
As a general rule, there is no “general audience”. You always want to communicate with a specific audience to
make the most effective use of your resources.
Segmenting specific audiences into groups based on characteristics will help you identify who are most likely to
purchase or utilize your products and services.
Step 2: Develop a situation analysis
Commonly referred to as a SWOT Analysis, this is basically a structured method of evaluating the internal
strengths and weaknesses, and external opportunities and threats that can impact your brand.
A situation analysis can provide much insight into both internal and external conditions that can lead to a more
effective marketing communications strategy.
Step 3: Determining marketing communication objectives
In this step, you basically want to document what you want to accomplish with your IMC strategy. Objectives
should be measurable if you truly want to map your campaign’s effectiveness at the end of your plan’s term.
Step 4: Determining your budget
Having a realistic idea on what you have to work with is important as it will shape the tactics you develop in the
next step. Once you determine your overall budget, you will want to come back to this after completing step five
to further refine your budget allocations.
Step 5: Strategies and tactics
Looking back at the objectives you created in step three, you will want to develop strategies which are ideas on
how you will accomplish those objectives. Tactics are specific actions on how you plan to execute a strategy.
Step 6: Evaluation and measurement
Almost as important as the plan as a whole, you want to outline a method of how you will evaluate the
effectiveness of your IMC strategy. Sometimes elements of your plan will not work. It’s important to know
what did or didn’t, try to understand why, and make note for future planning.
The more focused on how you will utilize your resources for promoting your business, the more you will
understand where you money is going and how it’s performing. An IMC strategy is important for any business
or organization.
If you would like to learn more about how you can benefit from a professional IMC strategy, please call SRJ at
214-528-5775. We’d love to work with you.

INTEGRATED COMMUNICATION STRATEGIES

1. Identify campaign goals and potential limitations. Which part of the marketing funnel are
you addressing, and what resources do you have access to? Is the purpose of your campaign to
boost consumer loyalty or are you looking to build awareness for customers who don’t know
about your brand? Decide exactly what you want to accomplish with your efforts.
2. Define the target audience. Always ask yourself, "If I would be charged a dollar for every
person who would watch my ad, who would I choose to show it to?" Remember, a large slice
of the market is better than bits and pieces of the full pie. In the words of Whitney Wilkinson,
assistant professor of marketing at Salt Lake Community College, “Selecting a target audience
is similar to the choice faced by Goldilocks. The most effective target audiences are not too
big, as to lose focus and spread resources too thin, and not too small, limiting potential market
size. Defining target audiences who are; accessible, receptive and profitable – is just right.
This can be achieved by using consumer insights uncovered in the research process, thinking
strategically, and using a data-driven approach."
3. Gain some insight. One of the best ways to do this is with a SWOT analysis. Analyze your
strengths, weaknesses, opportunities and threats from the perspective of your target audience.
In other words, do your best to answer these questions: What makes you special from your
consumer’s perspective? What doesn’t? What are some external factors and trends that could
help or threaten your business?
4. Understand your competition and identify your competitive edge. Perform a SWOT
analysis on the competition from the perspective of your target audience. Note that a good
competitive advantage has a high barrier of entry. The harder it is to duplicate what sets you
apart, the better off you are.
 5. Get creative. Creativity is a hard thing to define. People look at it as something you either
have or you don’t. I honestly don’t think that’s the case. Creativity is the process of
brainstorming a strategy after being well informed about the contributing factors. Emma Farr,
marketing specialist at Utah Food Services, said it best: “Creativity is a riddle, and oftentimes
the solution is sitting right in front of your face. It’s important to remember while in the
brainstorming phase that there are no bad ideas. Try not to protect your idea to the point you
become inflexible. The more you’re willing to dig deep and challenge why an idea will work
or not, the faster you are to finding your big idea.” Combine things, be adventurous, and have
fun with the process.
6. Check your “big idea.” Once you come up with your big idea, double check it. Ask yourself,
does this appeal to my audience and fit my strategy? Does it set me apart from my competition
and does it have a lasting impact? Would it be hard for my competitors to duplicate? If you
answer yes to these, you’re probably in good shape.
7. Communicate. Consider how you can tailor your idea through different mediums while
maintaining the original message. In other words, how would you address your Twitter and
Instagram followers differently? Creatively think of ways to communicate and present your
idea through different mediums while maintaining the original message. Is the message being
clearly communicated across your channels? Is your message consistently communicated
across all platforms? Are your employees and colleagues aware of and communicating your
message? Consistency is key, and your employees aren’t exempt from this; your message is
the voice of your company and should be communicated throughout every department.

RECENT TRENDS IN MARKETING COMMUNICATION

IS NOT FOUND

UNIT4

Marketing channel system

What is Channel Marketing?

Channel marketing focuses on the distribution of products from the manufacturer to the consumer. It is part of
the distribution (or “place”) component in the four P’s of the “marketing mix” – product, pricing, promotion,
and place. Since most manufacturers and producers don’t sell directly to their end user, they use a marketing
channel to distribute their products,  whether it’s a vending machine, department store, or a trade show. While
channel marketing is usually applied to products, it can also be used to market ideas and services.
Marketing channels help organizations expand their reach and their revenue. However, each marketing channel
will offer a different combination of coverage and performance, and so they may be used in combination.
Marketing channels may include traditional distribution models — which include producers, wholesalers and
retailers — or variants that cut out one or two components. For examples, companies like Dell and Avon avoid
wholesalers and retailers by using their own warehouses and salespeople to sell to consumers. Examples of
marketing channels include:

 Wholesalers
 Direct-to-distributors
 Internet direct
 Catalogue direct
 Sales team
 Value-added reseller
 Consultant
 Retail sales agent
 Manufacturer’s representative

Types of Marketing Channels

Definition: Marketing channel refers to the means through which the physical distribution of goods takes place
from the manufacturer to the customers, either directly or through intermediaries. The manufacturer can also
adopt Multi-Channel marketing if he finds it suitable for his product and the business.

In simple words, marketing channels are a medium to facilitate the active physical exchange of goods or
services.

Various Channels of Distribution

The different types of marketing channels or channels of distribution have been identified based on the number
of intermediaries or the levels the goods or services passes through to reach the customers.

These marketing channels are bifurcated into the following two categories:

Direct Marketing Channel

Direct selling is that medium of distribution in which there is no middle person involved, and the manufacturer
directly sells the goods or services to the customer. It is also termed as ‘zero-level channel’.

This type of channel is popular among the services industry. Most of the services like travel,
catering, salons fall under the direct marketing channel.

Even when the products are complicated to use like the industrial machinery require direct selling and support
from the manufacturer.

The small manufacturer of general goods finds this channel more profitable and cost-efficient since they cannot
afford giving margin to the intermediaries.

For Example; In restaurants, the food is prepared as well as served to the consumers.

Indirect Marketing Channels

In this channel of distribution, the goods produced by manufacturing units passes through different
intermediaries to reach its final consumer.

The indirect channels can be further classified into the following types, each of which is supported by an
example:

One-Level Channel
The single-level channel involves only one middle person, i.e. the retailer who purchases the goods from the

manufacturer and sells them to the customers. The shopping malls and marts use this channel
for acquiring products at a low price and selling them to customers at a reasonable price. Also, the
manufacturers of some specialise products like furniture, clothing, footwear, etc. preferably go for the one-level
marketing channel.

For Example; Big Bazaar is a retail mart which buys the products directly from the manufacturer and makes it
available to the consumers.

Two-Level Channel

The wholesaler buys the goods in large quantity from the manufacturers and supplies it to the various retailers in

small amounts. The retailers to the customers then sell these goods. This channel is
preferred by the manufacturers who want to sell their products to obtain market share. It eliminates the expenses
which the manufacturer incurs on the sales force, warehousing of goods and other retail selling practices.

It also facilitates mass production and a high volume of sales by increasing the scalability of the manufacturers.

For Example; Rice yield by farmers is purchased and stored in bulk quantity by the wholesalers. The retailers
then buy the rice in small portion from the wholesaler and sell it to the customers.

Three-Level Channel

The manufacturer appoints agents or gives the goods to agencies which further distribute the products to
selective wholesalers in large quantity. The wholesalers then sell the rice to the retailers in smaller amount who

finally sell it to the customers. This is one of the most commonly used channels of
distribution for confectionery products. It is used by the manufacturers who look forward to capturing a massive
market by reaching the consumers scattered over a vast geographical area. For instance; in rural marketing.

Even the perishable goods manufactured in large quantity need to be distributed through this medium since the
manufacturers cant acquire customers more quickly through any other channel.

For Example; Tata Tea manufactured by the company is sold to the agencies in different regions; these agencies
sell it to the wholesalers of their respective areas. The wholesaler further sells it to the retailers from where it
reaches the customers.
Key Terminology

 Manufacturer: The company or industry or the production unit where the goods are produced on a
small scale or large scale for selling in the market, is known as a manufacturer.
 Customer: The person who intends to buy a product or service and is capable of doing so is termed as
a customer.
 Wholesaler: The one who buys goods directly from the manufacturer in large quantity intending to sell
it to the retailer, to earn a marginal profit is called a wholesaler.
 Retailer: The person who sells goods in small quantity, directly to the customers at the maximum retail
price (MRP) is known as a retailer.
 Agent: The one who distributes goods from the manufacturers to the various wholesalers and earns
commission over it is called as an agent.

Conclusion

A marketing channel has to be selected wisely to ensure the proper distribution of goods or services to the
customers. Selection of a wrong channel may lead to excessive cost, perishability of products, loss, etc.

FUNCTIONS AND FLOWS

Channel Functions and Flows

A marketing channel performs the work of moving goods from producers to consumers. It overcomes the
time, place, and possession gaps that separate goods and services from those who need or want them. Members
of the marketing channel perform a number of key functions (see Table 12.1).

Some of these functions (storage and movement, title, and communications) constitute a forward flow of
activity from the company to the customer; others (ordering and payment) constitute a backward flow from
customers to the company. Still others (information, negotiation, finance, and risk taking) occur in both
directions. Five flows are illustrated in Figure 12.1 for the marketing of forklift trucks. If these flows were
superimposed in one diagram, we would see the tremendous complexity of even simple marketing channels.

A manufacturer selling a physical product and services might require three channels: a sales
channel, a delivery channel, and a service channel. The question for marketers is not whether various channel
functions need to be performed—they must be—but, rather, who is to perform

TABLE 12.1 Channel Member Functions

• Gather information about potential and current customers, competitors, and other actors and forces in
the marketing

environment.

• Develop and disseminate persuasive communications to stimulate purchasing.

• Negotiate and reach agreements on price and other terms so that transfer of ownership or possession can
be made.

• Place orders with manufacturers.

 • Acquire the funds to finance inventories at different levels in the marketing channel.

• Assume risks connected with carrying out channel work.

• Provide for the successive storage and movement of physical products.

• Provide for buyers’ payment of bills through banks and other financial institutions.

• Oversee transfer of ownership from one organization or person to another.

FiGURE 12.1 Five Marketing Flows in the Marketing Channel for Forklift Trucks

them. All channel functions use up scarce resources; they can often be performed better through
specialization; and they can be shifted among channel members. Shifting some functions to intermediaries
lowers the producer’s costs and prices, but the intermediary must add a charge to cover its work. If the
intermediaries are more efficient than the manufacturer, prices to consumers should be lower. If consumers
perform some functions themselves, they should enjoy even lower prices.

CHANNEL DESIGN AND MANAGEMENT

Channel design refers to those decisions involving the development of new marketing channels where none
had existed before or to the modification of existing channels. Channel design is a seven-step process of which
six steps are covered in this chapter and the seventh or final step is covered in Chapter 

Designing and Managing Marketing Channels

Marketing channels are set of mutually dependent organizations involved in the process of making product or
service available for utilization. It is established in academic studies that Marketing channels are the means by
which goods and services are made available for use by the customers. All goods go through channels of
distribution, and marketing will depend on the way goods are distributed. The direction that the product takes on
its way from production to the consumer is imperative because a marketer must choose which channel is best for
his particular product. It can be said that channel is the link between manufactures and purchasers. Decisions
about the marketing channel system are decisive for management.
Buy These   Notes   in   PDF   Format

The marketing channels chosen by marketers influence all other marketing decisions. The firm’s sales force and
advertising decisions depend on how much training and inspiration dealers need. Further, channel decisions
involve comparatively long-term commitments to other firms. Holistic marketers guarantee that marketing
decisions in all these different areas are made to jointly maximize value.

Channel of distribution (Marketing channel)

In current competitive climate, big companies are using hybrid channels in any one area. The firm must choose
how much effort is needed to assign to push versus pull marketing. A push strategy uses the manufacturer’s
sales force and trade promotion to encourage intermediaries to carry, promote, and sell the product to customers.
This is suitable where there is low brand loyalty in a category, brand choice is made in the store, the product is
desired item, and product benefits are well understood. In a pull strategy, the manufacturer uses advertising and
promotion to influence customers to ask intermediaries for the product, thus inducing the intermediaries to order
it. This is suitable when there is high brand loyalty and high involvement in the category, people perceive
differences between brands, and people choose the brand before they shop. A marketing channel executes the
work of moving products from producers to consumers, beat the time, place, and possession gaps that separate
goods and services from those who need or want them.
Channel level: The producer and the final customer are part of every channel. There are numerous channels by
which goods and services are distributed. It is divided into direct and indirect channel. In direct channel also
known as zero-level channel, manufacturer and customer deal directly with each other. There is no middleman
in this channel. It consists of a producer selling directly to final customers through door-to-door sales, Internet
selling, mail order, telemarketing, home parties, TV selling, manufacturer-owned stores, and other methods.
In indirect channel, companies manufacture products in huge scale and sell these products to middle man for
example whole seller and retailers. This channel can be very expensive.
Manufacturer to Customer: Manufacturer produces the goods and sells them to the customer directly with no
mediator, such as a wholesaler, agent or retailer. Goods come from the manufacturer to the user without an
intermediary.
Manufacturer to Retailer to Consumer: Purchases are made by the seller from the manufacturer and then the
retailer sells the products to the consumer. This channel is used by manufacturers that specialize in producing
shopping goods.
Manufacturer to Wholesaler to Customer: Consumers can buy directly from the wholesaler. The wholesaler
breaks down bulk packages for resale to the consumer. The wholesaler reduces some of the cost to the consumer
such as service cost or sales force cost, which makes the purchase price cheaper for the consumer.
Manufacturer to Agent to Wholesaler to Retailer to Customer: This type of distribution involves more than one
intermediary involves an agent called in to be the middleman and help with the sale of the goods. An agent
receives a commission from the producer. Agents are useful when products or services need to move rapidly
into the market soon after the order is placed.
Market channels by which goods and services are distribute
d

Characteristics of Marketing Channels

Link between Producer and Consumer.
Flow of Goods
Remuneration.
Classification-Direct and Indirect.
Activities- Financing, Credit Facility
It is important to consider some factors when choosing appropriate marketing channel such as product, market,
company. It is observed that middle man plays vital role in distribution of product in market channel. The core
responsibility of intermediaries is to deliver products to customers in their desired location. To accomplish this
objective, they purchase goods and store these and then ship to customers.
marketing channel function performed by middleman.---

Designing a Marketing Channel System

Designing a marketing channel system entails factors such as analysing customer needs, establishing channel
objectives, identifying major channel alternatives, and evaluating major channel alternatives.
Analysing Customers’ Desired Service Output Levels: The marketer must recognize the service output levels
which its target customers want. Channels produce five service outputs:

1. Lot size: The number of units the channel allows a particular customer to buy at one time.
2. Waiting and delivery time: The average time consumers of that channel wait for receipt of the goods.
Customers generally prefer fast delivery channels.
3. Spatial convenience: The extent to which the marketing channel facilitate for customers to obtain the
product.
4. Product variety: The variety provided by the channel. Usually, consumers prefer a greater collection,
which enhances the chance of finding what they need.
5. Service backup: The add-on services such as credit, delivery, installation, repairs provided by the
channel.

Providing greater service outputs denotes increased channel costs and higher prices for consumers. The triumph
of discount resellers (online and offline) designates that many consumers will accept lower outputs if they can
save money.
Establishing Objectives and Constraints
Another factor in designing a marketing channel system is that marketers must declare their channel objectives
in terms of targeted service output levels. In competitive conditions, channel institutions should coordinate their
functional tasks to reduce total channel costs and still offer desired levels of service outputs. Generally, planners
can recognize several market segments that want different service levels. Successful planning needs to
determine which market segments to serve and the best channels for each. Channel objectives differ with
product characteristics. Channel design is also affected by numerous environmental factors as competitors’
channels, monetary conditions, and legal regulations and limitations.
Identify Major Channel Alternatives
Other decisive factor in developing market channel is to recognize alternatives. Companies may select array of
channels to approach customers, each of which has distinctive strengths as well as limitations. Each channel
alternative is explained by (i) the types of available intermediaries (ii) the number of intermediaries needed; and
(iii) the terms and responsibilities of each channel member. Types of Intermediaries entails a firm needs to
discover the types of intermediaries available to run its channel work. Some intermediary merchants such as
wholesalers and retailers buy, take title to, and resell the products. Agents such as brokers, manufacturers’
representatives, and sales agents chase customers and may bargain on the producer’s behalf but do not take title
to the merchandise. Facilitators, including transportation companies, independent warehouses, banks, and
advertising agencies, help in the distribution process but neither take title to goods nor negotiate purchases or
sales.
Companies should recognize pioneering marketing channels. Number of Intermediaries indicates that to choose
intermediaries to use, companies can adopt one of three strategies: exclusive, selective, or intensive distribution.
Exclusive distribution means severely limiting the number of intermediaries. Selective distribution depends on
more than a few but less than all of the intermediaries willing to carry a particular product. In intensive
distribution, the producer places the goods or services in as many outlets as possible. This strategy is usually
used for items such as snack foods, newspapers, and gum. Terms and Responsibilities of Channel Members
signify that each channel member must be treated courteously and given the opportunity to be lucrative. The
main constituents in the “trade-relations mix” are price policy, conditions of sale, territorial rights, and specific
services to be performed by each party. Price policy assists the producer to ascertain a price list and schedule of
discounts and allowances that intermediaries see as equitable and sufficient.
Evaluating the Major Alternatives
The Company must assess each alternative against suitable economic, control, and adaptive criteria. The firm
should verify whether its own sales force or a sales agency will create more sales and it estimates the costs of
selling different quantities through each channel.
Managing Marketing Channel
In order to maximize profit, companies must manage their marketing channel effectively. Management of
marketing channel refers to the process of analysing, planning, organizing and controlling its marketing channel.
In marketing channel two different activities occur. One is the establishment of physical distribution system and
other is management of marketing objectives. Management of marketing channel involves all functions of
marketing mix which include product, price, physical distribution, program and people. The physical
distribution system and channel structure is established through which products flow in the marketing channel.
Marketing Mix Activities In Marketing Channel Management: (McCalley, 1996)

To Mange marketing channel, firms must adopt motivational strategies such as paying higher slotting
allowances, offering higher trade discount, providing strong promotional and advertising support, training
channel member sales people, giving high level logistic support. Management professional stated that after a
firm has selected a channel system, it must select, train, motivate, and evaluate individual intermediaries for
each channel. It must also modify channel design and arrangements over time.
Selecting Channel Members: For successful management, Companies must have to choose talented channel
members cautiously because for customers, the channels are the company. Producers should decide what
features distinguish the better intermediaries and scrutinize the number of years in business, other lines carried,
growth and profit record, financial strength, cooperativeness, and service reputation of potential channel
members. If the intermediaries are sales agents, producers should assess the number and character of other lines
carried and the size and quality of the sales force. If the intermediaries want exclusive distribution, the
manufacturer should assess locations, future growth potential, and type of customers.
Training and Motivating Channel Members: It is a major responsibility of a company to examine its
intermediaries in the same way it views its customers. It needs to establish intermediaries’ needs and build a
channel positioning such that its channel offering is tailored to provide superior value to these intermediaries. To
enhance intermediaries’ performance, the company should offer training, market research, and other capability-
building programs. The company must also continually strengthen that its intermediaries are to jointly gratify
the needs of end users. Producers differ greatly in channel power, the ability to change channel members’
behaviour therefore the members take corrective actions. Often, gaining intermediaries’ collaboration is a major
challenge. Sometimes, Producers try to forge a long-term affiliation with channel members. The manufacturer
must talk clearly what it expects from its distributors in the way of market coverage and other channel issues
and may ascertain a compensation plan for adhering to these policies. Motivating channel members takes
numerous forms in order to gratify the requirements at each level in channel. Profitability is major Motivational
force for whole seller for product selection. When profit motivation is satisfied, whole seller will look for
marketing programs offered by producers to sell products to retailers. Whole seller checks the credit option and
terms of payment when assessing the profit option for business when dealing with particular supplier. Retailers
are mainly concerned with maintenance of product supply and availability. It is observed in market that when
customers cannot get product in one retail shop, they immediately search for it in another retailers. But retailers
do not want to lose customers. Another interest of retailers is profitability of the product.
Motivational consideration for channel members: (McCalley, 1996)

Evaluate Channel Members: To successfully manage market channel, producers must assess intermediaries’
performance at regular intervals against such standards as sales-quota attainment, average inventory levels,
customer delivery time, treatment of damaged and lost goods, and cooperation in promotional and training
programs. A producer will occasionally determine that it is paying particular intermediaries too much for what
they are actually doing. Producers should establish functional discounts in which they pay specific amounts for
the intermediary’s performance of each agreed-upon service. People who are not performing must be given
extra training or counselling.
Modifying Channel Arrangements: Channel arrangements must be reassessed regularly and altered when
distribution does not work as planned, consumer buying patterns change, the market develops, new competition
occurs, inventive distribution channels appear, and the product moves into later stages in the product life cycle.
No marketing channel remains successful over the entire product life cycle. Early purchaser might be willing to
pay for high-cost value-added channels, but later buyers will change to lower-cost channels. In highly
competitive markets with low entry barriers, the best channel structure will transform over time. The company
may add or drop individual channel members, add or drop particular market channels, or develop a new way to
sell merchandise. The process of adding or dropping an individual channel member needs an incremental
analysis to decide profitability of company. Additionally, marketers adopt data mining to analyse customer
shopping data as input for channel decisions. The most complicated decision is whether to modify the overall
channel scheme. Channels can become old-fashioned when gap occurs between the existing distribution system
and the ideal system to gratify customer’s needs and wants.
The most challenging face of channel management is the maintenance of control over all parts of distribution
flow and marketing activities. Marketers have to undergo legal issues in controlling marketing channels
therefore they need to develop successful channel programs that will stimulate the action planned without
creating conflict among competitive channel members.
To summarize, market channel is medium through product from raw material move to costumer. In designing
market channel it is important to comprehend customer’s need. The task of managing marketing channel falls to
marketing and sales managers. These people directly involve with channel members and company’s
competitors. They know how to find valuable information for good management decisions. To organize
marketing channel, it is imperative to gather relevant information. It assists in writing accurate and detail market
profile statement. Most marketing channels are created with one or more intermediaries between the
manufacturer and consumer.
EVALUATION OF CHANNEL MEMBERS

The need to evaluate the performance level of the channel members is just as important as the evaluation of the
other marketing functions. Clearly, the marketing mix is quite interdependent and the failure of one component
can cause the failure of the whole. There is one important difference, with the exception of the corporate VMS;
the channel member is dealing with independent business firms, rather than employees and activities under the
control of the channel member, and their willingness to change is lacking.
Sales is the most popular performance criteria used in channel evaluation. Sales might further be subdivided into
current sales compared with historical sales, comparisons of sales with other channel members, and comparisons
of the channel member's sales with predetermined quotas. Other possible performance criteria are: maintenance
of adequate inventory, selling capabilities, attitudes of channel intermediaries toward the product, competition
from other intermediaries and from other product line carried by the manufacturers own channel members.

Procedure for Selection of Effective Marketing Channels

Procedure for Selection of Effective Marketing Channels!

Channel strategy decisions involve (1) the selection of most effective distribution channel, (2) the appropriate

level of distribution intensity and (3) degree of channel integration.

Channel selection Procedure:

A company has to consider factors related to the market and customers, its own situation, the product and the

competitive environment.

All these factors have a strong bearing on the type of distribution channel selected.

A company should be very deliberate in deciding upon a distribution channel as it is expensive, cumbersome

and can invite litigations to dismantle a distribution channel once it is established because interests of

independent intermediaries are involved.

Marketing factors:

i. Buyers may mandate that products be sold to them only in a certain way. They may prefer to buy from a

particular type of outlet, and only at a particular time, and a supplier needs to match customer expectations if it

wants their business.

A supplier also needs to be mindful of customer needs regarding product information, installation and technical

assistance. Buyers’ level of need regarding such services has to researched.

The company has to decide whether the channel intermediary can meet these needs in terms of expertise,

commitment and cost, or it has to set up its own infrastructure to serve customers’ needs effectively.

For instance, car service can be provided by dealers or independent authorized service providers, or by service

centers run by the company. The company has to decide as to who will provide the service.

ii. The willingness of channel intermediaries to sell and distribute a company’s product strongly influences its

decision to use one channel arrangement over another. A company has to resort to direct distribution if

distributors refuse to distribute its product.

For an industrial product company, this will mean recruitment of salespeople, and for a consumer product

company, this will mean selling through direct mail, telephone, or internet. This situation may arise if the brand

or the product is not well established, the intermediaries feel that there would not be enough buyers, selling the

product is difficult and complicated, and there is not enough margin.

For such products the manufacturer will have to increase margins for the intermediaries and provide them more

support.
Alternatively, the manufacturer has to create demand among final consumers for the product, so that

intermediaries get interested in keeping it. Investment in branding is a good option for marketers of consumer

products and even the marketers of industrial products should not rule out the option of branding their products.

When customers will demand products, it will be in the self-interest of retailers to keep such products. In fact,

manufacturers should look at branding as their weapon for the long term, against powerful intermediaries.

Once they have made the initial investment in building a strong brand, they can reduce the margins of the

intermediaries and plough back the money in more branding efforts.

iii. The profit margins demanded by wholesalers and retailers and the commission rates demanded by sales

agents also affect their viability and attractiveness as a channel intermediary. These costs need to be assessed in

comparison with those that will be incurred if the company decides to sell directly to customers.

As the power of retailers has increased, they are demanding higher margins from manufacturers. While most

manufacturers are complying due to retailers’ command over a huge base of customers and lack of alternate

means of reaching customers, some companies are trying to bypass retailers by opening their own stores.

If retailers’ dominance continues, some radical response to bypass the powerful retailers should be expected

from manufacturers in the near future.

iv. The location and geographic concentration of customers strongly affects channel selection. Direct

distribution is feasible if the customer base is clustered, and is local. Direct distribution is also feasible when

customers are few in number and buy in large quantities, as in the case of industrial customers.

When a company has large number of customers who buy in small lots, and are widely dispersed, it has to use

channel intermediaries to reach them-direct distribution would be prohibitively expensive, and can be justified

only if unit price is high and the company is able to customize the product in the time between the customer

placing an order and the company delivering the product, as Dell does.
Manufacturer factors:

i. Most manufacturers are good at designing and producing products, and hence want to delegate the task of

selling and distributing to channel intermediaries. Some manufacturers lack the financial and managerial

resources to take on the tasks of selling and distributing.

Therefore, the company does not open its own stores or hires its own salespeople, and uses distributors or agents

to sell and distribute its product. A manufacturer of consumer products will need huge investment in setting up

infrastructure for distribution because the number of customers is large and are geographically dispersed.

The distribution channels of consumer products are long, and managing such a wholly- owned distribution

infrastructure will be an arduous task even for the mightiest manufacturers. Also, most manufacturers do not

have customer-based skills to sell and distribute their products, and hence have to rely on intermediaries.

ii. A wide mix of products makes direct distribution feasible, as the cost of setting up and operating a common

distribution infrastructure is distributed over a larger number of products.

Narrow or single product companies find the cost of direct distribution prohibitive unless the product is

expensive and its customers buy in bulk. Therefore, they have to use channel intermediaries to sell and distribute

their products.

iii. When a company uses independent channel intermediaries, it loses control over the way the product is sold

to customers. The company loses control of the price charged to customers and the way the product is stocked

and presented to customers.

There is no guarantee that the channel intermediary will stock its new products or its full range of products. It

may just be interested in stocking products which sell more or on which it earns higher margins. Manufacturers

of electronic products are opening wholly-owned megastores to showcase their full range of products.

Channel intermediaries are obliged to perform certain tasks like in-store promotion in retail stores, promotion in

the local media by retailers, or appointing a minimum number of salespersons in a region by a wholesaler. It is

very important for manufacturers to constantly monitor whether channel members are performing the agreed

functions.
Product factors:

i. Design and production of large and complex products need personal contact between the manufacturer and

customer. These products are also expensive, and hence direct selling and distribution of such products is

economically viable.

The manufacturer and customer remain in active contact during the lifetime of the equipment, as both need to

collaborate during its installation, operation and service.

ii. Perishable products require short channels to supply the customer with fresh stock. Bulky or difficult to

handle products may require direct distribution because distributors may refuse to carry them in their stores due

to space constraint or because expensive provisions will have to be made to handle and store them.

Intermediaries may have difficulty in displaying such bulky products.

Competitive factors:

If competitors control traditional channels of distribution, for instance, through exclusive dealership

arrangements, a company has to decide to sell directly or set up its own distribution network. It recruits

salespeople to sell directly or builds its own distribution infrastructure in terms of setting up distribution centers

and opening retail outlets, to reach customers.

Players of an industry sell and distribute in a particular way, but a manufacturer should not assume that channels

of distribution used by competitors are the only way to reach their customers. It should explore alternate means

of reaching customers i.e., use distributors and retailers not used by competitors to reach customers.

It should also explore the possibility of using direct marketing and distribution. Alternate distribution channels

may be used as a means of attaining competitive advantage. For instance, Dell uses direct marketing to gain a

substantial competitive advantage by customizing personal computers to suit customer requirements.

Deciding the number of outlets in a region or for a population, i.e., the intensity of outlets is a critical decision.

If the number of outlets is more than required, the cost of serving a customer goes up.

If the number of outlets are less than required, customers will face difficulty in accessing the outlets and they

may buy an alternate brand or product or forgo purchase altogether. There are three options for a company:

Intensive distribution:

The product is inexpensive and customers can choose from large number of equally good brands. Intensive

distribution is required for such products, which provides maximum coverage of the market by using all

available outlets.

Sales are a direct function of the number of outlets penetrated in case of mass market products such as

cigarettes, food and confectionaries. This happens because customers have a range of acceptable brands from

which they choose. If a brand is not available in an outlet, an alternative is bought.

The convenience aspect of purchase is paramount in such products, and the customer will buy an alternate brand

if his preferred brand is not stocked in the store he is shopping. Some such purchases are also unplanned a fid

impulsive in nature. They are bought because the products happen to be in sight. If the product or the brand not

spotted by the customer, sales are lost.

New outlets should be sought which have not stocked the product or brand so far. The retailers who have been

stocking the product do not mind when the manufacturer signs up more retailers to carry the product because the

revenue generated from each customer for such products are low.

Wider availability and display of such products across many outlets act to make them popular, which increases

the sale of the product in every outlet.

Also, most of these purchases happen in grocery stores for which customers show high amount of loyalty.

Therefore it is important that the store has all the products that its customers may want and expect the store to

stock. It is not very worrying if the next store has them, too.
Selective distribution:

For products like electronics goods and home appliances, a manufacturer uses a limited number of outlets in a

geographical area. It selects the best outlets in the area in terms of their location, space, decor and the owners’

enthusiasm to carry its products.

It develops close relationships with the outlets and trains their salespeople. It ensures that the salespeople are

motivated to sell its products and that they are well compensated. Retail outlets and industrial distributors prefer

such an arrangement as it reduces competition amongst them.

Selective distribution works well when the product’s characteristics are such that the customers are willing to

spend time to learn about the product and evaluate alternatives. The company cannot make its products available

in all possible outlets because customers expect a minimum amount of assistance in making the purchase.

They may also expect the product to be delivered and installed at their homes. They may also expect the retailer

to arrange loans and insurance for the product that they plan to buy. Therefore only the retailers who can

provide such services can be signed up to carry the product. And when these retailers have made such

investments, they do not expect the next shop to be selling the same product.

They expect some territory to themselves. Retailers would be aggrieved if the manufacturer tried to add more

outlets in their region as the new outlets would eat into their sales.

The customer makes such purchases after deliberation and is purposeful about buying a brand from a set of

brands. He will be willing to travel some distance to find his preferred brand or brands, and therefore, storing

the brand in stores which are very close to each other is really not required.

Exclusive distribution:

The product is important to the customer and he is willing to travel to buy his preferred brand. The product is

expensive and hence the company will incur high inventory holding costs if it is stocked at too many locations.

-Only one wholesaler, retailer or industrial distributor is used in a geographical area. Car dealers are an example.

Customers cannot negotiate prices between dealers since to buy in a neighboring town or from a dealer in a
distant location, may be inconvenient when repairing and servicing are required It allows close co-operation

between the manufacturer and the retailer over servicing, pricing and promotion.

The right to exclusive distribution may be demanded by a distributor as a condition for stocking a

manufacturer’s full product line. The manufacturer may agree for exclusive dealing where the distributor agrees

not to stock competing lines.

But before granting exclusive dealership to a retailer in a region, the manufacturer should deliberate if his brand

has strength enough to be able to make the customers face the inconvenience of traveling some distance to buy

the brand. In categories like automobiles where the manufacturers have strong brands and customers have strong

preferences, exclusive dealership should be granted.

Since establishing such dealerships involves big investments, it is wise not to fritter away resources in having

too many dealers. Not many customers buy a particular brand of car because its dealer happens to be next door.

The purchase is too expensive for customers to engage in such whims. But the same arguments do not hold in

categories like apparel where exclusive dealerships are provided Customers’ choice criteria are not crystallized

in such categories and customers do not have strong preferences.

It is unrealistic to expect a customer to travel to the other end of the city to buy his favorite shirt. But super

premium brands, even in such categories command high brand loyalty and exclusive dealership can be granted

for such high-end brands.

Exclusive dealing can reduce competition and make the dealer lackadaisical. This may be against the customer’s

interest as he has no alternate recourse.

There is another danger in an exclusive channel arrangement. Since the level of commitment of both the channel

member and the manufacturer are higher, in case of estrangement, both are likely to fight bitterly.

Channel integration:

Degree of channel integration varies widely. The manufacturer or any particular intermediary has minimal

control when independent wholesalers, dealers and agents are part of the distribution channels.
At the other extreme, in the wholly-owned distribution infrastructure, the channel members are owned by the

manufacturer who exercises complete control over them. Somewhere in between are arrangements like franchise

operation where both franchiser and franchisee exercise power and discretion in their areas of jurisdiction.

Conventional marketing channels:

Channel intermediaries are independent businesses with their individual profit goals. The channel intermediaries

are independent business entities, and they would look after their own interests. Therefore, manufactures cannot

unilaterally force them to do their bidding.

Independence of channel intermediaries makes it imperative that relationship between the manufacturer and its

channel intermediaries be based on fairness and equitable distribution of rewards. Manufacturers have to put

money-value on the tasks that the channel intermediaries perform for them, and then compensate them

adequately.

It is also important that they jointly decide as to what tasks will be performed by whom—one party may be in a

better position to perform an activity, and hence that party should be assigned to perform that activity. For

example, retailers are expected to hold inventory for most durable products, resulting in large amount of safety

inventory being held at multiple locations.

A manufacturer can hold inventory for all its retailers of a particular region, and the product can be sent to

customers directly from manufacturer’s storage area—retailers can concentrate on selling.

A manufacturer who dominates a market through its size and strong brands may exercise considerable power

over intermediaries though they are independent. Traditionally, manufacturers exercised control over

intermediaries because their brands drove business in retail stores and retailers felt dependent on them.

The manufacturer rationed the supply of hot brands, forced the retailers to carry their full range, and made them

participate and contribute in their promotional programmes. But with consolidation and emergence of retail

chains, the balance of power has shifted dramatically. They know the preference of customers, and know which

brands are selling and how much.

The retail chains enjoy enormous clout with customers and they have huge buying power. The retail chains also

have strong brands of their own in most categories. The manufacturers now are dependent on the retailers and

the latter are extracting their pound of flesh.

The retailers demand slotting fees for new products, carry only the hot selling brands, require frequent

replenishment from manufacturers, and expect the manufacturer to participate and contribute in the store’s

promotion programmes.

The relationship between the manufacturer and the intermediaries is governed by balance of power between the

two parties. Both manufacturers and retailers have been guilty of exploiting the vulnerable party whenever they

have been strong. Manufacturers did it earlier, retailers are doing now. But this is not a good ploy.

The economics of a supply chain dictates that an activity should be done at a point in the chain where it can be

done most efficiently and effectively, so that the cost structure of the supply chain is improved and there is more

profit for every player. The extra profit should be divided among the partners depending on the efforts expended

by the players.

A supply chain operated by dictum of the more powerful party will be inherently inefficient compared to the one

based on co-operation between the parties. The powerful player will shift activities to the more vulnerable

player even when the powerful player could do that particular activity more efficiently and effectively.

The result is an inefficient supply chain with less profit for all the players. And a large part of the smaller profit

is appropriated by the powerful player, leaving the weaker players disgruntled and less willing to co-operate.

And more dangerously, the vulnerable players are always looking at ways to get back at their tormentors.

It is time the manufacturer and the independent channel intermediaries shifted the basis of relationship from

power to rational distribution of activities in the supply chain and equitable distribution of profit amongst

themselves.

Franchising:

A franchise is a legal contract in which the manufacturer or the producer and the intermediary agree to each

member’s rights and obligations. The intermediary receives marketing, managerial, technical and financial
services from the producer in return for a fee. For instance, McDonald’s combines strengths of a large

sophisticated marketing oriented organization with energy and motivation of a locally owned outlet.

Franchise operations give the manufacturer a certain degree of control over its intermediaries. A franchise

agreement is a vertical marketing system in which there is a formal co-ordination and integration of marketing

and distribution activities between the manufacturer and its intermediaries. Roles and functions of each party are

clearly defined, and each is expected to look after the interest of the other.

Franchising occurs at four levels:

A. Manufacturer and retailer:

The retailer sets up outlets in which manufacturer’s cars are sold, and it also sets up repair and service facilities

for the car. The retailer is motivated. The manufacturer gets retail outlets for its car and repair facilities without

the capital outlay required with ownership.

B. Manufacturer and wholesaler:

The wholesaler gets the right to produce, bottle and distribute Coke’s product in a defined geographical area.

C. Wholesaler and retailer:

The wholesaler acquires the right to distribute manufacturer’s products or purchases its product, and then signs

up retailers to sell the product to final consumers. This arrangement is common in hardware stores.

D. Retailer and retailer:

A retailer expands geographically by means of franchise operations. For instance, Benetton and McDonald’s

have used this approach to expand their operations geographically.

In all franchising arrangements, it is imperative that profits are distributed equitably among both parties. The

structure of the agreement between the two parties should be such that profits are divided equitably.

When intermediaries are required to pay a fat upfront fee and the manufacturer takes only a small or no share of

the profit generated at the intermediaries’ end, the manufacturer has no major financial motivation to ensure that

the intermediaries earn profits.

But when the intermediaries pay small or no upfront fees and the manufacturer shares the profit generated at the

intermediaries’ end, the manufacturer becomes interested in the profitability of the intermediaries. McDonald’s

follows this practice and ensures that its franchisees earn profits and takes a share in the profits.

Channel ownership:

Total control over distributor activities comes with channel ownership by the manufacturer or an intermediary.

Channel ownership results in creation of a corporate vertical marketing system. When a manufacturer purchases

a chain of retail outlets, it begins to control the purchasing, production and marketing activities of these outlets.

In particular, the manufacturer’s control over purchasing means a captive outlet for its product. For example,

Purchase of Pizza Hut by Pepsi has tied these outlets to Pepsi’s soft drink brands. Retailing, is a specialized

business, and most manufacturers may find it difficult to manage retail operations.

TRAINING Benefits of Channel Partner Training

Channel training should be offered to everyone delivering your service or selling your product. In other words,
any representatives, franchisees, vendors, consultants, resellers, contractors, and distributors. These partners
may be local or international.

Because they’re not in-house employees, channel partners don’t get to benefit from in-house programs
that boost morale, stop them from feeling like outsiders and keep them motivated.
So, by offering comprehensive channel training, you’ll be investing in your channel partners. Partner
enablement shows them that your business is willing to make an effort to keep them functioning at their best.

Transparency
Channel training emphasizes that the relationship between the company and its partners is mutually beneficial
— in other words, success is a team effort. When both parties are working with this understanding,
communication is more transparent and more frequent. Any need for intervention or help can be identified and
addressed early on.

Another benefit of the transparent communication that partner enablement encourages is that any confusion
around performance expectations can be resolved before it becomes a problem.

Regular channel training about the company’s goals, and the training that will be provided to help partners
achieve them, keeps the latter motivated. Also, it often avoids those awkward conversations after a goal has
been missed.
Expect each sales representative to pick up three new clients per quarter? Make this clear in your training and
communication, and watch morale and performance results among your channel partners improve.

Customer retention
It’s common knowledge that it’s far more costly to gain a new customer than it is to keep an old one. A
targeted partner enablement program that teaches channel partners to handle typical (and difficult) customer
questions, points out the benefits of features that customers frequently overlook, and refers customers to helpful
documentation, can lower your “churn rate” significantly.
Because the more your channel partners know about your business and products, the more your customers will
know, too. And the more supported and knowledgeable your customers feel, the more loyal they’ll be to your
brand.

Overall satisfaction
Need to increase your NPS (Net Promoter Score) among customers?

Training partners to apply best practices when engaging with customers can make a huge difference to ongoing
sales figures – especially when it comes to conversations about customer satisfaction with your product. This
could include training about customer check-ins and overall communication improvement.

Another benefit of this partner enablement strategy is that it produces more confident, well-rounded partners,
who feel equipped to solve most customer issues.

Creating a Channel Partner Training Strategy That Works

You’re convinced – channel partner training is a must. But now you’re wondering how to best approach it.
Ensure you work through the following steps to create a strategy that pays off.

1. Evaluate Channel Training Needs

First, get a thorough picture of what your partners need. Some partners, such as vendors or franchisees, might
need general training in marketing your products. Sales representatives and distributors may need more on-
hands product training, like how to use the product’s different features.Determine what type of training would
best enable your channel partners through regular surveys to identify frequently-encountered problems.

2. Align Your Partner Enablement Goals with Your KPIs

Your Key Performance Indicators (KPIs) track how the business is faring against specific performance goals.
Channel partners can become distant from these KPIs, or have outdated KPIs in mind due to a lack of training.

Aligning your channel partner training to KPIs, and making the goals of the training program explicit and easy
to understand, will help you get the most out of training. For example, if one of your business KPIs for the year
is to increase customer retention by 25%, make sure this is clear in your training on customer retention
strategies.

Aligning your channel training with your business KPIs will also help you measure the ROI of your partner
training program because you can track performance improvement after training against your goals.

3. Choose the Right Platform

If you only have a small number of channel partners, then workshops and face-to-face training could be a great
way to foster camaraderie among partners. But what if you have many partners, and worse, they’re all over the
world?
This is where using a learning management system (LMS) can make all the difference. LMSs allow channel
partners to interact with your training content and assessments in their own time, without needing to travel or
take too much time out of their workdays.
Your choice of LMS for channel partner training will depend on factors like your budget and the features you
need, for example, quizzes. Evaluate the options available and compare how they meet your needs for the price.
Chances are, you’ll find an LMS that offers just the right combination.

4. Motivate Channel Partners

Clear expectation management, a sense of reward and feeling like part of the business culture are all important
for keeping partners motivated.

Once you identify your training goals, break them down into milestones that partners can work through during
the program. This introduces opportunities to “top-up” on motivation by recognizing your partners’ work, while
also making training more manageable.

You may offer certificates or other incentives for completing sections of training, such as product knowledge
certification. These incentives can be tracked on leaderboards to incentivize friendly competition.

Another way to motivate your channel partners to complete training and perform better is to bake your
business’ values into your training. Make sure they understand what the business values in its employees,
partners and customers, and the role that channel partners play in representing the culture of the business.

5. Make Communication Easy

Think about ways that you could build communication into your partner relationships and channel training.
Use LMS features like direct messaging in discussions and forums to make it quick and simple to ask questions.
These features can also allow partners to communicate with and learn from other partners.

Making it super easy to ask questions (and receive answers quickly) means that your training materials, sales
documentation, product information and other resources are more likely to be interpreted correctly.

6. Stage Your Training

Training in the workplace is seldom a once-off event, and the same should be true for channel training. Break
your training up into stages that partners complete in sequence. This makes it easier to keep them up to date with
the latest developments, without overwhelming them with information.

Multi-level training programs delivered over an extended period of time will also keep your channel partners
engaged with your product or service, and in tune with your goals

MOTIVATION

The Importance of Motivation to Distribution Channel Members

by Julie Davoren

With the onslaught of ecommerce, distribution has taken on a new, dynamic dimension and at the same time has

become extremely competitive. The Internet has not eradicated brick and mortar stores, however, and

manufacturers also generate sales through these stores. Traditional distribution channels move goods from the
manufacturer's factory or warehouse to the hands of middlemen or brokers who then sell them to wholesalers.

Goods move from wholesalers to retailers who then cater to the needs of customers. Conventionally, these are

the people who are channel partners for distribution of goods for the manufacturer.
Rapport

You can offer financial incentives so that the channel partners find it more lucrative to stock and sell your

products as compared to those of your competitors. A higher quantum of the commission on the sales of your

product or more intensive point of purchase advertising may be a good motivational strategy. Similarly, a

comprehensive knowledge about the unique selling points of your products could also help the channel partner

score more sales for your product. Such knowledge also helps to increase the rapport between the channel

partner and your organization, since he feels that you have the utmost trust in him.

Display

Your main aim is to see that customers purchase your product in preference to your competitors. If your channel

partner who stocks your product is not motivated enough, your product will just lie idle on the shelf or in his

warehouse. Many products offered in the market are homogeneous; they have similar features with a slight

difference in pricing and packaging. It is the channel partner who is most responsible in selling a particular

brand to his customers. If your product is not displayed prominently by the retailer and is not visible to the

customer, the customer may not even ask for it.

Presentation

The retailer must be motivated so that she is induced to "window display" your

product so that it catches the customer's eyes and persuades him to purchase it. There

are always new products hitting the market, and you want to ensure the retailer is

enthusiastic and excited enough to hard-sell your product. You spend a hefty

percentage of the product's cost on distribution; therefore,

winning the enthusiasm and mind of your channel partners is extremely vital for your

product distribution success.

Enthusiasm
It is a challenging job to keep the motivation and enthusiasm of your channel partners at a high level.

Motivation, however, is of paramount importance, since it is these channel partners who can "make or break"

your product in the customers' minds. In many cases, customers heed the advice of your channel partners while

finalizing their purchases. Hence, you want to make sure that your channel partners enthusiastically suggest

your products. A well-planned marketing strategy that includes your channel partners' active involvement helps

to distribute your products smoothly. Your channel partners involvement helps to push your products through all

the different distribution levels and ultimately reach satisfied customers.

EVALUATION OF CHANNEL MEMBERS

Channel Management
Decisions

Once the company has reviewed its channel alternatives and decided on the
best channel design, it must implement and manage the chosen channel.
Channel management calls for selecting, managing, and motivating
individual channel members and evaluating their performance over time.

SELECTING CHANNEL MEMBERS

Producers vary in their ability to attract qualified marketing intermediaries.

Some producers have no trouble signing up channel members. For example,
when Toyota first introduced its Lexus line in the United States, it had no
trouble attracting new dealers. In fact, it had to turn down many would-be
resellers. In some cases, the promise of exclusive or selective distribution for
a desirable product will draw plenty of applicants.

At the other extreme are producers who have to work hard to line up enough
qualified intermediaries. When Polaroid started, for example, it could not get
photography stores to carry its new cameras, and it had to go to mass-
merchandising outlets. Similarly, when the U.S. Time Company first tried to
sell its inexpensive Timex watches through regular jewelry stores, most
jewelry stores refused to carry them. The company then managed to get its
watches into mass-merchandise outlets. This turned out to be a wise decision
because of the rapid growth of mass merchandising.

When selecting intermediaries, the company should determine what

characteristics distinguish the better ones. It will want to evaluate each
channel member's years in business, other lines carried, growth and profit
record, cooperativeness, and reputation. If the intermediaries are sales agents,
the company will want to evaluate the number and character of other lines
carried and the size and quality of the sales force. If the intermediary is a
retail store that wants exclusive or selective distribution, the company will
want to evaluate the store's customers, location, and future growth potential.

MANAGING AND MOTIVATING CHANNEL MEMBERS

Once selected, channel members must be continuously managed and

motivated to do their best. The company must sell not only through the
intermediaries but to and with them. Most companies see their intermediaries
as first-line customers and partners. They practice strong partner
relationship management (PRM) to forge long-term partnerships with
channel members. This creates a marketing system that meets the needs of
both the company and its partners.

In managing its channels, a company must convince distributors that they can
succeed better by working together as a part of a cohesive value delivery
system.10 Thus, Procter & Gamble and Wal-Mart work together to create
superior value for final consumers. They jointly plan merchandising goals
and strategies, inventory levels, and advertising and promotion plans.
Similarly, GE Appliances has created an alternative distribution system
called CustomerNet to coordinate, support, and motivate its dealers.

GE CustomerNet gives dealers instant online access to GE Appliances'

distribution and order-processing system, 24 hours a day, seven days a week.
By logging on to the GE CustomerNet Web site, dealers can obtain product
specifications, photos, feature lists, and side-by-side model comparisons for
hundreds of GE appliance models. They can check on product availability
and prices, place orders, and review order status. They can even create
custom brochures, order point-of-purchase materials, or download
"advertising slicks"—professionally prepared GE appliance ads ready for
insertion in local media. GE promises next-day delivery on most appliance
models, so dealers need carry only display models in their stores. This
greatly reduces inventory costs, making even small dealers more price
competitive. GE CustomerNet also helps dealers to sell GE appliances more
easily and effectively. A dealer can put a computer terminal on the
showroom floor, where salespeople and customers together can use the
system to dig through detailed product specifications and check availability
for GE's entire line of appliances. Perhaps the biggest benefit to GE
Appliances, however, is that the system builds strong bonds between the
company and its dealers and motivates dealers to put more push behind the
company's products.11
Many companies are now installing integrated high-tech partner relationship
management systems to coordinate their whole-channel marketing efforts.
Just as they use customer relationship management (CRM) software systems
to help manage relationships with important customers, companies can now
use PRM software to help recruit, train, organize, manage, motivate, and
evaluate relationships with channel partners.12

EVALUATING CHANNEL MEMBERS

The producer must regularly check channel member performance against

standards such as sales quotas, average inventory levels, customer delivery
time, treatment of damaged and lost goods, cooperation in company
promotion and training programs, and services to the customer. The company
should recognize and reward intermediaries who are performing well and
adding good value for consumers. Those who are performing poorly should
be assisted or, as a last resort, replaced. A company may periodically
"requalify" its intermediaries and prune the weaker ones.

Finally, manufacturers need to be sensitive to their dealers. Those who treat

their dealers poorly risk not only losing dealer support but also causing some
legal problems. The next section describes various rights and duties
 pertaining to manufacturers and their channel members.

CHANNEL DYNAMICS

Channel Dynamics

Like any other concept, channel systems do change according to the development and the need of the hour. With
consumers becoming conscious of where they buy and how they want things to be delivered there has emerged
different systems namely the vertical, horizontal and multichannel marketing systems.
 
The conventional or the traditional marketing channel encompasses a producer, one or few wholesalers and one
or few retailers. The objective of theses different players is to see that they make enough profits, they are highly
independent and don’t have control over other channel members.
 
In contrast, the Vertical Marketing System (VMS) has the three members acting as one unified team, there is
one channel member who owns the other members or allows franchising but ensures a greater role in the
execution. Many organizations have started to operate in this format as strong channel members try to dictate
terms for the producer as well as when they found the objectives of different channel members differ from that
of the producer.
 
There are three variants of vertical marketing system namely corporate, administered and contractual vertical
marketing system. In case of corporate the organization combines the production and the distribution under one
roof. Organisations like Asian paints, Amul are not only involved in the production of the products but they also
own a considerable no of outlets. An administered vertical marketing system coordinates the production and
distribution efficiencies but use their size as a dominant influence.
 
HLL commands a greater shelf space or Samsung gets better displays in retail outlets purely because of their
size and the reputation they carry with them. The third variant namely contractual vertical marketing system
coordinates the activities of individual firms at different levels integrating their programs at contractual levels.
Firms like McDonalds, KFC use this type of vertical marketing systems for the integration of their businesses.
 
The Horizontal marketing systems is one where two or more unrelated businesses come together pull in
resources to exploit the emerging opportunities. Many private players especially banks have got into the act of
tie-ups with retail stores or even with fuel outlets in order to gain greater market. ICICI bank has got tied with
Big Bazaar, and this has greatly enhanced the reputation of both these firms as well as increasing the customer
base respectively.
 
The Multi-channel marketing systems as the term simplifies it is one in which a firm uses multiple channels to
reach different customer segments. In the present scenario most organizations have started to use multiple
channel method because it helps in the expansion of the market coverage, it costs little when the target segment
is small instead of using a bigger channel and mainly helps in customizing the offering according the need of the
segments. Exhibit 4.12 gives an idea about the different products and AT & T uses different channels to reach
out to different segments.

When distribution when goes overseas they are bound to face a lot of restraints and problems like the host
country laws, the laws of the country to which the goods are shipped, the laws of the nations through which the
goods pass must be abided by the company. Apart from this, other environmental factors do play an active role
when considered from a macro-marketing perspective. In the next lesson, we deal with the role of retailers,
wholesalers and logistics in this value chain and how do they facilitate the process of performing the channel
function effectively

VMS

Vertical Marketing System

 Definition: A Vertical Marketing system (VMS) comprises of the main distribution channel partners- the
producer, the wholesaler and the retailer who work together as a unified group to serve the customer needs.

In conventional marketing system, the producer, wholesaler and the retailer worked separately with the intention
to maximize their profits even at the expense of one another. This led to the unending conflicts between the
channel partners resulting in less profits for the business as a whole.

In order to overcome these conflicts, several firms have started using a vertical marketing system wherein
producers, wholesalers and retailers have joined hands with each other and are working in unison towards the
accomplishment of the business objective as a whole. This has led to the increased profits for each involved in
the channel of distribution.

Vertical Marketing System is further divided into three parts which are explained below:

--

1. Corporate Vertical Marketing System– In Corporate VMS, one member of the distribution channel
be it a producer, a wholesaler or a retailer Owns all the other Members of the Channel, thereby having all the
elements of production and distribution channel under a single ownership.For example,: Amway is an
American cosmetic company, which manufactures its own product range and sell these products only through its
authorized Amway stores. Here the ownership of production and distribution is with the company itself.
2. Contractual Vertical Marketing System– In Contractual VMS, every member in the distribution
channel works independently and integrate their activities on a Contractual Basis to earn more profits that are
earned when working in isolation. The most common form of Contractual VMS is Franchising. In franchising,
the producer authorizes the distributor to sell its product under the producer’s name against some annual license
fee. For example, Mc-Donalds, Dominos, Pizza Hut, etc. are all forms of the franchise which are working on a
contractual basis.
3. Administered Vertical Marketing System– Under Administered VMS, there is no contract between
the members of production & distribution channel but their activities do get influenced by the Size and
Power of any one of the member. In simple words, any powerful and influential member of the channel
dominate the activities of other channel members. For example, Big brands like HUL, ITC, Procter& Gamble,
etc. command a high level of cooperation from the retailers in terms of display, shelf space, pricing policies, and
promotional schemes.

Thus, through a vertical marketing system, the channel partners establishes a close contact with each other and
work in unison towards the accomplishment of common objectives thereby enjoying more profits which they
would have been earning when working alone.

INTRO

A vertical marketing system (VMS) is one in which the main members of a distribution channel—producer,

wholesaler, and retailer—work together as a unified group in order to meet consumer needs. ... In a
corporate VMS, one member of the distribution channel owns the other members.

HMS
 The meaning of HMS is Home Marketing Services and other meanings are located at the bottom which take
place within Marketing terminology and HMS has 1 different meaning. All meanings which belong to HMS
abbreviation are take part only within Marketing terminology and other meanings are not found. If you want to
see other meanings, please click the HMS meaning link. Thus, you will be directed to page which indicates all
meanings of HMS. Unless there are 1 different meanings HMS abbreviation at the bottom, please search again
by typing question structures such as “what does HMS mean in Marketing, the meaning of HMS in Marketing”.
Besides, you can search by typing HMS in the search box which is found our website.

Definition: A Horizontal Marketing system is a form of distribution channel wherein two or more companies
at the same level unrelated to each other come together to gain the economies of scale.

In other words, Horizontal marketing system is the merger of two unrelated companies who have come together
to exploit the market opportunities.

Generally, this type of marketing system is followed by companies who lack in capital, human resources,
production techniques, marketing programs and are afraid of incurring the huge losses. In order to overcome
these limitations, the companies join hands with other companies who are big in size either in the form of joint
venture –that can be temporary or permanent, or mergers to sustain in the business.

Horizontal marketing system has gained popularity in the recent times due to an immense competition in the
market where everybody is striving to gain a good position in the market along with huge profits.

In this marketing system, the collaboration can be between:

 Two or more Manufacturers- With an objective of making optimum utilization of scarce resources.
 Two or more Wholesalers-With the objective of covering a larger area of the distribution of goods and
services.
 Two or more Retailers- With the objective of providing bulk quantities in a particular area.
Examples of Horizontal Marketing:

1. Nike and Apple have entered into a partnership, with the intent to have a Nike+ footwear in which the
iPod can be connected with these shoes that will play music along with the display of information about time,
distance covered, calories burned and heart pace on the screen.
2. Johnson & Johnson, a health care company, have joined hands with Google, with an objective of
having a robotic-assisted surgical platform. That will help in the integration of advanced technologies, thereby
improving the healthcare services.

Thus, two or more companies join hands to capitalize on the expertise of each and capture a greater market
share.

MMS
 What is MMS?

Multimedia messaging services have been around since 1984 and the service simply allows cellphone and
smartphone users to send multi-media messages. The service is based on SMS and is often associate with this
similar messaging platform. All you need is a text messaging plan and you are ready to go.

MMS has recently come back into the zeitgeist as user engagement metrics show that it shares SMS marketing’s
98% open rate, with some brands claiming that MMS is even higher.

MMS Marketing

With SMS marketing continuing to grow as a powerful engagement tool, marketers are looking for ways to
stand out in a quickly crowding market. MMS marketing offers businesses the opportunity to send multimedia
messages that might have a better chance of capturing the customer’s attention than a simple SMS message.

Not only that, but MMS is a two-way street. Brands can send their users pictures, videos, and even gifs to entice
them to make a purchase or retain their services. But marketers can also request images and videos from their
audience if they are running a contest or fielding customer requests.
Learn more about Text Message Marketing

Like any marketing tool, you will get out of it what you put into it. In order to help you get the most out of an
MMS marketing campaign should you run one, let’s take a look at some best practices.

MMS Marketing Best Practices

When running an MMS marketing campaign, there are a few things you will want to avoid and other best
practices that will simply help you make the most out of this customer interaction.

(If you haven’t, we have already written an article on best practices for business text messaging. We recommend
reading this as well, since all of the same best practices apply here. These best practices are specific to MMS.)
 MMS images should be vertical or portrait in layout, as most mobile devices today are vertically
aligned.
 Image files should be in .JPG format and that the file size is below 500Kb.
 MMS image should be 640 pixels wide X 1,138 pixels high, with an aspect ratio of 9:16.
 While SMS can only be 160 characters, MMS can go up to 500 including images and subject line. You
can do more with MMS, but that doesn’t mean you always should.

As long as you can stick to these best practices, your MMS campaign should begin on the right foot.

MMS Subject Lines

Another unique feature of MMS compared to SMS is that MMS allows marketers to include a subject line.
Much like email marketing, these subject lines should catch the user’s attention and entice them to read further.
However, since MMS is more immediate than email marketing, you shouldn’t beat around the bush with your
customers. Get to the point and get to the value with your messages as soon as possible, your customers will
appreciate it.

Misconceptions about MMS

Along with these best practices, we also wanted to quickly address some misconceptions that consumers
sometimes have about MMS marketing. It is our hope that we will be able to squash these misconceptions and
that you will be able to take advantage of this powerful service.

Misconception #1: “MMS is more expensive than SMS and other solutions.”

This misconception comes from the fact that MMS messages used to be more expensive to send on most
networks. However, this has not been the case since around 2007, when carriers began simply bundling the two
together.

This misconception relates to MMS marketing as well, as companies believe it will cost them more to run a
campaign using multimedia messages instead of SMS. This is also untrue. While you may need additional
resources to create multimedia for the messages, the act of sending a MMS vs. SMS is the same.

Misconception #2: “Mobile phones don’t support MMS video.”

In 2017, nearly every mobile phone can process every form of MMS messaging, including video. Sending your
users videos showing how to use your product or best practices for your service can be very valuable to your
customer retention. Don’t let this misconception prevent you from making a difference with MMS marketing.

Misconception #3: “Customers need a smartphone/data plan to receive MMS messages.”While viewing an
MMS message on a smartphone likely makes the multimedia look better, having a smart phone is not a
requirement for customers to receive MMS. The same goes for the misconception that you need a data plan or
internet access to receive MMS.

F-inal thought

This is the beauty of MMS marketing, both the reach of SMS with the creative potential of email marketing. We
hope that this article will be beneficial for when you plan your next SMS and MMS marketing campaign.
MMS MARKETING

INTRO

MMS marketing is a method of mobile advertising that uses MMS, or Multimedia Messaging Service, to

send enhanced text messages. ... That's not possible with SMS, which only allows for regular text and up to 160
characters in the U.S. MMS marketing is also known as photo messaging, video messaging, and multimedia
messaging.
DISTRIBUTION STRATEGIES

Definition of Distribution Strategy

Distribution strategy is a comprehensive process of making products and services available to businesses and
target customers for their use.
Brands have strategized their distribution channels since time immemorial. Be it through finding river routes in
the Middle Ages or cheap cargo flights in the 21st century, minimizing distribution costs have been one of the
prime targets of a distribution strategy. So in essence, a good distribution strategy should have the following
objectives.
 Movements of Goods
 Availability of Goods
 Protection of Goods
 Cost Reduction
 Customer Satisfaction
In this article we are going to discuss the various distribution strategies that brands across the world are adopting
to ensure that they can meet the rising demands of the current market. The process necessarily entails
transporting the product from the manufacturer to the consumer. And while it may sound straightforward,
modern distribution strategies can be quite elaborate in order to reduce costs and maximize profits.
Types of Distribution Strategies
So, here’s a professional insight into the major types of distribution strategies that are applied in the current
market.

Direct Distribution Strategy
Direct distribution is exactly what it sounds like, the manufacturer directly selling to the consumer. It may
include a selling platform such as an e-commerce store, but as long as the length of the distribution channel is
minimal the process will be considered as a direct distribution process.

Modern retail brands are also examples of direct distribution channels. These brands prefer to have single
channel manufacturers and set up their own shop to sell their products. Clothing brands, fast-food brands, etc.
make use of the direct distribution strategy for quick access to their consumer base.
Indirect Distribution Strategy
When the chain of distribution channel is long and includes various steps, the process is considered to be
indirect distribution. If a brand creates a product, sends it over to C&F specialists, who then send it to a
distributor followed by the retailer where the customer finally buys it, the process will be termed as indirect
distribution.

Brands such as Pepsi or Nestle are great examples of indirect distribution. These brands use multiple distribution
channels that include various distributors and retailers to make their products available across the entire world.

Intensive Distribution Strategy
Sometimes the categorization of distribution strategies is not simply based on the size of the distribution
channel, but also its goals and capabilities. One such strategy is intensive distribution. This is when a brand tries
to push its products to maximum market capabilities and cover as much ground as possible.

Household goods or automobile brands use intensive distribution strategy to ensure that their products are
being catered to the most number of consumers possible. Such a strategy can include a long distribution channel
or a short one, depending on the needs of the target market.
Exclusive Distribution Strategy
A brand need not always push itself on its target market. There are various brands that have such high brand
value that having exclusive region-based showrooms serve their purpose better. Let us take Mercedes for
example. This brand does not try to have an outlet in every city, but only in certain major cities. This is an
example of exclusive distribution strategy.
Such strategies are mostly used to ensure that the brand value maintains a certain standard even though the
consumer base becomes smaller. Exclusive distribution strategies are used by brands like Luis Vuitton Stores
with high-end products and also ones that target the upper economic classes.

Selective Distribution Strategy

There are brands that try to place themselves on every street corner, and then there are brands that have a
selected number of outlets in every city. McDonalds, for example, will sport at least 8-10 outlets in any major
city. Whereas a premium clothing brand like Gucci or Versace will have maybe 3-5 outlets at premium
shopping centers. This process is known as selective distribution.
Once again, such a distribution strategy is not categorized based on the length of its distribution channel but
rather on the basis of its marketing strategy. Premium brands realize that their products are highly unlikely to be
purchased at certain locations and thus they actively place their distribution channels in select areas.

These are the 5 major distribution strategies that are used by businesses and brands to build their supply chain.
Creating a secure and high-functioning supply chain is one of the most crucial factors for any brand looking to
succeed, and thus selecting the right distribution strategy is of immense necessity.

INTRO

Distribution Strategy is a strategy or a plan to make a product or a service available to the target customers
through its supply chain. ... A company can decide whether it wants to serve the product and service through
their own channels or partner with other companies to use their distribution channels to do the same.

MARKET LOGISTICS DECISIONS

Many companies state their market-logistics objective as “getting the right goods to the right places at the
right time for the least cost" Unfortunately, no system can simultaneously maximize customer service and
minimize distribution cost. Maximum customer service implies large inventories, premium transportation, and
multiple warehouses, all of which raise market-logistics costs. Given that market-logistics activities require
trade-offs, managers must make decisions on a total-system basis. The starting point is to study what customers
require and what competitors are offering. Customers want on-time delivery, help meeting emergency needs,
careful handling of merchandise, and quick return and replacement of defective goods. The company must also
consider competitors’ service standards. It will normally want to match or exceed these, but the objective is to
maximize profits, not sales.

Market-Logistics Decisions

The firm must make four major decisions about its market logistics: (1) How should we handle orders (order
processing)? (2) Where should we locate our stock (warehousing)? (3) How much stock should we hold
(inventory)? and (4) How should we ship goods (transportation)?

Order Processing Most companies try to shorten the order-to-payment cycle—the time between an order’s
receipt, delivery, and payment. This cycle has many steps, including order transmission by the salesperson,
order entry and customer credit check, inventory and production scheduling, order and invoice shipment, and
receipt of payment. The longer this cycle takes, the lower the customer’s satisfaction and the lower the
company’s profits.

Warehousing Every company must store finished goods until they are sold because production and
consumption cycles rarely match. More stocking locations mean goods can be delivered to customers more
quickly but warehousing and inventory costs are higher. To reduce these costs, the company might centralize its
inventory in one place and use fast transportation to fill orders. To better manage inventory, many department
stores such as Nordstrom and Macy’s now ship online orders from individual stores. 20

Inventory Salespeople would like their companies to carry enough stock to fill all customer orders
immediately. However, this is not cost effective. Inventory cost increases at an accelerating rate as the customer-
service level approaches 100 percent. Management needs to know how much sales and profits would increase as
a result of carrying larger inventories and promising faster order fulfillment times and then make a decision.

As inventory draws down, management must know at what stock level to place a new order. This stock level
is called the order (or reorder) point. An order point of 20 means reordering when the stock falls to 20 units.
The order point should balance the risks of stock-out against the costs of overstock. The other decision is how
much to order. The larger the quantity ordered, the less frequently an order needs to be placed. The company
needs to balance order-processing costs and inventory-carrying costs. Order-processing costs for a
manufacturer consist of setup costs and running costs (operating costs when production is running) for the item.
If setup costs are low, the manufacturer can produce the item often; if setup costs are high, the firm can reduce
the average cost per unit by producing a long run and carrying more inventory.

Order-processing costs must be compared with inventory-carrying costs, which include storage charges, cost
of capital, taxes and insurance, and depreciation and obsolescence. The larger the average stock carried, the
higher the inventory-carrying costs. This means marketing managers who want to carry larger inventories need
to show that incremental gross profits will exceed incremental carrying costs.

We can determine the optimal order quantity by observing how order-processing costs and inventory-
carrying costs add up at different order levels. Figure 13.1 shows that the order-processing cost per unit
decreases as the number of units ordered increases because the order costs are spread over more units.
Inventory-carrying charges per unit increase with the number of units ordered because each unit remains longer
in inventory. We sum the two cost curves vertically into a total-cost curve and project the lowest point of the
total-cost curve on the horizontal axis to find the optimal order quantity Q .21

Companies are reducing their inventory costs by keeping slow-moving items in a central location and
carrying fast-moving items in warehouses closer to customers. They are also considering inventory strategies
that give them flexibility should anything go wrong, whether a dock strike in California, an earthquake in Japan,
or political turmoil in North Africa. The ultimate answer to carrying near-zero inventory is to build for order,
not for stock.

Transportation Transportation choices affect product pricing, on-time delivery performance, and the
condition of the goods when they arrive, all of which affect customer satisfaction. In shipping goods to its
warehouses, dealers, and customers, a company can choose rail, air, truck,

FIGURE 13.1 Determining Optimal Order Quantity

waterway, or pipeline. Shippers consider such criteria as speed, frequency, dependability, capability,
availability, traceability, and cost. For speed, the prime contenders are air, rail, and truck. If the goal is low cost,
then the choice is water or pipeline.
 Shippers are increasingly combining two or more transportation modes, thanks to containerization, putting
the goods in boxes or trailers that are easy to transfer between two transportation modes. Piggyback describes
the use of rail and trucks; fishyback, water and trucks; trainship, water and rail; and airtruck, air and trucks.
Each coordinated mode offers specific advantages. For example, piggyback is cheaper than trucking alone yet
provides flexibility and convenience.

Shippers can choose private, contract, or common carriers. If the shipper owns its own truck or air fleet, it
becomes a private carrier. A contract carrier is an independent organization selling transportation services to
others on a contract basis. A common carrier provides services between predetermined points on a scheduled
basis and is available to all shippers at standard rates. To reduce costly handing at arrival, some firms are putting
items into shelf-ready packaging. To reduce damage in shipping, the size, weight, and fragility of the item must
be reflected in the crating technique used and the density of foam cushioning. 22 With logistics, every little detail
must be reviewed to see how it might be changed to improve productivity and profitability.

UNIT 5

MARKETING ORGANIZATIONS AND CONTROL

Organization is defined as a group of people working together to achieve common goals   and objectives of the
business. Marketing organization provides a vehicle for making decisions on products, marketing channels ,
physical distributions, promotions and prices.

Marketing Organisation: Marketing organization is the framework for planning and making marketing
decision that are essential to marketing success. It is the vehicle for making decision on all marketing areas such
as product, price, place and promotion. Marketing organization is a group of marketing persons working
together towards the attainment of certain common objectives. Marketing organization provides a system of
relationships among various marketing functions to be performed by coordinating among marketing people.

Need for the organization: to be competitive in the market where consumer is the king we need to satisfy the
consumer. So a good marketing organization is required to satisfy the customers. Marketing organization is the
pillar for success for many organizations and provides a framework for the following:

a.      Divide and fix authority among the sub ordinates

b.      To locate responsibility
c.      To establish sales routines
d.      To enforce proper supervision of sales force
e.      To avoid repetitive duties
f.       To enable the top executives to devote more time for planning policy matters

FACTORS AFFECTING MARKETING ORGANIZATION

Factors influencing marketing org can be categorized into internal and external factors .
Internal:
1. Top Management Philosophy: Organizational planning and its working is greatly influenced by
philosophy which can be good or bad eg: Centralization Vs Decentralization
2. Product policy: the width of product line of an org determines its size as the product offerings
becomes increasingly diverse. Eg: There could be a need to move away from straight functional approach to
product group approach.
3. People: The size of the organization is not an important factor in terms of number of people but it is
important with respect to human values which are critical and correct decisions regarding people cannot be
made unless taking into consideration

 Number
  Qualifications
 Capabilities
 Personality
 Attitude
 Fear
 Suspicion
  Ambition

Are some of the above intangible factors which affect the marketing organization?

External Factors:
1.  Business Environment: With regards to business environment three points are important.

1. The type of environment in which the firm is operating in terms of operations and size.
2. The Nature of particular requirement for success in a given business which again         determines the
size.
3. The rate of change in industries being served which again decides on its size and working.

2.   Markets: This is the factor which again affects the marketing organization i.e. one should note about its
a.       Size
b.      Scope
c.       Nature
d.      Location

Based on the above aspects we need to design the size of the organization.
3.  Consumer requirements and expectations: Consumers have their own set of requirements and expectations from
the organization. The more varied and vivid services they expect that the usual requirements. as a marketer we
need to increase the workload depending upon the consumer  requirements and expectations
4.      Channels of distribution: It is the type of channel of distribution which a marketing firm selects based on its
size. Egg : Incase the company opts for indirect channel or channels it depends on outside sales force and hence
the organization gets thinner .When the organization selects direct channel its size is increased as it has its own
sales force.

TYPES OF MARKETING ORGANIZATION STRUCTURES

Types of marketing organization structures: The marketing organization of a business can be structured on any
of the following basis:
a.       Line and staff organization
b.      Functional Organization
c.       Product oriented marketing organization
d.      Customer oriented marketing organization
e.       Geography oriented marketing organization
f.        Matrix form / Combined base

1. Line and Staff Organization: In most business forms  especially medium size the marketing job is structured
around few line functions and few staff functions i.e. Major staff functions is organized into separate department
and the line function is responsible for sales department. The required coordination between the line and staff
function is managed by the executive at higher level.

            Merits:
1. Provides expert advice from specialists
2. Relives line executes of routine, specialize functions
3. Enables young sales executive to acquire expertise
4. Helps in achieving effective coordination
5. Easy to operate
6. Less Expensive
 Demerits:
1.      Produce confusions arriving from indeterminate authority relationships
2.      Curbs the authority of experts
3.      Too much is expected from executives
4.      Decision making is taken by top management

2. Functional: Under the organization the departments are created on the basis of specified functions to be
performed i.e. The Activities related to marketing, distribution etc
             
Merits:
1. Division of work base on specialization
2. Relives line executives of routine and specialized functions
3. Promotes application of expert knowledge
4. Helps to increase overall efficiency
Demerits:
1.      Leads to complex relationships
2.      Makes coordination ineffective
3.      Promotes centralization
4.      Lack of proper coordination
5.      Delay in taking decisions

3. Product Oriented Marketing Organization: Organizations that produce wide variety of products often organize
marketing, training and promotion with respect to a product.
            Merits:
1.      The salesmen can render better customer service as they possess good knowledge of product and may have
close contacts with customers.
2.      It makes individual departments responsible for the promotion of specific products.
3.      It facilitates effective coordination
Demerits:

1.      It increases the employment of a number of managerial personal

2.      Many salesmen of same enterprise attend same customer each representing a separate product which creates
confusion in the minds of the customer.
3.      There may be duplication of activities

4. Customer Oriented Marketing Organization: When the departmentation of sales organization is done on
customer basis it is called customer oriented marketing organization. Deparmtnetation by customer may be done
in enterprise engaged in providing specialized services to different classes of customers.
           
Merits:
1.      It takes into account needs of each class of customers.
2.      IT provides specialization among the enterprise staff
Demerits:
1.      It makes coordination difficult
2.      It may lead to under utilization of resources in same department
3.      There may be duplication of activities
4.      These types of sales organizations are not suitable for small enterprises.

5. Geography/Territory: In a territory oriented marketing organization , the responsibilities  for marketing of

various products rests almost entirely with line executives .The territory managers are given varying
nomenclatures like depot manager, district manager, area manager, zonal manager , divisional manager etc.
           
Merits:
1.      It leads to economy in terms of times and money
2.      It helps in taking knowledge of local customers
3.      It helps in effective control
Demerits:
1.      It requires employment of number of managerial personnel.
2.      It dilutes control from head quarters

Marketing Control:

Marketing control is concerned with analyzing the performance of marketing decision, identifying the
problem/opportunities and taking actions to take advantage of opportunities and resolving problems. It is the
sequel to marketing planning. All manager need to exercise control over their decision and marketing
operations.

            Specifically marketing performance is measured in terms of market share, sales, profits. Hence most
control measures are designed with these parameters in mind. But today's marketing needs to measure the
following.

a)      Market share
b)      Sales and profits
c)      Marketing effectiveness
d)      Customer satisfaction
e)      Customer perception of the firms and its brands

There are four types of controls with different objectives and tools and exist with different levels of
management.

1)  Annual plan control:  It is with top or middle level mgmt to evaluate actual performance with targeted to analyze
differences or gaps. The tools used are sales analysis, market share analysis, sales and expense ratios, and
financial analysis.
2) Profitability control: It is used by marketing department to examine profitability by product, territory, customer
segment and trade channel.
3) Efficiency control: It is used to asses the effectiveness of money spend on sales force, advertising, sales
promotion and distribution. It is used by both line and staff executives.
4)  Strategic control: It is used by the top mgmt to examine wether the firm and marketing capable to cope with
environment or not. The major tool used here is marketing audit.

Marketing Control Process:

Marketing Control Process includes monitoring, evaluating and improving the performance in each activity.
There are six steps in this

a)      Decide the aspect of marketing operation to be evaluated:

The first step in mcp is deciding about the marketing operation to evaluate.
Eg: effectiveness of media for product advertisement, sales person performance, or performance of company
product

b)      Establish measurement criterion

In this stage performance standards are decided against which actual performance is evaluated.
Eg: control sales person performance, in this one can measure new accounts obtained, call frequency ratio
and order per call
c)      Establishing monitoring mechanism
After setting the standards, the next step is to develop monitoring mechanism tools like marketing information
system(MIS). MIS is used to record performance of all marketing areas like monthly sales volume for products.
d)      Compare actual results with standards of performance
In this stage, results obtained through monitoring process are compared with pre established standards of
performance.
e)      Analyze performance improvement
If the results/performance are not up to the desired standards, a corrective action is to be taken to enhance the
performance levels. For this performance improvement analysis is to be done.

                                          

           
Marketing Audit:

Definition: Marketing audit is systematic review and appraisal of the basic objectives and policies of marketing
function and of the marketing organization methods, procedures and personal employed to implement those
policies and to achieve those goals. Marketing audit is one of the important tool to asses the effectiveness of
different marketing mix elements.

Types of Marketing Audit:

Marketing Environment Audit: It is divided into two groups i.e macro environment and task environment.
Macro environment audit includes analysis of political, economical, technological and cultural aspects. Task
environment audit covers customers,competitors, markets, dealer/distributors, suppliers, marketing firms and
public.

Marketing Strategy Audit: This audit reviews firms marketing mission, objectives, goals, and strategies and to
appraise their adaptability to present and future environment.

Marketing Organisation Audit: The audit evaluates the firms capability in implementing necessary strategies for
the future environment. It also reviews formal organization structure and efficiency.

Marketing Systems Audit: It evaluates the subsystems of a system such as marketing information system,
marketing planning system, marketing control system and new product development system.

Marketing productivity Audit: This audit critically examines the profitability of different marketing entities and
cost effectiveness of different heads of marketing expenditure.

Marketing Function Audit: It is a functional audit mainly covering marketing mix components namely product,
price, place and promotion (advertising, sales promotion, sales force and publicity).

CONTROL MARKETING EFFORTS

arketing control is used by small business owners to monitor and evaluate their current marketing strategies to

identify needed adjustments and set guidelines for the future to achieve marketing and business goals. Although

businesses and marketing firms have designed many marketing control techniques over the years, a handful of

techniques stand out from the rest.

Tip

 The five major marketing control techniques are competitor analysis, customer analysis, testing

research, customer feedback and cost analysis.

Analysis of Competitor Offerings and Strategies

A small business owner needs to know how his products, services and marketing strategy compare to local,

regional, national and international competitors to retain existing customers and attract new ones. Competitor
analysis involves checking out the new products or services offered by your competitors, examining their

marketing strategies and determining whether they are succeeding or failing with their businesses. Use this

information to adjust your strategies accordingly. For example, you could hire a mystery shopper to shop at your

competitor's store to acquire information or visit businesses similar to your own in other regions and speak with

their owners to get ideas.

Existing Customer Analysis

Another way to monitor and evaluate your marketing is to perform an existing customer analysis to provide a

detailed picture of the types of customers buying your products or services. An analysis involves gathering data

about your customers during or after check out and then tabulating this information in a spreadsheet for

comparison. For example, you might gather data about your customers such as their geographical location,

average age and sex. In addition, you might gather spending habits data such as average purchase amounts,

amount and type of foot traffic before and after advertising and coupon or discount usage.

Testing Research with a Focus Group

Once you identify a target customer base, you can determine the potential success of a new product or service,

the marketing methods needed to promote and sell it and the financial impact of a planned marketing strategy

through prerelease group testing. One example of testing research involves communication with a focus group

of 10 to 15 people from your target customer base. Ask them to discuss in general the products and services they

like and dislike to help you brainstorm ideas for the future, or ask them to try one of your new products or

services and provide feedback.

Customer Opinions and Feedback

Customer feedback is a marketing control technique similar to testing research, but instead of gaining insight

into future products and services, you evaluate customers' opinions of existing products or services and the

marketing methods you currently use. Customer feedback might involve inviting your customers to complete a

survey, offer opinions through a suggestion box or respond to specific questions in-person or over the phone

after they've purchased a product or service. Other customer feedback methods include asking your employees

for feedback and maintaining a list of the types of products or services customers have inquired about that you

don't currently offer.

Cost Analysis and Comparison with Budget

Small-business owners use cost analysis to create an overall picture of the cost of existing marketing strategies

to reduce costs, weed out products and marketing strategies that aren't working and create a new budget to use

moving forward. To perform a cost analysis, look at the current costs involved with all aspects of your business
including inventory, distribution and the current costs of your marketing strategies. After you determine the

costs, compare the numbers with your existing budget and the costs of alternative marketing methods.

Marketing Control: Top 4 Methods of Marketing Control

Article shared by :  <="" div="" style="margin: 0px; padding: 0px; border:
0px; outline: 0px; font-size: 16px; vertical-align: bottom; background: transparent; max-width: 100%;">

ADVERTISEMENTS:

On the basis of types of criteria – sales, profits, efficiency, and strategic considerations – used for measuring and

comparing results, there are four types or tools of marketing control. In every type of control, the same

procedure is applied, i.e., setting standards, measuring actual performance, comparing actual performance with

standards, and taking corrective active actions, if required.

Philip Kotler considers four types of marketing control:

Annual Plan Control:

In this method, annul plans are prepared for various activities. Each plan includes setting objectives (expected

results or standards), allocating resources, defining time limit, and formulating rules, policies and procedures.

Annual plan control relates to sales. Periodically (mostly annually) the actual results are measured and

compared with standards to judge whether annual plans are being (or have been) achieved.

Depending on the degree of difference between the planned and the actual results, causes are detected and

suitable corrective actions are undertaken. Thus, it contains checking ongoing performance against annual plan

and taking corrective action. Figure 1 shows five measures of annual plan control.

Measures (Evaluation Tools) of Annual Plan Control:

Following five measures are used in annual plan control:

1. Analysis of Different Sales:

Analysis of different sales contains measuring and evaluating different sales (total sales, territory- wise sales,

distribution channel-wise, product-wise sales, customer-wise sales, etc.) with annual sales goals. Targets are set

for different types of sales and actual sales of different categories are compared to find out how far company can

achieve its sales goals.

2. Analysis of Market Share:

Here, market share is used as base for measuring, comparing, and correcting results. Market share is a

proportion of company’s sales in the total sales of the industry. It helps to know how well the company is

performing relative to its close competitors. Thus, the performance is assessed against expected market share

and competitors’ market share.

It involves considering three types of market shares:

i. Overall market share

ii. Served market share

iii. Relative market share

3. Analysis of Market Expenses-to-Sales:

This type of control checks marketing expenses. It ensures that the firm is not overspending to achieve its annual

sales goals. Different marketing expenses are watched in relations to sales.

Normally, company considers five components to calculate expenses-to-sales ratios and compares them

with standard ratios to find out how far expenses are under control, such as:

i. Sales force-to-sales ratio

ii. Advertising-to- sales ratio

iii. Sales promotion-to-sales ratio

iv. Marketing research-to-sales ratio

v. Sales administration-to-sales ratio

Marketing managers needs to monitor these expenses in relation to sales. If the expenses fall beyond permissible

limits, it should be taken as a serious concern and needed steps are taken to keep them under control.

4. Financial Analysis:

Financial control consists of evaluating sales and sales-to-expense ratios in relation to overall financial

framework. It means net profits, net sales, assets, and expenses are studied to find out rate return on total assets,

and rate of return on net worth.

Financial analysis determines firm’s capacity of earnings, profits, or income. Attempts are made to find out

factors influencing firm’s rate of return on net worth. Here, various ratios are calculated such as profit margin

ratio (net profits + net sales), asset turnover ratio (net sales + total assets), and return on assets ratio (net profits

+ total assets), financial leverage (total assets + net worth) and return on net worth (net profits – net worth).

Profit margin can be improved either by cutting expenses and/or increasing sales.

5. Analysis of Customer and Stakeholder Attitudes:

The measures of annual plan control discussed in former part are financial and quantitative in nature. Qualitative

measures are more critical because they give early warning about what is going to happen on sales as well as

profits.

Manager can initiate precautionary actions to minimize adverse impacts of forces on the future outcomes. Under

this tool, customers’ attitudes are tracked to project the way they will react to the company’s offers. Alert

company prefers to set up a system to monitor attitudes of customers, dealers, and other participants.

Base on their attitudes, preference and satisfaction, management can take early actions. This tool is preventive in

nature as adverse impact on the future results can be prevented by advanced steps. Market- based preference

scorecard analysis is used to measure (score) attitudes of customers and other participants. Such analysis reflects

actual company’s performance and provides early warnings.

Measuring Customers’ Attitudes:

Here, a firm tries to measure attitudes of customers by using various methods like, complaints and suggestions,

customer panels, customer survey, etc. It provides details about new customers created, existing customers lost,
dissatisfied customers, relative product quality, relative service quality, target market awareness, target market

preference, and other valuable information.

Measuring Stakeholders’ Attitudes:

It consists of measuring or recording stakeholders’ attitudes. It shows the pattern of stakeholders’ preference,

attitudes, and overall response toward company and its offers. Stakeholders include suppliers, dealers,

employees, stockholders, service providers, etc. They have critical interest and impact on company’s

performance.

Without their cooperation and contribution, a company cannot realize its goals. When one or more of these

stakeholders register dissatisfaction, management must take suitable actions. Methods used to track attitudes of

customers can also be used for measuring attitudes of stakeholders.

Profitability Control:

In this method, the base of exercising control over marketing activities is the profitability. Certain profitability

(and expenses) related standards are set and compared with actual profitability results to find out how far

company is achieving profits. Profitability control calls for measuring profitability of various products,

channels, territories, customer groups, order size, etc. It provides necessary information to management to

determine whether products, channels, or territories should be expanded, reduced, or eliminated.

Process of Marketing-Profitability Analysis:

Systematic and logical process is used for analysis of profitability.

It involves:

1. Identifying Functional Expenses:

It consists of determining expenses to be incurred for the marketing activities like salaries, rents, advertising,

selling and distribution, packing and delivery, billing and collection, etc.

2. Assigning Function Expenses to Marketing Entities:

Simply, expenses of particular head (for example, salary or advertising) are associated with different entities like

products, channels, territories or customers groups.

3. Preparing Profits and Loss statement:

A profit and loss statement is prepared for each type of products, channels, territories, etc., to evaluate their

relative performance. Based on relative performance in form of profitability, management can decide on

products, channels or territories to be expanded, reduced or eliminated.

For example, a firm has five products, like A, B, C, D, and E. If profit and loss statement shows that:

(1) Product C is more profitable, and therefore, it must be expanded;

(2) Product B is poor, and, therefore, it must be reduced;

(3) Product D is making loss, and therefore, it must be eliminated, and

(4) Product A and product E are satisfactory, and therefore they must be maintained. In the same way, it can be

applied to different territories and segments.

Table 1 shows how to prepare profit and loss statement for different products.

4. Taking Action:

On the basis of the profit and loss statement, necessary actions can be directed.

Actions include one or more of followings:

i. Expanding product(s)

ii. Reducing product(s)

iii. Eliminating product(s)

iv. Reducing any of the expenses

v. Increasing sales, etc.

Efficiency Control:

This control, particularly, concerns with measuring spending efficiency. While profitability control reveals the

relative (in relation to different entities like products, territories, channels, etc.) profits a company is earning, the

efficiency control shows the ways to improve efficiency of various marketing entities like sales force,

advertising, distribution, sales promotion, and so forth.

Sometimes, a post of marketing controller is created to work out a detailed programme to measure and improve

efficiency of expense-centered marketing activities. Here also, in order to evaluate efficiency level of different

marketing activities, the efficiency standards (of ideal performance) are set and are compared with actual

performance.

Efficiency control can improve efficiency of marketing department in two ways – one is, improving ability of

various marketing activities to contribute more in reaching the goals, and the second is, reducing expenses or

wastage.

Types of Efficiency Control:

Figure 2 shows major types of efficiency control. Main types of efficiency control involve controlling sales

force efficiency, advertising efficiency, sales promotion efficiency, distribution efficiency, and marketing

research efficiency.

1. Sales Force Efficiency Control:

To measure efficiency of sale force (salesmen), certain key indicators/criteria are developed. A manager has to

make a lot of calculations and paperwork.

Common criteria used to measure and evaluate the sales force efficiency include:
i. Average number of sales calls per salesman in a day

ii. Average sales calls time spared per contact

iii. Average revenue generated per call

iv. Average costs incurred per call

v. Entertainment cost per calls

vi. Percentage of orders per specific number of calls, i.e., how many orders have been received from 100 calls

made

vii. Number of new customers created during specific period

viii. Number of customers lost in a given period

ix. Contribution of salesmen in total sales, revenue, and profits

x. Sales force costs as percentage of total sales.

Questionnaire, discussion, inspection, observation, salesman’s report, etc., methods are used for the purpose.

However, most companies use salesman’s report. A unique computer-based programme or software can also be

developed for speedy and accurate measurement of sales forces efficiency on a regular basis. Simply, actual

performance of sales force is compared with these criteria to find out deviation, and, accordingly, necessary

actions are taken.

This measurement of sales force efficiency can provide satisfactory answers of following questions:

i. What is role/contribution of sales force in selling efforts?

ii. Who are the most efficient, less efficient and inefficient sales people?

iii. Which are reasons responsible for poor efficiency of sales force?
iv. What can/should be done to improve efficiency?

2. Advertising Efficiency Control:

Advertising is the most expensive among all the promotional tools. Major part of promotion budget is consumed

by advertising alone. So, it is extremely necessary to find out efficiency level of advertising efforts. A company

sets advertising goals (standards) and compared actual contribution of advertising to decide how far advertising

has been capable to fulfill firm’s expectations. Advertising efficiency control mainly involves measuring cost

efficiency or contribution efficiency.

Practically, it is difficult to measure the exact contribution of advertising efforts/costs. Systematic tools can be

developed to measure impact of advertising qualitatively – in forms of increasing awareness, changing attitudes,

and creating brand loyalty – and quantitatively – in forms of impact on sales and profits. Survey of dealers and

customers can be made to collect needed data.

Common criteria used for measuring advertising efficiently include:

i. Advertising cost per thousand target customers reached by a specific media vehicle, for example, television

medium.

ii. Percentage of audience who read, noted, or saw message from print media.

iii. Customer opinion on advertising contents and effectiveness.

iv. Measurement of pre-post (before-after) advertising impact on attitudes of people toward the product.

v. Number of inquiries generated by advertising.

vi. Cost per inquiry.

vii. Media suitability.

viii. Impact of advertising on personal selling, sales promotion, public relations, publicity, and distribution.

ix. Need and performance of advertising agency, etc.

Manager can compared efficiency of advertising programme with internal as well as external standards to judge

comparative efficiency. He must find out causes leading to inefficiency.

One or more of following actions are initiated:

i. To changes advertising objectives and policies.

ii. To change advertising message.

iii. To change advertising media.

iv. To change media scheduling and frequencies.

v. To change and/or train the staff.

vi. To change advertising agency.

vii. To change advertising budget, etc.

3. Sales Promotion Efficiency Control:

This control is exercised by sale manager. Sometimes, sales promotion manager is also appointed to deal with

the issue. Sales promotion efficiency measures the impact of sales promotion efforts on sales, profits,

competitiveness, and consumer satisfaction. Such efforts include offering a wide range of short-term incentives

to stimulate buyer interest and consumer trial. Sales promotion is, no doubt, costly, but it seems essential. Here,

manager tries to measure costs and impact of each of sales promotion tools. Normally, sales promotion tools are

applied at three levels – customer level, dealer level, and sale force level.

Common criteria used for measuring sales promotion efficiency include:

i. Percentage of total sales promotion expenses to sales.

ii. Costs of display, sample, coupons, and other tools per unit selling price.

iii. Number of inquires generated due to display, demonstration, other such incentives.
iv. Joint and individual impact of various tools on dealer interest, consumer purchase, and competitiveness.

Analysis of costs and contribution of sales promotion tools helps in selecting the most cost- effective sales

promotion tools to use. A firm can reduce unnecessary costs and/or can improve contribution of each of the

tools of sales promotion. It helps design suitable sales promotion strategies in term of costs, level of sales

promotion, timing, and types of techniques at each of the levels.

4. Distribution Efficiency Control:

In an average, distribution costs account for 20 to 30 per cent of selling price. By a suitable distribution network,

company can improve its profitability on one end and consumer satisfaction on the other end. Therefore, it is

necessary to review or assess the entire distribution system periodically. Distribution efficiency control

measures how far company’s distribution system is efficient to achieve marketing goals.

Common criteria used for the purpose include:

i. Percentage of total distribution costs per unit price.

ii. Percentage of physical distribution (warehousing, inventory, ordering, transportation, communication,

insurance, etc.) costs per unit price.

iii. Percentage of channel members’ (wholesalers, retailers, agents, etc.) costs per unit price.

iv. Costs and contribution of direct v/s indirect channels.

v. Potentials of using online marketing, network marketing, and by retailing chains.

vi. Assessing costs of marketing channels in relation to services they offer to the company as well consumers.

Distribution efficiency gives valuable information to select the most cost-effective distribution option and sub-

options. Company can minimize distribution costs and/or improve profits and competitiveness. In the same way,

it can increase consumer satisfaction, too.

5. Marketing Research Efficiency Control:

Marketing research is process of gathering, analyzing, and interpreting data relating to any marketing problem.

Due to dynamic nature of marketing environment, a company needs data on various relevant variables time to

time. Marketing research is an expensive option. It is imperative for a firm to know how far marketing research

efforts and costs are instrumental in achieving marketing goals. It provides necessary details to improve research

policies and practices.

Common criteria used to measure marketing research efficiency include:

i. Annual budget of marketing research department.

ii. Costs of research projects conducted in a year.

iii. Effectiveness of tools and methods used for collecting and analyzing data.

iv. Usefulness of findings of marketing research in decision-making.

v. Relative advantages of company’s research department v/s professional research firms, etc.

Strategic Control:

Strategic control implies a critical review of overall marketing effectiveness in relation to broad and long-term

objectives and firm’s response to marketing environment. It deals with assessing firm’s ability to define and

achieve marketing goals, and response pattern to environment. Normally, strategic control verifies company’s

long-term performance with reference to the close competitors. Here, entire marketing system is reviewed to

judge firm’s overall strengths and weaknesses. It answers the question: How far is the firm capable to exploit

emerging marketing opportunities and face challenges and threats?

Methods or Tools:

As shown in Figure 3, four tools are used for strategic control – the marketing effectiveness review, the

marketing audit, the marketing excellence review, and the ethical and social responsibility review. Let’s discuss

each of them.
--

1. The Marketing Effectiveness Review:

It involves a review of overall marketing performance. It helps finding effectiveness of several business plans in

term of sales growth, market share, and profitability. Attempts are made to detect causes for good-performing

marketing department and poor-performing department.

Common criteria:

Some criteria are used to review marketing effectiveness.

They include:

i. Company’s Customer Philosophy:

It shows company’s approach toward customers.

ii. Integrated Marketing Efforts:

It shows the way company integrates efforts of all divisions and departments for achieving marketing goals.

iii. Marketing Information:

It studies company’s policies and practices to collect, use, and disseminate critical information on a regular

basis.

iv. Company’s Strategic Orientation:

It shows company’s broad and long-term plans for survival and growth. It also indicates firm’s long-term plans

for profits, sales, and expansion.

v. Operational Efficiency:

It shows how efficiently a company managing its current operations.

vi. Public Relations Practices:

It shows company’s policies and practices to establish, maintain, and improve relations with various publics,

which have direct interest in the company’s operations, and whose cooperation seems critical in achieving

marketing goals.

Here, we have considered only six criteria. As per need, more criteria can be developed and used for the

purpose.

A special instrument can be developed by using these criteria to measure marketing effectiveness. The

instrument (a type of questionnaire or form with questions and certain number of options or intensity in each of

the questions) is filled by managers of marketing and various other departments.

On the basis of this instrument, controller can calculate score of each managers of each of the departments.

Level of scores received by manager or department clearly indicates the effectiveness of particular manager

and/or department. Accordingly, each department is awarded class like excellent, very good, good, fair, or poor.

Necessary actions can be taken on the basis of performance.

2. The Marketing Audit:

Another alternative tool for critical review of overall marketing performance is the marketing audit. Audit

means to examine systematically. It is systematic examination/investigation of all critical aspects of marketing

department.

Philip Kotler defines: “A marketing audit is a comprehensive, systematic, independent, and periodical

examination of a company’s marketing environment, objectives, strategies, and activities with a view to

determine problem areas and opportunities, and recommending a plan of action to improve the company’s

marketing performance.”

Key characteristics of marketing audit have been discussed below:

i. Comprehensive:

The marketing audit covers all the major marketing activities of a business unit.

ii. Systematic:
It is a systematic examination of all marketing operations. It is a well-planned and orderly task. All aspects are

audited minutely. It indicates corrective actions to improve firm’s marketing performance.

iii. Independent:

Marketing audit is conducted objectively (bias-free) or neutrally. It includes self-audit, internal, or external

audit. However, the external audit is considered as the best one.

iv. Periodical:

The marketing audit should be conducted regularly to detect problems and avoid crisis.

v. Purposive:

Its purpose is to find out marketing problem areas and opportunities. It recommends actions to improve

company’s marketing performance.

Key Issues or Decisions of Marketing Audit:

A detailed plan is prepared to conduct marketing audit.

The main decisions/issues of marketing audit include:

i. Deciding on marketing audit objectives (why).

ii. Deciding on marketing audit responsibility (who).

iii. Deciding on data to be collected (what).

iv. Deciding on respondents (whom).

v. Deciding on time (when and how long).

vi. Deciding on areas of marketing audit (Where).

vii. Deciding on intensity of examination (How much).

viii. Deciding on methods and tools (how)

ix. Deciding on audit report format

x. Deciding on actions to be taken on the basis of report.

Components of Marketing Audit:

The marketing audit examines six major components of company’s marketing operations, such as:

a. Marketing Environment Audit:

It examines impacts of micro and macro factors of marketing environment. Macro marketing environment

consists of demographic, economic, environmental (ecological), technological, political and cultural factors.

Micro marketing environment includes market segments, customers, competitors, dealers, suppliers, facilitators,

and general public’s.

b. Marketing Strategy Audit:

It examines company’s business mission, marketing goals and objectives, resources capacity, and marketing

strategies.

c. Marketing Organisation Audit:

It examines suitability of marketing organisation (structures) to implement marketing operations effectively. It

includes level, relations, authority- responsibility, communication, facilities, organisation manual, etc.

d. Marketing System Audit:

It examines major systems like marketing information and research system, marketing planning system,

marketing control system, new product development system, etc.

e. Marketing Productivity Audit:

It examines company’s profitability for different products, territories, and channels. It also examines cost-

effectiveness for various operations.

f. Marketing Function Audit:

It examines marketing mix elements such as product, price, promotion (advertising, sales promotion, personal

selling-sales force, publicity, and public relations), and distribution. For each of the components, appropriate
auditing questions are designed to examine how effectively the company is performing. All relevant respondents

like customers, suppliers, managers, dealers, etc., are interviewed using these questions.

Finally, the auditor prepares marketing audit report. The audit report contains individual and joint evaluation of

main audit components (marketing areas). It detects strengths and weakness, and recommends actions for

improving marketing performance.

3. The Marketing Excellence Review:

This is more or less similar to market effectiveness review. But, here, some excellently performing business

units are taken as the base for evaluating firm’s performance. Here, performance is reviewed relatively.

The marketing excellence review is used to judge how excellently the company is performing with reference to

high performing business units. A special instrument with adequate number of criteria and appropriate scaling

can be developed to judge poor, good or excellent performance.

Criteria used for the purpose include:

a. Market/customer orientation

b. Market segmentation

c. Product quality

d. Quality of services

e. Approach toward competition

f. Integration and alliance

g. Approach toward dealers

h. Dealing with other stakeholders

i. Social responsibility and national services, etc.

Depending on result of the marketing excellent review, necessary actions are taken. Company’s actions mainly

include undertaking all possible steps to reach the level of excellently performing business units.

4. The Ethical and Social Responsibility Review:

This review/verification decides whether firm’s marketing policies and practices are ethically and socially true.

Ethics are moral principles, norms, or standards of right or wrong. Every business unit has social responsibilities

toward a number of stakeholders.

In same way, marketing practices should be ethical with reference to moral norms, standards, and values.

Company’s products, policies, and practices should not have adverse impact on customers, other stakeholders,

and larger interest of society. Thus, here company tries to assess its ethical and social responsibility. As per

need, necessary actions are taken.

Criteria used to review social and ethical responsibility include:

a. Clear definitions of illegal, immoral, and antisocial activities.

b. Company’s active efforts to practice, promote, and disseminate moral principles and to hold its employees

fully responsible to observe them in practice.

c. Company’s direct contribution for social welfare of people.

d. Fulfilment of social responsibility toward various parties.

e. The adherence to all laws and regulations in force.

f. Use of business ethics in areas of product, price, promotion and distribution.

On the basis of ethical and social review, company can evaluate its performance in this regard and, if necessary,

appropriate actions are taken.

CUSTOMER RELATIONSHIP MARKETING

Relationship Marketing Techniques and Required Capabilities

There are many techniques that marketers can and should implement when planning their path to relationship
marketing. These techniques, and the technological capabilities required to deploy them, include:
 Single Customer View – A self-contained, unified and continuously updated aggregated database of
all the information available about each customer. A single customer view is an essential component that
enables organizations to understand and interact with each customer in the most personalized and effective
ways.

 Multi-channel Campaign Automation – Different people are more receptive to communications via
different channels, while various channels are better suited to particular types of messages. Effectively
determining which realtime channels (e.g., website pop-up, email, SMS, push notification, phone call) work best
for each customer, and for each type of message, is a powerful way to improve the effectiveness of personalized
campaigns.

 Predictive Customer Modeling – A predictive marketing engine applies mathematical and statistical
models to transactional, behavioral, demographic and realtime data in order to predict future customer behavior
and value.

 Realtime On-site/In-app Activity Tracking – A system for tracking the activity of individual
customers on websites and in mobile apps provides additional customer behavior data that significantly
enhances the marketer’s ability to individually address each customer in the most relevant and personalized
manner (and to deliver hypertargeted realtime messaging). Read on to learn more!

What is Customer Relationship Marketing?

Although customer relationship marketing may use the same acronym as customer relationship management

(CRM), the two concepts are related, but still quite different. And while customer relationship management is a

term that collectively refers to the practices, strategies, and tools that are used by companies to manage and

analyse customer interactions and data, customer relationship marketing is more focused on building brand

loyalty through the use of targeted marketing strategies.

Customer relationship marketing begins with the customer's first encounter with the brand, and doesn't stop once

a sale is made. Instead, relationship marketers see the sale as the first step towards a mutually-profitable brand

relationship that, if properly nurtured, will endure long after the memories of that first sale have faded away.

After all, long-term engagement and brand loyalty are more valuable to businesses than single sales. Storytelling

furthers the goals of relationship marketers, by eschewing the hard data and facts favored by many marketing

campaigns, and relying instead upon the emotional connection generated through compelling narrative.

What is Customer Relationship Marketing? Definition of Customer Relationship Marketing, Strategies,

Benefits, and More

By
With more enterprises putting the customer at the center of their marketing strategies, customer relationship
marketing remains prominent among organizations that strive to foster customer loyalty and cultivate brand
ambassadors. Here’s a look at how you can put customer relationship marketing to work for your company.
A Definition of Customer Relationship Marketing

Customer relationship marketing (CRM) is a technique based on client relationships and customer loyalty.

Using customer data and feedback, companies utilizing this marketing strategy develop long-term relationships

with customers and develop laser-focused brand awareness. Customer relationship marketing varies greatly

from the traditional transactional marketing approach that focuses on increasing individual sale numbers.

Companies that prioritize customer relationships, on the other hand, strive to create strong customer

connections, which may be emotional, to their brand to promote customer loyalty and increase customer lifetime

value. They benefit from word-of-mouth promotion and develop brand ambassadors.

Customer Relationship Marketing Strategies

Customer relationship marketing builds upon customer experience management and puts improving customer

interactions to foster brand loyalty at the core of marketing activities and efforts. There are several ways that

companies go about customer relationship marketing, including providing excellent customer service at all

times, getting to know individual customers to anticipate their needs, and offering loyalty program perks and

rewards for repeat customers.  Companies typically turn to the internet and social media to pursue customer

relationship marketing initiatives, which means that small businesses also can benefit from it by inviting

customers to visit their websites, read and comment on blog posts, and communicate via social media platforms

like Twitter and Instagram.

The goal of customer relationship marketing is to build trust with and engage customers to build brand loyalty

and reduce customer churn. One of the best strategies for building relationships with customers is focusing

on emotion. Brands who excel in CRM use nostalgia in their campaigns because it is one of the most powerful

connections consumers can have to a brand, according to BDA CEO Jay Deutsch. That’s why branded

merchandising is becoming part of some of the most successful marketing campaigns.

Other strategies in customer relationship marketing include:

 Show customers you value them with every interaction – Consider spontaneously recognizing them

and delighting them in unexpected ways

 Listen to customers and respond – Use social media monitoring tools to reply to comments and

complaints and address customers’ concerns

 Give customers free information – Identify topics and interests customers have and then create

content to address them and give customers free access to it, such as informational videos on products they

recently purchased or newsletters that highlight individual customers and share their stories

 Expanded loyalty rewards – Any company can offer perks and rewards, but you need to expand

beyond the typical reward program and give people stuff they love or recognize them in unexpected ways

 Communicate frequently – A relationship is nothing without communication, so make sure you

communicate with customers often via social media, email, messages, etc. (just be sure the communication

provides value to customers and does not become intrusive or too frequent)

Benefits of Customer Relationship Marketing

When companies implement customer relationship marketing, they make good use of their customer data and

identify customers that will be of more value to the company itself. With customer relationship marketing

campaigns, companies save time and money by focusing on customers that will not be as costly in terms of

maintaining relationships with them; they also make better decisions about which customers have

underdeveloped potential.

Another advantage of utilizing customer relationship marketing is that it increases customer satisfaction and

communication levels. Customers who have strong relationships with companies interact with them more

frequently, which makes it easier to learn more about customers via customer data platforms. These companies

also save money by building relationships with existing customers rather than spending to attract new

customers.

Other benefits of using a customer relationship marketing strategy include:

 Delivering a consistent customer experience – By becoming customer-centric and focusing on

customer relationships, companies align their touchpoints and work across the organization to meet customer

needs, improve satisfaction, and deliver an exceptional experience

 Gathering customer feedback – Building strong relationships with customers requires

communication, and companies put more stock in gathering feedback and analyzing it to make better business

decisions to build stronger relationships

 Improving customer profitability – Customers that are loyal to brands spend more with them; in fact,

consumers are now putting customer experience ahead of cost when making purchasing decisions

 Creating customer advocates – The happier your customers are, the better the chances they will

spread the word about you to others; when you build a strong relationship with them and deliver a consistent

experience, they have better reviews to share

CUSTOMER ATTRACTING

1) Communicate as humans do

One of the most frequent complaints about customer service is that they come across and robotic or

unnatural, even when the user is interacting with a human being and not an automatic recording or machine.

The problem is that companies seem to train their customer service employees to memorize greetings, sales

pitches and apologies, while what clients want are genuine answers. In fact, according to the study we

mentioned earlier, 83% of consumers believe it will always be important to speak with actual people

about customer service matters. The more complicated the problem, the greater the need for human

interaction.

When you talk to your clients, try to make your communication as “face-to-face” as possible. Make sure you

use their name, be funny if it is appropriate and be polite but natural. Showing empathy will be a huge help

in connecting with your clients.

Don’t waste any opportunity: any and all interactions will help attract and loyalize clients. Little by little,

these interactions will form a relationship. Think about your personal life for a moment: the people you have

stronger relationships with are those you interact with most often, right? The same goes for brands.
To attract clients, be sure to guarantee smooth communication, really listen to them and react according to

their answers and feedback. High quality communication will make you stand out from your competition.

2) Know your clients

The ancient Greeks were onto something when they said “know yourself”... in the business world, it would

be “know your clients”. The customer attraction and retention process is very closely to the sales process:

you need to know who you’re talking to, their name, what they need, when their birthday is and even what

kind of dog the have.

How do you get all this information? The key lies in continuing the conversation after the transaction is

complete. For example, if you work in the B2B industry, you can search for the user’s LinkedIn profile, or

your clients professional page. Once you have this information, you can start thinking of ways to offer them

value: recommendations, content, trainings, etc.

In the intensely competitive business environment we work in today, the best way to differentiate yourself

from the competition is through the customer experience,  not the products or services you offer. Make

your relationship with client as personalized as possible, until you stick in their minds.

3) Make the most of user complaints

Improving client attraction and retention requires a change in attitude. Negative comments and complaints

aren’t an unbearable nuisance, but rather a valuable opportunity to know what your clients really think of

you. Personally, I would much rather a user complained openly about their concerns rather than abandoning

the brand without saying a word.

Criticism is what will help you improve your service, will give you the chance to redeem yourself and avoid

potential online reputation crises. In order for this to be true, however, you have to learn how to deal with

them in the right way.

The next time a user speaks up, take it as a chance to help them solve their problems. Listen to them, get the

information you need to solve their problem and act quickly. Offer them your most sincere apologies, thank

them for sharing their problem and only promise what you can deliver. If all goes well,  you will have won

over a client’s loyalty forever.

4) Keep in touch

One of the basic keys to any good relationship is communication and fluidity. In fact, according to IDC,

67% of consumers and 91% of companies agree that online and mobile services should be quicker and more

intuitive.

In order to guarantee this fluidity, you need to keep in touch with clients and contact them

regularly. Again, it is just like our personal relationships: if you never meet up with someone, if you

nothing about their day-to-day life, your relationship will inevitably fade away.

Creating a continuous relationship will let you keep an eye on how the user is feeling about you and your

brand, and address potential issues before they become problematic. This ideas will help keep the spark in

your relationship alive:

 After any relevant interaction, be sure to follow up, whether by phone, email or social media.

 Send your clients friendly messages from time to time, reminding them that you’re there for them.

 Create valuable content, such as articles or videos, and send them out in your newsletter.

 Send out a monthly email with your company news, such as new product launches, events and
interesting content.
5) Earn your clients’ trust

All long term relationships are built on trust and commitment. If you can earn your clients’ trust, they will

be much more satisfied and much more likely to stay loyal to you in the long term. Earning this trust is a

matter of integrity and common sense:

 Be honest and keep your promises. Say what you mean and mean what you say. If you promise,
deliver!

 Show your good intentions. Trust is often broken and lost because the client feels like the company
is trying to take advantage of the, rather than acting in mutual benefit to both.

 Be flexible. You already know the customer is always right… and even if they're not, it is
sometime best to give in a little to their requests and conditions.

6) Focus on Inbound marketing

Outbound or traditional marketing is based on going out to find consumers and interrupt their daily lives to

show them your products or services (for example through TV ads, banners or unwanted emails).

Inbound marketing turns this all around and attracts and retains clients. The idea is to get your clients to

come to you to initiate your relationship.

One of the most popular strategies to do this is to create high-value content that solves your potential

clients’ real problems. Using an array of blog posts, videos, ebooks, reports and other content to attract users

and get them to leave their contact information and become a lead.

A lead can be the beginning of a beautiful friendship.

INTRO

In today’s entertainment and media market, content owners and distributors are competing not only to attract
new customers, but also to build loyalty and retention rates among existing customers. Today's mandate for
"reinvention" means the future depends not only on incremental improvements, but on quantum-leap
breakthroughs as well. Subscription-based operators are constantly developing strategies to maintain and grow
 ARPU (Average Revenue Per User) through customer retention, process improvement, and product innovation.
In the wider sphere, across the E&M landscape cable and satellite TV operators, broadcast and cable networks,
cinema owners, newspaper and magazine publishers, and Internet portals are struggling to enhance their
customer care and management operations. Companies are seeking to derive value from the entire customer
management value chain, from database interrogation to inform and drive marketing and cost-reduction
strategies, to development of powerful people and systems strategies which can deliver the highest level of
customer service.

That's why technological advances and functional improvement programs alone aren't enough. You need a way
to improve your processes and the organisation supporting those processes to achieve performance results which
will benefit and be recognised by those who count the most — your customers and stakeholders.

CONSUMERISM

Consumerism in India: Meaning, Consumer Protection, Need for Consumer Protection and Other Details

Contents
1. Meaning of Consumerism
2. Consumer Protection
3. Need for Consumer Protection
4. Consumer Responsibilities
5. Business Response to Consumerism
6. Consumerism in Marketing
7. Consumerism and Marketing
8. Management Response to Consumerism
9. Indian Scenario on Consumer Protection
10. Indian Consumer and Need for Consumer Protection

Consumerism in India – Meaning

The term ‘consumerism’ was first coined by businessmen in the mid-1960s as they thought consumer movement
as another “ism” like socialism and communism threatening capitalism.
Consumerism is defined as social force designed to protect consumer interests in the marketplace by organising
consumer pressures on business. Consumerism is a protest of consumers against unfair business practices and
business injustices.
It aims to remove those injustices, and eliminate those unfair marketing practices, e.g., misbranding, spurious
products, unsafe products, planned obsolescence, adulteration, fictitious pricing, price collusion, deceptive
packaging, false and misleading advertisements, defective warranties, hoarding, profiteering, black marketing,
short weights and measures, etc.”
Consumer organisations could provide united and organised efforts to fight against unfair marketing practices
and to secure consumer protection. The balance of power in the marketplace usually lies with the seller.
Consumerism is society’s attempt to redress this imbalance in the exchange transactions between sellers and
buyers.
Consumerism challenges the very basis of the marketing concept. Can a free market economy based on
competition respond to the rightful public demands? Is there an inherent defect in the market mechanism?
Should that defect be corrected by political means, i.e., consumer legislation and Government regulations?
According to P. Drucker, consumerism challenges four important premises of the marketing concept- (1) It is
assumed that consumers know their needs. (2) It is assumed that business really cares about those needs and
knows exactly how to find about them. (3) It is assumed that business does provide useful information that
precisely matches product to needs. (4) It is presumed that products and services really fulfil customer
expectations as well as business promises.
Consumerism covers the following areas of consumer dissatisfaction and remedial efforts:
(1) Removal or reduction of discontent and dissatisfaction generated in the exchange relationships between
buyers and sellers in the market. The marketing activities of the selling firms must ensure consumer satisfaction
which is the core of marketing concept. Marketing practices and policies are the main targets of consumerism.
(2) Consumerism is interested in protecting consumers from any organisation with which there is an exchange
relationship. Hence, consumer dissonance (post-purchase anxiety and doubt) and remedial effort can develop
from consumers’ relations not only with profit-seeking organisations but also with non-profit organisations, e.g.,
hospitals, schools, Government agencies, etc.
(3) Modern consumerism also takes keen interest in environmental matters affecting the quality of life.
Consumerism is the public demand both for refinement in marketing practices to make them more informative,
more responsive, more sincere, more truthful and more efficient, and for a new concern with factors other than
privately-consumed goods and services that determine the quality of life.
Often, the new growing interest for the good life translates itself into demand for more public goods and
services such as better highways, more education, better airports, better transport, crime-free cities and better
environmental conditions, conservation of natural resources and elimination of environmental pollution and so
on. Thus, consumerism represents vital aspects of socially responsible marketing.

Consumerism in India – Consumer Protection

The idea of consumer supremacy and consumer sovereignty is definitely fallacious in a free market economy. In
reality, consumer is not a king or queen. The manufacturer or the seller is dominant and his voice is all
powerful. His interests normally prevail over the welfare of the consumer.
The root-cause of consumer movement or consumerism is ‘consumer dissonance’, as it has been so nicely
termed. Dissonance means after purchase doubts, dissatisfaction, disillusion, disappointment. These are the
sentiments of all dethroned sovereigns. But the consumer protection (the core of consumerism) is essential for a
healthy economy.
ADVERTISEMENTS:

The apparatus of consumer protection alone can give necessary strength to consumers in the market and restore
the balance in the buyer-seller relationship. Basically, consumers are demanding four ‘rights’ from the
company- Safety of products, full and accurate information about products and services (without which some
articles may not be usable and may produce sales-resistance), a choice and a voice (redress).
Growth of consumer movement was a proof that business had not been practising the marketing concept but
merely paying it lip sympathy. Drucker revealed that consumerism is “product-oriented marketing.” Consumer
protection or consumerism will be redundant if business sincerely practices marketing concept, viz. customer-
oriented marketing philosophy.
Kotler is one of the few marketing theorists to see that consumerism is the ultimate expression of the marketing
concept because it forces product managers and marketers to look at things from consumer’s point of view. In
other words the pressure of consumer protection really presents opportunities not challenges which, if seized
upon by the marketers, can provide additional strength to their marketing effort.
Marketers should realise that only satisfied customers are the best business assets and they should not spare any
efforts in obtaining as many as possible. This is the underlying spirit of marketing concept and if such a policy is
executed not only in letter but also in spirit, there is no reason to have any additional constraint like
consumerism or legislation.

Consumerism in India – Need for Consumer Protection

Consumer choice is influenced by mass advertising using highly developed arts of persuasion. The consumer
typically cannot know whether drug preparations meet minimum standards of safety, quality and efficacy. He
usually does not know whether one prepared food has more nutritional value than others; whether the
performance of a product will in fact meet his needs and expectations; or whether the “large economy size” is
really a bargain. Hence, we need consumer protection.
1. Physical protection of the consumer, for instance, protection against products that are unsafe or endanger
health and welfare of consumer.
2. Protection of the consumer against deceptive and unfair trade practices. Consumer must have adequate rights
and means of redress against business malpractices and frauds.
3. Ecological and environmental effects of chemical, fertiliser or refinery complexes will have to be seriously
considered because they pollute water, air and food and endanger human life. Consumer wants due protection
against all types of pollution; he wants enriched quality of life — a beautiful, healthy, and peaceful environment
free from pollution.
ADVERTISEMENTS:

4. Adequate protection of consumer public against the abuse of monopoly position and/or restrictive trade
practices. Protection delayed is protection denied.
Greater and free competition in the market is of definite advantage to the consumer. Competition can reduce
prices, enhance quality and stimulate innovation in product-mix and marketing-mix. Innovation means progress
and progress means life, a prosperous life. Competition is the dispenser of justice to the consumer and producer.
Consumer seeks protection, advice and information when his rights are adversely affected. The shift from buyer
beware to seller beware has increased the role of Government in promoting the consumer’s right to safety, the
right to be informed, the right to choose, the right to be heard, the right to redress and right to represent.
These consumer rights constitute Consumer Bill of Rights. In 1962, President John F. Kennedy, in his consumer
message, summed up these rights of consumers and paved the way for organised consumerism in the U.S.A. and
all over the world.
Consumerism in India – Consumer Responsibilities
ADVERTISEMENTS:

The rights and responsibilities being the two faces of the same coin, the IOCU has also drafted certain
consumer responsibilities which are as follows:
(a) Critical Awareness- To be alert and questioning about the goods and services they use.
(b) Action- To act on fair and just demands.
(c) Social Responsibility- Consumers must be concerned about the impact of their consumption behaviour on
other citizens, particularly on disadvantaged groups in the local, national or international community.
(d) Environmental Awareness- To be sensitive about what their consumption of goods does to the environment
and not waste scarce natural resources or pollute the earth.
(e) Solidarity- To act together through the formulation of consumer groups which have the strength and
influence to promote consumer interests.
Over the last twenty years, in fact, ever since the consumer forum under the Consumer Protection Act became
functional, consumers have become aware about their rights and how these can be exercised. But, on the other
hand, the Indian consumer does not want to observe and fulfill responsibilities.
He is especially apathetic about his social responsibilities (e.g., indulging in conspicuous consumption of
luxuries), environmental awareness (e.g., slave to the disposable culture) and consumer solidarity (‘all I’m
interested is in solving my own personal problem’ syndrome).
What the Indian consumer fails to realise is that it is this very lack of solidarity that results in his large-scale
exploitation. The more solidarity there is, less will be the need to approach consumer forum for redressal.
Solidarity can lead to more representation on departmental bodies that can take care of various consumer
problems. Solidarity can lead to policy changes benefiting consumers and much more. The prime concern of the
consumer movement is to prevent or minimise consumers’ exploitation and not maximise litigation.
In the present scenario, consumers’ policy issues no longer remain national and local issues. With the
Government opening its doors to international business interests, consumer issues too need to be studied and
understood in the international context.
Third world countries have already suffered from the policy of ‘dumping’ of drugs banned in Europe and the
West and are likely to suffer further from the effects of the transfer of obsolete or worn-out technologies into the
countries. Consumer solidarity gains extreme importance at such a time.
The United Nations has adopted a set of general guidelines for consumer protection.
These cover seven areas:
1. Physical safety.
2. Promotion and protection of consumers’ economic interests.
3. Standards for the safety and quality of consumer goods.
4. Distribution facilities for essential consumer goods and services.
5. Measures enabling consumers to obtain redress.
6. Education and information programmes.
7. Measures relating to specific areas (food, water and pharmaceuticals).
The purpose of these guidelines was well described by the United Nations Secretary General in his 1983 report
— ‘The draft guidelines represent an initial attempt to create an international framework within which national
consumer protection policies and measures can be worked out. They are also intended to assist the international
community in its consideration of the question of consumer protection policy and to further international co-
operation in this field.’

Consumerism in India – Business Response to Consumerism

Consumerism Opportunities:
Consumerism is now an established, a vocal, and a well-organised force in the marketplace so that consumer
complaints and grievances will be heard and redressed (set right). The only question is who will answer those
complaints? And who will redress them? Business or Government?
If business ignores them or if business cannot or will not be accountable to the consumer, it is obvious that the
only alternative is more and more consumer legislation and Government intervention to ensure justice and fair
play to consumers. It means that indifference of business towards ever-growing consumer movement will
amount to an open invitation or a blank cheque in favour of Government interference in the free market
mechanism.
In other words, consumerism is a direct challenge to business to be met with squarely, if business wants freedom
or survival in our economy.
Savvy marketers in India are fast recognising the value of adopting a positive attitude towards the new needs
and wants of their consumers. Many of them have instituted “positive action programmes” in their organisations
which anticipate and directly respond to consumer demands. This pro-consumerism is reflected in better quality
products, better services, better warranties, better credit, clearly spelt out and strongly backed.
It is reflected in the trend to release more informative advertising that not only sells, but clearly and honestly
tells the consumer what he, or she, is entitled to know about the product and its performance.
Consumers in India today increasingly expect value for money and quality in products and services. Marketers
in India are gradually showing genuine interest in satisfying todays more sophisticated, more skeptical and more
demanding consumers. They must bridge the gap between consumer expectations and business performance by
adopting pro-consumerism marketing policy. This will benefit the business and economy as a whole.
If businessmen avoid subjecting themselves to self-regulation and voluntary restraint, society has a right to
intervene through the people’s Government to regulate their behaviour. In that contingency, authorities will be
compelled to impose more and more controls and restrictions through legislation.
If businessmen had earlier shown the necessary foresight and followed effective, fair trade norms or practices,
the need for enacting consumer legislations would not have arisen. Failure of business to adopt marketing
strategies from consumer’s viewpoint and develop consumer-oriented marketing concept is really responsible
for the growth of consumerism and consequent legislation to provide consumer protection.
Self-policing is far more effective and superior or advantageous than State-policing in the field of distribution.
There are about 40 million people employed in the Indian distribution system alone. If constructive ties are
forged between the Government and the business, through co-operation, both parties can understand each
other’s viewpoints and difficulties and our economy can assure distributive justice without controls and
restrictions.
Business community must read the writing on the wall and take, without delay, appropriate steps to regulate its
conduct and cultivate self-discipline and self-regulation in the larger national interests. Let it be noted that this is
not merely for protecting the consumer interest but also to protect the interest of the business community itself.
In the current context of Indian marketing environment, business cannot hope to thrive or survive unless it
wakes up, faces the realities and fulfills both its economic as well as its social obligations to the satisfaction of
the consumer-public — the man in the street — or the community at large. For today businessmen can do their
business only with public acceptability. Otherwise they will have no business left to transact.

Consumerism in India – In Marketing

Areas of Basic Rights of Consumers:
Consumers have “rights” which are important for all marketers to appreciate. Recently the UK government has
encouraged the development of a citizen’s charter which includes a “Patient’s charter” for the National Health
Service, a passenger’s charter for rail travellers, and various other customer-focused initiatives.

The real awakening of consumerism was in the USA. Before Nader’s book, President Kennedy highlighted the
obligation on an organisation owes to its customers in his “Consumer Bill of Rights”.

This encompassed four main areas that should be basic rights for all consumers:
(1) The right to safety

(2) The right to be informed

(3) The right to choose

(4) The right to be heard.

The idea of rights can be traced back to the “inalienable rights” included in the US Declaration of Independence
by Thomas Jefferson. The marketing profession of today must be aware of these rights and combine them where
possible in any marketing plans for products and services. They form a good framework for considerations.

(1) The Right to Safety:

When a purchase is made, the consumer has the right to expect that it is safe to use. The product should be able
to perform as promised and should not have false or misleading guarantees. This “right” is in fact a minefield
for the marketing profession. Products which were at one time regarded as safe for use or consumption have
subsequently been found by modern research not to be so.

There was a time when cigarettes were regarded as not being harmful to health, sugar in foods was not
highlighted in television advertising as being bad for teeth, and the public were advised to “go to work on an
egg”- in retrospect, was it safe to do so? Other examples are to be found in the medical field, such as the
Thalidomide drug which caused deformity to children born to mothers who took his prescribed drug.

Legislation which highlights “Products liability” has been introduced in several countries. This has forced
suppliers to consider their responsibility. But should companies go further in a positive rather than a negative
way? It could be said that this right will be closely linked to legislation and it is obvious that this right will be
closely linked to legislation and it is obvious that marketers who fail to protect consumers do so at their peril.

(2) The Right to be informed:

The right to be informed has far-reaching consequences – it encompasses false or misleading advertising,
insufficient information about ingredients in products, insufficient information on product use and operating
instructions, and information which is deceptive about pricing or credit terms. But this adopts a negative
approach. Avoiding trouble is not sufficient.

Any market should take advantage of every opportunity to communicate with consumers and to inform them
about the benefits and features of the product offered. It should be no protection to claim that consumers fail to
read instructions. Marketers must ensure fully effective communications between consumer and supplier.

But this ‘right’ determines that customers should be given adequate information in order to implement the next
right-the right to choose.

(3) The Right to Choose:

The consumer has the right to choose and, of course, marketing does try to influence that choice. But, in most
western markets competition is encouraged and products should not confuse consumers.

As an example, it has been suggested that to make this right easier to attain, packaging should be changed so
that similar products from different firms are packaged in exactly the same quantities, or at least use both metric
and imperial weights/ measures and so make value comparisons easier for the customer.

In fact, Sainsbury provide this comparative information on shelf tickets, but Tesco do not. The unanswered
question remains – Do consumers use this information in making choices, or do they use other criteria?

(4) The Right to be Heard:

The right of free speech is present in all western countries. However, do organisations listen to consumers? In a
well-focused marketing organisation such feedback should be encouraged, and it should be treated as a key
input for the future. This right allows consumers to express their views after a purchase, especially if it is not
satisfactory. When anything goes wrong with a purchase the customer should expect that any complaint should
be fairly and speedily dealt with.

Consumerism in India – Consumerism and Marketing

All consumer groups affect the marketing environment in which organisations operate. In addition, it should be
realised that individual pressure groups are each ‘marketing’ their ideas, but this is not considered here. Pressure
groups can be considered as one way of receiving feedback from consumers.
By working with such groups marketers can gain increased influence, and this can be reflected in additional
exposure as the pressure groups can generate positive. PR for cooperative suppliers. Where it is an area of
individual consumer taste, such as – beer, the Campaign for Real Ale successfully encouraged suppliers to meet
demands.
So marketers need to work with organised consumer groups and understand the power of such groups in
reflecting consumer attitudes and in shaping demand. The consumers of today can vote with their spending
power.
There is a growing realisation that this is happening. Companies that recognise this and comply with such
expectations hold a strong marketing advantage over their unaware competitors. In 1991 The Times reported –
‘Stop drinking Nescafe for the sake of babies in Brazil’, the General Synod (of the Church of England) told us
this week. But as far as the Church the England’s legislators are concerned, we may continue to enjoy
Rowntrees’ sweets, Eindus fish fingers and Cross & Blackwell soup-our babies may continue to sup breast milk
substitutes.
Yet these are also products of the Nestle group, which, campaigners claim, promotes bottle feeding in third
world countries, encouraging mothers to give up breast-feeding, and increasing the risk of disease. Nestle says
that it is acting in accordance with a World Health Organisation code of 1981; the campaigners retort that it is
breaching rules added to the code in 1986.
We chose not to target baby milk, because it seemed inappropriate to boycott a product that some child might
genuinely need/ says Patti Rundall, the national coordinator of Baby Milk Action, the pressure group that
inspired the motion passed by the synod. ‘Nescafe is Nestle”s highest profile brand, and the company can well
afford to lose some of its market share without its affecting jobs.’
Campaigners do not necessarily measure effectiveness only in terms of policies reversed and products
withdrawn. There is little doubt that numerically more boycotts fail than succeed, the magazine The Ethical
Consumer said last year, adding – ‘Even an “unsuccessful” boycott can be a useful campaigning tool.’
However, when the Avon cosmetics group announced in June 1989 that it was giving up animal-testing, a
spokesman admitted that consumer boycotts had influenced the decision. A similar animal testing campaign
against Boots. The Chemist, has been less successful. The campaign is directed at Boots shops, but its targets
include drug-testing by Boots Pharmaceuticals.
The point is that Nestle are being made a target for consumer action aimed at their top selling product, even
though the behaviour being attacked is taking place with another product (dried baby milk) in another country
(Brazil).

Consumerism in India – Management Response to Consumerism

Ideally, consumerism represents a wonderful opportunity for the forward-looking, aggressive business
management. Consumerism challenges marketers to be more informative, more effective, more truthful and
more responsible. It imparts a new social dimension to the challenge to the marketer and the ideal against which
he measures his own performance.
The ideal objective before every marketer is perfect match between the marketing effort and marketing
opportunity so that we have guaranteed customer satisfaction and thereby assured profitability — the result of
serving the demand. The basis of marketing concept is bending or adapting the supply to demand.
Indian marketing environment in the near future will demonstrate very keen competition among sellers and
intense consumerism. In such a matured market all marketers will be obliged to adopt societal marketing
concept. Now, we have also Consumer Protection Act.
Consumerism suggests the prospects of new ways of competing for consumers’ preferences — through better
products (safer, more nutritious, less polluting, more durable, more reliable, easier to repair and maintain, and so
on), better services (better trained travelling salesmen, regional customer-service centres), direct channels of
communication between the company and its aggrieved customers (consumer representation or voice in
decision-making), better customer information (informative labelling, credible advertising, personal selling,
consumer guidance and education, truthful packaging), and the need to develop many entirely new products to
conserve natural resources and to reduce pollution, and to permit recycling, when possible.
Many aspects of consumerism and environmental pollution may involve additional costs to marketers. For
example, social costs of pollution may have to be absorbed by the business enterprises. These may be involved
in the production, consumption and disposal of many products. But such costs also imply a profit opportunity
for intelligent and smart marketers.
Since 1975, however, companies are making sincere efforts not only to identify and anticipate consumer
problems and initiate constructive actions to solve those problems, but also to reorient their marketing ideology
radically to suit the changing circumstances. Corporate managers now consider consumerism not as a threat or
an obstacle but as a golden opportunity to establish mutually profitable exchange relationships.
Consumerism forced the business to build up marketing-mix around the consumer and not around the product.
This has enlarged appreciably the scope and significance of marketing. Almost all are incomplete agreement
that the most important underlying cause of growth of consumerism and recognition of its importance was the
general feeling that business must assume greater social responsibilities.
Enlightened and forward looking companies are taking positive steps through the development of a
comprehensive consumer-oriented marketing programme.
We may give a few illustrations:
1. Recognition of the natural problem of providing appliances which perform reliably.
2. An improved service organisation to offer service after sale.
3. ‘Cool line’ programme permitting customers with a complaint or problem to contact service consultants
directly and a radically simplified warranty.
4. Stopping the sale of items whose contents have been deceptively reduced to avoid a price rise.
5. Marking the phosphate contents of soaps and detergents with shelf signs.
6. Shelf-dating programme for products, such as batteries.
7. Utilising discounting, open dating, unit pricing and nutritional information plans.
8. Experimenting with tel-tags (informative labels) to improve the quality of point of sale information. Tel-tags
help also the counter sales force.
9. Providing adequate and accurate information to consumers to enable them to have informed decisions.
10. Advertisers are undertaking consumer educational campaigns to fill up the information gap through special
booklets with helpful details. Such a trend is always welcome.
11. Advertisers are slowly but steadily adopting norms of ethical advertising.
12. All external communications (not only media advertising but also product-label copy, warranties,
guarantees, and so forth) are made as deception-free and informative as possible.
The examples of consumer-centred marketing programmes merely indicate that the modern business has
ultimately realised the need of sound ethics (which alone is good business). Lip sympathy on consumerism will
not do. Businessmen will now be judged by their actions. They will have to take due note of new expectations
and moods of society and ensure fair trade practices.

Consumerism in India – Indian Scenario on Consumer Protection

Protection of consumers is necessary because an average consumer is less informed and less powerful than the
seller. Both voluntary measures and law can be used to protect consumers.
Anyone who buys goods and avails services for his/her use is a consumer. Any user of such goods and services
with the permission of the buyer is also a consumer. Government of India has enacted more than thirty laws to
improve the lot of the consumers.
Some of these are — The Contract Act 1882, The Sale of Goods Act 1930, The Laws of Torts, The Essential
Commodities Act 1955, Tine Prevention of Food Adulteration Act 1954, The Standards and Weights of
Measures Act 1976, The Monopolies and Restrictive Trade Practices (MRTP) Act 1969, Agriculture Produce
(Grading and Marketing) Act 1937 and the Consumer Protection Act 1986.
Despite the plethora of laws and rules, the status of consumers in India remains deplorable. There are several
loopholes in many laws. The implementation of many laws has been tardy and faulty. The enforcement
machinery is lethargic and corrupt.
Consumers are ignorant of the rights and remedies available to them under different laws. Even if a consumer is
aware of these laws, he does not go to the courts due to complicated, time-consuming and expensive legal
procedures.
In the absence of strong consumer movement, legislation has failed to improve the lot of the consumers. Further,
the various laws provide no direct relief to the consumer as the focus is on punishment to persons violating the
laws.
The Consumer Protection Act, 1986 was enacted for better protection of consumers’ interests. It provides
effective safeguards to consumers against defective goods, unsatisfactory services, unfair trade practices and
other forms of exploitation.
The law lays down a time frame for disposal of cases. It provides for simple, speedy and inexpensive redressal
of grievances because no fee or other charges have to be incurred by a consumer. He can make a complaint on a
simple paper without any legal or stamp paper.
Unlike other laws, which are punitive or preventive in nature, this law is compensatory in nature. It provides for
three tier machinery consisting of the District Forum, State Commissions and National Commission.
The law also provides for formation of Consumer Protection Councils. These Councils are expected to promote
the cause of consumer protection in every State of India through education.
It covers six consumer rights:
(i) Right to safety,
(ii) Right to be informed,
(iii) Right to choose,
(iv) Right to be heard,
(v) Right to redress, and
(vi) Right to consumer education.
After an amendment in 1993, the scope of the Act has been widened to include paid services like medical
services rendered for a charge.
The Act applies to all goods and services unless specifically exempted by the Central Government. It cover- all
sectors whether private, public or cooperative. The provisions of this Act are in addition to and not in derogation
of the provisions of any other Act.
State Commission is set up by the State Government and its jurisdiction is restricted to the boundaries of the
State concerned.
(i) The State Commission shall consist of a President, who either is or has been a Judge of a High Court, and
two other members. All the three shall be appointed by the State Government.
(ii) Only those complaints can be filed where the value of goods/services and compensation claimed is between
Rupees twenty lakhs and one crore. Appeals against the orders of any District Forum can also be filed before the
State Commission.
(iii) The State Commission, after being satisfied that the goods were defective, can issue an order directing the
opposite party to either remove the defect or replace the goods or return the price paid or pay compensation to
the consumer for loss or injury, etc.
Any person who is aggrieved by the order of the State Commission can appeal against such order to the
National Commission within 30 days.
Consumerism in India – Indian Consumer and Need for Consumer Protection
In marketing and economics, it is said consumer is the king. Consumers are supposed to direct and control all
economic activities, but the reality is a far cry from this in India.
The reasons are many:
1. Some products, some of which are of strategic importance, are short in supply. Producers exploit the
consumer as in the situation of excess demand, supplier and not the consumer becomes the king in the market.
Trading in such products gives rise to black market and hoarding.
2. In certain products, even if there is no actual shortage, markets due to oligopoly (market with few sellers) and
monopoly (market with one seller), create an artificial demand by restricting the output so that they are able to
push up the price. Under such conditions, consumers often get products paying a high price for a low quality.
3. Ignorant and uneducated consumers. Lack of education has spilled its ill effect on every sphere of the society,
including in consumption. Consumers are ignorant and uneducated about the market conditions and the
availability of products. In such situations, the marketer has a tendency to exploit the consumer. The situation is
really unfortunate when the so called educated people turn out to be ignorant consumers. In India, there are
many such cases.
4. People are very scared of the legal procedures. People are apprehensive about Police and Courts. Many
consumers, to avoid legal action, will not exercise their rights. People are unaware of the simple procedures
under the Consumer Protection Act.
5. Last but not the least, India is a country of low and middle-class income people. Most of them struggle for
their “bread and butter” and consider raising voice, against injustice towards them from the market or a
Government institution, a time wasting activity, This needs an attitudinal change, and consumerism can go a
long way in achieving such attitudinal change.
All these points emphasise one aspect. There is a real need in our country to have a good and effective
“Consumer Protection.” Such a protection will go a long way to build a healthy economy. A strong market is
made up by strong supply and demand side. Consumer Protection, which is the core of consumerism alone, can
give necessary strength to the demand side in the market, which is generally biased in favour of the supplier. To
strike a balance in the buyer-seller relation, “consumer protection” plays an important role.
To have an effective consumer protection, a practical response on the part of three parties, viz., the business, the
Government and the consumer, is essential. Firstly, the business, comprising the producers and all the elements
of the distribution channels, all have to give due importance and regard to consumer rights.
The producer has an inescapable responsibility to ensure efficiency in production and quality of output.
Producers are always tempted to charge “exploitative price” that should be resisted, especially when the product
is of high importance and relatively low supply. In other words, if it is a seller’s market, a socially responsible
producer should see that product reaches the consumer within a reasonable time and at a reasonable price, i.e.,
products should not be hoarded and black marketed.
As the veteran business executive of a multinational observes- “Restraint is best exercised voluntarily than
through legislation, which will, otherwise, become inevitable. Advertising agencies and marketing management
have a very important role to play in this respect. By overplaying the claims, they will be cutting the very branch
on which they are perched.”
Secondly, the Government has to come to the rescue of the “helpless” consumer by preventing him from being
misled, duped, cheated and exploited. The motive of private gain tempts business to maximise income by
socially undesirable trade practices. These are calls for Government intervention.
Statutory action, to protect the interests of consumers, has become quite common everywhere in the world. The
most common example of Government’s intervention to protect consumer’s interest is the policy of price
cycling in the case of house rent, kerosene, etc.
Thirdly, consumers themselves should accept consumerism as a means of asserting and enjoying their rights.
This brings us to the next important issue in consumerism — “Consumer’s Rights.”

MARKETERS RESPONSIBILITIES

In many companies, marketing departments turn into a kind of catch-all: they do lots of tasks that in most

cases are not related in any way to each other.

A common situation is that a task arrives to the company and these questions arise:

Then this must be a task for the marketing department.

However, a company without a marketing department or at least a department in charge of marketing is

unconceivable. All companies are being aware that they need to get their message to the client through the

marketing department.

If it’s that important, how come ends up being a ‘does it all’ department? What are the real duties of a marketing

department?

In this post you'll find 10 tasks that are the responsibility of the marketing department. All of them have a

crucial importance in ensuring the survival of your company.

The 10 responsibilities of marketing departments

1. Listening to customer needs

To establish a marketing strategy, it’s necessary to get closer to the clients and listen in order to find out what

their needs are. It’s a marketing department task, to plan the necessary means for receiving customer feedback:

 Company internal channels: Create surveys or capture information of the sales team and customer
support (departments closest to the customer) that may be relevant to enhancing or redirecting the
marketing strategies in the future.

 Channels outside the company: Perform searches and create actions in social networks that help to
better understand the needs of users, in order to convert them into customers.

2. Track trends and monitor competition

Similar to the previous point, it’s important to know the position of the company regarding the market and the

competition. That's why from marketing, you must watch the competition to learn what they do best or to

identify their mistakes in order to avoid falling into them.

3. Work and brand values

Conceptually, a brand is a representation of the feelings that the products, services and company shares show.

The marketing department is responsible for creating and disseminating images, messages and ideas that best

communicate the brand values.

Additionally, you must ensure that all company departments convey these messages in a consistent and

unified way.

 4. Searching for new (and helpful) marketing' tools

Been updated in all what concerns the marketing field is a must. That's why as marketers we should be

conscious about the new trends, strategies and digital tools that arise by the time.
Nowadays there are three types of marketing tools that must have a presence in every marketing department:

  Product Management tools

There are many types of product management software depending on our product management routine. It can

include tools for Project Tracking (such as Basecamp or Slack); User Feedback, perfect for collecting

customers impressions (tools like SurveyMonkey, Canny are useful); and obviously, analytics tools such as

Google Analytics (well known globally) or Kissmetrics, that are a must to determined the our product success

and those web areas with greatest or lowest interaction. 

 Marketing automation tools

The power of this "all in one" platforms is the possibility of managing and controlling all the processes of

our digital marketing strategy. These tools include the possibility of creating content, landing pages, email

marketing, lead nurturing with automated workflows, CRM, etc... Hubspot is the perfect example of a complete

marketing automation tool.

 Product Information Management tools

Maybe you haven't heard before about it, or maybe you know it as PIM. This digital solution allows you in real

time collecting-storing-analyze-distribute all your product content in all the platforms, marketplaces and

channels where products are published. Also, it has become an ally for the creation and update sales

materials: catalogs (online & offline), price listings, etc. It's possibilities seem unreal, but it offers more benefits

and advantages for your marketing team, find it all in this guide.

5. Coordinate efforts with those of the marketing partners of the company

Around the business’s marketing there are lots of contributors: publishers, designers, journalists, consultants...

The work of these contributors must be aligned with the objectives of the company, and is the department itself

who should control it to do so.

6. Innovate
Customers need to be surprised, and every day, given the higher offer, they are more demanding with this. The

marketing department should work on new promotions, affiliate programs, customer retention techniques,

improvements in the conversion of their messages and actions…

It’s not a matter of inventing entirely different disruptive actions; you’ll find innovation in the small details and

in the continuous improvement.

6. Communicate with the rest of the company

company is a chain of members pursuing a common goal: to fulfil its mission and maximize its profits, while

respecting the principles of business ethics.A chain is as weak as its weakest link. It doesn’t matter that the

commercial or production department are doing an impeccable job, if the marketing department fails, the entire

company will fail and the efforts of other departments will be in vain. That is why the marketing department

must ensure that their actions are aligned with the overall objectives of the company and that they report the

work they are doing.

 8. Help improve sales processes and customer

As mentioned above, it’s the responsibility of the marketing department to know the users and especially the

customers’ feelings.

A good way for better knowing the customer is that all departments that have more direct contact with the

customer shall be working with the empathy maps.

 9. Manage marketing budgets & Calculate the ROI (Return Of Investment) of the company’s actions

Like any other division, the marketing department should be able to plan its budget for the next year’s activities,

stretching it in order to make the most of it, for ensuring a positive ROI.

Because as you know, marketing activities are an investment of time, money and effort. And like every

investment, it requires measuring actions in order to check whether they meet the intended objectives and in
order to compare a certain action with others. Faced with questions as 'should I invest in telemarketing, social

media, traditional media...?' The answer is unique: measure them all and choose based on the numbers.

 10. Define strategic marketing plans

The most cost-effective strategies are those that are planned for the long term. To do so, you must draft a

document setting out the objectives to be achieved in the following months; the actions that are to be

undertaken; the strengths of the company; the competition; the target markets... In addition, these strategic plans

must also be aligned both with the strategic plan of the company and with other departments’ plans.

In many companies, marketing departments turn into a kind of catch-all: they do lots of tasks that in most

cases are not related in any way to each other.

However, a company without a marketing department or at least a department in charge of marketing is

unconceivable. All companies are being aware that they need to get their message to the client through the

marketing department.

If it’s that important, how come ends up being a ‘does it all’ department? What are the real duties of a marketing

department?

In this post you'll find 10 tasks that are the responsibility of the marketing department. All of them have a

crucial importance in ensuring the survival of your company.