COURSE MATERIAL

Program : BCOM INDUSTRY INTEGRATED Semester : III

Course : MARKETING MANAGEMENT Course Code : B19BC3040
Unit. No. :I
Unit Title : INTRODUCTION TO MARKETING
Course Presenter: PROF. ABHISHEK DUTTAGUPTA
Course Mentor: PROF. JOHN PRAVIN

MARKETING
The word marketing has been defined in different ways by several authors and scholars. The
following are some of the definitions which have been given;
1. American Marketing Association – A.M.A. (1964)
Marketing is the process of planning and executing the conceptions, pricing, promotion and
distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational
goals.
2. Kotler and Armstrong (2010)
Marketing is a societal process by which individuals and groups obtain what they need and want
through creating, offering and freely exchanging products and services of value with others
Marketing is the bridge between production and consumption. Marketing forms the vital link between
people’s needs and means of satisfying them. Marketing is an activity that satisfies human needs
through exchange processes. Marketing is merely a civilized form of welfare in which battles are won
with words, ideas and disciplined thinking.

KEY CONCEPTS OF MARKETING

Philip Kotler, the eminent writer, defines modern marketing as, “Marketing is social and managerial
process by which individuals and groups obtains what they needs and wants through creating and
exchanging product and value with others.” Careful and detailed analysis of this definition necessarily
reveals some core concepts of marketing.

1. Needs:
Existence of unmet needs is preconditioned to undertake marketing activities. Marketing tries to
satisfy needs of consumers. Human needs are the state of felt deprivation of some basic satisfaction. A
need is the state of mind that reflects the lack-ness and restlessness situation. Needs are physiological
in nature. People require food, shelter, clothing, esteem, belonging, and likewise. Note that needs are
not created. They are pre-existed in human being. Needs create physiological tension that can be
released by consuming/using products.
2. Wants:
Wants are the options to satisfy a specific need. They are desire for specific satisfiers to meet specific
need. For example, food is a need that can be satisfied by variety of ways, such as sweet, bread, rice,
chapati, puff, etc. These options are known as wants. In fact, every need can be satisfied by using
different options. Maximum satisfaction of consumer need depends upon availability of better
options. Needs are limited, but wants are many; for every need, there are many wants. Marketer can
influence wants, not needs. He concentrates on creating and satisfying wants.

3. Demand:
Demand is the want for specific products that are backed by the ability and willingness (may be
readiness) to buy them. It is always expressed in relation to time. All wants are not transmitted in
demand. Such wants which are supported by ability and willingness to buy can turn as demand.
Marketer tries to influence demand by making the product attractive, affordable, and easily available.
Marketing management concerns with managing quantum and timing of demand. Marketing
management is called as demand management.

4. Product:
Product can also be referred as a bundle of satisfaction, physical and psychological both. Product
includes core product (basic contents or utility), product-related features (colour, branding, packaging,
labeling, varieties, etc.), and product-related services (after-sales services, guarantee and warrantee,
free home delivery, free repairing, and so on). So, tangible product is a package of services or
benefits. Marketer should consider product benefits and services, instead of product itself. Marketer
can satisfy needs and wants of the target consumers by product. It can be broadly defined as anything
that can be offered to someone to satisfy a need or want. Product includes both good and service.
Normally, product is taken as tangible object, for example, pen, television set, bread, book, etc.

However, importance lies in service rendered by the product. People are not interested just owning or
possessing products, but the services rendered by them. For examples, we do not buy a pen, but
writing service. Similarly, we do not buy a car, but transportation service. Just owning product is not
enough, the product must serve our needs and wants. Thus, physical product is just a vehicle or
medium that offers services to us. As per the definition, anything which can satisfy need and want can
be a product. Thus, product may be in forms of physical object, person, idea, activity, or organisation
that can provide any kind of services that satisfy some needs or wants.

5. Utility (value), Cost, and Satisfaction:

Utility means overall capacity of product to satisfy need and want. It is a guiding concept to choose
the product. Every product has varying degree of utility. As per level of utility, products can be
ranked from the most need-satisfying to the least need-satisfying. Utility is the consumer’s estimate of
the product’s overall capacity to satisfy his/her needs. Buyer purchases such a product, which has
more utility. Utility is, thus, the strength of product to satisfy a particular need. Cost means the price
of product. It is an economic value of product. The charges a customer has to pay to avail certain
services can be said as cost. The utility of product is compared with cost that he has to pay. He will
select such a product that can offer more utility (value) for certain price. He tries to maximize value,
that is, the utility of product per rupee. Satisfaction means fulfillment of needs. Satisfaction is possible
when buyer perceives that product has more value compared to the cost paid for. Satisfaction closely
concerns with fulfillment of all the expectations of buyer. Satisfaction releases the tension that has
aroused due to unmet need(s). In short, more utility/value with less cost results into more satisfaction.

6. Exchange, Transaction, and Relationships:

Exchange is in the center of marketing. Marketing management tries to arrive at the desired exchange.
People can satisfy their needs and wants in one of the four ways – self-production, coercion/snatching,
begging, or exchanging. Marketing emerges only when people want to satisfy their needs and wants
through exchange. Exchange is an act of obtaining a desired product from someone by offering
something in return. Obtaining sweet by paying money is the example an exchange. Today’s
marketing practice gives more importance to relation building. Marketing practice based on relation
building can be said as relationship marketing. Relationship marketing is the practice of building
long-term profitable or satisfying relations with key parties like customers, suppliers, distributors, and
others in order to retain their long-term preference in business. A smart marketer tries to build up
long-term, trusting, and ‘win-win’ relations with valued customers, distributors, and suppliers.
Relationship marketing needs trust, commitment, cooperation, and high degree of understanding.

7. Markets:
A market consists of all potential customers sharing particular need/ want who may be willing and
able to engage in exchange to satisfy need/ want. Market Size = fn (Number of people who have need/
want; have resources that interest others, willing or able to offer these resources in exchange for what
they want).
In Marketing terms: Sellers – called as “INDUSTRY”. Buyers – referred to in a group as
“MARKET”.
Types of Markets:

 Resource Market,
 Manufacturing Market,
 Intermediary Market,
 Consumer Market,
 Government market.

8. Marketing & Marketers:

Working with markets to actualize potential exchanges for the purpose of satisfying needs and wants.
One party seeks the exchange more actively, called as “ Marketer”, and the other party is called
“Prospect”. Prospect is someone whom marketer identifies as potentially willing and able to engage in
exchange. Marketer may be seller or buyer. Most of time, marketer is seller. A marketer is a company
serving a market in the face of competition. Marketing Management takes place when at least one
party to a potential exchange thinks about the means of achieving desired responses from other
parties.
EVOLUTION OF MARKETING CONCEPT
The marketing concept is the belief that companies must assess the needs of their consumers first and
foremost. Based on those needs, companies can make decisions in order to satisfy their consumers’
needs, better than their competition. Companies that hold this philosophy believe that their consumers
are the driving forces of their business. Nowadays, most companies have incorporated the marketing
concept. So if you were a new company, how would you know what a customer would need and
want?

There are five distinctive marketing concept types or approaches to achieving effective marketing.
Notably, not all these marketing concept types work for all industries, because they differ in function.
Every marketing concept was created depending on the need of the market. As markets changed, so
did the concepts.

The Production Concept

Companies that use the production concept have the belief that customers primarily want products
that are affordable and accessible. The production concept is based on the approach that a company
can increase supply as it decreases its costs. Moreover, the production concept highlights that a
business can lower costs via mass production. A company oriented towards production believes in
economies of scale (decreased production cost per unit), wherein mass production can decrease cost
and maximize profits. As a whole, the production concept is oriented towards operations. A working
example of the production concept is a company that produces their goods overseas. Producing retail
goods abroad lowers costs and the resulting savings can be passed on to the consumer. These lower
prices could be a good incentive to attract new consumers. However, the company may experience a
decline in quality and gradually a decline in sales, if the process is not kept to a standard. Businesses
oriented towards production are required to avoid production efficiency procedures that affect their
product’s quality and design. By compromising product quality and design simply for production
would probably lower the desirability of a product for customers. The production concept actually
came about in the early 1920s during the industrial revolution. During that time, the production
concept was very popular because the goods produced back then were mainly basic necessities.
Moreover, there was quite a high level of demand that was unfulfilled. Almost everything that was
manufactured then were easily sold based on production costs. There were just two main concerns for
a company before they produced a product back then—whether they could produce the product and if
they could produce enough of it.

The Product Concept

Companies that focus on the product concept believe that the most significant priorities for a customer
are quality and functional characteristics of a product. What this indicates is that a customer looks for
innovative alternatives and always searches for the best of what is currently available in the market. In
addition, within this concept, it is assumed that consumers stay loyal if they receive more product
options and benefits. Companies who keep this philosophy intact direct their marketing efforts in
raising their product quality. With this in mind, it is not surprising that many companies in technology
use the product concept. These companies always update and release their new products. It is then
important for these technology companies to create strong decisions on how often they should release
their new products. By releasing too often, consumers can feel frustration due to minimal changes.
Not releasing often enough would make consumers feel that the business is out of step. Companies
that believe in the product concept always have to review consumer needs and execute those changes
as efficiently and as quickly as possible.

The Selling Concept

The selling concept involves companies that are sales oriented. What this means is that they can make
a product and then sell it to their target market without consideration of their consumers needs or
wants. The selling concept highlights that customers would buy a company’s products only if the
company were to sell these products aggressively. This concept became very popular in the early
1930s. At this stage in time, mass production had become the norm, there was more competition, and
most of customer demand had already been met. So, companies started to practice the selling concept.
Companies would produce the product, but at the same time attempt to convince consumers to buy
them through personal selling and advertising. The key considerations companies had for using the
selling concept was whether they could sell the product and if they could charge sufficiently for it.
The selling concept pays little attention to whether or not a product was truly needed by consumers.
The objective was to beat the competition merely in sales, with few regarding the satisfaction of a
consumer. Nowadays, this is called “hard selling,” wherein goods are not bought – they are sold. This
concept is based on the belief that consumers may be attracted; hence, companies can focus their
efforts in attracting and educating consumers.

The Marketing Concept

A company that believes in the marketing concept places the consumer at the center of the
organization. All activities are geared towards the consumer. A business, oriented towards the market,
aims to understand the needs and wants of a customer and executes the marketing strategy according
to market research beginning from product conception to sales. As sales begin, further research can be
implemented to figure out what customers think about a product and whether improvements are
needed. While markets change continuously, product development and market research is always
ongoing for a company that concentrates on the market. By focusing on the needs and wants of a
target market, a company can deliver value, more than its competitors. The marketing concept
highlights the pull strategy, wherein a brand is so strong that customers would always prefer your
brand to others’. The main concerns of a company that was focused on the marketing concept were
the wants of consumers, if they could develop the product while the consumers still wanted it, and
how they could keep customer satisfaction.

The marketing concept came about after the Second World War. There were more product variety and
the selling concept could not be depended upon to generate sales. With raised discretionary income,
consumers were also able to be selective. They could buy products that met their needs precisely but
those needs were not patently obvious. As companies started to use the marketing concept actively,
they usually put up individual marketing departments in their organizations. Their goals were to
satisfy the needs of their customers. Oftentimes, the departments were sales departments with
extended responsibilities. Although these extended sales departments are still found in the companies
of today, many companies have structured themselves to marketing organizations with more wide-
ranging focus on the company.
The Societal Marketing Concept
The societal marketing concept is a relatively new marketing concept. While the societal marketing
concept highlights the needs and wants of a target market and the delivery of better value than its
competitors, it also underscores the importance of the well-being of customers and society as a whole
(consumer welfare or societal welfare). The societal marketing concept goes one step further than the
marketing concept. Case in point, if a company creates a car that uses less fuel but has more pollution,
this would merely increase customer satisfaction, but not societal welfare. Companies who believe in
the societal marketing philosophy direct their marketing towards giving customer satisfaction and
social welfare. With this last concept of marketing, companies receive long-term profit, not only from
the viewpoint of the consumer, but also of society.

The Holistic Marketing Philosophy

The holistic marketing concept is a 21st century business thinking. The concept is based on the
“development, design, and implementation of marketing programmes, processes and activities that
recognizes their breadth and interdependencies”. The holistic marketing concept suggests that the 21st
century business firm needs a new set of belief and practice toward business operation that is more
complete and cohesive than the traditional application of the marketing concept. According to Kotler
and Keller holistic marketing recognizes that “everything matter” in marketing. Holistic marketing is
thus based on the assumption that the approach to marketing should be the adoption of all activities of
marketing. Thus, holistic marketing includes internal marketing, performance marketing, integrated
marketing and relationship marketing. Kotler and Keller’s holistic marketing concept seems to be an
embodiment of marketing practice rather than a concept or philosophy of business. A marketing
concept is “a way of thinking; a management philosophy guiding an organisation's overall activities
[affecting] all the efforts of the organisation, not just its marketing activities". The holistic marketing
orientation seems to dwell on just the marketing functions and not the overall activities of the
organisation. The concept looks at internal marketing, performance marketing, integrated marketing
and relationship marketing, which are all typical activities of marketing. The concept fails to
acknowledge other activities of business such as production, management style, organisation culture
and other non-marketing factors of business that make a firm business orientated. Thus, the holistic
marketing concept should better be viewed as a summary of what effective and efficient marketing
involves rather than a business philosophy, and for that matter a marketing concept, because a
marketing concept means more than just marketing functions, as suggested by Kotler and Keller’s.
‘Integration of all marketing activities’, this should include internal marketing, performance
marketing, integrated marketing and relationship marketing. Better still; the holistic marketing
concept can be described as a clever combination of all the concepts that have been developed prior to
it.
FUNCTIONS OF MARKETING
Marketing is related to the exchange of goods and services. Through its medium the goods and
services are brought to the place of consumption. This satisfies the needs of the customers. The
following activities are undertaken in respect of the exchange of goods and services:

1. Gathering and Analysing Market Information:

Gathering and analyzing market information is an important function of marketing. Under it, an effort
is made to understand the consumer thoroughly in the following ways:
(a) What do the consumers want?
(b) In what quantity?
(c) At what price?
(d) When do they want (it)?
(e) What kind of advertisement do they like?
(f) Where do they want (it)?
What kind of distribution system do they like? All the relevant information about the consumer is
collected and analysed. On the basis of this analysis an effort is made to find out as to which product
has the best opportunities in the market.

2. Marketing Planning:
In order to achieve the objectives of an organisation with regard to its marketing, the marketeer chalks
out his marketing plan. For example, a company has a 25% market share of a particular product. The
company wants to raise it to 40%. In order to achieve this objective the marketer has to prepare a plan
in respect of the level of production and promotion efforts. It will also be decided as to who will do
what, when and how. To do this is known as marketing planning.

3. Product Designing and Development:

Product designing plays an important role in product selling. The company whose product is better
and attractively designed sells more than the product of a company whose design happens to be weak
and unattractive. In this way, it can be said that the possession of a special design affords a company
to a competitive advantage. It is important to remember that it is not sufficient to prepare a design in
respect of a product, but it is more important to develop it continuously.

4. Standardisation and Grading:

Standardisation refers to determining of standard regarding size, quality, design, weight, colour, raw
material to be used, etc., in respect of a particular product. By doing so, it is ascertained that the given
product will have some peculiarities. This way, sale is made possible on the basis of samples. Mostly,
it is the practice that the traders look at the samples and place purchase order for a large quantity of
the product concerned. The basis of it is that goods supplied conform to the same standard as shown
in the sample. Products having the same characteristics (or standard) are placed in a given category or
grade. This placing is called grading. For example, a company produces commodity – X, having three
grades, namely A’. ‘B’ and ‘C’, representing three levels of quality; best, medium and ordinary
respectively.

5. Promotion and Pricing:

Promotion means informing the consumers about the products of the company and encouraging them
to buy these products. There are four methods of promotion: (i) Advertising, (ii) Personal selling, (iii)
Sales promotion and (iv) Publicity. Every decision taken by the marketer in this respect affects the
sales. These decisions are taken keeping in view the budget of the company.
It is the most important function of a marketing manager to fix price of a product. The price of a
product is affected by its cost, rate of profit, price of competing product, policy of the government,
etc. The price of a product should be fixed in a manner that it should not appear to be too high and at
the same time it should earn enough profit for the organisation.

6. Packaging and Labelling:

Packaging aims at avoiding breakage, damage, destruction, etc., of the goods during transit and
storage. Packaging facilitates handling, lifting, conveying of the goods. Many a time, customers
demand goods in different quantities. It necessitates special packaging. Packing material includes
bottles, canister, plastic bags, tin or wooden boxes, jute bags etc. Label is a slip which is found on the
product itself or on the package providing all the information regarding the product and its producer.
This can either be in the form of a cover or a seal.

7. Branding:
Every producer/seller wants that his product should have special identity in the market. In order to
realise his wish he has to give a name to his product which has to be distinct from other competitors.
Giving of distinct name to one’s product is called branding. Thus, the objective of branding is to show
that the products of a given company are different from that of the competitors, so that it has its own
identity. For instance, if a company wants to popularise its commodity – X under the name of “777”
(triple seven) then its brand will be called “777”. It is possible that another company is selling a
similar commodity under AAA (Triple ‘A’) brand name. Under these circumstances, both the
companies will succeed in establishing a distinct identity of their products in the market. When a
brand is not registered under the trade Mark Act, 1999, it becomes a Trade Mark.

8. Customer Support Service:

Customer is the king of market. Therefore, it is one of the chief functions of marketer to offer every
possible help to the customers. A marketer offers primarily the following services to the customers:
(i) After-sales-services
(ii) Handling customers’ complaints
(iii) Technical services
 (iv) Credit facilities
(v) Maintenance services
Helping the customer in this way offers him satisfaction and in today’s competitive age customer’s
satisfaction happens to be the top-most priority. This encourages a customer’s attachment to a
particular product and he starts buying that product time and again.

MARKETING ENVIRONMENT
The marketing environment refers to all internal and external factors, which directly or indirectly
influence the organization’s decisions related to marketing activities. Internal factors are within the
control of an organization; whereas, external factors do not fall within its control. The external factors
include government, technological, economical, social, and competitive forces; whereas,
organization’s strengths, weaknesses, and competencies form the part of internal factors. Marketers
try to predict the changes, which might take place in future, by monitoring the marketing
environment. These changes may create threats and opportunities for the business. With these
changes, marketers continue to modify their strategies and plans.

The marketing environment can be broadly classified into three parts:

1. 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.

2. 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.

3. 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.
 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.
 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.

ENVIRONMENTAL SCANNING
Environmental scanning is the process of gathering information about events and their relationships
within an organization's internal and external environments. The basic purpose of environmental
scanning is to help management determine the future direction of the organization. Environmental
scanning is a process where deep analysis of an environment is done in order to learn about the new
opportunities and threats on the basis of which new strategies can be prepared. Popular method of
environmental scanning are SWOT Analysis, Porter's Five Forces Analysis etc.
CONSUMER BEHAVIOUR
Consumer Behaviour is the study of individuals, or organizations and the processes consumers use to
search, select, use and dispose of products, services, experience, or ideas to satisfy needs and study of
its impact on the consumer and society.
Consumers are complex in needs and expectations, but if you segment them accordingly and
understand their behaviour, you will know how to treat your customers and increase the number of
loyal ones. How many times throughout the day do you make decisions? What should I wear today?
What perfume should I put on? What am I going to have for lunch? If you think about it, we take
many buying decisions every day without giving them much thought. And these decisions, however
insignificant they may seem, keep marketers up at night. Because decoding the processes behind them
means that we can use that info to boost revenue.
Studying consumer behaviour is important because this way marketers can understand what
influences consumers’ buying decisions. By understanding how consumers decide on a product they
can fill in the gap in the market and identify the products that are needed and the products that are
obsolete. Studying consumer behaviour also helps marketers decide how to present their products in a
way that generates maximum impact on consumers. Understanding consumer buying behaviour is the
key secret to reaching and engaging your clients and convert them to purchase from you.
A consumer behaviour analysis should reveal:

 What consumers think and how they feel about various alternatives (brands, products,
etc.);
 What influences consumers to choose between various options;
 Consumers’ behaviour while researching and shopping;
 How consumers’ environment (friends, family, media, etc.) influences their
behaviour.
Consumer behaviour is often influenced by different factors. Marketers should study consumer
purchase patterns and figure out buyer trends. In most cases, brands influence consumer behaviour
only with the things they can control; like how Supermarkets like Big Bazaar, Pantaloons etc seems to
compel you to spend more than what you intended to every time you walk into the store.

TYPES OF CONSUMER
In business terms, there are different types of consumers of goods and services that are offered for
sale by companies and manufacturers. So, why is it important to understand different types of
consumers and how to reach them? A product manufacturing company needs to understand the type
of consumers it is targeting with its goods because it is essential to be confident a market exists for the
products they intend to introduce into the market.
Knowing the types of consumers for goods enables a company to appropriately present the product to
the potential purchaser, hence increasing sales and profitability. Understanding the type of consumers
who purchases your products can help you make a diverse range of decisions including: product
design (including cost), product placement, promotions (type and timing) and production schedules.
There are different types, classes or categories of consumers of goods and services and in this article
each of them will be discussed to help you understand the difference.
 1. Seasonal Consumers
Many consumers purchase and consume products on a seasonal basis. They shop at certain times
when the need for them arises. Cash flow for a business selling seasonal products can be very
difficult. Long periods of the year may be without sales, so it is vital to quickly and effectively target
seasonal consumers.
Examples of products that rely on seasonal consumers:

 Sweaters during the winter season

 Raincoats during rainy season
 Crackers during Diwali season
 Kites during Uttarayan / Makar Sankranti

2. Personal Consumers
These types of consumers are individual consumers who purchase goods for the sole purpose of
personal, family or household use.
Examples:

 Going to the supermarket and shopping for goods which are to be used in the house
 Purchasing a car that you intend to use personally
 Purchasing clothes for personal use from a clothing mall
 Purchasing a mobile phone for personal communication.
Have you ever wondered why cameras and internet connections were added to cell phones? It is
hard to imagine any individual who would not be eager to take photos and share them with their
personal contacts and friends. Manufacturers selling products to personal consumers are
constantly looking for ideas for upgrades and add-ons to enhance the appeal of their goods to
individuals.

3. Organizational Consumer
Organizational consumers purchase products for organizations, governments or businesses, They
often buy in bulk and may place long-term recurring orders. For this reason, an organizational
consumer is generally highly prized and sought after. Products and services sold to organizational
consumers are often required to meet very strict standards. They may need to be adapted to meet
the specific requirements of the buyer, and specific prices are negotiated.
Manufacturers and service providers who target organizational consumers are expected to be
flexible in their approach to negotiating a sale, but rigid in maintaining quality. Goods may be
offered for resale at a profit to the organizational purchaser. Or an organization may buy raw
materials that are aimed at producing other goods which will later be offered for sale to other
consumers.
 4. Impulse Buyers
Impulse buyers are consumers who make unplanned buying decisions. Impulse buyers make swift
buying decisions and immediately purchase when they 'connect' with the product and its features.
There is often some kind of emotional appeal. Products impulse consumers purchase are not
initially in their plans, so product placement is very important. Manufacturers who target impulse
buyers need their goods to be featured prominently in a store.
For example:

 Chewing gums and Chocolates near the check-out counter of supermarkets

 Cookies at Café’s
Service providers can also target impulse buyers, often by offering significant discounts or
immediate service.

5. Need Based Consumers

Need based consumers are those types of consumers who buy goods and services when they need
them and not any other time. Many of the products in a hardware store, for instance, are sold to
need based consumers. A need for a certain product will necessitate buying it because it is needed
immediately for a certain purpose. The challenge for marketers is to create a sense of 'need' to
promote the sale of products and services.
Examples:

 Enamel Coating paint on cars for protection from weather conditions

 Car insurance
 Light bulbs when we need to see at night
 Heaters or air-conditioning if we need to be comfortable in our homes.
 Life insurance sales increased during the Corona Pandemic.

6. Discount Driven Consumers

Discount driven consumers are the type of consumers who purchase goods and services primarily for
the discounts on offer. They may not engage in any buying activity until they hear or see large
discounts being offered on products they like. Discount driven buyers are price sensitive and would
rather wait to purchase products when they come with discounts as opposed to when they are sold for
full price. Coupons and stock-take sales are popular with this type of consumer. An increasing number
of manufacturers, retailers and service providers offer discounts during recession or harsh economic
climates.

7. Habitual Consumer
Habitual consumers are those who feel compelled to use certain brands or types of goods. Marketers
work hard to create brand loyalty among this type of consumer. It may be as simple as always
choosing the same brand of deodorant, the same brand of soda, or shopping in the same store for
groceries or clothes. Cigarettes and alcohol are classic examples of products that target habitual
consumers. A beer drinker can be expected to always buy the same type of beer, and smokers have
been known to leave a store and go to a different sales outlet if their brand of cigarette is not available.
Advertising often encourages a persona associated with a specific product to appeal to habitual
consumers.

TYPES OF CONSUMER BEHAVIOR

1. Complex buying behaviour
This type of behaviour 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 behaviour.
Consumer behaves very different when buying an expensive product or a product that is unfamiliar to
him. When the risk of buying a product is very high, a consumer consults friends, family and experts
before making the decision. In complex buying behaviour, the buyer will pass through a learning
process. He will first develop beliefs about the product, then attitudes, and then making a thoughtful
purchase choice.
For complex buying behaviour customers, marketers should have a deep understanding of the
products. It is expected that they help the consumer to understand about their product. It is important
to create advertising message in a way that influences the buyer’s beliefs and attitudes.

2. Dissonance-reducing buying behaviour

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. Consumers will be forced to buy goods that do not have too many choices and therefore
consumers will be left with limited decision making. Based on the products available, time limitation
or the budget limitation, consumers buy certain products without a lot of research.
For example, a consumer who is looking for a branded orthopaedic mattress for sleeping, quickly
decides on the product based on few brands available. The main criteria here will be the brand name
of the mattress and the budget available with him.
Marketers should run after-sale service camps that deliver focused messaging. These campaigns
should aim to support consumers and convince them to continue with their choice of their brand.
These marketing campaigns should focus on building repeat purchases and referrals by offering
discounts and incentives.

3. Habitual buying behaviour

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 a convenient store and buy your
preferred vegetables / fruits. You are exhibiting a habitual pattern, not strong brand loyalty. When
consumers are buying products that they use for their daily routine, they do not put a lot of thought.
They either buy their favourite brand or the one that they use regularly – or the one available in the
store or the one that costs the least.
For example, while a consumer buys a toothpaste, he tends to buy the brand that he is familiar with
without actually putting a lot of research and time. Many products fit into this category. Everyday use
products, such as salt, sugar, biscuits, groceries etc all fit into this product category. Consumer just go
for it and buy it – there is no brand loyalty. Consumers do not research or need information regarding
purchase of such products.
Habitual buying behaviour is influenced by radio, television and print media. Moreover, consumers
are buying based on brand familiarity. Hence marketers must use repetitive advertisements to build
brand familiarity. Further to initiate product trial, marketers should use tactics like price drop
promotions and sales promotions. Marketers should attract consumers using visual symbols and
imagery in their advertising. Consumers can easily remember visual advertisements and can associate
with a brand.

4. Variety seeking behaviour

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. In
variety seeking consumer behaviour, consumer involvement is low. There are significant differences
between brands. Here consumers often do a lot of brand switching. The cost of switching products is
low, and hence consumers might want to try out new products just out of curiosity or boredom.
Consumers here, generally buy different products not because of dissatisfaction but mainly with an
urge to seek variety.
For example, a consumer likes to buy chips and choose a brand without putting much thought to it.
Next time, the same consumer might may choose a different brand out of a wish for a different taste.
Brand switching occurs often and without intention. Brands have to adopt different strategies for such
type of consumer behavior. The market leader will persuade habitual buying behavior by influencing
the shelf space. The shelf will display a large number of related but different product versions.
Marketers avoid out-of-stock conditions, sponsor frequent advertising, offer lower prices, discounts,
deals, coupons and free samples to attract consumers.

CONSUMER BUYING PROCESS

To understand consumer behaviour, it important to first understands consumer buying process.

Buying process represent different stages through which the consumer goes through when he must
purchase something. Consumer has a bundle of desires, needs, out of which the pressing needs move
to the top. This is known as need recognition. After this consumer searches relevant information
related to product based on which decision is taken and purchase is made.
After consuming the product, the post purchase behaviour is evaluated and a dissatisfied customer
again has an unsatisfied need, and the process starts again. Each stage in the consumer buying process
is a challenge to the marketer, for which he must have a careful understanding of behaviour before he
develops the marketing programme.
The various stages in consumer buying process are:
1. Need / Problem Recognition:
The starting point of the buying process is an unsatisfied need. It is the perceived want or desire that
paves the way for next stage. As we know every customer has bundle of desire or needs, many of
which are not satisfied. When such unfulfilled needs are identified, the buying process starts. It is
important to note that need recognition should be of those needs without whose satisfaction, consumer
is restless and under tension. He should feel that he has desire or need which has arisen and which
needs to be satisfied.
Dissatisfaction from the existing product or service may also give rise to restlessness and again a need
to satisfy the urge. Need or wants to arise due to internal or external situations. A person may be
having deep rooted desires which may suddenly become dominant and pressing under conducive
environment. Needs may also arise due to external situations where consumer is exposed to different
advertisements and people. It is the intensity or urgency of wants which decides the speed at which it
must be satisfied. The pressing or urgent wants are first satisfied as resources are limited.
2. Information Gathering / Search:
For satisfying the need which has aroused, he must look for suitable product which will best satisfy
his needs. For this, consumer is willing to gather more information about the product. Alternative
sources are there from where information can be gathered.
He may contact his family, friends, colleagues, neighbours who are personal sources, or he may look
for commercial sources like – advertisement, retailers etc. or he may look at other people which
constitute the public source. In this way before purchasing the product, he tries to collect the relevant
information, as he is willing to satisfy this need.
3. Evaluation of Alternatives:
The desire to satisfy need, gives way to evaluation stage where the consumer try to evaluate the
information, he has received in the pre- purchase stage of information search. This is a stage of mental
trial of the product by consumer. Based on the information received, he has number of alternatives
before him, out of which he must choose one.
His selection will be based on the relative worth of each alternative i.e. how suitable the product will
be to satisfy his wants i.e. product’s want satisfying potential. Based on factors like- product
attributes, brand image, facilities, convenience, etc. he accepts or rejects the alternatives. His final
decision to buy will depend upon the relative strength of the positive intention to buy.
4. Purchase Decision:
The positive decision or evaluation of product leads to purchase decision. This decision implies
consumer’s commitment for a product or a service. Here he purchases the product and exchange
process is thus complete. Purchase can be trial purchase or adoption purchase. Trial purchases are
mostly done for non-durable goods where the consumer buys the goods for the first time. For
consumer durable goods, adoption purchase is done because; these items are not purchased frequently.
On consuming the goods, consumer may be satisfied or dissatisfied. Satisfaction leads to repeat
purchase.
5. Purchase of Product / Service:
This stage is the actual phase when the consumer is purchasing the product / service with appropriate
financial / non-financial transaction.
 6. Post Purchase Evaluation:
This stage is concerned with the behaviour of the consumer after he consumes the product. This post-
purchase reaction may be positive or negative. If consumer is satisfied, repeat purchase may be there
or he may recommend the product to other people. Dissatisfaction leads to anxiety and makes a
person restless. He has a problem before him and again he tries to solve it by going for other
alternative products or services. A marketer help the buyer feel good about the product purchased. In
order to reduce his anxiety about the product, the after-sale services are very important as it develops
loyalty, increases sales and profit.

FACTORS INFLUENCING CONSUMER BUYING DECISIONS

There are many factors affecting consumer behaviour. These all factors jointly shape consumer
behaviour. Due to impact of various factors, consumers react or respond to marketing programme
differently. For the same product, price, promotion, and distribution, their responses differ
significantly. The factors do not affect equally to all the buyers; they have varying effect on their
behaviour. However, some factors are more effective, while others have negligible effect on consumer
behaviour.
1. Marketing Factors
Each element of the market mix – product, pricing, promotion and place has the potential to affect the
buying process at various stages.

 Product: The uniqueness of the product, the physical appearance and packaging can
influence buying decision of a consumer.
 Pricing: Pricing strategy does affect buying behaviour of consumers. Marketers must
consider the price sensitivity of the target customers while fixing prices.
 Promotion: The various elements of promotion such as advertising, publicity, public
relations, personal selling, and sales promotion affect buying behaviour of consumers.
Marketers select the promotion mix after considering the nature of customers.
 Place: The channels of distribution, and the place of distribution affects buying behaviour
of consumers. Marketers tries to select the right channel and distribute the products at the
right place.

2. Personal Factors
The personal factors of a consumer may affect the buying decisions. The personal factors include:

 Age Factor: The age factor greatly influences the buying behaviour. For instance, teenagers
may prefer trendy clothes, whereas, office- executives may prefer formal clothing.
 Gender: The consumer behaviour varies across gender.
 Education: Highly educated persons may spend on books, personal care products, and so on.
But a person with low or no education may spend less on personal grooming products,
general reading books, and so on.
 Income Level: Normally, higher the income level, higher is the level of spending and vice-
versa. But this may not be always the case in developing countries, especially in the rural
areas.
  Status’ in the Society: Persons enjoying higher status in the society do spend a good amount
of money on luxury items such as luxury cars, luxury watches, premium brands of clothing,
jewellers, etc.
 Other Personal Factors: The other personal factors such as personality, lifestyle, family size,
etc., influence consumer behaviour.

3. Psychological Factors
A person’s buying behaviour is influenced by psychological factors such as:

 Learning: It refers to changes in individual behaviour that are caused by information and
experience. For example, when a customer buys a new brand and is satisfied by its use, then
he/she is more likely to buy the same brand the next time. Through learning, people acquire
beliefs and attitudes, which in turn influence the buying behaviour.

 Attitude: It is a tendency to respond in a given manner to a particular situation or object or

idea. Consumers may develop a positive, or negative or neutral attitude towards certain
product or brands, which in turn would affect his/her buying behaviour.

 Motives: A motive is the inner drive that motivates a person to act or behave in a certain
manner. The marketer must identify the buying motives of the target customers and influence
them to act positively towards the marketed products.

 Perception: It is the impression, which one forms about a certain situation or object. A
motivated person is ready to act. But the way or the manner in which he acts is influenced by
his/her perception of the situation.

 Beliefs: A belief is a descriptive thought, which a person holds about certain things. It may be
based on knowledge, opinion, faith, trust and confidence. People may hold certain beliefs of
certain brands/products. Beliefs develop brand images, which in turn can affect buying
behaviour.

4. Situational Factors

Major situational influences include the physical surroundings, social surroundings, time, the nature
of the task, and monetary moods and conditions.

 Physical Surroundings: The physical surroundings at the place of purchase affects buying
behaviour. For instance, when a customer is shopping in a store, the features that affects
buying behaviour would include the location of the store, the decor, the layout of the store, the
noise level, the way merchandise is displayed, and so on.

 Social Surroundings: The social surroundings of a situation involve the other people with the
customer that can influence buying decision at the point of purchase. For instance, a bargain
hunter shopping with an impatient friend may do quick purchases, and may not bargain over
the price, to please the impatient customer.

 Time Factor: Customers may make different decisions based on when they purchase – the
hour of the day, the day of the week, or the season of the year. For instance, a consumer who
 has received a pay cheque on a day may shop more items, than at the end of the month when
he is short of funds.

 Momentary Conditions: The moods and conditions of the customer at the time of purchase
may also affect the buying decision. A customer who is very happy would make a different
buying decision, as compared to when he is not happy.

5. Social Factors

The social factors such as reference groups, family, and social and status affect the buying behaviour:

 Reference Groups: A reference group is a small group of people such as colleagues at work
place, club members, friends circle, neighbours, family members, and so on. Reference
groups influence its members as follows:
- They influence members’ values and attitudes.
- They expose members to new behaviours and lifestyles.
- They create pressure to choose certain products or brands.
 Family: The family is the main reference group that may influence the consumer behaviour.
Nowadays, children are well informed about goods and services through media or friend
circles, and other sources.

 Roles and Status: A person performs certain roles in a particular group such as family, club,
organisation, and so on. For instance, a person may perform the role of a senior executive in a
firm and another person may perform the role of a junior executive. The senior executive may
enjoy higher status in the organisation, as compared to junior executive.

 People may purchase the products that conform to their roles and status, especially in the case
of branded clothes, luxury watches, luxury cars, and so on.

6. Cultural Factors

Culture includes race and religion, tradition, caste, moral values, etc. Culture also include sub-cultures
such sub-caste, religious Sects, language, etc.

 Culture: It influences consumer behaviour to a great extent. Cultural values and elements are
passed from one generation to another through family, educational institutions, religious
bodies, social environment, etc. Cultural diversity influences food habits, clothing, customs
and traditions, etc. For instance, consuming alcohol and meat in certain religious communities
is not restricted, but in certain communities, consumption of alcohol and meat is prohibited.

 Sub-Culture: Each culture consists of smaller sub-cultures that provide specific identity to its
members. Subcultures include sub-caste, religious sects geographic regions as South Indians,
North Indians, and based on languages etc. The behaviour of people belong to various sub-
cultures is different. Therefore, marketers may adopt multicultural marketing approach, i.e.,
designing and marketing goods and services that cater to the tastes and preferences of
consumers belonging to different sub-cultures.
NATURE OF MARKETING

The Nature of Marketing are as follows:

1. Human Activity: Originally, the term marketing is a human activity under which human needs
are satisfied by human efforts. It’s a human action for human satisfaction.

2. Consumer Oriented: A business exist to satisfy human needs, hence business must find out
what the desire of customer (or consumer) and thereby produce goods & services as per the
needs of the customer. Thus, only those goods should be produce that satisfy consumer needs
and at a reasonable profit to the manufacturer (or producer).

3. Art as well as Science: In the technological arena, marketing is the art and science of
choosing target markets and satisfying customers through creating, delivering, and
communicating superior customer value. It is a technique of making the goods available at
right time, right place, into right hands, right quality, in the right form and at right price.

4. Exchange Process: All marketing activities revolve around commercial exchange process.
The exchange process implies transactions between buyer and seller. It also involves
exchange of technology, exchange of information and exchange of ideas.

5. Starts and Ends with Customers: Marketing is consumer oriented and it is crucial to know
what the actual demand of consumer is. This is possible only when required information
related to the goods and services is collected from the customer. Thus, it is the starting of
marketing and the marketing end as soon as those goods and services reach into the safe
hands of the customer.

6. Creation of Utilities: Marketing creates four components of utilities viz. time, place,
possession and form. The form utility refers to the product or service a company offers to
their customers. The place utility refers to the availability of a product or service in a location
i.e. Easier for customers. By time utility, a company can ensure that products and services are
available when customers need them. The possession utility gives customers ownership of a
product or service and enables them to derive benefits in their own business.

7. Goal Oriented: Marketing seeks to achieve benefits for both buyers and sellers by satisfying
human needs. The goal of marketing is to generate profits through the satisfaction of the
customer.

8. Guiding Element of Business: Modern Marketing is the heart of industrial activity that tells
what, when, how to produce. It is capable of guiding and controlling business.

9. System of Interacting Business Activities: Marketing is the system through which a business
enterprise, institution or organization interacts with the customers with the objective to earn
profit, satisfy customers and manage relationship. It is the performance of business activities
that direct the flow of goods and services from producer to consumer or user.

10. Marketing is a Dynamic Process (series of interrelated functions): Marketing is a complex,

continuous and interrelated process. It involves continuous planning, implementation and
control.
SCOPE OF MARKETING

1. Study of Consumer Wants and Needs - Goods are produced to satisfy consumer wants.
Therefore study is done to identify consumer needs and wants. These needs and wants
motivates consumer to purchase.

2. Study of Consumer behaviour - Marketers performs study of consumer behaviour. Analysis of

buyer behaviour helps marketer in market segmentation and targeting.

3. Production planning and development - Product planning and development starts with the
generation of product idea and ends with the product development and commercialisation.
Product planning includes everything from branding and packaging to product line expansion
and contraction.

4. Pricing Policies - Marketer must determine pricing policies for their products. Pricing policies
differs from product to product. It depends on the level of competition, product life cycle,
marketing goals and objectives, etc.

5. Distribution - Study of distribution channel is important in marketing. For maximum sales

and profit goods are required to be distributed to the maximum consumers at minimum cost.

6. Promotion - Promotion includes personal selling, sales promotion, and advertising. Right
promotion mix is crucial in accomplishment of marketing goals.

7. Consumer Satisfaction - The product or service offered must satisfy consumer. Consumer
satisfaction is the major objective of marketing.

8. Marketing Control - Marketing audit is done to control the marketing activities.

PROMOTIONAL STRATEGIES

Promotions refer to the entire set of activities, which communicate the product, brand or service to the
user. The idea is to make people aware, attract and induce to buy the product, in preference over
others. There are several types of promotions. Above the line (ATL) promotions include advertising,
press releases, consumer promotions (schemes, discounts, contests); Below the line (BTL) include
trade discounts, freebies, incentive trips, awards and so on while Through the line promotions digital
marketing as well as combining ATL and BTL.

A promotion strategy is defined by the plan and tactics you implement in your marketing plan, in
order to increase the demand for your product or service. Promotion strategies play a vital role in the
mix of marketing (product, price, placement & promotion), and they revolve around:

 Target audience – who are you selling for and what are their interests
 Budget – how much are you willing to invest
 Plan of action – what strategy are you adopting in order to reach your purpose and make a
profit.
Advertising

Advertising refers to impersonal paid promotions which use mass media to deliver a message. These
include things like newspaper or magazine space ads, TV spots, Internet banners, and outdoor
billboards or posters. The upside of advertising is it's an excellent way to reach a large number of
people. Though it's not targeted, it can be an excellent way to do a branding campaign or boost
awareness. Unfortunately, because advertising is not very targeted the return on investment tends to
be lower. In industries where everyone advertises, the ads may also get "lost in the noise."

Personal Selling

Personal selling is the oldest form of promotion. It takes place generally face to face or over the
telephone, when a company representative speaks with someone in charge of purchasing decisions
(such as a manger, consumer, or company buyer) and persuades them to place an order. The
advantage of personal selling is that the message is always custom-tailored to the prospective
customer. If the consumer doesn't understand or respond to one message, the sales rep can take a
different approach in order to address the customer's needs better. Unfortunately, the in-person nature
of personal selling can also be a major drawback. Personal selling is labour intensive, and many sales
reps have a personality that does not quite resonate with the client. Many people have experienced
salespeople who were overly aggressive, annoying, or repetitive in their pitch, and this can turn off
customers.

Direct Marketing

Direct marketing is a form of advertising where organizations communicate directly to customers

through a variety of media including cell phone text messaging, email, websites, online adverts,
database marketing, fliers, catalog distribution, promotional letters and targeted television, newspaper
and magazine advertisements as well as outdoor advertising. Among practitioners, it is also known as
a direct response.

Sales Promotion

Sales promotions use short-term offers or giveaways such as promotional pens to incentivise a
purchase. The idea is that customers will feel compelled to "act now" to take advantage of the limited
time offer or will be more likely to prefer a brand they've received something useful. However, too
many short-term sales promotions can increase customer price sensitivity or eliminate the response.

Public Relations

Public relations is the art of using non-paid media (such as news) to draw attention to the company.
Sending out press releases announcing news is the best-known form of public relations, but there are
many other methods also. The major benefit of public relations is the effect of a single "success" is
much greater than nearly any other form of promotion. Third party sources like newspapers are seen
as much more authoritative and trustworthy, and far more people read the articles in a newspaper than
look at the ads. However, traditional news is no longer as widely read by the public as it once was, so
traditional PR efforts are also less effective.

Digital promotion

Digital promotion uses social media, phones, and other electronic devices to advertise or sponsor a
product or service. This includes those fancy electronic billboards that are alongside highways and
heavily trafficked areas. All the different platforms and types of devices like desktops, mobile phones,
tablets, etc should be taken into consideration. Digital advertising is any visual ad, written or video,
that you see on the internet. This includes pop ups that appear before you can log onto your daily
crossword puzzle or information about a new drug that comes in your social media feed.

Integrated Marketing Communications

Integrated marketing communication refers to integrating all the promotion strategies to promote a
product or service among target customers. In integrated marketing communication, all aspects of
marketing communication work together for increased sales and maximum cost effectiveness.
Integrated marketing communications is an approach used by organizations to brand and coordinate
their marketing efforts across multiple communication channels. As marketing efforts have shifted
from mass advertising to niche marketing, companies have increasingly used IMC to develop more
cost-effective campaigns that still deliver consumer value. Typically, communication tools for IMC
encompass both traditional and digital media, such as blogs, webinars, search engine optimization,
radio, television, billboards, and magazines.

ADVERTISING STRATEGIES FOR PROMOTING NEW PRODUCT VS EXISTING

PRODUCTS

As products move through the four stages of the product lifecycle different promotional strategies
should be employed at these stages to ensure the healthy success and life of the product.

 Introduction - When a product is new the organizations objective will be to inform the target
audience of its entry. Television, radio, magazine, coupons etc may be used to push the
product through the introduction stage of the lifecycle. Push and Pull Strategies will be used
at this crucial stage.

 Growth - As the product becomes accepted by the target market the organization at this stage
of the lifecycle the organization works on the strategy of further increasing brand awareness
to encourage loyalty. Organization take persuasive tactics to encourage the consumers to
purchase their product over their rivals

 Maturity - At this stage with increased competition the organization take retention tactics to
encourage the consumers to keep purchasing their products /services. Any differential
advantage will be clearly communicated to the target audience to inform of their benefit over
their competitors.
  Decline - As the product reaches the decline stage the organization will use the strategy of
reminding people of the product to slow the inevitable.

New products typically merit large advertising budgets to build awareness and to gain consumer trial.
Existing products usually are supported with lower advertising budgets, measured as a ratio to sales.

ADVERTISING STRUCTURE

Whether you are advertising an event, new product or a service, creating an ad can help you inform,
persuade and even remind current and potential customers about your brand. Advertising ads are
placed in newspapers, magazines and on websites. Regardless of where you place you advertisement,
successful ads contain five major parts.

1. Headline - The headline is a major aspect of an advertising ad. It often appears at the top of an
advertisement or in the middle so that it immediately attracts attention from potential
customers. Headlines contain a few words of text and they should be direct and to the point so
as not to overwhelm readers. Your headline should make a promise to the reader, stating what
they’ll discover if they continue to read the rest of the advertisement. The headline and its
promise should address a concern, problem or interest your consumers have.

2. Sub-headline - A sub-headline appears directly under the headline. The text is typically
smaller and it gives more insight into the product you are selling, while further outlining why
the customer should care enough to keep reading. The sub-headline can be the length of a
sentence.

3. Benefits - Your potential customers want to know how their lives may improve if they use the
product or service you are promoting. For this reason, it is important to turn your product or
service features into benefits. If you are selling a microwave, one feature is fast-cooking
times, so a benefit might be that parents spend less time in the kitchen and families get to eat
faster. You can list your benefits in bullet points, as individual words or even in paragraph
form.

4. Image - While not all ads contain images, many companies use images of their products, or
people using their products, to grab consumer interest. Ensure that the image you use fits the
scale of the advertisement and is clear. If you do not use an image of your product, you can
include an image of your logo.

5. Call-to-action - Get your potential customers to act on your offer by including a call-to-action
in your. The call-to-action typically appears at the end of an advertisement and is used to add
a sense of urgency. It should instruct customers what steps they should take to purchase your
item or sign up with a service through your company. You can ask customers to visit your
website, call to book an appointment or drop by your location.

ADVERTISING BUDGET

A budget is an expression in monetary terms of the forward plan and the proposed activity.
Advertising plan includes, sales targets, product facts, marketing information, competitive situation,
creative platform, copy treatment etc. The advertising budget is the translation of an advertising plan
into monetary form. It states the amount of proposed advertising expenses and informs the
management of the organisation the expected cost of executing the advertising plan.
The advertising budget is a statement of the advertising plan in financial terms. It is the allocation of
available funds to various advertising functions after determining the total funds available for
advertising purposes during a specified period.

The budgetary process involves:

 Preparation:

The total expenditure on advertising is estimated on the basis of the information of markets,
product, pricing, image, message and media. The determination of the total funds is the first
step in budgeting, which is known as budget appropriation. The determination of advertising
appropriation depends on the existing sales, the unit of sales, and the expenditure on
advertising and affordable capacity.

After determining the appropriation, the next step is to specify the expenditure to be incurred
on each function of advertising. The allocation of appropriation to different advertising
activities in made on the basis of the contribution to advertising and the attitude of the
management.

Thus, the total budget is cut into small budgets for each advertising function. Advertising
budgets are prepared for each market segment, time and geographic area.

 Presentation:

The budget prepared by the advertising manager is presented to the marketing manager who
decides the rationale and the contribution of the budget components. The budget is modified
on the basis of the prevailing marketing conditions and management requirements.

The top executive may also fix the budget and budget components. The financial manager is
consulted before this decision is taken. The budget is modified in the light of sales forecast,
sales opportunities and the role of advertising in capturing the market share. The advertising
plan is then formulated for the final budget.

 Budget Execution:

The execution of the budget is done through routine activities. The cost of advertising,
production, purchase of advertising time and space and other functions are considered.
Constant surveillance and periodic checks determine whether the advertising norms are
implemented and budgets properly utilised.

The budgets are prepared in the light of the normal marketing conditions. If the conditions
change, the budgets are changed accordingly. Contingency funds are provided in the
beginning, which are used during times of need.

 Control of Budget:

The advertising budget should not be less than the advertising expenditure. The expenditure is
compared with the provision in the advertising plan. No larger amount should be spent unless
the advertiser is constrained to do so in the light of existing conditions. The planned
expenditure and the actual expenditure should be on parallel lines.
The budgeted expenditure on advertising should be used only for advertising purposes and not
for other purposes. Since sales promotions include several functions other than the advertising
function, the advertising budget should be used only for the advertising purposes and not for
other sales promotion strategies – that is, on personal selling, merchandising, packaging,
public relations, etc.

There should be a separate budget for each sales promotion strategy. When the budget is
exhausted by other functions, the phenomenon is known as budget attrition, which should be
avoided. There are some combined expenditures on sales promotion which may be drawn
from the advertising budget.