COURSE MATERIAL

Program : BCOM INDUSTRY INTEGRATED Semester : III

Course : MARKETING MANAGEMENT Course Code : B19BC3040
Unit. No. : III
Unit Title : DEVELOPMENTS & ISSUES IN MARKETING
Course Presenter: PROF. ABHISHEK DUTTAGUPTA
Course Mentor: PROF. JOHN PRAVIN

MARKETING MIX
The process of marketing or distribution of goods requires particular attention of management
because production has no relevance unless products are sold. Marketing mix is the process
of designing and integrating various elements of marketing in such a way to ensure the
achievement of enterprise objectives. The marketing mix is a key foundation on which most
modern marketing strategies and business activities are based. But what is it? What are its
components? And why is it so heavily relied upon?

The concept of the ‘Marketing Mix’ came about in the 1960s when Neil H. Borden, professor
and academic, elaborated on James Culliton’s concept of the marketing mix. Culliton
described business executives as ‘mixers of ingredients’: the ingredients being different
marketing concepts, aspects, and procedures. However, it’s now widely accepted that Jerome
McCarthy founded the concept. After all, it was McCarthy who offered the marketing mix as
we know it today; in the form of ‘The 4Ps of Marketing’: Product, Place, Price, & Promotion.
The 4Ps then paved the way for two modern academics, Booms and Bitner, who, in 1981,
brought us the extended version of the marketing mix: the ‘7Ps’. The 7Ps comprise
McCarthy’s 4 original elements, and extend to include a further 3 factors: ‘Physical
Evidence’, ‘People’, & ‘Processes’.

The Marketing Mix is as follows:

Product - The Product should fit the task consumers want it for, it should work and it should
be what the consumers are expecting to get.
Place – The product should be available from where your target consumer finds it easiest to
shop. This may be High Street, Mail Order or the more current option via e-commerce or an
online shop.

Price – The Product should always be seen as representing good value for money. This does
not necessarily mean it should be the cheapest available; one of the main tenets of the
marketing concept is that customers are usually happy to pay a little more for something that
works really well for them.

Promotion – Advertising, PR, Sales Promotion, Personal Selling and, in more recent times,
Social Media are all key communication tools for an organisation. These tools should be used
to put across the organisation’s message to the correct audiences in the manner they would
most like to hear, whether it be informative or appealing to their emotions.

People – All companies are reliant on the people who run them from front line Sales staff to
the Managing Director. Having the right people is essential because they are as much a part
of your business offering as the products/services you are offering.

Processes –The delivery of your service is usually done with the customer present so how the
service is delivered is once again part of what the consumer is paying for.

Physical Evidence – Almost all services include some physical elements even if the bulk of
what the consumer is paying for is intangible. For example a hair salon would provide their
client with a completed hairdo and an insurance company would give their customers some
form of printed material. Even if the material is not physically printed (in the case of PDFs)
they are still receiving a “physical product” by this definition.

Though in place since the 1980’s the 7 Ps are still widely taught due to their fundamental
logic being sound in the marketing environment and marketers abilities to adapt the
Marketing Mix to include changes in communications such as social media, updates in the
places which you can sell a product/service or customers expectations in a constantly
changing commercial environment.
In some spheres of thinking, there are 8 Ps in the Marketing Mix. The final P is Productivity
and Quality. This came from the old Services Marketing Mix and is folded in to the Extended
Marketing Mix by some marketers so what does it mean?
Productivity & Quality - This P asks, “is what you’re offering your customer a good deal?”
This is less about you as a business improving your own productivity for cost management,
and more about how your company passes this onto its customers.

FOUR A’s of MARKETING

Despite its popularity and longevity, the 4P’s model has been criticized for a variety of
reasons. One frequent criticism is that the 4P’s focus on the selling organization rather than
on the customer. This description is factually accurate, but that doesn’t mean the 4P’s model
is flawed. It simply means that the 4P’s were never designed to describe what is needed to be
successful from the customer’s perspective.

To understand what is required to achieve success with customers, marketers need other tools
to complement the 4P’s model. One of these important complementary tools is known as the
4A model of marketing. The 4A model was developed by Jagdish Sheth, a marketing
professor at Emory University, and Dr. Rajendra Sisodia, a marketing professor at Bentley
University.

Components of the 4A Model

Acceptability: The Acceptability component of the 4A model says that a product or service
offering must meet or exceed the needs and expectations of customers in a given target
market. Acceptability has two dimensions – functional acceptability and psychological
acceptability. Functional acceptability refers to the “objective” performance attributes of a
product or service. Does the product have the features that customers in the target market
expect? Is is reliable? Does it perform as expected? Psychological acceptability refers to the
more “subjective” attributes of a product or service. We often see psychological acceptability
associated with so-called “luxury” brands. So for example, a mid-priced automobile may be
as objectively functional as a vehicle of comparable size made by Mercedes or BMW. But
those brands are more psychologically acceptable to a certain segment of buyers.

Affordability: Affordability refers to whether customers in the target market are economically
able and psychologically willing to pay a product’s price. As this definition indicates,
affordability also has two dimensions – economic affordability and psychological
affordability. Economic affordability refers to whether the potential customers in the target
market have sufficient economic resources to pay a product’s price. Psychological
affordability refers to a customer’s willingness to pay, which is primarily determined by a
customer’s perception of the value he or she will obtain from a product or service relative to
the cost of the product or service.

Accessibility: The third component of the 4A model is Accessibility, which describes

whether customers can easily acquire and use a product or service. The two dimensions of
Accessibility are availability and convenience. Availability measures whether a selling
company has enough of a product to match customer demand. Convenience refers to how
easy it is for potential customers to acquire a product or service. Robert Woodruff, the former
chairman of Coca-Cola, captured the essence of Accessibility when he said in 1923 that
Coca-Cola should always be “within an arm’s length of desire.”

Awareness: The final component of the 4A model is Awareness, which refers to whether
customers are adequately informed about a product’s attributes and benefits in a way that
persuades potential buyers to give the product a try and reminds existing users why they
should continue to purchase a product. The two dimensions of Awareness are product
knowledge and brand awareness. The basic idea here is that most potential customers will not
buy unless they have a positive perception of the brand and adequate information regarding
the specific product or service.

Like the 4P’s, the 4A model is not a comprehensive model of the marketing function. There
are obviously many specific marketing issues that neither the 4P’s nor the 4A’s address.
However, the combination of the 4P’s and the 4A’s provides a powerful foundation for
shaping marketing strategy.

CHALLENGES IN MARKETING FIELD

Problem 1: Inexperience or Understaffed -

As the marketing field grows and becomes more complex, there is more to know, more to do,
and more to track. While you may start out with what looks like the perfect marketing team,
holes can begin to appear where there is a lack of knowledge or capability. This results in
sub-par marketing strategies and poor performance. Thoroughly consider the possibility that
your team may need to see some changes before valuable marketing results can start to
appear.
Problem 2: New Marketing Trends -
As new trends appear on the market, it can be difficult for marketing managers to keep track
of the changes and implement them in their own strategies. While embracing these changes
would be to their benefit, keeping up with all things new regarding social media, web design,
user interface, and much more can be quite overwhelming.
Problem 3: Interpreting marketing report data -
Some marketing managers lack the knowledge necessary to interpret marketing report data.
Without this information, they are not able to know which marketing strategies to pursue.
This can decrease their ROI as they continue to utilize too many strategies, not knowing
which one is performing best, or can drastically damage their campaign if they are not using
the correct strategies to their full potential.
Problem 4: Lack of Communication –
While there is a swirl of things going on (blogs are posted, websites are updated and the
marketing strategy progresses) it is important that all results and happenings are
communicated to the rest of the team. Marketing managers that do not have a working system
for collecting, organizing, interpreting, and communicating their campaign data to the rest of
the team are ill-equipped to analyze and improve their marketing strategy. In addition to this,
poorly collected data or a lack of data can cause poor and uncomfortable communication
between marketing managers and their superiors.
Problem 5: Closing the Sales Loop –
Putting in the effort without seeing results can be one of the most discouraging things a
marketing team will experience. You could have laid out a strategy that seems to be working
well, and your traffic and the lead count has gone up, but your customer count will not budge.
Here are two possible areas where things are slipping through.

FUNCTIONS OF MARKETING MANAGEMENT

Marketing Management focuses upon the psychological and physical factors of Marketing.
The Marketing managers are responsible for influencing the level, timing, and composition of
customer demand accepted definition of the term. While the psychological factors focus upon
discovering the needs and wants of the consumer and the changing patterns of buying
behavior, habit etc. the physical factors focus upon fulfilling those needs and demands buy
better product design, channel of distribution and other functions. The functions are as
follows:

Marketing Objectives:
Marketing management determines the marketing objectives. The marketing objectives may
be short term or long term and need a clear approach. They have to be in coherence with the
aims and objectives of the organization.
Planning:
After objectively determining the marketing Objectives, the important function of the
marketing Management is to plan how to achieve those objectives. This includes sales
forecast, marketing programmes formulation, marketing strategies.
Organization:
A plan once formulated needs implementation. Organizing functions of marketing
management involves the collection and coordination of required means to implement a plan
and to achieved pre determined objectives. The organization involves structure of marketing
organization, duties, responsibilities and powers of various members of the marketing
organization.
Coordination:
Coordination refers to harmonious adjustment of the activities of the marketing organization.
It involves coordination among various activities such as sales forecasting, product planning,
product development, transportation, warehousing etc.
Direction:
Direction in marketing management refers to development of new markets, leadership of
employees, motivation, inspiration, guiding and supervision of the employees.
Control:
Control refers to the effectiveness with which a marketing plan is implemented. It involves
the determination of standards, evaluation of actual performance, adoption of corrective
measures.
Staffing:
Employment of right and able employees is very crucial to success of a market plan. The
market manager coordinates with the Human Resource Manager of an organization to be able
to hire the staff with desired capability.
Analysis and Evaluation:
The marketing management involves the analysis and evaluation of the productivity and
performance of individual employees.

Marketing Management has the responsibility to perform many functions in the field of
marketing such as planning, organizing, directing, motivating, coordinating and controlling.
All these function aim to achieve the marketing goals.

NATIONAL MARKETING ENVIRONMENT

The marketing environment of a company is composed of the people, institutions, and forces
outside marketing that influencer marketing management’s ability to develop and maintain a
successful relationship with its target customers. Constantly watching and adapting to the
changing marketing environment is important because the marketing environment offers both
opportunities and threats.
For example, an alliance with the supplier and distributor may help an organization to get a
competitive edge over its rivals. On the other hand entry of many competitors poses a threat
to the organization as some of their customers may shift to a new seller. By conducting a
regular and systematic environmental analysis, the company can revise and adapt marketing
strategies to cope with the new challenges and opportunities in the marketplace. The
marketing environment is the combination of the microenvironment and macro environment.

According to Philip Kotler, “A company’s marketing environment consists of the internal

factors & forces, which affect the company’s ability to develop & maintain successful
transactions & relationships with the company’s target customers”.

According to Pride &Ferrell, “The marketing environment consists of external forces that
directly or indirectly influence an organization’s acquisition of inputs and generation of
outputs”.

To sum up, the marketing environment is a set of diverse, dynamic and uncontrollable forces
that impinge on an organization’s marketing operations and opportunities.

MICRO - ECONOMIC ENVIRONMENT

The micro-environment refers to the forces that are close to the company and affect its ability
to serve its customers. It influences the organization directly. It includes the company itself,
its suppliers, marketing intermediaries, customer markets, competitors, and the public.

The components of the micro environment of marketing are;

Internal Organizational Environment: The first is the organization’s internal environment—

its several departments and management levels as it affects marketing management’s decision
making.

Marketing Channel: The second component includes the marketing channel firms that
cooperate to create value: the suppliers and marketing intermediaries (middlemen, physical
distribution firms, marketing-service agencies, financial intermediaries).
Types of Market: The third component consists of the five types of markets in which the
organization can sell: the consumer, producer, reseller, government, and international
markets.

Competition: The fourth component consists of the competitors facing the organization.

Organizational Objectives: The fifth component consists of all the public’s that have an
actual or potential interest in or impact on the organization’s ability to achieve its objectives:
financial, media, government, citizen action, and local, general, and internal publics.

MACRO - ECONOMIC ENVIRONMENT

Macro environment factors which consist of external forces. These external factors influence
the company’s marketing strategy is a great length. The external environment factors are un-
controllable, and the company finds it hard to tackle the external factors.

Demographic Environment:
Demography is the study of human populations in terms of size, destiny, location, age,
gender, race, occupation, and other statistics. This is the very important factors that help the
marketer to divide the population into different market segments and target markets.
Demographic data also helps in preparing geographical marketing plans, age, and gender-
wise plans.

Economic Environment:
Economic Environment is those macro factors that affect consumer buying power and
spending patterns. It includes the level of income, policies, and nature of an economy,
economic resources, trade cycles, distribution of income and wealth. When the income of a
family or country (per capitate income) changes it also changes the buying behavior and
spending pattern of the family or country.

Natural Environment:
Natural environment involves the natural resources that are needed as inputs by marketers or
they are affected by marketing activities. So marketers should be aware of several trends in
the natural environment.

Technological Environment:
Technological forces are perhaps the most dramatic forces which are changing rapidly. These
macro-environmental forces create a new product, new markets and marketing opportunities
for marketers.

Political Environment:
It includes government actions, government legislation, public policies, and acts which affect
the operations of a company or business. These forces may affect an organization on a local,
regional, national or international level. So marketers and business management pay close
attention to the political forces to judge how government actions which will affect their
company.

Cultural Environment:
Cultural factors in heritage, living styles, religion, etc. also affect a company’s marketing
strategy. Social responsibility also becomes part of marketing and slowly emerged in
marketing literature. Socially responsible marketing is that business firms should take the
lead in eliminating socially harmful products.

GLOBAL MARKETING ENVIRONMENT

International Marketing environment refers to the controllable and uncontrollable forces that
influence upon the marketing decision making of a firm globally. International Marketing
environment is comprised of those components which shape policies, programmes and
strategies of an international marketer. To serve the international markets effectively, a firm
is in need of understanding international marketing environment properly. The needs,
preferences and expectations of buyers in different overseas markets are not necessarily
similar. The environmental differences influence the international marketing decisions of a
firm.
The international marketing environment surrounds and impacts upon the organisation.
Marketers aim to deliver value to satisfied customers, so they need to assess and evaluate the
internal environment and the external environment which is subdivided into micro and
macro.

1. Internal Environment:
Internal environment refers to the firm related factors. The firm related factors are referred to
as controllable variables because the firm has control over them and can (relatively easily)
change them as may be thought appropriate as its personnel, physical facilities, organisation
and functional means such as marketing mix, to suit the environment. The internal
environment of the company includes all departments, such as management, finance, research
and development, purchasing, operations and accounting. Each of these departments has an
impact on international marketing decisions. For example, research and development have
input as to the features a product can perform and accounting approves the financial side of
marketing plans.
The ability of a firm to do international business depends on a number of internal factors like
the mission and objectives of the firm; the organisational and management structure and
nature; internal relationship between employees, shareholders and Board of Directors, etc.;
company image and brand equity; physical assets and facilities; R&D and technological
capabilities; personnel factors like skill, quality, morale, commitment, attitude, etc.;
marketing factors like the organisation for marketing, quality of the marketing men and
distribution network; and financial factors like financial policies, financial position and
capital structure.

2. External Environment:
External environment refers to the factors outside the firm. These factors are uncontrollable
or we can say that these are beyond the control of a company. The external environmental
factors such as the economic factors, socio-cultural factors, government and legal factors,
demographic factors, geographical factors etc. are generally regarded as uncontrollable
factors.

The external environment may further be divided in two parts:

a. Micro Environment:
The micro environment is made from individuals and organisations that are close to the company
and directly impact the customer experience. They can be defined as the actors in the firm’s
immediate environment which directly influence the firm’s decisions and operations. These include,
suppliers, various market intermediaries and service organisations, competitors, customers, and
publics. The micro environment is relatively controllable since the actions of the business may
influence such stakeholders.

i. Suppliers:

Marketing managers must watch supply availability and other trends dealing with suppliers to
ensure that product will be delivered to customers in the time frame required in order to maintain a
strong customer relationship.

ii. Marketing Intermediaries:

Marketing intermediaries refers to resellers, physical distribution firms, marketing services agencies,
and financial intermediaries. These are the people that help the company promote, sell, and
distribute its products to final buyers. Resellers are those that hold and sell the company’s product.
They match the distribution to the customers and include places such as Wal-Mart, Target, and Best
Buy.

Physical distribution firms are places such as warehouses that store and transport the company’s
product from its origin to its destination. Marketing services agencies are companies that offer
services such as conducting marketing research, advertising, and consulting. Financial intermediaries
are institutions such as banks, credit companies and insurance companies.

iii. Customers:

Another aspect of microenvironment is the customers. There are different types of customer
markets including consumer markets, business markets, government markets, international markets,
and reseller markets. The consumer market is made up of individuals who buy goods and services for
their own personal use or use in their household. Business markets include those that buy goods and
services for use in producing their own products to sell.

This is different from the reseller market which includes businesses that purchase goods to resell as
is for a profit. These are the same companies mentioned as market intermediaries. The government
market consists of government agencies that buy goods to produce public services or transfer goods
to others who need them. International markets include buyers in other countries and includes
customers from the previous categories.

iv. Competitors:

Competitors are also a factor in the micro environment and include companies with similar offerings
for goods and services. To remain competitive a company must consider who their biggest
competitors are while considering its own size and position in the industry. The company should
develop a strategic advantage over their competitors.

v. Publics:
The final aspect of the microenvironment is publics, which is any group that has an interest in or
impact on the organisation’s ability to meet its goals. For example, financial publics can hinder a
company’s ability to obtain funds affecting the level of credit a company has. Media publics include
newspapers and magazines that can publish articles of interest regarding the company and editorials
that may influence customers’ opinions.

Government publics can affect the company by passing legislation and laws that put restrictions on
the company’s actions. Citizen- action publics include environmental groups and minority groups and
can question the actions of a company and put them in the public spotlight. Local publics are
neighborhood and community organisations and will also question a company’s impact on the local
area and the level of responsibility of their actions.

The general public can greatly affect the company as any change in their attitude, whether positive
or negative, can cause sales to go up or down because the general public is often the company’s
customer base and finally those who are employed within the company and deal with the
organisation and construction of the company’s product.

b. Macro Environment.
The macro environment is less controllable. The macro environment consists of much larger
all-encompassing influences (which impact the micro environment) from the broader global
society. The macro environment includes culture, political issues, technology, the natural
environment, economic issues and demographic factors amongst others. A number of factors
constitute the international environment: social, cultural, political, legal, competitive,
economic, and technology. Each should be evaluated before a company makes a decision to
go international.

i. Social/Cultural Environment:
The social/cultural environment consists of the influence of religious, family, educational,
and social systems in the marketing system. Marketers who intend to market their products
overseas may be very sensitive to foreign cultures. While the differences between home
country and those of foreign nations may seem small, marketers who ignore these differences
risk failure in implementing marketing programmes. Failure to consider cultural differences
is one of the primary reasons for marketing failures overseas.
This task is not as easy as it sounds as various features of a culture can create an illusion of
similarity. Even a common language does not guarantee similarity of interpretation. For
example, in the US customers purchase “cans” of various grocery products, but the Britishers
purchase “tins”. A number of cultural differences can cause marketers problems in attempting
to market their products overseas.
These include:
(a) Language:
The importance of language differences cannot be overemphasised, as there are almost 3,000
languages in the world. Language differences cause many problems for marketers in
designing advertising campaigns and product labels. Language problems become even more
serious once the people of a country speak several languages. For example, in Canada, labels
must be in both English and French. In India, there are over 200 different dialects, and a
similar situation exists in China.
(b) Colours:
Colours also have different meanings in different cultures. For example, in Egypt, the
country’s national colour of green is considered unacceptable for packaging, because
religious leaders once wore it. In Japan, black and white are colours of mourning and should
not be used on a product’s package. Similarly, purple is unacceptable in Hispanic nations
because it is associated with death.
(c) Values:
An individual’s values arise from his/her moral or religious beliefs and are learned through
experiences. For example, in America people place a very high value on material well-being,
and are much more likely to purchase status symbols than people in India.
Similarly, in India, the Hindu religion forbids the consumption of beef, and fast-food
restaurants such as McDonald’s and Burger King would encounter tremendous difficulties
without product modification. Americans spend large amounts of money on soap, deodorant,
and mouthwash because of the value placed on personal cleanliness. In Italy, salespeople call
on women only if their husbands are at home.
(d) Aesthetics:
The term aesthetics is used to refer to the concepts of beauty and good taste. The phrase,
“Beauty is in the eye of the beholder” is a very appropriate description for the differences in
aesthetics that exist between cultures. For example, Americans believe that suntans are
attractive, youthful, and healthy. However, the Japanese do not.
(e) Time:
Americans seem to be fanatical about time when compared to other cultures. Punctuality and
deadlines are routine business practices in the US. However, salespeople who set definite
appointments for sales calls in the Middle East and Latin America will have a lot of time on
their hands, as business people from both of these cultures are far less bound by time
constraints. To many of these cultures, setting a deadline such as “I have to know next week”
is considered pushy and rude.
(f) Business Norms:
The norms of conducting business also vary from one country to the next.
Here are several examples of foreign business behaviour that differ from Indian business
behaviour:
(1) In France, wholesalers do not like to promote products. They are mainly interested in
supplying retailers with the products they need.
(2) In Russia, plans of any kind must be approved by a seemingly endless string of
committees. As a result, business negotiations may take years.
(3) In Japan, businesspeople have mastered the tactic of silence in negotiations.
(g) Religious Beliefs:
A person’s religious beliefs can affect shopping patterns and products purchased in addition
to his/her values. In the United States and other Christian nations, Christmas time is a major
sales period. But for other religions, religious holidays do not serve as popular times for
purchasing products. Women do not participate in household buying decisions in countries in
which religion serves as opposition to women’s rights movements.
Every culture has a social structure, but some seem less widely defined than others. That is, it
is more difficult to move upward in a social structure that is rigid. For example, in the US, the
two-wage earner family has led to the development of a more affluent set of consumers. But
in other cultures, it is considered unacceptable for women to work outside the home.

ii. Political Environment:

The political environment abroad is quite different from that of India. Most nations desire to
become self-reliant and to raise their status in the eyes of the rest of the world. This is the
essence of nationalism. The nationalistic spirit that exists in many nations has led them to
engage in practices that have been very damaging to other countries’ marketing
organisations.
(a) Political Stability:
Business activity tends to grow and thrive when a nation is politically stable. When a nation
is politically unstable, multinational firms can still conduct business profitably. Their
strategies will be affected however. Most firms probably prefer to engage in the export
business rather than invest considerable sums of money in investments in foreign
subsidiaries. Inventories will be low and currency will be converted rapidly. The result is that
consumers in the foreign nation pay high prices, get less satisfactory products, and have
fewer jobs.
(b) Monetary Circumstances:
The exchange rate of a particular nation’s currency represents the value of that currency in
relation to that of another country. Governments set some exchange rates independently of
the forces of supply and demand. The forces of supply and demand set others. If a country’s
exchange rate is low compared to other countries, that country’s consumers must pay higher
prices on imported goods. While the concept of exchange rates appears relatively simple,
these rates fluctuate widely and often, thus creating high risks for exporters and importers.
(c) Trading Blocs and Agreements:
A trade bloc is a type of intergovernmental agreement, often part of a regional
intergovernmental organisation, where regional barriers to trade, (tariffs and non-tariff
barriers) are reduced or eliminated among the participating states. Regional trading blocs
represent a group of nations that join together and formally agree to reduce trade barriers
among themselves. Trace blocs can be stand-alone agreements between several states such as
the North American Free Trade Agreement (NAFTA) or part of a regional organisation such
as the European Union (EU). Depending on the level of economic integration, trade blocs can
fall into different categories, such as, preferential trading areas, free trade areas, customs
unions, common markets and economic and monetary unions. Trade agreements regulate
international trade between two or more nations. An agreement may cover all imports and
exports, certain categories of goods, or a single category. The most important general trade
agreement is called, simply enough, the General Agreement on Tariffs and Trade (GATT).
(d) Tariff and Non-Tariff Barriers:
The most common form of restriction of trade is the tariff, a tax placed on imported goods.
Protective tariffs are established in order to protect domestic manufacturers against
competitors by raising the prices of imported goods. The other form of restriction is non-
tariff. Countries impose non-tariff barriers to restrict the import of goods indirectly from
certain countries. Non-tariff barriers include quota system, restriction on foreign exchange,
state trading, etc.
(e) Expropriation:
All multinational firms face the risk of expropriation. That is, the foreign government takes
ownership of plants, sometimes without compensating the owners. However, in many
expropriations there has been payment, and it is often equitable. Many of these facilities end
up as private rather than government organisations. Because of the risk of expropriation,
multinational firms are at the mercy of foreign governments, which are sometimes unstable,
and which can change the laws they enforce at any point in time to meet their needs.

iii. Legal Environment:

Businesses are affected by legal environments of countries in many ways. Legal
environments are not just based on different laws and regulations concerning businesses,
these are also defined by the factors like rule of law, access to legal systems by foreigners,
litigations systems etc. Variations in legal environments, rule of law, laws, and legal systems
affect foreign business firms in a number or areas.
(a) Laws concerning employment and labour affect managing of workforce in international
markets.
(b) Different laws in foreign countries regulate financing of operations by foreigners. In some
countries foreign firms are restricted access to local deposits/funds.
(c) Various countries around the world have different laws concerning marketing of products,
especially food products, pharmaceuticals, hazardous materials and strategic products to a
nation.
(d) Countries also control and regulate developing and utilising of technologies through
various laws and regulations.
(e) Many countries also have different laws and regulations that affect ownership of
businesses by foreigners.
(f) Countries also regulate /restrict remittances to foreign countries and repatriation of profits.
(g) Some countries regulate closing of operations and in some countries businesses are not
allowed to close shop especially when they have sold products that have guarantees and
warranties from the foreign firms.
(h) Various countries around the world have implemented different trade and investment
regulations.
(i) Countries also have their own taxation requirements, systems and laws.
(j) Countries also differ on the accounting reporting requirements from various categories of
firms.
(k) Countries around the world have also actively implemented environmental regulations
that affect businesses.

iv. Technological Environment:

Technological know-how impacts all spheres of an international marketer’s operations
including production, information system, marketing etc. The international marketers must
understand technological development and its impact on its total operations. The marketing
intelligence system may help the international firm to know technological orientations of
other enterprises and to update its own technologies to remain competitive. Research and
Development (R&D) has a vital role to play in increasing technological ability of a firm.
New technologies create new markets and opportunities. However, every new technology
replaces an old technology. Xerography hurt carbon-paper industry, computer hurt typewriter
industry, and examples are so on. Any international marketer, when ignored or forgot new
technologies, their business has declined. Thus, the marketer should watch the technological
environment closely. Companies that do not keep up with technological changes, soon find
their products outdated.

v. Economic Environment:
The international marketer tries to understand economic environmental variables of the
global markets for identifying the right marketing opportunities for the enterprise.
The economic situation varies from country to country. There are variations in the levels of
income and living standards, interpersonal distribution of income, economic organisation,
and occupational structure and so on. These factors affect market conditions. The level of
development in a country and the nature of its economy will indicate the type of products that
may be marketed in it and the marketing strategy that may be employed in it.

In high income countries there is a good market for a large variety of consumer goods. But in
low-income countries where a large segment does not have sufficient income even for their
basic necessities, the situation is quite different. A nation’s economic situation represents its
current and potential capacity to produce goods and services. The key to understanding
market opportunities lies in the evaluation of the stage of a nation’s economic growth.
A way of classifying the economic growth of countries is to divide them into three groups:
(a) Industrialised,
(b) Developing, and
(c) Less-developed nations.

The industrialised nations are generally considered to be the United States, Japan, Canada,
Russia, Australia, and most of Western Europe. The economies of these nations are
characterised by private enterprise and a consumer orientation. They have high literacy,
modern technology, and higher per capita incomes. Developing nations are those that are
making the transition from economies based on agricultural and raw materials production to
industrial economies. Many Latin American nations fit into this category and they exhibit
rising levels of education, technology, and per capita incomes. Finally, there are many less
developed nations in today’s world. These nations have low standards of living, literacy rates
are low, and technology is very limited.

vi. Competitive Environment:

To plan effectively international marketing strategies, the international marketer should be
well-informed about the competitive situation in the international markets. Entering an
international market is similar to doing so in a domestic market, in that a firm seeks to gain a
differential advantage by investing resources in that market. Often local firms will adopt
imitation strategies, sometimes successfully. When they are successful, their own nation’s
economy receives a good boost. When they are not successful, the multinational firm often
buys them out. Following are the ways an international marketer can handle competition:
(i) Proper knowledge about the competitors
(ii) Knowledge of competitors’ objectives
(iii) Knowledge of competitors’ strategies
(iv) Knowledge of competitors’ reaction patterns
(v) Knowledge of competitors’ strengths and weakness.
SOCIAL MEDIA MARKETING
Business in today’s day and age is dominated by customers and their demands. People prefer
to see referrals, reviews over Google search results, or a website before purchasing a product.
To stand by the flow, we need to learn what people say about us. You need to actively
participate in relevant communities to interact and influence masses. You need to engage
with social media to manage your online reputation. Social media marketing is a must to
target a wider customer base and expand your business. Social Media Marketing is the
activity of driving website traffic through social media sites.

Social Media is a platform that lets us participate in social networking. We can share our
posts on various social media platforms to improve business visibility. Today it is the best
source for news updates, marketing, education, and entertainment. Social media marketing
first started with publishing. Businesses were sharing their content on social media to
generate traffic to their websites and, hopefully, sales. But social media has matured far
beyond being just a place to broadcast content.

The most widely used Social Media Networks are:

Facebook
Users: 1.73 billion daily active users worldwide
Audience: Generation X and millennials
Industry impact: B2C
Best for: Brand awareness; advertising
Twitter
Users: 126 million daily active users worldwide
Audience: Primarily millennials
Industry impact: B2B and B2C
Best for: Public relations; customer service
Instagram
Users: 1 billion monthly active users
Audience: Primarily millennials
Industry impact: B2C
Best for: Natural-looking media, behind-the-scenes, and user-generated content;
advertising
LinkedIn
Users: 675 million monthly active users worldwide
Audience: Baby boomers, Generation X, and millennials
Industry impact: B2B
Best for: B2B relationships, business development, and employment marketing
YouTube:
Users: Over 2 billion logged-in monthly users worldwide
Audience: Millennials, closely followed by Generation Z
Industry impact: B2C
Best for: Brand awareness; entertainment, and how-to videos
Snapchat:
Users: 229 million daily active users worldwide
Audience: Primarily Generation Z
Industry impact: B2C
Best for: Brand awareness; advertising
Pinterest:
Users: 367 million monthly active users worldwide
Audience: Primarily older millennials and younger baby boomers
Industry impact: B2C
Best for: Visual advertising; inspiration

Nowadays, businesses use social media in a myriad of different ways. For example, a
business that is concerned about what people are saying about its brand would monitor social
media conversations and response to relevant mentions (social media listening and
engagement). A business that wants to understand how it’s performing on social media would
analyze its reach, engagement, and sales on social media with an analytics tool (social media
analytics). A business that wants to reach a specific set of audience at scale would run highly-
targeted social media ads (social media advertising).

NEED OF SOCIAL MEDIA MARKETING

1. Increase Brand Awareness

In 2018, there were over 3.2 billion people on social media globally. Due to the sheer amount
of people on social media, you can see why ensuring your business is sharing content related
to your products as well as details about your company via a platform or two has the potential
to help you improve brand awareness.

2. Generate Leads and Boost Conversions

Promoting and sharing your products on social media is a simple way to improve lead
generation, boost conversions, and increase sales because you’re advertising to people who
have opted to engage with you by following your account.

3. Foster Relationships With Customers

By connecting and engaging with your social media followers, you’ll be able to build lasting
relationships between them and your business. You can do this by interacting with them on
your posts, responding to their questions and comments, and providing them with any help
they may need.

4. Learn From Competitors

Social media is a great way to keep tabs on your competitors — whether that’s in reference to
their social media tactics, the products they’re promoting, the campaigns they’re
implementing, or their level of interaction with followers.

PROMOTIONAL STRATEGIES
Promotion is a type of communication between the buyer and the seller. The seller tries to
persuade the buyer to purchase their goods or services through promotions. It helps in making
the people aware of a product, service or a company. It also helps to improve the public
image of a company. This method of marketing may also create interest in the minds of
buyers and can also generate loyal customers. It is one of the basic elements of the market
mix, which includes the four P’s: price, product, promotion, and place. It is also one of the
elements in the promotional mix or promotional mix or promotional plan. These are personal
selling, advertising, sales promotion, direct marketing publicity and may also include event
marketing, exhibitions, and trade shows.
Types of Promotional Strategies:

Advertising
Advertising means to advertise a product, service or a company with the help of television,
radio or social media. It helps in spreading awareness about the company, product or service.
Advertising is communicated through various mass media, including traditional media such
as newspapers, magazines, television, radio, outdoor advertising or direct mail; and new
media such as search results, blogs, social media, websites or text messages.

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 promotion uses both media and non-media marketing communications for a pre-
determined, limited time to increase consumer demand, stimulate market demand or improve
product availability.

Personal Selling
The sale of a product depends on the selling of a product. Personal Selling is a method where
companies send their agents to the consumer to sell the products personally. Here, the
feedback is immediate and they also build a trust with the customer which is very important.

Public Relation
Public relation or PR is the practice of managing the spread of information between an
individual or an organization (such as a business, government agency, or a nonprofit
organization) and the public. A successful PR campaign can be really beneficial to the brand
of the organization.
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 TYPES
Product Advertising: Most advertising is product advertising, designed to promote the sale or
reputation of a particular product or brand. This is true whether the advertising is done by a
manufacturer, a middleman, or a dealer, and whether the advertising concerns the product itself or
some of its features, such as service, price, or the quality directly associated with it. The objective of
product advertising is to promote particular products or services that the organization sell. The
marketer may use such promotion to generate exposure attention, comprehension, attitude change or
action for an offering.
Institutional Advertising: Institutional advertising is also called corporate advertising. This type of
advertising is done by institutions to build-up an image of itself in the public mind. It is a public
relations-relations-approach advertising. This type of advertisement is sometimes aimed at general
audience to explain a company or institution and to suggest its positive attributes. There May Be
Various Goals For Doing Institutional Advertising: i. Image building ii. Build confidence and iii.
Advocacy.
Primary Demand Advertising: By primary demand we mean the demand of a class of product or
service and not the demand for a particular brand. Primary demand is the demand for the whole
product category. The main purpose of primary demand advertising is to stimulate the overall demand
of the whole product category. It is most useful when a new type of product is introduced in a market
or when a product is in the introductory stages in a given market. Such type of advertising is done to
inculcate the habit for the product among people in general and to get a favour for it so that a
permanent demand can be created in the near future.
Selective Demand Advertising: Relatively few completely new products appear on the market, thus
most new product introductions today are accompanied by selective demand advertising, which
promotes a specific manufacturer’s brand. Most advertising for various products and services is
concerned with stimulating selective demand and emphasizes reasons for buying a particular brand.
Advertisers generally assume that there is a favourable level of primary demand for a product class
and focus attention on increasing their market share.
Comparative Advertising: This is a highly controversial trend in competitive markets that is recently
noticed. Such types of advertising stress on comparative features of two or more specific brands in
terms of product/service attributes. This method is adopted in the maturity stage when similar
products appearing the market fast constitute a stiff competition. Comparative advertising delivers
information not previously available to consumers”. When comparative advertising appears it reveals
the intensity of competition in the market.
Shortage Advertising: When shortage in the supply of products occurs, advertising often disappears
into the background. A concrete example is found in the case of petroleum products that since the oil
crisis in 1974, virtually advertising for these products ceased. But the intelligent marketers have found
that advertising is still a viable marketing tool during times of shortage. This is what is termed as
shortage advertising. In such kinds of advertising new promotional objective may be incorporated
such as:
(a) Educating the user of more efficient means of utilising the product, thus reducing the demand;
(b) To reduce customer pressure on the sales force;
(c) Improving goodwill; and
(d) Making appeal to save resources.
Co-Operative Advertising: When manufacturers, wholesalers and/or retailers jointly sponsor and
share the expenditure on advertising, it takes the form of co-operative advertising. Such advertising
would carry the names of all the parties involved. From the point of view of the customers this is
beneficial as they could get the articles directly from the authorised outlets. For example, the
manufacturers of cars undertake this type of advertising.
Commercial Advertising: It is also termed as business advertising. As the name suggests such
advertising is solely meant for effecting increase in sales. Usually the following forms of commercial
advertising are recognised:
(a) Industrial advertising —this is exclusively used for selling industrial products.
(b) Trade advertising —advertising relating to a trade.
(c) Professional advertising —undertaken by professional people such as doctors, accountants, etc.
(d) Farm advertising —exclusively used for selling farm products such as fertilisers, insecticides,
farm implements, etc.
Non-Commercial Advertising: These are usually published by charitable institutions preferably to
solicit general and financial help (e.g., collection of donations or sale of tickets.)
Direct Action Advertising: Advertising that stresses and persuades immediate buying of the product is
known as direct action advertising. Direct mail advertising is capable of achieving immediate action
to a large extent.
ADVERTISING EFFECTIVENESS
Advertising effectiveness pertains to how well a company's advertising accomplishes the
intended. Small companies use many different statistics or metrics to measure their
advertising effectiveness. These measurements can be used for all types of advertising,
including television, radio, direct mail, Internet and even billboard advertising. A company's
advertising effectiveness usually increases over time with many messages or exposures. But
certain advertising objectives can be realized almost immediately. The work is not complete
if the effectiveness of advertise is not measured. This is the only way to know how the
advertisement is performing, is it reaching the targets and is the goal achieved. It is not at all
possible to measure advertisement effectiveness accurately as there are many factors like
making a brand image, increasing the sales, keeping people informed about the product,
introducing new product, etc, which affect the effectiveness of an advertisement. The
managerial responsibility in the area of advertising does not come to an end with the
execution of an advertising programme. Any sound managerial effort is finally interested in
goal attainment and, therefore, always ready to evaluate the results. Evaluation of advertising
or advertising effectiveness refers to the managerial exercise aimed at relating the advertising
results to the established standard of performance and objectives so as to assess the real value
of the advertising performance. This evolution exercise is also known as advertising research.

FACTORS TO BE TESTED
According to Philip Kotler and Armstrong, the Gurus Of Marketing, there are two most
popular areas which need to be measured for knowing the effectiveness of advertisement:
Communication Effect & Sales Effect.

Communication Effect Research studies the influence that an advertisement or some other
form of promotional activity might have, is having, or has had, on consumers or on the usage
of a product advertised.

Sales Effect Research totally depends on the sales of the company. The sales keep varying
from time to time. There are some factors affecting sales like product availability, the price of
the product, contents of the product, and sometimes the competitors. So this method is a little
difficult than the communication one.
DAGMAR Approach
DAGMAR is a marketing expression that stands for “Defining Advertising Goals for
Measured Advertising Results”. It is a marketing tool to compute the results of an advertising
campaign. DAGMAR attempts to guide customers through ACCA model. According to this
approach, every purchase encounters four steps; Awareness, Comprehension, Conviction, and
Action. DAGMAR method is an established technique of creating effective advertising.
The DAGMAR approach of advertising was devised by Mr Russell Colley who was much
appreciated for his work, as till date, DAGMAR is a concept used in advertising to set
advertising objectives and goals. DAGMAR is an abbreviation for “Defining advertising
goals to measure advertising results”.

DAGMAR- ACCA MODEL

1. AWARENESS
Awareness of the existence of a product or a service is needful before the purchase behaviour
is expected. The fundamental task of advertising activity is to improve the consumer
awareness of the product.
Once the consumer awareness has been provided to the target audience, it should not be
forsaken. The target audience tends to get distracted by other competing messages if they are
ignored. Awareness has to be created, developed, refined and maintained according to the
characteristics of the market and the scenario of the organization at any given point of time.
The objective is to create awareness about the product amongst the target audience.
2. COMPREHENSION
Awareness on its own is not sufficient to stimulate a purchase. Information and understanding
about the product and the organisation are essential. This can be achieved by providing
information about the brand features.
Example: In an attempt to persuade people to budge for a new toothpaste brand, it may be
necessary to compare the product with other toothpaste brands, and provide an additional
usage benefit, such as more effective than other toothpaste because it contains salt or that this
particular toothpaste is a vegetarian toothpaste, which will, in turn, attract more customers.
The objective is to provide all the information about the product.
3. CONVICTION
Conviction is the next step where the customer evaluates different products and plans to buy
the product. At this stage, a sense of conviction is established, and by creating interests and
preferences, customers are convinced that a certain product should be tried at the next
purchase.
At this step, the job of the advertising activity is to mould the audience’s beliefs and persuade
them to buy it. This is often achieved through messages that convey the superiority of the
products over the others by flaunting the rewards or incentives for using the product.
Example: Thumbs up featured the incentive of social acceptance as “grown up”. It implied
that those who preferred other soft drinks were kids.
The objective is to create a positive mental disposition to buy a product.
4. ACTION: This is the final step which involves the final purchase of the product. The
objective is to motivate the customer to buy the product.

KINDS OF PROMOTION
Ultimately, almost all promotional strategy consists of a mix of specific promotion types.
Each of these delivers the organisation's message in a different way: reaching different parts
of the buying public at different points in the buying process. Though there are thousands or
millions of different ways to combine them in your promotional campaign, almost every
campaign uses one or more of just seven different promotional types: personal selling, direct
marketing, advertising, public relations, sponsorship, sales promotion, and digital.

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 sales people who were overly
aggressive, annoying, or repetitive in their pitch, and this can turn off customers.

Social Media Marketing

Mastering social media is a must-have if you intend for your business to survive a
competitive marketplace. Even if you feel like social channels are wasting too much time,
you have no excuse. Nine out of 10 companies report they don’t have the requisite skills to
leverage social media as a business tool.

Direct Marketing
Direct marketing is a form of promotion where the company reaches out directly to the
prospective client using mail or other media. Direct mail is the best-known version of this,
and it is often cheaper than traditional forms of advertising. Direct mail makes it possible to
precisely tailor your message and laser-target your market. (Direct mail should always be
selectively sent to people who are likely to buy, rather than shipped out to everyone in a
database.) The advantage is that direct marketing promotions are easy and fast to roll out. It's
often possible to design and mail a promotion within a few days or weeks. It's also an
effective way to test out prices and products while keeping control of which customer
receives which promotion or offer. Unfortunately, direct marketing, in particular direct mail,
is often viewed by customers as "junk mail." Therefore, companies run the risk of being seen
as obtrusive.

General / Traditional 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 numbers 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."

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.

Sponsorship
Sponsorship generally involves supplying resources (such as money) to a group or an event in
exchange for advertising or publicity. Companies will often help fund athletes, teams, or
events in exchange for having their logo prominently visible, for example. Sponsorship
provides an excellent way to "buy" publicity and place the company logo somewhere people
pay close attention -- such as on the clothing of a well-liked athlete. The downside is
sponsorship is often extremely expensive and may not provide the ROI of other advertising
methods, and there is a risk if the sponsored individual does something unpopular that it will
reflect badly on the company.

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.
Digital Promotions
All web-/ digital device-focused promotions fall under the category of digital promotion,
from online advertising to social media to viral and "advergaming." Digital tends to be much
cheaper and faster to create, however consumers are largely desensitised to digital methods
due to a high level of "spam." The response rate of digital promotions tends to be low.

TOOLS & TECHNIQUES OF SALES PROMOTIONS

Tools and Programmes for Consumer Sales Promotion:

i. Sample:
Also known as consumer sample or free samples and given to consumers to introduce a new
product or to expand the market. The consumers are expected to be convinced to use the
product.

ii. Demonstrations or Instructions:

These are instructions given to aware the consumers about using the product. This method
may be used in products like washing machine.

iii. Coupon:
It is a certificate that reduces the price. When a buyer gives a coupon to the dealer or retailer
he gets the product at lower price. It gives expected result.

iv. Money-Refund Orders:

The technique indicates refund of full purchase price if the buyer so wants. It is helpful in the
introduction of a new product. Refund offer creates additional interest and increases sales
considerably. It is a good device for creating new user and to strengthen the brand loyalty.

v. Premium (Gift) Offers:

These are temporary price reductions, which appeal to bargain instinct. Towels, dinner ware,
hair-brushes, key-chains, artificial flowers, ball pens, toilet soaps, bathing soaps, blades, are
given as in-pack premiums. BUY ONE GET ONE, BUY TWO GET ONE FREE are the
usual offers made to the customers to appeal them.

vi. Price-Off:
The price off label is printed on the package that is a certain amount is reduced from the
actual price to woo the customers. It gives a temporary discount to the consumers.

vii. Contests or Quizzes:

These are held to stimulate consumer’s interest in the product. In these contests, participants
compete for prizes on the basis of their skill or creative ideas. In this type of sales promotion,
prizes are offered in kinds (especially the products of the company) and sometimes a payment
is given to the participants.

viii. Trading Stamps:

Trading or Bonus stamps are issued by retailers to customers who buy goods from there. The
number of stamp given to a buyer depends upon the amount of purchases made by him.
Stamps are issued at predetermined percent rate of the purchase amount.
These stamps are given free of charge and the customers can redeem them to obtain products
out of the specified list. This technique induces customer to buy their requirements from the
retailers who offer such stamps. The purpose is to increase customer loyalty.

ix. Fairs and Exhibitions:

Trade shows, fashion shows or parades, fairs and exhibitions are important technique/tools of
sales promotion. They provide a forum for the exhibitions or demonstration of products. Free
literature can be distributed to introduce the firm and its products to the public. Fairs and
exhibitions are organized usually by big firms or trade associations. At these fairs and
exhibitions, business firms are allotted stalls wherein they display their products and attract
the customers through gifts, special concessions and free demonstrations of technical and
specialty products.

x. Public Relations Activities:

These include greetings or thanks in newspapers, donating space for noble causes, offer of
Privileged Citizen Card, etc. Their purpose is not to create immediate demand or to increase
sales. They are designed to create a good image of the firm in the society.

xi. Exchange Scheme:

This technique offers to exchange the old product with new one in payment of a fixed amount
which is less than the original price. For example, exchange of old Black & White Television
for Colour Television by paying rupees 8000 only (original price is rupees 10000) was
offered by a particular producer of colour TV sets.

Tools and Programmes for Dealers/Distributors Sales Promotion:

i. Free Display:
There is provision of free display of material either at the point of purchase (POP) or at the
point of sale (POS), depending on one’s view point. Display reaches consumers when they
are buying and actually spending their money.

ii. Retail Demonstrations:

These are arranged by manufactures for preparing and distributing the products as a retail
sample, for example, Nescafe Instant Coffee was served to consumers for trying the sample
on the spot of demonstration regarding the method of using the product.

iii. Trade Deals:

These are offered to encourage retailers to give additional selling support to the product, e.g.,
tooth paste sold with 30% to 40% margin.

iv. Buying Allowance:

Sellers give buying allowance of a certain amount of money for a product bought.

v. Buy-Back Allowance:
It is offered to encourage repurchase of a product immediately after another trade deal. A buy
back is a resale opportunity.
vi. Advertising and Display Allowance:
These are also offered to retailers to popularise the product and brand name of the
manufacturer.

vii. Contests:
Sales contests are held for salesmen. These are usually aimed at increasing the performance
of the sales persons.

viii. Dealer Loader:

A gift for an order is a premium given to the retailer for buying certain quantities of goods or
for special display done by the retailer.

ix. Training for Salesmen:

Periodical training programmes are conducted by dealers and distributors for salesmen to
give them a better knowledge of a product and its usage. Dealer sales promotion provides the
selling devices. Sales promotion devices at the point of purchase inform, remind, and
stimulate buyers to purchase products.

TECHNIQUES OF SALES PROMOTION

1. Distribution of Samples:
Many big businessmen distribute free samples of their products to the selected people in
order to popularise their products. Distribution of samples is popular in case of books, drugs,
cosmetics, perfumes and other similar products. As the distribution of samples is very costly,
this system is confined to those products of small value which have often repeated sales.

2. Rebate or Price-Off Offer:

In order to increase sale, many producers introduce price off offer to the customers. Under
this, the product is offered at a price lower than the normal price. For example, during off
season (winter), ceiling fans, coolers and refrigerators may be offered at 20 to 30% off price.
Rebate offer is given for a limited period only, for example, Coca cola offered 2 litre bottle at
Rs. 35 only during winter 2009. Khadi Gram Udyog offers rebates on Khadi cloth and
readymades to coincide with the month of Gandhi Jayanti every year.

3. Partial Refund:
A firm may use the strategy of refunding a part of the price paid by the customer on the
production of some proof of purchase of its product. For instance, the buyer of two cakes of a
branded soap may be refunded Rs. 5 on returning the empty packages to the dealer.

4. Discount Coupons:
A discount coupon is a certificate that entitles its holder to a specified saving on the purchase
of a specified product. Coupons may be issued by the manufacturers either directly by mail
through sales-force or through the dealers. The coupons are also issued through newspapers
and magazines. The holders of coupons can go to the retailers and get the product at a
cheaper price. The retailers are reimbursed by the manufacturer for the value of coupon
redeemed and also paid a small percentage to cover handling cost. But many retailers do not
patronise this method because it involves financial and accounting problems for them.

5. Packaged Premium:
Under this, the seller offers premium to the buyer by way of supplying a gift along with the
product or inside the product package. Premium on sales helps the salesman to make
effective presentation, stimulate sale in a particular area, lead to enlistment of new customers
and have the way for introducing new brands in the market. Premiums are generally given in
the case of customer convenience goods such as packed tea leaves, blades, tooth-pastes and
toilet soaps.

6. Container Premium:
Several firms use container premium to push the sale of their products. For instance, Taj
Mahal tea leaves, Ariel detergent powder, Bournvita, Kissan jams, etc. are made available in
special containers which could be reused in kitchens after the product has been consumed.
The reusable containers for packaging often have special appeal to the consumers who don’t
have to pay anything extra for the product.
7. Contests:
There may be consumers’ contests, salesman’s contests and dealers’ contests. Contests for
salesman and dealers are intended for inducing them to devote greater efforts or for obtaining
new sales idea in the task of sales promotion. Contests for consumers may centre around
writing a slogan on the product. Such slogan centres around the questions as to the liking of a
customer for the product, or formulation of new advertising idea for the product. Such
contests are held through radio, T.V., newspapers, magazines, etc.

8. Public Relations:
Public relations activities strive for creating a good image of the enterprise in the eyes of the
customers and the society. These activities are not aimed at immediate demand creation. It is
very common that big business enterprises convey their greetings and thanks to the people
through newspapers and other media.

9. Free Gift:
The customer does not get any benefit at the time of purchase, rather he gets it through mail.
For this he has to send the proof of purchase (e.g., cash memo and wrapper) to the
manufacturer to claim the gift which might be a diary or book or any other item. The gift is
sent by the manufacturer by mail or through courier.

10. Exchange Offer:

It means exchange of an old product with the new one after payment of the exchange price
fixed by the manufacturer. Such offers are very common these days in case of electric irons,
TVs, refrigerators, scooters, gas stoves, washing machines, etc.

11. Product Combination or Gift:

It refers to giving a free gift on purchase of a product. Generally, the free gift is related to the
product but it is not necessary. For example, Mug free with Bournvita, Toothbrush free with
Toothpaste, DVD free with TV, Vacuum cleaner free Fridge, etc.

12. Instant Draws and Assured Gifts:

Some sectors offer instant draws and assured gifts to their customers when they make
purchases. The scheme may be like – “Scratch a card (or burst a cracker) and instantly win a
car, A.C., fridge, T.V., computer or electric iron on the purchase of a T.V.”

13. Full Finance @ 0%:

Manufacturers of durables like bikes, T.V., A.C., etc. offer easy financing schemes even at
0% rate of interest e.g., “Pay Rs. 10,000 in cash and Rs. 30,000 in 12 equal instalments of
2,500 each by post-dated cheques and get a bike on the spot.” This tool of promotion
misleads the customers and so should be avoided by the marketers.

PUSH-PULL STRATEGIES OF PROMOTION

Promotional strategies to get your product or service to market can be roughly divided into
two separate camps.

PUSH STRATEGIES OF PROMOTION

A push promotional strategy involves taking the product directly to the customer via
whatever means, ensuring the customer is aware of your brand at the point of purchase.
"Taking the product to the customer".

Examples of push tactics:

1. Trade show promotions to encourage retailer demand
2. Direct selling to customers in showrooms or face to face
3. Negotiation with retailers to stock your product
4. Efficient supply chain allowing retailers an efficient supply
5. Packaging design to encourage purchase
6. Point of sale displays
The term 'push strategy' describes the work a manufacturer of a product needs to perform to
get the product to the customer. This may involve setting up distribution channels and
persuading middle men and retailers to stock your product. The push technique can work
particularly well for lower value items such as fast moving consumer goods (FMCGs), when
customers are standing at the shelf ready to drop an item into their baskets and are ready to
make their decision on the spot. This term now broadly encompasses most direct promotional
techniques such as encouraging retailers to stock your product, designing point of sale
materials or even selling face to face. New businesses often adopt a push strategy for their
products in order to generate exposure and a retail channel. Once your brand has been
established, this can be integrated with a pull strategy.

PULL STRATEGIES OF PROMOTION

A pull strategy involves motivating customers to seek out your brand in an active process.
"Getting the customer to come to you"

Examples of pull tactics

1. Advertising and mass media promotion
2. Word of mouth referrals
3. Customer relationship management
4. Sales promotions and discounts
'Pull strategy' refers to the customer actively seeking out your product and retailers placing
orders for stock due to direct consumer demand. A pull strategy requires a highly visible
brand which can be developed through mass media advertising or similar tactics. If customers
want a product, the retailers will stock it - supply and demand in its purest form, and this is
the basis of a pull strategy. Create the demand, and the supply channels will almost look after
themselves.

PERSONAL SELLING
Personal selling is an act of convincing the prospects to buy a given product or service. It is
the most effective and costly promotional method. It is effective because there is face to face
conversation between the buyer and seller and seller can change its promotional techniques
according to the needs of situation. It is basically the science and art of understanding human
desires and showing the ways through which these desires could be fulfilled. According to
American Marketing Association, “Personal selling is the oral presentation in a conversation
with one or more prospective purchasers for the purpose of making sale; it is the ability to
persuade the people to buy goods and services at a profit to the seller and benefit to the
buyer”. In the word of Professor William J. Stanton, “Personal selling consists in individual;
personal communication, in contrast to mass relatively impersonal communication of
advertising; sales promotion and other promotional tools”.

Personal selling is a different form of promotion, involving two way face-to-face

communications between the salesmen and the prospect. The result of such interaction
depends upon how deep each has gone into one another and reached the height of the
common understanding. Basically the essence of personal selling is the interpretation of
products and services benefits and features to the buyer and persuading the buyer to buy these
products and services.
OBJECTIVES OF PERSONAL SELLING
The major objectives of salesmanship are as follows:
(i) Attracting the Prospective Customers:
The first and foremost objective of a salesperson is to attract the attention of people who
might be interested to buy the product he is selling.

(ii) Educating the Prospective Customers:

The salesman provides information about the features, price and uses of the product to the
people. He handles their queries and removes their doubts about the product. He educates
them as to how their needs could be satisfied by using the product.

(iii) Creating Desire to Buy:

The salesman creates a desire among the prospective customers to buy the product to satisfy
specific needs.

(iv) Concluding Sales:

The ultimate objective of personal selling is to win the confidence of customers and make
them buy the product. Creation of customers is the index of effectiveness of any salesperson.

(v) Getting Repeat Orders:

A good salesperson aims to create permanent customers by helping them satisfy their needs
and providing them product support services, if required. He tries for repeat orders from the
customers.

PERSONAL SELLING PROCESS

The process of personal selling includes prospecting and evaluating, preparing, approach and
presentation, overcoming objections, closing the sale and a follow up service.

1. Prospecting and evaluating: The effort to develop a list of potential customers is known as
prospecting. Sales people can find potential buyers, names in company records, customer
information requests from advertisements, telephone and trade association directories, current
and previous customers, friends, and newspapers. Prospective buyers predetermined, by
evaluating (1) their potential interest in the sales person’s products and (2) their purchase
power.

2. Preparing: Before approaching the potential buyer, the sales person should know as much
as possible about the person or company.

3. Approach and presentation: During the approach, which constitutes the actual beginning of
the communication process, the sales person explains to the potential customer the reason for
the sales, possibly mentions how the potential buyer’s name was obtained, and gives a
preliminary explanation of what he or she is offering. The sales presentation is a detailed
effort to bring the buyer’s needs together with the product or service the sales person
represents.

4. Overcoming objections: The primary value of personal selling lies in the sales person’s
ability to receive and deal with potential customers’ objections to purchasing the product. In a
sales presentation many objections can be dealt with immediately. These may take more time,
but still may be overcome.

5. Closing the sale: Many sales people lose sales simply because they never asked the buyer
to buy. At several times in a presentation the sales person may to gauge how near the buyer is
to closing.

6. Follow up: To maintain customer satisfaction, the sales person should follow up after a
sale to be certain that the product is delivered properly and the customer is satisfied with the
result.