40.Explain various pricing approaches followed in practice. Write pros and consof each approach?

Ans: On the surface, a product's price seems like a reasonably straightforward piece of information, communicating how much a customer needs
to pay to bring an item home. But pricing strategies can be complex and sophisticated, taking into account everything from production costs to
consumer attitudes. The advantages of a pricing policy lies in its ability to make your product appealing to customers, while also covering your
costs. The disadvantages of pricing strategies come into play when they are not successful, either by not sufficiently appealing to customers or by
not providing you with the income you need.

Geographical Pricing Advantages and Disadvantages

Geographical pricing is the practice of varying price tags based on where you sell your products. A geographical pricing strategy can grow out of
a need to recoup shipping costs, which tend to grow higher as you send your offerings further afield. Or, your products may have a higher
perceived value in another region, because of rarity or cache. Sometimes, obstacles to operating in a certain area may require you to raise prices
to break even, such as working in areas that have prohibitive regulatory structures. Geographical pricing offers the advantage of allowing you to
earn more in certain situations. This is disadvantageous, because it adds extra layers of bookkeeping, because you need to keep track of different
prices in different places.

Competitive Pricing Strategy Advantages

A competitive pricing strategy positions your product in reference to other options on the market. You set your price after considering the prices
of comparable products, using the product to send a message about whether your offering is a better value or of higher quality. Competition-based
pricing advantages and disadvantages include the opportunity to leverage a simple tool to send a powerful message, and the danger of locking
into a price that makes it hard to break even, as you undersell the competition.

Value Based Pricing Strategies

Value-based pricing can be part of a competition-based strategy, as you use price to communicate that your product has features or workmanship
that make it worth more than the competition's offerings. But you can base price on value, without worrying about what competition charges. If
you offer something unique or uniquely appealing, you may be able to write your own playbook when it comes to price, as long as you're able to
find the customers who understand that your product is worth more and that they have the money to pay for it. Alternatively, you can incorporate
value into your price by charging a fair price for a high-quality item. The benefits of pricing with value in mind are that value is somewhat
subjective, so you can craft a marketing message that supports your price's value claims.

Skimming and Penetration Pricing

Skimming and market penetration are pricing strategies based on a product's newness. When a product has cache, fans are willing to pay more, so
that they are among the first to use the product Releasing long anticipated products in limited quantities can help add to the buzz that makes
passionate customers happy to pay more. By releasing a product that has a high price, initially, you can make the most of this initial enthusiasm.
Once consumers have grown accustomed to having the product on the market and more people own it, you can reduce the price to entice a more
diverse pool of buyers.

Penetration pricing takes the opposite approach, offering an initially low price to encourage customers to buy and familiarize themselves with the
product. Skimming and penetration pricing offer the advantage of attracting attention when your product is especially fresh and interesting.
However, these pricing strategies have the disadvantage of not being long-term strategies, because newness always fades.

Short notes:

a. Non-profit branding

Ans: Branding might not be the first thing you think of when you think of nonprofits, social businesses, or any other organizations that focus
on delivering social impact.The word ‘branding’ can sound like something that’s strictly reserved for large for-profit enterprises. However,
branding is as important for nonprofit organizations as it is for businesses .

Standing Out

Good nonprofit branding helps you stand out amongst other similar nonprofit organizations and get your message across in a noisy space.

Many nonprofit organizations nowadays face the struggle of differentiating themselves from other comparable organizations working on similar
causes. Branding can help your organization become memorable.
Increased Trust and Loyalty

When a brand has been intentionally crafted, properly positioned and aligned to its target audiences, the trust, and loyalty of the audience
increase. A strong nonprofit brand doesn’t only increase the trust and loyalty amongst supporters but also creates a sense of organizational unity
within the organization (amongst staff, volunteers, and other stakeholders). All of these contribute to the growth of the organization.

Fundraising and Increased Engagement

In the nonprofit sector, the competition for funding is high. A strong nonprofit brand can help you achieve your fundraising goals by increasing
visibility and generating support. A strong brand also increases engagement among supporters and donors.

These are only some of the benefits a strong nonprofit brand can bring about. Beyond these, nonprofit branding can drive your long-term strategic
goals, increase public trust, increase internal cohesion, increase awareness about your cause and your work, build your reputation, among other
things.

b.Line extension versus brand extension:

ans: Brand extension

Effort to use a successful brand name to introduce a new product into a different product category. Here a firm is marketing a product with a
well-developed image uses the same brand name in a different product category.

Example: When we think about the great brand Horlicks, what comes to our mind is the malted milk hot drink (developed by founders James and
William Horlick ). Through Brand extension, Holrlicks make use of the power of this brand to come with new products like Biscuits, Noodles,
Nutribar, etc (But in Horlicks’ case brand extension was not that successful,except the biscuits )

Product extension (Line Extension)

When a brand is used to brand a new product that targets a new market segment within a product category currently served by the parent brand. A
product line extension is the use of an established product brand name for a new item in the same product category.

Example: The same Horlicks has got different products in the same category like Junior Horlicks(1995), Lite Horlicks (2005), Mother’s
Horlicks(1977, relaunched in 2014).

c.Brand resonance model:

Ans:

• Brand Salience: The brand salience means, how well the customer is informed about the product and how often it is evoked under the
purchase situations?

The marketer should not only focus on just creating the awareness about the product but also includes the ease with which the customers can
remember the brand and the ability to recall it under the different purchase situations.

• Brand Performance: The Brand performance means, how well the functional needs of customers are met? At this level of the pyramid, the
marketers check the way in which product is performing and how efficiently it is fulfilling the needs of the customers.
• Brand Imagery: The Brand Imagery means, what product image the customer create in their minds? This aspect deals with the customer’s
psychology or the feelings that how they relate to the product in terms of their social needs.

• Brand Judgements: The Brand Judgement means, What customer decides with respect to the product? The customers make the judgment
about the product by consolidating his several performances and the imagery associations with the brand. On the basis of these, the final
judgment is made about the product in terms of its Perceived Quality, Credibility, Consideration, and Superiority.

• Brand Feelings: The Brand feelings means, what customers feel, for the product or how the customer is emotionally attached to the product?
The consumer can develop emotions towards the brand in terms of fun, security, self-respect, social approval, etc.

Brand Resonance: The Brand Resonance means, what psychological bond, the customer has created with the brand?
This is the ultimate level of the pyramid, where every company tries to reach. Here the focus is on building the strong relationship with the
customer thereby ensuring the repeated purchases and creating the brand loyalty. The resonance is the intensity of customer’s psychological
connection with the brand and the randomness to recall the brand in different consumption situations.

d.Possible pricing objectives:

Pricing can be defined as the process of determining an appropriate price for the product, or it
is an act of setting price for the product. Pricing involves a number of decisions related to
setting price of product. Pricing policies are aimed at achieving various objectives. Company has
several objectives to be achieved by the sound pricing policies and strategies. Pricing decisions
are based on the objectives to be achieved.

Maximum Current Profit:

One of the objectives of pricing is to maximize current profits. This objective is aimed at making
as much money as possible. Company tries to set its price in a way that more current profits can
be earned. However, company cannot set its price beyond the limit. But, it concentrates on maximum
profits.

Target Return on Investment:

Most companies want to earn reasonable rate of return on investment.

Target return may be:

fixed percentage of sales,

(2) return on investment, or

(3) a fixed rupee amount.

Company sets its pricing policies and strategies in a way that sales revenue ultimately yields average return on total investment. For example,
company decides to earn 20% return on total investment of 3 crore rupees. It must set price of product in a way that it can earn 60 lakh rupees.

Sales-related Objectives:

i. Sales Growth:

Company’s objective is to increase sales volume. It sets its price in such a way that more and more sales can be achieved. It is assumed that sales
growth has direct positive impact on the profits. So, pricing decisions are taken in way that sales volume can be raised. Setting price, altering in
price, and modifying pricing policies are targeted to improve sales.

ii. Target Market Share:

A company aims its pricing policies at achieving or maintaining the target market share. Pricing decisions are taken in such a manner that enables
the company to achieve targeted market share. Market share is a specific volume of sales determined in light of total sales in an industry. For
example, company may try to achieve 25% market shares in the relevant industry.
iii. Increase in Market Share:

Sometimes, price and pricing are taken as the tool to increase its market share. When company assumes that its market share is below than
expected, it can raise it by appropriate pricing; pricing is aimed at improving market share.

Competition-related Objectives:

Competition is a powerful factor affecting marketing performance. Every company tries to react to the competitors by appropriate business
strategies.

With reference to price, following competition-related objectives may be priorized:

i. To Face Competition:

Pricing is primarily concerns with facing competition. Today’s market is characterized by the severe competition. Company sets and modifies its
pricing policies so as to respond the competitors strongly. Many companies use price as a powerful means to react to level and intensity of
competition.

ii. To Keep Competitors Away:

To prevent the entry of competitors can be one of the main objectives of pricing. The phase ‘prevention is better than cure’ is equally applicable
here. If competitors are kept away, no need to fight with them. To achieve the objective, a company keeps its price as low as possible to minimize
profit attractiveness of products. In some cases, a company reacts offensively to prevent entry of competitors by selling product even at a loss.

iii. To Achieve Quality Leadership by Pricing:

Pricing is also aimed at achieving the quality leadership. The quality leadership is the image in mind of buyers that high price is related to high
quality product. In order to create a positive image that company’s product is standard or superior than offered by the close competitors; the
company designs its pricing policies accordingly.

iv. To Remove Competitors from the Market:

The pricing policies and practices are directed to remove the competitors away from the market. This can be done by forgoing the current profits
– by keeping price as low as possible – in order to maximize the future profits by charging a high price after removing competitors from the
market. Price competition can remove weak competitors.

4. Customer-related Objectives:

Customers are in center of every marketing decision.

Company wants to achieve following objectives by the suitable pricing policies and practices:

i. To Win Confidence of Customers:

Customers are the target to serve. Company sets and practices its pricing policies to win the confidence of the target market. Company, by
appropriate pricing policies, can establish, maintain or even strengthen the confidence of customers that price charged for the product is
reasonable one. Customers are made feel that they are not being cheated.

ii. To Satisfy Customers:

To satisfy customers is the prime objective of the entire range of marketing efforts. And, pricing is no exception. Company sets, adjusts, and
readjusts its pricing to satisfy its target customers. In short, a company should design pricing in such a way that results into maximum consumer
satisfaction.
Unit 4

1. What is a distribution channel? Explain the advantages and disadvantagesof channel

intermediaries.

Ans: A distribution channel (also called a marketing channel) is the path or route decided by the company to deliver its good or service to the
customers. The route can be as short as a direct interaction between the company and the customer or can include several interconnected
intermediaries like wholesalers, distributors, retailers, etc. Hence, a distribution channel can also be referred to as a set of interdependent
intermediaries that help make a product available to the end customer.

When a customer is considering buying a product he tries to access its value by looking at various factors which surround it. Factors like its
delivery, availability etc which are directly influenced by channel members. Similarly, a marketer too while choosing his distribution members
must access what value is this member adding to the product. He must compare the benefits received to the amount paid for using the services of
this intermediary. These benefits can be the following:

• Cost Saving

The members of distribution channel are specialized in what they do and perform at much lower costs than companies trying to run the
entire distribution channel all by itself.

• Time Saving

Along with costs, time of delivery is also reduced due to efficiency and experience of the channel members. For example if a grocery
store were to receive direct delivery of goods from every manufacturer the result would have been a chaos. Everyday hundreds of
trucks would line up outside the store to deliver products. The store may not have enough space for storing all their products and this
would add to the chaos. If a grocery wholesaler is included in the distribution chain then the problem is almost solved. This wholesaler
will have a warehouse where he can store bulk shipments. The grocery store now receives deliveries from the wholesaler in amounts
required and at a suitable time and often in a single truck. In this way cost as well as time is saved.

• Customer Convenience

Including members in the distribution chain provides customer with a lot of convenience in their shopping. If every manufacturer
owned its own grocery store then customers would have to visit multiple grocery stores to complete their shopping list. This would be
extremely time-consuming as well as taxing for the customer. Thus channel distribution provides accumulating and assorting services,
which means they purchase from many suppliers the various goods that a customer may demand. Secondly, channel distribution is
time saving as the customers can find all that they need in one retail store and the retailer

• Customers can buy in small quantities

Retailers buy in bulk quantities from the manufacturer or wholesaler. This is more cost effective than buying in small quantities.
However they resell in smaller quantities to their customers. This phenomenon of breaking bulk quantities and selling them in smaller
quantities is known as bulk breaking. The customers therefore have the benefit of buying in smaller quantities and they also get a
share of the profit the retailer makes when he buys in bulk from the supplier.

• Resellers help in boosting sales

Resellers often use persuasive techniques to persuade customers into buying a product thereby increasing sales for that product. They
often make use of various promotional offers and special product displays to entice customers into buying certain products.

• Customers receive financial support

Resellers offer financial programs to their customers which makes payment easier for the customer. Customers can buy on credit, buy
using a payment plan etc.
 • Resellers provide valuable information

Manufacturers who include resellers for selling their products rely on them to provide information which will help in improving the
product or in increasing its sale. High-level channel members often provide sales data. On all other occasions the manufacturer can
always rely on the reseller to provide him with customer feedback.
Disadvantages of including intermediaries in the distribution channel

• Revenue loss

The manufacturer sells his product to the intermediaries at costs lower than the price at which these middlemen sell to the final
customers. Therefore the manufacturer goes for a loss in revenue. The intermediaries would never offer their services to the
manufacturer unless they made a profit out of selling his products. They are either made a direct payment by the manufacturer, for
instance shipping costs or as in the case of retailers by selling the product at costs higher than the price at which the product was
bought from the manufacturer (also known as markup). The manufacturer could have sold at this final price and made a greater profit
if he had been managing the distribution all by himself.

• Loss of Communication Control

Along with loss over the revenue the manufacturer also loses control over what message is being conveyed to the final customers. The
reseller may engage in personal selling in order to increase the product sale and communicate about the product to his customers. He
might exaggerate about the benefits of the product this may lead to miscommunication problems with end users. The marketer may
provide training to the salespersons of retail outlets but on the whole he has no control on the final message conveyed.

• Loss of Product Importance

The importance given to a manufacturer�s product by the members of the distribution channel is not under the manufacturer�s
control. In various cases like transportation delays the product loses its importance in the channel and the sales suffer. Similarly a
competitor�s product may enjoy greater importance as the channel members might be getting a higher promotional incentive.

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2.Explain the concepts of vertical marketing systems, horizontal marketing systems

and the multi-channel marketing systems?

Ans: A Vertical Marketing system (VMS) comprises of the main distribution channel partners- the producer, the wholesaler and the retailer
who work together as a unified group to serve the customer needs. In conventional marketing system, the producer, wholesaler and the retailer
worked separately with the intention to maximize their profits even at the expense of one another. This led to the unending conflicts between the
channel partners resulting in less profits for the business as a whole.

In order to overcome these conflicts, several firms have started using a vertical marketing system wherein producers, wholesalers and retailers
have joined hands with each other and are working in unison towards the accomplishment of the business objective as a whole. This has led to the
increased profits for each involved in the channel of distribution.

Vertical Marketing System is further divided into three parts which are explained below:
 1. Corporate Vertical Marketing System– In Corporate VMS, one member of the distribution channel be it a producer, a wholesaler or
a retailer Owns all the other Members of the Channel, thereby having all the elements of production and distribution channel under
a single ownership.For example,: Amway is an American cosmetic company, which manufactures its own product range and sell
these products only through its authorized Amway stores. Here the ownership of production and distribution is with the company
itself.
2. Contractual Vertical Marketing System– In Contractual VMS, every member in the distribution channel works independently and
integrate their activities on a Contractual Basis to earn more profits that are earned when working in isolation. The most common
form of Contractual VMS is Franchising. In franchising, the producer authorizes the distributor to sell its product under the
producer’s name against some annual license fee. For example, Mc-Donalds, Dominos, Pizza Hut, etc. are all forms of the franchise
which are working on a contractual basis.
3. Administered Vertical Marketing System– Under Administered VMS, there is no contract between the members of production &
distribution channel but their activities do get influenced by the Size and Power of any one of the member. In simple words, any
powerful and influential member of the channel dominate the activities of other channel members. For example, Big brands like
HUL, ITC, Procter& Gamble, etc. command a high level of cooperation from the retailers in terms of display, shelf space, pricing
policies, and promotional schemes.

Thus, through a vertical marketing system, the channel partners establishes a close contact with each other and work in unison towards the
accomplishment of common objectives thereby enjoying more profits which they would have been earning when working alone.

A Horizontal Marketing system is a form of distribution channel wherein two or more companies at the same level unrelated to each other
come together to gain the economies of scale. In other words, Horizontal marketing system is the merger of two unrelated companies who have
come together to exploit the market opportunities.

Generally, this type of marketing system is followed by companies who lack in capital, human resources, production techniques, marketing
programs and are afraid of incurring the huge losses. In order to overcome these limitations, the companies join hands with other companies who
are big in size either in the form of joint venture –that can be temporary or permanent, or mergers to sustain in the business.

Horizontal marketing system has gained popularity in the recent times due to an immense competition in the market where everybody is striving
to gain a good position in the market along with huge profits.

In this marketing system, the collaboration can be between:

• Two or more Manufacturers- With an objective of making optimum utilization of scarce resources.
• Two or more Wholesalers-With the objective of covering a larger area of the distribution of goods and services.
• Two or more Retailers- With the objective of providing bulk quantities in a particular area.

Examples of Horizontal Marketing:

1. Nike and Apple have entered into a partnership, with the intent to have a Nike+ footwear in which the iPod can be connected with
these shoes that will play music along with the display of information about time, distance covered, calories burned and heart pace on
the screen.
2. Johnson & Johnson, a health care company, have joined hands with Google, with an objective of having a robotic-assisted surgical
platform. That will help in the integration of advanced technologies, thereby improving the healthcare services.

Thus, two or more companies join hands to capitalize on the expertise of each and capture a greater market share.

Multichannel marketing refers to the practice by which companies interact with customers via multiple channels, both direct and indirect, in order
to sell them goods and services. Companies use direct channels, or ones in which the company proactively reaches the customer – such as
physical stores, catalogs or direct mail – or indirect ones in which they push content via websites or social media, also known as inbound
marketing. Other means of reaching customers with multichannel marketing include via mobile devices, text messaging, email, company website,
social media, search engine optimization (SEO) or GPS to track customers' proximity to goods and services. Multichannel marketing combines
the practices of inbound and outbound marketing with the goal of reaching customers on the channel of their choice. In this way, the buying
process is more controlled by the customer than the marketer.

Multichannel marketing is based on the fact that customers have more choices than ever in terms of getting information on products. The spread
of available channels, including the growth of email, social media and mobile, has caused marketing departments to increase their presence on
these channels in order to develop their customer relationship management (CRM) efforts. The old ways of marketing, such as using print
sources, telemarketing or broadcasting on radio and TV are no longer the sole focus of marketing departments. These methods are still present,
but are part of a bigger strategy that includes new media and evolve along with changing customer tastes and communication preferences.

Companies strive to develop analytics in order to determine which customers get which messages based on their demographic information and
other behaviors. Beyond knowing who the customer is and what he/she wants, companies try to understand which channel a particular customer
prefers to maximize the visibility of their messages. This enables companies to target the right audience with the right content to facilitate sales.
To have success in multichannel marketing, or any other digital marketing, efforts, companies aim to devise campaigns that span multiple
channels easily. Since expecting customers to adapt to the company's preferred channel is an unrealistic hope, companies cater to the customer
and tailor campaigns to fit multiple channels. Another goal of companies is to know which campaigns on which channels lead to the most sales,
enabling them to determine the effectiveness of their efforts and measuring the return on investment of their presence on each respective channel.

Companies can coordinate their online and offline marketing efforts in order to optimize both. For example, keyword testing from online
marketing can inform the effectiveness of certain campaigns before they are made into print ads or other advertisements.

Main benefits of multichannel marketing include:

• Management of sales through feedback: By maximizing marketing efforts through promoting a message through as many channels
as possible, companies have the potential to collect feedback from different customer segments. Overall performance can be
determined through this feedback and improvements can be made by crowdsourcing information. By ensuring that resources are being
used effectively and efficiently, operational costs decrease.
• More sales: The more visible a message is the more potential customers a company can attract. By concentrating efforts on a single
channel, the potential to reach the most prospective customers is diminished. Companies can use their presences on various channels
to mold a personalized image that can build a customer following and boost retention and loyalty.
• Achieving a 360-degree view of the customer: When companies collect feedback from customers, they can better understand what is
expected by their customer bases and how to improve product and service offerings. Companies can then augment marketing efforts
and identify which channels work best for certain customer segments and strategize to cater to the needs of that group of customers.

Companies struggle to centralize goals and figure out things like measuring the message's reach or frequency when devising multichannel
strategies. Difficulties stem from the inability to coordinate the message across all departments and brands to make sure it is consistent on each
channel. Due to a lack of common technology to satisfy every channel, staff and IT support is another painpoint in developing multichannel
campaigns. General challenges companies struggle with in developing overall CRM, such as getting a single repository for customer data, is also
a hindrance to multichannel marketing.

5.With suitable examples explain the emerging tools of promotion?

Ans: Sales promotion

It is a variety of short-term incentives to encourage trial or purchase of a product or service. It may include consumer promotions – focused
towards the consumer – such as a distribution of free samples, coupons, offers on purchase of higher quantity, discounts and premiums or trade
promotions – focused on retailers – such as display and merchandising allowances, volume discounts, pay for performance incentives and
incentives to salespeople.

Sales promotion helps to draw the attention of the consumers and offers an invitation to engage in a transaction by giving various types of
incentives.

Personal Selling

Face-To-Face interaction with one or more buyers for the purpose of making presentations, answering questions and taking orders. This proves to
be the most effective tool in the later stages of the buying process.

The advantage is that the message can be customized to the needs of the buyer and is focused on building a long-term relationship with the buyer.

Public Relations

A variety of programs directed toward improving the relationship between the organisation and the public. Advertising is a one-way
communication whereas public relations is a two-way communication which can monitor feedback and adjust its message for providing
maximum benefit. A common tool used here is publicity which capitalizes on the news value of the product or service so that the information can
be disseminated to the news media.

Direct Marketing

Direct Marketing involves the use of mail, telephone, fax, e-mail, or internet to communicate directly with or solicit response or dialogue from
specific customers or prospects. Shoppers have started relying on credit cards and online purchasing more than ever which makes it essential for
marketers to approach the consumers directly thus helping them in the purchase process.
Companies have a database of contact details of consumers through which they send catalogues and other marketing material making it easier for
the consumer to purchase online. The relevance of direct marketing has increased in recent years.

Events and Experiences

These are company sponsored activities and programs designed to create brand-related interactions with customers. Sponsorships improve the
visibility of the company. Companies provide customers with an experience of using the product which ends up leading to a higher brand recall
than competitors. These events prove to be engaging with the audience.

Advertising

Advertising refers to any paid form of non-personal promotion of products or services by an identified sponsor. The various media used are print
(newspapers and magazines), broadcast (radio and television), network (satellite, wireless and telephone), electronic (web page, audio and
videotape) and display (billboards, signs and posters).

The primary advantage of advertising is that it reaches geographically dispersed consumers. Consumers generally tend to believe that a heavily
advertised brand must offer some ‘good value’ but at the same time, advertising proves to be an expensive form of promotion.

6.Which factors should be kept in mind while deciding the promotion mix?

Ans: Type of Product:

Type of product plays an important role in deciding on promotion mix. Product can be categorized in terms of branded products, non-branded
products, necessity products, luxury products, new products, etc. All these types of products need different promotional tools. For example,
advertising is suitable for the branded and popular products. Personal selling may be fit for non-branded products. Advertising, personal selling,
sales promotion and publicity – all four tools – are used for a newly launched product to get a rapid consumer acceptance.

2. Use of Product:

Product may be industrial product, consumable and necessity product, or may be luxurious product that affects selection of promotion tools and
media. For example, advertising and sales promotion techniques are widely used for consumer goods while personal selling is u sed for industrial
goods.

3. Complexity of Product:

ADVERTISEMENTS:

Product complexity affects selection of promotional tools. Personal selling is more effective for complex, technical, risky, and newly
developed products as they need personal explanation and observation. On the other end, advertising is more suitable for simple and
easy-handled products.

4. Purchase Quantity and Frequency:

Company should also consider purchase frequency and purchase quantity while deciding on promotion mix. Generally, for frequently
purchase product, advertising is used, and for infrequently purchase product, personal selling and sales promotion are preferred.
Personal selling and advertising are used for heavy users and light users respectively.

5. Fund Available for Market Promotion:

Financial capacity of company is a vital factor affecting promotion mix. Advertising through television, radio, newspapers and magazines
is too costly to bear by financially poor companies while personal selling and sales promotion are comparatively cheaper tools. Even, the
company may opt for publicity by highlighting certain commercially significant events.

6. Type of Market:

Type of market or consumer characteristics determine the form of promotion mix. Education, location, income, personality
characteristics, knowledge, bargaining capacity, profession, age, sex, etc., are the important factors that affect company’s promotion
strategy.
7. Size of Market:

ADVERTISEMENTS:

Naturally, in case of a limited market, personal selling is more effective. When market is wide with a large number of buyers, advertising
is preferable. Place is also an important issue. Type of message, language of message, type of sales promotion tools, etc., depend on
geographical areas.

8. Stage of Product Life Cycle:

Product passes through four stages of its life cycle. Each stage poses different threats and opportunities. Each stage needs separate
marketing strategies. Each of the promotional tools has got different degree of suitability with stages of product life cycle.

It can be concluded that, in normal situations:

(1) Advertising, personal selling, and, even, sales promotion are used during the introduction stage. However, advertising is given more
priority,

ADVERTISEMENTS:

(2) More intensive advertising and sales promotional techniques are used during the second stage,

(3) More rigorous advertising along with personal selling are followed in the third stage, and

(4) Company prefers to curb the expenses in forth stage, and promotional efforts are reduced.

9. Level of Competition:

Promotional efforts are designed according to type and intensity of competition. All promotional tools are aimed at protecting company’s
interest against competition. Level of promotional efforts and selection of promotional tools depend on level of competition.

10. Promotional Objectives:

ADVERTISEMENTS:

It is the prime factor affecting promotional mix. Different objectives can be achieved by using different tools of promotional mix. If
company’s objective is to inform a large number of buyers, advertising is advisable. If company wants to convince limited consumers, it
may go for personal selling. Even, when company wants to influence buyers during specific season or occasion, the sales promotion can
be used. Some companies use publicity to create or improve brand image and goodwill in the market.

11. Other Factors:

Over and above these factors, there are certain minor factors that affect promotion mix.

These factors may include:

i. Price of Product

ADVERTISEMENTS:

ii. Type of Marketing Channel

iii. Degree of Product Differentiation

iv. Desire for Market Penetration, etc. The list of factors stated above is not complete. There may be more factors. Promotional strategy should
be formulated only after considering the relevant factors. Marketing manager must be aware of these variables. Note that these factors affect
different firms in varying degree depending upon its internal and external marketing environment.
7.What are the various ways to set promotion budget? Explain the advantages and
disadvantages of each of these.

Ans: Several methods are used for setting advertising budget. Depending upon internal situations of the company, the suitable method is
followed. Every method has its merits, demerits, and applicability.

Commonly practiced methods have been briefly discussed in this part:

1. Percentage of Sales Method:

It is a commonly used method to set advertising budget. In this method, the amount for advertising is decided on the basis of sales. Advertising
budget is specific per cent of sales. The sales may be current, or anticipated. Sometimes, the past sales are also used as the base for deciding on ad
budget. For example, the last year sales were Rs. 3 crore and the company spent Rs. 300000 for advertising. It is clear that the company has spent
1% of sales in the last year.

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Company has the tendency to maintain certain per cent (or percentage) of sales as ad budget. Based upon the past, the current and the expected
sales, amount for advertising budget is determined. This method is based on the notion that sales follow advertising efforts and expenditure. It is
assumed that there is positive correlation between sales and advertising expenditure. This is not the scientific method to decide on advertising
budget.

Merits:

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The method offers following merits:

(a) It is based on sales volume. Therefore, cost of advertising can be offset against profits earned from the sales. It satisfies financial management.

(b) This method encourages marketing manager to think in terms of relationship between promotional costs, selling price, and profits per unit.

(c) It maintains competitive parity. All firms in the industry spend approximately the same percentage of sales for advertising.

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(d) It keeps the company in constant touch with the sales target to be achieved.

Demerits:

The method has been criticized on following grounds:

(a) In absence of specific guidelines, it is not possible to decide the appropriate per cent of sales. It lacks a scientific base.

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(b) Long-term planning is not possible because a long-term sales forecasting seems difficult.

(c) It neglects other objectives of advertising. Only sales are given priority. It doesn’t consider the need of advertising.

(d) Stage of product life cycle is not considered.

(e) It is, to some extent, inflexible.

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(f) It is assumed that only advertising affect sales. It is erroneous.

2. Objectives and Task Method:

This is the most appropriate ad budget method for any company. It is a scientific method to set advertising budget. The method considers
company’s own environment and requirement. Objectives and task method guides the manager to develop his promotional budget by (1) defining
specific objectives, (2) determining the task that must be performed to achieve them, and (3) estimating the costs of performing the task. The sum
of these costs is the proposed amount for advertising budget.

The method is based on the relationship between the objectives and the task to achieve these objectives. The costs of various advertising activities
to be performed to achieve marketing objectives constitute advertising budget.

Under this method, following steps are to be followed to set advertising budget:

1. Determine main objectives of marketing department.

2. Set advertising objectives in terms of sales, profits, brand loyalty, competitive stability, etc.

3. Determine advertising task in terms of various advertising activities required to be performed to achieve the advertising objectives.

4. Estimate cost of each advertising activity for the defined period.

5. Make sum of costs of all the activities. It is the estimated amount for advertising.

Thus, advertising budget is set on the basis of the objectives a company wants to achieve and in what way it wants the objectives to be achieved.
This method is logically consistent and practically applicable for all the companies. The method emphasizes on actual needs of the company. It is
considered as a scientific method to set ad budget.

3. Competitive Parity Method:

Competition is one of the powerful factors affecting marketing performance. This method considers the competitors’ advertising activities and
costs for setting advertising budget. The advertising budget is fixed on the basis of advertising strategy adopted by the competitors.

Thus, competitive factor is given more importance in deciding advertising budget. For example, if the close competitors spend 3% of net sales,
the company will spend, more or less, the same per cent for advertising. Here it is assumed that “competitors or leaders are always right.” If not
followed carefully, this method may result into misleading.

It is obvious that a company differs significantly from the competitors in terms of product characteristics, objectives, sales, financial conditions,
management philosophy, other promotional means and expenses, image and reputation, price, etc.

Therefore, it is not advisable to follow the competitors blindly. Marketing/advertising manager should take competitors’ advertising strategy as
the base, but should not follow as it is. The advertising budget must be adjusted to the company’s internal and external situation.

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Limitations:

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Manager must be aware of following limitations of the competition parity method:

(a) In case of a new product, the method fails to guide for deciding on advertising budget.

(b) It is difficult to know in which stage of life cycle the product of close competitor is passing through.

(c) Company differs in terms of sales, profits, challenges, financial conditions, and so on. To follow competitors directly may be erroneous.

(d) Advertising is not the sole factors that affect the sales; interplay of many factors determines sales.

(e) In case, when there are many competitors, it is difficult to decide as to whom the company should follow.
(f) The method is followed only when there are dominant competitors. In absence of competition, the method cannot be used.

(g) The method can make a sense only to followers and challengers. It is not applicable to a market leader.

4. Affordable or Fund Available Method:

This is, in real sense, not a method to set advertising budget. The method is based on the company’s capacity to spend. It is based on the notion
that a company should spend on advertising as per its capacity. Company with a sound financial position spends more on advertising and vice
versa.

Under this method, budgetary allocation is made only after meeting all the expenses. Advertising budget is treated as the residual decision. If
fund is available, the company spends; otherwise the company has to manage without advertising. Thus, a company’s capacity to afford is the
main criterion.

Limitations:

Following are the limitations of the method:

(a) The method completely ignores the role or need of advertising in the competitive market environment.

(b) In long run, it leads to uncertain planning as there is no guarantee that the company will spend for advertising.

(c) Except company financial position, other factors like company’s need for advertising, consumer base, competition, and so forth are ignored.

(d) This method only guides that a company should not spend beyond its capacity.

(e) This is not a method in real sense.

(f) There is possibility of bias in deciding advertising amount.

5. Expert Opinion Method:

Many marketing firms follow this method. Both internal and external experts are asked to estimate the amount to be spent for advertisement for a
given period. Experts, on the basis of the rich experience on the area, can determine objectively the amount for advertising. Experts supply their
estimate individually or jointly.

Along with the estimates, they also underline certain assumptions. Internal experts involve company’s executives, such as general manager,
marketing manager, advertising manager, sales manager, distribution manager, etc.

Whereas external experts involve marketing consultants, dealers, suppliers, distributors, trade associations, advertising agencies, and other
professionals related to the field. Marketing consultants and advertising agencies provide such services on professional basis.

Advertising budget recommended by external experts is more neutral (bias-free) and, hence, is reliable. Experts considers overall situation and
give their opinion on how much a company should spend. Mostly, the experts consider all the relevant factors related to advertising while
deciding on advertising budget.

Merits:

Expert opinion method offers following merits:

(a) The estimates tend to be more balanced as various executives and experts are involved.

(b) The budget is more accurate and realistic because the internal executives are well aware of company’s strengths and weaknesses.

(c) It is the only option when a company is new, having no past experience.

(d) External experts tend to be more neutral as they are external to organisation
Demerits:

However, the user must be aware of following possible demerits:

(a) It is not a scientific method. Personal value, experience, and attitudes play vital role.

(b) It is difficult to fix responsibility of the final estimates as many experts contribute to budget estimates.

(c) External experts are not fully aware of the company’s marketing situations.

(d) When more internal experts are involved, it may deteriorate relation due to possible conflicts or lack of consensus.

(e) Possibility of prejudice or bias cannot be ignored.

(f) All opinions, right or wrong, are given equal importance

6. Other Methods:

There are some other methods used for setting advertising budget.

They have been listed below:

i. Arbitrary Allocation Method

ii. Profit Maximization Approach

iii. Incremental Method

iv. Sales Force Opinion Method, etc.

8.What are the various roles of advertising?

Ans. In the 20th century, the media was dominated by print, radio, and television, attracting a broad swath of the public, affording them the
opportunity to read, listen, and watch the world around them in a way that they previously had not been able to do. Beginning in 1989, the World
Wide Web, (W3C.org) was invented, and it devised a virtual medium of software laid on top of the internet's physical wiring structure, which has
since enabled the public to message, tweet, send and receive emails, photos and videos; and to interact with user sites such as Twitter, Facebook
and many others. Apart from imparting knowledge and connecting the world, media serves another role: It spreads awareness about products and
services, broadcasting the benefits of specific products and services, via advertising.

The advertising industry is huge. Advertisers spent a grant total of $267 billion in 2016, much of it from the rapidly growing companies in China
like Alibaba. Procter and Gamble spent more on advertising than any other company, a whopping $10.5 billion, followed closely by the
electronics company, Samsung, with expenses of $9.9 billion. Car companies like Ford and General Motors, and consumer firms like Amazon
were also among the big spenders.

Many companies spend a lot of money on advertising, relying on the various forms of media out there to spread awareness about their products
and increase their sales. Here is a breakdown of the role of advertising in the media.

Spreading Awareness Through Advertising

Advertisements alert people about new products and services in the market that could potentially fulfill their needs or solve their problems. A
typical advertisement will tell you what the service or product is, where it can be bought, for how much, by whom, and why it should be bought.
This is possible through the power of the media to reach millions of people at the same time.

Popularizing a Brand
Think of all the popular brands you know, such as Coca-Cola or McDonald’s. These brands are where they are today because they utilized the
phenomenon of advertising well. Through constant republishing and replay to large groups of people, the media popularizes the brand. Many
people see it multiple times, and it sticks in their heads. Eventually, when they see it out there, they will recognize it and are more likely to buy it.

Increasing Customer Demand

The target audience of advertisements is typically large, whether you’re advertising in social media, print media, radio, or television. A well-
crafted advertisement will convince the public that they should buy the product or subscribe to the service being advertised. As a result, whatever
is already in the market becomes exhausted or oversubscribed, leading to an increase in demand for the product or service.

Increased Company Profits

This one works for the same reasons as the previous one on demand. Advertisements are usually displayed to large groups of people at the same
time. This means that, even with a low conversion rate, many people will end up buying your products eventually. If you execute your
advertisement well, you will get a good conversion rate and great sales. Increased sales, of course, mean increased profits.

It all boils down to how well you do your advertisement. A badly executed ad will not do any good for your company, no matter how many
people see it. A well-executed ad, on the other hand, can do wonders for your bottom line and turn your brand into a household name. Ultimately,
it can’t be denied that advertising in media is the fuel that drives global business.

9.Explain the difference between a “pull” promotional strategy and a “push” promotional
strategy. Under what conditions each strategy should be used?

1. Ans: The type of marketing strategy which involves direction of marketing efforts to intermediaries is called push strategy. On the
other hand, the marketing strategy involving the promotion of marketing efforts to the end user is called pull strategy.
2. In pull strategy, communication of products or information is demanded by the buyer, while in push strategy, no such communication
is demanded.
3. Push strategy aims at making customer aware of the product or brand. As against this, pull strategy encourages the customer to seek
the product or brand.
4. Push strategy uses sales force, trade promotion, money, etc. to induce channel partners, to promote and distribute the product to the
final customer. Conversely, pull strategy uses advertising, promotion and any other form of communication to instigate customer to
demand product from channel partners.
5. Push strategy focuses on resource allocation whereas pull strategy is concerned with responsiveness.
6. There is a long lead time in push strategy. However, it is just opposite in the case of pull strategy.
7. Push strategy is best suited when there is low brand loyalty in a category. Unlike pull strategy, is appropriate for the products with
high brand loyalty, where the consumers are well known about the differences in various brands, and they opt for a particular brand
before they go shopping.

Comparison Chart
Basis for
Push Strategy Pull Strategy
Comparison

Push strategy is a strategy that involves direction of Pull strategy is a strategy that involves promotion of marketing
Meaning
marketing efforts to channel partners. efforts to the final consumer.

A strategy in which customers demand company's product

What is it? A strategy in which third party stocks company's product.
from sellers.

Objective To make customer aware of the product or brand. To encourage customer to seek the product or brand.

Uses Sales force, Trade promotion, money etc. Advertising, Promotion and other forms of communication.

Emphasis on Resource Allocation Responsiveness

Suitability When the brand loyalty is low. When the brand loyalty is high.

Lead Time Long Short

10.Marketing managers make four important decisions when developing an advertising
program. List and briefly describe these decisions.

Ans: Whenever an advertising program is prepared, the marketing management should take into account the four advertising
decisions.

1. Setting Advertising Objectives

2. Setting Advertising Budgets
3. Developing Advertising Strategy
4. Evaluating Advertising Campaigns

On the basis of these advertising decisions, you may easily develop a successful Advertising Program for your business.

Advertising Decisions for Advertising Program

1. Setting Advertising Objectives:

The first important advertising decision in developing an advertising program is setting the advertising objectives. The decisions of
the past about the target market, Marketing Mix and positioning serve as a basis for the determination of the main job of
advertisement in the total of advertising program. An advertising objective is defined as a particular task of communication that
should be completed with a particular target audience and in a particular duration of time frame. Following are the four forms of
advertising objectives.

• Informative Advertising:

Under this objective, customers are informed about the new product or its new features or the primary demand is built through it.

• Persuasive Advertising:

In persuasive advertising selective demand for a brand is built by persuading the buyers about the offering that is best for their
investing money.

• Comparison Advertising:

In this objective of advertising a brand of a company is compared with the brand

of some other company either directly or indirectly.

• Reminder Advertising:

For the advertising of mature products this kind of advertising is adopted in which customers are educated to consider the product
continuously.

2. Setting Advertising Budgets:

When the advertising objectives are determined, then the next step of the advertising decisions is to determine the advertising
budget for each market and product category. There are four methods for setting an advertising budget which are as follow.

1. Affordable Method
2. Percent of Sales method
3. Competitive parity Method
4. Objective & Task Method

Whichever method is adopted for the budgeting of the advertisement, the main focus is to consider the appropriate amount of the
advertising. Most companies of consumer packaged products spend huge amount on advertising of their product and on the other
hand B2B companies spends little amount on their advertising. Both of these considerations are not healthy enough for the success
of the products in the markets.

On setting of advertising budgets, certain points should be considered which are as follow.

• Stage of the Product Life Cycle

• Market Share
• Competition & Clutter
• Product Differentiation

3. Developing an Advertising Strategy:

The advertising strategy includes the following two areas of the advertising decisions.

01- Message Decisions

02- Media Decisions

• Message Decisions:

The success of advertising is not based on the portion of budget utilized, but it relies on the content of the messages that can
attract attention of the customers and show clear picture. The effective advertising messages are required, which otherwise can
cause serious problems to the advertiser. In the old days all the viewers of the television have limited option of few channels that
can show them a great proportion of ads.

But now with the advancement in the world, there are many options to the viewers of televisions and they can easily avoid man y of
the unwanted or boring messages. So the advertising messages should be much more imaginative, planned, rewarding to
customers and entertaining. In some situations the advertisers include the controversial issues in their messages to make it more
attractive and attention gaining.

• Media Decisions:

The media decision of advertising strategy consists of the selection of proper media that can be effectively delivered the developed
message. For this purpose media planning is done by the media department in the organization to eliminate the friction between
effective advertising message and appropriate media. The selection of media is carried out through the following steps.

• The decision of the frequency, reach & impact.

• Selection of one of media among prominent media categories.
• Selection of Particular vehicles of media.
• Decision about the timing of the media selected.

4. Evaluating Advertising Campaigns:

The fourth & the last step in the related to the advertising decisions is the evaluation of the advertising campaigns. The ad vertising
program not only evaluates the effects of Communication of Advertising, but also the effects of sales. All this evaluation is carried
out on a regular basis. For the purpose of evaluation of communication effects, a technique called copy testing is used which can
tell about any particular ad that either it is communicated well or not. Copy testing technique can be adopted before or after the
printing or broadcasting of any ad before placement of an ad, the advertiser can present it to the customers and ask various
questions about the ad like how they feel about it? In this the advertiser can evaluate the attitudes of different customers and try to
find the exact results of the ad when the ad runs through a medium, the advertiser can evaluate the effects of that ad on
customers by analyzing the knowledge, awareness and preferences of the customers about the product.

On the other hand the effects of sales by an ad are not easy to measure as compared to the effects of communication. For
example, it is quite hard to measure the ratio of sales increase when the awareness of the product increases by 25% and the
preference of brand by 15%? Besides the above factors, there are many other factors that affect the sales of a product like, the
features of the product, the price of the product, its availability in the proper locations etc. That is why the sales effects of
advertising are harder to measure.

11.Explain the hierarchy of effects model to determine the communication

objectives.

Ans: The hierarchy of effects model is a model which tells advertisers to make an advertisement in such a way that the customer goes through all
these six stages namely awareness, knowledge, liking, preference, conviction and purchase. It is created by Robert J Lavidge and Gary A Steiner
in 1961, the hierarchy of effects model suggests six steps to consumer buying behaviour.

Hierarchy of Effects Steps

The steps are defined as below:

1. Awareness: This is the most crucial step and the starting point for purchase. Brands must make sure that the consumer is aware of the presence
of your brand in a particular product segment.

For example, if Tina wants to buy a toothbrush, and you as the marketing manager of Coolgate wants her to buy your brand’s toothbrush, you
have to make sure that you advertise well so that she is aware of the existence of such a brand for toothbrushes.

2. Knowledge: This is where your product will be evaluated against other brands by the consumer. Make sure enough (positive) knowledge is
available about your product – through the internet, retail stores and the product package itself.

For example, now Tina, aware that there is a Coolgate brand will try figure out what unique features and benefits you are offering over any other
brand like Colgate and Oral-B.

3. Liking: This is where the consumer builds a liking to your product. This is where your product is being considered for its emotional benefits;
be sure to make them prominent.

For example, now Tina has evaluated the pros & cons of buying a Coolgate brush but might not like the colour of it, or might feel that this brush
is for the elderly. As the marketing manager of Coolgate, you have to make sure that these features, that leave emotional impact, are taken care of
properly in the marketing communication program.

4. Preference: By this time consumer may be convinced to try out your product, but may like other brands of toothbrush too. So what is it that
will make her prefer Coolgate over the other brands? These points of differentiations or unique selling points need to be highlighted to make sure
that the consumer likes your brand more than the others in her consideration list.

For example, Tina now may be actually considering buying a Coolgate toothbrush. But is she thinking that she’ll buy it to try it only or is she
thinking that the next buy will also be a Coolgate brush?

5. Conviction: This is the stage where the doubt in consumers’ minds about buying the product of your brand needs to be converted into action.
Marketers can aid in this step by giving out free samples, test drives etc. This step should also decide if the consumer will stick to your brand i.e.
actually buy your brand, or switch after testing the sample.
For example, Tina tried the brush you gave her for a month and then when time came to buy one, she bought an Oral-B one. Make sure that
doesn’t happen and that trial builds loyalty. Incorporate such unique features in your brand that will encourage purchase.

6. Purchase: The last and the most crucial stage of the consumer buying cycle is the purchase. You need to make sure that purchase experience is
easy and perhaps even enjoyable for the consumer. Some of the ways to encourage purchase is by keeping simple and multiple paying options,
making the product available easily, easy to understand usage instructions, offers etc.

For example, now that Tina has decided to buy your brand after trying it out for a month, make sure she knows where to buy it from and how she
can pay. You may also give her a tube of toothpaste free to delight her.

The main aim of this tool that serves as a marketing communication tool is to encourage consumers to go through the six steps that end in
purchase of product. It is not necessary that consumers always go through all the six steps but the aim is to land a purchase.

Hierachy of Effects Consumer Behaviour Stages

Lavidge and Steiner further grouped these six stages into three main stages of consumer behaviour:

1. Cognitive

2. Affective

3. Conative

1. Cognitive: Also called the “thinking” stage, this is where the consumer gathers knowledge about the product and becomes aware of it. This can
be said to be a rational step where pros and cons, product specifications etc. of a product are evaluated.

2. Affective: Also called the “feeling” stage is when the consumer starts developing a liking for the product, and may even develop strong
positive (or negative) feelings toward it.

3. Conative: This is the “behaviour” stage of the process. This is when the consumer, after weighing the pros and cons, and deciding his/her
preference actually buys the product.

The model is named so because of the fact that the buying process is a step by step process where the number of people willing to participate at
each level keeps decreasing. Say you started with 10 people who are aware of your brand; 5 people who considered buying it and only 2 of those
10 actually bought the product.

The hierarchy of effects model is a model which tells advertisers to make an advertisement in such a way that the customer goes through all these
six stages namely awareness, knowledge, liking, preference,conviction and purchase.

Hence, this concludes the definition of Hierarchy of Effects Theory along with its overview.

12.The Internet is the latest public relation frontier. What kinds of special public relations
problems and opportunities does the internet present to today’s marketers?

Ans: The Internet has caused a revolution in communication by giving a voice to those that previously could not have been heard. This has
opened a whole new world of opportunities for both businesses and individuals that were unimagined in the era of the traditional media. These
still play an important role in shaping the public opinion but with the entire globe moving to the online world to search for information and buy
products/services, a PR that does not effectively communicate with the online community can no longer effectively shape and maintain the
desired public image.

Challenges of the Internet for PR

Although the Internet is one of the greatest inventions in human history, it has dramatically changed the world and above all, the communication.
The world wide web has opened a number of opportunities but it has also opened a number of challenges, especially for the PR sector that has
mastered communication with and through the traditional media. While PR specialists virtually had no competition in the era of the traditional
media, the democracy of the Internet has forced them to compete with the entire world.

The Internet has given just about everyone the ability to share their opinion just about everything with the entire world in a matter of seconds. The
ability to reach thousands or millions of people in virtually no time gave PR specialists a powerful tool but it also made their jobs more difficult,
especially in case of an attack on integrity of their clients. Just imagine restoring the client’s reputation if the first page of search engine results
contains mainly compromising or damaging content.

The Importance of Internet PR

Why businesses and individuals who want to succeed in the modern world cannot afford not to utilise the Internet PR is clearly evident from the
example of “anti-campaigns”. These can either be an unfortunate incident or a carefully devised plan of unethical competition. But regardless of
who stands behind and why, negative campaigning can have a devastating effect on public reputation of a company or an individual. The risk of
negative publicity, however, is not the only reason why the Internet PR is increasingly gaining in importance.

The Internet has a major influence on people’s opinion and the decisions they make, especially when they are uncertain. For example, let’s say
Joe has difficulties deciding which anti-acne cream to choose. He will open his search engine and look for information about the creams he is
considering buying. He will most likely take into account a variety of factors including the price and other people’s opinions but his decision will
also be influenced greatly by the information he will be able to receive about a particular product. And if he finds little information about how the
product is supposed to work, how soon he will be able to see the results, etc. there is a great chance that he will not buy that product.

In order to encourage Joe to at least consider buying your cream, he needs to be provided accurate, trustworthy and up-to-date information about
both the product and your company. And this can be achieved only through an effective Internet PR.

12.What is sales promotion? Explain the various tools of sales promotion.

Ans: Sales promotion is a type of Pull marketing technique. If you have a product which is new in the market or which is not receiving a lot of
attention, then you can promote this product to customers via sales promotion. You can use various techniques like giving discounts on the product,
offering 1 + 1 free schemes, etc etc.

When a brand wants to increase the sales of its products, it uses Sales promotion. The brand can increase the sales by attracting new customers to
their products or by retaining the old customers by various means. The company can also motivate the dealers and distributors of their channel to
perform better for their brand, and to get their stock moving.

There are two types of Sales promotional

a) Consumer sales promotions

Any sales promotion activity that you do keeping the end consumer in mind is known as consumer sales promotions. Example – if an E-commerce
website gives 10% discount on its products, then it wants the consumers to make the best of this deal. This is a consumer focused promotional
activity and hence can be called as consumer sales promotions.

The objective of Consumer sales promotions might be various. A consumer might be asked to test a sample of a completely new perfume in the
market and rate it. An existing customer might be asked to use a Scratch card so that he receives a gift.

At the end, the result should be an action from the consumer. Either the consumer should purchase the product right away, or he should come to
know about the product so that further awareness is created for the brand.

b) Trade Sales promotions

If your promotional activities are focused on Dealers, distributors or agents, then it is known as trade promotions. There is a lot of competition in
any field. And in channel sales, to get the products moving and to motivate the dealer to perform better, trade discounts are given.
Example – You are a dealer for Televisions. Now Sony comes and tells you, you will be given 5% discount if you cross a sale of 100 televisions.
Naturally, you will be very motivated because 5% in television sales is huge. Plus selling Sony TV’s is easy because it is already a brand. Thus,
you divert all potential customers to Sony Televisions so that you can achieve the target.

Similarly, there are other types of trade sales promotions which can be used to motivate the dealer and distributor. More such techniques of sales
promotions are discussed below.

As the noise of competitors rises, you will find more and more companies using sales promotions techniques. The advantage of sales promotion is
that they are not too expensive for the company when compared with ATL advertising mediums like Television or newspaper. Hence, even small
businesses use it quite effectively.

Sales promotion tools for consumers (Consumer promotion tools) –

The marketers need to choose the right sales promotion tool to reach its audience. Below are the major promotion tools directed towards
consumers –

1) Free samples – The manufacturer offers free samples to consumers in various ways doing door-to-door visits, at retail stores, malls, attached
to another product, etc. For example, attaching a sample of a shampoo sachet with a bottle of a beauty lotion. The purpose is to gain new
customers or enter into a new market.

2) Exchanges – Customer are asked to submit the old product and a new product is offered at a new price. The organisations sometimes asks to
submit the old product manufactured by them, but sometimes, the exchange rolls over to a product from any brand. For example, most of the
mobile phones are sold with exchange offers for any brand on the ecommerce site – Flipkart.

3) Sales promotion letters – Sent to buyer’s homes and offices giving information on promotion activity or information on the products.

4) Coupons – These are certificates by which a buyer can buy a product at a reduced price. These are mailed, accompanied with other products,
with newspapers or magazines, or even direct mail. This helps consumers and also the dealers as they are required to stock the product because of
a possibility of increase in demand. These help in introducing a new product, encourage trials, etc.

5) Cash refund offers or rebates – Here the manufacturer gives a certain percentage of refund as part of the deal for buying a product. The
refund is not given while making a purchase but received when the buyer submits a proof-of-purchase to the manufacturer.

6) Point-of Purchase displays – The customers are exposed to company’s product at the POP to ensure its awareness to maximum people
visiting the store. It draws the customer to the company’s brand and encourages customers to buy the product before they leave the store.

7) Demonstrations – Demonstrations are done at retail stores and malls. For example, sales people at malls and retail stores demonstrate
perfumes, cosmetic products, small electronic items, etc. Company’s also do door-to-door demonstrations as not all the people visit stores
regularly.

8) Gifts or Premium – Products are offered free or at a low cost for buying a particular product. For example, buy one get one free, book a flat
with no EMI for first year, etc. The company also gives out gifts like wallets, calendars, diaries, etc. along with a purchase. These gifts carry the
company’s logo and name.

9) Frequency program – The consumers are rewarded for making the purchase of the product regularly. The aim is to ensure the customer
doesn’t switches brand.

10) Free trials – Potential buyers are invited to try the new product for free. For example, new cola, flavoured packaged water, etc.

11) Contests, games, sweepstakes (Prizes) – These are opportunities for the buyers to win cash, trip, or a product when making a certain
purchase. Contest asks consumers to submit entries that may win the deal communicated from a panel of judges. These can be quiz contest,
beauty contest, etc. Sometimes consumers get a chance to take part in games like bingo numbers, letters, etc. After getting the right numbers, the
consumers win a prize. Sweepstakes refers to submitting names for a draw – lucky draws.

12) Product warranties and guarantees – The manufacturers make a promise to the buyer that the product will be repaired free of cost,
replaced, or money refunded if it doesn’t performs as promised for a certain period.

13) Promotion along with other brands – Two or more manufacturers advertise each other’s products.
Short notes:

A.Third Party Logistics: As companies grow they encounter many challenges associated with an
increased customer base, new locations, updated manufacturing methods, and other factors. For some
companies, meeting these challenges with investment in capital and overhead is ultimately not the
most financially viable option. Many times, it’s a better choice for these companies to look outside
their walls to third-party service providers to deliver the enhanced functions that they need to
continue growing. Logistics is certainly one of those functions that can benefit greatly from
choosing the right third-party partner. This is where 3PL comes in to play.

3PL, or third-party logistics, is essentially a variety of services and processes that are provided
to a business by an external company for a variety of reasons such as wanting to reduce costs,
improve efficiencies and expand capabilities. 3PL services are usually flexible and scalable based
on the needs of the business, meaning that they can be utilized on an as-needed basis, or as a
long-term solution depending on the goals and objectives of the business.

There are many reasons why companies choose to go the 3PL service route. Often, as a company grows, the need for warehouse space increases
beyond that business’ ability to manage it. 3PL warehousing can be a good option for companies facing storage capacity issues. Other companies
may be challenged with increasing transportation costs and investment in equipment and vehicles. The large fleets of modern vehicles and
equipment that are available through 3PL providers are often a much more cost-effective solution. Then there are US businesses looking to
expand into the Canadian market – a good 3PL will have the depth of experience to help solve many logistics challenges involved with these
scenarios.

Other reasons why companies may choose to partner with a 3PL include challenges with customer service, order fulfilment, returns, order
tracking, technical services, inventory management, and more. As you can expect, the more of these struggles that a company faces as they grow,
the more value a 3PL partner can provide.

Benefits of 3PL

3PL logistics providers can deliver a great deal of value to companies that are dealing with the challenges associated with rapid growth or
changing market conditions. Here are some of the main benefits that can be realized by utilizing 3PL logistics.

Cost Savings

3PL providers have vast networks of resources across the country, and the globe. This includes warehousing space, trucking and transportation
fleets, human resources, and technology that your company can take advantage of without the necessary massive investment in overhead and
capital setting this all up on your own would require. This level of flexibility adds up to significant cost savings which have a big impact on the
bottom line.

Flexibility

The level of service you obtain from a 3PL provider is entirely up to you, and can be adjusted to accommodate different levels of business due to
seasonal or cyclical demands. For example, if your company sees a big surge in orders every year for the holidays, 3PL companies can scale up
services and labor accordingly to meet high demand needs, and then go back to normal levels once the surge subsidesEfficiency

In addition to the savings in capital costs, many companies see a significant savings in time through 3PL services. This can take the form of lower
cost per unit shipped, faster transportation and reduced delivery times, and in the ability for the whole organization to devote more time to its core
specialties, including product development, customer service, sales & lead generation, or market growth.

Improved efficiency means greater return on your investment.

Customer Experience

In addition to business-side benefits, there are many customer-facing benefits to 3PL services. Companies can expect to achieve faster and more
reliable delivery times, improved tracking and order status communication, reduced chance of damage or incorrect product packing, and more.
All these benefits make a big difference in overall customer satisfaction and retention, while improving the average lifetime value of customers
and your brand image.
International Reach

When an American company expands beyond its country’s borders into Canada, a new set of challenges arises in the form of regulatory
compliance, customs clearance, and communications. 3PL providers are able to assist companies with a smooth and efficient entry into new
markets through the use of their established & extensive Canadian networks.

For anyone considering a move into Canadian markets, the guidance available from experienced 3PL logistics providers is extremely valuable.

B.Category Killer: very popular or successful product, store, etc., that dominates competitors in
a particular category Their approach delivered search results that creamed the competition's, and
it served them up in a simple, quick-loading, no-frills format. It was a stone-cold category killer.

a chain store that dominates the sale of merchandise in a particular category (such as toys,
sporting goods, or office supplies) by offering a large selection of products at discounted prices
The big discounters are following another set of retailers that have been making their mark
throughout the five boroughs: the so-called category killers, who sell basically one type of
merchandise, be it books, apparel, linen or electronic goods. — Douglas Martin, New York Times, 11
Dec. 1994 Founded by Charles Lazarus in 1957, Toys “R” Us was the original “category killer”—
industry jargon for a chain of large stores that offered low prices on almost every product and
brand in its category and killed competing local retailers.

C.Buzz Marketing: The Buzz Marketing is the practice of creating an excitement among the users and the consumers about a
particular product, service, brand or the company. It is one of the forms of Word- of-Mouth, wherein the users give a buzz i.e. create a hype
among the consumers about a product or service they have recently experienced.

The Buzz can be both online and off- line, i.e. face to face communication without any medium. Friends meeting in a marketplace and discussing
the latest movie can be the example of off-line buzz marketing.

The social media marketing plays a dominant role in creating a buzz worldwide. The social media sites viz. Facebook, Twitter, Google+, etc.
provides a platform for the companies and the users to meet and discuss the company’s whereabouts.

Generally, the buzz is created for Movies, Gadgets, Sports, Events, Cars, Bikes, cosmetics, etc.

The buzz created in the market can be:

1. The Controversial Buzz called as the Taboo

2. The Unique Buzz i.e. something unheard or unthought called as the Unusual
3. The Buzz that creates a favorable brand impression called as the Outrageous.
4. The Hilarious Buzz that can keep the brand in talks for its comic side.
5. The Remarkable Buzz, to give remarks to the brand.
6. The Secret Buzz to create a sense of suspicion.

The “Buzz” is the sound created by the “Bees” and similarly in buzz marketing, the group of people is considered as “vectors” who create the
buzz about the brand or a company.

Following are the types of Vectors in Buzz Marketing:

1. The Lunatic Fringe: Also called as “Innovators,” who are open-minded and always ready to try the new products and services
launched in the market.
2. Alphas: These users lie between the innovators and the early adopters, who search in for the novice products and ready to bear the
risk.
3. Bees: These users give birth to the buzz marketing, who regularly share their experiences about the goods and services with the other
consumers.
4. Large public: It includes those users who buy the goods and services only when it has been used by the majority of the population
and is well tried and tested.There more than 150 users who share their experiences with the consumers, but it has a Snowball Effect
i.e. less information fades naturally.
5. Laggards: These users are traditionally bound with the conservative mindsets. They do not resort to the new goods and services
immediately and wait for a long time till it becomes a tradition.
D.Integrated Marketing Communications: It is essential for organizations to promote their brands well
among the end-users not only to outshine competitors but also survive in the long run. Brand promotion increases awareness of products and
services and eventually increases their sales, yielding high profits and revenue for the organization.

To understand integrated marketing communication, let us first understand what does brand communication mean?

Brand communication is an initiative taken by organizations to make their products and services popular among the end-users. Brand
communication goes a long way in promoting products and services among target consumers. The process involves identifying individuals who
are best suited to the purchase of products or services (also called target consumers) and promoting the brand among them through any one of the
following means:

▪ Advertising
▪ Sales Promotion
▪ Public Relation
▪ Direct Marketing
▪ Personal Selling
▪ Social media, and so on

Integrated Marketing Communication - Let us now understand what does integrated marketing communication mean?

Integrated marketing communication refers to integrating all the methods of brand promotion to promote a particular product or
service among target customers. In integrated marketing communication, all aspects of marketing communication work together for increased
sales and maximum cost effectiveness.

Let us go through various components of Integrated Marketing Communication:

1. The Foundation - As the name suggests, foundation stage involves detailed analysis of both the product as well as target market. It is
essential for marketers to understand the brand, its offerings and end-users. You need to know the needs, attitudes and expectations of
the target customers. Keep a close watch on competitor’s activities.
2. The Corporate Culture - The features of products and services ought to be in line with the work culture of the organization. Every
organization has a vision and it’s important for the marketers to keep in mind the same before designing products and services. Let us
understand it with the help of an example.

Organization A‘s vision is to promote green and clean world. Naturally its products need to be eco friendly and biodegradable, in lines
with the vision of the organization.

3. Brand Focus - Brand Focus represents the corporate identity of the brand.
4. Consumer Experience - Marketers need to focus on consumer experience which refers to what the customers feel about the product.
A consumer is likely to pick up a product which has good packaging and looks attractive. Products need to meet and exceed customer
expectations.
5. Communication Tools - Communication tools include various modes of promoting a particular brand such as advertising, direct
selling, promoting through social media such as facebook, twitter, orkut and so on.
6. Promotional Tools - Brands are promoted through various promotional tools such as trade promotions, personal selling and so on.
Organizations need to strengthen their relationship with customers and external clients.
7. Integration Tools - Organizations need to keep a regular track on customer feedbacks and reviews. You need to have specific
software like customer relationship management (CRM) which helps in measuring the effectiveness of various integrated marketing
communications tools.

Integrated marketing communication enables all aspects of marketing mix to work together in harmony to promote a particular product or service
effectively among end-users.