Chapter1-Introduction

CHAPTER 1

INTRODUCTION
The rise of rural markets as exceptionally undiscovered potential, underlines the need to
investigate them. Advertisers in the course of recent decades, with imaginative methodologies,
have endeavored to comprehend and tap country markets. Some of their endeavors paid off and
many markets still a riddle. Rural marketing is a developing idea, and as a part of any economy,
has undiscovered potential; advertisers have understood the open door as of late. Rural
purchasers jump at the chance to take after the urban example of living. Along these lines,
looking open entryways, which provincial markets offer to the sponsors, one may state that
what's to come is to a great degree empowering for the people who can fathom the movement of
rustic markets and attempt them additionally reinforcing their best favorable luck. The heart of
India lives in its villages, and the “Indian rural market” through its inconceivable extent and
request base offers incredible chances to advertisers. Rural marketing incorporates tending to
more than 700 million potential purchasers and more than 40 for every penny of the Indian focus
wage. Hence, the rural market needs specialized techniques for selling products and services.

1.1 Marketing Mix Strategies

The marketing mix is the set of controllable, tactical marketing tools that a company uses to
produce a desired response from its target market. It consists of everything that a company can
do to influence demand for its product. It is also a tool to help marketing planning and execution.
An effective marketing strategy combines the 4 Ps of the marketing mix. It is designed to meet
the company’s marketing objectives by providing its customers with value. The 4 Ps of the
marketing mix are related, and combine to establish the product’s position within its target
markets.

The term "marketing-mix," was first coined by Neil Borden, the president of the American
Marketing Association in 1953. It is still used today to make important decisions that lead to the
execution of a marketing plan. The various approaches that are used have evolved over time,
especially with the increased use of technology. The use and importance of marketing mix lie in
its contribution towards the formation of an effective marketing strategy and its practical
implementation. Integrating all the essentials of effective marketing, marketing mix allows you
to analyze and asses the feasibility and role of the product or service that you have to offer,
identify appropriate distribution channel for the proper placement of your product, set a suitable
price for the value that you are offering to your consumers and identify and employ suitable
promotional media.
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Consequently, marketing mix provides you with an all-inclusive and holistic marketing approach
and gives direction. One of the most significant aspects of marketing is concerned with
effectively conveying to the consumers the value that you have to offer to them through the
offered goods or services and highlighting the distinctive features of your offered services and
products in comparison to that of your competitors. Basically, marketers are required to convey
convincing information to the target consumers so that they choose their brand over others’.

The role of marketing mix in Strategy – Marketing mix plays a crucial role while deciding the
strategy of an organization. It is the first step even when a marketing plan or a business plan is
being made. This is because; the marketing mix decision will also affect positioning decisions.
Based on products, segmentation and targeting will be done. Based on the price, positioning can
be decided. And these decisions will likely affect the place and promotion decisions. Thus, the
marketing mix strategy goes hand in hand with segmentation targeting and positioning.
Marketing mix includes and combines various factors that help you identify and assess various
factors, which will enable you to communicate effectively with your target consumers.
Marketing mix guides you towards identifying and assessing the diverse aspects of your products
or services in relation to their utility for your consumers and their relevance to consumer
preferences. Furthermore, marketing mix also provides direction for the selection of a suitable
distribution channel, where you target consumer are more likely to look around for your offered
services or products. It may be any platform, ranging from a retail store to an online shop.
Marketing mix also includes directives for the allocation of a suitable price, which confers with
priorities and limitations of your target consumers. It helps you promote and advertise your
products and services effectively, so that you may be able to proficiently deliver value to your
consumers.

The 4 P’s of Marketing:

Marketing Mix, a term coined by Neil Borden, are the ingredients that combine to capture and
promote a brand or product’s unique selling points, those that differentiate it from its
competitors. The ideas behind Borden’s model were refined over the years until E. Jerome
McCarthy reduced them to 4 elements called “The Four Ps.” This proposed classification has
been used by marketing companies, branding agencies and web design companies throughout the
world. The origins of the four Ps can be traced to the late 1940s. The first known mention of a
mix has been attributed to a Professor of Marketing at Harvard University, Prof. James
Culliton. In 1948, Culliton published an article entitled, The Management of Marketing Costs in
which Culliton describes marketers as 'mixers of ingredients'. Some years later, Culliton's
colleague, Professor Neil Borden, published a retrospective article detailing the early history of
the marketing mix in which he claims that he was inspired by Culliton's idea of 'mixers', and
credits himself with popularizing the concept of the 'marketing mix'.
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According to Borden's account, he used the term, 'marketing mix' consistently from the late
1940s. For instance, he is known to have used the term 'marketing mix' in his presidential
address given to the American Marketing Association in 1953.
Although the idea of marketers as 'mixers of ingredients' caught on, marketers could not reach
any real consensus about what elements should be included in the mix until the 1960s. The 4 Ps,
in its modern form, was first proposed in 1960 by E. Jerome McCarthy in his text-book, Basic
Marketing: A Managerial Approach. McCarthy used the 4 Ps as an organizing framework for the
entire work with chapters devoted to each of the elements, contained within a managerial
approach that also included chapters dedicated to analysis, consumer behavior, marketing
research, and market segmentation and planning to round out the managerial approach. Phillip
Kotler, a prolific author, popularized the managerial approach, and with it, spread the concept of
the 4 Ps. McCarthy’s 4 Ps has been widely adopted by both marketing academics and
practitioners.
The prospect of expanding or modifying the marketing mix first took hold at the inaugural AMA
Conference dedicated to Services Marketing in the early 1980s, and built on earlier theoretical
works pointing to many important limitations of the 4 Ps concept. Taken collectively, the papers
presented at that conference indicate that service marketers were thinking about a revision to the
general marketing mix based on an understanding that services were fundamentally different to
products, and therefore required different tools and strategies. In 1981, Booms and Bitner
proposed a model of 7 Ps, comprising the original 4 Ps plus process, people and physical
evidence, as being more applicable for services marketing. Since then there have been a number
of different proposals for a service marketing mix (with various numbers of Ps - 6 Ps, 7 Ps, 8 Ps,
9 Ps and occasionally more).
The categories that can be controlled in the marketing of goods and services are product, price,
place and promotion. Designs made in the product component determine the name, design and
packaging of the goods. Price involves the cost of the good, place decisions outlines where the
product will be sold and how it will be delivered to the market, whereas promotion involves
advertising, public relations and promotional strategy.

Marketing mix is about putting the right product or a combination thereof in the place, at the
right time, and at the right price. The difficult part is doing this well, as you need to know every
aspect of your business plan. The marketing mix is a crucial tool to help understand what the
product or service can offer and how to plan for a successful product offering. The marketing
mix is most commonly executed through the 4 P’s of marketing: Price, Product, Promotion,
and Place.

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 Product- The first thing a business needs is a product. Therefore product is also the first
variable in the marketing mix. Product decisions are the first decisions you need to take
before making any marketing plan. A product can be divided into three parts. The core
product, the augmented product and the tertiary product. However, if the product features
are not fitting in the marketing mix, it can be altered such that it finds a place for itself in
the marketing mix.

 Pricing- Pricing of a product depends on a lot of different variables and hence it is

constantly updated. Major consideration in pricing is the costing of the product, the
advertising and marketing expenses, any price fluctuations in the market, distribution
costs etc. Many of these factors can change separately. Thus the pricing has to be such
that it can bear the brunt of changes for a certain period of time. However, if all these
variables change, then the pricing of a product has to be increased and decreased
accordingly.

 Place- Place refers to the distribution channel of a product. If a product is a consumer

product, it needs to be available as far and wide as possible. On the other hand, if the
product is a Premium consumer product, it will be available only in select stores.
Similarly, if the product is a business product, it will need a team who interacts with
businesses and makes the product available to them. Thus the place where the product is
distributed depends on the product and pricing decisions, as well as any STP decisions
taken by a firm. Distribution has a huge effect on the profitability of a product. Supply
chain and logistics decisions are considered as very important costing decisions of the
firm. The firm needs to have a full proof logistics and supply chain plan for its
distribution.

 Promotion- Promotions in the marketing mix includes the complete integrated marketing
communications which in turn includes ATL and BTL advertising as well as sales
promotions. Promotions are dependent a lot on the product and pricing decision. If the
product is completely new in the market, it needs brand / product awareness promotions,
whereas if the product is already existing then it will need brand recall promotions.
Promotions also decide the segmentation targeting and positioning of the product.
However, the budget required for extensive promotions is also high. Promotions are
considered as marketing expenses and the same needs to be taken in consideration while
deciding the costing of the product.

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Fig.1.1 4 Ps of Marketing

Thus as we see from the above diagram, all the four variables of marketing mix are inter related
and affect each other. By increasing the pricing of the product, demand of the product might
lessen, and lesser distribution points might be needed.

1.1.1 Networks & Channels of Distribution

A distribution channel is the network of individuals and organizations involved in getting a

product or service from the producer to the customer. Distribution channels are also known as
marketing channels or marketing distribution channels.
The two primary channels are direct and indirect, but there are different sub-channels within
those categories. With the direct channel, the vendor of a product or service sells directly to the
customer. The vendor may maintain its own sales force to close deals with clients or sell its
products or services through an e-commerce website. The direct sales approach requires vendors
to take on the expense of hiring and training a sales team or building and hosting an e-commerce
operation.

The indirect channel, in contrast, offloads sales activities to individuals and organizations known
as intermediaries. Examples of intermediaries include value-added resellers (VARs), consultants,
systems integrators (SIs), managed service providers (MSPs), original equipment manufacturers
(OEMs), independent software vendors ISV wholesaler’s distributors. Each type of intermediary
represents a channel, with its own distinct characteristics. VARs, for example, are often local
companies that sell horizontal (accounting) or vertical (manufacturing) IT solutions to the
businesses in its geographic region. Systems integrators may be large, national companies that
work on highly complex, multi-vendor IT projects. Consultants may not resell solutions at all,
but influence sales through product recommendations to customers. A vendor develops a channel
strategy to determine what types of intermediaries to target and how to optimize partner
relationships to increase sales and improve distribution.
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A distribution network is an interrelated arrangement of people, storage facilities and

transportation systems that moves goods and services from producers to consumers. A
distribution network is the system a company uses to get products from the manufacturer to the
retailer. A fast and reliable distribution network is essential to a successful business because
customers must be able to get products and services when they want them. A distribution channel
strategy enables you to sell to customers in geographical areas or market sectors that your direct
sales team cannot reach. You can choose from a number of distribution channels, including
wholesalers, retailers, distributors and the Internet. Each channel gives you different options for
dealing with customers and prospects. However, to ensure that your distributors operate
effectively on your behalf, your strategy must incorporate the right level of control and support.

Features of Distribution Channel:

 Reach- If your strategy is to grow your business regionally or nationally, highlight the
geographical areas you want to reach through a distribution channel and identify a
network of distributors or retailers that provide existing coverage of the territories. If you
are planning to export products, focus on established distributors with detailed local
market knowledge. Consider marketing your products on the Internet so that you can
extend coverage to customers where there is no suitable physical distribution network.
 Cost- Although a distribution strategy gives you a ready-made platform for expansion,
it’s important to compare the cost of dealing through indirect distribution channels with
the cost of setting up your own network or direct sales operation. Without a distribution
network, you will have to commit resources to order processing, stockholding, delivery,
invoicing and customer service. Compare that with the lower margins you will make by
giving distributors a discount for providing a similar level of service and providing them
with a program of marketing and training support.
 Contribution- Your strategy should also take account of the potential contribution of each
distribution channel. Concentrate on working with distributors that give you access to an
additional customer base, with no additional direct sales and marketing costs. Distributors
also provide you with local market knowledge, enabling you to establish your business in
new markets without incurring heavy market entry costs.
 Support- Support and control are critical factors in your distribution strategy. Appointing
a manager to work with distributors enables you to monitor their performance and
identify their support needs. Develop marketing support programs to meet the needs of
different channels. Options include funds for advertising or direct marketing campaigns
or templates that enable partners to develop their own campaigns. If channel sales
represent a significant proportion of your business, develop advertising and marketing
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campaigns to drive business to your channel partners. Operating a training program will
improve distributors’ product and marketing knowledge and enable them to deliver a
higher standard of service to customers.
 Customer Service- It’s important to identify the types of customers you wish to serve
directly. Typically, these would be your largest customers or customers that demand
levels of technical support beyond your partners’ capability. Use channel partners to deal
with large numbers of smaller customers cost effectively so that you can concentrate your
resources on your key accounts.

1.1.2 Product Strategy

All great products start with a clear strategy that is customer and market-driven. Strategy not
only ensures that you work on what matters. It is also essential so that you can communicate
what matters to your team and organization. The main purpose of a strategy is to provide the
product manager with direction so they can guide their product team and manage the business
over the planning period. Strategies also help product managers communicate the products' value
to cross-functional teams and key stakeholders, who want to know how products will achieve
high-level business objectives. A product strategy is the foundation of a product lifecycle, and its
execution plan for further development. As they develop their product strategy, product leaders
zero in on target audiences and define key product and customer attributes.

Product strategy comprises of three major factors:

Product
Strategy

Vision Goals Initiatives

Fig.1.2 Factors of Product Strategy

 Vision- A good vision describes who the customers are, what customers need, and how
you plan to deliver a unique offering. The vision includes details on the market
opportunity, target customers, positioning, a competitive analysis, and the go-to-market
plan.
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 Goals- Goals define what you want to achieve in the next quarter, year, or 18 months.

 Initiatives- Initiatives are the high-level efforts that will help you achieve your goals.

A great strategy starts with a clear product plan, a vision and a canvas that explains how
customer and market forces shape the product's direction. That's why you must visualize your
strategy and relationships.

A product strategy draws from the ultimate vision of the product. It states where the product will
end up. By setting a product strategy, you can determine the direction of your product efforts.
Similar to making effective use of a map, you first need a destination, and then you can plan your
route. Just as a business has a strategic vision of what it wants to be when it grows up, the
product has its own strategy and destination.

Elements of Product Strategy:

 Who to selling- Defining the target customer or market. Identifying whom to sell, and
what that market looks like.

 What to sell- Describe how potential customers will perceive the product compared to
competitive products. Understand what makes the product unique in the market.

 What value is provided to the customer- Determining what problems the product solves
for customers. A product cannot be everything to everyone within a particular market, but
it can help to solve specific problems. Create a value proposition to position the value to
provide and the benefits that customers will receive with the solution.

 How to price the product- Stating how to price the product. Include its perceived value
and a pricing model.

 How to distribute the product- Describe how to sell the product, and how the target
market will acquire that product.

Creating Product Strategy:

Creating product strategy for a product starts with identifying the market problems to be solved.
This includes interviewing the target market, understanding the competitive landscape and
identifying how to differentiate. The product strategy will change over time according to the
needs of the market, and when decided to entering different markets. Listening to the market and
developing the product strategy is a circular process. For a product to be successful it has to meet
and satisfy a specific need and it should be able to function as promised.
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The features and benefits of the product should be clearly communicated to current and potential
customers. Another vital feature of a product is branding because it’s what differentiates itself
from other similar products in the market. It also creates customer recall and loyalty. These
factors ultimately affect the product strategy. Other factors that attract customers, aside from the
product itself, are the packaging, quality, services, options, and warranty. Manufacturer might
want to bundle his products with all the services to entice customers because it adds value to the
products.

1.1.3 Pricing Strategy:

Price must support the other elements of the marketing mix. Pricing is difficult and must
reflect supply and demand relationship. Pricing a product too high or too low could mean lost
sales for the organization. Good pricing strategy helps to determine the price point at which one
can maximize profits on sales of the products or services. When setting prices, a business owner
needs to consider a wide range of factors including production and distribution costs, competitor
offerings, positioning strategies and the business’ target customer base. While customers won’t
purchase goods that are priced too high, and on the other hand a company won’t succeed if it
prices goods too low to cover all of the business’ costs.
Along with product, place and promotion, price can have a profound effect on the success of a
small business. Pricing is one of the most vital and highly demanded components within the
theory of marketing mix. It helps consumers to have an image of the standards the firm has to
offer through their products, creating firms to have an exceptional reputation in the market. The
firm's decision on the price of the product and the pricing strategy impacts the consumer's
decision on whether or not to purchase the product. When firms are deciding to consider
applying any type of pricing strategy they must be aware of the following reasons in order to
make an appropriate choice which will benefit their business. The competition within the market
today is extremely high, for this reason, businesses must be attentive to their opponent's actions
in order to have the comparative advantage in the market.

The technology of internet usage has increased and developed dramatically therefore, price
comparisons can be done by customers through online access. Consumers are very selective
regarding the purchases they make due to their knowledge of the monetary value. Firms must be
mindful of these factors and price their products accordingly.

Mainly there are three major approaches in which a business can fix the price of its product:
1.) Cost based pricing- when price is fixed by adding a profit element on top of the
original cost of making the product.
2.) Customer based pricing- when prices are determined what the firm believes,
customers will be ready to pay for that product.
3.) Competitor based pricing- when competitor’s price is the main influence for
fixing prices.
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Cost Based
Pricing

Customer
Based Pricing

Competitor
based Pricing

Fig.1.3 Approaches of Pricing

Cost Based Pricing:

This involves setting a price by adding a fixed amount or percentage to the cost of making or
buying the product. In some ways this is quite an old-fashioned and somewhat discredited
pricing strategy, although it is still widely used. Cost plus (or mark-up) pricing is widely used in
retailing, where the retailer wants to know with some certainty what the gross profit margin of
each sale will be. An advantage of this approach is that the business will know that its costs are
being covered. The main disadvantage is that cost-plus pricing may lead to products that are
priced un-competitively. The main advantage of cost-based pricing is that selling prices are
relatively easy to calculate. If the mark-up percentage is applied consistently across product
ranges, then the business can also predict more reliably what the overall profit margin will be.

Customer Based Pricing:

 Penetration Pricing- Penetration pricing is the pricing technique of setting a relatively low
initial entry price, usually lower than the intended established price, to attract new
customers. The strategy aims to encourage customers to switch to the new
product because of the lower price. Penetration pricing is most commonly associated with
a marketing objective of increasing market share or sales volume. In the short term,
penetration pricing is likely to result in lower profits than would be the case if price were
set higher. However, there are some significant benefits to long-term profitability of
having a higher market share, so the pricing strategy can often be justified.

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You often see the tagline "special introductory offer" – the classic sign of penetration
pricing. Penetration pricing is often used to support the launch of a new product, and
works best when a product enters a market with relatively little product differentiation
and where demand is price elastic – so a lower price than rival products is a competitive
weapon.

 Price Skimming- Skimming involves setting a high price before other competitors come
into the same market. This is often used for the launch of a new product which faces little
or no competition – usually due to some technological features. Such products are often
bought by “early adopters” who are prepared to pay a higher price to have the latest or
best product in the market. Price skimming as a strategy cannot last for long, as
competitors soon launch rival products which put pressure on the price. Another problem
is that by price skimming, a firm may slow down the volume growth of demand for the
product. This can give competitors more time to develop alternative products ready for
the time when market demand is strongest.

 Loss Leaders- The use of loss leaders is a method of sales promotion. A loss leader is a
product priced below cost-price in order to attract consumers into a shop or online store.
The purpose of making a product a loss leader is to encourage customers to make further
purchases of profitable goods while they are in the shop. If a business undercuts its
competitors on price, new customers may be attracted and existing customers may
become more loyal. So, using a loss leader can help drive customer loyalty. One risk of
using a loss leader is that customers may take the opportunity to "bulk-buy". If the price
discount is sufficiently deep, then it makes sense for customers to buy as much as they
can, if the product is not perishable. Using a loss leader is essentially a short-term pricing
tactic for any one product. Customers will soon get used to the tactic, so it makes sense to
change the loss leader or its merchandising every so often.

 Predatory Pricing- With predatory pricing, prices are deliberately set very low by a
dominant competitor in the market in order to restrict or prevent competition. The price
set might even be free, or lead to losses by the predator. Whatever the approach,
predatory pricing is illegal under competition law.

 Psychological Pricing- The aim of psychological pricing is to make the customer believe
the product is cheaper than it really is. Pricing in this way is intended to attract customers
who are looking for value.

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Competitor Based Pricing:

If there is strong competition in a market, customers are faced with a wide choice of who to buy
from. They may buy from the cheapest provider or perhaps from the one which offers the best
customer service. But customers will certainly be mindful of what is a reasonable or normal price
in the market. Most firms in a competitive market do not have sufficient power to be able to set
prices above their competitors. They tend to use “going rate” pricing – i.e. fixing a price that is in
line with the prices charged by the competitors. In effect such businesses are “price takers”, they
must accept the going market price as determined by the forces of demand and supply. An
advantage of using competitive pricing is that selling prices should be line with rivals, so price
should not be a competitive disadvantage.

1.1.4 Promotional Tools & Techniques:

Promotion is the aspect of marketing that involves delivery of company, brand or product
messages to target customers. Several tools are used by companies to aid the delivery of both
paid and unpaid promotional methods. Each tool contributes a different way to reach customers
and achieve communication objectives. These promotional tools look to communicate,
company’s messages across to the consumer. The purpose of a promotion and thus its
promotional plan can have a wide range, including: sales increases, new product acceptance,
creation of brand equity, positioning, competitive retaliations, or creation of a corporate image.
Both personal and non-personal channels of communication can be used as promotional tools.

The five major tools of promotion are:

 Advertising
 Sales Promotion
 Public Relation
 Direct Marketing
 Publicity

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Advertising

Sales
Publicity
Promotion

Direct Public
Marketing Relation

Fig.1.4 Tools of Promotion

Advertising:

Advertising is an audio or visual form of marketing communication that services an openly

sponsored, non-personal message to promote or sell a product, service or idea. Sponsors of
advertising are often businesses who wish to endorse their products or services. Advertising is
communicated through various mass media, including media such as newspapers,
magazines, television, radio, outdoor advertising or direct mail; or new media such as search
results, blogs, websites or text messages. The actual presentation of the message in a medium is
referred to as an advertisement or "ad". All products, old and new, cheap or expensive, durable
or consumer, need extensive advertising to survive in this competitive era. It facilitates large
scale marketing.

Some of the major purposes of advertising are:

Give
Information

Influencing
Purposes of Attract
Buying Advertising Attention
Behaviour

Create
Awareness

Fig.1.5 Purposes of Advertising

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 Give Information- The first and foremost purpose of advertising is giving information,
not only regarding a product or service, but even several other issues related to the
society.
 Attract Attention- Advertising acts as a marketing vehicle, and is extremely useful in
gaining attention of people towards a particular product or service. Marketers draw
attention of their target audiences through advertising.
 Creates Awareness- Advertising campaigns are even designed to create awareness in the
society regarding a particular issue. These advertising messages are not trying to sell the
consumer something, but are working to make them aware of an issue.
 Influencing Buying Behavior- Marketing and promotional efforts use advertising as a
vehicle to influence the buying behavior of consumers. This type of advertising typically
promotes a particular product or service, introduces a new offering, or promotes a sale or
upcoming event.

Features of Advertising:

 Tool for Promotion- Advertising is a powerful, expensive and popular element of

promotional mix, majorly used by marketers for selling their products and services.
 Paid Form- Advertising is not free of costs. Advertiser, called as sponsor, has to spend
money for preparing message, buying media, and observing advertising efforts. It is the
costliest option of market promotion. Company has to prepare its advertising budget
suitable to the advertising costs.
 Use of Media- Advertiser can use any of the numerous advertising media options to
deliver the message. Widely used media are print media (newspapers, magazines,
pamphlets, booklets, letters, etc.), outdoor media (hoardings, sign boards, wall-printing,
vehicle, banners, etc.), audio-visual media (radio, television, film, Internet, etc.), or any
other to address the target audience.
 Non-Personal- Advertising is a type of non-personal or mass communication with the
target audience. A large number of people are addressed at time. It is called as non-
personal salesmanship.
 Wide Relevancy- Advertising is a popular and widely used means for communicating
with the target audience. It is not used only for business and profession, but is widely
used by charitable trusts, government agencies, educational institutions, non-profitable
organizations and others to inform and appeal various target public.
 Diverse Objectives- Advertising is targeted at achieving several objectives. It is directed
to increase sales, create and improve brand image, face competition, build relations with
publics, or to educate people.

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 Advertising as an Art- Today’s advertising is much more complex. Message creation and
presentation involves a good deal of knowledge, creativity, skills, and experience. So,
advertising can be said as an art. It is an artful activity.
 Component of Truth- It is difficult to say that advertising message always discloses the
truth. In many cases, exaggerated facts are advertised. However, due to certain legal
provisions, the component of truth can be legitimately assured. But, there is no assurance
that the claim made in advertisement is completely true. Some advertisements can be
materialistic, misleading, and producer-centered.
 Methods of Advertising- Advertising message can be communicated in written, oral,
audible, or visual forms. Mostly, message is expressed in a joint form, such as oral-
visual, audio-visual, etc. So various methods of advertising can be used by the advertiser
as per the requirements.

Types of Advertising Media:

Advertising has evolved into a vastly complex form of communication, with literally thousands
of different ways for a business to get a message to the consumer. Today's advertiser has a vast
array of choices at his or her disposal. Some of the famous and currently available advertising
media options are:

Types of Advertising Media

Online/ Mobile/
Print Broadcast Guerrilla
Digital Cellphone
Advertising Advertising Advertising
Advertising Advertising

Fig.1.6 Types of Advertising Media

1. Online/Digital Advertising- If there is an advertisement via the Internet (World Wide

Web), then it is classified as online or digital advertising. Online advertising is a
marketing strategy that involves the use of the Internet as a medium to obtain website
traffic and target and deliver marketing messages to the right customers. Online
advertising is geared toward defining markets through unique and useful applications.
Since the early 1990s there has been an exponential increase in the growth of online
advertising, which has evolved into a standard for small and large organizations. The
other name given to online advertising is internet advertising.

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2. Mobile/Cellphone Advertising- A relatively new form of advertising compared to the

others, but one that's dominating the media mix, uses cellphones, and other portable
electronic devices with Internet connectivity. Current trends in mobile advertising
involve major use of social media such as Twitter, Instagram, Snapchat, and Facebook.
This kind of advertising is not only disruptive, but can leave the customers with a lot of
ill will.

3. Print Advertising- Print media advertising is a form of advertising that uses physically
printed media, such as magazines and newspapers, to reach consumers, business
customers and prospects. In these days of digital media, it's easy to overlook the art of
print ads. But the medium is still as relevant and powerful as vintage posters ever were;
whether small scale magazine ads or huge billboard advertising. Some of the famous
ways of print advertising are:
 Newspaper- Newspaper advertising includes publications such as national, local and
community newspapers. According to Dun & Bradstreet, small businesses have an
advantage over national businesses when it comes to newspaper advertising. If the
goal of a business is to attract local customers, then advertising in a neighborhood or
small local newspaper is an effective way to reach the target audience. The price of a
print ad depends on the newspaper's popularity and size of the ad. With so many
different ad sizes available, every business is able to find a size that fits their budget.
 Magazine- Magazine advertising includes advertising in regional and national
magazines. Magazines present an effective way to brand a business. A magazine
gives the freedom to focus on creating an ad that's visually appealing. Appearances
might not count as much if the goal is to simply attract customers. However,
appearances count when a business is working to increase its visibility and build a
public image.
 Directory- Directory advertising includes advertising that appears in places such as
the Yellow Pages and regional or industry directories. Appearing in such a directory
can potentially expose any business to a new client base, depending on the target
market. When placing a Yellow Pages print ad, remember that size matters. Not only
are a display ad more noticeable, but also it influences the way consumers see your
business.
 Point of Sale- Point of sale marketing refers to all efforts that increase sales at the
point the purchase is actually made. Primarily this revolves around a cash register and
is a staple of retail and restaurant environments. The most common method of point
of sale marketing is the merchandise display, while other methods include the use of
signage, receipts, and suggestive selling by the retailer at the POS.

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 Additional Print Advertising- Additional print advertising methods include brochures

and flyers. Brochures are sometimes found on display racks in public places. Flyers
can be seen on windshields or inserted into newspapers. Postcard advertising also
falls into the category of print advertising. One side of the postcard contains a print ad
and the other side contains a mailing address. Postcards gives a chance to create a
colorful, glossy ad for less than it would cost to advertise in a magazine.

4. Broadcast Advertising- A mass-market form of communication including television and

radio, broadcast advertising has, until recently, been the most dominant way to reach a
large number of consumers. The role of broadcast advertising is to persuade consumers
about the benefits of the product. It is considered as a very effective medium of
advertising. The cost of advertising on this channel depends on the time of the
commercial and the specific time at which it is aired. The most prominent ways of
broadcast advertising are:
 Television- The television advertising is usually considered the advertising for the
corporate giant, though even the small businesses can benefit from it. A strong audio
and video combination is a must for the success of the commercial. It is one of the
most expensive forms of advertising, but on the other hand it reaches a very wide
audience. Advertisers buy time from TV stations to broadcast their commercials.
 Radio- A radio ad must be aired several times before it actually sinks in the minds of
the consumers. Thus the frequency of the ad is important. The type of your target
audience is also important. Therefore, one must do a research on which type of
audience listens to which channels if they want the ads to be successful. Radio
stations are more specialized in what they broadcast. One radio station offers pop
music and has a younger listening audience; the other may broadcast classical music
with older listeners. The ads can be chosen according to the group of people who
listen. Local advertisers place about 70 per cent of advertising on the radio. An
advantage of radio is that people listen to programs while doing other things. In some
cases radios are on the whole day. Radio commercials last about 30 seconds.

5. Guerrilla Advertising- Also known as ambient media, guerrilla advertising has become
prominent over the last 20 years. It is a broadly used term for anything unconventional,
and usually invites the consumer to participate or interact with the piece in some way.
Location is important, as is timing. The driving forces behind guerrilla advertising or
marketing are creative ideas and innovation, not a large budget. Quite often, a business
will ask for forgiveness rather than permission with these campaigns, and they will
spread via word of mouth or social media.

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Advantages of Advertising:

Advertising is a major source of marketing. It is used by each and every company for marketing
its goods and services. Some of the major advantages of advertising are as follows:

 Introduction of a New Product to the Market- Advertising plays a vital role in the
introduction of a new product to the market. It motivates the buyers to purchase that
product.
 Increases Sales- Advertisement facilitates mass production to goods and increases the
volume of sales. In other words, sales can be increased with additional expenditure on
advertising with every increase in sale, selling expenses will decrease.
 Fights Competition- Advertising is greatly helpful in meeting the forces of competition
prevalent in the market. Continuous advertising is very essential in order to save the
product from the clutches of the competitors.
 Expanding Market- It enables the manufacturer to expand his market. It helps in
exploring new markets for the product and retaining the existing markets. It plays a sheet
anchor role in widening the marketing for the manufacturer’s products even by conveying
the customers living at the far flung and remote areas.
 Enhances goodwill- Advertising is instrumental in increasing goodwill of the concern. It
introduces the manufacturer and his product to the people. Repeated advertising and
better quality of products brings more reputation for the manufacturer and enhances
goodwill for the concern.
 Educates Consumer- Advertising is educational and dynamic in nature. It familiarizes the
customers with the new products and their diverse uses and also educates them about the
new uses of existing products.
 Eliminates Middleman- It aims at establishing a direct link between the manufacturer and
the consumer, thereby eliminating the marketing intermediaries. This increases the profits
of the manufacturer and the consumer gets the products at lower prices.
 Supports Salesmanship- Advertising greatly facilitates the work of a salesman. The
customers are already familiar with the product which the salesman sells. The selling
efforts of a salesman are greatly supplemented by advertising. It has been rightly pointed
out that “selling and advertising are cup and saucer, hook and eye, or key and lock
wards.”
 More Employment Opportunities- Advertising provides and creates more employment
opportunities for many talented people like painters, photographers, singers, cartoonists,
musicians, models and people working in different advertising agencies.

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Disadvantages of Advertising:

 Addition to the Cost- An organization has to spend large amount on advertising. It

increases the cost of the products. To meet this expenditure, price of the product is raised.
No manufacturer pays for the advertising expenses out of his pocket. Advertising,
therefore, leads to unnecessary rise in prices. In this reference it is said that advertising
costs are passed on to the consumers in the form of high prices.
 Confuses Buyers- Many a time distorted version of reality is shown in the advertising.
Believing in advertising, consumers buy the product. On its use, they feel cheated. They
come to realize later that the information given in the advertisement was something else
whereas the actual product was quite different from it. Thus, people lose confidence in
advertising because of wrong presentation. In this reference it is said that advertising
confuses rather than helps.
 Damages Social Values- Advertisement is a sort of day-dreaming for the people. These
days it is taking the people away from reality and into the realm of artificiality. Through
its medium people get information about new products. Only very few products are of
any use for them. The brilliance of new products really gets on their nerves. They want to
buy them but have no resources at their command. Consequently, they start feeling upset
with their present status. Taking it as a social evil, it can be said that advertisement
damages the social values.
 Sale of Inferior Products- Every manufacturer projects his product as superior one in the
advertisement. Therefore, the buyer is unable to decide as to which product is really
good. Consequently, it is difficult to get good quality product even after paying a
handsome price for it. Therefore, it is said that advertisement encourages the sale of
inferior products.
 Advertisement of Bad Taste- Many times, foul language and objectionable pictures are
used in advertising in order to attract a particular class. They may be insulting to a
particular class. It causes decay of social values.

Sales Promotion:

Sales promotion is the process of persuading a potential customer to buy the product. Sales
promotion is designed to be used as a short-term tactic to boost sales, it is rarely suitable as a
method of building long-term customer loyalty. Some sales promotions are aimed at consumers.
Others are targeted at intermediaries and at the firm's sales force.

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A company uses various methods of sales promotion, for promoting their goods and services.
Some of these famous methods of sales promotion are as follows:

Money off
Coupons

Competitions

Discount
Vouchers

Loyalty Cards

Free Gifts

Fig.1.7 Methods of Sales Promotion

 Money off Coupons- Customers receive coupons, or cut coupons out of newspapers or a
products packaging that enables them to buy the product next time at a reduced price.

 Competitions- Competitions are arranged like buying the product will allow the customer
to take part in a chance to win a prize.

 Discount Vouchers- Another method of sales promotion is Discount vouchers;

they encourage customers to spend money in-store by effectively lowering prices.

 Loyalty Card- Loyalty card allows customers earn points for buying certain goods or
shopping at certain retailers, that can later be exchanged for money, goods or other offers.

 Free Gifts- Offering a free gift when purchasing a particular product, is another famous
method of sales promotion.

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Advantages of Sales Promotion:

 Quick Boost to Sales- The major advantage and reason of using sales promotion is to
quick boost the sales of a particular product or service. By offering various sales
promotion methods, the sales can be multiplied in no time.
 Motivates Customers- Sales promotion is even helpful in motivating customers for trying
new products and services available in market.
 Switching Brands- With the help of sales promotion, marketers influence consumers in
switching the brands and try out for the new ones available in the market.

Disadvantages of Sales Promotion:

 Short Term Effect- The major disadvantage of sales promotion is that its effect is short
term. Till the various offers are available, sales will boost but as soon as it ends the effect
of sales promotion also ends.
 Damages Brand Image- Sales promotion sometimes even damages the brand image of a
particular product, which is another setback.
 Customers Anticipates Further Promotion- Another disadvantage of sales promotion is
that once the promotion is over, customers anticipates and expect for it in the future.
They rely for purchasing that product during promotions only.

Public Relation:

Every organization, no matter how large or small, ultimately depends on its reputation for
survival and success. Customers, suppliers, employees, investors, journalists and regulators can
have a powerful impact. They all have an opinion about the organizations they come into contact
with - whether good or bad, right or wrong. These perceptions will drive their decisions about
whether they want to work with, shop with and support these organizations. In today's
competitive market, reputation can be a company's biggest asset, the thing that makes you stand
out from the crowd and gives you a competitive edge. Effective public relation can help manage
reputation by communicating and building good relationships with all organization stakeholders.

Public Relation is the discipline which looks after reputation, with the aim of earning
understanding and support and influencing opinion and behavior. It is the planned and sustained
effort to establish and maintain goodwill and mutual understanding between an organization and
its public.

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Advantages of Public Relation:

 Power Appeal to Large Audience- The dominant advantage of public relation is its power
appeal to large audience. Millions of audiences get the information regarding the
business, with the help of public relation.
 Appealing Power and Responses- The information, which the highly public mass
communication picks up from a lot of information, becomes at a premium for the readers
and audiences at that point. Therefore it is the greatest characteristic of PR to bring an
effect which creates needs by shaking up the targeted consumers' minds, who receive the
information.
 Inexpensive- The cost to carry out the PR activity always occurs, but these expenses can
be controlled compared to the other ways of advertising.

Disadvantages of Public Relation:

 Difficult to Conduct Successfully- A strategy supported by the professional knowledge of

the media will be needed if the marketer wants to get into the media where he can get
high responses to the promotions. So it’s difficult to conduct it successfully.
 Hard to Predict Response- The responses of the PR last around 3 days to 1 week at most.
So then a business plan will be necessary that utilizes the media exposure well without
getting influenced by the needs which temporally went up. So it’s hard to predict the
responses of public relation.
 Opposite effect- It draws the end users who have bad quality and they are introduced to
the media. The PR may end up with a result that gives the opposite effect, unless the
management which involves the assessment of risks is done.

Direct Marketing:

Direct marketing is a form of advertising which allows businesses and nonprofit organizations to
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. Direct marketing focuses on the customer, data, and testing. Hence, besides
the actual communication, a direct marketing campaign will incorporate actionable segments and
use pre- and post-campaign analytics to measure results. Direct marketing occurs when
businesses address customers through a multitude of channels, including mail, e-mail, phone, and
in person.

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Direct marketing messages involve a specific “call to action,” such as “Call this toll-free-
number” or “Click this link to subscribe.” The results of such campaigns are immediately
measurable, as a business can track how many customers have responded through a message’s
call to action.

Types of Direct Marketing:

 Face to Face Selling

 Telemarketing
 Direct Mail Marketing
 Catalog Marketing
 Direct Response Television Marketing
 Kiosk Marketing
 Online Marketing & Electronic Commerce

Direct Mail
Marketing

Telemarketing Catalog
Marketing

Types of
Direct
Face to Face Direct
Selling
Marketing Response TV
Marketing

Online
Marketing & Kiosk
Electronic Marketing
Commerce

Fig.1.8 Types of Direct Marketing

Advantages of Direct Marketing:

 Branding Business- Branding a business can seem like an expensive notion, but by
simply creating a cohesive direct marketing campaign, marketer can create a recognizable
company brand. Throw in a special offer, and business will combine brand with a call-to-
action.
 Finding New Customers- Direct marketing helps in building a list of new potential
customers. Marketer can compile or purchase a database of customers who are likely to
buy his product or service.
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 Good Communication is Possible- Some of the most important business comes from
repeat customers. Stay in touch with customers with direct marketing to promote a
special offer, promotion or event and let them know about other services.
 Track and Measure Results- Direct marketing offers ways to track and measure results, so
that the marketer knows how many customers they have reached, the response received,
and how much money they have spent per customer. They can even test new markets or
products to determine what appeals the most to whom and can measure how effective
their direct marketing campaign is by determining the return-on-investment.
 Cost Effective- Direct marketing is a cost effective marketing solution. Marketer knows
exactly how much you are spending to reach each customer.

Disadvantages of Direct Marketing:

 Limited Reach- While having a finite defined group of target customers acts as an
advantage in many ways by focusing marketing efforts; this can also be a restrictive
factor insomuch as the marketers reach stays limited. Despite database updates and
addition of new customers, the reach of direct marketing can never touch the reach of
mass marketing methods.
 Customers Resent Invasive Communication- Most people do not like their inboxes,
voicemail boxes and mobile devices to be flooded with marketing and promotional
content. To remedy this, people often use email and voicemail filters and the marketer’s
communication either lands straight in the SPAM folder or gets deleted without being
opened by the targeted customer.
 Difficult to acquire data- While a customer database is the spine of direct marketing and
its presence is one of its biggest advantages, acquiring such data may be a mammoth task.
Not everyone may be willing to participate in market and customer surveys and give out
their personal and professional details. Also, data dealers and services that sell captured
customer data to marketers also charge a high price to part with such data. So, the initial
creation of a database may be quite an uphill task for a marketer.

Publicity:

Publicity is the movement of information to the general public from the media. The subjects of
publicity include people, goods and services, organizations, and works of art or entertainment.
Publicity is gaining public visibility or awareness for a product, service or your company via the
media. Publicity is generally not paid for by the organizations. Publicity comes from reporters,
columnists, and journalists.

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Advantages of Publicity:

 Virtually Free- Apart from the costs accruable from media distribution, liaison,
preparation and distribution, the cost for publicity is virtually free - every magazine
article, newspaper feature, media mention, press release or radio and/or television
interview is really and freely free.
 Helps in Forming Strategic Alliances- More organizations and high net-worth companies
are more likely to fraternize with another business once their credibility is vouchsafed as
a tour de force in that chosen field. That means more open doors, more opportunities.
 Publicity is Viral- In the marketing world, ads don’t regenerate themselves but publicity
does. All it takes is for the message to appeal to people with high social networking
potential and boom, it goes viral.
 Builds Credibility- The more media appearances a business makes, the more it will be
associated with success setting it apart from the rest of the market.

Virtually Free

Helps in Forming
Alliance

Publicity is Viral

Builds Credibility
Fig.1.9 Advantages of Publicity

Disadvantages of Publicity:

 Damage to Public Image- A person or corporation suffers damage to its public image or
brand when negative reports come out. Public figures and corporations find it difficult to
restore their public image after it is damaged because they must regain the public's trust.
 Loss of Sales- Bad publicity can also hurt the financial positions of public figures and
corporations. Corporations can lose millions or even billions in potential sales and
business contracts and must spend more money to regain its sales volume.
 Boost to Competition- Bad publicity can help the competition. A corporation's
competitors can use its bad publicity in their ads to make themselves look better by
comparison.
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1.2 Marketing Environment

The marketing environment represents a mix between the internal and external forces which
surround an organization and have an impact upon it, especially their ability to build and
maintain successful relationships with target customers. The marketing environment comprises
of demographic environment, micro and macro environment.
Macro environmental factors include political, economic, social, technological, legal and
environmental. The organization cannot control these forces, it can only prepare for changes
taking place. The macro environment is made up of factors that affect the firm on a long term
basis. In general macro environment factors are not close to the firm. Macro environment factors
could be national or global measures and affect many industries and groups. Macro environment
examples include legislation, the economy (e.g. recession, inflation, VAT changes), and
technological change such as the internet. Macro environment factors are uncontrollable factors
but still influence company strategy.
Micro environment refers to the forces closely influencing the company and directly affect the
organization’s relationships. The factors include the company and its current employees, its
suppliers, marketing intermediaries, competitors, customers and the general public. The micro
environment is made up of factors that are close to the firm and affect it on a 'day to day' basis;
usually these factors interact with the firm or are involved in the same industry. Micro
environment examples include customers, banks and trade unions as they all interact with the
firm. Competitors are also part of the micro environment because they are selling competing
products; their activity could have a direct impact on the firm's daily business. Some of the
factors within the micro environment can be controlled by the firm whilst others cannot. These
forces can sometimes be controlled or influenced.
The marketing environment in India is undergoing a rapid transformation, and this is particularly
significant for Indian companies. Changes in government and economic policies, forces of
globalization and competition, and the evolving nature of consumption behavior are providing
significant opportunities. Many companies have started utilizing these opportunities, which are
emerging in the changing marketing environment.

1.2.1 Micro Environment:

Micro environment factors are factors close to a business that have a direct impact on its business
operations and success. Before deciding corporate strategy businesses should carry out a full
analysis of their micro environment.. The major responsibility for identifying significant
marketplace changes falls to the company’s marketers. More than any other group in the
company, they must be the trend trackers and opportunity seekers.

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Although every manager in an organization needs to observe the outside environment, marketers
have two advantages: they have disciplined methods for collecting information and they also
spend more time interacting with customers and observing competition. The company’s
marketing information system should be a cross between what managers thinks they need, what
managers really need, and what is economically feasible. An internal MIS committee can
interview a cross section of marketing managers to discover their information needs.

Some of the components of micro environment are:

 Customers- As all businesses need customers, they should be centered on customers. The
firm's marketing plan should aim to attract and retain customers through products that
meets their "wants and needs" and excellent customer service.
 Employees- Employing staff with relevant skills and experience is essential. This process
begins at recruitment stage and continues throughout an employee's employment via
ongoing training and promotion opportunities. Training and development play a critical
role in achieving a competitive edge; especially in Service Sector Marketing. If a
business employs staff without motivation, skills or experience it will affect customer
service and ultimately sales.
 Suppliers- Suppliers provide businesses with the materials they need to carry out their
business activities. A supplier's behavior will directly impact the business it supplies. For
example if a supplier provides a poor service this could increase time scales or product
quality. An increase in raw material prices will affect an organization’s Marketing
Mix strategy and may even force price increases. Close supplier relationships are an
effective way to remain competitive and secure quality products.
 Competitors- The name of the game in marketing is differentiation. Can the organization
offer benefits that are better than those offered by competitors? Does the business have a
unique selling point (USP)? Competitor analysis and monitoring is crucial if an
organization is to maintain or improve its position within the market. If a business is
unaware of its competitor's activities they will find it very difficult to “beat” their
competitors. The market can move very quickly for example through a change in trading
conditions, consumer behavior or technological developments. As a business it is
important to examine competitors' responses to these changes so that you can maximize
the impact of your response.
 Shareholders- As organizations require investment to grow, they may decide to raise
money by floating on the stock market i.e. move from private to public ownership. The
introduction of public shareholders brings new pressures as public shareholders want a
return from the money they have invested in the company. Shareholder pressure to
increase profits will affect organizational strategy. Relationships with shareholders need
to be managed carefully as rapid short term increases in profit could detrimentally affect
the long term success of the business.

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 Media- Positive media attention can “make” an organization (or its products) and
negative media attention can “break” an organization. Organizations need to manage the
media so that the media help promote the positive things about the organization and
reduce the impact of a negative event on their reputation. Some organizations will even
employ public relations (PR) consultants to help them manage a particular event or
incident.

1.1.2 Macro environment:

Macro environment consists of the major external and uncontrollable factors that influence an
organization's decision making and affect its performance and strategies. It refers to all forces
that are part of the larger society. A macro environment is the condition that exists in the
economy as a whole, rather than in a particular sector or region. In general, the macro
environment includes trends in gross domestic product (GDP), inflation, employment, spending,
and monetary and fiscal policy. The major components of macro environment are described as
PESTLE, which stands for, political, economic, social, technological, legal and environmental.
They all play a vital role in macro environment of marketing.

 Political - Political factors refer to the stability of the political environment and the
attitudes of political parties or movements. This may manifest in government influence
on tax policies, or government involvement in trading agreements. Political factors
influence organizations in many ways. Political factors can create advantages and
opportunities for organizations. Conversely they can place obligations and duties on
organizations.
 Economical- All businesses are affected by national and global economic factors.
National (and global) interest rates and fiscal policy is set around economic conditions.
The climate of the economy dictates how consumers, suppliers and other organizational
stakeholders such as suppliers and creditors behave within society. An economy
undergoing recession will have high unemployment, low spending power and low
stakeholder confidence. Conversely a “booming” or growing economy will have low
unemployment, high spending power and high stakeholder confidence. A truly global
player has to be aware of economic conditions across all borders and needs to ensure
that it employs strategies that protect and promote its business through economic
conditions throughout the world.
 Social- The third aspect of PESTLE focuses its attention on forces within society such
as family, friends, colleagues, neighbors and the media. Social forces affect our
attitudes, interests and opinions. These forces shape who we are as people, the way we
behave and ultimately what we purchase.
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Organizations must be able to offer products and services that aim to complement and
benefit people's lifestyle and behavior. If organizations do not respond to changes in
society they will lose market share and demand for their products and services.

 Technological- Technological advances have greatly changed the manner in which

businesses operate. The pace of technological change is so fast that the average life of a
computer chip is approximately 6 months. Technology is utilized by all age groups,
children are exposed to technology from birth and a new generation of technology
savvy pensioners known as “silver surfers” has emerged. Technology will continue to
evolve and impact consumer habits and expectations, organizations that ignore this will
hinder their success.
 Legal- Legal factors are important as organizations have to work within legislative
frameworks. Legislation can hinder business by placing onerous obligations on
organizations. On the other hand legislation can create market conditions that benefit
business.
 Environmental- Environmental impacts can include issues such as limited natural
resources, waste disposal and recycling procedures. These are the factors related to
environment, and benefitting the environment on whole.

1.1.3 Demographic Environment

Demographic environment is a set of demographic factors such as gender or ethnicity.

Companies use demographic environments to identify target markets for specific products or
services. Demographic trends are highly reliable for the short an intermediate run. Analysis of
demographic environments is a crucial marketing practice for many businesses because it allows
long term planning of marketing campaigns for a specific consumer groups. The main
demographic factors that marketers monitor are:
 Income- Income is one demographic variable that can affect businesses. A company's
products usually appeal to certain income groups. For example, premium products such
as high-end women’s' clothing usually appeal to women with higher incomes.
Conversely, people with comparatively lower incomes are more sensitive to price and,
therefore, may prefer purchasing discount products.
 Age- Age is another demographic element that impacts businesses. A company's products
and services are more likely to appeal to certain age groups. Younger people under 35 are
often the first consumers to purchase high-tech products like cell phones, electronic
books and video games. Certain buying groups also have more buying power than others.
 Geographic Region- People's buying preferences also vary by geographic region, which
is another type of demographic. Those who meet buyers' needs and requirements in
certain geographic regions can earn higher sales and profits.
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 Population- The world population is growing explosively. It totaled 6.1 billion in 2000
and will exceed 7.9 billion by the year 2025. The population explosion has been a major
concern. Explosive population growth has major implications for business. Companies
that carefully analyze their markets have sufficient purchasing power.
 Literacy Levels- Literacy levels also vary according to gender. For a marketer, literacy
levels have important implications, because of a host of decisions.

Marketing Environment
Macro Environment

Micro Environment

Demographic
Environment

Fig.1.10 Marketing Environment

1.2 Marketing for 21st Century

Marketing in the 21st century is very different from its early beginnings. Today's marketers have
more choices in terms of support, media opportunities, and communications. They also have
more competition from varied sources, especially as the Internet has made it possible for
companies around the globe to compete virtually. Various new developments been made in the
field of marketing are:

 More Communication Choices- The 21st century offers many choices for marketing
communications. Companies still have access to traditional tools, such as newspapers,
radio, and television, but also have a wide range of online tools, including social media.
More choices are a good thing; they present opportunities to connect with more people in
different ways than ever before. More choices also represent challenges, however.
Staying on top of the many options available can be time-consuming and sometimes
costly.
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 More Creative Options- Technology has offered not only more options for sharing
marketing messages, but more selections for creating these messages as well. Today's
marketing personnel can use a range of tools to enhance communications through
graphics, sound, and movement. Inexpensive video cameras mean marketers can create
do-it-yourself media that saves both time and money. Be careful, as the quality of created
materials needs to be consistent with the desired brand image.

 More Consumer Choices- More consumers’ choices in the 21st century mean more
competition for businesses from many sources. The Internet, in particular, now allows
even the smallest organization to establish a regional, national, or even international
presence. Competition now comes not only from the business across the street, but also
from across the world.

 Social Media Streamlines Word-of-Mouth- Word-of-mouth has always been an important

factor in successful marketing efforts, but social media makes this method even more of a
factor. Consumers have the ability to interact with millions of people in the 21st century,
in sharp contrast to the days when information was shared over the backyard fence.

 Tried and True Marketing Techniques Still Work- Despite the many new opportunities
available to marketers in the 21st century, tried and true marketing techniques still work.
Ultimately, successful marketing is about identifying a target market, understanding its
needs, and communicating the business' compelling messages through multiple channels.
These marketing messages all convey how consumer needs can be met by the business'
products and services

Marketing Functions:

Marketing is important to every small business, helping companies increase revenue and profit
by meeting customers’ needs effectively. Although one person or one department is generally
responsible for managing the seven functions of marketing, it’s important for all employees to
understand customer needs so they can develop the right products and provide the highest
standards of customer service. Various functions of marketing:

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Marketing Information
Management

Marketing Functions
Distribution

Pricing

Product/Service
Management

Promotion

Selling

Financing

Fig.1.11 Marketing Functions

 Marketing Information Management- Managing marketing information helps you

understand your customers’ needs. You can gather information by reviewing published
market research reports, asking your sales team for feedback or carrying out a survey
using a market research firm. You should also monitor product review sites and social
media, such as Facebook and Twitter, where you can find information on consumers’
needs and attitudes toward products.

 Distribution- Distribution strategy determines how and where customers can obtain your
products. If you market products to a small number of business customers, you may deal
with them directly through a sales team. If your business expands to other regions or
countries, it may be more cost effective to deal with customers through local distributors.
Companies marketing consumer products distribute them through retail outlets or,
increasingly, via the Internet.

 Product/Service Management- Marketing provides valuable input to product and service

development. Information on customers’ needs helps to identify the features to
incorporate in new products and product upgrades. Marketing also identifies
opportunities to extend a product range or launch existing products into new sectors.

 Pricing- Pricing plays an important role in determining market success and profitability.
If you market products that have many competitors, you may face strong price
competition. In that situation, you must aim to be the lowest-cost supplier so you can set
low prices and still remain profitable.
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You can overcome low price competition by differentiating your product and offering
customers benefits and value that competitors cannot match.

 Promotion- Promotion makes customers and prospects aware of your products and your
company. Using promotional techniques, such as advertising, direct marketing,
telemarketing or public relations; you can communicate product benefits and build
preference for your company’s products.
 Selling- Marketing and selling are complementary functions. Marketing creates
awareness and builds preference for a product, helping company sales representatives or
retail sales staff sells more of a product. Marketing also supports sales by generating
leads for the sales team to follow up.
 Financing- Successful marketing provides a regular flow of revenue to pay for business
operations. Marketing programs that strengthen customer loyalty help to secure long-term
revenue, while product development programs open new revenue streams. Financing also
plays a role in marketing success by offering customers alternative methods of payment,
such as loans, extended credit terms or leasing.

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References:

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 Pallant, J. (2007). A step by step guide to data analysis using spss for windows (third
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Books:

 Chunnawalla S.A. & Sethia K.C., Foundations of Advertising- Theory & Practice,
Himalaya Publications.
 Clancy, Kevin J., Peter C. Kreigafsd, Counter Intuitive Marketing, The Free Press.
 Habeeb-ur-Rehman, Rural Marketing in India, Himalaya Publications.
 Joshi Rakesh Mohan, International Marketing, Oxford University Press, New Delhi and
New York.
 Majumdar, R. (2013). Consumer Behaviour: Insights for Indian Market. New Delhi. PHI
Learning.
 Mathur U.C., Rural Marketing-Text & Cases, Excel Books.
 Mohan Savita, Rural Marketing, Neha Publishers & Distributors.
 Philip Kotler, Kevin Lane Keller, Marketing Management 12th Ed., Pearson Prentice
Hall, New Delhi.
 Singh Y.K., Fundamentals of Rural Marketing in India, Neha Publishers & Distributors.
 Sudha G.S., Sales & Advertising Management, Ramesh Book Depot.

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