Learning objectives

• To explain the meaning of ‘Marketing’.

• To Distinguish between ‘marketing’ and ‘Selling’.
• To list out the important functions of marketing.
• To examine the role of marketing in the development of an economy in a firm, to the society and
to consumers.
• To explain the elements of marketing-mix.
• To classify products into different categories.
• To analyse the factors affecting price of a product.
• To list out the types of channels of distribution.
• To explain the major tools of promotion, viz. advertising, personal selling, sales promotion, and
publicity.

Meaning of market

In the traditional sense: Market refers to a place where buyers and sellers come together to
exchange goods and services.
In the modern sense: Market refers to a set of actual and potential buyers of a product or
service
Marketing

In the traditional sense, marketing refers to the performance of business activities that direct the flow of
goods and services from producers to consumers.

In modern sense, marketing refers to a social process by which individual groups obtain what they need
and want through creating offerings and freely exchanging products and services of value with others.

Marketing activities
A number of activities, such as product designing or merchandising, packaging, warehousing,
transportation, branding, selling, advertising, and pricing together known as marketing activities.

Features of marketing:

1)Need and want: The focus of the marketing process is on satisfaction of the needs and wants of
individuals and organisations. A marketer’s job in an organization is to identify needs of the target
customers and develop products and services that satisfy such needs and wants.

2) creating a market offering: On the part of the marketers, the effort involves creation of a ‘market
offering’. Market offering refers to a complete offer for a product or service, having given features like
size, quality, taste, etc.; at a certain price; available at a given outlet or location and so on.

3) Customer Value: While buying a product, consumer analyses its cost and satisfaction derived from it.
The job of a marketer is to add to the value of the product so that the customers prefer it in relation to
the competing products and decide to purchase it.
4) Exchange Mechanism: The process of marketing involves exchange of products and services for
money, or something considered valuable by the people. Exchange is often referred as the ‘essence of
marketing’ as goods produced at different places are distributed over a wide geographical area.

Essential conditions required for exchange mechanism

• Involvement of at least two parties
• Each party should be capable of offering something of value to the other.
• Each party should have the ability to communicate and deliver the product or service.
• Each party should have freedom to accept or reject other party’s offer.
• The parties should be willing to enter into transaction with each other i.e., on voluntary basis
rather than any compulsion.

What can be marketed?

In marketing, anything that can be of value to the buyer is termed as product. All the products which are
of some value to the other can be marketed.

The meaning of product is not confined to physical objects, but also include other things of value such as
services, ideas, places, experience, events etc.

▪ Physical Products: DVD player, Motorcycle, iPod, Cell phone, Footwear, Television, etc.

▪ Services: Insurance, Health Care, Education, Business Process Outsourcing, Security, Easy Bill
service, Financial Services etc.

▪ Ideas: Polio Vaccination, Family Planning, Donation of Blood, Donation of money on Flag Day etc.

▪ Persons: For Election of Candidates for Certain Posts, Celebrities for inauguration etc.

▪ Place: ‘Visit Agra – ‘City of Love’, ‘Udaipur – ‘The City of Lakes’, ‘Mysore – The City of Gardens’,
‘When Orisa celebrates, Eleven the God Join In’.

▪ Events: Sports events (say Olympics, Cricket series), fashion show, music concert, film festival,
elephant race etc.

▪ Information: information from organisations such as by universities, research organisations,

market information (marketing research agencies), technology information etc.

▪ Experience: lunch with a celebrity, tea with a cricket player.

Marketing versus selling.

Marketing involves whole range of activities relating to planning, pricing, promoting, and distributing
the products that satisfy customer’s needs.
The function of selling, on the other hand, is restricted to promotion of goods and services through
salesmanship, advertising, publicity, and short-term incentives so that title of the product is transferred
from seller to buyer or in other words product is converted into cash. Selling is just one part in
marketing.

Marketer
Marketer refers to any person who takes more active part in the process of exchange. Generally, it is the
seller who is more active in the exchange process as he analyses the needs of potential buyers, develops
a market offering and persuades the buyers to buy the product.
However, sometimes buyer may take more active role in the exchange process. In this case, the buyer
will be treated as the marketer.

Marketing Management
Marketing management refers to planning, organising, directing and control of the activities
which
facilitate exchange of goods and services between producers and consumers or users of
products and services.
Philip kotler has defined Marketing management as ‘the art and science of choosing target
markets
and getting, keeping, and growing customers through creating, delivering, and communicating
superior customer values of management.

The process of management of marketing involves:

(i) Choosing a target market,

(ii) In respect of the target market chosen, the focus of the process of management is on getting, keeping
as well as growing the customers.

(iii) The mechanism for achieving the objective is through creating, developing, and communicating
superior values for the customers.

Thus, Marketing management involves performance of various functions such as analysing and planning
the marketing activities, implementing marketing plans, and setting control mechanism. These functions
are to be performed in such a way that organisation’s objectives are achieved at the minimum cost.

Marketing management philosophies

In order to achieve desired exchange outcomes with target markets, it is important to decide what
philosophy or thinking should guide the marketing efforts of an organisation. An understanding of the
philosophy or the concept to be adopted is important as it determines the emphasis or the weightage to
be put on different factors (e.g., product design or selling technique or customer needs or social
concerns etc.), in achieving the organisational objectives.

1)The Production Concept: It was believed that profits could be maximised by producing
at large scale, thereby reducing the average cost of production. Thus, the availability and affordability
of the product were considered to be the key to the success of a firm. Therefore, greater emphasis was
placed on improving the production and distribution efficiency of the firms.

2)The Product Concept: The emphasis of the firms shifted from quantity of production to quality of
products. The focus of business activity changed to bringing continuous improvement in the quality,
incorporating new features, etc. Thus, product improvement became the key to profit maximisation of a
firm, under the concept of product orientation.

3) The Selling Concept: the focus of business firms shifted to pushing the sale of products through
aggressive selling techniques such as advertising, personal selling, and sales promotion etc. with a view
to persuade, lure or coax the buyers to buy the products.
4) The Marketing Concept: Marketing orientation implies that focus on satisfaction of customer’s
needs is the key to the success of any organisation in the market.
The marketing concept is based on the following pillars:
(i) Identification of market or customer who are chosen as the target of marketing effort.
(ii) Understanding needs and wants of customers in the target market.
(iii) Development of products or services for satisfying needs of the target market.
(iv) Satisfying needs of target market better than the competitors.
(v) Doing all this at a profit.

5) The Societal Marketing Concept: The societal marketing concept holds that the task of any
organisation is to identify the needs and wants of the target market and deliver the desired satisfaction
in an effective and efficient manner so that the long-term well-being of the consumers and the society is
taken care of. Apart from the customer satisfaction, it pays attention to the social, ethical and ecological
aspects of marketing.

Functions Of Marketing
Marketing is made up of a number of activities known as marketing functions. The marketing functions
involved in exchange of goods from producer to consumer are;
1. Gathering and Analysing Market Information: one of the important functions of a marketer is to gather
and analyse the market information. It is necessary to identify the needs of the customers, to know
about opportunities and threats as well as strengths and weaknesses of the organisation and take
various decisions for the successful marketing of the products and services.

2. Marketing Planning: Another important activity or area of work of a marketer is to develop

appropriate marketing plans so that the marketing objectives of the organisation can be achieved.

3. Product Designing and Development: it involves taking decisions regarding features, design, shape,
size, appearance etc. about the product. Design of a product makes the product attractive to the target
customers. A good design can improve the performance of a product and also give it a comparative
advantage in the market.

4. Standardisation and Grading: Standardisation refers to producing goods of predetermined

specifications, which helps in achieving uniformity and consistency in the output. Standardisation
ensures the buyers that goods conform to the predetermined standards of quality, price and packaging
and reduces the need for inspection, testing and evaluation of the products.

Grading is the process of classification of products into different groups, on the basis of some of its
important characteristics such as quality, size, etc. Grading is particularly necessary for products which
are not produced according to predetermined specifications, such as in the case of agricultural products,

5. Packaging and Labelling: Packaging refers to designing and developing the package for the products. It
is important not only for protection of the products but also serves as a promotional tool. Sometimes,
the quality of the product is assessed by the buyers form packaging.
Labelling refers to designing and developing the label to be put on the package. The label may vary from
a simple tag to complex graphics. Label provides detailed information about the product such as
contents, method of use, manufacturing date, expiry date, batch number, price etc.

6. Branding: Branding refers to giving a special name to the product. Brand name helps in creating
product differentiation, i.e., providing basis for distinguishing the product of a firm with that of the
competitor, which in turn, helps in building customer’s loyalty and in promoting its sale.
E.g.-Phillips, puma
7. Customer Support Services: In this modern world, it is very important to develop customer support
services such as after sales services, handling customer complaints and adjustments, procuring credit
services, maintenance services, technical services, and consumer information. Customer support
services are very effective in bringing repeat sales from the customers and developing brand loyalty for
a product.

8. Pricing of Product: The demand as well as the success or failure of a product or service in the market
is related to its price. So, the marketers have to properly analyse the factors determining the price of a
product and take several crucial decisions in this respect, including setting the pricing objectives,
determining the pricing strategies, determining the price, and changing the prices.

9. Promotion: Promotion of products and services involves informing the customers about the firm’s
product, its features, etc., and persuading them to purchase these products. A marketer has to take
several crucial, decisions in respect of promotion of the products and services such as deciding the
promotion budget, the promotion mix (i.e., combination of different methods or tools of promotion such
as advertising, Personal Selling, Publicity and Sales Promotion)

10.Physical Distribution: This function of marketing involves deciding the distribution of goods and
services from the place of production to the place of consumption. The important decision areas under
physical distribution include managing inventory (levels of stock of goods), storage and warehousing,
channels of distribution, and transportation of goods from one place to the other.

11. Transportation: Transportation involves physical movement of goods from one place to the other. As
generally, the users of products, are widespread, it is necessary to move them to the place where it is
needed for consumption or use. A marketing firm has to analyse its transportation needs after taking
into consideration various factors such as nature of the product, cost, and location of target market and
take decisions in respect of mode of transportation to be chosen and other related aspects.

12. Storage or Warehousing: The need for storage or warehouse arises because there is a time gap
between production and consumption because of some reasons like irregular demand irregular supply.
In order to maintain smooth flow of products in the market and to protect against unavoidable delays in
delivery or to meet out contingencies in the demand, there is a need for proper storage of the products.

Marketing mix
Marketing mix refers to a set of marketing tools that a firm uses to pursue its marketing objectives in a
target market The marketing mix consists of various elements, which have broadly been classified into
four categories, popularly known as four Ps (which is popularized by Mc Carthy) of marketing. These
are: (i) Product, (ii) Price, (iii) Place, and (iv) Promotion.

1.PRODUCT MIX:

Product
Product means goods or services or ‘anything of value’, which is offered to the market for sale. E.g., Amul
offers a number of food products (Amul milk, ghee, butter, cheese, chocolates, etc.).
The concept of product also relates to the benefits offered by it from customer’s viewpoint (for example
toothpaste is bought for whitening teeth, strengthening gums, etc.), the extended product or what is
offered to the customers by way of after sales services, handling complaints, availability of spare parts
etc. as well as important product decisions include features, new product design and
development,quality,packaging ,labeling branding etc.

Classification of Products
Consumer products: Goods purchased by the ultimate consumers or users for satisfying their personal
needs and desires. E.g., soap, textiles, toothpaste.

On the basis of durability:

• Non-durable products: the products which are consumed in one or few uses. e.g., soap,
stationary etc.
• Durable products: Tangible consumer products which normally survive many years. E.g.,
refrigerator, television, sewing machine etc.
• Services: intangible activities or benefits which are offered for sale .e.g., hair cutting, postal
services, lawyer, doctor etc.

On the basis of shopping efforts:

• convenience products: products, which are purchased frequently, immediately and with least
time and efforts. e.g., cigarettes, toothpaste etc.
• shopping products: The consumer goods, for which buyers devote considerable time to compare
the quality, price, style, suitability etc. before making final purchase. E.g.: clothes, jewellery,
furniture etc.
• Speciality products: consumer goods which have some special features. So, people make special
efforts in their purchase. E.g., rare collection of artworks and antique etc.

Industrial products:
Industrial products are those products, which are used as inputs in producing other products.e.g., raw
materials, engines, lubricants, machines, tools, etc. The market for industrial products consists of
manufacturers, transport agencies, banks, and insurance companies, mining companies and public
utilities.

(i) Materials and Parts: These include goods that enter the manufacture’s products completely. Such
goods are of two types:

(a)Raw material: including

• farm products like cotton, sugar cane, oil seed
• natural products such as minerals (say crude petroleum, iron ore), fish and lumber.
(b) Manufactured material and Parts: These are again of two types –
• component materials like glass, iron, plastic
 • component parts such as tyre, electric bulb, steering, and battery.

(ii)Capital Items: These are such goods that are used in the production of finished goods. These include:

(a)installations like elevators, mainframe Computers, and

(b)equipments like Hand Tools, Personal Computer, Fax Machines, etc.

(iii)Supplies and Business Services: These are short lasting goods and services that facilitate developing
or managing the finished product. These include:

(a) maintenance and repair items like Paint, Nails, etc.,

(b)operating supplies like Lubricant, Computer Stationary, Writing Paper, etc.

Branding

Most marketers give a brand name to their product instead of Generic name which means a whole class
of the product, e.g., book, wristwatch, soap, washing machine etc. Brand name helps in identifying and
distinguishing their products from the competitors’ products. This process of giving a name or a sign or
a symbol etc., to a product is called branding.

Brand: A brand is a name, term, sign, symbol, design, or some combination of them, used to identify the
products—goods or services of one seller or group of sellers and to differentiate them from those of the
competitors. e.g., Parker, puma etc.
Components:-
1. brand name is the verbal component of a brand. e.g., Nike, Apple
2. It appears in the form of a symbol, design, distinct colour, scheme or lettering. e.g.,

Trademark: A brand or part of a brand that is given legal protection is called trademark. The protection
is given against its use by other firms. The firm gets the exclusive right for its use.

Characteristics of Good Brand Name

Should be:
• short& easy to pronounce
• appropriate to the product’s function or suggest the benefits ,quality ,or purpose of the product
• distinctive or unique
• adaptable to packing or labelling
• versatile to accommodate new products
• capable of being registered and protected legally
• staying power-should not get out of date

Advantages of branding to marketer

1. Helps in product differentiation -to distinguish the product from other competitors
2. Helps in advertising and display programmes-to popularize the brand
3. Differential pricing-established brands can charge higher price.
4. Ease in introduction of new products -can extend the same brand name to introduce many of its
new products.

Advantages of branding to customers

1. Helps in product identification -makes identification of the product easier and facilitates repeat
purchase.
2. Ensure quality-builds up the confidence of the customers and increases the satisfaction level.
 3. Status symbol-provides status and prestige.

Packaging
Packaging refers to the act of designing and producing the container or wrapper of a product. In modern
marketing, packaging plays a very important role in the success or failure of many products.

Levels of packaging

• Primary Package: It refers to the product’s immediate container.

• Secondary packaging: It refers to additional layers of protection that are kept till the product is
ready for use.
• Transportation packaging: It refers to further packaging, necessary for storage and
transportation.

Importance of packaging

• Rising standards of health and sanitation: People prefer packed goods over loose goods as there
are less chances of adulteration or contamination in packed products.
• Self-service outlets: The traditional role assigned to personal selling in respect of promotion has
gone to packaging.
• Innovational opportunity: Innovations in respect of packaging has increased the scope for the
marketing of such products
• Product differentiation: The colour, size, material, etc., of package makes real difference in the
perception of customers about the quality of the product.

Functions of packaging

▪ Product identification i.e., packaging differentiate one product from another

▪ Product protection from spoilage, breakage, leakage, pilferage, damage, climatic effect, etc.
▪ Facilitating the use of product i.e., it should be convenient to open, handle and use for the
consumers.
▪ Product promotion i.e., to attract the attention of the people

Labelling
Labelling is the process of attaching or putting labels on the product. Labels provide detailed
information about the product or the seller.
Labels can be;
▪ Simple tag: indicating only some information about the quality or price. e.g., in local products
like sugar ,wheat etc.
▪ Descriptive label: provide complete information about the product, contents, use, features etc.

Functions of label
o Describe the product: Specify its contents, usage, cautions, price, manufacturing date ,expiry
date etc.
o Identify the product or brand: The brand name of any product imprinted on its package helps
the customers to identify their favourite brand, from number of packages.
o Helps in grading of the product: Differentiates the products according to their features or
quality.
o Helps in promotion of products: A carefully designed label can attract the attention of customers
and give reason to purchase.
o Provide information required by law, for example, in case of hazardous or poisonous material,
appropriate safety-warning need to be put on the label.
2.PRICE MIX
Price may therefore be defined as the amount of money paid by a buyer (or received by a seller) in
consideration of the purchase of a product or a service.
Functions of price
 Helps in marketing the product
 Regulates the demand of the product
 Use as a weapon against the competitors

Factors affecting Price Determination

1. Product cost: all marketing firms strive to cover their total cost of producing,
distributing and selling the product which include fixed cost, variable cost, and semi variable cost, at
least in the long run as they want to survive. In addition, they aim at earning a margin of profit over and
above the costs.

2. The Utility and Demand: The buyer may be ready to pay up to the point where the utility from the
product is at least equal to the sacrifice made in terms of price paid. consumers usually prefer more
units at a low price. Price is also affected by the intensity or price elasticity of demand.

3. Extent of competition in the market: Price is affected by the nature and the degree of competition.
The price will tend to reach the upper limit in case there is lesser degree of competition while under
conditions of free competition, the price will tend to be set at the lowest level.

4.Government and Legal Regulations: In order to protect the interest of public against unfair practices in
the field of price fixing, Government can intervene and declare a product as essential product and
regulate its price(price ceiling and price floor).

5. Pricing Objectives:
➢ Profit maximisation: If the firm decides to maximise profit in the short run, it will charge
maximum price and to maximise its total profit in the long run, it will opt lower price and earn
greater profits through increased sales.
➢ Obtaining Market Share Leadership: If a firm’s objective is to obtain larger share of the market;
it will fix a lower price and attracts more customers
➢ Surviving in a Competitive Market: If a firm faces intense competition in the market, it may offer
discounts or use a promotion campaign.
➢ Attaining Product Quality Leadership: Normally higher prices are charged to cover high quality
and high cost of research and Development.
➢ Marketing methods used: Price fixation process is also affected by other elements of marketing
such as distribution system, quality of salesmen employed, quality and amount of advertising,
sales promotion efforts, the type of packaging, product differentiation, credit facility and
customer services provided.
3.PLACE/PHYSICAL DISTRIBUTION MIX

Physical distribution includes all those activities that ensure the availability of the product at the right
place, at the right time and in right condition so as to facilitate its purchase.

Two main decisions involved in physical distribution

• Physical movement of goods from producers to consumers

• Choice of channels of distribution
Components

• Order Processing: Order processing refers to the time and steps involved between receipt of order
from customers and delivery of goods. A good physical distribution system should provide for an
accurate and speedy processing of orders.
• Inventory: it means the maintenance of stock of goods held for distribution. Higher inventory level
raises the cost while the shortage of industry may lead to the loss of customers.
• Warehousing: Warehousing refers to the act of storing and assorting products in order to create
time utility in them. The need for warehousing arises because there may be difference between
the time a product is produced and the time it is required for consumption.
• Transportation: It is the means of carrying goods and raw materials from the point of production
to the point of sale. The various means of transportation include rail,road,air,water etc.

Channels of Distribution:
Channels of distribution refers to the set of individuals and firms that act as intermediaries in the form of
agents, wholesalers, retailers etc. that help to transfer the title of ownership to the buyer and also facilitate
physical movement of the products.

Types of channels of distribution

1. Direct channel:
o Manufacturer- consumer (zero level)- e.g., company owned retail shop ,Door to door selling,
mail order selling, tele marketing etc.
2. Indirect channels:
o Manufacturer- retailer consumer (one level channel)
o Manufacturer- wholesaler- retailer- consumer(two level channel)
o Manufacturer-agent- wholesaler- retailer- consumer(three level channel)

Functions of distribution channels

• Sorting
• Accumulation
• Allocation
• Assorting
• Product Promotion
• Negotiation
• Risk Taking

Factors determining choice of channel

1. Product related factors

o Type of product
o Nature of product
o Degree of complexity of product
o Unit value of the product
2. Company characteristics
o Financial strength of the firm
o Degree of control desired on channel members
3. Competitive factors
o Policy of firm
4. Market factors
o Geographical concentration of buyers
 o Quantity purchased
o Size of the market
5. Environmental factors
o Economic conditions
o Legal constraints

4.PROMOTION MIX:
Promotion refers to the set of activities undertaken by a marketer to inform the prospective buyers about the
product and persuading them to make a purchase. Promotion mix refers to combination of promotional
tools used by an organization to achieve its communication objectives. What combination of these
elements is used by a firm will depend upon various factors such as nature of market, nature product,
the promotions budget, objectives of promotion, etc.

Promotion mix

• Advertising
• Personal selling
• Sales promotion
• Public relations

I. ADVERTISING
Advertisement is a paid form of non-personal communication undertaken by the marketers to
boost the sale of a product or a service. Some common modes of advertising are newspaper
,television, magazine, radio ,social media etc.

Features of Advertising

• Paid form: The sponsor has to bear the cost of communicating with the perspective customers.
• Impersonality: There is no direct face to face contact between customer and advertiser(It’s a
monologue not a dialogue)
• Identified sponsor: It is undertaken by some identified individual or company, who makes the
advertising efforts and also bears the cost of it.

Merits of advertising

(i) Mass Reach: To a large number of people can be reached over a vast geographical area.
(ii) Enhancing Customer Satisfaction and Confidence: Buyers feel more comfortable and assured about
the product quality and hence feel more satisfied.
iii) Expressiveness: With the developments in art, computer designs, and graphics, advertising has
developed into one of the most forceful medium of communication. Use messages ,emotional quotes etc.
to make it more expressive.
iv) Economy: Advertising is a very economical(cheap) mode of communication, since per-unit cost of
reach is less.

Role of Advertising

• Enhancing customers awareness about the product

• Helps in creating demand for both old and new products
• Repeated advertisements increases the confidence of the consumers
• Improves the public image of the company
 • Helps to create employment opportunities

Objections to Advertising

 Adds to cost : Advertising unnecessarily adds to the cost of product, which is ultimately passed
on to the buyers in the form of high prices.
 Undermines social values: It undermines social values and promotes materialism. Some
advertisements show new lifestyles, which do not find social approval.
 Encourages sale of inferior products: Persuade people to purchase even the inferior products.
 Confuses the buyers: So many products are being advertised which makes similar claims that the
buyer gets confused as to which one is true and which one should be relied upon.
 Some advertisements are in bad taste: Misleading or exaggerated claims or not relevant to the
viewer.

II. PERSONAL SELLING

Personal selling refers to a personal form of communication (conversation) between the seller and one or
more prospective customers for the purpose of making sales prospective buyer. Salespersons create
awareness about the product and develop product preferences with the aim of making sale

Features of Personal selling

(i) Personal Form: It involves a direct face-to-face dialogue and an interactive relationship
between the seller and the buyer.

(ii) Development of Relationship: Salespersons develop personal relationships with the

prospective customers, which may become important in making sale. Sometimes it may lead to
the development of long-term relationship between the company and a buyer.

Merits of personal selling

(i) Flexibility: The sales presentation or message is not uniform, can be adjusted to fit the specific needs
of the individual customers.
(ii) Direct and immediate Feedback: Face-to-face communication helps to take a direct feedback from
the customer and to adapt the presentation according to the needs of the prospects.
(iii) Minimum Wastage: The wastage of efforts in personal selling can be minimised as company can
decide the target customers before making any contact with them.

Role/Importance Of Personal Selling

1) Importance to Businessmen

(i) Effective Promotional Tool: It helps in influencing the prospects about the merits of a product and
thereby creating demand for a firm’s products and increasing its sale.
(ii) Flexible Tool: It helps businesspersons in adopting their offer in varying purchase situations.
(iii) Minimises Wastage of Efforts: The possibility of wastage of efforts in personal selling is minimum.
This helps the businesspersons in bringing economy in their efforts.
(iv) Consumer Attention: There is an opportunity to detect the loss of consumer attention and interest
in a personal selling situation.
(v) Lasting Relationship: It helps to develop lasting relationship between the sales persons and the
customers, which is very important for achieving the objectives of business.
(vi) Personal Rapport: Development of personal rapport with customers increases the competitive
strength of a business organisation.
(vii) Role in Introduction Stage: In the introduction stage of a new product, it helps in persuading
customers about the merits of the product.
(viii) Link with Customers: Sales people play three different roles, namely persuasive role, service role
and informative role, and thereby link.
a business firm to its customers.

2) Importance to Customers
The role of personal selling becomes more important for the

(i) Help in Identifying Needs: Personal selling helps the customers in identifying their needs and wants
and in knowing how these can best be satisfied.
(ii) Latest Market Information: Customers get latest market information regarding price changes,
product availability and shortages and new product introduction, which help them in taking the
purchase decisions in a better way.
(iii) Expert Advice: Customers get expert advice and guidance in purchasing various goods and services,
which help them in making better purchase.
(iv) Induces Customers: Personal selling induces customers to purchase new products and thereby
Helps them in improving their standards of living.
(iv)Useful to illiterate customers: with the help of sales persons, the illiterate and rural customers get
product information.

3) Importance of Personal Selling to Society

i. Converts Latest Demand: Latest demand is converted into effective demand with the help of
personal selling. Because of this effective demand, production is raised, which results in more
jobs, incomes, and products and services. In this way, personal selling brings economic growth.
ii. Employment Opportunities: It creates employment opportunities for people as it requires a lot
of sales persons. A lot of youth get employed because of personal selling.
iii. Career Opportunities: It creates many attractive opportunities for career advancement and job
satisfaction. security, respect, and independence are provided to the youth through personal
selling.
iv. Mobility of Sales People: It also boosts travel and tourism in the country, as the salesperson is
required to move from one place to another.
v. Product Standardisation: Personal selling increases product standardisation and uniformity in
consumption pattern in a diverse society.

Qualities of a Good Salesman

Personal Selling is an art that requires skill and constant practice to be effective. A salesman should have
the following essential qualities:

1. Physical Qualities

A salesman should be healthy and should possess an attractive personality. For creating a favourable
impression on the customers, good appearance, posture, sound health, pleasing voice. etc., are required.
As a salesman is required to travel a lot, he should be physically capable of travelling.

2. Knowledgeable

A salesman should have complete knowledge of the product and its features, knowledge about the
organisation, its philosophy, policies, motto, customers, competitors, etc.

3. Mental Attributes

A high degree of intelligence and imagination are essential qualities for a successful salesman. He should
be in a position to understand customers and read their minds quickly. For effective selling, he should
have a creative imagination, keen observation, sharp memory, and good judgement ability.

4. Vocational Attributes

The salesperson should be highly ambitious and enthusiastic, as salesmanship is a highly skilled
vocation. He should be optimistic and should have creative ability and an urge for excellence.

5. Courtesy

In order to win the trust of customers, a salesman should be polite, sympathetic, and courteous. If the
language of the salesman is polite, then he can win the buyer’s confidence.

6. Tactfulness

As a salesman has to deal with humans, who differ in aptitudes, viewpoints, requirements, etc., he must
be tactful. He must have the ability to adjust to the circumstances and needs of the customers.

7. Self-confidence

Self-confidence is an essential quality to be a successful salesman. He should have firm determination

and take every objection or obstacle as a challenge.

8. Enthusiastic

A salesman should be enthusiastic and should work with zeal. He should focus on achieving the selling
objectives by accepting the challenge of making a positive sale to the customer.

9. Honesty

The policy of honesty should be practiced by the salesman. He should not try to win customers through
false and misleading representations.

10. Persistent

A salesman should be persistent. He should try to convince the prospects with persistent efforts. He
should not give up on the customers soon. Regular and willing customers for the company can be won
by the persistent efforts of the salesman.

11. Good Communication Skills

The success of the sales depends upon the communication skills of the salesman, as selling is a two-way
communication process. The salesman should have a controlled voice and demand over the language. He
should clearly communicate what he wants to communicate. Moreover, he should not be only a good
speaker but also a good listener.

III. Sales Promotion

Short-term incentives, which are offered to encourage the buyers to make an immediate purchase of a
product or service is known as Sales Promotion. Sales Promotion helps to boost the sales of a company.
All the activities that provide short-term incentives to boost sales are included in sales promotion. Sales
promotion is usually undertaken to supplement other promotional efforts such as advertising and
personal selling .
Sales Promotion techniques are useful because:
• They bring a short and immediate effect on sales.
• They help in stock clearance.
• They induce customers and distribution channels
• They help to win over competitors

Merits of Sales Promotion

• Attention Value: With the help of sales promotion techniques or activities, companies are
able to grab the attention of customers, as it gives extra incentive to consumers to make a
purchase.
• Useful in New Product Launch: Sales Promotion plays a prominent role when a new product
is launched in the market. Products are available as free samples or at low prices, which
induces people to try new products.
• Synergy in Total Promotional Efforts: Sales promotion aids other promotional techniques
and makes them more effective. It helps to increase the overall effectiveness of promotional
efforts by supplementing personal selling and advertising.

Demerits/Limitations of Sales Promotion

• Reflects Crisis: Frequent use of sales promotion techniques may give a bad impression on
the image of the product and the company. It gives the impression that there is no demand
for that product. It reflects a crisis and declines company’s reputation.
• Spoils Product Image: The image of the product is adversely affected by frequent use of
promotional activities. Buyers may feel that the quality of the product is not good or is not
appropriately priced, which is why the company is offering incentives.
• Short-term Focus: Sales promotion tools have short and temporary life.

Sales Promotion Activities/ Techniques

• Rebate: Offering products at a price less than the original price to clear off the excess
inventory is known as rebate. For example, offering Pizza at INR 250 instead of INR 500.
• Discount: A reduction of a certain percentage from the price for a limited period is known as
discount. Discounts are given to induce customers to buy more. For example, 50% off at
Nike Stores.
• Refunds: Under this, a part of the product price is refunded to the customers on showing
proof of purchase. For example, Swiggy and Zomato offer cashback while making payments
through certain apps.
• Product Combination: Giving one product as a gift along with the purchase of the main
product is known as product combination. For example, Disney+Hotstar subscription is free
with every Airtel recharge.
 • Quantity Gift: When we offer some extra quantity of the main product as a gift to the
customer, it is known as quantity gift. For example, 10% extra Lays with every packet.
• Instant Draws and Assigned Gift: In this, companies offer schemes, like scratch cards to win
instant gifts on the purchase of the product. For example, Utensils companies offer scratch
cards to customers.
• Lucky Draw: In this method, customers are given coupons on the purchase of a product and
the lucky winners are decided by draw of lots. The winner of the lucky draw gets a gift. For
example, a Lucky draw coupon on the purchase of clothes worth Rs. 5,000 and above.
• Usable Benefit: Under this, a coupon or discount voucher is given to customers on the
purchase of a product in order to avail any special benefit or discount. For example,
Purchase goods worth ` 3000 and get a holiday package worth ` 3000 free’.
• Full Finance @ 0%: Under this, products are sold on instalment basis at the rate of zero
percent. For example, Buy Samsung Washing Machine at 0 percent interest and pay in 35
instalments. However, customers must be aware of charges in such schemes.
• Sampling: It is distribution of free samples of a product through sales representatives.
Usually, daily products, like detergents, soaps, toothpaste, etc., are distributed using this
method. This method is generally used at the time of launch of a new product by a company.
For example, get mini lipstick free with Maybelline New York Lipstick.
• Contests: Under this method, companies organise events like quiz and consumers
participate in such events to win prizes and gifts. For Example, contest to design the label for
a company, and the best label would be featured in the first 100 products.
• Container Premium: These include special containers or boxes which are used to pack
products, which could be reused by the customers. For example, Jars of cake, milkshakes can
be used in kitchen to store spices, milk, etc.
• Packaged Premium: In this, the gift is kept inside the pack. The gift is kept in limited
products and the excitement to win the gift induces people to buy the products and thus,
increasing sales. For example, silver coins in the soaps.

IV. Public Relations

Public relations refers to the practice of managing communication between an organisation and its
public (shareholders, suppliers, intermediaries, investors, creditors, government, etc.) in order to create
and maintain a positive image about itself and its products. In other words, It is the deliberate, planned,
and sustained effort to establish and maintain mutual understanding between an organisation and its
public.

Role of Public Relations

• Helps an organisation in its functioning and achieving organisational goals

• Creates a favourable impression on the target customer.
• It helps in building corporate image which affects the products favourably. For
example, donating to a social cause creates a positive image of the organisation.
• Helps to launch new products easily.
• It supplements advertising.
• Building credibility
• It lowers the cost of promotion and Stimulates sales

TOOLS
Publicity: it is a non-personal and nonpaid form of communication. Publicity generally takes place
when favourable news, For example, news about a breakthrough achievement, is presented in the mass
media about a product or service. As the information is disseminated by an independent source, the
message has more credibility than if that comes as a sponsored message.

Press release: Information about the organisation needs to be presented in a positive manner in the
press. The public relations department is in contact with the media to present true facts and a correct
picture about the company.

Corporate communication: The image of the organisation needs to be promoted through communicating
with the public and the employees within the organisation. This is usually done with the help of
newsletter, annual reports, brochures, articles, and audio-visual materials.

Lobbying: The organisation has to deal with government officials and different ministers in charge of
corporate affairs, industry, finance with respect to policies relating to business and the economy.

Counseling : The public relations department advises the management on general issues which affect the
public and the position the company would like to the take on a particular issue. The company can build
goodwill by contributing money and time to certain causes like environment, wildlife, children’s rights,
education.

Press Kits: The comprehensive package of promotional material which is provided to the members of
the press containing information about the company’s products and services is known as Press Kits. The
company’s biography, information of senior management, comments from the customers, pictures of
products, etc., are included in the press kits.

Brochures: Brochures are usually booklets containing an organisation’s background, ethics, vision,
mission, goals, its past, present and future projects. These are published by the organisations annually or
half-yearly.

Newsletters: The periodically sent publications which focus on a particular set of people are known as
Newsletters. The writing style of the newsletter is kept less formal and more like a letter. Nowadays
companies send newsletters through emails, e.g., H&M, Daniel Wellington, etc., send their newsletters to
customers through emails.

Annual Reports: The operations and financial activities of a company throughout the preceding year are
described through a comprehensive report, known as Annual Reports. It provides information about the
company’s activities and financial performance to the shareholders and other interested parties.

Conferences and Seminars: Companies conduct conferences, seminars, and webinars on a regular basis
to maintain public relations. These make the public aware of the organisation. For example, an IT firm
conducting a seminar or webinar on ‘How does anti-virus helps?’.

Events: Events build a big picture of an organisation. Businesses often organise events to build a positive
image of the organisation. They organise opening ceremonies, star-studded events, etc. For example, a
publishing house launching a book with the authors of the book, big investors, other famous authors and
writers, etc.