MARKETING MANAGEMENT

MBCA 2003

MBA- II Semester

Directorate of Distance Education

Pondicherry University , Pondicherry

Dr. MD. NIZAMUDDIN

Asst. Professor
 UNIT- I
INTRODUCTION TO MARKETING
In this Unit we will be discussing:
Basic concepts of Marketing
Definition of Marketing
Different concepts/orientation of Marketing
Difference between Marketing & Selling
Marketing Environment
Marketing Mix
Segmentation, Targeting & Positioning
 What is Marketing ?
 The term “marketing” is derived from the term “market”, which refers
to a group of buyers and sellers that cooperates to exchange goods and
services .
 In fact marketing has been described in various ways approaching the
subject from various angle: as both as an art and a science, as an
exchange, as a function of business, as a process and as a relationship.
What does marketing do?
 Meeting customer need
 Creating value for the customer
 Generating customer satisfaction at a profit
 Building Relationship with customers
 Meeting competition
 Marketing Defined
Philip Kotler defines” Marketing is societal process individuals
and groups obtain what they need and want by creating offering
and freely exchanging products and services of value with
others”
American marketing Association (AMA) defines “Marketing is
an organizational function and a set of processes for creating,
communicating and delivering value to customers and for
managing customer relationships in a way that benefit the
organization and its stake holders.”
Chartered Institute of Marketing (CIMA) defines “Marketing is
the management process for identifying, anticipating and
satisfying customers requirement profitably.”
Marketing consists of the strategies and tactics used to identify,
create and maintain satisfying relationships with customers that
result in value for both the customer and marketer
 Functions of Marketing
Marketing function Description
A. Exchange functions Ensuring that product offerings are available in
1. Buying sufficient quantities to meet customer demands
2. Selling Using advertising, personal selling and sales
promotion to match goods and services to
customer needs

B. Physical distribution functions Moving products from their points of

3. Transporting production to locations convenient for
4. Storing purchasers Warehousing products until needed
for sale

C. Facilitating functions Ensuring that product offerings meet

5. Standardizing and grading
6. Financing
7. Risk taking
8. Securing marketing information
established quality and quantity control
standards of size, weight and so on
Providing credit for channel members or
consumers
Dealing with uncertainty about consumer
purchases resulting from creation and
marketing of goods and services that consumers
may purchase in the future Collecting
information about consumers, competitors and
channel members for use in marketing decision
making
Marketing Concepts
 Marketing Concepts
 Needs, Wants and Demands
 The most basic concept underlying marketing is that of human needs. Humans have
many needs, viz., physical needs, social needs, spiritual needs and so on. Wants are the
form taken by needs and are described in terms of
objects that will satisfy needs. When backed by buying power(ability), a want becomes a
demand.
 Products
A product is anything that can be offered to a market to satisfy a need or want. People
satisfy their needs and wants with products.
 Value and Satisfaction
Customer will value each existing product according to how close it comes to his/her ideal
product and end up choosing the product that gives the most benefit for the rupee – the
greatest value.
 Exchange, Transactions and Relationships
Marketing occurs when people decide to satisfy needs and wants through exchange.
Exchange is the act of obtaining a desired object from someone by offering something in
return
 Markets
The concept of transactions leads to the concept of a market. A market is the set of actual
and potential buyers of a product. It may exist in a physical environment as a marketplace
or in a virtual environment (on the internet platform) as a marketspace.
 Evolution of Marketing
Although marketing has always been a part of business,
its importance has varied greatly over the years. The
following are the five eras in the history of marketing.
Production era(Mass production)
Product era (Quality product)
Sales era (Pressure selling)
Marketing era (Satisfied customer)
Relationship marketing era (Relationships with
customers)
Societal Era
Marketing Process
 Marketing Process
The marketing process can be divided in several
different ways. One popular conceptualization of
marketing tasks is:
 Strategy formulation
 Marketing planning
 Marketing programming, allocating and budgeting
 Marketing implementation
 Monitoring and auditing
 Analysis and research
 Marketing vs Selling
Selling Marketing
Starts with seller Starts with buyer
Seller is the centre of business universe Buyer is the centre of business universe

Emphasis on Saleable surplus Emphasis on identification of customer

needs
Concern itself with just techniques to Concern itself with fulfilling the needs of
attract customers the customers
Views business as a goods producing Views business as a customer satisfying
process process
Overemphasises the exchange aspect, Concern itself primarily and truly with the
without caring for the ‘value satisfaction’ ‘value satisfaction’
Emphasis on existing technology Emphasis on innovation

Cost determines the price Consumer determines the price

Emphasis on somehow selling Emphasis on integrated marketing

covering 4ps
Views customer as the last link Views customer as the very purpose of
business
Marketing Framework
 Marketing Mix
Elements of the Marketing Sub-Elements
Mix
Product Product design, Product positioning,
product name and branding, packaging and
labeling, breadth and depth of product line
level and type of customer service, product
warranty, new product development process
product life cycle strategies

Price Manufacturer, wholesaler and retailer selling

prices, terms and conditions, bidding tactics,
discount policies, new product pricing

Promotion (marketing Advertising, sales force policies, direct

communications)
Place (distribution channels)
marketing (mail, catalog), public relations,
price promotions – for the consumers and
the channel, trade shows and special events
Direct Vs. Indirect channels, channel length,
channel breadth (exclusive, selective or
intensive), franchising policies, policies to
ensure channel coordination and control
 Marketing Environment
 Demographic environment
Since business depends on people/consumers, demographic is a major element of
marketing environment
 Political-legal environment
Businesses need considerable diligence to understand the legal framework for their
marketing decisions. Numerous laws and regulations affect those decisions
 Economic environment
Marketing’s economic environment consists of forces that influence consumer
buying power and marketing strategies. They include the stage of the business
cycle, inflation, unemployment, resource availability and income.
 Socio-cultural environment
The social-cultural environment of marketing describes the relationship between
marketing and society and its culture. Marketers must cultivate sensitivity to
society’s changing values and to demographic shifts such as population growth and
age distribution
 Technological environment
Technology is revolutionizing the marketing environment. The technological
environment represents the application nmarketing of discoveries in science,
inventions and innovations. to
Buyer Behaviour
Consumer behaviour is the process through which the
ultimate buyer makes purchase decisions.
‘… the study of the buying units and the exchange processes
involved in acquiring, consuming, and disposing of goods,
services, experiences, and ideas’ (Mowen)
‘… the decision process and physical activity individuals
engage in when evaluating, acquiring, using or disposing of
goods and services’ (Loudon and Della Bitta)
 Determinants of Consumer Behaviour
Consumers don’t make purchase decisions in a vacuum; rather, they respond to
a number of external, interpersonal influences and internal, personal factors.
Consumer often decide to buy goods and services based on what they believe
others expect of them.
Marketers recognize three broad categories of interpersonal influenceson
consumer behaviour:
1. Cultural influences,
2. Group influences and
3. Family influences.
Consumer behaviour is affected by many internal, personal factors, as well as
interpersonal ones. The factors are:
 Unique needs,
 Motives,
 Perceptions,
 Attitudes,
 Learning and
 Self-concept.
Consumer Decision Process
Segmentation, Targeting and Positioning
Market is composed of heterogeneous groups of people
with differing wants and varying purchase power. The
heterogeneous marketplace can be divided into many
homogeneous customer segments along several
segmentation variable. The division of the total market
into smaller relatively homogeneous groups is called
market segmentation.
Segmentation can be done based on:
 Geography
 Demographic
 Psychographic
 General lifestyle

 Product usage

 Product benefit
 Targeting & Positioning
TARGETING
 Target market selection is the next logical step following
segmentation. Once the market-segment opportunities have been
identified, the organization got to decide how many and which ones
to target.

POSITIONING
 concept of positioning seeks to place a product in a certain position’
in the minds of the prospective buyers.
 Positioning is the act of designing the company’s offer so that it
occupies a distinct and valued place in the target customers’ minds.
 Positioning is creating an identity to your product. This identity is a
cumulative of the following four positioning identities:
1. Who am I?
2. What am I?
3. For whom am I?
4. Why me?
 UNIT- II
PRODUCT DECISION
In this Unit we will be discussing about:
Basic concepts of product
Product Levels
Product Classification
Brand Decision
New Product Development
Product Life Cycle
 PRODUCT DECISIONS
Introduction:
The term ‘product’ is widely used to refer a market offering
of any kind. In its broadest sense this may be anything from
the physical to the abstract – an idea or a moral issue.
Generally, however, most products are made up of a
combination of physical elements and services.
Definitions:
“Product is a bundle of utilities consisting of various
product features and accompanying services” -Alderson, W.
“A product is something a firm markets that will satisfy a
personal want or fill a business or commercial need”. –
Schwarte D.J.
Product Levels
 Product Levels
i. Core Product: This is the most fundamental level. This includes the
fundamental service or benefit that the customer is really buying. For
example, a hotel customer is actually buying the concept of ―rest and sleep‖
ii. Basic or Generic Product: The marketer at this level has to turn the core
benefit to a basic product. The basic product for hotel may include bed,
toilet, and towels.
iii. Expected Product: At this level, the marketer prepares an expected product
by incorporating a set of attributes and conditions, which buyers normally
expect they purchase this product. For instance, hotel customers expect
clean bed, fresh towel and a degree of quiteness.
iv. Augmented product: At this level, the marketer prepares an augmented
product that exceeds customer expectations. For example, the hotel can
include remote-control TV, fresh flowers, room service and prompt check-in
and checkout.
v. Potential Product: This level takes into care of all the possible
augmentations and transformations the product might undergo in the
future. This level prompts the companies to search for new ways to satisfy
the customers and distinguish their offer.
 Products Classification
1 Durability and 2 Consumer 3 Industrial goods
tangibility goods

a Non-durable a Convenience a Material and parts

goods goods

b Durable goods b Shopping goods b Capital items

c Services c Specialty goods c Supplies and

business
services

d Unsought
goods
 Product Mix & Product Line
 Product mix and product line are two expressions used in
connection with the range of variety of the products of a firm.
 Product mix: Product mix, which is the larger entity, denotes
the complete set of all products offered for sale by a company.
 Product line: A group of closely related products constitute a
product line. The product mix is composed of all the product
lines it carries.
 Width of product mix: The width of product mix denotes the
number of product line it carries.
 Length of product line: Length of product line is decided by the
umber of products/brands in the line.
 Depth of product line: Depth of product line denotes the total
number of items under each product/brand in the line , in
terms of variants, shades, models, pack sizes, etc.
 Brand Decision
David Ogilvy defined “a brand is a collection of
perceptions in the mind of the consumer. A brand is
the most valuable real-state in the world, a corner of
the consumer’s mind”
A brand is given legal protection from being used by
others.
A brand distinguishes a product or service from
similar offerings on the basis of names.
Examples:
lux, liril, rexona, hamam in case of toilet soaps; surf,
ariel, and nirma in case of detergents and nivea, fem,
oil of oley, charmis and vaseline in case of vanishin
creams.
 Product Life Cycle
During it’s life span a product passes through certain
stages in terms of demand, growth rate and profitability.
This is called the Product Life Cycle (PLC). The utility of
the PLC concept lies in the fact that each stage in the
cycle is characterized by a typical market behaviour and
consequently lends to the application of a specific
marketing strategy.
The four distinct stages in PLC
• Market pioneering stage
• Market growth stage
• Market maturity stage
• Market decline stage
Product Life Cycle Curve
Stages of PLC and it’s characteristics
PCL Elements Introduction Growth Maturity Decline

Characteristics

1. Sales Low Fast Slow Declining

Growth Growth

2. Profits Negligible Peak Level Declining Low

3. Cash inflow Negative High Moderate Low

4. Competitors Few Growing Many Declining

5. Customers Innovative Mass Market Mass

Market Laggards
 New-Product Development
A firm can obtain new products through:
• Acquisition refers to the buying of a whole
company, a patent, or a license to produce
someone else’s product.
• New product development refers to
original products, product improvements,
product modifications, and new brands
developed from the firm’s own research
and development.

9-30
 Stages in New Product Development
• Idea generation
• Idea screening
• Concept development and testing
• Business/market analysis
• Actual product development
• MarketTest
• Commercialization

9-31
 New-Product Failure
Reasons for new product failure
• Overestimation of market size
• Poor design
• Incorrect positioning
• Wrong timing
• Priced too high
• Ineffective promotion
• Management influence
• High development costs
• Competition

9-32
Innovation Diffusion & New Product Adoption

Theory was first propounded by Evertt M Rogers

According to this theory people differ in terms of risk
taking ability and attitude towards change
This affects their willingness to try and adopt a new
product
Based on this two parameters and the time they take
to try a new product, customers can be grouped as:
1. Innovators 2. Early adopters 3. Early majority
4. Late majority 5. Laggards
Innovation Diffusion & New Product Adoption
 UNIT- III
PRICING DECISION
In this unit we will be discussing:
Introduction to pricing
Factors affecting pricing decision
Pricing objectives
Various approaches to pricing
Procedure for a pricing policy
Pricing and product life cycle
Pricing methods
 PRICING DECISIONS
A price is an expression of value
 A price is the seller’s estimate of what all of this is worth to
potential buyers
In the competitive marketplace, pricing is a game
The price one competitor sets is a function not only of what
the market will pay but also of what other firms charge
Prices set by individual firms respond to those of
competitors; they also are intended often to influence
competitors’ pricing behaviour
A way to think about making a pricing decision is that price
should be set somewhere between what the product costs to
make and sell and its value to the customer
 Pricing in Marketing Mix
Pricing is one of the important elements of the marketing mix; but lately,
it has come to occupy center stage in marketing war. The reasons for this
are:
Diminishing Product Differentiation: As technology get standardized,
differentiation among firms on this basis of the product is diminishing
Inter-Firm Rivalry: The intensity of inter-firm rivalry increases, the firms
cost of operation also increases as it now has to spend more money to lure
customer and middlemen.
Mature Products and Markets: when products and markets enter the
maturity stage, the only way to differentiate between various offers is on
the basis of augmented service or price cuts.
Consumer’s value perception: Many a time the customer’s perception
may not necessarily be inline with the price.
Inflation in the Economy: Inflation affects pricing in two ways one, it
lowers the purchasing power and hence customer’s search for low low-
priced substitutes and, two, it increases firm’s cost.
Pricing in a Digital world
Here is a short list of how the Internet allows seller to
discriminate between buyers and buyers to discriminate
between sellers:
Get instant comparision from thousands of vendors
Check prices on the point of purchase Name their price
and have it met
Get product free
Monitor customer behaviour and tailor offers to
individual
Give certain customers access to special price
Negotiate price in online auctions and exchanges or even
in person
 Pricing objectives
 Price is a complex decision that has direct bearing on the company’s
profitability
 Price is a component of the total marketing mix,
 Pricing objectives also represent components of the organization’s
overall objectives
 The objectives of the firm and its marketing organization guide
the development of pricing objectives
 To arrive at a good price strategy, the marketer should be able to
decide on the price objectives
 Pricing objectives vary from firm to firm, they can be classified
as following:
 Maximize current profit and return on investment
 Exploit competitive position
 Survival in competitive market
 Balance price over product line
 Prestige objective
 Factors Influencing Pricing
Internal Factors:
 Corporate and marketing objective of the firm
 The image short by the firm by pricing
 The characteristics of the product
 The stage of the product in its life cycle
 Use pattern and turnaround rate of the product
 Cost of the manufacturing and marketing
 Extent of distinctiveness/differentiation of the product
 Interaction of other 3p’s of marketing
 Whether buyer buy some of the products in
combination
 Factors Influencing Pricing
External Factors:
 Market characteristics (demand, customer and
competition)
 Price elasticity of demand of the product in particular
 Buying behaviour of the customer of the product
 Bargaining power of major customers
 Competitor’s pricing strategy
 Government control/regulations on pricing
 Other relevant legal aspects
 Societal views
 Understanding, reached, if any with competitors
 General pricing approaches
Cost-based pricing
 Markup pricing (cost plus pricing)
 Absorption cost pricing (full cost pricing)
 Target rate of return pricing
 Marginal cost pricing

Demand based approach

 What the traffic can bear pricing
 Skimming pricing
 Penetration pricing

Competition-oriented pricing
 Premium pricing
 Discount pricing
 Parity-pricing/Going rate pricing

Product line-oriented pricing

Tender pricing
Affordability-based pricing
Differentiated pricing
Procedure for a pricing policy

Selecting the pricing objective

Determining demand
Estimating costs
Analysing competitors’ costs, prices and
offers
Selecting a pricing approach
Selecting the final price
 Pricing and Product Life Cycle
Introduction phase
-Skimming pricing
- Penetration pricing
-Cost-plus pricing
Growth phase
-price must be reduced gradually
-skimming other market segments that are progressively more
price sensitive
Mature phase
-developing and pricing good, better and best versions to expand
the product line)
Decline phase
-Beat a retreat on price
-Increase the price on the few remaining units in inventory
 Pricing Strategies
New Product pricing Product-bundle pricing
strategies Price Adjustment
Market Skimming pricing strategies
Market Penetration Discount and allowance
pricing pricing
Product Mix pricing Discriminatory pricing
strategies Psychological pricing
Product-line pricing Value pricing
Optional-product pricing Promotional pricing
Captive-product pricing Geographical pricing
By product pricing International pricing
 UNIT- IV
CHANNEL DECISION
In this unit we will be discussing:
Introduction to channel decisions
Flows in marketing channel
Functions of distribution channel
Channel structure
Channel conflicts
 Channel Decisions
Marketing channels can be defined as the external
contractual organization that management operates to
achieve its distribution objectives
The term external means that the marketing channel exists
outside the firm
The term contractual organization refers to those firms who
are involved in the negotiatory function as the product
moves from the producer to the end user.
The function of these firms involves buying, selling and
transferring of goods and services
In simpler terms a channel then consists of producer,
consumer and any intermediary
 Distribution Channels Breadth
It refers to the number of channels the firm uses at a
particular distribution level like wholesalers or retailers
The firm can increase or decrease channel breadth as per
the circumstances dictate
The firm also considers different type of distributor
Adding a new distributor can be important when
customer have preffered outlets
Adding new distributor can be negative or positive
Firms have three broad distribution-channel breadth
Intensive Distribution
Exclusive Distribution
Selective Distribution
 Criteria for selecting DC
 Clear and unambiguous criteria for selecting channel partners favor both
supplier and distributors
 The firm should clearly specify the function and performance standards
distributors must meet
 Both the firm and distributor should recognize their separate obligations
before making and agreement
 To improve success proximities, the supplier should ask several questions of
potential distributors:
• Does the distributor have adequate market coverage?
• How competent is distributor management
• How does the distributor rate on aggressiveness, enthusiasm, and taking
interest
• What is the distributor’s credit and financial condition?
• What is the distributor’s general reputation?
• What is the distributor’s selling capability?
 Factors influencing Distribution decision
Market Characteristics

Company Characteristics

Product Characteristics

Middlemen Characteristics

Intensity of Competition

Environmental Characteristics
Flows In Marketing Channels
Functions Of Distribution Channels
Some of the major functions performed by the
intermediaries are mainly physical distribution,
communication and facilitating functions. Physical
functions include
breaking bulk
accumulating bulk
creating assortments
reducing transactions
transporting and storing
credit services
risk taking
Bulk-breaking function
Bulk-accumulating Function
Transaction without an intermediary
Reduction of transactions by an intermediary
 Channel Structure
Channel structure is distinguished on
the basis of the number of intermediaries
There are different levels in a channel
structure
The common levels are zero-level, one-
level, two-level, three-level
Each level presents both opportunities
and challenges for the marketer
Typical channel structure for
Consumer Goods
B2B Marketing Channels
Designing Distribution Channels
The channel design decision can be broken
down into six steps namely:
1. Recognizing the need for channel design
decision
2. Setting and coordinating distribution
objectives
3. Specify the distribution tasks
4. Develop alternative channel structures
5. Evaluate relevant variables
6. Choose the best channel structure
 Sources of Channel conflicts
Sources of Examples
conflict

1 Differences in Manufacturers want long-term profitability but middlemen prefer

objectives short-term

2 Dealings with Middlemen feel cheated when the manufacturer deals with large
customers customers and asks them to serve small customers

3 Differences in The manufacturer feels that the middlemen are not giving attention
interests to the firm’s products. The middlemen are interested in products
that are fast moving or have higher margins for them

4 Differences Manufacturer’s representatives (agents) feel that the commission

in perceptions percentage offered by the manufacturer is not adequate. The
manufacturer thinks otherwise

5 Unclear territory The territory boundaries between middlemen are not clear, resulting
boundaries in competition among the firm’s intermediaries to secure business
from the same customers
Management of Channel Conflict
The channel conflicts can be controlled
or managed in several ways, including:
Effective communication network
 Joint goal-setting
 Diplomacy
 Mediation
 Arbitration and
vertical marketing
 RETAILING
Retailing is one of the largest and most dominant
sectors in the global economy
Retailing is the second largest industry in India next
only to agriculture
It accounts for over 20% of GDP and contributes 8% to
total employment
The word ‘retail’ is derived from the French word
retailer, meaning ‘to cut a piece off ’ or ‘to break bulk
Retail business is not just about stores but is also
about gaining insight about customers, managing
supply chain, visual-merchandising, managing
information system and much more
 Major Indian Players in retail
Indian retailers Group

Pantaloon Future Group

D’Mart Avenue Group

Big Bazar/Reliance Bazar Reliance Group

Lifestyle Retail Landmark Group

Shoppers Stop Raheja Group

Spencer’s Retail RPG

Reliance Retail Reliance Group

Tata Trend-Westside Tata Group

Aditya Birla- More Aditya Birla Group

Major Foreign Retailers in India
Name of Stores Country of Origin

Carrefour – Cash and Carry France

Wallmart USA

Metro – Cash and Carry Reliance

Amazon USA

Tesco UK

McDonald USA

Marke Spencer UK

Starbuck USA

USA Gap
 Major Online Retailers
Online Retailers

Amazon.in

Alibaba.com

Junglee.com

Flipkart.com

Snapdeal.com

Ebay.com

Jabong.com

Sulekha.com

Shopclues.com

Myntra.com
 Retailing in India- the Contemporary Scene
Retail Sector as a whole, keep enlarging
Modern retail too grows, but at a lower rate than
previously expected
Urban Indians shopping trends indicate the potential
modern retail
Modern retail comes in a multitude of formats-
department store/super markets/hyper markets/ shopping
malls
Spread of modern retail (MFS) in recent years
FDI in retail not taking off as expected
Growth of e-tailing/online retailing
 Modern Retail (MFS)
Modern Retails Modern Retails

Speciality Store Category killer

Department Store Hypermarket/Mega Store

Supermarket Destination Store

Supermarket (Food Superstore) Convenience Store

Retail Chain Stop Over Store

Discount Retail Chain Highway Retailing

 Functions Of Retailing
Retailers perform four major activities in the value chain.
They are:
1. Arranging assortment
2. Breaking bulk
3. Holding stock and,
4. Providing service

Each of these activities holds significance when the

product gets transferred from the manufacturer or the
wholesaler to the retailer
 Retail Strategy
Situation Analysis: Organizations’ Mission, Ownership and
Management

Objective: Image, Profits, Customer Satisfaction

Identification of consumers: Segmentation, Targeting and

Positioning

Overall Strategy: Controllable and Un-controllable factors

Specific Activities: Response to environments

Control: Evaluation and Adjustment

 Difference Between Conventional Marketing and DM
Conventional Marketing
CM is mass marketing provides very little
scope for customization
Deals with customers indirectly; sells to
them indirectly
CM is a one-way activity to a large extent
CM relies heavily on marketing
channels/retail stores
CM relies heavily on advertising/mass
promotion
Opt for sales promotion-offers/incentives
on mass basis
Direct Marketing
DM is one to one marketing; it approaches
customer individually
Deals with them Directly; sell to them
directly
DM is interactive marketing; with two way
communication between the firm and
each and every customer
DM does not involve channels/stores; the
marketer secures the sales directly from
the consumer
DM does not involve advertising/mass
promotion; it may go for promotion on
one to one basis
Opts for individualized sales promotion-
offers/incentives
 UNIT- V
PROMOTION DECISION
In this unit we will be discussing:
What is promotion?
Marketing Communication
Promotion Mix
Importance of Advertising
Difference between Advertising & Sales
Promotion
Steps in Advertising Programme
Types of Media in Advertising
 PROMOTION DECISION
Promotion is a key part of marketing program
 It is the persuasive communication of the marketing
program to target audience
 It is goal oriented program with an objective
to create brand awareness,

to educate the consumers,

to create a positive image,

to build preference

 The ultimate goal is to sell the product or service to

consumers
MARKETING COMMUNICATION
Marketing communications is one of the four major elements
of the company’s marketing mix. The objective and importance
of marketing communications are:
Behaviour modification
Objective to inform
Objective to persuade
Reminder objective
Specific Objective
The five major modes of communications are:
Advertising
Sales promotion
public relations
personal selling
direct marketing
 Promotion Mix
The components of promotion mix are as follows:
Advertising: paid form of non – personal presentation and
promotion of ideas, goods or services by an identified sponsor
Personal selling: oral presentation to a buyer for the purpose
of making sales
Sales promotion: promotional methods using special
short-term techniques to persuade members of a target
market to respond or undertake certain activity
Publicity: voluntary coverage of some activity by media that
is not paid for
Direct Marketing: serving the customer straight without
involvement of a third party in between
 Advertising
AMA defines advertising as ‘any paid form of non – personal
presentation and promotion of ideas, goods or services by an
identified sponsor’
Russell and Lane defined advertising as ‘a message paid for by an
identified sponsor and delivered through some medium of mass
communication.
It is paid by the sponsor
It’s sponsor is identifiable
It is non-personal
It can be used to promote idea, goods and services
The contents of advertising are controlled by the advertiser
It is associated with mass media
It seeks to ultimately persuaded the target audience
Bias is inherent in advertising as it seeks to benefit the
 IMPORTANCE OF ADVERTISING
Way of communicating information to the
customers
Manufacturer’s concerns communicate to an
audience either to sell or promote a product
Fundamental Right of Freedom of Speech

Improving in development of productivity

Economic Growth of Country

 Steps in Advertising Programme
Before Advertising
Market
- Define Market
- Select the target market-
After Advertising
- Measure the effect of advertising to determine
whether it would help achieve the target.

Motive
- Identify what makes people buy - Compare the consumer buying motive and the
advertising appeal.

Media - Evaluate the effectiveness of media

- Decide about the media mix - - Assess the effectiveness of the message.
Allocate budget among TV, Radio,
Press etc.,

Measurement
- Assesses effectiveness of
advertising
- Evaluate possible achievement.
- Study sales graph
- Take a decision about future profile of
advertising programme.
 MEDIA SELECTION DECISIONS

While selecting the advertising media the

following factors should be borne in mind:
Cost of advertisement,
Nature of the product,
Comparison of the medium selected with other
competitors
Popularity of the media
Characteristics of customers and
Competition in the market
 ROLE OF MEDIA IN THE ADVERTISING PROCESS
Media Selection for Rural Marketing. The following points
have in be considered while selecting the media for the rural
markets :
The total number of literates in the rural market and their
reading habits
The extent and type of contribution of the product.
The number of cinemas and video parlors, panchayat
viewing and listening facilities and the type of audience.
The number of publications which are circulated in the area
concerned, the number of readers and their categories,
whether casual, regular or headline readers.
 Types of Media in advertising
Print Media Electronic Outdoor Media Direct Mail
Media
- Newspapers - TV - Billboards - Price Lists
- Direct Mail - Video - Hoardings - Catalogues

- Folders - Radio - Balloons - Personal

letters
- Product - Voice mail - Advertising on
Literature transport means - Circulars
- Cinema - Electric Display
- Journals
 Effectiveness of each mode of media
Mode Verbality Visual Colour Processing Reach Frequency
Impact Time

TV Low High High Low High High

Radio High - - Low Very High High

Newspapers High Ok - High High Low

Magazines High High High High Low Low

Outdoor Can be High High High High Low Low

POP Can be High High High High Low Low

Direct Mail Very High High High Very High Depends Very Low
 MEASURING ADVERTISING EFFECTIVENESS
Measuring advertising effectiveness could be of two
types according to the objectives of the advertisers:
Communication Effect Research, Sales Effect Research.
Communication Effect Research
The study seeks to discover if advertising is achieving
the intended communication effect
This method is also known as “Copy Testing”.
The objective of this research is an improvement in
the present system.
The testing can be categorized into two types: Pre-
testing of advertising campaign, and Post-testing of
advertising campaign.
 MEASURING ADVERTISING EFFECTIVENESS
Three major methods of ad pre-testing are: -
Direct Rating, Portfolio Test, Laboratory Testing
Direct Rating In this type, respondents are asked questions to rate
the alternative ads. These ratings are used to evaluate an ad’s
attention, read through, cognitive, effective and behavioural
strengths.
The following steps can be adopted.
Evaluate ad’s –
Attention strength
Read through strength
Cognitive strength
Effective strength
Behavioural strength
Method of evaluation through rating scale. Primarily helps in
 SALES PROMOTION
Sales promotion describes promotional methods using
special short-term techniques to persuade members of a
target market to respond or undertake certain activity
Objectives of Sales promotion are:
Building Product Awareness
Creating Interest
Providing Information
Stimulating Demand
Reinforcing the Brand
Roger A. Strang has defined sales promotion in a few words
as:
“Sales promotion is short-term incentives to encourage
purchase or sale of a product or service.”
 Difference between Advertising & Sales Promotion
Advertising Sales Promotion

(i) A reason is offered to buy. (i) An incentive is offered to buy.

(ii) Theme is to build up brand loyalty. (ii) Theme is to break down the loyalty to a
competing brand
(iii) Aim is to attract the ultimate
Consumers. (iii) Aim is to attract not only consumers but
retailers, wholesales and Sales force also
(iv) Effective in the long run.
(iv) Effective in the short run.
(v) Heavy advertising makes the brand
image of the product and accords it the (v) Heavy Sales promotion leads to the
perception of higher quality product being perceived as having a
brand image of cheaper and lower
(vi) Advertising includes m e s - sages quality product.
delivered through various types of
Media. (vi) Various types of incentives are offered
for - Consumer promotion - Trade
Promotion - Sales force Promo
 Personal Selling

Importance of Personal Selling

Relationship Tool
Information and Persuasion Suited for Complex Product
Role in Sales Cycle
Total Firm in Customers’ eye
Source of Information
 Theory of Selling
AIDAS Theory of Selling : In this theory AIDAS stands for
A - Attention

I - Interest

D - Desire

A - Action

S - Satisfaction
E-mail: nizamsm.pu@gmail.com