The concept of exchange leads to the concept of a market.

A market is the set of

actual and potential buyers of a product. These buyers share a particular need or
want that can be satisfied through exchange. Thus, the size of a market depends
on the number of people who exhibit the need, have resources to engage in
exchange, and are willing to offer these resources in exchange for what they want

Marketing means managing markets to bring about exchanges for the purpose of
satisfying human needs and wants. Thus, we return to our definition of marketing
as a process by which individuals and groups obtain what they need and want by
creating and exchanging products and value with others.

Marketing Management

We define marketing management as the analysis, planning, implementation and

control of programs designed to create, build and maintain beneficial exchanges
with target buyers for the purpose of achieving organizational objectives. Thus,
marketing management involves managing demand, which in turn involves
managing customer relationships

What is 'Markets'

Definition: A market is defined as the sum total of all the buyers and sellers in the
area or region under consideration. The area may be the earth, or countries,
regions,states,orcities.

The value, cost and price of items traded are as per forces of supply and demand
in a market. The market may be a physical entity, or may be virtual. It may be
local or global, perfect and imperfect.

A market is a place where buyers and sellers can meet to facilitate the exchange
or transaction of goods and services.

Markets can be physical like a retail outlet, or virtual like an e-retailer.

Other examples include illegal markets, auction markets, and financial markets.
  Markets establish the prices of goods and services that are determined by
supply and demand.
 Features of a market include the availability of an arena, buyers and
sellers, and a commodity.

Types of Markets

 Physical and Virtual Markets

 Underground Market
 Auction Market
An auction market brings many people together for the sale and purchase of
specific lots of goods. The buyers or bidders try to top each other for the
purchase price. The items up for sale end up going to the highest bidder.

Financial Market

The blanket term financial market refers to any place where securities,

currencies, bonds, and other securities are traded between two parties.

The financial market includes the stock exchanges 

Features of a Market

There are certain features that help define a market. These are necessary in
order for the market to function. The following are the most basic characteristics
that shape a market:

 Arena: This is the platform where transactions are conducted between

buyers and sellers. Keep in mind that this doesn't necessarily mean a
physical location. It can also mean the area in which all parties involved are
spread out.
 Buyers and Sellers: In order for the market to function, there must be
buyers and there must be sellers. The market can't exist if someone isn't
buying something that someone else is selling. These entities can be
businesses, individuals, or even governments, and they can execute their
transactions physically or virtually, thanks to the internet.
 One Commodity: A single market is dependent on a single commodity, so
in order for a market to operate, a related commodity must be present.
For instance, wheat is the commodity bought and sold in the wheat
 market. Electronics make up the electronics market en masse but can be
broken down into subcategories.

Markets are an important part of the economy. They allow a space where
governments, businesses, and individuals can buy and sell their goods and
services. But that's not all. They help determine the pricing of goods and services
and inject much-needed liquidity into the economy.

MARKETING

the activity of showing and advertising a company’s products in the best possible
way

Marketing refers to any actions a company takes to attract an audience to the

company's product or services through high-quality messaging. 

Types of Marketing
Where your marketing campaigns live depends entirely on where your customers
spend their time. It's up to you to conduct market research that determines which
types of marketing -- and which mix of tools within each type -- is best for building
your brand. Here are several types of marketing that are relevant today, some of
which have stood the test of time:
 Internet marketing: Inspired by an Excedrin product campaign that took place
online, the very idea of having a presence on the internet for business reasons is a
type of marketing in and of itself.
 Search engine optimization: Abbreviated "SEO," this is the process of optimizing
content on a website so that it appears in search engine results. It's used by
marketers to attract people who perform searches that imply they're interested in
learning about a particular industry.
 Blog marketing: Blogs are no longer exclusive to the individual writer. Brands now
publish blogs to write about their industry and nurture the interest of potential
customers who browse the internet for information.
 Social media marketing: Businesses can use Facebook, Instagram, Twitter,
LinkedIn, and similar social networks to create impressions on their audience over
time.
 Print marketing: As newspapers and magazines get better at understanding who
subscribes to their print material, businesses continue to sponsor articles,
photography, and similar content in the publications their customers are reading.
 Search engine marketing: This type of marketing is a bit different than SEO, which
is described above. Businesses can now pay a search engine to place links on
pages of its index that get high exposure to their audience. (It's a concept called
"pay-per-click" -- I'll show you an example of this in the next section).
 Video marketing: While there were once just commercials, marketers now put
money into creating and publishing all kinds of videos that entertain and educate
their core customers.

Marketing refers to activities a company undertakes to promote the buying or
selling of a product or service. Marketing includes advertising, selling, and
delivering products to consumers or other businesses. 

KEY TAKEAWAYS

 Marketing refers to all activities a company does to promote and sell

products or services to consumers.
 Marketing makes use of the "marketing mix," also known as the four Ps—
product, price, place, and promotion.
 Marketing used to be centered around traditional marketing techniques
including television, radio, mail, and word-of-mouth strategies.
 Though traditional marketing is still prevalent, digital marketing now
allows companies to engage in e-mail, social media, affiliate, and content
marketing strategies.
 At its core, marketing seeks to take a product or service, identify its ideal
customers, and draw the customers' attention to the product or service
available.
The 4 P's of Marketing
Product, price, place, and promotion are the Four Ps of marketing. The Four Ps
collectively make up the essential mix a company needs to market a product or
service. Neil Borden popularized the idea of the marketing mix and the concept
of the Four Ps in the 1950s.
Product
Product refers to an item or items the business plans to offer to customers. The
product should seek to fulfill an absence in the market, or fulfill consumer
demand for a greater amount of a product already available. Before they can
prepare an appropriate campaign, marketers need to understand what product is
being sold, how it stands out from its competitors, whether the product can also
be paired with a secondary product or product line, and whether there are
substitute products in the market.

Price
Price refers to how much the company will sell the product for. When
establishing a price, companies must consider the unit cost price, marketing
costs, and distribution expenses. Companies must also consider the price of
competing products in the marketplace and whether their proposed price point
is sufficient to represent a reasonable alternative for consumers.

Place
Place refers to the distribution of the product. Key considerations include
whether the company will sell the product through a physical storefront, online,
or through both distribution channels. When it's sold in a storefront, what kind of
physical product placement does it get? When it's sold online, what kind of
digital product placement does it get?

Promotion
Promotion, the fourth P, is the integrated marketing communications campaign.
Promotion includes a variety of activities such as advertising, selling, sales
promotions, public relations, direct marketing, sponsorship, and guerrilla
marketing.

Promotions vary depending on what stage of the product life cycle the product is
in. Marketers understand that consumers associate a product’s price and
distribution with its quality, and they take this into account when devising the
overall marketing strategy.

Types of Marketing Strategies

Marketing is comprised of an incredibly broad and diverse set of strategies. The
industry continues to evolve, and the strategies below may be better suited for
some companies over others.
Traditional Marketing Strategies
Before technology and the internet, traditional market strategies was the
primary way companies would market their goods to customers. The main types
of traditional marketing strategies includes:

 Outdoor Marketing: This entails public displays of advertising external to a

consumer's house. This includes billboards, printed advertisements on
benches, sticker wraps on vehicles, or advertisements on public transit.
 Print Marketing: This entails small, easily printed content that is easy to
replicate. Companies often mass produce printed materials as the printed
materials delivered to one customer does not need to vary from other.
Examples include brochures, fliers, newspaper ads, or magazine ads.
 Direct Marketing: This entails specific content delivered to potential
customers. Some print marketing content could be mailed. Otherwise,
direct marketing mediums could include coupons, vouchers for free goods,
or pamphlets.
 Electronic Marketing: This entails use of TV and radio for advertising.
Though short bursts of digital content, a company can convey information
to a customer through visual or auditory media that may grab a viewer's
attention better than a printed form above.
 Event Marketing: This entails attempting to gather potential customers at
a specific location for the opportunity to speak with them about products
or demonstrate products. This includes conferences, trade shows,
seminars, roadshows, or private events.

Digital Marketing
The marketing industry has been forever changed with the introduction of digital
marketing. From the early days of pop-up ads to targeted placements based on
viewing history, there are now innovating ways companies can reach customers
through digital marketing.

 Search Engine Marketing: This entails companies attempting to increase

search traffic through two ways. First, companies can pay search engines
for placement on result pages. Second, companies can emphasize search
engine optimization (SEO) techniques to organically place highly on search
results.
 E-mail Marketing: This entails companies obtaining customer or potential
customer e-mail addresses and distributing messages. These messages can
 include coupons, discount opportunities, or advance notice of upcoming
sales.
 Social Media Marketing: This entails building an online presence on
specific social media platforms. Like search engine marketing, companies
can place paid advertisements to bypass algorithms and obtain a higher
chance of being seen by viewers. Otherwise, a company can attempt to
organically grow by posting content, interacting with followers, or
uploading media like photos and videos.
 Affiliate Marketing: This entails using third-party advertising to drive
customer interest. Often, an affiliate that will get a commission from a sale
will do affiliate marketing as the third-party is incentivized to drive a sale
for a good that is not their own original product.
 Content Marketing: This entails creating content, whether eBooks,
infographics, video seminars, or other downloadable content. The goal is
to create a product (often free) to share information about a product,
obtain customer information, and encourage customers to continue with
the company beyond the content.

The term Marketing is derived from the word ‘Market’. Here, Market refers to
the place or geographical area where buyers and sellers gather and enter into
transactions involving transfer of ownership of goods and services. Definition of
Marketing
 Traditional Concept: The term ‘traditional marketing’ can be expressed as the
business activity through which goods and services directly move from producers
to consumers or users.
 Modern Concept: The term ‘modern marketing’ can be expressed as the
achievement of corporate goals through meeting and exceeding customer needs
better than the competition.

Nature of Marketing
The Nature of Marketing (or Modern marketing) may be studied under the
following points:
1. Human activity: Originally, the term marketing is a human activity under which
human needs are satisfied by human efforts. It’s a human action for human
satisfaction.
2. Consumer-oriented: A business exist to satisfy human needs, hence business must
find out what the desire of customer (or consumer) and thereby produce goods &
services as per the needs of the customer. Thus, only those goods should be
produce that satisfy consumer needs and at a reasonable profit to the
manufacturer (or producer).
3. Art as well as science: In the technological arena, marketing is the art and science
of choosing target markets and satisfying customers through creating, delivering,
and communicating superior customer value. It is a technique of making the
goods available at right time, right place, into right hands, right quality, in the
right form and at right price.
4. Exchange Process: All marketing activities revolve around commercial exchange
process. The exchange process implies transactions between buyer and seller. It
also involves exchange of technology, exchange of information and exchange of
ideas.
5. Starts and ends with customers: Marketing is consumer oriented and it is crucial
to know what the actual demand of consumer is. This is possible only when
required information related to the goods and services is collected from the
customer. Thus, it is the starting of marketing and the marketing end as soon as
those goods and services reach into the safe hands of the customer.
6. Creation of Utilities: Marketing creates four components of utilities viz. time,
place, possession and form. The form utility refers to the product or service a
company offers to their customers. The place utility refers to the availability of a
product or service in a location i.e. Easier for customers. By time utility, a
company can ensure that products and services are available when customers
need them. The possession utility gives customers ownership of a product or
service and enables them to derive benefits in their own business.
7. Goal oriented: Marketing seeks to achieve benefits for both buyers and sellers by
satisfying human needs. The ultimate goal of marketing is to generate profits
through the satisfaction of the customer.
8. Guiding element of business: Modern Marketing is the heart of industrial activity
that tells what, when, how to produce. It is capable of guiding and controlling
business.
9. System of Interacting Business Activities: Marketing is the system through which a
business enterprise, institution or organization interacts with the customers with
the objective to earn profit, satisfy customers and manage relationship. It is the
 performance of business activities that direct the flow of goods and services from
producer to consumer or user.
10.Marketing is a dynamic processe. series of interrelated functions: Marketing is a
complex, continuous and interrelated process. It involves continuous planning,
implementation and control.

Nature of Marketing
1. Marketing is an Economic Function

Marketing embraces all the business activities involved in getting goods and
services, from the hands of producers into the hands of final consumers. The
business steps through which goods progress on their way to final consumers is
the concern of marketing.

2. Marketing is a Legal Process by which Ownership Transfers 

In the process of marketing the ownership of goods transfers from the seller to
the purchaser or from producer to the end-user.

3. Marketing is a System of Interacting Business Activities 

Marketing is that process through which a business enterprise, institution, or

organization interacts with the customers and stakeholders with the objective to
earn a profit, satisfy customers, and manage relationships. It is the performance
of business activities that direct the flow of goods and services from producer to
consumer or user.

4. Marketing is a Managerial Function 

According to the managerial or systems approach - "Marketing is the combination

of activities designed to produce profit through ascertaining, creating, stimulating,
and satisfying the needs and/or wants of a selected segment of the market." 

According to this approach, the emphasis is on how the individual organization

processes marketing and develops the strategic dimensions of marketing
activities. 
5. Marketing is a Social Process 

Marketing is the delivery of a standard of living to society. According

to Cunningham and Cunningham (1981) societal marketing performs three
essential functions:-

1. Knowing and understanding the consumer's changing needs and wants;

2. Efficiently and effectively managing the supply and demand of products and
services; and
3. Efficient provision of distribution and payment processing systems.

6. Marketing is a philosophy based on consumer orientation and satisfaction

7. Marketing had dual objectives - profit-making and consumer satisfaction

Scope of Marketing
1. Study of Consumer Wants and Needs

Goods are produced to satisfy consumer wants. Therefore the study is done to
identify consumer needs and wants. These needs and wants motivate the
consumer to purchase.

2. Study of Consumer Behaviour

Marketers perform a study of consumer behavior. Analysis of buyer behavior

helps marketers in market segmentation and targeting.

3. Production Planning and Development

Product planning and development starts with the generation of product ideas
and ends with product development and commercialization. Product planning
includes everything from branding and packaging to product line expansion and
contraction.

4. Pricing Policies
The marketer has to determine pricing policies for their products. Pricing policies
differ from product to product. It depends on the level of competition, product
life cycle, marketing goals, and objectives, etc.

5. Distribution

The study of distribution channels is important in marketing. For maximum sales

and profit, goods are required to be distributed to the maximum consumers at
minimum cost.

6. Promotion

Promotion includes personal selling, sales promotion, and advertising. The right
promotion mix is crucial in the accomplishment of marketing goals.

7. Consumer Satisfaction

The product or service offered must satisfy the consumer. Consumer satisfaction
is the major objective of marketing.

8. Marketing Control

The marketing audit is done to control the marketing activities.

The different types of marketing strategies that you should be aware of are:

B2B Marketing

The term B2B marketing means business-to-business transactions. B2B marketing

strategies are used when a company is selling goods or services to some other
company.

B2C Marketing

B2C marketing means business-to-consumer marketing. This refers to a company

selling its products or services to consumers and the business promotion is done
through ads.
C2B Marketing

This is the opposite of B2C and means consumer-to-business marketing. In this

type of marketing, the consumer gives goods or services to the company.

C2C Marketing

C2C Marketing refers to consumer-to-consumer marketing. In this, consumers

interact with co-consumers when they share a common product or service. An
example of this is OfferUp and let go apps.

following points bring out the importance of marketing:

1. Marketing generates revenue for business.

2. Marketing considerations are the most critical factors in business planning and
decision making.

3. Efficient marketing is a pre-requisite for the successful operation of a business

enterprise.

4. Marketing generates employment.

5. Marketing makes available new variety of useful and quality goods to

consumers.

6. Marketing converts latent demand of the consumers into effective demand and
thus enables to raise the standard of living.

7. Marketing is helpful in stabilizing prices and optimum utilisation of resources.

8. Marketing raises the level of economic activity. There is a positive relation

between marketing activity and economic activity of a country—economic booms
and depressions are always marked by higher and lower tempo of marketing
activities. Thus a high level of marketing activity is a pre-requisite for a higher
level of economic activity.
Increase in Discretionary Income:

Discretionary income can be defined as the amount of income remaining with the
customer after tax and after he has satisfied his basic needs for food, shelter and
clothing. 

Increase in Intangible Wants:

Increasing Technological Competition:

Its importance to a business firm can be studied as under:

1. Helps Business Planning and Decision-Making:

Helps Product Development:

Helps Seller in Buyer’s Market:

Helps in Recession:

Marketing helps a business firm in successfully facing recession in various ways

viz.:

(i) Discovering new markets

(ii) Reducing cost of distribution

(iii) Diversifying and improving products

(iv) Suggesting alternative uses of product.

5. Helps Increasing Profits:

Marketing is helpful in increasing business profits by:

(i) Reducing selling cost

(ii) Increasing demand of product through advertisement and sales promotion

activities.
6. Helps Collecting Information Regarding Consumer’s Behaviour:

Through marketing, a firm collects information about competitors and their price
policies, production policies, and sales promotion policies and on that basis, takes
suitable marketing decisions and makes necessary adjustments in its own policies.

7. Marketing is Eyes and Ears of a Business:

This means that it keeps business in close contact with its environment and
informs about events which can influence its operations.

The exchange process refers to a function where two or more parties offer

something of value to each other for satisfying their needs.
Definition (2):
An exchange process occurs when a person or an organization decides of
satisfying a need or want by giving some money or services or goods in exchange.
For an exchange to take place certain conditions must be met:
 There must be at least two parties.
 Each must have something that might be of value to the other.
 Each can communicate and deliver what they are offering.
 Each is free to accept or reject what is on offer.
 Each party trusts/respects the other sufficiently to take the exchange
seriously.

Marketing functions are the foundation for the work that marketing professionals
do. Each function comprises a set of responsibilities and tasks for a marketing
team to design, organize and execute a successful campaign. There are seven
widely accepted marketing functions that contribute to the overall work of
marketers. These functions are:

 Promotion
 Selling
 Product management
 Pricing
 Marketing information management
 Financing
 Distribution

1. Promotion

Promotion fosters brand awareness while educating target audiences on a

brand's products or services. It emphasizes introducing potential consumers to
your brand. This function of marketing varies in form, and marketing professionals
tailor each form to relate to a particular product, brand or target
audience. Promotion may include any of the following strategies:

 Email marketing
 Social media advertisements
 Public relations
 Digital or print advertising
 Content marketing
  Brand partnerships
 Influencer marketing
 Events

Each of these methods attempts to generate conversation and excitement about

a product or service. However, the promotion itself often requires the support of
other marketing functions to be successful.

2. Selling

Selling is a function of marketing that comprises communicating with potential

customers and pursuing sales leads. It's important for marketing professionals to
pursue sales leads with subtlety, which helps them build relationships with
potential customers. As communication with a potential customer progresses,
successful marketers may introduce their product and answer questions
customers may have. Effective selling techniques can help you distinguish your
brand from competitors. Marketers and salespeople may collaborate to
determine how to best position their product within their market and sell it to
potential customers.

3. Product management

Product management includes the development, design and improvement of

products or services. The role of a marketer in product management is to ensure
that a finished product meets customer needs. This includes examining the
overall visual of the product, its usefulness and how it's delivered. Some product
management strategies include:

 Analyzing competitors: Researching and analyzing your competitors equips

you with information to develop a product that rivals or surpasses theirs.
 Communicating with customers: This strategy provides helpful insight into
ways to improve your products before they reach the market.
 Implementing feedback: It's important for marketing professionals to
gather feedback from several areas—both inside and outside their
organization—to improve their production processes.
 Conducting market research: Researching similar products helps a
marketing team determine what customers want and how to satisfy them.
  Coordinating with other departments: Collaborating with other teams in
your organization prepares your entire company to release a product,
generate ideas for distribution and deliver products seamlessly.
4. Pricing

Establishing a price for a product incorporates several factors of cost and value.
Ideally, marketers find a price between customers' perceptions of a product's
value and the actual cost of producing it. Other factors include the price your
competitors set and the amount customers might pay for your product.
Marketing professionals consider these elements when deciding how to price a
particular product or service.

It can be challenging to determine a price for your product, but using in-depth
market research can help you make an informed decision. Whatever price you
choose for your product, it's important for your promotions and branding to
match its price. For example, if you sell a handbag for $1,000, you might market it
as a luxury item. This emphasizes your product's value, which could convince
customers to purchase your item.

5. Marketing information management

You can optimize your marketing strategies when you focus on data and
information. It's important to collect and store data, such as customer
preferences and demographics. Often, this data directly relates to your target
audience for your products and services. This also can inform effective business
decisions for the entire company, so consider sharing your data and findings with
other departments, as well.

You can gather relevant information from various marketing tools, such as:

 Surveys
 Online reviews
 Social media engagements
 Market research reports

Each marketing tool provides unique data and feedback, so choosing the right one
depends on your specific needs. For example, if your team wants to measure the
effectiveness of your last social media campaign, you could research the number
of followers that your brand's accounts gained during the campaign. This can help
you determine whether your efforts succeeded in increasing social media
engagement.

6. Financing

Financing is a marketing function that involves securing funding—either internally

or externally—to create marketing campaigns. It's important for marketing teams
to secure enough availability in their annual budget to improve previous
marketing campaigns and remain updated with industry trends.

A marketing team can demonstrate its added value to its company if revenue
continues to increase due to high-quality marketing campaigns. This upward
trajectory might also allow that team to secure future funding, as they can
demonstrate a quantifiable positive return on their investment.

7. Distribution

Distribution is the process of transporting your company's products or services to

your customers. There are several physical and digital methods of distribution,
including:

 Online stores
 Catalogs or magazines
 Sales calls
 Retail stores
 Wholesalers

Marketers often choose the channel of distribution that best fits a particular

product, brand or target audience. It's important to choose a location to sell your
product that your target audience often visits. Distribution is a function of
marketing that requires collaboration across departments to ensure that each
product reaches your consumers in its intended fashion.

the following are the functions of marketing:

1. Identify needs of the consumer: The first steps in marketing function is to
identify the needs and wants of the consumer that are present in the market.
Companies or businesses must therefore gather information on the customer and
perform analysis on the collected information.
By doing this they can present the product or service that matches closely with
the customer needs and wants.
2. Planning: The next step in marketing function is planning. It is considered very
important for a business to have a plan. The management should be very clear
about the company objectives and what it wishes to achieve from the created
plan.
The company should then chalk out a timeline that is essential for achieving the
objectives.
3. Product Development: After the details are received from the consumer
research, the product is developed for use by the consumers. There are many
factors that are essential for a product to be accepted by the customer, a few
factors among the many are product design, durability and cost.
4. Standardisation and Grading: Standardisation refers to the process of ensuring
uniformity in the product which means that a product developed by a business
shall be standard for every consumer with the same quality and design and this is
one of the key aspects that needs to be maintained by the business.
Grading is referred to as the process of classifying products that are similar in
quality and characteristics. Grading helps in making the customer know about the
quality of the product offered. It helps in making customers understand that the
products conform to highest quality standards.
5. Packing and Labelling: The first impressions of a product are its packaging and
the label attached to it. Therefore, packaging and labelling should be looked after
very well. It is a well known fact that a great packaging and labelling goes a long
way in ensuring product success.
6. Branding: Branding is referred to as the process of identifying the name of the
producer with the product. Certain brands are there in the market which have a
lot of goodwill and any product coming from the same brand will be accepted
more warmly by the consumers. Although, having a separate identity for the
product can be helpful.
7. Customer Service: A company has to set-up various kinds of customer service
based on their product. It can be pre-sales, technical support, customer support,
maintenance services, etc.
8. Pricing: It can be regarded as one of the most important parts of marketing
function. It is the price of a product that determines whether it will be successful
or a failure. Some other factors are market demand, competition, price of
competitors.
The company or business should understand clearly that bringing about frequent
changes in the price of a product can lead to confusion in the minds of
consumers.
9. Promotion: Promotion is the process of making the customers aware of the
product by presenting it to customers across various channels of promotion and
entice them to buy the product.
The major channels of promotion are: advertising, media, personal selling and
promotion (publicity). An ideal promotion mix will be a combination of all or some
methods.
10. Distribution: Distribution refers to the movement of consumer goods to the
point of consumption. A company must ensure that the correct channel of
distribution is selected for the product.
The mode of distribution is dependent on the factors such as shelf life, market
concentration and capital requirements. Proper management of inventory is also
essential.
11. Transportation: Transportation is defined as the physical movement of goods
from one place to another. In other words, it is the movement of goods from the
place of production to the place of consumption.
Also, the correct mode of transportation can be selected based on the
geographical boundaries of the market.
12. Warehousing: Warehousing of products creates time utility. It is often seen
that there is a gap between the time a product is produced and the time when it
is consumed. Companies like to maintain the smooth flow of goods even when
the products are of seasonal nature. Warehousing and storing provides the
opportunity to provide goods during off season also.
1) NEED/ WANT/ DEMAND:

 Need: It is a state of deprivation of some basic satisfaction. eg.- food,

clothing, safety, shelter.
 Want: Desire for specific satisfier of need. eg.- Indians needs food –
wants paneer tikka/ tandoori chicken. Americans need food- wants
hamburger/ French fries.
 Demand: Want for a specific product backed up by ability and
willingness to buy. eg.- Need – transportation.
Clarifying, Consumer may want – Car (say, Mercedes)……but able to buy only
Volvo. Therefore, demand is for Volvo.

Marketers cannot create needs. Needs preexists. Marketers can influence wants.
This is done in combination with societal influencers.

Demand influenced by making product :

 APPROPRIATE
 ATTRACTIVE
  APPROACHABLE/ AFFORDABLE
 AVAILABLE EASILY
To target consumers (4 P’s) – Product/ Promotion/ Price/Place

(2) PRODUCTS- GOODS/ SERVICES/ PLACE.

Product is anything that can satisfy need/ want.

Product component-

1. Physical Good.
2. Service.
3. Idea.
eg. Fast-food- burger/ pizza.

 Physical Good – material eaten.

 Service – purchase of raw material/ cooking
 Idea – the speed of computer/ processing power.
Importance of product lies in – Owning them (minor); Obtaining them
(major). Hence, products are really a via- media for services. Hence, in marketing,
the focus is on providing/ satisfying service rather than providing products.

Marketing Myopia: Focus on products rather than on customer needs. Read more
about Marketing Myopia HERE

(3) VALUE/ COST/ SATISFACTION:

 The decision for purchase made based on value/ cost satisfaction

delivered by product/ offering.
 The product fulfils/ satisfies Need/ Want.
 Value is products capacity to satisfy needs/ wants as per consumer’s
perception or estimation.
  Each product would have a cost/ price elements attached to it.
Eg. – Travel from city A to city B.

 Need – to reach B ( from A)

 Method/ Products- Rail/ air/ road or train/ plane.
 Satisfaction – Estimated in terms of time lead & travel comfort.
VALUE– Products capacity to satisfy.

COST– Price of each product.

(4) EXCHANGE/ TRANSACTION:

To satisfy need/ want, people may obtain the product through

 Self Production
 By force or coercion
 Begging
 Exchange
EXCHANGE: – The act/ process of obtaining a desired product from someone by
offering something in return. For exchange potential to exist, the following
conditions must be fulfilled.

1. There must be at least two parties.

2. Each party has something of value for other parties.
3. Each party is capable of communication & delivery
4. Each party is free to accept/ reject the exchange offer.
5. Each party believes it is appropriate to deal with the other party.
TRANSACTION: – Event that happens at the end of an exchange. Exchange is a
process towards an agreement. When an agreement is reached, we say a
transaction has taken place.
a) Barter transaction.

b) Monetary Transaction.

1. At least two things of value.

2. Condition agreed upon.
3. Time of agreement.
4. Place of agreement.
5. May have a legal system for compliance.
Proof of transaction is BILL/ INVOICE.

TRANSFER: – It is one way. Hence, differ from Transaction.

NEGOTIATION: – Process of trying to arrive at mutually agreeable terms.

Negotiation may lead to

 Transaction
 The decision not to Transaction

(5) RELATIONSHIP/ NETWORKING:

Relationship marketing:- It’s a pattern of building long term satisfying relationship

with customers, suppliers, distributors in order to retain their long term
performances and business.

Achieved through promise and delivery of

 high quality
 good service
 fair pricing, over a period of time.
The outcome of Relationship Marketing is a MARKETING NETWORK.
MARKETING NETWORK: It is made up of the company and its customers,
employees, suppliers, distributors, advertisement agencies, retailers, research &
development with whom it has built a mutually profitable business
relationship.Competition is between the whole network for market share and
NOT between companies alone.

(6) MARKET:
A market consists of all potential customers sharing particular need/ want who
may be willing and able to engage in exchange to satisfy need/ want.

Market Size = fn (Number of people who have need/ want; have resources that
interest

others, willing or able to offer these resources in exchange for what

they want).

In Marketing terms: Sellers – called as “INDUSTRY”.

Buyers – referred to in a group as “MARKET”.

Types of Markets:

1. Resource Market,
2. Manufacturing Market,
3. Intermediary Market,
4. Consumer Market,
5. Government market.

(7) MARKETERS/ PROSPECTS:

Working with markets to actualize potential exchanges for the purpose of

satisfying needs and wants. One party seeks the exchange more actively, called as
“ Marketer”, and the other party is called “Prospect”.
Prospect is someone whom marketer identifies as potentially willing and able to
engage in exchange. Marketer may be seller or buyer. Most of time, marketer is
seller. A marketer is a company serving a market in the face of competition.

Marketing Management takes place when at least one party to a potential

exchange thinks about the means of achieving desired responses from other
parties.

Production concept
The production concept advocates that more the products or production, more
would be the sales. In countries where labor is cheap and easily available, the
production can be maximized while minimizing the costs, hence increasing the
production efficiency.
the Production concept assumes that consumers favor highly available &
affordable products, and therefore, management should focus on production &
distribution processes.
At the time of production era, the focus of businesses and industries was to
increase production, and the economies of scale would lower the cost and
increase the profitability of the business

The production concept was popular at a time when the market wasn’t
competitive. At that time, people would consume more if industries are supplying
more goods in the market at a low price.
It is the oldest marketing philosophy and still very useful for business in two
situations.

 Frist, If the demand for any product exceeds its supply, the management
should find out ways to increase production.
 When the product cost per unit is very high, the management should focus
on increasing productivity and bring down the cost.
Advantages of Production Concept
Good for the Customers
As we know that the focus of the production concept is on the mass production of
goods and economies of scale lowers the price of products and services. The
quality of products and the efficiency of production methods improves over time.
The customers don’t have to worry about the shortage of products. The mass-
scale production would take care of it.

Low Prices
The production concept makes sure that the product is available in the market at
a reasonable price to the customers. The economies of scale lower the prices of
goods and the majority of the people are price-conscious. It attracts the attention
of price-conscious customers.

Investors
The production concept usually works in the non-competitive market
environment. Mass-scale production increases the profitability of the company.
When a business is making a profit, it attracts the attention of investors. They’ll
end up investing in the business because of the high profitability and share value.

Community
The industry and community are closely linked with each other. People work in
the industry to manufacture goods and get paid. They go home and spend the
same money on buying the industrial products that they’ve produced. That’s how
the economic cycle works. Mass-scale production serves the community in two
ways by giving people jobs and products.

Suppliers
Almost all the operations of the industry depend on the availability of raw
materials and other basic ingredients. The suppliers prefer to have relationships
with big manufacturers so that they have consistent orders. If both parties keep
their end of the deal, such relationships usually last for a long time.

Employees
If a company is making a profit through the production concept, then it would
provide bonuses to its employees. If the business expands its operations, then it
would have to hire more people. It means that there would be more employment
opportunities for people. If people are satisfied with the job, it would increase
their morale and motivation level.

The Whole Society

When various segments of society are performing well, then it’s good for the
whole nation. If people have jobs and a reliable source of income, then it means
that the unemployment rate would be lower. Most importantly, the production
concept would fill the market with the availability of products.

Disadvantages of Production Concept
Low Quality 
The efficiency in the manufacturing process comes after a long time. The quality
of the company’s products at the beginning of the production concept is low. The
reason people buy it is that they don’t have many options in the market. 

Avoiding Customers Needs 

The needs and wishes of the customers have secondary importance to the
manufacturers in the production concept. The company manufactures products
for the majority of the people, instead of targeting any particular segment. 

Impersonalized 
The focus of the production concept on satisfying the needs and wishes of the
majority, and it doesn’t target any particular segment. The marketing campaign
for this concept doesn’t follow the personalized approach. It just manufactures
the mass scale products and pushes them into the market, and the customer
would buy because they don’t have many options. 

Obsolete Nowadays 
The market has become very competitive nowadays. You’ll find competition in
every field, it doesn’t matter whatever category is. The business and marketing
strategies are highly focused and targeted. You can’t succeed in your business if
you aren’t following the personalized campaign. That’s why businesses and
companies have changed their focus to other concepts. 

Ford Motor Company – Ford’s Model-T

The whole philosophy on Henry Ford was to perfect the production process of
Ford Model-T. The initial cost of the Ford Model-T vehicle was roundabout 800 US
dollars, and it was high at the beginning of the 20th century. The company
followed the production concept and developed its assembly line and other
manufacturing processes. The price jumped from $800 to $300 and $300 was an
affordable price to many Americans at that time. 

A product concept, also known as a concept statement, It articulates the product

strategy, vision, purpose, and how it will provide value to customers and the
business.

What is Product Concept?

Product Concept states that customers or consumers prefer product which is of
the highest quality, performance and features. Product concept is a mandatory
concept in order to give the best possible product to the customer as per the
demand and expectation. A product is not complete in itself and requires other
factors of business like marketing, distribution, sales, service etc. to be successful.
What’s included in product concept statements?
Product concept statements typically cover these elements:

 The product or service name

 Target users or segment
 How target users will use the product or service
 What problems or pain points the product or service solves
 The business goals the product or service supports
 The concept’s unique selling points
 The overall vision and strategy for the user experience

Types of products

Convenience products – A convenience product saves customers time and effort.

Convenience products are goods that customers usually purchase frequently,
immediately and with minimal effort. For example, soap, toilet paper, and
batteries — are all examples of convenience products.

Specialised products – Specialised products are products that consumers actively

seek to purchase because of unique characteristics or loyalty to a specific brand.
These consumers won’t normally accept substitute products. For example, high-
end fashion clothing, luxury vehicles, and famous paintings.

Brand products – The sentiment behind branded products is simple: the more
positive the brand connotation, the more likely it is that a consumer will buy
something from it. For those with brand recognition, the chances of a successful
product concept — not just from a design and market opportunity — are much
higher as they’ve established their position.

Advantages of product concepts

 Quality over quantity

Product concepts are all about balancing high quality, accessibility and
performance. As new ideas are shared as product concepts, you can start to
assess and evaluate them, discarding low-quality ideas much earlier in the
process. This ensures that you only ever go to production with product concepts
that are most likely to achieve success — e.g. align with customer needs — and
support business goals.

 Develop curiosity

When established brands bring new product concepts to market, consumers are
inevitably interested; they want to purchase the product and see the new
features to satisfy their curiosity. As for the brands, they keep themselves in the
media for as long as possible to increase perceived value and awareness of the
new product concept.

 Increase margins

If a company has created a strong product concept and marketed it effectively to

its target audience, e.g. they’ve displayed the very high quality of the product and
its functional value, it can charge more than its competitors. Remember, quality
over quantity is the name of the game, and if consumers are aware of that fact
(and it’s embedded in their minds), they’ll spend more.

Disadvantages of product concepts

Irrelevant and impractical features

One of the main concerns with early product concepts is that in the race for
innovation and differentiation, there’s a risk of going off track and missing the
needs of potential customers. Even with unique features and better quality, it’s
important to focus on functional value. What is the problem you are trying to
solve with the product concept?
  Price concerns

In many markets, consumers are very price-conscious. They prefer cheaper

solutions rather than products with higher quality because they are more
affordable. With this in mind, if you have a target market or segment that is more
price-conscious than your other buyers, consider creating a lite version of your
product concept (where practical).

Examples of product concepts

Samsung’s folding screens

Samsung wanted to supply customers with larger screen space, but also knew
that portability was a key concern for its customers. In 2021, Samsung came up
with a foldable screen – the S foldable — with a bi-fold design that opens to 7.2
inches.

Now, Samsung could see the interest in foldable tech due to propositions from
other manufacturers like LG, but by moving fast and getting a product concept to
launch, they now lead the way within the telecommunications market.

During the period of WW2, the industry was producing machine guns, weapons,
and other wartime equipment. When the war finished, the industrialists changed
their focus to consumer goods. They maintained the same pace of production as
of the wartime in the 50s. Consequently, the supplies exceeded the demand in
the market.

Now businesses and companies had a great challenge and that was to sell their
products and services. Marketers developed many techniques like qualifying,
closing, and probing during the same period of the 50s and 60s. Businesses and
companies have created separate sales departments and started hiring sales
personals. That’s how the profession of sales and marketing emerged. Today,
we’ll discuss the sales or selling concept and how it’s different from the marketing
concept.

What is Selling Concept?

The selling concept essentially mirrors the thought that consumers will not
purchase enough of the company’s products unless large-scale promotional and
selling efforts are carried out by it. Selling concept is one of the ideologies in
marketing like production concept, product concept, holistic concept etc.
Selling concept is used for goods which customers don’t buy normally, unsought
goods like insurance etc. These goods are aggressively sold by tracking down the
target segment and sold on the virtue of the product benefits. The final objective
is to increase sales revenue and increase profits.

Importance of Selling Concept

The focus in the selling concept is more on selling the products of the company to
consumers without comprehending the market needs and increasing sales
transactions rather than building and enhancing relationships with customers.The
selling concept works under poor assumptions that if customers are coaxed into
buying a product then they will necessarily like it. Even if they don’t like it, they’ll
forget their dissatisfaction over a period of time and buy the product again later.
Selling Concept Example
One of the most common example of selling concept is the insurance industry.
Insurance companies spend a lot of budget in promoting insurance products and
selling efforts are very important part of it. Insurance agents and managers
promote the products at a large scale and explain the benefits to the target
audience. Insurance companies tie up at group level with companies as well. 
Selling Concept Vs Marketing Concept
The focus of the marketing concept is on the customers or buyers and finding out
ways to produce such a product that would satisfy the needs and wants of
customers. 

The focus of the selling philosophy is the needs and requirements of sellers and
finding out different selling methods and techniques for converting products into
liquid cash. 
ome of the main characteristics of the selling concept are as follows; 

 It focuses on the needs of the inner of businesses and companies. 

 Goods and services define their business in the selling concept. 
 It focuses on everyone, whether they’re kids or adults, as long as they can
buy goods and services. 
 As the sale of your business increases, the profitability would increase. 
 If the business environment is competitive, then this marketing concept
would be less favorable. 
 The concept is applicable where you price your product based on the cost.
They are short term oriented. 
 Encyclopedia, door to door selling, insurance, and online shopping are some
of the main examples of s. 

Some of the main advantages of the selling concept are as follows;  

 Increase in Sales
 This type of marketing philosophy helps companies to increase their sales
volume. Markets are competitive everywhere, and if the companies are
unable to pursue customers for their products and services, then it will be
difficult for the businesses to survive.
 Focus on Sales and Marketing
 Since the companies try to target the majority of customers in the market,
it is understandable that the products would be visible to these targeted
people. So, there are two benefits i.e., selling and marketing the products
 at the same time. If the companies do not follow this concept, then
customers’ minds will never change, and they will always buy established
brands.
 No Unsold Stock Issues
 The basic idea behind using the selling concept is to sell every product the
company produces without keeping in mind the needs of the consumers.
As a result, the company will not face unsold stock issues that mean the
company can use its working capital for other productive activities.

Disadvantages of Selling Concept 

 Some of the disadvantages of the selling concept are as follows; 
 Ignore Customer Needs
 One of the drawbacks of this concept is that it avoids the need and wants
and focus remains on the sales of products and services. Companies sell
whatever they produce rather than providing customers what they want.
 Ignore Customer Feedback and Reviews
 According to this concept, the company does not pay any attention to
feedback and reviews of the customers, which is not right. Because with
the help of customers’ feedback, companies can improve the product. Since
there is no such thing, companies will never know the negative comments
that can badly affect the reputation of the company.
 Short-term Focus
 It focuses on the short-term goals and objectives of the company, and that
is to finish the stock. In this way, the companies have no working capital
issue and can use it the other profitable projects.
 What is Marketing Concept?
Marketing concept is a set of strategies that the firms adopt where they analyse
the needs of their customers and implement strategies to fulfil those needs which
will result in an increase in sales, profit maximisation and also beat the existing
competition.
The marketing concept has been widely used by companies all over the world in
the present age,
Marketing ConceptMarketing is added as one of the newer marketing
management philosophies. It is a very recent concept which truly believes “the
customer is king”. All the decisions are directly or indirectly influenced by the
needs of the customer. Right from the production to designing of the goods till its
transportation, each process has customer satisfaction in mind.
4 pillars of the marketing concept are;

1. Market Focus
2. Customer Orientation
3. Coordinated Marketing
4. Profitability

Marketing Concept: The selling concept is not for a long duration. The market is
customer centric, therefore any product that should be able to fulfill the customer
needs. Marketing concept is based on the assumption that a consumer will
purchase products.

Companies conduct research in order to identify customer needs and create a

product that meets those needs in a better way than their competitors. It results
in businesses developing relationships with customers that leads to profit
generation in the long run.

Marketing Concept 
Some of the main characteristics of the marketing concept are as follows; 
 The focus is on the needs and wants of customers. 
 The benefits of your products/services would define your business. 
 Instead of focusing on everyone, the marketing concept focuses only on a
specific segment of the market. 
 Your business would profitable if your products have satisfied the needs and
want of customers. 
 If the business environment is competitive, then you should follow the
marketing concept because it would be favorable in such an environment. 
 This concept follows the integrated approach. Where the customer is the
boss, and he would define the price, and the price would define cost. They
keep in mind long term planning. 
 Automobiles, Dell Computers, and designer clothes are some of the main
examples of the marketing concept. 
What Is Holistic Marketing?

Holistic marketing concept considers all the different parts of a business as one
single entity. It is based on the premise that the whole is greater than the sum of
its parts. As such, there is a shared aim and purpose for all the activities related to
a business. This ensures that each person in every department, from sales to
operations to HR to marketing and others, work towards one common goal.

What is Holistic Marketing?

Holistic marketing is a business marketing philosophy which considers business

and all its parts as one single entity and gives a shared purpose to every activity
and person related to that business.

A business is just like a human body: it has different parts, but it’s only able to
function properly when all those parts work together towards the same objective.
Holistic marketing concept enforces this interrelatedness and believes that a
broad and integrated perspective is essential to attain best results.

3 Features of Holistic Marketing Philosophy

There are three main features of holistic marketing philosophy: a common goal,
aligned activities, and integrated activities.

1. Common Goal - All parts of the business focus on a single goal to provide a
great customer experience.
2. Aligned Activities - All activities, processes, and communication that occur
within the business should be aligned towards the achievement of the common
goal.
3. Integrated Activities - All activities done within the business should be designed
and integrated such that they work in a cohort to provide a seamless and
consistent customer experience.

Holistic Marketing Concepts and Components

Holistic marketing has five different components that come together to unify a
company’s brand image.

1. Relationship Marketing

Relationship marketing is centered on the relationships you have with your

potential and existing customers, employees, partners, and competitors. This
component of holistic marketing focuses on creating a comprehensive business
plan with long-term goals that cover the whole business system. The main goal is
to focus on marketing activities that create a strong, emotional bond and cultivate
loyalty from these stakeholders, rather than simply interacting with them only
when required.
2. Internal Marketing

Holistic marketing sees two types of customers - internal and external. While
external customers are the top priority for any business, internal customers
(employees) also play a vital role in the marketing process. Internal marketing
treats employees as customers who must be convinced of the company’s core
values just as aggressively as its external customers. This ensures that they
understand their role in the marketing process.

3. Integrated Marketing

Integrated marketing creates a seamless experience for the consumer to interact

with the brand by integrating various communication channels (sales promotion,
public relations, advertising, direct marketing, digital marketing, etc). This ensures
that the communication is in sync and projects a strong and focused brand image.

4. Societal Marketing

Societal or socially responsible marketing involves a broader concern for society

at large. It follows the philosophy that a business is part of a society and should
give back to it. This requires following certain business ethics and focusing on
philanthropy and community organizations. Societal marketing encourages all
stakeholders of a business to have a positive impact on society.

5. Performance Marketing

Performance marketing is focused on the different activities of a business, such as

selling a product or service, ethical and legal responsibilities as a business, brand
and customer equity, etc.

Benefits of Holistic Marketing

Following are the most visible benefits of holistic marketing:

 1. Attracting New Clients

As the company dedicates all of its resources for gaining more clients, the results
are much more optimistic. There is a higher chance of gaining leads, converting
them into clients and improving sales.

2. Efficient Use of Resources

Businesses can plan more suitable strategies since they have more resources to
use for achieving the end goal. The company can choose resources that can make
the entire process more efficient. This increases the productivity and efficiency of
the workflow as well.

3. Faster Goal Achievement

Lags in the processes are eliminated and workflow becomes more streamlined as
resources are dedicatedly used for achieving a single goal. This expedites the
entire process of getting to the final product.

Phases of Holistic Marketing

The structure of holistic marketing includes the following three phases:

 Analysis

Companies analyse how their actions can align with their end goal. This involves
doing research on how to maintain work-life balance, customer needs and
availability of resources. Once the analysis is done, the company can move ahead
toward building strategies. They also assess the image of the company in the
industry and consumers to further work on their strategies.

 Building Strategy

The next phase is building strategies to achieve the common goal. Based on the
market research, available data and trends, the company builds strategies. They
choose strategies that can be implemented in terms of budget, availability of
resources and market conditions. These strategies should be in line with the short
term and long term goals of the company.
 Implementation

At this stage, the company starts implementing strategies so that it can achieve
the common goal. The team has to be in sync to work in the same direction.

Samsung is an example of Holistic marketing where the products are developed

keeping the customer in mind, The showrooms are branded in the proper
manner, the customer service is polite and the service is fast. Thus Samsung is an
excellent example of Holistic marketing.

Some key concepts which are important in Holistic marketing are

Internal marketing – Marketing between all the departments in an organization

Relationship marketing – Building a better relationship with your customers,
internal as well as end customers is beneficial for holistic marketing.
Performance marketing – Driving the sales and revenue growth of an
organization holistically by reducing costs and increasing sales.
Integrated marketing – Products, services and marketing should work hand in
hand towards to growth of the organization.

What is 'Marketing Mix'

Definition: The marketing mix refers to the set of actions, or tactics, that a
company uses to promote its brand or product in the market. The 4Ps make up a
typical marketing mix - Price, Product, Promotion and Place. However, nowadays,
the marketing mix increasingly includes several other Ps like Packaging,
Positioning, People and even Politics as vital mix elements.
Marketing Mix is a set of marketing tool or tactics, used to promote a product or
services in the market and sell it. It is about positioning a product and deciding it
to sell in the right place, at the right price and right time. The product will then be
sold, according to marketing and promotional strategy. The components of the
marketing mix consist of 4Ps Product, Price, Place, and Promotion. In the business
sector, the marketing managers plan a marketing strategy taking into
consideration all the 4Ps. However, nowadays, the marketing mix increasingly
includes several other Ps for vital development.

What is 4 P of Marketing
Product in Marketing Mix:
A product is a commodity, produced or built to satisfy the need of an individual or
a group. The product can be intangible or tangible as it can be in the form of
services or goods. It is important to do extensive research before developing a
product as it has a fluctuating life cycle, from the growth phase to the maturity
phase to the sales decline phase.
A product has a certain life cycle that includes the growth phase, the maturity
phase, and the sales decline phase. It is important for marketers to reinvent their
products to stimulate more demand once it reaches the sales decline phase. It
should create an impact in the mind of the customers, which is exclusive and
different from the competitor’s product. There is an old saying stating for
marketers, “what can I do to offer a better product to this group of people than
my competitors”. This strategy also helps the company to build brand value.
Price in Marketing Mix:
Price is a very important component of the marketing mix definition. The price of
the product is basically the amount that a customer pays for to enjoy it. Price is
the most critical element of a marketing plan because it dictates a company’s
survival and profit. Adjusting the price of the product, even a little bit has a big
impact on the entire marketing strategy as well as greatly affecting the sales and
demand of the product in the market. Things to keep on mind while determining
the cost of the product are, the competitor’s price, list price, customer location,
discount, terms of sale, etc.,
Place in Marketing Mix:
Placement or distribution is a very important part of the marketing mix strategy.
We should position and distribute our product in a place that is easily accessible
to potential buyers/customers.
Promotion in Marketing Mix:
It is a marketing communication process that helps the company to publicize the
product and its features to the public. It is the most expensive and essential
components of the marketing mix, that helps to grab the attention of the
customers and influence them to buy the product. Most of the marketers use
promotion tactics to promote their product and reach out to the public or the
target audience. The promotion might include direct marketing, advertising,
personal branding, sales promotion, etc.

What is 7 P of Marketing:
The 7Ps model is a marketing model that modifies the 4Ps model. As Marketing
mix 4P is becoming an old trend, and nowadays, marketing business needs deep
understanding of the rise in new technology and concept. So, 3 more new P’s
were added in the old 4Ps model to give a deep understanding of the concept of
the marketing mix.
People in Marketing Mix:
The company’s employees are important in marketing because they are the ones
who deliver the service to clients. It is important to hire and train the right people
to deliver superior service to the clients, whether they run a support desk,
customer service, copywriters, programmers…etc. It is very important to find
people who genuinely believe in the products or services that the particular
business creates, as there is a huge chance of giving their best performance.
Adding to it, the organisation should accept the honest feedback from the
employees about the business and should input their own thoughts and passions
which can scale and grow the business.
Process in Marketing Mix:
We should always make sure that the business process is well structured and
verified regularly to avoid mistakes and minimize costs. To maximise the profit, Its
important to tighten up the enhancement process.
Physical Evidence in Marketing Mix:
In the service industries, there should be physical evidence that the service was
delivered. A concept of this is branding. For example, when you think of “fast
food”, you think of KFC. When you think of sports, the names Nike and Adidas
come to mind.

Marketing Mix Product

All products can be broadly classified into 3 main categories. These are :

1. Tangible products: These are items with an actual physical presence such

as a car, an electronic device, and an item of clothing or a consumer good.
2. Intangible products: These are items that have no physical presence but
can be felt indirectly. An insurance policy is an example of this. Online items
such as software, applications or even music and video files are also
intangible products.
3. Services: Services are also intangible products but they are the result of an
economic activity that does not result in ownership. It is a process that
creates benefits for customers. Services depend highly on who is
performing them and remain difficult to reproduce exactly.

Product. The item or service being sold must satisfy a consumer's need or

desire.
Price. An item should be sold at the right price for consumer expectations,
neither too low nor too high.
Promotion. The public needs to be informed about the product and its
features to understand how it fills their needs or desires. 
Place. The location where the product can be purchased is important for
optimizing sale
description of 7 Cs Compass Model
Broadly speaking, the seven Cs are the seven factors that need to be considered
when determining what about the organization either needs to be modified to
improve market performance or maintained in order to preserve market position.
The 7 Cs of the 7 Cs Compass Model incude:
 
1. Corporation: This is the company model itself, which is either a for-profit or
non-profit organization. In addition, the organization needs to consider who
are its competitors within the industry and how the other Cs in this model
compare to what they do. The 7 Cs Model emphasizes the importance of
aligning marketing strategies with the broader goals of the organization.
2. Commodity: The product or service the company sells to its clientele.
3. Cost: How much it costs to create the product or service, in addition to how
much it is sold for, the cost of the materials or resources used to create it and
the cost to advertise and market it.
4. Communication: The manner in which the product or service is marketed to
the customer. This includes how it is advertised, sales promotions, and how
much it is talked about in the community. Communication also refers to how
efficiently and respectfully individuals within the organization speak with one
another and how clearly information is transmitted from one person to the
next.
5. Channel: The paths through which the product or service is distributed to the
customer.
6. Consumer: The needs and desires of the customer as well as what kinds of
educational materials they will need to be able to use the product or service,
the type of warranty that is included, how safe the product production process
is and how safe the product is to use. In order to improve their market position,
the organization might consider offering additional product features to meet
customer needs.
7. Circumstances: External conditions that might have an effect on organizational
functions or employees but are outside the control of any organizational
member. These include the national and international environment (politics,
policies, ethics, etc.), the weather, the economy, and social and cultural norms.

Marketing supports business growth and establishes a strong brand

presence. The 7 Cs of marketing help brands design a framework that will
help them achieve their marketing goals.
1. Customer
In marketing, the customer is the Hero. Considering your customers and treating
them as VIPs is a great marketing strategy. Be very clear about your clients and
potential clients you should pursue. All your marketing content should focus on
your client’s needs. Carefully understand your client’s needs and cater to them in
the best way possible. Every communication made and campaign done should
match the needs of your clients.
2. Convenience
Convenience is all about quick and easy access to what a client need. Make it easy
for clients to access your products and purchase at any time from wherever they
are. Ensure information about your brand is available to clients and prospects.
Delivery of what a client needs should also be available for clients that want to
make quick purchases.
3. Competition
The competition challenges a brand to increase its visibility and upgrade its
operation. The goal is to help brands differentiate themselves from other brands.
Studying your competitors helps get insights on what to do to separate your
brand and make it stand out amid other similar brands. Analyze to understand the
marketing strategies of your competitors. It will help you enhance your approach
and diversify to differentiate your brand.
4. Communication
Effective communication is key to maintaining a good relationship with your
clients. Clients feel valued when they are communicated to and updated.
Communicate the right kind of information about your brand to your clients.
Be available to communicate with your clients constantly. Engage with them to
understand their needs. Reply to them when they inquire and to their
comments. Allow them to express their thoughts and opinions. Good
communication will keep clients loyal.
5. Creative Content
Content used for marketing should be creative, unique, and of good quality.
The content should be informative, inspiring, and entertaining. Update your
content as often as possible. To reach most people, ensure content is engaging
and shareable. Pick the best topics to help market your brand that will help
rank higher your content higher on the search results page (SEPS) and use the
right keywords for Search Engine Optimization.
 6. Credibility
Clients are always looking for credible brands. Credibility contributes to a
company’s success and ensures it remains trustable. Credible brands earn the
trust of clients, and they will always return. Satisfied clients will refer friends
and family to credible brands, and referral is a sure way to grow a brand.
Credibility gives a brand a positive image before audiences.
7. Consistency
A consistent brand image stamps the existence of your brand in the market.
Brands should be consistent across all the channels and pages you use to
market. Consistency is good to help create brand awareness. Your brand
comes out reputable and reliable due to being consistent. Clients find
brands that communicate consistent brands more reliable and are likely to
trust them more.

4 A’s of marketing is basically a customer-oriented marketing approach that

focuses on four elements that are very important from the customer’s point of
view. 4 A’s actually mean;

 Acceptability
 Affordability
 Accessibility
 Awareness
The core objective of 4 A’s is basically giving entrepreneurs, managers, and
businesses better insight into customers’ perceptions.  It is eventually the
customer who takes different roles such as user, payer, and selector.

The 4 A’s marketing concept states that these four elements are mandatory for
the success of a product that can offer value to customers, society, as well as
businesses. Let’s discuss every A of 4 A’s marketing framework in detail.

Here is my breakdown of the A's, C's, E's and P's:

Acceptability--->Consumer--->Experience--->Product

Affordability--->Costs--->Everyplace--->Place

Accessibility--->Convenience--->Exchange--->Price

Awareness--->Communication--->Evangelism--->Promotion

4 As of Marketing

4 A’s of Marketing is customer-centric marketing that pays heed to the 4 values

that matter most to the customers- Acceptability, Affordability, Accessibility, and
Awareness.
A’s of marketing are responsible for creating value for the customer(s).

It helps managers and business leaders see a business as per the perspectives of
their target customers. Customers are actually market seekers, selectors, payers,
and users. Acceptability, affordability, accessibility, and Awareness come into play
around all these key roles of a customer life-cycle.

1. Acceptability

It is the extent to which an offered product or service either meets or exceeds the
customer’s expectations in target market. Are the customers satisfied? Did it fulfill
their expectations or not? Sometimes, a product may even exceed the customers’
expectorations. There are 2 dimensions of acceptability – functional acceptability
and psychological acceptability.

Functional Acceptability

Functional Acceptability is “objective” in nature. Free from the subjective nature,

it talks about things like facts, features, and performance. For example, were the
customers expecting these features? Are they actually useful for them even if
they were not expecting them? Most importantly, will these features make the
product more distinctive and attractive?

If a company makes a bigger cereal box to give “more” in “less,” it seems a

wonderful idea. However, if the box is too big to fit in the regular cupboard
shelves, it will be placed somewhere else where it might be out of the customer’s
sight, thus ignored.

Psychological Acceptability

Psychological Acceptability focus on the innate nature of a person. Subjective in

nature, this feature is mostly incorporated in luxury brands that appeal to
society’s higher sections. Even if two products are fundamentally similar in their
function, one might belong to a brand psychologically satisfying to the targeted
set of customers. For instance, cars like BMW and Mercedes appeal to their
customers through their brand reputation. A Psychological position can be
developed through the incorporation of changes in imaging, packaging, and
design.

2. Affordability

It adheres to the customers’ ability and willingness to pay the price for a
particular product or service. There are 2 types of affordability – economic and
psychological affordability.

Economic Affordability

Economic Affordability focuses on the physical ability of customers to buy through

sufficient economic resources at their disposal. For instance, Walmart used
private labels for various products (Products with Walmart’s stamp) at lower
prices to attract customers in place of those from big brands. This resulted in

billions of sales of private products against big brands out in their stores. Example
discounts and sales during festival time

Psychological Affordability

With a major focus on the customer’s understanding of products and their value
against the cost, Psychological Affordability talks about a person’s willingness to
pay. An online rental start-up named Airbnb looked forward to creating
memorable and lasting experiences for their simple, crisp, and economically
viable users. An increased supply of travel accommodations has been concealed
additions to this company’s long list of benefits.

3. Accessibility

This dimension talks about the extent and ease to which products and services
are accessible to their customers.

Customer Availability

Availability checks whether the given company has enough stock to keep up with
the demands of the market. For instance, Walmart runs one of the most widely
spread retail businesses around the world. With more than 10,000 stores across
27 countries and an E-commerce platform in 10 others, it has proved to be one of
the most significant retail businesses. Some techniques that play a crucial role in
product replenishment include robotic technology, cross-docking, and amazing
inventory technology. Indian examples – grocery stores, reliance mart

Customer Convenience

Convenience talks about the ease of access for a potential customer in obtaining a
product or service. Human beings tend to go after the easiest option available to
them, and the former chairman of CocaCola emphasized the same. He stated that
the company’s products must always be within “an arm’s length of desire” for
every potential customer.

4. Awareness

It focuses on both potential and existing customers of a particular product or

service. It keeps in mind that all customers are informed enough about the
benefits and features a product has to offer, persuade potential customers, and
keep the trust of existing buyers. It is a crucial factor for brands since creating a
positive perception in the customers’ minds is necessary for them to buy their
product.

Product Knowledge

Product Knowledge will ensure that potential consumers have adequate

knowledge about products for purchase. People have to be aware of anything,
and everything that is on offer to go after a particular product/service. For
instance, GoPro buys rights to user-created videos to share through their means,
inspiring others to buy these products themselves.

Brand Awareness

Brand Awareness is the ability of consumers to recognize, recall, and remember a

particular brand. CocaCola is one of the best examples here, and the brand has
always focused on staying relevant in the minds
of people through notable ad campaigns. Customer-value-perspective based on
brand awareness is a key step in promoting a new product or reviving any older
brand.

What is a Value Chain Analysis?

The value chain also known as Porter’s Value Chain Analysis is a business
management concept that was developed by Michael Porter.
In his book Competitive Advantage (1985), Michael Porter explains that a value
chain is a collection of activities that are performed by a company to create value
for its customers.

The strength of this analysis is its approach. It focuses on the systems and
business activities with customers as the central principle 
The Value Chain activities

It consists of a number of activities, namely primary activities and support

activities.

Primary activities have an immediate effect (cost advantage) on the production,

maintenance, sales and support of the products or services to be supplied. These
activities consist of the following elements:
Inbound Logistics

These are all processes that are involved in the receiving, storing, and internal
distribution of the raw materials or basic ingredients of a product or service. The
relationship with the suppliers is essential to the creation of value in this matter.

Production

These are all the activities (for example production floor or production line) that
convert inputs of products or services into semi-finished or finished products.
Operational systems are the guiding principle for the creation of value.

Outbound logistics

These are all activities that are related to delivering the products and services to
the customer. These include, for instance, storage, distribution (systems) and
transport.

Marketing and Sales

These are all processes related to putting the products and services in the markets
including managing and generating customer relationships. The guiding principles
are setting oneself apart from the competition and creating advantages for the
customer.

Service

This includes all activities that maintain the value of the products or service to
customers as soon as a relationship has developed based on the procurement of
services and products.

The Service Profit Chain Model is an alternative model, specific designed for

service management and organizational growth.
Support activities of the Value Chain Analysis

Support activities within the Porter’s Value Chain Analysis assist the primary
activities and they form the basis of any organization.
In the figure dotted lines represent linkages between a support activity and a
primary activity.

A support activity such as human resource management for example is of

importance within the primary activity production but also supports other
activities such as service and outbound logistics.

Firm infrastructure

This concerns the support activities within the organization that enable the
organization to maintain its daily operations. Line management, administrative
handling, financial management are examples of activities that create value for
the organization.

Human resource management

This includes the support activities in which the development of the workforce
within an organization is the key element. Examples of activities are recruiting
staff, training and coaching of staff and compensating and retaining staff.

Technology development

These activities relate to the development of the products and services of the
organization, both internally and externally.

Examples are IT, technological innovations and improvements and the

development of new products based on new technologies. These activities create
value using innovation and optimization.

Procurement

These are all the support activities related to procurement to service the
customer from the organization.

Examples of activities are entering into and managing relationships with suppliers,
negotiating to arrive at the best prices, making product purchase agreements
with suppliers and outsourcing agreements. Organizations use primary and
support activities as building blocks to create valuable products, services and
distinctiveness.
Value Chain Analysis

A value chain is a series of consecutive steps that go into the creation of a finished
product, from its initial design to its arrival at a customer’s door. The chain
identifies each step in the process at which value is added, including the sourcing,
manufacturing, and marketing stages of its production.

A company conducts a value-chain analysis by evaluating the detailed procedures

involved in each step of its business. The purpose of a value-chain analysis is to
increase production efficiency so that a company can deliver maximum value for
the least possible cost.

A value chain is a step-by-step business model for transforming a product or

service from idea to reality. Value chains help increase a business's efficiency so
the business can deliver the most value for the least possible cost. The end goal of
a value chain is to create a competitive advantage for a company by increasing
productivity while keeping costs reasonable. The value-chain theory analyzes a
firm's five primary activities and four support activities.

Because of ever-increasing competition for unbeatable prices, exceptional

products, and customer loyalty, companies must continually examine the value
they create in order to retain their competitive advantage. A value chain can help
a company to discern areas of its business that are inefficient, then implement
strategies that will optimize its procedures for maximum efficiency and
profitability.

In addition to ensuring that production mechanics are seamless and efficient, it’s
critical that businesses keep customers feeling confident and secure enough to
remain loyal. Value-chain analyses can help with this, too.

Michael E. Porter introduced the concept of a value chain in his book, Competitive
Advantage: Creating and Sustaining Superior Performance. He wrote:
“Competitive advantage cannot be understood by looking at a firm as a whole. It
stems from the many discrete activities a firm performs in designing, producing,
marketing, delivering, and supporting its product. In other words, it’s important to
maximize value at each specific point in a firm’s processes.
Components of Value Chain

In his concept of a value chain, Porter splits a business’s activities into two
categories, “primary” and “support,” whose sample activities we list below.
Specific activities in each category will vary according to the industry.

Primary Activities

Primary activities consist of five components, and all are essential for adding value
and creating competitive advantage:

1. logistics include functions like receiving, warehousing, and managing

inventory.

2. Operations include procedures for converting raw materials into a finished

product.

3. Outbound logistics include activities to distribute a final product to a

consumer.

4. Marketing and sales include strategies to enhance visibility and target

appropriate customers— such as advertising, promotion, and pricing.

5. Service includes programs to maintain products and enhance the consumer

experience—like customer service, maintenance, repair, refund, and exchange.

Support Activities

The role of support activities is to help make the primary activities more efficient.
When you increase the efficiency of any of the four support activities, it benefits
at least one of the five primary activities. These support activities are generally
denoted as overhead costs on a company’s income statement:

1. Procurement concerns how a company obtains raw materials.

 2. Technological development is used at a firm's research and development
(R&D) stage—like designing and developing manufacturing techniques and
automating processes.

3. Human resources (HR) management involves hiring and retaining employees

who will fulfill the firm's business strategy and help design, market, and sell the
product.

4. Infrastructure includes company systems and the composition of its

management team—such as planning, accounting, finance, and quality control.

McDonald’s mission is to provide customers with low-priced food items. The

analysis helps McDonald’s identify areas for improvement and activities that add
value to their products and services

Primary activities

• Inbound Logistics: McDonald's has pre-selected, low-cost suppliers for the raw
materials for their food and beverage items. It sources suppliers for items like
vegetables, meat, and coffee.

• Operations: The business is a franchise and each McDonald’s location is owned

by a franchisee. There are more than 39,000 McDonald’s locations worldwide

• Outbound Logistics: Instead of formal, sit-down restaurants, McDonald’s has

restaurants that focus on counter-service, self-service, and drive-through service
• Marketing and Sales: Its marketing strategies focus on media and print
advertising, including social media posts, magazine advertisements, billboards,
and more.

• Services: McDonald’s strives to achieve high-quality customer service. It

provides its thousands of employees with in-depth training and benefits so they
can best assist their customers

Support Activities
• Firm Infrastructure: The McDonald’s corporation has both C-suite executives
and Zone Presidents who oversee the firm’s operations in various regions, with a
general counsel overseeing legal matters

• Human Resource Management: It maintains a career page where job seekers

can apply to both corporate and restaurant roles. It pays both hourly and salaried
rates and promotes its tuition assistance program to attract talent

• Technology Development: The restaurant has invested in touch kiosks to

facilitate ordering and increase operational efficiency

• Procurement: The firm uses Jaggaer, a digital procurement firm, to establish

relationships with key suppliers across various regions of the world.

Political Factors

Broadly speaking, political factors are those driven by government actions and
policies. They include, but are not limited to, considerations like:

 Corporate taxation
 Other fiscal policy initiatives
 Free trade disputes
  Antitrust and other anti-competition issues

It’s worth noting that even the overhang of potential trade disputes or antitrust
issues can present material risks and opportunities for management teams.
Divergent stances on key platform issues between parties on the left and the right
can also make run-ups to elections particularly challenging for a firm’s
management team, as the range of possible outcomes can vary considerably
depending on election results.

Political Factor Example: A multinational company closes several facilities in a

higher tax jurisdiction in order to relocate operations somewhere with lower tax
rates and/or greater state funding and grant opportunities.

Economic Factors

Economic factors relate to the broader economy and tend to be expressly

financial in nature. They include:

 Interest rates
 Employment rates
 Inflation
 Exchange rates

Many analysts in the financial services sector tend to overweight economic

factors in their analysis since they’re more easily quantified and modeled than
some of the other factors in this framework (which are somewhat qualitative in
nature).

Economic Factor Example: Based on where we are in the economic cycle and

what Treasury yields are doing, an equity research analyst may adjust
the discount rate in their model assumptions; it can have a material impact on the
valuations of the companies they cover. 

Social Factors

Social factors tend to be more difficult to quantify than economic ones. They refer
to shifts or evolutions in the ways that stakeholders approach life and leisure,
which in turn can impact commercial activity. Examples of social factors include:
  Demographic considerations
 Lifestyle trends
 Consumer beliefs
 Attitudes around working conditions

Social factors may seem like a small consideration, relative to more tangible
things like interest rates or corporate taxation. Still, they can have a shockingly
outsized impact on entire industries as we know them. Consider how trends
towards healthier and more active lifestyles have ushered in the evolution of
connected fitness technologies, as well as many changes to the nature of food
products we consume and how these food products are packaged and marketed.

Social Factor Example: Post-pandemic, management at a technology firm has had

to seriously reevaluate hiring, onboarding, and training practices after an
overwhelming number of employees indicated a preference for a hybrid, work-
from-home (WFH) model.

Technological Factors

In today’s business landscape, technology is everywhere – and it’s changing

rapidly. Management teams and analysts alike must understand how
technological factors may impact an organization or an industry. They include, but
are not limited to:

 Automation
 How research and development (R&D) may impact both costs and
competitive advantage
 Technology infrastructure (like 5G, IoT, etc.)
 Cyber security

The speed and scale of technological disruption in the present business

environment are unprecedented, and it has had a devastating impact on many
traditional businesses and sectors – think Uber upending the transportation
industry or the advent of e-commerce revolutionizing retail trade as we know it. 

Technological Factor Example: A management team must weigh the practical and
the financial implications of transitioning from on-site physical servers to a cloud-
based data storage solution.

Environmental Factors

Environmental factors emerged as a sensible addition to the original PEST

framework as the business community began to recognize that changes to our
physical environment can present material risks and opportunities for
organizations. Examples of environmental considerations are:

 Carbon footprint
 Climate change impacts, including physical and transition risks
 Increased incidences of extreme weather events
 Stewardship of natural resources (like fresh water)

Environmental factors in a PESTEL analysis will overlap considerably with those

typically identified in an ESG (Environmental, Social, and Governance) analysis. In
fact, it’s widely believed that the addition of environmental factors to the PESTEL
framework evolved from the growing popularity of movements such as CSR
(Corporate Social Responsibility) and ESG.

Environmental Factor Example: Management at a publicly traded firm must

reevaluate internal record keeping and reporting tools in order to track
greenhouse gas emissions after the stock exchange announced mandatory
climate and ESG disclosure for all listed companies.

Legal Factors

Legal factors are those that emerge from changes to the regulatory environment,
which may affect the broader economy, certain industries, or even individual
businesses within a specific sector. They include, but are not limited to:

 Industry regulation
 Licenses and permits required to operate
 Employment and consumer protection laws
 Protection of IP (Intellectual Property)

Regulation can serve as a headwind or a tailwind for operators. An example

headwind might be increased capital requirements for financial institutions; an
example tailwind is if regulation is so heavy in a particular industry (let’s say food
production) that it may serve as a protective moat for established operators,
creating an additional barrier preventing potential new entrants.

Example Legal Factors: A rating agency is assessing the creditworthiness of a

technology firm that has considerable growth prospects in emerging markets. The
analyst must weigh this growth trajectory against the inherent risk of IP theft in
some jurisdictions where legal infrastructure is weak. IP theft can severely
undermine a firm’s competitive advantage.

PESTEL and Financial Analysis

Combined, the above six factors can have a profound impact on risks and
opportunities for firms. It’s imperative that the analyst community recognize
these and attempt to quantify them in their financial models and risk assessment
tools.

Some examples include:

 Financial analysts may adjust model assumptions such as revenue growth

rates and gross margins based on inflation expectations. 
  A business that has done a poor job managing its carbon footprint may be
subject to future fines or carbon tax levies, so analysts may wish to project
a cash reserve accordingly.
 A changing macroeconomic environment may require analysts at credit
rating agencies to build in a higher interest rate buffer for sensitivity
analysis when calculating a firm’s debt service coverage ratio.
 Massive levels of automation in a particular industry are expected to
reduce labor costs by X% – which would materially change free cash flow
estimates in a financial model.
The framework is also used to identify potential threats and weaknesses which
are used in a SWOT Analysis when identifying any strengths, weaknesses,
opportunities and threats to a business.
Let’s look at each element of a PESTEL analysis.
Political Factors
These determine the extent to which government and government policy may
impact on an organisation or a specific industry. This would include political policy
and stability as well as trade, fiscal and taxation policies too.
Economic Factors
An economic factor has a direct impact on the economy and its performance,
which in turn directly impacts on the organisation and its profitability. Factors
include interest rates, employment or unemployment rates, raw material costs
and foreign exchange rates.
Social Factors
The focus here is on the social environment and identifying emerging trends. This
helps a marketer to further understand consumer needs and wants in a social
setting. Factors include changing family demographics, education levels, cultural
trends, attitude changes and changes in lifestyles.
Technological Factors
Technological factors consider the rate of technological innovation and
development that could affect a market or industry. Factors could include
changes in digital or mobile technology, automation, research and development.
There is often a tendency to focus on developments only in digital technology, but
consideration must also be given to new methods of distribution, manufacturing
and logistics.
Environmental Factors
Environmental factors are those that are influenced of the surrounding
environment and the impact of ecological aspects. With the rise in importance of
CSR (Corporate Sustainability Responsibility) and sustainability, this element is
becoming more central to how organisations need to conduct their business.
Factors include climate, recycling procedures, carbon footprint, waste disposal
and sustainability
Legal Factors
An organisation must understand what is legal and allowed within the territories
they operate in. They also must be aware of any change in legislation and the
impact this may have on business operations. Factors include employment
legislation, consumer law, healthy and safety, international as well as trade
regulation and restrictions.
Political factors do cross over with legal factors; however, the key difference is
that political factors are led by government policy, whereas legal factors must be
complied with.
How to do a PESTEL Analysis?
There are several steps involved when undertaking a PESTEL analysis. At first, it is
important to get a group of people together from different areas of the business
and brainstorm ideas.
Next, you will want to consult and seek the opinions of experts from outside your
business. These could be your customers, distributors, suppliers or consultants
who know your business well.
The third stage will involve you researching and gathering evidence for each
insight in your Analysis. Then you will want to evaluate and score each of the
items for ‘likelihood’; how likely it is to happen and ‘impact’; how big an impact it
could have on your business.
The final stage involves refining your ideas and repeating the proves until you
have a manageable number of points in each of the six categories.
Advantages of a PESTEL Analysis:

 It can provide an advance warning of potential threats and opportunities

  It encourages businesses to consider the external environment in which
they operate
 The analysis can help organisations understand external trends

Disadvantages of a PESTEL Analysis:

 Many researchers argued that simplicity of the model that it is a simple list
which is not sufficient and comprehensive
 The most significant disadvantage of the model is it is only based on an
assessment of the external environment

Final Thoughts
A PESTEL analysis helps an organisation identify the external forces that could
impact their market and analyse how they could directly impact their business.
It’s important when undertaking such an analysis that the factors affecting the
organisation are not just identified but are also assessed – for example, what
impact might they have on the organisation? The outcomes can then be used to
populate the opportunities and threats in a SWOT analysis.

Buyer behavior
it refers to the decision and acts people undertake to buy products or services for
individual or group use. It’s synonymous with the term “consumer buying
behavior,” which often applies to individual customers in contrast to businesses.
Buyer behavior is the driving force behind any marketing process. Understanding
why and how people decide to purchase this or that product or why they are so
loyal to one particular brand is the number one task for companies that strive for
improving their business model and acquiring more customers. 
The study of consumer buying behavior is most important for marketers as they
can understand the expectation of the consumers. It helps to understand what
makes a consumer buy a product. It is important to assess the kind of products
liked by consumers so that they can release it to the market. 
Types of buyer behavior

Buyer behavior is always determined by how involved a client is in their decision

to buy a product or service and how risky it is. The higher the product price, the
higher the risk, the higher the customer’s involvement in purchase decisions.
Based on these determinants, four types of consumer buyer behavior are
distinguished:

So
urce: Geektonight

Complex buying behavior

This type is also called extensive. The customer is highly involved in the buying
process and thorough research before the purchase due to the high degree of
economic or psychological risk. Examples of this type of buying behavior include
purchasing expensive goods or services such as a house, a car, an education
course, etc.

Dissonance-reducing buying behavior

Like complex buying behavior, this type presupposes lots of involvement in the
buying process due to the high price or infrequent purchase. People find it
difficult to choose between brands and are afraid they might regret their choice
afterward (hence the word ‘dissonance’). 
As a rule, they buy goods without much research based on convenience or
available budget. An example of dissonance-reducing buying behavior may be
purchasing a waffle maker. In this case, a customer won’t think much about which
model to use, chousing between a few brands available. 

Habitual buying behavior

This type of consumer buying behavior is characterized by low involvement in a

purchase decision. A client sees no significant difference among brands and buys
habitual goods over a long period. An example of habitual buying behavior is
purchasing everyday products.

Variety seeking behavior

In this case, a customer switches among brands for the sake of variety or
curiosity, not dissatisfaction, demonstrating a low level of involvement. For
example, they may buy soap without putting much thought into it. Next time,
they will choose another brand to change the scent. 

Buyer behavior patterns

Each consumer may have unique buying habits. Still, there are typical tendencies,
which allows distinguishing the following buyer behavior patterns:

Place of purchase

If customers have access to several stores, they are not always loyal to one place.
So even if all items are available in one outlet, they may divide their purchases
among several shops.

Items purchased

There are two things to consider: the type of the product customers purchase and
its quantity. As a rule, people buy necessity items in bulk. In contrast, luxury items
are more likely to be purchased in small quantities and not frequently. The
amount of goods people buy is influenced by such factors: 

 Product durability
 Product availability

 Product price

 Buyer’s purchasing power 

 Number of customers for whom the product is intended

The analysis of a buyer’s shopping cart may bring many valuable insights about
buyer behavior.

Time and frequency of purchase

With the development of e-commerce, purchases have become only a few clicks
away. Anyway, marketers should understand how often and at what time of the
year or day people tend to buy more goods. The product purchase frequency may
depend on the following factors:

 Product type
 Customer’s lifestyle
 Product necessity
 Customer’s traditions and customs

Method of purchase

People buy goods in different ways: some go to the store, while others prefer
ordering items online. Some pay cash, while others use a credit card. Among
customers who buy goods in online stores, some pay on delivery, while others are
ready to pay right after they place an order. The way customers choose to
purchase products tells a lot about their buyer persona.

Model of consumer buying behavior

The buyer behavior model is a structured step-by-step process. Under the

influence of marketing stimuli (product, price, place, and promotion) and
environmental factors (economic, technological, political, cultural), a customer
understands the need to make a purchase.
The decision-making process they undergo afterward is affected by their
characteristics, such as their beliefs, values, and motivation, resulting in the final
decision to either buy or not to buy. 

Most buyers go through several stages when making a purchase decision:

1. Need recognition

At the first stage, the buyer recognizes that there is a need for a product or
service. For instance, they might realize that, since their company is growing,
manual email outreach is no longer effective, so they need an email automation
solution.

2. Information search

After understanding the need for a product or service, the buyer starts looking for
information. They might obtain it from different sources (friends, commercials,
mass media). For example, a prospect may start browsing email automation
solutions, read reviews, etc.
3. Evaluation of alternatives

Once all the necessary information has been gathered, the buyer starts to
evaluate a choice. They might compare key features and pricing, looking for
advantages of one tool over all others.

4. Purchase decision

After evaluation, the buyer makes a purchase decision. For example, they start
their free trial or purchase a paid plan. 

5. Post-purchase evaluation

After purchasing the product or service, the buyer assesses whether it has met
their expectations. At this stage, they might also leave an online review about the
purchase or share their feedback with subscribers, colleagues, or friends. 
There are cases, however, when some stages of the decision-making process are
skipped. For example, the customer already knows a lot about a product and does
not need to search for information. Another situation is when the buyer might see
a product in the store and decide to buy it impulsively. Besides, there are
situations when, after evaluating alternatives, the customer goes back to the
information search step.

Buyer behavior analysis

To offer relevant products and services to the target audience, marketers should
analyze what and how people buy. Companies adhere to several ways of
monitoring consumer buying behavior:

Using computer software

Computer software provides companies with valuable information about the

customers’ purchase experience. This allows analyzing what products or services
are preferable among certain groups of buyers, how the customers’ location
influences their purchase habits, etc.
Analyzing customers’ reviews

Another way of analyzing buyer behavior is to study the customer’s feedback.

Online reviews can often reveal more than just people’s feelings about the
purchase. They might also share some information about how they choose items
or the way they prefer buying goods. 
Importance of Consumer Behavior
1. Consumer Differentiation:
2. Retention of Consumers:
3. Design Relevant Marketing Program:
4. Predicting Market Trend:
5. Competition:
6. Innovate New Products:
 Stay Relevant in the Market
. Improve Customer Service

What Is Market Segmentation?

Market segmentation is a marketing strategy in which select groups of

consumers are identified so that certain products or product lines can be
presented to them in a way that appeals to their interests.

Market segmentation is a process companies use to break their potential

customers into different sections. This allows the company to allocate the
appropriate resource to each individual segment which allows for more accurate
targeting across a variety of marketing campaigns.
KEY TAKEAWAYS

 Market segmentation seeks to identify targeted groups of consumers to

tailor products and branding in a way that is attractive to the group.
 Markets can be segmented in several ways such as geographically,
demographically, or behaviorally.
 Market segmentation helps companies minimize risk by figuring out which
products are the most likely to earn a share of a target market and the
best ways to market and deliver those products to the market.
 With risk minimized and clarity about the marketing and delivery of a
product heightened, a company can then focus its resources on efforts
likely to be the most profitable.
 Market segmentation can also increase a company's demographic reach
and may help the company discover products or services they hadn't
previously considered.
Types of Market Segmentation
There are four primary types of market segmentation. However, one type can
usually be split into an individual segment and an organization segment.
Therefore, below are five common types of market segmentation.

Demographic Segmentation
Demographic segmentation is one of the simple, common methods of market
segmentation. It involves breaking the market into customer demographics as
age, income, gender, race, education, or occupation. This market segmentation
strategy assumes that individuals with similar demographics will have similar
needs.

Example: The market segmentation strategy for a new video game console may
reveal that most users are young males with disposable income.

Firmographic Segmentation
Firmographic segmentation is the same concept as demographic segmentation.
However, instead of analyzing individuals, this strategy looks at organizations and
looks at a company's number of employees, number of customers, number of
offices, or annual revenue.
Example: A corporate software provider may approach a multinational firm with
a more diverse, customizable suite while approaching smaller companies with a
fixed fee, more simple product.

Geographic Segmentation
Geographic segmentation is technically a subset of demographic segmentation.
This approach groups customers by physical location, assuming that people
within a given geographical area may have similar needs. This strategy is more
useful for larger companies seeking to expand into different branches, offices, or
locations.

Example: A clothing retailer may display more raingear in their Pacific Northwest
locations compared to their Southwest locations.

Behavioral Segmentation
Behavioral segmentation relies heavily on market data, consumer actions, and
decision-making patterns of customers. This approach groups consumers based
on how they have previously interacted with markets and products. This
approach assumes that consumers prior spending habits are an indicator of what
they may buy in the future, though spending habits may change over time or in
response to global events.

Example: Millennial consumers traditionally buy more craft beer, while older

generations are traditionally more likely to buy national brands.1

Psychographic Segmentation
Often the most difficult market segmentation approach, psychographic
segmentation strives to classify consumers based on their lifestyle, personality,
opinions, and interests. This may be more difficult to achieve, as these traits (1)
may change easily and (2) may not have readily available objective data.
However, this approach may yield strongest market segment results as it groups
individuals based on intrinsic motivators as opposed to external data points.

Example: A fitness apparel company may target individuals based on their

interest in playing or watching a variety of sports.

Regardless of your approach, a useful segmentation should include these six

characteristics:
1) Identifiable. You should be able to identify customers in each segment and
measure their characteristics, like demographics or usage behavior.

2) Substantial. It’s usually not cost-effective to target small segments — a

segment, therefore, must be large enough to be potentially profitable.

3) Accessible. It sounds obvious, but your company should be able to reach its
segments via communication and distribution channels. When it comes to young
people, for example, your company should have access to Twitter and Tumblr and
know how to use them authentically — or, as Clearblue smartly did, reach out to
celebrities with active Twitter presences to do some of your marketing for you.

4) Stable. In order for a marketing effort to be successful, a segment should be

stable enough for a long enough period of time to be marketed to strategically.
For example, lifestyle is often used as a way to segment. But research has found
that, internationally, lifestyle is dynamic and constantly evolving. Thus,
segmenting based on that variable globally might not be wise.

5) Differentiable. The people (or organizations, in B2B marketing) in a segment

should have similar needs that are clearly different from the needs of other
people in other segments.

6) Actionable. You have to be able to provide products or services to your

segments. One U.S. insurance company, for example, spent a lot of time and
money identifying a segment, only to discover that it couldn’t find any customers
for its insurance product in that segment, nor was the organization able to design
any actions to target them.

There are following criteria for an effective segmentation:

i. Measurable and Obtainable:

The size, profile and other relevant characteristics of the segment must be
measurable and obtainable in terms of data.

It has to be possible to determine the values of the variables used for

segmentation with justifiable efforts. This is important especially for demographic
and geographic variables. For an organisation with direct sales (without
intermediaries), the own customer database could deliver valuable information
on buying behaviour (frequency, volume, product groups, mode of payment etc).

ii. Relevant:
The size and profit potential of a market segment have to be large enough to
economically justify separate marketing activities for this segment. If a segment is
small in size then the cost of marketing activities cannot be justified.

iii. Accessible:
The segment has to be accessible and servable for the organisation. That means,
the customer segments may be decided considering that they can be accessed
through various target-group specific advertising media such as magazines or
websites the target audience likes to use.

iv. Substantial:
The segments should be substantial to generate required returns. Activities with
small segments will give a biased result or negative results.

v. Valid:
This means the extent to which the base is directly associated with the differences
in needs and wants between the different segments. Given that the segmentation
is essentially concerned with identifying groups with different needs and wants, it
is vital that the segmentation base is meaningful and that different preferences or
needs show clear variations in market behaviour and response to individually
designed marketing mixes.
vi. Unique or Distinguishable or Differentiable:
The market segments have to be that diverse that they show different reactions
to different marketing mixes. If not then there would have been no use to break
them up in segments.

vii. Appropriate:
The segments must be appropriate to the organisation’s objectives and resources.

viii. Stable:
The segments must be stable so that its behaviour in the future can be predicted
with a sufficient degree of confidence.

ix. Congruous:
The needs and characteristics of each segment must be similar otherwise the
main objective of segmentation will not be served. If within a segment the
behaviour of consumers are different and that they react differently, then a
unique marketing strategy cannot be implemented for everyone. This will call for
a further segmentation.

x. Actionable or Feasible:
It has to be possible to approach each segment with a particular marketing
programme and to draw advantages from that. The segments that a company
wishes to pursue must be actionable in the sense that there should be sufficient
finance, personnel and capability to take them all. Hence, depending upon the
reach of the company, the segments must be selected.
Identifying the target market is a key part of the decision-making process when a
company designs, packages, and advertises its product.

KEY TAKEAWAYS

 A target market is a group of customers with shared demographics who

have been identified as the most likely buyers of a company's product or
service.
 Identifying the target market is important in the development and
implementation of a successful marketing plan for any new product.

What is a Product in Marketing?

A product is something that is made with the purpose of being sold in the
marketplace. The use of products satisfies the needs of customers. All marketing
operations centre around the product, which is one of the most important
aspects of marketing.
There are two types of products: tangible and intangible. Intangible products are
referred to as services, while physical things are referred to as goods.
Classification of Products in Marketing
Product classification is a marketing and commercial phrase that divides products
into categories depending on how and why customers buy them. The organizing
of the various sorts of products that consumers purchase is referred to as
product classification.
Consumer goods and industrial goods are the two types of products. These can
be further divided into the following categories −
Consumer Products
Consumer goods are made for the final consumer's personal use.
Convenience Products
Convenience Products are typically low-cost, readily available items that
customers purchase on a regular basis without prior preparation or research, and
with minimal comparison and purchasing effort. Customers can obtain such
products through a wide range of distribution channels, including all retail shops.
Fast moving consumer goods (FMCG) such as soap, toothpaste, detergents, and
food items such as rice, wheat flour, salt, sugar, milk, and so on fall into this
category.
Informed or Shopping goods
Shopping items and services are more expensive (in comparison to convenience
products) and are less commonly purchased consumer goods and services. When
purchasing such products or services, the consumer devotes a significant amount
of time and effort to acquiring information about the product before making a
purchase based on price, quality, features, style, and suitability.
These products are only available through a few exclusive distribution outlets.
Televisions, air conditioners, automobiles, furniture, hotel and airline services,
and tourism services are all examples.
Specialty goods
Customers are convinced that this product is superior to all other competing
brands in terms of features and quality, and thus are willing to pay a high price
for it. Specialty Products are high-priced branded products and services with
unique features, and customers are convinced that this product is superior to all
other competing brands in terms of features and quality, and thus are willing to
pay a high price for it.
These items are rarely acquired, perhaps once or twice in a lifetime, and are
supplied through one or a few limited distribution venues. Specialty products are
not compared by purchasers.
Mandatory or Unsought goods
Consumers that buy mandatory purchases, often known as unsought goods, do
so out of necessity rather than want. Typically, these are items like batteries,
smoke detectors, air filters, and cleaning supplies that buyers aren't very
enthusiastic to acquire. When advertising these things, marketing teams can
concentrate on reminding customers of their need for them and establishing
brand familiarity, allowing them to buy a specific brand without hesitation.
A marketing team might, for example, promote a flashlight by showing someone
utilizing one during a power outage.
Industrial or Business Products
Industrial goods are basically made for industrial purposes.
Materials and Parts
Agricultural products, crude petroleum, and iron ore are examples of raw
materials; produced materials include iron, yarn, cement, and wires; and
component parts include small motors, tyres, and castings.
Capital Items
Capital items include installations such as factories and offices, fixed equipment
such as generators, computer systems, and elevators, and auxiliary equipment
such as tools and office equipment.
Supplies
Lubricants, coal, paper, pencils, and repair supplies such as paint, nails, and
brooms are among the supplies available.
Business Services
Maintenance and repair services, such as computer repair, legal services,
consulting services, and advertising services, are all examples of services.
Reasons for Classification of Products
Professionals divide products into categories for a variety of reasons. Product
classifications can influence a variety of decisions during a product's life cycle,
including how corporations promote it, its pricing, the sort of consumer who buys
it, and how high demand is for it.

Other reasons why professionals classify products include the following reasons
Marketing Strategies
As previously stated, the strategies used by marketing teams to promote a
product are typically determined by its classification type. The focus of a
campaign and the marketing budget can both be affected by product
classification.
For example, a corporation is less likely to invest money on organizing a focus
group to test its product while selling a speciality item. They may instead devote
their resources to brand management.
Product Pricing
The classification a product receives can have an impact on how merchants and
distributors price it. Because consumers value the availability and necessity of
convenience items and necessary purchases, they are generally less expensive
than specialty items or informed purchases.
Convenience and necessary items are also more regular in nature, and include
lower-cost things like meals. Because consumers have a lesser level of brand
loyalty for products in these categories, it's even more crucial for companies
selling convenience and necessary purchases to assign a lower price to these
things in order to compete with other brands.
Product Demand
The demand for a product is frequently affected by its classification. In general,
customers choose to buy obligatory and convenience items over speciality and
informed purchases. This has an impact on how corporations make these
products and how marketing teams promote them.
Companies selling specialist and informed buy products may need to devote
more time and money to marketing their products since consumers may require
more inducement to make purchases that they need less frequently.
Invention
A corporation may consider product classes when determining which products to
develop. Because marketing efforts for each sort of product differ, a corporation
may choose to specialize in one type of advertisement, limiting the types of items
they can produce.
The demand for a product, which influences how specialists form product
categories, can also have an impact on a company's decision to develop a
product
Conclusion
In conclusion, product classification can help determine product demand, pricing
and the primary demographic to which advertisers can target with their
marketing campaigns.

What is Product Mix?

Product mix, also known as product assortment or product portfolio, refers to the
complete set of products and/or services offered by a firm. A product mix consists
of product lines, which are associated items that consumers tend to use together
or think of as similar products or services.

Dimensions of a Product Mix

#1 Width

Width, also known as breadth, refers to the number of product lines offered by a

company. For example, Kellogg’s product lines consist of: (1) Ready-to-eat cereal,
(2) Pastries and breakfast snacks, (3) Crackers and cookies, and (4)
Frozen/Organic/Natural goods.

#2 Length

Length refers to the total number of products in a firm’s product mix. For
example, consider a car company with two car product lines (3-series and 5-
series). Within each product line series are three types of cars. In this example,
the product length of the company would be six.
#3 Depth

Depth refers to the number of variations within a product line. For example,
continuing with the car company example above, a 3-series product line may offer
several variations such as coupe, sedan, truck, and convertible. In such a case, the
depth of the 3-series product line would be four.

#4 Consistency

Consistency refers to how closely related product lines are to each other. It is in
reference to their use, production, and distribution channels. The consistency of a
product mix is advantageous for firms attempting to position themselves as a
niche producer or distributor. In addition, consistency aids with ensuring a firm’s
brand image is synonymous with the product or service itself.

Illustration of a Product Mix

In the illustration above, the product mix shows a:

 Width of 3
  Length of 5
 Product Line 1 Depth of 2
 Product Line 2 Depth of 1
 Product Line 3 Depth of 2

The mix is considered consistent if the products in all the product lines are similar.

Example of a Product Mix

Let us take a look at a simple product mix example of Coca-Cola. For simplicity,
assume that Coca-Cola oversees two product lines – soft drinks and juice (Minute
Maid). Products classified as soft drinks are Coca-Cola, Fanta, Sprite, Diet Coke,
Coke Zero, and products classified as Minute Maid juice are Guava, Orange,
Mango, and Mixed Fruit.

The product (mix) consistency of Coca-Cola would be high, as all products within
the product line fall under beverage. In addition, production and distribution
channels remain similar for each product. The product mix of Coca-Cola in the
simplified example would be illustrated as follows:

Product Line vs. Product Mix?

First, it’s important to note how the product line and the product mix differ.
A product line refers to a product category or brand marketed by a company.
Products within a product line all perform a similar function, offer similar benefits,
target similar customers, are similarly priced, and follow similar distribution
channels. Important product line attributes include line stretching, line filling, line
modernization, and line featuring.

A product mix is the total number of product lines and individual products or
services offered by a company. Additionally referred to as product
assortment or product portfolio. Product mixes vary from company to company.
Some have multiple product lines with lots of products in each line. But others are
much more limited.

A product mix strategy has four dimensions:

Width Total number of product lines a company offers.

Length Total number of products in a company’s product mix.

Depth Total number of product variations in a product line.

Consistency ___ Indicates how product lines relate to one another.

A company can have multiple product lines with lots of products in each line, but
it can only have one product mix.

Key Product Mix Strategies

There are four key product mix strategies:

1. Expansion: A company increases the number of product lines or depth (i.e.,

product variations) within lines.
2. Contraction: A company narrows its product mix to eliminate lower-
performing products or lines or to simplify remaining products or lines.
 3. Change an Existing Product: A company improves a current product rather
than creating a completely new product.
4. Product Differentiation: Without modifying the product in any way, a
company positions it as a superior choice to a competitive product.

Additional product mix strategies include:

 Deepening Depth: A company keeps existing lines but expands them.

 Developing New Uses for Existing Products: A company finds and
communicates new uses for current products without disturbing lines or
products.
 Trading Up: A company adds a higher-cost product to an existing line to
improve brand image and increase demand for its lower-cost products.
 Trading Down: A company adds a lower-cost product to an existing line of
higher-cost products.

The term product life cycle refers to the length of time a product is introduced to
consumers into the market until it's removed from the shelves. This concept is
used by management and by marketing professionals as a factor in deciding
when it is appropriate to increase advertising, reduce prices, expand to new
markets, or redesign packaging. The process of strategizing ways to continuously
support and maintain a product is called product life cycle management.

KEY TAKEAWAYS

 A product life cycle is the amount of time a product goes from being
introduced into the market until it's taken off the shelves.
 There are four stages in a product's life cycle—introduction, growth,
maturity, and decline.
 A company often incurs higher marketing costs when introducing a product
to the market but experiences higher sales as product adoption grows.
 Sales stabilize and peak when the product's adoption matures, though
competition and obsolescence may cause its decline.
 The concept of product life cycle helps inform business decision-making,
from pricing and promotion to expansion or cost-cutting.
What Is Packaging?

Packaging is the act of enclosing or protecting the product using a container to aid
its distribution, identification, storage, promotion, and usage.

According to Kotler –

Packing constitutes all the activities of designing and producing the container for a
product.
In simple terms, packaging refers to designing and developing the wrapping
material or container around a product that helps to

 Identify and differentiate the product in the market,

 Transport and distribute the product,
 Store the product,
 Promote the product,
 Use the product properly.
Importance Of Packaging For The Seller

 Distribution: Good packaging makes it possible for the seller to transport

the product from the manufacturing unit to the final selling point and then
to the customer. The seller uses different packaging for the same –
transport packaging to transport the products and consumer packaging to
aid the consumer in consuming the product.
  Storage: Warehousing comes with its own risks of product spoilage,
spillage, and mishandling. Proper packaging helps the seller store and
assort the products better.
 Promotion: Packaging forms a vital marketing element that the brand uses
to differentiate the product using attractive, colourful, and visually
appealing packages and inform the buyer about the product’s performance,
features, and benefits.
 Safety: Good packaging aids in product safety before it reaches the final
consumer. For example, a Tetra Pak prevents the milk from getting spoilt
before its expiry date.
Importance Of Packaging For The Buyer

 Identification: Packaging and labelling help the customers identify the

product and differentiate it from other products in the market.
 Usage: Often, packaging, like that of a toothpaste, that forms a part of the
product aids in its usage and consumption.
 Safety: It also protects the consumer from the dangers that the product
comes with. For example, an acid bottle protects the user from getting acid
burns.
Functions Of Packaging

Packaging plays a crucial role from the time a product is developed to the time a
product is fully consumed. These functions of packaging include:

1. Contains the product: Most products need to be contained either during

transportation, storage, or consumption. Packaging makes sure the product
is contained as and when required.
2. Protects the product: Packaging protects the product and its quality,
features, utility, etc. from being damaged or contaminated during
transportation, storage, and consumption.
3. Aids product handling and usage: Proper packaging aids product handling
and makes it easy to transport, ship, and even use the product.
4. Differentiates the product and makes it stand out: Packaging makes it
easier for the customer to identify and differentiate it from other products.
Moreover, attractive packages have a property to stand out and attract
customers towards it.
 5. Forms a part of product marketing strategy: An attractive and/or
informative package makes the product stand out and have a promotional
appeal. Packaging also acts as the final touchpoint that helps in product
promotion and sale.
6. Provides customer convenience: Packaging is also a convenience tool that
makes it convenient for the customer to carry, transport, and use the
product.
7. Acts as a communication medium: Packaging along with labelling helps
communicate the brand identity, brand message, and product and
company information to the customer.
8. Adds to the aesthetic value: Packaging can make a simple product look
attractive or a unique product look ordinary. It’s an important aesthetic
touchpoint that can make or break a sale.

Types Of Packaging

Primary Packaging

Primary packaging, also referred to as consumer packaging, is in direct contact

with the product and is intended for the customer to identify, gain product
knowledge, and to aid product consumption.

It is the primary layer like the plastic pouch, cardboard box, etc. containing the
finished product, that protects and preserves the finished product from
contamination and tampering, while including aesthetic elements that make the
product stand out.

Besides aiding identification, differentiation, and consumption, primary packaging

also acts as a promotional tool to attract more customers at the point of sale by
making the product look more appealing.

Some examples of primary packaging are:

 Laminated pouches for dry fruits

 Plastic containers for fruits
 Tin cans for soft drinks
 Laminated tubes for beauty products
  Composite cans for chips
Often, removing the primary packaging of a product affects the product’s quality
or attribute.

Secondary Packaging

Secondary packaging forms the second packaging layer that the customers don’t
usually see. Its main use is to group and hold together individual units of the
product to deliver large quantities of that product to the point of sale.

It collates smaller product units into a single pack and aids in inventory
management (grouping and identification) before the product is showcased to the
customer.

Some examples of secondary packaging are:

Plastic ring that holds soda cans together, and

 Cardboard box containing multiple individual boxes of cereal, etc.
Removing secondary packaging doesn’t affect the product’s quality or attributes.

Tertiary Packaging

Tertiary packaging, also referred to as bulk or transit packaging, is used to group a

large quantity of a particular product to transport it from point A to B.

The main objective of this packaging is to make it easier to transport heavy loads
or large quantities of a product easily and securely, while facilitating easy storage
and handling.

 Some examples of tertiary packaging are:

 Wooden pallets used in freight shipping

 A stretch-wrapped pallet containing a large quantity of secondary packaged
Labelling is the display of label in a product. A label contains information about a
product on its container, packaging, or the product itself. It also has warnings in it.
For e.g. in some products, it is written that the products contain traces of nuts and
shouldn’t be consumed by a person who’s allergic to nuts. The type and extent of
information that must be imparted by a label are governed by the relevant safety
and shipping laws.

Labeling is also an important part of the brand of the product and the company. It
helps the product stand out in the market, and identifies it as a part of a particular
brand. This is important in the era of high and intense competition.

Labels can be divided in four types. They are brand label, grade label, descriptive
label and informative label. These different types of labels can be described as
follows:

1. Brand label

If only brand is used on package of a product, this is called brand label. Brand
itself is expressed in label. Brand label is put on some cloth. It tells the name of
the cloth, e.g, 'Sanforised'. Similarly, label is used on soap
e.g, Lux, Hamam, Rexona etc.

2. Grade label

Some products have given grade label. This type of label shows the grade of the
product. It shows the quality of products by words, letters, or figure. A,B,C,D
grade can be put on peas packed into cans. Similarly, grade label can be
mentioned as 1,2,3,4 grades for packed wheat,. Some firms may use labels as
good, better, best etc. on their products.

3. Descriptive label

Descriptive label give information about the feature, using instruction, handling,
security etc. of the products. Descriptive label is used for the products whose
grade cannot be differentiated.
4. Informative label

Informative label gives information about the product. Using method and security
of the product, name of the producer, manufactured date, expiry date, name of
intermediary, additional instructions regarding the use of the product etc. are
mentioned in informative label. Descriptive label gives general information about
the product whereas informative label gives maximum information about the
product including its use, manufacturer etc.

Meaning of Pricing:
Pricing is a process of fixing the value that a manufacturer will receive in the
exchange of services and goods. Pricing method is exercised to adjust the cost of
the producer’s offerings suitable to both the manufacturer and the customer. The
pricing depends on the company’s average prices, and the buyer’s perceived
value of an item, as compared to the perceived value of competitors product.
Every businessperson starts a business with a motive and intention of earning
profits. This ambition can be acquired by the pricing method of a firm. While
fixing the cost of a product and services the following point should be considered:

 The identity of the goods and services

 The cost of similar goods and services in the market
 The target audience for whom the goods and services are produces
 The total cost of production (raw material, labour cost, machinery cost,
transit, inventory cost etc).
 External elements like government rules and regulations, policies,
economy, etc.,

Objectives of Pricing:

 Survival- The objective of pricing for any company is to fix a price that is

reasonable for the consumers and also for the producer to survive in the
market. Every company is in danger of getting ruled out from the market
because of rigorous competition, change in customer’s preferences and
taste. Therefore, while determining the cost of a product all the variables
 and fixed cost should be taken into consideration. Once the survival phase
is over the company can strive for extra profits.
 Expansion of current profits-Most of the company tries to enlarge their
profit margin by evaluating the demand and supply of services and goods in
the market. So the pricing is fixed according to the product’s demand and
the substitute for that product. If the demand is high, the price will also be
high.
 Ruling the market- Firm’s impose low figure for the goods and services to
get hold of large market size. The technique helps to increase the sale by
increasing the demand and leading to low production cost.
 A market for an innovative idea- Here, the company charge a high price for
their product and services that are highly innovative and use cutting-edge
technology. The price is high because of high production cost. Mobile
phone, electronic gadgets are a few examples.

What is Pricing Method?

Pricing method is a technique that a company apply to evaluate the cost of their
products. This process is the most challenging challenge encountered by a
company, as the price should match the current market structure and also
compliment the expenses of a company and gain profits. Also, it has to take the
competitor’s product pricing into consideration so, choosing the correct pricing
method is essential.

Types of Pricing Method:

The pricing method is divided into two parts:

 Cost Oriented Pricing Method– It is the base for evaluating the price of the
finished goods, and most of the company apply this method to calculate
the cost of the product. This method is divided further into the following
ways.

 Cost-Plus Pricing- In this pricing, the manufacturer calculates the cost

of production sustained and includes a fixed percentage (also known
as mark up) to obtain the selling price. The mark up of profit is
evaluated on the total cost (fixed and variable cost).
  Markup Pricing- Here, the fixed number or a percentage of the total
cost of a product is added to the product’s end price to get the selling
price of a product.
 Target-Returning Pricing- The company or a firm fix the cost of the
product to achieve the Rate of Return on Investment.
 Market-Oriented Pricing Method- Under this category, the is determined
on the base of market research
 Perceived-Value Pricing- In this method, the producer establish the
cost taking into consideration the customer’s approach towards the
goods and services, including other elements such as product quality,
advertisement, promotion, distribution, etc. that impacts the
customer’s point of view.
 Value pricing- Here, the company produces a product that is high in
quality but low in price.
 Going-Rate Pricing- In this method, the company reviews the
competitor’s rate as a foundation in deciding the rate of their
product. Usually, the cost of the product will be more or less the
same as the competitors.
 Auction Type Pricing- With more usage of internet, this
contemporary pricing method is blooming day by day. Many online
platforms like OLX, Quickr, eBay, etc. use online sites to buy and sell
the product to the customer.
 Differential Pricing- This method is applied when the pricing has to
be different for different groups or customers. Here, the pricing
might differ according to the region, area, product, time etc.
Factors Affecting Pricing Product: Internal Factors and External Factors

The pricing decisions for a product are affected by internal and external factors.

A. Internal Factors:
1. Cost:
While fixing the prices of a product, the firm should consider the cost involved in
producing the product. This cost includes both the variable and fixed costs. Thus,
while fixing the prices, the firm must be able to recover both the variable and
fixed costs.

2. The predetermined objectives:

While fixing the prices of the product, the marketer should consider the
objectives of the firm. For instance, if the objective of a firm is to increase return
on investment, then it may charge a higher price, and if the objective is to capture
a large market share, then it may charge a lower price.

3. Image of the firm:

The price of the product may also be determined on the basis of the image of the
firm in the market. For instance, HUL and Procter & Gamble can demand a higher
price for their brands, as they enjoy goodwill in the market.

4. Product life cycle:

The stage at which the product is in its product life cycle also affects its price. For
instance, during the introductory stage the firm may charge lower price to attract
the customers, and during the growth stage, a firm may increase the price.

5. Credit period offered:

The pricing of the product is also affected by the credit period offered by the
company. Longer the credit period, higher may be the price, and shorter the
credit period, lower may be the price of the product.

6. Promotional activity:
The promotional activity undertaken by the firm also determines the price. If the
firm incurs heavy advertising and sales promotion costs, then the pricing of the
product shall be kept high in order to recover the cost.
B. External Factors:
1. Competition:
While fixing the price of the product, the firm needs to study the degree of
competition in the market. If there is high competition, the prices may be kept
low to effectively face the competition, and if competition is low, the prices may
be kept high.

2. Consumers:
The marketer should consider various consumer factors while fixing the prices.
The consumer factors that must be considered includes the price sensitivity of the
buyer, purchasing power, and so on.

3. Government control:
Government rules and regulation must be considered while fixing the prices. In
certain products, government may announce administered prices, and therefore
the marketer has to consider such regulation while fixing the prices.

4. Economic conditions:
The marketer may also have to consider the economic condition prevailing in the
market while fixing the prices. At the time of recession, the consumer may have
less money to spend, so the marketer may reduce the prices in order to influence
the buying decision of the consumers.

5. Channel intermediaries:
The marketer must consider a number of channel intermediaries and their
expectations. The longer the chain of intermediaries, the higher would be the
prices of the goods.
how to price a product? Here are the steps!
Let’s take a look at the following steps on the price setting process. So what is the
first step to setting the price of your product/service?

Step 1: Selecting the pricing objective

Pricing can make reaching the company’s positioning goals easier. If the company
has to work over its capacity or handle tough competition, the price of the
product would need to take into account two factors. The variable costs and a
part of the fixed cost.
Although short-term, this strategy can help boost initial performance for
companies who are introducing revolutionary products or services.
If a company is looking to maximise the profit, it can set a higher price by
considering costs and the competition. On the other hand, if a company is looking
to improve and maximise its market share, it will set a lower price to generate
maximum volume.
However lucrative, this strategy can be risky, as it can cause consumer-related or
legal issues.

Step 2: Determining demand

According to the law of economics, there’s a definite demand for a product at
every price level. However, this law depends on the nature of the product in
question. For instance, demand rises with the price increase for luxury goods,
while the demand for a commodity will fall as the price rises.
What companies must do is plan the demand curve while understanding price
sensitivity. It is possible to estimate the demand curve by analysing historical data
or performing price-related tests. That way, a company can gain a deeper insight
into how much the consumers are willing to pay for a specific product or service.

Step 3: Estimating costs – ensuring profits

In order to continue working successfully, companies need to manage their costs
so that they are left with a good profit margin. Therefore, to achieve this, a
company needs to establish a production level at which it will be able to maintain
its fixed and variable costs.
In general, the cost per unit decreases as production level increases. That is
simply due to the learning curve effect that comes with increased experience. So
to ensure you profit with this strategy, you need to allocate the costs and set the
price accordingly.

Step 4: Analysing Competitors’ Costs, Prices, and Offers

Every company has to track its competitors carefully. That especially goes for
pricing, costs, and promotional offers. Companies need to know just how much
their competitors’ prices can fluctuate in comparison to their own. They also need
to be ready to adjust to those fluctuations with their own offers.

Step 5: Choosing your pricing method

There are several methods you can go for with regards to the pricing process of
your products or services.
These are the most popular ones:

 The markup method means that you’re setting a price based on your
desired profit level.
 Target return means that you’re setting a price based on the company’s
desired ROI.
 Perceived value is as simple as setting a price based on how much your
consumers believe your product or service is worth to them in reality.

There are also auction type pricing and group pricing methods, but they are less
popular.

Step 6: Determining the final price

The previous steps will help you set a price, but the final word goes to your
consumers. Do market research to make sure that you’re not under or
overcharging for your products or services.
  Distribution channels are the paths that products and services take on
their way from the manufacturer or service provider to the end consumer.
A distribution channel represents a chain of businesses or intermediaries
through which the final buyer purchases a good or service.
 Distribution channels include wholesalers, retailers, distributors, and the
Internet.
 In a direct distribution channel, the manufacturer sells directly to the
consumer. Indirect channels involve multiple intermediaries before the
product ends up in the hands of the consumer.
types of distribution channels

Businesses use three main distribution channels: direct, hybrid, and indirect.

They vary from each other, depending on the steps a product takes to reach the
end consumer from the raw materials.

1. Direct: Manufacturer → Consumer

Direct channels of distribution involve just the manufacturer and the customer.

In this case, the producer sells the product directly to the clients through a
website or a physical shop.

A good example is a farmer who would rather sell his products directly to his
customers through a farm stand instead of selling produce wholesale to a market.
2. Indirect: Manufacturer → Wholesaler → Retailer → Consumer

This channel introduces a new type of intermediary: the wholesaler.

A wholesaler is a business that purchases products in bulk and sells them to

retailers in bulk.

Since they benefit from economies of scale, they can profit by selling to various
retailers at a slightly higher price than the manufacturer.

3. Hybrid: Manufacturer → Authorized retailer → Consumer

A hybrid channel of distribution is a mix of direct and indirect distribution

channels.

Manufacturers partner with intermediaries like authorized retailers to sell

products to consumers in hybrid channels. 

This has some pros and cons.

Manufacturers receive more help distributing their products, speeding up the

process and increasing revenue, and consumers have a more convenient way to
purchase products, increasing customer satisfaction.

The manufacturer also maintains control over customer contact and

communication to keep an eye on messaging and brand reputation.

However, because the intermediary needs to profit, product prices need to be

increased for customers.

The role of distribution channels can be summarised as follows:

1. Distribution channels offer salesmanship: The distribution channels offer

pivotal role of a sales agent. They help in creating new products in market.
They specialize in word of mouth selling and promotion of products. They
assure pre-sale and post-sale service to the consumers. Since these channels
are in direct and regular contact with the consumers, they do salesmanship
very well and at the same time provide true and valuable feedback to the
producers.
2. Distribution channels increase distributional efficiency: The intermediary
channels ease the sales process as they are in direct contact with the
customers. They narrow down the gap between producers and consumers
both ecoomically and efficiently. These intermediaries reduce the number of
transactions involved in making products available from producers to
consumers.
For instance, there are four producers who are targeting to sell their products
to four customers. If there is no distribution channel involved, then there will
be sixteen transactions involved. But if the producers use distribution
channels, then the number of transactions involved will be reduced to
eight( four from producer to intermediary and four from intermediary to
customer), and thereby the transportation costs and efforts will also be
reduced.
3. The channels offer products in required assortments: Just like the producers
have expertise in manufacturing products, similarly the intermediaries have
their own expertise. The wholesalers specialize in moving and transferring
products from various producers to greater number of retailers. Similarly, the
retailers have expertise in selling a wide assortment of goods in less quantity
to a greater number of final customers.
Due to the presence of distribution channels(wholesalers and retailers), it is
possible for a consumer to buy the required products at right time from a
store conveniently located(geographically closer) rather than ordering from a
far located factory. Thus, these intermediaries break the bulk and meet the
less quantity demand of the customers.
4. They assist in product merchandising: It is actually the merchandising by
intermediaries which fastens the product movement from the retail shop
desk to the customer’s basket.
When a customer goes to a retail shop, he/she may be fascinated by the
attractive display of some new product, may get curious about that new
product, and may switch over to that new product leaving his/her regular
product. Thus merchandising activities of the intermediaries serve as a quiet
seller at a retail store.
5. The channels assist in executing the price mechanism between the firm and
the final customers: The intermediaries help in reaching a price level which is
acceptable both to the producers as well to the consumers.
6. Distribution channels assist in stock holding: The intermediaries perform
various other functions like financing the products, storing the products,
bearing of risks and providing required warehouse space.
Importance of

Distribution channel

Importance of Distribution channel

Timely Delivery Of Products
This is one of the important function of distribution channels. Distribution channel
helps in the delivery of products to customers on the right time. If products are
not available at the right time to customers, it may disappoint him.
It has removed all distance barriers for businesses while performing their
operations. Distribution channels have made it possible for businesses to serve
customers even at far distant places.

Maintain Stock Of Products

Distribution channel has an efficient role in maintaining sufficient stocks of goods.
It helps in maintaining the supply of goods as per the demands in the economy.
Distribution channels performs functions of storing the products in warehouses &
supplying them according to demand in the market. It avoids all cases of shortage
of supply of goods in market.

Provides Market Information

Distribution channel is served as the medium through which business acquire all
required information from the market. It takes all information like demand, price
& nature of competition in the market from its different intermediaries involved
in its distribution channel. Also, customers provide information & various
suggestions to producers through these channels. It helps in formulating
strategies according to that.

Promotion Of Goods
Distribution channels helps in marketing & promotion of products. There are
several middlemen’s who are involved in the distribution system of businesses.
These intermediaries inform the customers about the product.

They introduce them with new products & explain them to its specifications.
Customers are induced & motivated to buy these products by intermediaries.
Hence, the distribution channel has an efficient role in promotion & marketing of
goods.

Provide Finance
Business gets financial assistance from the distribution channel. Intermediaries
involved in distribution channel buys goods in bulk from producers. These
intermediaries give payment to producers while purchasing.

Then these middlemen sell these goods to customers in quantities demanded by

them. They even provide credit facilities to the customers. However, producers
get timely payment & are saved from blocking of their funds through credit
selling. Therefore distribution channel regulation the funds’ movement of
businesses.

Generates Employment
Distribution channel generates employment in the economy. There are huge
number of peoples who are involved in the distribution system of businesses.
These people are wholesaler, retailers & different agents. All these people earn
their livelihood through working in these distribution channels. Therefore,
distribution channels are creating employment opportunities for peoples.

Distribution Of Risk
Risk is something which is associated with each & every business. Distribution
channels save the producers from the risk of delivering products to customers
safely & timely.
It becomes the duty of intermediaries that are involved in the channel to deliver it
to customers timely. Producers focus only on their production activities & don’t
need to consider issues about delivering products.

Elements that make up the Channel Management Decisions

The following are the important elements which entails the decisions which are to
be taken during channel management

I) Selecting Channel Members: Selecting the channel members would be the

most crucial decision the manufacturer will take. The channel management
decision will be taken keeping the following things in mind:
a) if the firm's values will be taken to the end consumer by the channel members
and thus form the face of the organization itself?

b) Any backlash the company might incur can be because of a small mistake done
by the final channel member, and this would mean loss of reputation

c) Characteristics that should be kept in mind while selecting the channel

members

 Number of years in business- gives an idea of intermediaries' consistence

performance.
 Financial record- gives an idea of their creditworthiness.
 Service reputation gives a picture of their credibility to carry the brand forward.
 Location-gives an idea of whether they can meet the sales targets.
 Growth potential- the growth of intermediary, gives an idea of potential
growth on that particular channel.
 Cooperativeness-given an idea of how easy or difficult it would be to perform
business with the intermediary.
II) Training of Channel Members: This part of the channel management decision
can be looked at it an HR ft. The marketing aspect of Marketing Channel
Strategies. Training the channel members to perpetuate the company's values
among the intermediaries effectively will improve performance.
A few methods by which a behavioural change can be brought about among the
intermediaries. These are classical influence techniques seen in the HR domain
which showcase how higher-ups can use power to bring about change. Types of
power are:

Coercive power: Can be used to ascertain authority via force of severe

repercussions if not cooperating

Reward power: performance-linked bonuses can be given. If the stick in the

above situation didn't work, the carrot here would be bringing about the change.

Legitimate power: source of power from legal provisions. One difference

between coercive power and legitimate power would be that in coercive power,
one uses forces, but in legitimate power, one reiterates the positions of legal
avenues

Expert power: the technical know-how of the product lies with the manufacturer,
which can be leveraged to pass on the knowledge to the channel intermediaries.

Based on the situation, any one of the above powers can change channel
members to motivate and perform better.

III) Evaluating Channel Members: In chapter three, we spoke of how X

responsibilities given to the intermediaries have Z financial implications on the
firm. Every channel member should be periodically evaluated to see if the channel
of sale is still profitable after the expenses. The parameters to assess the
members would be
 Sales attainment quota: if the sales targets are met

 Average inventory levels: will give us an estimation of movement of goods on

one particular channel via that specific channel member
 Customer delivery time and costs associated with the return of damaged
products on the channel. 
IV) Channel Evolution: Channels evolve. Towards the end of the third chapter, we
saw that adaptability of the channel should be a prime consideration in channel
design decisions. This adaptability is not just due to external factors but also due
to internal concerns.
During the channel life cycle, the products reach keeps increasing till the maturity
phase is reached. This growth should be predicted to keep the channel delivery
load optimal for each stage.

V) Channel Modification decision:  While channel evolution is accommodating

the natural progression of the product life cycle, channel modification decisions
would be to accommodate any unseen changes which might necessitate the
robustness in the channel.
VI) Global Channel Consideration: Future chance of expansion will also be in the
back of the mind when deciding the channel and further while maintaining the
channel
 A brief definition of the term: Distribution logistics ensures that manufactured
goods reach the customer quickly and reliably.

A detailed definition of distribution logistics technology can be found on the

website Betriebswirtschaft lernen: ”Distribution logistics comprises the planning
tasks, control and all processes concerning the flow of goods and information
between production companies and customers.”

Distribution logisticians essentially pursue three goals:

 1. Availability: They must always ensure that a sufficient quantity of products is

available to customers. Customers should be able to receive goods promptly and
without great effort.

 2. Cost minimization: High quality demands of the manufacturers require sales

logisticians to keep shipping and delivery costs as low as possible. In concrete
terms, the aim is to reduce costs associated with transport, storage, shortage and
order processing. At the same time, however, delivery is to become faster, more
energy-efficient and more environmentally friendly.

 3. Influence: Distribution logisticians want to have the highest possible say in the
marketing of their products, for instance. It is about answering the questions of
“How are my products placed on the sales shelf?” and “How can I stand out from
the competition with the presentation of my goods?”.

What are marketing logistics decisions?

The firm must make four major decisions about its market logistics: (1) How
should we handle orders (order processing)? (2) Where should we locate our
stock (warehousing)? (3) How much stock should we hold (inventory)? and (4)
How should we ship goods (transportation)?
What are the decision areas in logistics?

There are four major decision areas in supply chain management:

1) location,

2) production,

3) inventory, and

4) transportation (distribution),

and there are both strategic and operational elements in each of these decision
areas
Promotions refer to the entire set of activities, which communicate the product,
brand or service to the user. The idea is to make people aware, attract and induce
to buy the product, in preference over others. What is Promotion?” Promotion is
a marketing tool, used as a strategy to communicate between the sellers and
buyers. Through this, the seller tries to influence and convince the buyers to buy
their products or services. It assists in spreading the word about the product or
services or company to the people. The company uses this process to improve its
public image. This technique of marketing creates an interest in the mindset of
the customers and can also retain them as a loyal customer.

Types of Promotion:

Advertising-
It helps to outspread a word or awareness, promote any newly launched service,
goods or an organization. The company uses advertising as a promotional tool as
it reaches a mass of people in a few seconds. An advertisement is communicated
through many traditional media such as radio, television, outdoor advertising,
newspaper or social media. Other contemporary media that supports
advertisement are social media, blogs, text messages, and websites.

Direct Promotion-
It is that kind of advertising where the company directly communicates with its
customers. This communication is usually done through various new approaches
like email marketing, text messaging, websites, fliers, online adverts, promotional
letters, catalog distributors, etc.

Sales Promotion-
This utilizes all sorts of a marketing tool to communicate with the customers and
increase sales. However, it is for a limited time, used to expand customers
demand, refresh market demand and enhance product availability

Self-promotion-
It is a process where the enterprises send their agents directly to the customers to
pitch for their product or service. Here, the response for the feedback of the
customer is prompt and therefore, easy to build trust.
Public Relation-
Popularly know as PR is exercised to broadcast the information or message
between a company (NGO, Government agency, business), an individual or a
public. A powerful PR campaign can be valuable to the company.

Online Promotion-
This includes almost all the elements of the promotion mix. Starting from the
online promotion with pay per click advertising. Direct marketing by sending
newsletters or emails.
Key Points of Promotion

 It is a communication tool that incorporates all the elements used to spread

awareness and convince customers to buy good and services
 It is applicable only for short term sales
 It is one of the variables of the marketing mix
 The effect of promotion is short term
 The result or outcome of the promotion is immediate
 It is an economic marketing tool as compared to advertising
 It can be used for all sorts of businesses irrespective of the size, brand of a
company


the importance of promotion are:

 It increases the speed of product and service acceptance.

 Aids in the sales of goods and services in imperfect market conditions.
 It provides effective sales support.
 Fills the gap between the manufacturers and the end consumers.
 Increases the trade pressure in the market.
 Aids in facing industry competition.
 Increases the standard of living.
 Provides employment opportunities.
 Pave way for large-scale selling activities.
Importance of Promotion

The importance of promotion can be briefly shown below:

 Sales of the goods in imperfect market:

Promotion helps in the sales of the goods in imperfect market. In the imperfect
market conditions, the product cannot be sold easily only on the basis of price
differentiation. It is the promotional activity that provides information about the
differences, characteristics and the multi-use of the products of various
competition in the market. The customer is attracted to purchase the goods on
the basis of such information successfully.

 Filling the gap between producers and consumers:

Promotion helps in filling the gap between producers and consumers. Due to the
tough market condition, mass selling is quite impossible without promotional
activities. The distance between producers and consumers has so widened in
present days to get them touched with the product that promotional activities are
necessary.

 Facing intense competition:

Promotion helps in facing intense competition in the market.When a

manufacturer increases his promotional spending and adopts an aggressive
strategy in creating a brand image, others are also forced to follow the suit. This
leads to ‘promotional war. Without promoting the goods, the competition is not
possible in the market. So, it is necessary to face the competition in the market
with the help of promotional activities.

 Large scales selling:

Promotion helps in the large selling of goods and services. Sales promotion is the
result of large-scale production. It can be achieved only by appropriate methods
of large scale selling. Large scale selling is possible with the help of promotional
activity. Due to the large selling of goods, there will be more chance of promotion
of goods. So, it is necessary to sell lot of goods in the market for promotional
activities.
  Higher standard of living:

Promotion helps in the rising standard of the people.The promotional activities

increase the standard of living by providing the better goods at a lower rate due
to large scale production and selling. It help to increase the standard of living in a
good way. People can raise their standard of living with the help of promotional
activity. As the promotional activities increases, the standard of living of people
also increases. So, the promotional activity has a great role in the increment of a
standard of people so that they can live a good and happy life.

 More employment:

Promotion helps to create more employment opportunities. People can gain

employment opportunity with the help of promotional activities. With the help of
promotional activity, many workers get motivated towards the work. Promotional
activity helps to increase more employment opportunities to the people who are
unemployed, as the promotional activities cannot be performed without the help
of an effective sales force and the specialists in various fields.

 Increased trade pressure:

Promotion helps to increase trade pressure in the market.The growth of large

scales retailer, such as supermarkets, chain stores, etc. has brought greater
pressure on manufacturers for support and allowance. Promotional activities help
to decrease the trade pressure. There is need for promotional activities to
decrease the trade pressure.

 Effective sales support:

Promotion helps in the sales support of the product.Sales promotion policies are
under the supplement to the efforts and impersonal salesmanship. Good sales
promotion materials make the salesman’s effort more productive.Promotion
helps in the sales of theproduct. It provides good support in selling the different
types of goods. Sales of different types of goods in the market are very necessary
to increase the market economy.
  Increased speed of product acceptance:

Promotion helps to increase the speed of the products acceptance.Most of the

sales promotion devices such as contests, premium coupons, etc. can be used
faster than other promotion methods such as advertising. The increase in rapid
speed of product acceptance has occurred with the help of promotional activities.
As the promotional activities are done, there will be direct effect in the increment
of a speed of the product. Increase in the speed of product acceptance is very
important in the competitive market. So, it is necessary to increase the speed of
product.

Importance of Marketing Promotion

The marketing promotion plays a very important role in business. Without
effective promotion, the product awareness may remain low in the market and
lead to lower than expected revenue. But on the other hand, marketing
promotion also would require dedicated budget but it helps in creating the
awareness in the market enabling the organization to drive additional revenue.
The main aim of marketing promotion is:
1. To introduce a new product
2. To educate customers about the product usage
3. To increase awareness of the product
4. To differentiate from competitors
5. To achieve increase in product recall
6. To build brand value and image
7. To encourage people to buy in bulk especially in off season to level the demand
8. To encourage people to try their product over their existing products
Promotion is one of the P’s of marketing mix. Promotional activities works in
tandem with other three P’s which are: Pricing decisions, Product and Place
(Distribution strategies).
A promotional mix is a combination of marketing methods including advertising,
sales, public relations and direct marketing to achieve a specific marketing goal.
The promotional mix is typically only part of a larger marketing mix.

How to use a promotional mix

These steps offer suggestions on how to use a promotional mix:

1. Establish your target audience.

2. Create advertisements.
3. Use public relations.
4. Utilize sales promotion.
5. Consider direct marketing.

Types of promotional tools

There are four main strategies that are used to promote goods or services. These
include:

Advertising

Advertising is any form of paid correspondence used to market a product or

resource. This can include communication tools such as commercials, newspaper
ads, digital ads, billboards, radio announcements and more. Some companies also
advertise their business by giving free items to customers that include the
company's name, logo or tag line. Popular promotional items include pens, t-
shirts, water bottles, coffee mugs, tote bags and more.

Sales promotion

A sales promotion is a limited-time offer that is used to increase sales of a

particular item or service. It typically includes incentives for customers like
coupons, discounts, samples or free trials. This strategy is most often used when a
company is introducing a new product or would like to increase sales of a product
they already have.
Public relations

In public relations, the goal of a company or organization is to build a quality

reputation and solid relationship with its customers and clients. Public relations
professionals can do this in a variety of ways, such as creating a positive corporate
image, sharing newsworthy information with the public, sponsoring a special
event or donating to a charity.

Direct marketing

Direct marketing involves promoting a product, resource or business directly to

specific individuals. Companies may select these individuals based on the
demographics that they're trying to reach. Many companies and sales
professionals achieve this through telephone marketing, email marketing, direct
mail campaigns and social media marketing.

Benefits of using promotions tools

There are several benefits of using promotions tools, and they include:

Generates sales

The primary advantage of using promotions tools is generating more sales. Having
multiple promotions tools to choose from can be valuable, because the same
strategy that works for one company may not work for others. When you find a
promotional strategy that works well for a particular business or product, you
may see an increase in sales.

Helps you stand out

By using a wide variety of tools to promote a company or business, you can reach
different demographics of consumers. This can be helpful in boosting the visibility
of the specific company or brand to different people. Promoting goods and
services to a wide customer base may also help a company stand out from
competitors.
Retains customers

Promoting customer loyalty can be a very effective way of retaining customers

and ensuring they return often to purchase the service or product. You can
promote customer loyalty by making sure customers feel valued when engaging
with the company. When consumers are loyal to a brand or company, they may
also recommend or refer it to their friends, family members, coworkers and
acquaintances.

Maximizes budgets

Promotions tools can be a cost-effective advertising strategy compared to other

forms of marketing. There are many types of promotions tools that are free to use
and only require time to implement. If the business is new or you need to
maximize the use of a marketing budget, consider using a free or low-cost
promotional tool.

9 promotions tools to market a product or service

Below are nine promotions tools to advertise a business:

1. Digital publishing platforms

Digital publishing platforms allow writers, business owners, experts and

professionals to post their web articles or blog posts. These platforms act as an
alternative to print media, allowing you to reach a target audience faster and
more efficiently. Many of these platforms have high volumes of traffic, making
these promotional tools an ideal way to maximize marketing efforts.

2. Paid online advertising

Paid online advertising can be a cost-effective marketing strategy, especially for

small business owners who have a limited advertising budget. There are several
types of paid online advertising tools available, such as:

 Banner ads: Companies typically display these ads on websites in target

locations, like the top of the page or the sidebar. They vary in size and are
usually square or rectangular to help fit in naturally with the webpage.
  Pay-per-click (PPC): Companies can use PPC ads when they want their
company links to be displayed first in search engine results, and the
company pays the publisher every time a user clicks the link. This can be an
effective marketing method, as it makes it easier for consumers to find a
company.
 Ad re-targeting: This is a very efficient method of advertising where a
company sends ads to people who have visited their website. Companies
typically send these ads by email.
2. Open web advertising

Media companies partner with open web advertising platforms to connect digital
content with consumers. Using recommendation technology, open web
advertising shares digital content with a large network of mainstream publishers
and media brands. These platforms allow you to choose specific targeting options
that will help you reach the ideal audience. These services typically allow you to
track campaigns so you can discover which of your digital content articles are
most effective at reaching potential customers.

3. Email marketing campaigns

Email marketing is an effective promotions tool that can target individuals who
are already interested in the product or resource. Email marketing campaigns are
designed to encourage new website visitors to become consumers, or for current
customers to make more purchases. Companies typically accomplish this by
sending email newsletters and sales offers on a consistent schedule.

4. Landing pages

These stand-alone web pages are designed to capture the contact information of
individuals who are interested in a company's products or resources. These pages
are usually the first thing a customer interacts with while visiting a website.
Typically, they enter their name and email address, and in exchange, you send
them a valuable item like a discount, coupon code or special offer.
5. Social media scheduling tools

You can optimize social media efforts by using social media scheduling tools for
promotions. With these tools, you can post digital content to a variety of social
media channels at set intervals of time. These tools allow you to create batches of
social media content at once, and the scheduler will automatically post them at
the specific date and time you request. Some platforms allow you to respond to
various mentions of a business on social media.

6. Search engine optimization tools

Search engine optimization, also known as SEO, is a promotions method that

helps websites or digital content rank higher on search engines. By strategically
placing keywords throughout a website or content articles, search engines might
place them towards the top of the search results page. This increases the chances
of visitors clicking on and visiting a website.

7. Content creation tools

When you need to create unique digital images for online ads, blog posts or social
media headers, a content creation tool can be very beneficial. You can use these
to create images, videos, GIFs, charts and more. Most content creation
promotions tools include templates, color palettes, font styles, stock images and
other features, so you can completely customize the images.

8. Video marketing promotions tools

Video is a valuable resource for promoting and marketing goods and services.
They can be embedded on websites, posted on social media platforms and
included in emails. Many popular brands use video marketing to find leads,
increase sales, engage with followers on social media and more. Video marketing
tools work much like content creation tools in that you can create completely
unique videos to use as part of a marketing strategy. For example, you might
record the testimony of a happy customer or demonstrate how to use products.
9. Print advertising

While digital promotions tools are extremely popular, there are still advantages to
using print advertising. Newspapers can still be a beneficial tool in promoting a
business, and you can reach a wider audience by choosing local, community or
national newspapers to advertise in. Advertising in magazines is also an effective
way to increase a brand's visibility. These publications use colorful, vibrant and
dramatic ads, and can give you the freedom to use imagination and creativity
when marketing with them.

For companies who wish to promote their goods or services to a local or

community audience, directories are a valuable promotions tool. For example,
you might take out an advertisement in the directory of the local Chamber of
Commerce. Many residents trust local organizations such as this one. By taking
advantage of the authority a local organization like this holds, you may see an
increase in leads and potential customers
What is services marketing?

Services marketing is a form of marketing businesses that provide a service to

their customers use to increase brand awareness and sales. Unlike product
marketing, services marketing focuses on advertising intangible transactions that
provide value to customers.

service marketing is simply the process of promoting and selling a service or an

intangible good to a specific group of people. It is a new way of marketing that
has become very popular and helps companies all over the world promote their
services.

Who uses services marketing?

Companies that provide a service use services marketing strategies to reach

potential customers. Popular examples of service-based industries that use this
form of marketing include:

 Telecommunications

 Health and wellness

 Financial

 Tourism, leisure and entertainment

 Transportation

 Hospitality

 Consulting

 Design, marketing and sales

 Management

 Education

 Trade industries
  Restaurants

This type of marketing may include both business-to-consumer (B2C) and

business-to-business (B2B) advertisements, depending on the service. Marketing
and sales professionals who work in these industries can use services marketing
strategies to increase brand awareness, generate leads and acquire new
customers.

How services marketing differs from product marketing

While companies use both services marketing and product marketing to acquire
new customers, marketing services differs from marketing products in a number
of ways. Some of the key differences between these two types of marketing
strategies include:

1. Tangible products vs. intangible services

Tangible products may be easier to market than intangible services because

advertisers can easily show them and demonstrate how they work. It can also be
easier for customers to assign value to physical items. Since services are
intangible, advertisers often focus on marketing the people who provide the
service and building relationships with potential customers. This can help build
trust and generate sales.

2. Customization

Unlike products that are often designed one way and sold to customers as is,
businesses can customize their services to meet the unique needs of each
customer.

Example: A company that offers digital marketing services may customize which
platforms it focuses on to fit the needs of each individual customer. As an
advertiser, your services marketing strategy can highlight this by focusing on how
you can adapt a service to better suit a wide range of different customers.

3. Ownership
When a customer purchases a product, they own it. This means they can
continue to use the product for as long as they see fit and resell the product if
they desire to do so. When a customer purchases a service, the business still
retains the employees, skills and capabilities that provided the service. While
product marketing may focus on why a customer wants to own an item, services
marketing focuses on building the brand and the personality of the service
provider.

Example: A business that provides personal counseling services may highlight

how empathetic, professional and well-educated their staff is to encourage
potential clients to schedule a session with them.

4. Trust

While customers who are unhappy with a product may return it, customers who
are unhappy with a service cannot return it after they have used it. This is why
services marketing focuses heavily on building trust with their customers and
continuing to provide an excellent customer experience at every interaction with
their audience. Service-based businesses also want to ensure their customers are
happy so they continue to purchase services from them.

Example: A hair salon that hires personable and talented hairdressers can
increase the number of repeat customers and referrals they receive because
customers trust them to provide excellent service.

5. Time

Usually, businesses provide services to customers at a specific time or for a

specific duration. After this, customers must renew the service agreement to
continue receiving the service. However, a customer may purchase a product
once and continue using it indefinitely. Because of this, services marketing
typically focuses on selling subscriptions, encouraging referrals and retaining
customers instead of selling customers a product one time.

Example: A hotel might offer customers who have recently booked a stay with
them a free night to use on a future reservation. This can encourage customers to
return to the hotel during their next vacation.

6. Market size
The market size for service-based businesses may be smaller than the market size
for product-based businesses. This is because most businesses can ship products
to customers globally, while many businesses provide services only to a specific
geographic region.

Example: A landscaping company may only serve customers within a 50-mile

radius of their business location. As a result, advertisers who market services may
place a heavier emphasis on developing strong relationships with their customers
to earn referrals and repeat business. They may also focus on promoting
upgrades to increase the amount of revenue they can collect per customer.

Tips for creating effective services marketing strategies

Here are some tips to help you create an effective services marketing strategy for
your next campaign:

 Incentivize potential customers. One strategy to market your services is to

provide customers with an extra incentive. Consider offering new
customers a one-time discount or a free gift as part of a special promotion.

 Implement a referral program. Another great way to market your services

is to encourage your current customers to tell their friends, family
members and colleagues about your business. You can offer customers a
discount, upgrade or another incentive for every person they refer that
signs up for your service.

 Nurture existing customer relationships. Continue to check in with your

current customers regularly to ensure they are happy with your service
and identify any additional needs they may have. You can reach out to
them via email, phone call, survey or by providing exclusive discounts to
current customers.

 Embrace digital marketing. In addition to creating a professional website

to promote your services, consider creating business pages and profiles on
popular social media platforms. This can make it easier for potential
customers to connect with you and learn more about the services you
provide.
  Get involved with your community. Get involved by attending trade
shows, networking events and volunteer opportunities. This can help you
showcase your values as a service-based business, meet potential
customers and increase referrals. It can also help you form valuable
partnerships with other businesses in your area.

 Ask for customer testimonials. Incorporating customer testimonials into

your services marketing strategy can help you generate trust with your
target audience. Customer testimonials can be effective because they
show people how you have helped other customers who may have similar
needs.

 Showcase your awards and badges. If you've received any service

verification awards or badges that set your business apart from your
competitors, consider incorporating them in your services marketing
strategy.

 Focus on the process. While your customers are interested in the end

result your service can provide, the way you offer your service can also
provide value. Let potential customers know about unique features you
offer such as flexibility, responsiveness, personalized services or payment
plans.

 Highlight your people. Show the people behind your services through

employee advocacy. Include employees in your marketing materials. You
can use professional photos of your team, video interviews or quotes from
your employees.

Services Marketing Examples

Healthcare industry

Doctors, nurses, surgeons, and other people who work in hospitals are great
examples they sell their health services by seeing and taking care of their
patients.

Hospitality industry
The hospitality industry is made up of places like hotels and restaurants that
serve food, rent rooms, give massages, and do other things for their customers.

Professionals services

Accountants, lawyers, teachers, writers, masons, carpenters, chefs, electricians,

and plumbers are all examples of service-based jobs. Depending on the job, they
may offer more than one service to their clients.

Importance of Service Marketing

Because services can’t be seen or touched, marketing them is a difficult but

very important job. let’s understand why.

1. A key differentiator:

As products become more similar, the services that go along with them are
becoming a key differentiator in the minds of consumers. For example, Pizza Hut
and Domino’s both serve pizza, but they are different from each other more
because of the quality of their service than because of the pizza itself. So,
marketers can use the services they offer to set themselves apart from the
competition and draw in customers.

2. Importance of relationships:

Relationships are a key part of marketing services, so it’s important to keep them
in good shape. Since the product can’t be seen or touched, a lot of the
customer’s decision to buy will depend on how much he trusts the seller. So, it’s
important to listen to what the customer wants, meet those needs with the right
service, and build a long-term relationship that will lead to repeat sales and good
word of mouth.

3. Customer retention:

In today’s highly competitive market, where many companies compete for a

small number of customers, keeping customers is even more important than
getting new ones. Since services are usually made and used at the same time, the
customer is actually involved in the process by taking his needs and feedback into
account. So, they give customers more options for customization based on their
needs, making them happier and more likely to stick with the company.

Types of Service Marketing

In general, there are three kinds of service marketing one should learn about
them to better understand the idea as a whole.

1. External Service Marketing

The first type of service marketing is called “external service marketing.” This is
when a company promotes its services to customers in a setting outside of the
company.

This type suggests that services be advertised using tried-and-true methods like
price, product, and purchasers.

External service marketing is all about promoting services in the outside world
(between the company and its customers) so that they are availed of and used
well.

2. Internal Service Marketing

Second, there is internal service marketing. It is used to promote service within

the company (company employees).

This means that the service is promoted internally so that employees know
where it is and can spread the word better.

Since employees are an important part of the marketing chain, internal service
marketing pays more attention to them than to customers.

It is very important for a company’s employees to know a lot about the service so
that they can spread the word and help the company promote the service on a
large scale.

3. Interactive Service Marketing

Maybe technical service is also a very important part that needs the third type of
service marketing, which is called “Interactive Service Marketing.” Service
promotion happens between the employees and the customers in this case
(employees-customers).

Interactive marketing is a type in which the employees talk to customers to

promote the services of their company, as the name suggests.

For example, the hotel chain Taj Hotels wants to advertise its services to the right
people. Here is a short list of the different kinds of service marketing it will use to
reach its goal.

 Firstly, the company will make ads that show what services the chain of
hotels has to offer its customers (External).

 Then, the company will promote its services within itself to make sure that
its employees are well-informed about what it has to offer so that they can
help promote and sell the services (Internal).

 Lastly, the company’s employees will talk to customers when they use the
service.

 This means that the employees will have to serve the customers in a
variety of administrative and quality ways (Interactive).

Service Marketing Mix

The service marketing mix is also called an extended marketing mix, and it is an
important part of the design of a service blueprint. The 7 Ps make up this
marketing mix. Let’s talk about them in more detail.

1. Product

The product-service marketing mix is not something that can be seen or touched.
Service products can’t be measured in the same way that soap or detergent can’t
be. A good example would be the tourism or education industries. Service
products are also different, change over time, and can’t be owned.

So, care needs to go into making the service product. Blueprinting is usually used
to define the service product. For example, before starting a restaurant business,
a blueprint will be made. This service blueprint shows exactly how the product
(in this case, the restaurant) will be.

2. Place

In the case of services, the place will decide where the service product will be.
The best places to put gas stations are on highways or in cities. A place with little
traffic is not a good place to start a gas station. In the same way, a software
company will do better in an area with a lot of other businesses than in a town or
the middle of nowhere.

3. Promotion

Promotions have become an important part of the service marketing mix.

Services are easy to copy, so the brand is usually what makes one service
different from another. A lot of banks and phone companies work hard to get
their names out there.

What is that? Because there is usually a lot of competition in the service industry,
you need promotions to stay in business. So, advertising and promotions help
banks, IT companies, and dotcoms stand out from the rest.

4. Price

Putting a price on a service is a lot harder than putting a price on a product. If you
run a restaurant, you could only charge people for the food you serve. But then,
who will pay for the nice atmosphere you’ve made for your customers? Who will
pay for the music group you have?

So, these things have to be taken into account when pricing. When pricing a
service, labour, materials, and overhead costs are usually taken into account.
When you add a profit markup, you get the final price for your service.

Published by MBA Skool Team, Last Updated: September 01, 2021

What is Service Marketing?

Service marketing is a strategy which promotes and showcases the intangible

benefits and offerings delivered by a company to drive end customer value. This
can be for standalone service offerings or complementary services to tangible
products. Service marketing is a concept which focuses mainly on the business of
non-physical intangible goods. It is done for company given benefits which
cannot be seen, touched, felt etc. These are benefits which are driven mostly by
people, process & cannot be kept by a customer.

Sectors like hospitality, tourism, financial services, professional services etc. use
service marketing to drive their business.

Importance of Service Marketing

Marketers market different types of entities such as goods, services, events,

persons etc. The marketing of services is known as service marketing. Services
are essentially intangible and does not result in the ownership of anything. Its
production may or may not be tied to a physical product.

Service marketing excellence requires excellence in three broad levels: external,

internal and interactive marketing. External marketing covers the pricing,
distribution and promotion of services to consumers. Internal marketing involves
training and motivating employees to serve customers well. Interactive
marketing describes the employees’ skill in serving the client.
Factors in Service Marketing

The key factors which define marketing for services are:

1. Intangible

services are non-physical unlike physical products which can be touched, felt,
seen. This makes services different from products and hence the marketing
approach would also be different.

2. No ownership

Services cannot be owned but can only be experienced. This is a holistic concept
which is related to customer experience.

There is ownership in service in form of evidence like plan, bills, invoice etc. but
you cannot own it like a product.

3. Inseparability
Service marketing is driven by a concept of moment of truth, i.e. the services are
created & used at the same moment.

They cannot be stored like products in an inventory, they are produced and
consumed at the same time.

4. Variability

Services vary in nature despite the same people, process, type of work etc.,
unlike standardized products. Different customers can get different experience
for exactly the same service used.

e.g. a telecom customer might get different experience for the same plan.

5. Perishability

Unlike products which can be stored, services are consumed at that very
moment. But there is another way to look at it as well. These days many services
or plans do have expiry date. They are not similar to best before dates in
products but these dates are more in terms of validity of service.

e.g. free warranty service after 2 years of purchase.

6. People involvement

Service marketing is driven by people who provide benefits & solutions to the
needs of the customers. These days lot of automatic service solutions are coming
up but people play the most important role in service marketing.

Service marketing planning involves taking care of 7Ps. Price, Place, Promotion,
Product, People, Process and Physical evidence.

Types of Service Marketing

There are broadly 3 types of service marketing:

1. B2C

This is the main customer service provided by companies to its end customers.
These can be telecom, hospitality, financial services, repair provided by
providers. The main focus of the company can be selling service. E.g. Vodafone
provides telecom services to consumers and markets it as its core offering.

2. B2B

Many companies provide services to enterprises and organizations. These can be

networks, finance, travel, technology services etc. The motive is to show business
value to an organization through usage of their service. This forms the core part
of the b2b service marketing.

E.g. Many technology services firms showcase their references and case studies
where they derived value for similar organizations as the target customer. The
value can be in terms of cost savings, revenue increase.

3. Post Purchase Service

This category if service marketing focuses on the add on and complementary

services offered by companies in addition to the core product (or service in some
cases). These can be warranty services, customer support, service request
resolution, helpdesk, repairs etc. These services can be differentiating factor for
customers when they buy the core offering. E.g. When a person buys a phone but
gets 2 years of free warranty service and support. This can become a
differentiator and forms part of the service marketing done by the phone
manufacturer.

5. People

One part of the service marketing mix is the people. People define a service. If
you run an IT business, your software engineers are what make you who you are.
If you own a restaurant, your chef and service staff defines you. Additionally, if
you work in banking, your employees and how they treat customers show what
kind of banker you are. In service marketing, it’s the people who can make or
break a business.
So, many companies today are putting extra effort into training their staff in
people skills and customer service with the goal of making customers happy. In
fact, many companies have to go through accreditation to prove that their
employees are the best. In the case of services, this is a USP for sure.

6. Process

The service process is how a service is given to the end customer. Let’s look at
two great companies as an example: McDonald’s and FedEx. Both companies do
well because they offer fast service, which they can do because they trust their
processes.

On top of that, these services are in such high demand that they have to deliver
at their best without sacrificing quality. So, a service company’s process for
delivering its product is very important. It is also a key part of the service
blueprint, which is what the company uses to figure out how the service product
will get to the end customer before it starts the service.

7. Physical evidence

A very important part of the service marketing mix is the last one. As we already
said, services are not physical things. But to give the customer a better
experience, tangible things are also sent along with the service. Take a restaurant
with just chairs and tables and good food as an example. Or, take a restaurant
with good lighting, nice music, and comfortable seating that also serves good
food. Which one do you like better? The one with a nice feel to it. That is physical
evidence. In service marketing, physical evidence is often used as a way to stand
out.

This is a simple definition of CRM.

Customer relationship management (CRM) is a technology for managing all your
company’s relationships and interactions with customers and potential
customers. The goal is simple: Improve business relationships. A CRM system
helps companies stay connected to customers, streamline processes, and improve
profitability.
CRM is a combination of business strategies, software and processes that enable
companies to build long-lasting relationships with their customers.

Customer Relationship Management is a strategy which is customized by an

organization to manage and administrate its customers and vendors in an
efficient manner for achieving excellence in business. It is primarily entangled
with following features:

1. Customers Needs- An organization can never assume what actually a

customer needs. Hence it is extremely important to interview a customer
about all the likes and dislikes so that the actual needs can be ascertained
and prioritized. Without modulating the actual needs it is arduous to serve
the customer effectively and maintain a long-term deal.
2. Customers Response- Customer response is the reaction by the
organization to the queries and activities of the customer. Dealing with
these queries intelligently is very important as small misunderstandings
could convey unalike perceptions. Success totally depends on the
understanding and interpreting these queries and then working out to
provide the best solution. During this situation if the supplier wins to satisfy
the customer by properly answering to his queries, he succeeds in
explicating a professional and emotional relationship with him.
3. Customer Satisfaction- Customer satisfaction is the measure of how the
needs and responses are collaborated and delivered to excel customer
expectation. In today’s competitive business marketplace, customer
satisfaction is an important performance exponent and basic differentiator
of business strategies. Hence, the more is customer satisfaction; more is
the business and the bonding with customer.
4. Customer Loyalty- Customer loyalty is the tendency of the customer to
remain in business with a particular supplier and buy the products
regularly. This is usually seen when a customer is very much satisfied by the
supplier and re-visits the organization for business deals, or when he is
tended towards re-buying a particular product or brand over times by that
supplier. To continue the customer loyalty the most important aspect an
organization should focus on is customer satisfaction. Hence, customer
loyalty is an influencing aspect of CRM and is always crucial for business
success.
5. Customer Retention- Customer retention is a strategic process to keep or
retain the existing customers and not letting them to diverge or defect to
 other suppliers or organization for business. Usually a loyal customer is
tended towards sticking to a particular brand or product as far as his basic
needs continue to be properly fulfilled. He does not opt for taking a risk in
going for a new product. More is the possibility to retain customers the
more is the probability of net growth of business.
6. Customer Complaints- Always there exists a challenge for suppliers to deal
with complaints raised by customers. Normally raising a complaint indicates
the act of dissatisfaction of the customer. There can be several reasons for
a customer to launch a complaint. A genuine reason can also exist due to
which the customer is dissatisfied but sometimes complaints are launched
due to some sort of misunderstanding in analyzing and interpreting the
conditions of the deal provided by the supplier regarding any product or
service. Handling these complaints to ultimate satisfaction of the customer
is substantial for any organization and hence it is essential for them to have
predefined set of process in CRM to deal with these complaints and
efficiently resolve it in no time.
7. Customer Service- In an organization Customer Service is the process of
delivering information and services regarding all the products and brands.
Customer satisfaction depends on quality of service provided to him by the
supplier. The organization has not only to elaborate and clarify the details
of the services to be provided to the customer but also to abide with the
conditions as well. If the quality and trend of service go beyond customer’s
expectation, the organization is supposed to have a good business with
customers.Customer Relationship Management
IMPORTANCE OF CRM

Proper Understanding Of Customers

Customer Relationship Management is a customer-centric technique. The main
focus of CRM technique is on the customers of Business. It helps businesses to
acquire all required information of customers.

This information is then stored &  used for understanding customer behaviour.
After having a proper understanding of its customers business can serve its
customers in a proper way. CRM helps businesses in satisfying customers in a
more better way.
Increase Customers-Base
It not only focuses on serving & understanding existing customers of businesses.
CRM aims at acquiring more & more customers for businesses. It targets to
increase the customer base & retain them for the long term. Through CRM, a
communication channel is developed between customers & businesses.

This way businesses acquire all information from customers. Customers are free
to give their feedback & suggestions. It helps businesses in getting a clear idea of
what customers want. Accordingly, businesses design their policies for acquiring
new customers.

Reduce Cost
Cost-effective is one of the importance of CRM to business. It helps in reducing
the cost involved in processes in many ways. Firstly it reduces all the paperwork
involved in different processes. All data is stored digitally on the database.

Also, it reduce the manual work to be done in businesses. This leads to a decrease
in the staff requirement for manual work. Overall CRM technique helps
businesses in saving their cost.

Saves Time & Increase Productivity

The CRM technique is quite smooth in performance. It Improves the performance
of the business as compared to traditional mode. Here data are stored on
database centrally at one place. Data in the database can be accessed anytime &
from anywhere.

This saves the time involved in searching & getting the required information.
Information when available quickly will help in taking action quickly. This increase
the productivity of businesses.

Controls Customer Defection Rate

Retaining customers is one of the major challenges for every business. In today’s
competition customers are more frequently shifting from one product to another.
CRM helps businesses in retaining & maintaining long term relationships with
their customers. CRM provides all information about the market to business.

A complete idea about customers’ needs & expectation from the market is
acquired. This will help in serving them better. Customers when are served better
to become loyal to a particular brand.
Helps In Building Corporate Image
A good image in the market is a dream for every business. Well, reputed
businesses enjoy several benefits in the market. Customers get easily attracted to
there brands. A good image of the company also helps it in acquiring funds from
the market. Image of business is created by its customers.

Customers when treated well & satisfied properly, they will definitely spread good
word about the business. This will enhance the company image in the market.
Through CRM, businesses are able to satisfy their customer in a better way.

Increase Growth Of Business

CRM has effective role in increasing the profits & turnover of the business.
Through it, businesses increase their return on investment. CRM helps in creating
more & more loyal customers for term.

These loyal customers do repeat purchases & increase the revenue of the
business. Large revenues collected helps businesses in increasing their size. This
way CRM helps in increasing the shareholders worth.

KEY TAKEAWAYS

 Social media marketing (SMM) uses social media and social networks—like
Facebook, Twitter, and Instagram—to market products and services,
engage with existing customers, and reach new ones.
  The power of social media marketing comes from the unparalleled capacity
of social media in three core marketing areas: connection, interaction, and
customer data.

 Social media marketing has transformed the way businesses are able to
influence consumer behavior—from promoting content that drives
engagement to extracting personal data that makes messaging resonate
with users.

 Because social media today is so ubiquitous, marketing techniques using

these platforms are extremely important for businesses.

Social media marketing (SMM) is the use of social media platforms to interact
with customers to build brands, increase sales, and drive website traffic. As social
media usage grows around the world, both via computer and mobile devices, the
ability to drive sales from certain user populations is a growing business, rife with
competition for views and clicks.

Benefits of social media marketing

With such widespread usage and versatility, social media is one of the most
effective free channels for marketing your business today. Here are some of the
specific benefits of social media marketing:

 Humanize your business: Social media enables you to turn your business

into an active participant in your market. Your profile, posts, and
interactions with users form an approachable persona that your audience
can familiarize and connect with, and come to trust.

 Drive traffic: Between the link in your profile, blog post links in your posts,
and your ads, social media is a top channel for increasing traffic to your
website where you can convert visitors into customers. Plus, social
signals are an indirect SEO factor.

 Generate leads and customers: You can also generate leads and

conversions directly on these platforms, through features like
 Instagram/Facebook shops, direct messaging, call to action buttons on
profiles, and appointment booking capabilities.

 Increase brand awareness: The visual nature of social media platforms

allows you to build your visual identity across vast audiences and
improve brand awareness. And better brand awareness means better
results with all your other campaigns.

 Build relationships: These platforms open up both direct and indirect lines

of communication with your followers through which you can network,
gather feedback, hold discussions, and connect directly with individuals.

The essentials of a successful social media marketing strategy

A successful social media marketing strategy will look different for every business,

but here are the things they will all have in common:

 Knowledge of your audience: What platforms they use, when they go on

them and why, what content they like, who else they’re following, and
more.

 Brand identity: What is the message you want to convey to your audience?

How do you want them to feel when viewing your content?

 Content strategy: While there is a level of spontaneity on social, you’ll need

a structured content strategy to be able to have a consistent voice and
produce quality content regularly.

 Analytics: Quantifiable insights will inform your strategy, including who

you’re reaching, the right content to share, the best times to post, and
more.

 Regular activity: Social media is a real-time platform. If you want to use it

to grow your business, you need to post regularly, stay on top of
engagements with your business, engage back, keep up with trends, and
maintain accurate profiles.
  Inbound approach: Don’t use social media to pitch your business. Focus on
adding value through useful and interesting content and building up those
around you. This, in turn, will organically promote your business and others
will promote it for you.

Creating your social media marketing plan

Now that you know the essentials of a social media marketing strategy, it’s time
to put it into action. Your social media marketing plan is the roadmap to carrying
out your strategy. It puts structure around your efforts so you can measure your
success and make sure you’re spending your resources wisely. Here’s how to
create your social media marketing plan:

1. Choose your platforms: Choose based on your target audience, platforms

popular for your industry, as well as your bandwidth. Only take on the
number of platforms you can actively keep up with. You can always start
with one and then add on more slowly as you get the hang of them.

2. Set goals and objectives: These should be simple and task-like to start, like
post once a day for a month, get your profiles set up, or do a competitive
analysis. Once you get into a rhythm and gather insights, you’ll be able to
set more specific and strategic goals like increase your following by X% or
publish X [content types you’ve found your audience likes] per month.

3. Report and adjust regularly: Use each platform’s analytics to identify which

posts generate the most engagement, whether you’re getting more
followers, and to see your audience demographics. Harness and scale up
what works and nix what doesn’t.

What is green marketing?

Green marketing (or environmental marketing) is the promotion of

environmentally friendly products, services, and initiatives. More specifically,
green marketing refers a broad range of environmentally friendly practices and
strategies. Some green marketing examples include:

 Creating eco-friendly products

 Using eco-friendly product packaging made from recycled materials

 Reducing greenhouse gas emissions from production processes

 Adopting sustainable business practices

 Marketing efforts communicating a product's environmental benefits

 Investing profits in renewable energy or carbon offset efforts

Green marketing strategy

Beyond making an environmentally friendly product, business owners can

implement other tactics to create a business strategy that capitalizes on the
benefits of green marketing. The following can all be part of a green marketing
strategy:

 Using eco-friendly paper and inks for print marketing materials

 Skipping printed materials altogether in favor of electronic marketing

 Adopting responsible waste disposal practices 

 Using eco-friendly or recycled materials for product packaging

 Seeking official certifications for sustainability and

 Using efficient packing and shipping methods

 Using renewable energy and sustainable agriculture practices

 Taking steps to offset carbon emissions via investment

Green companies take a long view of their businesses, prioritizing the well-being
of the planet and future generations over short-term profits.
KEY TAKEAWAYS

 Green marketing describes a company's efforts to advertise the

environmental sustainability of its business practices.

 The emergence of a consumer population that is becoming increasingly

concerned with environmental and social factors has led to green
marketing becoming an important component of corporate public relations.

 One criticism of green marketing practices is that they tend to favor large
corporations that can absorb the additional costs entailed by these
programs.

 Smaller businesses may not be able to shoulder the high-cost burden of

green marketing, but this isn't to say, they cannot.

 Greenwashing occurs when a company states it is involved in

environmental endeavors but it turns out the claims can't be substantiated.

Starbucks is often cited as a leader in green marketing practices. The company has
invested heavily in various social and environmental initiatives in recent years. For
example, in a 2018 report, Starbucks reported that it had committed over $140
million to the development of renewable energy sources.2 The company
purchases enough renewable energy to power all of its company-operated stores
throughout North America and the United Kingdom

What Are Some Green Companies?

Starbucks, Patagonia, and Burts Bees are all active in green marketing due to the
high level of positive ecological and social programs that these companies
support.

What Is an Example of Green Marketing?

Green marketing focuses on myriad environmentally friendly policies and

initiatives that illuminate products and services that are more beneficial (or at
least less harmful) to the environment than other products.
Benefits of Green Marketing

With green marketing, companies have an excellent opportunity to change our

planet for the better and support people who are aware of the situation to help
the environment. By creating sustainable products, companies want to reduce the
negative impact of waste products on our nature. Going green enables you to win
the trust and loyalty of your customers. It helps you:

 stand out in the increasingly competitive environment;

 reduce the negative impact of production on the environment;

 save energy, reduce the use of natural resources and carbon footprint;

 produce recyclable products;

 improve your credibility;

 enter a new audience segment;

 ensure long-term growth;

 implement innovations;

 obtain a higher revenue.

Knowing about the benefits of green marketing may not be enough since you
should also be aware of the strategies. Luckily, there are many ways to go green.
Let’s review them right away.

 Green Marketing Strategies

You can find a lot of strategies related to green marketing that can help
you create a sustainable brand to help our planet. Let’s review some of them.
1. Sustainable design. It’s not just about a recycling logo on your product
packaging, it’s about a full life cycle of your product in mind. You should pay
attention to the details like sources of your materials or workers involved in
the process. Moreover, your company should control the amount of waste
generated and how your products are packaged and delivered. You have to
consider a lot of things that have an impact on our environment when
designing for sustainability.

2. Responsibility. If you’re giving a thought to going green, your brand should

be ready for a profound change. Green marketing is about becoming
conscious of pollution. If you want to prove the sincerity of your intentions,
rethink your company in terms of ecological and social responsibility and
show customers that you care about our planet.

3. Green pricing. Environmentally friendly products usually have a high value

due to the increased cost of sustainable design. However, customers are
still willing to pay for them despite the high costs. Therefore, if you charge
high prices for your eco products, ensure to communicate specifics to prove
that your goods are worth their price. Keep in mind that the greater your
mission, the greater your opportunity to gain exposure for your brand’s
goods.

4. Sustainable packaging.  The number one reason for the pollution of our
planet is the excessive use of plastic. According to Greenpeace, 8.3 billion
tonnes of plastic have been produced since the 1950s, while only around
9% have been recycled. Nowadays, consumers are more responsible and
try to avoid plastic packaging. That’s why it’s advisable to create recycled or
no-plastic packaging for your brand.
Now that you know some of the strategies, it’s time to learn how to implement
them.

 Green Marketing Ideas

1. Use recycled materials

2. Consider using bulk email service

3. Upgrade your equipment and vehicles

4. Highlight that your company is eco-friendly

5. Invest in social media marketing

6. Support environmental initiatives

Internal marketing involves promoting your organization’s mission, objectives,

purpose, culture, products and services, and brand to your own employees.
Occasionally referred to as “employee marketing,” the purpose of internal
marketing is to “sell” your business to your employees so they are more engaged,
brand-aware, and knowledgeable about your organization.

nternal marketing is just as important as external marketing when it comes to

motivating and engaging employees into the company and their work.

The idea behind internal marketing is to earn employees’ enthusiasm by creating

an emotional connection to the brand.

Internal marketing involves marketing tactics to earn employees’ enthusiasm

about the brand.

Internal marketing promotes the company’s values, culture, and goals to its
employees.

Benefits of Internal Marketing

Internal marketing can benefit both your employees and your organization as a
whole. Some of its major advantages include: 

 Employee Engagement: Internal marketing can keep employees informed

about and supportive of your company. If their jobs have a purpose and
they feel like they’re a valued part of your organization, they’re more likely
to be enthusiastic about and devoted to their work.

 Company Culture: Since it allows you to communicate your mission and

values, internal marketing can help develop and strengthen your company’s
culture. Having engaged employees can further solidify culture, making
your organization a more positive and enjoyable place to work.

 Brand Awareness: Not only does internal marketing help with developing

your organization’s brand, but it also boosts brand awareness among
employees. This helps employees become brand advocates who publicize
your company (both for customers and potential employees) outside of the
workplace. As long as your messaging is consistent, this can also help with
your external marketing efforts.
  Staff Empowerment: With increased brand awareness, your employees are
better equipped to do their work. This is especially true for staff members
who work with clients, allowing them to improve the experience customers
have with your business. 

 Recruitment and Hiring: Internal marketing can also support your hiring

efforts, making it easier to market job openings and recruit talented
employees. With more engaged employees and strong company culture,
your organization will gain a positive reputation, making it a desirable
workplace for more applicants.

 Retention: What’s more, this also can help you retain employees, both new
and old. It’s believed that increased employee engagement reduces
turnover, allowing you to keep the best workers on your team for the
benefit of your business.  

The Key Components of Internal Marketing

Internal marketing includes key components such as:

 A clear strategy with specific goals

 Effective internal communication

 Great onboarding experience

 Education on the company’s products and services

 Trust and transparent communication

 A great employee experience

 A positive workplace culture

 Professional development opportunities

 Effective cross-departmental collaboration and teamwork

benefits of internal marketing

There are many benefits to intentional internal marketing. Exactly how your
company will benefit depends on the peculiarities of your organization. But for
most, successful campaigns result in:

 Strong company culture reinforced and enriched by employee engagement

 Higher employee satisfaction and retention

 Better customer service provided to external customers

 Higher productivity and profitability

 Employees who become brand ambassadors

These kinds of benefits can produce gains in the long term. The gains can also
become self-perpetuating, creating wins repeatedly with little direct input from
the organization. 

MARKETING TRENDS

1. Conversational marketing
What is conversational marketing?

It’s where users interact and have conversations with brands through chatbots
and voice assistants. It’s also commonly used in online marketing campaigns, with
click-to-messenger being one of the most popular options for paid
advertising.  Artificial intelligence and machine learning are the main technologies
behind conversational marketing.

Why is it so effective?

Recent studies by IBM found that 70% of users expect instant answers to their
questions and queries. From a marketer‘s point of view, it’s a powerful way
of driving engagement, which in turn boosts conversion rates and increases
return on investment (ROI). It also makes the sales process more agile, as
chatbots, through AI, can pre-screen prospects and send only qualified leads to
the sales team. And in the age of data-driven digital advertising, conversational
marketing helps collect a broader range of audience information. 

From a consumer’s perspective, conversational marketing helps build trust and

improves the customer experience. A survey by Salesforce found that 42% of
consumers don’t trust brands, and this is often down to a lack of responsiveness
or slow customer service. By leveraging conversational marketing, brands provide
instant responses at different touchpoints and this increases loyalty and brand
buy-in. 

How to implement conversational marketing in your business

There is a wide range of tools available to take advantage of conversational

marketing. On social media channels, like LinkedIn and Facebook, click-to-
messenger are perfect ways to drive conversations with customers. While on
websites, live chats and WhatsApp messaging buttons are popular conversational
marketing devices.

2. Highly personalized content experience

What is a highly personalized content experience?

As the name suggests, it’s content that’s personalized and tailored to each
individual user. Amazon, Netflix, Spotify, and Facebook are examples of well-
known brands that effectively personalize content to each user. When you log on
to Amazon, the home page content displays products likely to interest you based
on your previous purchases and browsing history. Netflix makes movies and series
recommendations based on your viewing history and preferred genres, while
Spotify does the same with music. And social media giant Facebook
uses algorithms to determine what type of content to show on your newsfeed. 

Why is it so effective?

Highly personalized content is trending more than ever following the Covid-

19 pandemic, lockdowns, and increasingly virtual living. Studies by Hubspot found
that 74% of online consumers get frustrated by content that seemingly has
nothing to do with their interests. Experts believe that so much time spent on
devices consuming content during the lockdowns of 2020 has made society
almost “immune” to content. 

So, by personalizing content, brands help stand out and speak to their ideal
customers in a way that’s relevant to them. Hubspot also analyzed data from
nearly 100,000 call-to-action buttons (CTAs) throughout the course of a year, and
found that personalized CTAs received 43% more click thoughts than generic
ones.

How to implement personalized content in your business

To provide highly personalized content, businesses need to be proactive in

collecting consumer data and have strong data analysis, AI technology, and CRM
platforms. By personalizing content, brands build stronger relationships with their
audience, which helps drive engagement and conversions.

3. Experiential Marketing

What is experiential marketing?

Experiential marketing, as the name suggests, is a trend that focuses on creating a

brand-based user experience, and not just a product-based one. Experiences vary
by brand and sector, but corporate events, webinars, competitions are some of
the most common examples of experiential marketing. 

Let’s take tech giant Apple, a brand often regarded as a pioneer in this type of
publicity. They’ve recently been running their famous “photo-walks” in which
an Apple employee guides consumers around a neighborhood and teaches them
how to take photos with their iPhone. The brand also runs its annual Worldwide
Developers’ Conference, its biggest event of the year, in which it brings together
thousands of programmers from across the globe to discuss the latest trends. 

Why is it so effective?

Experiential marketing serves for customers to engage with the brand and
experience its values and personality, and not just its product. According to
research by salesforce, 84% of consumers prefer to be treated as a person and
not a number. So by creating memories, brands strengthen the personal
connection between product and emotion which increases brand buy-in and
conversions.

How to implement experiential marketing in your business

Experiential marketing should form part of any brand’s marketing strategy, no

matter the size of the business. Of course, small businesses don’t have the
budgets to run large events like Apple, but that doesn’t mean they can’t create
unique experiences for their market segmentation. Small-scale local and online
events are common examples of experiential marketing used by SMEs and
startups.

To be successful at experiential marketing, businesses need to know their

audience and define clear and measurable objectives for their experiences.
Building email subscriber lists, increasing social media following, and driving sales
are some of the more common objectives in experiential marketing.

4. Influencer Marketing
 What is influencer marketing?

 Similar to celebrity endorsements, It’s where brands use influencers for

their marketing campaigns through social media platforms like TikTok and
Instagram. It’s by no means a new trend but has gained significant traction in the
past few years for its simplicity. Influencers (including micro-influencers) post
content in which they interact with a brand, either by using one of its products or
services or engaging with employees. 

Why is it so effective?

 Influencer marketing usually yields better results than traditional celebrity

endorsements given the “engagement factor”: people interact with influencers,
and so are more likely to react to the marketing campaign. For
example, Amazon subsidiary Audible, which specializes in ebook subscriptions,
worked with photography influencer Jesse Driftwood. Although he has less than
100,000 followers on Instagram, Amazon saw he had loyal fans with high levels of
engagement. Driftwood’s posts about Audible received high engagement rates,
with users leaving comments like “that is a good idea” and “can’t wait to give it a
try”. 

 Influencer marketing also plays on consumer behavior and psychology, such as

recommendations. Market research firm Nielsen found that 83% of consumers
trust personal recommendations more than traditional digital advertising,
so influencers are the perfect way for brands to create persona recommendations
this en masse. 

 Social media influencers also specialize in a particular niche and have followers

with certain types of interest. For marketers, this means more targeted
advertising, which helps reduce ad spend. For example, National Geographic
recently teamed up with wildlife photography influencers for a social media
marketing campaign. And of course, their followers will naturally be interested in
the National Geographic brand as they’re interested in wildlife photographhy. 

How to implement influencer marketing in your business

 Brands should source influencers who post content related to their product or
industry for the best results. Marketers can use hashtags to
find influencers themselves through different social media platforms or work
with influencer agencies. As with all marketing campaigns, brands should define
their objectives and target audience before
contacting influencers. Influencers posting photos and videos of themselves using
a brand’s product or service is the most popular type of influencer
marketing content.

5. Continued Digital Transformation 

 What is continued digital transformation in marketing?

It’s how companies adapt their business models, products, and internal structures
to new, digital-driven consumer trends. In marketing, digital transformation
meant businesses changing their marketing mix to more digital channels, moving
away from print advertising to social media, for example. Continued digital
transformation in marketing for 2021 and beyond refers to how businesses
leverage new technology to optimize their marketing efforts and
improve customer experience. 

 Why is it so effective?

 Continued digital transformation in marketing means more data-driven

campaigns and optimization which leads to higher conversions, lower ad spend,
and greater ROI – something that’s not possible with traditional
advertising. According to research, 86% of businesses claim customer acquisition
costs (CPA) have increased over the past two years. To help reduce CPA, brands
need to focus on improving user experience and increasing customer retention.

 Amazon’s Alexa is a prime example of customer-focussed digital transformation.

Let’s say you want to order your favorite variety of coffee. You no longer need to
go online and search for it, you simply tell Alexa “order my favorite coffee”
and Amazon, through artificial intelligence-powered voice search, will take care of
the rest. This is known as “headless commerce” and is a perfect example of how
brands leverage technology to improve user experience and retain customers.
 How to implement continued digital transformation in your business

 Continued digital transformation doesn’t have to be as sophisticated as Alexa. In

smaller businesses and startups, marketers have a wide range of tools at their
disposal to continue digital transformation in their brands. Google Analytics, A/B
testing, customer data platforms (CDP) are all examples of digital transformation
in marketing.

6. New Social Media Trends

What are the new social media trends for 2022?

Video content and social selling are the most trending new features on

popular social media platforms for 2022 and beyond. With the rise of TikTok,
video and Livestream have become more popular than ever. Indeed, Instagram
launched Reels in 2020, in what many social media experts consider an attempt to
counter TikTok’s dominance in the video space.

And social selling has been trending since Facebook launched Shops throughout

its network in May 2020. Brands can now use social media like e-
commerce websites, uploading the products to be purchased directly through the
platform. 

Why are these new social media trends so effective?

In the case of video, studies show that audiovisual content is 40 times more likely
to be shared than non-audiovisual posts. And video is the most clicked type of
advertising, receiving better engagement than text and image-only ads. And 80%
of consumers prefer to watch videos rather than read content when considering a
purchase. With stats like these, it’s clear to see that consumers engage more with
video, and so marketers can use this to their advantage when planning
campaigns. Some social media experts even claim videos can increase conversions
by up to 30%.
For social selling, market research shows that 87% of consumers believe social
media helps them make buying decisions. Typically, consumers would research
products through social media, looking at reviews and content, before proceeding
to purchase on a company’s website. With new shopping functionality on
platforms like Facebook and Instagram, consumers can purchase products directly
through the platform. This makes for an easier and more streamlined customer
journey, which in turn increases conversions. In China, stats show that 70% of Gen
Z consumers purchase directly through social media. 

How to implement new social media trends in your business

While there are high-tech cameras and clever editors, really anyone with a
smartphone can record a video for social media. Marketers can repurpose
evergreen content to create videos, and make use of Stories, Reels, and Lives to
drive engagement. Social media teams should analyze audience data to
determine the best types of content and times of day to post for the best results.
And avoid the common mistake of trying to be on all channels, and instead focus
on the platforms most used by your audience. For social selling, marketing teams
should go to their account settings to configure shops and upload their products
for sale.

7. E-commerce

What are the new e-commerce trends for 2022?

We’ve already touched on some new e-commerce trends in this article: selling

on social media, personalization, headless e-commerce, and conversational
marketing. Other new trends include virtual reality, visual search, and shop local.

Virtual reality is trending as it addresses a common objection to buying online:

they fear the product will be different from the photos. Interactive 3D and 360°
photos help users visualize the product better, while some retailers share user-
created videos of their products to help boost conversions. Similarly, AI-powered
visual search displays images of products when users enter search terms.
“Shop Local” has become a popular trend due to the devastating effects of
the pandemic on local businesses. Consumers now increasingly opt to buy from
independent retailers, as opposed to big brands to help support their recovery.

Why are these new trends so effective?

E-commerce boomed in 2020 owing to the onset of

the Coronavirus pandemic and the closure of retail stores. In the UK, May 2020
saw a huge 61% increase in e-commerce sales compared to May 2019. Even with
the world reopening, consumer behavior has changed and the penetration of e-
commerce is expected to grow further.

Virtual reality and visual search are boosting conversions due to the simple fact
that humans respond better to visual, rather than text, content. Google
claims visual content receives 94% more clicks, while AI firm Vizenze claims 62%
of millennials favor visual over text search. 

65% of consumers now prefer to buy from brands that support sustainability, and
local businesses tend to be more agile in this: they have a lower carbon footprint
and energy consumption compared to big brand retailers. 

How to implement new e-commerce trends in your business

There are a few simple changes businesses can make to boost conversions
through visual content. Switching images from JPEG and PNG to WebP format will
improve image quality and loading speed. Asking customers to submit photos and
videos of them using products is an effective way of combining social proof with
visual content to increase conversions. As for sustainability, businesses should
support green initiatives like carbon offsetting and reduced packaging.

8. Programmatic Advertising
What is programmatic advertising?

In simple terms, programmatic advertising is the automation of buying digital

advertising space. Traditionally, marketing teams would need to create proposals,
negotiate and sign contracts. But through programmatic advertising, brands can
bid for ad space within milliseconds, freeing up marketers to spend more time on
campaign optimization rather than administration. Many brands are now
assigning up to 50% of their ad budgets to programmatic advertising, and the
trend is expected to exceed $100 billion in 2022.

Why is it so effective?

Programmatic advertising facilitates real-time data analysis and audience

targeting. Google used programmatic advertising to promote its search app
and reached up to 30% more people with a 30% lower cost per thousand
impressions (CPM). Through programmatic advertising, brands enjoy more agile
and automated ad buying, which saves employee time and increases ROI.

Programmatic advertising works across a wide range of networks and ad

exchanges, allowing businesses to increase their reach and target their audience
with more relevant ads. This helps drive conversions and brand awareness.

How to implement programmatic advertising in your business

To run programmatic ads, businesses first need to choose a demand-side platform

(DSP) to set budgets. Popular DSPs include Media Math and Adform. Then, as
with all digital advertising campaigns, marketers need to define their campaign’s
objectives and KPIs, the creative format, and the target audience. Then once in
circulation, marketers should use data to see trends and optimize their campaigns
for better results.

9. Adoption of automation
 Automation in marketing is the use of technology to automate marketing and
advertising efforts. During the last year, the pandemic has accelerated the use of
technology in the workplace, and automation has taken center stage in all
business processes, not just marketing. It may sound technical and complex,
but automation in marketing is quite simple. Automated email sequences in sales
funnels, scheduled social media posts, and email order updates are all everyday
examples of automation in marketing. 

 Why is it so effective?

 Marketing automation allows brands to scale their efforts to reach higher

volumes of traffic. 30% of business owners claim the biggest benefit
to automation is time-saving. Their marketing teams no longer need to waste
time undertaking repetitive takes, and instead can focus on optimization and
content creation. Automation also allows marketing teams to streamline their
omnichannel marketing into one platform, removing the need to upload content
and engage with their communities on each different social media channel. This
increases productivity, which directly correlates to increased ROI and conversion
rates.

 It also allows businesses to collect and analyze greater amounts of customer data
much quicker than a human could. This means brands can quickly build a
panoramic view of their sales cycle and customer journey, exposing gaps and
weak points in the process. 

How to implement automation in your business

 To get the most out of automation, marketers should map out their customer
journey and sales cycle and identify steps that can be automated. Once identified,
brands should set SMART goals (specific, measurable, achievable, realistic, and
timed) to determine the success of automation. Finally, try out
different automation platforms, like MailChimp for email marketing, SproutSocial
for social media, and Google Analytics for data analysis.

10. Artificial Intelligence

What is Artificial Intelligence (AI)?

AI is where machines and computers undertake tasks that require human

intelligence, such as decision making and speech recognition. In marketing and
advertising, AI leverages historic sales and marketing data to predict the
customer’s next step in the sales cycle. This allows marketers to optimize their
customer journey, improving weak points and gaps in the process. 

AI is increasingly being used to help marketers with creative tasks, such as

headline and copy creation, logo designs, and email newsletter generation. It
analyses data from past customer interactions to “learn” how to carry out these
tasks effectively and create relevant content. 

As we’ve already discussed in this post, AI is the driving technology behind

new digital marketing trends like personalized content and chatbots. You can read
more about it in this post here.

Why is it so effective?

Put simply, AI allows marketers to analyze, interpret and understand infinite

amounts more customer data than humans can. This allows teams to have a far
greater understanding of how their target audience behaves. By using this data to
predict a customer’s next move, marketers can create new campaigns with more
targeted outreach, which in turn increases conversions and ROI. A recent study by
consulting firm PwC found that 72% of CMOs consider AI to be a “considerable
advantage”. 

AI and automation take care of repetitive and time-consuming tasks, which frees

up marketing teams to focus on optimization and strategy. 

How to implement artificial intelligence in your business

The most popular marketing-related software these days leverage AI, so

implementing it is a case of adopting the right tool for your business. And this
depends on your firm’s goals and objectives. Chatbot software, AI-powered PPC
campaigns, and AI content creation tools are all common examples of marketing
software in use in 2021.
11. Direct Mail

What is direct mail?

Direct mail refers to physical marketing material that’s mailed directly to a

potential customer’s home, hence the name: direct mail. Examples include
brochures and letters with special offers. Compared to the other points in this
article, direct mail bucks the trend in the sense it isn’t digital but rather print-
based marketing. However direct mail plays an increasingly important part in
omnichannel marketing strategies in 2021, with research showing 70% of people
engage with a brand online after receiving direct mail from them. 

Postcards have become one of the most effective direct mail formats in 2021:
with no envelope and short content, they’re much more likely to be read than
letters and brochures. It’s also more cost-effective than sending traditional mail.
Short copy is another trend, with research finding that direct mail has on average
62% fewer words in 2021 when compared to 2014. The average word count for
direct mail in 2021 was just 500 words. 

Why is it so effective?

Direct mail is making a comeback due to changing consumer behavior. With

the content marketing boom and remote working becoming the new normal,
many consumers have become “numb” to digital marketing campaigns. Studies
show that 70% of consumers value direct mail for its authenticity and personal
nature that makes them feel valued. The same study also found that 56% of
physical mail remains in homes for more than 28 days after being received and
this naturally increases brand exposure. The sensory nature of direct mail also
helps make it effective. 

How to implement direct mail in your business

To run a successful direct mail campaign, marketers first need to define their
objectives: increased sales, website visits, and social media followings are some of
the most common goals of direct mail. It’s also important to define how it
integrates with online marketing channels and where it would be most effective
in the customer journey. Due to postage and print, direct mail is a costlier way of
advertising, so marketing teams need to ensure they have the data and tools
necessary to ensure its effectiveness. It’s a good idea to test out and optimize
different direct mail campaigns on a small group of customers before targeting a
larger audience. Consider using QR codes in your copy to guide the customer to
your online channels.